CONTRIBUTION AGREEMENT
AMONG
BRANDYWINE OPERATING PARTNERSHIP, L.P.,
BRANDYWINE REALTY TRUST,
AND
XXXXXX X. XXXXX
AND
THE OTHER CONTRIBUTORS NAMED HEREIN
Dated as of July 10, 1998
CONTRIBUTION AGREEMENT
----------------------
THIS CONTRIBUTION AGREEMENT (this "Agreement") is made and
entered into as of the 10th day of July, 1998 by and among BRANDYWINE
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, having an address
at Newtown Square Corporate Campus, 00 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000 (the "Partnership"), BRANDYWINE REALTY TRUST, a
Maryland real estate investment trust, having an address at Newtown Square
Corporate Campus, 00 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxxxx, Xxxxxxxxxxxx
00000 (the "Trust"), XXXXXX X. XXXXX, having an address c/o Xxxxxx X. Xxxxx
Companies, 000 Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxx Xxxx 00000 ("Xxxxx"), and the
other Contributors (the "Other Contributors" and, together with Xxxxx, the
"Contributors") set forth on Schedule 1 attached hereto.
RECITALS
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A. Each property, commonly identified by the street address set forth
on Schedule 1 hereto, together with the building and improvements thereon, as
more fully described on "Exhibit A" attached hereto (each, a "Parcel"), is
owned by the corporation, limited partnership, limited liability company,
general partnership or individual listed opposite the name of such Parcel on
Schedule 1 under the caption "Contributor (Record Owner)";
B. The shareholders, partners or members of each Contributor that is
not an individual, and any other person having a contractual entitlement to
share in any of the Consideration (as defined below) are set forth opposite
the name of such Contributor on Schedule 1 under the caption "Participants"
(collectively, the "Participants"); and
C. Each Contributor desires and hereby agrees to sell or contribute,
and the Partnership desires and hereby agrees to acquire or accept, all of
each such Contributor's right, title and interest in and to the applicable
Property (as hereinafter defined) or (as specified below) all of the
applicable Participants' right, title and interest in and to the Entity
Interests (as hereinafter defined), subject to and on the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of these premises, 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, intending to be legally bound, 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:
"0 Xxxxxxx Xxxxx Property" shall mean the Property
specifically relating to the Parcel located at 0 Xxxxxxx Xxxxx, Xxxxxxxx, Xxx
Xxxxxx.
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"31 Commercial Street Property" shall mean the Property
specifically relating to the Parcel located at 00 Xxxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx.
"101 Paragon Drive Property" shall mean the Property
specifically relating to the Parcel located at 000 Xxxxxxx Xxxxx, Xxxxxxxx,
Xxx Xxxxxx.
"263 Old Country Road Property" shall mean the Property
specifically relating to the Parcel located at 000 Xxx Xxxxxxx Xxxx, Xxxxxxxx,
Xxx Xxxx.
"Accredited Investor" shall have the meaning given to that
term under Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended.
"ADI Lease" shall mean the lease dated August 8, 1997
between Ademco Distribution, Inc. ("ADI") and Xxxxx, as assigned to AML by
assignment dated November 17, 1997, relating to the 000 Xxx Xxxxxxx Xxxx
Property.
"Affiliate" shall mean, as to any Person, any Person or
entity controlling, controlled by or under common control with such Person.
"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.
"AML" shall mean Xxxxx Xxxxxxxx, LLC, the current owner of
the 000 Xxx Xxxxxxx Xxxx Property.
"Assignments" shall have the meaning specified in Paragraph
5(g) hereof.
"Assumed Debt Differential" shall mean in respect of an
Assumed Mortgage Loan the lesser of: (a) the spread between the interest costs
of the Assumed Mortgage Loan and a rate of 7% on the principal amount of such
Assumed Mortgage Loan discounted at a rate of 10% over the remaining term of
the Assumed Mortgage Loan from the Applicable Closing Date to the sooner of
(i) the Assumed Mortgage Loan's earliest prepayment date on which no
prepayment premium or penalty shall be due or (ii) the Maturity Date for the
Assumed Mortgage Loan; or (b) the prepayment penalty on such Assumed Mortgage
Loan (computed as of the Closing Date) . There shall be no Assumed Debt
Differential for any Assumed Mortgage Loan that bears interest at a per annum
rate equal to or below 7%. The Assumed Debt Differential as of June 30, 1998
for each Assumed Mortgage Loan is as set forth in Schedule "5" annexed hereto
and made a part hereof.
"Assumed Mortgage Loan" shall mean an outstanding mortgage
loan that the Partnership assumes and agrees to be liable for at any of the
Closings denominated as an Assumed Mortgage Loan on Schedule 5.
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"Xxxxx Participants" shall mean Xxxxxx X. Xxxxx and members
of his immediate family who share the same household as Xx. Xxxxx. The Xxxxx
Participants consist of Xx. Xxxxx and Xxxx Xxxxx.
"Xxxxx Participant Percentage" shall mean the amount,
expressed as a percentage, set forth under such caption on Schedule 1 hereto.
The Xxxxx Participant Percentage is, in respect of each Property and Entity
Interest, the ratio of the amount of the Purchase Price allocated touch
Property and Entity Interest paid to Xxxxx Participants divided by the
Purchase Price for each such Property and Entity Interest.
"Closing" shall mean any of the Initial Closing, the 00
Xxxxxxxxxx Xxxxxx Closing, the 000 Xxxxxxx Xxxxx Closing or the Old Country
Road Closing.
"Closing Date" shall mean, as applicable, any of the Initial
Closing Date, the 00 Xxxxxxxxxx Xxxxxx Closing Date, the 000 Xxxxxxx Xxxxx
Closing Date or the Old Country Road Closing Date.
"Common Shares" shall mean the common shares of beneficial
interest, par value $.01 per share, of the Trust.
"Consideration" shall have the meaning given to it in
Paragraph 3(b) hereof.
"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
Real Property, to the extent assignable by each Contributor to the Partnership
and approved by the Partnership, all as described on "Exhibit B" attached
hereto.
"Deposit" shall mean the deposits to be delivered by the
Partnership to the 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 July 10, 1998.
"Effective Date" shall mean the date on which this Agreement
has been fully executed and delivered by all parties hereto to each other.
"Entity Interests" shall mean all of the outstanding equity
interests in and to the respective partnerships and limited liability
companies that own one or more of the New Jersey Property as set forth in
Schedule 1.
"Escrow Terms" shall mean the terms and conditions of the
escrow agreement to be entered into of even date herewith between the Escrow
Agent, each Contributor and the Partnership.
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"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 each Parcel, as described on
"Exhibit A" attached hereto.
"Initial Closing" shall have the meaning ascribed to that
term in Paragraph 4(a) hereof. The date upon which the Initial Closing
actually occurs shall be the "Initial Closing Date."
"Leases" shall mean those certain leases (and guarantees
thereof, if any) listed on "Exhibit C" attached hereto (with reference to each
applicable Parcel), or hereafter entered into by the applicable Contributor,
as landlord, in accordance with the terms of this Agreement, for any space
within any of the Improvements located on any Parcel. The term "Leases"
includes any leases that have been executed for space at the 000 Xxx Xxxxxxx
Xxxx Property.
"Licenses" shall mean the licenses, permits, approvals and
agreements affecting any of the Real Property of such Contributor listed on
"Exhibit C-1" attached hereto.
"New Jersey Property" means the Property described on
"Exhibit A" located in the State of New Jersey.
"New York Property" means the Property described on "Exhibit
A" located in the State of New York.
"NYSE" means the New York Stock Exchange, Inc.
"Old Country Road Closing" shall have the meaning specified
in Paragraph 4(b) hereof. The date upon which the Old Country Road Closing
occurs shall be the "Old Country Road Closing Date."
"31 Commercial Street Closing" shall have the meaning
specified in Paragraph 4(c) hereof. The date upon which the 00 Xxxxxxxxxx
Xxxxxx Closing occurs shall be the "31 Commercial Street Closing Date."
"101 Paragon Drive Closing" shall have the meaning specified
in 4(d) hereof. The date upon which the 000 Xxxxxxx Xxxxx Closing occurs shall
be the "101 Paragon Drive Closing Date."
"Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership, as amended, of the Partnership.
"Permitted Exceptions" shall mean, with respect to any of
the Real Property: (i) liens of real estate taxes, water rent and sewer
charges that are not due and payable on the Closing Date with respect to such
Real Property, (ii) the printed exclusions, conditions and
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stipulations contained in the Commitment (as hereinafter defined), (iii)
additional exceptions to title set forth in "Exhibit D" attached hereto, (iv)
special assessments which become a lien on any of the Real Property on or
after the Closing Date with respect to such Real Property, (v) such other
title matters existing on the Closing Date with respect to such Real Property
which are accepted or deemed accepted by the Partnership pursuant to Paragraph
5 hereof (vii) the rights of Tenants of any of the Real Property set forth in
the Leases for all or any portion of any of the Real Property; and (viii) the
mortgage liens with respect to each Assumed Mortgage Loan.
"Person" means any natural person, corporation, limited
partnership, limited liability company, limited liability partnership, general
partnership, joint stock company, joint venture, real estate investment trust,
association, company, trust, bank, trust company, land trust, vehicle trust,
business trust or other organization irrespective of whether it is a legal
entity, or any government or agency or political subdivision thereof.
"Personal Property" shall (except as specifically excluded
on "Exhibit E-1" attached hereto) mean, as to each Contributor, such
Contributor'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 such Contributor, situated on any of
the Real Property on the date hereof or on the Closing Date, all as set forth
on "Exhibit E" attached hereto; and all artwork, renderings, flags, awnings
and trade dress; and 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 such Contributor's possession and are not proprietary in nature,
and all building names and such Contributor's rights, if any, to the names
"Long Island Office Park" (125-131 Jericho Turnpike), "Chestnut Ridge Plaza"
(102 Chestnut Ridge Road), "Montvale II" (101 Paragon Drive), "Montvale III"
(3 Paragon Drive), "Montvale IV" (25 Xxxxxxxx Parkway) and "Brookdale Plaza"
(0000 Xxxxx Xxxxxx).
"Property" shall mean the Real Property, Contracts, Leases,
Licenses, Personal Property and any other rights, titles and interests which
pertain to the Real Property and are to be contributed, conveyed, sold or
otherwise transferred to the Partnership (or its designee) by the applicable
Contributor pursuant to this Agreement.
"Purchase Price" shall mean the dollar amount set forth
under the caption "Purchase Price" on Schedule 2.
"Real Property" shall mean the Parcel and the Improvements.
"Registration Rights Agreement" shall mean the Registration
Rights Agreement in substantially the form of "Exhibit J" attached hereto
between the Trust and the Contributors and Participants that will be
receiving, at the Initial Closing, all or a portion of the Consideration
hereunder payable in Units.
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"Rent Commencement Date" shall mean the date on which ADI
first commences to pay rent under the ADI Lease.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Tenants" shall mean the tenants under the Leases.
"Total Xxxxx Equity" shall mean the aggregate quantities
obtained by multiplying: (a) the Consideration for each Parcel (whether to be
transferred by Deed or Entity Interest Contribution) by (b) the Xxxxx
Participant Percentage for each such Parcel.
"Underlying Shares" shall mean the Common Shares issuable
upon redemption of Units that are issued hereunder.
"Units" shall mean Class A units of limited partner interest
of the Partnership.
2. Contribution of the Property and Entity Interests.
(a) On the Initial Closing Date, and subject to the
terms and conditions set forth in this Agreement, the respective Contributors
shall sell or contribute, assign, transfer and convey to the Partnership (or
its designee) (provided, however, that if the Partnership requests that any
Property or Entity Interests be transferred to a designee the transfer will be
treated as a contribution by the Contributors and/or the Participants to the
Partnership followed by a subsequent transfer by the Partnership to any such
designee and any reference in this Agreement to a transfer to a designee of
the Partnership shall so be treated) and the Partnership shall purchase or
accept, as the case may be, from the respective Contributors the following:
(i) All right, title and interest of the
Contributors in and to the New York Property of such Contributors other than
the 000 Xxx Xxxxxxx Xxxx Property and the 00 Xxxxxxxxxx Xxxxxx Property;
(ii) All right, title and interest of the
Contributors, 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 Parcel comprising the
New York Property which is owned by such Contributor, other than any Parcel of
such Contributors constituting part of the 000 Xxx Xxxxxxx Xxxx Property and
the 00 Xxxxxxxxxx Xxxxxx Property, to the center line thereof;
(iii) All right, title and interest of the
Contributors, if any, in any easements, covenants, rights of way, privileges,
hereditaments and other rights appurtenant to any of the New York Property
which is owned by such Contributors, other than the 000 Xxx Xxxxxxx Xxxx
Property and the 00 Xxxxxxxxxx Xxxxxx Property.
(b) On the Initial Closing Date, and subject to the
terms and conditions set forth in this Agreement, each Participant partner or
member of the Contributor which owns New Jersey Property (other than the 000
Xxxxxxx Xxxxx Property) shall sell or contribute, assign,
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transfer and convey to the Partnership (or its designee) and the Partnership
shall purchase or accept, as the case may be, from each Participant partner or
member of the Contributor which owns New Jersey Property (other than the 000
Xxxxxxx Xxxxx Property) such Participant's Entity Interest in and to the
Contributor so that one hundred percent (100%) of the Entity Interests in and
to such Contributor shall be contributed, assigned, transferred and conveyed
to the Partnership. In each case, such Entity Interests shall be contributed,
assigned, transferred and conveyed to the Partnership free and clear of any
claim, lien, pledge, security interest or encumbrances (collectively, "EI
Encumbrances").
(c) On the Old Country Road Closing Date, and
subject to the terms and conditions set forth in this Agreement, the
applicable Contributor shall sell or contribute, assign, transfer and convey
to the Partnership (or its designee) and the Partnership shall purchase or
accept, as the case may be, from the applicable Contributor the following:
(i) All right, title and interest of the
applicable Contributor in and to that certain ground lease which is to be
entered into (prior to the Old Country Road Closing but after the Effective
Date) between the Suffolk County Industrial Development Agency (which shall be
subject to the reasonable approval of the Partnership) and such Contributor
with respect to the 000 Xxx Xxxxxxx Xxxx Xxxxxxxx;
(x) Xx the 00 Xxxxxxxxxx Xxxxxx Closing Date, and
subject to the terms and conditions set forth in this Agreement, the
applicable Contributor shall sell or contribute, assign, transfer and convey
to the Partnership (or its designee) and the Partnership shall purchase or
accept, as the case may be, from the respective applicable Contributor the
following:
(i) All right, title and interest of the
applicable Contributor in and to the Property of such Contributor in the 00
Xxxxxxxxxx Xxxxxx Property;
(ii) All right, title and interest of the
Contributor, 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 Parcel of such
Contributor constituting part of the 00 Xxxxxxxxxx Xxxxxx Property, to the
center line thereof;
(iii) All right, title and interest of the
Contributor, if any, in any easements, covenants, rights of way, privileges,
hereditaments and other rights appurtenant to any of the Real Property of such
Contributor constituting part of the 00 Xxxxxxxxxx Xxxxxx Property
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3. Consideration and Time of Payment.
(a) On the Effective Date, the Partnership shall
deposit in immediately available funds the amount of Two Million Dollars
($2,000,000) to the Escrow Agent, which funds shall be held and disbursed
pursuant to the Escrow Terms. The Deposit shall be allocated to and among the
Contributors and Participants, pro rata, in accordance with the relative
Purchase Price payable by the Partnership to the respective Contributors and
Participants for each of the Properties and Entity Interests as set forth on
Schedule "2" annexed hereto. At the applicable Closing, the Escrow Agent shall
release to each Contributor and Participant the portion of the Deposit
allocable to such Contributor and Participant at each Closing in partial
satisfaction of the cash Consideration such Contributor and Participants are
to receive at such Closing pursuant to subparagraph (c) below; provided that
if a Contributor or Participant is not to receive any cash Consideration at
such Closing, such portion of the Deposit shall be released to the Partnership
following receipt by each Contributor and Participant of Units pursuant to
subparagraph (c) below.
(b) On the Closing Date, the Partnership shall pay,
as consideration (the "Consideration") for the Property and Entity Interests,
as the case may be, relating to each Parcel contributed on such date, the
amount set forth under the heading "Purchase Price" on Schedule 2 hereto
opposite the address of such Parcel less the sum of (i) the aggregate
principal amount of the Assumed Mortgage Loans as of the applicable Closing
Date, if any, in respect of such Parcel, plus accrued interest thereon through
the applicable Closing Date, (ii) the Assumed Debt Differential, if any, in
respect of such Assumed Mortgage Loan, and (iii) the aggregate principal
amount of the Subject-to Mortgage Loans (as hereinafter defined) as of the
applicable Closing Date, plus accrued interest thereon through the applicable
Closing Date. The amount of the Consideration payable for each Property and
Entity Interests shall be subject to adjustment as provided in Paragraph 7.
The Consideration shall be paid to each Contributor and Participant in the
form of cash via wire transfer of immediately available funds and/or Units as
provided herein, subject to the provisions of this Agreement. Each Unit so
issued shall be deemed to have a value equal to $24.00.
(c) The percentage of the Consideration payable in
cash and Units to Xxxxx in respect of a Property and Entity Interest is
specified opposite Xxxxx'x name on Schedule 4. Each of the Contributors agrees
that a Contributor and Participant may only receive Units as all or a portion
of the Consideration if such Contributor and all Participants of such
Contributor that are to receive a distribution of such Units are Accredited
Investors and such Contributor and all Participants of such Contributor are
able to make (and make) the representations and warranties set forth either in
Section 10(b) hereof or in the Consent and Acknowledgment of Participant
substantially in the form annexed hereto as "Exhibit AA" and made a part
hereof. The parties agree that in all cases in which the Contributor and
Participants are required or elect to receive cash and not Units in respect of
a New York Property, such Contributor and Participants shall contribute,
assign, transfer and convey to the Partnership (or its designee) and the
Partnership shall accept from each Participant partner or member of the
Contributor which owns such New York Property or, all of such Participant's
Entity Interest in and to such Contributor (i.e., the transaction shall be a
transfer of Entity Interests).
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(d) The contribution, purchase and sale of all of
the Property and, as applicable, Entity Interests hereunder is conditioned
upon the contribution, purchase and sale of all Property listed on the
critical property list annexed hereto as Schedule "7" and made a part hereof
(collectively, the "Critical Property") and (as applicable) all Entity
Interests in the Contributors which own the Critical Property, so that no
Critical Property and Entity Interests in the Contributors which own the
Critical Property may be excluded from the transaction contemplated hereunder
without all of the Property and Entity Interests being so excluded, unless
expressly agreed to in writing by the Partnership, the Applicable Contributor
and the Participants, as the case may be. In the event that the parties
determine to exclude any Property (including any of the Critical Property) or
Entity Interests (including any Entity Interests in the Contributors which own
the Critical Property), the Escrow Agent shall release to the Partnership at
the Initial Closing the portion of the Deposit allocable to the Contributor of
such Property (including any of the Critical Property) and to such
Participants.
(e) Schedule 5 attached hereto lists (i) all of the
mortgage debt (collectively, the "Mortgage Loans") secured by the respective
Properties, (ii) the principal balance of the Mortgage Loans as of June 30,
1998, (iii) the interest rate borne by the Mortgage Loans, (iv) the maturity
date of the Mortgage Loans, (v) the earliest date that each such Mortgage Loan
may be prepaid without premium or penalty, (vi) any lender participations
applicable to such Mortgage Loans, (vii) the Property securing the Mortgage
Loans and (viii) the name of the lenders of such Mortgage Loans. All of the
Assumed Mortgage Loans will be assumed by the Partnership at the Closing of
the applicable Property, as indicated on Schedule 5. The Partnership agrees to
use commercially reasonable efforts to release at the applicable Closing each
Contributor and Participant that has personal liability on any Assumed
Mortgage Loan from continuing personal liability on such Assumed Mortgage
Loan; provided that the use of commercially reasonable efforts shall not
require expenditure of funds by the Partnership. Schedule 5 identifies in
respect of each Assumed Mortgage Loan the Contributor and Participants, if
any, who have personal liability on such Assumed Mortgage Loan. The
Partnership will provide each Contributor with reasonable assistance in its
lender negotiations. Each Contributor will be responsible for any prepayment
costs associated with the Mortgage Loan payoffs and debt transfer costs for
each Assumed Mortgage Loan. At the applicable Closing, the applicable
Contributor shall receive a credit for any amounts held in deposit or in
escrow accounts by each of the lenders of the Assumed Mortgage Loans if and to
the extent such amounts held in deposit or in escrow accounts will thereafter
be held for the benefit of the Partnership, free of any claims of the
Contributor. As to any Mortgage Loan that is not as Assumed Mortgage Loan, but
which is to be repaid by the Partnership at the applicable Closing, as set
forth on Schedule 5-1 (each a "Subject-to Mortgage Loan"), the Partnership (or
its designee) shall take title to the mortgaged Parcel subject to the mortgage
securing such Subject-to Mortgage Loan and shall discharge a stated amount of
principal and accrued interest on the Subject-to Mortgage Loan at the Closing
(based on a pay-off letter from the applicable lender), so long as the amount
required to discharge such Subject-to Mortgage Loans affecting such mortgaged
Parcel, together with all other credits against the Consideration applicable
to such mortgaged Parcel hereunder, does not exceed the cash portion of the
consideration applicable to such mortgaged Parcel; and provided further that
the Partnership shall not be required to assume,
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and shall not be deemed to have assumed, any debt, obligation or liability
under or in connection with any Subject-to Mortgage Loan other than the
liability to pay the above-referenced stated amount of principal and accrued
interest. At the applicable Closing, the Partnership and the applicable
Contributor shall enter into an agreement, in form and substance reasonably
acceptable to both the Partnership and the Applicable Contributor, with
respect to each Subject-to Mortgage Loan (the "Subject-to Mortgage Loan
Agreement").
(f) If the aggregate Consideration that has been paid in
the form of Units (with each Unit valued at $24.00) to the Xxxxx Participants
exceeds 75% of the dollar amount of the Total Xxxxx Equity, then each
Contributor and Participant which has agreed to receive Units as Consideration
hereunder shall receive, as additional Consideration, a number of additional
Units equal to the product of the number of Units such Contributor and
Participant agreed to receive multiplied by 0.035. The Partnership shall have
no obligation to issue fractional Units under this Agreement and, in lieu of
issuing fractional Units, shall round the fraction up or down to the next
closest whole number in accordance with customary rounding conventions.
(g) Notwithstanding anything contained in this Agreement
to the contrary, the parties hereto agree that the Purchase Price for the 00
Xxxxxxxxxx Xxxxxx Property shall be $778,845.00 if the 00 Xxxxxxxxxx Xxxxxx
Closing occurs on or before April 1, 1999 and shall be $811,170.00 if the 00
Xxxxxxxxxx Xxxxxx Closing occurs subsequent to April 1, 1999.
4. Closings.
(a) Subject to satisfaction of the conditions set forth
in this Agreement, the initial closing of the transactions contemplated by
this Agreement (the "Initial Closing"), other than those transactions
specified in subparagraphs (b), (c) and (d) below, shall be held on or before
the date that is twenty (20) calendar days following the Due Diligence
Termination Date, on a mutually agreed date determined by the Contributors and
the Partnership, at the offices of Xxxxxx Xxxxxxxx LLP, 3000 Two Xxxxx Square,
Philadelphia, Pennsylvania, commencing at 10:00 a.m., time being of the
essence.
(b) Subject to satisfaction of the conditions set forth
in this Agreement and the consummation of the Initial Closing, the closing of
the transactions contemplated by this Agreement with respect to the 000 Xxx
Xxxxxxx Xxxx Property (the "Old Country Road Closing") shall be held on the
Rent Commencement Date, at the offices of the Partnership, 00 Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, commencing at 10:00 a.m., time being
of the essence. The applicable Contributor shall provide the Partnership with
no less than ten (10) days prior written notice of the date for the Old
Country Road Closing.
(c) Subject to satisfaction of the conditions set forth
in this Agreement and the consummation of the Initial Closing, the closing of
the transactions contemplated by this Agreement with respect to the 00
Xxxxxxxxxx Xxxxxx Property (the "31 Commercial Street Closing") shall be held
on a date specified by the Partnership at the offices of the Partnership, 00
Xxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, commencing at 10:00 a.m., time
being of the essence; provided, that the obligation of the Partnership to
consummate the 00 Xxxxxxxxxx Xxxxxx Closing is further conditioned upon the
satisfaction of the 31 Commercial
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Environmental Condition (as set forth in Paragraph 14(d) below). The
Partnership shall provide the Applicable Contributor with no less than ten
(10) days prior written notice of the date for the 00 Xxxxxxxxxx Xxxxxx
Closing.
