Exhibit 10.4
000 XXXXXXXXXXX XXXXX
AGREEMENT
THIS AGREEMENT is made and entered into as of the 5th day of
December, 1997 by and among English Creek Partners #2, Limited Partnership,
a New Jersey limited partnership having its principal office at Scarborough
Properties, 00 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxxxx 00000
("English Creek"), X. Xxxxxx Xxxxxxxxxxx, the general partner ("RRS"),
Xxxxxxx Xxxxxxx ("RP") and Xxxxxx X. Xxxxxxx ("Xxxxxxx"), the limited
partners of English Creek (collectively, the "English Creek Partners"),
Brandywine Realty Trust, a Maryland real estate investment trust (the
"Trust"), and Brandywine Operating Partnership, L.P., a Delaware limited
partnership or its nominee, having an address at Newtown Square Corporate
Campus, 00 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000
(the "Partnership").
RECITALS
A. English Creek is the owner of a certain tract of land being
comprised of one (1) parcel of property, being Xxx 00 xx Xxxxx 0000, together
with the building and improvements thereon, including one office building
approximately 44,750 square feet, commonly known as 000 Xxxxxxxxxxx Xxxxx,
Xxx Xxxxxx, Xxx Xxxxxx as more fully described on Exhibit "A" attached
hereto; and
B. English Creek desires and hereby agrees to sell or contribute, and
the Partnership desires and hereby agrees to acquire or accept, all of
English Creek's right, title and interest in and to the Property (as
hereinafter defined), subject to and on the terms and conditions hereinafter
set forth.
NOW THEREFORE, in consideration of the mutual promises and
agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:
1. Definitions Of Certain Terms. For all purposes of this
Agreement, the following terms shall have the respective meanings set forth
below:
"Agreement" shall mean this document entitled "Agreement", all
exhibits and schedules attached hereto or made a part hereof and all
amendments to this Agreement which are agreed to in writing and signed by all
of the parties hereto.
"Assignments" shall have the meaning ascribed to that term in
Paragraph 5(f) hereof.
"Closing" shall have the meaning ascribed to that term in
Paragraph 4 hereof. The date upon which the Closing actually occurs shall be
the "Closing Date."
"Common Shares" shall mean the common shares of beneficial
interest, par value $.01 per share, of the Trust.
"Contracts" shall mean all contracts and agreements with
respect to the management (excluding property management agreements),
operation, supply, maintenance, repair or construction affecting any of the
Property, to the extent assignable by English Creek, all as described in
Exhibit "B" attached hereto and made a part hereof.
"Deposit" shall mean the Deposit delivered by the Partnership
to Escrow Agent pursuant to Paragraph 3(a) hereof, together with all interest
earned thereon, if any.
"Due Diligence Termination Date" shall mean 5:00 p.m. E.S.T. on
December 9, 1997.
"Effective Date" shall mean the date on which this Agreement
has been fully executed and delivered by all parties hereto to each other.
"Escrow Terms" shall mean the escrow agreement to be entered
into of even date herewith between the Escrow Company, English Creek and the
Partnership.
"Escrow Agent" shall mean Commonwealth Land Title Insurance
Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000.
"Improvements" shall mean those certain buildings and other
improvements constructed and located on the Land as described on Exhibit "A".
"Land" shall mean that certain parcel of real property located
at 0000 Xxxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx.
"Leases" shall mean those certain leases (and guarantees
thereof, if any) listed on Exhibit "C" attached hereto and made a part
hereof, or hereafter entered into by English Creek, as landlord, in
accordance with the terms of this Agreement, for any space within any of the
Improvements located on any of the Land.
"Licenses" shall mean the licenses, permits, approvals and
agreements affecting any of the Real Property.
"Permitted Exceptions" shall mean with respect to any of the
Real Property (i) the lien of real estate taxes, water rent and sewer charges
that are not due and payable on the Closing Date, (ii) the printed
exclusions, conditions and stipulations contained in the Commitment (as
hereinafter defined), (iii) additional exceptions to title set forth in
Exhibit "D" to this Agreement, (iv) special assessments which become a lien
on any of the Real Property on or after the Closing Date, and (v) such other
title matters existing on the Closing Date which are accepted or deemed
accepted by the Partnership pursuant to Paragraph 5 hereof; and (vii) the
rights of Tenants of any of the Real Property pursuant to the Leases for all
or any portion of any of the Real Property.
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"Personal Property" shall (except as specifically excluded on
Exhibit "E" hereto) mean all of English Creek's right, title and interest in
and to the tangible personal property including, without limitation, artwork,
furniture, furnishings, equipment, machinery and fixed and movable fixtures,
together with all component and replacement parts, owned by English Creek,
situated on any of the Real Property on the Closing Date, and all artwork,
renderings, flags, awnings and trade dress; all architects', engineers',
surveyors' and other real estate professionals' plans, specifications,
certifications, reports, data or other technical descriptions (including,
without limitation, all environmental, structural and mechanical inspection
reports) to the extent the same are in English Creek's possession and are not
proprietary in nature, and all building names and English Creek's rights, if
any, in and to the name "500 Scarborough Drive."
"Property" shall mean the Real Property and such of the
Contracts, Leases, Licenses, Personal Property and other rights, titles,
interests and obligations which pertain to the Real Property and are intended
to be contributed, conveyed, sold or otherwise transferred to the Partnership
by English Creek pursuant to this Agreement.
"Real Property" shall mean the Land and the Improvements.
"Tenants" shall mean the tenants under the Leases.
"Trust" shall mean Brandywine Realty Trust, a Maryland real
estate investment trust, the sole general partner of the Partnership.
"Underlying Shares" shall mean the Common Shares issuable upon
the conversion or redemption of, or otherwise pursuant to, the Units issuable
hereunder.
2. Acquisition Of The Property. On the Closing Date, and subject
to the terms and conditions set forth in this Agreement, English Creek shall
sell or contribute, at English Creek's sole discretion, assign, transfer and
convey to the Partnership and the Partnership shall purchase or accept, as
the case may be, from English Creek the following:
(a) All right, title and interest of English Creek in and to
all of the Real Property;
(b) All right, title and interest of English Creek, if any, in
any land lying in the bed of any street, road, avenue or alley, open or
closed, in front of or adjoining any of the Land, to the center line thereof;
(c) All right, title and interest of English Creek, if any, in
any easements, covenants, rights of way, privileges, hereditaments and other
rights appurtenant to any of the Real Property;
(d) to the extent assignable to the Partnership and approved
by the Partnership, all right, title and interest of English Creek in and to
the Contracts and the Licenses relating to any of the Real Property;
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(e) all right, title and interest of English Creek in and to
the Leases; and
(f) all right, title and interest of English Creek in and to
the Personal Property.
3. Consideration And Time Of Payment. The consideration (the
"Consideration") to be received by English Creek from the Partnership in
exchange for the Property shall be Six Million One Hundred Fifty Thousand
Dollars ($6,150,000) less the amount of principal and accrued interest
secured by a mortgage on the Property if and to the extent such principal and
accrued interest is not repaid at the Closing, as adjusted pursuant to
Paragraph 7 of this Agreement which shall be paid to English Creek in the
following manner:
(a) On the Effective Date, the Partnership shall deliver a
check, subject to collection, in the amount of Twenty Thousand Dollars
($20,000) to the Escrow Agent, which check shall be payable to the order of
the Escrow Agent and shall be held and disbursed pursuant to the Escrow
Terms. Thereafter, within two (2) business days following the Due Diligence
Expiration Date, the Partnership shall deliver a check, subject to
collection, in the amount of Ten Thousand Dollars ($10,000) to the Escrow
Agent, which check shall be payable to the order of the Escrow Agent and
shall be held and disbursed pursuant to the Escrow Terms. In the event that
English Creek elects, pursuant to subparagraph (c) below, to receive all of
the Consideration in Units in exchange for the contribution of the Property,
the Escrow Agent shall release the Deposit to the Partnership at the Closing.
(b) The balance of the Consideration shall be paid to English
Creek at the Closing by wire transfer of immediately available funds to an
account designated by English Creek.
(c) In lieu of receiving the Consideration pursuant to
subparagraphs (a) and (b) above, English Creek may elect, at its option, to
receive all or a portion of the Consideration in the form of Class A Units of
Limited Partnership Interest ("Units") in the Partnership in exchange for the
contribution to the Partnership of all or a portion, as the case may be, of
the Property (such amount being estimated as approximately $1,610,000 worth
of Units (i.e., 92% of $1,750,000 the remainder of $6,150,000 - $4,400,000)).
English Creek may make such election by providing the Partnership written
notice no later than thirty (30) days prior to the Closing Date. Such
election notice shall state the dollar amount of the Consideration to be
received in Units. The number of Units issuable in satisfaction of the
applicable portion of the Consideration that English Creek elects to be so
received shall be computed by dividing the aggregate dollar amount of such
applicable portion of the Consideration by the Computed Market Price. The
term "Computed Market Price" shall mean the average closing price for the
Common Shares as reported by the New York Stock Exchange (the "NYSE") for the
ten (10) trading day period immediately preceding the Due Diligence
Termination Date. The distributions declared by the Partnership in respect
of the Class A Units issuable pursuant to this Agreement during the initial
calendar quarter in which the Closing occurs shall be pro-rated by the
Partnership based on the number of days the Class A Units are outstanding
during such quarter. For example, if the Class A Units issuable pursuant to
this Agreement are issued on December 1, 1997, each of such
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Class A Units shall be entitled to receive an amount equal to one-third of
the amount of the distribution payable to a Class A Unit that was outstanding
during the full quarter.
(d) The transaction contemplated by this Agreement is
conditioned upon the closing of the sale of the other properties identified
on Exhibit "F" attached hereto (the "Other Properties"), so that no one or
more of the Other Properties and the Property hereunder may be sold without
all of the Property being sold unless expressly provided for in writing by
the parties hereto and in any event the Deposit hereunder and thereunder
shall be deemed a single deposit for the entire transaction.
4. Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall be held on or before December 12, 1997, on a
mutually agreed date determined by English Creek and the Partnership, at the
offices of the Partnership, Plaza 1000 at Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxx Xxxxxx, commencing at 10:00 a.m., time being of the essence.
5. Title And Conveyance Of The Property.
(a) At Closing, title to the Real Property shall be insurable
at regular rates by Commonwealth Land Title Insurance Company (the "Title
Insurer"), free and clear of all liens, encumbrances and restrictions other
than the Permitted Exceptions; provided, however, that if title to any of the
Real Property is not insurable as aforesaid, the Partnership's sole right and
remedy shall be as set forth in Paragraph 5(b) below.
(b) (i) The Partnership has applied for a title insurance
commitment (1992 ALTA Form with Creditor's Rights Exclusion Deleted) to be
issued by the Title Insurer ("Commitment"), agreeing to issue to the
Partnership, upon recording of the Deeds (as hereinafter defined) for each of
the Real Property, an owner's policy of title insurance as above specified
("Title Policy"). Said Commitments shall agree to insure the proposed title
of the Partnership to each of the Real Property subject only to the Permitted
Exceptions and such other title exceptions as the Partnership has agreed to
accept or is deemed to have accepted pursuant to this Paragraph. If any of
the Commitments disclose any title exceptions in addition to the Permitted
Exceptions and the Partnership objects to such additional title exceptions
(the "Title Defects"), the Partnership shall notify English Creek of such
Title Defects with sufficient specificity to enable English Creek to respond.
