Exhibit 10.20
October 16, 1997
Christiana Operating Company I LLC
c/o Gender Road Joint Venture
62 Read's Way
New Castle, DE 19720
Attention: Brock J. Vinton
DEAR MR. Vinton:
Brandywine Realty Trust, a Maryland real estate investment trust, or its
affiliate ("Lender"), hereby offers to make a loan ("Loan") to Christiana
Operating Company I LLC, a Delaware limited liability company ("Borrower"), for
term financing for 400 Commerce Drive, New Castle County, Delaware (the "Real
Property"), inclusive of the 150,000 TRIANGLE square foot mid-rise office
building to be constructed thereon (the building, parking and related
improvements being collectively referred to as "Improvements"), all on the terms
and conditions set forth herein:
1. Amount; Purpose.
(a) The Loan shall be in the principal amount of up to $14,500,000, or
such lesser amount as shall actually be advanced by PNC Bank, Delaware, for
construction, and shall be evidenced by a promissory note in such aggregate
principal amount executed by Borrower and made payable to the order of Lender
("Note").
(b) The Loan shall be used by Borrower solely to refinance the cost of
acquisition of the Real Property and construction of the Improvements.
2. Interest Rate. The Loan shall provide for interest to be paid on the
unpaid principal balance outstanding from time to time, at a per annum rate
equal to a 30, 60 or 90 day (as determined by Lender) LIBOR + 250 basis points.
Interest only shall be paid in advance for the month in which the loan closing
("Closing") shall occur, followed by 119 payments of principal and interest,
payable in arrears, commencing on the first day of the second month following
the date of the Closing and each succeeding month thereafter, with all unpaid
principal and interest due on the 120th installment date. Amortization of the
Loan is based upon a twenty-five (25) year schedule.
Christiana Operating Company I LLC
c/o Gender Road Joint Venture
Attn: Brock J. Vinton
October 16, 1997
Page 2
3. Payment Terms.
(a) Borrower shall have the right, prior to the Maturity Date, to
prepay the unpaid principal balance of the Note, subject to and upon the terms
and conditions governing the prepayment of indebtedness to be set forth in
definitive loan documents, including, without limitation, the payment of
breakage fees and yield maintenance costs.
(b) Any prepayment, whether voluntary or involuntary, shall be applied
first to any accrued and unpaid interest under the Note up to the date of such
prepayment, and then to any other sums which may be payable to Lender under the
Loan Documents up to the date of such prepayment, and then to the outstanding
principal balance of the Note, any such prepayment applied to principal shall be
applied to the principal portions of installments due under the Note in the
inverse order of their maturity, and the acceptance of any such prepayment when
there is an event of default in existence under any of the Loan Documents shall
not constitute a waiver, release or accord and satisfaction thereof or of any
rights with respect thereto by Lender.
(c) The Note shall provide for a late payment charge of four (4%)
percent of any principal, interest or other amount not paid when due, and a
rate of interest after the occurrence of an event of default under the Loan
Documents ("Default Rate") of five (5%) percent in excess of the interest rate
then payable under the Note pursuant to paragraph 2 above.
(d) Borrower shall reimburse Lender for any and all fees, costs and
expenses Lender may incur in connection with making, disbursing, administering
and enforcing the Loan contemplated hereby. Without limitation of any
provisions set forth herein or in the Loan Documents, Borrower shall indemnify,
defend and save and hold harmless Lender of, from and against any and all loss,
cost, expense, damage and liability which Lender or Lender's affiliates may
suffer, sustain or incur by reason of, or arising out of Borrower's breach,
violation or default under, or other failure to timely and fully pay and
perform its obligations under the Loan.
