EXHIBIT 2.2
FIRST AMENDMENT TO
CONTRIBUTION AGREEMENT
THIS FIRST AMENDMENT TO CONTRIBUTION AGREEMENT, dated as of
December 23, 1998 (this "First Amendment"), is by and among ROOSEVELT BLVD. CO.,
INC., a Pennsylvania corporation ("RBC"), XXXXXX XXXXX, XXXXXX XXXXX, XXXXXX
BROKER, XXXXXXX X. XXXXX, XXXXXX XXXXXXXX, XXXXX X. XXXXX, XXXXXXXX XXXXX,
XXXXXX XXXXXXXX, XXXXXXX XXXXXXX and XXXXXX XXXXXXXXX (collectively the "Limited
Partners," and collectively with RBC, the "Contributors," and each, a
"Contributor"), PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, an unincorporated
association in business trust form created under Pennsylvania law pursuant to a
Trust Agreement dated December 27, 1960, as last amended and restated on
December 16, 1987 ("PREIT"), and PREIT ASSOCIATES, L.P., a Delaware limited
partnership ("PREIT Associates").
WHEREAS, the Contributors, PREIT and PREIT Associates have
executed that certain Contribution Agreement relating to Xxxxxxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx dated as of July 30, 1997 (the "Contribution
Agreement");
WHEREAS, Section 2(c) of the Contribution Agreement describes
certain terms relating to the acquisition by PREIT Associates of the Bradlees
Property (as defined therein);
WHEREAS, Schedule A to the Contribution Agreement ("Schedule
A") sets forth certain terms relating to the consideration to be paid by PREIT
and PREIT Associates to the Contributors in connection with the transactions
contemplated by the Contribution Agreement; and
WHEREAS, the parties hereto wish to amend Section 2(c) of the
Contribution Agreement and to amend and restate Schedule A as provided herein.
NOW, THEREFORE, in consideration of the promises and the
agreements contained herein, the parties hereto, intending to be legally bound,
hereby agree as follows:
SECTION 1. Amendment to Section 2(c) of Contribution
Agreement. Section 2(c) of the Contribution Agreement is hereby amended and
restated in its entirety to read as follows:
(c) The Bradlees Property. The Contributors hereby assign,
transfer and convey to the Partnership or its nominee all
of their right, title and interest in and to the right to
purchase Parcel 2 on the Plan (the "Bradlees Property")
from State Street Bank and Trust Company as Owner Trustee
("State Street") in accordance with a certain Agreement of
Sale between Xxxxxxxxx XX Associates, L.P., as purchaser,
and State Street, as seller, dated October 12, 1998 (the
"Agreement of Sale"). The Partnership
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hereby assumes the obligations of the Contributors and
RAII, L.P. under the Agreement of Sale, and shall pay or
reimburse to RAII, L.P. (or if so directed, the
Contributors) at Closing by wire transfer in immediately
available funds the $100,000 deposit paid by RAII, L.P.
thereunder. The Partnership shall acquire fee title to the
Bradlees Property pursuant to the Agreement of Sale for
the purchase price thereunder. In consideration of the
Contributor's assignment of the Agreement of Sale to the
Partnership, the Partnership also hereby assumes the
obligations of Buyer under that certain letter agreement
with First American Title Insurance Company dated December
23, 1998, and pursuant thereto, the Partnership shall,
concurrently with the closing under the Agreement of Sale,
deposit in escrow with First American Title Insurance
Company the sum of $450,000 pursuant to the letter
agreement. The Contributors agree that, in the event the
lease relating to the Bradlees Theater Space (as defined
in Schedule A hereto) is terminated because existing
restrictions on the property prohibit the tenant
thereunder from constructing a movie theatre, the
Contributors shall pay to the tenant of such lease the
amount of liquidated damages required to be paid to such
tenant that exceeds $135,000.
SECTION 2. Amendment to Section 3(a) of Contribution
Agreement. Section 3(a) of the Contribution Agreement is hereby amended by
deleting the last sentence of Section 3(a), which reads: "Upon the closing of an
exercise of any option specific in Section 2(c), the Partnership shall issue to
the applicable Contributors the number of Class A Units specified in Section
2(c)."
SECTION 3. Amendment to Schedule A. Schedule A is hereby
amended and restated in its entirety to read as attached hereto (the attached
Schedule A has been marked to reflect changes from the original Schedule A).
SECTION 4. Contribution Agreement in Full Force and Effect as
Amended. Except as specifically amended hereby, all of the terms and conditions
of the Contribution Agreement (including, without limitation, Section 3(b)
thereof) shall remain in full force and effect. All references to the
Contribution Agreement in any other document or instrument shall be deemed to
mean such Contribution Agreement as amended by this First Amendment. The parties
hereto agree to be bound by the terms and obligations of the Contribution
Agreement, as amended by the First Amendment, as though the terms and
obligations of the Contribution Agreement were set forth herein.
SECTION 5. Power of Attornery.
(a) Each of the Contributors, by signing this First Amendment,
and notwithstanding anything to the contrary contained in the Limited
Partnership Agreements of RA, L.P. or RAII, L.P., hereby irrevocably constitutes
and appoints each of Xxxxxx Xxxxx, Xxxxxx Xxxxx and Xxxxxx Xxxxxxxx (the
"Attorneys in Fact") as his, her or its true and lawful attorney-in-fact, with
full power of substitution, for the purpose of performing all acts necessary or
proper to complete the contribution transactions contemplated under the
Contribution
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Agreement, including without limitation the Closing, the Home Depot
Closing and the Second Closing (collectively, the "Contribution Transactions"),
with each of the Attorneys in Fact having full power and authority in each
Contributor's name, place and stead, to:
(i) Execute, acknowledge, deliver, swear to, file and
record with the appropriate public offices such certificates, instruments and
documents, including without limitation assignments of partnership interest,
certificates, non-imputation affidavits, closing statements or settlement
sheets, which the Attorneys in Fact deem necessary or appropriate to carry out
the provisions of, and to complete the Contribution Transactions pursuant to,
the Contribution Agreement.
