AGREEMENT REGARDING ASSIGNMENT OF PURCHASE AND SALE
AGREEMENTS
THIS AGREEMENT is made as of the 30th day of June, 1997 between THE
RUBIN ORGANIZATION, INC. (the "Assignor"), a Pennsylvania Corporation, with an
office at The Bellevue, 200 S. Broad Street, Philadelphia, Pennsylvania,
19102, and PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, an unincorporated
association in business trust form created in Pennsylvania pursuant to a Trust
Agreement dated December 27, 1960, as last amended and restated on December
16, 1987 (the "Assignee"), each having an office at 455 Pennsylvania Avenue,
Suite 135, Fort Washington, Pennsylvania 19034.
BACKGROUND
On June 30, 1997, the Assignor entered into the following Purchase
and Sale Agreements (collectively, the "Mall Purchase Agreements"):
A. Purchase and Sale Agreement (the "Dartmouth Mall Agreement") with
Diversified Equity Corporation of Illinois, Inc. (the "Dartmouth Seller") for
the sale and purchase of the real property located in the City of Dartmouth,
Massachusetts, commonly known as the North Dartmouth Mall, and more
particularly described in the Dartmouth Mall Agreement.
B. Purchase and Sale Agreement (the "Magnolia Mall Agreement") with
Magnolia Retail Associates, L.L.C. (the "Magnolia Seller") for the sale and
purchase of various interests in and relating to the retail shopping center
located in the City of Florence, South Carolina, commonly known as Magnolia
Mall, and more particularly described in the Magnolia Mall Agreement.
In this Agreement, the Assignor and the Assignee desire to set forth
the terms and conditions under which the Assignor will assign all of its
right, title and interest in and to the Mall Purchase Agreements to the
Assignee, and the Assignee will assume the same. Capitalized terms which are
not defined in this Agreement shall have the same meanings ascribed to them in
the Magnolia Mall Agreement.
TERMS
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is acknowledged, the Assignor and the Assignee, intending to be
legally bound, agree as follows:
1. MAGNOLIA MALL AGREEMENT. (a) (i) Concurrently with the
execution of this Agreement, the Assignee shall deposit $1,000,000.00 on account
of the purchase price as required under the Magnolia Mall Agreement.
(ii) Subject to and simultaneously with compliance
by the Assignee with the preceding paragraph (i), the Assignor hereby assigns to
the Assignee, without representation, warranty, or recourse (except as otherwise
expressly provided in this Agreement), all of the Assignor's right, title and
interest in and to the Magnolia Mall Agreement, and the Assignee hereby assumes,
all of the Assignor's obligations under the Magnolia Mall Agreement, including
without limitation the obligation to complete closing thereunder.
(b) On or before July 9, 1997, the Assignee shall pay the
Final Down Payment, in the amount of $4,000,000.00, to the Magnolia Seller as
required under the Magnolia Mall Agreement.
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(c) The Assignee hereby indemnifies and agrees to hold the
Assignor harmless from and against all cost, loss, liability and expense,
including reasonable attorneys' fees, incurred by the Assignor as a result or
arising out of the Assignee's failure to timely pay the Down Payment.
(d) If (i) closing of the transaction described in the
Letter of Intent (the "Letter of Intent") between the Assignor and the
Assignee dated April 16, 1997 (the "PREIT/TRO Closing"), is not completed for
any reason other than a material default by the Assignor beyond applicable
notice and cure periods under the definitive agreement governing the
transaction described in the Letter of Intent, as a result of which the
Assignee has the right to cancel, and does cancel, such agreement, and (ii)
the Assignee purchases the Magnolia Mall pursuant to the Magnolia Mall
Agreement, then the Assignee shall, effective as of closing thereof, enter
into a management agreement with the Assignor as exclusive management and
leasing agent, on a month-to-month basis upon the same terms and conditions
contained in the Management and Operating Agreement dated as of January 1,
1995 between the Magnolia Seller, as Owner, and Equity Properties and
Development Limited Partnership ("EPDLP"), as Operator, as assigned by EPDLP
to the Assignor as of December 31, 1996.
(e) If the Assignee does not for any reason complete the
closing under the Magnolia Mall Agreement, then the Assignor shall have the
right and option (but not the obligation) to require the Assignee to reassign
all of its rights, title and interest in and to the Magnolia Mall Agreement to
the Assignor for a consideration of $1.00 and upon reimbursement to the
Assignee of the Down Payment under the Magnolia Mall Agreement.
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2. DARTMOUTH MALL AGREEMENT. (a) The Assignor has deposited the sum
of $1,000,000.00 on account of the purchase price as required thereunder (the
"Dartmouth Deposit").
(b) If and when the PREIT/TRO Closing is completed, then
concurrently with the PREIT/TRO Closing:
(i) The Assignor shall assign to the Assignee all of
the Assignor's right, title and interest in and to the Dartmouth Mall Agreement,
and the Assignee shall assume all of the Assignor's obligations under the
Dartmouth Mall Agreement including without limitation the obligation to complete
closing thereunder, and the Assignor and the Assignee shall execute and deliver
an Assignment and Assumption of Purchase and Sale Agreement consistent with the
provisions of this Agreement.