The Partnership's notice of any Title Defects shall be given in writing to
English Creek no later than the date which is five (5) business days prior to
the Due Diligence Termination Date, together with the Commitments and copies
of all matters of record raised therein as exceptions thereto, after which
the Partnership shall be deemed to have waived any and all Title Defects not
so raised, except for Title Defects which are disclosed to the Partnership in
continuations of title issued subsequent to the issuance of the Commitments,
unless the Partnership fails to object to same in writing within three (3)
business days after the Partnership's receipt of the continuation of title in
which the same is disclosed, in which case the Partnership will be deemed to
have waived such additional Title Defects. English Creek shall have the
right, but not the obligation (except as otherwise specifically provided), to
cure such Title Defects and, if English Creek elects to attempt to cure the
Title Defects but has
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not cured same on or before the Closing Date, then the Closing Date may be
extended by English Creek at its sole option for up to thirty (30) days to
enable English Creek to effect such cure.
(ii) In the event that either (a) English Creek is unable
to convey title in accordance with the terms of this Agreement, (b) English
Creek elects not to cure or cause the removal of any exception to title,
except as required in subparagraph (iii) below, or (c) if English Creek is
unable to satisfy any other conditions to the Partnership's obligations under
this Agreement, then (except as otherwise specifically provided in
subparagraph (iii) below) the sole liability of English Creek shall be to (A)
direct the Escrow Agent to return the Deposit to the Partnership and (B)
reimburse the Partnership for the reasonable charges imposed by the Title
Company for preparation of the Commitments (without the issuance of a policy)
and for the reasonable fees paid by the Partnership to update the existing
surveys (collectively "the Partnership's Reasonable Costs"), and upon such
payments being made, this Agreement shall be deemed canceled and the parties
hereto shall be released of all obligations and liabilities hereunder, except
as to any provisions which expressly survive a termination of this Agreement;
and the Partnership shall have no rights of action against English Creek in
law or in equity, for damages or, except for the purpose of enforcing English
Creek's contractual obligations under subparagraph (iii) below, for specific
performance. Notwithstanding the foregoing, the Partnership shall have the
right to waive any conditions to the Partnership's obligations hereunder, in
which event English Creek shall make the deliveries provided for herein to
the Partnership to the extent that English Creek is able so to do, and there
shall be no reduction in the Consideration in such event.
(iii) Notwithstanding the provisions of the foregoing
paragraph, if the condition of title to the Real Property at the Closing is
other than that which the Partnership is required or agrees to accept
hereunder solely by reason of any mortgages or other monetary liens
(hereinafter referred to as "Liens") which can be satisfied or remedied by
the payment of a liquidated amount of money not to exceed the Purchase Price,
English Creek shall not have the right to cancel this Agreement and English
Creek shall either (aa) discharge, satisfy, or bond the same or (bb) deliver
such funds to be held in escrow required by the Title Company, in either
event so that the Title Company shall affirmatively insure the full and
complete discharge of the foregoing and shall agree to omit the same as an
exception to its title insurance policy.
(iv) Notwithstanding anything to the contrary contained in
this Agreement, English Creek shall have no duty nor be required to take any
action, to institute any proceedings or to incur any expense (other than as
may be expressly required in subparagraph (iii) above) in order to remedy or
remove any objections to title or otherwise to render title in accordance
with the terms called for in this Agreement.
(c) The Partnership expressly understands, acknowledges and
agrees that any failure by the Partnership to notify English Creek in writing
of any Title Defects on or before the expiration of the Due Diligence, shall
for all purposes be deemed to be an acceptance by the Partnership of such
Title Defects as if they were one or more of the Permitted Exceptions.
(d) At Closing, English Creek will convey fee simple title to
the Real Property by a Bargain and Sale Deed with covenant against grantor's
acts (the "Deed"), subject in
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all cases to the Permitted Exceptions, in the forms attached hereto and made
a part hereof as Exhibit "G".
(e) At Closing, English Creek will transfer all of its right,
title and interest in and to the Personal Property to the Partnership by
executing a Xxxx of Sale ("Xxxx of Sale") in the form attached hereto and
made a part hereof as Exhibit "H".
(f) At Closing, English Creek will assign all of English
Creek's right, title, and interest, and the Partnership shall assume all of
the obligations from and after the Closing Date, in, to and under the Leases,
Licenses and the Contracts for the Property, by executing an Assignment and
Assumption Agreement in the form attached hereto and made a part hereof as
Exhibit "I" (the "Assignments").
6. Closing Documents.
(a) At the Closing, as a condition of the Partnership's
obligation to close hereunder, English Creek shall deliver or cause to be
delivered the following:
(i) The Deed, executed by English Creek, covering the
Real Property (and separate quitclaim deeds to the Real Property utilizing
new ALTA survey descriptions, if requested);
(ii) The Bills of Sale executed by English Creek covering
the Personal Property;
(iii) The Assignments, executed by English Creek;
(iv) As many signed originals (or true and correct copies
of same) of the Contracts, Leases, Licenses, and other items covered by the
Assignments as are in the possession or control of English Creek;
(v) All machinery and/or equipment operating manuals,
technical data and other documentation relating to the building systems and
equipment, and all machinery, equipment and other building warranties and
guarantees, if any, but only to the extent that any of the same are in the
possession or control of English Creek;
(vi) All master and duplicate keys, combinations and codes
to all locks and security devices for the Improvements which are in the
possession or control of English Creek;
(vii) Written notice from English Creek or English
Creek's managing agent to each Tenant in form reasonably satisfactory to the
Partnership stating that the Real Property have been sold to the Partnership
and that tenant security deposits (if any) in English Creek's possession have
been transferred to the Partnership and directing the Tenants to make future
rental payments to the Partnership at the address designated by the
Partnership;
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(viii) Non-foreign person certification in the form
attached hereto as Exhibit "J";
(ix) All building records and Tenant lease files with
respect to the Real Property which are in the possession of English Creek;
(x) Each xxxx of current real estate taxes, sewer charges
and assessments, water charges and other utilities and to the extent in
English Creek's possession or control, bills for each of the same for the
three (3) years, together with proof of payment thereof (to the extent same
have been paid);
(xi) All plans, specifications, as-built drawings,
surveys, site plans, and final, written reports of architects, engineers and
surveyors, and any other Personal Property forming part of the Property or
any portion thereof, but only to the extent that the same exist and are in
the possession of English Creek or any property manager controlled by English
Creek;
(xii) An affidavit or affidavits of title in favor of
the Title Insurer on the form used by such Title Insurer, in form reasonably
acceptable to English Creek to enable the Title Insurer to issue the
Commitments described in Paragraph 5(b)(i). The Partnership shall require
affirmative endorsements against mechanic's liens, consistent with English
Creek's obligations under Paragraph 5(b)(iii), above;
(xiii) A letter, from the New Jersey Department of
Environmental Protection or its successor ("NJDEP") stating that the
provisions of the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq., the
regulations promulgated thereunder and any successor legislation and
regulations are inapplicable to the Real Property (the "Non-Applicability
Letter");
(xiv) Subject to the provisions of Paragraph 11(d),
below, Estoppel Letters, if any, received from Tenants;
(xv) Updated rent rolls, which shall be certified by
English Creek to be correct and complete as of Closing Date;
(xvi) Proof as to the due authorization and execution
by English Creek of the documents executed and delivered by English Creek;
(xvii) Such affidavits of title or other certifications
as shall be required by the Title Company to insure the Partnership's title
to the Property as set forth in Section 3, and to provide affirmative
endorsements (a) against mechanic's liens, (b) insuring against any violation
of existing covenants, conditions or restrictions, and insuring that future
violation will not result in forfeiture of title, (c) insuring that all
foundations in place as of the date of such policy are within the lot lines
and applicable set back lines, (d) insuring that the buildings and structures
on the Property do not encroach onto adjoining land or onto any
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easements, (e) insuring that confirming that there are no encroachments of
improvements from adjoining land onto the Property (f) removing any
exceptions for matters which an accurate survey would disclose, and (g)
providing affirmative insurance with respect to such other matters as the
Partnership or its lender shall specify;
(xviii) A Registration Rights Agreement in the form
attached hereto as Exhibit "K" executed by English Creek and the English
Creek Partners;
(xix) The closing certificate required pursuant to
Paragraph 9;
(xx) An executed three year lease from Lockheed Xxxxxx
(approximately 15,000 rentable square feet) at $17.00 per rentable square
foot plus electric on the Partnership's standard form of lease. In addition
, English Creek shall remain solely responsible for all tenant improvements,
leasing commissions and renovation charges associated with such space. If
English Creek is able to procure a rental rate of greater than $17.00 for at
least a three year term, the Partnership shall pay the leasing commission of
Xxxxxx Xxxxx, the procuring broker, at Closing;
(xxi) An executed counterpart to the Agreement of
Limited Partnership of the Partnership (the "Partnership Agreement") signed
by each of the English Creek Limited Partners;
(xxii) An executed Tax Indemnity Agreement in the form
attached hereto as Exhibit "L"; and
(xxiii) An executed Investor Questionnaire in the form
attached hereto as Exhibit "M".
(xxiv) An executed $1,500,000 Guaranty in favor of the
Partnership in the form attached hereto as Exhibit "N".
(b) At the Closing, as a condition of English Creek's
obligation to close hereunder, the Partnership shall deliver or cause to be
delivered the following:
(i) The balance of the Consideration (in immediately
available funds or Units in accordance with Paragraph 3);
(ii) The Assignments, executed by the Partnership;
(iii) An agreement by the Partnership not to sell the
Property for four years, including an indemnity for the Partnership's breach
thereof;
(iv) A Registration Rights Agreement in the form attached
hereto as Exhibit "K" and the Tax Indemnity in the form of Exhibit "L"
executed by the Trust; and
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(v) The closing certificate required pursuant to
Paragraph 9.
7. Prorations And Closing Costs. All matters involving prorations
or adjustments to be made to the Consideration in connection with the Closing
and not specifically provided for in any other provision of this Agreement
shall be adjusted as provided below. Except as otherwise set forth herein,
all items to be prorated pursuant to this Paragraph shall be prorated as of
the Closing Date, with the Partnership to be treated as the owner of the
Property, for purposes of prorations of income and expenses, on and after the
Closing Date.
(a) Real estate taxes and all other ad valorem taxes, if any,
with respect to the Real Property for the applicable fiscal or calendar year
in which the Closing occurs shall be prorated on a per diem basis. If the
amount of such taxes is not known on the Closing Date, taxes will be prorated
on the basis of the most recently ascertainable tax xxxx. There shall be no
proration of English Creek's insurance premiums or assignment of English
Creek's insurance policies and English Creek shall be entitled to cancel all
of its existing policies as of the Closing Date. The Partnership shall be
obligated (at its own election) to obtain any replacement policies. The
amounts of all telephone, electric, sewer, water and other utility bills,
trash removal bills, janitorial and maintenance service bills relating to the
Property and allocable to the period prior to the Closing Date shall be
determined and paid by English Creek before Closing, if possible, or shall be
paid promptly thereafter by English Creek or adjusted between the Partnership
and English Creek immediately after the same have been determined. The
Partnership and English Creek shall to the extent necessary enter into an
agreement to such effect at Closing. English Creek shall attempt to have all
utility meters read as of the Closing Date. English Creek shall further
attempt to obtain from the provider of same, all other service statements and
bills of account adjusted as of the Closing Date. English Creek shall be
entitled to refunds of all deposits, if any, paid by English Creek or English
Creek's predecessor-in-interest prior to Closing and held by entities
providing such service, or, at English Creek's option, English Creek shall
transfer all of English Creek's right, title and interest in and to such
deposits to the Partnership at Closing and shall receive a full credit for
the amount of such deposits. All Contracts and other obligations in
connection with the Property, to the extent the same are intended to be
assumed hereunder, shall be prorated as of the Closing Date.
