AGREEMENT OF SALE
for
GREEN HILLS CORPORATE CENTER
between
BRANDYWINE REALTY TRUST
and
GILBERT ASSOCIATES, INC.
Dated: June ____, 1997
AGREEMENT OF SALE
INDEX
Section Page
I. PROPERTY BEING SOLD..................................... 1
A. Real Property........................................... 1
B. Personal Property....................................... 1
C. Leases.................................................. 2
D. Right to Names.......................................... 2
II. PURCHASE PRICE AND MANNER OF PAYMENT.................... 2
A. Purchase Price.......................................... 2
B. Manner of Payment....................................... 2
1. Deposit............................................ 2
2. Additional Deposit................................. 2
3. Cash at Closing.................................... 2
4. Purchase Money Mortgage............................ 3
C. Allocation.............................................. 3
III. TITLE................................................... 3
IV. COVENANTS............................................... 3
A. Maintenance............................................. 3
B. Alterations............................................. 3
C. Lease................................................... 4
D. Security Deposits....................................... 4
E. Bill Tenants............................................ 4
F. Notice to Buyer......................................... 4
G. Update Rent Roll........................................ 4
H. Comply with Leases...................................... 4
I. No New Agreements....................................... 4
J. Tax Disputes............................................ 5
K. No Removal of Personalty................................ 5
V. REPRESENTATIONS AND WARRANTIES.......................... 5
A. Certain Definitions..................................... 5
B. Organization............................................ 5
C. Authority............................................... 6
D. Consents and Approvals.................................. 6
E. Litigation.............................................. 6
F. Absence of Certain Changes or Events; Material
Agreements............................................. 6
G. No Violation of Law..................................... 7
H. Brokers or Finders...................................... 7
I. Real Estate............................................. 7
J. Taxes................................................... 8
K. Compliance with Laws and Recorded Declarations.......... 9
L. Absence of Undisclosed Liabilities and Contractual
Obligations............................................. 10
M. Leases.................................................. 10
N. Condemnation or Governmental Proceedings................ 11
O. Insurance............................................... 11
P. No Defaults............................................. 11
Q. Significant Agreements.................................. 11
R. Service Contracts....................................... 12
S. Right to Cancel......................................... 12
T. Required Improvements................................... 12
U. Subdivided Parcel....................................... 12
V. Environmental........................................... 12
W. Zoning.................................................. 13
X. Flood Plain............................................. 13
A. Organization............................................ 14
B. Consents and Approvals.................................. 14
C. Litigation.............................................. 14
D. Absence of Certain Changes or Events; Material
Agreements............................................ 14
E. No Violation of Law..................................... 15
F. Brokers or Finders...................................... 15
VI. POSSESSION.............................................. 15
VII. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY......... 15
A. Title Binder............................................ 15
B. Survey.................................................. 16
C. Physical Inspection..................................... 16
1. Contracts, Licenses, Permits....................... 17
2. Utility Costs...................................... 17
3. Inventory.......................................... 17
4. Three Years' Maintenance Expenses.................. 17
5. Three Years' Tax Bills............................. 17
7. Schedule of Violations............................. 17
8. Schedule of Notices................................ 18
9. Schedule of Replacements and Repairs............... 18
10. Zoning, Site Plan, Subdivision Plan or Plat........ 18
11. Takings or Changes................................. 18
12. Tax Assessments, Appeals and Increases............. 18
13. Litigation......................................... 18
14. Insurance Policies................................. 18
D. Seller's Failure to Deliver............................. 18
E. Notification of Certain Matters......................... 18
F. Board of Trustees Approval.............................. 19
VIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.............. 19
IX. FIRE OR OTHER CASUALTY.................................. 19
A. Maintain Insurance...................................... 19
B. Minimal Damage.......................................... 19
C. Substantial Damage...................................... 19
D. Closing After Substantial Damage........................ 20
E. Rent Insurance.......................................... 20
X. CONDEMNATION............................................ 20
XI. EXPENSE ALLOCATIONS..................................... 20
XII. CLOSING................................................. 21
A. Time and Date and Place................................. 21
B. Documents............................................... 21
1. Seller's Documents and Other Items................. 21
2. Buyer's Documents.................................. 24
3. Title Insurance.................................... 24
4. Necessary Documents................................ 24
XIII. DEFAULT; REMEDIES....................................... 24
XIV. CONDITIONS PRECEDENT TO CLOSING......................... 25
A. Correctness of Warranties and Representations........... 25
C. Buyer's Satisfaction with Inspection.................... 25
D. Trustee Approval........................................ 26
E. Estoppels............................................... 26
F. Lease With Seller....................................... 26
XV. PRORATIONS.............................................. 26
A. Operating Expenses...................................... 26
1. Taxes.............................................. 26
2. Sewer Rents........................................ 26
3. Permit Fees........................................ 26
4. Operating Costs.................................... 26
5. Rents.............................................. 26
6. Security Deposits.................................. 28
7. Project Contracts.................................. 28
B. Custom and Practice..................................... 28
C. Future Installments of Taxes............................ 28
D. Application of Prorations............................... 29
E. Schedule of Prorations.................................. 29
F. Escalations............................................. 29
G. Readjustments........................................... 29
H. Indemnification for Seller's Tax Obligations............ 29
XVI. BROKERS................................................. 29
XVII. ESCROW AGENT............................................ 29
A. Payment to Seller...................................... 30
B. Notice of Dispute...................................... 30
C. Escrow Subject to Dispute.............................. 30
D. Escrow Agent's Rights and Liabilities.................. 30
XVIII. GENERAL PROVISIONS..................................... 30
A. Notices................................................ 30
B. Binding Effect......................................... 31
C. Entire Agreement....................................... 31
D. Governing Law.......................................... 32
E. No Recording........................................... 32
F. Tender................................................. 32
G. Execution in Counterparts.............................. 32
H. Further Instruments.................................... 32
I. Time................................................... 32
J. Designation of Nominee; Assignment of Agreement........ 32
K. Effective Date......................................... 32
L. Time for Acceptance.................................... 33
M. Confidentiality........................................ 33
N. Delivery of Documents.................................. 33
XIX. SEC REPORTING (8-K) REQUIREMENTS....................... 33
XX. INDEMNIFICATION........................................ 33
XXI. EXCULPATION............................................ 34
AGREEMENT OF SALE
AGREEMENT OF SALE made this 26 day of June, 1997, between BRANDYWINE
REALTY TRUST, a Maryland Real Estate Investment Trust, its assignee or
nominee, having its principal office at 16 Campus Boulevard, Suite 150,
Newtown Square, Pennsylvania 19073 ("Buyer"), and SALIENT 3 COMMUNICATIONS,
INC., a corporation, having its principal office at P.O. Box 1498, Reading,
PA 19603 ("Seller").
BACKGROUND
The Background of this Agreement is as follows:
A. Seller is the owner of a certain tract of land containing
approximately 192 acres, together with the buildings and improvements
thereon, including five buildings containing approximately 574,241 net
rentable square feet, commonly known as 100 Gundy, 200 Gundy, 100 Davis, 300
Gundy and 100 Kachel Boulevard located in Cumru and Robeson Townships, Berks
County, Pennsylvania; and
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:
I. PROPERTY BEING SOLD.
Seller shall sell, transfer and convey to Buyer on the Closing Date
(as hereinafter defined),
A. Real Property. Fee simple interest in the parcels of land, all
as more fully described on Exhibit "A", with the building and improvements
thereon, including the five buildings containing approximately 574,241 net
rentable square feet, commonly known as 100 Gundy, 200 Gundy, 100 Davis, 300
Gundy and 100 Kachel Boulevard located in Cumru and Robeson Townships, Berks
County, Pennsylvania, 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
B. Personal Property. All equipment, fixtures, machinery and
personalty 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 all
assignable intangible personal property owned by Seller and used in
connection with the ownership, operation and maintenance of the land,
improvements and other property, 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
escrow accounts, deposits, instruments, documents of title, general
intangibles, all computers, computer software programs and data and business
records pertaining to the Premises, 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
C. 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
D. Right to Names. Any and all right, title and interest of
Seller in and to the name "Green Hills Corporate Center", 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."
