EXHIBIT 10.1
AGREEMENT FOR PURCHASE OF
REAL ESTATE
THIS AGREEMENT FOR PURCHASE OF REAL ESTATE (this "Agreement") is made
and entered into as of the 15th day of April, 2005, by and between The Lyme
Timber Company, a New Hampshire Limited Partnership, having offices at 23 South
Main Street, 3rd Floor, Hanover, New Hampshire 03755 ("Seller"), and Biomed
Realty, L.P., a Maryland limited partnership, having offices at 17140 Bernardo
Center Drive, Suite 222, San Diego, California 92128 ("Purchaser"). In addition
to Seller and Purchaser, this Agreement contains certain provisions enumerating
the rights and obligations of the Joint Ventures (as defined below). The
agreement of the Joint Ventures to accept such rights and be bound by such
obligations is addressed in Section 8 hereof.
RECITALS
A. Seller and its wholly-owned subsidiaries set forth on Schedule 1 are
the owners of, or own interests in, the Properties set forth opposite their
names on Schedule 1. Additionally, Seller owns certain interests in joint
ventures (the "Joint Ventures") that in turn are the owners of, or whose
subsidiaries are the owners of, the Properties set forth opposite their names on
Schedule 1. Each such wholly-owned subsidiary of Seller, Joint Venture, or
subsidiary of a Joint Venture set forth on Schedule 1 is hereinafter referred to
as a "Subsidiary" and collectively as "Subsidiaries".
B. Seller desires to sell, and/or cause its Subsidiaries to sell, the
Properties set forth opposite their names on Schedule 1 to Purchaser by deed
conveyance of such Properties, and Purchaser desires to so purchase such
Properties as specified on Schedule 1 from Seller or its Subsidiaries, as
applicable, each upon and subject to the terms and conditions of this Agreement.
C. Section 15 contains a table of defined terms, Section 16 contains a
list of Exhibits and Section 17 contains a list of Schedules with respect to
this Agreement.
NOW THEREFORE, in consideration of the terms, covenants and conditions
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller, the Joint
Ventures and Purchaser agree as follows:
1. PURCHASE AND SALE OF PROPERTY
Subject to the terms and conditions of this Agreement (including,
without limitation, Section 13(B)), Seller shall sell and convey, or shall cause
its Subsidiaries to sell and convey, and Purchaser shall purchase, the
Properties as specified on Schedule 1 opposite the names of the Seller and its
Subsidiaries. Each parcel of property set forth on Schedule 1 (each, a
"Property" and collectively, the "Properties") shall consist of:
(A) all right, title and interest of Seller or its Subsidiaries, as
applicable, in and to those certain tracts of real estate described on the
attached Schedule 1, upon which are situated
certain buildings, garages or other improvements, which real estate is legally
described in the attached Schedule 1(A), together with all and singular
easements, covenants, agreements, rights, privileges, tenements, hereditaments
and appurtenances thereunto now or hereafter belonging or appertaining thereto
(collectively, the "Land"); and
(B) all right, title and interest of Seller or its Subsidiaries, as
applicable, in and to any land lying in the bed of any street, alley, road or
avenue (whether open, closed or proposed) adjoining the Land or any of it (all
of the foregoing being included within the term "Land"); and
(C) all right, title and interest of Seller or its Subsidiaries, as
applicable, in and to all of the buildings, structures, fixtures, facilities,
installations and other improvements of every kind and description now or
hereafter located on the Land, including, without limitation, any and all
plumbing, air conditioning, heating, ventilating, mechanical, electrical and
other utility systems, parking lots and facilities, landscaping, roadways,
sidewalks, security devices, signs and light fixtures (collectively, the
"Improvements"; the Land and Improvements being collectively referred to as the
"Premises"); and
(D) all right, title and interest of Seller or its Subsidiaries, as
applicable, in and to the items of personal property now or hereafter located in
and used in connection with the operation, ownership or management of the
Premises, including the items of personal property set forth on Schedule 1(D)-1
attached to this Agreement (the "Personal Property"), but specifically excluding
(i) any items of personal property listed on Schedule 1(D)-2 (the "Excluded
Property") and (ii) any items of personal property owned or leased (from anyone
other than Seller) by Seller's property manager or any tenant at or on the
Premises, provided that Seller shall have thirty (30) days after the Closing
Date to remove any Excluded Property located at the Premises and Purchaser shall
reasonably cooperate with Seller in connection with such removals; and
(E) all right, title and interest of Seller or its Subsidiaries, as
applicable, in and to all existing surveys, blue prints, drawings, plans and
specifications (including, without limitation, structural, HVAC, mechanical and
plumbing plans and specifications) and other documentation for or with respect
to the Property; all marketing artwork and construction drawings concerning the
Property, in each case, to the extent available and in the possession and
control of Seller or its Subsidiaries, as applicable; all tenant lists and data,
correspondence with past, present and prospective tenants, vendors, suppliers,
utility companies and other third parties, booklets, manuals and promotional and
advertising materials concerning the Property or any part thereof, in each case,
to the extent available and in the possession and control of Seller or its
Subsidiaries, as applicable; and such other existing books, records and
documents (including, without limitation, those relating to ad valorem taxes and
leases) used solely in connection with the operation of the Property to the
extent available and in the possession and control of Seller or its
Subsidiaries, as applicable; all trade names and trade marks associated with any
Property or by which any Property is commonly known or designated (each, a
"Property Name"); provided, however, that (i) none of Seller, Joint Ventures or
any of their Subsidiaries makes any representations or warranties whatsoever
with respect to the Property Names and (ii) for the avoidance of doubt, Seller
and Purchaser each acknowledge that patents, trademarks, trade names, copyrights
or other intellectual property other than the Property Names
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(collectively, "Intellectual Property"), including, without limitation, the
trade names "Lyme," "Lyme Properties," and "Kendall Square" shall not be
transferred from Seller to Purchaser under this Agreement; and
(F) all right, title and interest of Seller or its Subsidiaries, as
applicable, in and to the leases affecting the Premises (the "Leases") and the
Other Documents affecting the Premises and the other intangible personal
property (other than Intellectual Property) now or hereafter owned by Seller or
its Subsidiaries, as applicable, and solely relating to the Property.
2. PURCHASE PRICE
(A) Purchase Price.
The total consideration to be paid by Purchaser to Seller and the Joint
Ventures for the Properties is Five Hundred Twenty-Four Million Dollars
($524,000,000) (the "Purchase Price"), which is allocated among the Properties
as indicated on the attached Schedule 1 (the amount allocated to each Property
on Schedule 1 being the "Allocated Purchase Price" for such Property).