(b) Special assessments which have been filed as a lien
against any of the Real Property on or before the Closing Date and are not
payable in installments shall be paid by English Creek. Special assessments
which have been filed as a lien against any of the Real Property, but which
are payable in installments shall be adjusted based upon the installment
payment for the fiscal or calendar year in which Closing takes place and the
remaining unpaid assessments shall be assumed by the Partnership. Special
assessments which are or may be pending, but which have not become a lien on
the Real Property as of the Closing Date, and special assessments which are
filed as a lien after the Closing Date, shall be assumed and paid by the
Partnership.
(c) English Creek shall pay the cost of State and County
transfer taxes or stamps imposed in connection with the recordation of the
Deeds for the Real Property. The Partnership shall pay the expense of the
title searches, title premiums and any other title insurance costs on the
owner's title insurance policies and the cost of obtaining any surveys, if
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desired by the Partnership. The Partnership agrees to pay the expense of the
legal fees of its own counsel. The cost of all of the Partnership's Due
Diligence Activities (as defined below) shall be borne solely by the
Partnership.
(d) Any base, minimum or similar rents under the Leases
collected by English Creek for a rental period or portion thereof from or
after the Closing Date shall be credited to the Partnership at Closing on a
per diem basis. In addition, any security deposits held by English Creek for
any Lease, together with the interest due thereon, if any and if required
under the terms of the Lease or as required by applicable law, shall either
be credited or transferred to the Partnership at Closing at English Creek's
option. If any tenant is in arrears in the payment of rent or additional
rent on the Closing Date, rents received from such tenant ninety (90) days
after the Closing Date shall be applied in the following order of priority:
(a) to the Partnership, so long as such tenant is in arrears for current or
prior rent arising after Closing, then (b) to English Creek for all rent in
arrears prior to the Closing Date; and then (c) to the Partnership with no
further claim by English Creek thereto. Except as herein provided, the
Partnership is not under any obligation to collect rents in arrears for the
benefit of English Creek. Any rents which are delinquent or otherwise not
paid at the time of Closing, and collected by the Partnership or English
Creek within ninety (90) days after Closing shall be apportioned as aforesaid
and the portion to which English Creek is entitled shall be promptly remitted
by the Partnership to English Creek. English Creek shall have no claim to
rents collected ninety (90) days after the Closing Date. English Creek
retains the right to pursue its remedies against Tenants after Closing for
any delinquent rents or other amounts owed to English Creek (other than
proceedings to evict Tenant or terminate its lease). The Partnership shall
not enter into any agreement pursuant to which any sums owed to English Creek
in respect of any Lease for periods prior to the Closing are reduced,
modified or waived. The Partnership's obligations to collect rent arrearages
shall be limited to commercially reasonable efforts, and the Partnership
shall under no circumstance be required to commence litigation against any
Tenant to collect the same.
(e) All leasing commissions due or to become due prior to the
Closing Date for any Leases entered into before the date hereof and all
amendments, renewals and modifications thereof entered into before the date
hereof, shall be paid by English Creek without contribution by, or
reimbursement from, the Partnership. At Closing, the Partnership shall pay
or reimburse English Creek for any leasing commissions due or to become due
prior to Closing for any Leases and for any amendments, modifications or
renewals of any Leases entered into after the date hereof which are entered
into in accordance with the provisions of Paragraph 15(e) hereof. The
Partnership shall expressly assume and be solely obligated to pay all leasing
commissions payable under all Leases entered into prior to the date hereof
(including all amendments, renewals and modifications thereof) which are
first due or payable on or after the Closing Date, regardless of the date on
which such Leases (including all amendments, renewals and modifications
thereof) were executed or any of the leasing commissions therefor earned,
subject only to the Partnership's right to approve any new Leases or
amendments, discretionary renewals or modifications of any Leases which are
not otherwise permitted pursuant to Paragraph 15(e), below. English Creek
shall be responsible for the costs of, and shall pay or perform prior to
Closing any tenant improvements and allowances for work performed or required
to be performed (or paid, as applicable) prior to the Closing Date by or on
behalf of English Creek for all Leases (including all amendments, renewals
and modifications thereof)
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entered into on or before the date of this Agreement for any of the Real
Property. The Partnership shall assume, pay or reimburse (as applicable)
English Creek on the Closing Date for the costs of any tenant improvements
and allowances for work to first be performed after the Closing Date pursuant
to Leases (including all amendments, renewals and modifications thereof)
entered into prior to the date of this Agreement; and all costs of tenant
improvements and allowances incurred by or on behalf of English Creek in
connection with any Leases (including all amendments, renewals and
modifications thereof) entered into after the date of this Agreement for any
of the Real Property, provided the same were approved by the Partnership or
are otherwise permitted as set forth in Paragraph 15(e) hereof and provided
that such costs are set forth on Exhibit "C" hereto.
(f) Amounts paid or payable as fees or expenses under any of
the Licenses assigned at Closing, shall be prorated as of the Closing Date
but all amounts refundable under unassigned and unassignable Licenses shall
belong to English Creek.
(g) English Creek shall be solely responsible for the payment
of any "roll back taxes" assessed or imposed upon any of the Real Property
under the "Farmland Assessment Act of 1964," Chapter 58, Laws of 1964,
N.J.S.A. 54:4 23-1 et seq., as amended or otherwise, which relate to any
period prior to the Closing Date, and English Creek agrees to indemnify,
defend and save the Partnership harmless (including attorneys' fees) from and
against any claim for such taxes.
(h) Miscellaneous income including, without limitation,
telephone and vending machine income, if any, shall be prorated as of the
Closing Date.
(i) All of the provisions of this Paragraph 7 and English
Creek's and the Partnership's respective rights and obligations hereunder
shall survive the Closing.
8. Possession Of Property.
(a) English Creek shall deliver possession to the Real
Property to the Partnership on the Closing Date, subject only to the
Permitted Exceptions.
(b) the Partnership shall assume, by execution of the
Assignments, all of English Creek's obligations in, to and under the
Contracts, the Licenses and Leases. Notwithstanding the foregoing, the
Partnership shall not assume management, leasing or brokerage agreements
provided, however, that the Partnership shall remain liable for leasing
commissions as set forth in Paragraph 7(e), above.
(c) All of the provisions of this Paragraph 8 and English
Creek's and the Partnership's respective rights and obligations hereunder
shall survive the Closing.
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9. Representations Of English Creek, The English Creek Limited
Partners and The Partnership.
(a) English Creek hereby represents and warrants, as follows,
all of which shall be true and correct at, and as of, the Effective Date:
(1) English Creek is a limited partnership duly
organized and validly existing under the laws of the State of New Jersey, and
is in good standing in such state.
(2) English Creek has all necessary power and
authority to enter into this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby, without the consent
or authorization of, or notice to, any third party, except those third
parties to whom such consents or authorizations have been or will be
obtained, or to whom notices have been or will be given, prior to the
Closing. This Agreement constitutes, and the other documents and instruments
to be delivered by English Creek pursuant hereto when delivered will
constitute, the legal, valid and binding obligations of English Creek,
enforceable against English Creek in accordance with their respective terms.
(3) Except as set forth in Exhibit "O" attached
hereto and made a part hereof, there is no litigation, proceeding or action
pending or, to the best of English Creek's knowledge, threatened against or
relating to English Creek or its Property which might materially and
adversely affect English Creek or its Property or which questions the
validity of this Agreement or any action taken or to be taken by English
Creek pursuant hereto. English Creek shall remain responsible to defend, and
shall indemnify and hold the Partnership harmless from and against all
liability, cost and expense relating to the litigation identified in on
Exhibit "O", which obligation shall survive the Closing.
(4) Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will constitute a
violation or be in conflict with or constitute a default under any term or
provision of the English Creek's limited liability agreement or any other
material agreement, instrument or lease to which English Creek is a party,
subject to any required consents or authorizations of, or notices to, third
parties from whom such consents or authorizations will be obtained or to whom
notices will be given prior to Closing.
(5) True, correct and complete copies of all of the
following, together with any modifications or amendments thereof, but only if
and to the extent the same are in English Creek's possession or control, have
been or will be delivered, or made available, to the Partnership within five
(5) days following the execution of this Agreement: (i) Leases and rent
rolls; (ii) Contracts; (iii) leases of equipment, vehicles and other tangible
personal property used by English Creek in connection with the ownership and
operation of the Property (the "Personal Property Leases"); (iv) Licenses;
(v) surveys; (vi) title reports; (vii) engineering reports; and (viii)
environmental reports.
13
(6) To the best of English Creek's knowledge, (i)
all of the Leases, Contracts and Personal Property Leases and Licenses, are
in full force and effect, (ii) there has been no action or failure to act by
English Creek or any other party to any Lease, Contract or Personal Property
Lease which, with the giving of notice or the passage of time or both, would
constitute a default in any material respect or otherwise entitle either
party to damages or a right to terminate; and (iii) English Creek has not
received from any other party written notice with respect to the condition of
the Property or the use or repair of the same or of any alleged default by
English Creek under any such Lease, or Personal Property Lease or License.
Except as set forth on Exhibit "P", each of the Contracts is terminable at
will without penalty or cancellation fee upon no more than thirty (30) days
prior written notice but, except as hereinafter expressly provided, unless
otherwise directed by the Partnership, the Contracts shall not be terminated
by English Creek as of Closing. Anything in this Agreement to the contrary
notwithstanding, any and all existing management agreements and brokerage or
leasing agreements shall be terminated as of Closing. The Partnership shall
assume all Contracts not terminated at Closing pursuant to the Assignment.
(7) English Creek shall indemnify and hold the
Partnership harmless of, from and against any and all claims and liabilities
arising out of the employment of any individuals by English Creek and its
affiliates, whether as employees or independent contractors. As of the
Closing, there are and shall be no liens against the Real Property arising
under the Employee Retirement Income Security Act of 1974, as amended, nor
any other compensation or employment related lien or liability that could
become the responsibility of the Partnership after the Closing. The
Partnership shall be under no obligation to assume any of English Creek's
employees, it being English Creek's sole responsibility and obligation to
provide severance arrangements, if any, for all such employees. This
Paragraph shall survive Closing.
(8) To English Creek's actual knowledge, there are
no public improvements in the nature of off-site improvements or otherwise,
which have been ordered to be made and/or which have not heretofore been
assessed and, to English Creek's actual knowledge, there are no special or
general assessments currently affecting or pending against the Real Property
or any portion thereof.
(9) English Creek has not been served with written
notice that it has been named as a party in any litigation, administrative
proceeding or investigation naming English Creek as a responsible party or
potentially responsible party for any liability for clean-up costs, natural
resource damages or other damages or liability for prior disposal or release
of Hazardous Substances, Hazardous Wastes or other environmental pollutants
or contaminants. For purposes of this Agreement, "Hazardous Substances"
means those elements and compounds which are designated as such in Section
101(14) of the Comprehensive Response, Compensation and Liability Act
(CERCLA), 42 U.S.C. Section 9601 (14), as amended, all petroleum products and
by-products, and any other hazardous substances as that term may be further
defined in any and all applicable federal, state and local laws (including,
in New Jersey, the New Jersey Industrial Site Recovery Act (ISRA); and
"Hazardous Wastes" means any hazardous waste, residential or household waste,
solid waste, or other waste as defined in applicable federal, state and local
laws. English Creek has not received any summons,
14
citation, directive, letter or other written communication, from any
governmental or quasi-governmental authority concerning any intentional or
unintentional action or omission on English Creek's part which either (a)
resulted in the releasing, spilling, leaking, pumping, pouring, emitting,
emptying or dumping of Hazardous Substances or Hazardous Wastes, or (b)
related in any way to the generation, storage, transport, treatment or
disposal of Hazardous Substances or Hazardous Wastes.