(ii) Expend such sums as may be necessary or proper,
in order to complete the Contribution Transactions.
(iii) Demand and recover all money, Class A Units and
other consideration which may become due and owing to the Contributors by reason
of the Contribution Transactions.
(b) Notwithstanding anything contained in Section 5 to the
contrary, nothing contained in this Section 5 shall be deemed or construed to
give the Attorneys in Fact any right, power or authority, without first
obtaining the approval of the Contributors, to agree to any further amendment of
the Contribution Agreement.
(c) Either of the Attorneys in Fact named and appointed above
may and is hereby authorized to exercise any of the powers or perform any of the
acts described above without the joinder or consent of the other, it being the
express intent of the Contributors that each of the individuals named and
appointed as Attorneys in Fact shall possess full power of attorney to act for
the Contributors and in their names as set forth above.
(d) The power of attorney given in this Section 5 shall be
binding upon the heirs, executors, administrators, personal representatives,
successors and assigns of each of the Contributors. In recognition of the fact
that each of the Contributors will be relying on the powers of the Attorneys in
Fact to act as contemplated by this Section 5, this power of attorney shall be
deemed to be coupled with an interest, and shall to the fullest extent permitted
by applicable law, survive the bankruptcy, death, disability or incompetency of
each of the Contributors.
SECTION 6. Counterparts. This First Amendment may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which taken together shall constitute one and the same instrument. For
purposes of this First Amendment, a telecopy of an executed counterpart shall
constitute an original.
SECTION 7. Governing Law. This First Amendment is made
pursuant to, and shall be construed and enforced in accordance with, the laws of
the Commonwealth of Pennsylvania (and United States federal law, to the extent
applicable), irrespective of the
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xxxxxxxxx xxxxx xx xxxxxxxx, xxxxxxxxx or domicile of the parties hereto, and
without giving effect to otherwise applicable principles of conflicts of laws.
SECTION 8. Defined Terms. Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such terms in the
Contribution Agreement.
SECTION 9. Bradlees Property Transfer Tax. Schedule 9.1(c) of
the Contribution Agreement is hereby amended to reflect the following:
(a) It is acknowledged that transfer tax on the Deed for the
Bradlees Property has been calculated on the basis of the transfer tax
value of $3,001,000.
(b) To the extent that either the Commonwealth of Pennsylvania
and/or the City of Philadelphia successfully maintains that the
transfer tax value is in excess of $3,001,000, each Contributor will
indemnify and hold harmless the Buyer Indemnified Persons for the
amount of any transfer taxes which are ultimately payable upon a
transfer tax value in excess of $3,001,000 and all interest and
penalties, pursuant to and subject to the provisions of, Section 9 of
the Contribution Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
First Amendment as of the day and year first above written.
ROOSEVELT BLVD. CO., INC.
By: /s/ Xxxxxxx Xxxxxxx
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Name: Xxxxxxx Xxxxxxx
Title: Vice President
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx X. Xxxxx
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Xxxxxx Xxxxx Xxxxxxx X. Xxxxx
/s/ Xxxxxx Xxxxx /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxx Xxxxxx Xxxxxxxx
/s/ Xxxxx X. Xxxxx /s/ Xxx Xxxxx
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Xxxxx X. Xxxxx Xxx Xxxxx
/s/ Xxxxxx Xxxxxxxx /s/ Xxxxxxx Xxxxxxx
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Xxxxxx Xxxxxxxx Xxxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxxxx /s/ Xxxxxx Broker
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Xxxxxx Xxxxxxxxx Xxxxxx Broker
[Signature Page to First Amendment to Contribution Agreement]
PENNSYLVANIA REAL ESTATE
INVESTMENT TRUST
By: /s/ Xxxxxxx X. Xxxx
----------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President-Acquisitions and Secretary
PREIT ASSOCIATES, L.P.
By: Pennsylvania Real Estate
Investment Trust, its general
Partner
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: Vice President-Acquisitions and Secretary
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Schedule A
to
Contribution Agreement
relating to
Northeast Tower Center, Philadelphia, Pennsylvania
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1. Certain Definitions. For purposes of this Schedule A, the
following capitalized terms shall have the following meanings:
"Adjusted Cash Flow" means the amount of pro forma Rental
Income to be received by either or both of the Project Partnerships during the
first 12-months following the date on which such Adjusted Cash Flow is being
calculated under a lease of space within the Shopping Center to a Credit Tenant
less the sum of: (i) a replacement reserve of $0.25 per square foot of
facilities built to suit (provided, that such replacement reserve shall be
eliminated if the Bradlees Theater Space is leased to General Cinema or a Credit
Tenant under an unsubordinated ground lease); (ii) the management fees allocable
to such space that are payable by either of the Project Partnerships in respect
of such 12-month period (or if there is no management contract in effect or if
the management contract is with TRO, an amount equal to 4% of such Rental
Income) to the extent not reimbursed by tenants; (iii) all common area
administrative or overhead charges to the extent not included in the management
fee or reimbursed by tenants; (iv) all pro forma Operating Expenses to be
incurred by either of the Project Partnerships in respect of such 12-month
period that are directly attributable to such space, to the extent such
Operating Expenses are not required to be reimbursed by the Credit Tenant under
the terms of such lease; and (v) 3% of such Rental Income (in respect of a
vacancy reserve), except that there shall be a 5% vacancy reserve with respect
to portions of the Shopping Center which are leased to tenants other than Home
Depot. If a lease provides for no rent or reduced rent during all or a portion
of the aforementioned 12- month period, the base rent under the lease (before
periodic step-ups) shall be pro-rated and straight-lined over the initial lease
term (excluding option periods), and on that basis, Rental Income for the
aforementioned 12-month period will be calculated.
