Exhibit 2.6
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is dated as of May
1, 2003, by and between MID-ISLAND PROPERTIES, INC., a Pennsylvania corporation
("Buyer"), and PREIT ASSOCIATES, L.P., a Delaware limited partnership ("Seller"
or "PREIT LP").
BACKGROUND
Seller owns a fifty percent (50%) general partnership interest (the
"Partnership Interests") in Cambridge Apartments, a Pennsylvania general
partnership (the "Partnership"). Buyer owns the remaining fifty percent (50%)
general partnership interest in the Partnership. The Partnership was formed
pursuant to that certain Partnership Agreement Cambridge Apartments, dated June
13, 1967, by and between Murray M. Eisman and Pennsylvania Real Estate
Investment Trust ("PREIT"), as amended by Supplement I to Partnership Agreement,
dated April 10, 1970, by and among PREIT, Mid-Island Properties, Inc., Morris A.
Kravitz and Murray M. Eisman; Supplement II to Partnership Agreement, dated
October 13, 1970, by and among PREIT, Mid-Island Properties, Inc., Morris A.
Kravitz and Murray M. Eisman; Supplement III to Partnership Agreement, dated
September 22, 1971, by and between PREIT and Mid-Island Properties, Inc.;
Amendment to Partnership Agreement of Cambridge Apartments, dated March 1, 1988,
by and between PREIT and Mid-Island Properties, Inc.; Fifth Amendment to
Partnership Agreement, dated January 1, 1996, by and between PREIT and
Mid-Island Properties, Inc.; and the Assignment of Partnership Interest
Acceptance of Assignment and Agreement to be Bound, dated September 30, 1997, by
and between PREIT and PREIT LP (together, the "Partnership Agreement"). The
Partnership Agreement is hereby incorporated herein by this reference. All
defined terms in the Partnership Agreement shall, unless otherwise expressly
provided herein, have the same meanings in this Agreement as are ascribed to
them in the Partnership Agreement.
The Partnership owns that certain apartment complex more commonly known
as Cambridge Hall Apartments, located in West Chester, Pennsylvania (the
"Building"). The Building is located on the real property (the "Parcel") more
particularly described on Exhibit A. The improvements (inclusive of the
Building) constructed on the Parcel are referred to as the "Improvements." The
Parcel, together with the Improvements located thereon shall be referred to as
the "Property." The Property is encumbered by a first mortgage loan (the
"Mortgage Loan") from Green Park Financial Limited Partnership (the "Lender")
pursuant to loan documents (the "Loan Documents") listed on Exhibit B hereto.
The unpaid principal balance of the Mortgage Loan as of December 31, 2002 is
$5,085,000.00.
Buyer desires to buy the Partnership Interests from Seller and Seller
desires to sell the Partnership Interests to Buyer, all on the terms and subject
to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Sale and Purchase of Partnership Interests. Upon the terms and
subject to the conditions set forth in this Agreement, upon closing under this
Agreement (the "Closing"), Seller will sell, assign, transfer and convey the
Partnership Interests to Buyer without recourse, representation or warranty of
any kind except as expressly set forth in this Agreement and in the instruments
of conveyance, and Buyer will assume, purchase and acquire the Partnership
Interests from Seller.
2. Purchase Price. The purchase price for the Partnership Interests
(the "Purchase Price") shall be Six Million Seven Hundred Twenty-Two Thousand
Six Hundred Dollars ($6,722,600.00), and shall be paid as follows:
(a) Deposit. Two Hundred Forty Thousand Ninety-Two and 85/100
Dollars ($240,092.85) has been sent by bank wire transfer of immediately
available funds to PREIT. All such funds will be referred to herein as the
"Deposit". The Deposit shall, at Closing, be applied against the Purchase Price.
The Deposit shall be non-refundable except as expressly provided in this
Agreement.
(b) Mortgage Loan. At Closing, Buyer will be credited against
the Purchase Price for the Partnership Interests, an amount equal to fifty
percent (50%) of the then principal balance of the Mortgage Loan.
(c) Balance of Purchase Price. The balance of the Purchase
Price, subject to adjustments, shall be paid to Seller at Closing by wire
transfer of immediately available funds.
(d) No Further Adjustment. Paragraph 2(f) of that certain
Purchase and Sale Agreement by and between PREIT LP, et al., as seller, and MPM
Acquisition Corp., as buyer, dated as of March 3, 2003 (the "MPM Agreement") (a
copy of which Buyer acknowledges having received and reviewed) provides for,
inter alia, an adjustment in the purchase rice thereunder "[i]n the event the
aggregate Net Operating Income shown on the revised financial statement for the
Properties for the twelve (12) months ending December 31, 2002...is less than
the aggregate Net Operating Income shown in the projected financial statement
for the Properties for such period captioned `2002 Multifamily Portfolio
Roll-Up, 11 month Actual and December Forecast' ... by more than 1%", all as
such terms are defined in the MPM Agreement. Seller represents and warrants to
Buyer, that solely with respect to the Property, the aggregate Net Operating
Income (as defined in the MPM Agreement) with respect to the twelve (12) months
ending December 31, 2002, is not less than the aggregate Net Operating Income
(as defined in the MPM Agreement) shown in the projected financial statements
for the Property for such period captioned "2002 Multifamily Portfolio Roll-Up,
11 month Actual and December Forecast" (attached hereto as Schedule 6(a)(i)(F))
by more than 1% and based upon such representation there shall be no adjustment
to the Purchase Price hereunder as a result thereof.
3. Apportionments. At Closing, the following apportionments required
hereunder shall be prorated as of 11:59 p.m. on the day prior to the Closing
Date:
(a) Transfer Taxes. If any realty transfer taxes are due in
connection with the transactions contemplated hereby, each party shall be
responsible for one-half (1/2) thereof.
(b) Mortgage Loan. Interest on the Mortgage Loan will be
apportioned in accordance with the method by which interest is calculated under
the Mortgage Loan, e.g., if interest is payable on the related mortgage loan on
the basis of twelve, 30 day months, it shall be apportioned between Buyer and
Seller on such basis. Seller shall be credited for one-half of any deposits
(other than security deposits), escrows or reserves required to be maintained by
Lender (as hereinafter defined) under the Mortgage Loan.
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(c) Rents. All collected rents and other payments from tenants
under the leases with respect to the Property (the "Leases") shall be prorated
between Seller and Buyer. Seller shall be entitled to fifty percent (50%) of all
rents, charges, and other revenue of any kind attributable to any period under
the Leases prior to but not including the Closing Date. Rents and expense
escalations or other reimbursements due Partnership, as landlord under the
Leases, not collected as of the Closing Date shall not be prorated at the time
of Closing, but for a period of ninety (90) days after the Closing Date the
Partnership and Buyer shall make a good faith effort to collect the same on
Seller's behalf and to tender Seller fifty percent (50%) of any amounts
collected upon receipt (and attributable to the period of time up to but not
including the Closing Date)(which obligation shall survive the Closing);
provided, however, that all rents, escalations and other reimbursements due
landlord under the Leases collected by Buyer and/or the Partnership on or after
the Closing Date shall first be applied to all amounts due under the Leases at
the time of collection (i.e., current rents and sums due Buyer and/or the
Partnership, as landlord) with the balance (if any) payable to Seller (prorated
as aforesaid), to be applied in reverse chronological order of the date on which
same became due. Such collection efforts by Buyer and/or Partnership shall
exclude (unless Buyer and/or the Partnership elects in its sole discretion)
enforcement in courts of law or equity or threats of such enforcement.
