FIRST AMENDMENT TO
CONTRIBUTION AGREEMENT
THIS FIRST AMENDMENT TO CONTRIBUTION AGREEMENT is made as of
September 30, 1997 by and among RUBIN OXFORD, INC. ("RO, Inc."), a Pennsylvania
corporation, RUBIN OXFORD VALLEY ASSOCIATES, L.P. ("RO,L.P."), a Pennsylvania
limited partnership, PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania
business trust ("PREIT"), and PREIT ASSOCIATES, L.P., a Delaware limited
partnership (the "Partnership").
Background
The parties hereto are parties to a Contribution Agreement
dated as of July 30, 1997 (the "Original Agreement") relating to The Court at
Oxford Valley, Langhorne, Pennsylvania.
The parties desire to enter into this Agreement to (i) amend
the Original Agreement to provide for the contribution of RO,Inc.'s Interests
in the Project Partnership to PR Oxford Valley Trust, a Pennsylvania business
trust ("PROV"), the outstanding beneficial interests in which are owned by the
Partnership and (ii) to provide for a post-closing adjustment.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Original Agreement.
2. Amendment Relating to Contributors. Section 2 of the
Original Agreement is hereby amended as follows:
(a) by inserting the words "and PR Oxford Valley
Trust, a Pennsylvania business trust," immediately following the word
"Partnership" each time it appears in the third line of Section 2;
(b) by inserting the words "(in accordance with
Sections 4(a) and 4(b) of Schedule A hereto)" immediately following the word
"Interests" in line seven of Section 2.
3. Amendment Relating to Certain Actions at Closing.
(a) Section 4(a) of Schedule A to the Original
Agreement is hereby amended by substituting the words "PR Oxford Valley Trust,
a Pennsylvania business trust ("PROV")," for the
words "the Partnership" appearing in the second line of Section 4(a).
(b) Section 4(c) of Schedule A to the Original
Agreement is hereby amended by:
(i) substituting the words "Each of the
Partnership and PROV" for the words "The Partnership" in the first line of
Section 4(c);
(ii) inserting the words "PROV and"
immediately prior to the words "the Partnership" in the seventh
line of Section 4(c); and
(iii) inserting the word ",respectively"
immediately following the word "partner" in the last line of Section 4(c).
(c) Section 4(d) of Schedule A to the Original
Agreement is hereby amended by:
(i) substituting the words "Each of the
Partnership and PROV" for the words "the Partnership" in the first line of
Section 4(d); and
(ii) inserting the words "and/or PROV"
immediately following the word "Partnership" in the second and eighth lines of
Section 4(d).
4. Indemnity. In connection with PROV's assumption of
RO,Inc.'s general partner interest, the Partnership shall indemnify and hold
RO,Inc. harmless from and against any and all obligations and liabilities
arising from a breach of or a default under the Project Partnership Agreement by
PROV from and after the date hereof in its capacity as general partner of the
Project Partnership other than any breach or default under the Project
Partnership Agreement that arises on or prior to the date hereof.
5. Post-Closing Adjustment. Section 6 of the Original
Agreement is hereby amended by the addition of a new Section 6.3 to read in its
entirety as follows:
"Section 6.3 Closing Balance Sheet; Post-Closing
Adjustment.
(a) Prior to Closing, the Contributors shall cause to
be prepared and delivered to PREIT a balance sheet of the Project Partnership as
of the Closing Date, prepared in accordance with GAAP, provided that the
accounts receivable of the Project Partnership as of the Closing shall be
accounted for in accordance with the applicable parenthetical in Section 3(b) of
Schedule A to the Original Agreement (the "Estimated Closing
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Balance Sheet"). The calculation of Deemed Value on the Closing Date shall be
based upon the Estimated Closing Balance Sheet.