"Applicable Ownership Percentage" means 100%.
"Appraised Value" means an amount that the Special Committee
(as defined in the TRO Contribution Agreement) and RBC, Inc. agree represents
the fair market value (the "Fair Value") of specified space within the Shopping
Center or undeveloped, but developable, land within the boundaries of the real
estate owned or ground leased by the Project Partnerships as of the Closing Date
("Developable Land") or, if RBC,Inc. and the Special Committee are unable to
agree upon the Fair Value within 30 days of the Closing Date, Fair Value shall
be determined by the following appraisal process. If RBC,Inc. and the Special
Committee have been unable to agree upon the Fair Value of space within the
Shopping Center or of the Developable Land that is to be valued based on its
"Appraised Value," then, each of RBC, Inc. and the Special Committee shall have
the right to institute an appraisal procedure to determine the Fair Value by so
notifying the other party in writing. Within ten days after the notice is
received by the other party, both parties shall, jointly nominate and appoint
one appraiser who shall make a determination of the Fair Value of such space. If
RBC,Inc. and the Special Committee fail to jointly agree on the nomination and
appointment of one appraiser within said ten (10) day period, each of such
parties shall then nominate and appoint one appraiser within fifteen (15) days
after the end of the initial ten (10) day period and give notice of such
appointment to the other party. Upon the appointment of the two appraisers as
aforesaid, the two appraisers so appointed shall jointly make a determination of
the Fair Value of such space. If
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either party fails to appoint an appraiser within said fifteen (15) day period,
the appraiser appointed by the other party shall make the determination of the
Fair Value. If the two appraisers are unable to agree upon a determination of
the Fair Value of such space within fifteen (15) days after the appointment of
the second appraiser, the two appraisers shall jointly nominate and appoint a
third appraiser within fifteen (15) days after the expiration of said fifteen
(15) day period and give written notice of such appointment to both parties. In
the event the two appraisers fail to appoint such third appraiser within said
fifteen (15) day period, either party may thereafter apply to the United States
District Court for the Eastern District of Pennsylvania for the appointment of
such third appraiser. The third appraiser shall make a determination of the Fair
Value. In the event the three appraisers are unable to agree upon a
determination of the Fair Value of such space within fifteen (15) days after the
appointment of the third appraiser, then the Fair Value shall be an amount equal
to the average of the three values contained in the respective written
appraisals submitted by the appraisers. The appraisers shall make their
determination in writing and give notice thereof to both parties. Each appraiser
shall afford both parties a hearing and the right to submit evidence, with the
privilege of cross-examination in connection with its determination of the Fair
Value. In the event any appraiser appointed as aforesaid shall die or become
unable or unwilling to act before completion of the appraisal, such appraiser's
successor shall be appointed in the same manner as provided above.
Notwithstanding anything in this definition to the contrary, within thirty days
after the Closing Date, the Partnership and the Contributors shall jointly
nominate and appoint one appraiser who shall make a determination of the Fair
Value of the Three Acre Parcel. Any appraiser appointed hereunder shall (x) be
independent of both parties (and of all persons and entities with interest in
either party); (y) have not less than five (5) years' experience in the
appraisal of real property; and (z) hold the professional designation M.A.I., or
if the M.A.I. ceases to exist, a comparable designation from an equivalent
professional appraiser organization. All appraisal fees and expenses shall be
borne equally by the Partnership and RBC,Inc. In determining Fair Value, the
appraisers will be instructed to take into consideration, inter alia, any sums
payable by tenants to the Project Partnership, including rent and all other cash
flows, other than Reimbursements.
"Attributable Debt" means the Applicable Ownership Percentage
of the aggregate amount of (i) all indebtedness and liabilities of RAII, L.P. as
of the Closing Date other than indebtedness being entirely amortized and
serviced out of payments being made by Credit Tenants under Purchase Leases and
for which recourse is limited solely to the property that is the subject of such
leases, (ii) Attributable Expenditures made by the Partnership at any time after
July 30, 1997 and by either the Partnership or RAII, L.P. at any time after the
Closing Date and on or before the Excepted Space Closing Date, and (iii)
interest at the rate of 10% per annum on all Attributable Expenditures made by
RAII, L.P. and the Partnership at any time after the Closing Date and on or
before the Excepted Space Closing Date; provided, however, that liabilities of
RAII, L.P. shall not be deemed to constitute Attributable Debt to the extent
such liabilities are taken into account in adjusting the consideration payable
to the Contributors in accordance with Section 8.1 above; provided further,
however, that Attributable Debt shall be reduced by the amount of the net
proceeds received by RAII, L.P. from the sale of any of the Excepted Space.