(10) True and correct copies of the income and
expense statements for the Property, and a current rent roll certified by
English Creek, will be delivered to the Partnership upon execution of this
Agreement.
(11) English Creek has received no written notice of
any violation of any of the licenses, permits, consents, authorizations,
approvals, and certificates of any regulatory, administrative or other
governmental agency or body, if any, issued to or held by the English Creek
and related to the ownership or operation of the Property (collectively, the
"Permits"), and there is no pending or, to the actual knowledge or English
Creek, threatened proceeding which could result in the revocation or
cancellation of, or inability of English Creek to renew, any Permit.
(12) To the best of English Creek's knowledge, except
as set forth in Exhibit "Q" attached hereto and made a part hereof, all
management fees, leasing commissions and tenant improvement allowances are
fully paid, there are no brokerage commissions owing by English Creek with
respect to any of the Leases or otherwise related to the Property which have
not been paid, and there are no ongoing commission or leasing fee obligations.
(13) English Creek has received no written notice
from any insurance company which has issued a policy with respect to the
Property or by any board of fire underwriters (or other body exercising
similar functions) claiming any defects or deficiencies or requesting the
performance of any repairs, alterations or other work, and English Creek will
promptly notify the Partnership of any such notice or requirement if such
notice is received prior to the Closing.
(14) English Creek is not a "foreign person" and will
deliver to the Partnership, at the Closing, a statement certifying that it is
not a "foreign person" within the meaning of the Internal Revenue Code of
1986, as amended.
(15) English Creek has not received written notice
from any governmental agency or authority of outstanding material violations
issued by governmental authorities having jurisdiction over the Real Property.
(16) Except as may be set forth in a Lease as
specifically noted on Exhibit "C", there are no options, rights of first
refusal or conditional sales agreements regarding the purchase and sale of
the Real Property.
15
(17) There are no oral or written leases or rights of
occupancy or grants or claims of right, title or interest in any portion of
the Property other than the leases (the "Leases") listed on the rent roll
attached hereto as Exhibit "C". No tenant has advised English Creek that
English Creek is in default under any of the Leases, or asserted any claim or
basis for any claim for free or reduced rent or right of set off against the
landlord or the rent under the Leases, and English Creek and its agent have
no actual knowledge of any default or any event which has taken place which,
with the passage of time, or the delivery of notice, or both, could become an
event of default. English Creek has the sole right to collect rents under
the Leases, and neither such right nor any of the Leases has been assigned,
pledged, hypothecated or otherwise encumbered by English Creek except as
additional collateral for the existing mortgage upon the Property which shall
be satisfied at or before Closing. No holder of any such collateral
assignment has asserted or exercised any of its right to collect such rents.
Each of the Leases is valid and subsisting and in full force and effect, the
tenant is in actual possession in the normal course, and the rents set forth
in Exhibit "C" are the actual rents, income and charges being collected by
English Creek under the Leases. Except for the Lockheed Xxxxxx fit-out
requirement under the applicable lease, for which English Creek will remain
obligated post-Closing to complete, all obligations of English Creek which
it is required to complete pursuant to any Lease (or any unsigned lease
proposal or lease amendment) has been completed as of this date or shall be
completed as of Closing, and all costs therefore have been or shall be paid
by English Creek, and all of English Creek's work has or shall have been
accepted by the Tenant without exception on or before Closing, other than
routine punch list items, which items shall remain the responsibility of
English Creek following Closing, and which obligation shall expressly survive
Closing. The amount of each security deposit contains, where required by law
or otherwise applicable, interest which has accrued in accordance with law.
No tenant of the Property under any of the Leases has, and shall not at
Closing have, prepaid any rent under any of the Leases for more than one (1)
month. Except as otherwise set forth on Exhibit "C", no security deposits by
tenants have heretofore been returned or applied to charges against the
tenants.
(18) To the best of English Creek's knowledge, the
Property and the continued operation and use thereof comply with all
applicable requirements of federal, state and local law, and all applicable
requirements of governmental bodies or agencies having jurisdiction thereof,
no portion of the Property lies within a flood hazard area, flood plain or
wetland; and there are no outstanding notices of any violations issued by
governmental authority having jurisdiction over the Property.
(19) To the best of English Creek's knowledge, no
Hazardous Substances (defined below) and no Hazardous Wastes (defined below)
are present on the Property including, without limitation, asbestos,
flammable substances, explosives, radioactive materials, hazardous wastes,
toxic substances, pollutants, pollution, contaminant, polychlorinated
byphenyls ("PCBs"), urea formaldehyde foam insulation, radon, corrosive,
irritant, biologically infectious materials, petroleum product, garbage,
refuse, sludge, hazardous or waste materials, and there has been no use of
the Property that may, under any federal, state or local environmental
statute, ordinance or regulation, require, at any time, any closure or
cessation of the use or occupancy of the Property and/or impose, at any time,
upon the owner of the Property any clean-up or other monetary obligation.
English Creek hereby indemnifies and holds
16
the Partnership harmless of, from and against any and all liability, loss or
damage suffered or incurred as a result of a claim, demand, cost or judgment
in favor of a third party, including, without limitation, any governmental
authority, arising from the deposit, storage, disposal, burial, dumping,
injecting, spilling, leaking, or other placement or release in or on the
Property of Hazardous Substances or Wastes during English Creek's period of
ownership. To the best of English Creek's knowledge, neither the Property
nor any portion thereof, have been identified on the federal CERLIS, the
National Priorities List (40 C.F.R. Part 300, App. B) or any state or local
list of potential hazardous waste disposal sites or as an industrial
establishment. English Creek has conducted a complete and thorough inspection
and test of the underground storage tanks located on the Property, if any,
and English Creek has confirmed that, to the best of its knowledge, the
results thereof show compliance with all requirements of the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Sections 6901 et seq. and
all other applicable federal, state and local laws, and English Creek has
taken all other necessary and appropriate action to comply fully therewith.
(20) To the best of English Creek's knowledge, all
adequate utilities, useable public sanitary and storm sewers, public water
facilities, electric facilities and, if any, gas facilities (collectively,
the "Utilities"), are installed in, and are duly connected to, the Real
Property, the sanitary sewer system has been dedicated to and accepted by the
Municipal Utilities Authority, and can be used without charge except the
normal and usual metered utility charges and water and sewer charges. All
Utilities required for the operation of the Property either enter the
Property through adjoining public streets or, if they pass through adjoining
public land, do so in accordance with valid public easements or private
easements which will inure to the benefit of the Partnership at no cost to
the owner of the Property. All of said Utilities are installed and operating
and all installation, connection and "tap-in" charges have been paid for in
full.
(21) No work has been performed or is in progress
at, and no materials have been furnished to the Property which, though not
presently the subject of, might give rise to construction, mechanic's,
materialmen's, municipal or other liens against the Property or any portion
thereof, except that for which full and complete releases have been obtained.
If any lien for any such work is filed before or after Closing, English Creek
shall promptly discharge the same.
(22) To the best of English Creek's knowledge, none
of the artwork being a part of the Personal Property was prepared on a "work
for hire" basis and none of the artwork was commissioned after 1991.
(23) To the best of English Creek's knowledge,
all applicable charges, fees and assessments (including condominium fees, to
the extent applicable) and any and all other sums due under declarations,
cross-easements and like agreements to which the Property or any portion
thereof may be subject, have been paid, and no special assessments thereunder
are pending, there is no constituted Board of Directors for the Property or
the development and all consents and approvals required to be obtained under
any such declarations, cross-easements and like agreements have been obtained
pursuant to the requirements of such
17
documentation and English Creek shall pay for all 1997 retension basin
charges due to the adjacent Shopping Center under that certain Declaration
dated ________________, 19__.
(24) To the best of English Creek's knowledge,
all debts, liabilities, and obligations of English Creek arising out of the
construction, ownership, and operation of the Property including, but not
limited to, construction costs, salaries, taxes, accounts payable and the
like, have been paid as they became due and payable and shall continue to be
so paid from the date hereof until the Closing Date.
(b) Each of English Creek, RRS, RP and Xxxxxxx, on its own
behalf, hereby represents and warrants as follows, all of which shall be true
and correct on, and as of, the Effective Date:
(1) That it has received a copy of the Trust's
Annual Report on Form 10-K, as amended, for the fiscal year ended December
31, 1996, the Trust's Quarterly Reports on Form 10-Q, as amended, for the
fiscal quarters ended March 31, 1997, June 30, 1997 and September 30, 1997,
and all Current Reports on Form 8-K filed by the Trust during fiscal 1997,
the Trust's proxy statement for its annual meeting of shareholders held on
May 12, 1997 and a copy of the Partnership Agreement;
(2) That the Units and the Underlying Shares
(collectively, the "Securities"), are being acquired for its own account
without a view to public distribution or resale and that it has no contract,
undertaking, agreement or arrangement to sell or otherwise transfer or
dispose of any Securities or any portion thereof to any other person (other
than from English Creek to the English Creek Limited Partners);
(3) That it understands that the Securities have not
been registered under the Securities Act or the securities laws of any state,
and, as a result thereof, the Securities are "restricted securities" as
defined in Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"), and are subject to substantial restrictions on transfer;
(4) That it understands that the certificates
evidencing the Securities shall bear a legend indicating that such Securities
have not been registered under the Securities Act or any applicable state
securities laws and the transferability thereof is subject to compliance with
the Securities Act and applicable state securities laws;
(5) That it will not sell or otherwise transfer or
dispose of any Securities or any portion thereof unless the Securities are
registered under the Securities Act and any applicable state securities laws
or it obtains an opinion of counsel which is satisfactory to the Partnership
or the Trust, as appropriate, that the Securities may be sold in reliance on
an exemption from such registration requirements, and that the Securities and
certificates evidencing the same will bear a legend reflecting such
restrictions;
(6) That it understands that (i) except as expressly
set forth in the Registration Rights Agreement attached hereto as Exhibit
"K", neither the Partnership nor the Trust has any obligation or intention to
register the Securities for resale under
18
any federal or state securities laws and (ii) it therefore may be precluded
from selling or otherwise transferring or disposing of any Securities or any
portion thereof for an indefinite period of time or at any particular time;
(7) That in determining to acquire the Securities,
it has relied solely upon its independent investigation, including the advice
of its legal counsel and accountants or other financial and tax advisers or
English Creek representatives and has, during the course of discussions
concerning the acquisition of the Securities, been offered the opportunity to
ask such questions and inspect such documents concerning the Partnership and
the Trust and their respective businesses and affairs as it has requested so
as to more fully understand the nature of the investment and to verify the
accuracy of the information supplied;
(8) THAT IT UNDERSTANDS THAT THE ACQUISITION OF THE
SECURITIES INVOLVES A HIGH DEGREE OF RISK, and that it can bear the economic
risk of the acquisition of the Securities, including the total loss of its
investment;
(9) That (i) it has adequate means of providing for
its current needs and financial contingencies, (ii) it has no need for
liquidity in this investment, (iii) it has no debts or other obligations, and
cannot reasonably foresee any other circumstances, that are likely in the
future to require it to dispose of the Securities, (iv) all its investments
in and commitments to non-liquid investments are, and after its acquisition
of the Securities will be, reasonable in relation to its net worth and
current needs, and (v) it was not formed for the specific purpose of making
an investment in the Securities;
(10) That it understands that no federal or state
agency has approved or disapproved the Securities, passed upon or endorsed
the merits of the offering of the Securities hereunder, or made any finding
or determination as to the fairness of the Securities for investment; and
(11) That it understands that the Securities are
being offered and distributed in reliance on specific exemptions from the
registration requirements of federal and state securities laws and that each
of the Partnership and the Trust is relying upon the truth and accuracy of
the representations, warranties, agreements, acknowledgments and
understandings set forth herein in order to determine the applicability of
such exemption and the suitability of English Creek and the English Creek
Limited Partners to acquire the Securities. In this regard it understands
that Common Shares will only be issued upon the conversion or redemption of,
or otherwise pursuant to, the Units, if an exemption from the registration
requirements of the Securities Act is then available for such issuance;
(12) It is an accredited investor, as defined in Rule
501(a) of Regulation D adopted under the Securities Act.
