Exhibit 10.13
AGREEMENT OF PURCHASE AND SALE
BETWEEN
WHDWA REAL ESTATE LIMITED PARTNERSHIP
AS SELLER
AND
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AS BUYER
November 21, 1997
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................... 1
Section 1.2 Terms Generally............................................... 6
ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale.......................................................... 7
Section 2.2 Purchase Price................................................ 8
Section 2.3 Due Diligence Period.......................................... 10
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase.................. 11
Section 3.2 Conditions to Seller's Obligations to Sell.................... 12
Section 3.3 Termination................................................... 13
Section 3.4 Waiver by Buyer............................................... 13
Section 3.5 Excluded Consent Properties................................... 13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller...................... 14
Section 4.2 Estoppels..................................................... 16
Section 4.3 Limitation on Claims; Survival of Representations
and Warranties................................................ 16
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Section 4.4 Representations and Warranties of Buyer....................... 18
Section 4.5 Buyer's Independent Investigation............................. 19
Section 4.6 Entry and Indemnity; Limits on Government Contacts............ 22
Section 4.7 Release....................................................... 24
ARTICLE V
TITLE
Section 5.1 Conveyance of Title........................................... 24
Section 5.2 Evidence of Title............................................. 26
ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers....................................................... 26
Section 6.2 Expenses...................................................... 26
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties........................... 27
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free Rent... 28
Section 7.3 Seller's Maintenance of the Properties........................ 29
Section 7.4 Lease Enforcement............................................. 29
Section 7.5 Lease Termination Prior to Closing............................ 29
Section 7.6 Tenant Notices................................................ 29
Section 7.7 Risk of Loss and Insurance Proceeds........................... 30
Section 7.8 Notifications................................................. 30
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions........................................... 31
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Section 8.2 Closing....................................................... 31
Section 8.3 Deposit of Documents.......................................... 31
Section 8.4 Estoppel Certificates......................................... 34
Section 8.5 Prorations.................................................... 35
Section 8.6 Tax Certiorari Proceedings.................................... 37
Section 8.7 Tenant Obligations............................................ 38
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices....................................................... 38
Section 9.2 Entire Agreement.............................................. 39
Section 9.3 Time.......................................................... 40
Section 9.4 Attorneys' Fees............................................... 40
Section 9.5 No Merger..................................................... 40
Section 9.6 Assignment.................................................... 40
Section 9.7 Counterparts.................................................. 40
Section 9.8 Governing Law; Jurisdiction and Venue......................... 40
Section 9.9 Waiver of Trial by Jury....................................... 41
Section 9.10 Confidentiality and Return of Documents...................... 41
Section 9.11 Interpretation of Agreement.................................. 44
Section 9.12 Amendments................................................... 44
Section 9.13 No Recording................................................. 44
Section 9.14 No Third Party Beneficiary................................... 44
Section 9.15 Severability................................................. 44
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract..................................................... 44
Section 9.17 Further Assurances........................................... 45
Section 9.18 Special Provisions Regarding Properties Located
in the Commonwealth of Pennsylvania.......................... 45
Section 9.19 Exculpation.................................................. 45
Section 9.20 Counterparts................................................. 45
EXHIBITS
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EXHIBIT A REAL PROPERTY DEEDS
EXHIBIT B ASSIGNMENTS OF GROUND LEASES
EXHIBIT C INTENTIONALLY OMITTED
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EXHIBIT D INTENTIONALLY OMITTED
EXHIBIT E ▇▇▇▇ OF SALE
EXHIBIT F ASSIGNMENT OF LEASES
EXHIBIT G ASSIGNMENT OF CONTRACTS, WARRANTIES AND
GUARANTEES AND OTHER INTANGIBLE PROPERTY
EXHIBIT H DESIGNATION AGREEMENT
EXHIBIT I BUYER'S AS-IS CERTIFICATE
EXHIBIT J TENANT ESTOPPEL CERTIFICATE
EXHIBIT K INTENTIONALLY OMITTED
EXHIBIT L SELLER'S AFFIDAVIT
EXHIBIT M GROUND LEASE ESTOPPEL CERTIFICATE
EXHIBIT N ESCROW AGREEMENT
SCHEDULES
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SCHEDULE 1 INTENTIONALLY OMITTED
SCHEDULE 2.1.1 PROPERTY DESCRIPTIONS
SCHEDULE 2.1.2 LEASEHOLD ESTATES
SCHEDULE 2.1.3 EXISTING LEASES
SCHEDULE 2.1.5 PURCHASE RIGHTS
SCHEDULE 2.2.1 ALLOCATED PURCHASE PRICE
SCHEDULE 2.2.2 WIRING INSTRUCTIONS
SCHEDULE 4.1.1 REQUIRED CONSENTS
SCHEDULE 4.1.2 NON-TERMINABLE CONTRACTS
SCHEDULE 4.1.3 PENDING LITIGATION
SCHEDULE 4.1.4 MUNICIPAL VIOLATION NOTICES
SCHEDULE 7.2 LEASING COSTS
SCHEDULE 8.1.1 TRANSFER TAXES
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AGREEMENT OF PURCHASE AND SALE
AGREEMENT OF PURCHASE AND SALE, dated as of November 21, 1997 (this
"Agreement"), between WHDWA Real Estate Limited Partnership, a Delaware limited
partnership ("Seller"), and Brandywine Operating Partnership, L.P., a Delaware
limited partnership ("Buyer").
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the following
terms shall have the meanings set forth below, which meanings shall be
applicable equally to the singular and plural of the terms defined:
"Additional Deposit" shall mean the ▇▇▇▇▇▇▇ money deposit funded by
Buyer pursuant to the second sentence of Section 2.2(b)(i).
"Additional Deposit Date" shall have the meaning set forth in Section
2.2(b)(i)
"Additional Rents" shall have the meaning set forth in Section 8.5(a).
"Affiliate" shall mean with respect to any Person (i) any other Person
that directly or indirectly through one or more intermediaries controls or
is controlled by or is under common control with such Person, (ii) any
other Person owning or controlling 10% or more of the outstanding voting
securities of or other ownership interests in such Person, (iii) any
officer, director or partner of such Person, or (iv) if such Person is an
officer, director or partner, any other company for which such Person acts
in any such capacity.
"Agreement" shall have the meaning set forth in the first paragraph of
this Agreement.
"Allocated Purchase Price" shall have the meaning set forth in
Section 2.2(a).
"Assignment of Contracts" shall have the meaning set forth in Section
8.3(a).
"Assignment of Ground Lease" shall have the meaning set forth in
Section 5.1(b).
"Assignment of Leases" shall have the meaning set forth in Section
8.3(a).
"▇▇▇▇ of Sale" shall have meaning set forth in Section 8.3(a).
"Business Day" shall mean any day other than a Saturday, a Sunday, or
a federal holiday recognized by the Federal Reserve Bank of New York.
"Buyer" shall have the meaning set forth in the first paragraph of
this Agreement and shall include any assignee of Buyer (including, without
limitation, any Permitted Assignee).
"Buyer Party" or "Buyer Parties" shall have the meaning set forth in
Section 4.6.
"Claim Notice" shall mean a written notice delivered by Buyer or a
Permitted Assignee to Seller setting forth (i) the identity of the Property
with respect to which a breach or inaccuracy of a representation or
warranty is alleged to have occurred, (ii) a reasonably detailed
description of the claimed breach or inaccuracy, including reasonably
detailed information as to the adverse effect on the value of the Property
to which such claimed breach relates, (iii) the specific provision of this
Agreement under which such breach is claimed and (iv) complete and detailed
evidence of the satisfaction of the conditions to Buyer's or a Permitted
Assignee's recovery set forth in Section 4.3.
"Claims" shall have the meaning set forth in Section 4.3(a).
"Closing" shall have the meaning set forth in Section 2.2(b).
"Closing Date" shall have the meaning set forth in Section 8.2.
"Closing Documents" shall have the meaning set forth in
Section 4.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any corresponding provision(s) of any succeeding law.
"Confidential Information" shall have the meaning set forth in Section
9.10(c).
"Confidentiality Agreement" shall mean the Confidentiality Agreement,
dated October 8, 1997, between Brandywine Realty Trust and Seller.
"Consent Properties" shall mean the Property identified on Schedule
2.1.1 as "Freedom Business Center," King of Prussia, Pennsylvania.
"Contracts" shall have the meaning set forth in Section 2.1(e).
"Deed" shall have the meaning set forth in Section 5.1(a).
"Deposit" shall mean the Initial Deposit and the Additional Deposit.
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"Designation Agreement" shall have the meaning set forth in Section
8.3(a).
"Document Delivery Date" shall have the meaning set forth in Section
8.3.
"Due Diligence Materials" shall mean all of the documents and other
materials delivered to, or made available for inspection by, Buyer, its
Permitted Assignees and their representatives including, without
limitation, the materials referenced in the materials delivered to Buyer
and its representatives entitled "WHDWA Properties Due Diligence Index"
dated November 21, 1997) and on-site materials made available to Buyer for
inspection.
"Due Diligence Period" shall mean the period commencing on the
Effective Date and ending at 4:00 P.M. (Eastern Standard Time) on December
12,1997 (as such period may be extended by written notice from Seller to
Buyer), during which period Buyer shall conduct the due diligence
activities contemplated by Section 4.6 of this Agreement.
"Effective Date" shall mean the date of this Agreement.
"Evaluation Material" shall have the meaning set forth in
Section 9.10(a).
"Excluded Consent Property" shall have the meaning set forth in
Section 3.5.
"Existing Leases" shall mean those leases, license agreements and
occupancy agreements identified on Schedule 2.1.3, as the same may be
amended or modified from time to time in accordance with the terms of this
Agreement.
"Fee Parcel" shall have the meaning set forth in Section 2.1(a).
"Fee Property" or "Fee Properties" shall have the meaning set forth
in Section 2.1(a).
"▇▇▇▇▇▇▇" shall have the meaning set forth in Section 6.1.
"Governmental Authority" shall mean any federal, state, county or
municipal government, or political subdivision thereof, any governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court or administrative tribunal.
"Ground Lease" shall have the meaning set forth in Section 4.5(b).
"Hazardous Materials" shall mean materials, wastes or substances that
are (A) included within the definition of any one or more of the terms
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"hazardous substances," "hazardous materials," "toxic substances," "toxic
pollutants" and "hazardous waste" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Resource Conservation and Recovery Act of 1976
(42 U.S.C. Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section
1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section 1401, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801,
et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.) and the regulations promulgated pursuant to such laws, (B) regulated,
or classified as hazardous or toxic, under federal, state or local
environmental laws or regulations, (C) petroleum, (D) asbestos or
asbestos-containing materials, (E) polychlorinated biphenyls, (F) flammable
explosives or (G) radioactive materials.
"Improvements" shall have the meaning set forth in Section 2.1(a).
"Indemnified Party" shall have the meaning set forth in Section 6.1.
"Initial Deposit" shall mean the ▇▇▇▇▇▇▇ money deposit funded by Buyer
pursuant to the first sentence of Section 2.2(b)(i).
"Initial Deposit Date" shall mean the first Business Day after the
Effective Date.
"Intangible Property" shall have the meaning set forth in Section
2.1(h).
"Leasehold Estate" or "Leasehold Estates" shall have meaning set forth
in Section 2.1(b).
"Leasehold Improvements" shall have the meaning set forth in Section
2.1(b).
"Leasehold Improvements Deed" shall have the meaning set forth in
Section 5.1(c).
"Leasehold Property" or "Leasehold Properties" shall have the meaning
set forth in Section 2.1(b).
"Leases" shall mean all Existing Leases and New Leases, collectively.
"Leasing Costs" shall have the meaning set forth in Section 7.2.
"Licenses and Permits" shall have the meaning set forth in Section
2.1(h).
"New Leases" shall mean those leases, license agreements and occupancy
agreements encumbering any Real Property which are entered into after the
Effective Date in accordance
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with the terms of this Agreement, as the same may be amended or modified
from time to time in accordance with the terms of this Agreement.
"Non-Terminable Contracts" shall have the meaning set forth in Section
4.1(h).
"Order" shall mean an order or decree of any Governmental Authority.
"Permitted Assignee" shall have the meaning set forth in Section 9.6.
"Permitted Exceptions" shall have the meaning set forth in Section
5.1.
"Person" shall mean any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Personal Property" shall have the meaning set forth in Section
2.1(c).
"Prescribed Form" shall have the meaning set forth in Section 8.4.
"Prime Rate" shall mean the prime (or base) rate of interest publicly
announced by Citibank, N.A. or its successors from time to time.
"Property" or "Properties" shall have the meaning set forth in Section
2.1.
"Purchase Price" shall have the meaning set forth in Section 2.2(a).
"Real Estate Taxes" shall have the meaning set forth in Section
4.5(b).