"Attributable Expenditure" means any expenditure (other than
Bradlees Attributable Expenditures and expenditures made with the proceeds of
any indebtedness
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described in subclause (i) of the definition of Attributable Debt), incurred by
RAII, L.P. or the Partnership in connection with the Shopping Center other than
the Bradlees Property, including, without limitation, leasing and development
fees, professional fees, site work and demolition expenses, real estate taxes,
insurance, common area maintenance contributions, construction costs and tenant
allowances provided, that Attributable Expenditures shall not include the
attorneys' fees and expenses of either the Partnership's or the Contributors'
attorneys incurred in connection with the Closing, the Home Depot Closing or the
Second Closing.
"Bradlees Attributable Debt" means the Applicable Ownership
Percentage of the aggregate amount of (i) Bradlees Attributable Expenditures
made by the Partnership at any time after July 30, 1997 and by either the
Partnership or RAII, L.P. after the Closing Date and on or before the Bradlees
Theater Space Closing Date, and (iii) interest at the rate of 10% per annum on
all Bradlees Attributable Expenditures made by RAII, L.P. and the Partnership at
any time after the Closing Date and on or before the Bradlees Theater Space
Closing Date.
"Bradlees Attributable Expenditure" means any expenditure
(other than Attributable Expenditures) incurred by RAII, L.P. or the Partnership
in connection with the Bradlees Property, including, without limitation, leasing
and development fees, professional fees, site work and demolition expenses, real
estate taxes, insurance, common area maintenance contributions, construction
costs and tenant allowances, all costs incurred in the acquisition of the
Bradlees Property and the amount of liquidated damages (not to exceed $135,000),
if any, required to be paid to the tenant of the lease relating to the Bradlees
Theater Space if such lease is terminated by such tenant because existing
restrictions on the property prohibit the tenant from constructing a movie
theater; provided, that Bradlees Attributable Expenditures shall not include the
attorneys' fees and expenses of either the Partnership's or the Contributors'
attorneys incurred in connection with the Closing.
"Bradlees Retail G-2 Space Closing Date" means December 31,
1999.
"Bradlees Retail G-2 Space Issuance Date" means the thirtieth
day (or, if such day is not a business day, the first business day following
such thirtieth day) following the Bradlees Retail G-2 Space Closing Date.
"Bradlees Retail G-2 Space Value" means an amount (not less
than zero) equal to: (i) the Applicable Ownership Percentage of the product of
(x) 10 and (y) the Adjusted Cash Flow with respect to the lease relating to the
Bradlees Retail G-2 Space, calculated as of the Bradlees Retail G-2 Space
Closing Date, minus (ii) the portion of Bradlees Attributable Debt that was not
used to reduce Bradlees Theater Space Value.
"Bradlees Property" has the meaning provided in Section 2(c)
of the Contribution Agreement.
"Bradlees Space" means the Bradlees Theater Space and the
Bradlees Retail G-2 Space.
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"Bradlees Retail G-2 Space" means the 17,000 +/- square foot
portion of the Bradlees Property designated as Retail G-2 on the plan layout
attached hereto as Exhibit "A".
"Bradlees Theater Space" means the 80,000 +/- square foot
portion of the Bradlees Property intended to be leased to a theater tenant and
designated as "Movie Theater" on the plan layout attached hereto as Exhibit "A".
"Bradlees Theater Space Closing Date" means the first date on
which the Bradlees Theater Space is subject to a lease executed on or before
December 31, 1999 with, and has become Occupied, and rent is being paid, by
General Cinema or Credit Tenants.
"Bradlees Theater Space Issuance Date" means the thirtieth day
(or, if such day is not a business day, the first business day following such
thirtieth day) following the Bradlees Theater Space Closing Date.
"Bradlees Theater Space Value" means an amount (not less than
zero) equal to: (i) the Applicable Ownership Percentage of the product of (x) 10
and (y) the Adjusted Cash Flow with respect to the lease relating to the
Bradlees Theater Space, calculated as of the Bradlees Theater Space Closing
Date, minus (ii) the portion of Bradlees Attributable Debt that was not used to
reduce Bradlees Retail G-2 Space Value.
"Carved Out Receivables" means the rent receivables or other
accounts receivable as of the Closing under the Fuddrucker's and Staples Leases,
in the amounts of $98,904 and $25,350, respectively.
"Carved Out Receivables Value" means the net realizable value
(not less than zero) of the Carved Out Receivables in accordance with GAAP and
not including rental income recognized in excess of payments currently due and
notes receivable from the tenants under the Fuddrucker's and Staples Leases. The
determination of Carved Out Receivables Value shall be made as promptly as
practicable after the Closing by the Partnership's independent CPA.
"Completion Date" means the first date on which at least 80%
of the Shopping Center is Occupied by Credit Tenants.
"Component I of Property Value" means an amount equal to the
product of (x) 10 and (y) the Adjusted Cash Flow as of the Closing Date with
respect to all space within the Shopping Center that is Occupied as of such date
by Credit Tenants (other than space leased pursuant to Purchase Leases).
"Component II of Property Value" means an amount equal to the
product of (x) 10 and (y) the Adjusted Cash Flow as of the date of calculation
with respect to all space within the Shopping Center (other than space leased
pursuant to Purchase Leases) that is leased as of such date to Credit Tenants
pursuant to fully executed leases that are in effect but that are not then
Occupied and therefore the leases are not included within the calculation of
Component I of Property Value, such calculation of Adjusted Cash Flow to be made
as if all such space within
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the Shopping Center were completely fit out and built as of the date of
calculation in accordance with the Project Partnerships' budget for the Shopping
Center.