(d) Operating Expenses. Operating Expenses of the Property
shall be prorated between Buyer and Seller, with Seller being responsible for
fifty percent (50%) of accrued and unpaid liabilities and being credited for
fifty percent (50%) of all prepaid expenses attributable to the period of time
up to but not including the Closing Date.
(e) Taxes. Real estate and personal property taxes shall be
prorated for the calendar year or fiscal year, as the case may be, for which
such taxes are assessed. Such proration shall be calculated based upon the
actual number of days in such calendar year or fiscal year, as the case may be,
with Seller and Buyer each being responsible for one-half of that portion of
such calendar or fiscal year occurring prior to midnight of the day prior to the
Closing Date and Buyer being responsible for that portion of such calendar or
fiscal year occurring on and after the Closing Date. All prorations shall be
based upon the actual tax assessed. If the real estate and/or personal property
tax rate and assessments have not been set for the calendar or fiscal year in
which the Closing occurs, then the proration of such taxes shall be based upon
the rate and assessments for the preceding calendar or fiscal year, and such
proration shall be adjusted between Seller and Buyer upon presentation of
written evidence that the actual taxes paid for the calendar or fiscal year in
which the Closing occurs differ from the amounts used at Closing in accordance
with the provisions of Section 3(g). Seller and Buyer shall each be responsible
for one-half of all installments of special assessments due and payable prior to
the Closing Date and Buyer shall be responsible for all installments of special
assessments due and payable on and after the Closing Date; provided, however,
that Seller shall not be responsible for any installments of special assessments
which have not been finally assessed (even if Seller shall have received notice
that such an assessment is contemplated) or which relate to projects that have
not been completed on the Closing Date.
(f) Other Adjustments. Adjustments pursuant to Closing under
this Agreement shall not include security deposits, if any, held by the
Partnership under the Leases (which will continue to be held by the Partnership)
but shall include, inter alia, credits to Seller for fifty percent (50%) of bank
balances held by the Partnership (except to the extent such bank balances
include items, such as current rents or the like that are adjusted between the
parties in accordance with this Agreement), utility and other deposits posted by
the Partnership, any reserves held by the Lender and revenue from other sources
other than the Leases (such as laundry room vending contracts).
(g) Delayed Adjustments. If at any time following the Closing
Date, any adjustment under any subsection of this Section 3 shall prove to be
incorrect (whether as a result in an error in calculation or a lack of complete
and accurate information as of the Closing), the party in whose favor the error
was made shall promptly pay to the other party the sum necessary to correct such
error upon receipt of proof of such error, provided that such proof is delivered
to the party from whom payment is requested within one (1) year after the
Closing Date for all adjustments. The provisions of this Section 3(g) shall
survive the Closing.
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(h) Attorney's Fees. Buyer and Seller shall each be
responsible for paying the fees and expenses of their own attorneys, consultants
and other professionals in connection with this transaction.
4. Buyer's Inspections and Closing Date.
(a) Buyer's Inspections. Buyer acknowledges and agrees that as
fifty (50%) percent owner of the partnership interests of the Partnership, Buyer
is intimately familiar with the value, and the environmental, physical and other
conditions of the Property and expressly waives Buyer's right to make any
investigations with respect to the Property or Partnership Interests except as
specifically hereinafter provided.
(b) Closing. Closing shall take place at the offices of
Drinker Biddle & Reath LLP, One Logan Square, 18th & Cherry Streets,
Philadelphia, Pennsylvania 19107-3496, at 10:00 A.M. on the date hereof (the
"Closing Date").
5. Title.
(a) It shall be a condition to Buyer's obligation to close
hereunder (which condition may be waived in whole or in part by Buyer) that
title to the Property shall be good and marketable, insurable by Fidelity
National Title Insurance Company ("Title Company") at regular rates in the
amount of the Purchase Price, insuring that fee simple title thereto is vested
in the Partnership, subject only to the Permitted Exceptions (as hereinafter
defined), and that Title Company shall agree to issue at the filed rates, or
rates otherwise customarily charged therefor, a non-imputation endorsement to
the existing title policy for the Property.
(b) Buyer has previously been delivered a title commitment
(the "Commitment") issued by the Title Company with respect to the Property, has
reviewed the same and has no objections thereto.
(c) Buyer has previously been delivered a survey (a "Survey")
for the Property, has reviewed the same and has no objection thereto.
6. Representations and Warranties.
(a) (i) Seller represents and warrants to Buyer as follows:
A. Seller is duly formed and validly existing under
the laws of the state of its formation and qualified to conduct business under
the laws of the state in which the Property is located.
B. Seller has the full legal right, power and
authority to execute and deliver this Agreement and all documents now or
hereafter to be executed by Seller pursuant to this Agreement (collectively, the
"Seller's Documents"), to consummate the transaction contemplated hereby, and to
perform its obligations hereunder and under Seller's Documents.
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C. This Agreement and Seller's Documents have been
duly authorized by all requisite action on the part of Seller, and are the valid
and legally binding obligations of Seller, enforceable in accordance with their
respective terms subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer, fraudulent conveyance and similar laws
affecting the enforcement of contractual obligations.
D. INTENTIONALLY DELETED
E. Seller has not pledged, assigned, transferred or
otherwise encumbered the Partnership Interests, and Seller owns the Partnership
Interests free and clear of any liens, claims or encumbrances.
F. Attached hereto as Schedule 6(a)(i)(F) are true and
correct copies of: "Blue Book Income Statements as of December 31, 2001" (2001
Financial Statements") and "2002 Multifamily Portfolio Roll-Up--11 Month Actual
and December Forecast" "Management Costs Allocated to Properties, 11 Months
Actual and December Forecast" and "Comparison of Annualized November Max Rents
and Forecasted Max Rents for 2002, from Monthly NOI Comparison Report - 11 Month
2002 Actuals and Forecast for December" (collectively, the "2002 Financial
Statements"). The 2001 Financial Statements and the 2002 Financial Statements
are collectively referred to herein as the "Financial Statements." The 2002
Financial Statements were prepared from PREIT's "Blue Book Income Statements"
for September 30, 2002, with monthly reports for October and November 2002, and
a forecast for December 2002. The Financial Statements were prepared in
accordance with PREIT's standard accounting policies and practices and the
Financial Statements fairly present the results of operations and the
information they purport to present for the periods involved. Seller shall
endeavor, upon final preparation thereof, to deliver to Buyer a statement of Net
Operating Income for the twelve (12) months ending December 31, 2002 with
respect to the Property, which shall be prepared from PREIT's "Blue Book Income
Statements" for December 31, 2002 in accordance with PREIT's standard accounting
policies and practices, consistently applied throughout 2001 and 2002, and which
will fairly present the results of operations for the periods involved (the
"2002 NOI Statement").
G. The rent roll and delinquency reports attached
hereto as Schedule 6(a)(i)(G) are accurate, complete and correct in all material
respects as of the date thereof and there are no written or material oral leases
or tenancies or other occupancy arrangements of any kind or nature whatsoever
affecting the Property, other than as shown on the rent roll identified on
Schedule 6(a)(i)(G), as the same may have changed in the ordinary course of
business in accordance with Section 11.
H. INTENTIONALLY DELETED
I. INTENTIONALLY DELETED
J. Schedule 6(a)(i)(J) lists all material service
contracts, and other contracts affecting the Property (collectively, "Service
Contracts") which will be binding upon Buyer and/or the Partnership after the
Closing. To Seller's knowledge, each Service Contract is in full force and
effect and, to Seller's knowledge, no default exists thereunder.