II. PURCHASE PRICE AND MANNER OF PAYMENT.
A. Purchase Price. Buyer shall pay the total sum of Forty Million
Dollars ($40,000,000.00) (hereinafter referred to as the "Purchase Price")
subject to adjustment, on a per diem basis.
B. Manner of Payment. The Purchase Price shall be paid in the
following manner:
1. Deposit. By delivery, upon Seller's execution and
delivery of this Agreement, of Buyer's good check in the amount of
$100,000.00 to the Title Company (hereinafter referred to as "Escrow Agent"
or "Escrowee"). This sum, the sum specified in Section II.B.(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 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. Additional Deposit. By delivery, within two (2) business
days next following the Inspection Period Expiration Date (as hereinafter
defined in Section VII.C.), of Buyer's good check in the amount of $50,000.00.
3. Cash at Closing. Thirty-eight Million Three Hundred Fifty
Thousand Dollars ($38,350,000) by delivery to Seller on the Closing Date, by
bank cashier's, title company, or certified check, or by wire transfer, in
the amount of Thirty-eight Million Three Hundred Fifty Thousand Dollars
$38,350,000.00, subject to adjustment as herein provided.
4. Purchase Money Mortgage. One Million Five Hundred
Thousand Dollars ($1,500,000) by delivery to Seller on the Closing Date of
Buyer's Purchase Money Mortgage evidenced by Buyer's Note substantially in
the form of Exhibit "I-1" attached hereto and made a part hereof (the "Note")
and secured by a mortgage encumbering the Premises substantially in the form
of Exhibit "I-2") attached hereto and made a part hereof (the "Mortgage").
The Note will bear interest at the rate of five (5%) percent per annum.
Principal under the Note will be paid in three annual installments each in
the amount of Five Hundred Thousand Dollars ($500,000), payable on the first,
second and third anniversaries of the Closing Date. The Note will be
non-recourse to Buyer. Seller agrees to subordinate the Mortgage to an
institutional first mortgage securing a line of credit extended to Buyer
provided that such line of credit is also secured by mortgages encumbering a
majority of the properties other than the Premises owned directly or
indirectly by Buyer. In lieu of subordinating the Mortgage to an
institutional first mortgage, Seller shall have the right to confine the lien
of the Mortgage to the undeveloped portions of the Premises in which event
the Mortgage will remain as a first mortgage encumbering the undeveloped
portions of the Premises until the Note is paid in full.
C. Allocation. The Purchase Price shall be allocated between
realty and personalty in the manner provided on Schedule 2.3 attached hereto.
III. 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 XII.B.(j) below.
Seller and Buyer consent to use, at Buyer's option, Commonwealth Land Title
Insurance Company, Lawyers Title Insurance Corporation or First American
Title Insurance Company as the Title Company.
IV. COVENANTS. In addition to the covenants contained in the other
Sections of this Agreement, Seller covenants that it shall:
A. Maintenance. At all times prior to the Closing Date, maintain
the Property in good condition and repair, reasonable wear and tear 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.
B. Alterations. Not make or permit to be made any alterations,
improvements or additions to the Property without the prior written consent
of Buyer, 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.
C. Lease. Not enter into any new Lease, nor amend, modify or
terminate any existing Lease without Buyer's consent.
D. Security Deposits. Not apply any Tenant's security deposit to
the discharge of such Tenant's obligations, without Buyer's consent.
E. Bill Tenants. Timely bill all Tenants for all rent billable
under Leases, and use its best efforts to collect any rent in arrears.
F. Notice to Buyer. Notify Buyer promptly of the occurrence of
any of the following:
1. a fire or other casualty causing damage to the Property,
or any portion thereof;
2. receipt of notice of eminent domain proceedings or
condemnation of or affecting the Property, or any portion thereof;
3. 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;
4. receipt or delivery of any default or termination notice
or claim of offset or defense to the payment of rent from any tenant;
5. receipt of any notice of default from the holder of any
lien or security interest in or encumbering the Property, or any portion
thereof;
6. a change in the occupancy of the leased portions of the
Property;
7. notice of any actual or threatened litigation against
Seller or affecting or relating to the Property, or any portion thereof; or
8. the commencement of any strike, lock-out, boycott or other
labor trouble affecting the Property, or any portion thereof.
G. 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.
H. 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.
I. 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, and not permit
the creation of any liability which shall bind Buyer or the Premises after
Closing.
J. 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 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.
K. 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.
V. 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 except as set forth on a Disclosure Schedule delivered by Seller
concurrently with the execution and delivery of this Agreement (the "Seller
Schedule"):
A. Certain Definitions. As used in this Agreement, "Seller
Material Adverse Effect" shall mean any fact, condition, event, development
or occurrence which, individually or when taken together with all other such
facts, conditions, events, developments or occurrences, has had or could
reasonably be expected to have a material adverse effect on the ability of
Seller to consummate the transactions contemplated hereby.
B. Organization. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted, except where the failure to be so organized, existing and in good
standing or to have such power and authority would not have a Seller Material
Adverse Effect. Seller is duly qualified or licensed to do business and in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so duly
qualified or licensed and in good standing would not have a Seller Material
Adverse Effect. Seller has heretofore made available to Buyer a complete and
correct copy of the charter and by-laws or comparable organizational
documents, each as amended to date, of Seller. Such charters, by-laws and
comparable organizational documents are in full force and effect. Seller is
not in violation of any provision of its charter, by-laws or comparable
organizational documents, except for such violations that would not have a
Seller Material Adverse Effect.
C. Authority. Seller has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Seller and the consummation by Seller of the other
transactions contemplated hereby have been duly authorized by the Board of
Directors of Seller, and no other corporate proceedings on the part of Seller
are necessary to authorize this Agreement or to consummate the transactions
so contemplated. This Agreement has been duly executed and delivered by
Seller and constitutes a valid and binding obligation of Seller, enforceable
against it in accordance with its terms.
D. Consents and Approvals. None of the execution, delivery or
performance of this Agreement by Seller or the consummation by Seller of the
transactions contemplated hereby and compliance by Seller with any of the
provisions hereof will (i) conflict with or result in any breach of any
provisions of the charter or by-laws or comparable organizational documents
of Seller, (ii) require any filing by Seller with, or any permit,
authorization, consent or approval to be obtained by Seller of, any court,
arbitral tribunal, administrative agency or commission or other governmental
or other regulatory authority or administrative agency or commission (a
"Governmental Entity") (except where the failure to obtain such permits,
authorizations, consents, approvals or to make such filings would not have a
Seller Material Adverse Effect), (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, amendment, cancellation or
acceleration) under, or result in the creation of any lien or other
encumbrance on any property or asset of Seller pursuant to, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement, franchise, permit, concession or other
instrument, obligation, understanding, commitment or other arrangement to
which Seller is a party or by which it or any of its properties or assets may
be bound or affected (each, a "Contract"), including, without limitation, the
Leases, (iv) result in the triggering of any right of first refusal or other
right under any stockholder, partnership or joint venture agreement to which
Seller is a party or (v) violate any order, writ, injunction, decree,
statute, ordinance, rule or regulation applicable to Seller except, in the
case of clauses (iii), (iv) and (v), for violations, breaches or defaults
which would not have a Seller Material Adverse Effect.
E. Litigation. There is no suit, claim, action, proceeding or
investigation pending (in which service of process has been received by an
employee of Seller) or, to the knowledge of Seller, threatened against Seller
or with respect to the Property before any Governmental Entity which, if
adversely determined, individually or in the aggregate would have a Seller
Material Adverse Effect. Seller is not subject to any outstanding order,
writ, injunction or decree which, insofar as can be reasonably foreseen,
individually or in the aggregate, in the future would have a Seller Material
Adverse Effect.
F. Absence of Certain Changes or Events; Material Agreements.
Since September 30, 1996, Seller has conducted its business only in the
ordinary and usual course consistent with past practice, and there has not
been any change or development, or combination of changes or developments,
which have a Seller Material Adverse Effect. As of the date of this
Agreement, Seller has not become a party to any agreement or amendment to an
existing agreement which would be required to be filed by Seller as an
exhibit to its next Annual Report on Form 10-K, except for this Agreement.
The transactions contemplated by this Agreement will not require the consent
from or the giving of notice to a third party pursuant to the terms,
conditions or provisions of any Contract to which Seller is a party or by
which it is bound.