5. Title and Conveyance of the Property.
(a) At each Closing, title to each Parcel of Real
Property to be conveyed to the Partnership in accordance with Paragraph 2
hereof and title to each Parcel comprising New Jersey Property (each, a
"Subject Property" for purposes of this Paragraph) 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 Subject
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 with respect to each Subject Property (1992 ALTA Form with
Creditor's Rights Exclusion Deleted) to be issued by the Title Insurer (each,
a "Commitment"), providing for the issue to the Partnership, upon recording of
the Deeds (as hereinafter defined) for each Subject Property and upon transfer
of the Entity Interests, an owner's policy of title insurance as above
specified ("Title Policy"). Said Commitments shall provide a commitment to
insure the proposed title of the Partnership to each Subject 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 discloses 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 Xxxxx and the Contributor of such Subject Property (for purposes of
this Paragraph, the "Applicable Contributor") of such Title Defects with
sufficient specificity to enable Xxxxx and the Applicable Contributor to
respond. All notices to be given by the Partnership to the Applicable
Contributor under the terms of this Paragraph 5 shall be addressed to Xxxxx,
at Xxxxxx X. Xxxxx Companies, 000 Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxx Xxxx 00000,
with copies given to the additional parties as required under Paragraph 22
hereof. The Partnership's notice of any Title Defects shall be given in
writing to Xxxxx and the Applicable Contributor 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 (or fails to deliver such continuations of title
together with copies of all matters raised therein as exceptions thereto)
within five (5) 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. Xxxxx
and the Applicable Contributor shall have the right, but not the obligation
(except as otherwise specifically provided), to cure such Title Defects and,
if Xxxxx and the Applicable Contributor elect to attempt to cure the Title
Defects but have not cured the same on
12
or before the Closing Date for the Subject Property (for purposes of this
Paragraph, the "Applicable Closing Date"), then the Applicable Closing Date
may be extended by Xxxxx and the Applicable Contributor, for a period not to
exceed forty-five (45) days, to enable Xxxxx and the Applicable Contributor to
effect such cure. Notwithstanding anything contained in this Paragraph 5 to
the contrary, the Partnership shall not be obligated to close the transfer of
title to any Property, unless and until all Title Defects relating to the
Critical Property are cured by either Xxxxx or the Applicable Contributor or
waived in writing by the Partnership.
(ii) In the event that either (a) the
Applicable Contributor is unable to convey title in accordance with the terms
of this Agreement free of Title Defects, (b) Xxxxx and the Applicable
Contributor elect not to cure or cause the removal of any exception to title,
except as required in subparagraph (iii) below, or (c) if Xxxxx and the
Applicable Contributor are 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 Xxxxx
and the Applicable Contributor shall be to cause the Escrow Agent to return
the applicable portion of the Deposit to the Partnership, and to pay the
Partnership the amounts, if any, required pursuant to Paragraph 17(b) hereof
and upon such payments being made, this Agreement shall be deemed canceled
with respect to the Subject Property (and if the Subject Property is a
Critical Property, then this Agreement shall be deemed canceled with respect
to all Property and Entity Interests) 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 Xxxxx and the Applicable Contributor in
law or in equity, for damages, except for the purpose of enforcing Xxxxx'x and
the Applicable Contributor's contractual obligations under subparagraph (iii)
below for specific performance. Notwithstanding the foregoing, the Partnership
shall have the right, upon written notice to Xxxxx and the Applicable
Contributor, to waive any conditions to the Partnership's obligations
hereunder, in which event Xxxxx and the Applicable Contributor shall make the
deliveries provided for herein to the Partnership to the extent that Xxxxx and
the Applicable Contributor are 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 Subject Property at
the Applicable Closing is other than that which the Partnership is required or
agrees to accept hereunder solely by reason of any mortgages (other than
Assumed Mortgage Loans) 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 10% of the Consideration to be received for the
Subject Property, Xxxxx and the Applicable Contributor shall not have the
right to cancel this Agreement and Xxxxx and the Applicable Contributor shall
either (aa) discharge, satisfy, or bond the same or (bb) deliver the
applicable portion of the Consideration to be held in escrow as and to the
extent 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, no Contributor (including Xxxxx) shall
have any duty nor be required to take any
13
action, to institute any proceedings or to incur any expense (other than as
may be 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. Nothing contained in this Agreement shall be
construed as a representation of the state of title to any of the Real
Property. Any attempt by Xxxxx or an Applicable Contributor to cure Title
Defects shall not be construed as an admission by either Xxxxx or such
Applicable Contributor that such Title Defects are valid title objections
under this Agreement.
(c) Any failure by the Partnership to notify Xxxxx and a
Contributor of Real Property in writing of any Title Defects relating to such
Real Property on or before the Due Diligence Termination Date 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, except with
respect to continuations of title as specifically provided in Paragraph
5(b)(i).
(d) At each Closing for the New York Property (as
provided in Section 3(c)), either (i) each Contributor of Real Property will
convey fee simple title to such Real Property by a Bargain and Sale Deed with
Covenant Against Grantor's Acts (collectively, the "Deeds") to the Partnership
(or its designee), subject in all cases to the Permitted Exceptions and free
of all Title Defects other than Title Defects expressly waived or deemed to
have been waived under clause (b)(i), in the forms attached hereto and made a
part hereof as "Exhibit"F" or (ii) each Participant partner or member shall
assign to the Partnership (and/or its designee) all of its Entity Interests in
such Contributor by an Assignment of Entity Interest (the "Entity
Assignments") in the forms attached hereto and made a part hereof as "Exhibit
F-1" so that one hundred percent (100%) of the Entity Interests in and to such
Contributor shall be contributed, assigned, transferred and conveyed to the
Partnership. In each case, such Entity Interests shall be contributed,
assigned, transferred and conveyed to the Partnership free and clear of EI
Encumbrances. The title to the New York Property shall be subject in all cases
to the Permitted Exceptions and free of all Title Defects other than Title
Defects expressly waived under clause (b)(i).
(e) At each Closing for the New Jersey Property, each
Participant partner or member shall assign to the Partnership (and/or its
designee) all of its Entity Interests in such Contributor by an Entity
Assignment so that one hundred percent (100%) of the Entity Interests in and
to such Contributor shall be contributed, assigned, transferred and conveyed
to the Partnership (and/or its designee). In each case, such Entity Interests
shall be contributed, assigned, transferred and conveyed to the Partnership
free and clear of EI Encumbrances. The title to the New Jersey Property shall
be subject in all cases to the Permitted Exceptions and free of all Title
Defects other than Title Defects expressly waived under clause (b)(i).
(f) At each Closing, each Contributor of Personal
Property will transfer all of its right, title and interest in and to its
Personal Property to the Partnership by executing a Xxxx of Sale (the "Bills
of Sale") in the form attached hereto and made a part hereof as "Exhibit G".
14
(g) At each Closing, each Contributor will assign to the
Partnership all of such Contributor's right, title, and interest in, to and
under the Leases, Licenses and the Contracts relating to such Property, and
the Partnership shall assume all obligations accruing from and after the
Closing Date under such Leases, Licenses and Contracts, by executing an
Assignment and Assumption Agreement in the form attached hereto and made a
part hereof as "Exhibit H" (the "Assignments").
(h) At the Old Country Road Closing, as a condition to
the Partnership's obligation to close in respect of the 000 Xxx Xxxxxxx Xxxx
Property, the Contributor of such Property shall deliver to the Partnership
(i) "as built" plans sealed by the architect or contractor relating to the
construction of the approximately 62,500 square foot office building currently
under construction thereon, (ii) a temporary certificate of occupancy relating
to such building and (iii) an estoppel certificate from ADI certifying that it
has taken possession of space at such property and has accepted such space
under its lease, subject to the terms thereof with respect to any punchlist
items. The Contributor and Xxxxx shall also provide the Partnership, at the
Old Country Road Closing, with an agreement pursuant to which they shall each
be jointly and severally obligated to obtain, at the Contributor's and Xxxxx'x
sole cost (without regard to any limitations set forth in Paragraph 11
hereto), a permanent certificate of occupancy and to complete the punchlist
items in accordance with the provisions of the ADI Lease. Notwithstanding the
foregoing, at the Old Country Road Closing, the Partnership shall assume all
of the obligations of AML, including, without limitation, AML's obligations
under Article 7(c)(iii) of the ADI Lease, and AML shall assign to the
Partnership all of its right, title and interest in and to all warranties and
guaranties relating to such construction at the 000 Xxx Xxxxxxx Xxxx Property.
AML shall also certify to the Partnership that, to AML's knowledge, as of the
Closing Date for the Old Country Road Closing, there are no defaults by AML,
as landlord, under the terms of the ADI Lease.
(i) At the Initial Closing, Xxxxx shall execute and
deliver to the Partnership an income guaranty pursuant to which Xxxxx shall
guaranty the net operating income (which net operating income shall be
determined using the same calculations used to determine the Purchase Price
for the Chestnut Property (as hereinafter defined)) at the 000 Xxxxxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx Property (the "Chestnut Property"), subject to the
terms and conditions set forth herein and subject to such other terms as the
parties shall mutually agree upon prior to the Initial Closing (the "Chestnut
Guaranty"). The Chestnut Guaranty shall provide that Xxxxx shall only be
liable thereunder in the event Geotek Communications, Inc. ("Geotek"), the
tenant at the Chestnut Property, rejects its lease with Xxxxx for the Chestnut
Property (the "Geotek Lease") in connection with its current Chapter 11
bankruptcy proceeding within two (2) years after the Initial Closing and such
rejection occurs prior to the assumption of the lease by Geotek. In the event
of such a rejection, Xxxxx shall only be liable for actual damages incurred by
the Partnership up to $500,000. Xxxxx shall be fully released from his
obligations thereunder (and the Chestnut Guaranty shall be promptly returned
to Xxxxx) in the event Geotek assumes the Geotek Lease in connection with its
current Chapter 11 bankruptcy proceeding. For purposes of computing the
Partnership's actual damages, the parties shall take into account any monies
which the Partnership will receive as a result of (a) the Partnership
exercising its rights with respect to the $817,000 letter of credit security
held pursuant to the
15
terms of the Geotek Lease, which letter of credit will be assigned by Xxxxx to
the Partnership at the Initial Closing, (b) the Partnership retaining all or a
portion of the Xxxxx & Xxxxx Commission (as hereinafter defined) as a result
of the termination of the Geotek Lease, whether in connection with Geotek's
rejection of the same in the Chapter 11 bankruptcy proceeding or otherwise,
and (c) the Partnership recovering any net damages, after costs including
reasonable attorneys fees, awarded to it by the bankruptcy court from Geotek.
At the Initial Closing, the Partnership shall receive a credit in the amount
of $250,000, representing the remaining amount of the brokerage commission due
Xxxxx & Xxxxx (the "Xxxxx & Xxxxx Commission") under its brokerage agreement
for the Geotek Lease (the "Xxxxx & Xxxxx Agreement") and, in consideration
thereof, the Partnership shall assume all of the obligations of Xxxxx under
the Xxxxx & Xxxxx Agreement.
6. Closing Documents.
(a) At each Closing, as a condition of the Partnership's
obligation to close hereunder, the Contributor of the Property to be conveyed
at such Closing or the Participants of such Contributor shall deliver or cause
to be delivered the following:
(i) The Deeds, executed by each
Contributor of the New York Property, covering such New York Property or the
Entity Assignments, executed by each Participant covering all Entity Interests
in the Contributors which own such New York Property, except in the case of
the 000 Xxx Xxxxxxx Xxxx Property (and separate quitclaim deeds to such Real
Property utilizing new ALTA survey descriptions, if requested), and, in the
case of the 000 Xxx Xxxxxxx Xxxx Property, the 263 Assignment and Assumption
(as hereinafter defined), executed by the Contributor of the 000 Xxx Xxxxxxx
Xxxx Property;
(ii) The Entity Assignments, executed by
each Participant covering all Entity Interests in the Contributors which own
New Jersey Property. With respect to the 0 Xxxxxxx Xxxxx Property and the 00
Xxxxxxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxxxx Property (the "25 Xxxxxxxx Property")
the Contributor which owns the 3 Paragon Property shall also deliver or cause
to be delivered, a correcting deed from Xxxxx to 80-20 Associates for the 0
Xxxxxxx Xxxxx Property (the "3 Paragon Correcting Deed") and the Contributor
which owns the 25 Xxxxxxxx Property shall also deliver or cause to be
delivered a correcting deed from Xxxxx to Montvale IV for the 00 Xxxxxxxx
Xxxxxxx Property (the "25 Xxxxxxxx Correcting Deed");
(iii) The Bills of Sale executed by each
Contributor of Personal Property, covering such Personal Property. The
applicable Contributor shall also deliver to the Partnership the original
title certificates for the three (3) automobiles listed on Exhibit "E",
together with any and all documentation which is necessary to effectuate the
transfer of ownership of the same to the Partnership;
(iv) The Assignments, executed by each
Contributor of Property;
16
(v) The originals (or copies where the
originals are not available) of the Contracts, Leases, Licenses, and other
items covered by the Assignments as are in the possession or control of any
Contributor or Participant;
(vi) 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 any Contributor or Participant;
(vii) 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 any Contributor or Participant;
(viii) All Tenant security deposits in
possession of such Contributor or such Contributor's managing agent;
(ix) Written notice from each Contributor
of Real Property or such Contributor's managing agent to each Tenant in form
annexed hereto as "Exhibit BB" stating that such Real Property has been sold
to the Partnership and that Tenant security deposits (if any) in such
Contributor's (or such managing agent'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 ( the "Tenant
Notice Letter");
(x) Non-foreign person certifications
executed by each Contributor in the form attached hereto as "Exhibit I";
(xi) All building records and Tenant lease
files in with respect to all Real Property to be conveyed at such Closing that
are in the possession of any Contributor or Participant;
(xii) All bills for current real estate
taxes, sewer charges and assessments, water charges and other utilities with
respect to all Real Property to be conveyed at such Closing , and to the
extent in any Contributor's or Participant's possession or control, bills for
each of the same for the last two (2) years, together with proof of payment
thereof (to the extent same have been paid);
(xiii) All plans, specifications, as-built
drawings, surveys, site plans, and final, written reports of architects,
engineers and surveyors, and any other Personal Property constituting part of
the Property or any portion thereof, but only to the extent that the same
exist and are in the possession of any Contributor or Participant or any
property manager controlled by any Contributor or Participant;
(xiv) An affidavit or affidavits of title
in favor of the Title Insurer on the form customarily used by such Title
Insurer in the state in which the Subject Property is located, and in form
reasonably acceptable to each Contributor of Real Property, to enable the
17
Title Insurer to issue the Commitments described in Paragraph 5(b)(i). The
Partnership shall require affirmative endorsements against mechanic's liens,
consistent with each such Contributor's obligations under Paragraph 5(b)(iii),
above;
(xv) 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 Real Property located in New Jersey to be
conveyed at the Closing (the "Non-Applicability Letter");
(xvi) Subject to the provisions of
Paragraph 13(c), below, Estoppel Certificates, if any, received from Tenants
of the Real Property to be conveyed at the Closing;
(xvii) Updated rent rolls for the Real
Property to be conveyed at the Closing, which shall be certified as correct
and complete as of the Closing Date by such Contributors;
(xviii) Proof as to the due authorization
and execution by any Contributor and Participant of the documents executed and
delivered by such Contributor or Participant;
(xix) At the Initial Closing, a
certificate of continued occupancy for the 0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx
Xxxxxx Property;
(xx) A counterpart to the Partnership
Agreement and Power of Attorney in the form contained therein executed by each
Contributor receiving Units as Consideration in accordance with Paragraph 3
and executed by each Participant of any Contributor that will be receiving, at
the Closing, a distribution of any such Units from the Contributor;
(xxi) A Consent and Acknowledgment of
Participant executed by each Participant;
(xxii) INTENTIONALLY DELETED.
(xxiii) INTENTIONALLY DELETED
(xxiv) An Assumption, Modification and
Release Agreement in substantially the same form as annexed hereto as "Exhibit
CC" and made a part hereof (the "Loan Assumption Agreement") executed by the
lender of each Assumed Mortgage Loan that is secured by Property that will be
transferred at such Closing;
18
(xxv) A New York State Combined Real
Estate Transfer Tax Return and Credit Line Mortgage Certificate (form TP 584)
for each Parcel of Real Property located in New York (the "TP 584");
(xxvi) A Real Property Transfer Tax
Report, State of New York State Board of Real Property Services for each
Parcel of Real Property located in New York (the "Transfer Report");
(xxvii) A certificate from the Applicable
Contributors to the Partnership and the Trust certifying (i) that the
representations and warranties of the Contributors contained in this Agreement
are true and correct in all material respects as of the Applicable Closing
Date as if made on the Applicable Closing Date, except to the extent that they
expressly relate to an earlier date, (ii) that each of the Applicable
Contributors has performed or complied in all material respects with all of
its agreements herein contained and required to be performed or complied with
by it hereunder, and (iii) that none of the Participants have revoked their
consent to the transaction contemplated hereby as set forth in the Consent and
Acknowledgment of Participants and, to the knowledge of the Applicable
Contributor and Xxxxx, none of the Participants have threatened to revoke such
consent as of the Applicable Closing Date;
(xxviii) A certificate of each Contributor
the Entity Interests in which will be assigned to the Partnership duly
executed by an authorized officer of each such Contributors in such capacity,
certifying that annexed thereto (i) is a true and correct copy of (x) the
Contributor's partnership or operating agreement, as the case may be, and any
and all amendments thereto, and (y) the certificate of limited partnership or
articles of organization for the Contributor and all amendments thereto, if
any, as filed in the state of formation for the Contributor; and the same have
not been otherwise modified or amended, and are in full force and effect; (ii)
are duly adopted resolutions authorizing the consummation of the transactions
contemplated by this Agreement; and (iii) are good standing certificates dated
as of the most recent practicable date for each of the Contributors in their
respective state of formation;
(xxix) Incumbency certificates of each
Contributor the Entity Interests in which will be assigned to the Partnership
certifying the authority of the officers of such entity Contributor to execute
and deliver this Agreement and all applicable transaction documents;
(xxx) Resignations from all directors and
officers of the Contributors the Entity Interests in which will be assigned to
the Partnership pursuant to the terms hereof;
(xxxi) An opinion letter from the law firm
of Xxxxxxxxx & Xxxxxxxxx regarding the transfer of Entity Interests in the
form annexed hereto as "Exhibit EE" (the "Xxxxxxxxx Opinion Letter");
19
(xxxii) The Subject-to Mortgage Loan
Agreement executed by the Applicable Contributor and a payoff letter from each
lender stating the amount of principal and accrued interest that must be paid
in order for the lender to release its mortgage.
(xxxiii) Each Contributor and Xxxxx shall
deliver such other certificates, documents, instruments and agreements as the
Trust and the Partnership shall deem necessary in their reasonable discretion
in order to effectuate the transactions contemplated herein in form and
substance reasonably satisfactory to the Trust and the Partnership. For the
purposes of this Paragraph 6(a), except for the actual documents which each
Contributor is required to execute and deliver at each Closing as set forth
above, each Contributor shall be deemed to have fully satisfied its
obligations to deliver or cause to be delivered such Closing Documents at each
Closing, if: (a) each such Contributor actually delivers the same at each
Closing; or (b) such documentation continues to be located at the offices of
Xxxxxx X. Xxxxx Companies ("DEAC"), 000 Xxxxxxx Xxxxxxxx, Xxxxxxx, Xxx Xxxx at
the time of each Closing.
(b) (i) At the Initial Closing, as a condition of each
Contributor's and each Participant's obligations hereunder, Xxxxxx X. Xxxxx
shall be elected as a member of the Board of Trustees of the Trust (and the
Partnership shall provide evidence of the same to Xxxxxx X. Xxxxx in the form
of a Board Resolution of Trust's Board of Trustees certified by the Secretary
or Assistant Secretary of the Trust) and Xxxxx shall file a Form 3 with the
SEC, and the Partnership shall deliver or cause to be delivered the following
documents:
(1) Option Agreements, in substantially the forms
attached hereto as "Exhibit N" and "Exhibit O", respectively, executed by the
Trust, providing for the grant to each of Xxxxxx X. Xxxxx and Xxxx Xxxxx of
options to purchase 100,000 Common Shares.
(2) An Employment Agreement with Xxxx Xxxxx, in
substantially the form attached hereto as "Exhibit P", executed by the Trust.
(ii) At each Closing (including, without limitation,
the Initial Closing) as a condition of each Contributor's and each
Participant's obligations hereunder, the Partnership shall deliver or cause to
be delivered the following:
(1) The Consideration (in immediately available
funds or Units in accordance with Paragraph 3) for the Property and Entity
Interests conveyed to the Partnership at such Closing;
(2) The applicable Assignments, executed by the
Partnership;
(3) The applicable Entity Assignments, executed
by the Partnership;
20
(4) INTENTIONALLY DELETED
(5) At the Initial Closing, a Registration Rights
Agreement in substantially the form attached hereto as "Exhibit J", executed
by the Trust. Because this Agreement contemplates the issuance of Units after
the Initial Closing (the "Additional Units"), the Trust will execute, in
connection with closings held more than 175 days after the Initial Closing and
at which Additional Units are issued, an additional Registration Rights
Agreement in substantially the form attached hereto as Exhibit J covering the
resale of Common Shares issuable upon redemption of such Additional Units. The
timing of the Trust's obligations under such additional Registration Rights
Agreement will be established in a manner intended to provide the holder(s) of
such Additional Units with the ability to resell the Common Shares issuable
upon redemption of such Units under a Form S-3 Registration Statement within
six months following the date of issuance of such Additional Units.
(6) The applicable Tenant Notice Letters,
executed by the Partnership.
(7) The applicable Loan Assumption Agreement,
executed by the Partnership.
(8) The applicable TP 584, executed by the
Partnership.
(9) The applicable Transfer Report, executed by
the Partnership.
(10) Certificates duly executed and issued in the
names of the respective Participants evidencing the issuance of the Units,
together with the duly adopted amendment to the Partnership Agreement
described in subparagraph (11) below.
(11) A certificate of the Trust duly executed by
an authorized officer of the Trust in such capacity, on the Trust's behalf and
in its capacity as general partner of the Partnership, as the case may be,
certifying that annexed thereto (i) is a true and correct copy of (x) the
Amendment to the Amended and Restated Agreement of Limited Partnership of the
Partnership dated as of November 18, 1997, a copy of which is annexed hereto
as Exhibit II (the "Amendment"), and any and all amendments thereto, and (y)
the certificate of limited partnership of the Partnership and all amendments
thereto, if any, as filed in the State of Delaware; and the same have not been
otherwise modified or amended, and are in full force and effect; (ii) are duly
adopted resolutions authorizing the consummation of the transactions
contemplated by this Agreement; (iii) is a true and correct copy of the
Trust's declaration of trust and by-laws and all amendments thereto and that
the same have not been otherwise modified or amended, and are in full force
and effect; and (iv) good standing certificates dated as of a date within
fifteen (15) days of the applicable Closing for each of the Trust and the
Partnership for Maryland and Delaware, respectively.
(12) INTENTIONALLY DELETED
21
(13) A certificate from the Trust and the
Partnership to the Contributors and the Participants certifying (i) that the
representations and warranties of the Trust and the Partnership contained in
this Agreement are true and correct in all material respects as of the
Applicable Closing Date as if made on the Applicable Closing Date, except to
the extent that they expressly relate to an earlier date, and (ii) that each
of the Trust and the Partnership has performed or complied in all material
respects with all of its agreements herein contained and required to be
performed or complied with by it hereunder.
(14) A certificate of the Partnership, certifying
that each Participant to be admitted at such Closing has been admitted as a
limited partner of the Partnership in respect to the applicable Units,
effective on the Applicable Closing Date, and that the Partnership's books and
records will, as of the Applicable Closing Date, indicate that each
Participant is the holder of the number of Units which is called for pursuant
to Paragraph 3.
(15) An incumbency certificate of the Trust
certifying the authority of the officers of the Trust, on its own behalf and
as general partner of the Partnership, to execute and deliver this Agreement
and all applicable transaction documents.
(16) The Subject-to Mortgage Loan Agreement,
executed by the Partnership.
(17) The Trust and the Partnership shall deliver
such other certificates, documents, instruments and agreements as the
Contributors and Participants shall deem necessary in their reasonable
discretion in order to effectuate the transactions contemplated herein in form
and substance reasonably satisfactory to the Contributors and the
Participants.