K. Except as set forth in Section 7, there are no
employees of Seller or any affiliate of any Seller with respect to the operation
and management of the Property and no employee benefit plans for which Buyer
will be responsible on or after the Closing Date. To Seller's knowledge, solely
during that period of time Seller has been acting as manager of the Property,
Seller has complied with all such plans and contracts in all material respects.
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L. Except as set forth on Schedule 6(a)(i)(L), there
are no pending actions, suits, proceedings or investigations to which Seller is
a party before any court or other governmental authority with respect to (i) the
Partnership Interests, which may have a material adverse impact on the
transactions contemplated hereby or (ii) to Seller's knowledge, the Property,
which may have a material adverse impact on the transactions contemplated
hereby.
M. To Seller's knowledge, there are no pending
condemnation proceedings affecting all or any portion of any Property and Seller
has not received, solely during that period of time Seller has been acting as
manager of the Property, any written notice from any condemning authority
threatening a condemnation proceeding that would affect all or any portion of
the Property, except as set forth in Schedule 6(a)(i)(M).
N. Solely during that period of time Seller has been
acting as manager of the Property, Seller has not received written notice from
any governmental authority with respect to a violation of any applicable laws,
rules, ordinances, codes, regulations orders or requirements of applicable
governmental authorities (collectively, the "Laws") at the Property which has
not been cured except as set forth in Schedule 6(a)(i)(N). Except as set forth
in Schedule 6(a)(i)(N), solely during that period of time Seller has been acting
as manager of the Property, Seller has not received written notice of any
pending or (to Seller's knowledge) threatened judicial or administrative action
by adjacent landowners or other persons or with respect to any easements or
other recorded instruments encumbering any Property.
O. Solely during that period of time Seller has been
acting as manager of the Property, Seller has not received: any summons,
citation, directive, notice of violation, letter, or other related communication
from the United States Environmental Protection Agency or State Department of
Environmental Protection or other governmental body responsible for
administering or enforcing environmental Laws relating to the Property or
written notice of pending requests for information or inquiries from any
governmental authority or any investigations, actions, suits, claims, or
proceedings relating to Hazardous Materials in or on the Property. Solely during
that period of time Seller has been acting as manager of the Property, to
Seller's knowledge (which knowledge shall, solely for the purposes of this
subsection (O), be based on the assumption that the Designated Employees have no
specialized knowledge about Hazardous Materials and their proper production,
deposit, generation, transportation, storage, treatment, or disposal under
applicable Law) and except as disclosed in any environmental report provided to
or obtained by Buyer relating to the Property, the Property has not been used
for the production, deposit, generation, transportation, storage, treatment, or
disposal of any Hazardous Materials contrary to applicable Laws, and no
Hazardous Materials were stored at or disposed of on, in, or at the Property
contrary to applicable Laws. For purposes of this Agreement, the term "Hazardous
Material" shall mean any substance, chemical, waste or material that is or
becomes regulated by any federal, state or local governmental authority because
of its toxicity, infectiousness, radioactivity, explosiveness, ignitability,
corrosiveness or reactivity, including, without limitation, asbestos,
polychlorinated biphenyls, flammable explosives, oil, petroleum or any refined
petroleum product.
P. Solely during that period of time Seller has been
acting as manager of the Property, Seller, as manager of the Property, has not
instituted any tax appeals with respect to the Property.
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Q. As of December 31, 2002, the principal amount
outstanding on the Mortgage Loan was $5,085,000.
R. Except pursuant to the MGM Agreement, Seller has
not entered into any other agreement to sell the Partnership Interests.
S. Seller has not (1) commenced a voluntary case, or
had entered against it a petition, for relief under any federal bankruptcy act
or any similar petition, order or decree under any federal or state law or
statute relative to bankruptcy, insolvency or other relief for debtors, (2)
caused, suffered or consented to the appointment of a receiver, buyer,
administrator, conservator, liquidator, or similar official in any federal,
state, or foreign judicial or non-judicial proceeding, to hold, administer
and/or liquidate all or substantially all of its assets, or (3) made an
assignment for the benefit of creditors.
T. Schedule 6(a)(i)(T) summarizes the relevant
provisions of the insurance policies carried by the Partnership on or with
respect to the Property. As of the date of this Agreement, such policies are in
full force and effect.
U. Aside from the Partnership Agreement, Schedules
6(a)(i)(G) and 6(a)(I)(J) and Exhibit B list all material contractual
obligations of the Partnership or Seller that will be binding upon the
Partnership or Buyer following Closing, except for Service Contracts entered
into in the ordinary course of business in accordance with Section 11 between
the date hereof and the Closing Date;
V. The balance sheets of the Partnership listed in
Schedule 6(a)(i)(V) are true, correct and complete in all material respects as
of the respective dates thereof.
W. Solely during that period of time Seller has been
acting as manager of the Property, Seller has not received any written notice of
any special assessment to be levied against any Property.
X. Seller is not a foreign person as defined in
Section 1445 of the Internal Revenue Code of 1986, as amended.
(ii) As used in this Agreement, the words "Seller's
knowledge" or words of similar import shall be deemed to mean, and shall be
limited to, the actual (as distinguished from implied, imputed or constructive)
knowledge of Raymond Trost and Jeffrey A. Linn (the "Designated Employees"),
without any duty of inquiry or investigation, and shall not be construed to
refer to the knowledge of any other officer, agent or employee of Seller or any
affiliates thereof. Seller represents and warrants that the Designated Employees
are the employees who are primarily responsible for the Property and who possess
relevant knowledge pertaining to the Property and the representations and
warranties contained herein. There shall be no personal liability on the part of
the Designated Employees arising out of any representations or warranties made
herein.
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(iii) If, at or prior to the Closing, Buyer shall become
actually aware (as opposed to implied, constructive or imputed awareness) that
any representation or warranty herein made by Seller is untrue, inaccurate or
incorrect in any material respect and Buyer nevertheless proceeds to closing,
Buyer shall be deemed to have waived the same. If, at or prior to the Closing,
Seller obtains knowledge that a representation or warranty herein made by Seller
is untrue, inaccurate or incorrect in any material respect, Seller shall give
written notice to Buyer thereof promptly upon becoming aware thereof. If any
such representation or warranty is either (1) immaterial or (2) material but not
materially untrue, inaccurate or incorrect, and is not cured or corrected by
Seller on or before the Closing Date, Buyer shall nevertheless be deemed to, and
shall, waive such misrepresentation or breach of warranty and shall consummate
the transactions contemplated hereby without any reduction of or credit against
the Purchase Price. If any such representation or warranty is both (1) material
and (2) materially untrue, inaccurate or incorrect, and is not cured or
corrected by Seller on or before the Closing Date, then Buyer, as its sole
remedy for any and all such materially untrue, inaccurate or incorrect material
representations or warranties, shall elect either (x) to waive such
misrepresentations or breaches of warranties and consummate the transactions
contemplated hereby without any reduction of or credit against the Purchase
Price, or (y) to terminate this Agreement by notice promptly given to Seller, in
which event this Agreement shall be terminated and neither party shall have any
further rights, obligations or liabilities hereunder, except for those
obligations that are expressly stated to survive the termination of this
Agreement (the "Surviving Obligations"), and except that Buyer shall be entitled
to a return of the Deposit if this Agreement is terminated. Buyer acknowledges
and agrees that (x) at or prior to the Closing, Buyer's rights and remedies in
the event any of Seller's representations or warranties made in this Agreement
are untrue, inaccurate or incorrect shall be only as provided in this Section
6(a)(iii), and (y) if the Closing does not occur, Buyer hereby expressly waives,
relinquishes and releases all other rights or remedies available to it at law,
in equity or otherwise (including, without limitation, the right to seek damages
from Seller) as a result of any of Seller's representations or warranties made
in this Agreement being untrue, inaccurate or incorrect.