G. No Violation of Law. To its knowledge, Seller is not in
violation of, or is under investigation with respect to, and has not been
given notice or been charged by any Governmental Entity with any violation
of, any law, statute, order, rule, regulation, ordinance or judgment
(including, without limitation, any applicable environmental law, ordinance
or regulation) of any Governmental Entity, except for violations which, in
the aggregate, do not have a Seller Material Adverse Effect.
H. Brokers or Finders. Seller does not have any liability to any
agent, broker, investment banker, financial advisor or other firm or person
for any broker's or finder's fee or any other commission or similar fee in
connection with this Agreement or any of the transactions contemplated hereby.
I. Real Estate.
1. Included in the Seller Schedule is a description of all
real property constituting the Premises.
2. At the Closing title to the Premises shall be good and
marketable and insurable as such, together with Buyer's right to use all
easements benefitting the Premises and the contiguity of all pieces or
parcels of land, if there be more than one contained therein, by any
reputable title insurance company licensed to do business in Pennsylvania at
regular standard rates, free and clear of all pledges, liens, claims,
security interests, restrictions, encumbrances, easements, leases, tenancies,
claims or rights of use or possession and other title objections, including
any lien or future claim for materials or labor supplied in improvement of
the Premises ("Liens"), excepting only the Permitted Exceptions:
(a) the matters referred to in the Seller Schedule,
including, without limitation, the Leases;
(b) all terms, covenants, conditions and restrictions of
record not objected to by Buyer during the Review Period (as defined below);
(c) water lines, sanitary sewer, drainage, gas
distribution line and main, electrical and telephone easements and
rights-of-way of record not objected to by Buyer during the Review Period;
(d) zoning ordinances, sanitary and building codes and
all statutes, ordinances, regulations, or other administrative enactments of
any municipal authority having jurisdiction over the Premises not objected to
by Buyer during the Review Period;
(e) real property taxes not yet due and payable and
assessments for improvements not yet due and payable as of the Closing Date,
provided that if the Premises are affected by any assessment that is or may
become payable in annual installments, of which one or more is then payable
or has been paid, then for the purposes of this Agreement, any such
assessment shall be deemed a lien on the Premises and shall be paid and
discharged by Seller at or prior to Closing; and
(f) any state of facts that an accurate survey of the
Premises would disclose not objected to by Buyer during the Review Period.
3. Included in the Seller Schedule is a description of all
leases and other possessory agreements pertaining to the Premises
(collectively, the "Leases"). Each of the Leases is valid, binding and in
full force and effect, all rent and other sums payable by or to Seller
thereunder are current within applicable notice and grace periods, no notice
of default or termination under any Lease has been given or received by
Seller that describes a default that has not been cured and, to Seller's
knowledge, except as identified on the Seller Schedule, no event has occurred
that would, with the giving of notice or the passage of time or both,
constitute a default under any of the Leases.
4. Included in the Seller Schedule is a description of all
environmental reports known to Seller that affect the Premises, and Seller
has delivered a complete copy of each such report to Buyer. Except as set
forth therein or otherwise in the Seller Schedule, Seller has no knowledge of
the presence or release of any toxic substance or hazardous material or of
any other environmental condition or contamination in or from the Premises.
In addition, the validity of Buyer's right to use all easements benefitting
the Premises and the contiguity of all pieces or parcels of land, if there be
more than one, shall be so insurable without additional premium.
5. The Premises are in good repair, order and condition in
all material respects, subject to ordinary wear and tear. To the best of
Seller's knowledge without independent investigation, there is no material
latent or patent structural, mechanical or other significant defect or
deficiency in the improvements.
6. Seller has received no notices, oral or written, and has
no reason to believe, that any Government Entity having jurisdiction over the
Premises intends to exercise the power of eminent domain or similar power
with respect to all or any part of the Premises. Seller has not received any
notice of violation of law or ordinance with respect to the Premises that
will remain uncorrected at Closing.
J. Taxes.
1. There are no liens for Taxes upon the Premises, except for
liens for Taxes not yet due.
2. The Premises constitute separate tax parcels that are
separately assessed for real estate tax purposes; to Seller's knowledge there
is no proceeding pending for the adjustment of the assessed valuation of all
or any portion of the Premises; to Seller's knowledge the Premises have been
assessed and real estate taxes have been paid on the basis of the value of
all improvements as completed; there is no abatement in effect with respect
to all or any portion of the real estate taxes; the real estate tax bills
previously delivered by Seller to Buyer and initialled by Seller and Buyer
for identification are true and complete copies of all bills for taxes levied
against or on account of the Premises or any rent or income from the Premises
since January 1, 1994; and to the best of Seller's knowledge, there are no
proposed reassessments of any of the Premises by any taxing authority and
there are no threatened or pending special assessments or other actions or
proceedings (other than county-wide reassessments and/or the usual increases
in mileage rates that may be under consideration by the taxing authorities in
the jurisdictions where the Premises are located) that could reasonably be
expected to give rise to an increase in real property taxes or assessments
against any of the Premises.
3. "Taxes" shall mean any and all taxes, charges, fees,
levies or other assessments, including, without limitation, real or personal
property, transfer and recording taxes, fees and charges, imposed by any
taxing authority (whether domestic or foreign including, without limitation,
any state, county, local or foreign government or any subdivision or taxing
agency thereof (including a United States possession)), whether computed on a
separate, consolidated, unitary, combined or any other basis; and such term
shall include any interest whether paid or received, fines, penalties or
additional amounts attributable to, or imposed upon, or with respect to, any
such taxes, charges, fees, levies or other assessments.
K. Compliance with Laws and Recorded Declarations. Except as
disclosed on the Seller Schedule, no notice or communication of any kind has
been issued to Seller by any governmental authority, insurance regulatory
body or other person stating or alleging that the Premises or any business or
activity conducted thereon, is in violation of any applicable law, rule or
regulation, including without limitation, zoning, building, health or fire
codes or that the Premises were being used or operated without first
obtaining any applicable license, permit, certificate, entitlement, grant of
right or other item or document. To the best of Seller's knowledge, Seller
has complied with all laws and requirements of insurance bodies applicable to
the ownership, leasing, use and operation of the Premises and secured all
required consents and approvals and obtained all licenses, permits,
certificates and other documents required by applicable law for the
completion, ownership, leasing, use and occupancy of the Premises. Seller
has not taken any action that would (or failed to take any action, the
omission of which would) result in the revocation or suspension of such
licenses, permits, certificates, entitlements, grants of right and other
items and documents, and Seller has not received any notice of any violation
from any federal, state or municipal entity or notice of an intention by any
such governmental entity to revoke any certificate of occupancy or other
certificate, license, permit, entitlement or grant of right issued by it in
connection with the ownership, use and occupancy of any of the Premises that
in each case has not been cured or otherwise resolved to the satisfaction of
such governmental entity. Seller has not received or been informed in
writing of the receipt of any written notice which is still in effect that
there is, and, to the best of Seller's knowledge, there does not exist, any
violation of a condition or agreement contained in any easement, restrictive
covenant or any similar instrument or agreement affecting the Premises, or
any portion thereof. To the best of Seller's knowledge, (i) any and all
charges and other assessments under declarations and like agreements to which
any of the Premises are subject have been paid and no special assessments
thereunder against any of the Premises are pending, and (ii) all consents and
approvals required to be obtained under such declarations and like agreements
with respect to the Premises have been obtained.
L. Absence of Undisclosed Liabilities and Contractual Obligations.
Except for (i) liabilities disclosed in the Seller Schedule, (ii) liabilities
arising in the ordinary course of business which, if material (individually
or in the aggregate), are disclosed in Seller Schedule, (iii) liabilities at
the date hereof which are specifically disclosed or otherwise reflected in
the Exhibits attached to this Agreement and (iv) current liabilities incurred
in the ordinary course of business after the date hereof, Seller has no, and
the Premises are not subject to liabilities of any nature, whether matured or
unmatured, fixed or contingent, which could reasonably be expected to have,
individually or in the aggregate, a Seller Material Adverse Effect. None of
the Premises is cross-defaulted and/or cross-collateralized with any other
properties other than among the Premises.