(c) It is agreed and understood that the Partnership intends
to perform its own due diligence, investigation and analysis in connection
with the transaction contemplated by this Agreement. If and to the extent
that the Partnership determines prior to the Due Diligence
19
Termination Date that any or all of the representations and warranties made
in this Agreement by English Creek or the English Creek Limited Partners
shall be untrue as a result of such due diligence, investigation or analysis,
the Partnership shall not be entitled to rely on such representation(s) and
warranty(ies) contained in this Agreement and the same shall be deemed to
have been deleted from this Agreement as to such matters. Accordingly, in
the event that the Partnership has now or hereafter acquires prior to the Due
Diligence Termination Date actual knowledge that one or more of the
representations and warranties of English Creek or the English Creek Limited
Partners are not true, no such fact or circumstance known to the Partnership
shall be made the basis of a claim by the Partnership of a breach of
representation or warranty by English Creek or a Member, as the case may be.
(d) Notwithstanding anything to the contrary contained in this
Agreement, in the event any representation, agreement or undertaking made by
English Creek or the English Creek Limited Partners in this Agreement shall
prove to be false and the cost or expense incurred or likely to be incurred
by the Partnership as a result thereof shall not exceed $50,000 in the
aggregate, such misrepresentation, agreement or undertaking shall be deemed
"immaterial" and shall not give rise to any right of the Partnership to
terminate or refuse to close title under this Agreement or give rise to any
right of action for money damages or specific performance and the Partnership
hereby waives all its rights, claims and remedies relating thereto. The
Partnership's sole remedy in the event any representation, agreement or
undertaking of English Creek or the English Creek Limited Partners which is
discovered by the Partnership at or prior to the Closing herein shall prove
to be false and the cost or expense incurred or likely to be incurred by the
Partnership as a result thereof exceeds $50,000 shall be to terminate this
Agreement by written notice given at or prior to Closing, which notice shall
specify in detail the nature of the misrepresentation and identify in detail
the costs incurred or likely to be incurred by the Partnership, and thereupon
the Partnership shall receive a refund of the Deposit, and English Creek
shall reimburse the Partnership for the Partnership's Reasonable Costs and
Due Diligence Costs. To the extent the Partnership has actual knowledge that
any representation, agreement or undertaking is false at or prior to the
Closing, and does not or is not permitted to terminate this Agreement, the
Partnership hereby waives all of its rights, claims and remedies relating
thereto.
(e) The Partnership and the Trust hereby represent and warrant
as follows, all of which shall be true and correct at, and as of, the
Effective Date:
(1) The Partnership is a limited partnership duly formed
and validly existing under the laws of the State of Delaware, and is in good
standing with the State of Delaware. The Trust is a real estate investment
trust duly formed and validly existing under the laws of the State of
Maryland, and is in good standing with the State Department of Assessments
and Taxation of Maryland.
(2) Subject to Paragraph 9(e)(5), below, the Partnership
and the Trust have all necessary power and authority to enter into this
Agreement, to perform their obligations hereunder, and to consummate the
transactions contemplated hereby, without the consent or authorization of, or
notice to, any third party, except those third parties to whom such consents
or authorizations have been or will be obtained, or to whom notices have been
or will be given, prior to the Closing. This Agreement constitutes, and the
other documents and
20
instruments to be delivered by the Partnership and the Trust pursuant hereto
when delivered will constitute, the legal, valid and binding obligations of
the Partnership and the Trust, enforceable against the Partnership and the
Trust in accordance with their respective terms.
(3) Neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will (a) violate any
provision of any organizational document of the Partnership or the Trust, or
(b) constitute a violation of or be in conflict with or constitute a default
under any term or provision of any material agreement, instrument or lease to
which the Partnership or the Trust is a party.
(4) There is no litigation, proceeding or action pending,
or, to the best of the Partnership's or the Trust's knowledge, threatened
against or relating to the Partnership or the Trust which might materially
and adversely affect the ability of the Partnership or the Trust to
consummate the transactions contemplated hereby or which questions the
validity of this Agreement or any action taken or to be taken by the
Partnership or the Trust pursuant hereto.
(5) The execution and delivery of this Agreement shall
have been approved by the Board of Trustees of the Trust on or prior to the
Due Diligence Termination Date and no further action shall thereupon be
required on the part of the Partnership or the Trust to consummate the
transaction contemplated hereby. The signatories for the Partnership and the
Trust are authorized and empowered to bind the Partnership and the Trust to
this Agreement and all transactions contemplated herein.
(6) Except as otherwise set forth in Paragraph 9(e)(5)
above, in connection with the listing application with the NYSE pursuant to
Paragraph 17(d) and the registration of the Underlying Shares pursuant to the
Registration Rights Agreement attached hereto as Exhibit "K" and as required
by any applicable state securities or "blue sky" laws, no consent, approval
or authorization of, or declaration, filing or registration with, any
governmental agency is required in connection with the execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereunder by the Trust or the Partnership.
(7) The Partnership has sufficient funds available to
consummate the transactions contemplated by this Agreement, without the
necessity of third-party financing other than other than the Partnership's
existing revolving credit facility administered by Nationsbank, N.A. The
Partnership and the Trust acknowledge that their obligations hereunder are
not conditioned upon any third party financing or capital infusion by another
party.
(8) The Securities, upon issuance, if any, will be duly
and validly issued, fully-paid and non-assessable.
(9) The information contained in the Trust's Annual
Report on Form 10-K for the year ended December 31, 1996 was prepared in all
material respects in accordance with and complied in all material respects
with the requirements of the rules of the Securities and Exchange Commission,
and did not at the time that it was filed contain any untrue
21
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(f) As to any representation or warranty made in this
Agreement which is qualified as being to the best knowledge of the
Partnership or English Creek, it is agreed and understood that such party
shall be under no obligation to conduct any independent investigation or
inquiry regarding the matters covered by such representation and warranty.
The Partnership or English Creek will be deemed to have knowledge of a
particular matter only if the facts and circumstances thereof are actually
known to such party making such representation or warranty.
(g) All of the representations and warranties set forth in
this Paragraph 9 shall be deemed renewed by English Creek, the English Creek
Limited Partners and the Partnership on the Closing Date and shall, as a
condition to each party's obligation to close hereunder, be recertified by
each party as being true and correct in all material respects as of the
Closing Date as if made at such time (it being understood that specific,
numbered representations and warranties that speak of a specified date shall
only continue to speak as of the date so specified), and all such
representations shall survive for a period of one year from the Closing.
10. Access To The Property.
(a) The Partnership and/or its agents and representatives,
during normal business hours and after reasonable advance notice to English
Creek, may enter upon any of the Real Property from time to time prior to the
Closing Date, accompanied by an agent of English Creek, for purposes of
conducting such inspections, investigations and/or studies as the Partnership
deems necessary, including, without limitation, financial reviews, physical
inspections, lease reviews and environmental reviews and testing, which
activities may include test borings and soil samplings ("the Partnership's
Due Diligence Activities"). The Partnership's access to the Real Property
shall be subject to the rights of the Tenants of any of the Real Property,
who shall not be unreasonably disturbed during any such inspection by the
Partnership. The Partnership shall not engage in any activity in or about
the Real Property which directly or indirectly violates the terms of any
governmental or quasi-governmental statute, rule, regulation, order or
practice. The Partnership shall not make any physical changes to any of the
Real Property, except for test borings and soil samplings which shall be
performed only by licensed engineers reasonably acceptable to English Creek
and only after three (3) business days' prior notice to English Creek. The
Partnership may contact any governmental or quasi-governmental authorities
concerning the Property without the prior written approval of English Creek.
English Creek shall have the opportunity to observe any and all action taken
by the Partnership or its representatives, consultants, agents, etc. pursuant
to this Paragraph 10. All information set forth in any document which
English Creek has granted to the Partnership the express right to review, if
any, shall be held in strict confidence until Closing and thereafter in the
event Closing does not occur. If the Partnership violates its obligations
under this Paragraph 10(a) or in the event of any physical damage to any of
the Real Property or any Personal Property resulting, directly or indirectly,
from the exercise by the Partnership of its rights under this Paragraph
10(a), the Partnership hereby agrees to restore the Real Property and
Personal Property to their respective
22
conditions prior to incurring such damage. The Partnership hereby agrees to
indemnify, defend and hold harmless English Creek from and against all
physical damage to any of the Real Property and Personal Property, personal
injury and/or any other claims or liability which may occur as a result of
the Partnership's (or the Partnership's agents, employees, invitees or
licensees) entry or activities upon any of the Real Property. The provisions
of this Paragraph 10(a) shall survive Closing or other termination of this
Agreement.
(b) The Partnership, or any of the Partnership's consultants
performing physical tests on the Real Property shall maintain public
liability insurance policies (naming English Creek as an additional named
insured with respect to any liability occurring on the Real Property), with
combined single limit coverage of at least $1,000,000, insuring against
claims arising as a result of the inspections of the Partnership, its agents,
employees or such contractors at any of the Real Property. A certificate of
insurance evidencing the foregoing coverage shall be delivered to English
Creek prior to the Partnership's or any of the Partnership's consultants'
entry on to any of the Real Property.
(c) In the event Closing does not occur or this Agreement is
terminated, the Partnership shall promptly return to English Creek any
documents obtained from English Creek or English Creek's agents and deliver
to English Creek, without charge, copies of all written test results,
studies, reports and similar materials obtained by or on behalf of the
Partnership relating to any of the Real Property.
11. Due Diligence Period; Additional Provisions.
(a) During the period commencing on the Effective Date and
ending at 5:00 p.m. E.S.T. on the Due Diligence Termination Date, the
Partnership may, subject to the provisions set forth in Paragraph 10 above,
review all plans and specifications, condition of title, agreements relating
to and the availability of utilities, environmental conditions, the physical
condition of the existing improvements, compliance by the Property with
zoning, licensing and all other governmental requirements, Leases for any of
the Real Property, operating statements pertaining to the Property and all
other aspects and conditions of the Property which the Partnership may decide
to review (collectively, "the Partnership's Due Diligence Activities"), all
as the Partnership shall deem appropriate). In connection with the
Partnership's Due Diligence Activities, English Creek has delivered or will
deliver to the Partnership various documents, reports and materials
(collectively, the "English Creek Due Diligence Materials"). THE PARTNERSHIP
UNDERSTANDS AND HEREBY ACKNOWLEDGES AND AGREES THAT THE ENGLISH CREEK DUE
DILIGENCE MATERIALS ARE BEING DELIVERED TO THE PARTNERSHIP WITHOUT ANY
REPRESENTATION OR WARRANTY WHATSOEVER BY ENGLISH CREEK OR BY THE PREPARER OF
SUCH ENGLISH CREEK DUE DILIGENCE MATERIALS, WITH THE SOLE EXCEPTION OF ANY
REPRESENTATION OR WARRANTY AS TO THE CORRECTNESS, ACCURACY OR COMPLETENESS
THEREOF WHICH IS EXPRESSLY SET FORTH IN THIS AGREEMENT.