"Real Property" or "Real Properties" shall have the meaning set forth
in Section 2.1.
"Records and Plans" shall have the meaning set forth in Section
2.1(g).
"Rent Rolls" shall have the meaning set forth in Section 4.1(g).
"Representatives" shall have the meaning set forth in Section 9.10(a).
"Required Deletion Items" shall have the meaning set forth in
Section 3.1(c).
"Required Percentage" shall have the meaning set forth in Section
8.4(a).
"Schedule of Contracts" shall have the meaning set forth in Section
4.1(h).
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"Seller" shall have the meaning set forth in the first paragraph of
this Agreement.
"Seller Party" shall have the meaning set forth in Section 4.7(a).
"Seller's Affidavit" shall have the meaning set forth in
Section 8.3(a)(ix).
"Significant Tenant" shall mean any Tenant occupying space equal to
twenty percent (20%) or more of the rentable square footage of any
Property.
"Survey" shall have the meaning set forth in Section 4.5(a).
"Tenant" shall mean the tenant, occupier or licensee under any lease,
license agreement or occupancy agreement encumbering any Real Property.
"Termination Notice" shall have the meaning set forth in Section 2.3.
"Threshold Amount" shall have the meaning set forth in Section 4.3.
"Title Commitment" shall have the meaning set forth in Section 3.1(c).
"Title Company" shall have the meaning set forth in Section 2.2(b).
"Title Policy" shall have the meaning set forth in Section 5.2.
"Warranties" shall have the meaning set forth in Section 2.1(f).
Section 1.2 Terms Generally. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(b) the words "including" and "include" and other words of similar
import shall be deemed to be followed by the phrase "without limitation"; and
(c) any consent, determination, election or approval required to be
obtained, or permitted to be given, by or of any party hereunder, shall be
granted, withheld or made (as the case may be) by such party in the exercise of
such party's sole and absolute discretion.
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ARTICLE II
PURCHASE AND SALE OF PROPERTIES
Section 2.1 Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, subject only to the Permitted Exceptions and to all
other terms, covenants and conditions set forth herein, all of Seller's right,
title and interest in and to the following: (a) each parcel of land described
in Schedule 2.1.1 attached hereto (each, a "Fee Parcel") identified as being
owned by Seller on Schedule 2.1.1, together with any and all rights, privileges
and easements appurtenant thereto owned by Seller (including any rights of
Seller as declarant), together with all buildings, improvements and fixtures
(other than fixtures owned or removable by any Tenant or third party) located
thereon (collectively, the "Improvements"; each Fee Parcel, together with the
Improvements thereon, a "Fee Property" and, collectively, the "Fee Properties");
(b) each leasehold estate described in Schedule 2.1.2 attached hereto identified
as being owned by Seller on Schedule 2.1.2, together with any and all rights
appurtenant thereto owned by Seller (each, a "Leasehold Estate" and,
collectively, the "Leasehold Estates"), together with all buildings,
improvements and fixtures (other than fixtures owned or removable by any Tenant
or third party) located thereon (collectively, the "Leasehold Improvements;"
each Leasehold Estate, together with the Leasehold Improvements thereon, a
"Leasehold Property" and, collectively, the "Leasehold Properties"); (c) all
tangible personal property not owned or removable by any Tenant or third party,
if any, located on the Real Properties and owned by Seller and used in the
operation or maintenance of any one or more of the Real Properties (the
"Personal Property"); (d) (i) Seller's interest, as landlord, owner or licensor,
in each of the Existing Leases, (ii) Seller's interest, as landlord, owner or
licensor, in any New Leases and (iii) to the extent assignable, any guarantees,
letters of credit or other instruments that secure or guarantee the performance
of the obligations of each Tenant; (e) to the extent assignable, all service
contracts, maintenance contracts, operating contracts, warranties, guarantees,
listing agreements, parking contracts and like contracts and agreements relating
to the Real Properties, and commission agreements, equipment leases, contracts,
subcontracts and agreements relating to the construction of any unfinished
tenant improvements (collectively, the "Contracts"); (f) to the extent
assignable, all warranties and guaranties made by or received from any third
party with respect to any building, building component, structure, fixture,
machinery, equipment or material situated on any Real Property, or contained in
any or comprising a part of any Improvement or Leasehold Improvement
(collectively, the "Warranties"); (g) to the extent Seller currently has such
items in its possession and to the extent assignable, all (i) preliminary, final
and proposed building plans and specifications (including "as-built" floor plans
and drawings) and tenant improvement plans and specifications for the
Improvements and the Leasehold Improvements and (ii) surveys, grading plans,
topographical maps, architectural and structural drawings and engineering,
soils, seismic, geologic and architectural reports, studies and tests relating
to any Real Property ((g)(i) and (g)(ii) collectively, the "Records and Plans");
and (h) to the extent transferable, any intangible personal property now or
hereafter owned by Seller and used in the ownership, use or operation of any one
or more of the Real Properties and/or the Personal Property, excluding materials
or information which in Seller's
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judgment is privileged or confidential information, the name WHDWA Real Estate
Limited Partnership and related names and proprietary computer equipment,
software and systems, but including all (i) licenses, permits, building
inspection approvals, certificates of occupancy, approvals, subdivision maps and
entitlements issued, approved or granted by Governmental Authorities in
connection with a Real Property, (ii) unrecorded covenants, conditions and
restrictions, reciprocal easement agreements, area easement agreements and other
common or planned development agreements or documents affecting any Real
Property and (iii) licenses, consents, easements, rights of way and approvals
obtained from private parties to make use of utilities and to ensure vehicular
and pedestrian ingress and egress for any Real Property ((h)(i), (h)(ii) and
(h)(iii) collectively, the "Licenses and Permits") or other rights relating to
the ownership, use or operation of any of the Real Properties or the Personal
Property (collectively, the "Intangible Property"). Each Fee Property or
Leasehold Property is referred to herein individually as a "Real Property" and
all of the foregoing are referred to herein collectively as the "Real
Properties." Each Fee Property and Leasehold Property, together with the
Personal Property, the Leases, the Contracts, the Warranties, the Records and
Plans and the Intangible Property relating thereto are referred to herein as a
"Property" and, collectively, as the "Properties."
Section 2.2 Purchase Price.
(a) The purchase price of the Properties is One Hundred Seven Million
One Hundred Thousand Dollars ($107,100,000) (the "Purchase Price"), subject to
prorations, credits and adjustments as set forth herein. The Purchase Price
shall be allocated among each Property (the "Allocated Purchase Price") in
accordance with Schedule 2.2.1 attached hereto.
(b) The Purchase Price shall be paid by Buyer as follows:
(i) By 3:00 P.M. (Eastern Standard Time) on the Initial Deposit
Date, Buyer shall deposit by wire transfer (made in accordance with the wiring
instructions set forth on Schedule 2.2.2 attached hereto) of immediately
available funds, in escrow with Commonwealth Land Title Insurance Company, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(the "Title Company"), a cash payment in the amount of Five Hundred Thousand
Dollars ($500,000). Unless Buyer has terminated this Agreement pursuant to
Section 2.3, by 3:00 P.M. (Eastern Standard Time) on the first Business Day
after the expiration of the Due Diligence Period (the "Additional Deposit
Date"), Buyer shall deposit by wire transfer (made in accordance with the wiring
instructions set forth on Schedule 2.2.2 attached hereto) of immediately
available funds, in escrow with the Title Company a cash payment in the amount
of Four Million Eight Hundred Fifty-Five Thousand Dollars ($4,855,000). The
Initial Deposit and the Additional Deposit shall be held by the Title Company
pursuant to an escrow agreement among Buyer, Seller and the Title Company in the
form of Exhibit N attached hereto.
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(ii) The Deposit shall be held in an interest bearing account
reasonably designated by Buyer and all interest thereon shall be deemed a part
of the Deposit. If the sale of the Properties as contemplated hereunder is
consummated, then the Deposit (including the interest accrued on the Deposit)
shall be paid to Seller at the consummation of the purchase and sale of the
Properties contemplated hereunder (the "Closing") and credited against the
Purchase Price.
(iii) The balance of the Purchase Price over and above the Deposit
(each as may be adjusted in respect of any Excluded Consent Property pursuant to
Section 3.5), as adjusted pursuant to Section 8.5, shall be deposited by Buyer,
by wire transfer (made in accordance with the wiring instructions set forth on
Schedule 2.2.1 attached hereto) of immediately available funds, with the Title
Company and paid to Seller at the Closing.
(c) (i) IF THE SALE OF THE PROPERTIES IS NOT CONSUMMATED DUE TO
THE FAILURE OF ANY CONDITION TO BUYER'S OBLIGATION TO PURCHASE OR SELLER'S
INABILITY TO PERFORM OR SELLER'S DEFAULT HEREUNDER, THEN THE DEPOSIT SHALL BE
RETURNED TO BUYER, AND BUYER'S SOLE REMEDY, AT LAW OR IN EQUITY, SHALL BE THE
RETURN OF THE DEPOSIT, PROVIDED, THAT IF THE SALE OF THE PROPERTIES IS NOT
CONSUMMATED BECAUSE OF SELLER'S FAILURE TO CLOSE WHEN OBLIGATED TO DO SO
UNDER THIS AGREEMENT, BUYER MAY EITHER (A) TERMINATE THIS AGREEMENT BY
WRITTEN NOTICE OF TERMINATION TO SELLER ON THE CLOSING DATE, WHEREUPON THE
DEPOSIT SHALL BE IMMEDIATELY RETURNED TO BUYER AND SELLER SHALL BE OBLIGATED
TO REIMBURSE BUYER FOR ITS OUT OF POCKET EXPENSES (NOT TO EXCEED $25,000) OR
(B) CONTINUE THIS AGREEMENT PENDING BUYER'S ACTION FOR SPECIFIC PERFORMANCE,
IN WHICH LATTER EVENT BUYER, AS A CONDITION TO SUCH ACTION, SHALL NOT ACCEPT
RETURN OF THE DEPOSIT AND SHALL PLACE THE FULL AMOUNT OF THE PURCHASE PRICE
ABOVE THE DEPOSIT INTO ESCROW. (ii) IF THE SALE OF THE PROPERTIES IS NOT
CONSUMMATED AS A RESULT OF A DEFAULT BY BUYER HEREUNDER, THEN, AS ITS SOLE
AND EXCLUSIVE REMEDY, SELLER SHALL RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A
FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE
AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS
AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES
THAT SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH
PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE
FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME
THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION. THE FOREGOING IS NOT INTENDED TO LIMIT BUYER'S INDEMNITY
OBLIGATIONS UNDER
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SECTIONS 4.6(a), 6.1, 9.4 AND 9.10(a) OR SELLER'S OBLIGATIONS UNDER SECTIONS 6.1
0R 9.4.
INITIALS: Seller ___________ BUYER ___________
(d) In the event that Buyer fails to fund within one Business Day
after the Initial Deposit Date or the Additional Deposit Date (with time being
of the essence) the full amount of the Initial Deposit or the Additional
Deposit, as the case may be, for any or no reason whatsoever in accordance with
the terms of Section 2.2(b)(i), this Agreement shall immediately and
automatically terminate. Upon any termination of this Agreement pursuant to
this Section 2.2(d) or Section 2.3, no party shall have any further rights or
obligations hereunder, except as provided in Sections 4.6(a), 6.1, 9.4 and
9.10(a).
Section 2.3 Due Diligence Period. At any time prior to the
expiration of the Due Diligence Period, Buyer shall be free, in its sole and
absolute discretion, and for any or no reason whatsoever to terminate this
Agreement by written notice to Seller (the "Termination Notice") delivered on or
prior to the expiration of the Due Diligence Period. If the Termination Notice
is not delivered on or prior to the expiration of the Due Diligence Period,
Buyer shall be deemed to have reviewed, accepted and approved (and all
representations and warranties of Seller made herein shall be subject to and
qualified by) all of the Due Diligence Materials. Notwithstanding anything to
the contrary herein, Seller shall have no liability whatsoever to Buyer with
respect to any matter disclosed to or actually known by Buyer or its agents
prior to the Closing Date.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions to Buyer's Obligation to Purchase. Buyer's
obligation to purchase the Properties is conditioned upon the satisfaction (or
Buyer's written waiver) on or prior to the Closing Date of the following
conditions:
(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Seller from consummating the transactions
contemplated hereby with respect to any Property.
(b) Except as set forth in Section 3.5, all consents required to be
obtained from, or filing required to be made with, any Governmental Authority or
third party in connection with the execution and delivery of this Agreement by
Seller or the consummation by Seller of the transactions contemplated hereby
shall have been obtained or made.