Purchaser, Seller and the Joint Ventures agree that (i) the allocation of the
Purchase Price among the Properties set forth on Schedule 1 reflects Purchaser's
determination of the fair market value of each Property, and (ii) no portion of
the Purchase Price shall be allocated to the Personal Property. The Purchase
Price shall be paid as follows:
(B) Earnest Money.
(i) Upon the execution of this Agreement by Seller and
Purchaser, Purchaser shall either (a) deposit in an account (the "Escrow
Account") designated by the New York City office of the Title Insurer
("Escrowee") the sum of Two Million Dollars ($2,000,000) in immediately
available funds, or (b) deliver to Escrowee a Letter of Credit in the stated
amount of Two Million Dollars ($2,000,000) (such funds, together with any
interest earned thereon, net of investment costs, or such Letter of Credit, the
"Earnest Money"). Upon the expiration of the Due Diligence Date (as defined in
Section 13(B)), Purchaser shall either (x) deposit in the Escrow Account the
additional sum of Thirteen Million Dollars ($13,000,000) in immediately
available funds, or (y) deliver to Escrowee an additional Letter of Credit in
the stated amount of Thirteen Million Dollars ($13,000,000) or an amended and
restated Letter of Credit in the amount of Fifteen Million Dollars ($15,000,000)
(in which case, with respect to the amended and restated Letter of Credit the
Escrowee shall return the original Letter of Credit to Purchaser) (such funds,
together with any interest earned thereon, net of investment costs, or such
Letter of Credit, the "Second Deposit"), which Second Deposit shall become part
of the Earnest Money. The Earnest Money shall be held by Escrowee pursuant to
the escrow instructions in the form attached hereto as Exhibit A (the "Earnest
Money Escrow Instructions"). If at any time any portion of the Earnest Money is
not represented by a Letter of Credit, Escrowee shall invest such portion of the
Earnest Money in an interest-bearing savings account or short-term U.S. Treasury
Bills or similar cash-equivalent securities, as directed by Purchaser and
Seller. Any and all interest earned on the Earnest Money shall be reported to
Purchaser's federal tax identification number and shall become part of the
Earnest Money. "Letter of Credit" shall mean an irrevocable, unconditional,
transferable, clean sight draft letter of credit in a form reasonably acceptable
to Seller issued or confirmed for direct payment by a financial institution
acceptable
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to Seller, that expires no later than three (3) months after the Closing, in
favor of Seller entitling Seller to draw thereon based solely on a statement
purportedly executed by an officer of Seller stating that it has the right to
draw thereon.
(C) Notwithstanding anything herein to the contrary, if this Agreement
is terminated pursuant to Sections 4(B)(iv), 4(D), 4(F), 6(A), 8(A)(iii), 8(C),
8(E), 8(H), 8(I), 10(A)(ii) or 13(B), the Earnest Money shall be delivered by
the Escrowee to Purchaser. This Section 2(C) shall survive the termination of
this Agreement.
(i) If this Agreement is terminated pursuant to Section 10(C),
the Earnest Money shall be delivered by the Escrowee to an account or accounts
designated by Seller. This Section 2(C)(i) shall survive the termination of this
Agreement.
(ii) At the Closing, the Earnest Money shall be delivered by
the Escrowee to an account or accounts designated by Seller (subject to the next
sentence) as payment toward the Purchase Price. For convenience in determining
the Cash Balance, only interest earned through the fifth (5th) business day
prior to the scheduled Closing Date (even if such Closing Date should be
adjourned) shall be delivered to an account or accounts designated by Seller and
taken into account in determining the Cash Balance and the remaining interest
with respect to the Earnest Money shall be delivered to Purchaser.
(D) Cash Balance.
At the Closing, Purchaser shall pay to Seller (or such other parties as
directed by Seller) the Purchase Price less (i) the amount delivered to Seller
under Section 2(C)(ii), and (ii) the aggregate principal amount outstanding
under the Assumed Loans as of the Closing Date, such sum to be paid by wire
transfer of immediately available funds transferred to an account or accounts
designated by Seller in writing by notice received by Purchaser not less than
one (1) business day prior to the Closing Date, subject, however, to such
prorations and adjustments as are required by this Agreement (such amount to be
paid to Seller (or such other parties as directed by Seller), as adjusted, being
referred to as the "Cash Balance").
3. OPERATION OF PROPERTY THROUGH CLOSING
From the date of this Agreement through the Closing Date, Seller
covenants that (and, as applicable, Purchaser covenants that):
(A) Except as otherwise provided in this Section 3, Seller and the
Joint Ventures shall, or shall cause their respective Subsidiaries, as
applicable, to manage, operate and maintain the Properties in a manner
consistent with past practices. Seller and the Joint Ventures will not, and will
cause their respective Subsidiaries, as applicable, not to make any change in
their normal and customary billing practices or apply any security deposits
against rent delinquencies or other Lease defaults (other than for tenants who
either vacate their spaces or with whom Seller, the Joint Ventures or their
respective Subsidiaries engage in litigation) without notice to Purchaser.
(B) Without the prior written consent of Purchaser or except as
otherwise provided in this Section 3, Seller and the Joint Ventures shall not,
and shall cause their respective
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Subsidiaries, as applicable, not to sell, mortgage, pledge, hypothecate or
otherwise transfer or dispose of all or any part of the Properties (except for
(x) such items of tangible Personal Property as become obsolete, consumed or are
disposed of in the ordinary course of business, or (y) due to a Condemnation
(for which Section 6 shall govern)). Purchaser's consent to the actions
described in this Section 3(B) shall not be unreasonably withheld conditioned or
delayed, provided that (I) such consent shall be deemed given if Purchaser does
not respond within five (5) days after request for consent from Seller or a
Joint Venture, as applicable, and (II) any denial of consent shall be
accompanied by an explanation as to why such consent was denied.