4. Loan Documents; Security. The Loan evidenced by the Note shall be
governed and secured, inter alia, as follows:
(a) a first, insured Open-End Mortgage and Security Agreement covering
the Real Property and Improvements from Borrower to Lender ("Mortgage");
Christiana Operating Company I LLC
c/o Gender Road Joint Venture
Attn: Brock J. Vinton
October 16, 1997
Page 3
(b) a first Assignment of Leases and Rents from Borrower to Lender
relating to all leases affecting all or any portion of the Real Property
("Assignment of Leases and Rents");
(c) a first Assignment of Borrower's interests under contracts,
licenses and permits, documents and rights relating to the property as specified
by Lender ("Assignments of Contracts");
(d) Uniform Commercial Code financing statements executed by Borrower in
favor of Lender, perfecting Lender's first security interests granted by
Borrower pursuant to the Mortgage in all tangible and intangible personal
property which at the time of the Loan Closing or thereafter is located on or
used in connection with the Real Property ("UCC's");
(e) an Environmental Indemnification Agreement furnished by Borrower
with which Borrower shall indemnify and hold Lender harmless of and from any
and all loss, cost, expense, damage or liability relating to the environmental
condition of the Real Property or the presence of hazardous wastes thereon.
5. Loan Closing Date. Lender's obligation to fund under this Commitment
shall terminate on September 30, 1998. The foregoing notwithstanding, Borrower
shall have one (1) option to extend the expiration date of this Commitment for
one additional period of six (6) months upon written request of Borrower
accompanied by an extension fee equal to one half of one percent (.5%) percent
of the Loan ($72,500), such extension notice and commitment fee to be due and
payable on or before September 30, 1998, time being of the essence.
6. Composition of Borrower. During the term of the Loan, Borrower shall be
and remain a Delaware limited liability company, validly existing and in good
standing under the laws of the State of Delaware, in which Gender Road Joint
Venture and Brandywine Operating Partnership, or its affiliate, shall be and
remain its sole members.
7. General and Special Conditions. The General Conditions attached hereto
are an integral part of this Commitment and are incorporated herein by this
reference. The General Conditions shall not in any way diminish any of the
terms, conditions or requirements set forth herein, and such General Conditions
shall be interpreted to augment, supplement and complement such terms,
conditions and requirements. In addition to the General Conditions and any other
conditions that may be set forth in the Loan Documents, Lender's obligation to
make the Loan shall be specifically subject to the following conditions:
(a) Intentionally Omitted.
Christiana Operating Company I LLC
c/o Gender Road Joint Venture
Attn: Brock J. Vinton
October 16, 1997
Page 4
(b) Intentionally Omitted.
(c) Intentionally Omitted.
(d) Certificate of Occupancy: Borrower shall deliver to Lender a
current, final certificate of occupancy for the building and for the CSC
premises, issued by the Delaware Department of Labor and Industry and by New
Castle County (or other appropriate governmental authorities) and evidence
satisfactory to Lender demonstrating compliance with all zoning, building,
health, fire, traffic, safety, environmental, wetlands and such other rules,
regulations, ordinances, statutes and requirements applicable to the property
and the improvements relating thereto.
8. Fees and Costs. Acceptance of this Commitment shall constitute Borrower's
unconditional agreement, irrespective of whether or not the Loan Closing occurs
and the reasons therefor, to pay all fees, including a closing fee equal to one
(1%) percent of the Loan ($145,000), expenses, taxes, costs and charges in
respect to the Loan, or in any way connected therewith, including but not
limited to Lender's counsel fees and costs, title insurance premiums and search
fees, survey costs, environmental audit costs, appraisal costs, recording and
filing fees and site inspection fees of Lender.
9. Tax and Insurance Escrows. Real estate taxes and insurance premiums shall
be paid or caused to be paid by Borrower timely, and Borrower shall be required
to furnish Lender with paid receipts therefor. The Mortgage shall reserve to
Lender the option to collect monthly from Borrower and hold in escrow amounts
sufficient to pay real estate taxes, water and sewer charges and assessments,
other lienable assessments and insurance premiums, irrespective of whether such
items are paid by the tenants under any executed leases relating to space on the
Real Property. Lender shall release such amounts to Borrower from time to time
upon proof of the payment of such items by Borrower.
10. Accuracy of Information. Borrower represents and warrants to Lender that
all documents and/or information provided to Lender by Borrower in connection
with the issuance of this Commitment are true and correct in all material
respects and Borrower further acknowledges that the issuance of this Commitment
by Lender is in reliance upon the accuracy and truth of such documents and/or
information.
