AGREEMENT OF SALE
for
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
between
BRANDYWINE REALTY TRUST
and
GENDER ROAD JOINT VENTURE
Dated: September 19, 1997
AGREEMENT OF SALE
INDEX
Section Page
1. PROPERTY BEING SOLD.......................................................1
1.1 Real Property..............................................1
1.2 Personal Property..........................................2
1.3 Leases.....................................................2
1.4 Right to Names.............................................2
2. PURCHASE PRICE AND MANNER OF PAYMENT......................................2
2.1 Purchase Price.............................................2
2.2 Manner of Payment..........................................2
2.2.1 Deposit....................................................2
2.2.2 Additional Deposit.........................................3
2.2.3 Cash Balance...............................................3
2.3 Allocation.................................................3
3. TITLE.....................................................................3
4. COVENANTS.................................................................3
4.1 Maintenance.................................................3
4.2 Alterations.................................................3
4.3 Lease.......................................................3
4.4 Security Deposits...........................................4
4.5 ▇▇▇▇ Tenants................................................4
4.6 Notice to Buyer.............................................4
4.7 Update Rent Roll............................................4
4.8 Comply with Leases..........................................4
4.9 No New Agreements...........................................5
4.10 Tax Disputes................................................5
4.11 No Removal of Personalty....................................5
5. REPRESENTATIONS AND WARRANTIES..............................5
5.1 Seller's Authority For Binding Agreement....................5
5.2 Employment on "At-Will" Basis...............................5
5.3 Service Contracts...........................................6
5.4 Condemnation................................................6
5.5 No Lawsuits.................................................6
5.6 No Tax Assessments..........................................7
5.7 Leases......................................................7
5.8 Compliance with Law.........................................8
5.9 Insurance...................................................9
5.10 Current Use Unrestricted....................................9
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5.11 No Brokers..................................................9
5.12 Utilities...................................................9
5.13 Permits, Approvals and Certificates.........................9
5.14 Good Title to Property.....................................10
5.15 All Taxes and Assessments Paid.............................10
5.16 FIRPTA.....................................................10
5.17 Operating Statement........................................10
5.18 Mechanic's Liens...........................................10
5.19 Inventory Schedule.........................................10
5.20 Charges, Fees and Assessments..............................10
5.21 Rights to Purchase.........................................10
5.22 No Outstanding Obligations.................................11
5.23 Access.....................................................11
5.24 Rollback Taxes.............................................11
5.25 Development Agreements.....................................11
5.26 Correct Copies of Documents................................11
6. POSSESSION...............................................................11
7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY..........................11
7.1 Title Binder...............................................11
7.2 Survey.....................................................12
7.3 Physical and Financial Inspection..........................12
7.3.1 Leases.....................................................13
7.3.2 Contracts, Licenses, Permits...............................13
7.3.3 Utility Costs..............................................13
7.3.4 Inventory..................................................13
7.3.5 Three Years' Maintenance Expenses..........................13
7.3.6 Three Years' Tax Bills.....................................13
7.3.7 Three Years' Operating Statements..........................13
7.3.8 Schedule of Violations.....................................14
7.3.9 Schedule of Notices........................................14
7.3.10 Schedule of Replacements and Repairs.......................14
7.3.11 Zoning, Site Plan, Subdivision Plan or Plat................14
7.3.12 ...........................................................14
7.3.13 Takings or Changes.........................................14
7.3.14 Tax Assessments, Appeals and Increases.....................14
7.3.15 Litigation.................................................14
7.3.16 Insurance Policies.........................................14
7.3.17 Schedule of Employees......................................15
7.3.18 Title Information..........................................15
7.4 Seller's Failure to Deliver................................15
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES...............................15
9. FIRE OR OTHER CASUALTY...................................................15
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9.1 Maintain Insurance.........................................15
9.2 Minimal Damage.............................................15
9.3 Substantial Damage.........................................15
9.4 Closing After Substantial Damage...........................15
9.5 Rent Insurance.............................................16
10. CONDEMNATION.............................................................16
11. Expense Allocations......................................................16
12. CLOSING..................................................................16
12.1 Time and Date and Place....................................16
12.2 Documents..................................................16
12.2.1 Seller's Documents and Other Items.........................17
12.2.1.1 Deed.......................................................17
12.2.1.2 ▇▇▇▇ of Sale...............................................17
12.2.1.3 Original Leases............................................17
12.2.1.4 Original Licenses, Contract Documents and Other Personal
Property...................................................17
12.2.1.5 Assignment of Leases.......................................17
12.2.1.6 Assignment of Licenses, Contract Documents and Other
Personal Property..........................................17
12.2.1.7 FIRPTA Certificates........................................17
12.2.1.8 Tenant Letter..............................................17
12.2.1.9 Estoppel Certificate from Municipality. ...................17
12.2.1.10 Title Insurance Certificates...............................17
12.2.1.11 Updated Rent Roll..........................................18
12.2.1.12 Seller Certificate.........................................18
12.2.1.13 Organization Certifications................................18
12.2.1.14 Keys.......................................................18
12.2.1.15 Tax Bills..................................................18
12.2.1.16 Tax Reduction Rights.......................................18
12.2.1.17 Tenant Estoppels...........................................18
12.2.1.18 Leasing and Management Agreement...........................19
12.2.2 Buyer's Documents..........................................19
12.2.2.1 ...........................................................19
12.2.2.2 ...........................................................19
12.2.2.3 ...........................................................19
12.2.3 Title Insurance............................................19
12.2.4 Necessary Documents........................................19
13. DEFAULT; REMEDIES........................................................19
13.1 ...........................................................19
13.2 ...........................................................20
13.3 Buyer's Out-of-Pocket Costs................................20
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14. CONDITIONS PRECEDENT TO CLOSING..........................................20
14.1 Correctness of Warranties and Representations. ................21
14.2 Compliance with Terms and Conditions...........................21
14.3 Buyer's Satisfaction with Inspection...........................21
14.4 Trustee Approval...............................................21
15. PRORATIONS...............................................................21
15.1 Operating Expenses..................................................21
15.1.1 Rents..........................................................21
15.1.2 Taxes..........................................................21
15.1.3 Deposits. .....................................................22
15.1.4 Water and Sewer Charges........................................22
15.1.5 Assigned Contracts.............................................22
15.1.6 Electricity, gas, steam and fuel...............................22
15.1.7 Security Deposits..............................................22
15.2 Custom and Practice............................................22
15.3 Future Installments of Taxes...................................22
15.4 Application of Prorations......................................22
15.5 Schedule of Prorations.........................................22
15.6 Escalations....................................................22
15.7 Readjustments..................................................23
15.8 Indemnification for Seller's Tax Obligations...................23
15.9 Survival.......................................................23
16. BROKERS..................................................................23
17. ESCROW AGENT.............................................................23
17.1 Payment to Seller..............................................23
17.2 Notice of Dispute..............................................24
17.3 Escrow Subject to Dispute......................................24
17.4 Escrow Agent's Rights and Liabilities..........................24
18. GENERAL PROVISIONS.......................................................24
18.1 Notices........................................................24
18.2 Binding Effect.................................................26
18.3 Entire Agreement...............................................26
18.4 Governing Law..................................................26
18.5 No Recording...................................................26
18.6 Tender.........................................................26
18.7 Execution in Counterparts......................................26
18.8 Further Instruments............................................26
18.9 Time...........................................................26
18.10 Designation of Nominee; Assignment of Agreement................27
18.11 Effective Date.................................................27
18.12 Time for Acceptance............................................27
18.13 Confidentiality................................................27
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18.14 Delivery of Documents..........................................27
19. SEC REPORTING (8-K) REQUIREMENTS.........................................27
20. INDEMNIFICATION..........................................................28
21. EXCULPATION..............................................................29
22. AS-IS....................................................................29
23. Other Transactions.......................................................30
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Exhibits to Agreement of Sale
"A" - Legal Description
"B" - Schedule of Inventory
"C" - Permitted Encumbrances
"D" - Rent Roll
"E" - Service Contracts
"F" - Insurance
"G" - Operating Statements
"H" - Form of Tenant Estoppel Certificate
AGREEMENT OF SALE
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ made this 19th day of September, 1997, between
BRANDYWINE REALTY TRUST, a Maryland Real Estate Investment Trust, its
permitted assignee or nominee, having its principal office at ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Buyer"), and
GENDER ROAD JOINT VENTURE, a Delaware partnership, having its principal
office at c/o The Commonwealth Group, ▇▇ ▇▇▇▇'▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Seller").
BACKGROUND
The Background of this Agreement is as follows:
A. Seller is the owner of a certain tract of land being comprised of
6.75 plus/minus acres, together with the building and improvements thereon,
including one (1) three (3)-story office building containing approximately
64,000 net rentable square feet, and accessory off-street parking, commonly
known as ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in the City of Newark, New Castle County, Delaware.