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(c) The Title Company shall have issued or shall have committed to
issue, upon payment of the applicable premium therefor, a 1992 ALTA Owner's
Policy of Title Insurance (provided, that in jurisdictions where local
regulations require a form of policy other than a 1992 ALTA Owner's Policy, such
other required form shall be used) with respect to each Real Property in the
form of the title insurance commitment (each, a "Title Commitment") obtained by
Buyer during the Due Diligence Period from the Title Company showing title to
such Real Property vested in Buyer, subject only to the Permitted Exceptions.
It shall not be a condition to Closing that Buyer obtain any endorsements or
coverages not set forth in the applicable Title Commitment. Seller shall be
entitled, by notice to Buyer, to adjourn the Closing one or more times for an
aggregate period not to exceed thirty (30) days in order to remove any
exceptions to title that are not Permitted Exceptions. Nothing contained herein
shall require Seller to bring any action or proceeding or otherwise to incur any
expense to correct, discharge or otherwise remove title exceptions or defects
with respect to any Property or to remove, remedy or comply with any other
grounds for Buyer's refusing to approve title, provided that Seller shall be
obligated to remove or discharge, or otherwise cause the Title Company to omit
as an exception to title or to insure against collection thereof from or against
any Property any mortgages or monetary liens created by Seller, any mechanics'
liens or judgment liens that are the obligation of Seller (as opposed to any
Tenant or other third party) and any liens and encumbrances voluntarily created
by Seller in violation of Section 7.1 (collectively, the "Required Deletion
Items"). If on the Closing Date there are any Required Deletion Items, Seller
may use any portion of the Purchase Price payable pursuant to Section 2.2(b) to
satisfy same, provided the Title Company shall omit such lien or encumbrance as
an exception to title.
(d) Buyer shall have received estoppel certificates for each Real
Property to the extent required by Section 8.4 and the estoppel certificate from
the ground lessor with respect to each Ground Lease.
(e) Each of the documents required to be delivered by Seller pursuant
to Section 8.3 shall have been delivered as provided therein and Seller shall
not otherwise be in material default of its material obligations hereunder, and
all of Seller's representations and warranties contained herein shall be true
and correct in all material respects as of the Closing Date (except that any
representations and warranties which are made as of a specified date shall be
true and correct as of such specified date).
(f) Buyer shall not have previously terminated this Agreement
pursuant to and in accordance with Section 7.7.
Section 3.2 Conditions to Seller's Obligations to Sell. Seller's
obligation to sell the Properties is conditioned upon the satisfaction (or
Seller's written waiver) on or prior to the Closing Date of the following
conditions:
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(a) There shall exist on the Closing Date no pending Order
prohibiting, enjoining or restraining Buyer from consummating the transactions
contemplated hereby with respect to any Property.
(b) Except as set forth in Section 3.5, all consents required to be
obtained from, or filings required to be made with, any Governmental Authority
or third party in connection with the execution and delivery of this Agreement
by Buyer or the consummation by Buyer of the transactions contemplated hereby
shall have been obtained or made.
(c) Seller shall have actually received the Purchase Price in cash.
(d) Buyer shall not otherwise be in material default of its material
obligations hereunder.
(e) Each of the documents required to be delivered by Buyer pursuant
to Section 8.3 shall have been delivered as provided therein, and all of Buyer's
representations and warranties contained herein shall be true and correct in all
material respects as of the Closing Date.
Section 3.3 Termination. In the event that any condition set forth
in Section 3.1 or Section 3.2 is not satisfied on or prior to the Closing Date,
then the party to this Agreement whose obligations are conditioned upon the
satisfaction of such condition may in its sole and absolute discretion terminate
this Agreement, subject to Section 2.2(c), by written notice delivered to the
other party at or prior to the occurrence of the Closing. Upon any termination
of this Agreement pursuant to this Section 3.3, no party shall have any further
rights or obligations hereunder, except as provided in Sections 2.2(c), 4.6(a),
6.1, 9.4 and 9.10(a).
Section 3.4 Waiver by Buyer. If Buyer and/or its Permitted
Assignees, with knowledge of (i) a default in any of the covenants, agreements
or obligations to be performed by Seller under this Agreement and/or (ii) any
breach of or inaccuracy in any representation or warranty of Seller made in this
Agreement, nonetheless elects to proceed to Closing, then, upon the consummation
of the Closing, Buyer and/or its Permitted Assignees shall be deemed to have
waived any such default and/or breach or inaccuracy and shall have no claim
against Seller with respect thereto.
Section 3.5 Excluded Consent Properties. In the event that on the
Closing Date, the conditions set forth in Section 3.1(b) shall not have been
satisfied by Seller or if a purchase option has been exercised with respect to
any Consent Property (such Consent Property, an "Excluded Consent Property"),
and but for such failure to satisfy Section 3.1(b) (or the exercise of such
purchase option) the conditions to Closing set forth in Section 3.1 otherwise
would be satisfied on the Closing Date, (i) Buyer shall be obligated to
purchase, and Seller shall be obligated to sell, the Properties other than such
Excluded Consent Property in accordance with the terms of this
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Agreement, and (ii) Buyer and Seller shall use their commercially reasonable
efforts (without incurring any additional expense) to satisfy such unsatisfied
conditions as soon as reasonably possible; provided that in such circumstances
"Properties" and the other defined terms used herein shall be construed to mean
the Properties excluding such Excluded Consent Property, Seller shall retain a
pro rata portion of the Deposit with respect to such Excluded Consent Property
(i.e., five percent (5%) of the Allocated Purchase Price attributable to such
Excluded Consent Property), and the Purchase Price shall be reduced by the
Allocated Purchase Price attributable to such Excluded Consent Property. If
within thirty (30) days after the Closing Date, the conditions to Closing set
forth in Section 3.1(b) with respect to such Excluded Consent Property shall
have been satisfied, Buyer shall be obligated to purchase, and Seller shall be
obligated to sell, such Excluded Consent Property in accordance with the terms
of this Agreement (but with prorations under Section 8.5 being calculated as of
the date such purchase and sale is closed, rather than the Closing Date) for a
Purchase Price equal to the Allocated Purchase Price attributable to such
Excluded Consent Property. The closing of such Excluded Consent Property shall
occur on the date which is ten (10) Business Days after the date either Buyer or
Seller notifies the other of the satisfaction of the conditions in Section
3.1(b).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES;
BUYER'S EXAMINATION OF THE PROPERTIES
Section 4.1 Representations and Warranties of Seller. Subject to
(i) the provisions of Sections 2.3, 4.2 and 4.3 and (ii) the information
disclosed in the Due Diligence Materials (except that the representations and
warranties in clauses (a), (b), (c) and (d) of this Section 4.1 shall not be
subject to the information disclosed in the Due Diligence Materials), Seller
hereby makes the following representations and warranties:
(a) Seller has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by Seller's creditors, (iii) suffered the
appointment of a receiver to take possession of any of the Properties or all, or
substantially all, of Seller's other assets, (iv) suffered the attachment or
other judicial seizure of any of the Properties or all, or substantially all, of
Seller's other assets, (v) admitted in writing its inability to pay its debts as
they come due, or (vi) made an offer of settlement, extension or composition to
its creditors generally.
(b) Seller is not a "foreign person" as defined in Section 1445 of
the Code and any related regulations.
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(c) Seller is duly organized and validly existing and in good standing
under the laws of its state of formation. Seller further represents and
warrants that this Agreement and all documents executed by Seller that are to be
delivered to Buyer at Closing (i) are, or at the time of Closing will be, duly
authorized, executed and delivered by Seller, (ii) do not, and at the time of
Closing will not, violate any provision of any agreement or judicial order to
which Seller is a party or to which Seller or any Property owned by Seller is
subject and (iii) constitute (or in the case of Closing documents will
constitute) a valid and legally binding obligation of Seller, enforceable in
accordance with its terms.
(d) Seller has full and complete power and authority to enter into
this Agreement and, subject to obtaining any consents or waivers required to be
obtained prior to Closing, to perform its obligations hereunder.
(e) Seller is not aware of any consents required for the performance
of Seller's obligations hereunder except as set forth on Schedule 4.1.1.
(f) The Due Diligence Materials contain true, correct and complete
copies of all Existing Leases, Ground Leases, all material Contracts and all
environmental and structural reports in the possession of Seller. This
representation shall not be deemed breached by virtue of any Leases or Contracts
entered into after the Effective Date in accordance with Section 7.1.
(g) Except as included in the Due Diligence Materials (including the
rent rolls, dated October 9, 1997, delivered to Buyer (the "Rent Rolls")),
(i) there are to Seller's knowledge no leases, license agreements or occupying
agreements (or any amendments or supplements thereto) encumbering, or in force
with respect to, any Property (except for any New Leases entered into after the
Effective Date in accordance with Section 7.1) and (ii) as of the Effective
Date, Seller has not received written notice from any Significant Tenant that
Seller has not performed its material obligations under such Significant
Tenant's Lease.
(h) To Seller's knowledge, the only Contracts and amendments thereto
that will be in effect on the Closing Date that are not terminable without cause
or penalty on sixty (60) days notice with respect to any Property (the
"Non-Terminable Contracts") are as set forth in Schedule 4.1.2 (the "Schedule of
Contracts") or as entered into in accordance with Section 7.1.
(i) As of the Effective Date, Seller has not received any written
notice of any pending or threatened condemnation of all or any portion of any
Property.
(j) Seller has not received written notice of any litigation that is
pending or threatened with respect to any Property, except (i) litigation fully
covered by insurance policies (subject to customary deductibles) or (ii)
litigation set forth in Schedule 4.1.3.
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(k) As of the Effective Date, except as set forth in Schedule 4.1.4,
Seller has not received any written notice from any Governmental Authority that
all or any portion of any Property is in material violation of any applicable
building codes or any applicable environmental law (relating to clean-up or
abatement), zoning law or land use law, or any other applicable local, state or
federal law or regulation relating to any Property, which material violation has
not been cured or remedied prior to the Effective Date.
(l) Except as set forth in Schedule 2.1.5 or Schedule 4.1.1 attached
to this Agreement, Seller has not granted any option or right of first refusal
or first opportunity to any party to acquire any fee or ground leasehold
interest in any portion of any Property.
(m) Seller is not in material default under any Ground Lease, and, to
Seller's knowledge, each Ground Lease is in full force and effect.
(n) Seller has no employees employed in connection with the operation
of the Properties.
Each of the representations and warranties of Seller contained in this
Section 4.1: (1) is made as of the Effective Date (subject to the information
disclosed in the Due Diligence Materials); (2) other than clauses (i) and (k)
above (which, in the case of clause (i) above, the parties acknowledge shall be
governed by Section 7.7 with respect to events occurring after the Effective
Date) shall be deemed remade by Seller, and shall be true in all material
respects, as of the Closing Date (except that any representations and warranties
which are made as of a specified date, shall have been true and correct as of
such specified date) subject to (A) the information disclosed in the Due
Diligence Materials, (B) litigation that is not reasonably likely to have a
material adverse effect on any Property, and (C) other matters expressly
permitted in this Agreement or otherwise specifically approved in writing by
Buyer; and (3) shall survive the Closing only as and to the extent expressly
provided in Section 4.2 and Section 4.3. If prior to the expiration of the Due
Diligence Period, Buyer discovers the existence of any option or right of first
refusal or first opportunity to acquire any fee or ground leasehold interest in
any portion of any Property other than those disclosed on Schedule 2.1.5 or
Schedule 4.1.1 to this Agreement, Buyer shall promptly provide Seller written
notice thereof so that the same may be disclosed to the Title Company in
Seller's Affidavit.
Section 4.2 Estoppels. The representations and warranties of Seller
regarding Leases in Section 4.1(f) or 4.1(g) or in any estoppel delivered by
Seller pursuant to Section 8.4 shall terminate to the extent specifically
confirmed by a tenant estoppel certificate delivered by a Tenant. The
representation in Section 4.1(m) shall terminate to the extent specifically
confirmed by an estoppel certificate by the ground lessor under the applicable
Ground Lease.
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Section 4.3 Limitation on Claims; Survival of Representations and
Warranties.