M. Leases. The rent roll attached hereto as Exhibit "D" (the
"Rent Roll") lists each of the Leases in effect with respect to the Premises
as the same have been amended or modified; there are no leases, licenses or
other rights of occupancy affecting any of the Premises except for the
Leases. Seller has made available to Buyer complete copies of all of the
documents that constitute the Leases. The Leases are in full force and
effect and, except as set forth on the Rent Roll, (A) to the best of Seller's
knowledge, no uncured Event of Default (as defined in such Leases), has
occurred and is continuing under any such Lease, no tenant has asserted a
defense to, offset or claim against its rent or the performance of its
obligations under its Lease and no tenant has asserted a default on the part
of the landlord which would give it the right to terminate its Lease or set
off against rent, (B) other than as set forth in a Lease, there are no rights
of first refusal on, or options to purchase, any of the Premises, or any
right to a participation interest (whether of profits, sale or refinancing
proceeds, or calculated based on fair market value) with respect to any such
property, in favor of any tenant, (C) there are no proposed modifications to
any Lease that would reduce (i) the space leased to any tenant, (ii) the
amount of any tenant's rent or (iii) the term of any lease, (D) other than as
set forth in a Lease, no free rent or other rent concession is due any tenant
under the Leases for periods after the Closing Date, (E) other than as set
forth in a Lease, no landlord under a Lease is required to provide tenant
improvements or refurbishments with respect thereto after the Closing Date
(other than any tenant improvements that the landlord may be required to
construct if an expansion option provided in a Lease is exercised), and (F)
other than as set forth in a Lease, no tenant under a Lease has the option to
terminate its lease prior to the stated expiration date; and, except as set
forth on the Seller Schedule, Seller has received no written notice or, to
the best of Seller's knowledge, any other notice, whether or not in writing,
that any tenant as of the date hereof intends to vacate the Premises or
attempt to abrogate its lease other than at the expiration of the term
thereof. Except for (i) security deposits, (ii) the first full month's rent,
whether or not the term of a Lease has commenced, or (iii) rents paid by
tenants on an estimated basis, including, but not limited to, pass-throughs
for additional or increased operating expenses and real estate taxes, no
prepayments of rent more than thirty (30) days in advance have been made
under the Leases. All decorating, repairs, alterations or other work
required to be performed by the landlord under each of the Leases prior to
the date hereof, or the cost of any such work performed by the tenant and to
be reimbursed by the landlord prior to the date hereof, has been performed or
reimbursed, as applicable. No rent or security deposits under the Leases
have been assigned or encumbered. There are no agreements or understandings,
written or oral, with any of the tenants other than as set forth in the
Leases or otherwise set forth on the Rent Roll. All brokerage commissions
and other compensation and fees payable by reason of the Leases have been
paid in full, except as set forth in the Seller Schedule. Except as set forth
on the Seller Schedule, all tenants under Leases are in actual possession of
their leased premises. Seller has no obligation to pay rent or satisfy any
other obligation of any tenant under any Lease for space in any other
building, or to purchase any tenant's leasehold estate in any other building,
or to contribute to any tenant for unfinished tenant leasehold improvements
other than those listed on the Seller Schedule.
N. Condemnation or Governmental Proceedings. No eminent domain,
condemnation, incorporation, annexation or moratorium or similar proceeding
has been commenced or, to the best of Seller's knowledge, threatened by an
authority having the power of eminent domain to condemn any part of the
Premises. To the best of Seller's knowledge without independent
investigation, there are no pending or threatened governmental rules,
regulations, plans, studies or efforts, or court orders or decisions, which
do or could adversely affect the use or value of the Premises for their
present use.
O. Insurance. Exhibit "F" attached hereto lists the insurance
policies relating to the Premises or any part thereof carried by Seller; all
such policies are in full force and effect, and will be continued or renewed
with the existing coverages and policy limits until the Closing Date, and all
premiums thereunder have been paid to the extent due, and will be paid until
the Closing Date; and no notice of cancellation has been received with
respect thereto and, to the best knowledge of Seller, no cancellation is
threatened.
P. No Defaults. Seller is not in default of any Significant
Agreement (as herein defined) and, to the best of Seller's knowledge, no
event has occurred which with the giving of notice or passage of time would
become a default under any such Significant Agreement.
Q. Significant Agreements. To the best of Seller's knowledge,
there are no Significant Agreements other than as set forth on Exhibit "E"
attached hereto and made a part hereof. For purposes hereof, "Significant
Agreement" means and includes any of the following to which Seller is a party
and by which all or any portion of the Premises may be subject or bound, in
each such case as amended and currently in effect, inclusive of any waivers
relating thereto:
1. all agreements, instruments and documents (excluding the
Leases and Service Contracts) with respect to the Premises evidencing,
securing, or pertaining to the contractual obligations of a person that
involve annual payments or receipts in excess of $10,000;
2. all leases where Seller is the lessee (including capital
leases), contracts, agreements or commitments (whether written or oral) that
are not terminable without penalty on not more than thirty (30) days notice
and that involve annual gross payments or receipts in excess of $10,000;
3. all ground leases where Seller is a ground lessee; and
4. all reciprocal easement agreements affecting the Premises
except as are set forth as Permitted Exceptions.
Each of the Significant Agreements is valid and binding
and in full force and effect, enforceable against the parties thereto in
accordance with its terms.
R. Service Contracts. All service agreements, if any, with
respect to the maintenance and operation of the Premises are set forth on
Exhibit "E" attached hereto and made a part hereof ("Service Contracts"); all
Service Contracts are terminable by Seller within not more than thirty (30)
days. Seller shall terminate any management agreement with respect to the
Premises effective on the Closing Date.
S. Right to Cancel. Except as set forth on the Seller Schedule,
to the best of Seller's knowledge, no condition exists which, with the giving
of notice or the passage of time, or both, would constitute a default by
Seller, thereby permitting any party to cancel its obligations under any
Significant Agreement benefitting the Premises.
T. Required Improvements. To the best of Seller's knowledge, all
alterations, improvements, or other work required to have been completed by
Seller under any reciprocal easement agreement or development or similar
agreement with any municipality or other governmental authority which relates
to, or otherwise affects the Premises, and to which Seller is a party has
heretofore been completed and paid for in full.
U. Subdivided Parcel. The Premises are an independent unit which
do not now rely on any facilities or facilities of municipalities or public
utility and water companies located on any property not included in the
Premises to fulfill any municipal or governmental requirement or for the
furnishing to the Premises of any essential building systems or utilities.
V. Environmental. To the best of Seller's knowledge and except as
may be set forth on the Seller Schedule:
1. The Premises and all operations conducted thereon are now
and always have been in compliance with all federal, state, and local
statutes, ordinances, regulations, rules, standards, and requirements of
common law concerning or relating to industrial hygiene and the protection of
health and the environment (collectively, "the Environmental Laws"). There
are no conditions on, about, beneath or arising from the Premises which might
give rise to liability, the imposition of a statutory lien or require
"Response," "Removal" or "Remedial Action," as defined herein, under any of
the Environmental Laws. As used in this Agreement, the terms "Response,"
"Removal" and "Remedial Action" shall be defined with reference to Sections
101(23) - 101 (25) of the Comprehensive Environmental Response, Compensation
and Liability Act ("CERCLA"), as amended by the Superfund Amendments and
Reauthorization Act ("SARA"), 42 U.S.C. Sections 9601(23) - 9601(25).
2. "Hazardous Substances," as defined below, have never been
used, handled, generated, processed, treated, stored, transported to or from,
released, discharged, or disposed of on, about or beneath the Premises.
There are no transformers containing or contaminated with PCB's or storage
tanks above or below the Premises. There is no asbestos or asbestos
containing material on the Premises or in any Building.
3. As used in this Section, the term "Hazardous Substance"
shall mean any substance regulated under any of the Environmental Laws
including, without limitation, any substance which is: (A) gasoline,
petroleum products, explosives, radioactive materials, including by-products,
source and/or other nuclear material or solid waste, asbestos or
asbestos-containing material or polychlorinated biphenyls or related or
similar material; (B) defined, designated or listed as a "Hazardous
Substance" pursuant to Sections 307 and 311 of the Clean Water Act, 33 U.S.C.
Sections 1317, 1321, Section 101(14) of CERCLA, 42 U.S.C. Section 9601
or Section 103 of the Pennsylvania Hazardous Sites Cleanup Act, 35 Pa. C.S.A.