"Component III of Property Value" means an amount equal to the
net present value (applying a discount rate of 10% per annum) as of the date of
calculation of the Spread Payments for all annual periods under each fully
executed Purchase Lease with a Credit Tenant that is in effect as of such date
(based upon an assumption that each purchase option will be exercised in the
first year that such purchase option is exercisable).
"Component IV of Property Value" means an amount equal to the
net present value (applying a discount rate of 10% per annum) of all amounts, if
any, payable by Credit Tenants (other than Credit Tenants with Purchase Leases)
to RAII, L.P. under fully executed Shopping Center leases in effect as of the
date of calculation other than amounts constituting Rental Income or
Reimbursements.
"Component V of Property Value" means an amount equal to the
Appraised Value as of the date of calculation of all space within the Shopping
Center and Developable Land (which shall, for purposes of this definition,
include the Three Acre Parcel) that is not leased to Credit Tenants as of such
date, whether built or unbuilt.
"Credit Tenant" means a commercial tenant leasing space within
the Shopping Center whose credit worthiness and lease terms are consistent with
good industry leasing standards and are at least as favorable to the landlord as
the tenants (and lease terms applicable thereto) that occupy as of the date of
this Agreement The Court at Oxford Valley and Northeast Tower Center.
"Deemed Closing Value" means an amount (not less than zero)
equal to: (i) the Applicable Ownership Percentage of the sum of (x) Component I
of Property Value; (y) Component III of Property Value (but computed by
excluding the Home Depot parcel and taking into account solely those Purchase
Leases of space Occupied as of the Closing Date); and (z) Component IV of
Property Value (but computed by taking into account solely leases of space
Occupied by Credit Tenants as of the Closing), each such component being
calculated as of the Closing Date, minus (ii) the Attributable Debt, plus (iii)
the Applicable Ownership Percentage of all cash of RAII, L.P. as of Closing;
plus (iv) the Applicable Ownership Percentage of all rent receivables or other
accounts receivable as of the Closing (except for the Carved Out Receivables)
from tenants of RAII, L.P. relating to periods prior to Closing (such rent and
other account receivables being valued at their net realizable value in
accordance with GAAP and not including rental income recognized in excess of
payments currently due and notes receivable from tenants with respect to
improvement costs), and plus (v) the Applicable Ownership Percentage of all
prepaid expenses of RAII, L.P. as of the Closing.
"Excepted Space" means the following portions of the Shopping
Center: (i) the 5,150 square foot parcel designated as Retail G-1 on the plan
layout attached hereto as Exhibit "A", (ii) the 4,800 square foot space
designated as Retail F on the plan layout attached hereto as Exhibit "A", (iii)
the Powerhouse Space, and (iv) the R&F Space, if the closing of the sale of such
space does not occur under an agreement of sale by December 31, 1999.
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"Excepted Space Closing Date" means the earlier to occur of
(i) December 31, 1999, or (ii) the first date on which all of the Excepted Space
has become Occupied by Credit Tenants.
"Excepted Space Issuance Date" means the thirtieth day (or, if
such day is not a business day, the first business day following such thirtieth
day) following the Excepted Space Closing Date.
"Excepted Space Value" means an amount (not less than zero)
equal to: (i) the Applicable Ownership Percentage of the product of (x) 10 and
(y) the Adjusted Cash Flow with respect to the leases with Credit Tenants
relating to the Excepted Space, calculated as of the earlier of the first date
on which lease payments are to commence or the date of Occupancy, minus (ii) the
portion of Attributable Debt, if any, that has not been used to reduce Deemed
Closing Value or Non-Credit Tenant Value and the portion of the aggregate value
of Damages arising from breaches described in Section 8.1 that were not used to
reduce Deemed Closing Value or Non-Credit Tenant Value; provided, however, that
in the event that any leases relating to the Excepted Space have not become
Occupied by Credit Tenants between the Closing Date and the Excepted Space
Closing Date, such leases shall be excluded from the calculation of Excepted
Space Value, and the parties shall instead cause the Appraised Value of such
space to be calculated (other than any portion of the Powerhouse Space that is
not Occupied by Credit Tenants between the Closing Date and the Excepted Space
Closing Date, to which no value shall be attributed).
"Home Depot Closing Date" means the first business day of the
month after the month in which RA, L.P. or the Partnership receives the consent
of MetLife, the mortgagee of the Home Depot parcel, concerning the transfer of
partnership interests in RA, L.P. as contemplated under the Contribution
Agreement, the cancellation and release of all guarantees given by any of the
Contributors (or principals thereof), and the cancellation and release of all
letters of credit, pledges of partnership interests and other collateral
security, such that none of the Contributors shall have any further liability or
obligation to MetLife, and none of the partnership interests of the Contributors
shall be encumbered in connection with the mortgage debt held by MetLife (the
"MetLife Consent").
"MetLife Consent" shall have the meaning provided in the
definition of Home Depot Closing Date.