(C) Without the prior written consent of Purchaser, Seller and the
Joint Ventures shall not, and shall cause their respective Subsidiaries, as
applicable, not to (i) terminate any Lease (except in the case of (x) a default
or to relocate a tenant and otherwise in the ordinary course of business or (y)
such Lease terminating by its terms) or (ii) modify, extend, amend or renew any
Lease or enter into any new Lease. Purchaser's consent to the actions described
in this Section 3(C) shall not be unreasonably withheld conditioned or delayed,
provided that (I) such consent shall be deemed given if Purchaser does not
respond within five (5) business days after request for consent from Seller or a
Joint Venture, as applicable, and (II) any denial of consent shall be
accompanied by an explanation as to why such consent was denied; provided,
however, Purchaser's denial of consent shall be considered reasonable if,
assuming the Closing were to occur, any action could jeopardize BioMed Realty
Trust, Inc., a Maryland corporation ("Purchaser's REIT Entity") status as a real
estate investment trust within the meaning of Sections 856 through 860 of the
Internal Revenue Code of 1986 (the "Code") or cause the Purchaser REIT Entity to
be in receipt of income that does not constitute "rent from real property"
within the meaning Section 856(d) of the Code. Notwithstanding the foregoing,
Purchaser approves of the proposed Lease amendments on Schedule 3(C) and Seller
or its applicable Subsidiary shall have the right, but not the obligation, to
enter into such Lease amendments without further consent of Purchaser at any
time prior to Closing. At Closing, Purchaser shall assume the obligations of
Seller, the Joint Ventures, and their respective Subsidiaries, as applicable,
under all of the Leases affecting the Properties that exist as of the Closing
(including the Leases that exist as of the date hereof (other than those that
expired or were duly terminated) and such Leases affecting the Properties that
are entered into, amended, modified or renewed after the date hereof not in
violation of this Agreement).
(D) Prior to the Closing Date, except as described in Sections
8(A)-8(C), without the prior written consent of Purchaser, Seller and the Joint
Ventures shall not, and shall cause their respective Subsidiaries, as
applicable, not to (i) terminate any of the Assumed Loan Documents or Other
Documents, except for such Assumed Loan Documents or Other Documents which
mature or expire by their terms prior to the Closing Date, (ii) modify, extend,
amend or renew any Assumed Loan Document or Other Document, or (iii) unless
otherwise required by the applicable lender and subject to Seller paying off any
financing with respect to any Property which is not an Assumed Loan, make any
payments other than regularly scheduled payments on the Assumed Loans.
Purchaser's consent to the actions described in this Section 3(D) shall not be
unreasonably withheld conditioned or delayed, provided that (I) such consent
shall be deemed given if Purchaser does not respond within five (5) business
days after request for consent from Seller or a Joint Venture, as applicable,
and (II) any denial of consent shall be accompanied by an explanation as to why
such consent was denied; provided, however, Purchaser's denial of consent shall
be considered reasonable if, assuming the Closing were to
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occur, any action could jeopardize Purchaser's REIT Entity's status as a real
estate investment trust within the meaning of Sections 856 through 860 of the
Code or cause the Purchaser REIT Entity to be in receipt of income that does not
constitute "rent from real property" within the meaning Section 856(d) of the
Code. At Closing, Purchaser shall assume the obligations of Seller, the Joint
Ventures, and their respective Subsidiaries, as applicable, under the Assumed
Loan Documents and Other Documents affecting the Properties.
(E) Not less than five (5) business days prior to the Due Diligence
Date, Purchaser shall have the right to provide Seller with a list of Service
Contracts which Purchaser wishes to have assigned to it by Seller, the Joint
Ventures or the Subsidiaries, as applicable, at the Closing (the "Assigned
Contracts"). Purchaser has elected not to assume any management and leasing
commission agreements (subject to Purchaser's obligations under Section
5(C)(i)(c) hereunder) affecting the Property. Seller and the Joint Ventures
shall, or shall cause the Subsidiaries to (i) assign the Assigned Contracts to
Purchaser at Closing to the extent the terms of such contracts permit such
assignment (and Purchaser shall assume the obligations of Seller, the Joint
Ventures and their respective Subsidiaries, as applicable, under the Assigned
Contracts), and (ii) terminate or otherwise assume, and hold Purchaser harmless
from and against, all claims with respect to the Service Contracts which are not
Assigned Contracts as of the Closing. Seller will not enter into or amend,
terminate, waive any default under, or grant concessions regarding any contract
or agreement that will be an obligation affecting the Property or binding on
Purchaser after the Closing (unless the same is terminable on 30 days prior
notice without penalty or premium) without Purchaser's prior written consent,
which shall not be unreasonably withheld conditioned or delayed and which
consent shall be deemed given if Purchaser does not respond within five (5)
business days after request for consent from Seller or a Joint Venture, as
applicable. Any denial of consent shall be accompanied by an explanation as to
why such consent was denied.
(F) Seller and the applicable Joint Venture shall, and shall cause
their respective Subsidiaries to, continue to have the construction and repair
work performed that is set forth on Schedule 3(F)-1 in accordance with the terms
of that certain Lease to Genzyme Corporation (the "Genzyme Lease") for space at
the Property located at 500 Kendall Street, Cambridge, Massachusetts. If the
total amount expended by Seller, such Joint Venture and their respective
Subsidiaries, collectively, for such construction and repair work prior to the
Closing Date is less than $582,884, then the Purchase Price shall be reduced by
an amount equal to the difference between $582,884 and such amount actually
expended. At or prior to Closing, Seller shall provide purchaser with reasonable
back-up documentation substantiating such expenditures. The parties acknowledge
that certain work, that is described on Schedule 3(F)-2, may be performed after
the Closing Date by Seller (or its subsidiaries or affiliates), which work would
result in an increased rent under the Genzyme Lease (such work that increases
such rent to be referred to as the "Genzyme Work"). From time to time, and as
and when Seller (or its applicable subsidiary or affiliate) intends to perform
the Genzyme Work (or any portion thereof), such performing party shall have the
right to give Purchaser a notice (a "Genzyme Work Payment Request") demanding
that Purchaser pay the amounts then required to perform such work (but in no
event more than $1,800,000 in the aggregate), which notice shall be accompanied
by reasonable documentation substantiating the costs contained in such notice.
Purchaser shall pay to such performing party the amount set forth in such
Genzyme Work Payment Request within thirty (30) days after receiving such
notice. Upon completion of the
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applicable Genzyme Work (or applicable portion thereof), Seller shall (or shall
cause its applicable subsidiary or affiliate performing such work to) provide
Purchaser with evidence of such completion that is reasonably required for
Purchaser to enforce its rights under the Genzyme Lease to increase the rent
thereunder based upon such work performed; provided that (i) nothing contained
herein shall obligate Seller or any subsidiary or affiliate to perform the
Genzyme Work unless and to the extent that Purchaser has been given a Genzyme
Work Payment Request and Purchaser has paid the amounts due thereunder when
required hereunder to Seller (or Seller's applicable subsidiary or affiliate
performing such work) and (ii) neither Seller nor any Subsidiary have any
liability hereunder if Purchaser is unable to obtain such increased rent. The
provisions of this Section 3(F) shall survive the Closing.