B. Seller desires to sell to Buyer and Buyer desires to purchase from
Seller the property referred to in this Agreement, upon the terms and
conditions set forth herein.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and with the preceding Background paragraphs incorporated
by reference, the parties hereto, intending to he legally bound hereby,
covenant and agrees as follows:
1. PROPERTY BEING SOLD.
Seller shall sell, transfer and convey to Buyer on the Closing Date (as
hereinafter defined),
1.1 Real Property. Fee simple interest in the parcel of land, all
as more fully described on Exhibit "A", with the building and improvements
thereon, including one (1) three (3)-story office building containing
approximately 64,000 net rentable square feet, and accessory off-street
parking, commonly known as ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, Delaware, and all of the easements, licenses, rights of way,
privileges, hereditaments, appurtenances, and rights to any land lying in the
beds of any street, road or avenue, open or proposed, adjoining thereto, and
inuring to the benefit of said land (hereinafter collectively referred to as
the "Premises"); and
1.2 Personal Property. All equipment, fixtures, machinery and
personalty of Seller, of every description attached to or used in connection
with the Premises (and not owned by tenants under leases of the Premises),
including, without limitation, those listed on the Schedule of Inventory
attached hereto as Exhibit "B", all artwork, renderings, flags, awnings,
trade dress, and to the extent legally assignable, all intangible personal
property owned by the Seller and used in connection with the ownership,
operation and maintenance of the land, improvements and other property,
excluding cash on hand but including, without limitation, all contract
rights, guaranties and warranties of any nature, all architects', engineers',
surveyors' and other real estate professionals' plans, specifications,
certifications, contracts, reports, data or other technical descriptions,
reports or audits (including, without limitation, all environmental,
structural and mechanical inspection reports), and all marketing materials
("Contract Documents"), all governmental permits, licenses, certificates, and
approvals in connection with the ownership of the Premises ("Licenses"), all
security deposits, utility deposits, escrow accounts, instruments, documents
of title, general intangibles, all computers, computer software programs and
data and business records pertaining to the Premises, all telephone,
communications and security systems and equipment, and all of Seller's
rights, claims, and causes of action if any, to the extent they are
assignable, under any warranties and/or guarantees of manufacturers,
contractors or installers, all rights against tenants and others relating to
the Premises or the operation or maintenance thereof, including to the extent
applicable, any warranties from any previous owners of the Premises
(hereinafter collectively referred to as "Personal Property"); and
1.3 Leases. All leases, licenses and other occupancy agreements
for any part of the Premises, and all prepaid rent and unapplied security
deposits (the "Leases"); and
1.4 Right to Names. Any and all right, title and interest of
Seller in and to the name of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the right to all
printing styles, trademarks and logos ("Name").
The Premises, Personal Property, Leases and Name are sometimes
hereinafter referred to as "Property."
2. PURCHASE PRICE AND MANNER OF PAYMENT.
2.1 Purchase Price. Buyer shall pay the total sum of Five Million
Five Hundred Thousand ($5,500,000) Dollars (hereinafter referred to as the
"Purchase Price") subject to adjustment.
2.2 Manner of Payment. The Purchase Price shall be paid in the
following manner:
2.2.1 Deposit. By delivery, upon Seller's execution and
delivery of this Agreement, of Buyer's good check in the amount of
Eighty-Five Thousand ($85,000) Dollars to the Title Company (hereinafter
referred to as "Escrow Agent" or "Escrowee"). This sum, the sum specified in
Section 2.2.2 below, and all other sums paid by Buyer to the Escrow Agent
under this Agreement (hereinafter referred to as the "Deposit") shall be held
by Escrow Agent in a federally-insured, segregated money market account at an
institution to be designated by Buyer
2
until termination or consummation of this Agreement. Interest on the Deposit
shall be credited to Buyer at Closing, or paid to the party otherwise
entitled to the Deposit in the event of the termination of this Agreement
prior to Closing.
2.2.2 Additional Deposit. By delivery, within two (2)
business days next following the Inspection Period Expiration Date (as
hereinafter defined), of Buyer's good check in the amount of One Hundred
Seventy Thousand ($170,000) Dollars.
2.2.3 Cash Balance. The balance by delivery to the Seller
on the Closing Date, by wire transfer, the amount of Five Million Two Hundred
Forty-Five Thousand ($5,245,000) Dollars, subject to adjustment as herein
provided.
2.3 Allocation. The Purchase Price shall be allocated between
realty and personalty in the manner provided on Schedule 2.3 attached hereto.
3. TITLE. On the Closing Date, Seller shall convey to Buyer good and
marketable fee simple title to the Premises subject only to those rights of
way, easements, covenants restrictions, and objections to title (hereinafter
"Permitted Exceptions") listed on Exhibit "C" hereto, unless identified by
Buyer as "Title Objections" as hereinafter provided, and subject to the
rights of tenants listed on the rent roll attached hereto as Exhibit "D",
which title shall be insurable at regular rates by a reputable title
insurance company ("Title Company") under an ALTA 1970 Form B (Revised
10/17/70 and 3/30/84) title insurance policy ("Title Policy"), with the
endorsements and affirmative insurance specified in Section 12.2.1.10 below.
Seller and Buyer consent to use, at Buyer's option, Commonwealth Land Title
Insurance Company, Lawyers Title Insurance Corporation or Congress Title
Insurance Company as the Title Company.
4. COVENANTS. In addition to the covenants contained in the other
Sections of this Agreement, Seller covenants that it shall:
4.1 Maintenance. At all times prior to the Closing Date, maintain
the Property in good condition and repair, reasonable wear and tear and
casualty alone excepted, operate the Property with first class management
practices and leasing standards, and pay in the normal course of business
prior to Closing, all sums due for work, materials or service furnished or
otherwise incurred in the ownership and operation prior to Closing.
4.2 Alterations. Not make or permit to be made any alterations,
improvements or additions to the Property without the prior written consent
of Buyer, not to be unreasonably withheld or delayed , except 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.
4.3 Lease. Not enter into any new Lease, nor amend, modify or
terminate any existing Lease without Buyer's consent, not to be unreasonably
withheld or delayed.
4.4 Security Deposits. Not apply any Tenant's security deposit to
the discharge of such Tenant's obligations without Buyer's consent, not to be
unreasonably withheld or delayed.
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4.5 ▇▇▇▇ Tenants. Timely ▇▇▇▇ all Tenants for all rent billable
under Leases, and use its best efforts to collect any rent in arrears.
4.6 Notice to Buyer. Notify Buyer promptly of the occurrence of
any of the following:
(i) a fire or other casualty causing damage to the Property,
or any portion thereof;
(ii) receipt of notice of eminent domain proceedings or
condemnation of or affecting the Property, or any portion thereof;
(iii) receipt of notice from any governmental authority or
insurance underwriter relating to the condition, use or occupancy of the
Property, or any portion thereof, or any real property adjacent to any of the
Property, or setting forth any requirements with respect thereto;
(iv) receipt or delivery of any default or termination notice
or claim of offset or defense to the payment of rent from any tenant;
(v) receipt of any notice of default from the holder of any
lien or security interest in or encumbering the Property, or any portion
thereof;
(vi) a change in the occupancy of the leased portions of the
Property;
(vii) notice of any actual or threatened litigation against
Seller or affecting or relating to the Property, or any portion thereof; or
(ix) the commencement of any strike, lock-out, boycott or other
labor trouble affecting the Property, or any portion thereof.
4.7 Update Rent Roll. Provide Buyer with monthly updates of the
rent roll attached as Exhibit "D", each warranted by Seller to be true,
correct and complete, with a final update as of one day prior to the Closing
Date, also warranted by Seller to be true, correct and complete.
4.8 Comply with Leases. Perform all obligations of the landlord as
required by the Leases or by any order or direction of any governmental
authority having jurisdiction thereof, and to the extent required by law or
by any of the Leases, maintain all security deposits held under all Leases in
a segregated account, with interest thereon as required.
4.9 No New Agreements. Except for agreements which can be
terminated on not more than thirty (30) days' notice, not enter into any
other agreements which affect the Property or the transactions contemplated
by this Agreement, without the prior written consent of Buyer, not to be
unreasonably withheld or delayed; and not permit the creation of any
liability which shall bind Buyer or the Premises after Closing.
4
4.10 Tax Disputes. Notify Buyer of any tax assessment disputes
(pending or threatened) prior to Closing, and not agree to any changes in the
real estate tax assessment, nor settle, withdraw or otherwise compromise any
pending claims with respect to prior tax assessments, without Buyer's prior
written consent. 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.
The parties agree that from and after the execution and delivery of
this Agreement, Buyer, at its sole cost, shall have the right to appeal the
current tax assessment of each tax parcel comprising the Premises. Buyer
shall consult with Seller prior to filing tax appeal documents, and shall
afford Seller reasonable advance notice prior to any public hearings or
proceedings at which said appeal will be considered. Seller agrees that
Buyer may file such appeals in its name or in Seller's name, as may be
required, and Seller shall cooperate with Buyer in the prosecution of such
appeal; provided, however, that Buyer agrees to pay the reasonable legal fees
incurred by Seller, if any, in connection with furnishing such cooperation.
4.11 No Removal of Personalty. Not remove any non-consumable
Personal Property from the Premises without replacing it with similar
personal property, new and of equal or better quality.
5. REPRESENTATIONS AND WARRANTIES. In order to induce Buyer to enter
into this Agreement, Seller hereby represents and warrants to Buyer that the
following representations and warranties are true now and will be true at
Closing:
5.1 Seller's Authority For Binding Agreement. Seller is a duly
authorized and validly existing partnership formed under the laws of the
State of Delaware. Seller has full power, right and authority to own its
properties, to carry on its business as now conducted, and to enter into and
fulfill its obligations under this Agreement. Each of the persons executing
this Agreement on behalf of Seller is authorized to do so. This Agreement is
the valid and legally binding obligation of Seller, enforceable against
Seller in accordance with its terms. The execution and delivery of this
Agreement and compliance with its terms will not conflict with or result in
the breach of any law, judgement, order, writ, injunction, decree, rule or
regulation, or conflict with or result in the breach of any other agreement,
document or instrument to which Seller is a party or by which it or the
Property is bound or affected.