(a) Notwithstanding any provision to the contrary herein or in any
document or instrument (including, without limitation, any deeds or assignments)
executed by Seller and delivered to Buyer or any Permitted Assignee at or in
connection with the Closing (collectively, "Closing Documents"), Seller shall
have no liability whatsoever with respect to any suits, actions, proceedings,
investigations, demands, claims, liabilities, fines, penalties, liens,
judgments, losses, injuries, damages, expenses or costs, including, without
limitation, attorneys' and experts' fees and costs and investigation, and
remediation costs (collectively "Claims") under, and Buyer shall be barred from
bringing any Claims with respect to, any of the representations and warranties
contained in this Agreement or in any Closing Document, except to the extent
(and only to the extent) that (i) with respect to Claims for breach of
representations and warranties relating to a specific Property, the amount of
such Claims exceed (each, a "Threshold Amount") (a) Four Hundred Thousand
Dollars ($400,000) with respect to the Property known as "Freedom Circle
Business Center," (b) Seventy Five Thousand Dollars ($75,000) with respect to
the Property known as "Devon West, and (c) One Hundred Thousand Dollars
($100,000) with respect to any other single Property and, in such case, such
Claims shall only be valid (and the Seller shall only be liable) for the portion
that exceeds the Threshold Amount; provided, however, notwithstanding any
provision to the contrary herein or in any Closing Document, the (i) total
liability of Seller for any or all Claims (inclusive of Claims with respect to
any estoppel certificates delivered by Seller pursuant to Section 8.4(a)) with
respect any Property shall not exceed two and three quarters percent (2.75%) of
the Allocated Purchase Price for such Property. Further notwithstanding any
provision to the contrary herein or in any Closing Document, Seller shall have
no liability with respect to any Claim under any of the representations and
warranties contained in this Agreement or in any Closing Document, which Claim
relates to or arises in connection with (1) any Hazardous Materials (except
solely to the extent that Seller has breached its representation in
Section 4.1(k)), (2) the physical condition of any Property (except solely to
the extent that Seller has breached its representation in Section 4.1(k)) or
(3) any other matter not expressly set forth in the Seller's representations and
warranties set forth in Section 4.1. Buyer shall not make any Claim or deliver
any Claim Notice unless it in good faith believes the Claims would exceed the
Threshold Amount provided in this Section 4.3(a).
(b) Except as otherwise specifically set forth in this Agreement,
the representations and warranties of Seller contained herein or in any
Closing Document shall survive only until July 6, 1998. Any Claim that Buyer
may have at any time against Seller for a breach of any such representation
or warranty, whether known or unknown, with respect to which a Claim Notice
has not been delivered to Seller on or prior to July 6, 1998 shall not be
valid or effective. For the avoidance of doubt, on July 6, 1998, Seller
shall be fully discharged and released (without the need for separate
releases or other documentation) from any liability or obligation to Buyer,
any Permitted Assignee and/or their successors and assigns with respect to
any Claims or any other matter relating to this Agreement, any Closing
Document or the Properties, except solely for those matters that are then the
subject of a pending Claim Notice delivered by Buyer to Seller.
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Any Claim that Buyer may have at any time against Seller for a breach of any
such representation or warranty, whether known or unknown, with respect to
which a Claim Notice has been delivered to Seller on or prior to July 6, 1998
may be the subject of subsequent litigation brought by Buyer against Seller,
provided that such litigation is commenced against Seller on or prior to
October 6, 1998. For the avoidance of doubt, on October 6, 1998, Seller
shall be fully discharged and released (without the need for separate
releases or other documentation) from any liability or obligation to Buyer
and/or its successors and assigns with respect to any Claims or any other
matter relating to this Agreement, any Closing Document or the Properties,
except solely for those matters that are the subject of a litigation by Buyer
against Seller that is pending on October 6, 1998.
(c) This Section 4.3 shall survive the Closing.
Section 4.4 Representations and Warranties of Buyer. Buyer hereby
makes the following representations and warranties:
(a) Buyer is a limited partnership duly organized and validly
existing and in good standing under the laws of the State of Delaware. Buyer
further represents and warrants to Seller that this Agreement and all documents
executed by Buyer that are to be delivered to Seller at Closing (i) are, or at
the time of Closing will be, duly authorized, executed and delivered by Buyer,
(ii) do not, and at the time of Closing will not, violate any provision of any
agreement or judicial order to which Buyer is a party or to which Buyer or any
property owned by Buyer is subject and (iii) constitutes (or in the case of
Closing documents will constitute) a valid and legally binding obligation of
Buyer, enforceable in accordance with its terms.
(b) Buyer has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing, of any involuntary petition by Buyer's creditors, (iii) suffered the
appointment of a receiver to take possession of all, or substantially all, of
Buyer's assets, (iv) suffered the attachment or other judicial seizure of all,
or substantially all, of Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally. As of the Closing Date,
Buyer will have sufficient funds to pay the Purchase Price and consummate the
transactions contemplated by this Agreement.
(c) Buyer has full and complete power and authority to enter into
this Agreement and to perform its obligations hereunder.
(d) Buyer (i) is a sophisticated investor, (ii) is represented by
competent counsel and (iii) understands the assumptions of risk and liability
set forth in this Agreement.
(e) No consents are required to be obtained from, and no filings are
required to be made with, any Governmental Authority or third party in
connection with the execution and
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delivery of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby.
Each of the representations and warranties of Buyer contained in this
Section (i) is made on the Effective Date; (ii) shall be deemed remade by Buyer
and/or its assignee(s), as applicable and appropriate, and shall be true in all
material respects, as of the Closing Date; and (iii) shall survive the Closing
until July 6, 1998.
Section 4.5 Buyer's Independent Investigation.
(a) Buyer, for itself and any successors or assigns (including any
Permitted Assignees), acknowledges and agrees that it is being given the full
opportunity during the Due Diligence Period to inspect and investigate each and
every aspect of each Property, either independently or through agents,
representatives or experts of Buyer's choosing, as Buyer considers necessary or
appropriate, and the funding of the Additional Deposit will conclusively
evidence Buyer's complete satisfaction with such independent investigation (but
will not constitute a waiver of any breach of representation or warranty set
forth in Section 4.1 unless such breach is disclosed in the Due Diligence
Materials or is otherwise known by Buyer and/or any Permitted Assignee before
the Closing Date and Buyer and/or such Permitted Assignee(s) elect to proceed
with the Closing). Such independent investigation by Buyer may include, without
limitation:
(i) all matters relating to title to such Property;
(ii) all matters relating to governmental and other legal
requirements with respect to such Property, such as taxes, assessments, zoning,
use permit requirements and building codes;
(iii) all zoning, land use, building, environmental and other
statutes, rules, or regulations applicable to each Real Property;
(iv) the physical condition of each Real Property, including,
without limitation, the interior, the exterior, the square footage of the
Improvements or the Leasehold Improvements and of each tenant space therein, the
structure, the roof, the paving, the utilities, and all other physical and
functional aspects of such Real Property, including the presence or absence of
Hazardous Materials;
(v) any easements and/or access rights affecting such Real
Property;
(vi) the Leases with respect to such Real Property and all
matters in connection therewith, including, without limitation, the ability of
the Tenants thereto to pay the rent;
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(vii) the Contracts and any other documents or agreements of
significance affecting such Property;
(viii) all matters that would be revealed by an ALTA as-built
survey (a "Survey"), a physical inspection or an environmental site assessment
of such Real Property;
(ix) all matters relating to the income and operating or capital
expenses of the Properties and all other financial matters; and
(x) all other matters of significance affecting, or otherwise
deemed relevant by Buyer with respect to, such Property.
(b) The Due Diligence Materials heretofore delivered or made
available to Buyer for its review and approval include:
(i) to the extent in the possession of Seller, a copy of a Survey
of each Real Property;
(ii) a Rent Roll for each Real Property, listing for any Tenant
the name, rent, amount of deposit and prepaid rent, if any, and lease term and
copies of the Existing Leases;
(iii) the Schedule of Contracts;
(iv) operating, income and expense statements for each Real
Property for the period in 1997 ending September 30, 1997;
(v) copies of all Licenses and Permits in the possession of
Seller;
(vi) reports, studies, assessments, investigations and other
materials related to the presence of Hazardous Materials at, on or under each
Real Property and the compliance of such Real Property with all environmental
laws, including recent Phase I (and, in some cases, Phase II) environmental
surveys;
(vii) to the extent in the possession of Seller or Seller's
property managers, copies of (i) the bills issued for the most recent year for
each Real Property for all real estate taxes and assessments, water rates, water
meter charges, sewer rates, sewer charges, and similar matters, imposed by any
Governmental Authority ("Real Estate Taxes") and personal property taxes and
(ii) all notices or documents for any assessments or bonds relating to each Real
Property; and
(viii) the ground lease creating each Leasehold Estate (each, a
"Ground Lease").
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(c) Buyer acknowledges and agrees that (i) on or prior to the
expiration of the Due Diligence Period it will have completed its independent
investigation of the Properties and the Due Diligence Materials and shall have
obtained, reviewed and approved a Title Commitment for each Property, (ii) it is
acquiring the Properties based on such independent investigation and subject to
all information disclosed in the Due Diligence Materials (and also in reliance
on Seller's representations and warranties contained herein) and (iii) Buyer
shall have no right after the expiration of the Due Diligence Period to
terminate this Agreement based on any further investigations of the Properties
or the Due Diligence Materials. The failure of Buyer to send a Termination
Notice prior to the expiration of the Due Diligence Period shall conclusively
constitute Buyer's approval of each and every aspect of such Properties. The
preceding sentence is not intended to relieve, and shall not relieve, Seller
from any of its obligations under Section 4.1.
(d) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT (i) SELLER SHALL
SELL AND BUYER SHALL PURCHASE EACH PROPERTY "AS IS, WHERE IS AND WITH ALL
FAULTS," (ii) EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER IS NOT
RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, WHETHER
ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER, NOR
ANY PARTNER, OFFICER, EMPLOYEE, ATTORNEY, AGENT OR BROKER OF SELLER, AS TO ANY
MATTER, CONCERNING ANY PROPERTY, OR SET FORTH, CONTAINED OR ADDRESSED IN THE DUE
DILIGENCE MATERIALS (INCLUDING WITHOUT LIMITATIONS, THE COMPLETENESS THEREOF),
INCLUDING WITHOUT LIMITATION: (i) the quality, nature, habitability,
merchantability, use, operation, value, marketability, adequacy or physical
condition of any Property or any aspect or portion thereof, including, without
limitation, structural elements, foundation, roof, appurtenances, access,
landscaping, parking facilities, electrical, mechanical, HVAC, plumbing, sewage,
and utility systems, facilities and appliances, soils, geology and groundwater,
(ii) the dimensions or lot size of any Real Property or the square footage of
the Improvements or Leasehold Improvements thereon or of any tenant space
therein, (iii) the development or income potential, or rights of or relating to,
any Real Property, or any Real Property's use, habitability, merchantability, or
fitness, or the suitability, value or adequacy of such Real Property for any
particular purpose, (iv) the zoning or other legal status of any Real Property
or any other public or private restrictions on the use of such Real Property,
(v) the compliance of any Real Property or its operation with any applicable
codes, laws, regulations, statutes, ordinances, covenants, conditions and
restrictions of any Governmental Authority or of any other person or entity
(including, without limitation, the Americans with Disabilities Act), (vi) the
ability of Buyer to obtain any necessary governmental approvals, licenses or
permits for Buyer's intended use or development of any Real Property, (vii) the
presence or absence of Hazardous Materials on, in, under, above or about any
Real Property or any adjoining or neighboring property, (viii) the quality of
any labor and materials used in any Improvements or Leasehold Improvements, (ix)
the condition of title to any Real Property, (x) the Leases, Contracts or any
other agreements affecting any Real Property or the intentions of any party with
respect to the negotiation and/or execution of any lease
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or contract with respect to any Real Property, (xi) Seller's ownership of any
Property or any portion thereof or (xii) the economics of, or the income and
expenses, revenue or expense projections or other financial matters, relating
to, the operation of any Real Property. Without limiting the generality of the
foregoing, except as otherwise set forth herein, Buyer expressly acknowledges
and agrees that Buyer is not relying on any representation or warranty of
Seller, nor any partner, officer, employee, attorney, agent or broker of Seller,
whether implied, presumed or expressly provided at law or otherwise, arising by
virtue of any statute, common law or other legally binding right or remedy in
favor of Buyer. Buyer further acknowledges and agrees that Seller is under no
duty to make any inquiry regarding any matter that may or may not be known to
Seller or any partner, officer, employee, attorney, agent or broker of Seller.
This Section 4.5(d) shall survive the Closing, or, if the Closing does not
occur, beyond the termination of this Agreement.
(e) ANY REPORTS, REPAIRS OR WORK REQUIRED BY BUYER ARE THE SOLE
RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE
PART OF SELLER TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY PROPERTY OR TO
CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
BUYER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR ANY
OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF ANY PROPERTY AND
FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER'S SOLE
COST AND EXPENSE.
Section 4.6 Entry and Indemnity; Limits on Government Contacts.