(G) Seller and the Joint Ventures shall, and shall cause their
respective Subsidiaries to continue in full force and effect existing insurance
coverages for the Properties as disclosed to Purchaser on Schedule 7(A)(iv) or
replacement insurance with coverage that is not materially less favorable.
(H) Estoppel Certificates.
(i) Seller and the Joint Ventures shall use good faith,
commercially reasonable efforts to obtain estoppel letters from all tenants
under Leases demising 50,000 square feet or more, in substantially the form
annexed hereto as Exhibit B or in the form called for under the applicable Lease
if the applicable tenant refuses to execute one substantially in the form
annexed hereto as Exhibit B after being requested to do so by Seller or the
applicable Joint Venture (the "Tenant Estoppels"). If, with respect to a
particular Lease, Seller or the applicable Joint Venture has failed to obtain a
Tenant Estoppel required hereunder, Seller or such Joint Venture may elect to
satisfy the requirement to obtain such estoppel by delivering a seller estoppel
certificate in the form attached hereto as Exhibit C (each, a "Seller Tenant
Estoppel Certificate") as a substitute for any remaining Tenant Estoppels that
have not been obtained; provided, however, that Seller or the applicable Joint
Venture may not provide Seller Tenant Estoppel Certificates with respect to (I)
the Genzyme Lease and (II) any Leases to Vertex Pharmaceuticals Incorporated
("Vertex") to satisfy the Tenant Estoppel condition to Closing hereunder with
respect to such two tenants. Any Seller Tenant Estoppel Certificate shall
survive for the Representation Survival Period and Seller's or the applicable
Joint Venture's liability with respect all Seller Tenant Estoppel Certificates
shall be capped at the Damage Cap (together with any other amounts credited
against such cap); provided, however, that at any time prior to the expiration
of the Representation Survival Period if Seller or a Joint Venture shall receive
and deliver a Tenant Estoppel from any tenant covered in any such Seller Tenant
Estoppel Certificate, then such Seller Tenant Estoppel Certificate shall be
returned to Seller or the applicable Joint Venture and shall be deemed null and
void and of no further force or effect.
(ii) Seller agrees to request, or cause the Subsidiaries to
request, that each of the lenders under the Assumed Loans execute an estoppel
certificate addressed to Purchaser stating (i) that the applicable Assumed Loan
Documents have not been amended, (ii) the outstanding principal balance of the
applicable Assumed Loan and the amounts of all reserve and impound accounts and
(iii) that there are no material defaults under the applicable Assumed Loan (the
"Lender Estoppels"). Seller agrees to use good faith commercially reasonable
efforts to obtain each of the Lender Estoppels. If, with respect to a particular
Assumed Loan, Seller has
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failed to obtain a Lender Estoppel, Seller may elect to satisfy the requirement
to obtain such estoppel by delivering a seller lender estoppel certificate
making the same statements as would have been in the Lender's Estoppel (each, a
"Seller Lender Estoppel Certificate") as a substitute for any remaining Lender
Estoppels that have not been obtained. Any Seller Lender Estoppel Certificate
shall survive the Closing indefinitely and not be subject to the Damage Cap;
provided, however, that at any time if Seller shall receive and deliver a Lender
Estoppel from the lender covered in any such Seller Lender Estoppel
Certificates, then such Seller Lender Estoppel Certificate shall be returned to
Seller and shall be deemed null and void and of no further force or effect.
(iii) Seller agrees to request, or cause the Joint Ventures
and the Subsidiaries to request, that each counterparty ("CER Counterparty") to
that certain Declaration of Covenants, Easements and Restrictions, dated July
17, 2002 (the "CER") and recorded against the Properties which are part of the
development known as "Kendall Square" execute an estoppel certificate (the "CER
Estoppels") addressed to Purchaser in the form required by the CER which shows
no material defaults by KS Parcel A, LLC and KS Parcel D, LLC under the CER. If,
with respect to a particular CER Counterparty, Seller has failed to obtain a CER
Estoppel, Seller may elect to satisfy the requirement to obtain such estoppel by
delivering a seller CER estoppel certificate making the same statements as would
have been in the CER Estoppel (each, a "Seller CER Estoppel Certificate") as a
substitute for any remaining CER Estoppels that have not been obtained. Any
Seller CER Estoppel Certificate shall survive the Closing indefinitely and not
be subject to the Damage Cap; provided, however, that at any time if Seller
shall receive and deliver a CER Estoppel from the CER Counterparty covered in
any such Seller CER Estoppel Certificates, then such Seller CER Estoppel
Certificate shall be returned to Seller and shall be deemed null and void and of
no further force or effect.
(I) Seller shall use commercially reasonable efforts to maintain in
existence all current licenses, permits and approvals, if any, in its name
necessary or reasonably appropriate to the ownership, operation or improvement
of the Properties.
(J) So long as this Agreement is in effect and Purchaser is not in
default hereunder, Seller shall: (i) remove each of the Properties from the
market, and (ii) not actively solicit or negotiate with any other prospective
purchasers of any Property.
4. STATUS OF TITLE OF PROPERTY
(A) State of Title.
At Closing, Purchaser shall accept title to the Premises, subject only
to the following enumerated exceptions (collectively referred to as the
"Permitted Exceptions"):
(i) those agreements, covenants, conditions, restrictions,
encroachments and other matters that are shown on any Title Commitment or
Survey, except to the extent that Seller or the applicable Joint Venture or
Subsidiary is obligated to remove the same pursuant to the express terms of
Sections 4(B) or 4(C) ("Seller Removal Obligations");
(ii) those agreements, covenants, conditions, restrictions and
other matters which are not shown on any Title Commitment or Survey that do not
affect (x) the
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Seller's, a Joint Venture's or any of their respective Subsidiaries' title to
such Premises or (y) the use of such Premises for commercial purposes, in either
case other than to a de minimis extent, but shall not include the Seller Removal
Obligations. The matters set forth on Schedule 4(A)(ii) shall be deemed to be
Permitted Exceptions hereunder;
(iii) the lien of general real estate taxes, personal property
taxes and all water, sewer, utility, trash and other similar charges and
assessments which are not yet due and payable;
(iv) the Leases, Assigned Contracts and Other Documents that
exist as of the Closing (including the Leases and Assigned Contracts that exist
as of the date hereof (other than those that expired or were duly terminated)
and such Leases and Assigned Contracts that are entered into, modified or
renewed after the date hereof not in violation of this Agreement);
(v) all notes or notices of violation of law or municipal
ordinances, orders or requirements that have been noted in or issued by any
federal, state or municipal department having jurisdiction over the Properties
prior to the date hereof;
(vi) any liens, encumbrances or other defects or exceptions to
title insurance coverage caused by Purchaser, by any of Purchaser's
Representatives or by Seller, any Joint Venture, any of their respective
Subsidiaries or any of their respective representatives at Purchaser's or any
Purchaser's Representative's prior request;
(vii) any leases by which Seller, the Joint Ventures or their
respective Subsidiaries hold the right to possess and use any of the Personal
Property;
(viii) the notes, mortgages, indentures and other documents
relating to the financings listed on Schedule 7(A)(xi) attached hereto (such
financings, the "Assumed Loans"; such notes, mortgages, indentures and other
documents related to the Assumed Loans, the "Assumed Loan Documents");
(ix) any state of facts which an accurate survey or personal
inspection of the Property might reveal, provided same do not render title
unmarketable, other than the Seller Removal Obligations;
(x) all rights or easements, if any, of the applicable
jurisdiction or municipality or any public or private utility company, to
maintain telephone wires, pipes, conduits or other facilities which enter or
cross the Properties.