(b) Following Closing, the Partnership shall cause a
balance sheet of the Project Partnership as of Closing (the "Closing Balance
Sheet") to be prepared in accordance with GAAP (provided that the accounts
receivable of the Project Partnership shall be accounted for in accordance with
the applicable parenthetical in Section 3(b) of Schedule A to the Original
Agreement) and the TRO Shareholders shall use their best efforts to cause the
Project Partnership and its managing general partner to cooperate with the
Partnership and its representatives in the preparation of such balance sheet and
to provide full access to the Project Partnership's books and records in
connection therewith. The Partnership shall use all reasonable efforts to
deliver to RO,L.P. a copy of the Closing Balance Sheet within 60 days of the
Closing Date. Unless RO,L.P. notifies the Special Committee within 10 days after
receipt of the Closing Balance Sheet of any objections thereto (specifying in
reasonable detail the basis therefor), such Closing Balance Sheet shall be
deemed the definitive Closing Balance Sheet. If RO,L.P. timely notifies the
Special Committee of any such objection, RO,L.P. and the Special Committee shall
attempt in good faith to reach an agreement as to the matters in dispute. If
RO,L.P. and the Special Committee shall have failed to resolve such disputed
matter within 10 business days after receipt of timely notice of such objection,
then any such disputed matter shall, at the instance of the Special Committee or
RO,L.P., be submitted to and resolved by any nationally recognized accounting
firm mutually acceptable to the Special Committee and RO,L.P. The fees and
expenses of such accounting firm incurred in resolving the disputed matters
shall be equitably apportioned by such accountants based upon the extent to
which the Special Committee, on the one hand, or RO,L.P., on the other hand, is
determined by such accountants to be the prevailing party in the resolution of
such disputed matters. The Closing Balance Sheet shall, after resolution of any
disputes pursuant to this Section 6.3(b), be deemed to be the definitive Closing
Balance Sheet.
(c) If there is a Net Deficit (as defined below) as
of the Closing Date, as conclusively determined based upon the definitive
Closing Balance Sheet, then RO,L.P. shall transfer, assign and convey, free and
clear of all Encumbrances, to the Partnership for cancellation a number of Class
A Units having a value (based upon a value of $23.40 per Class A Unit) equal to
the aggregate amount of the Net Deficit. If there is a Net Surplus (as defined
below) as of the Closing Date, as conclusively determined based upon the
definitive Closing Balance Sheet, then the Partnership shall issue and deliver
to RO,L.P. an additional number of Class A Units having a value (based upon a
value of $23.40 per Unit) equal to the aggregate amount of such Net Surplus.
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(d) Any payment pursuant to subparagraph (c) above
shall be made within 5 days following the date on which the Closing Balance
Sheet becomes the definitive Closing Balance Sheet as contemplated above,
provided, however, that if at any time prior to the time the Closing Balance
Sheet becomes definitive the Special Committee and RO,L.P. mutually agree that
following final determination of the Closing Balance Sheet (and the relevant
calculation based thereon) a payment will be required to be made pursuant to
subparagraph (c), the amount of such payment that the parties do not dispute
shall then be paid.
(e) For purposes of this Section 6.3, "Net Deficit"
means the excess, if any, of the Deemed Value (as defined in paragraph 3 of
Schedule A) calculated based upon the Estimated Closing Balance Sheet over the
Deemed Value calculated based upon the definitive Closing Balance Sheet, and
"Net Surplus" means the excess, if any, of Deemed Value calculated based upon
the definitive Closing Balance Sheet over the Deemed Value calculated based upon
the Estimated Closing Balance Sheet.
(f) The provisions of this Section 6.3 shall in no
way limit or alter any of the representations, warranties and covenants of the
parties made herein and following the preparation of the Closing Balance Sheet
and the payment of any amounts due pursuant to this Section 6.3, PREIT and the
Partnership shall continue, inter alia, to have all rights available to them
pursuant to Section 9 hereof."
6. Confirmation. The Original Agreement, as amended hereby, is
ratified and confirmed in all respects.
IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement, all as of the date first above written.
RUBIN OXFORD, INC.
By: /s/ Ronald Rubin
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Name:
Title:
RUBIN OXFORD VALLEY ASSOCIATES, L.P.
By: Rubin Oxford, Inc., its
general partner
By: /s/ Ronald Rubin
-----------------------------
Name:
Title:
PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST
By: /s/ Jonathan B. Weller
---------------------------------------
Name:
Title:
PREIT ASSOCIATES, L.P.
By: Pennsylvania Real Estate
Investment Trust, its
general partner
By: /s/ Jonathan B. Weller
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Name:
Title: