PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made as of the
24th day of July, 1998, by and between OAKLANDS LIMITED PARTNERSHIP, a
Pennsylvania limited partnership ("Seller") with an office at 120 Arrandale
Boulevard, Exton, Pennsylvania 19341 and PREIT ASSOCIATES, L.P., or its nominee
("Purchaser"), a Delaware limited partnership, with an office at 455
Pennsylvania Avenue, Fort Washington, Pennsylvania 19034.
RECITALS:
A. Seller is the owner of a certain parcel of real estate (the "Real
Property") in Chester County, Pennsylvania which parcel is more particularly
described in Exhibit A attached hereto and upon which is located a retail
shopping center commonly known as "Festival at Oaklands".
B. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, the Property (as such term is hereinafter defined), each
in accordance with and subject to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the above Recitals, the mutual
covenants and agreements herein set forth and the benefits to be derived
therefrom, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Purchaser and Seller agree as
follows:
1. PURCHASE AND SALE
Subject to and in accordance with the terms and conditions set forth
in this Agreement, Purchaser shall purchase from Seller, and Seller shall sell
or cause to be sold to Purchaser, the Real Property together with: (i) all
buildings and improvements owned by Seller and located on the Real Property,
together with any and all of Seller's rights, easements and privileges
presently thereon or appertaining thereto, including without limitation,
Seller's reversionary interest in any buildings owned by tenants and Seller's
interest in any and all Reciprocal Easement Agreements ("REA") and other
agreements benefiting the Real Property; (ii) Seller's right, title and
interest in and to the leases of the Real Property as of the date hereof, and
other leases entered into in accordance with this Agreement, and all
amendments thereto (the "Leases") affecting the Real Property or any part
thereof and all unapplied security or other deposits paid under the Leases;
(iii) all tangible personal property owned or leased by Seller and used or
useful in the ownership, operation or maintenance of the Real Property (or any
portion thereof) and located at the Real Property or used solely in connection
with the Real Property, including without limitation the personal property set
forth on Exhibit B attached hereto and all additions to or substitutions for
the foregoing or any part thereof between the date hereof and the date of
Closing (as hereinafter defined) (the "Tangible Personal Property"); (iv) all
right, title and interest of Seller under any and all of the maintenance,
service, advertising and other like contracts and agreements and equipment
leases (to the extent assignable and to the extent Purchaser is to accept an
assignment thereof, as provided below) with respect to the ownership and
operation of the Real Property and/or the improvements thereon and other
agreements entered into in accordance with this Agreement, and all amendments
thereto (the "Service Contracts"); and (v) all other intangible personal
property owned by the Seller and used in the ownership, operation or
maintenance of the Property or any portion thereof; including without
limitation (A) to the extent assignable, the right to use the trade name
"Festival at Oakland" and all other trade names; (B) to the extent assignable
and obtained, all certificates of occupancy and other permits, licenses and
certificates held by Seller or any tenant under the Leases and necessary to
occupy, operate and transfer the Real Property (collectively, "Permits and
Licenses"); (C) to the extent assignable, all utility, security and other
deposits and reserve accounts made (and any refunds thereof) as security for
the fulfillment of any obligation of Seller or any person claiming by or
through Seller in connection with the Real Property; (D) if and to the extent
in Seller's possession or control, all files, budgets, reports, and other
business records pertaining to the Real Property, including without limitation
those relating to any marketing, advertising or similar promotional fund or
merchant's association (collectively, "Promotional Organizations") relating to
the Property (collectively, "Business Records"). The term "Business Records"
shall exclude all partnership documentation of Seller and business records
maintained by Seller for income tax purposes and in connection with
partnership affairs; (E) all matured and unmatured claims and causes of action
which arise from events occurring from and after Closing; (F) to the extent
assignable, all warranties, guaranties and other assurances of performance
("Guaranties and Warranties"); (G) to the extent assignable, all telephone
numbers and directory advertising agreements; and (H) to the extent
assignable, all surveys, drawings, plans, specifications, diagrams, reports,
environmental assessments and other architectural or engineering work product
if and to the extent in Seller's possession or control (collectively, the
"Plans and Reports") (items (i) through (v) above, together with the Real
Property, are collectively referred to in this Agreement as the "Property").
All of the foregoing expressly excludes all property owned by tenants or other
users or occupants of the Property. Seller makes no representation or warranty
regarding the accuracy or reliability of the Plans and Report delivered to
Purchaser pursuant to this Section 1.
Purchaser has entered into an Agreement of Sale with the owner of an
adjoining property on which is constructed a Ruby Tuesday Restaurant (the
"Other Agreement of Sale"). In the event Closing does not occur under the
Other Agreement of Sale, Purchaser shall have the right to terminate this
Agreement. In the event Closing under the Other Agreement of Sale does not
occur because of a default by Purchaser thereunder, the terms and conditions
of Section 9.A of this Agreement shall apply. In the event Closing under the
Other Agreement of Sale does not occur because of a default by the seller
thereunder, then Seller shall be deemed to be in default hereunder. In the
event Closing under the Other Agreement of Sale does not occur because of the
failure of a condition, then the terms and conditions of this Agreement
dealing with the same condition shall apply.
2. PURCHASE PRICE
The purchase price to be paid by Purchaser to Seller for the Property
is Seventeen Million Seven Hundred Thousand Dollars ($17,700,000) (the
"Purchase Price"). The Purchase Price shall be paid as follows:
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A. Deposit. Purchaser shall, within two (2) business day from the
date of this Agreement, deliver to the Title Company (as hereinafter defined),
as Escrow Agent, a clean, irrevocable letter of credit issued by a financial
institution reasonably acceptable to Seller addressed to the Escrow Agent in
the amount of Four Hundred Thousand Dollars ($400,000) (the "Deposit"),
substantially in the form of Exhibit C attached hereto.
B. Cash at Closing. At Closing, Purchaser shall pay to Seller, by
wire transfer of immediately available funds to a bank located in the
continental United States, an amount equal to the Purchase Price, plus or
minus, as the case may require, the closing prorations and adjustments to be
made pursuant to Section 4.C below (the "Cash Portion"). Seller shall give
Purchaser its wiring instructions at least three (3) business days before
Closing. Seller shall instruct the Title Company to return the Letter of
Credit to Purchaser at Closing so long as Purchaser replaces the Letter of
Credit with cash at Closing.
3. EVIDENCE OF TITLE
A. Title Examination; Commitment for Title Insurance. Except as
otherwise provided in this Section 3, Purchaser shall have until the
expiration of the Review Period (as set forth in958647182 Section 10) to
examine title to the Real Property. Purchaser shall be responsible for
obtaining from Commonwealth Land Title Insurance Company (the "Title
Company"), at Purchaser's expense, a title insurance commitment (the "Title
Commitment") covering the Real Property, under which the Title Company agrees
to insure title to the Real Property at customary rates in the full amount of
the Purchase Price under an ALTA Form B (1970, as revised 1984, or 1992 with
the creditors rights exception removed by endorsement) owner's policy and free
and clear of all restrictions, encumbrances and title objections, except for
the "Permitted Exceptions" (as defined below) (collectively, "Insurable
Title"). Purchaser shall instruct the Title Company to deliver to Purchaser
and Seller copies of the Title Commitment and all instruments referenced in
Schedule B thereof within twenty (20) days of the date hereof.
B. Survey. (i) During the Review Period, Purchaser may, at
Purchaser's expense, employ a surveyor or surveying firm to prepare a survey
(the "Survey") of the Property. Purchaser shall instruct said surveyor to
deliver a copy of the Survey to Purchaser, Seller and the Title Insurer.
(ii) If Purchaser causes a Survey of the Property to be made, the
metes and bounds description in the Deed referred to in Section 4.B(i)(a) below
shall, at Purchaser's option, be based on and conform to the Survey, provided
said description accurately describes the Real Property owned by Seller.
Seller's warranty of title in the Deed shall be limited to the legal
description of the Property contained in Seller's existing Deed to the
Property.
C. Title Objections; Cure of Title Objections. (i) Seller shall
convey and transfer fee simple title to the Real Property at Closing to
Purchaser in accordance with all the provisions of this Agreement and subject
only to Permitted Exceptions. The "Permitted Exceptions" shall consist of only
those title exceptions and survey items which are noted on the Title
Commitment and Survey obtained by Purchaser and to which Purchaser has not
objected prior to the expiration of the Review Period. If Purchaser delivers
notice to Seller identifying such objections, Seller, within ten (10) days of
receipt of said notice, shall either (x) clear the title of the defects and
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objections so specified or demonstrate to Purchaser's satisfaction its ability
to clear such defects prior to or at Closing, or (y) notify Buyer in writing
that it shall not clear such defect prior to or at Closing, in which case
Purchaser may either terminate this Agreement by giving written notice of same
to Seller within ten (10) days of Purchaser's receipt of Seller's notice, or
if it does not give such notice to Seller, accept such matters as Permitted
Exceptions. If Purchaser terminates this Agreement pursuant to this Section 3
on account of a title defect that would render title to the Property to be
other than good, marketable and insurable as provided above, the Title
Company, as Escrow Agent, shall immediately refund the Deposit to Purchaser
together with all interest accrued thereon, and Seller shall reimburse
Purchaser for Purchaser's costs and expenses actually incurred not to exceed
$5,000 for the preparation of the Title Commitment and Survey, whereupon
neither party shall have any further rights, liabilities or obligations to
each other or hereunder.
If a Title Commitment exception arises between the expiration date
of the Review Period and the Closing which could render title to the Real
Property to be other than good, marketable and insurable as provided above (a
"New Exception"), Purchaser shall have five (5) business days after it has
been made aware of same within which to notify Seller of any such New
Exception to which it objects. Any such New Exception not objected to by
Purchaser as aforesaid shall become a Permitted Exception.
(ii) Notwithstanding anything to the contrary contained in
the preceding paragraph (i).
(A) Seller shall be obligated to pay out of the
proceeds received at Closing or deposit in escrow with the Title Company and
caused to be removed as an exception to title the existing mortgages
encumbering the Property, any other liens created by Seller and any
non-consensual liens of a liquidated amount in the aggregate of not more than
$50,000; and
(B) (1) With respect to New Exceptions which are
not Permitted Exceptions and were caused by an intentional violation by Seller
of an obligation of Seller hereunder, Seller shall be obligated to remove or
to obtain Title Insurer's waiver of, or endorsement over, such New Exception.
Any violation of Section 5.G(ii)(c) shall be deemed "intentional" for purposes
of this Section.
(2) With respect to New Exceptions which are
not Permitted Exceptions but which arose from events occurring prior to the
date hereof, Seller shall be obligated to remove or to obtain the Title
Insurer's waiver of, or endorsement over, such New Exceptions but shall not be
required to spend, in the aggregate, more than $50,000. If such New Exceptions
require the expenditure of amounts in excess of $50,000 to be so cured, and
Seller elects not to cure such New Exceptions, Seller shall not be in breach
under Section 9.A., but Purchaser may elect either (a) to close subject to
such New Exceptions (in which event Seller shall credit Purchaser in the
amount of $50,000 at Closing), or (b) to terminate this Agreement in which
event the Deposit will promptly be re-paid to Purchaser and neither party
shall have any further obligation hereunder except as expressly survives
pursuant to this Agreement.
(3) With respect to New Exceptions which are
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Permitted Exceptions, Seller shall have no obligation to cure the same. Seller
shall, upon receipt of any notice of a claim or lawsuit related to an event
occurring after the date hereof which could result in a New Exception, forward
a copy of such notice to Purchaser and respond thereto in such manner as
Purchaser may reasonably direct, at Seller's sole cost and expense.
(4) Seller may delay Closing as necessary fo
up to thirty (30) days in order to cure any exception which it is required or
may elect to cure hereunder, provided Purchaser's financing commitment shall
extend for such period of time without additional cost or expense to Purchaser
and provided further that all closing prorations and adjustments as set out in
Section 4.C shall be as of the original Closing Date.
(iii) If this Agreement is not terminated in accordance with
subsection (ii) above as a result of a New Exception, Purchaser shall
consummate the Closing without any adjustment in the Purchase Price (except as
provided above) and accept title to the property subject to all Permitted
Exceptions.
4. CLOSING
A. Closing Date. The "Closing" of the transaction
contemplated by this Agreement (that is, the payment of the Purchase Price,
the transfer of title to the Property and the satisfaction of all other terms
and conditions of this Agreement) shall occur at the office of PREIT-RUBIN,
Inc., The Bellevue, Suite 300, Philadelphia, PA 19103 at 10:00 AM E.D.T on
fifteen (15) days after expiration of the Review Period or such earlier date
as may be agreed to in writing by the parties. The "Closing Date" shall be the
date of Closing, provided the Purchase Price (net of Seller's closing costs)
has been wired to Seller by 2:00 PM E.D.T. on that day; otherwise the Closing
Date shall be deemed to be the next business day. If the date for Closing
above provided for falls on a Saturday, Sunday or legal holiday, then the
Closing Date shall be the next business day.
B. Closing Documents.
(i) Seller. In addition to the other items and documents
required elsewhere under this Agreement to be delivered to Purchaser at
Closing, Seller shall also execute and/or deliver (or cause to be delivered)
to Purchaser the following at Closing:
(a) a special warranty deed (the "Deed") in the
form attached as Exhibit D duly acknowledged and in proper form for recording;
(b) a bill of sale in the form attached as Exhibit
E, to which will be attached an updated list of the Tangible Personal
Property;
(c) a letter advising tenants under the Leases of
the change in ownership of the property in the form attached as Exhibit F and
similar documents if required by any Reciprocal Easement Agreement ("REA");
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(d) assignments and assumptions of the Leases and the
Service Contracts that are to be transferred to Purchaser pursuant to this
Agreement in the form attached as Exhibit G;
(e) if and to the extent not previously delivered
to Purchaser, the originals (or if not available, copies certified as true by
Seller) of the Leases, the Service Contracts and to the extent in the
possession or control of Seller, the originals (or if not available, copies)
of the Permits and Licenses, Business Records, Guaranties and Warranties and
Plans and Reports;
(f) a Non-Foreign Certification in the form
attached as Exhibit H;
(g) a closing statement to be executed by Seller
and Purchaser, setting forth the prorations and adjustments to the Purchase
Price as required by Section 4.C below;
(h) the schedule of past-due rents for the
Property, if any, as described in Section 4.C(i)(b) below;
(i) a termination of any applicable management
agreement;
(j) an affidavit of title in such form and content
as may be required by the Title Company to enable the Title Company to insure
Purchaser's title to the Property in conformity with Section 3 of this
Agreement;
(k) a certificate that the representations and
warranties of Seller contained in this Agreement remain true and correct;
(l) a partnership certificate executed by the
general partner of Seller authorizing this transaction and the general partner
to sign this Agreement and the other documents to be executed and delivered by
Seller pursuant to this Agreement;
(m) a current Certificate of Good Standing for
Seller from the State of its organization and Pennsylvania, if different;
(n) a certified lease schedule and rent roll for
the property dated one day prior to Closing, containing the same types of
information set forth on Exhibit J;
(o) omitted;
(p) if necessary, the withdrawal by Seller of any
registration of the trade name "Festival at Oaklands";
(q) if required by the Title Company, a bulk sales
clearance certificate issued by the Pennsylvania Department of Revenue;
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(r) evidence that certain Service Contracts
identified by Purchaser to Seller at least thirty (30) days prior to Closing
have been terminated to the extent such Service Contracts may be terminated in
accordance with their respective terms;
(s) assignment of any and all bankruptcy claims or
receivables involving any tenant in a form reasonably satisfactory to
Purchaser and its counsel; and
(t) such other documents requested by Purchaser at
least five (5) business days prior to Closing, and consistent with the
provisions of this Agreement, as may be reasonably required to complete this
transaction.
(ii) Purchaser. At Closing, Purchaser shall deliver or cause
to be delivered to Seller the following:
(a) the Cash Portion;
(b) omitted;
(c) a counterpart of the termination or assignment
of any management agreement, as the case may be;
(d) assignments and assumptions of the Leases and
the Service Contracts that are to be transferred to Purchaser pursuant to this
Agreement, in the form attached as Exhibit G;
(e) the closing statement referred to in Section
4.B(i)(g) above;
(f) a certificate that the representations and
warranties of Purchaser contained in this Agreement remain true and correct;
(g) resolutions/consents of Purchaser authorizing
this transaction, and an incumbency certificate for the officer(s) signing
this Agreement and the other documents to be executed and delivered by
Purchaser pursuant to this Agreement; and
(h) such other documents requested by Seller, and
consistent with the provisions of this Agreement, as may be reasonably
required to complete this transaction.
(iii) Tenant Estoppels
Seller shall use diligent efforts to furnish Purchaser with estoppel
certificates substantially in the form attached as Exhibit I ("Estoppel
Certificates") from all tenants and all parties to any REA which are tenants
of the Property prior to the expiration of the Review Period. Seller shall
keep Purchaser apprised as to the status of receipt of the Estoppel
Certificates and shall send Purchaser copies of all correspondence received by
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Seller regarding same. Seller's liability under the representations and
warranties under Section 6.A(v) as to a particular tenant shall terminate upon
Purchaser's receipt of an Estoppel Certificate for the applicable tenant
(provided, if Purchaser receives an Estoppel Certificate which confirms some
but not all of the matters which are the subject of the representations and
warranties under Section 6.A(v), then as to such tenant, (x) if the Estoppel
Certificate was received prior to Closing, the representations and warranties
set forth in Section 6.A(v) shall be deemed to omit such matters stated on the
Estoppel Certificate and (y) if received after Closing, the representations
and warranties under Section 6.A(v) shall cease to survive as to such matters,
but shall continue to survive as to matters not confirmed by such Estoppel
Certificate.
It shall be a condition to Purchaser's obligation to close hereunder
that Seller obtain Tenant Estoppels acceptable to Purchaser from all Major
Tenants (as that term is defined in Exhibit J hereof) and eighty (80%) percent
of tenants leasing more than 3500 square feet in the Property.
C. Closing Prorations and Adjustments
(i) The following items are to be prorated or adjusted (as
appropriate) as of 11:59 PM on the day before the Closing Date and reprorated
(if necessary) pursuant to Section 4.C(ii) below, it being understood that for
purposes of prorations and adjustments, Seller shall be deemed the owner of
the Property on the day before the Closing Date, and Purchaser shall be deemed
the owner of the Property on the Closing Date:
(a) real estate and personal property taxes based
on the fiscal year used by the taxing authority (on the basis of the most
recent ascertainable tax if the current bill is not then available).
(b) the "minimum" or "base" rent payable by tenants
under the Leases; provided, however, that rent and all other sums which are
due and payable to Seller by any tenant but uncollected as of the Closing
shall not be adjusted, but Purchaser shall cause the rent and other sums for
the period prior to Closing to be remitted to Seller if, as and when
collected. At Closing, Seller shall deliver to Purchaser a schedule, certified
to be complete and accurate by Seller , of all such past due but uncollected
rent and other sums owned by tenants (including without limitation those
described in paragraphs (c) and (d) below). Purchaser shall include the amount
of such rent and other sums in the first bills thereafter submitted to the
tenants in question after the Closing, and shall continue to do so for twelve
(12) months thereafter. In connection with the allocation of such uncollected
rent and other sums, the parties shall disregard any purported or attempted
designation by tenants of the months or periods to which their payments should
be applied. Purchaser shall not be obligated to start a lawsuit to collect any
such sums or to evict any tenant for the failure to pay any such sums but
Seller shall retain the right to do so after the Closing with respect to any
delinquent rent regardless of whether such tenant is current in its rent
obligations to Purchaser. However, Purchaser shall promptly remit to Seller
any such rent or other sums paid by scheduled tenants, but only if there is no
deficiency in the then current rent and such other sums owed by the tenant;
(c) to the extent not set forth on the schedule of
uncollected rent described in Section 4.C(i)(b) above, "percentage" or
"overage" rent that is (1) attributable to any Percentage Rent lease year in
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which the Closing Date falls and (2) not yet due or payable (not including
estimated payments) as of the Closing Date (collectively, "Current Year
Percentage Rent"), shall be prorated as follows: promptly upon receipt by
Purchaser, Purchaser shall furnish to Seller copies of all sales reports from
tenants relative to Current Year Percentage Rent, including, without
limitation, all sales reports with respect to any tenants whose Percentage
Rent lease years have expired as of the Closing but whose sales reports were
not delivered to Seller as of the Closing Date and sales reports of any
tenants whose Percentage Rent lease years expire after the Closing, and the
amount of any Current Year Percentage Rent shall be payable in accordance with
such tenant's Lease as existing as of the Closing Date, and Purchaser shall
(to the extent not paid to Seller by way of estimated payments prior to
Closing) pay to Seller a pro rata portion of such rent based upon the
apportionment being made as of the Closing Date (in proportion to the relative
number of days in the subject year occurring prior and subsequent to the
Closing Date), promptly after the date when such rent is received from the
tenant. The schedule referred to in Section 4.C(i)(b) above shall include an
itemized breakdown of the total estimated payments made by each tenant as of
the Closing Date on account of Current Year Percentage Rent;
(d) to the extent not set forth on the schedule of
uncollected rent described in Section 4.C(i)(b) above, any real estate taxes,
common area maintenance, mall maintenance, utility charges, water and sewer
charges, contributions to Promotional Organizations and other charges to or
contributions by tenants under the Leases that are attributable to the
operating year in which the Closing Date falls (collectively, "Current Year
Operating Charges") shall be allocated between Seller and Purchaser as
follows: Seller shall be entitled to retain amounts paid by (and shall be
responsible for the refunding of excess amounts paid by) tenants for Current
Year Operating Charges that are attributable to the period prior to the
Closing Date; Purchaser shall be entitled to retain amounts paid by (and shall
be responsible for the refunding of excess amounts paid by) tenants for
Current Year Operating Charges attributable to the period from and after the
Closing Date. Any excess Current Year Operating Charges payable by Seller
shall be refunded directly to the appropriate tenants. The schedule referred
to in Section 4.C(i)(b) above shall include an itemized breakdown of the total
estimated payments made by each tenant as of the Closing Date on account of
Current Year Operating Charges;
(e) Seller and Purchaser shall, as to each of the
Leases set forth on Exhibit J (the "Lease Schedule") and any lease or
amendment entered into after the date hereof, allocate the responsibility for
all leasing costs (including but not limited to tenant improvement costs,
tenant allowances, leasing commissions, and attorneys' fees), as follows:
Leasing costs payable pursuant to leases and lease amendments to be assigned
to Purchaser are to be prorated between Purchaser and Seller as follows:
Purchaser shall pay "Purchaser's Pro Rata Share" and shall credit Seller for
any part of "Purchaser's Pro Rata Share" that has already been paid by Seller
as of Closing, and Seller shall pay "Seller's Pro Rata Share" and shall credit
Purchaser for any portion of "Seller's Pro Rata Share" that has not yet been
paid by Seller as of Closing. "Purchaser's Pro Rata Share" shall be a portion
of the leasing costs equal to the percentage that the base rent required to be
paid under the applicable Lease for the period from and after the Closing Date
bears to the total base rent required to be paid under the Lease over the
entire term, without regard to extension or cancellation options. "Seller's
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Pro Rata Share" shall be the portion of leasing costs equal to the percentage
that the base rent required to be paid under the applicable Lease prior to
Closing bears to the base rent required to be paid under the Lease over the
entire term, without regard to extension or cancellation options. Seller and
Purchaser agree to pay when due all leasing costs for which each is
responsible, and to pay any leasing commissions payable by each under this
Agreement in accordance with any management agreement;
(f) the amount of unapplied security deposits and
other tenant deposits paid under the Leases, and the tenants' portion of any
interest required to be paid thereon, if any, which shall be paid or credited
to Purchaser at Closing;
(g) to the extent not paid by tenants, gas, water,
electric, telephone and all other utility and fuel charges, fuel on hand (at
cost plus sales tax, if applicable), and any deposits with utility companies
(to the extent possible, utility prorations will be handled by final meter
readings obtained from the utility providers on the day immediately preceding
the Closing Date);
(h) amounts due and prepayments under the Service
Contracts assigned to Purchaser under this Agreement;
(i) assignable license and permit fees;
(j) contributions by Seller to the Promotional
Organizations shall be adjusted and prorated by the parties based upon the
period to which such charges relate and any transferable deposits by tenants
with respect to such Promotional Organizations, all cash on hand and in bank
accounts and all reserves of such Promotional Organizations shall be paid or
credited to Purchaser at the Closing; and
(k) other similar items of income and expenses of
operation if and to the extent not paid or reimbursed by Tenants.
(ii) If any item of income or expense set forth in this
Section 4.C is subject to final adjustment after Closing, then Seller and
Purchaser shall make, and each shall be entitled to, an appropriate
reproration to each such item promptly when accurate information becomes
available. Any such reproration shall be paid promptly in cash to the party
entitled thereto.
(iii) For purposes of this Section (C), the amount of any
expense credited by one party to the other shall be deemed an expense paid by
that party. The terms of this Section 4.C, to the extent they call for
adjustments, prorations or payments after Closing (collectively, "Post-Closing
Adjustments"), shall survive the Closing.
(iv) Except as otherwise provided herein, in any management
agreement or in any document or instrument to be executed at the Closing, as
between Seller and Purchaser, if the Closing occurs: (1) Seller shall pay and
be responsible for any liabilities resulting from claims for injury to or
death of persons which arise prior to Closing, (and if any such amount is
subject to a judgment lien as of Closing, then, subject to Section 3.C(A),
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Seller shall either credit Purchaser for such amount at Closing or discharge
such liability or provide adequate security for the contest of such
liability), and (2) Purchaser shall pay and be responsible for any liabilities
resulting from claims for injury to or death of persons which arise from and
after Closing. Purchaser and Seller shall cooperate with each other to the
extent reasonably necessary in connection with the defense of any such claims.
The provisions of this subparagraph (iv) shall survive the Closing, and shall
not benefit any third party.
(v) Seller shall be obligated to pay all assessments for
improvements relating directly to the Real Property in progress or completed
as of the date of this Agreement. Purchaser shall be obligated to pay all such
assessments relating to improvements commenced after the date of this
Agreement.
D. Transaction Costs
All realty transfer taxes hereunder imposed on the sale of the
Property shall be shared equally by Seller and Purchaser at Closing. Purchaser
shall pay the premium for any title insurance obtained by Purchaser, the cost
of any survey obtained by Purchaser and recording fees for recording of the
Deed and Assignment of Leases, except that escrow fees shall be divided
equally between Purchaser and Seller. Seller shall pay the cost of recording
any documents required to deliver good title to Purchaser. Seller and
Purchaser shall, however, be responsible for the fees of their respective
attorneys.
E. Possession
Upon Closing, Seller shall deliver to Purchaser possession of the
Property, subject only to the Leases.
5. OPERATION OF PROPERTY PRIOR TO CLOSING; SELLER COVENANTS
A. Prior to expiration of the Review Period, and except for the
"Consent Transactions" (as defined below), Seller may in the ordinary course
of business modify, extend, renew, cancel or permit the expiration of any
Lease or Service Contract, or enter into any proposed Lease or Service
Contract (which Service Contract is terminable as of Closing or upon 30 days
notice without any fee), without Purchaser's consent; provided, however, that
Purchaser shall receive copies of all documents evidencing the foregoing and
except that Seller may not without Purchaser's advice and consent in each
instance (which shall not be unreasonably withheld or delayed) modify, extend,
renew or cancel, or enter into, any lease (I) for any space now occupied or
hereafter vacated by any "Anchor Tenant" or "Major Tenant" (as those terms are
defined on Exhibit J) (II) for any movie theater, or (III) for any space
greater than 2500 square feet in the aggregate, or enter into a Service
Contract which is not terminable upon 30 days notice or as of Closing
(collectively, "Consent Transactions").
B. After the expiration of the Review Period, Seller may not modify,
extend, renew, cancel or permit the expiration of any Lease or Service
Contract, or enter into any proposed Lease or Service Contract, without
Purchaser's prior written consent.
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C. When Seller seeks in writing Purchaser's consent for any such
action, Purchaser shall respond in writing to Seller (therein giving consent
or specifying the precise nature of Purchaser's objection to the action)
within seven (7) business days of receipt of Seller's request. If Purchaser
does not respond within said seven (7) business day period, Purchaser shall be
deemed conclusively to have denied consent to the action requested by Seller.
D. At least thirty (30) days prior to the Closing, Purchaser will
advise Seller as to which Service Contracts, if any, will be assigned to
Purchaser at the Closing. As to the remaining Service Contracts, Seller shall
upon written request by Purchaser give written notice canceling such Service
Contract as of the Closing Date if such Service Contracts are cancelable as of
the Closing Date and Seller shall pay any cancellation fee, if any, in
connection therewith.
E. From the date hereof until the Closing or earlier termination of
this Agreement, Seller shall not remove (or direct the removal of) any item of
Tangible Personal Property except as may be required for repair or replacement
or to retire obsolete property. Seller shall cause any property so removed to
be promptly replaced by property of equal function and of equal or greater
quality.
F. From the date hereof until the Closing or earlier termination of
this Agreement, Seller shall keep all existing insurance for the Property (as
described in Exhibit K) in full force and effect
G. Seller also covenants that between the date of this Agreement and
the Closing Date:
(i) Except to the extent contrary to the provisions of this
Agreement, Seller shall not take any action or fail to take any action, and
shall not direct Seller's manager under a management agreement to take any
action or to fail to take any action, (1) which would cause the Property to be
operated, managed and maintained other than in a substantially similar manner
as the Property is currently operated, managed and maintained, (2) which would
violate or continue the violation of any Law (as defined below), (3) which
would violate the provisions of this Agreement, (4) which would cause any of
the representations and warranties of Seller contained in this Agreement to be
incorrect, in any material respect as of the Closing, or (5) which would cause
any improvements, painting, repairs, alterations or any other tenant finish
work required to be performed by the landlord under the Leases (or any
amendments or extensions thereof) by their terms prior to Closing not to be
performed on or prior to Closing.
(ii) Without limiting the generality of the preceding
paragraph (i):
(a) Seller shall timely comply with its obligations
as owner under the management agreement.
(b) Seller shall not cause or permit any "Hazardous
Substances" (as defined below) to be placed in, on or under the Property in a
manner or in quantities that require remediation or regulation under
applicable "Environmental Laws" (as defined below).
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(c) Seller shall not grant any new liens or
encumbrances against the Property, or grant any easements affecting the
Property.
(d) Seller shall not release or modify any of the
Guaranties or Warranties without Purchaser's prior written consent.
(e) Unless a Lease is terminated, Seller may not
apply the tenant security or other deposits under that Lease to cure any
defaults under that Lease.
(iii) Without the prior written consent of Purchaser, Seller
will not execute easements, covenants, conditions, restrictions, rights-of-way
or any other recorded or unrecorded contracts with respect to the Real
Property except as otherwise provided in Sections 5.A and 5.B above.
(iv) Seller will not seek zoning changes or other
governmental approvals with respect to the Real Property not in accordance
with this Agreement.
6. REPRESENTATIONS
A. Seller's Representations and Warranties. Seller represents and
warrants to Purchaser that as of the date of this Agreement (unless otherwise
stated below):
(i) Seller is a duly formed and validly existing limited
partnership organized under the laws of the Commonwealth of Pennsylvania.
Seller is authorized to own and convey title to land in Pennsylvania.
(ii) 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 it pursuant hereto (collectively, the "Seller's Documents"), to
consummate the transaction contemplated in this Agreement, and to perform its
obligations under this Agreement and the Seller's Documents. The person
signing this Agreement on behalf of Seller is authorized to do so.
(iii) There is no threatened or pending litigation, nor has
Seller been served with any litigation which is still pending with respect to
the Property that would adversely affect Seller's ability to perform its
obligations under this Agreement, or that would affect title to the Property
after Closing or the enforcement of any of the Leases, or that would
materially and adversely affect the financial condition or operation of the
Property.
(iv) Purchaser has been given access to, or possession of,
complete and accurate copies of the Leases, the Permits and Licenses, the
Guaranties and Warranties, the Service Contracts and the Plans and Reports
(and all amendments thereto) existing as of the date of this Agreement.
(v) (a)(1) The information contained in the Lease Schedule
is complete and accurate as of the date hereof; and (2) there are no leases,
or tenancies or other rights to occupy the Property as of the date hereof
other than those set forth in the Lease Schedule.
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(b) Except as set forth in the Lease Schedule:
(1) No action or proceeding has been threatened
against or instituted against Seller by any tenant of the Property which is
presently pending in any court, including claims involving personal injury or
property damage, other than those referred to in Exhibit L attached hereto and
made a part of this Agreement and, with the exception of claims or offsets
referred to in Exhibit M, there are no outstanding written claims for rent
offsets or claims of Landlord default by any tenants against Seller.
(2) Seller holds no other security or tenant
deposits.
(3) All security and other tenant deposits have
been held and, where applicable, returned in compliance with all applicable
rules, ordinances and statutes.
(4) There are no leasing commissions outstanding
which are payable out of rents or which will not be paid in full by Seller
prior to or at Closing except as set forth in Exhibit R.
(5) Each Lease is in full force and effect.
(6) No default exists on the part of Seller or any
tenant under any Lease.
(7) No tenant has any defense, offset or
counterclaim against or with respect to rent and other sums payable by it
under its Lease except as set forth in its Lease.
(8) There are no concessions, free rent periods,
tenant improvement obligations, landlord construction obligations or
improvement allowances to any tenant not specified in the applicable Lease.
(9) All tenants are in occupancy and continuously
operating their premises.
(vi) (a) Except as described in the documents set forth on Exhibit
N ("Environmental Reports"):
(1) Seller has no Knowledge of any failure to
comply with any applicable laws, regulations, ordinances, codes, judgments, or
other governmental requirements (collectively, "Laws") with respect to the
use, occupancy, construction or condition of the Property (collectively,
"Violations"), including without limitation zoning, planning, building,
safety, health, electrical, plumbing, or fire Laws and "Environmental Laws"
(as defined below) which has not been corrected to the satisfaction of the
appropriate governmental authority prior to the date of this Agreement.
(2) No notice has been received from any insurer of
the Property requesting any improvements, alterations, additions, corrections,
or other work in, on or about the Property. Purchaser shall be promptly
notified if any such notice is received by Seller or its manager.
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(b) Without limiting the preceding subparagraph (a), except
as described in the Environmental Reports:
(1) No enforcement action for violation of
Environmental Laws has been or is now pending or, to Seller's Knowledge, is
threatened by any governmental authority with respect to the Property.
(2) To Seller's knowledge, no Hazardous Substance
is present on the Property that is handled or stored in a manner, or is
present in quantities, which require remediation under or otherwise violates
applicable Environmental Laws.
(3) There are no above-ground or, to Seller's
knowledge, underground storage tanks at the Property.
As used in this Agreement, the term "Hazardous Substances" means any
hazardous, toxic, corrosive, or flammable substance or waste, pollutant or
contaminant, including without limitation petroleum, petroleum products, PCBs
and asbestos containing materials and including those defined as such under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), 42 U.S.C. ss.9601, et. seq.; the Resource Conservation and
Recovery Act ("RCRA"), 42 U.S.C. ss.6903(5); the Clean Water Act, 42 U.S.C.
ss.7401, et. seq.; the Safe Drinking Water Act, 42 U.S.C. ss.300f, et. seq.;
or under other similar applicable federal or state laws and regulations
(collectively "Environmental Laws").
(vii) Exhibit B attached to and made a part of this
Agreement is a complete and accurate schedule of material items of Tangible
Personal Property as of the date of this Agreement.
(viii) Exhibit O attached to and made a part of this
Agreement is a complete list of the Service Contracts, and neither party
thereto is in default under any of the Service Contracts.
(ix) Exhibit P attached to and made a part of this Agreement
is a complete and accurate list of all Permits and Licenses affecting the
Property in Seller's possession. None of the Permits and Licenses have been
revoked, and Seller has received no notice that any Permit or License is
subject to revocation.
(x) Exhibit K attached to and made a part of this Agreement
is a complete and accurate schedule of all insurance now carried by Seller
with respect to the Property.
(xi) Seller is not a party to an unrecorded agreement
relating to the installation or use of any water, sanitary sewer or septic
system.
(xii) Except as disclosed on Exhibit Q, there are no
existing claims under any of the Guaranties and Warranties.
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(xiii) Seller has received no notice that it is in default
under any mortgage loan encumbering the Property.
(xiv) Seller is the fee simple title holder of the Property,
free and clear of all mortgages and security interests, licenses, claims,
options, options to purchase or lease, liens, covenants, conditions,
restrictions, rights-of-way, easements, judgments, and other matters affecting
title to the Property other than Permitted Exceptions.
(xv) There are no employment, labor or pension agreements
relating to the Property or Seller.
(xvi) There has been no taking or condemnation of the Real
Property or any part thereof filed prior to the date of this Agreement, or, to
the knowledge of Seller, threatened, which reduces the areas, interferes with
the access to, or affects the current use of the Real Property. There are no
proceedings for special assessments pending. Seller has no knowledge of any
proposed or contemplated assessment or any work of such a nature such that an
assessment therefor may hereafter be levied with respect to the Real Property.
(xvii) Seller is not a "foreign person, corporation or
partnership" within the meaning of Section 1445 of the Internal Revenue Code
of 1986, as amended.
(xviii) There are no private unrecorded restrictions or
agreements affecting the uses which may be made of the Real Property,
including, but not limited to, size or cost of buildings, limitations on use
or restrictions in regard to height of buildings, agreements to submit
architectural plans to an association, community organization or other group,
provisions requiring improvements, or provisions requiring the joining with
others in group actions.
(xix) Seller has not knowingly incurred any obligation or
liability which will become an obligation or liability of Purchaser after
Closing except for the Leases, Service Contracts and any matters which are
Permitted Exceptions.
(xx) To Seller's knowledge, there are no violations of any
federal, state, county or municipal law, ordinance, order, rule, regulation,
agreement, approval, resolution, permit or requirement affecting any portion
of the Real Property including, but not limited to, violations of any housing,
building, zoning, subdivision, fire, safety, environmental, traffic, flood
control or health laws, and no notice of any such violation has been received
by Seller.
(xxi) The Real Property is not now benefiting from any real
estate tax abatement, exemption or reduced assessment as a consequence of
which an additional or "roll back" tax could be assessed or imposed against
the Real Property at any time on or after the date of this Agreement
(including, without limitation, any assessment resulting from the conversion
of the Real Property from an agricultural or horticultural use).
B. Purchaser's Representations and Warranties. Purchaser represents
and warrants to Seller that as of the date of this Agreement:
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(i) Purchaser is a duly formed and validly existing limited
partnership organized under the laws of Delaware.