(iv) In the event the Closing occurs:
A. Notwithstanding anything contained in Section
6(a)(iii) or elsewhere in this Agreement to the contrary, Buyer hereby expressly
waives, relinquishes and releases any right or remedy available to it at law, in
equity or under this Agreement to make a claim against Seller for damages that
Buyer may incur, or to rescind this Agreement and the transactions contemplated
hereby, as the result of any of Seller's representations or warranties being
untrue, inaccurate or incorrect if (1) Buyer actually knew (as opposed to
implied, constructive or imputed knowledge) that such representation or warranty
was untrue, inaccurate or incorrect at the time of the Closing and Buyer
nevertheless closes hereunder, or (2) Buyer's damages that result from all of
such representation(s) or warranty(ies) of Seller made in this Agreement that
are untrue, inaccurate or incorrect are less than (exclusive of the damages
sustained by Buyer, if any, pursuant to a breach of warranty or
misrepresentation made by Seller pursuant to Section 2(d)), Eight Thousand
Dollars ($8,000) in the aggregate.
B. Notwithstanding anything contained herein to the
contrary, if the Closing shall have occurred and to the extent Buyer shall not
have waived, relinquished and released all rights or remedies available to it at
law, in equity or otherwise as provided hereunder, the aggregate liability of
Seller arising pursuant to or in connection with the representations,
warranties, covenants and other obligations (whether express or implied) of
Seller in this Agreement and/or the Seller's Documents shall not exceed
(exclusive of the damages sustained by Buyer, if any, pursuant to a breach or
warranty or misrepresentation made by Seller pursuant to Section 2(d)), Two
Hundred and Forty Thousand Dollars ($240,000) in the aggregate.
C. Notwithstanding anything herein to the contrary, in
the event of a misrepresentation or breach of warranty contained Section 2(d),
the maximum liability of Seller arising pursuant to or in connection therewith
shall not exceed, and the amount of damages shall be calculated based upon, the
amount by which the Purchase Price of the Property would have been reduced
pursuant to the terms of the MPM Agreement (i.e. based upon a capitilization
rate of 7.95%),
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The provisions of this Section 6(a)(iv) shall survive the
Closing.
(v) The representations and warranties of Seller set forth
in this Agreement shall be true, accurate and correct in all material respects
upon the execution of this Agreement and shall be deemed to be repeated on and
as of the Closing Date, it being understood that such items, including but not
limited to rent rolls, delinquency reports and financial statements (including
the items delivered pursuant to Section 6(a)(i)(F)) bearing a specific date, are
accurate as of such date only. The representations and warranties of Seller set
forth in this Agreement shall remain operative and shall survive for a period of
two (2) years following the Closing Date and no action or claim based thereon
shall be commenced after such period unless the factual basis of the claim or
cause of action asserted in the action was first identified with reasonable
clarity in a written notice delivered to Seller not later than two (2) years
following the Closing Date.
(b) (i) Buyer represents and warrants to Seller as follows:
A. Buyer is a duly formed and validly existing
corporation under the laws of the Commonwealth of Pennsylvania.
B. Buyer has the full legal right, power, authority
and financial ability to execute and deliver this Agreement and all documents
now or hereafter to be executed by it pursuant to this Agreement (collectively,
the "Buyer's Documents"), to consummate the transactions contemplated hereby,
and to perform its obligations hereunder and under Buyer's Documents.
C. This Agreement and Buyer's Documents have been duly
authorized by all requisite corporate action on the part of Buyer, and are the
valid and legally binding obligations of Buyer, enforceable in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer, fraudulent conveyance and
similar laws effecting the enforcement of contractual obligations.
D. This Agreement and Buyer's Documents do not and
will not contravene any provision of the articles and bylaws of Buyer, any
judgment, order, decree, writ or injunction issued against Buyer, or any
provision of any Laws applicable to Buyer. The consummation of the transactions
contemplated hereby will not result in a breach or constitute a default or event
of default by Buyer under any agreement to which Buyer or any of its assets are
subject or bound and will not result in a violation of any Laws applicable to
Buyer.
E. Buyer has no knowledge as of the date hereof of
pending actions, suits, proceedings or investigations to which Buyer is a party
before any court or other governmental authority which is likely to have
material adverse impact on the transactions contemplated hereby.
(ii) The representations and warranties of Buyer set forth
in Section 6(b)(i) and elsewhere in this Agreement shall be true, accurate and
correct in all material respects upon the execution of this Agreement, shall be
deemed to be repeated on and as of the Closing Date (except as they relate only
to an earlier date).
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7. Employees.
(a) As used in this Section 7, "Employee" shall mean an
employee of Seller or its affiliates, as applicable, whose principal duties
involve working at the Property. All Employees and their respective dates of
employment, job titles and base compensation are set forth on Schedule 7(a)
hereto. "Hired Employee" shall mean each Employee who accepts Buyer's, the
Partnership's or the then managing agent's, as applicable) offer of employment.
(b) On the Closing Date, Seller (or its affiliates, as
applicable) shall terminate the employment of each of the Employees, and Buyer
shall cause either Buyer, the Partnership or the then managing agent, to offer
employment to each such Employee on an at-will basis and in accordance with
Buyer's customary employment practices, policies and procedures. Notwithstanding
the foregoing, nothing in this Agreement shall be deemed to require Buyer, the
Partnership or the then managing agent, as applicable, to cause to be continued
any Hired Employee's employment for a definite period, except pursuant to the
provisions of any employment contract entered into by such party, as otherwise
provided by Section 7(c).
(c) Buyer covenants and agrees that Buyer, the Partnership or
the then managing agent, as applicable, shall not, for a period of 90 days
following the Closing Date, effect any reductions in force among the Hired
Employees other than reductions as a result of attrition, flexible staffing for
seasonal or occupancy adjustments, or terminations for cause. After 90 days,
Buyer may effect reductions in force and/or adjustments in compensation and/or
benefits without restriction.
(d) Buyer covenants and agrees that Buyer, the Partnership or
managing agent, as applicable, shall provide each Hired Employee with
compensation and benefits reasonably comparable to his or her compensation and
benefits from Seller as of the Closing Date; provided, however, benefits
pursuant to plans need be no greater than benefits provided by Buyer to its own
employees or to employees of an affiliate of Buyer similarly situated. In
particular, Buyer covenants and agrees that Buyer, the Partnership and managing
agent, as applicable, shall maintain the rental concessions offered to Hired
Employees in the Property. Buyer covenants and agrees that Buyer, the
Partnership or managing agent, as applicable, shall cause its health and
disability insurance plans to waive any eligibility periods and pre-existing
condition limitations for the Hired Employees and their eligible dependents
provided such waivers are allowed by Law and the terms of Buyer's health and
disability insurance plans, and may be made without cost to Buyer. Buyer
covenants and agrees that Buyer, the Partnership or managing agent, as
applicable, shall allow direct rollovers of all accounts of Hired Employees in
any qualified employee benefit plan maintained by Seller which has received a
favorable IRS determination letter, but only to the extent such rollovers are
allowed by Law and the terms of Seller's and Buyer's benefit plans, and may be
made without cost to Buyer. Buyer covenants and agrees that Buyer, the
Partnership or managing agent, as applicable, shall honor the seniority (based,
as of the Closing Date, on the time then worked by each Hired Employee during
the then-most recent continuous full-time period of employment at his or her
then-current employment location) for purposes of eligibility to participate in
and vesting and payment of benefits under (but not for purposes of determining
the amount of any benefit under) any employee benefit plan maintained by Buyer,
the Partnership or managing agent, as applicable, to the extent the same may be
done without cost to such party, and is allowed by Law and the terms of such
plan.