(a) In connection with any entry by Buyer, its Permitted Assignee(s)
or any of their agents, employees or contractors (collectively, the "Buyer
Parties" and each a "Buyer Party") onto a Real Property, Buyer shall give Seller
reasonable advance notice of such entry and shall conduct such entry and any
inspections in connection therewith so as to minimize, to the greatest extent
possible, interference with Seller's business and the business of the Tenants
and otherwise in a manner reasonably acceptable to Seller. Without limiting the
foregoing, prior to any entry to perform any necessary on-site testing, Buyer
shall give Seller written notice thereof, including the identity of the company
or persons who will perform such testing and the proposed scope of the testing
and the party performing the testing. Seller shall approve or disapprove any
proposed testing and the party performing the same within three (3) Business
Days after receipt of such notice. If a Buyer Party takes any sample from a
Real Property in connection with any such approved testing, Buyer shall provide
to Seller a portion of such sample being tested to allow Seller, if it so
chooses, to perform its own testing. Seller or its representative may be
present to observe any testing, or other inspection performed on any Real
Property. Buyer shall promptly deliver to Seller copies of any reports relating
to any testing or other inspection of any Real Property performed by or on
behalf of any Buyer Party. Buyer shall maintain, and shall ensure that its
contractors maintain, public liability and property damage insurance insuring
the Buyer Parties against any liability arising out of any
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entry or inspections of any Real Property pursuant to the provisions hereof.
Such insurance maintained by Buyer shall be in the amount of Ten Million Dollars
($10,000,000) combined single limit for injury to or death of one or more
persons in an occurrence, and for damage to tangible property (including loss of
use) in an occurrence. The policy maintained by Buyer shall insure the
contractual liability of Buyer covering the indemnities herein and shall (i)
name Seller (and their successors, assigns and Affiliates) as additional
insureds, (ii) contain a cross-liability provision, and (iii) contain a
provision that "the insurance provided by Buyer hereunder shall be primary and
noncontributing with any other insurance available to Seller." Buyer shall
provide Seller with evidence of such insurance coverage prior to any entry or
inspection of any Real Property. Buyer shall indemnify and hold the Seller
Parties harmless from and against any Claims arising out of or relating to any
entry on any Real Property by any Buyer Party, in the course of performing any
inspections, testings or inquiries. The foregoing indemnity shall survive the
Closing, or, if the Closing does not occur, beyond the termination of this
Agreement.
(b) Notwithstanding any provision in this Agreement to the contrary,
neither Buyer nor any other Buyer Party shall contact any Governmental Authority
regarding any Hazardous Materials on or the environmental condition of any Real
Property without Seller's prior written consent thereto; provided that if Buyer
or Buyer's consultant is unconditionally obligated by applicable law to notify a
Governmental Authority regarding any Hazardous Materials on, or the
environmental condition of, any Real Property discovered by Buyer's
environmental testing during the Due Diligence Period, Buyer shall first provide
prior written notice to Seller and shall not contact any Governmental Authority
except in conjunction with Seller. In addition, if Seller's consent is obtained
by Buyer, Seller shall be entitled to receive at least five (5) Business Days
prior written notice of the intended contact and to have a representative
present when Buyer has any such contact with any governmental official or
representative.
Section 4.7 Release.
(a) Without limiting the provisions of Section 4.5, Buyer, for itself
and any successors and assigns of Buyer (including, without limitation, any
Permitted Assignee), waives its right to recover from, and forever releases and
discharges, and covenants not to ▇▇▇, Seller, Seller's Affiliates, Seller's
asset manager, any lender to Seller, the partners, trustees, shareholders,
controlling persons, directors, officers, attorneys, employees and agents of
each of them, and their respective heirs, successors, personal representatives
and assigns (each a "Seller Party", and collectively, the "Seller Parties") with
respect to any and all Claims, whether direct or indirect, known or unknown,
foreseen or unforeseen, that may arise on account of or in any way be connected
with any Property including, without limitation, the physical, environmental and
structural condition of the related Real Property or any law or regulation
applicable thereto, including, without limitation, any Claim or matter relating
to the use, presence, discharge or release of Hazardous Materials on, under, in,
above or about any Real Property; provided, however, Buyer does not waive its
rights, if any, to recover from, and does not release or discharge or covenant
not to ▇▇▇ Seller for (i) any act
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that is found by a court of competent jurisdiction to constitute fraud, (ii) any
breach of Seller's representations or warranties set forth in Section 4.1 or in
Seller's estoppel certificate delivered pursuant to Section 8.4, subject to the
limitations and conditions provided in this Agreement, or (iii) any breach of
Seller's obligations set forth in this Agreement that expressly survive Closing.
(b) This Section 4.7 shall survive the Closing indefinitely.
ARTICLE V
TITLE
Section 5.1 Conveyance of Title. Promptly after the Effective Date,
Buyer shall obtain a Title Commitment for each Property (and Buyer's failure to
obtain a Title Commitment prior to the expiration of the Due Diligence Period
for a Property shall constitute a waiver of Buyer's rights under Section 3.1(c)
and this Article V and Buyer shall be deemed to have accepted and approved all
matters affecting title to such Property). A copy of each Title Commitment
delivered to Buyer shall be simultaneously delivered to Seller and its counsel.
At the Closing, as a condition precedent to Buyer's obligation to close, Seller
shall have delivered to Buyer (a) a deed for each Fee Property in the form of
Exhibit A for the applicable jurisdiction (each, a "Deed"), (b) an assignment
and assumption for each Leasehold Estate in the form of Exhibit B (each, an
"Assignment of Ground Lease") and (c) a deed for each Leasehold Improvement in
the form of Exhibit C (each, a "Leasehold Improvements Deed"), each subject to
no exceptions other than the following (the "Permitted Exceptions"):
(i) Interests and rights of Tenants in possession under Existing
Leases and New Leases, including, without limitation, those Tenant purchase
rights listed on Schedule 2.1.5;
(ii) Liens for Real Estate Taxes that are apportioned as
provided in Section 8.5 (including special assessments and special improvement
district or local improvement district bonds);
(iii) Any exceptions, exclusions and other matters set forth in
or disclosed by the Title Commitment for such Real Property or other documents
made available to Buyer and any other exceptions to title that would be
disclosed by an inspection and/or survey of such Real Property, including those
disclosed on a Survey;
(iv) Any and all present and future laws, ordinances,
restrictions, requirements, resolutions, orders, rules and regulations of any
Governmental Authority, as now or hereafter existing or enforced (including,
without limitation, those related to zoning and land use), and all notes or
notices of violation of any such laws, ordinances, rules or regulations set
forth in the
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Due Diligence Materials or in any title reports, commitments or updates
delivered to Buyer prior to the expiration of the Due Diligence Period;
(v) Any lien or encumbrance encumbering such Property as to
which Seller shall deliver to Buyer, or the Title Company, at or prior to the
Closing, proper instruments, in recordable form, canceling such lien or
encumbrance, together with funds to pay the cost of recording and canceling the
same;
(vi) Such other exceptions as the Title Company shall commit to
insure over in a manner reasonably satisfactory to Buyer, without any additional
cost to Buyer, whether such insurance is made available in consideration of
payment, bonding or indemnity by Seller or otherwise;
(vii) Uniform Commercial Code filings that have expired or
terminated by operation of law on or prior to the Closing Date;
(viii) Any exceptions caused by Buyer, its agents,
representatives or employees; and
(ix) Any other matters affecting title to such Property that
have been approved or waived by Buyer pursuant to the terms hereof.
The acceptance by Buyer of the Deeds, the Assignments of Ground Leases, and the
Leasehold Improvements Deeds shall be deemed to be a full performance and
discharge of every obligation on the part of Seller to be performed under this
Agreement with respect to the applicable Property, other than those that are
specifically stated herein to survive the Closing.
Section 5.2 Evidence of Title. Delivery of title in accordance with
the foregoing shall be evidenced by the Title Company issuing, or to committing
to issue, at Closing, upon payment of the applicable premium therefor, one or
more 1992 ALTA Owner's Policies of Title Insurance (provided, that in
jurisdictions where local regulations require a form of policy other than a 1992
ALTA Owner's Policy, such other required form shall be used) in the aggregate
amount of the Purchase Price for the Properties showing title to each Property
vested in Buyer or its Permitted Assignee or designee, subject only to the
Permitted Exceptions (the "Title Policy").
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ARTICLE VI
BROKERS AND EXPENSES
Section 6.1 Brokers. Seller and Buyer represent and warrant to each
other that no broker or finder, other than ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and certain of
its affiliates ("Goldman") and GMH Realty, Inc. ("GMH"), whose fees will be the
responsibility of Seller pursuant to a separate among between Goldman, GMH and
Seller, was instrumental in arranging or bringing about this transaction and
that there are no claims or rights for brokerage commissions or finders' fees in
connection with the transactions contemplated hereby by any person or entity
other than Goldman and GMH. If any person brings a claim for a commission or
finder's fee based upon any contact, dealings or communication with Buyer or
Seller, then the party through whom such person makes its claim shall defend the
other party (the "Indemnified Party") from such claim, and shall indemnify the
Indemnified Party and hold the Indemnified Party harmless from any and all
costs, damages, claims, liabilities or expenses (including without limitation,
reasonable attorneys' fees and disbursements) incurred by the Indemnified Party
in defending against the claim. The provisions of this Section 6.1 shall
survive the Closing or, if the Closing does not occur, any termination of this
Agreement.
Section 6.2 Expenses. Except as provided in Section 8.5(e), each
party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VII
INTERIM OPERATION OF THE PROPERTIES
Section 7.1 Interim Operation of the Properties.
(a) Except as otherwise contemplated or permitted by this Agreement
or approved by Buyer in writing, from the Effective Date to the Closing Date,
Seller agrees that it will operate, maintain, repair and lease the Real Property
in the ordinary course, on an arm's-length basis and consistent with Seller's
past practices and will not dispose of or encumber any Property, except for
dispositions of personal property in the ordinary course of business or as
otherwise permitted by Section 7.1 or Section 7.3. Without limiting the
foregoing, Seller shall, in the ordinary course, negotiate with prospective
Tenants and enter into New Leases (on terms that Seller believes, in its good
faith business judgment, to be market terms), enforce Leases in all material
respects, perform in all material respects all of landlord's obligations under
the Leases (other than Leases that are or that are in the process of being
terminated due to Tenant's default thereunder, provided that this provision
shall not be deemed breached by virtue of Seller's failure to perform under
Leases expiring
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on or before December 30, 1997), and the ground lessee's obligations under the
Ground Leases and pay all costs and expenses of the Properties, including
without limitation debt service and Real Estate Taxes.
(b) During the period between the Effective Date and the expiration
of the Due Diligence Period, Seller shall provide Buyer with reasonably prompt
notice of (i) any New Lease, (ii) any modification of or amendment to any Lease
and (iii) any termination by Seller of any Lease prior to its expiration date.
With regard to any New Lease entered into before the expiration of the Due
Diligence Period, Seller shall in good faith consult with Buyer regarding such
Lease at least three (3) Business Days prior to becoming legally bound with
respect thereto (but Seller shall nevertheless be free to enter such New Lease
without Buyer's approval). After the expiration of the Due Diligence Period,
Seller shall not, without Buyer's consent, enter into any New Leases or
materially modify any Existing Lease. Any consent to be given by Buyer pursuant
to this Section 7.1(b) shall not be unreasonably withheld or delayed and shall
be deemed granted if Buyer does not respond in writing to Seller's request for
consent within three (3) Business Days.
(c) After the expiration of the Due Diligence Period, Seller shall
not enter into or terminate any operating agreement or any contract, agreement
or other commitment of any sort (including any contract for capital items or
expenditures, but excluding any liens or other encumbrances on title other than
Permitted Exceptions), with respect to any one or more of the Properties that
(A) requires payments to or by Seller in excess of $50,000 per annum, or the
performance of services by Seller the value of which is in excess of $50,000 per
annum and (B) is not terminable without cause and without penalty on thirty (30)
days' notice or less; provided that Seller, in its good faith but sole
discretion, believes such contract is on market terms and will benefit the
applicable Property. At least three (3) Business Days prior to becoming legally
bound with respect to any such matter, Seller shall consult with and seek the
consent of Buyer, and shall provide reasonable detail to Buyer (including, at
Buyer's request, copies of the relevant documentation), with respect thereto.
Any consent to be given by Buyer pursuant to this Section 7.1(c) shall not be
unreasonably withheld or delayed and shall be deemed granted if Buyer does not
respond in writing to Seller's request for consent within three (3) Business
Days.
(d) Except for New Leases or other agreements entered into in
accordance with this Section 7.1, Seller shall not enter into any agreement to
create a lien or encumbrance on any Property without Buyer's prior written
consent (which consent shall not be unreasonably withheld or delayed with
respect to any utility or similar easement necessary for the operation of a
Property, and which shall be deemed granted if Buyer does not respond in writing
to Seller's request for consent within three (3) Business Days).
(e) Prior to the Closing Date or the earlier termination of this
Agreement, Seller shall not sell any Property or portion thereof without Buyer's
prior written consent.
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(f) Within three (3) days after the execution thereof, Seller shall
provide Buyer with copies of all Contracts entered into by Seller after the
Effective Date affecting any Property (other than Contracts terminable on
30 days' notice or less), and all operating statements, rent rolls, receivable
aging reports, leasing reports and other periodic reports prepared by or
delivered to Seller.
(g) Prior to the Closing Date, Seller shall not enter into any
amendment, modification or termination of any Ground Lease.
Section 7.2 Tenant Improvement Costs, Leasing Commissions and Free
Rent. If the Closing occurs, Buyer shall be responsible and shall pay for the
costs of tenant improvement work or allowances, third-party leasing
commissions and other leasing costs (collectively, "Leasing Costs") relating
to or arising from (i) those Leases or modifications of Leases entered into
on or after October 9, 1997 (ii) the exercise by a Tenant of a renewal,
expansion or extension option contained in any Lease, which renewal or
extension period commences, or which expansion space such Tenant first has
the right to occupy, on or after October 9, 1997 (notwithstanding that such
Tenant may have exercised such option prior to October 9, 1997 and (iii) any
items set forth on Schedule 7.2.1, and any amounts paid by Seller in respect
of such Leasing Costs shall result in an upward adjustment to the Purchase
Price at Closing equal to the amounts so paid. Free rent periods provided for
in Leases entered into by Seller prior to October 9, 1997 that occur, in
whole or in part, after the Closing Date shall be for the account of, and
borne by, Buyer without adjustment to the Purchase Price at closing. The
provisions of this Section 7.2 shall survive the Closing.
Section 7.3 Seller's Maintenance of the Properties. Between the
Effective Date and the Closing Date, Seller shall (a) maintain each Real
Property in substantially the same manner as prior hereto pursuant to Seller's
normal course of business, subject to reasonable wear and tear and further
subject to the occurrence of any damage or destruction to such Real Property by
casualty or other causes or events beyond the control of Seller; provided,
however, that Seller's maintenance obligations under this Section 7.3 shall not
include any obligation to make capital expenditures not incurred in Seller's
normal course of business or any other expenditures not incurred in Seller's
normal course of business; (b) continue to maintain its existing insurance
coverage; and (c) not grant any voluntary liens or encumbrances affecting such
Property other than Permitted Exceptions of the type described in clauses (i)
and (ix) of Section 5.1.
Section 7.4 Lease Enforcement. Subject to the provisions of Section
7.1, prior to the Closing Date, Seller shall have the right, but not the
obligation, to enforce the rights and remedies of the landlord under any Lease
or New Lease, by summary proceedings or otherwise, and to apply all or any
portion of any security deposits then held by Seller toward any loss or damage
incurred by Seller by reason of any defaults by any Tenant, provided, that
(i) with respect to delinquent rents, Seller may (to the extent permitted under
the Lease) apply Tenant security deposits held by Seller only to rents that are
thirty (30) days or more past due and (ii) with respect to any application by
Seller of Tenant security deposits held by Seller, Seller will deliver, in
connection with any such
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application, written notice to the affected Tenant(s) indicating that their
security deposits have been or are being so applied).
Section 7.5 Lease Termination Prior to Closing. The bankruptcy or
default of any Tenant or the termination of any Lease or New Lease or the
removal of any Tenant by reason of a default by such Tenant (by summary
proceedings or otherwise) or by operation of the terms of such Lease or New
Lease shall not affect the obligations of Buyer under this Agreement in any
manner or entitle Buyer to a reduction in, or credit or allowance against, the
Purchase Price or give rise to any other claim on the part of Buyer.
Section 7.6 Tenant Notices. At the Closing, Seller shall furnish
Buyer with a signed notice to be given to each Tenant. Such notice shall
disclose that the applicable Property has been sold to Buyer and that, after the
Closing, all rents should be paid to Buyer.
Section 7.7 Risk of Loss and Insurance Proceeds. Buyer shall be
bound to purchase the Properties for the full Purchase Price as required by the
terms hereof, without regard to the occurrence or effect of any damage to the
related Real Properties or destruction of any improvements thereon or
condemnation of any portion of any Property, provided that upon the Closing,
there shall be a credit against the Purchase Price due hereunder equal to the
amount of any insurance proceeds or condemnation awards collected by Seller as a
result of any such damage or destruction or condemnation, plus the amount of any
insurance deductible or any uninsured amount or retention, less any sums
reasonably expended by Seller prior to the Closing for the restoration or repair
of any Property. Seller has provided Buyer with a certificate of insurance for
Seller's casualty insurance policy so that Buyer can confirm its satisfaction
with such policy. Seller agree that it will maintain such policy in full force
and effect until the Closing. If the proceeds or awards have not been collected
as of the Closing, then such proceeds or awards shall be assigned to Buyer,
except to the extent needed to reimburse Seller for sums it reasonably expended
prior to the Closing for the restoration or repair of such Property.
Notwithstanding the foregoing, (i) Seller shall not settle, compromise or
otherwise stipulate any award or recovery in connection with any damage,
destruction or condemnation, in each case if such damage, destruction or
condemnation impairs the value of a Property by at least $250,000 and occurs
after the expiration of the Due Diligence Period, without the prior written
approval of Buyer, which approval shall not be unreasonably withheld,
(ii) following the expiration of the Due Diligence Period, Buyer shall have the
right to participate in any such settlement or other proceedings, and (iii) if
the amount of the damage or destruction as described in this Section 7.7 exceeds
ten percent (10%) of the Allocated Purchase Price for a Property, then Buyer
may, at its option to be exercised within five (5) Business Days of Seller's
written notice of the occurrence of the damage or destruction, either terminate
this Agreement or consummate the purchase for the full Purchase Price as
required by the terms hereof. If Buyer elects to terminate this Agreement, then
the Deposit shall be immediately returned to Buyer and neither party shall have
any further rights or obligations hereunder except to the extent set forth in
Sections 4.6(a), 6.1, 9.4 and 9.10(a). If Buyer elects to proceed with the
purchase, then upon the
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Closing, Buyer shall be entitled to a credit against the Purchase Price and
shall receive an assignment of any uncollected proceeds or awards, all as set
forth in this Section 7.7 above. The provisions of this Section 7.7 shall
survive the Closing.
Section 7.8 Notifications. Between the Effective Date and the
Closing, Seller shall promptly notify Buyer of any condemnation, environmental,
zoning or other land-use regulation proceedings relating to any of the
Properties of which Seller obtains knowledge, any notices of violations of any
legal requirements relating to any of the Properties received by Seller, any
litigation of which Seller obtains knowledge that arises out of the ownership of
any of the Properties unless fully covered by insurance (subject to customary
deductibles), and any other matters that would materially affect Seller's
representations and warranties hereunder.
ARTICLE VIII
CLOSING AND ESCROW
Section 8.1 Escrow Instructions. Upon execution of this Agreement,
the parties hereto shall deposit an executed counterpart of this Agreement with
the Title Company, and this instrument shall serve as the instructions to the
Title Company as the escrow holder for consummation of the purchase and sale
contemplated hereby. Seller and Buyer agree to execute such reasonable
additional and supplementary escrow instructions as may be appropriate to enable
the Title Company to comply with the terms of this Agreement; provided, however,
that in the event of any conflict between the provisions of this Agreement and
any supplementary escrow instructions, the terms of this Agreement shall
control, unless a contrary intent is expressly indicated in such supplementary
instructions.
Section 8.2 Closing. The Closing hereunder shall be held and delivery
of all items to be made at the Closing under the terms of this Agreement shall
be made at the offices of Seller's counsel (or such other location as the
parties may agree) at 10:00 A.M. (Eastern Standard Time) on January 5, 1998 or
such earlier or later date and time as Buyer and Seller may mutually agree upon
in writing (the "Closing Date"), in either case, with time being of the essence.
Except as otherwise permitted under this Agreement, such date and time may not
be extended without the prior written approval of both Seller and Buyer.
Section 8.3 Deposit of Documents.
(a) At or before the December 16, 1997 (the "Document Delivery
Date"), at the offices of Seller's counsel (or such other time and location as
the parties may agree) Seller shall deposit into escrow with the Title Company
the following items (pursuant to escrow instructions reasonably acceptable to
Seller and Buyer):
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(i) a duly executed and acknowledged Deed for each Fee Property;
(ii) a duly executed and acknowledged Assignment of Ground Lease
for each Leasehold Estate (including the Leasehold Improvements on each
Leasehold Estate);
(iii) [intentionally omitted]
(iv) a duly executed counterpart of a ▇▇▇▇ of Sale for each Fee
Property and each Leasehold Property in the form attached hereto as Exhibit E
(each, a "▇▇▇▇ of Sale");
(v) a duly executed counterpart of an Assignment and Assumption
of Leases for each Fee Property and each Leasehold Property in the form attached
hereto as Exhibit F (each, an "Assignment of Leases");
(vi) a duly executed counterpart of an Assignment and Assumption
of Contracts, Warranties and Guaranties and Other Intangible Property for each
Fee Property and each Leasehold Property in the form attached hereto as Exhibit
G (each, an "Assignment of Contracts");
(vii) a duly executed counterpart of an agreement designating the
Title Company as the "Reporting Person" for the transaction contemplated hereby
pursuant to Section 6045(e) of the Federal Code and the regulations promulgated
thereunder, substantially in the form of Exhibit H attached hereto (the
"Designation Agreement");
(viii) a duly executed counterpart of such disclosures and
reports (including withholding certificates) as are required by applicable state
and local law in connection with the conveyance of the Properties;
(ix) the Seller's affidavit to the Title Company, in the form of
Exhibit L attached hereto (the "Seller's Affidavit"); and
(x) an affidavit pursuant to Section 1445(b)(2) of the Code, and
on which Buyer is entitled to rely, that Seller is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Code.
(b) At or before the Document Delivery Date, at the offices of
Seller's counsel (or such other time and location as the parties may agree),
Buyer shall deposit into escrow with the Title Company the following items
(pursuant to escrow instructions reasonably acceptable to Seller and Buyer):
(i) a duly executed and acknowledged counterpart of an
Assignment of Ground Lease for each Leasehold Estate;
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(ii) a duly executed counterpart of each ▇▇▇▇ of Sale;
(iii) a duly executed counterparts of each Assignment of Leases;
(iv) a duly executed counterpart of each Assignment of
Contracts;
(v) a duly executed counterpart of the Designation Agreement
(vi) a duly executed counterpart of Buyer's As-Is Certificate and
Agreement, substantially in the form of Exhibit I attached hereto; and
(vii) a duly executed counterpart of such disclosures and
reports as are required by applicable state and local law in connection with the
conveyance of the Properties.
(c) On the morning of the Closing Date, Buyer shall effect a wire
transfer of federal funds to the Title Company's escrow account (in accordance
with the wiring instructions set forth on Schedule 2.2.1) in an amount equal to
the sum of (i) the Purchase Price and (ii) the amount (if any) of the costs,
expenses and adjustments payable by Buyer under this Agreement. The amount of
the funds to be wired to the Title Company's escrow account shall be reduced by
the Deposit (including all interest thereon). After Seller's confirmation of
receipt of the Purchase Price (as reduced by the costs, expenses, prorations and
adjustments payable by Seller under this Agreement) by wire transfer of federal
funds by the Title Company to one or more accounts designated by Seller: (i) the
Title Company shall be authorized to record the Deed for each Fee Property and
the Assignment of Ground Lease for each Leasehold Estate, (ii) the Title Company
shall deliver to Buyer all other documents and instruments received by it which,
in accordance with the terms of this Agreement, are to be delivered by Seller to
Buyer on the Closing Date, and (iii) the Title Company shall deliver to Buyer
all other documents and instruments received by it which, in accordance with the
terms of this Agreement are to be delivered by Buyer to Seller on the Closing
Date. Buyer and Seller shall each deposit such other instruments as are
reasonably required by the Title Company or otherwise required to close the
escrow and consummate the purchase and sale of the Properties in accordance with
the terms hereof; provided, that Seller shall not be required to provide any
indemnities or affidavits or to escrow any funds other than the Seller's
Affidavit.
(d) Seller shall deliver to Buyer originals of the Leases (or, if
originals are not available, copies), copies of the tenant correspondence files
of the Real Properties in Seller's possession, a set of keys to each Real
Property and originals (or copies, if originals are not available) of any other
items in Seller's possession relating to the use, ownership, operation,
maintenance, leasing, repair, alteration, management or development of the Real
Properties, on the Closing Date (at such location as Buyer and Seller shall
mutually agree). Following the Closing, Buyer shall make all Leases, Contracts,
other documents, books, records and any other materials in its possession, to
the extent the same relate to the period of Seller's ownership of the
Properties, available to Seller
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or its representatives for inspection and/or copying at Buyer's offices (at
Seller's sole cost and expense) at reasonable times and upon reasonable notice.
Section 8.4 Estoppel Certificates. (a) Seller shall use its
reasonable efforts (without incurring any additional expense) to obtain prior to
the Closing Date tenant estoppel certificates from each Tenant substantially in
the form attached hereto as Exhibit J; provided, however, that if a form of
estoppel certificate is attached to or otherwise prescribed in a particular
lease document, that form (the "Prescribed Form") shall be deemed to be
acceptable to Buyer in the event that any Tenant is unwilling to sign the form
attached hereto as Exhibit J. It shall be a condition to Buyer's obligation to
close the sale and purchase of a Property that on or before the Closing Seller
delivers to Buyer tenant estoppel certificates substantially in the form
attached hereto as Exhibit J (or in the Prescribed Form, if applicable) from
(i) Tenants occupying seventy five percent (75%) of the total leased square
footage of the Properties; and (ii) Significant Tenants occupying seventy five
percent (75%) of the total leased square footage covered by such Significant
Tenants' Leases (with respect to each of preceding clauses (i)-(ii), the
"Required Percentage"); provided, however, if Seller is unable to obtain the
aforesaid tenant estoppel certificates from Tenants or Significant Tenants (as
the case may be) occupying the Required Percentage, Seller may, but shall not be
obligated to, provide a certificate to Buyer, with respect to such missing
estoppel certificates, as chosen by Seller, to the effect that (except as
disclosed in the Due Diligence Materials or in the Leases to which such
estoppels relate): (i) to Seller's knowledge the Leases for those Tenants or
Significant Tenants (as the case may be) are in full force and effect; (ii) the
amount of the Tenants' or Significant Tenants' security deposits; (iii) the
dates through which rent has been paid; (iv) neither Seller nor, to Seller's
knowledge, any of those Tenants or Significant Tenants (as the case may be) is
in default thereunder; (v) a true, correct and complete copy of the Leases are
attached; (vi) the Leases expire on the dates specified and are not subject to
any renewal or extension options, except as specified, and (viii) there are no
options to purchase or rights of first refusal except as specified. Buyer shall
be obligated to accept Seller's certification in lieu of any missing estoppel
certificates. Seller's representations and warranties in the certificate shall
survive the Closing, provided that (i) Buyer must give Seller a Claim Notice
with respect to any claim it may have against Seller for a breach of any such
representation and warranty by July 6, 1998, and must commence litigation (if
any) relating to such Claim Notice not later than October 6, 1998 (and any claim
that Buyer may have that is not so asserted, or litigation by Buyer that is not
so commenced, shall be barred and not be valid or effective and Seller shall
have no liability whatsoever with respect thereto) and (ii) any certificate
delivered by Seller pursuant to this Section 8.4 shall cease to survive the
Closing to the extent specifically confirmed by a tenant estoppel certificate
delivered by a Tenant or a Significant Tenant. In no event shall the minimum
thresholds to Buyer's recovery set forth in Section 4.3(a) apply to any
certificates delivered by Seller (but Buyer's recovery under any such
certificates shall be limited by the maximum limitations set forth in
Section 4.3(a)).
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(b) Seller shall use reasonable efforts (without incurring any
additional expense) to obtain prior to the Closing Date an estoppel certificate
from the ground lessor of each Ground Lease, substantially in the form attached
hereto as Exhibit M.
Section 8.5 Prorations.
(a) Rents, including, without limitation, percentage rents,
escalation charges for Real Estate Taxes, parking charges, marketing fund
charges, operating expenses, maintenance escalation rents or charges,
cost-of-living increases or other charges of a similar nature ("Additional
Rents"), and any additional charges and expenses payable under Leases; Real
Estate Taxes and personal property taxes, including refunds with respect
thereto, if any; the current installment (only) of any improvement bond or
assessment that is a lien on any Property or that is pending and may become a
lien on any Property; water, sewer and utility charges; amounts payable under
any existing Contract, Contract entered into after the Effective Date and in
accordance with this Agreement or Ground Lease; annual permits and/or inspection
fees (calculated on the basis of the period covered); and any other income or
expenses relating to the operation and maintenance of each Property (other than
any Leasing Costs and free rent which shall be prorated as provided in Section
7.2), shall all be prorated as of 12:01 a.m. Eastern Standard Time on the
Closing Date, on the basis of a 365-day year, with Buyer deemed the owner of the
Properties on the entire Closing Date. Rent which is due but uncollected as of
the Closing Date shall not be adjusted. On the Closing Date, Seller shall
deliver to Buyer a schedule of all such past due but uncollected rent owed by
tenants. Buyer agrees to cause the amount of such rental arrears to be included
in the first bills thereafter submitted by Buyer to such tenants after the
Closing Date. Any rents collected from a tenant after the Closing Date shall be
applied first to the month in which the Closing Date occurs, next to any rents
payable by such tenant after the Closing Date and thereafter to any arrearage
owed by such tenant on the Closing Date in the inverse order of maturity.
Additional rent payments (and estimated additional rent payments) actually paid
by tenants prior to Closing attributable to real estate taxes and operating
costs shall be adjusted as of the Closing Date. Additional rent payments (and
estimated additional rent payments) attributable to real estate taxes and
operating costs to be paid by tenants after the Closing shall be adjusted upon
receipt by Buyer. The adjustments of additional rent payments shall be based
upon the number of days in the period for which such payment relates that are
before or after the Closing Date. In no event will Buyer be entitled to receive
any payments on or under the promissory notes or other agreements referred to in
Section 8.7. Buyer shall use reasonable efforts until October 6, 1998 to
collect any delinquent rents that accrued prior to the Closing Date (but Seller
shall have the right to commence and pursue litigation against any Tenant to
collect delinquent rents and/or expense reimbursements, provided that Seller may
not seek as a remedy in any such litigation the termination of any Leases or the
dispossession of any Tenant). Seller agrees to forward any rents received by it
after the Closing Date to Buyer for application in accordance with the
provisions hereof. The amount of any security deposits that are required to be
returned to Tenants under Leases shall be credited against the Purchase Price
(and Seller shall be entitled to retain such security deposits). In the event
any Property has been assessed for property taxes purposes at such rates as
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would result in reassessment (i.e., "escape assessment" or "roll-back taxes")
based upon the change in land usage or ownership of such Property resulting from
or after the consummation of the transactions described in this Agreement, as
between Buyer and Seller, Buyer hereby agrees to pay all such taxes and to
indemnify and save Seller harmless from and against all claims and liability for
such taxes. Such indemnity shall survive the Closing.
(b) Seller and Buyer hereby agree that if any of the aforesaid
prorations cannot be calculated accurately on the Closing Date, then the same
shall be calculated as soon as reasonably practicable after the Closing Date,
and that if any Tenant is required to pay Additional Rents and such Additional
Rents are not finally adjusted between the landlord and tenant under the
applicable Lease until after the end of the 1997 calendar year, then such
prorations shall be calculated as soon as reasonably practicable after such
Additional Rents have been finally adjusted. Either party owing the other party
a sum of money based on proration(s) calculated after the Closing Date shall
promptly pay said sum to the other party, together with interest thereon at the
rate of two percent (2%) per annum over the Prime Rate from the Closing Date to
the date of payment, if payment is not made within ten (10) days after delivery
of a ▇▇▇▇ therefor. If the real estate and/or personal property tax rate and
assessments have not been set for the calendar year in which the Closing occurs,
then the proration of such taxes shall be based upon the rate and assessments
for the preceding calendar year, and such proration shall be adjusted between
Seller and Buyer as soon as reasonably practicable after such tax rate or
assessment has been set.
(c) Buyer shall calculate the prorations contemplated by Section
8.5(b). Seller and its representatives and auditors shall be afforded the
opportunity to review all underlying financial records and work papers
pertaining to the preparation of Buyer's proration statements, and Buyer shall
permit Seller and its representatives and auditors during regular business hours
and upon reasonable prior written notice to have reasonable access to the books
and records in the possession of Buyer or any party to whom Buyer has given
custody of the same relating to the Properties to permit Seller to review
Buyer's proration statements. Seller shall have sixty (60) days after receipt
of Buyer's calculations to accept or contest such prorations.
(d) Buyer shall pay for all recording and escrow fees. Buyer shall
also pay the costs of the Title Commitments, Title Policies and all endorsements
thereto, and Surveys and Survey updates, and all costs of any appraisal,
engineering and environmental reports not delivered by Seller. Seller and Buyer
shall pay transfer, recordation, excise and deed taxes in accordance with local
custom (as set forth on Schedule 8.1.1 attached hereto). Seller and Buyer shall
each be responsible for paying their respective attorneys' fees and costs.
Buyer and Seller agree that, given the de minimis amount of Personal Property
included within the Properties, no portion of the Purchase Price is allocable or
attributable to such Personal Property.
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(e) Buyer agrees that for purposes of any appeals relating to Real
Estate Taxes after the Closing Date, Buyer shall not value the Properties in a
manner (or otherwise take a position) inconsistent with the relative Allocated
Purchase Prices set forth herein.
(f) Notwithstanding anything to the contrary herein, to the extent
set forth in Section 8.6 Seller reserves the right to protest any Real Estate
Taxes relating to the period prior to the Closing Date and to receive and retain
any refunds on account of such Real Estate Taxes.
(h) The obligations of Seller and Buyer under this Section 8.5 shall
survive the Closing until October 6, 1998 (except with respect to prorations of
taxes and municipal assessments).
Section 8.6 Tax Certiorari Proceedings. Seller is hereby authorized,
but not obligated, to (a) commence (prior to the Closing Date) or continue
(after the Effective Date and after the Closing Date) any proceeding for the
reduction of the assessed valuation of any Property for any tax year which, in
accordance with the laws and regulations applicable to such Property, requires
that, to preserve the right to bring a tax certiorari proceeding with respect to
such tax year, such proceeding be commenced prior to the Closing Date and (b)
endeavor to settle any such proceeding in Seller's discretion. After the
Closing, with respect to any Property, (i) Seller shall retain all rights
(subject to any rights of Tenants under their Leases) with respect to any tax
year ending prior to the tax year (and all refunds relating thereto) in which
the Closing Date occurs, and shall have the sole right to participate in and
settle any proceeding relating thereto (provided, that such settlement does not
affect the assessed tax value for any subsequent tax year), and (ii) Buyer shall
have all rights (subject to any rights of Tenants under their Leases) with
respect to any tax year (and all refunds relating thereto) which ends after the
Closing Date; provided, however, that if the proceeding is for a tax year in
which the Closing Date occurs, such settlement shall not be made without Buyer's
prior consent, which consent shall not be unreasonably withheld or delayed.
With respect to any such proceeding for a tax year in which the Closing Date
occurs (whether commenced by Seller or Buyer), any refund or credit of taxes for
such tax year shall be applied first to the unreimbursed out-of-pocket expenses,
including reasonable counsel fees, necessarily incurred in obtaining such refund
or credit, and second, to any Tenant entitled to same, and the balance shall be
apportioned between Seller and Buyer as of the Closing Date in accordance with
the proportion of the applicable tax year occurring before and after the Closing
Date. In each case, the party which prosecuted the proceeding shall deliver to
the other copies of receipted tax bills and any decision or settlement agreement
evidencing the reduction in taxes. If any refund shall be received by Seller
which is for the account of Buyer as provided in this Section 8.6, then Seller
shall hold Buyer's share thereof in trust for Buyer and, promptly upon receipt
thereof, pay such share to Buyer or any other party entitled to same as provided
above. If any refund shall be received by Buyer which is for the account of
Seller as provided in this Section 8.6, then Buyer shall hold Seller's share
thereof in trust for Seller and, promptly upon receipt thereof, pay such share
to Seller or any other party entitled to same as provided above. Each party
shall execute any and all consents or other documents as may be reasonably
necessary to be executed by such party so as to permit the other party to
commence or
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continue any tax certiorari proceeding which such other party is authorized to
commence or continue pursuant to the terms of this Section 8.6, or to collect
any refund or credit with respect to any such tax proceeding. The provisions of
this Section 8.6 shall survive the Closing.
Section 8.7 Tenant Obligations. Notwithstanding anything herein that
may be construed to the contrary (including, without limitation, Section 8.5),
promissory notes or other agreements (other than the Leases) delivered to Seller
that evidence, deal with or otherwise relate solely to a Tenant's rental or
expense reimbursement obligations under its Lease that, as of the Closing Date,
are or were past due, shall not be conveyed to Buyer and shall be retained by
Seller. Seller agrees that in enforcing its rights against Tenants under any
such promissory notes or other agreements, Seller will not seek to exercise any
remedies that may be available to it under the affected Leases.
Section 8.8 Seller Financial Statements. Upon the request of Buyer,
Seller shall make available to Buyer's third party accountants, Seller's audited
financial statements for the 1997 calendar year.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b) by
certified mail, postage prepaid, return receipt requested, (c) by a commercial
overnight courier that guarantees next day delivery and provides a receipt, or
(d) by legible facsimile (followed by hard copy delivered in accordance with
preceding subsections (a)-(c)), and such notices shall be addressed as follows:
To Buyer: Brandywine Operating Partnership, L.P.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Facsimile No.(▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., General Counsel
c/o Brandywine Realty Trust
▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.(▇▇▇) ▇▇▇-▇▇▇▇
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To Seller: WHDWA Real Estate Limited Partnership
c/o GMH Associates, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o Goldman, Sachs & Co.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
and to: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Arent Fox ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon receipt (or
refusal by the intended recipient to accept delivery).
Section 9.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, and the Confidentiality Agreement, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any correspondence, memoranda or agreements between
the parties, including, without limitation, or any oral or written statements
made by Seller, its Affiliates, employees or agents, are not binding on or
enforceable against any party, and are superseded and replaced in total by this
Agreement together with the Exhibits and Schedules hereto.
Section 9.3 Time. Time is of the essence in the performance of each
of the parties' respective obligations contained herein.
Section 9.4 Attorneys' Fees. If either party hereto fails to perform
any of its obligations under this Agreement or if any dispute arises between the
parties hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and expenses incurred
by the other party on account of such default and/or in enforcing or
establishing its rights hereunder, including, without limitation, court costs
(including costs of any trial or appeal therefrom) and reasonable attorneys'
fees and disbursements.
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Section 9.5 No Merger. The obligations contained herein, the
performance of which is contemplated after the Closing, shall not merge with the
transfer of title to the Properties but shall remain in effect until fulfilled.
Section 9.6 Assignment. Buyer's rights and obligations hereunder
shall not be assignable, directly or indirectly, without the prior written
consent of Seller; provided, that Buyer may, by written notice delivered to
Seller not less than ten (10) Business Days prior to the Closing, designate any
Affiliate of Buyer ("Permitted Assignees") as grantee or assignee, as the case
may be, of one or more of the Properties and Seller shall convey at Closing such
Property or Properties (on behalf of Buyer) in accordance with such written
instructions. Nothing contained in the preceding sentence shall be deemed to
diminish or otherwise affect the obligations of Buyer hereunder, including the
obligations to pay the Purchase Price at Closing and to indemnify Seller and the
other Seller Parties in accordance with the terms hereof. Subject to the
limitations described herein, this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
Section 9.7 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
Section 9.8 Governing Law; Jurisdiction and Venue.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. THE PARTIES RECOGNIZE THAT, WITH
RESPECT TO SOME OF THE PROPERTIES, IT MAY BE NECESSARY FOR THE PARTIES TO COMPLY
WITH CERTAIN ASPECTS OF THE LAWS OF OTHER STATES IN ORDER TO CONSUMMATE THE
PURCHASE AND SALE OF SUCH PROPERTIES PURSUANT HERETO. THE PARTIES AGREE TO
COMPLY WITH SUCH OTHER LAWS TO THE EXTENT NECESSARY TO CONSUMMATE THE PURCHASE
AND SALE OF SUCH PROPERTIES. IT IS THE PARTIES' INTENT THAT THE PROVISIONS OF
THIS AGREEMENT BE APPLIED TO EACH PROPERTY IN A MANNER THAT RESULTS IN THE
GREATEST CONSISTENCY POSSIBLE.
(b) For the purposes of any suit, action or proceeding involving this
Agreement, Buyer and Seller hereby expressly submit to the jurisdiction of all
federal and state courts sitting in the State of New York or the Commonwealth of
Pennsylvania and consent that any order, process, notice of motion or other
application to or by any such court or a judge thereof may be served within or
without such court's jurisdiction by registered mail or by personal service,
provided that a reasonable time for appearance is allowed, and Buyer and Seller
agree that such courts shall have the exclusive jurisdiction over any such suit,
action or proceeding commenced by any party. In
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furtherance of such agreement, Buyer and Seller agree upon the request of the
other party to discontinue (or agree to the discontinuance of) any such suit,
action or proceeding pending in any other jurisdiction.
(c) Buyer and Seller each hereby irrevocably waive any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any federal
or state court sitting in the State of New York or the Commonwealth of
Pennsylvania and hereby further irrevocably waive any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
Section 9.9 Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER
OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, THE PROPERTIES, OR ANY CLAIMS, DEFENSES, RIGHTS
OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.
Section 9.10 Confidentiality and Return of Documents.
(a) As a condition to Seller's agreement to furnish and/or disclose
Evaluation Material (as defined below) to Buyer, any Permitted Assignee(s) and
their Affiliates and representatives for review and inspection, Buyer (on behalf
of itself, any Permitted Assignee(s), and their respective Affiliates and
representatives) hereby agrees to be bound by the terms set forth in this
Section 9.10(a).
(i) "Evaluation Material" shall include all documents, and other
written or oral information, as well as diskettes and other forms of
electronically transmitted data, furnished to Buyer, a Permitted Assignee,
or their respective officers, directors, employees, agents, advisors,
Affiliates or representatives (collectively "Representatives") by Seller or
its Affiliates relating to the Properties, as well as written memoranda,
notes, analyses, reports, compilations, or studies prepared by Buyer or its
Representatives (in whatever form of medium) that contain, or are derived
from, such information provided by Seller. Notwithstanding the foregoing,
information provided by Seller shall not constitute "Evaluation Material"
if such information (i) is or becomes generally available to the public
other than as a result of a disclosure by or through Buyer or its
Representatives in contravention of this Section 9.10(a) or (ii) is or
becomes available to Buyer from a source (other than Seller) not bound, to
the knowledge of Buyer, by any legal or contractual obligation prohibiting
the disclosure of Evaluation Material by such source to Buyer.
(ii) Buyer agrees that it and its Representatives will use the
Evaluation Material exclusively for the purpose of evaluating the merits of
a possible purchase of the
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Properties as contemplated by this Agreement and not for any other purpose
whatsoever. Buyer (on behalf of itself and its Representatives) further
agrees that it will not disclose any Evaluation Material or use it to the
detriment of Seller or its Affiliates; provided, however, that Buyer may
without liability disclose Evaluation Material (x) to any Representative of
Buyer who needs to know such Evaluation Material for the purpose of
evaluating the transactions described in this Agreement involving Seller
and the Properties and Buyer or its Permitted Assignee(s) (it being
understood and agreed that Buyer shall be fully responsible for any
disclosures by any such Person) and (y) pursuant to administrative order or
as otherwise required by law.
(iii) In the event that Buyer desires to disclose Evaluation
Material under the circumstances contemplated by clause (y) of the
preceding paragraph, Buyer will (x) provide Seller with prompt notice
thereof, (y) consult with Seller on the advisability of taking steps to
resist or narrow such disclosure, and (z) cooperate with Seller (at
Seller's cost) in any attempt that Seller may make to obtain an order or
other reliable assurance that confidential treatment will be accorded to
designated portions of the Evaluation Material.
(iv) Buyer agrees that, in the event this Agreement is terminated
prior to the consummation of the purchase and sale contemplated hereunder,
all written Evaluation Material and all copies thereof will be returned to
Seller promptly upon Seller's request. All analyses, compilations, studies
or other documents prepared by or for Buyer and reflecting Evaluation
Material or otherwise based thereon will be (at Buyer's option) either
(x) destroyed or (y) retained by Buyer in accordance with the
confidentiality restrictions set forth in this Section 9.10(a).
(v) Buyer acknowledges that significant portions of the
Evaluation Material are proprietary in nature and that Seller and its
Affiliates would suffer significant and irreparable harm in the event of
the misuse or disclosure of the Evaluation Material. Without affecting any
other rights or remedies that either party may have, Buyer acknowledges and
agrees that Seller shall be entitled to seek the remedies of injunction,
specific performance and other equitable relief for any breach, threatened
breach or anticipatory breach of the provisions of this agreement by Buyer
or its Representatives.
(vi) Buyer agrees to indemnify and hold harmless Seller from and
against all loss, liability, claim, damage and expense arising out of any
breach of this Section 9.10(a) by Buyer or any of its Representatives
(except that Buyer shall not be liable for consequential or punitive
damages unless such breach was intentional).
(vii) This Section 9.10(a) shall survive, if the Closing does not
occur, any termination of this Agreement, but shall terminate upon the
Closing.
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(b) Seller and Buyer hereby covenant that (i) prior to the Closing it
shall not issue any press release or public statement (a "Release") with respect
to the transactions contemplated by this Agreement without the prior consent of
all parties to this Agreement, except to the extent required by law or the
regulations of the Securities and Exchange Commission or the New York Stock
Exchange, and (ii) after the Closing, any Release issued by Seller or Buyer
shall be subject to the review and approval of all such parties (which approval
shall not be unreasonably withheld). If Seller or Buyer is required by law to
issue a Release, such party shall, at least two (2) Business Days prior to the
issuance of the same, deliver a copy of the proposed Release to the other
parties for their review. In response to inquiries concerning a Release, Buyer
cannot release any information concerning Seller without Seller's prior written
consent.
(c) Seller agrees for a period of one (1) year after the Closing Date
not to disclose capitalization rates and rates of return relating to the
Properties (the "Confidential Information"), provided that such disclosure may
be made (a) to any Person who is a member, partner, officer, director or
employee of Seller or counsel to or accountants of Seller solely for their use
and on a need-to-know basis, provided that such Persons are notified of Seller's
confidentiality obligations hereunder, (b) with the prior consent of Buyer, or
(c) subject to the next sentence, pursuant to legal, regulatory or
administrative process. In the event that Seller shall receive a request to
disclose any Confidential Information under clause (c) of the preceding
sentence, Seller shall (i) promptly notify Buyer thereof, (ii) consult with
Buyer on the advisability of taking steps to resist or narrow such request and
(iii) if disclosure is required or deemed advisable, reasonably cooperate with
Buyer (at no cost to Seller) in any attempt it may make to obtain an order or
other assurance that confidential treatment will be accorded such Confidential
Information.
Section 9.11 Interpretation of Agreement. The article, section and
other headings of this Agreement are for convenience of reference only and shall
not be construed to affect the meaning of any provision contained herein. Where
the context so requires, the use of the singular shall include the plural and
vice versa and the use of the masculine shall include the feminine and the
neuter. The term "person" shall include any individual, partnership, joint
venture, corporation, trust, limited liability company, unincorporated
association, any other entity and any government or any department or agency
thereof, whether acting in an individual, fiduciary or other capacity.
Section 9.12 Amendments. This Agreement may be amended or modified
only by a written instrument signed by each of Buyer and Seller.
Section 9.13 No Recording. Neither this Agreement nor any memorandum
or short form thereof may be recorded by Buyer.
Section 9.14 No Third Party Beneficiary. The provisions of this
Agreement are not intended to benefit any third parties.
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Section 9.15 Severability. If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.
Section 9.16 Drafts not an Offer to Enter into a Legally Binding
Contract. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Properties. The parties shall be legally bound with respect to the
purchase and sale of the Properties pursuant to the terms of this Agreement only
if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and each of Seller and Buyer have fully executed
and delivered to each other a counterpart of this Agreement.
Section 9.17 Further Assurances. Each party shall, whenever and as
often as it shall be requested to do so by the other party, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, any and all
such other documents and do any and all other acts as may be necessary to carry
out the intent and purpose of this Agreement.
Section 9.18 Special Provisions Regarding Properties Located in the
Commonwealth of Pennsylvania. With respect to the Properties located in the
Commonwealth of Pennsylvania, under the terms of the Pennsylvania Sewage
Facilities Act of January 24, 1966, ▇▇. ▇▇▇, ▇.▇. ▇▇▇▇▇ as amended, Seller has
received no written notice from a Governmental Authority that a tie-in or tap
to a community sewage system currently exists or is available or that such
system or any other utility systems or facilities are presently adequate for
Buyer's use of such Properties, and Buyer agrees to assume full responsibility
for contacting any agencies or utility companies in order to obtain service to
such Properties and for any fee incurred or payment required in connection
therewith.
Section 9.19 Exculpation. No recourse shall be had for any
obligation under this Agreement , or any document executed and delivered by
Buyer in connection with the Closing, 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
Seller and all parties claiming by, through or under Seller
Section 9.20 Counterparts. This Agreement may be executed in
counterparts, all of which taken together shall constitute one and the same
original, and the execution of counterparts by Buyer and Seller shall bind Buyer
and Seller as if they had executed the same counterpart.
[Signatures on following page]
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The parties hereto have executed this Agreement as of the date first
written above.
Buyer: BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: Brandywine Realty Trust, General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
Seller: WHDWA REAL ESTATE LIMITED PARTNERSHIP
By: WHDWA Gen-Par, Inc.,
General Partner
By: _________________________
Name:
Title
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