7. Prorations and Closing Costs. All matters involving
prorations or adjustments to be made to the Consideration for the Property
relating to each Parcel (each, a "Subject Property") 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 for each Subject Property as of
the Closing Date for such Subject Property (for purposes of this Paragraph,
the "Applicable Closing Date"), with the Partnership to be treated as the
owner of the Subject Property, for purposes of prorations of income and
expenses, on and after the Applicable Closing Date.
(a) Real estate taxes and all other ad valorem taxes, if
any, with respect to the Real Property constituting part of the Subject
Property (the "Subject Real Property") for the applicable fiscal or calendar
year in which the Applicable Closing Date with respect to the Subject Real
Property occurs shall be prorated in accordance with the provisions of this
Paragraph 7. If the amount of such taxes is not known on the Applicable
Closing Date for the Subject Real Property, taxes will be prorated on the
basis of the most recently ascertainable tax xxxx and such proration shall be
adjusted by the Applicable Contributor and the Partnership upon written
evidence that the actual taxes for the year in which the Applicable Closing
Date occurs differ from the amounts used for adjustments at the applicable
Closing in accordance with Paragraph 7(i) below. There shall be no proration
of insurance premiums or assignment of
22
insurance policies relating to the Applicable Real Property and the
Contributor of the Subject Real Property (for purposes of this Paragraph, the
"Applicable Contributor") shall be entitled to cancel all of its existing
policies relating to the Applicable Real Property as of such 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 Subject Real Property and allocable to the period prior to the
Applicable Closing Date shall be determined and paid by the Applicable
Contributor before the Applicable Closing Date, if possible, or shall be paid
promptly thereafter by the Applicable Contributor, or shall be adjusted
between the Partnership and the Applicable Contributor at the applicable
Closing based upon the last meter readings, or adjusted between the
Partnership and the Applicable Contributor immediately after the same have
been determined. The Partnership and the Applicable Contributor shall, to the
extent necessary, enter into an agreement to such effect as of the Applicable
Closing Date. The Applicable Contributor shall attempt to have all utility
meters read as of the Applicable Closing Date. The Applicable Contributor
shall further attempt to obtain from the provider of same all other service
statements and bills of account adjusted as of the Applicable Closing Date.
The Applicable Contributor shall be entitled to refunds of all deposits, if
any, paid by the Applicable Contributor or the Applicable Contributor's
predecessor-in-interest prior to the Applicable Closing Date and held by
entities providing such service, or, at the Applicable Contributor's option,
the Applicable Contributor shall transfer all of its right, title and interest
in and to such deposits to the Partnership on the Applicable Closing Date and
shall receive a credit for the amount of such deposits. All Contracts and
other obligations in connection with the Subject Property, to the extent the
same are intended to be assumed hereunder, shall be prorated as of the
Applicable Closing Date.
(b) Special assessments which have been filed as a lien
against the Subject Real Property on or before the Effective Date and are not
payable in installments shall be paid by the Applicable Contributor. Special
assessments which have been filed as a lien against the Subject Real Property,
but which are payable in installments shall be adjusted based upon the
installment payment for the fiscal or calendar year in which Applicable
Closing Date 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 Subject Real Property as of the Applicable
Closing Date, and special assessments which are filed as a lien after the
Applicable Closing Date, shall be assumed and paid by the Partnership.
(c) The Partnership and each Applicable Contributor shall
each pay one half of any state or county documentary stamps or transfer taxes
imposed in connection with the transfer of each Subject Real Property. The
Partnership and each Applicable Contributor shall also each pay one-half of
the costs charged by the Title Insurer in connection with its issuance of
non-imputation endorsements to the Title Policy and one-half of costs charged
by Xxxxxxxxx & Xxxxxxxxx in connection with its issuance of the Xxxxxxxxx
Opinion Letter. The Partnership shall pay the expense of recording the Deeds
for the Subject Real Property, 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 desired by the Partnership. The Partnership
agrees to pay the expense of the legal fees of its own counsel, and the
Contributors and Participants shall
23
pay the expense of the legal fees of their 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 (including,
without limitation, estimated pass through payments, payments for common area
maintenance and all additional charges payable by tenants) under the Leases
(in each case, collectively, the "Rents") relating to the Subject Real
Property (the "Subject Leases") which are in arrears as of the Applicable
Closing Date shall not be apportioned at the applicable Closing, but instead
the right to collect the same shall be assigned to the Partnership. All such
Rents received by the Partnership or the Applicable Contributor within the
first ninety (90) days after the Applicable Closing Date (other than "true up"
payments received from Tenants attributable to a year-end reconciliation of
actual and budgeted pass-through payments which shall be apportioned between
the Partnership and the Applicable Contributor pro rata in accordance with
their respective period of ownership as provided in Paragraph 7(i) below)
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
the Applicable Closing Date, then (b) to the Applicable Contributor for all
rent in arrears prior to the Applicable Closing Date; and then (c) to the
Partnership with no further claim by the Applicable Contributor thereto. The
Applicable Contributor shall have no claim to Rents collected ninety (90) days
after the Applicable Closing Date. Any Rents which are delinquent or otherwise
not paid on the Applicable Closing Date, and collected by the Partnership or
the Applicable Contributor after the Applicable Closing Date shall be
apportioned as aforesaid and the portion to which the Applicable Contributor
is entitled shall be promptly remitted by the Partnership to the Applicable
Contributor and the portion to which the Partnership is entitled shall be
promptly remitted by the Applicable Contributor to the Partnership. The
Applicable Contributor retains the right to pursue its remedies against
Tenants after the Applicable Closing Date for any delinquent Rents or other
amounts owed to the Applicable Contributor (other than proceedings to evict
Tenant or terminate the Subject Lease). The Partnership shall not enter into
any agreement pursuant to which any sums owed to the Applicable Contributor in
respect of the Subject Lease for periods prior to the Applicable Closing Date
are reduced, modified or waived. The Partnership's obligations to collect rent
arrearages shall be limited to commercially reasonable efforts and the
Partnership shall not be obligated to spend any money without adequate
assurance of reimbursement from the Applicable Contributor, and the
Partnership shall under no circumstance be required to commence litigation
against any Tenant to collect the same. Any cash security deposits held by the
Applicable Contributor for any Subject Lease, together with the interest due
thereon, if any and if required under the terms of the Subject Lease or as
required by applicable law, shall either be credited or transferred to the
Partnership on the Applicable Closing Date at the Applicable Contributor's
option. If any security deposits are in the form of a letter of credit, the
Applicable Contributor shall assign its interest in the letter of credit to
the Partnership (to the extent assignable) and deliver the original letter of
credit to the Partnership at the applicable Closing.
(e) All leasing and brokerage commissions for the Subject
Lease(s) set forth on "Exhibit V" annexed hereto and made a part hereof (and
designated thereon as the responsibility of the Applicable Contributor) shall
be paid by the Applicable Contributor without contribution by, or
reimbursement from, the Partnership. The Partnership shall expressly assume
24
and be solely obligated for the leasing and brokerage commissions for which
the Partnership is the responsible party as set forth on "Exhibit V", for all
the leasing and brokerage commissions arising in connection with expansions
and extensions exercised by a tenant after the Effective Date and all the
leasing and brokerage commissions which are not set forth on said "Exhibit V"
(provided any such commissions that are the Partnership's responsibility as
provided herein are in connection with expansions and renewals exercised by
tenants listed on the rent roll annexed hereto as "Exhibit C" after the
Effective Date and are at rates which brokers are customarily receiving in the
area in which the Subject Property is located), subject only to the
Partnership's right to approve any new Subject Lease or amendments,
discretionary renewals or modifications of any Subject Lease which are not
otherwise permitted pursuant to Paragraph 18(e), below. Any other leasing or
brokerage commissions which are not set forth on Exhibit "V" or are the
responsibility of the Partnership as set forth in the preceding sentence shall
remain the responsibility of the Applicable Contributor. The Applicable
Contributor shall be responsible for the costs of, and shall pay or perform
prior to the Applicable Closing Date, the capital improvements, tenant
improvements and allowances for work performed or required to be performed (or
paid, as applicable) prior to March 23, 1998 by or on behalf of the Applicable
Contributor for all Subject Leases as set forth in "Exhibit V" annexed hereto
and made a part hereof (collectively, the "Contributors Tenant Work"). The
Partnership shall assume, pay or reimburse (as applicable) the Applicable
Contributor on the Applicable Closing Date for the costs of all other capital
improvements, tenant improvements and allowances for work (other than
Contributors Tenant Work) pursuant to the Subject Leases (including all
amendments, renewals and modifications thereof) incurred by or on behalf of
the Applicable Contributor in connection with any Subject Lease (including all
amendments, renewals and modifications thereof) entered into after March 23,
1998 with respect to any of the Subject Real Property, provided that such
costs are explicitly noted on "Exhibit C" hereto or are approved by the
Partnership after the date hereof in accordance with Paragraph 18(e) below.
(f) Amounts paid or payable as fees or expenses under any
of the Licenses relating to the Subject Property (the "Subject Licenses")
assigned on the Applicable Closing Date shall be prorated as of the Applicable
Closing Date but all amounts refundable under unassigned and unassignable
Subject Licenses shall belong to the Contributor of each such Subject License.
(g) The Applicable Contributor shall be solely
responsible for the payment of any "roll back taxes" assessed or imposed upon
any of the Subject 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 Applicable Closing Date,
and the Applicable Contributor agrees to indemnify, defend and save the
Partnership harmless (including attorneys' fees) from and against any claim
for such taxes without regard to the limits set forth in Paragraph 11.
(h) Miscellaneous income relating to the Subject Leases,
including, without limitation, telephone and vending machine income, if any,
shall be prorated as of the Applicable Closing Date, to the extent that such
income has been actually received by the Applicable Contributor.
25
(i) At the Initial Closing, the Partnership shall receive
a credit against the Purchase Price in the amount of $400,000 in full
satisfaction of the obligations of each Contributor and Participants with
respect to the physical condition of the Properties (the "IC Credit"). Prior
to the Initial Closing, Xxxxx shall advise the Partnership, in writing, as to
how the IC Credit shall be allocated to and among the Contributors and
Participants. The Applicable Contributor shall remain responsible for all
payments due under repair contracts for those repair items which are such
Applicable Contributor's responsibility as specifically set forth on Schedule
V. The Partnership shall be responsible for all payments due under all other
repair contracts, provided the Applicable Contributor obtains the prior
written approval of the Partnership for such repair contracts. The Partnership
shall respond to the Applicable Contributor's request for a consent in all
cases under this subparagraph (i) within three (3) business days of receiving
such request. Failure by the Partnership to respond within such three (3)
business day period, shall be deemed the consent of the Partnership to such
repair contract. Except as specifically set forth herein, the Contributors and
Participants shall have no other obligations to the Partnership or to the
Trust with respect to the physical condition of the Properties.
(j) At the Initial Closing, the Contributors and the
Participants set forth on Schedule 13 shall deposit up to $34,000.00 in the
aggregate in escrow so that funds will be available to the Partnership to
complete the environmental condition items at the Properties set forth on
Schedule 13 annexed hereto. The Contributors and the Partnership shall agree
upon the actual amount to be held in escrow prior to the Initial Closing. Such
Contributors, Participants and the Partnership shall, at the Initial Closing,
enter into an agreement, in form and substance reasonably acceptable to all
parties, to reflect such an escrow arrangement. Except as specifically set
forth herein and except for the obligations of the Contributor of the 00
Xxxxxxxxxx Xxxxxx Property set forth in Paragraphs 11(b) and 14(d) below, the
Contributors and the Participants shall have no other obligations to the
Partnership or to the Trust with respect to the environmental condition of the
Properties.
(k) At the Initial Closing, the Contributor of the 80
Skyline-Express Plainview, New York Property shall receive a credit in the
amount of $12,400.00 with respect to such Contributor's funding of the cost of
"tenant extras" pursuant to the terms of such Contributor's lease with Olsten
Health Services.
(l) All prorations shall be made on the basis of the
actual number of days of the month which shall have elapsed as of the day of
the applicable Closing and based upon the actual number of days in the month
and a three hundred and sixty five (365) day year. The amount of such
prorations shall be initially performed at the applicable Closing but shall be
subject to adjustment after the applicable Closing as and when complete and
accurate information becomes available, if such information is not available
as of the Applicable Closing Date. The Partnership and each Applicable
Contributor agree to cooperate and use their best efforts to make such
adjustment no later than one hundred and twenty (120) days after the
applicable Closing (or as soon thereafter as may be practicable, with respect
to common area maintenance and other additional rent charges including
pass-throughs for real estate taxes and special assessments, if any, payable
by tenants under the Subject Leases). Except as set forth in
26
this Paragraph 7, all items of income and expense which accrue for the period
prior to each applicable Closing will be for the account of each Applicable
Contributor and all items of income and expense which accrue for the period
after the applicable Closing will be for the account of the Partnership. The
provisions of this subparagraph 7(i) shall specifically survive each
applicable Closing.
(m) All of the provisions of this Paragraph 7 and each
Contributor's and the Partnership's respective rights and obligations
hereunder shall survive the Closings contemplated by this Agreement and Xxxxx
shall be obligated to cause each Contributor to comply with all of such
Contributor's obligations hereunder.
8. Possession of Property.
(a) Each Contributor or Participant shall deliver
possession to the Real Property conveyed by it to the Partnership either
directly or through the conveyance of Entity Interests on each Closing Date
and shall also deliver possession to the Real Property owned by Contributors
whose Participants have conveyed Entity Interests to the Partnership on each
Closing Date, subject only to the Permitted Exceptions.
(b) The Partnership shall assume, by execution of the
Assignments on each Closing Date, all of each Contributor's obligations in, to
and under the Licenses and Leases assigned on such Closing Date if such
obligations are set forth in writing in such Licenses and Leases and such
Licenses and Leases are listed on Exhibits annexed hereto. The Applicable
Contributor and Xxxxx shall remain responsible for all other obligations in,
to and under the Licenses and the Leases which the Partnership does not assume
pursuant to the terms hereof. Notwithstanding the foregoing, the Partnership
shall not assume management agreements, leasing or brokerage agreements;
provided, however, that the Partnership shall remain liable for all leasing
and brokerage commissions as and to the extent set forth in Paragraph 7(e)
above.
(c) All of the provisions of this Paragraph 8 and each
Contributor's and the Partnership's respective rights and obligations
hereunder shall survive each Closing contemplated hereunder.
9. Employees. The Property of each Contributor does not
include any employees of such Contributor. The Partnership, through an
affiliate or related person, intends, however, to offer to hire or retain (but
shall not be obligated to offer to hire or retain) those individuals currently
employed by DEAC and identified on "Exhibit Q" (the "Transferred Employees")
at salary levels and with benefits consistent with those currently paid by
DEAC, which salary levels and benefits are also set forth on "Exhibit Q". It
is anticipated that the responsibilities currently borne by the Transferred
Employees will be subject to modification to insure consistency with the
Partnership's existing Asset Management/Tenant Services Program. The
Partnership and its affiliates and related persons shall have no obligation or
liability whatsoever with respect to employees of DEAC, or of any Contributor,
Participant or their respective affiliates, it being such Contributor's,
Participant's or affiliate's sole responsibility and obligation to provide
severance arrangements, if any, for all such employees and to pay all
27
liabilities to such employees that accrued or relate to periods of time prior
to the Closing. Closing of the transactions under this Agreement shall not be
conditioned upon any or all of the Transferred Employees accepting employment
with the Partnership or any affiliate or related person of the Partnership.
10. Representations and Warranties.
(a) Each Contributor (excluding Xxxxx), severally and not
jointly, hereby represents and warrants, solely as to himself, itself and each
Property owned by it or him, as the case may be, and Xxxxx, severally and
jointly, hereby represents and warrants as to himself and each Property owned
by each Contributor and as to each Contributor, as follows, all of which shall
be true and correct on, and as of the Effective Date and each applicable
Closing Date:
(1) Unless the Contributor is an
individual, the Contributor is duly organized or formed and validly existing
under the laws of its state of organization or formation, and is in good
standing in such state. With respect to Contributors who are not individuals,
the Contributor is not in default under, or in violation of, any provision of
its organizational documents.
(2) The Contributor 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, as necessary on or prior to
each Closing Date. A list of such required consents or authorizations is
contained on "Exhibit R" attached hereto. A list of such required notices is
contained on "Exhibit R-1". This Agreement constitutes, and the other
documents and instruments to be delivered by the Contributor pursuant hereto
when delivered will constitute, valid and binding obligations of the
Contributor, enforceable against the Contributor in accordance with their
respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar rights of creditors
generally and by general principals of equity.
(3) Except as set forth in "Exhibit S"
attached hereto and made a part hereof, there is no litigation, proceeding,
action or investigation pending or, to the best of the Contributor's
knowledge, threatened against or relating to the Contributor or its Property,
nor is there any judgment, decree, injunction, or order of any court,
governmental department, commission, agency, instrumentality or arbitrator,
which could reasonably be expected to materially and adversely affect the
Contributor or its Property or which would invalidate this Agreement or any
action taken or to be taken by the Contributor pursuant hereto.
(4) Except as set forth in "Exhibit R" and
in "Exhibit "R-1", neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will (i) constitute a
violation or be in conflict with or constitute a default under any term or
provision of the Contributor's constituting or organizational documents; (ii)
result in a violation or breach of, or constitute (with or without due notice
or lapse of time or
28
both) a default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of any
indenture, license, contract, agreement or other instrument or obligation to
which a Contributor is a party or by which its respective properties or assets
may be bound; or (iii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Contributor, or any of its properties or
assets.
(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 Contributor's possession or
control, have been made available as of April 22, 1998, to the Partnership:
(i) Leases and rent rolls; (ii) Contracts; (iii) leases of equipment, vehicles
and other tangible personal property used by Contributor in connection with
the ownership and operation of the Property listed on "Exhibit C-2" (the
"Personal Property Leases"); (iv) Licenses; (v) surveys; (vi) title reports;
(vii) engineering reports; and (viii) environmental reports.
(6) (i) all of the Leases, Contracts,
Personal Property Leases and Licenses are in full force and effect, (ii) to
the best of its knowledge, there has been no action or failure to act by the
Contributor or any other party to any Lease, Contract, Personal Property Lease
or License which, with the giving of notice or the passage of time or both,
would constitute a default in any material respect of such document or
otherwise entitle any other party thereto to damages or a right to terminate;
and (iii) the Contributor has not received from any other party written notice
with respect to a material deficiency in the condition of the Property or the
use or repair of the same or of any alleged default by Contributor under any
such Lease, Contract, Personal Property Lease or License which is reasonably
likely to cost more than $5,000 to cure or remediate individually (or more
than $25,000 in the aggregate for each property), as the case may be. Except
as set forth on "Exhibit T", 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 the
Contributor. Except as set forth on "Exhibit T", to the best of its knowledge,
the Contributor is not a party to any existing management agreement or
brokerage or leasing arrangement.
(7) There is set forth or identified in
"Exhibit U" all of the plans, funds, policies, programs, arrangements or
understandings sponsored or maintained by the Contributor, or DEAC or any DEAC
affiliates (collectively, the "Xxxxx Affiliates"), and administered by the
Contributor or any of the Xxxxx Affiliates, which provide any current employee
of the Contributor or any of the Xxxxx Affiliates (an "Employee") (or any
dependent or beneficiary of any such Employee) with (a) retirement benefits;
(b) severance or separation from service benefits; (c) incentive, performance,
stock, share appreciation or bonus awards; (d) health care benefits; (e)
disability income or wage continuation benefits; (f) supplemental unemployment
benefits; (g) life insurance, death or survivor's benefits; (h) accrued sick
pay or vacation pay; or (i) any other type of material benefit offered under
any arrangement subject to characterization as an "employee benefit plan"
within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") and not excepted by Section 4 of ERISA are
collectively called "Employee Benefit Plans". Except as set forth on
00
"Xxxxxxx X", xxxx of such Employee Benefit Plans is an "employee benefit
pension plan" or a "pension plan" as defined in Section 3(2) of ERISA which is
subject to Title IV of ERISA. As to any Employee Benefit Plan identified in
"Exhibit U", each of the following is true: (i) all amounts due from the
Contributor or other person responsible for sponsoring, maintaining or
administering such Employee Benefit Plan (the "Responsible Person") as
contributions to the date hereof have been paid or accrued on their books;
(ii) the Responsible Person and any Affiliated Company (as hereinafter
defined) have performed or satisfied all material obligations required to be
performed or satisfied by them under, and are not in default under or in
violation of, any Employee Benefit Plan and no other party is in default
thereunder or in violation thereof; (iii) the Responsible Person and any
Affiliated Company are in compliance in all material respects with the
requirements (including reporting and disclosure requirements applicable to
them) prescribed by all statutes, orders or governmental rules or regulations
applicable to the Employee Benefit Plans, including, but not limited to, ERISA
and the Internal Revenue Code of 1986, as amended (the "Code"); (iv) neither
the Responsible Person nor any Affiliated Company or any other "disqualified
person" or "party in interest" (as defined in Section 4975 of the Code and
Section 3(14) of ERISA, respectively) has engaged in any "prohibited
transaction," as such term is defined in Section 4975 of the Code or Section
406 of ERISA, which could subject any Employee Benefit Plan (or its related
trust), the Contributor, the Responsible Person or any Affiliated Company, the
Partnership, the Trust, any shareholder, officer, director, trustee, partner
or employee of the Contributor, any Affiliated Company, the Partnership or the
Trust or any trustee, administrator or other fiduciary of any Employee Benefit
Plan to the tax or penalty imposed under Section 4975 of the Code or Section
502(i) of ERISA; and (v) there are no material actions, suits or claims
pending (other than routine claims for benefits) or threatened, against any
Employee Benefit Plan or against the assets of any Employee Benefit Plan. For
purposes of this subparagraph 10(a)(7), "Affiliated Company" shall mean any
member (whether or not incorporated) of a group which is part of a controlled
group of corporations or under common control (within the meaning of the
regulations promulgated under Section 414 of the Code) and of which the
Contributor, the Xxxxx Affiliates or the Responsible Person is a member.
Neither the Seller nor the Responsible Person maintains or participates in,
and has never maintained or participated in, any "multiemployer plans" as
defined in Section 3(37) of ERISA. There are no liens against the Real
Property arising under ERISA, nor any other compensation or employment related
lien or liability that could become the responsibility of the Partnership.
There are no existing collective bargaining or other employment agreements in
effect with respect to the Real Property or the employees of the Contributor
or the Xxxxx Affiliates. The Contributors and the Xxxxx Affiliates shall offer
health care continuation coverage pursuant to the Consolidated Omnibus
Reconciliation Act ("COBRA"), if any, for persons employed by the Contributor
or Xxxxx Affiliates and have complied and shall otherwise comply in all
material respects with all applicable laws (including laws prohibiting
employment discrimination) relating to persons employed by such Contributors
and the Xxxxx Affiliates.
(8) Except for public improvements which
are to be made in connection with the construction of the 000 Xxx Xxxxxxx Xxxx
Property, to the Contributor's 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
30
heretofore been assessed and, to the Contributor's knowledge, there are no
special or general assessments currently affecting or pending against the Real
Property or any portion thereof.
(9) Except as set forth in "Exhibit S-1",
the Contributor has not been served with written notice that it has been named
as a party in any litigation, administrative proceeding or investigation
naming Contributor 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 such 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 such
federal, state and local laws. Except as set forth in "Exhibit S-1", the
Contributor has not received any summons, citation, directive, letter or other
written communication from any governmental or quasi-governmental authority
concerning any intentional or unintentional action or omission on the
Contributor'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) To the Contributor's knowledge,
except (a) in amounts customarily found in office uses and in other uses for
which the Property is suited and used and (b) in compliance with applicable
law, no Hazardous Substances and no Hazardous Wastes are present on the
Property including, without limitation, asbestos, flammable substances,
explosives, radioactive materials, hazardous wastes, toxic substances,
pollutants, pollution, contaminant, polychlorinated biphenyls ("PCBs"), urea
formaldehyde foam insulation, radon, corrosive, irritant, biologically
infectious materials, petroleum product, garbage, refuse, sludge, hazardous or
waste materials, except as has been disclosed in the environmental site
assessment reports prepared for the Partnership for each Property by Dames &
Xxxxx, and there has been no use of the Property that shall, 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. To the Contributor's knowledge, none of
the Properties 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. Notwithstanding the representations and warranties set forth in
this subparagraph and subparagraph (9) above, the acts, if any, of any
Applicable Contributor's past or current tenants shall not be imputed to such
Applicable Contributor unless such Applicable Contributor shall have actual
knowledge thereof.