(ii) Subject to obtaining approval from PREIT's Board of
Directors, Purchaser has the full legal right, power and authority to execute
and deliver this Agreement and all documents now or hereafter to be executed
by Purchaser pursuant to this Agreement (collectively, the "Purchaser's
Documents"), to consummate the transaction contemplated hereby, and to perform
its obligations hereunder and under Purchaser's Documents. Purchaser agrees to
seek approval for this transaction from its Board of Directors prior to the
expiration of the Review Period (as hereinafter defined).
C. Seller and Purchaser (as of Closing) shall be deemed to remake and
restate the representations and warranties set forth in this Section 6. Should
Seller proceed to Closing with the Knowledge of Purchaser's violation of any
representation or warranty contained in this Section 6, Seller will be
conclusively deemed to have waived any remedy therefor. Should Purchaser
proceed to Closing with Knowledge of Seller's violation of any representation
or warranty of Seller contained in this Section 6, Purchaser will be
conclusively deemed to have waived any remedy therefor, including any
adjustment in Purchase Price.
D. The representations and warranties set forth in Section 6 above,
as of the date made (or deemed made), shall survive the Closing, but any
"Claims" (as defined below) thereunder must be made in writing within one (1)
year after Closing (the "Representations Expiration Date") or they shall
thereafter be deemed to have lapsed and to be null, void and of no further
force or effect. In no event shall any limited partner of Seller incur any
liability to Purchaser, nor shall such limited partner's share of the
Partnership be at risk in connection with or arising out of any alleged breach
of any representation or warranty made by Seller hereunder, and Purchaser
agrees to look solely to the assets of the general partner of Seller in any
breach of warranty claim.
E. No inspection or examination by Purchaser shall limit Purchaser's
right to rely on the representations and warranties of Seller contained
herein. Purchaser and Seller agree to promptly notify the other if either
Seller or Purchaser becomes aware that any representation or warranty made by
it is or has become untrue.
7. CASUALTY LOSS AND CONDEMNATION
If, prior to Closing, the Property or any material part thereof shall be
condemned or destroyed or damaged by fire or other casualty, Seller shall
promptly so notify Purchaser. In the event the effect of such condemnation or
casualty occurring prior to Closing is material (as hereinafter defined),
Purchaser shall have the option either to terminate this Agreement or to
consummate the transaction contemplated by this Agreement notwithstanding such
condemnation, destruction or damage. If Purchaser elects to consummate the
transaction contemplated by this Agreement or if a casualty or condemnation is
immaterial, Purchaser may not terminate this Agreement but, provided Closing
occurs, shall be entitled to receive the condemnation proceeds or settle the
loss under all policies of insurance applicable to the destruction or damage
and receive the proceeds of the insurance applicable thereto after
reimbursement to Seller for all reasonable costs of collection including,
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without limitation, attorneys' fees, incurred by Seller in connection with
obtaining such condemnation or insurance proceeds, and Seller shall, at
Closing, execute and deliver to Purchaser all necessary and customary proofs
of loss, assignments of claims and other similar documents and Purchaser shall
be entitled to receive a credit against the Purchase Price equal to the amount
of all deductibles under all applicable insurance policies. If, upon a
material condemnation or casualty prior to the Closing Date, Purchaser elects
to terminate this Agreement, the Deposit shall be returned to Purchaser by the
Title Company, together with all interest accrued thereon, in which event this
Agreement shall, without further action of the parties, become null and void
and neither party shall have any further rights or obligations under this
Agreement. For purposes of this provision, a condemnation or casualty loss
shall be deemed to be "material" if (i) the cost of repairing or restoring the
premises in question would be, in the opinion of an independent architect
selected by Seller and approved by Purchaser in its sole discretion, equal to
or greater than One Hundred Thousand Dollars ($100,000), or (ii) such loss
would materially and detrimentally impair access to the Property or its
improvements or common areas after Closing, or (iii) such loss results in the
termination of the Lease of an "Anchor Tenant" (defined in Exhibit J) or two
(2) or more "Major Tenants" (defined in Exhibit J) or (iv) such loss results
in the termination of Leases for other tenants occupying, in the aggregate,
ten percent (10%) or more of the gross leasable area of the Property. The
provisions of this Section shall supersede the provisions of any Law regarding
the allocation of the risk of loss between buyers and sellers.
8. BROKERAGE
Purchaser and Seller each hereby represents and warrants to the other
that it has not dealt with any broker, finder or other party in connection
with the negotiation of this Agreement or otherwise in connection with the
Property other than PREIT-RUBIN, Inc. and The Flynn Company. Seller and
Purchaser shall each indemnify and hold the other harmless from and against
any and all claims of all other brokers and finders claiming by, through or
under the indemnifying party and in any way related to the sale and purchase
of the Property, this Agreement or otherwise, including, without limitation,
attorneys' fees and expenses incurred by the indemnified party in connection
with such claim. Seller shall be responsible for all brokerage commissions, if
any, due pursuant to a separate brokerage listing agreement. Seller shall have
no obligation to pay any brokerage commission to PREIT-RUBIN, Inc. in
connection with this transaction.
9. DEFAULT AND REMEDIES
A. If Purchaser fails to close in accordance with the terms of this
Agreement, the Deposit shall be retained by Seller as liquidated damages which
shall be Seller's sole remedy for such failure. Seller and Purchaser
acknowledge and agree that: (i) the Deposit is a reasonable estimate of and
bears a reasonable relationship to the damages that would be suffered and
costs incurred by Seller as a result of having withdrawn the Property for sale
and the failure of Closing to occur due to a default of Purchaser under this
Agreement; (ii) the actual damages suffered and costs incurred by Seller as a
result of such withdrawal and failure to close due to a default of Purchaser
under this Agreement would be extremely difficult and impractical to
determine; (iii) Purchaser seeks to limit its liability under this Agreement
to the amount of the Deposit in the event this Agreement does not close due to
a default of Purchaser under this Agreement; and (iv) such amount shall
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constitute valid liquidated damages. If Seller is unable to close in
accordance with the terms of this Agreement due to Seller's inability to (i)
deliver title to the Property as provided in Section 3 above, or (ii) remake
and restate at the time of Closing the representations and warranties set
forth in Section 6 above, Purchaser's recourse against Seller shall be limited
to either (a) terminating this Agreement and receiving a return of the Deposit
plus all interest accrued thereon plus reimbursement for actual third-party
expenses incurred by Purchaser in this transaction not to exceed Twenty-five
Thousand Dollars ($25,000), or (b) completing Closing hereunder without any
abatement in the Purchase Price.
B. After Closing and subject to any limitations set forth in this
Agreement, including but not limited to Section 12.L, Seller and Purchaser
shall, subject to the terms and conditions of this Agreement, have such rights
and remedies as are available at law or in equity, but only for such
obligations as expressly survive Closing; except that neither Seller nor
Purchaser shall be entitled to recover from the other exemplary, punitive or
special damages.
10. REVIEW PERIOD
Subject to Sections 11, 12.G and 12.H below, Purchaser shall have the
period of time beginning on the date hereof and ending thirty (30) days after
the date hereof, within which to inspect and investigate the Property and its
operations (the "Review Period"). If Purchaser is dissatisfied for any reason
with its findings during said Review Period and notifies Seller of such
decision within the Review Period, the Deposit shall be returned to Purchaser,
at which time this Agreement shall be null and void and neither party shall
have any further rights or obligations under this Agreement, except those
which by their terms expressly survive such termination. Purchaser need not
disclose its reasons for termination. Seller shall cooperate with Purchaser to
allow Purchaser and Purchaser's Representatives free access to the Property,
to allow Purchaser and Purchaser's Representatives free access to all
information and documentation, and otherwise to promptly provide such
information and documentation relating to the Property and its operations as
Purchaser may request (including, without limitation, tenant sales reports and
other financial information, income and expense statements for the prior three
years and appraisals, environmental site assessments and reports, surveys, and
title policies in Seller's possession). Purchaser's failure to object within
the Review Period shall be deemed a waiver by Purchaser of the condition
contained in this Section 10.