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(e) Seller shall be solely responsible for, and Buyer shall
have no liability (subject to reimbursement from the Partnership therefor from
Partnership's Operating Expenses to the extent required in the Management
Agreement (as hereinafter defined)) with respect to: (i) all obligations to
employees or former employees of Seller who were not Employees on the Closing
Date; (ii) all obligations to Employees accruing before the Closing Date; (iii)
all employee retirement, health, welfare or benefit plans and similar programs
of Seller, whether or not relating to the apartment portfolio; and (iv) all
obligations with respect to unemployment compensation and workers' compensation
from claims arising out of the claimant's employment by any Seller or its
affiliates.
(f) To the extent required by Law or any contractual
obligations, on and after the Closing Date, Seller shall comply in all respects
with the group health plan continuation coverage requirements of COBRA with
respect to any Employee of Seller who does not become a Hired Employee (subject
to reimbursement from the Partnership therefor from Partnership's Operating
Expenses to the extent required in the Management Agreement).
(g) Except as set forth in Section 7(c), nothing contained in
this Section 7 shall limit Buyer's management prerogatives with respect to the
Hired Employees, or create a right of continued employment for any Hired
Employee or create any right of action by any Hired Employee, any group of Hired
Employees or any other third party, either jointly or severally, and no Employee
shall be a third party beneficiary of this Agreement or have any rights against
Buyer.
(h) The parties obligations under this Section 7 shall survive
Closing.
8. Conditions Precedent to Closing.
(a) Buyer's obligation to Close under this Agreement is
subject to the fulfillment of each of the following conditions, subject, however
to the provisions of Section 8(c):
(i) The representations and warranties of Seller contained
herein shall be materially true, accurate and correct as of the Closing Date, it
being understood that rent rolls, delinquency reports and financial statements,
bearing a specific date are accurate as of such date only;
(ii) Seller shall have delivered all the documents and
other items required by Section 9, and shall have performed in all material
respects all other covenants, undertakings and obligations, and complied in all
material respects with all conditions required by this Agreement to be performed
or complied with by the Seller at or prior to the Closing; and
(iii) Title to the Property shall be as provided in this
Agreement.
Buyer acknowledges and agrees that its obligation to perform under this
Agreement is not contingent upon Buyer's ability to obtain, inter alia, any (A)
governmental or quasi-governmental approval of changes or modifications in use,
zoning or subdivision, (B) modification of any existing land use restriction,
(C) site plan approval or building permit, (D) consents to assignments of any
Service Contracts, management agreements or other agreements which Buyer
desires, or (E) financing.
(b) Seller's obligation under this Agreement to sell Seller's
Partnership Interests to Buyer, is subject to the fulfillment of each of the
following conditions, subject, however to the provisions of Section 8(c):
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(i) the representations and warranties of Buyer contained
herein shall be materially true, accurate and correct as of the Closing Date
except to the extent they relate only to an earlier date;
(ii) Buyer shall have delivered the Purchase Price and
other funds required hereunder and all the documents to be executed by Buyer set
forth in Section 10, and shall have performed in all material respects all other
covenants, undertakings and obligations, and complied in all material respects
with all conditions required by this Agreement to be performed or complied with
by Buyer at or prior to the Closing; and
(iii) on or prior to Closing Date, (A) Buyer shall not
have applied for or consented to the appointment of a receiver, trustee or
liquidator for itself or any of its assets unless the same shall have been
discharged prior to the Closing Date, and no such receiver, liquidator or
trustee shall have otherwise been appointed, unless same shall have been
discharged prior to the Closing Date; (B) Buyer shall not have admitted in
writing an inability to pay its debts as they mature; (C) Buyer shall not have
made a general assignment for the benefit of creditors; (D) Buyer shall not have
been adjudicated a bankrupt or insolvent, or had a petition for reorganization
granted with respect to Buyer; and (E) Buyer shall not have filed a voluntary
petition seeking reorganization or an arrangement with creditors or taken
advantage of any bankruptcy, reorganization, insolvency, readjustment or debt,
dissolution or liquidation Laws, or filed an answer admitting the material
allegations of a petition filed against it in any proceedings under any such
Laws, or had any petition filed against it in any proceeding under any of the
foregoing Laws unless the same shall have been dismissed, cancelled or
terminated prior to the Closing Date.
(c) In the event that any condition contained in Section 8(a)
or (b) is not satisfied, the party entitled to the satisfaction of such
condition as a condition to its obligation to close title hereunder shall have
as its sole remedy hereunder the right to elect to (i) waive such unsatisfied
condition, whereupon title shall close as provided in this Agreement without
abatement of the Purchase Price, or (ii) terminate this Agreement pursuant to
Sections 15(a) or (b) (as the case may be). If Closing occurs, Buyer and Seller
shall be conclusively deemed to have waived the benefit of any remaining
unfulfilled conditions set forth in Sections 8(a) or (b), respectively.
9. Deliveries by Seller at Closing. At the Closing, Seller shall
execute, acknowledge and/or deliver, as applicable, to the Buyer (or, as
appropriate, Title Company), the following:
(i) (A) the original (or, if not in the possession or
control of Seller, as the current manager of the Property, copies) of the
existing certificate or certificates of occupancy for the Property; (B) all
original (or, if not in the possession or control of Seller, as the current
manager of the Property, copies of) permits issued for or with respect to the
Property and all Leases, tenant files, plans and specifications. To the extent
that the items listed in this subsection are located at the Property, such
documents shall be made available to Buyer at such location and shall not be
required to be delivered at Closing.
(ii) INTENTIONALLY DELETED
(iii) Any updated Schedules and documents Seller are
required to provide pursuant to Section 6(a);
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(iv) Termination of the Management Agreement Cambridge
Hall Apartments, dated January 1, 2002, by and among PREIT-Rubin, Inc., PREIT,
and Mid-Island Properties, Inc. with joinder by Seller (the "Management
Agreement");
(v) An assignment of the Partnership Interests in form
attached hereto as Exhibit C (the "Partnership Assignment").
(vi) An amendment to the fictitious name registration, if
any, withdrawing Seller therefrom;
(vii) An Amended and Restated Partnership Agreement for
the Partnership pursuant to which Seller withdraws from the Partnership.
(viii) A "FIRPTA" affidavit sworn to by Seller in the form
of Exhibit D. Buyer acknowledges and agrees that upon Seller's delivery of such
affidavit, Buyer shall not withhold any portion of the Purchase Price pursuant
to Section 1445 of the Internal Revenue Code of 1986, as amended.
(ix) Duly completed and signed real estate transfer tax
returns (if required for the transaction contemplated herein by the governmental
authorities of the Commonwealth of Pennsylvania).
(x) An Assignment and Assumption of Service Contracts, in
the form of Exhibit E ("Service Contracts Assignment"), assigning without
warranty and representation beyond that made in this Agreement, all of Seller's
right, title and interest, if any, in and to all assignable (without consent of
any third party and without cost or expense to Seller) Service Contracts to
Buyer or its nominee. Seller shall not assign any insurance policies for the
Property that are in Seller's or its affiliates name(s) and shall not assign the
Management Agreement.