5.2 Employment on "At-Will" Basis. All persons and entities
presently employed by Seller in connection with the operation and maintenance
of the Premises are employed on an "at will" basis; are dischargeable upon
thirty (30) days notice, and, unless otherwise directed by Buyer, shall be
terminated by Seller as of Closing. There are no labor disputes pending, nor
to the best of Seller's knowledge, contemplated pertaining to the operation
or maintenance of the Premises, or any part thereof. Seller is not party to
any collective bargaining agreement or labor contract; nor has Seller agreed
to recognize any union or collective bargaining unit. Seller has not received
any requests from any party for recognition as a representative of employees
for collective bargaining purposes; nor has any union or other
5
collective bargaining unit been certified as representing any of Seller's
employees. Seller has complied in all respects with all applicable laws
relating to the employment of labor, including, without limitation, the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
coverage requirements of group health plans, and those relating to wages,
hours, collective bargaining, unemployment insurance, workers compensation,
equal employment opportunity, age and handicapped discrimination, immigration
control and the payment and withholding of taxes. Seller does not have any
defined benefit, defined contribution, deferred compensation, profit sharing
or retirement or severance arrangements, whether legally binding or not, in
which its personnel are eligible to participate; nor is Seller presently
paying any pension, deferred compensation or retirement allowance to any
person, and Seller has no obligations to continue or to fund such
compensation or other arrangements. Seller has no employment agreements,
either written or oral, with any person which would require Buyer to employ
any such person after the date hereof. Seller acknowledges that it is aware
that Buyer may, but shall have no obligation to, offer employment to any of
the current employees of Seller. Prior to Closing, Seller shall have paid
all of its employees all accrued compensation, including, without limitation,
vacation, sick pay or other similar benefits accrued through the date of
Closing.
5.3 Service Contracts. Exhibit "E" attached hereto is a complete
list of all existing service, equipment, supply and maintenance contracts
with respect to or affecting the Property (the "Service Contracts"), and each
of such Service Contracts is terminable at will without penalty or
cancellation fee upon no more than thirty (30) days notice but, unless
otherwise directed by Buyer, shall not be terminated by Seller as of Closing.
No written notice of default or breach by Seller in the terms of any of such
Service Contracts have been received by Seller. Seller has performed, and at
Closing shall have performed, all obligations which it has under said Service
Contracts.
Anything in this Section 5.3 to the contrary notwithstanding, Seller
represents and warrants that any and all existing management agreements and
exclusive brokerage or leasing agreements shall, unless otherwise directed by
Buyer in writing, or unless otherwise agreed by the parties in writing, be
terminated as of Closing, Seller having fully paid and discharged any and all
obligations accruing thereunder, and Buyer shall assume no liability under or
in respect of any such agreements.
5.4 Condemnation. There is no condemnation or eminent domain
proceeding pending with regard to any part of the Property, and to the best
of Seller's knowledge, no such proceedings are proposed.
5.5 No Lawsuits. There are no claims, lawsuits or proceedings
pending, or to the best of the Seller's knowledge, threatened against or
relating to Seller or the Property, or which could affect them, or either of
them, in any court or before any governmental agency, except for actions for
possession, damages and or rent, if any, against defaulted tenants as
disclosed in Exhibit "D".
5.6 No Tax Assessments. 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
6
heretofore been assessed, and, to Seller's knowledge, there are no special or
general assessments currently affecting or pending against the Property,
except as set forth in the Title Binder.
5.7 Leases. 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 Premises other than the leases (the "Leases") listed on the rent roll
attached hereto as Exhibit "D". Exhibit "D" identifies (i) each tenant of
the Premises, (ii) the date of that tenant's lease, (iii) the expiration date
of that tenant's lease, (iv) the annual and monthly minimum rental charge,
the tenant's share of building operating costs (including, without
limitation, taxes) and any and all costs, expenses and other charges payable
by the tenant under the Lease, (v) arrearages, if any, and whether the latest
rent due has been paid, (vi) the amount of prepaid rent, if any, (vii) a
description of the documents constituting said tenant's Lease, including all
amendments, modifications, and letter agreements; (viii) the amount or
description of any concessions, allowances, rebates, refunds, escrow or
security deposits made by the tenant under said tenant's Lease; (ix) any
options to renew, extend, purchase, cancel or terminate; (x) any defaults,
outstanding notices of defaults of any kind or nature whatsoever, claims of
defaults or similar claim under Leases, and (xi) such other information as
Buyer or Buyer's investors or lenders may reasonably request. 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 Premises 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 in the standard form of lease previously delivered to Buyer, 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 "D" are
the actual rents, income and charges being collected by Seller under the
Leases. Any tenant improvements which Seller is obligated 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 punchlist 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 or other person has any right or option to
acquire the Premises, or any part thereof, or to terminate any of the rights
currently appurtenant to the Premises, and there are no restrictive covenants
in any Leases. No tenant of the Premises 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 "D", no
security deposits by tenants have heretofore been returned or applied to
charges against the tenants.
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5.8 Compliance with Law.
(i) 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, and to the best of Seller's knowledge, no portion of
the Property lies within a flood hazard area, flood plain or wetland except
as may be disclosed on the survey, if any, supplied by Seller or obtained by
Buyer, or on the Record Plans for the Property; and there are no outstanding
notices of any violations issued by governmental authority having
jurisdiction over the Property. The zoning classification of the Property is
O-2. Not more than ten (10) days prior to Closing, Seller shall provide
Buyer with a certificate from the zoning code enforcement (or other
appropriate) officer of the City of New Castle County, dated no earlier than
thirty (30) days prior to Closing, confirming that no portion of the Property
is in violation of any applicable codes (provided that such confirmation
shall be within the province of such officer), and that the Property is in
compliance with applicable zoning restrictions.
(ii) To the best of Seller's knowledge, (1) 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 byphenyls
("PCBs"), urea formaldehyde foam insulation, radon, corrosive, irritant,
biologically infectious materials, petroleum product, garbage, refuse,
sludge, hazardous or waste materials, and (2) 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 Premises any clean-up or other monetary obligation. Seller has
not been identified in any litigation, administrative proceeding or
investigation 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, and no lien or
superlien has been recorded, filed or otherwise asserted against any real or
personal property of Seller for any clean-up costs or other responses costs
incurred in connection with any environmental contamination that is
attributable, in whole or in part, to Seller. Seller hereby indemnifies and
holds Buyer harmless 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
Premises of Hazardous Substances or Wastes first occurring during Seller's
period of ownership. 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; and
"Hazardous Wastes" means any hazardous waste, residential or household waste,
solid waste, or other waste as defined in applicable federal, state and local
laws. Seller has not received any summons, citation, directive, letter or
other communication, written or oral, from any governmental or
quasi-governmental authority concerning any intentional or unintentional
action or omission on Seller's part which (a) resulted
8
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. To the best of Seller's knowledge, neither
the Premises 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 Premises,
if any, and Seller has confirmed that 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.
5.9 Insurance. Exhibit "F" attached hereto contains a true and
correct description of all insurance policies affecting the Property and the
operation thereof. All of said insurance policies shall remain in full force
and effect until the completion of Closing hereunder. Seller has not
received any written notice from any insurance company board of fire
underwriters or rating organization (or other body exercising similar
functions) (i) claiming any defects or deficiencies which have not been
addressed and fully cured or corrected, or (ii) requesting the performance of
any repairs, alterations or other work which have not been performed, or
(iii) claiming any default which, if not corrected, would result in a
cancellation of insurance coverage.
5.10 Current Use Unrestricted. The current use of the Premises as
an office building with accessory off-street parking is free from any
restrictions which restrict or prevent the continued use of the Premises as
such.
5.11 No Brokers. No brokerage or leasing commission or other
compensation is now, or will at Closing be, due or payable to any person,
firm, corporation, or other entity with respect to or on account of any of
the Leases, or any extensions or renewals thereof.
5.12 Utilities. 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 Premises, 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.
5.13 Permits, Approvals and Certificates. All required certificates
of occupancy for the Property and for separately demised spaces at the
Property, and all other licenses, permits, authorizations and approvals
necessary for the operation of the Property, have been validly issued and are
in good standing and shall remain so upon consummation of Closing. All
charges and fees for such have been paid in full.
9
5.14 Good Title to Property. Seller holds good and marketable,
indefeasible fee simple title to the Property, free and clear of liens and
encumbrances, other than the lien of security interests securing any existing
mortgage loans which shall be paid and discharged at or before Closing, and
the Permitted Encumbrances.
5.15 All Taxes and Assessments Paid. Seller will have paid prior to
Closing, all taxes and assessments, including assessments payable in
installments, which are to become due and payable and/or a lien on the
Property, except for taxes for the current year which shall be prorated at
Closing.
5.16 FIRPTA. Seller is not a "foreign person" as such term is
defined in Section 1445(f)(3) of the Internal Revenue Code of 1954, as
amended (the "Code").
5.17 Operating Statement. Exhibit "G" is a correct and complete
list of all (a) actual expenses of the Property, including real estate taxes,
heat, electric, insurance, water, sewer, gas, fuel oil, trash removal,
maintenance and repairs for the three years immediately preceding the date of
this Agreement; and (b) actual income collected from rents and other charges
paid by tenants (but specifically excluding interest in reserves, tenant
security deposits held as such, and interest thereon) for the three (3) years
immediately preceding this Agreement.
5.18 Mechanic's Liens. 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, 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.
5.19 Inventory Schedule. The Schedule of Inventory contains a
correct and complete list of personal property owned by Seller and located at
or used in connection with the operation of the Property.
5.20 Charges, Fees and Assessments. Any and all applicable
charges, fees and assessments (including condominium fees, office building
association fees, and the like, to the extent applicable) and any and all
other fees, assessments, charges and 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.
5.21 Rights to Purchase. There are no outstanding agreements,
options, rights of first refusal, conditional sales agreements or other
agreements or arrangements, whether oral or written, regarding the purchase
and sale of the Property, or which otherwise affect any portion of or all the
Property.
5.22 No Outstanding Obligations. 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
10
they became due and payable and shall continue to be so paid from the date
hereof until the Closing Date. No debts, liabilities, claims, or obligations
(whether known or unknown, accrued, absolute, contingent, or otherwise) shall
be outstanding as of the Closing Date.
5.23 Access. All curb cut and street opening permits or licenses
required for vehicular access to and from the Property to any adjoining
public street have been obtained and paid for by Seller and shall be in full
force and effect at the Closing.