11. Waiver of Trial by Jury. Borrower hereby knowingly, voluntarily and
intentionally waives the right it may have to a trial by jury in respect of any
litigation based hereon, arising out of, under or in connection with this
Commitment or the Loan and any document contemplated to be executed in
conjunction herewith or therewith, or any course
Christiana Operating Company I LLC
c/o Gender Road Joint Venture
Attn: Brock J. Vinton
October 16, 1997
Page 5
of conduct, course of dealing, statements (whether verbal or written) or
actions of Borrower or Lender. This provision is a material inducement for
Lender entering into this Commitment.
12. Brokerage and Other Fees. Borrower agrees to indemnify and hold Lender
harmless against the claims of any and all brokers or agents and from claims for
any commissions, fees or other amounts owned or claimed to be owed regarding the
Loan and/or the Real Property and Improvements.
13. Intentionally Omitted.
14. Lender's Review. Lender and its agents may inspect the plans and
specifications, the Project Budget, the course of construction and other matters
pertaining to construction of the Building and Improvements. Borrower
acknowledges and agrees that such inspections are made solely for the protection
of the Lender in its capacity as Lender, and Borrower confirms that the Lender
is not making and will not be deemed to be making any representations or
warranties as to any matters pertaining to the Building or Improvements by
reason of such inspections or by reason of advances made by the Lender under the
Loan Documents. Without limitation of any of the foregoing, Borrower has
selected the general contractor, all major subcontractors, the project architect
and engineer, and all other consultants providing professional services with
respect to the Project, and Lender, in its capacity as such, has not and shall
not have any responsibility for their selection nor for the quality of their
materials, their services, or workmanship. Neither the Borrower nor any other
person shall have any right to rely on any procedures required by the Lender
herein, such procedures being solely for the protection of the Lender, in its
capacity as lender.
Following acceptance of this Commitment and prior to the Closing, Borrower
shall provide to Lender a copy of all periodic architect's reports by the
architect of record and by the construction lender's architect/engineer within
ten (10) days of submission during the entire period of construction. In
addition to the foregoing, Borrower shall provide to Lender a lease schedule
provided during each calendar quarter of the initial lease-up period of the
property containing not less than the following information: tenant name, lease
term, lease commencement, date of occupancy, monthly rent, concessions, unit
size and unit leased.
15. No Off-set. Anything herein contained to the contrary notwithstanding,
the Borrower specifically acknowledges and agrees that neither the Borrower nor
Gender Road Joint Venture shall have any right to offset against sums due and
owing to Lender, distributions or other sums paid or to be paid to Brandywine
Operating Partnership, in its capacity as a member of Borrower, nor may any
distributions or other sums due Brandywine Operating Partnership as a member of
Borrower be offset against sums paid or payable to Lender under the Loan.
Christiana Operating Company I LLC
c/o Gender Road Joint Venture
Attn: Brock J. Vinton
October 16, 1997
Page 6
16. Borrower and Lender. Borrower acknowledges and agrees that its
obligations to Lender hereunder and under the Loan Documents are and shall be
independent of any obligations of Borrower to its members, and the obligations
of Borrower's members, each to the other. Borrower, Brock J. Vinton and Gender
Road Joint Venture expressly acknowledge and agree that Lender has no fiduciary
duty or obligation of any kind to them, or any of them, and Lender is and shall
be free to exercise any and all rights and remedies reserved to Lender hereunder
and under the Loan Documents, notwithstanding that Brandywine Operating
Partnership, L.P., or its subsidiary, is a member in Borrower.
17. Exculpation. No recourse shall be had for any obligation of Brandywine
Realty Trust under this Commitment or under any document executed in connection
herewith or pursuant hereto, or for any claim based thereon or otherwise in
respect thereof, against any past, present or future trustee, shareholder,
officer or employee of Brandywine Realty Trust, whether by virtue of any statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being expressly waived and released by the Borrower and all
parties claiming by, through or under Borrower.
18. Acceptance; Termination. The acceptance of this Commitment shall be
evidenced by the return of the enclosed copy hereof executed by Borrower, within
three (3) days from the date hereof. Unless this Commitment is so accepted, it
shall become null and void.
VERY TRULY YOURS,
BRANDYWINE REALTY TRUST,
a Maryland real estate investment trust
By: /S/ Gerard H. Sweeney
------------------------------------
Name: Gerard H. Sweeney
Title: President and CEO
ACCEPTANCE
Intending to be legally bound, the undersigned hereby accept the foregoing
Commitment and agree to the terms and conditions thereof.