(xi) All other documents Seller is required to deliver
pursuant to the provisions of this Agreement or that Buyer reasonably requests
in order to effectuate the sale of the Partnership Interests; provided, that
such documents requested by Buyer do not impose any additional obligations on
Seller.
10. Deliveries by Buyer at Closing. At the Closing, Buyer shall
execute, acknowledge and/or deliver, as applicable, to Seller (or, as
appropriate, Title Company):
(i) Termination of the Management Agreement.
(ii) The Partnership Assignment.
(iii) An amendment to the fictitious name registration, if
any, withdrawing Seller from the Partnership;
(iv) An Amended and Restated Partnership Agreement for the
Partnership pursuant to which Seller withdraws from the Partnership.
-13-
(v) The Purchase Price, subject to apportionments, credits
and adjustments as provided in this Agreement.
(vi) Duly completed and signed real estate transfer tax
returns (if required for the transaction contemplated herein by the governmental
authorities of the Commonwealth of Pennsylvania).
(vii) The Service Contracts Assignment, assuming all of
Seller's right, title and interest, if any, in and to the Service Contracts.
(viii) All other documents Buyer is required to deliver
pursuant to the provisions of this Agreement.
11. Operation of the Property prior to the Closing Date. Between the
date hereof and the Closing Date, the Property shall be operated, maintained,
managed and insured in the same manner as it has been operated by the
Partnership (and/or manager) prior to the date of this Agreement. Such operation
and maintenance shall include, without limitation:
(a) The Partnership shall continue its existing capital
expenditure programs in accordance with Schedule 11(a) for the Property;
provided however except as shall be required to be made in the event an
emergency, capital expenditures and capital improvements shall not be made with
respect to the Property from and after the date here through the Closing Date,
except and to the extent currently included in said capital expenditure program.
(b) The parties agree the Partnership shall not further
encumber the Property or, except as contemplated in this Agreement, amend any of
the Loan Documents.
12. As Is; Release.
(a) Buyer acknowledges and agrees that the Property owned by
the Partnership shall at Closing be "AS IS - WHERE IS, WITH ALL FAULTS," with no
right of setoff or reduction in any Purchase Price based upon the condition
thereof and Buyer, as purchaser of an interest in the Partnership that owns the
Property, shall assume the risk of any and all adverse physical, environmental,
economic or legal conditions, subject to the representations and warranties made
by Seller in this Agreement or Seller's Documents. Except as expressly set forth
in Section 6(a)(i) or elsewhere in this Agreement or Seller's Documents, neither
Seller nor Seller's Representatives (as hereinafter defined) have or shall be
deemed to have made any representations or warranties, express or implied,
regarding the Partnership Interests, the Property or any matters affecting the
Property, including without limitation the physical condition of the Property,
title to or boundaries of the Property, pest control, soil conditions, the
presence or absence, location or scope of any Hazardous Materials in, at, or
under the Property, compliance with building, health, safety, land use or zoning
Laws, other engineering characteristics, traffic patterns and all other
information pertaining to the Property or with respect to any personal property
located thereon. Buyer moreover acknowledges (i) that Buyer is a sophisticated
buyer, knowledgeable and experienced in the financial and business risks
attendant to an investment in real property and partnerships who own and operate
the same and capable of evaluating the merits and risks of entering into this
Agreement and purchasing the Partnership Interests, (ii) that Buyer has entered
into this Agreement with the intention of relying upon its own knowledge of the
Property and investigations of the physical, environmental, economic and legal
condition of the Property, and (iii) that Buyer is not relying upon any
representation or warranty concerning the Property made by Seller or Seller's
Representatives other than as expressly set forth in Section 6(a)(i) or
elsewhere in this Agreement or Seller's Documents. Seller shall not have any
liability of any kind or nature for any subsequently discovered defects in the
Property, whether such defects were latent or patent.
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(b) Buyer or anyone claiming by, through or under Buyer hereby
fully and irrevocably releases Seller and Seller's Representatives from any and
all claims that it may now have or hereafter acquire against Seller or Seller's
Representatives for any cost, loss, liability, damage, expense, action or cause
of action, whether foreseen or unforeseen, arising from or related to any
structural, engineering or environmental condition at the Property, including
without limitation the presence or absence, location or scope of any Hazardous
Materials in, at, or under the Property (whether patent, latent or otherwise) as
of the Closing Date, except for claims against Seller based upon any
obligations, indemnities and liabilities of Seller expressly provided in this
Agreement. Buyer further acknowledges and agrees that this release shall be
given full force and effect according to each of its expressed terms and
provisions, including but not limited to those relating to unknown and suspected
claims, damages and causes of action. As a material covenant and condition of
this Agreement, Buyer agrees that in the event of any structural, engineering or
environmental defects, errors or omissions, including without limitation the
presence or absence, location or scope of any Hazardous Materials in, at, or
under the Property, or any other conditions affecting the Property as of the
Closing Date, Buyer shall not look to Seller for any redress or relief, except
for claims against Seller based upon any obligations, indemnities and
liabilities of Seller expressly provided in this Agreement.
(c) Buyer acknowledges and agrees that the provisions of this
Section 12 were a material factor in Seller's acceptance of the Purchase Price
for the Partnership Interests and, while Seller has cooperated with Buyer,
Seller is unwilling to sell its Partnership Interests unless Seller and Seller's
Representatives are expressly released as set forth in Section 12(b).
(d) Buyer has inspected the Property, is thoroughly acquainted
with and accepts its condition, subject to the express representations and
warranties contained in this Agreement and Seller's Documents. It is understood
that Buyer shall not be deemed to have audited any Leases or other records.
Seller shall not be liable or bound in any manner by any oral or written
"setups" or information pertaining to the Property furnished by Seller or
Seller's Representatives.
(e) The provisions of this Section 12 shall survive the
Closing or earlier termination of this Agreement.
13. Broker.
Buyer and Seller represent and warrant to each other that there is no
broker with whom they have dealt in connection with the sale and purchase
described herein. Buyer and Seller agree to indemnify, defend and hold the other
harmless from and against any and all claims, causes of action, losses, costs,
expenses, damages or liabilities, including reasonable attorneys' fees and
disbursements, which the other may sustain, incur or be exposed to, by reason of
any claim or claims by any broker, finder or other person, for fees, commissions
or other compensation arising out of the transactions contemplated in this
Agreement if such claim or claims are based in whole or in part on dealings or
agreements with the indemnifying party. The obligations and representations and
warranties contained in this Section 13 shall survive the Closing or earlier
termination of this Agreement.
-15-
14. INTENTIONALLY DELETED
15. Remedies.
(a) If (A) Seller fails to complete Closing in accordance with
the terms of this Agreement, or (B) Seller has otherwise breached any
representation, warranty or covenant contained in this Agreement in any material
respect and such breach is not cured within ten (10) days after written notice
from Buyer to Seller specifying such default, then Buyer, as its sole remedies
shall either (i) seek specific performance of Seller's obligations under this
Agreement or (ii) terminate this Agreement by written notice to Seller, in which
latter event the Deposit shall be returned to Buyer, this Agreement shall become
null and void and, thereafter, neither party shall have any further rights,
liabilities or obligations hereunder except as otherwise expressly provided
herein.
(b) If (A) Buyer fails to complete Closing in accordance with
the terms of this Agreement, or (B) Buyer has otherwise breached any
representation, warranty or covenant contained in this Agreement in any material
respect and such breach is not cured within ten (10) days after written notice
from Seller to Buyer specifying such default, then Seller shall have the right
to terminate this Agreement and as its sole and exclusive remedy, to retain the
Deposit as liquidated and agreed damages.