(b) If, as a result of the Partnership's Due Diligence
Activities or otherwise, the Partnership shall conclude, for any reason or
for no reason, that it does not wish to proceed with the transaction
contemplated by this Agreement, it may terminate this Agreement
23
by written notice delivered to and received by English Creek on or before
5:00 P.M. E.S.T. on the Due Diligence Termination Date (as to which date time
shall be of the essence), with a simultaneous copy thereof to the Escrow
Agent. In the event of such timely termination of this Agreement by the
Partnership, the Escrow Agent shall make the delivery of funds contemplated
under Paragraph 1 of the Escrow Terms, and this Agreement shall thereupon be
null and void and of no further force or effect, except as to those matters
which expressly survive such termination.
(c) English Creek shall obtain, prior to the Closing the
Non-Applicability Letter from the NJDEP or its successor. In furtherance of
the foregoing, English Creek shall apply for the Non-Applicability Letter
promptly after the Effective Date, and shall pursue the same diligently and
in good faith.
(d) The Partnership agrees to prepare and forward to English
Creek, at the Partnership's sole cost and expense, certificates (the
"Estoppel Certificates") for execution by the Tenants which shall, at the
Partnership's election, either (i) be in such form or contain such
information as the Tenant from whom request is made is obligated under its
Lease to execute and deliver for execution by the Tenants (the "Required
Form"), or (ii) in the form annexed hereto as Exhibit "R". English Creek
agrees to deliver the Estoppel Certificates to the Tenants promptly after the
Partnership's written election as to the form to be used (which election
shall be made not later than five (5) days after the date hereof), and to use
all reasonable and diligent efforts to obtain executed copies of same from
such Tenants prior to the Closing. It shall be a condition to the
Partnership's obligations hereunder that, at or prior to Closing, Estoppel
Certificates shall have been obtained from at least 75% of the Tenants at
each Property, including those identified on Exhibit "S" annexed hereto and
made a part hereof (the "Identified Tenants"), BUT ONLY IF THE INITIAL
REQUEST MADE OF SUCH TENANT WAS FOR AN ESTOPPEL CERTIFICATE IN THE REQUIRED
FORM, provided, however, if an estoppel in the Required Form is not obtained
from an Identified Tenant, English Creek may, in lieu thereof, deliver its
certificate containing the information set forth on the Required Form, which
certificate shall serve as English Creek's representation as to the facts
stated therein, which representation shall survive for a period of six (6)
months following the Closing. In no event shall the Partnership's
obligations under this Agreement be conditioned, in whole or in part, upon
the delivery of Estoppel Certificates from any Tenant in other than the
Required Form.
12. Condemnation. English Creek covenants and warrants that
English Creek has not received any written notice of any condemnation
proceeding or other proceeding in the nature of eminent domain in connection
with the Real Property, and has no actual knowledge of any threatened
condemnation. As used herein, a "material taking" shall mean a taking of
either an entire Real Property, more than twenty percent (20%) of a Building
or more than 10% of the parking area of a Real Property. If, prior to the
Closing, any such proceeding affecting a material portion of any of the Real
Property is commenced, English Creek agrees promptly to notify the
Partnership thereof. In the event of a material taking of one or more Real
Property or commencement of proceedings in connection with such a taking, the
Partnership may, at its sole option exercised by delivery of written notice
thereof within ten (10) days after receipt of such written notice thereof,
(x) proceed to Closing as provided in this Paragraph 12 without an abatement
of the Consideration and at Closing English Creek shall assign to the
Partnership, without recourse, all condemnation proceeds paid or payable with
respect thereto; or (y)
24
terminate this Agreement with respect to the Property as to which a material
taking has occurred, whereupon this Agreement shall terminate with respect to
such Real Property and this Agreement shall continue in full force and effect
with respect to all of the remaining Real Property, and at Closing, the
Partnership shall pay to English Creek the aggregate of the Allocated Prices
for the remaining Real Property. Provided the Partnership shall have waived
its right to terminate this Agreement with respect to the Real Property so
taken, as provided above, English Creek shall not, from and after the Due
Diligence Termination Date, settle or adjust any claims relating to a
condemnation without the Partnership's prior approval, which shall not be
unreasonably withheld or delayed.
13. Damage By Fire Or Other Casualty.
(a) English Creek shall promptly notify the Partnership of
damage to the Improvements occurring by reason of casualty during the period
between the Effective Date and the Closing Date. English Creek shall timely
notify any insurance companies with respect to any damage and shall promptly
submit claims for such damage. Provided the Partnership shall have waived
its right to terminate this Agreement with respect to the Real Property so
damaged, as provided below, English Creek shall not, from and after the Due
Diligence Termination Date, settle or adjust any claims relating to a
casualty without the Partnership's prior approval, which shall not be
unreasonably withheld or delayed.
(b) If (i) any portion of the Improvements is damaged by fire
or casualty after the Execution Date and the Improvements so damaged are not
repaired or restored on or before Closing to substantially the condition
existing prior to the damage, and (ii) at the time of Closing, the estimated
cost of repairs by reason of such fire or casualty to the Improvements, as
determined by an independent adjuster is, with respect to any of the Real
Property so damaged, an amount equal to or less than ten percent (10%) of the
Consideration allocated for such Real Property, there shall be no abatement
or adjustment in the Consideration and, provided the loss or damage is a
covered loss under English Creek's insurance policy, the Partnership shall be
required to purchase all of the Real Property in accordance with the terms of
this Agreement and, at Closing, English Creek shall assign to the
Partnership, without recourse, all insurance claims and proceeds with respect
thereto (less sums theretofore expended, if any, by English Creek for
emergency repairs or barricades) and English Creek shall credit the
Partnership at Closing with the amount of any applicable deductible. English
Creek shall have no liability or obligation with respect to the condition of
any of the Real Property as a result of any such fire or casualty. If the
repair to, or the restoration of, the Improvements so damaged has not been
completed as aforesaid and, at the time of Closing, the estimated cost of
such repair or restoration, as determined by such independent adjuster, for
any of the Real Property is an amount which is greater than ten percent
25
(10%) of the Consideration allocated for the applicable Real Property, the
Partnership may, at its sole option, (x) proceed to Closing as provided in
this Paragraph 13(b) without an abatement of the Consideration and at Closing
English Creek shall assign to the Partnership, without recourse, all
insurance claims and proceeds with respect thereto (less sums theretofore
expended, if any, by English Creek for emergency repairs or barricades) and
English Creek shall credit the Partnership at Closing with the amount of any
applicable deductible; or (y) terminate this Agreement with respect to the
Property which have suffered damage to the Improvements by fire or other
casualty in an amount which exceeds ten percent (10%) of the Consideration
allocated for such Real Property(s) whereupon this Agreement shall terminate
with respect to such damaged Real Property(s) and this Agreement shall
continue in full force and effect with respect to all of the remaining Real
Property, and at Closing, the Partnership shall pay to English Creek the
aggregate of the Considerations for the remaining Real Property. The
Partnership shall assign all of its right, title and interest in and to any
and all insurance policies and insurance proceeds relating to such of the
Real Property for which this Agreement has been terminated.
14. Default.
(a) If the Partnership shall default in its obligations to pay
the Consideration and complete Closing in accordance with the terms of this
Agreement, then, as English Creek's sole and exclusive remedy therefor,
English Creek shall be entitled to retain the Deposit as liquidated and
agreed upon damages for the losses and injuries which English Creek shall
have sustained and suffered as a result of the Partnership's default, and
thereupon this Agreement and the Partnership's obligations hereunder shall be
terminated except as expressly provided in this Agreement. It is agreed that
the provisions of this Paragraph 14(a) for liquidated and agreed upon damages
are a bona fide provision for such and are not a penalty, the parties
understanding that by reason of the withdrawal of the Real Property from sale
to the general public at a time when other parties would be interested in
purchasing such Real Property, that English Creek shall have sustained
damages which will be substantial, but will not be capable of determination
with mathematical precision. Therefore, this provision for liquidated and
agreed upon damages has been incorporated as part of this Agreement as a
provision beneficial to both parties.
(b) If English Creek shall default in its obligation to
deliver any of the Deeds or other items described in Paragraph 5 hereof, upon
the Partnership's (i) tender of the full Consideration and (ii) compliance
with all of the material terms and conditions of this Agreement, the
Partnership shall have the sole option of terminating this Agreement and
receiving the return of the Deposit, together with payment by English Creek
of (A) the Partnership's Reasonable Costs, and (B) the Partnership's actual,
documented out-of-pocket costs and expenses incurred in connection with its
Due Diligence Activity, not to exceed Fifteen Thousand Dollars ($15,000)
("Due Diligence Costs") for the Property and the Other Properties or (Y) to
seek specific performance of English Creek's obligation to convey the Real
Property in accordance with this Agreement. If the Partnership elects to
terminate this Agreement, upon payment of the sums described above, English
Creek shall be released and relieved of any further liability and this
Agreement shall thereupon be null and void. Except as expressly set forth
above, the Partnership hereby waives any right which the Partnership may have
to any lis pendens or other lien or encumbrance against any of the Real
Property, equitable relief, consequential or punitive damages, loss of
profits, costs related to in-house or other overhead allocations, and
damages. The remedies set forth herein shall be the Partnership's sole
remedies pursuant to this Agreement, or otherwise at law or in equity shall
become null and void if Closing occurs (except as to obligations hereunder
which by their terms expressly survive Closing), and shall not apply to a
defect in title, the remedies for which are set forth in Paragraph 5(b)
hereof, or to any inability on the part of English Creek to perform its
obligations under this Agreement.
26
15. Operations Prior To Closing.
(a) English Creek agrees to operate the Property between the
Effective Date and the Closing Date in the same general manner as English
Creek has operated the Property during the immediately preceding six (6)
month period, paying all costs and expenses as they come due, and in any
event prior to Closing, and maintaining all insurance coverage currently in
force.
(b) English Creek shall comply with all of the obligations of
landlord under the Leases and all other agreements and contractual
arrangements affecting the Real Property by which English Creek is bound or
to which the Real Property, or any of them, are subject, and which will be
binding upon the Partnership or a lien upon such Real Property, after the
Closing.
(c) English Creek shall notify the Partnership promptly of
English Creek's receipt of any notice from any party alleging that English
Creek is in default of its obligations under any of the Leases or any Permit
or agreement affecting the Real Property, or any portion or portions thereof.
(d) No contract for or on behalf of or affecting the Real
Property shall be negotiated or entered into which cannot be terminated by
English Creek upon the Closing without the payment of a specific charge,
cost, penalty or premium for such termination.
(e) Except with the prior written consent of the Partnership,
which the Partnership agrees it shall not unreasonably withhold, condition or
delay, English Creek shall not enter into any new leases for any portion of
the Real Property. Any new lease shall be on the Partnership's customary
form (which may vary to reflect customary negotiated revisions thereto), or
such other form which is reasonably acceptable to the Partnership. Further,
except with the prior written consent of the Partnership, which the
Partnership agrees it shall not unreasonably withhold, condition or delay, or
as set forth above, English Creek shall not amend, extend (except where
required under the terms of the Lease in question), terminate (except by
reason of a tenant's default), accept surrender of, or permit any assignments
or subleases of, any of the Leases (except as may be required under such
Lease), nor accept any rental more than one (1) month in advance (exclusive
of any security deposit).
(f) English Creek shall not make or permit to be made any
capital improvements or additions to the Real Property, or any portion
thereof, without the prior written consent of the Partnership, except those
made by English Creek pursuant to the express requirements of this Agreement,
those made by tenants pursuant to the right to do so under their Leases, or
by English Creek if required by applicable law or ordinance, or as required
under any Lease.
(g) English Creek shall timely xxxx all tenants for all rent
billable under Leases, and use commercially reasonable efforts to collect any
rent in arrears.