(xi) any lien, encumbrance or governmental obligation which
either affects solely the property of a tenant under a Lease or is the
obligation of such a tenant to discharge, cure or comply with; and
(xii) all laws, regulations, ordinances and deed restrictions
including, without limitation, all environmental, building and zoning
restrictions affecting the Properties or the ownership, use or operation thereof
adopted by any governmental authority having jurisdiction over the Properties or
the ownership, use or operation thereof, and all amendments or
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additions thereto now in effect or which may be in force and effect on the
Closing Date with respect to such Properties.
(B) Preliminary Evidence of Title.
(i) Purchaser acknowledges that it has received the
commitments (each, a "Title Commitment" and collectively, the "Title
Commitments") listed on Schedule 4(B)(i), issued by Stewart Title Guaranty
Company (the "Title Insurer").
(ii) Purchaser acknowledges that it has received copies of all
documents referred to in the Title Commitments and all other documents
evidencing or relating to matters reflected in the Title Commitments.
(iii) Purchaser acknowledges that it has received the as-built
survey (the "Survey") for each of the Premises as listed on Schedule 4(B)(iii).
(iv) Purchaser shall have until the Due Diligence Date to
review the Title Commitments and the Surveys. If, prior to the Due Diligence
Date, Purchaser objects to any matter or condition shown on any Title Commitment
or Survey or otherwise discovers any exceptions to title other than Permitted
Exceptions with respect to any Property, Purchaser shall notify Seller and the
Joint Ventures promptly upon making such determination and, in any event, not
later than 5:00 p.m. (New York City time) on the Due Diligence Date. The
Purchaser's notice (the "Purchaser's Title Objection Notice") shall include an
explanation of such matter, condition or exception. Seller or such Joint
Venture, as applicable shall have until 5:00 p.m. (New York City time) on the
date that is five (5) business days after the delivery of Purchaser's Title
Objection Notice to respond in writing (the "Seller's Title Objection Response")
either that (x) it will cure or correct such matter, condition or exception
prior to Closing, or (y) it is unable or unwilling to cure or correct such
matter, condition or exception (and failure to respond will deemed to be an
election of option (y)). If Seller or such Joint Venture delivers (or is deemed
to have delivered) a Seller's Title Objection Response indicating that it will
not cure or correct such matter, condition or exception, Purchaser shall have
until 5:00 p.m. (New York City time) on the date that is three (3) business days
from the date on which the Seller's Title Objection Response was delivered, or
is deemed to have been delivered, to (i) waive the original Purchaser's Title
Objection Notice, in which event such matter, condition or exception shall be
deemed a Permitted Exception; or (ii) terminate this Agreement by written notice
to Seller and the Joint Ventures. If Seller or such Joint Venture delivers a
Seller's Title Objection Response indicating it will cure or correct such
matter, condition or exception, then Seller or such Joint Venture shall, or
shall cause their respective subsidiaries to, cure or correct such matter,
condition or exception to the reasonable satisfaction of Purchaser on or prior
to the Closing Date. If Purchaser terminates this Agreement pursuant to this
Section, this Agreement shall become null and void and no party shall have any
further rights or obligations under this Agreement, except for the return of the
Earnest Money to Purchaser and the provisions that are expressly stated to
survive the termination of this Agreement. If Purchaser does not elect to
terminate this Agreement (including by not delivering Purchaser's Title
Objection Notice within the required time period) in accordance with this
Section 4(B)(iv), Purchaser shall be deemed to have accepted all matters shown
on the Title Commitments and the Surveys and all other exceptions to title with
respect to
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the Properties which were discovered by Purchaser prior to the Due Diligence
Date, without any change to the other terms of this Agreement.
(C) Title Report and Survey.
Purchaser may elect to obtain a new preliminary title report
or new Title Commitment for each of the Properties, provided that such new
report or Title Commitment shall be obtained from the Title Insurer and not from
any other title insurance company. Purchaser agrees to purchase its title
insurance at Closing from the Title Insurer. Purchaser may also elect to obtain
new Surveys or revise, modify, or re-certify existing Surveys as necessary in
order for the Title Insurer to delete the survey exception from the Title Policy
or otherwise satisfy Purchaser's objectives.
(D) Title Defects.
After the Due Diligence Date, if any revision or update of any
Title Commitment or Survey, including the new preliminary title reports, Title
Commitments and Surveys obtained pursuant to Section 4(C) above, discloses
exceptions to title other than Permitted Exceptions, Purchaser shall so notify
Seller on or before the fifth (5th) business day after receipt of same, or at
Closing, if less than five (5) business days remain from receipt of same and
Closing (the "Objection Cut Off Date"), time being of the essence, and Seller,
or a Joint Venture, as applicable, shall have until Closing (and may adjourn the
Closing for such reasonable periods, not to exceed sixty (60) days in the
aggregate) to have each such exception that is not a Permitted Exception to
title removed or corrected in each case to the reasonable satisfaction of
Purchaser, but subject to Section 4(E). Nothing herein shall require Seller or
the Joint Ventures or any of their Subsidiaries to (i) bring any action or
proceeding to remove any exception that is not a Permitted Exception or (ii)
take any steps, or otherwise incur any expense, in excess of $100,000 for any
one Property and $400,000 in the aggregate for all Properties (such cap amounts
collectively, the "Title and Violations Cure Cap") to remove any exception that
is not a Permitted Exception (except that Seller or a Joint Venture, as
applicable, shall be obligated to remove any and all liens voluntarily placed by
Seller or such Joint Venture or their respective Subsidiaries against any
Property after the date of the applicable Title Commitment in violation of this
Agreement and shall remove any other exceptions that are not Permitted
Exceptions that: (I) are for liquidated amounts, (II) can be removed by the mere
payment of money, and (III) would cost not more than the Title and Violations
Cure Cap to remove). Any exception to title which Purchaser does not raise on or
before the Objection Cut Off Date shall be deemed a Permitted Exception. If
Seller or a Joint Venture, as applicable, fails to have each such exception that
is not a Permitted Exception removed or corrected at or prior to Closing (as
adjourned), Purchaser may at its sole and exclusive option at Closing (as
adjourned), either (a) terminate this Agreement by written notice to Seller and
the Joint Ventures, whereupon all rights and obligations hereunder of each party
shall cease and terminate and be of no further force or effect except those
rights and obligations hereunder that expressly survive the termination of this
Agreement, or (b) elect to accept title to the Property as it then is without
any reduction in, abatement of, or credit against the Purchase Price and such
exceptions shall be deemed Permitted Exceptions; if Purchaser fails to make
either such election at Closing, Purchaser shall be deemed to have elected
option (b).