16. INTENTIONALLY DELETED.
17. Indemnity.
(a) Buyer's Indemnity. Buyer hereby agrees to indemnify,
defend and hold Seller and Seller's employees, representatives, agents, any
partner, officer, director, employee, trustee, shareholder, principal, parent,
subsidiary, affiliate or agent of Seller (collectively, "Seller's
Representatives") harmless from and against all claims, demands, causes of
action, losses, damages, liabilities, costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements) asserted against or
incurred by Seller or Seller's Representatives in connection with or arising out
of (i) any breach by Buyer or Partnership of the Service Contracts assigned to
Buyer, if any, which occurs after the Closing, (ii) damage to property and
injuries to third parties on the Property occurring after the Closing, (iii)
liability under any Loan Documents or guaranty or indemnification executed by
Seller under the Mortgage Loan arising and accruing from and after the Closing
Date; and (iv) breach by Buyer of the covenants and obligations of Buyer
pursuant to Section 7 hereof. Buyer's obligations under this Section 17(a)
shall survive the Closing.
(b) Seller Indemnity. Seller hereby agrees to indemnify,
defend and hold harmless Buyer and its successors and assigns and their
respective employees, representatives, agents, partners, officers, directors,
trustees, shareholders, principals, parents, subsidiaries and affiliates
(collectively, "Buyer's Representatives") from and against all claims, demands,
causes of action, losses, damages, liabilities, costs and expenses (including,
without limitation, reasonable attorneys fees and disbursements) asserted
against or incurred by any of them in connection with or arising out of (i)
INTENTIONALLY DELETED (ii) any claim by any Employee of Seller or any affiliates
thereof who does not become a Hired Employee and/or any claim accruing before
Closing by any Employee of any Seller or any affiliates thereof who becomes a
Hired Employee; and (iii) any actions or proceedings listed in Schedule
6(a)(i)(L)(i) hereto. The provisions of this Section 17(b) shall survive
Closing.
-16-
18. INTENTIONALLY DELETED.
19. Assignment
(a) This Agreement may be not assigned by Buyer except in
strict accordance with this Section 19, and any assignment or attempted
assignment by Buyer in violation of this Section 19 shall constitute a default
by Buyer hereunder and shall be null and void. Buyer shall be entitled to assign
its rights and obligations hereunder to any entity or entities consisting of
Buyer and/or any entity which is controlled by, controls, or is under common
control of or with Buyer and/or an equity investment partner and such assignee
shall succeed to the rights and obligations of Buyer under this Agreement. No
such assignment shall relieve Buyer from its obligations hereunder.
(b) Seller may consummate the transaction hereunder as a
"like-kind exchange" under Section 1031 of the Internal Revenue Code of 1986, as
amended, and Buyer agrees to cooperate with Seller, but at no expense to Buyer.
In furtherance thereof, Seller shall have the right to assign all or any part of
the benefits of this Agreement, but not Seller's obligations hereunder, to a
"qualified intermediary," as defined in Treasury Regulation Section
1.1031(k)-1(g)(4).
20. Access to Records; Tax Matters.
(a) For a period not to exceed one (1) year from and after
Closing, Seller and Seller's Representatives shall be entitled to access during
business hours to all Partnership related documents, books and records given to
Buyer by Seller solely for tax and audit purposes, regulatory compliance, and
cooperation with governmental investigations upon reasonable prior notice, and
shall have the right, at the requesting party's sole cost and expense, to make
copies of such documents, books and records in connection therewith. Buyer and
Buyer's Representatives shall have the same rights for the same period of time
with respect to documents, books and records of Seller that Buyer reasonably
believes will be useful for the continuing operation of the Property.
(b) For a period not to exceed one (1) year from and after
Closing, Buyer shall cooperate with the Seller and the Seller shall cooperate
with Buyer fully as and to the extent reasonably requested in connection with
the filing of tax returns solely as they relate to the Partnership. Within
fifteen (15) days after written request from a party, the other party shall
deliver its partnership tax return and any other related standard tax filing in
its possession or control to the requesting party, which returns and filings
shall be subject to Section 22. The provisions of this Section 20(b) shall
survive the Closing and shall not be merged therein.
21. Notices.
(a) All notices, elections, consents, approvals, demands,
objections, requests or other communications which Seller or Buyer may be
required or desire to give pursuant to, under or by virtue of this Agreement
must be in writing and sent by (i) first class U.S. certified or registered
mail, return receipt requested, with postage prepaid, or (ii) express mail or
courier (for next business day delivery), or (iii) facsimile, with hard copy
sent either the same or the next business day pursuant to subsections (i) or
(ii) above addressed or sent as follows:
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If to Seller:
c/o PREIT Services, LLC
The Bellevue, Third Floor
200 South Broad Street
Philadelphia, PA 19102
Attn: Jeffrey A. Linn
Facsimile No.: (215) 564-0240
with a copy to:
PREIT Services, LLC
The Bellevue, Third Floor
200 South Broad Street
Philadelphia, PA 19102
Attention: Bruce Goldman, Esquire
Facsimile No.: (215) 546-7311
and a copy to:
Clifford H. Swain, Esquire
Drinker Biddle & Reath LLP
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103-6996
Facsimile No.: (215) 988-2757
If to Buyer:
c/o Kravitz Properties, Inc.
attn: Joshua E. Hyman
25 Washington Lane
Suite 4A
Wyncote, PA 19095
with a copy to:
c/o Ron M. Donohue, Ph.D.
Hoyt Advisory Services
The Hoyt Center, Suite 300
760 US Highway One
North Palm Beach, FL 33408-4424
Facsimile No.: (561) 694-7629
-18-
with a copy to:
Mark S. Blaskey, Esquire
Pepper Hamilton LLP
3000 Two Logan
Square 18th & Arch Streets
Philadelphia, PA 19103
Facsimile No.: 215-981-4750
(b) Seller or Buyer may designate another addressee or change
their address for notices and other communications hereunder by a notice given
to the other parties in the manner provided in this Section 21. A notice or
other communication sent in compliance with the provisions of this Section 21
shall be deemed given and received on (i) the third (3rd) day following the date
it is deposited in the U.S. mail, or (ii) the first business day following the
date it is delivered to an express mail provider or courier, or (iii) the day it
is delivered if sent by facsimile before 5:00 p.m. local time on a business day
and the required hard copy is also sent as provided herein.
22. Confidential Information and Confidentiality.
(a) Except as hereinafter provided, neither Seller nor Buyer
will release or cause or permit to be released any press notices or publicity
(oral or written) or advertising promotion relating to, or otherwise announce or
disclose or cause to permit to be announced or disclosed in any manner
whatsoever, the terms, conditions or substance of this Agreement without first
obtaining the written consent of the other party; provided, however if Buyer or
Seller become legally obligated to disclose any confidential information or
information other pertinent to the transaction contemplated hereby, each will
give the non-disclosing party prompt and timely notice of such fact so that such
party may obtain a protective order or other appropriate remedy concerning any
such disclosure or waive compliance with the provisions of this Section 22. The
disclosing party will cooperate fully with the non-disclosing party in
connection with its efforts to obtain a protective order or other appropriate
remedy. In the event the non-disclosing party is unable to obtain a protective
order or other appropriate remedy with respect to the confidential information,
the disclosing party shall have nevertheless used its best efforts to have the
confidential information so required to be disclosed treated confidentially;
provided, further, notwithstanding anything herein to the contrary, Seller shall
have the right to make any disclosure (including public announcements) which
Seller reasonably believes (following consultation with its counsel) is required
by law or applicable rules of any securities exchange.