"Non-Credit Tenant Value" means (A) with respect to
calculations made prior to the Excepted Space Closing Date, an amount (not less
than zero) equal to: (i) the Applicable Ownership Percentage of Component V of
Property Value, calculated as of the Closing Date, minus (ii) the portion of
Attributable Debt, if any, that was not used to reduce Deemed Closing Value, or
Excepted Space Value and the portion of the aggregate value of Damages arising
from breaches described in Section 8.1 that were not used to reduce Deemed
Closing Value or Excepted Space Value, and (B) with respect to calculations made
after the Excepted Space Closing Date, an amount (not less than zero) equal to:
(i) the Applicable Ownership Percentage of Component V of Property Value,
calculated as of the Excepted Space Closing Date, minus (ii)
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the portion of Attributable Debt, if any, that was not used to reduce Deemed
Closing Value, Excepted Space Value or Non-Credit Tenant Value (as calculated
under subsection (A) of this definition) and the portion of the aggregate value
of Damages arising from breaches described in Section 8.1 that were not used to
reduce Deemed Closing Value, Excepted Space Value or Non-Credit Tenant Value (as
calculated under subsection (A) of this definition).
"Occupied" means that space within the Shopping Center is
occupied by a commercial tenant that is open to the public for business in such
space and such occupancy is pursuant to a fully executed lease with either of
the Project Partnerships that is in effect.
"Operating Expenses" means all state, county or local taxes or
other operating expenses (including, without limitation, all state and local
income taxes imposed on PREIT, the Partnership or either of the Project
Partnerships in respect of payments made by tenants under Shopping Center
leases).
"Per Unit Amount" means $23.40 adjusted so as to reflect any
PREIT Recapitalization (as defined in the TRO Contribution Agreement) occurring
after the date hereof and prior to Closing.
"Powerhouse Space" means the 25,000 +/- square foot space
designated as the "Existing Power Plant" powerhouse on the plan layout attached
hereto as Exhibit "A".
"Purchase Lease" means a fully executed lease of space within
the Shopping Center between a Credit Tenant and the Project Partnership that is
in effect and that provides for a bargain, triple net lease under which the
tenant has the right to purchase the leased premises.
"R&F Closing Date" means the closing date on which the R&F
Space is sold by RAII, L.P. or the Partnership under an agreement of sale.
"R&F Issuance Date" means the thirtieth day (or, if such day
is not a business day, the first business day following such thirtieth day)
following the R&F Closing Date.
"R&F Net Proceeds" means an amount equal to (i) the gross
proceeds to RAII, L.P. or the Partnership from the sale of the R&F Space on the
R&F Closing Date minus (ii) the Real Estate Closing Costs.
"R&F Space" means the 38,000 +/- square foot space proposed to
be sold to Raymour & Xxxxxxxxx and designated as Parcel 4 on the plan layout
attached hereto as Exhibit "A".
"Real Estate Closing Costs" means the customary closing costs
incurred by the seller of commercial real estate in Philadelphia County,
Pennsylvania, including reasonable counsel fees and costs incurred in the sale
of the R&F space.
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"Reimbursements" means all payments to either of the Project
Partnerships by tenants pursuant to Shopping Center leases that reimburse either
of the Project Partnerships for Operating Expenses associated with a lease or
leased premises.
"Rental Income" means all rent payable by a Credit Tenant to
either of the Project Partnerships (excluding Reimbursements), plus all other
amounts other than Reimbursements (collectively, "Additional Payments") that are
originally payable by a Credit Tenant under a lease of space within the Shopping
Center ratably over at least a ten year period.
"Spread Payment" for an annual period means the aggregate
amount of payments to be made by a Credit Tenant under a Purchase Lease during
such annual period (including, without limitation, in the year in which the
purchase option is first exercisable, all amounts payable upon exercise of the
purchase option under the lease) less the sum of (x) the portion of such
payments that are required to service debt (including all principal amortization
and interest payments) secured by or related to such lease or the leased
premises and (y) the portion of such payments that constitute Reimbursements.
"Three Acre Parcel" means the vacant three acre parcel
situated behind the Shopping Center at the rear of the boundary of the real
estate owned by the Project Partnerships.
2. Description of the Interests.
The Interests consist of the following:
(a) RBC, Inc., is the owner of a 1% general partner interest
in RA, L.P. and RAII, L.P., constituting 100% of the outstanding general
partnership interest in RA, L.P. and RAII, L.P. and entitled to the rights and
subject to the obligations described in the Project Partnership Agreements.
(b) The following is a schedule of the percentage interests
(constituting all of the outstanding limited partner interests in each of RA,
L.P. and RAII, L.P.) of the limited partners in each of the Project
Partnerships. Each such limited partner interest is entitled to the rights and
subject to the obligations described in the applicable Project Partnership
Agreement:
Xxxxxx Xxxxx 42%
Xxxxxx Xxxxx 16%
Xxxxxx Broker 12.5%
Xxxxxxx X. Xxxxx 10%
Xxxxxx Xxxxxxxx 6%
Xxxxx X. Xxxxx 5%
Xxx Xxxxx 3%
Xxxxxx Xxxxxxxx 2.5%
Xxxxxxx Xxxxxxx 1%
Xxxxxx Xxxxxxxxx 1%
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(c) At the Closing, Xxxxxx Xxxxx shall retain a 7.96% limited
partner interest and Xxxxxx Xxxxx shall retain a 3.04% limited partner interest
in RAII, L.P. At the Home Depot Closing, Xxxxxx Xxxxx shall retain a 7.96%
limited partner interest and Xxxxxx Xxxxx shall retain a 3.04% limited partner
interest in RA, L.P. (such retained interests, collectively, the "Retained
Interests").