31
(11) True and correct copies of the income
and expense statements for each Property owned by the Contributor for the
calendar year 1997 certified by the Contributor, have been delivered to the
Partnership upon execution of this Agreement.
(12) The Contributor has received no
written notice of any material 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 Contributor and related to the ownership or operation of each Property
owned by the Contributor (collectively, the "Permits"), and there is no
pending or, to the knowledge of the Contributor, threatened proceeding which
could result in the revocation or cancellation of, or inability of the
Contributor to renew, any Permit.
(13) Except as set forth in "Exhibit V"
attached hereto and except for the obligations which the Partnership has
specifically agreed to assume pursuant to the provisions of Paragraph 7(e)
above, to the best of the Contributor's knowledge, all management fees,
leasing commissions and tenant improvement allowances relating to the Property
are fully paid, there are no brokerage commissions owing by the Contributor
with respect to any of the Leases or otherwise related to the Properties owned
by the Contributor which have not been paid, and there are no ongoing
commission or leasing fee obligations.
(14) The Contributor has received no
written notice from any insurance company which has issued a policy with
respect to any of the Property or by any board of fire underwriters (or other
body exercising similar functions) claiming any material defects or
deficiencies or requesting the performance of any material repairs,
alterations or other work, and the Contributor will promptly notify the
Partnership of any such notice or requirement if such notice is received prior
to any Closing.
(15) The Contributor is not a "foreign
person" within the meaning of the Internal Revenue Code of 1986, as amended.
(16) The Contributor has not received
written notice in the last two (2) years from any governmental agency or
authority of outstanding material violations issued by governmental
authorities having jurisdiction over the Property owned by it.
(17) Except as set forth in "Exhibit R-1",
there are no options, rights of first refusal, rights of first offer or
conditional sales agreements regarding the purchase and sale of the Property.
(18) 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 and the Licenses. No Tenant has
advised the Contributor in the last two (2) years, that the Contributor is in
default under any of the Leases, or asserted, in the last two (2) years, 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 the Contributor has no
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
32
an event of default. The Contributor 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 the Contributor except as
additional collateral for any existing mortgage upon the Real Property to
which any such Lease relates, which shall be satisfied or assumed at or before
Closing at which such Real Property shall be conveyed by the Contributor. 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 currently being collected by the Contributor under the Leases.
Except as set forth on "Exhibit V", all material obligations of the
Contributor that it is required to complete pursuant to any Lease as of the
date hereof has been completed as of this date or shall be completed as of the
Closing at which the Real Property as to which any such Lease relates shall be
conveyed, and all costs therefore have been or shall be paid by the
Contributor, and all of the Contributor's work has or shall have been accepted
by the Tenant without exception on or before such Closing, other than routine
punch list items, which items shall remain the responsibility of the
Contributor following such Closing (without regard to the limitations set
forth in Paragraph11), and which obligation shall expressly survive Closing.
The amount of each security deposit contains, where required by law or
otherwise, such interest which has accrued in accordance with law. No Tenant
of the Property under any of the Leases has, and shall not at Closing at which
such Property shall be conveyed have, prepaid any rent under any of the Leases
for more than one (1) month. Except as explicitly noted in "Exhibit C", no
security deposits by Tenants have heretofore been returned or applied to
charges against the Tenants.
(19) Schedule 5 is a true and correct list
of matters regarding the Mortgage Loans covered by Paragraph 3(e) above. No
holder of an Assumed Mortgage Loan is entitled to receipt of a participation
interest (whether of profits, sale or refinancing proceeds) in any of the
Consideration to be received by the Applicable Contributor hereunder, nor is
the holder of an Assumed Mortgage Loan entitled to receipt of a participation
interest under any other circumstances.
(20) To the Contributor's knowledge, all
adequate utilities, useable public sanitary and storm sewers, public water
facilities, electric facilities and gas facilities (collectively, the
"Utilities"), are installed in, and are duly connected to, the Property; the
sanitary sewer system has been dedicated to and accepted by the Municipal
Utilities Authority and can be used without charge, except for 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 Partnership. All of
said Utilities are installed and operating and all installation, connection
and "tap-in" charges have been paid in full.
(21) No work has been performed or is in
progress at, and no materials have been furnished to the Contributor with
respect 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
33
complete releases have been obtained and except for the work currently being
performed in connection with the 000 Xxx Xxxxxxx Xxxx Property. If any lien
for any such work is filed before or after Closing with respect to the
Property (including the 000 Xxx Xxxxxxx Xxxx Property), the applicable
Contributor covenants that it shall promptly discharge the same.
(22) To the Contributor'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) All charges, fees and assessments
(including condominium fees) 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 or board of
trustees for the Property (or the development in which the Property is
situated) 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 documentation.
(24) To the Contributor's knowledge, all
debts, liabilities, and obligations of the Contributor arising out of the
construction, ownership, and operation of the Property owned by it, including,
but not limited to, construction costs, salaries, taxes, accounts payable and
the like, have been paid consistent with the Contributor's prior practices and
shall continue to be so paid from the date hereof until the Closing Date with
respect to the Property.
(25) Except as set forth on "Exhibit DD",
there are no existing tax reduction proceedings in effect with respect to the
Property.
(26) Schedule 1 attached hereto correctly
reflects all existing Participants of the Contributor as shown on the books of
the Contributor, the percentage ownership interest of each Participant of the
Contributor, the percentage ownership of the Xxxxx Participants of the
Contributor, and either the state of residence for each individual Participant
and Contributor or the state of formation for each such entity Participant and
Contributor.
(27) Each of the Contributors has
conducted its business only in the ordinary course of such business and there
has not been any change, circumstance or event since January 1, 1998 that has
resulted in a material adverse effect on the business, properties, results of
operations or financial condition of each of the Contributors, taken as a
whole.
(28) Xxxxx and the Contributors have not
provided management, maintenance or other services other than in a de minimis
manner to persons or entities who are not then tenants or customers of the
Property owned by them. The employees listed on "Exhibit Q" only provide
services to Property owned by Xxxxx or DEAC in whole or in part.
34
(29) None of the Contributors have made a
general assignment for the benefit of creditors, filed any voluntary petition
in bankruptcy or suffered the filing of any involuntary petition by the
creditors of any such entity, suffered the appointment of a receiver to take
possession of all, or substantially all, of the assets of such Contributor, or
any of their respective direct or indirect subsidiaries, suffered the
attachment or other judicial seizure of all, or substantially all, of the
assets of any such entity, admitted in writing its inability to pay its debts
as they come due or made an offer of settlement, extension or composition to
its creditors generally.
(b) Each Contributor hereby represents and warrants
as follows, all of which shall be true and correct on and as of the Effective
Date and each Closing Date:
(1) That it has received a copy of the
Trust's Annual Report on Form 10-K for the fiscal year ended December 31,
1997, and all Current Reports on Form 8-K filed by the Trust between January
1, 1998 and the date hereof, the Trust's proxy statement for its annual
meeting of shareholders to be held on May 15, 1998, the Trust's Prospectus
dated November 13, 1997 (relating to Preferred Shares, Common Shares,
Depositary Shares and Warrants), the Trust's Form 10-Q for the quarter ended
March 31, 1998 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
and not with 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;
(3) That it is an Accredited Investor;
(4) That it is not relying on, and did not
become aware of, the offering of the Securities through or as a result of any
form of general solicitation or general advertising including, without
limitation, any article, notice, advertisement or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, in connection with the offering and sale of the
Securities;
(5) 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 and are subject to
substantial restrictions on transfer;
(6) 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 such
state securities laws and the transferability thereof is subject to compliance
with the Securities Act and such state securities laws;
(7) 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
35
Act and any applicable state securities laws, or unless the Securities may be
sold in reliance on an exemption from such registration requirements;
(8) That it understands that, except as
and to the extent set forth in the Registration Rights Agreement, neither the
Partnership nor the Trust has any obligation or intention to register the
Securities for resale under any federal or state securities laws and 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;
(9) 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, 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;
(10) That it has been apprised by Xxxxx of
the terms of the options to be issued to Xxxxx and Xxxx Xxxxx and the
employment agreement to be entered into by Xxxx Xxxxx. That it has reviewed
with Xxxxx the financial condition of the Contributor in which it has an
economic interest and has reviewed with Xxxxx the reasons for the transactions
contemplated by this Agreement and alternatives to the transactions
contemplated hereby;
(11) That it acknowledges that, except for
the information contained in the public filings made by the Trust with the
Securities and Exchange Commission and specifically identified herein, the
undersigned has not relied upon any information furnished by the Trust or the
Partnership in determining to consent to the transactions contemplated by this
Agreement.
(12) THAT IT UNDERSTANDS THAT THE
ACQUISITION OF THE SECURITIES INVOLVES CERTAIN RISKS, including those risks
identified in the Trust's Prospectus dated November 13, 1997 referred to
above, and that it can bear the economic risk of the acquisition of the
Securities, including the total loss of its investment;
(13) 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, and (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;
(14) 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
36
the Securities hereunder, or made any finding or determination as to the
fairness of the Securities for investment;
(15) 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 exemptions and the suitability of the Contributors and Participants to
acquire the Securities. In this regard, it understands that Common Shares will
only be issued upon the redemption of the Units if an exemption from the
registration requirements of the Securities Act is then available for such
issuance; and
(16) That it does not beneficially own
five (5%) percent or more of the outstanding Common Shares.
(c) The Trust and the Partnership, jointly and
severally, hereby represent and warrant to each of the Contributors as
follows, all of which shall be true and correct on and as of the Effective
Date and each Closing 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 and by
virtue of the laws of the State of Maryland, and is in good standing with the
State Department of Assessments and Taxation of Maryland. Each of the Trust
and the Partnership has the trust and limited partnership power and authority,
as the case may be, to own its properties and is duly registered, qualified,
authorized and licensed to do business and is in good standing in each
jurisdiction in which the conduct of its business or the nature of its
properties requires such registration, qualification, authorization or
license, except where the failure to be so registered, qualified, authorized
or licensed would not have a material adverse effect on the Trust and its
subsidiaries taken as a whole.
(2) Subject to subparagraph (c)(5), below,
each of the Trust and the Partnership has all necessary trust and limited
partnership power and authority, as the case may be, to enter into this
Agreement, to execute and deliver this Agreement and 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, in each case,
prior to each Closing. This Agreement has been duly and validly executed and
delivered by each of the Trust and the Partnership and constitutes, and the
other documents and 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, as applicable,
enforceable against the Partnership and the Trust, as applicable, in
accordance with their respective terms.
37
(3) Neither the execution and delivery of
this Agreement by the Trust or the Partnership nor the consummation by any of
them of the transactions contemplated hereby nor compliance by each of them
with any of the provisions hereof will (i) conflict with or result in any
breach of any provision of the organizational documents of the Trust or the
Partnership; (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any indenture, license, contract, agreement or
other instrument or obligation to which the Trust or the Partnership is a
party or by which any of them or any of their respective properties or assets
may be bound; or (iii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Trust or the Partnership, or any of their
properties or assets.
(4) There is no litigation, proceeding or
action pending, or, to the Partnership'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 would invalidate this Agreement or
any action taken or to be taken by the Partnership or the Trust pursuant
hereto.
(5) Except in connection with the filing
by the Trust of a supplemental listing application with the NYSE to list the
Common Shares issuable upon redemption of the Units issuable hereunder and the
registration of the Underlying Shares pursuant to the Registration Rights
Agreement and as required by any federal and state securities or "blue sky"
laws, no permit, 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.
(6) The Units to be issued hereunder are
duly authorized and, when issued by the Partnership, will be fully paid and
non-assessable, free and clear of any mortgage, pledge, lien, encumbrance,
security interest, claim or rights of interest of any third party. The Common
Shares that may be issued upon redemption of the Units are duly authorized,
and, upon such issuance, will be fully paid and non-assessable, free and clear
of any mortgage, pledge, lien, encumbrance, security interest, claim or rights
of interest of any third party. As of the date hereof, if the Unitholders were
to redeem a Unit pursuant to the Partnership Agreement and the Trust were to
satisfy such redemption with Common Shares, such Unitholder, as applicable,
would receive one Common Share in exchange therefor. As of the date on which
the last dividend on the Common Shares was paid, the amount of the dividend
payable with respect to one Common Share into which a Unit may be redeemed was
equivalent to the distribution payable on one Unit that had been outstanding
for the last full quarter.
(7) Since January 1, 1998, the Trust has
filed all reports, schedules, forms, statements and other documents
(collectively, the "SEC Documents") required to be filed by it with the
Securities and Exchange Commission ("SEC"). The Trust furthermore has caused
to be delivered to the Contributors copies of the SEC Documents (without
exhibits) and will cause to be delivered to the Contributors copies of such
additional
38
documents as may be filed by the Trust pursuant to the 1933 Act or the 1934
Act on or prior to the Closing Date if the Trust believes such documents
contain such information that would be material to a Participant or
Contributor. The SEC Documents were, and those additional documents filed
between the date hereof and the Closing will be, prepared and filed in
material compliance with the 1933 Act and the 1934 Act and the rules and
regulations promulgated by the SEC, and do not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein in order to make the statements contained therein, in light of
the circumstances under which they were made or will be made, not misleading.
The consolidated financial statements included in the SEC Documents (i)
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, (ii) have been prepared in accordance with GAAP and applied on a
consistent basis during the period involved (except as may be indicated in the
notes thereto or, in the case of the unaudited statements, as permitted by
Form 10-Q) and (iii) present fairly (subject, in the case of the unaudited
statements, to normal, recurring year-end audit adjustments) the consolidated
financial position of the Trust and its subsidiaries at the dates thereof and
the consolidated results of operations and cash flows for the periods then
ended.
(8) Except as disclosed in the SEC
Documents filed with the SEC prior to the date hereof , since March 31, 1998,
each of the Trust and the Partnership and each of their subsidiaries has
conducted its business only in the ordinary course of such business and there
has not been any change, circumstance or event that has resulted in a material
adverse effect on the business, properties, results of operations or financial
condition of the Trust, the Partnership and their respective subsidiaries,
taken as a whole.
(9) Neither the Trust nor the Partnership,
nor any of their respective direct or indirect subsidiaries is at the date of
this Agreement, or will be at the Closing, required to be registered with the
SEC as an investment company under the Investment Company Act of 1940, as
amended.
(10) Neither the Trust nor the Partnership
is in default under, or in violation of, any provision of its organizational
documents.
(11) Neither the Trust nor the
Partnership, nor any of their respective direct or indirect subsidiaries has
made a general assignment for the benefit of creditors, filed any voluntary
petition in bankruptcy or suffered the filing of any involuntary petition by
the creditors of any such entity, suffered the appointment of a receiver to
take possession of all, or substantially all, of the assets of the Trust, the
Partnership, or any of their respective direct or indirect subsidiaries,
suffered the attachment or other judicial seizure of all, or substantially
all, of the assets of any such entity, admitted in writing its inability to
pay its debts as they come due or made an offer of settlement, extension or
composition to its creditors generally.
(12) To the knowledge of the Trust and the
Partnership, except as disclosed in the SEC Documents, none of the Trust, the
Partnership, or any of their respective direct or indirect subsidiaries has
violated or failed to comply with any statute, law,
39
ordinance, regulation, rule, judgment, decree or order of any governmental
authority applicable to its business, properties, or operations, except for
any violations and failures to comply that would not, in the aggregate,
reasonably be expected to have a material adverse effect on the Trust, the
Partnership and their respective subsidiaries, taken as a whole.
(13) The Trust, beginning with its taxable
year ended December 31, 1986 and through December 31, 1997 (i) has been
subject to taxation as a Real Estate Investment Trust (a "REIT Entity") within
the meaning of the Code and has complied with all requirements contained in
the Code to qualify as a REIT Entity for such years, (ii) has operated, and
currently intends to continue to operate, in such a manner as to qualify as a
REIT Entity for the tax year ending December 31, 1998 and thereafter and (iii)
has not taken or omitted to take any action which could reasonably be expected
to result in a successful challenge to its status as a REIT Entity, and no
such challenge is pending or, to the knowledge of the Trust, threatened.
Neither the Trust nor any of its Subsidiaries holds any asset that is subject
to a consent filed pursuant to Section 341(f) of the Code and the regulations
thereunder.
(14) The Trust and the majority-owned
subsidiaries of the Trust (the "Subsidiaries") have (A) timely filed with the
appropriate taxing authority all Tax Returns required to be filed by them
(after giving effect to any filing extension granted by the appropriate taxing
authority) and such Tax Returns were true, complete and accurate in all
respects and (B) have paid all Taxes shown as owed by any of them on any Tax
Return. Neither the Trust nor any of the Subsidiaries has executed or filed
with the Internal Revenue Service or any other taxing authority any agreement
now in effect extending the period for assessment or collection of any Tax. To
the Trust's knowledge, neither the Trust nor any of the Subsidiaries is a
party to any material pending action or proceedings by any taxing authority
for assessment or collection of any Tax, and no material claim for assessment
or collection of any Tax has been asserted against any of them. No claim has
been made by an authority in a jurisdiction where the Trust or any of the
Subsidiaries, as applicable, does not file Tax Returns that such entity is or
may be subject to taxation by the jurisdiction. There is no material dispute
or claim concerning any Tax liability of the Trust or any of the Subsidiaries
claimed or raised by any taxing authority and neither the Trust nor any of the
Subsidiaries has entered into or intends to enter into any agreements with any
taxing authority, including but not limited to closing agreements. True,
complete and accurate copies of all income or franchise tax returns that have
been filed by the Trust or any of the Subsidiaries for 1993, 1994, 1995 and
1996 and all written communications with a taxing authority relating thereto
which could affect the tax status of the Trust have been delivered to the
Contributors.
(15) Neither the Trust nor any of the
Subsidiaries has incurred (i) any material liability for Taxes under Sections
856(b), 860(c) or 4981 of the Code, or (ii) a liability for Taxes other than
Taxes incurred in connection with the ordinary course of business. Except for
the risks identified in the Trust's Prospectus dated November 13, 1997
referenced in Section 10(b)(i) above, no event has occurred, and to the
Trust's knowledge, no condition or circumstances exists, which presents a
material risk that any material Tax described in the preceding sentence will
be imposed upon the Trust or any of the Subsidiaries.
40
(16) The Partnership was not and is not a
publicly traded partnership within the meaning of Section 7704 of the Code and
the regulations promulgated thereunder. In addition, no Subsidiaries have
taken the position, for federal income tax purposes, that it is a publicly
traded partnership within the meaning of Section 7704 of the Code and the
regulations promulgated thereunder and (ii) (A) the Subsidiaries organized as
a partnership or a limited liability company including, without limitation,
the Partnership (and any other Subsidiaries that file tax returns as
partnership for income tax purposes) were and continue to be classified as
partnerships for income tax purposes (other than wholly owned, "100% pass
through" subsidiary partnerships and limited liability companies which are not
classified as a partnerships for income tax purposes); and (B) each
corporation or other entity which is taxable as a corporation for income tax
purposes and in which the Trust has a direct or indirect interest is either
(x) a "qualified REIT Entity subsidiary", within the meaning of Section 856(i)
of the Code, or (y) an entity of which less than ten (10%) percent of the
voting securities is owned directly or indirectly by the Trust and of which
the total value of the securities of such entity owned directly or indirectly
by the Trust represent less than five (5%) percent of the value of the assets
of the Trust within the meaning of Section 856(c)(5) of the Code.
(17) The Trust is a "domestically-
controlled" REIT Entity within the meaning of Section 897(h)(4)(B).
(18) To the Trust's knowledge, no person
or entity owns or would be considered to own (taking into account the
ownership attribution rules under Section 544 of the Code, as modified by
Section 856(h) of the Code) in excess of 9.8% of the value of the outstanding
equity interests in the Trust, except as set forth in public filings on either
Schedule 13D or 13G filed with the Securities and Exchange Commission.
(19) Neither the Trust nor the Partnership
is an entity whose assets are deemed to be "plan assets" within the meaning of
the Department of Labor Regulation Section 2510.3-101.
(d) As to any representation or warranty made in
this Agreement which is qualified as being to the "knowledge" of any party,
the following shall apply: a Contributor will be deemed to have knowledge of a
particular matter if the facts and circumstances thereof are actually known,
without any implied, imputed or constructive knowledge, without any
independent investigation having been made or any implied duty to investigate
by Xxxxxx Xxxxx and Xxxx Xxxxx, and with respect to the Property located at 00
Xxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx, if the facts and circumstances thereof are
actually known, without any implied, imputed or constructive knowledge,
without any independent investigation having been made or any implied duty to
investigate by Xxxxxx Xxxxxx only. The Partnership will be deemed to have
knowledge of a particular matter if the facts and circumstances thereof are
actually known, without implied, imputed or constructive knowledge, without
independent investigation having been made or any implied duty to investigate
by Xxxxxx X. Xxxxxxx, Xxxx X. Xxxxxxxx, Esq. and Xxxxxx Xxxxx.
41
(e) All of the representations and warranties set forth
in this Paragraph 10 shall be deemed renewed by Xxxxx, each Contributor, the
Trust and the Partnership on each Closing Date and shall, as a conditions to
each party's obligation to close hereunder, be recertified by each party as
being true and correct in all material respects as of such Closing Date as if
made at such time (it being understood that specific, numbered representations
and warranties that speak as of a specified date shall only continue to speak
as of the date so specified).
(f) If, to the Trust's or the Partnership's knowledge,
as evidenced by written information furnished to them, any of the
Contributor's or Xxxxx'x representations or warranties in this Agreement are
not true as of the Closing and the Trust and the Partnership elect nonetheless
to close, the Trust and the Partnership shall be deemed to have waived any
claim for breach of such representation or warranty. This limitation shall be
in addition to, and not in substitution for, any other limitations of the
Trust's and the Partnership's remedies or damages set forth in this Agreement.
(g) If, to Xxxxx'x or the Contributors' knowledge, as
evidenced by written information furnished to them, any of the Trust's or the
Partnership's representations or warranties in this Agreement are not true as
of the Closing and the Contributors elect nonetheless to close, the
Contributors shall be deemed to have waived any claim for breach of such
representation or warranty. This limitation shall be in addition to, and not
in substitution for, any other limitations of the Contributors' or Xxxxx'x
remedies or damages set forth in this Agreement.
(h) Any event, fact or circumstance described in any
section of the Disclosure Schedules shall be deemed a disclosure for all
purposes of all other portions of the Disclosure Schedules, provided the
relevance of the disclosure to such other portions can be reasonably discerned
from the applicable section of the Disclosure Schedules.
11. Survival; Indemnification.
(a) The Partnership hereby acknowledges and agrees that
the representations and warranties contained in Paragraphs 10 (a) (3), (7)
(with respect to representations and warranties made by Xxxxx and each
Contributor regarding compliance with ERISA only), (17) and 10(b) shall
survive for a period of three (3) years from the Applicable Closing Date for
such Subject Property. With respect to all other representations and
warranties set forth in Paragraph 10, the representations and warranties made
with respect to a Subject Property in Paragraph 10 shall survive for a period
of nine (9) months from the Applicable Closing Date for such Subject Property.
The representations and warranties of the Trust and the Partnership shall
survive for nine (9) months from the Applicable Closing Date. In addition, in
the event that an Applicable Contributor delivers to the Partnership a tenant
estoppel certificate for a tenant (whether prior to, at or subsequent to any
Applicable Closing), then the Applicable Contributor shall thereafter be
released from all liability relating to such tenant's Lease which the
Applicable Contributor may have as a result of its representations, warranties
and certificates under Paragraphs 10(a)(6), 10(a)(18) and Paragraph 20(i)
below to the extent such representations and warranties relate to matters
covered by the tenant estoppel certificate
42
(provided such tenant estoppel contains no information which is materially and
adversely contradictory or inconsistent with the information previously
provided by the Applicable Contributor to the Partnership with respect to such
tenant). Any claim that the Trust or the Partnership may have at any time
against Xxxxx or any other Contributor or that any Contributor or Participant
may have against the Trust or the Partnership for a breach of any such
representation or warranty, whether known or unknown, which is not asserted by
written notice from the Partnership and the Trust to Xxxxx or the Applicable
Contributor or by the Contributor and Participants against the Trust and the
Partnership within such three (3) year period or nine (9) month period, as the
case may be, will not be valid or effective, and Xxxxx and such Applicable
Contributor, the Trust and the Partnership will have no liability with respect
thereto. Nor shall the Contributors and Xxxxx have an aggregate liability to
the Partnership or the Trust for a breach of any representation or warranty
exceeding $7,500,000.00 (the "R&W Cap"). If the Partnership or the Trust is
successful in an action regarding a breach of a representation or warranty,
the Applicable Contributor and Xxxxx shall have the right, at the option of
such Applicable Contributor and Xxxxx, to redeem Units (at the market price
for one Common Share for each Unit at the time such action is completed) or
pay such amounts in cash.