(b) The provisions of this Section 22 shall survive Closing or
earlier termination of this Agreement.
23. Mortgage Loan. Within thirty (30) days after the Closing Date,
Buyer, shall, in compliance with the Loan Documents, notify Lender of the sale,
transfer and assignment of the Partnership Interests to Buyer, as
purchaser/assignee, and shall provide Lender with such documents and information
as required by Lender in connection with such sale, transfer and assignment and
any required assumption of the Loan Documents. In addition to and not in
limitation of the foregoing, Buyer shall request and use commercially reasonable
efforts (including but not limited to entering into any amendments to any Loan
Documents, if any are requested by Lender) to obtain a release from Lender for
Seller (and its affiliates) from all liability under any and all non-recourse
carveouts, environmental indemnities and/or guarantees under any of the Loan
Documents. Buyer shall pay all costs, expenses and fees, including legal fees,
if any, imposed by Lender pursuant to the Mortgage Loan (or otherwise) for
processing and for obtaining the release from Lender for Seller (and its
affiliates) from all liability under any and all non-recourse carveouts,
environmental indemnities or guarantees under any of the Loan Documents. The
provisions of this Section 23 shall survive Closing.
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24. Miscellaneous.
(a) Until the Closing Date or earlier termination of this
Agreement, Seller shall notify Buyer promptly after obtaining knowledge of any
violation of any Laws or any litigation threatened or commenced which might
materially affect any of the Property or Partnership Interests.
(b) This Agreement shall not be altered, amended, changed,
waived, terminated or otherwise modified in any respect or particular, and no
consent or approval required pursuant to this Agreement shall be effective,
unless the same shall be in writing and signed by or on behalf of the party to
be charged.
(c) Any and all representations and warranties contained in
this Agreement or any Schedule or Exhibit attached hereto or any certificate,
financial statement or report or other document delivered pursuant to this
Agreement or in connection with the transactions contemplated hereby, and all
covenants and agreements contained in this Agreement, unless otherwise expressly
provided herein, shall not survive Closing;
(d) This Agreement shall be binding upon and shall inure to
the benefit of the parties and to their respective heirs, executors,
administrators, successors and permitted assigns.
(e) All prior statements, understandings, representations and
agreements between the parties with respect to the purchase and sale of the
Property, oral or written, are superseded by and merged in this Agreement, which
alone fully and completely expresses the agreement between them in connection
with this transaction and which is entered into after full investigation,
neither party relying upon any statement, understanding, representation or
agreement made by the other not embodied in this Agreement. This Agreement shall
be given a fair and reasonable construction in accordance with the intentions of
the parties. The parties acknowledge that each party and its counsel have
reviewed and revised this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendment,
Schedule or Exhibit hereto.
(f) Buyer agrees not to sue or otherwise seek to enforce any
personal obligation against any past, present or future trustee, shareholder,
officer or employee of PREIT or PREIT LP with respect to any matters arising out
of or in connection with this Agreement or the transactions contemplated hereby.
The provisions of this section shall survive the Closing or earlier termination
of this Agreement.
(g) Buyer and Seller mutually agree that, wherever this
Agreement provides that Buyer or Seller must send or give any notice, make an
election or take some other action within a specific time period or at a
specific time in order to exercise a right or remedy they may have hereunder,
time shall be of the essence with respect to the taking of such action, and
either party's failure to take such action within the applicable time period or
at such specific time shall be deemed to be an irrevocable waiver by such party
of such right or remedy.
-20-
(h) No failure or delay of either party in the exercise of any
right or remedy given to such party hereunder or the waiver by any party of any
condition hereunder for its benefit (unless the time specified herein for
exercise of such right or remedy has expired) shall constitute a waiver of any
other or further right or remedy nor shall any single or partial exercise of any
right or remedy preclude other or further exercise thereof or any other right or
remedy. No waiver by either party of any breach hereunder or failure or refusal
by the other party to comply with its obligations shall be deemed a waiver of
any other or subsequent breach, failure or refusal to so comply.
(i) Neither this Agreement nor any memorandum thereof shall be
recorded and any attempted recordation hereof shall be void and shall constitute
a default hereunder. Buyer agrees to indemnify Seller against all costs,
expenses and damages, including without limitation reasonable attorneys' fees
and disbursements, incurred by Seller by reason of the filing by Buyer of this
Agreement or any memorandum thereof. Notwithstanding anything to the contrary
contained in this Agreement, the filing with or submission to any court of this
Agreement in connection with any litigation shall not be a default hereunder.
(j) Delivery of this Agreement shall not be deemed an offer
and neither Seller nor Buyer shall have any rights or obligations hereunder
unless and until all parties have signed and delivered an original of this
Agreement. This Agreement may be executed in one or more counterparts, each of
which so executed and delivered shall be deemed an original, but all of which
taken together shall constitute but one and the same instrument. A facsimile of
a signature will have the same legal effect as an originally drawn signature.
(k) Each of the Exhibits and Schedules referred to herein and
attached hereto is incorporated herein by this reference.
(l) The caption headings in this Agreement are for convenience
only and are not intended to be a part of this Agreement and shall not be
construed to modify, explain or alter any of the terms, covenants or conditions
herein contained.
(m) This Agreement shall be interpreted and enforced in
accordance with the laws of the Commonwealth of Pennsylvania without reference
to principles of conflicts of laws.
(n) If any provision of this Agreement shall be unenforceable
or invalid, the same shall not affect the remaining provisions of this Agreement
and to this end the provisions of this Agreement are intended to be and shall be
severable. Notwithstanding the foregoing sentence, if (i) any provision of this
Agreement is finally determined by a court of competent jurisdiction to be
unenforceable or invalid in whole or in part, (ii) the opportunity for all
appeals of such determination have expired, and (iii) such unenforceability or
invalidity alters the substance of this Agreement (taken as a whole) so as to
deny either party, in a material way, the realization of the intended benefit of
its bargain, such party may terminate this Agreement within thirty (30) days
after the final determination by notice to the other. If such party so elects to
terminate this Agreement, then this Agreement shall be terminated and neither
party shall have any further rights, obligations or liabilities hereunder,
except for the Surviving Obligations, and except that Buyer shall be entitled to
a return of the Deposit.
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(o) SELLER AND BUYER HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY RIGHT THEY MAY HAVE TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING IN TORT
OR CONTRACT) BROUGHT BY THEM AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS AGREEMENT OR ANY OTHER DOCUMENT EXECUTED AND
DELIVERED BY A PARTY IN CONNECTION HEREWITH (INCLUDING ANY ACTION TO RESCIND OR
CANCEL THIS AGREEMENT OR ALLEGING THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS
OTHERWISE VOID OR VOIDABLE).
(p) This Agreement may be executed in any number of
counterparts, each of which shall be an original, and such counterparts together
shall constitute one and the same instrument.
(q) The parties hereto agree that a facsimile transmission of
an executed counterpart of this Agreement shall have the same binding effect on
the signatory as an executed and delivered original thereof. The parties hereto
further agree, for confirmatory purposes only, to exchange copies of executed
counterpart originals promptly after the aforesaid facsimile transmissions so
that each party may have at least one (1) fully executed original hereof.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the day and year first above written.
BUYER:
MID-ISLAND PROPERTIES, INC.
By: Joshua E. Hyman
----------------------
Joshua E. Hyman
President
SELLER:
PREIT ASSOCIATES, L.P.
By: Pennsylvania Real Estate Investment
Trust, its general partner
By: Jonathan B. Weller
----------------------
Jonathan B. Weller
President