Section 6020.103; (C) listed in the United States Department of
Transportation Hazardous Material Table, 49 C.F.R. Section 172.101; (D)
defined, designated or listed as a "Hazardous Waste" pursuant to Section
1004(5) of the Resource and Conservation and Recovery Act, 42 U.S.C. 6903(5)
or Section 103 of the Pennsylvania Solid Waste Management Act, 35 Pa. C.S.A.
Section 6018.103; or (E) regulated under the Pennsylvania Clean Streams Law,
35 Pa. C.S.A. Section 691.1-691.1001, and in the regulations adopted and
publications promulgated pursuant thereto.
4. Seller has not received notice or actual or constructive
knowledge of: (A) any claim, demand, investigation, enforcement, Response,
Removal, Remedial Action or other governmental or regulatory action
instituted or threatened against Seller or the Premises pursuant to any of
the Environmental Laws; (B) any claim, demand, suit or action made or
threatened by any person against Seller or the Premises relating to any form
of damage, loss or injury resulting from, or claimed to result from, any
Hazardous Substance on, about, beneath or arising from the Premises or any
alleged violation of the Environmental Laws; and (C) any communication to or
from any governmental or regulatory agency arising out of or in connection
with Hazardous Substances on, about, beneath, arising from or generated at
the Premises, including without limitation, any notice of violation,
citation, complaint, order, directive, request for information or response
thereto, notice letter, demand letter or compliance schedule. If discovered
prior to Closing, Seller shall immediately advise Buyer of any of the claims
or communications listed in clauses (A) through (C) above and also shall
immediately advise Buyer of the discovery of any Hazardous Substances on,
about, beneath, or arising from the Premises or the discovery of any
condition on, about, beneath, or arising from the Premises which might give
rise to liability, the imposition of a statutory lien or require Response,
Removal or Remedial Action under any of the Environmental Laws.
W. Zoning. To the best of Seller's knowledge, the current zoning
classification of the Premises under the Zoning Code of Cumru Township is
"Highway Commercial" and under the Zoning Code of Robeson Township is "Light
Industrial" and the construction, operation and use of the buildings and
other improvements constituting the Premises do not violate any zoning,
subdivision, building or similar law, ordinance, order, regulation or
recorded plat or any certificate of occupancy issued for the Premises; no
zoning variances, special exceptions or zoning board of adjustment
certificates were issued for the construction of the Premises or for its
present use; and the buildings and improvements on the Premises are not
non-conforming uses or structures.
X. Flood Plain. To the best of Seller's knowledge without
independent investigation, no portion of the Premises is located within an
area designated as a flood hazard area or an area which will require the
purchase of flood insurance for the obtaining of any federally insured or
federally related loan; except as set forth on the Seller Schedule, no
portion of the Premises is located in any area constituting a "wetland."
Buyer represents and warrants to Seller as follows, except as set forth
on a Disclosure Schedule delivered by Buyer concurrently with the execution
and delivery of this Agreement (the "Buyer Schedule"):
K. Organization. Buyer is a real estate investment trust duly
formed and existing under and by virtue of the laws of the State of Maryland
and is in good standing with the State Department of Assessments and Taxation
of Maryland and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted
except where the failure to be so organized, existing and in good standing or
to have such power and authority would not have a Buyer Material Adverse
Effect. As used in this Agreement, "Buyer Material Adverse Effect" shall
mean any fact, condition, event, development or occurrence which,
individually or when taken together with all other such facts, conditions,
events, developments or occurrences, has had or could reasonably be expected
to have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby. But in no case shall include the effects
of facts, conditions, events, developments or occurrences that are generally
applicable in (1) the commercial real estate industry, (ii) the United States
economy or credit markets, or (iii) the United States securities markets.
Buyer is duly qualified or licensed to do business and in good standing in
each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not in the aggregate have a Buyer
Material Adverse Effect. Buyer has heretofore made available to Seller a
complete and correct copy of the Declaration of Trust and by-laws or
comparable organizational documents, each as amended to date, of Buyer. Such
Declaration of Trust, by-laws and comparable organizational documents are in
full force and effect. Buyer is not in violation of any provision of its
Declaration of Trust, partnership agreement, charter, by-laws or comparable
organizational documents, except for such violations that would not,
individually or in the aggregate, have a Buyer Material Adverse Effect.
L. Consents and Approvals. The execution, delivery or performance
of this Agreement by Buyer; the consummation by Buyer of the transactions
contemplated hereby; and the compliance by Buyer with any of the provisions
hereof will not (i) conflict with or result in any breach of any provision of
the Declaration of Trust or Bylaws of Buyer, (ii) require any filing by Buyer
or its Subsidiaries with, or permit, authorization, consent or approval of,
any Governmental Entity to be obtained by Buyer (except where the failure to
obtain such permits, authorizations, consents or approvals or to make such
filings would not have a Buyer Material Adverse Effect), or (iii) violate any
order, writ, injunction, decree, statute, ordinance, rule or regulation
applicable to Buyer except, in the case of clause (iii), for violations,
breaches or defaults which would not have a Buyer Material Adverse Effect.
M. Litigation. There is no suit, claim, action, proceeding or
investigation pending (in which service of process has been received by an
employee of Buyer) or, to the knowledge of Buyer, threatened against Buyer
before any Governmental Entity which, if adversely determined, individually
or in the aggregate would have a Buyer Material Adverse Effect. Buyer is not
subject to any outstanding order, writ, injunction or decree which, insofar
as can be reasonably foreseen, individually or in the aggregate, in the
future would have a Buyer Material Adverse Effect.
N. Absence of Certain Changes or Events; Material Agreements.
Since December 31, 1996, Buyer has conducted its business only in the
ordinary and usual course consistent with past practice, and there has not
been any change or development, or combination of changes or developments,
which have a Buyer Material Adverse Effect. The transactions contemplated by
this Agreement will not constitute a change of control under or require the
consent from or the giving of notice to a third party pursuant to the terms,
conditions or provisions of any Contract to which Buyer is a party or by
which it is bound.
O. No Violation of Law. To its knowledge, Buyer is not in
violation of, or, under investigation with respect to, or been given notice
or been charged by any Governmental Entity with any violation of, any law,
statute, order, rule, regulation, ordinance or judgment (including, without
limitation, any applicable environmental law, ordinance or regulation) of any
Governmental Entity, except for violations which, in the aggregate, do not
have a Buyer Material Adverse Effect.
P. Brokers or Finders. Buyer does not have any liability to
any agent, broker, investment banker, financial advisor or other firm or
person for any broker's or finder's fee or any other commission or similar
fee in connection with this Agreement or any of the transactions contemplated
hereby.
VI. 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.
VII. BUYER'S REVIEW AND APPROVAL OF TITLE AND SURVEY.
A. Title Binder. Buyer has secured a current title commitment
(the "Title Binder") from the Title Company, and shall have until the
Inspection Period Expiration Date (as hereinafter defined in Section VII.(C)
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 Objections"). Subject to the
provisions of the succeeding portion of this Section VII.A., 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 such Title Objection(s),
and Seller shall remain liable (which liability shall survive the Closing)
for the cost of removing any such Title Objection in excess of the credit
granted against the cash portion of the Purchase Price, and Seller shall
reimburse Buyer for any and all costs, claims, damages, obligations,
liabilities and expenses (including, without limitation, reasonable legal
fees and expenses) incurred by Buyer with respect to the Title Objection(s).
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.
B. Survey. Within five (5) business days after the date of this
Agreement, Buyer shall order 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 VII.A., and the provisions of
Section VII.A. with respect to Disapproval Notices shall apply.