5.24 Rollback Taxes. The Property is not, and to Seller's
knowledge has not been, subject to any roll-back or agricultural taxation or
other tax abatement program.
5.25 Development Agreements. Seller is in compliance with and
has fully paid and discharged all obligations arising under any and all
development, tri-party and like agreements, and any and all other agreements
with county, municipal and other governmental and quasi-governmental agencies
and authorities respecting the ownership, development and operation of the
Property and all portions thereof.
5.26 Correct Copies of Documents. Where copies of any documents
have been delivered by Seller to Buyer, whether prior to or pursuant to this
Agreement, such copies: (i) are exact copies of the originals of said
documents, as executed and delivered by all of the parties thereto; (ii) to
the best of Seller's knowledge, constitute, in each case, the entire
agreement between the parties thereto with respect to the subject matter
thereof, and the original instruments in the form delivered to Buyer, are now
in full force and effect, and valid and enforceable in accordance with their
respective terms, and no party thereto is in default, and no claim of default
by any party has been made or is now pending and there does not now exist any
default which, after either the giving of notice or the passing of time, or
both, will or may constitute a default, or would excuse performance by any
party thereto; and (iii) have not been changed or amended except for
amendments, if any, specifically referred to therein.
6. POSSESSION. Possession of the Premises is to be given to Buyer,
subject to the right of tenants under the Leases on the Closing Date, by
delivery of the Deed, and all keys, combinations and security codes at
Closing.
7. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY.
7.1 Title Binder. On or before five (5) business days from the
execution of this Agreement, Seller shall have delivered to Buyer a copy of
its title commitment or policy for the Property (complete with copies of all
exceptions to title), and within ten (10) business days after the receipt of
same, Buyer shall secure a current title commitment (the "Title Binder") from
the Title Company, and shall have until the Inspection Period Expiration Date
(as hereinafter defined) to examine the condition of title, including the
terms and provisions of all items and documents referred to in the Title
Binder, and all information regarding title as disclosed on the Survey
(hereinafter defined), and to approve or disapprove the same. If Buyer shall
disapprove the condition of title, such disapproval shall be set forth in a
notice given to Seller (the "Disapproval Notice") identifying the condition
of title to the Property or any of the terms, provisions or contents of said
items, documents or Survey which are disapproved by Buyer (the "Title
11
Objections"). Subject to the provisions of the succeeding portion of this
Section 7.1, Seller shall have until the date which is ten (10) days after
the date of the Disapproval Notice (the "Title Cure Expiration Date") in
which to cure or eliminate all items which Buyer disapproves in the
Disapproval Notice, and to furnish evidence satisfactory to Buyer and the
Title Company that all such items have been cured or eliminated or that
arrangements have been made with the Title Company and any parties in
interest to cure or eliminate the same at or prior to the Closing. If Seller
fails to remove any Title Objection in accordance with the provisions of the
immediately preceding sentence, Buyer, nevertheless, may elect (at or prior
to the Closing) to consummate the transaction provided for in this Agreement
subject to any such Title Objection(s) as may exist as of the Closing with a
credit against the Purchase Price equal to the sum necessary to remove any
lien of a fixed or ascertainable amount . If Buyer shall not so elect, Buyer
may terminate this Agreement by notice in writing to Seller, whereupon the
Deposit shall be immediately refunded to Buyer, and this Agreement shall be
null and void, and the parties hereto shall be relieved of all further
obligations and liability under this Agreement.
7.2 Survey. Within ten (10) days after the date of this Agreement,
at Buyer's cost, Seller shall deliver to Buyer a current survey of Property
(the "Survey"), prepared by a duly licensed land surveyor acceptable to
Buyer. The Survey shall be currently dated, shall show the location on the
Property of all buildings and improvements, building and set-back lines,
easements, rights-of-way, encroachments, elevations between public roads
providing access to the Property, and the boundary of the Property, and other
such matters affecting the Property whether physically apparent from the
ground, of record in public offices, or otherwise, and shall contain a legal
description of the boundaries of the Premises by metes and bounds which shall
include a reference to the recorded plat, if any. The surveyor shall certify
to Buyer and to the Title Company and to any lender making a loan to Buyer
secured by the Property that the Survey is correct and was made on the
ground; and that there are no visible discrepancies, conflicts,
encroachments, overlapping of improvements, violations of set-back lines,
easements, rights-of-way or other such matters affecting the Property except
as are shown on the Survey, and that the Survey conforms to all ACTA/ACSM and
Pennsylvania Land Title Association standards and requirements for a Class A
Survey. Any and all recorded matters shown on said Survey shall be legibly
identified by appropriate volume and page recording references with dates of
recording noted. Buyer shall have until the Inspection Period Expiration
Date to approve or disapprove the material contained thereon. If Buyer shall
disapprove such Survey, such disapproval shall be set forth in a Disapproval
Notice as hereinabove provided in Section 7.1, and the provisions of Section
7.1 with respect to Disapproval Notices shall apply.
7.3 Physical and Financial Inspection. For a period (the
"Inspection Period") commencing on the second (2nd) business day next
following the date upon which Buyer shall receive from Seller a
fully-executed counterpart of this Agreement, and expiring twenty (20) days
thereafter (such date is herein referred to as the "Inspection Period
Expiration Date"), Buyer shall have the right to have performed a physical
and mechanical inspection, measurement and audit of the Property and an
inspection of all books and records and financial information pertaining
thereto, and Seller shall cooperate with Buyer and shall furnish to Buyer
such information, materials and documents as Buyer may reasonably request and
shall have its accountant or internal controller available throughout such
period to assist in Buyer's inspection and review. The inspection, audit and
measurement of the Property's operation, condition and maintenance
12
shall include, without limitation, such environmental and engineering
inspections, reviews and assessments that Buyer deems appropriate. If Buyer
fails to close hereunder for any reason other than Seller's breach or
default, Buyer shall, to the maximum extent practicable, restore the Property
to the condition existing immediately before such tests and assessments. In
the event Seller shall fail to deliver or make available any item or
information material to Buyer's review of the Property and required to be
delivered or made available pursuant to the terms of this Section within five
(5) business days next following the date upon which Buyer shall receive from
Seller a fully-executed counterpart of this Agreement, then at Buyer's
written election, the Inspection Period Expiration Date (and the Closing
Date) shall be extended by one day for each day that the delivery or
availability of such item is delayed. If Buyer, at Buyer's sole and absolute
discretion, shall find such inspection(s) to be unsatisfactory for any reason
whatsoever, Buyer shall have the right, at its option, to terminate this
Agreement on or before the Inspection Period Expiration Date, and upon such
termination, the Deposit shall be immediately refunded to the Buyer, and
thereupon the parties hereto shall have no further liabilities one to the
other with respect to the subject matter of this Agreement. Buyer agrees
that it shall not unreasonably interfere with tenants in performing its
inspection. In connection with such inspection, and without limiting the
generality of Seller's obligations hereunder, Seller agrees to deliver to
Buyer, within five (5) days:
7.3.1 Leases. Copies of all Leases for the Property as of
the date hereof, certified by Seller to be true, complete and correct, and
lease abstracts respecting each Lease;
7.3.2 Contracts, Licenses, Permits. Copies of the Contract
Documents, the Licenses, all building permits, certificates of occupancy,
insurance policies applicable to the Property and any other documents
evidencing rights described in Section 1.2 hereof;
7.3.3 Utility Costs. A break-down of utility costs for the
period the Property has been owned by Seller;
7.3.4 Inventory. Invoices, bills of sale, and other
evidence supporting the Schedule of Inventory;
7.3.5 Three Years' Maintenance Expenses. Information
concerning maintenance costs of the Property for the past three years, or
lesser period, if owned less than three years by the Seller;
7.3.6 Three Years' Tax Bills. A copy of tax bills (i) for
the current year, and (ii) if available, for the preceding two years;
7.3.7 Three Years' Operating Statements. Statements of
operation of the Property for the past three years, or lesser period, if
owned less than three years by Seller, and like statements for the balance of
such three year period during which operations were by a prior owner, if
available, and if not available, any statements as were received from such
prior owner, and such other and further information as Buyer shall reasonably
require in order to obtain a certified audit of the operation of the Property
prepared in accordance with generally accepted accounting principles
consistently applied, by an independent certified public accounting firm
selected and paid for by Buyer;
13
7.3.8 Schedule of Violations. A schedule setting forth all
violations of any law, ordinance, regulation, rule or requirement of any
governmental body having jurisdiction, whether existing or prospective, of
which Seller has received written notice, issued or noted by any governmental
body during the past three years, and copies of any notices, terminations or
correspondence relating thereto;
7.3.9 Schedule of Notices. A schedule of any written
demands, requests, requirements or recommendations regarding the operation,
maintenance, repair or replacement of the Property or any portion thereof, of
which Seller has received notice during the past three years, from the holder
of any mortgage or deed of trust or any insurance company or any board of
fire underwriters or real estate associations or like body, and copies of all
correspondence relating thereto;
7.3.10 Schedule of Replacements and Repairs. All documentation
in Seller's possession regarding replacements and repairs to the Property;
7.3.11 Zoning, Site Plan, Subdivision Plan or Plat. All
conditional and permanent zoning, site plan, subdivision, building, housing,
safety, fire and health approvals, including, without limitation, the local
governmental applications, resolutions and approvals supporting the same;
7.3.12 Intentionally Omitted.
7.3.13 Takings or Changes. Copies of all written notices to
Seller of proposed or threatened takings or changes with respect to the
Property or major access roads within a reasonable radius which would affect
the access to the Property, or any portion thereof, by prospective occupants;
7.3.14 Tax Assessments, Appeals and Increases. Copies of all
written notices to Seller of all filed, proposed or threatened tax assessment
appeals or tax assessment increases related to the Premises;
7.3.15 Litigation. Copies of all pending and written notices
to Seller of threatened litigation, including litigation involving tenants,
affecting the Property or this transaction;
7.3.16 Insurance Policies. Copies of all insurance policies
of Seller related to the Property;
7.3.17 Schedule of Employees. A schedule of all current
employees of the Property, setting forth the name, residence, salary, hourly
wages, benefit package, bonuses, vacation and sick pay and other
prerequisites of their employment; and
7.3.18 Title Information. Seller's most recently dated title
report or title commitment respecting the Premises.