(b) Without limitation of any other indemnity
obligations of the Contributors or Xxxxx set forth herein, from and after the
Initial Closing Date, each Contributor and Xxxxx shall be obligated to
indemnify, defend and save and hold harmless the Partnership and the Trust,
and their respective partners, trustees, 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 such
Contributor's or Participant's indemnification obligations (hereinafter
collectively, the "P&T 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 a breach of a representation or warranty
by such Contributor or Participant contained in this Agreement, subject,
however, to the time limitations set forth in Paragraph 11(a) above; (ii) all
litigation identified on "Exhibit S" to which such Contributor or Participant
has ever been a party; (iii) all "non-Property claims and liabilities" (as
hereinafter defined) arising out of the Contributor, the Entity Interests in
which will be assigned to the Partnership; (iv) 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 of
Hazardous Substances or Hazardous Wastes in or on any Property conveyed by
such Contributor to the Partnership during Contributor's period of ownership,
but only if such Contributor had actual knowledge of the such Hazardous Wastes
or Hazardous Substances condition and failed to disclose same to the
Partnership (except in the case of those environmental remediation conditions
which are specifically the subject of the environmental escrow arrangement
described in Paragraph 7(j) above, in which case such Contributor shall be
obligated to indemnify and hold the Partnership and the Trust harmless from
and against the matters set forth in this subparagraph (iv) with respect to
those environmental remediation conditions which are the subject of the
environmental escrow arrangement and any additional environmental remediation
which may arise as a result thereof, regardless of whether such Contributor
had actual knowledge of the same); (v) any and all actions, suits,
investigations, proceedings, demands, assessments, audits, judgments; and/or
claims arising out
43
of or relating to any of the foregoing. This obligation shall survive all
Closings contemplated hereby. For purposes of this Agreement, the term
"non-Property claims and liabilities" means claims and liabilities which would
not have been incurred by the Trust or Partnership had the Trust or
Partnership acquired the applicable Property owned by the Applicable
Contributor, rather than the Entity Interests, on the terms and conditions,
and subject to the representations and warranties, contained herein applicable
to Property being acquired in fee.
(c) Without limitation of any other indemnity
obligations of the Trusts or Partnership set forth herein, from and after the
Initial Closing Date, each of the Trust and the Partnership shall be obligated
to indemnify, defend and save and hold harmless the Contributors and the
Participants, and their respective partners, 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 such
Trust's or Partnership's indemnification obligations (hereinafter
collectively, the "C&P Losses") which each Contributor and Participant may
suffer or incur, resulting from, relating to, or arising in whole or in part,
from or out of (i) any misrepresentation or a breach of a representation or
warranty by the Trust or the Partnership contained in this Agreement; and (ii)
any and all actions, suits, investigations, proceedings, demands, assessments,
audits, judgments; and/or claims arising out of or relating to any of the
foregoing. This obligation shall survive all Closings contemplated hereby.
(d) 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 "P&T Third Party Action") or
promptly after the Partnership or the Trust incurs any P&T Losses or has
knowledge of the existence of any P&T Losses, the Partnership or the Trust, as
the case may be, will, if a claim with respect thereto is to be made against
any Contributor or Xxxxx (the "P&T Indemnitor") due to such P&T Indemnitor's
obligation to provide indemnification hereunder, give such P&T Indemnitor
written notice within forty-five (45) days of such P&T Losses or within
forty-five (45) days of the Partnership's or the Trust's receipt of notice of
the commencement of any P&T Third Party Action. Promptly after receiving such
notice, the P&T Indemnitor 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 P&T 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 the P&T Indemnitor that the P&T Indemnitor shall agree in
writing that the P&T Losses, or the P&T Third Party Action, as the case may
be, is properly within the scope of the indemnification obligation and that as
between the parties, the P&T Indemnitor shall be responsible to satisfy and
discharge such P&T Third Party Action. No P&T Indemnitor shall enter into any
resolution or other compromise of a P&T 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 P&T 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.
(e) 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 P&T
44
Third Party Action if (a) 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) the P&T Indemnitor 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 P&T 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 the P&T Indemnitor provided that such written
consent may not be withheld if it would materially interfere with the
Partnership's or the Trust's, as the case may be, business operation and (ii)
keep the P&T Indemnitor informed on an ongoing basis of the status of such P&T
Third Party Action and shall deliver to the P&T Indemnitor copies of all
documents related to the P&T Third Party Action reasonably requested by the
P&T Indemnitor. 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.
(f) Promptly after receipt by a Contributor, Xxxxx or a
Participant of written notice of the commencement of any suit, audit, demand,
judgment, action, investigation or proceeding (a "C&P Third Party Action") or
promptly after such Contributor, Xxxxx or a Participant incurs any Losses or
has knowledge of the existence of any C&P Losses, such Contributor, Xxxxx or a
Participant will, if a claim with respect thereto is to be made against the
Trust or the Partnership (the "C&P Indemnitor") due to such C&P Indemnitor's
obligation to provide indemnification hereunder, give such C&P Indemnitor
written notice within forty-five (45) days of such C&P Losses or within
forty-five (45) days of such C&P's receipt of notice of the commencement of
any C&P Third Party Action. Promptly after receiving such notice, the C&P
Indemnitor will, upon notice to the Contributor and the Participant have the
right to assume and control the defense and settlement of any such C&P 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 the C&P Indemnitor that
the C&P Indemnitor shall agree in writing that the C&P Losses, or the C&P
Third Party Action, as the case may be, is properly within the scope of the
indemnification obligation and that as between the parties, the C&P Indemnitor
shall be responsible to satisfy and discharge such C&P Third Party Action. No
C&P Indemnitor shall enter into any resolution or other compromise of a C&P
Third Party Action without obtaining the complete release of the Contributor,
Xxxxx or the Participant, as appropriate, for any liability to all claimants
under or pursuant to such C&P Third Party Action. The Contributor, Xxxxx and
the Participant shall have the right to participate in any such defense,
contest or other protective action at its own cost and expense.
(g) Notwithstanding the foregoing, the Contributor,
Xxxxx and the Participant shall have the right to assume and control the
defense and settlement of a C&P Third Party Action if (a) such action includes
claims for equitable relief which, if determined adversely to the Contributor,
Xxxxx and the Participant could reasonably be expected to interfere with its
intended business operations or damage its business reputation or (b) the C&P
Indemnitor fails to do so in a timely manner. In any circumstances in which
the Contributor, Xxxxx and the Participant undertakes to control the C&P 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 the C&P Indemnitor provided that such written
consent
45
may not be withheld if it would materially interfere with the Contributor's,
Xxxxx'x and the Participant's business operation and (ii) keep the C&P
Indemnitor informed on an ongoing basis of the status of such C&P Third Party
Action and shall deliver to the C&P Indemnitor copies of all documents related
to the C&P Third Party Action reasonably requested by the C&P Indemnitor. The
Contributor. Xxxxx and the Participant shall act to assure that all attorneys'
fees and expenses incurred in connection therewith are reasonable.
(h) Except as specifically set forth in this
subparagraph (h), from and after the Initial Closing Date, the Trust and the
Partnership on the one hand and the Contributors and Xxxxx on the other hand
shall indemnify, defend, save and hold harmless the other group and their
respective partners, trustees, officers and employees of, from and against
one-half of any and all loss, cost, expense, damage and liability, including
reasonable attorneys' fees, arising with respect to any state or county
documentary or transfer taxes (including any interest and late charges with
respect thereto) imposed subsequent to each Closing in connection with the New
Jersey Property. Notwithstanding the foregoing, Xxxxx and the Contributor of
the 0 Xxxxxxx Xxxxx Property shall indemnify, jointly and severally, save and
hold harmless the Trust and the Partnership and their respective partners,
trustees, officers and employees of, from and against any and all loss, cost,
expense, damage and liability, including reasonable attorneys' fees, arising
with respect to any state or county documentary or transfer taxes (including
any interest and late charges with respect thereto) imposed subsequent to the
Initial Closing in connection with such Contributor's recordation of the 3
Paragon Correcting Deed and Xxxxx and the Contributor of the 25 Xxxxxxxx
Property shall indemnify, jointly and severally, save and hold harmless the
Trust and the Partnership and their respective partners, trustees, officers
and employees of, from and against any and all loss, cost, expense, damage and
liability, including reasonable attorneys' fees, arising with respect to any
state or county documentary or transfer taxes (including any interest and late
charges with respect thereto) imposed subsequent to the Initial Closing in
connection with such Contributor's recordation of the 25 Xxxxxxxx Correcting
Deed, in each case without regard to the limitations in Paragraph 11.
(i) The indemnifying party and the indemnified party
under subparagraphs (d) through (h) above shall cooperate fully in all aspects
of any investigation, defense, pretrial activities, trial, compromise,
settlement or discharge of any claim in respect of which indemnity is sought
pursuant to this Paragraph 11, including, but not limited to, by providing the
other party with reasonable access to employees and officers (including as
witnesses) and other information.
(j) IN NO EVENT SHALL ANY PARTY HERETO, OR ANY DIRECT OR
INDIRECT PARTNER, MEMBER, SHAREHOLDER, BENEFICIARY, OWNER OR AFFILIATE
THEREOF, OR ANY OFFICER, DIRECTOR, EMPLOYEE, TRUSTEE, OR AGENT OF ANY OF THE
FOREGOING OR ANY AFFILIATE OR CONTROLLING PERSON THEREOF, BE LIABLE TO ANY
INDEMNIFIED PARTY IN CONTRACT, TORT OR OTHERWISE WITH RESPECT TO ANY INDIRECT,
CONSEQUENTIAL, OR EXEMPLARY DAMAGES ARISING FROM OR RELATING TO THIS AGREEMENT
OR ANY CLOSING DOCUMENT OR TRANSACTION DOCUMENT.
46
(k) IN NO EVENT SHALL THE CONTRIBUTORS OR XXXXX BE
LIABLE TO THE TRUST OR THE PARTNERSHIP HEREUNDER UNLESS AND UNTIL THE
AGGREGATE AMOUNT OF DAMAGES FOR WHICH THE CONTRIBUTORS OR XXXXX ARE OBLIGATED
TO INDEMNIFY THE TRUST AND THE PARTNERSHIP EXCEEDS $150,000, AFTER WHICH THE
TRUST AND THE PARTNERSHIP MAY BRING ONE OR MORE CLAIMS AGAINST THE
CONTRIBUTORS OR XXXXX FOR THE ENTIRE AMOUNT OF THEIR AGGREGATE DAMAGES,
SUBJECT TO THE FURTHER LIMITATIONS SET FORTH IN THIS PARAGRAPH 11.
(l) IN NO EVENT SHALL THE TRUST OR THE PARTNERSHIP BE
LIABLE TO THE CONTRIBUTORS, XXXXX OR THE PARTICIPANTS HEREUNDER UNLESS AND
UNTIL THE AGGREGATE AMOUNT OF DAMAGES FOR WHICH THE TRUST OR THE PARTNERSHIP
ARE OBLIGATED TO INDEMNIFY THE CONTRIBUTORS, XXXXX OR THE PARTICIPANTS EXCEEDS
$150,000, AFTER WHICH THE CONTRIBUTORS, XXXXX AND THE PARTICIPANTS MAY BRING
ONE OR MORE CLAIMS AGAINST THE TRUST OR THE PARTNERSHIP FOR THE ENTIRE AMOUNT
OF THEIR AGGREGATE DAMAGES SUBJECT TO THE FURTHER LIMITATIONS SET FORTH IN
THIS PARAGRAPH 11.
(m) IF THE CLOSING OCCURS, THE TRUST AND THE PARTNERSHIP
ON THE ONE HAND, AND THE CONTRIBUTORS, XXXXX AND PARTICIPANTS, ON THE OTHER
HAND, SHALL NOT HAVE THE RIGHT TO BRING A CLAIM AGAINST ANY MEMBER OF THE
OTHER GROUP BY VIRTUE OF ANY OF THE REPRESENTATIONS OR WARRANTIES CONTAINED
HEREIN OR IN ANY TRANSACTION DOCUMENT BEING FALSE OR MISLEADING UNLESS (I)
SUCH CLAIM IS BROUGHT ON OR PRIOR TO THE DATE ON WHICH A CLAIM BASED ON SUCH
REPRESENTATION OR WARRANTY MAY NO LONGER BE BROUGHT AND (II) NOTICE OF THE
FALSE OR MISLEADING REPRESENTATION OR WARRANTY HAS BEEN GIVEN TO THE MEMBERS
OF THE APPLICABLE GROUP AND THE MEMBERS OF SUCH GROUP HAVE HAD THIRTY (30)
DAYS TO CURE SAME, PROVIDED SAME IS SUSCEPTIBLE TO CURE WITHIN SAID THIRTY
(30) DAY PERIOD.
(n) Notwithstanding anything contained in this Paragraph
11 to the contrary, the R&W Cap and the provisions of subparagraphs 11(k) and
11(l) hereof shall not apply with respect to the indemnifications by the
Contributors and Xxxxx set forth in subparagraph 11(b)(ii) through (b)(v)
hereof and with respect to the indemnifications of all parties set forth in
subparagraph 11(h) hereof.
(o) As collateral security for Xxxxx'x indemnification
obligations under this Paragraph 11, at the Initial Closing, Xxxxx shall enter
into a pledge agreement, in the form annexed hereto as "Exhibit FF" (the
"Xxxxx Pledge Agreement"), pursuant to which Xxxxx shall pledge and grant to
the Partnership a security interest in the 312,500 Units which Xxxxx is to
receive at the Initial Closing.
47
(p) With respect to the indemnity obligations of Xxxxxx
Xxxxxx under this Paragraph 11, it is understood and agreed by the Partnership
and the Trust that such indemnity obligations shall only relate to the 00 Xxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx Property.
12. Access to the Property.
(a) The Partnership and its agents, employees and
representatives, during normal business hours and after reasonable advance
notice to any Contributor, may enter upon any of the Real Property of such
Contributor from time to time prior to the Closing Date with respect to such
Real Property, accompanied by an agent of the Contributor, 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
Inspections"). 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 the Contributor and only after
three (3) business days' prior notice to the Contributor. The Partnership may
contact any governmental or quasi-governmental authorities concerning the
Property without the prior written approval of the Contributor. The
Partnership shall give the Contributor at least five (5) days notice prior to
the Partnership contacting any such governmental or quasi-governmental
authorities. The Contributor shall have the opportunity to observe any and all
action taken by the Partnership or its representatives, consultants, agents,
etc. pursuant to this Paragraph 12. All information set forth in any document
which the Contributor has granted to the Partnership the express right to
review, if any, shall be held in confidence until the Closing Date hereunder
to which such information relates. The Partnership shall promptly repair any
damage to the Real Property resulting from the Partnership Inspections and
replace, refill and regrade any holes made in, or excavations of, any portion
of the Real Property used for such Partnership Inspections so that the Real
Property shall be in the same condition that it existed prior to such
Partnership Investigations. In conducting any inspections, investigations or
tests of the Real Property, the Trust and the Partnership and their agents and
representatives shall: (i) not disturb or interfere in any material respect
with the Tenants' use of the Real Property pursuant to their respective
Leases; (ii) not interfere in any material respect with the operation and
maintenance of the Real Property; (iii) not damage in any material respect any
part of the Real Property or any personal property owned or held by Tenant or
any other Person; (iv) not injure or otherwise cause bodily harm to any
Contributor, or its agents, guests, invitees, contractors and employees or any
Tenant or any other Person; (v) promptly pay when due the costs of all tests,
investigations, and examinations performed by or on behalf of the Trust or the
Partnership with regard to the Real Property; and (vi) comply with all
statutes, laws, ordinances, rules and regulations applicable to any such
inspections, investigations or tests. The Partnership hereby agrees to
indemnify, defend and hold harmless Contributor from and against all (a)
physical damage to any of the Real Property and Personal Property, personal
injury and/or any other claims or liability which may
48
occur as a result of the Partnership's (or the Partnership's agents,
employees, or representatives) entry or activities upon any of the Real
Property, as specified in this Paragraph and (b) any liens or encumbrances
filed or recorded against any of the Real Property as a consequence of the
Partnership or the Partnership's representatives entry thereon. The provisions
of this Paragraph 12(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 each Contributor as additional
named insured with respect to any liability occurring on the Real Property of
such Contributor), 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 Contributor prior to the Partnership's or any of the
Partnership's consultants' entry on to any of the Real Property.
Notwithstanding anything to the contrary in Paragraph 12(a), the Partnership
shall have no obligation to indemnify any contributor to the extent that any
liability is covered by the insurance obtained by the Partnership pursuant to
this Paragraph 12(b).
(c) In the event Closing does not occur with respect to
one or more Parcels of Real Property, the Partnership shall promptly return to
Contributor any documents obtained from Contributor or Contributor's agents
and deliver to Contributor, without charge, copies of all written test
results, studies, reports and similar materials obtained by or on behalf of
the Partnership relating to such Real Property.
13. 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 review all plans and specifications, conditions of title,
agreements relating to and the availability of utilities, environmental
conditions, the physical condition of the existing improvements, compliance by
the Properties with zoning, licensing and all other governmental requirements,
Leases for any of the Real Property, operating statements pertaining to the
Properties and all other aspects and conditions of the Properties which the
Partnership may decide to review (collectively with the Partnership's
Inspections, "the Partnership's Due Diligence Activities"), all as the
Partnership shall deem appropriate. In connection with the Partnership's Due
Diligence Activities, each Contributor has delivered or will deliver to the
Partnership various documents, reports and materials (collectively, the
"Contributor Due Diligence Materials"). The Partnership understands and hereby
acknowledges and agrees that the Contributor Due Diligence Materials are being
delivered to the Partnership without any representation or warranty whatsoever
by any Contributor or by the preparer of such Contributor 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. The Partnership and the Trust hereby acknowledge and agree
that the Due Diligence Termination Date has, as of the date hereof, expired
and the right of the Partnership and the Trust to conduct the Partnership's
Due Diligence Activities and to terminate this Agreement as a result thereof
has also expired.
49
(b) INTENTIONALLY DELETED.
(c) Each Contributor shall prepare certificates (the
"Estoppel Certificates") for execution by the Tenants of such Contributor's
Real Property, which shall 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) be in the form annexed hereto as "Exhibit W". Each Contributor
agrees to deliver the Estoppel Certificates to the Tenants of its Real
Property promptly after the Due Diligence Termination Date and to use all
reasonable and diligent efforts to obtain executed copies of same from such
Tenants prior to the Closing with respect to such Real Property.
(d) Xxxxx shall recommend to all of the Participants
that they each consent to the transactions contemplated by this Agreement and
shall use good faith efforts to obtain the consents of each of the
Participants, if the organizational documents of each Contributor require that
such consents be obtained in order to effectuate the same. In soliciting the
consents of the Participants, Xxxxx shall also provide each Participant with
information regarding the transactions contemplated hereby which is sufficient
to comply with the partnership or limited liability company law of the
applicable state.
14. Additional Provision Relating to the 0 Xxxxxxx Xxxxx
Property, the 000 Xxxxxxx Xxxxx Property and the 000 Xxx Xxxxxxx Xxxx
Property.
(a) The 3 Paragon Drive Property. (i) Axinn holds fee title
to the 0 Xxxxxxx Xxxxx Property as nominee for a New York general partnership
known as 80-20 Associates (the "3 Paragon Drive Partnership"). Axinn and
Xxxxxxx Xxxxx are the sole partners in the 0 Xxxxxxx Xxxxx Partnership.
(ii) Axinn is the borrower under a loan (the "NY Life
Loan") with New York Life Insurance Company ("NY Life"). Axinn has entered
into a Forbearance Agreement dated June 10, 1998 (the "Forbearance Agreement")
with NY Life.
(iii) The costs incurred and anticipated to be incurred
by the 0 Xxxxxxx Xxxxx Partnership in connection with the 0 Xxxxxxx Xxxxx
Partnership's operation of the 0 Xxxxxxx Xxxxx Property from March 24, 1998
through the remainder of 1998 are set forth on Schedule 12 annexed hereto (the
"3 Paragon Operating Costs").
(iv) At the Initial Closing, the Partnership agrees to
pay the 0 Xxxxxxx Xxxxx Partnership the sum of (1) $500,000 plus (ii) an
amount equal to the 3 Paragon Operating Costs actually incurred through the
Initial Closing. In exchange for the payments made by the Partnership pursuant
to the preceding sentence, the 0 Xxxxxxx Xxxxx Partnership grants the
Partnership an option (the "Option") to make a loan (the "Loan") in the amount
of $10,000,000 to 0 Xxxxxxx Xxxxx Partnership on the terms set forth below.
Upon exercise by the Partnership of the Option, Xxxxx shall cause the proceeds
of the Loan, together with the other funds, to be used to repay in full the
Discounted Amount (as defined in the Forbearance
50
Agreement) and shall cause all of the partnership interests in the 0 Xxxxxxx
Xxxxx Partnership to be contributed to the Partnership or, as directed by the
Partnership, one or more subsidiaries of the Partnership. Upon such
contribution, neither Xxxxx nor Xxxxxxx Xxxxx shall have any liability to
repay any portion of the Loan, which shall thereupon be treated as a capital
contribution by the Partnership to the 3 Paragon Drive Partnership.
(v) The Partnership agrees to pay to the 0 Xxxxxxx Xxxxx
Partnership $500,000, of which $100,000 shall be paid at the Initial Closing
and $100,000 shall be paid on each of the following dates: November 1, 1998,
February 1, 1999, May 1, 1999 and August 1, 1999; provided that any such
payments made by the Partnership after the date the Partnership makes the Loan
shall be paid directly to Xxxxx.
(vi) On or before 5:00 p.m. on December 28, 1998, the
Partnership may exercise the Option by loaning $10,000,000 to the 0 Xxxxxxx
Xxxxx Partnership, which shall thereupon be required to use such funds to
enable Axinn to satisfy in full his obligations to NY Life under Section 4 of
the Forbearance Agreement. In the event that the Partnership has not exercised
the Option by 12:00 p.m. on December 28, 1998, it shall exercise such Option
by 4:00 p.m. on December 29, 1998, subject only to the condition that Axinn
has not then defaulted in his obligations under the Forbearance Agreement and
hence that NY Life will accept the Discounted Amount (as defined in the
Forbearance Agreement) and take the actions specified in the third and fourth
sentences of Section 4 of the Forbearance Agreement.
(vii) Upon exercise by the Partnership of the Option and
payment by Xxxxx of the Discounted Amount to NY Life in accordance with the
Forbearance Agreement, Axinn will file a corrective deed for the 0 Xxxxxxx
Xxxxx Xxxxxxxx (xxx "0 Xxxxxxx Corrective Deed") reflecting record ownership
of the 0 Xxxxxxx Xxxxx Property by the 0 Xxxxxxx Xxxxx Partnership (which will
then be owned by the Partnership and one or more subsidiaries of the
Partnership), free and clear of all liens and encumbrances other than any
Permitted Exceptions.
(viii) Xxxxx represents and warrants that upon exercise
by the Partnership of the Option, all sums owning by the 0 Xxxxxxx Xxxxx
Partnership to any and all third parties, including NY Life, will have bee
paid in full (except to the extent of 0 Xxxxxxx Xxxxx Operating Expenses
incurred subsequent to the Initial Closing).
(ix) In the event that 0 Xxxxxxx Xxxxx is leased prior
to exercise by the Partnership of the Option and revenues are received from
the tenant under a lease, such revenues shall be applied as an offset against
the 3 Paragon Operating Expenses that the Partnership will otherwise be
required to fund.
(x) The Partnership acknowledges that the transactions
contemplated by the New York Life Forbearance Agreement are intended to be
consummated in a manner which will allow Axinn and Xxxxxxx Xxxxx to defer the
recognition of certain gain for federal and state income tax purposes.