11. PROPERTY INFORMATION AND CONFIDENTIALITY
A. Purchaser agrees that, prior to the Closing, Purchaser shall use
diligent efforts to keep all "Property Information" (as defined below)
confidential, and that Property Information shall not, without the prior
written consent of Seller, be disclosed by Purchaser or Purchaser's
Representatives (as hereinafter defined), except to PREIT or any assignee and
its Purchaser Representatives or Purchaser's lender, and that Property
Information will not be used for any purpose other than investigating and
evaluating the Property. Moreover, Purchaser agrees that, prior to the
Closing, the Property Information will be transmitted only to PREIT or an
assignee, and to the Purchaser's Representatives and such entities who need to
know the Property Information for the purpose of investigating and evaluating
the Property. The provisions of this Section 11.A shall not apply to Property
Information which is a matter of public record and shall not be used or
construed by Seller to impede Purchaser from complying with laws, including,
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without limitation, governmental regulatory, disclosure, tax and reporting
requirements, subpoenas or court orders or stock exchange rules.
B. Purchaser and Seller, for the benefit of each other, hereby agree
that between the date of this Agreement and the expiration of the Review
Period, they will not release or cause or permit to be released any press
notices, publicity (oral or written) or advertising promotion relating to, or
otherwise announce or disclose or cause or permit to be announced or
disclosed, in any manner whatsoever, the terms, conditions, parties to or
substance of this Agreement or the transactions contemplated herein, without
first obtaining the written consent of the other party hereto as to the
portion of the disclosure relating to this transaction, the Property or such
party and its affiliates, which consent shall not be unreasonably withheld.
Seller or Purchaser shall have no right to object to any disclosure (including
public announcements) required by law to the extent it identifies the parties,
property and purchase price (and method of payment thereof) in connection with
this transaction. Failure to disapprove any disclosure within two (2) business
days of receipt shall be deemed an approval. It is understood that the
foregoing shall not preclude either party from discussing the substance or any
relevant details of the transactions contemplated in this Agreement, subject
to the terms of this Section 11, with PREIT or any of the Purchaser's or
PREIT's or Seller's attorneys, accountants, professional consultants or
potential lenders, as the case may be, or prevent either party hereto from
complying with applicable laws, including, without limitation, governmental
regulatory, disclosure, tax and reporting requirements, subpoenas or court
orders, or stock exchange rules or prevent Seller from coordinating with
tenants to obtain the Estoppel Certificates.
C. In the event this Agreement is terminated, Purchaser and
Purchaser's Representatives shall promptly return to Seller all originals and
copies of the "New Seller-Supplied Information" (defined below) in the
possession of Purchaser and Purchaser's Representatives (or certify to Seller
that the same has been destroyed).
D. As used in this Agreement, the term "Property Information" shall
mean:
(i) All information and documents relating to the Property,
the operation thereof or the sale thereof (including, without limitation,
Leases, Service Contracts, labor contracts and licenses) furnished to, or
otherwise made available by Seller or any of Seller's Affiliates for review by
Purchaser or PREIT, or their respective directors, officers, employees,
affiliates, partners, brokers, agents, title insurers, surveyors or other
representatives, including, without limitation, attorneys, accountants,
contractors, consultants, engineers and financial advisors (collectively,
"Purchaser's Representatives"), and if and to the extent such information and
documents have not been previously furnished to or otherwise made available to
Purchaser, such Property Information shall constitute "New Seller-Supplied
Information".
(ii) All analyses, compilations, data, studies, reports or
other information or documents prepared or obtained by Purchaser or
Purchaser's Representatives containing or based in any material part on any
information or documents described in the preceding clause (i).
E. In addition to any other remedies available to Seller under this
Agreement, Seller shall have the right to seek equitable relief, including,
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without limitation, injunctive relief or specific performance, against
Purchaser or Purchaser's Representatives in order to enforce the provisions of
this Section 11.
F. Each of the parties hereto covenants and agrees that, prior to the
Closing, they will hold the nature and content of this Agreement, including
without limitation, the Purchase Price contained herein, in strict confidence,
and other than disclosure required by the Securities and Exchange Commission
("SEC") or any stock exchange on which shares of any Affiliate of Purchaser
are traded and except as may be necessary to comply with this Agreement,
neither party shall disclose the nature, content or the Purchase Price of this
Agreement without the express written consent of the other party.
Notwithstanding the foregoing, Purchaser shall be permitted to file this
Agreement as an Exhibit to its required 8-K filings with the SEC.
G. The provisions of this Section 11 shall survive the termination of
this Agreement.
12. MISCELLANEOUS
A. All understandings and agreements heretofore had between Seller
and Purchaser with respect to the Property are merged in this Agreement, which
alone fully and completely expresses the agreement of the parties.
B. Neither this Agreement nor any interest hereunder shall be
assigned or transferred by Purchaser or Seller without the prior written
consent of the other party, except that Purchaser may assign its rights under
this Agreement to any entity in which PREIT or Purchaser has at least a direct
or indirect fifty (50%) percent interest, without first having to obtain
Seller's consent, provided Seller shall receive written notice of the identity
of the ultimate assignee at least five (5) business days prior to Closing and
provided further that Purchaser shall promptly deliver to Seller a duplicate
original Assignment and Assumption signed by both the assignor and the
assignee of all of Purchaser's rights and obligations under this Agreement.
C. This Agreement shall not be modified or amended except in a
written document signed by Seller and Purchaser.
D. Time is of the essence of this Agreement.
E. This Agreement shall be governed and interpreted in accordance
with the laws of the Commonwealth of Pennsylvania.
F. All notices, requests, demands or other communications required or
permitted under this Agreement shall be in writing and delivered personally,
by certified mail, return receipt requested, postage prepaid, by overnight
courier (such as Federal Express), or by facsimile transmission (with
confirmation of transmission), addressed as follows:
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If to Seller:
Oaklands Limited Partnership
120 Arrandale Boulevard
Exton, PA 19341
Fax No.: (610) 524-7548
With simultaneous copies to:
Joshua M. Bernstein, Esquire
Abrahams, Loewenstein, Bushman & Kauffman, P.C.
One Liberty Place, Suite 3100
1650 Market Street
Philadelphia, PA 19103-7392
Fax No.: (215) 587-0888
and to:
Maggin & Swan
108-18 Queens Boulevard
Forest Hills, NY 11375
Fax No.: (718) 268-0187
If to Purchaser:
PREIT Associates, L.P.
c/o Pennsylvania Real Estate
Investment Trust
455 Pennsylvania Avenue
Suite 135
Fort Washington, PA 19034
Attn: Jeffrey A. Linn
Fax No.: (215) 546-0240
With simultaneous copies to:
PREIT Associates, L.P.
c/o PREIT-RUBIN, Inc.
Attn: Eric Mallory
200 South Broad Street
The Bellevue, Suite 300
Philadelphia, PA 19103
Fax No: (215) 546-0240
And to:
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Drinker Biddle & Reath LLP
1000 Westlakes Drive, Suite 300
Berwyn, PA 19312
Attn: John W. Fischer, Esquire
Lisa Hunn Barber, Esquire
Fax No: (610) 993-8585
All notices given in accordance with the terms hereof shall be deemed given
when first received or refused. Either party hereto may change the address for
receiving notices, requests, demands or other communication by notice sent in
accordance with the terms of this Section 12.F.
G. Purchaser's right of inspection pursuant to Section 10 above shall
include the right to enter on the Property, but shall be subject to the rights
of tenants under the Leases and other occupants and users of the Property. No
inspection shall be undertaken without reasonable prior notice to Seller.
Seller shall have the right to be present at any or all inspections.