14
7.4 Seller's Failure to Deliver. If Seller shall have failed to
deliver to Buyer all material documents required to be delivered under
Section 7.3 hereof, Buyer may, at its option, at any time on or after such
date, but prior to the curing of such failure by Seller, give Seller a five
(5) day written notice specifying such default, and if Seller fails to cure
such default within such five (5) day period, Buyer may terminate this
Agreement, receive the return of the Deposit and pursue any other remedy
available to it pursuant to the provisions hereof.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer and Seller set forth herein shall survive Closing and
delivery of the deed for the applicable period of the statute of limitations
pertaining thereto.
9. FIRE OR OTHER CASUALTY.
9.1 Maintain Insurance. Seller shall maintain in effect until the
Closing Date the insurance policies (or like policies) now in effect with
respect to the Premises and Personal Property as set forth in Exhibit "F".
9.2 Minimal Damage. If prior to the Closing Date any portion of
the Property is damaged or destroyed by fire or other casualty, and the cost
of repair or restoration thereof shall be $50,000 or less (as established by
good faith estimates obtained by Buyer), this Agreement shall remain in force.
9.3 Substantial Damage. If prior to the Closing Date any portion
of the Property is damaged or destroyed by fire or other casualty, and the
cost of repair or restoration thereof shall be more than $50,000 (as
established by good faith estimates obtained by Buyer), Buyer may within ten
(10) days after receipt of notice ("Damage Notice") of said damage or
destruction, terminate this Agreement by giving written notice thereof to
Seller ("Buyer's Notice of Election"), and if this Agreement is so
terminated, then the Deposit shall be immediately refunded to Buyer, and
thereafter neither party shall have any further liability hereunder
thereafter. If Buyer does not so terminate this Agreement, it shall remain in
full force and effect, and the provisions of Section 9.4 below shall apply.
9.4 Closing After Substantial Damage. So long as this Agreement
shall remain in force under Section 9.2 or 9.3, then either (a) (i) all
proceeds of insurance collected prior to Closing, plus the amount of
deductible under Seller's insurance policy, shall be adjusted subject to
Buyer's approval and participation in any adjustment, and shall be credited
to Buyer against the Purchase Price payable by Buyer at Closing, and (ii) all
unpaid claims and rights in connection with losses shall be assigned to Buyer
at Closing, or, (b) at Buyer's option, Seller shall (i) restore the Property
as soon as reasonably practicable to its condition immediately preceding the
casualty, (ii) include Buyer, and obtain Buyer's approval to, any adjustments
made by Seller.
9.5 Rent Insurance. All rental loss insurance and the proceeds
thereof allocable to any period subsequent to Closing shall be paid or
assigned to Buyer at Closing.
10. CONDEMNATION. If, prior to the Closing Date, all or any portion of
the Premises is taken by eminent domain or a notice of any eminent domain
proceedings with respect
15
to the Premises or any part thereof is received by the Seller, then Seller
shall within five (5) days thereafter give notice thereof to Buyer and Buyer
shall have the option to (a) complete the purchase hereunder or (b) if such
taking, in Buyer's sole and absolute discretion, materially affects the
Premises or its current economic viability, terminate this Agreement, in
which event the Deposit shall be immediately refunded to Buyer, and this
Agreement shall be null and void. Buyer shall deliver written notice of its
election to the Seller within ten (10) days after the date upon which the
Buyer receives written notice of such eminent domain proceedings. If notice
of condemnation is received by Buyer and it fails to deliver said written
notice of its election within said time period, such failure shall constitute
a waiver by Buyer of its right to terminate this Agreement. If this
Agreement is not so terminated, Buyer shall be entitled to all awards or
damages by reason of any exercise of the power of eminent domain or
condemnation with respect to or for the taking of the Premises or any portion
thereof, and until such time as closing has occurred, or this Agreement
terminates. Any negotiation for, or agreement to, and all contests of any
offers and awards relating to eminent domain proceedings shall be conducted
with the joint approval and consent of the Seller and the Buyer.
11. Expense Allocations.
11.1 Seller shall pay for one-half of all applicable realty transfer
taxes related to the execution, delivery and recording of the Deed, ▇▇▇▇ of
Sale, and other Closing Documents, and all related recording charges.
11.2 Buyer shall pay for one-half of all applicable realty transfer
taxes, for Buyer's title examination, the survey and for Buyer's title
examination and premiums.
11.3 Buyer and Seller shall be responsible for paying their own
attorney's fees in connection with this transaction.
12. CLOSING.
12.1 Time and Date and Place. The closing ("Closing") on the sale
of the Property (herein referred to as the "Closing Date") shall take place
at a time specified by Buyer in writing to Seller at least five (5) days
prior to the specified Closing Date, but in any event no later than September
19, 1997, at the offices of Pepper, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, 3000 Two ▇▇▇▇▇
Square, Eighteenth & Arch Streets, Philadelphia, PA, commencing at 10:00 a.m.
12.2 Documents. At Closing, the parties indicated shall
simultaneously execute and deliver the following:
12.2.1 Seller's Documents and Other Items. Seller shall
execute and deliver or cause to be executed and delivered to Buyer in proper
form for recording:
12.2.1.1 Deed. A special warranty deed prepared by
Buyer's counsel in form acceptable to Seller (the "Deed"), conveying the
Premises to Buyer, duly executed by Seller for recording. The Deed
description shall be based upon the metes and bounds description attached as
Exhibit "A", unless Buyer requests that Seller convey the Premises by the
16
metes and bounds description shown on the new ALTA/ACSM survey, if any,
obtained by Buyer, in which event the Premises shall be so conveyed.
12.2.1.2 ▇▇▇▇ of Sale. A warranty ▇▇▇▇ of sale prepared
by Buyer's counsel in form acceptable to Seller, assigning, conveying and
transferring to Buyer, all of the Personal Property.
12.2.1.3 Original Leases. All original Leases, tenant
files, tenant correspondence and repair records, certified by Seller as being
true, correct and complete.
12.2.1.4 Original Licenses, Contract Documents and Other
Personal Property. All original Licenses, Contract Documents, and other
Personal Property described in Section 1.2 of this Agreement, certified by
Seller as being true, correct and complete.
12.2.1.5 Assignment of Leases. An assignment and
assumption agreement with reciprocal indemnities, prepared by Buyer's counsel
in form acceptable to Seller (the "Assignment"), duly executed by Seller and
Buyer, assigning, conveying and transferring to Buyer the Leases.
12.2.1.6 Assignment of Licenses, Contract Documents and
Other Personal Property. An assignment agreement prepared by Buyer's
counsel, in form acceptable to Seller, assigning, conveying and transferring
to Buyer the Licenses, Contracts Documents and Other Personal Property,
including, specifically, the Names.
12.2.1.7 FIRPTA Certificates. All certificate(s)
required under Section 1445 of the Code.
12.2.1.8 Tenant Letter. Letters to each tenant advising
of the change in ownership and directing the payment of rent to such party as
the Buyer shall designate, said letter to be in form acceptable to Buyer.
12.2.1.9 Estoppel Certificate from Municipality. All
certificate(s) required by Section 5.8 hereof, and any other certificates
required by New Castle County, or the State of Delaware as a condition of the
conveyance of the Premises or the recording of the Deed.
12.2.1.10 Title Insurance Certificates. Such affidavits
of title or other certifications as shall be required by the Title Company to
insure Buyer's title to the Premises 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 Premises 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 Premises (f)
removing any exceptions for matters
17
which an accurate survey would disclose, and (g) providing affirmative
insurance with respect to such other matters as Buyer shall reasonably
specify.
12.2.1.11 Updated Rent Roll. An updated schedule of
Tenant Leases, containing all information required to be set forth in Exhibit
"D", which schedule is correct and complete as of the date of closing.
12.2.1.12 Seller Certificate. A written certification
confirming that as of Closing no representation or warranty of Seller
contained in this Agreement, nor any document or certificate delivered to
Buyer pursuant to this Agreement or in connection with the transaction
contemplated hereby, contains any untrue statement of a material fact or
knowingly omits to state a material fact necessary to make any representation
or warranty contained herein misleading.
12.2.1.13 Organization Certifications. Confirmation of
the good standing and existence of Seller and the due authority of those
executing for them, including, without limitation, the following documents
issued no earlier than 30 days prior to Closing: (a) good standing
certificate in state of organization and in the State in which the Premises
are located, (b) articles of incorporation, partnership agreement or other
formation instrument certified by the secretary of state of the state of
incorporation, (c) a certificate from the secretary of the corporation or
managing general partner of the partnership confirming the incumbency of the
signatories and the current force and effect of the resolution authorizing
their execution of the documents required under this Agreement.
12.2.1.14 Keys. All keys, combinations and security codes
for all locks and security devices on the Property;
12.2.1.15 Tax Bills. Current tax bills and, if available,
tax bills for each of the years of Seller's ownership of the Property;
12.2.1.16 Tax Reduction Rights. An instrument assigning
to Buyer any claims for the reduction of real or personal property taxes
assessed against any portion of the Property for the fiscal year in which the
Closing takes place; any refund for such year shall be prorated when received;
12.2.1.17 Tenant Estoppels. Seller shall obtain and
deliver to Buyer, at least five (5) business days prior to Closing, estoppel
certificates in substantially the form attached hereto as Exhibit "H" from
The Traveler's Bank, KCI Technologies, Inc. and Blaze Systems Corporation
(the "Estoppels"). An estoppel certificate which contains material
discrepancies, or any statements inconsistent with representations and
warranties of Seller contained in this Agreement and for which Seller does
not provide Buyer with an explanation in all respects satisfactory to Buyer,
shall not be included when determining the sufficiency of the Estoppels to
meet the required percentage set forth above.