Consequently, to the extent that the NY Life Loan is satisfied at less than
its face amount, the cancellation of indebtedness income realized by the 3
00
Xxxxxxx Xxxxx Partnership will be allocated to Xxxxx and Xxxxxxx Xxxxx, as the
current partners in the 0 Xxxxxxx Xxxxx Partnership, and not to the
Partnership. In addition, if any of the cancellation of indebtedness income is
determined to be "qualified real property business indebtedness" under Section
108(a)(3) of the Code and applicable regulations thereunder, and Xxxxx and
Xxxxxxx Xxxxx elect to exclude the cancellation of indebtedness income under
Section 108(a)(1)(D) of the Code, it is anticipated that the 0 Xxxxxxx Xxxxx
Partnership will reduce its tax basis under Section 1017 of the Code in the 0
Xxxxxxx Xxxxx Property in the amount of the excluded cancellation of
indebtedness income to the extent of the 0 Xxxxxxx Xxxxx Partnership's tax
basis in the 0 Xxxxxxx Xxxxx Property, and to the extent of any cancellation
of indebtedness income that exceeds the 0 Xxxxxxx Xxxxx Partnership's tax
basis in the 0 Xxxxxxx Xxxxx Property, the Partnership will agree to permit
Xxxxx and Xxxxxxx Xxxxx to elect to reduce their basis in any Units that they
own. The proportionate share of the basis of the 0 Xxxxxxx Xxxxx Property and
the Units of Xxxxx and Xxxxxxx Xxxxx is equal to the sum of: (1) the partners'
basis adjustment under section 743(b) of the Code to items of Partnership
depreciable real property for the 0 Xxxxxxx Xxxxx Property and the Units and
(2) the common basis depreciation deductions that, under the terms of the 0
Xxxxxxx Xxxxx Partnership Agreement and the Partnership Agreement of the
Partnership, are reasonably expected to be allocated to Xxxxx and Xxxxxxx
Xxxxx over the remaining useful life of the 0 Xxxxxxx Xxxxx Property. The
amount of the reduction to the basis of the 0 Xxxxxxx Xxxxx Property and the
property underlying the Units constitutes an adjustment to the basis of
Partnership property with respect to Xxxxx and Xxxxxxx Xxxxx and not to the
Partnership, and such adjustment will be recovered in the manner described in
Treas. Reg. Section 1.743-1. Consequently, no adjustment will be made to the
common basis of Partnership property. For purposes of income, deduction, gain
and loss, Xxxxx and Xxxxxxx Xxxxx will have a special basis for the
Partnership properties whose basis are adjusted under Section 1017 of the
Code.
(b) The 101 Paragon Drive Property.
(i) Xxxxx represents and warrants to the Trust and
the Partnership that:
(A) He has furnished the Trust and the Partnership with true
and correct copies of the documents listed on Schedule 14 (the "Documents").
(B) The Documents provide that Xxxxx, as nominee for Xxxxx
Montvale II Associates("AMA"), a New Jersey general partnership having the
partners identified on Schedule I attached hereto, owns 000 Xxxxxxx Xxxxx,
free of all liens and encumbrances other than (i) the First Mortgage (the
"First Mortgage") from Xxxxx, as nominee for AMA, as mortgagor, and NJRE
Corp., as mortgagee, that secures a loan in the original principal amount of
$12,992,607 (the "First Mortgage Loan"); (ii) the Second Mortgage (the "Second
Mortgage" from Xxxxx, as nominee for AMA, as mortgagor, and NJRE Corp., as
mortgagee, that secures a loan in the original principal amount of $6,197,393
(the "Second Mortgage Loan" and, together with the First Mortgage Loan, the
"NJRE Loans"), (iii) the Purchase Option (as defined below) and (iv) Permitted
Exceptions.
52
(C) Xxxxx, on behalf of AMA, has the right to purchase, and
thereupon discharge in their entirety, the NJRE Loans (including all accrued
interest thereon) for $11,000,000.00 on September 15, 2005 (the "Loan Purchase
Date"). Assuming that the purchase option (the "Purchase Option") held by
Medco Containment Services, Inc., Paid Prescriptions, Inc. ("Medco") is not
exercised by Medco prior to the Loan Purchase Date then, upon purchase by
Xxxxx of the NJRE Loans, Xxxxx, as nominee for AMA, will own 000 Xxxxxxx
Xxxxx, free of all liens and encumbrances other than Permitted Exceptions. The
Purchase Option may only be exercised by Medco on or before _____________ and,
if not exercised by Medco on or before such date, expires. The minimum price
that Medco must pay to acquire 101 Paragon upon exercise of the Purchase
Option is $11,000,000.00.
(D) Under a lease (the "Lease") between Xxxxx, as landlord,
and Medco, as tenant, Xxxxx is presently entitled to receive annual lease
payments that aggregate not less than $50,000 per year (the "Annual Excess
Amount") in excess of Xxxxx'x payment obligations under the NJRE Loans.
(ii) At the Initial Closing, and in reliance on the foregoing
representations and warranties, the Partnership (or, at the option of the
Partnership, one or more subsidiaries of the Partnership) shall pay to AMA
$500,000 in cash or in the form of Units, with each Units valued at $24.
(iii) In consideration of the payment by the Partnership or one or
more subsidiaries of the Partnership of $500,000 to AMA pursuant to paragraph
(ii) above, Xxxxx, on behalf of himself and AMA, agrees to the following:
(A) to pay the Partnership, in cash and to the extent
collected by Xxxxx or AMA (which Xxxxx shall use best efforts to collect), an
amount equal to the Annual Excess Amount on each of the following: September
1, 1999; September 1, 2000; September 1, 2001; September 1, 2002; September 1,
2003; September 1, 2004; and September 1, 2005; provided that such payment
obligation shall cease upon the earlier to occur of (i) the exercise by Medco
of the Purchase Option; and (ii) the purchase by Xxxxx, AMA or the Partnership
of the NJRE Loans.
(B) unless and until the Purchase Option has previously been
exercised by Medco, to give all notices and take all actions so as to purchase
the NJRE Loans for $11,000,000.00 on the Loan Purchase Date, subject to
receipt by Xxxxx or AMA of $11,000,000.00 on the Loan Purchase Date from the
Partnership or its subsidiaries;
(C) in the event the Purchase Option is exercised and the
purchase price exceeds $11,000,000.00, to pay over, or cause to be paid over,
the amount in excess of $11,000,000.00 to the Partnership;
(D) unless the deed to 000 Xxxxxxx Xxxxx has previously been
transferred to AMA, to transfer the deed to 000 Xxxxxxx Xxxxx to AMA
concurrently with the purchase and discharge of the NJRE Loans, free of liens
and encumbrances except Permitted Exceptions.
53
(E) to cause the partnership agreement of AMA (the "AMA
Partnership Agreement") to be amended and restated to include the following
provisions and to have such provisions remain in the AMA Partnership Agreement
unless the Partnership consents to the amendment of any such provisions:
(1) AMA will elect to close its books pursuant to
Section 706(d) of the Code immediately prior to the admission of the
Partnership as a partner of AMA.
(2) In the event that the Partnership is admitted as
a partner of AMA, if the NJRE Loans are satisfied at less than their face
amounts, the cancellation of indebtedness income realized by AMA shall be
allocated as follows: (i) if the NJRE Loans are satisfied for less than
$11,000,000, the income up to $8,000,000 will be allocated to Xxxxx and other
partners of AMA, not including the Partnership, and the balance will be
allocated to the Partnership, and (ii) if the NJRE Loans are satisfied for
$11,000,000 or more, the income will be allocated among Xxxxx and the other
partners of AMA in accordance with their percentage interests in AMA, not
including the Partnership.
(F) to permit the Partnership to review the federal income
tax return of AMA in the year that any cancellation of indebtedness income is
reported as a result of the payment of the NJRE Loans.
(iv) The Partnership agrees to loan AMA up to $11,000,000.00 (the
"Partnership Loan") on the Loan Purchase Date in order to provide AMA (or
Xxxxx acting on behalf of AMA) with funds necessary to purchase and thereupon
discharge the NJRE Loans such that, upon such purchase and discharge, AMA will
hold fee title to 000 Xxxxxxx Xxxxx free of liens and encumbrances other than
Permitted Exceptions; provided that the Partnership's agreement to make the
Partnership Loan shall terminate if (A) the Purchase Option has then been
exercised; (B) the NJRE Loans have previously been purchased (a possibility
contemplated by subparagraph (vi) below); (C) any of Xxxxx'x representations
and warranties in subparagraph (i) above are incorrect in any material
respect; or (D) Medco has actually terminated or threatened to terminate the
Lease; provided that this clause (D) shall only be a condition to the
Partnership's obligation to make the Partnership Loan in the event that AMA or
the Partnership suffers or can reasonably be expected to suffer economic loss
as a result of any actual Lease termination; or (E) the partners of AMA do not
unconditionally agree to transfer to the Partnership or, as directed by the
Partnership, one or more subsidiaries of the Partnership, all of their right,
title and interest in AMA, free and clear of liens, encumbrances and
liabilities (other than the Partnership Loan), immediately following the
making of the Partnership Loan.
(v) Xxxxx, on behalf of himself and the other partners of AMA, agrees
that immediately following the making of the Partnership Loan and the
concurrent purchase and discharge by AMA of the NJRE Loans, Xxxxx and such
other partners will contribute all of their right, title and interest in AMA
to the Partnership or, as directed by the Partnership, to subsidiaries of the
Partnership, free and clear of liens, encumbrances and liabilities (other than
the Partnership Loan), in exchange for an aggregate of 12 Class A Units (to be
allocated among themselves as they may agree).
54
(vi) Without limiting the provisions to be included in the AMA
Partnership Agreement in accordance with paragraph (iii)(E) above, Xxxxx, on
behalf of himself and the partners of AMA, and the Partnership agree that in
the event that the NJRE Loans are purchased prior to the Loan Purchase Date,
any cancellation of indebtedness income arising from the purchase shall be
allocated under Section 704b) of the Code and the applicable regulations
thereunder to Xxxxx and the other partners in AMA, not including the
Partnership. In addition, if any of the cancellation of indebtedness income is
determined to be "qualified real property business indebtedness" under Section
108(a)(3) of the Code and applicable regulations thereunder, and Xxxxx and the
other partners of AMA elect to exclude the cancellation of indebtedness income
under Section 108(a)(1)(D) of the Code, it is anticipated that AMA will reduce
its tax basis under Section 1017 of the Code in 000 Xxxxxxx Xxxxx in the
amount of the excluded cancellation of indebtedness income to the extent of
AMA's tax basis in 000 Xxxxxxx Xxxxx, and to the extent of any cancellation of
indebtedness income that exceeds AMA's tax basis in 000 Xxxxxxx Xxxxx, the
Partnership will agree to permit Xxxxx and the other Partners of AMA to elect
to reduce their basis in any Units that they own. The proportionate share of
the basis of 101 Paragon and the Units of Xxxxx and the other partners of AMA
is equal to the sum of: (1) the partners' basis adjustment under section
743(b) of the Code to items of partnership depreciable real property for 000
Xxxxxxx Xxxxx and the Units and (2) the common basis depreciation deductions
that, under the terms of the AMA Partnership Agreement and the Partnership
Agreement of the Partnership, are reasonably expected to be allocated to Xxxxx
and the other partners of AMA over the remaining useful life of the property.
The amount of the reduction to the basis of 000 Xxxxxxx Xxxxx and the property
underlying the Units constitutes an adjustment to the basis of partnership
property with respect to Xxxxx and the other partners of AMA and not to the
Partnership, and such adjustment will be recovered in the manner described in
Treas. Reg. Section 1.743-1. Consequently, no adjustment will be made to the
common basis of Partnership property. For purposes of income, deduction, gain
and loss, Xxxxx and the AMA Partners will have a special basis for the
partnership properties whose bases are adjusted under Section 1017 of the Code.
(vii) In the event that the Loan Purchase Date is accelerated by NJRE
Corp. to a date earlier than September 15, 2005, then the Partnership shall
have the option to (A) terminate the arrangements provided for this Section
and receive from Xxxxx or AMA payment of $500,000 minus the aggregate of the
sums previously paid to it under paragraph iii(A) above or (B) lieu of making
the Partnership Loan, to loan AMA the funds necessary to enable AMA to
purchase and thereupon discharge the NJRE Loans and concurrently obtain fee
title to 000 Xxxxxxx Xxxxx free of liens and encumbrances other than Permitted
Exceptions (in which case Xxxxx and the other partners of AMA will thereupon
contribute their partnership interests in AMA to the Partnership in the manner
and for the consideration contemplated by paragraph (v) above).
(viii) Xxxxx agrees to defend the Trust and the Partnership, and to
hold the Trust and the Partnership harmless from and against, any lawsuits or
actions instituted by Medco, NJRE Corp. or their affiliates that name the
Trust or the Partnership alleging that the arrangements set forth herein
breach any of Xxxxx'x agreements with Medco and NJRE Corp. This indemnity
shall not be subject to the limitations contained in Paragraph 11 of this
Agreement. Neither Xxxxx nor the Trust or Partnership, by including this
provision, shall be deemed to have
55
acknowledged that the arrangements provided for herein breach any obligation
Xxxxx or his affiliates have with Medco, NJRE Corp. or their affiliates, and
it is not the intention of the parties to breach any such obligations.
(ix) In recognition of the intent of this paragraph to vest in the
Partnership the ultimate right to acquire ownership of 000 Xxxxxxx Xxxxx
(through the Partnership's acquisition, directly or through subsidiaries, of
AMA) concurrently with the purchase of the NJRE Loans and the discharge of the
related First Mortgage and Second Mortgage, free of all liens and encumbrances
other than Permitted Exceptions, and to afford the Partnership any benefits
that might arise from subsequent negotiations with Medco relating to a
modification of the contractual arrangements in effect between Medco, NJRE
Corp., Xxxxx and their respective affiliates, Xxxxx agrees: (i) not to modify
any contracts he or any affiliate has with Medco or NJRE Corp. without the
Partnership's written consent; (ii) to seek to modify any such contracts as
and to the extent requested by the Partnership; and (iii) to allow the
Partnership to realize the economic benefits of any such contractual
modifications. For example, if Medco is willing to sell the NJRE Loans prior
to the Loan Purchase Date at less than $11,000,000.00 and the Partnership
wishes to have the NJRE Loans acquired on such earlier date for such lower
amount, then Xxxxx will cooperate in effecting such earlier purchase, with
funds provided by the Partnership, thereby allowing AMA to acquire fee title
to 000 Xxxxxxx Xxxxx for less than $11,000,000.00 followed immediately by a
contribution of the partnership interests in AMA to the Partnership in
exchange for the Units specified in Paragraph (v) above; provided, however,
that in such event, any cancellation of indebtedness income attributable to
the purchase and discharge of the NJRE Loans for less than $11,000,000 shall
be allocated to the Partnership and, in order to effect such allocation, the
$500,000 payment made by the Partnership pursuant to Section (ii) above shall
be treated as a capital contribution to AMA as of the time immediately prior
to the purchase of the NJRE Loans for less than $11,000,000.
(x) In the event of an inconsistency between this Section and the AMA
Partnership Agreement, this Section shall prevail.
(c) The 000 Xxx Xxxxxxx Xxxx Property. The
Partnership and the Contributor of the 000 Xxx Xxxxxxx Xxxx shall, at the 000
Xxx Xxxxxxx Xxxx Closing, enter into an assignment and assumption agreement
(the "263 Assignment and Assumption") pursuant to which such Contributor shall
represent and warrant that it has not defaulted under, and shall assign all of
its right, title and interest in and to the ground lease with the Suffolk
County Industrial Development Agency for the 000 Xxx Xxxxxxx Xxxx Property
(the "XXX Ground Lease") and the Partnership shall assume all of the
obligations of such Contributor under the XXX Ground Lease. The Partnership
and the Trust hereby also acknowledge that they have been advised by the
Contributor of the 000 Xxx Xxxxxxx Xxxx Property that : (i) the Contributor
and/or its affiliate intends on entering into an agreement with ADI with
respect to an affiliate of the Contributor performing certain interior tenant
improvement work for ADI at the 000 Xxx Xxxxxxx Xxxx Property (the "ADI
Agreement"), and (ii) in connection therewith, ADI shall execute and deliver
to the Contributor, and/or its affiliate, a promissory note in the amount of
the cost of such work to ensure the repayment of the same by ADI to the
Contributor and/or its affiliate. The Partnership and the Trust hereby consent
to all of the foregoing transactions between ADI and the
56
Contributor and/or its affiliate; provided the promissory note does not give
ADI or any affiliate of ADI a right to set-off rents under the ADI Lease.
(d) The 00 Xxxxxxxxxx Xxxxxx Property. The
Partnership and the Trust hereby acknowledge that the 00 Xxxxxxxxxx Xxxxxx
Property is the subject of a consent order dated April, 0000 (xxx "Xxxxxxxxxx
Xxxxxx Consent Order") between the Contributor of the 00 Xxxxxxxxxx Xxxxxx
Property and the New York State Department of Environmental Conservation (the
"DEC"). The parties agree that the Partnership shall purchase the 00
Xxxxxxxxxx Xxxxxx Property upon, and subject to, the satisfaction of the 31
Commercial Environmental Condition. For purposes hereof, the 31 Commercial
Environmental Condition shall mean that the 00 Xxxxxxxxxx Xxxxxx Property has
been delisted by the DEC as a hazardous waste disposal site under the DEC's
Registry of Inactive Hazardous Waste Disposal Sites (which delisting shall
include a determination by the DEC that no further ground water monitoring or
other action under the Commercial Street Consent Order is required). Upon the
Contributor's satisfaction of the 31 Commercial Environmental Condition and
the transfer of title to the 00 Xxxxxxxxxx Xxxxxx Property from the
Contributor to the Partnership, all of the Contributor's obligations to the
Partnership with respect to environmental matters at the 00 Xxxxxxxxxx Xxxxxx
Property including, without limitation, any environmental indemnity
obligations set forth in Paragraph 11 hereof, shall be deemed fully and
completely satisfied. In the event that remediation activities are required at
the 31 Commercial Property in connection with the delisting activities, the
costs of such remediation shall remain the responsibility of Xxxxx, who shall
hold the Trust and Partnership harmless from any such costs, regardless of the
limitations in Section 11. Notwithstanding anything contained in this
Agreement to the contrary, in the event the 31 Commercial Environment
Condition is not satisfied by two (2) years from the Initial Closing, either
the Contributor of the 00 Xxxxxxxxxx Xxxxxx Property or the Partnership shall
have the right to terminate this Agreement by providing the other party with
written notice thereof, whereupon this Agreement shall terminate with respect
to the 00 Xxxxxxxxxx Xxxxxx Property.
(e) 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxx. The
Partnership hereby agrees that, in the event United States Profile Wrapping
Co., Inc. ("USPW") does not close its purchase of the 000 Xxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxx Property (the "Waverly Property") pursuant to the terms
of USPW's purchase option set forth in Article 63 of its lease with the
Contributor of the Waverly Property (the "USPW Lease"), the Partnership shall
purchase the Waverly Property in accordance with the terms hereof. The
applicable Contributor shall provide the Partnership with written notice that
USPW has either failed to close its purchase of the Waverly Property in
accordance with the terms of Article 63 of the USPW Lease or has waived its
option under the same (the "Waverly Closing Condition"). The applicable
Contributor shall also provide the Partnership with no less than ten (10) day
prior written notice of the date of the Closing for the Waverly Property.
Notwithstanding the foregoing, in the event the Waverly Closing Condition is
not satisfied by six (6) months from the Initial Closing, either the
Contributor of the Waverly Property or the Partnership shall have the right to
terminate this Agreement by providing the other party with written notice
thereof, whereupon this Agreement shall terminate with respect to the Waverly
Property.
57
15. Condemnation. Each Contributor represents and warrants that such
Contributor has not received any written notice of any condemnation proceeding
or other proceeding in the nature of eminent domain in connection with any
Real Property of such Contributor, and has no actual knowledge of any
threatened condemnation. As used herein, a "material taking" shall mean a
taking of either an entire Parcel of Real Property (for purposes of this
Paragraph, the "Subject Property"), more than twenty percent (20%) of the
Improvements constituting a part of the Subject Property or more than 10% of
the parking area of the Subject Property. If, prior to the Closing with
respect to the Subject Property (for purposes of this Paragraph, the
"Applicable Closing"), any such proceeding affecting a material portion of any
of the Subject Property is commenced, the Contributor of the Subject Property
(for purposes of this Paragraph, the "Applicable Contributor") agrees promptly
to notify the Partnership thereof. In the event of a material taking or
commencement of proceedings in connection with such a material 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 with the Applicable Closing as provided in this Paragraph 15 without
an abatement of the Consideration for the Subject Property and, at the
Applicable Closing, the Applicable Contributor of the Subject Property shall
assign to the Partnership, without recourse, all condemnation proceeds paid or
payable with respect thereto; or (y) terminate this Agreement with respect to
the Subject Property as to which a material taking has occurred, whereupon
this Agreement shall terminate with respect to the Subject Property but shall
continue in full force and effect with respect to all of the remaining
Properties and, at the Applicable Closing, the Partnership shall pay to each
Contributor the aggregate of the Consideration for the remaining Properties.
Provided the Partnership shall have waived its right to terminate this
Agreement with respect to the Subject Property so taken, as provided above,
the Applicable Contributor 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. The parties hereby waive the provisions of Section 5-1311
of the General Obligation Law of the State of New York, and agree that the
provisions of this Paragraph shall serve in lieu thereof.
16. Damage by Fire or Other Casualty.
(a) Each Contributor shall promptly notify the Partnership of
damage to the Improvements constituting part of the Real Property of such
Contributor (for purposes of this Paragraph, the "Applicable Contributor")
occurring by reason of casualty during the period between the Effective Date
and the Closing Date with respect to such Real Property (for purposes of this
Paragraph 16, the "Applicable Closing Date"). The Applicable Contributor 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 (for purposes of this Paragraph, the "Subject Property"), as
provided below, Contributor 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 Effective Date and the Improvements so damaged are not
repaired or restored
58
on or before the Applicable Closing Date to substantially the condition
existing prior to the damage, and (ii) on the Applicable Closing Date, the
estimated cost of repairs by reason of such fire or casualty to the
Improvements, as determined by an independent adjuster is an amount equal to
or less than ten percent (10%) of the Consideration for the Subject Property,
there shall be no abatement or adjustment in the Consideration and, provided
the loss or damage is a covered loss under the Applicable Contributor's
insurance policy, the Partnership shall be required to purchase the Subject
Property in accordance with the terms of this Agreement and, on the Applicable
Closing Date, the Contributor shall assign to the Partnership, without
recourse, all insurance claims and proceeds with respect thereto (less sums
theretofore expended, if any, by the Applicable Contributor for emergency
repairs or barricades) and the Applicable Contributor shall credit the
Partnership on the Applicable Closing Date with the amount of any such
deductible. The Applicable Contributor shall have no liability or obligation
with respect to the condition of any of the Subject 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 the Applicable Closing Date, the estimated cost of such repair or
restoration, as determined by such independent adjuster, is an amount which is
greater than ten percent (10%) of the Consideration for the Subject Property,
the Partnership may, at its sole option, (x) proceed to Closing with respect
to the Subject Property as provided in this Paragraph 16(b) without an
abatement of the Consideration and, on the Applicable Closing Date, the
Applicable Contributor shall assign to the Partnership, without recourse, all
insurance claims and proceeds with respect thereto (less sums theretofore
expended, if any, by the Applicable Contributor for emergency repairs or
barricades) and the Applicable Contributor shall credit the Partnership on the
Applicable Closing Date with the amount of any such deductible; or (y)
terminate this Agreement with respect to the Subject Property which has
suffered damage to the Improvements by fire or other casualty in an amount
which exceeds ten percent (10%) of its Consideration, whereupon this Agreement
shall terminate with respect to the Subject Property but shall continue in
full force and effect with respect to all of the remaining Property and, at
each Closing, the Partnership shall pay to the Contributor's thereof the
aggregate of the Consideration for the remaining 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 the Subject Property for
which this Agreement has been terminated.
(c) The parties hereby waive the provisions of Section
5-1311 of the General Obligation Law of the State of New York, and agree that
the provisions of this Paragraph shall serve in lieu thereof.