27
(h) English Creek shall notify the Partnership of any tax
assessment disputes (pending or threatened) prior to Closing, and from and
after the Due Diligence Expiration Date, English Creek not agree to any
changes in the real estate tax assessment, nor settle, withdraw or otherwise
compromise any pending claims with respect to tax assessments relating to the
current or any subsequent year, without the Partnership's prior written
consent, which shall not be unreasonably withheld, delayed or conditioned.
If any proceedings shall result in any reduction of assessment and/or tax for
the tax year in which the Closing occurs, it is agreed that the amount of tax
savings or refund for such tax year, less the reasonable fees and
disbursements in connection with such proceedings, shall be apportioned
between the parties as of the date real estate taxes are apportioned under
this Agreement. All refunds relating to any tax year prior to the Closing
shall be the sole property of English Creek, and all refunds relating to any
year subsequent to the year in which Closing occurs shall be the sole
property of the Partnership. Each party agrees to promptly remit to the
other any refund received by it which is the property of the other.
(i) English Creek shall notify the Partnership promptly of the
occurrence of any of the following:
(i) Receipt of notice from any governmental or
quasi-governmental agency or authority or insurance underwriter relating to
the condition, use or occupancy of the Real Property, or any portion thereof;
(ii) Receipt of any notice of default from any tenant or
from the holder of any lien or security interest in or encumbering the Real
Property, or any portion thereof;
(iii) Notice of any actual or threatened litigation
against English Creek or affecting or relating to the Real Property, or any
portion thereof which may materially and adversely affect the Real Property
or English Creek's ability to consummate the transactions contemplated by
this Agreement; or
(iv) Vacancy of any demised Property by a tenant, other
than in accordance with a scheduled lease termination.
16. PROPERTY CONVEYED "AS-IS, WHERE IS". IT IS UNDERSTOOD AND
AGREED THAT, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT,
ENGLISH CREEK IS NOT MAKING AND SPECIFICALLY DISCLAIMS ANY WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE ECONOMICAL, FUNCTIONAL, ENVIRONMENTAL OR PHYSICAL CONDITION OF ALL OF THE
PROPERTY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OR REPRESENTATIONS AS TO
MATTERS OF TITLE, ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL
CONDITIONS, AVAILABILITY OF ACCESS, INGRESS OR EGRESS, OPERATING HISTORY OR
PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, GOVERNMENTAL REGULATIONS OR
ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE ECONOMICAL,
FUNCTIONAL, ENVIRONMENTAL OR PHYSICAL CONDITION OF THE PROPERTY
28
INCLUDING, WITHOUT LIMITATION: (I) THE VALUE, CONDITION, MERCHANTABILITY,
MARKETABILITY, PROFITABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR USE OR
PURPOSE OF ANY OF THE PROPERTY, (II) THE MANNER OR QUALITY OF THE
CONSTRUCTION OR MATERIALS INCORPORATED INTO ANY OF THE PROPERTY AND (III) THE
MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF ANY OF THE PROPERTY.
THE PARTNERSHIP AGREES THAT WITH RESPECT TO THE PROPERTY, THE PARTNERSHIP HAS
NOT RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY
REPRESENTATION OR WARRANTY OF ENGLISH CREEK OR ANY AGENT OF ENGLISH CREEK NOT
EXPRESSLY SET FORTH IN THIS AGREEMENT. THE PARTNERSHIP REPRESENTS THAT IT IS
A KNOWLEDGEABLE THE PARTNERSHIP OF REAL ESTATE AND THAT IT IS RELYING SOLELY
ON ITS OWN EXPERTISE AND THAT OF THE PARTNERSHIP'S CONSULTANTS, AND THE
REPRESENTATIONS AND WARRANTIES OF ENGLISH CREEK CONTAINED IN THIS AGREEMENT,
SUBJECT, HOWEVER, TO THE LIMITATIONS CONTAINED HEREIN UPON SUCH
REPRESENTATIONS AND WARRANTIES, AND THAT ENGLISH CREEK HAS OR SHALL HAVE
AFFORDED THE PARTNERSHIP WITH A FULL AND COMPLETE OPPORTUNITY TO MAKE ITS OWN
INDEPENDENT INVESTIGATION OF THE PROPERTY AND ALL MATTERS PERTAINING THERETO
INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS
THEREOF AND, UPON CLOSING, SHALL ASSUME THE RISK THAT ADVERSE MATTERS,
INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS,
MAY NOT HAVE BEEN REVEALED BY THE PARTNERSHIP'S INSPECTIONS AND
INVESTIGATIONS. THE PARTNERSHIP ACKNOWLEDGES AND AGREES THAT, UPON CLOSING,
ENGLISH CREEK SHALL SELL AND CONVEY TO THE PARTNERSHIP AND THE PARTNERSHIP
SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS," WITH ALL FAULTS, AND THERE ARE
NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS (EXCEPT AS HEREIN
SPECIFICALLY PROVIDED), COLLATERAL TO OR AFFECTING ANY OF THE PROPERTY BY
ENGLISH CREEK, ANY AGENT OF ENGLISH CREEK OR ANY THIRD PARTY. THE
PARTNERSHIP EXPRESSLY AGREES THAT THE TERMS AND CONDITIONS OF THIS PARAGRAPH
16 SHALL EXPRESSLY SURVIVE THE CLOSING AND NOT MERGE THEREIN AND ENGLISH
CREEK IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN
STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO ANY OF THE PROPERTY
FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER
PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO IN THIS
AGREEMENT.
17. Conditions Precedent to Closing.
The obligations of the Partnership hereunder are subject to the
fulfillment of the following conditions prior to or on the Closing Date (any
one of which may be waived in whole or in part by the Partnership at or prior
to the Closing) and in the event any of the conditions are not complied with,
the Partnership may terminate this Agreement by notifying the English Creek
and Escrow Agent and thereupon shall be returned the Deposit and thereafter
this Agreement shall be null and void:
29
(a) Correctness of Warranties and Representations. The
warranties and representations made by English Creek and the English Creek
Limited Partners in this Agreement shall be true and correct on the Closing
Date as though such representations and warranties were made on the Closing
Date (except for changes in the Leases permitted under the terms of this
Agreement).
(b) Compliance with Terms and Conditions. English Creek shall
have performed and complied with all of the terms and conditions required by
this Agreement, including, without limitation, the delivery of all required
documents pursuant to Paragraph 6(a), to be performed and complied with by it
prior to or on the Closing Date.
(c) The Partnership's Satisfaction with Inspection. The
Partnership shall have notified English Creek of the Partnership's
satisfaction with the inspection performed under Paragraph 11 of this
Agreement, or shall fail to notify English Creek on or before the Due
Diligence Expiration Date, of the Partnership's dissatisfaction with the
results of such review.
(d) Exchange Approval. On or prior to the Closing Date, the
Underlying Shares shall have been approved for listing with the NYSE, upon
official notice of issuance.
(e) Shareholder Approval. The Partnership shall have received
confirmation that the issuance of the Securities will not require approval of
the Trust's security holders under the rules of the NYSE.
(f) 9.8% Limitation. The number of Underlying Shares shall
not exceed that number that is equal to 9.8% of the number of outstanding
Common Shares of the Trust.
(g) Issuance of the Units. The issuance of the Units, if any,
shall be (i) exempt from the registration requirements of the Securities Act
and (ii) either exempt from, or registered pursuant to, any applicable state
securities or "blue sky" registration requirements.
18. Brokers.
(a) English Creek and the Partnership each represent to the
other that neither English Creek nor the Partnership has dealt with any real
estate broker, dealer or salesman in connection with the subject transaction.
(b) English Creek and the Partnership shall and hereby each
agree to indemnify, defend, and hold harmless the other from and against any
loss, damage, or claim resulting from a breach of the representations of
English Creek and the Partnership set forth in Paragraph 18(a) hereof.
(c) The provisions of this Paragraph 18 shall survive Closing
hereunder, or any other termination of this Agreement.
30
19. Notices. All notices, requests and other communications
required or permitted to be given under this Agreement shall be in writing
and shall be delivered (i) in person, or (ii) by certified mail, return
receipt requested, or (iii) by recognized overnight delivery service
providing positive tracking of items (for example, Federal Express), or (iv)
by confirmed telecopier, in each case addressed as follows (or at such other
address of which English Creek or the Partnership shall have given notice as
herein provided):
If to the Partnership, addressed to:
Brandywine Operating Partnership, L.P.
Newtown Square Corporate Campus
00 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx,
President and Chief Executive Officer
with a copy in each instance to:
Xxxx X. Xxxxxxxx, General Counsel
Brandywine Operating Partnership, L.P.
Newtown Square Corporate Campus
00 Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxxx, XX 00000
If to English Creek or Member, addressed to:
English Creek Partners #2,
Limited Partnership
00 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: X. Xxxxxx Xxxxxxxxxxx
with a copy in each instance to:
Xxxxx Xxxxx, Esquire
00 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
31
If to Escrow Agent, addressed to:
M. Xxxxxx Xxxxxxx, Esquire
Commonwealth Land Title Insurance Company
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
or to such-other address or addresses and to the attention of such other
person or persons as any of the parties may notify the other in accordance
with the provisions of this Agreement. All such notices, requests and other
communications shall be deemed to have been sufficiently given for all
purposes hereof only if given pursuant to the foregoing requirements as to
both manner and address, and only upon receipt (or refusal to accept
delivery) by the party to whom such notice is sent. Notices by the parties
may be given on their behalf by their respective attorneys.
20. Successors And Assigns. Except to a subsidiary or related
party, the Partnership may not assign this Agreement or any rights herein or
any portion hereof without the prior written consent of English Creek, which
may be withheld for any reason or for no reason, except that no such consent
shall be required to an assignment of this Agreement by the Partnership to
the Trust or a subsidiary of the Partnership. This Agreement shall apply to,
inure to the benefit of and be binding upon and enforceable against the
parties hereto and their respective permitted successors and assigns, to the
same extent as if specified at length throughout this Agreement.
21. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which
counterparts together shall constitute one and the same Agreement.
22. Time Of The Essence. Time is of the essence of each and every
provision in this Agreement. If any time period or date ends on a day or
time which is a weekend, legal holiday or bank holiday, such period shall be
extended to the same time on the next business day.
23. Judicial Interpretation. Should any provision of this
Agreement require judicial interpretation, it is agreed that the court
interpreting or construing the same shall not apply a presumption that the
terms hereof shall be more strictly construed against one party by reason of
the rule of construction that a document is to be construed more strictly
against the party who itself or through its agent prepared the same, it being
agreed that the agents of all parties have participated in the preparation of
this Agreement.
32
24. Captions And Recitals. The captions contained herein are not a
part of this Agreement and are included solely for the convenience of the
parties.
25. Entire Agreement. This Agreement and the Exhibits and
Schedules attached hereto contains the entire agreement between the parties
relating to the acquisition of the Property, all prior negotiations between
the parties are merged by this Agreement and there are no promises,
agreements, conditions, undertakings, warranties or representations, oral or
written, express or implied, between them other than as herein set forth. No
change or modification of this Agreement shall be valid unless the same is in
writing and signed by the parties hereto. No waiver of any of the provisions
of this Agreement, or any other agreement referred to herein, shall be valid
unless in writing and signed by the party against whom it is sought to be
enforced.
26. Governing Law; Venue.
(a) This Agreement and the rights and duties of the parties
hereto and the validity, construction, enforcement and interpretation of this
Agreement shall be governed by the laws of the State of New Jersey.