12.2.1.18 Leasing and Management Agreement. A
leasing and management agreement prepared by Buyer's counsel in form
acceptable to Seller (the "Leasing
18
and Management Agreement") duly executed by Buyer and Commonwealth Management
Group, Ltd., pursuant to which Commonwealth Management Group, Ltd. shall
lease and manage the Property on the terms and conditions more fully set
forth therein.
12.2.2 Buyer's Documents. Buyer shall deliver or cause to
be delivered to Seller:
12.2.2.1 The amounts required to be paid to Seller
pursuant to this Agreement;
12.2.2.2 Confirmation of the existence and subsistence of
Buyer, and the authority of those executing for Buyer, including, without
limitation, the following documents issued no earlier than thirty (30) days
prior to Closing: (a) good standing certificate in State of Maryland, (b)
Buyer's Amendment and Restatement of Declaration of Trust filed on August 27,
1996, as amended, (c) a certificate from any officer of Buyer confirming the
incumbency of the signatories and the current force and effect of the
resolution authorizing their execution of the documents required under this
Agreement.
12.2.2.3 Leasing and Management Agreement. Buyer shall
execute and deliver the Leasing and Management Agreement, as defined above,
pursuant to which Commonwealth Management Group, Ltd. shall lease and manage
the Property on the terms and conditions more fully set forth therein.
12.2.3 Title Insurance. As a condition to Buyer's
obligations at Closing, Title Company shall furnish Buyer at Closing with the
Title Policy, in the form approved by Buyer pursuant to Section 3, in the
full amount of the Purchase Price, wherein the Title Company shall insure fee
simple title to the Property in Buyer or its designee as of the Closing Date
containing no exceptions to title other than those which have been approved
by Buyer in writing pursuant to Section 3 hereof and providing the title
endorsements specified in Section 12.2.1.10 above.
12.2.4 Necessary Documents. Buyer and Seller shall execute
and deliver such other documents and instruments as may be reasonably
necessary to complete the transaction contemplated by this Agreement.
13. DEFAULT; REMEDIES
13.1 In the event that any of Seller's representations or warranties
contained in this Agreement are materially or prejudicially untrue or if
Seller shall have failed to have performed any of the covenants and/or
agreements contained in this Agreement which are to be performed by Seller,
on or before the date set forth in this Agreement for the performance
thereof, or if any of the conditions precedent to Buyer's obligation to
consummate the transaction contemplated by this Agreement shall have failed
to occur, Buyer may, at its option, rescind this Agreement by giving written
notice of such rescission to Seller and Seller shall immediately thereafter
return the Deposit, and thereupon, subject to the provisions of Section 13.3
below, the parties shall have no further liability to each other hereunder.
In the alternative, but without
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limitnig Buyer's right upon any default by Seller hereunder to receive the
prompt return of the Deposit, Buyer may seek to enforce specific performance
of this Agreement.
13.2 Buyer recognizes that the Property will be removed by Seller
from the market during the existence of this Agreement and that if this
purchase and sale is not consummated because of Buyer's default Seller shall
be entitled to compensation for such detriment. Seller and Buyer acknowledge
that it is extremely difficult and impracticable ascertain the extent of the
detriment, and to avoid this problem, Seller and Buyer agree that if the
purchase and sale contemplated in this Agreement is not consummated because
of Buyer's default under this Agreement, Seller shall be entitled to retain
the Deposit as liquidated damages. The parties agree that the sum stated
above as liquidated damages shall be in lieu of any other relief to which
Seller might otherwise be entitled, Seller hereby specifically waiving any
and all rights which it may have to damages or specific performance as a
result of Buyer's default under this Agreement.
13.3 Buyer's Out-of-Pocket Costs. In the event of Seller's
breach or default hereunder which results in Buyer's termination of this
Agreement, or in the event that Seller shall fail to perform any term,
covenant or agreement, or satisfy any condition herein stipulated (including,
without limitation, a failure of title), then, in any such event, upon
termination by Buyer hereunder, in addition to receiving the immediate return
of the Deposit, anything in the Agreement contained to the contrary
notwithstanding, Buyer shall also receive from Seller, upon demand, Buyer's
actual, documented out-of-pocket costs and expenses associated with this
Agreement and Buyer's anticipated acquisition of the Property including,
without limitation, Buyer's reasonable counsel fees and costs, title
expenses, survey costs, and other costs and expenses associated with Buyer's
due diligence, including, without limitation, legal, financial and accounting
due diligence, Buyer's structural inspection of the Property and Buyer's
environmental assessment of the Property (collectively, "Transaction Costs").
The foregoing list is not intended to be exclusive, but representative of
the costs and expenses that the parties anticipate that Buyer will incur in
anticipation of this transaction. Seller's maximum reimbursement liability
under this Section 13.3 shall not exceed Twenty Five Thousand ($25,000)
Dollars.
14. 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:
14.1 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).
14.2 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.
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14.3 Buyer's Satisfaction with Inspection. Buyer shall have
notified Seller of Buyer's satisfaction with the review and inspection
performed under Section 7 of this Agreement, or shall fail to notify Seller on
or before the Inspection Period Expiration Date, of Buyer's dissatisfaction with
the results of such review and inspection.
14.4 Trustee Approval. This Agreement and the transactions
contemplated hereby shall have received formal approval of Buyer's Board of
Trustees at a meeting duly called during the Inspection Period to consider same.
14.5 Estoppels. Seller shall have delivered to Buyer the required
Estoppels.
15. PRORATIONS.
15.1 Operating Expenses. The following items shall be prorated at
Closing, as of close of business of the day immediately preceding Closing
"Adjustment Date":
15.1.1 Rents. All rent, additional rent, percentage rent (if
any) and all other charges collected under the Leases shall be apportioned on
the Closing Date pro rata on a per diem basis, as if all tenants were current
in the payment of rent for the month during which the Closing shall occur. If
any tenant is in arrears in the payment of rent or additional rent on the
Closing Date, rents received from such within 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. Buyer
shall use good faith efforts to collect any rent owed Seller hereunder, but
shall not threaten, and shall be under no obligation to institute, litigation
to collect the same. Except as herein provided, Buyer shall have no 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
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.
15.1.2 Taxes. Real estate and personal property taxes, if any,
on the basis of the fiscal year for which assessed. If the Closing shall occur
before the tax rate or assessment is fixed, the apportionment of such real
estate and personal property taxes at the Closing shall be upon the basis of
the tax rate for the next preceding year applied to the latest assessed
valuation. Final adjustment will be made upon the actual tax amount, when
determined.
15.1.3 Deposits. Tax and utility company deposits, if any,
shall be assigned to Buyer.
15.1.4 Water and Sewer Charges. Water and sewer charges and
fire protection and inspection services based upon meter readings to be obtained
by Seller effective as of the Adjustment Date, or if not so obtainable, a date
not more than ten (10) days prior to the Adjustment Date, and the unfixed meter
charges based thereon for the intervening period shall be apportioned on the
basis of such last reading. Upon the taking of a subsequent actual reading,
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such apportionment shall be readjusted and Seller or Buyer, as the case may be,
will promptly deliver to the other the amount determined to be so due upon such
readjustment. If Seller is unable to furnish such prior reading, any reading
subsequent to the Closing will be apportioned on a per diem basis from the date
of such reading immediately prior thereto and Seller shall pay the proportionate
charges due up to the date of Closing.
15.1.5 Assigned Contracts. Amounts paid or payable in respect
of any service and maintenance contracts assigned to Buyer in accordance
herewith.
15.1.6 Electricity, gas, steam and fuel. Electricity, gas and
steam and fuel oil, if any, based on meter readings or a fuel company letter
showing measurement on the day immediately preceding Closing, and valued at
current prices.
15.1.7 Security Deposits. Buyer shall receive a check from
Seller for the full amount of any security deposits, with accrued interest, or
a credit against the Purchase Price in said amount.
15.2 Custom and Practice. Except as set forth in this Agreement, the
customs of the State and County in which the Premises are located shall govern
prorations.
15.3 Future Installments of Taxes. If at Closing, the Property or any
part thereof shall be or shall have been affected by an assessment or
assessments which are or may become payable in installments, then for purposes
of this Agreement, all unpaid installments of any such assessment, including
those which are to become due and payable and to be liens upon the Property
shall be paid and discharged by Seller at Closing.
15.4 Application of Prorations. If such prorations result in a payment
due Buyer, the cash payable at Closing shall be reduced by such sum. If such
prorations result in a payment due Seller, the same shall be paid by uncertified
check at Closing.
15.5 Schedule of Prorations. The parties shall endeavor to jointly
prepare a schedule of prorations for the Property no less than five (5) days
prior to Closing.
15.6 Escalations. At least five (5) days prior to Closing, Seller
shall deliver to Buyer a reasonably detailed statement setting forth, as of the
date of Closing (a) the sums collected from tenants under Leases on account of
or in reimbursement of landlord's operating expenses and/or any other payments
made by tenants to landlord on account of sums which are attributable to
expenses paid or incurred by the landlord ("escalation payments") for the
current fiscal year under each such Lease (whether a lease year or calendar or
other year); and (b) the amounts paid or incurred by Seller during the
appropriate fiscal year as aforesaid which Seller expects will be paid or
reimbursed by escalation payments made by tenants.