(d) The Class A Units to be issued hereunder at the Closing
shall be allocated among the Contributors in accordance with the following
percentages:
RBC, Inc. 1.12%
Xxxxxx Xxxxx 38.25%
Xxxxxx Xxxxx 14.56%
Xxxxxx Broker 14.05%
Xxxxxxx X. Xxxxx 11.24%
Xxxxxx Xxxxxxxx 6.74%
Xxxxx X. Xxxxx 5.62%
Xxx Xxxxx 3.37%
Xxxxxx Xxxxxxxx 2.81%
Xxxxxxx Xxxxxxx 1.12%
Xxxxxx Xxxxxxxxx 1.12%
(e) The Class A Units to be issued hereunder at the Second
Closing shall be allocated among the Xxxxxx in accordance with the following
percentages:
Xxxxxx Xxxxx 72.18%
Xxxxxx Xxxxx 27.82%
3. Closing Date. The Closing shall take place concurrently with
the closing under the Agreement of Sale for the Bradlees Property but not later
than December 30, 1998 (the "Closing Date") at the offices of PREIT-Xxxxx, Inc.,
The Bellevue, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx 00000, commencing at 10:00
a.m., local time, or at such other time or place as may be agreed to by the
Partnership and RBC, Inc.
4. Consideration.
(a) Subject to the terms and conditions of this Agreement, at
the Closing, the Partnership shall issue to the Contributors that number of
Class A Units equal to 89% of the quotient of the Deemed Closing Value divided
by the Per Unit Amount.
(b) Following the final determination of Appraised Value and
in the case of the Three Acre Parcel, its Fair Value, on the date that is the
earliest to occur of (i) the Home Depot Closing Date, (ii) the R&F Issuance Date
or (iii) the Excepted Space Issuance Date, the Partnership shall issue to the
Contributors that number of Class A Units equal to 89% of the quotient of
Non-Credit Tenant Value divided by the Per Unit Amount (such Per Unit Amount
being adjusted to reflect any PREIT Recapitalization occurring after the Closing
Date and prior to such issuance).
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(c) On the Home Depot Closing Date, the Partnership shall
issue to the Contributors that number of Class A Units equal to 89% of the
quotient of the amount which corresponds to the Home Depot Closing Date as set
forth on the chart attached hereto as Exhibit "B" divided by the Per Unit Amount
(such Per Unit Amount being adjusted to reflect any PREIT Recapitalization
occurring after the Closing Date and prior to such issuance). The parties shall
cooperate with each other to diligently pursue, and to obtain, the MetLife
Consent as soon as is practicable. Notwithstanding anything to the contrary
contained herein, the Contributors shall retain, and there shall be no further
adjustment for or valuation of, the Spread Payments under the Home Depot Lease
prior to the Home Depot Closing Date.
(d) On the R&F Issuance Date, the Partnership shall issue to
the Contributors that number of Class A Units equal to 89% of the quotient of
the R&F Net Proceeds divided by the Per Unit Amount (such Per Unit Amount being
adjusted to reflect any PREIT Recapitalization occurring after the Closing Date
and prior to such issuance).
(e) On the Excepted Space Issuance Date, the Partnership shall
issue to the Contributors that number of Class A Units equal to 89% of the
quotient of the Excepted Space Value divided by the Per Unit Amount (such Per
Unit Amount being adjusted to reflect any PREIT Recapitalization occurring after
the Closing Date and prior to such issuance).
(f) On the later of (i) five business days following the final
determination of Appraised Value pursuant to the proviso to the definition of
Excepted Space Value, or (ii) the Excepted Space Issuance Date, the Partnership
shall issue to the Contributors that number of Class A Units equal to 89% of the
quotient of Non-Credit Tenant Value for unleased portions of the Excepted Space
divided by the Per Unit Amount (such Per Unit Amount being adjusted to reflect
any PREIT Recapitalization occurring after the Closing Date and prior to such
issuance).
(g) If, and only if, the Bradlees Retail G-2 Space is leased
and Occupied on December 31, 1999, then on the Bradlees Retail G-2 Space
Issuance Date, the Partnership shall issue to the Contributors that number of
Class A Units equal to the quotient of (i) the Retail G-2 Space Value (if the
Bradlees Retail G-2 Space has become Occupied by Credit Tenants between the
Closing Date and the Bradlees Retail G-2 Space Closing Date), or (ii) the
Non-Credit Value (if the Bradlees Retail G-2 Space has become Occupied by an
acceptable non-Credit Tenant between the Closing Date and the Bradlees Retail
G-2 Space Closing Date), divided by the Per Unit Amount (such Per Unit Amount
being adjusted to reflect any PREIT Recapitalization occurring after the Closing
Date and prior to such issuance).
(h) If, and only if, the Bradlees Theater Space is leased as
of December 31, 1999, then on the Bradlees Theater Space Issuance Date, the
Partnership shall issue to the Contributors that number of Class A Units equal
to the quotient of Bradlees Theater Space Value divided by the Per Unit Amount
(such Per Unit Amount being adjusted to reflect any PREIT Recapitalization
occurring after the Closing Date and prior to such issuance).
(i) All Class A Units issuable by the Partnership hereunder
pursuant to subparagraphs (a) through (f) above shall be allocated in accordance
with Section 2(d) of this
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Schedule A. All Class A Units issuable by the Partnership hereunder pursuant to
subparagraphs (g) and (h) above shall be allocated in accordance with the
Contributors' respective percentage interests listed in Section 2(b) of this
Schedule A.
(j) On the date of the Second Closing, the Partnership shall
issue to the Xxxxxx that number of Class A Units equal to 11% of a quotient
whose numerator equals the sum of the Deemed Closing Value, the Non-Credit
Tenant Value, the R&F Net Proceeds and the Excepted Space Value, and whose
denominator equals the Per Unit Amount (such Per Unit Amount being adjusted as
appropriate to reflect any PREIT Recapitalization occurring after the Closing
Date and prior to the date of the Second Closing).