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(E) Discharge of Title Objections.
Notwithstanding anything herein to the contrary, Seller or a Joint
Venture, as applicable, shall be deemed to have removed or corrected each
matter, condition or exception that is not a Permitted Exception if, in Seller's
or such Joint Venture's discretion and at its sole cost and expense, Seller or
such Joint Venture either (a) causes the Title Insurer to remove such matter,
condition or exception that is not a Permitted Exception as an exception to
title in the title policy issued at Closing or affirmatively insure against the
same in a manner reasonably acceptable to Purchaser, in each case without any
additional cost to Purchaser, whether such insurance is made available in
consideration of payment, bonding, indemnity of Seller or otherwise, or (b)
delivers (i) its own funds (or directs that a portion of the Purchase Price be
delivered) in an amount needed to fully discharge any such matter, condition or
exception to the Title Insurer with instructions for the Title Insurer to apply
such funds to fully discharge any such matter, condition or exception, and (ii)
if required by the Title Insurer, such instruments, in recordable form, as are
necessary to enable the Title Insurer to discharge such matter, condition or
exception of record.
(F) Notices of Violations.
If Seller, the Joint Ventures or their Subsidiaries receive any notes
or notices of material violation (a "Material Violation") of law or municipal
ordinances, orders or requirements that have been noted in or issued by any
federal, state or municipal department having jurisdiction over the Properties
during the period between the date hereof and the Closing Date (exclusive of any
notice or further notice related to matters set forth on Schedule 7(A)(ii))
(each such note or notice, a "Material Violation Notice"), Seller or the
applicable Joint Venture shall so notify Purchaser on or before the fifth (5th)
business day after receipt of same, or at Closing, if less than five (5)
business days remain from receipt of same and Closing, time being of the
essence, and Seller or the applicable Joint Venture shall have until Closing
(and may adjourn the Closing for such reasonable periods, not to exceed sixty
(60) days in the aggregate) to cure or correct each such Material Violation, in
each case as required by the applicable Material Violation Notice. Nothing
herein shall require Seller or the Joint Ventures or any of their Subsidiaries
to (i) bring any action or proceeding to cure or correct any Material Violation,
or (ii) take any steps, or otherwise incur any expense, in excess of the Title
and Violations Cure Cap to cure or correct any Material Violation (except that
Seller or a Joint Venture, as applicable, shall be obligated to cure or correct
any and all Material Violations voluntarily committed by Seller or such Joint
Venture or their respective Subsidiaries with respect to any Property after the
date hereof in violation of this Agreement and shall cure or correct any other
Material Violations that: (I) are for liquidated amounts, (II) can be removed by
the mere payment of money, and (III) would cost not more than the Title and
Violations Cure Cap to cure or correct). If Seller or a Joint Venture, as
applicable, fails to have each such Material Violation cured or corrected at or
prior to Closing (as adjourned), Purchaser may at its sole and exclusive option
at Closing (as adjourned), either (a) terminate this Agreement by written notice
to Seller and the Joint Ventures, whereupon all rights and obligations hereunder
of each party shall cease and terminate and be of no further force or effect
except those rights and obligations hereunder that expressly survive the
termination of this Agreement, or (b) elect to proceed with the Closing without
any reduction in, abatement of, or credit against the Purchase Price and any
obligations of Seller, the Joint Ventures or their subsidiaries to correct or
cure such Material Violations shall be deemed waived
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by Purchaser; if Purchaser fails to make either such election at Closing,
Purchaser shall be deemed to have elected option (b). For the avoidance of
doubt, the Title and Violations Cure Cap shall apply to the aggregate amount, if
any, required to be expended by Seller, the Joint Ventures and their
Subsidiaries hereunder both to (i) remove or correct exceptions to title
discovered after the Due Diligence Date that are not Permitted Exceptions, and
(ii) to correct or cure Material Violations.
5. CLOSING
(A) Closing Date.
Subject to Section 13(B), the "Closing" of the transaction
contemplated by this Agreement (that is, the payment of the Purchase Price, the
transfer of title to the Properties, and the satisfaction of all other terms and
conditions of this Agreement) shall occur at 9:00 a.m. on the date that is
thirty (30) days after the Due Diligence Date (or, if such date is not a
business day, then the next succeeding business day), or as adjourned in
accordance with the express provisions of this Agreement (the "Closing Date") at
the offices of Seller's counsel in New York, New York, or at such other time and
place as Seller, the Joint Ventures and Purchaser shall agree in writing. Five
(5) business days prior to Closing the parties hereto will begin pre-closing the
transaction.
PURCHASER RECOGNIZES THAT IT IS A MATERIAL CONDITION TO THE
OBLIGATIONS OF SELLER AND THE JOINT VENTURES UNDER THIS AGREEMENT THAT THE
CLOSING OCCUR NOT LATER THAN THE CLOSING DATE. ACCORDINGLY, PURCHASER AGREES
THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, PURCHASER SHALL NOT BE ENTITLED TO
ANY ADJOURNMENT OF THE CLOSING, TIME BEING OF THE ESSENCE AS TO THE PERFORMANCE
OF THE OBLIGATIONS OF PURCHASER HEREUNDER ON OR PRIOR TO SUCH DATE.
(B) Closing Deliveries.