If Seller shall have collected escalation payments for periods prior to
Closing, whether pursuant to estimates which were in excess of the amounts
actually required to be paid, or otherwise, there shall be an adjustment and
credit to Buyer at Closing for such excess. If the charges were not billed or
have not been collected as of the date of Closing, then, when the
22
amount of such escalation payments is determined and collected by Buyer from
tenants, Buyer will, upon collection, remit to Seller the portion thereof to
which Seller is entitled to the date of Closing. Buyer shall have the right,
in good faith, to settle or adjust any amount of such escalation payments due
from any tenant without Seller's prior consent, provided that such settlement
or adjustment applies ratably to all amounts of escalation payments due from
such tenant.
15.7 Readjustments. The parties shall correct any errors in
prorations as soon after the Closing as amounts are finally determined.
15.8 Indemnification for Seller's Tax Obligations. Seller shall
indemnify, defend and save and hold harmless Buyer from any loss, cost,
liability or expense (including, without limitation, reasonable counsel fees
and court costs) incurred, paid or suffered by Buyer arising out of or by
reason of any claim made by any state taxing or employment authorities
asserting or indicating any claims or possible claims for unpaid taxes,
penalties, interest or court costs related thereto of Seller or any related
party, due the State of Delaware or its political subdivisions. The
provisions of this Section 15.8 shall specifically survive Closing hereunder.
15.9 Survival. The provisions of this Section 15 shall expressly
survive Closing hereunder.
16. BROKERS. Each party hereby represents and warrants to the other that
it has not employed or retained any broker or finder in connection with the
transactions contemplated by this Agreement other than CB Commercial, and that
other than CB Commercial, neither has had any dealings with any other person or
party which may entitle that person or party to a fee or commission. Each party
shall indemnify the other of and from any claims for commissions by any person
or party claiming such commission by or through the indemnifying party.
17. ESCROW AGENT. The parties hereto have requested that the Deposit be
held in escrow by the Escrow Agent to be applied at the Closing or prior
thereto in accordance with this Agreement. The Escrow Agent will deliver the
Deposit to Seller or to Buyer, as the case may be under the following
conditions:
17.1 Payment to Seller. To Seller on the Closing Date upon the
consummation of Closing;
17.2 Notice of Dispute. If either Seller or Buyer believes that it is
entitled to the Deposit or any part thereof, it shall make written demand
therefor upon the Escrow Agent. The Escrow Agent shall promptly mail a copy
thereof to the other party in the manner specified in Section 18.1 below. The
other party shall have the right to object to the delivery of the Deposit, by
filing written notice of such objections with the Escrow Agent at any time
within ten (10) days after the mailing of such copy to it in the manner
specified in Section 18.1 below, but not thereafter. Such notice shall set
forth the basis for objection to the delivery of the Deposit. Upon receipt
of such notice, the Escrow Agent shall promptly deliver a copy thereof to the
party who filed the written demand.
23
17.3 Escrow Subject to Dispute. In the event the Escrow Agent shall
have received the notice of objection provided for in 17.2 above of this
Section, in the manner and within the time therein prescribed, the Escrow Agent
shall continue to hold the Deposit until (i) the Escrow Agent receives written
notice from both Seller and Buyer directing the disbursement of the Deposit in
which case the Escrow Agent shall then disburse said Deposit in accordance with
said direction, or (ii) litigation arises between Seller and Buyer, in which
event the Escrow Agent shall deposit the Deposit with the Clerk of the Court in
which said litigation is pending, or (iii) the Escrow Agent takes such
affirmative steps as the Escrow Agent may, at the Escrow Agent's option elect in
order to terminate the Escrow Agent's duties including, but not limited to,
deposit in Court and an action for interpleader.
17.4 Escrow Agent's Rights and Liabilities. Escrow Agent shall not be
required to determine questions of fact or law, and may act upon any instrument
or other writing believed by it in good faith to be genuine and to be signed and
presented by the proper person, and shall not be liable in connection with the
performance of any duties imposed upon Escrow Agent by the provisions of this
Agreement, except for Escrow Agent's own willful default or gross negligence.
Escrow Agent shall have no duties or responsibilities except those set forth
herein. Escrow Agent shall not be bound by any modification of this Agreement,
unless the same is in writing and signed by Buyer and Seller, and, if Escrow
Agent's duties hereunder are affected, unless Escrow Agent shall have given
prior written consent thereto. In the event that Escrow Agent shall be
uncertain as to Escrow Agent's duties or rights hereunder, or shall receive
instructions from Buyer or Seller which, in Escrow Agent's opinion, are in
conflict with any of the provisions hereof, Escrow Agent shall be entitled to
hold and apply the Deposit, pursuant to Section 17.3, and may decline to take
any other action.
18. GENERAL PROVISIONS.
18.1 Notices. All notices or other communications required or
permitted to be given under the terms of this Agreement shall be in writing,
and shall be deemed effective when (i) sent by nationally-recognized overnight
courier, (ii) facsimile with original following by regular mail, or
(iii) deposited in the United States mail and sent by certified mail, postage
prepaid, addressed as follows:
18.1.1 If to Buyer, addressed to:
BRANDYWINE Realty Trust
Newtown Square Corporate Campus
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President and Chief Executive Officer
24
with a copy in each instance to:
▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Pepper, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
3000 Two ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
18.1.2 If to Seller, addressed to:
Gender Road Joint Venture
c/o The Commonwealth Group
▇▇ ▇▇▇▇'▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
with a copy in each instance to:
▇▇▇▇▇▇▇ ▇. ▇▇▇, Esquire
Saul, Ewing, ▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
18.1.3 If to Escrow Agent, addressed to:
Commonwealth Land Title Insurance Company
National Title Service
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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.
18.2 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
18.3 Entire Agreement. All Exhibits attached to this Agreement are
incorporated herein and made a part hereof. [The parties covenant and agree
to use their best efforts to develop within five (5) business days of the
date hereof, and attach to this Agreement, the exhibits required hereunder.
If such exhibits are not agreed upon within ten (10) business days of the
date hereof, Buyer may terminate this Agreement and receive back the
Deposit.] This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior negotiations, understandings and agreements
of any nature whatsoever with respect to the subject
25
matter hereof. This Agreement may not be modified or amended other than by
an agreement in writing. The captions included in this Agreement are for
convenience only and in no way define, describe or limit the scope or intent
of the terms of this Agreement.
18.4 Governing Law. This Agreement shall be construed and interpreted
in accordance with the laws of the Commonwealth of Pennsylvania.
18.5 No Recording. This Agreement shall not be recorded in the Office
for the Recording of Deeds or in any other office or place of public record.
18.6 Tender. Tender of Deed by Seller and of the Purchase Price by
Buyer, are hereby mutually waived.
18.7 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
18.8 Further Instruments. Seller will, whenever and as often as it
shall be reasonably requested so to do by Buyer, and Buyer will, whenever and
as often as it shall be reasonably requested so to do by Seller, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
any and all conveyances, assignments, correction instruments and all other
instruments and documents as may be reasonably necessary in order to complete
the transaction provided for in this Agreement and to carry out the intent and
purposes of this Agreement. All such instruments and documents shall be
satisfactory to the respective attorneys for Buyer and Seller. The provisions
of this Article shall survive the Closing.
18.9 Time. Time is of the essence. In the event the last day
permitted for the performance of any act required or permitted under this
Agreement falls on a Saturday, Sunday, or legal holiday of the United States
or the Commonwealth of Pennsylvania, the time for such performance will be
extended to the next succeeding business day. Time periods under this Agreement
will exclude the first day and include the last day of such time period.
18.10 Designation of Nominee; Assignment of Agreement. Buyer shall
have the right to designate one or more of its subsidiaries or affiliate
entities to acquire title to the Premises hereunder. Except for the foregoing,
Buyer may not assign this Agreement.
18.11 Effective Date. Whenever the term or phrase "effective date
hereof" or "date hereof" or other similar phrases describing the date this
Agreement becomes binding on Seller and Buyer are used in this Agreement, such
terms or phrases shall mean and refer to the date on which a counterpart or
counterparts of this Agreement executed by Seller and Buyer are deposited with
the Escrow Agent.
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18.12 Time for Acceptance. This Agreement shall constitute an
offer to buy or sell the Property, as case may be, on the terms herein set forth
only when executed by the Seller or Buyer. This Agreement may be accepted by
the party receiving such executed Agreement only by executing this Agreement and
delivering an original signed copy hereof to the Escrow Agent and an originally
signed copy hereof to the other party hereto within five (5) business days after
such receipt. Failure to accept in the manner and within the time specified
shall constitute a rejection and termination of such officer.
18.13 Confidentiality. Each of the parties hereto covenants and
agrees to hold the nature and content of this Agreement, including without
limitation, the Purchase Price contained herein, in strict confidence prior to
Closing, and other than disclosure required by the SEC and except as may be
necessary to comply with this Agreement, neither party shall disclose prior to
Closing, the nature, content or the Purchase Price of this Agreement without the
express written consent of the other party.
18.14 Delivery of Documents. If this Agreement (or any of the
Exhibits or Schedules hereto) shall have been prepared by Seller or by its
counsel, then promptly upon execution hereof by the parties hereto, Seller
shall deliver to Buyer one (1) "clean" copy of this Agreement, complete with
all Exhibits and Schedules prepared (or obtained) by Seller or its counsel,
and a copy of this Agreement (and said Exhibits and Schedules, if available)
on disk, compatible with WordPerfect 5.1.
19. SEC REPORTING (8-K) REQUIREMENTS.
For the period of time commencing on the date hereof and continuing
through the first anniversary of the Closing Date, and without limitation of
other document production otherwise required of Seller hereunder, Seller shall,
from time to time, upon reasonable advance written notice from Buyer, provide
Buyer and its representatives, with (I) access to all financial and other
information pertaining to the period of Seller's ownership and operation of the
Property, which information is relevant and reasonably necessary, in the opinion
of 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;
and (II) a representation letter, signed by the individual(s) responsible for
Seller's financial reporting, as prescribed by generally accepted auditing
standards promulgated by the Auditing Standards Division of the American
Institute of Certified Public Accountants, which representation letter may be
required by the Accountants in order to render an opinion concerning Seller's
financial statements.