(k) Notwithstanding anything contained in this Schedule A to
the contrary, the following provisions shall apply with respect to the Carved
Out Receivables:
(i) If and to the extent there is determined to exist
Carved Out Receivables Value, then on the date that is the earliest to occur of
(1) the Home Depot Closing Date, (2) the R&F Issuance Date or (3) the Excepted
Space Issuance Date, the Partnership shall issue to the Contributors that number
of Class A Units equal to 89% of the quotient of Carved Out Receivables Value
divided by the Per Unit Amount (such Per Unit Amount being adjusted to reflect
any PREIT Recapitalization occurring after the Closing Date and prior to such
issuance).
(ii) If it is determined that there exists no Carved
Out Receivables Value, but if and to the extent the Carved Out Receivables are
recovered at any time after the Closing but prior to the Excepted Space Issuance
Date (the "Recovery Period"), then on the date that is the earliest to occur of
(1) the Home Depot Closing Date, (2) the R&F Issuance Date or (3) the Excepted
Space Issuance Date, the Partnership shall issue to the Contributors that number
of Class A Units equal to 89% of the quotient of Carved Out Receivables Value
divided by the Per Unit Amount (such Per Unit Amount being adjusted to reflect
any PREIT Recapitalization occurring after the Closing Date and prior to such
issuance).
(iii) With respect to the Fuddrucker's Carved out
Receivable only: (1) if there exists no Carved Out Receivables Value therefor;
(2) if no recovery of such receivable in whole or in part occurs during the
Recovery Period; (3) during the Recovery Period, the Fuddrucker's space is
Occupied pursuant to a new lease for such space; and (4) the annual cash flow
derived from such new lease exceeds $100,000, ("Fuddrucker's Cash Flow Excess")
then the following shall apply:
(x) The Fuddrucker's Cash Flow Excess shall be
proportionately divided pari passu between the
Contributors and the Partnership, based on the
proportion that the amount of the Fuddrucker's
receivable ($98,904) and the amount of the
Partnership's credit for vacancy, receivables and
reserve, respectively, bears to the sum of those
amounts.
(y) The Partnership shall issue to the Contributors,
at calendar quarter intervals, that number of Class A
Units equal to 89% (if issued prior to the Second
Closing) and 100% (if issued after the Second
Closing), of the
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quotient of the Contributors' proportion of the
Fuddrucker's Cash Flow Excess divided by the Per Unit
Amount (such Per Unit Amount being adjusted to
reflect any PREIT Recapitalization occurring after
the Closing Date and prior to such issuance) until
the Fuddrucker's receivable is reduced to zero.
(l) In the event Bradlees Retail G-2 Space and the Retail G-1
Space are leased by December 31, 1999 but are not Occupied due to delays
resulting from construction of improvements on the Bradlees' Theater Space, then
the Bradlees Retail G-2 Space Closing Date shall be postponed until the Bradlees
Retail G-2 Space and the Bradlees Retail G-1 Space are Occupied, but in no event
later than June 30, 2000.
5. Contributions of the Contributors and Certain Actions at
the Closing and the Home Depot Closing.
(a) At the Closing, in addition to the other actions
contemplated elsewhere in this Agreement:
(i) RBC, Inc. shall contribute, assign, sell, transfer and
set over to the Partnership or its wholly owned affiliate
all of RBC, Inc.'s right, title and interest in and to its
1% general partner interest in RAII, L.P., free and clear
of all Encumbrances, and shall withdraw as a general
partner effective as of the Closing.
(ii) The Limited Partners shall contribute, assign, sell,
transfer and set over to the Partnership or its wholly
owned affiliate all of their respective right, title and
interest in and to their respective limited partner
interests as set forth above in RAII, L.P. with the
exception of the Retained Interests, free and clear of all
Encumbrances.
(iii) The Partnership or its wholly owned affiliate shall
assume the obligations arising after the Closing under the
RAII, L.P. Limited Partnership Agreement other than
liabilities or obligations from a breach of or default
under such Agreement prior to the Closing attributable to
the portion of the interests assigned to it at the Closing
as aforesaid, and the Contributors shall cause the
Partnership or its nominee to be admitted to RAII, L.P. as
a general and limited partner effective as of the Closing.
(b) At the Home Depot Closing, in addition to the other
actions contemplated elsewhere in this Agreement:
(i) RBC, Inc. shall contribute, assign, sell, transfer and
set over to the Partnership or its wholly owned affiliate
all of RBC, Inc.'s right, title and interest in and to its
1% general partner interest in RA, L.P., free and clear of
all Encumbrances, and shall withdraw as a general partner
effective as of the Home Depot Closing.
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(ii) The Limited Partners shall contribute, assign, sell,
transfer and set over to the Partnership or its wholly
owned affiliate all of their respective right, title and
interest in and to their respective limited partner
interests as set forth above in RA, L.P. with the
exception of the Retained Interests, free and clear of all
Encumbrances.
(iii) The Partnership or its wholly owned affiliate shall
assume the obligations arising after the Home Depot
Closing under the RA, L.P. Limited Partnership Agreement
other than liabilities or obligations from a breach of or
default under such Agreement prior to the Home Depot
Closing attributable to the portion of the interests
assigned to it at the Home Depot Closing as aforesaid, and
the Contributors shall cause the Partnership or its
nominee to be admitted to RA, L.P. as a general and
limited partner effective as of the Home Depot Closing.
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