17. Default.
(a) If the Partnership shall default in its obligations
to pay the Consideration and complete the Initial Closing in accordance with
the terms of this Agreement, then, as each Contributor's and Participant's
sole and exclusive remedy therefor, such Contributor and Participant shall be
entitled to retain its allocable portion of the Deposit as liquidated and
agreed upon damages for the losses and injuries which such Contributor and
Participant 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
59
as expressly provided in this Agreement. It is agreed that the provisions of
this Paragraph 17(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 Property from sale to the general public at a
time when other parties would be interested in purchasing such Property, that
each Contributor and Participant 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, at any Closing (each, an "Applicable Closing"
for purposes of this Paragraph), any Contributor shall default in its
obligation to deliver any of the Deeds or other items described in Paragraph 6
hereof or any Participant shall default in its obligation to deliver any of
the Entity Assignments or other items described in Paragraph 6 above, upon the
Partnership's (i) tender of the full aggregate Consideration for the Property
to be conveyed or the Entity Interests to be transferred at the Applicable
Closing and (ii) compliance with all of the terms and conditions of this
Agreement relative to the Applicable Closing, the Partnership shall have the
sole option of terminating this Agreement and receiving the return of the
Deposit (less any amount of such Deposit applied in satisfaction of the
Purchase Price at any prior or concurrent Closing), together with payment by
the Contributors of the Partnership's actual, documented out-of-pocket costs
and expenses incurred in connection with the Partnership's Due Diligence
Activities, not to exceed $12,500 with respect to any one Property or (Y) to
seek specific performance of the applicable Contributor's and Participant's
obligation to convey the Property to be conveyed or the Entity Interest to be
transferred, as the case may be, at the Applicable Closing in accordance with
this Agreement. If the Partnership elects to terminate this Agreement, upon
payment of the sums described above, the applicable Contributor and
Participant shall be released and relieved of any further liability. 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 Property or Entity Interests, 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, with respect to each Closing and such remedies shall become null
and void with respect to each Closing as each Closing occurs (except as to
obligations hereunder which by their terms expressly survive such Closings),
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 any Contributor
or Participant to perform its obligations under this Agreement.
18. Operations Prior To Closing.
(a) Each Contributor agrees to operate its Property
between the Effective Date and the Closing Date with respect to such Property
in the same general manner as such Contributor 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 the Closing with respect
to such Property, and maintaining all insurance coverage currently in force.
60
(b) Each Contributor shall comply with all of the
obligations of landlord under its Leases and all other agreements and
contractual arrangements affecting its Real Property by which such Contributor
is bound or to which such Contributor's Real Property, is subject, and which
will be binding upon the Partnership or a lien upon such Real Property, after
the Closing with respect to such Real Property.
(c) Each Contributor shall notify the Partnership
promptly of such Contributor's receipt of any written notice from any party
alleging that such Contributor is in default of its obligations under any of
the Leases or any Permit or agreement affecting its Real Property, or any
portion or portions thereof.
(d) No contract for or on behalf of or affecting the
Real Property of any Contributor shall be negotiated or entered into which
cannot be terminated by such Contributor upon the Closing with respect to such
Real Property without the payment of a specific charge, cost, penalty or
premium for such termination. On or before ten (10) days prior to each
Applicable Closing Date, the Partnership shall send written notice to the
Applicable Contributor informing the Applicable Contributor of which of the
Contracts listed on "Exhibit T" attached hereto the Partnership is willing to
accept assignment (the "Accepted Contracts"). At the Closing, the Partnership
shall be obligated to accept assignment of, and assume the Applicable
Contributor's obligations (arising on or after the date of Closing) under, the
Accepted Contracts. The Applicable Contributor and Xxxxx shall remain
responsible for all other obligations in, to and under the Contracts (other
than the Accepted Contracts) which the Partnership does not accept and assume
pursuant to the terms hereof. Anything herein to the contrary notwithstanding,
neither the Trust nor the Partnership is assuming the Contracts (or any other
obligation arising under the Contracts) identified on Exhibit B with American
Transfer Company, Inc. and Unique Sanitation Co., Inc. Xxxxx, on behalf of
himself and the Xxxxx affiliate that has entered into these agreements, shall
remain responsible for performance under these agreements. However, in
recognition of the benefits to be realized by the Partnership from the waste
removal services that will be provided under such agreements, from and after
the date the Partnership acquired title to the Properties that are subject to
these two agreements, the Partnership agrees to make payments on behalf of
Xxxxx when such payments are due under these agreements in accordance with the
terms thereof as currently in effect. Xxxxx agrees not to renew or modify
either of these agreements without the prior written consent of the
Partnership.
(e) Except with the prior written consent of the
Partnership, which the Partnership agrees it shall not unreasonably withhold,
condition or delay, no Contributor shall enter into any new leases for any
portion of its Real Property after the Effective Date. Any new lease entered
into after the Effective Date 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, no Contributor shall, after the Effective Date, 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 its Leases (except as may be required under such
Lease), nor accept any rental more than one (1) month in advance
61
(exclusive of any security deposit). The Partnership shall respond to the
Contributor's written request for a consent in all cases under this
subparagraph (e) within three (3) business days of receiving such request.
Failure by the Partnership to respond within such three (3) business day
period, shall be deemed the consent of the Partnership to the proposed leasing
transaction.
(f) No Contributor shall make or permit to be made any
capital improvements or additions to its Real Property, or any portion
thereof, without the prior written consent of the Partnership, except those
made by a Contributor pursuant to the express requirements of this Agreement,
those capital improvements or additions described on "Exhibit V", those made
by Tenants pursuant to the right to do so under their Leases, or by a
Contributor if required by such law or ordinance, or as required under any
Lease.
(g) Each Contributor shall timely xxxx all Tenants for
all rent billable under its Leases, and use commercially reasonable efforts to
collect any rent in arrears.
(h) Each Contributor shall notify the Partnership of any
tax assessment disputes (pending or threatened) prior to any Closing with
respect to the Property at issue, and, from and after the Due Diligence
Termination Date, no Contributor shall 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 with respect to such Contributor's Property 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 such Contributor and the Partnership as of the date real
estate taxes are apportioned under this Agreement. All refunds relating to any
tax year prior to the Closing with respect to its Property shall be the sole
property of Contributor, and all refunds relating to any year subsequent to
the year in which such Closing occurs shall be the sole property of the
Partnership. Each Contributor and the Partnership agrees to promptly remit to
the other any refund received by it which is the property of the other.
(i) Each Contributor 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 its Real Property, or any portion thereof;
(ii) Receipt of any notice of any default from any
Tenant or from the holder of any lien or security interest in or encumbering
its Real Property, or any portion thereof;
(iii) Notice of any actual or threatened litigation
against such Contributor or affecting or relating to its Real Property, or any
portion thereof which may
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materially and adversely affect such Real Property or such Contributor'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.
(j) Subject to the terms of this Agreement, Xxxxx
and each Contributor shall use all commercially reasonable efforts to take and
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations, to cause
the condition to the Partnership's and the Trust's obligation to close
specified in Paragraph 20 below to be satisfied and otherwise to consummate
and make effective the transactions contemplated by this Agreement.
19. PROPERTY CONVEYED "AS-IS, WHERE IS". IT IS UNDERSTOOD
AND AGREED THAT, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT,
NO CONTRIBUTOR IS MAKING AND EACH CONTRIBUTOR 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 OF
SUCH CONTRIBUTOR, INCLUDING, WITHOUT LIMITATION: (I) THE VALUE, CONDITION,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY, SUITABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE OF ANY OF SUCH PROPERTY, (II) THE MANNER OR QUALITY
OF THE CONSTRUCTION OR MATERIALS INCORPORATED INTO ANY OF SUCH PROPERTY AND
(III) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF ANY OF SUCH
PROPERTY. THE PARTNERSHIP AGREES THAT WITH RESPECT TO THE PROPERTY IN THE
AGGREGATE, THE PARTNERSHIP HAS NOT RELIED UPON AND WILL NOT RELY UPON, EITHER
DIRECTLY OR INDIRECTLY, ANY REPRESENTATION OR WARRANTY OF CONTRIBUTOR OR ANY
AGENT OF CONTRIBUTOR NOT EXPRESSLY SET FORTH IN THIS AGREEMENT. THE
PARTNERSHIP REPRESENTS THAT IT IS KNOWLEDGEABLE OF REAL ESTATE AND THAT IT IS
RELYING SOLELY ON ITS OWN EXPERTISE, THAT OF THE PARTNERSHIP'S CONSULTANTS,
AND THE REPRESENTATIONS AND WARRANTIES OF EACH CONTRIBUTOR CONTAINED IN THIS
AGREEMENT, SUBJECT, HOWEVER, TO THE LIMITATIONS CONTAINED HEREIN UPON SUCH
REPRESENTATIONS AND WARRANTIES, AND THAT EACH CONTRIBUTOR 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
63
DURING THE DUE DILIGENCE PERIOD 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, EACH CONTRIBUTOR 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 ANY CONTRIBUTOR, ANY AGENT OF ANY CONTRIBUTOR OR ANY THIRD PARTY. THE
PARTNERSHIP EXPRESSLY AGREES THAT THE TERMS AND CONDITIONS OF THIS PARAGRAPH
19 SHALL EXPRESSLY SURVIVE THE CLOSING AND NOT MERGE THEREIN AND EACH
CONTRIBUTOR 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.
20. Conditions Precedent to Obligations of the Partnership
and the Contributors.
(a) The obligations of the Partnership hereunder are
subject to the fulfillment of the following conditions prior to or on each
Closing Date (for purposes of this Paragraph, the "Applicable Closing Date"),
any one of which may be waived in whole or in part by the Partnership on or
prior to such Applicable Closing Date, and in the event any of the conditions
are not complied with, the Partnership may terminate this Agreement with
respect to a Closing that has not then been consummated by notifying the
Contributor and Escrow Agent and thereupon the remaining balance of the
Deposit shall be returned to the Partnership and thereafter this Agreement
shall be null and void, except for provisions which expressly survive each
applicable Closing:
(i) Correctness of Representations and Warranties
and Consent of Participants. The representations and warranties made by Xxxxx
and each Contributor in this Agreement and each Participant made in the
Consent and Acknowledge of each Participant shall be true and correct in all
material respects on the Closing Date as though such representations and
warranties were made on the Applicable Closing Date, except to the extent that
they expressly relate to an earlier date. For purposes of this subsection, the
truth and correctness of any representation or warranty shall be determined on
an absolute basis, meaning apart from any qualification of "knowledge" set
forth in said representation or warranty. No Participant shall have revoked
its consent to the Applicable Closing.
(ii) Compliance with Terms and Conditions. Each
Contributor and each Participant shall have performed and complied with all of
the material terms and
64
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 Applicable Closing Date.
(iii) The Partnership's Satisfaction with
Inspection. INTENTIONALLY DELETED.
(iv) Exchange Approval. On or prior to Applicable
Closing Date, the Underlying Shares and shares issuable upon exercise of the
options granted to Xxxxx and Xxxx Xxxxx shall have been approved for listing
with the NYSE, upon official notice of issuance.
(v) Issuance of Units. The issuance of Units shall
be (i) exempt from registration requirements of the Securities Act and (ii)
either exempt from, registered pursuant to, or qualified under any applicable
securities or "blue sky" requirements.
(vi) Termination of Agreements. The existing
management agreements and brokerage or leasing agreements identified on
"Exhibit T" shall be terminated as of the Closing with respect to the Property
to which they relate unless the Partnership shall specify otherwise or assume
the obligations of the Applicable Contributor under the terms thereof as
provided herein.
(vii) Estoppel Certificates. Estoppel Certificates
shall have been obtained from at least 75% of the Tenants at each Parcel of
Real Property and from all Tenants identified on "Exhibit X" 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 Certificate in the Required Form is
not obtained from an Identified Tenant, each Contributor may, in lieu thereof,
deliver its certificate containing the information set forth on the Required
Form, which certificate shall serve as Contributor's representation as to the
facts stated therein, which representation shall survive for a period of nine
(9) months following the Closing, except as set forth in Paragraph 11(a)
above.
(viii) No Injunction or Restraints. No statute,
rule, regulation, temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or
other legal restraint or prohibition preventing the consummation of the
transactions contemplated by this Agreement shall be in effect, provided,
however, that Xxxxx and the Applicable Contributor shall use commercially
reasonable efforts to have any such temporary restraining order, injunction,
order, restraint or prohibition vacated.
(ix) HSR Act. Any waiting period applicable to the
consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated, and no action shall have been instituted by
the United States Department of Justice or the United States Federal Trade
Commission challenging or seeking to enjoin the consummation of the
transactions contemplated hereby, which action shall not have been withdrawn
or terminated, or the Trust and the Partnership and the Contributors and the
65
Participants shall have reasonably mutually concluded that no filing under the
HSR Act is required with respect to the transactions contemplated hereby.
(x) Each Participant that is to contribute an Entity
Interest expressly agrees that the applicable Contributor the Entity Interest
in which is being contributed shall not be dissolved or terminated by virtue
of such contribution but shall continue.
(b) Conditions to the Contributors', Xxxxx'x and Participant's
Obligations to Close. The obligation of the Contributors, Xxxxx and
Participants to consummate the transactions contemplated hereby at the Closing
is further subject to satisfaction or waiver by the Contributors, Xxxxx and
the Participants of the following conditions on or before the Applicable
Closing Date:
(i) Representations and Warranties. The
representations and warranties of the Trust and the Partnership contained
herein shall be true and correct in all material respects as of the Closing
Date as if remade on the Closing Date, except to the extent that they
expressly relate to an earlier date. For purposes of this subsection, the
truth and correctness of any representation or warranty shall be determined on
an absolute basis, meaning apart from any qualification of "knowledge" set
forth in said representation or warranty.
(ii) Full Performance. Each of the Trust and the
Partnership shall have performed and complied in all material respects with
all agreements, covenants, obligations and conditions required by this
Agreement to be performed or complied with by it on or prior to the Closing.
(iii) Closing Documents. The Trust and the
Partnership, as applicable, shall have executed and delivered to the
Contributors and the Participants all Closing documents required to be
delivered by the members of them hereunder.
(iv) Employment Agreement. The Employment Agreement
shall have been executed and delivered as of the Closing.
(v) Option Agreements. The Option Agreements shall
have been executed and delivered as of the Closing.
(vi) Issuance of Units. The Partnership shall have
issued the Units to the Participants.
(vii) REIT Election. The Trust shall not have
revoked its prior election pursuant to Section 856(c)(1) of the Code to be
taxed as a REIT, and shall be in compliance with all applicable federal income
tax laws, rules and regulations, including the Code, necessary to permit it to
be taxed as a REIT. The Trust shall not have taken any action or have failed
to take any action which would reasonably be expected to, alone or in
conjunction with any other factors, result in the loss of its status as a REIT
for federal income tax purposes.
66
(viii) Amendment to Partnership Agreement. The
Partnership Agreement shall have been amended by an instrument in
substantially the form of the Amendment, a copy of which shall be delivered at
Closing, to reflect the admission of the Participants as limited partners
therein.
(ix) Absence of Litigation. No action, suit, or
legal, administrative or arbitral proceedings shall have been instituted
before or by any court or governmental authority or arbitration panel seeking
to enjoin or challenging the transactions contemplated by this Agreement.
(x) Approval of Transaction. The consummation of the
transactions contemplated hereby and the delivery of the consideration to the
Contributors and Participants shall have been duly and validly authorized and
approved by the board of the Trust, on its own behalf and in its capacity as
the general partner of the Partnership.
(xi) No Injunction or Restraints. No statute, rule,
regulation, temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect, provided, however, that the
Trust and the Partnership shall use commercially reasonable efforts to have
any such temporary restraining order, injunction, order, restraint or
prohibition vacated.
(xii) HSR Act. Any waiting period applicable to the
consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated, and no action shall have been instituted by
the United States Department of Justice or the United States Federal Trade
Commission challenging or seeking to enjoin the consummation of the
transactions contemplated hereby, which action shall not have been withdrawn
or terminated, or the Trust and the Partnership and the Contributors and the
Participants shall have reasonably mutually concluded that no filing under the
HSR Act is required with respect to the transactions contemplated hereby.
(xiii) Mortgage Loan Assumption. At each Closing,
the Partnership shall have assumed the Assumed Mortgage Loan for the Subject
Property in accordance with the terms of this Agreement and shall have entered
into an agreement with respect to the Subject-to Mortgage Loans to pay off the
dollar amount specified in the applicable debt pay off letters.
(c) In the event the Contributors, the Participants and Xxxxx have
failed to comply with or are unable to fulfill the conditions to Closing
relative to such parties set forth in Paragraph 20(a) by November 10, 1998,
the Partnership and the Trust may terminate this Agreement by notifying the
Contributors, the Participants, Xxxxx and the Escrow Agent in writing, proceed
under Section 17(b) hereof and thereafter this Agreement shall be null and
void, except as to obligations hereunder which by their terms expressly
survive such termination. In the event the Partnership and the Trust have
failed to comply with or are unable to fulfill the conditions to Closing
relative to such parties set forth in Paragraph 20(b) by November 10, 1998,
67
the Contributors, the Participants and Xxxxx may terminate this Agreement by
notifying the Partnership, the Trust and the Escrow Agent in writing,
whereupon the Deposit shall be returned to the Partnership and this Agreement
shall be null and void, except as to obligations hereunder which by their
terms expressly survive such termination.
21. Brokers.
(a) Each Contributor and Xxxxx jointly and severally
represents to the Partnership that neither Xxxxx nor any Contributor has dealt
with any real estate broker, dealer or salesman in connection with the
transactions contemplated hereby other than Realty Capital International,
Inc., all of the fees, expenses and commissions of which shall be paid by the
Contributors and Xxxxx.
(b) The Partnership and the Trust jointly and
severally represent to each Contributor and Participant that neither the
Partnership nor the Trust has dealt with any real estate broker, dealer or
salesman in connection with the transactions contemplated hereby other than
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated, all of the fees, expenses and
commissions of which shall be paid by the Partnership and the Trust.
(c) Each of the Contributors and Xxxxx, on the one
hand, and the Partnership and the Trust, on the other, hereby agree to
indemnify, defend, and hold harmless the other from and against any loss,
damage or claim resulting from a breach of the representations set forth in
subparagraphs (a) and (b) above. The provisions of this Paragraph shall
survive Closing hereunder and any termination of this Agreement and shall not
be subject to the limitations set forth in Paragraph 11.
22. 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 Contributor or the Partnership shall have given notice as
herein provided):
68
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 any Contributor (including Xxxxx) or Participant, to
it at the address set forth opposite such party's name on the signature pages
hereto.:
with a copy in each instance to:
--------------------------------
Xxxx Xxxxx
President and Chief Operating Officer
Xxxxxx X. Xxxxx Companies
000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
with a copy in each instance to:
--------------------------------
Xxxxxx X. Xxxxxxxx, Esquire
Lazer, Aptheker, Xxxxxxx, Xxxxxxx
& Xxxxx, LLP
Melville Law Center
000 Xxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Xxxx X. Xxxxxx, III, Esq.
Battle Xxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
69
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.
23. Successors and Assigns. The Trust and the Partnership
may not assign this Agreement or any rights herein or any portion hereof
without the prior written consent of each Contributor, which may be withheld
for any reason or for no reason; provided that neither the foregoing nor any
other provision in this Agreement will restrict the ability of the Trust or
Partnership to merge with another entity or sell all or substantially all of
its assets or otherwise engage in a business combination so long as any
successor to the Trust or the Partnership by merger, asset acquisition, or
other business combination succeeds to and assumes the rights and obligations
of the Trust and the Partnership hereunder. 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.
24. 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.
25. 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.
26. 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.
27. Captions and Recitals. The captions contained herein are
not a part of this Agreement and are included solely for the convenience of
the parties.
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28. Entire Agreement. This Agreement and the Exhibits and
Schedules attached hereto contains the entire agreement between the parties
relating to the acquisition of the Properties in the aggregate, 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. Any consents or approvals with respect to the subject matter
of this Agreement shall be in writing.
29. 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 York with
respect to the New York Property and the laws of the State of New Jersey with
respect to the New Jersey Property.
(b) Any dispute, controversy or claim arising out of or
concerning this Agreement shall be determined, settled and resolved by
arbitration (and not by litigation) administered by the American Arbitration
Association (or any successor thereto) under its Commercial Arbitration Rules
and judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereto. Such arbitration shall be conducted in the
State of New Jersey. The fees and expenses of the arbitrator and all other
expenses of the arbitration (other than the fees and disbursements of
attorneys or witnesses for each party) shall be borne by the parties equally.
30. Confidentiality. Subject to the provisions of Paragraphs
31 and 36 below, the Partnership agrees that, unless and until the Applicable
Closing occurs, all information and materials obtained by the Partnership in
connection with the Subject Property that are not otherwise known by or
readily available to the public will not be disclosed by the Partnership to
any third persons (other than to its Authorized Representatives) without the
prior written consent of the Applicable Contributor. If the transaction
contemplated by this Agreement does not occur for any reason whatsoever, the
Partnership shall promptly return to each Applicable Contributor, and shall
instruct its Authorized Representatives to return to each Applicable
Contributor all copies and originals of all documents and information provided
to the Partnership. The provisions of this Paragraph 30 shall survive any
termination of this Agreement.
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31. Public Announcement. The parties agree that upon the
prior written consent of Xxxxx, the Trust may issue a press release in in form
and substance reasonably acceptable to both Xxxxx and the Trust and that the
Trust may, upon execution and delivery of this Agreement, make such public
filings as the Trust reasonably believes to be required to enable it to comply
with applicable securities laws.
32. INTENTIONALLY DELETED
33. Limitation of Liability. The obligations of each
Applicable Contributor are binding only on such Applicable Contributor and
Xxxxx and such Applicable Contributor's and Xxxxx'x assets and shall not be
personally binding upon, nor shall any resort be had to, the private
properties of any of the partners, officers, directors, shareholders or other
beneficiaries of each Applicable Contributor (other than Xxxxx) or of any of
each Applicable Contributor's employees or agents (other than Xxxxx). In
addition, the obligations of Xxxxxx Xxxxxx are binding only on Xxxxxx Xxxxxx
and Xxxxxx Xxxxxx'x assets and shall not be personally binding upon, nor shall
any resort be had to, the private properties of Xxxxx with respect thereto. No
recourse shall be had for any obligation of the Partnership or 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 the Partnership or the Trust, whether by virtue of any
statute or rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being expressly waived and released by all of
the Contributors, all of the Participants and any other party claiming by,
through or under any Contributor or Participant.
34. SEC Reporting Requirements. For the period of time
commencing on the date hereof and continuing through the first anniversary of
the final Closing Date hereunder, each Contributor 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 such Contributor's possession pertaining to the period of such
Contributor's ownership and operation of its 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"); (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.
Each Contributor shall deliver to the Trust's accountants a representation
letter (the "Letter"), in the form annexed hereto as "Exhibit X".
00. 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.
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36. Reporting. The Trust may file this Agreement and any of
the Exhibits and Schedules to this Agreement as an exhibit to a filing it may
make with the Commission (such as a Current Report on Form 8-K) pursuant the
Securities Exchange Act of 1934.
37. Tender. Formal tender of an executed deed, an entity
assignment and assumptions and purchase money is hereby waived by the
Partnership.
38. Further Assurances. After the Closing with respect to a
Parcel of Property or with respect to an Entity Transfer, each Contributor
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 (or its designee) and perfect
the Partnership's (or such designee's) right, title and interest in and to
such Property.
39. Jury Trial Waiver. THE PARTNERSHIP, THE TRUST AND EACH
CONTRIBUTOR AND PARTICIPANT 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.
40. 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.
41. Additional Trust and Partnership Covenants
(a) Reasonable Efforts. Subject to the terms and
conditions of this Agreement, the Trust and the Partnership shall use all
commercially reasonable efforts to take, and cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations, to cause the conditions to the
Contributors' and Participants' obligation to close specified in Paragraph 20
to be satisfied and otherwise to consummate and make effective the
transactions contemplated by this Agreement.
(b) NYSE Requirements. The Trust shall file a
supplemental listing application with the NYSE to list the Common Shares
issuable upon redemption of the Units issuable hereunder and shall comply with
its obligations under the Registration Rights Agreement.
(c) Tax Deferral and Gain Recognition. The parties
acknowledge that the Contributors and the Participants have entered into this
Agreement and the transactions contemplated by this Agreement with an
intention to defer recognition of gain for federal income tax purposes at
Closing and to maintain such deferral thereafter to the extent provided herein
based upon the agreement of the Trust and the Partnership to abide by certain
covenants set forth
73
in this Agreement. Based upon the foregoing, the Trust and the Partnership
hereby covenant as follows:
(i) Debt Maintenance and Guaranty Requirements.
(A) Guaranty or Indemnity. In order to allow the
Contributors and the Participants to defer the recognition of gain for federal
and state income tax purposes resulting from the contribution of the
Properties and Entity Interests to the Partnership, the Trust and the
Partnership will, during the Restricted Period (as defined below) permit the
Contributors and the Participants to guarantee, or indemnify the Trust and the
Partnership for the indebtedness of the Partnership (excluding, however, any
indebtedness (not in excess of $25,000,000) that is, as of the date of
Closing, the subject of any such guaranty, indemnity or similar arrangement).