C. Physical 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 Seller shall cooperate with Buyer and shall
furnish to Buyer such information, materials and documents as Buyer may
reasonably request. The inspection, audit and measurement of the Property's
operation, condition and maintenance shall include, without limitation, such
environmental and engineering inspections, reviews and assessments that Buyer
deems appropriate. 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 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. Buyer further agrees that (i) all such activity shall be
done in a good and workmanlike manner and the Property shall at all times be
kept in a safe condition, (ii) immediately after each such survey, assessment
or evaluation, Buyer shall restore to their prior condition those portions of
the Premises disturbed or damaged by Buyer's activity, (iii) Buyer shall
defend, indemnify and save Seller harmless from and against all claims,
actions, suits, damages, losses, costs and expenses (including, without
limitation, attorneys' fees) instituted against or incurred by Seller as a
result of or relating to any activity on the Premises by Buyer, its agents,
employees, designees, representatives and independent contractors, and (iv)
if requested by Seller, Buyer shall provide Seller with a certificate of
comprehensive general liability insurance, in form, in an amount and issued
by a carrier reasonably acceptable to Seller, insuring Seller from all risks
and loss associated with Buyer's exercise of its rights hereunder. During
the Inspection Period, Buyer and its agents, employees, designees,
representatives and independent contractors also shall have the right, at
Buyer's expense, to perform such other due diligence investigations regarding
the Property as Buyer deems necessary, including, without limitation, title,
zoning, municipal code compliance and other investigations. Buyer may also
conduct discussions with the appropriate local, state and federal agencies,
authorities and governmental bodies regarding the Property. 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:
1. 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 I.(B) hereof;
2. Utility Costs. A break-down of utility costs for the
period the Property has been owned by Seller;
3. Inventory. Invoices, bills of sale, and other evidence
supporting the Schedule of Inventory;
4. 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;
5. Three Years' Tax Bills. A copy of tax bills (i) for the
current year, and (ii) if available, for the preceding two years;
6. 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 by Buyer;
7. 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;
8. 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;
9. Schedule of Replacements and Repairs. All documentation
in Seller's possession regarding replacements and repairs to the Property;
10. 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;
11. 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;
12. 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;
13. Litigation. Copies of all pending and written notices to
Seller of threatened litigation, including litigation involving tenants,
affecting the Property or this transaction;
14. Insurance Policies. Copies of all insurance policies of
Seller related to the Property; and
15. 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.
D. Seller's Failure to Deliver. If Seller shall have failed to
deliver to Buyer all documents required to be delivered under Section VII.C.
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.
E. Notification of Certain Matters. Seller shall give prompt
notice to Buyer, and Buyer shall give prompt notice to Seller of (a) the
occurrence, or nonoccurrence, of any event the occurrence, or non-occurrence,
of which would be likely to cause (i) any representation or warranty
contained in this Agreement to be untrue or inaccurate or (ii) any covenant,
condition or agreement contained in this Agreement not to be complied with or
satisfied and (b) any failure of Seller or Buyer, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of
any notice pursuant to this Section VII.E. shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
F. Board of Trustees Approval.
1. Buyer's obligations hereunder are contingent upon Buyer
obtaining the requisite authorization and approval of the Board of Trustees
of Buyer with respect to Buyer's execution, delivery and performance of this
Agreement on or before the Inspection Period Expiration Date. Upon Buyer's
obtaining said authorization and approval, no other proceedings on the part
of Buyer will be necessary to authorize this Agreement or permit Buyer to
consummate the transactions so contemplated herein, and this Agreement will
then constitute a valid and binding obligation of Buyer, enforceable in
accordance with its terms.
2. In the event Buyer is unable to obtain said authorization
and approval of the Board of Trustees of Buyer, within the above referenced
period, 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 Buyer, and
thereupon the parties hereto shall have no further liabilities to each other
with respect to the subject matter of this Agreement.
VIII. 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 one (1) year.
IX. FIRE OR OTHER CASUALTY.
A. 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".
B. 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.
C. Substantial Damage. If prior to the Closing Date any portion
of the Property is damaged or destroyed by fire or other casualty (a
"Property Casualty") and if (i) the cost to repair the same as reasonably
estimated by Seller and Buyer is less than $250,000, this Agreement shall not
terminate as a result of the Property Casualty, Seller shall have no
obligation to repair or restore the Property Casualty and Buyer shall receive
at Closing a credit against the Purchase Price in the amount reasonably
estimated by Seller and Buyer as the cost to fully repair and restore the
Property Casualty.
If a Property Casualty occurs prior to Closing and the cost to
repair the same as reasonably estimated by Seller and Buyer is more than
$250,000, or such damage results in the termination of the Lease with Penske
Truck Leasing Co., LP, UGI Utilities, Inc., Gilbert/Commonwealth, Inc. or
Parsons Power, Buyer may terminate this Agreement by giving notice to Seller
within thirty (30) days after Buyer receives notice of the casualty, unless,
prior to such date, Seller and Buyer shall have agreed (it being understood
that neither the Seller nor Buyer shall have any obligation to so agree) to
postpone the Closing Date for a period of time sufficient to permit Seller to
fully repair and restore the Property Casualty prior to Closing. If there is
any partial or total damage or destruction of any portion of the Property, as
above set forth, and if Buyer elects not to terminate this Agreement, then
all insurance proceeds paid or payable to Seller shall belong to Buyer and
shall be paid over and assigned to Buyer at Closing, and Seller shall further
execute all assignments and any other documents or other instruments as Buyer
may reasonably request or as may be necessary to transfer all interest in all
such proceeds to Buyer or to whomever Buyer shall direct.
In the event that the Seller and Buyer are unable to agree on the
amount required to repair or restore the Property Casualty, either Seller or
Buyer may request that the amount to fully repair and restore the Property
Casualty be conclusively determined by an insurance adjuster selected by
Seller and Buyer jointly.
D. Closing After Substantial Damage. So long as this Agreement
shall remain in force under Sections IX.B. or IX.C., 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
by Closing to its condition immediately preceding the casualty, (ii) remain
liable for any damages resulting from the failure to complete the repair by
Closing, and (iii) include Buyer, and obtain Buyer's approval to, any
adjustments made by Seller.
E. 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.
X. 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 to the Premises or any part thereof is received by
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,
adversely 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 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 Seller and Buyer.
XI. EXPENSE ALLOCATIONS.
A. Seller shall pay for one-half of all applicable realty transfer
taxes related to the execution, delivery and recording of the Deed, Bill of
Sale, and other Closing Documents, and all related recording charges.
B. Buyer shall pay for one-half of all applicable realty transfer
taxes, for Buyer's title examination, and for Buyer's title examination and
premiums.
C. Buyer and Seller shall be responsible for paying their own
attorney's fees in connection with this transaction.
XII. CLOSING.
A. Time and Date and Place. The Closing on the sale of the
Property (herein referred to as the "Closing") 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 the last to occur of
(i) ten (10) days next following the Inspection Period Expiration Date, or
(ii) July 30, 1997, at the offices of Drinker Biddle & Reath LLP, 1000
Westlakes Drive, Suite 300, Berwyn, PA 19312 commencing at 10:00 a.m.
B. Documents. At Closing, the parties indicated shall
simultaneously execute and deliver the following:
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:
(a) 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 metes and bounds
description shown on the new survey, if any, obtained by Buyer, in which
event the Premises shall be so conveyed.
(b) Bill of Sale. A bill of sale prepared by Buyer's
counsel in form acceptable to Seller, assigning, conveying and transferring
to Buyer, all of the Personal Property.
(c) Original Leases. All original Leases, tenant files,
tenant correspondence and repair records.
(d) Original Licenses, Contract Documents and Other
Personal Property. All original Licenses, Contract Documents, and other
Personal Property described in Section I.B. of this Agreement.
(e) 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.
(f) 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.
(g) FIRPTA Certificates. All certificate(s) required
under Section 1445 of the Code.
(h) 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.
(i) Estoppel Certificate from Cumru and Robeson
Townships. A Certification Statement or its equivalent issued by the zoning
officer, building inspector or other official of the municipality in which
the Property is located stating that the present use of the Property as an
office building complex is lawful, that there are no violations of record,
and that all conditions and required work have been performed in order that
the Property be a legally subdivided parcel. Such Statement shall be dated
not earlier than the date hereof. If such Certification Statement is not
available, Seller shall have the right, but not the obligation, to substitute
its own Certificate and Indemnity in place thereof.
(j) 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 III, 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 which an accurate survey would disclose ,
and (g) providing affirmative insurance with respect to such other matters as
Buyer or its lender shall specify.
(k) Updated Rent Roll. An updated schedule of
Leases, containing all information required to be set forth in Exhibit "D",
which schedule is correct and complete as of the date of closing.
(l) 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.
(m) 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.
(n) Keys. All keys, combinations and security codes for
all locks and security devices on the Property;
(o) Tax Bills. Current tax bills and, if available, tax
bills for each of the years of Seller's ownership of the Property;
(p) 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;
(q) Tenant's Estoppels.