(i) Seller. At the Closing, Seller and the Joint Ventures
shall deliver or cause to be delivered with respect to each Property or all of
the Properties, as applicable:
(a) to Purchaser, (i), for each Property located in
Massachusetts, a quitclaim deed substantially in the form attached hereto as
Exhibit D-1, and (ii) for each Property located in New Hampshire, (x) a warranty
deed substantially in the form attached hereto as Exhibit D-2, and (y) to the
Title Insurer or the appropriate authority, a real estate excise or transfer tax
affidavit (or other required forms), as required by law and any environmental
disclosure forms, as required by law;
(b) to Purchaser, an omnibus bill of sale and
assignment and assumption of Leases, security deposits, Assigned Contracts,
Personal Property, Other Documents and other property being conveyed pursuant to
this Agreement in the form attached hereto as Exhibit E;
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(c) to Purchaser, a letter advising tenants under the
Leases of the change in ownership of the Premises and where security deposits
will be held, and directing them to pay rent to Purchaser or as Purchaser may
direct (the form of same shall be prepared by Purchaser subject to Seller's
reasonable approval);
(d) to Purchaser, to the extent that the following
are in the possession or control of Seller, a Joint Venture or their respective
Subsidiaries or its property managers, all of the original (or copies if only a
copy is available) Leases, Other Documents, Assumed Loan Documents and Assigned
Contracts, and any and all building plans, surveys, site plans, engineering
plans and studies, utility plans, landscaping plans, development plans,
specifications, drawings, marketing artwork, construction drawings, complete
warranty book including all contractors and subcontractors and other
documentation concerning all or any part of the Property (provided, however,
Seller and the Joint Ventures may keep copies of any of the foregoing); provided
however, at Purchaser's request, Seller and the Joint Ventures will provide any
of such information in electronic format, if same is in the possession or
control of Seller, a Joint Venture or their respective Subsidiaries unless same
is in a proprietary format of a computer program, other computer software or
under a licensing agreement that Seller and the Joint Ventures are not
transferring;
(e) to Purchaser, any transferable bonds, warranties
or guaranties that relate to the Property and in Seller's, a Joint Venture's or
any of their respective Subsidiaries' possession and control;
(f) to Purchaser, a corporate resolution authorizing
the sale and the execution of closing documents, and a certificate of authority
of individuals authorized to consummate the sale on behalf of Seller, the Joint
Ventures and their respective Subsidiaries, or such other reasonable evidence of
Seller's, the Joint Ventures' and their respective Subsidiaries' power and
authority;
(g) to Purchaser, an affidavit from each of the
Subsidiaries that is the owner of a Property, in the form attached hereto as
Exhibit F stating, under penalty of perjury, such entity's U.S. taxpayer
identification number and that such entity is not a foreign person within the
meaning of Section 1445 of the Internal Revenue Code;
(h) to Purchaser, all other documents reasonably
required by Purchaser in order to perfect the conveyance, transfer and
assignment of the Properties to Purchaser as contemplated by this Agreement,
including without limitation, any assignments of tax certiorari claims or Net
Proceeds that are required pursuant to this Agreement; and
(i) to the extent a Property is transferred subject
to an Assumed Loan and/or Other Documents, but subject to the terms of Article
8, to Purchaser and the holder of such Assumed Loan and/or the third parties to
the Other Documents, as applicable, such assignments related to the Assumed
Loan, the Assumed Loan Documents and the Other Documents as shall be required to
transfer to Purchaser all of the right, title, interest and obligations of
Seller, the Joint Ventures and their respective Subsidiaries, as applicable,
with respect to the Assumed Loan, the Assumed Loan Documents and the Other
Documents, which
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shall include any documents required to effectuate the assignment, assumption,
release and other matters set forth on Schedule 8(F).
(j) an assignment of all of the amounts in the
reserve and/or impound accounts held by any lender in connection with any of the
Assumed Loans in form and substance reasonably acceptable to Purchaser and
Seller shall receive a credit at Closing for such amounts pursuant to Section
5(C)(i)(h).
(k) such conveyancing or transfer tax forms or
returns, if any, as are required to be delivered or signed by Seller by
applicable state and local law in connection with the conveyance of the
Property.
(l) an assignment of all of the letters of credit
held by Seller in connection with any of the Leases, including, without
limitation, in connection with the Vertex, Genzyme, Metabolix or Dartmouth
College Leases, if any.
(m) any additional documents that Escrow Agent or the
Title Company may reasonably and customarily require for the proper consummation
of the transaction contemplated by this Agreement.
(ii) Purchaser. At Closing, Purchaser shall deliver or cause
to be delivered, with respect to each Property or all of the Properties, as
applicable:
(a) to Seller (or such parties as may be directed by
Seller), the Cash Balance as required pursuant to Section 2(D) above;
(b) to Seller and the Joint Ventures, executed
counterparts of any other documents listed in Section 5(B)(i) required to be
signed by Purchaser;
(c) to Seller, its applicable Subsidiaries and the
holders of the Assumed Loans and the third parties under the Other Documents,
any Assumption Documents and Instruments or other documents that Purchaser or
its affiliates are required to execute and deliver pursuant to Article 8
hereunder;
(d) to Seller and its applicable Subsidiaries any
Assumed Loan Indemnities that Purchaser is required to execute and deliver
pursuant to Article 8 hereunder; and
(e) to Seller and the Joint Ventures, all other
documents reasonably required by Seller and the Joint Ventures in order to
perfect the conveyance, transfer and assignment of the Properties to Purchaser,
as contemplated by this Agreement, including without limitation any transfer tax
documents and IRS Form 1099.
(iii) Seller and the Joint Ventures shall, at no cost or
expense to them (other than costs that are expressly the obligations of Seller
or the Joint Ventures hereunder) reasonably cooperate with Purchaser in
obtaining the items listed in Section 5(B)(ii)(c)-(e).
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(C) Closing Prorations and Adjustments.
(i) A statement of prorations and other adjustments shall be
prepared by Seller and Purchaser together in conformity with the provisions of
this Agreement not less than ten (10) business days prior to the Closing Date.
For purposes of prorations, Seller, the Joint Ventures and their respective
Subsidiaries, as applicable, shall be deemed the owner of the Properties on the
Closing Date. In addition to prorations and other adjustments that may otherwise
be provided for in this Agreement, including, without limitation, pursuant to
Section 3, the following items are to be prorated or adjusted, as the case may
require, as of 11:59pm on the Closing Date:
(a) Taxes: real estate and personal property taxes
and assessments (initially prorated on the basis of the most recent
ascertainable bill, but subject to re-proration upon issuance of the actual bill
therefor to effect the actual proration). If any tenant in occupancy at the
Closing Date is obligated to pay any Impositions (defined below) directly to the
applicable taxing authority, such Impositions shall not be apportioned.