Subject to this Paragraph 41, the Trust and the Partnership agree to maintain,
or caused to be maintained, at all times during the Restricted Period an
amount of indebtedness not to exceed $46,500,000.00 (the "Debt Amount") solely
for the Contributors and the Participants (as allocated by the Contributors
and the Participants among themselves) either to guarantee (or to indemnify
the Trust and the Partnership against liability for such indebtedness);
provided, however, that if during the Restricted Period, the Trust and the
Partnership do not maintain such indebtedness, they shall not be liable under
this Agreement to a Contributor or Participant to the extent that the Trust or
Partnership can prove that such failure did not cause the Contributor or
Participant to recognize taxable income. In addition, after the Restricted
Period, the Trust and the Partnership agree to allow the Contributors and the
Participants to guarantee (or indemnify the Trust and the Partnership) any
debt of the Trust and Partnership to the extent that the Trust or the
Partnership has such debt outstanding and such debt is not guaranteed (or
indemnified) by any other partners of the Partnership up to the Debt Amount.
The Trust and the Partnership agree to execute and deliver the Indemnity
Agreement in the form attached hereto as "Exhibit HH" at each Closing. The
Trust and the Partnership agree to take commercially reasonable action
necessary so that the execution of each guarantee or indemnity by the
Contributor and the Participants results in tax basis for the Contributor and
the Participants for federal income tax purposes. Each Contributor
acknowledges that neither the Trust nor the Partnership has made or makes any
representations or warranties regarding the effectiveness of the Indemnity
Agreement (or any guaranty or indemnity agreement entered into by a
Contributor or Participant in replacement thereof) in deferring the
recognition of gain for federal or state income tax purposes and neither the
Trust nor the Partnership shall have any liability to the Contributors and
Participants on account of such ineffectiveness.
(B) In the event that any Contributor or Participant
(I) obtains a tax-free step-up in the basis of its Units for federal income
tax purposes (e.g., upon the death of a member); (ii) sells, transfers or
otherwise disposes of all or a portion of its Units in a taxable transaction;
(iii) receives the Tax Payment from the Trust and the Partnership in
reimbursement of Taxes imposed upon such Contributor or Participant as the
result of the sale, transfer or other disposition of Property contributed by
the Contributor or Participant to the Partnership or its designee; or (iv)
receives an allocation under Treasury Reg. Section 1.704-3(b) using the
traditional method without curative allocations that reduces the amount of
Built-in-Gain (as defined below) then, in each case, the Debt Amount shall be
reduced by the amount by
74
which the Built-in-Gain is reduced on account of the any of the events set
forth in this Subsection. For purposes of this Agreement, Built-in-Gain shall
mean with respect to each Property (including Properties that will be
contributed to the Partnership or its designee through a contribution of
Entity Interests), the amount of gain that would be allocated to the
applicable Contributor or Participant under Section 704(c) of the Code if the
Property or Entity Interest were disposed of in a fully taxable transaction.
(ii) No Property Disposition. Subject to the
following provisions of this Section, the Trust and the Partnership covenant
for the benefit of the Contributors and Participants, not to sell, transfer or
otherwise dispose of (including, without limitation, by way of foreclosure)
the Properties (or property for which any such Properties are exchanged), or
make distributions which are treated as taxable dispositions for federal
income tax purposes, prior to expiration of the applicable Restricted Period
for each Property, as set forth on Schedule 1 annexed hereto (in each case,
the "Restricted Period") other than an exchange or other disposition which
does not cause the applicable Contributor and Participant to recognize
Built-in Gain for federal income tax purposes. During the Restricted Period
the Trust and the Partnership shall have the right to dispose of or distribute
the Properties (including Properties that will be contributed to the
Partnership or its designee through a contribution of Entity Interests),
provided the Trust and the Partnership pay to the applicable Contributor or
Participant the Tax Payment within thirty (30) days after such disposition or
distribution.
(iii) Expiration of Restrictions. Upon a
Contributor's or Participant's conversion into Common Shares or disposition of
more than eighty (80%) percent of the Units issued to such Contributor or
Participant pursuant to this Agreement the Trust and the Partnership shall no
longer (I) be required to provide such Contributor or Participant with any
guarantee or indemnity as described in Section 41(c)(I)(A) above and (ii) be
liable to such Contributor or Participant for a Tax Payment as described in
Section 41(c)(ii) above.
(iv) Allocation Method. The Trust and the
Partnership covenant that the "traditional method" (without curative
allocations), as defined in Treas. Reg. 1.704-3(b), of allocating income,
gain, loss and deduction to account for the variation between the fair market
value and adjusted basis of the Property and Entity Interests for federal
income tax purposes, shall be used (I) with respect to the contribution of the
Property and Entity Interests, and (ii) with respect to any revaluation of the
Property and Entity Interests, pursuant to Treas. Reg. ss.ss.1.704-
1(b)(2)(iv)(f), 1.704-1(b)(2)(iv)(g) and 1.704-3(a)(6).
(v) Defined Terms
"Tax Payment" means, with respect to each Contributor and Participant, an
amount equal to the sum of (I) the product of (A) the Built-in-Gain allocable
to such Participant or Contributor and (B) the maximum combined (federal,
state and local) income Tax rate imposed on such Contributor or Participant on
income of such character and (ii) an additional payment in the amount equal to
the amount such that, after payment by such Contributor or Participant of all
Taxes (including interest and penalties) on amounts received under clause (I)
and this clause (ii), the Contributor or Participant retain an amount equal to
the amount described in clause (I).
75
"Tax or Taxes" means any and all federal and state income taxes.
"Tax Return" means returns, reports and forms required to be filed with any
governmental authority.
(vi) The Partnership and the Trust hereby agree that
the terms and the provisions of this Paragraph 41 are for the benefit of the
parties hereto and the Participants set forth in Schedule 1 of this Agreement.
76
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.
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
/s/ Xxxxxx X. Xxxxx
-------------------------------------
XXXXXX X. XXXXX
CONTRIBUTORS: ADDRESSES:
000 Xxxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxx Xxxxx Xxxxxxx, Xxx Xxxx 00000
-------------------------
XXXXXX XXXXXXX XXXXX
/s/ Xxxxxx X. Xxxxx -----------------------------
------------------------- -----------------------------
XXXXXX X. XXXXX
AXINN AVENUE ASSOCIATES c/o 000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
BY:/s/ Xxxxxx X. Xxxxx
-------------------------
77
AXINN ELLIPSE ASSOCIATES c/o 000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
BY:/s/ Xxxxxx X. Xxxxx
---------------------------
XXXXX-XXXXXXXX, LLP c/o 000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
BY:/s/ Xxxxxx X. Xxxxx
---------------------------
XXXXX XXXXXX ASSOCIATES c/o 000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
BY:/s/ Xxxxxx X. Xxxxx
---------------------------
AXINN-NEW XXXXXX ASSOCIATES c/o 000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
BY:/s/ Xxxxxx X. Xxxxx
---------------------------
XXXXXX X. XXXXX, L.L.C. c/o 000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
BY:/s/ Xxxxxx X. Xxxxx
---------------------------
XXXXX-XXXXXXXX ASSOCIATES c/o 000 Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
BY:/s/ Xxxxxx X. Xxxxx
---------------------------
78
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: _________________________
M. Xxxxxx Xxxxxxx
79
BRANDYWINE/AXINN
SCHEDULE 1
Axinn State
Participant Participant of Restricted
Property Contributor (Record Owner) Participants % % Residence Period
------------------------------------------------------------------------------------------------------------------------------------
LONG ISLAND
INDUSTRIAL
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxx Xxxxx Xxxxxx Xxxxxxx Xxxxx n/a n/a 100% New York 10 Years
Plainview, NY
------------------------------------------------------------------------------------------------------------------------------------
1
------------------------------------------------------------------------------------------------------------------------------------
Axinn State
Participant Participant of Restricted
Property Contributor (Record Owner) Participants % % Residence Period
------------------------------------------------------------------------------------------------------------------------------------
55 Xxxx Court Xxxxxx Xxxxxxx Xxxxx Xxxxxx X. Xxxxx 50% New York 10 Years
Plainview, NY and Xxxxxx X. Xxxxx,(1)
as tenants in common Xxxxxx Xxxxx 30.5% New York
Xxxxxx and Xxxxxx 4.56%
Xxxxxxxxx New York
Coney Gottlieb .912%
New York
Xxxxx Xxxxxx 6.39%
Wash.
Xxxxx Xxxxx 1.82% (State)
Conn.
Xxxxx Xxxxxx 3.65%
New York
Xxxxxxxx Xxxx .912%
Florida
Xxxxxx X. 1.25%
Xxxxxxxxx New York
------------------------------------------------------------------------------------------------------------------------------------
00 Xxxxxxx Xxxxx Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx 80 % New York 10 Years
Plainview, NY
Xxxxxxx Xxxxx 20% New York
------------------------------------------------------------------------------------------------------------------------------------
--------
(1) There is no written agreement regarding Xxxxxx Xxxxx'x distribution of his
fifty (50%) percent interest in the property.
2
------------------------------------------------------------------------------------------------------------------------------------
Axinn State
Participant Participant of Restricted
Property Contributor (Record Owner) Participants % % Residence Period
------------------------------------------------------------------------------------------------------------------------------------
00 Xxxxxxxxxx Xxxxxx Xxxxxx Xxxxxxx Xxxxx n/a n/a 100% New York 10 Years
Plainview, NY
00 Xxxxxxxxxx Xxxxxx Xxxxxx Xxxxxxx Xxxxx n/a n/a 100% New York 10 Years
Plainview, NY
80 Skyline - Express Xxxxxx Xxxxxxx Xxxxx n/a n/a 100% New York 10 Years
Plainview, NY
000 Xxxxxxx Xxxxxx Xxxxxx Xxxxxxx Xxxxx n/a n/a 100% New York 10 Years
Plainview, NY
163-167 S. Service Road Xxxxxx Xxxxxxx Xxxxx Xxxxxx X. Xxxxx 50% New York 10 Years
Plainview, NY
Radam Corp. 50% New York
and
Ontario,
Canada
------------------------------------------------------------------------------------------------------------------------------------
000 X. Xxxxxxx Xxxx Xxxxxx Xxxxxxx Xxxxx n/a n/a 100% New York 10 Years
Melville, NY
------------------------------------------------------------------------------------------------------------------------------------
3
------------------------------------------------------------------------------------------------------------------------------------
Axinn State
Participant Participant of Restricted
Property Contributor (Record Owner) Participants % % Residence Period
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxx. Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx 75% New York 10 Years
0 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, XX Xxxxx Xxxxxxx 6.25% Xxx Xxxx
Xxxxxx Xxxxxx 0.00% Xxx Xxxx
Xxxxxx of Irving 6.25%
Xxxxxxxxx Florida
Xxxxxx Xxx 2.97% Arizona
Xxxxxxx
3.02% New York
Xxxx Xxxxxxx
0.26% Mass.
Xxxx Xxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
4
------------------------------------------------------------------------------------------------------------------------------------
Axinn State
Participant Participant of Restricted
Property Contributor (Record Owner) Participants % % Residence Period
------------------------------------------------------------------------------------------------------------------------------------
8 Engineers Xxxx Xxxxxx Xxxxxxx Xxxxx Xxxxxx X. Xxxxx 75% New York 10 Years
Farmingdale, NY
Xxxxx Xxxxxxx 6.25% Xxx Xxxx
Xxxxxx Xxxxxx 0.00% Xxx Xxxx
Xxxxxx of Irving 6.25%
Xxxxxxxxx Florida
Xxxxxx Xxx 2.97% Arizona
Xxxxxxx
3.02% New York
Xxxx Xxxxxxx
0.26% Mass.
Xxxx Xxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
19 Engineers Xxxx Xxxxxx Xxxxxxx Xxxxx Xxxxxx X. Xxxxx 50% New York 10 Years
Farmingdale, NY
Xxx Xxxxxxx 25% New York
Xxxxxx Xxxxxx 12.5% New York
Xxxxxx Xxxxxx 12.5% New York
------------------------------------------------------------------------------------------------------------------------------------
91 N. Industry Court Xxxxxx X. Xxxxx n/a n/a 100% New York 00 Xxxxx
Xxxx Xxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxx Xxxx Xxxxxx Xxxxxxx Xxxxx n/a n/a 100% New York 10 Years
Xxxxx Place, NY
------------------------------------------------------------------------------------------------------------------------------------
5
------------------------------------------------------------------------------------------------------------------------------------
Axinn State
Participant Participant of Restricted
Property Contributor (Record Owner) Participants % % Residence Period
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxx Xxxx Xxxxxx Xxxxxxx Xxxxx n/a n/a 100% New York 10 Years
Xxxxx Place, NY
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxxxx Xxxxx Xxxxxx Associates, Xxxxxx X. Xxxxx 91.04% New York 10 Years
Garden City, NY a New York general
partnership Xxxxx Xxxx 8.96% Virginia
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxx Xxxxxx Xxxxxxx Xxxxx n/a n/a 100% Xxx Xxxx 00 Xxxxx
Xxxxxx Xxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxx Xxxxxx X. Xxxxx n/a n/a 100% New York 10 Years
Holtsville, NY
------------------------------------------------------------------------------------------------------------------------------------
LONG ISLAND
OFFICE
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxxxx Xxxxxx X. Xxxxx n/a n/a 100% New York 10 Years
Jericho, NY
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxxxx Xxxxxx X. Xxxxx n/a n/a 100% New York 10 Years
Jericho, NY
------------------------------------------------------------------------------------------------------------------------------------
000 Xxx Xxxxxxx Xxxx Axinn Ellipse Associates, Xxxxxx X. Xxxxx 80% New York 10 Years
Melville, NY a New York general
partnership Xxxxxxx Xxxxx 20% New York
------------------------------------------------------------------------------------------------------------------------------------
000 Xxx Xxxxxxx Xxxx Xxxxx-Xxxxxxxx, LLC, a Xxxxxx X. Xxxxx 100% New York 5 Years
Melville, NY New York limited liability
company
------------------------------------------------------------------------------------------------------------------------------------
6
------------------------------------------------------------------------------------------------------------------------------------
Axinn State
Participant Participant of Restricted
Property Contributor (Record Owner) Participants % % Residence Period
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY
INDUSTRIAL
------------------------------------------------------------------------------------------------------------------------------------
44 National Road Xxxxx Xxxxxx Associates, Xxxxxx X. Xxxxx 75% New York 10 Years
Edison, NJ a New York general
partnership Xxxxxx Xxxxxx 12.5% New York
Xxxxxx Xxxxxx 12.5% New York
------------------------------------------------------------------------------------------------------------------------------------
000/000 Xxxxxx Xxxx Xxxxx-Xxx Xxxxxx Xxxxxx X. Xxxxx 78.2% New York 10 Years
Edison, NJ Associates, a New Jersey
limited partnership Xxxxxx Xxxxxx 8.29% New York
Xxxxxx Xxxxxx 8.29% New York
Xxxxxxx Xxxxxxxx 5.4% New York
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY
OFFICE
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxxx Xxxxx Xxxxxx X. Xxxxx, L.L.C. Xxxxxx X. Xxxxx 99% New York 00 Xxxxx
Xxxx Xx. 0, a New Jersey limited
Montvale, NJ liability company Xxxxxx X. Xxxxx, 1%
Inc.
------------------------------------------------------------------------------------------------------------------------------------
7
------------------------------------------------------------------------------------------------------------------------------------
Axinn State
Participant Participant of Restricted
Property Contributor (Record Owner) Participants % % Residence Period
------------------------------------------------------------------------------------------------------------------------------------
00 Xxxxxxxx Xxxxxxx Xxxxxx X. Xxxxx(2) Xxxxxx X. Xxxxx 76% New York 10 Years
Montvale, NJ
Xxxxx Xxxxxxx 5% New
Jersey
Xxxxxx Xxxxxx 4% New York
Xxxxx Xxxxxxxx 5% New
Jersey
Xxxxxx X. Xxxx 5% New
Jersey
Xxxxxx X. Xxxxxxxx 5% New
Jersey
------------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxx Xxxxxx X. Xxxxx(3) Xxxxxx X. Xxxxx 87.5% New York 10 Years
Montvale, NJ
Xxxxxxx Xxxxx 10% New York
Trust UTW of 2.5% New York
Xxxxxxxx Xxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
--------
(2) At closing, the current record owner will be Montvale IV, a New Jersey
joint venture.
(3) At closing, the current record owner will be Axinn Montvale II Associates,
a New York general partnership.
8
------------------------------------------------------------------------------------------------------------------------------------
Axinn State
Participant Participant of Restricted
Property Contributor (Record Owner) Participants % % Residence Period
------------------------------------------------------------------------------------------------------------------------------------
0 Xxxxxxx Xxxxx Xxxxxx X. Axinn4 Xxxxxx X. Xxxxx 80% New York 5 Years
Montvale, NJ
Xxxxxxx Xxxxx 20% New York
------------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxxxx Xxxxx-Xxxxxxxx Xxxxxx X. Xxxxx 33.33% New York 10 Years
Bloomfield, NJ Associates, a New York
general partnership Xxxxxxx Xxxxxxxx 33.33% New York
Xxxxxx Xxxxx 33.33% New York
------------------------------------------------------------------------------------------------------------------------------------
--------
(4) At closing, the current record owner will be 80-20 Associates, a New York
general partnership.
9
BRANDYWINE/AXINN
SCHEDULE 2
Property Purchase Price Mortgage Debt Equity Unit Equivalents
-------- -------------- ------------- ------ ----------------
LONG ISLAND INDUSTRIAL
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxx Xxxxx $ 862,493 $ 862,493
Plainview, NY
-----------------------------------------------------------------------------------------------------------------------------------
00 Xxxx Xxxxx 3,918,112 3,918,112
Plainview, NY
-----------------------------------------------------------------------------------------------------------------------------------
00 Xxxxxxx Xxxxx 1,168,093 1,168,096
Plainview, NY
-----------------------------------------------------------------------------------------------------------------------------------
00 Xxxxxxxxxx Xxxxxx 778,845 778,845
Plainview, NY
-----------------------------------------------------------------------------------------------------------------------------------
00 Xxxxxxxxxx Xxxxxx 1,156,540 1,156,540
Plainview, NY
-----------------------------------------------------------------------------------------------------------------------------------
80 Skyline - Express 2,363,755 2,363,755
Plainview, NY
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxx 1,973,836 1,973,836
Plainview, NY
-----------------------------------------------------------------------------------------------------------------------------------
000-000 X. Xxxxxxx Xxxx 2,774,167 $ 1,843,985 930,182 38,757.58
Plainview, NY
-----------------------------------------------------------------------------------------------------------------------------------
000 X. Xxxxxxx Xxxx 3,453,486 2,110,735 1,342,753 55,948.04
Melville, NY
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxx. $1,082,691 $1,082,691
0 Xxxxxxxxx Xxxx
Xxxxxxxxxxx, XX
-----------------------------------------------------------------------------------------------------------------------------------
8 Engineers Lane 949,736 949,736
Farmingdale, NY
-----------------------------------------------------------------------------------------------------------------------------------
1-
Property Purchase Price Mortgage Debt Equity Unit Equivalents
-------- -------------- ------------- ------ ----------------
19 Engineers Lane 555,752 555,752
Farmingdale, NY
-----------------------------------------------------------------------------------------------------------------------------------
00 X. Xxxxxxxx Xxxxx 2,690,045 2,690,045
Deer Park, NY
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxxx Xxxx 1,957,029 1,957,029
Xxxxx Place, NY
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxxx Xxxx 1,249,964 1,249,964
Xxxxx Place, NY
-----------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxxxx 2,667,340 2,667,340
Garden City, NY
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxx 2,023,833 2,023,833
Garden City, NY
-----------------------------------------------------------------------------------------------------------------------------------
LONG ISLAND OFFICE
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxxxx $4,961,782 $4,961,782
Jericho, NY
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxxxx 1,609,767 1,609,767
Jericho, NY
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxx Xxxxxxx Xxxx 6,021,484 $5,790,678 230,806 9,616.92
Melville, NY
-----------------------------------------------------------------------------------------------------------------------------------
2-
Property Purchase Price Mortgage Debt Equity Unit Equivalents
-------- -------------- ------------- ------ ----------------
000 Xxx Xxxxxxx Xxxx 7,800,000 7,800,000
Melville, NY
-----------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY INDUSTRIAL
-----------------------------------------------------------------------------------------------------------------------------------
00 Xxxxxxxx Xxxx 1,587,714 1,587,714
Edison, NJ
-----------------------------------------------------------------------------------------------------------------------------------
000/000 Xxxxxx Xxxx 4,914,676 1,044,131 3,870,545 161,272.71
Edison, NJ
-----------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY OFFICE
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxxx Xxxxx Xxxx 7,936,863 3,948,796 3,988,067 166,169.46
Montvale, NJ
-----------------------------------------------------------------------------------------------------------------------------------
00 Xxxxxxxx Xxxxxxx 9,616,189 4,793,826 4,822,363 199,742.75
Montvale, NJ
-----------------------------------------------------------------------------------------------------------------------------------
000 Xxxxxxx Xxxxx 500,000 11,000,000 1,646,179 68,590.79
Montvale, NJ
-----------------------------------------------------------------------------------------------------------------------------------
0 Xxxxxxx Xxxxx $500,000 $12,214,174 $ 100,000 4,166.67
Montvale, NJ
-----------------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx Xxxxxx 4,866,400 4,866,400
Bloomfield, NJ
-----------------------------------------------------------------------------------------------------------------------------------
3-
SCHEDULE 5
ASSUMED MORTGAGE LOANS
Earliest
Pre-payment Assumed
Date Debt(1) Assumed
Property as of Principal Int. Maturity Without Differential Personal Other Debt
6/30/98 Balance Rate Date Lender Penalty Date Liability Participants Differential
------- ------- ---- ---- ------ ------- ---- --------- ------------ ------------
-----------------------------------------------------------------------------------------------------------------------------------
000 X. Xxxxxxx Xx. $2,090,350 9.875% June 1, Guardian June 1, June 1, 2001 No None $167,262
Xxxxxxxx, XX 0000 Life 2001
-----------------------------------------------------------------------------------------------------------------------------------
102 Chestnut $3,931,545 9.640% May 1, Lasalle May 1, May 1, 2007 No None $783,950
Ridge Rd. 2007 National 2007
Montvale, NJ Bank
-----------------------------------------------------------------------------------------------------------------------------------
101 Paragon Dr.(3) $19,190,000 6.0% September NJRE N/A N/A DEA- None $0
Montvale, NJ 15, 2005 Corp. Limited
$11,000,000
-----------------------------------------------------------------------------------------------------------------------------------
000 X. Xxxxxxx Xx. $1,825,428 8.375% October Roslyn October 1, September 1, DEA- None $60,966
Plainview, NY 1, 2007 Savings 2006 1998 Specific
Bank Performance(2)
-----------------------------------------------------------------------------------------------------------------------------------
--------
(1) Please see annexed documentation which sets forth how the assumed debt
differential amounts were calculated.
(2) DEA personal guaranty is limited to delivering the Premises occupied and
paying rent. DEA has complied with this provision.
1-
835/837 New $1,016,849 9.375% August 1, Woodmen August 1, August 1, No None $50,218
Durham Rd. 2008 Insurance 2008 1998
Edison, NJ
-----------------------------------------------------------------------------------------------------------------------------------
3 Paragon Dr. $10,500,000(4) 10.08% August 10, New N/A N/A DEA- None $0
Montvale, NJ(3) 1998 York Specific
Life Performance(5)
-----------------------------------------------------------------------------------------------------------------------------------
00 Xxxxxxxx Xxxx. $4,713,145 9.875% January 10, Lasalle January 1, January 1, No None $434,269
Xxxxxxxx, XX 0000 National 2002 2002
Bank
-----------------------------------------------------------------------------------------------------------------------------------
245 Old Country $5,761,959 8.0% October 1, Roslyn October 1, October 1, DEA- None $137,229
Rd. Melville, NY 2007 Savings 2006 2000 Limited
Bank guaranty
$1,000,000
-----------------------------------------------------------------------------------------------------------------------------------
--------
(3) Please see Section 14 of the Contribution Agreement.
(4) It is anticipated that pursuant to a settlement agreement between New York
Life and Xxxxxx X. Xxxxx that the existing principal balance totaling
$12,207,367will be reduced to $10,500,000.
(5) DEA personal guaranty is limited to "Good Guy" guaranty pursuant to
settlement agreement with New York Life.
2-