20. 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,
27
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
hereunder (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 set
forth in this Agreement and on Exhibit "D"; hereto; and (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 period of time shall not relieve Seller of any of its
obligations hereunder, unless Seller is materially prejudiced by such delay.
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.
21. EXCULPATION.
No recourse shall be had for any obligation of BRANDYWINE Realty Trust
under this Agreement or under any document executed in connection herewith or
pursuant hereto, or for any claim based thereon or otherwise in respect thereof,
against any past, present or future
28
trustee, shareholder, officer or employee of BRANDYWINE Realty Trust, whether
by virtue of any statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being expressly
waived and released by the Seller and all parties claiming by, through or
under Seller.
22. AS-IS.
Buyer acknowledges and agrees that except as herein elsewhere
specifically provided, Seller has not made, does not make and specifically
negates and disclaims any representations, warranties (other than the special
warranty of title as set out in the deed), promises, covenants, agreements or
guaranties of any kind or character whatsoever, whether express or implied,
statutory, oral or written, past, present or future, of, as to, concerning or
with respect to (A) the value, nature, quality or condition of the Property,
including, without limitation, the water, soil, and geology, (B) the suitability
of the Property for any and all activities and uses which Buyer or any tenant
may conduct thereon, (C) the compliance of or by the Property or its operation
with any laws, rules, ordinances or regulations of any applicable governmental
authority or body, (D) the habitability, merchantability, marketability,
profitability or fitness for a particular purpose of the Property, (E) the
manner or quality of the construction or materials, if any, incorporated into
the Property, (F) the manner, quality, state of repair or lack of repair of the
Property, (G) compliance with any environmental requirements, including the
existence in or on the Property of hazardous materials or (H) any other matter
with respect to the Property. Additionally, no person acting on behalf of
Seller is authorized to make, and by execution hereof, Buyer acknowledges that,
except as herein elsewhere specifically provided, no person has made any
representation, agreement, statement, warranty, guaranty or promise regarding
the Property or the transaction contemplated herein; and no such representation,
warranty, agreement, guaranty, statement or promise, if any, made by any person
acting on behalf of Seller shall be valid or binding upon Seller unless
expressly set forth herein. Buyer further acknowledges and agrees that, except
with respect to information developed by Seller, its principals or affiliates,
any information provided or to be provided with respect to the Property was
obtained from a variety of sources, that Seller has not made any independent
investigation or verification of such information and makes no representations
as to the accuracy, truthfulness or completeness of such information, and the
Buyer may not be entitled to rely on any such information. The foregoing
notwithstanding, Seller has no knowledge that any such information is
inaccurate or misleading. Buyer further acknowledges and agrees that to the
maximum extent permitted by law, and except as herein elsewhere specifically
provided, the sale of the Property as provided for herein is made on an "as is"
condition and basis with all faults. It is understood and agreed that the
purchase price has been adjusted by prior negotiation to reflect that the
Property is sold by Seller and purchased by Buyer subject to the foregoing.
23. Other Transactions. The obligations of the parties to consummate
Closing hereunder shall be expressly conditioned upon (i) Seller and
Brandywine Operating Partnership, L.P., a Delaware limited partnership
("BOP") executing and delivering a mutually satisfactory operating agreement
regarding the governance of Christiana Center Operating Company II LLC, (ii)
the execution and delivery by Seller, as seller, and the said Christiana
Center Operating Company II LLC, as buyer, of a mutually satisfactory
Agreement of Sale regarding the purchase and sale of those certain properties
known by the parties as 200 and ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, Delaware, and completion of closing thereunder,
(iii) Seller and BOP executing and delivering a mutually satisfactory
operating agreement regarding the governance of Christiana Center Operating
Company I LLC and (iv) the execution and delivery by Seller, as seller, and
the said Christiana Center Operating Company I LLC, as buyer, of a mutually
satisfactory Agreement of Sale regarding the purchase and sale of that
certain property known as and numbered ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, Delaware, each and all upon terms and conditions acceptable to the
parties, failing which neither party hereto shall have any obligation to
consummate Closing hereunder. If either party shall elect to terminate this
Agreement in such instance, then in that event, the Deposit shall be promptly
refunded to the Buyer and thereupon neither party shall have any further
obligation to the other hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed the day and year first above written.
GENDER ROAD JOINT VENTURE, BRANDYWINE REALTY TRUST,
a Delaware partnership a Maryland Real Estate Investment Trust
By: (SEAL) By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Presient & CEO(SEAL)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Venturer, Hereunto Duly President and Chief Executive
Authorized
30
EXHIBIT "H"
TENANT ESTOPPEL CERTIFICATE
(__________ Portfolio)
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇
__________ __, 1997
Brandywine Realty Trust
Newtown Square Corporate Campus
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President and Chief Executive Officer
NationsBank, N.A.,
as Agent for the parties listed on
Schedule 1 attached hereto
Real Estate Banking
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Vice President
Re: Name of Tenant: ___________________
Lease located at Suite _____, ___________ Premises
_____________ Municipality, ___ State (the "Property")
To Whom it May Concern:
The undersigned is the holder of the tenant's interest under the lease
described on Exhibit A attached hereto (the "Lease") demising a portion of
the Property known as Suite _____ (the "Leased Premises"). We understand
that Brandywine Realty Trust, its assignee or nominee ("Brandywine") intends
to acquire the Property, and that NationsBank, N.A., as Agent for the parties
listed on Schedule 1 attached hereto ("Lender") intends to be the holder of a
first mortgage on the Property, and that Brandywine and Lender require this
certification from us.
Accordingly, we hereby certify to Brandywine and Lender as follows:
1. The Lease is in full force and effect and has not been modified,
amended or supplemented in any way, except as follows: None (If appropriate
response is other than "None," insert dates of all modifications, amendments
or supplements): .
2. There are no other representations, warranties, agreements,
concessions, commitments, or other understandings between the undersigned and
the Landlord regarding the Property other than as set forth in the Lease or
paragraph 1 above.
3. The landlord under the Lease has completed and delivered, and the
undersigned has accepted, the Leased Premises in the condition required by the
Lease and the term of the Lease commenced on __________. The Leased Premises
consists of approximately _________ square feet. The undersigned has taken
possession of and is occupying the Leased Premises on a rent-paying basis and
the monthly base rent payable thereunder is __________, payable in advance.
All improvements and work required under the Lease to be made by the landlord
thereunder and all facilities required under the Lease to be furnished to the
Leased Premises have been completed to the satisfaction of the undersigned,
except as follows: None. (If appropriate response is other than "None,"
insert description of any improvements and work to be completed by the
landlord under the Lease): .
4. The fixed expiration date set forth in the Lease, excluding renewals
and extensions, is _________. The undersigned neither has any option or right
to purchase the Property or any portion thereof nor does the undersigned have
any right or option to terminate the Lease or any of its obligations thereunder
in advance of the scheduled termination date of the Lease as noted above, except
as follows: None. (If appropriate response is other than "None," insert
description of any purchase rights or options, and/or any early termination
rights, together with reference to document (and section or paragraph) where
found): .
5. All rents, additional rents and other sums due and payable under the
Lease have been paid in full and no rents, additional rents or other sums
payable under the Lease have been paid for more than one (1) month in advance
of the due dates thereof.
6. The landlord under the Lease is not in default under any of the
requirements, provisions, terms, conditions or covenants of the Lease to be
performed or complied with by the landlord under the Lease, and no event has
occurred or situation exists which would, with the passage of time and/or the
giving of notice, constitute a default or an event of default by the landlord
under the Lease.
7. The undersigned is not in default under any of the requirements,
provisions, terms, conditions, or covenants of the Lease to be performed or
complied with by the undersigned, and no event has occurred or situation exists
which would, with the passage of time and/or the giving of notice, constitute a
default or an event of default by the undersigned under the Lease.
8. The undersigned has received no notice from any governmental authority
or other person or party claiming a violation of, or requiring compliance with,
any Federal, State or local statute, ordinance, rule, regulation or other
requirement of law, for environmental contamination at the Leased Premises, to
the best knowledge of the undersigned, [NJ only: the undersigned is in
compliance with all applicable provisions of the Industrial Site Recovery Act],
and no hazardous, toxic or polluting substances or wastes have been generated,
treated, manufactured, stored, refined, used, handled, transported, released,
spilled, disposed of or deposited by Tenant on, in or under the Leased Premises.
9. Neither the undersigned nor the landlord under the Lease has commenced
any action or given or received any notice for the purpose of terminating the
Lease.
10. There are no existing defenses, offsets, claims, or credits against the
payment of rent or the performance of the undersigned's obligations under the
Lease.
11. The undersigned has paid to the landlord under the Lease a security
deposit of _________.
By: ______________________
Name:
Title:
Exhibit A
(Description of Lease)
Lease dated __________ with ________________, Tenant, for Suite _____,
_____________ Premises, __________________Municipality, _______State.
______________________________
Exhibit A
- (Alternate) -
The undersigned hereby certifies to Brandywine Realty Trust,
NationsBank, N.A., Administrative Agent, Seller with respect to its tenancy
at Suite _____, _______ Premises, ____________ Municipality, ____ State that
attached hereto is a true, correct and complete copy of its lease and all
amendments thereto ("Lease"). It is intended by the undersigned that this
Certificate and the attached documents shall be appended to the within Tenant
Estoppel Certificate delivered by the undersigned Tenant to the
above-mentioned parties.
By: ___________________________
Name:
Title:
Schedule 1
NationsBank, N.A., ▇▇▇▇▇ ▇▇▇▇▇▇ Mortgage Capital Group, Inc. and all
other parties to whom a direct participation interest in a certain Credit
Facility are sold, transferred and assigned pursuant to the provisions of a
certain Revolving Credit Agreement and a certain Co-Lender and Servicing
Agreement, each dated as of November 25, 1996.