(1) Seller shall use its best efforts to obtain, and
shall deliver to Buyer promptly as the same are received but in any event no
later than the Closing Date, estoppel certificates ("Tenant Estoppel
Certificates") dated no earlier than thirty (30) days prior to the Closing
Date from all tenants (except as otherwise provided for herein below in
subparagraph (2)) under Leases (in substantially the form of Exhibit "H"
attached hereto and made a part hereof). In lieu of delivering such required
Tenant Estoppel Certificates, if Seller shall have attempted in good faith
but shall have been unable to secure the same, then Seller shall be permitted
(but not obligated) to substitute its own Certificate and Indemnity,
substantially in the form of Exhibit "H" for each tenant from whom Seller
failed to receive a Tenant Estoppel Certificate.
(2) Notwithstanding anything to the contrary contained
herein, Seller shall obtain Tenant Estoppel Certificates for the following
tenants: Penske Truck Leasing Co., L.P., UGI Utilities, Inc. and Parsons Power
(the "Required Tenants"), and in no event shall Seller be permitted to
substitute its own Certificate and Indemnity for any or all of the Required
Tenants.
2. Buyer's Documents. Buyer shall deliver or cause to be
delivered to Seller:
(a) The amounts required to be paid to Seller pursuant to
this Agreement;
(b) 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.
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 III, 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 III hereof and providing the title endorsements
specified in Section XII.B.(1)(j) above.
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.
XIII. DEFAULT; REMEDIES
A. In the event that any of Seller's representations, warranties
or covenants contained in this Agreement are 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 XIII.C. below, the parties
shall have no further liability to each other hereunder. In the alternative,
but without limiting 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.
B. 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 to 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.
C. 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
XIII.C. shall not exceed $50,000.00.
XIV. CONDITIONS PRECEDENT TO CLOSING.
The obligations of Buyer hereunder are subject to the fulfillment of
the following conditions prior to or on the Closing Date (any one of which
may be waived in whole or in part by Buyer at or prior to the Closing) and in
the event any of the conditions are not complied with, Buyer may terminate
this Agreement by notifying the Seller and Escrow Agent and thereupon shall
be returned the Deposit and thereafter this Agreement shall be null and void:
A. Correctness of Warranties and Representations. All of the
representations and warranties of Seller contained in this Agreement shall
have been true and correct when
made, and shall be true and correct on the Closing date with the same effect
as if made on and as of the Closing Date. In the event any representation or
warranty is not true and correct on the Closing Date, Seller shall deliver to
Buyer at Closing a certification explaining in what respects the
representation or warranty is no longer true and correct. In the event Buyer
determines, in its sole and absolute discretion, that the representation or
warranty which is no longer true and correct is a Company Material Adverse
Effect, Buyer shall have the right to (i) terminate this Agreement, or (ii)
require as a condition of closing a specific indemnity from Seller with
respect to the fact disclosed as not being true and correct on the Closing
Date.
B. Compliance with Terms and Conditions. Seller shall have
performed and complied with all of the terms and conditions required by this
Agreement to be performed and complied with by it prior to or on the Closing
Date.
C. Buyer's Satisfaction with Inspection. Buyer shall have
notified Seller of Buyer's satisfaction with the title review performed under
Section VII of this Agreement, or shall fail to notify Seller on or before
the Title Review Expiration Date, of Buyer's dissatisfaction with the results
of such review.
D. 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 to consider same.
E. Estoppels. Seller shall have delivered to Buyer the required
Estoppels.
F. Lease With Seller. Buyer and Seller shall enter into a lease
substantially in the form attached hereto as Exhibit "J" and made a part
hereof.
XV. PRORATIONS.
A. Operating Expenses. The following items shall be prorated at
Closing, as of close of business of the day immediately preceding Closing
"Adjustment Date":
1. Taxes. Real estate taxes applicable to the Property for
the tax year in which Closing occurs, based on the respective tax years for
which such taxes are assessed and on the most recent assessment of the
Property and the then applicable tax rates. All real estate taxes, charges
and assessments shall be pro rated on a per diem basis as of midnight of the
day preceding the Closing Date, disregarding any discount or penalty and on
the basis of the fiscal year of the authority levying the same. If any of
the same have not been finally assessed as of the Closing Date for the
current fiscal year of the taxing authority, then the same shall be adjusted
at Closing based upon the most recently issued bills therefor, and shall be
re-adjusted immediately when and if final bills are issued. If any portion
of the Property is a net leased property wherein the tenant(s) have paid or
will pay all such taxes, charges and assessments directly to the person or
entity entitled to receive the same (and not to Seller as landlord under the
applicable Leases), no apportionment shall be made.
2. Sewer Rents. All sewer rents not based on meter readings.
Seller shall cause all utility meters to be read and the municipalities or
utility companies servicing the Property to issue final bills to Seller as of
the date of Closing, and all such bills shall be paid by Seller.
3. Permit Fees. Fees payable with respect to assignable
permits and governmental approvals;
4. Operating Costs. All items of operating cost or expense
incurred by Seller, including but not limited to utilities and fuel oil, and
reasonably allocable or attributable to periods after Closing;
5. Rents. All rents collected, both Basic Rents (as
hereinafter defined) and Additional Rents (as hereinafter defined) shall be
deemed to be applied first to the calendar month in which Closing occurs and
thereafter to current rental periods and secondly to satisfy rental
obligations arising from past rental periods prior to the date of Closing.
As used herein, the term "Basic Rents" shall mean all rents and charges
payable by any and all tenants, including, without limitation, occupancy
rents, but excluding Additional Rents. As used herein, the term "Additional
Rents" shall mean any amounts payable by tenants pursuant to any provisions
of such leases relating to escalation and pass-through of operating and other
similar expenses and any provisions therein in respect of tenant escrows and
reimbursements.
Basic Rents shall be apportioned as follows:
(a) Buyer shall receive a credit at Closing for all Basic
Rents actually collected prior to Closing relating to any period after Closing;
and
(b) With respect to Basic Rents uncollected as of Closing
and owed by occupants of the Property at Closing for any period prior to the
calendar month in which Closing occurs, Seller shall be reimbursed by Buyer
following Buyer's collection of such Basic Rents, to the extent they are
available in accordance with the provisions hereof, as follows: Buyer shall
use its best efforts to collect such rents, and all amounts collected by
Buyer, net of related costs of collection, shall be paid to Seller within ten
(10) days following the month of collection until the entire amount of such
uncollected rents shall have been paid. If Buyer is unable to collect any
portion of such Basic Rents within one hundred eighty (180) days following
Closing, Buyer may elect, with respect to such Basic Rents, either to (I)
assign all such Basic Rents to Seller, after which Seller may pursue any
remedies to collect such Basic Rents and retain any amounts so collected, or
(II) retain such Basic Rents, in which event Buyer, within one hundred eighty
(180) days following Closing, shall make a cash payment to Seller of the
amount of such Basic Rents, less Buyer's reasonable expenses relating to
efforts to collect such Basic Rents, after which any amounts collected by
Buyer shall be retained by Buyer.
Additional Rents shall be apportioned as follows:
(a) With respect to Additional Rents uncollected at Closing
and owed for any period prior to Closing and not yet billed, Buyer shall submit
appropriate bills to the tenants as soon as is practicable after Buyer
receives sufficient information from Seller concerning Additional Rents to
enable Buyer to do so. Buyer shall use its best efforts to collect such
Additional Rents for a period of three hundred sixty-five (365) days after
the rentals become due. Seller's apportioned interest in any amounts
collected by Buyer to the extent such amounts are available in accordance
with the provisions hereof, net of the costs of collection, shall be paid to
Seller within ten (10) days following receipt thereof. If after the
applicable three hundred sixty-five (365) day period Buyer has been unable to
collect any Additional Rents, Buyer may elect, with respect to one or more of
the leases one of the two alternatives set forth under subsection (A)(2)
above, with the same related cash payment or assignment of accounts as is
therein provided;
(b) With respect to Additional Rents billed and owed by
occupants of the Property as of Closing, Buyer shall use its best efforts to
collect such Additional Rents for a period of one hundred eighty (180) days
after Closing. Any such amounts collected by Buyer, to the extent available
pursuant to the provisions hereof, net of the costs of collection, shall be
paid to Seller within ten (10) days following receipt thereof. If after the
applicable one hundred eighty (180) day period Buyer has been unable to
collect Additional Rents, Buyer may elect, with respect to any one or more of
the leases one of the two alternatives set forth under subsection (A)(2)
above, with the same related cash payment or assignment of accounts as is
therein provided;
(c) Additional Rents shall be allocated over the period
with regard to which such operating expenses are incurred, notwithstanding
the date on which such Additional Rents become payable; and
(d) If the Premises are entirely net leased and the
tenant(s) pay all Additional Rent directly to third parties, no
apportionments or adjustments shall be made.
6. Security Deposits. Seller shall deliver to Buyer at
Closing, in cash or by certified check without adjustment, the amounts of all
security deposits which may have been received from tenants, together with
interest thereon which is due to any tenant under the provisions of any Lease
or applicable law.
7. Project Contracts. The unpaid monetary obligations of
Seller under all Contracts shall, as a general matter, be pro rated on a per
diem basis as of midnight of the day preceding the Closing Date, subject,
nevertheless, to the following: With respect to all
leasing, brokerage or other commission agreements relating to Property
Leases, there shall be no apportionment or reimbursement of or for any
leasing fees, commissions or other compensation ("Leasing Fees") which is in
respect of any lease executed prior to the Closing, all of which shall be and
remain the responsibility of Seller, and Seller shall pay the same when due
and shall indemnify and hold Seller harmless from all thereof; and (ii)
provided Closing occurs hereunder, Buyer shall be responsible for and shall
pay when due and indemnify and hold Seller harmless from and against or
reimburse to Seller if Seller has paid any Leasing Fees with respect thereto,
all Leasing Fees which are due and payable subsequent to Closing on an "as
collected" basis or all Leasing Fees which are due and payable for a renewal
term which shall come into effect on or after the Closing Date; provided,
however, Seller shall have disclosed to Buyer the existence of such Leasing
Fee on the Company Schedule. Leasing Fees apportionable hereunder shall be
apportioned and pro rated on a per diem basis as of midnight of the day
preceding the Closing Date and as a function of (and calculated with respect
to) the lease term for which the same were paid or will become due and
payable.
B. 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.
C. 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.
D. 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.
E. 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.
F. 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 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.
G. Readjustments. The parties shall correct any errors in
prorations as soon after the Closing as amounts are finally determined.
H. 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 the Pennsylvania Department of Revenue or by any
other 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 Commonwealth of
Pennsylvania or its political subdivisions. The provisions of this Section
XIV.H. shall specifically survive Closing hereunder.
XVI. 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, and that 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.
XVII. 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:
A. Payment to Seller. To Seller on the Closing Date upon the
consummation of Closing;
B. 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 XVIII.A. 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 XVIII.A. 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.
C. Escrow Subject to Dispute. In the event the Escrow Agent shall
have received the notice of objection provided for in XVII.B. 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.
D. 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 XVII.C., and may decline to take any other
action.
XVIII. GENERAL PROVISIONS.
A. 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:
If to Buyer, addressed to:
Brandywine Realty Trust
Newtown Square Corporate Campus
16 Campus Boulevard
Suite 150
Newtown Square, PA 19073
Attn: Gerard H. Sweeney,
President and Chief Executive Officer
with a copy in each instance to:
John W. Fischer, Esquire
Drinker Biddle & Reath, LLP
1000 Westlakes Drive, Suite 300
Berwyn, PA 19312
If to Seller, addressed to:
Salient 3 Communications, Inc.
P.O. Box 1498
Reading, PA 19603
Attn: Paul Snyder
with a copy in each instance to:
Salient 3 Communications, Inc.
P.O. Box 1498
Reading, PA 19603
Attn: Thomas F. Hafer, Esquire
If to Escrow Agent, addressed to:
Commonwealth Land Title Insurance Company
1700 Market Street
Philadelphia, PA 19103-3990
Attn: M. Gordon Daniels, Esquire
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.
B. 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.
C. Entire Agreement. All Exhibits attached to this Agreement are
incorporated herein and made a part hereof. 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 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.
D. Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the Commonwealth of Pennsylvania.
E. 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.
F. Tender. Tender of Deed by Seller and of the Purchase Price by
Buyer, are hereby mutually waived.
G. 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.
H. Further Instruments. Seller will, whenever and as often as it
shall be reasonably request 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.
I. 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.
J. 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.
K. 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.
L. 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.
M. 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, and
other than disclosure required by the SEC and except as may be necessary to
comply with this Agreement, neither party shall disclose the nature, content
or the Purchase Price of this Agreement without the express written consent
of the other party.
N. Delivery of Documents. Promptly upon execution hereof by the
parties hereto, Seller shall deliver to Buyer one (1) copy of this Agreement,
complete with all Exhibits and Schedules.
XIX. 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.
XX. INDEMNIFICATION.
Without limitation of any other Seller indemnity obligations set
forth herein, from and after the Closing Date, Seller shall indemnify, defend
and save and hold harmless Buyer, and its respective trustees, directors,
officers and employees, of, from and against any and all loss, cost, expense,
damage, claim, and liability, including reasonable attorney's fees and court
costs, including, without limitation, attorney's fees and costs associated
with the enforcement of Seller's indemnification obligations (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; (iv) all claims relating
to the construction, maintenance and operation of the Property prior to
Closing, except that with respect to any construction related claims such
indemnity obligations of Seller shall cease as of the second anniversary of
the Closing hereunder; or (v) 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. 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.
XXI. EXCULPATION.
No recourse shall be had for any obligation of Buyer under this
Agreement or under any document executed in connection herewith or pursuant
hereto, or for any claim based thereon or otherwise in respect thereof,
against any past, present or future trustee, shareholder, officer or employee
of Buyer, 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
SALIENT 3 COMMUNICATIONS, INC. BRANDYWINE REALTY TRUST
a Delaware Corporation a Maryland Real Estate Investment Trust
By: /s/ Thomas F. Hafer By: /s/ Gerard H. Sweeney
----------------------------- ---------------------------------
Thomas F. Hafer Gerard H. Sweeney,
Senior Vice President, President and Chief Executive Officer
General Counsel and Secretary
Agreed to by Escrow Agent with regard
to the obligations, terms, covenants
and conditions contained in this
Agreement relating to Escrow Agent.
COMMONWEALTH LAND TITLE INSURANCE COMPANY
By: /s/ Nancy Staino
--------------------------------
Nancy Staino
Vice President
EXHIBITS TO AGREEMENT OF SALE
"A" - Legal Description
"B" - Schedule of Inventory
"C" - Permitted Encumbrances
"D" - Rent Roll
"E" - Significant Agreements/Service Contracts
"F" - Insurance
"G" - Operating Statements
"H" - Estoppel Certificate Form
"I-1" - Purchase Money Note
"I-2" - Purchase Money Mortgage
"J" - Lease between Seller and Buyer
SCHEDULE TO AGREEMENT OF SALE
Schedule 2.3 - Allocation of Purchase Price
EXHIBIT "A"
Legal Description
-----------------
EXHIBIT "B"
Schedule of Inventory
---------------------
TO BE ATTACHED AFTER EXECUTION
EXHIBIT "C"
Permitted Encumbrances
----------------------
EXHIBIT "D"
Rent Roll
---------
EXHIBIT "E"
Significant Agreements/Service Contracts
----------------------------------------
TO BE ATTACHED AFTER EXECUTION
EXHIBIT "F"
Insurance
---------
TO BE ATTACHED AFTER EXECUTION
EXHIBIT "G"
Operating Statements
--------------------
TO BE ATTACHED AFTER EXECUTION
EXHIBIT "H"
Estoppel Certificate Form
-------------------------
EXHIBIT "I-1"
Purchase Money Note
-------------------
TO BE ATTACHED AFTER EXECUTION
EXHIBIT "I-2"
Purchase Money Mortgage
-----------------------
TO BE ATTACHED AFTER EXECUTION
EXHIBIT "J"
Lease between Seller and Buyer
------------------------------
TO BE ATTACHED AFTER EXECUTION
EXHIBIT "I-1"
Buyer Money Note
----------------
TO BE ATTACHED AFTER EXECUTION
SCHEDULE 2.3
Allocation of Purchase Price
----------------------------
TO BE ATTACHED AFTER EXECUTION