(ii) The Assignee shall pay or reimburse to the
Assignor the sum of $1,000,000.00 representing the Dartmouth Deposit.
3. REPRESENTATIONS OF ASSIGNOR. As material inducement for the Assignee
to enter into this Agreement, the Assignor represents and warrants to the
Assignee as follows:
(a) As of the date hereof, no fact or condition has been disclosed
to or learned by the Assignor that is in any material respect contrary to or in
conflict with any of the representations or warranties that are made by the
Magnolia Seller "to the Seller's Knowledge" under the Magnolia Mall Agreement
or that are otherwise qualified thereunder to the extent that information may
have been previously disclosed to or learned by the Assignor as manager of the
Magnolia Mall.
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(b) The Assignor is a duly formed and validly existing corporation
organized under the laws of Pennsylvania. The Assignor has the full legal right,
power and authority to execute and deliver the Magnolia Mall Agreement and this
Agreement and to perform its obligations under this Agreement. The person
signing this Agreement on behalf of the Assignor is authorized to do so.
(c) The Magnolia Mall Agreement has been duly executed by the
Assignor, and assuming due execution by the Magnolia Seller, is in full force
and effect.
4. REPRESENTATIONS OF ASSIGNEE. As material inducement for the Assignor
to enter into this Agreement, the Assignee represents and warrants to the
Assignor as follows:
(a) The Assignee is a duly formed and organized, and validly
existing, unincorporated association in business trust form under the laws of
Pennsylvania. The Assignee has the full legal right, power and authority to
execute and deliver this Agreement and to perform its obligations under this
Agreement and the Magnolia Mall Agreement. The person signing this Agreement
on behalf of the Assignor is authorized to do so.
(b) The Assignee has paid the Initial Down Payment and the Interim
Down Payment under the Magnolia Mall Agreement.
5. COVENANTS. (a) The Assignee agrees that it shall not further
assign or encumber the Magnolia Mall Agreement, or amend the Magnolia Mall
Agreement in any manner that would materially increase the Purchaser's
obligations thereunder, or enter into any contract to do any of the foregoing
(except as otherwise provided in this Agreement), without the prior written
consent of the Assignor, except that the Assignee may, without the Assignor's
consent, further assign the Magnolia Mall Agreement to a controlled affiliate
of the Assignee.
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(b) The Assignor and the Assignee each agree that neither shall
further assign or encumber the Dartmouth Mall Agreement, or amend the Dartmouth
Mall Agreement in any manner that would materially increase the Purchaser's
obligations thereunder, or enter into any contract to do any of the foregoing
(except as otherwise provided in this Agreement), without the prior written
consent of the other, except that the Assignee may, without the Assignor's
consent, assign its rights under this Agreement to a controlled affiliate of the
Assignee, and the Assignor's obligations under this paragraph (b) shall no
longer apply if for any reason the transaction contemplated in the Letter of
Intent is canceled or if the PREIT/TRO Closing is not completed.
(c) The Assignor agrees to provide to the Assignee and the Magnolia
Seller the current lease schedule referenced in Section 4.B(ii)(h) of the
Magnolia Mall Agreement, and to provide an affidavit as reasonably requested by
the Title Insurer which relates to matters which are the responsibility of the
Assignor as manager of the Magnolia Mall.
(d) If the Dartmouth Mall Agreement is assigned as contemplated
under this Agreement, the Assignor agrees to provide to the Assignee and the
Dartmouth Seller the current lease schedule referenced in Section 4.B(ii)(h) of
the Dartmouth Mall Agreement, and to provide an affidavit as reasonably
requested by the Title Insurer which relates to matters which are the
responsibility of the Assignor as manager of the North Dartmouth Mall.
6. ENTIRE AGREEMENT. This Agreement expresses the entire agreement
of, and the entire intention of, the parties hereto with respect to subject
matter hereof, and supersedes all prior understandings and agreements, whether
written or oral, among the parties relating to
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the transaction provided for herein. No prior discussions or drafts of this
Agreement shall have any legal effect or consequence.
7. MODIFICATION. This Agreement may not be modified or amended except
by a written instrument executed by the Assignor and the Assignee.
8. SEVERABILITY. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
9. WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
10. BINDING EFFECT. This Agreement shall inure to the benefit of and
be binding upon the Seller and the Buyer and their respective legal or
personal representatives, heirs, administrators, executors, successors and
permitted assigns.
11. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, and all of which taken
together shall constitute
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a single agreement, with the same effect as if the signatures thereto and
hereto were upon the same instrument. For purposes of this Agreement, a
telecopy of an executed counterpart shall constitute an original.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Agreement to be duly executed the day and year first above written.
WITNESS OR ATTEST: ASSIGNOR:
THE RUBIN ORGANIZATION, INC.,
a Pennsylvania Corporation
/s/ Alan Feldman By:/s/ Ron Rubin
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Name: Alan Feldman Name: Ron Rubin
Title: Vice President & Secretary Title: CEO
WITNESS OR ATTEST: ASSIGNEE:
PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST
/s/ Jeffrey A. Linn By:/s/ Jonathan B. Weller
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Name: Jeffrey A. Linn Name: Jonathan B. Weller
Title: Senior Vice President & Secretary Title: President/CEO
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