(b) With regard to any litigation arising out of or involving
this Agreement, each party hereto: (i) irrevocably submits to the
jurisdiction of the state and federal courts of the State of New Jersey and
agrees and consents to service of process being made upon it in any legal
proceeding arising out of or in connection herewith by service of process
provided by the law of the State of New Jersey; (ii) irrevocably waives, to
the fullest extent permitted by law, any objection which it now or hereafter
may have to the laying of venue of any litigation arising out of or in
connection with this Agreement brought in the State Courts of New Jersey or
the United States District Court for the District of New Jersey; (iii)
irrevocably waives any claims that any litigation brought in any such court
has been brought in an inconvenient forum; and (iv) irrevocably agrees that
any legal proceeding against any party hereto arising out of or in connection
with this Agreement shall be brought in either the State Courts of New Jersey
or the United States District Court for the District of New Jersey.
27. Confidentiality. Each of the parties to this Agreement
covenants that it shall not communicate the terms or any aspect of this
transaction prior to the Closing with any person or entity other than the
other parties to this Agreement, except for the Trust, and the Partnership's
agents, consultants, counsel and representatives in connection with the
Partnership's Due Diligence Activities and financing purposes, unless the
Trust is advised by its counsel that applicable securities laws and
regulations require. In addition, the Partnership covenants that if it
undertakes any investigation of the Property, it shall conduct such
investigation of the Property as described herein and with the degree of
confidentiality as the Partnership would apply with respect to its own
proprietary information. Notwithstanding the foregoing, at any time after
expiration of the Due Diligence Period, the Partnership may issue one or more
press releases (which shall not disclose financial terms), if necessary or
appropriate to comply with applicable securities laws and regulations.
33
28. Limitation Of Liability. No recourse shall be had for any
obligation of the Partnership of the Trust under this Agreement or under any
document executed in connection herewith or pursuant hereto, or for any claim
based thereon or otherwise in respect thereof, against any past, present or
future trustee, shareholder, partner, officer or employee of 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 English Creek and all parties claiming by, through or under
English Creek.
Except for breaches of the representations or warranties as stated
in Section 9 or 18 herein which shall be full recourse obligations to the
general partners of English Creek, no recourse shall be had for any
obligation of English Creek under this Agreement or under any document
executed in connection herewith or pursuant hereto, or for any claim based
thereon or otherwise in respect thereof, against any past, present or future
limited partner, general partner or employee of English Creek whether by
virtue of any statute or rule of law or by the enforcement of any assessment
or penalty or otherwise, all such liability being expressly waived and
released by the Partnership and all parties claiming by, through or under the
Partnership.
29. SEC Reporting Requirements. For the period of time commencing
on the date hereof and continuing through the first anniversary of the
Closing Date, English Creek shall, from time to time, upon reasonable advance
written notice from the Partnership, provide the Trust and its
representatives, with access to all financial and other information then in
English Creek's possession pertaining to the period of English Creek's
ownership and operation of the Real Property, which information is relevant
and reasonably necessary, in the opinion of the Trust's outside, third party
accountants (the "Accountants"), to enable the Trust and its Accountants to
prepare financial statements in compliance with any or all of (a) Rule 3-05
or 3-14 of Regulation S-X of the Securities and Exchange Commission (the
"Commission"), as applicable; (b) any other rule issued by the Commission and
applicable to the Trust; and (c) any registration statement, report or
disclosure statement filed with the Commission by, or on behalf of the Trust.
English Creek shall deliver to the Trust's accountants a representation
letter (the "Letter"), in the form annexed hereto as Exhibit "T", provided
that the Partnership (and any assignee or designee acquiring title to the
Real Property) shall indemnify and hold English Creek harmless from and
against any claim, damage, loss or liability including, without limitation,
legal fees incurred by English Creek in investigating, defending against or
settling any such matter and the amount of any such settlement to which
English Creek is at any time subjected, bonafide or not, by any person who is
not a party to this Agreement as a result of its delivery of the information
described in this Paragraph, or delivery of the Letter. The Partnership
acknowledges that English Creek is not making any representation or warranty
regarding such information as is delivered in accordance with the terms of
this Paragraph except to the extent set forth in the Letter or otherwise
expressly set forth in this Agreement.
30. Partial Invalidity. If any term, covenant or condition of this
Agreement, or the application thereof, to any person or circumstance shall be
invalid or unenforceable at any time or to any extent, then the remainder of
this Agreement, or the application of such term, covenant or condition to
persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby. Each term, covenant and
condition of this Agreement shall be valid and enforced to the fullest extent
permitted by law.
34
31. No Recordation. The Partnership shall not be entitled to
record this Agreement or a memorandum or other notice of this Agreement in
any public office. This Paragraph shall be deemed to be a specific directive
to the officials of such public office NOT to accept this Agreement or a
memorandum or other notice of this Agreement for recordation in any form
whatsoever. Any violation of the provisions of this Paragraph 32 shall
constitute an immediate default by the Partnership under this Agreement.
32. Tender. Formal tender of an executed deed and purchase money
is hereby waived by the Partnership.
33. Further Assurances. After the Closing, English Creek shall
execute, acknowledge and deliver, for no further consideration, all
assignments, transfers, deeds and other documents as the Partnership may
reasonably request to vest in the Partnership and perfect the Partnership's
right, title and interest in and to the Property.
34. Jury Trial Waiver. THE PARTNERSHIP AND ENGLISH CREEK HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE (TO THE EXTENT PERMITTED BY
APPLICABLE LAW) ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE
ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREE THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
35. No Offer. THE DELIVERY OF THIS AGREEMENT DOES NOT CONSTITUTE
AN OFFER AND THIS AGREEMENT SHALL NOT BE BINDING AND SHALL HAVE NO FORCE AND
EFFECT UNLESS AND UNTIL A FULLY EXECUTED COUNTERPART HEREOF HAS BEEN
DELIVERED TO EACH OF THE PARTIES. IT IS EXPRESSLY UNDERSTOOD THAT ENGLISH
CREEK HAS NO OBLIGATION TO EXECUTE THIS AGREEMENT.
36. Indemnification.
Without limitation of any other English Creek indemnity
obligations set forth herein, from and after the Closing Date, English Creek
shall indemnify, defend and save and hold harmless the Partnership and the
Trust, and their respective partners, trustees, directors, officers and
employees, of, from and against any and all loss, cost, expense, damage,
claim, and liability, including reasonable attorney's fees and court costs,
including, without limitation, attorney's fees and costs associated with the
enforcement of English Creek's indemnification obligations for all claims
brought within one year of such Closing (hereinafter collectively, "Losses")
which the Partnership or the Trust may suffer or incur, resulting from,
relating to, or arising in whole or in part, from or out of (i) any
misrepresentation or breach of a representation or warranty by English Creek
contained in this Agreement; (ii) any failure to fulfill any covenant or
agreement of English Creek contained in this Agreement; (iii) all litigation
set forth in this Agreement and on Exhibits hereto; (iv) any and all actions,
suits, investigations, proceedings, demands, assessments, audits, judgments,
and/or claims arising out of or relating to any of the foregoing.
35
Promptly after receipt by the Partnership or the Trust of
written notice of the commencement of any suit, audit, demand, judgment,
action, investigation or proceeding (a "Third Party Action") or promptly
after the Partnership or the Trust incurs a Loss or has knowledge of the
existence of a Loss, the Partnership or the Trust, as the case may be, will,
if a claim with respect thereto is to be made against English Creek due to
English Creek's obligation to provide indemnification hereunder, give English
Creek written notice of such Loss or the commencement of any Third Party
Action; provided, however, that the failure to provide such notice within a
reasonable period of time shall not relieve English Creek of any of its
obligations hereunder. Promptly after receiving such notice, English Creek
will, upon notice to the Partnership or the Trust, as the case may be, have
the right to assume and control the defense and settlement of any such Third
Party Action at its own cost and expense; provided, however, that it shall be
a condition precedent to the exercise of such right by English Creek that
English Creek shall agree in writing that the Loss, or Third Party Action, as
the case may be, is properly within the scope of the indemnification
obligation and that as between the parties, English Creek shall be
responsible to satisfy and discharge such Third Party Action. English Creek
shall not enter into any resolution or other compromise of a Third Party
Action without obtaining the complete release of the Partnership or the
Trust, as appropriate, for any liability to all claimants under or pursuant
to such Third Party Action. The Partnership or the Trust, as the case may
be, shall have the right to participate in any such defense, contest or other
protective action at its own cost and expense.
Notwithstanding the foregoing, the Partnership or the Trust, as the
case may be, shall have the right to assume and control the defense and
settlement of a Third Party Action (a) if such action includes claims for
equitable relief which, if determined adversely to the Partnership or the
Trust, as the case may be, could reasonably be expected to interfere with its
intended business operations or damage its business reputation or (b) if
English Creek fails to do so in a timely manner. In any circumstances in
which the Partnership or the Trust, as the case may be, undertakes to control
the Third Party Action as provided in this paragraph, it shall (i) not enter
into any resolution or other compromise involving monetary damages without
obtaining the prior written consent of English Creek provided that such
written consent may not be withheld if it would interfere with the
Partnership's or the Trust's, as the case may be, business operation and (ii)
keep English Creek informed on an ongoing basis of the status of such Third
Party Action and shall deliver to English Creek, copies of all documents
related to the Third Party Action reasonably requested by English Creek. The
Partnership or the Trust, as the case may be, shall act to assure that all
attorneys' fees and expenses incurred in connection therewith are reasonable.
36
IN WITNESS WHEREOF, intending to be legally bound hereby, the
parties have duly executed this Agreement as of the day and year first above
stated.
ENGLISH CREEK PARTNERS
#2, LIMITED PARTNERSHIP
By: /s/ X. Xxxxxx Scarborough
------------------------------
X. Xxxxxx Xxxxxxxxxxx, its
authorized general partner
/s/ Xxxxxxx Xxxxxxx
------------------------------
Xxxxxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
BRANDYWINE OPERATING PARTNERSHIP, L.P.
By: BRANDYWINE REALTY TRUST, its sole
general partner
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President & CEO
BRANDYWINE REALTY TRUST
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President & CEO
EXECUTIONS CONTINUED
37
The Undersigned Hereby Acknowledges
Receipt Of The Deposit And Agrees To
Hold And Apply The Same In Accordance
With The Provisions Of The Escrow Terms
Commonwealth Land Title Insurance Company:
By: /s/ M. Xxxxxx Xxxxxxx
----------------------
M. Xxxxxx Xxxxxxx
38
EXECUTION
000 XXXXXXXXXXX XXXXX
AGREEMENT
AMONG
ENGLISH CREEK PARTNERS #2, LIMITED PARTNERSHIP,
X. XXXXXX XXXXXXXXXXX, XXXXXXX XXXXXXX AND XXXXXX X. XXXXXXX
BRANDYWINE OPERATING PARTNERSHIP, L.P.
AND
BRANDYWINE REALTY TRUST
Dated as of December 5, 1997
LIST OF EXHIBITS
Exhibit A Description of Land
Exhibit B List of Contracts
Exhibit C Certified Rent Roll
Exhibit D Permitted Exceptions
Exhibit E Excluded Personal Property
Exhibit F The Other Properties
Exhibit G Form of Deed
Exhibit H Xxxx of Sale
Exhibit I Form of Assignment(s)
Exhibit J Form of Non-Foreign Person Certification
Exhibit K Registration Rights Agreement
Exhibit L Tax Indemnity Agreement
Exhibit M Investor Questionnaire
Exhibit N $1,500,000 Guaranty
Exhibit O Pending Litigation
Exhibit P Contracts Not Terminable with 30 days Notice
Exhibit Q Outstanding Brokerage Commissions and TI
Commission to Xxxxxx Xxxxx & Co. to be paid and Closing;
T/I under the Xxxxxx-Xxxxxxxx Lease to be paid by Seller
Exhibit R Form of Estoppel Certificate
Exhibit S Identified Tenants
Exhibit T Representation Letter