CHRISTIANA CENTER OPERATING COMPANY I LLC
a Delaware limited liability company
BY: /S/
-----------------------------------------------
Brock J. Vinton
GENERAL CONDITIONS
The following General Conditions are an integral part of this commitment:
1. Documents and Information to be Furnished to Lender Before Loan Closing.
At least ten (10) business days prior to the scheduled date of the Loan Closing,
Borrower must obtain at its expense and submit to Lender the documents and
information set forth below. Such documentation and information shall be subject
to Lender's review and approval, both as to form and substance, and shall be
updated and effective at the time of Loan Closing. None of the materials
provided by Borrower shall vary in any material respect from the information and
materials previously provided to Lender in order to induce Lender to underwrite
and approve the Loan.
(a) A currently dated title report, in form and substance satisfactory
to Lender, issued by Commonwealth Land Title Insurance Corporation, covering the
Real Property, which contains copies of all identified documents referred to
therein. The title report shall stipulate that title insurance, in a form
approved by Lender, shall be issued to Lender at time of the Loan Closing which
shall insure Lender as the holder of a valid first mortgage lien for the full
amount of the Mortgage, free and clear of all liens (including mechanic's liens
filed or unfiled), encumbrances and exceptions other than those which may be
approved by Lender.
(b) A current ALTA/ASCM as-built survey of the Real Property, certified
to and acceptable to Lender and to Commonwealth Land Title Insurance
Corporation, issuing the title insurance, showing such items as Lender shall
specify, together with a metes and bounds description of the Real Property
corresponding to such survey.
(c) Any and all lease agreements relating to any portion of the Real
Property, and any form of proposed lease agreement to be used by Borrower in
connection with the Real Property during the term of the Loan.
(d) Borrower's Operating Agreement, filed Certificate of Formation,
pertinent incumbency and signature certificates, and resolutions authorizing the
transaction.
(e) A written opinion of Borrower's 's counsel, who shall be acceptable
to Lender, stating that, inter alia: (i) Borrower is duly organized, validly
existing and in good standing in the State of Delaware, authorized to do
business in the State of Delaware, (ii) Borrower has full authority and legal
right to carry out the terms of this Commitment and any other documentation
required hereunder or in connection with the Loan, (iii) Borrower has taken all
necessary and appropriate action to authorize the execution and delivery of this
Commitment and all other documents required to be executed by it in connection
with
the Loan, (iv) this Commitment and all other documents required to be
executed by Borrower in connection with the Loan have been duly executed and
acknowledged or witnessed, as appropriate, by Borrower, (v) none of the
aforesaid actions, undertakings and agreements contravene or shall contravene
Borrower's Operating Agreement or Certificate of Formation, the provisions of
this Commitment, or the provisions of any contract or agreement to which
Borrower is a party or by which Borrower is bound or any applicable law, (vi)
such counsel is not aware of any matters contrary to the representations or
warranties of Borrower contained in this Commitment or in any documents required
to be executed in connection with the Loan, (vii) the Note, Mortgage and all
other loan documents are valid and binding and enforceable according to their
respective terms in the state where the Real Property is located and (viii) the
Loan is not usurious.
(f) Fully paid fire and casualty insurance policies with extended
coverage, covering risk of loss or damage to the Real Property due to fire and
such other casualties as Lender may require, with limits equal to one hundred
percent of the full replacement cost with such company or companies approved by
Lender (but such company must have an A or better rating by Best's Rating
Service) and containing mortgagee clauses in favor of Lender in form and content
satisfactory to Lender; fully paid flood insurance policy, if determined to be
necessary by Lender; and fully paid liability insurance and workmen's
compensation insurance in such amounts as may be required by Lender or, as to
workmen's compensation, mandated by statute.
(g) The final as-built plans and specifications for the Building and
Improvements, which shall have been approved in writing by all necessary and
appropriate governmental authorities, the general contractor, the primary
subcontractors, and the architect, engineer and bonding company, as appropriate.
(h) Appraisals of the Real Property in accordance with the requirements
of Title 11 of the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 ("FIRREA") based upon its fair market value currently and upon its
projected fair market value following completion of the construction of the
Building as shown in the plans and specifications, which appraisals shall be
paid for by Borrower, performed by an MAI appraiser selected by or acceptable to
Lender and acceptable in form and substance to Lender.
(i) A Phase I Environmental Report (and the report of such further
investigations, if any, as shall be deemed appropriate by Lender), prepared by
an independent environmental engineering firm acceptable to Lender, indicating
that there are no hazardous substances or wastes in, on or around the Real
Property, that the Real Property does not contain any wetlands, that the Real
Property is not located in a flood hazard area or 100-year flood plain, and
otherwise in form and substance satisfactory to Lender.
(j) Intentionally Omitted.
2. Lender's Approval of Documents and Title. The need for and the adequacy
as to form and substance of each and every document relating to the Loan and all
questions relating to the validity, status and priority of the security for the
Loan shall be determined by and must be satisfactory to Lender.
3. Condemnation. Lender shall have the right to terminate this Commitment in
the event there occurs, between the date of this Commitment and the date of the
Loan Closing, any loss or damage to the Real Property due to any taking of all
or any portion of the Real Property by exercise of the power of condemnation or
eminent domain, which precludes or substantially delays completion of the
Project.
4. Maximum Rate of Interest on Loan. Notwithstanding anything to the
contrary contained herein or in any other document executed in connection with
the Loan, the effective rate of interest on the Loan shall not exceed the
maximum effective rate of interest permitted by applicable law or regulation.
Borrower hereby agrees to give Lender prior written notice in the event any
interest payment made to Lender with respect to this Loan will cause the total
interest payments collected in any one year to be usurious under applicable law,
and Lender hereby agrees not to collect knowingly any interest from Borrower in
the form of fees or otherwise which will render this Loan usurious. In the event
that such interest would be usurious in Lender's opinion, Lender reserves the
right to reduce the interest payable by Borrower or, if the Loan Closing has not
yet occurred and at its option, to terminate this Commitment. This provision
shall survive the Loan Closing and the repayment of the Loan.
5. No Other Liens on Real Property. Borrower hereby agrees that during the
term of the Loan and any extension thereof, there shall be no other financing
secured by the Real Property and no lien or encumbrance other than those
contemplated by this Commitment shall be created or permitted to exist against
the Real Property without the written consent of Lender. In the event such
consent is given, any and all such financing and liens shall be absolutely and
unconditionally subordinated to the lien of the Mortgage contemplated by this
Commitment.
6. No Transfer of Real Property. Borrower hereby agrees that during the term
of the Loan and any extension thereof, there shall be no transfer of legal or
equitable ownership of the Real Property.
7. No Waiver of Rights. Neither the failure of Lender nor the delay of
Lender to exercise any right, power or privilege under this Commitment shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege preclude any other or further exercise of any other
right, power or privilege.
8. Assignment.
(a) Neither this Commitment nor the Loan proceeds shall be assignable by
Borrower without the prior written consent of Lender, and any attempt at such
assignment without such consent shall be void.
(b) This Commitment, the Loan and any and all documents pertaining
thereto may be placed, assigned, serviced or participated (either in whole or
in part) by Lender, its successors and assigns.
9. Modification; Entire Commitment; No Reliance by Third Parties. No change
or modification of this Commitment shall be valid unless the same is in writing
and signed by the parties hereto. This Commitment contains the entire agreement
between the parties hereto and there are no promises, agreements, conditions,
undertakings, warranties and representations, either written or oral, expressed
or implied between the parties hereto other than as herein set forth. It is
expressly understood and agreed that this Commitment represents an integration
of any and all prior and contemporaneous promises, agreements, conditions,
undertakings, warranties and representation between the parties hereto. This
Commitment is directed solely and exclusively to Borrower and shall not inure to
the benefit of or be relied upon by any third party.
10. Commitment to Survive Closing. This Commitment shall survive the Loan
Closing and each and every one of the obligations and undertakings of Borrower
named herein shall be continuing obligations and undertakings and shall not
cease and determine until the entire Loan, together with all interest and fees
due hereon and any other amounts which may accrue pursuant hereto or to the
Loan, shall have been paid in full, and until all obligations and undertakings
of Borrower shall have been fully completed and discharged.
* * * *