Notwithstanding anything to the contrary contained in this Agreement,
Purchaser shall restore the Property to its condition existing prior to
Purchaser's entry thereon, and indemnify and hold Seller and Seller's
Affiliates, and each of them, harmless from and against any and all losses,
claims, damages and liabilities (including, without limitation, attorneys'
fees incurred in connection therewith) arising out of or resulting from
Purchaser's exercise of its rights under this Agreement, including, without
limitation, its right of inspection as provided for in Section 10 above. The
terms of the preceding sentence shall survive the termination of this
Agreement.
H. Purchaser or Purchaser's Representatives shall not contact a
tenant or prospective tenant for the Property regarding this transaction
unless Purchaser or Purchaser's Representatives first obtains Seller's prior
written approval therefor (not to be unreasonably withheld, conditioned or
delayed). Seller shall have the right to be present for all such tenant
interviews.
I. In any lawsuit or other proceeding initiated under or with respect
to this Agreement, Purchaser and Seller waive any right they may have to trial
by jury.
J. Intentionally omitted.
K. Seller and Purchaser hereby designate the Title Company to act as
and perform the duties and obligations of the "reporting person" with respect
to the transaction contemplated by the Agreement for purposes of 26 C.F.R
Section 1.6045-4(e)(5) relating to the requirements for information reporting
on real estate transactions. In this regard, Seller and Purchaser each agree
to execute at Closing, and to cause the Title Company to execute at Closing, a
Designation Agreement designating Title Company as the reporting person with
respect to the transaction contemplated by this Agreement.
L. Purchaser agrees that it does not have and will not have any
claims or causes of action against any disclosed or undisclosed trustee,
partner, affiliate, beneficiary, principal, member, agent, managing entity,
shareholder, director, officer, or employee of Seller (whether direct or
indirect), including, without limitation, their attorneys, accountants,
consultants, engineers, brokers, and advisors (collectively, "Seller's
Affiliates"), arising out of or in connection with this Agreement or the
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transactions contemplated hereby except in the event of fraud, criminal
conduct or intentional tort by such person.
M. Seller shall have the exclusive right to file and control any tax
appeal for the real estate taxes attributable to the period prior to and
including the calendar year 1998 (the "pre-1999 Tax Period") but shall keep
Purchaser informed of the progress and outcome of any such appeal. To the
extent that Seller shall receive a refund therefor, Seller shall disburse to
any tenant not in default under its Lease a portion of such refund as may be
due that tenant under its Lease. To the extent that Purchaser's assistance is
required in disbursing the refund to the tenants, Purchaser agrees to assist
Seller in that regard at Seller's cost. Purchaser shall have the exclusive
right to file and control any tax appeal for the real estate taxes
attributable to the period after and including the calendar year 1999 (the
"1999 Tax Period"), but shall keep Seller informed of the progress and outcome
of such appeal. To the extent that Purchaser shall receive a refund therefor,
Purchaser shall disburse to any tenant not in default under its Lease a
portion of such refund as may be due that tenant under its Lease. The
remainder of the refund, if any, shall be prorated between Purchaser and
Seller as of the proration date provided in Section 4.C after deducting
therefrom the cost and expenses reasonably incurred in pursuing the appeal and
not charged to tenants. The terms of this Section 12.M shall survive the
Closing.
N. This Agreement may be executed in any number of counterparts, any
or all of which may contain the signatures of less than all of the parties,
and all of which shall be construed together as a single instrument. For
purposes of this Agreement, a telecopy of an executed counterpart shall
constitute an original.
O. In the event of litigation between the parties with respect to
this Agreement or the transactions contemplated hereby, the prevailing party
therein shall be entitled to recover from the losing party its attorney's fees
and costs of suit.
P. Neither party shall record this Agreement or a memorandum thereof;
provided, however, that the filing of this Agreement as part of any
proceedings instituted in any court of proper jurisdiction to enforce the
provisions of this Agreement shall not be deemed to be a breach of this
Agreement.
Q. Seller agrees, at all times prior to and after the Closing, at
Purchaser's cost and with no additional liability to Seller, to execute and
deliver, or cause to be executed and delivered, and to do, or cause to be
done, such other documents and acts as Purchaser may reasonably deem necessary
or desirable to assure the effectiveness and benefits of this Agreement and to
vest in Purchaser title to and ownership of all of the assets and property
being sold to Purchaser under this Agreement.
R. For purposes of this Agreement, the masculine shall be deemed to
include the feminine and the neuter, and the singular shall be deemed to
include the plural, and the plural the singular, as the context may require.
S. The invalidity or unenforceability of any provision of this
Agreement shall in no way affect the validity or enforceability of any other
provision.
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T. The captions contained in this Agreement are not a part of this
Agreement. There are only for the convenience of the parties and do not in any
way modify, amplify or give full notice of any of the terms, covenants or
conditions of this Agreement.
U. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective legal or personal representatives,
heirs, executors, administrators, successors, and permitted assigns.
V. Intentionally omitted.
W. Purchaser's obligations hereunder are contingent upon the approval
of this transaction by the Board of Trustees of PREIT prior to the expiration
of the Review Period. In the event such approval is not obtained prior to the
expiration of said Review Period, either party shall have the right to
terminate this Agreement, whereupon the Title Company shall refund the
Deposit, together with all interest accrued thereon, to Purchaser and this
Agreement shall be null and void and the obligations and liabilities of the
parties hereto shall cease.
X. SEC REPORTING (8-K) REQUIREMENTS.
For the period of time commencing from the date hereof and continuing
through the first anniversary of the Closing Date, and without limitation of
other document production otherwise required of Seller hereunder, Seller
shall, from time to time, upon reasonable advance written notice from
Purchaser, provide Purchaser and its representatives with (i) access to all
financial and other information pertaining to the period of Seller's ownership
and operation of the Property, which information is relevant and reasonably
necessary, in the opinion of Purchaser's outside, independent accountants
("Accountants"), to enable Purchaser and its Accountants to prepare financial
statements in compliance with any or all of (a) Rule 3-05 or 3-14 or
Regulation S-X of the SEC, as applicable; (b) any other rule issued by the SEC
and applicable to Purchaser; and (c) any registration statement, report or
disclosure statement filed with the SEC by, or on behalf of Purchaser; and
(ii) a representation letter, signed by the individual(s) responsible for
Seller's financial reporting, as prescribed by generally accepted auditing
standards promulgated by the Auditing Standards Division of the American
Institute of Certified Public Accountants, which representation letter may be
required by the Accountants in order to render an opinion concerning Seller's
financial statements.
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered
this Agreement as of the date first above written.
SELLER:
OAKLANDS LIMITED PARTNERSHIP
By: Project 125, Ltd., its general partner
By: Oaklands Business Parks, Inc.,
its general partner
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By: /s/ James J. Gorman
----------------------
Name:
Title:
PURCHASER:
PREIT ASSOCIATES, L.P.
By: Pennsylvania Real Estate Investment Trust,
its general partner
By: /s/ Jeffrey A. Linn
-----------------------
Name: Jeffrey A. Linn
Title: Senior Vice President - Acquisitions
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LIST OF EXHIBITS
----------------
Exhibit A Legal Description
Exhibit B List of Personal Property
Exhibit C Form of Letter of Credit
Exhibit D Form of Special Warranty Deed
Exhibit E Form of Bill of Sale
Exhibit F Form of Letter advising tenants and parties to any REA of the change of
ownership
Exhibit G Form of Assignment and Assumption of Leases and Service Contracts
Exhibit H Form of FIRPTA Certification
Exhibit I Form of Tenant Estoppel Certificate
Exhibit J Schedule of Leases and Rent Roll
Exhibit K Schedule of Insurance
Exhibit L Schedule of Claims involving property damage and personal injury
Exhibit M Schedule of Claims under Leases
Exhibit N Schedule of Environmental Reports
Exhibit O Schedule of Service Contracts
Exhibit P Schedule of Permits and Licenses Affecting the Property
Exhibit Q Schedule of Claims under Guaranties and Warranties
Exhibit R Schedule of Outstanding Brokerage Commission
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