(b) Rents: Rents and other charges payable by tenants
under the Leases ("Rents") shall be apportioned as and when collected. Any Rents
collected by Purchaser (which shall include Rents collected by any agent acting
for Purchaser) subsequent to the Closing (whether due and payable prior to or
subsequent to the Closing Date) shall be adjusted as of the 11:59 p.m. on the
Closing Date (the "Adjustment Point"), and any portion thereof properly
allocable to periods prior to the Adjustment Point, net of costs of collection
properly allocable thereto, if any, shall be paid by Purchaser to Seller (or
such parties as may be directed by Seller) promptly after the collection thereof
by Purchaser, but subject to the further provisions of this Section in the case
of Rents due prior to the Adjustment Point. If prior to the Closing Seller, the
Joint Ventures and their respective Subsidiaries shall have collected any Rents
(which shall include Rents collected by any agent acting for such parties) which
are properly allocable in whole or in part to periods subsequent to the
Adjustment Point, the portion thereof so allocable to periods subsequent to the
Adjustment Point, net of costs of collection properly allocable thereto, if any,
shall be credited to Purchaser by Seller at the Closing. As used in this Section
the term "costs of collection" shall mean and include reasonable attorneys' fees
and other costs incurred by Purchaser or Seller, the Joint Ventures and their
respective Subsidiaries in collecting any Rents, but shall not include the
regular fees payable to any property manager for the Property, the payroll costs
of any of Seller's, the Joint Ventures' or Purchaser's employees or any other
internal costs or overhead of Seller, the Joint Ventures and their respective
Subsidiaries or Purchaser.
1) Ten (10) business days prior to the Closing,
Seller shall deliver to Purchaser a list of all
tenants which are delinquent in payment of Rents as
of the Adjustment Point, which list shall set forth
the amount of each such delinquency, the period to
which each such delinquency relates and the nature of
the amount due itemizing separately, as applicable,
fixed monthly rent, tax reimbursements, common area
maintenance, operating expense escalations, electric
charges, charges for tenant services, charges for
overtime services, percentage rent and other charges,
if any.
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Any amount collected by Purchaser after the Closing
Date, from tenants who owe Rents for periods prior to
the Closing Date, shall be applied (i) first, in
payment of Rents for the month in which the Closing
Date occurs (the "Closing Month"), (ii) second, in
payment of Rents for the periods preceding the
Closing Month, and (iii) third, in payment of Rents
for the periods following the Closing Month. Each
such amount, less any costs of collection (including
reasonable counsel fees) reasonably allocable
thereto, shall be adjusted and prorated as provided
above, and the party who receives such amount shall
promptly pay over to the other party the portion
thereof to which it is so entitled.
2) Purchaser shall use commercially reasonable
efforts to bill and collect any delinquencies set
forth on the list delivered by Seller pursuant to
this Section for a period of six (6) months after the
Closing and the amount thereof, as, when and to the
extent collected by Purchaser, shall, if due to
Seller or the Joint Ventures pursuant to the
provisions of this Section, be paid by Purchaser to
Seller (or such parties as directed by Seller), less
any costs of collection (including reasonable counsel
fees) reasonably allocable thereto, promptly after
the collection thereof by Purchaser. In no event
shall Purchaser be obligated to institute any actions
or proceedings or to seek the eviction of any tenant
in order to collect any such delinquencies.
Thereafter, Seller and the Joint Ventures shall have
the right to sue tenants to collect such
delinquencies and Purchaser shall cooperate (but
shall not be obligated to spend any money unless
Seller or the Joint Ventures have agreed to reimburse
Purchaser therefor) with Seller and the Joint
Ventures to the extent reasonably necessary,
provided, however, Seller shall have no right to
cause any such tenant to be evicted or to exercise
any other "landlord" remedy (as set forth in the
Lease) against such tenant other than to sue for
collection.
3) Following the Closing and upon the written request
of Seller and the Joint Ventures, as applicable,
Purchaser shall submit or cause to be submitted to
Seller, within thirty (30) days after the end of each
calendar quarter up to and including the calendar
quarter which includes the date that is six (6)
months after the Closing Date, but only so long as
any delinquencies shall be owed to Seller or the
Joint Ventures, a statement which sets forth all
collections made by Purchaser from the tenants which
owe such delinquencies through the end of such
calendar quarter. Seller shall have the right from
time to time following the Closing until ninety (90)
days after receipt by Seller of the last quarterly
statement required hereunder, at Seller's expense, to
examine and audit so much of the books and records of
Purchaser as relate to
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such delinquencies in order to verify the collections
reported by Purchaser in such quarterly statements.
4) Purchaser agrees not to waive or settle any
delinquency owed in whole or in part to Seller or the
Joint Ventures without the prior written consent of
Seller, which consent may be granted or withheld in
Seller's sole discretion.
5) With respect to that portion of Rents which are
payable on an annual, semiannual or other non-monthly
basis, all such payments which become due after the
Closing, to the extent allocable to periods prior to
the Adjustment Point, shall be paid by Purchaser to
Seller (or such parties as may be directed by Seller)
promptly after receipt thereof, subject to costs of
collection, if any, properly allocable thereto. With
respect to that portion of Rents that are
attributable to payments of expenses such as common
area maintenance charges, association charges or
advertising and promotional charges, such Rents shall
be apportioned based on which party paid or will pay
the correlating expenses for the relevant period.
With respect to that portion of Rents which are
billed on an index-based formula or on an estimated
basis during the fiscal or other period for which
paid, at the end of such fiscal or other period
Purchaser shall determine whether the items in
question have been over billed or under billed (or
over- or under-estimated, as applicable). If there
has been an over billing or over-estimation and an
over billed/estimated amount has been received,
Seller shall, promptly after request by Purchaser,
pay to Purchaser the portion of such over
billed/estimated amount which is properly allocable
to the period prior to the Adjustment Point (to the
extent such amount was actually received), and
promptly thereafter Purchaser shall reimburse the
entire over billed/estimated amount to the tenants
which paid the same. If there has been an under
billing or under-estimation, the additional amount
shall be billed by Purchaser to the tenants and any
amount received by Purchaser, net of costs of
collection, if any, to the extent properly allocable
to periods prior to the Adjustment Point shall
promptly be paid by Purchaser to Seller (or such
parties as may be directed by Seller). In the event
that a tenant requires an audit with respect to an
over-billing or under-billing that relates to the
time period prior to the Adjustment Point, Purchaser
shall promptly notify Seller and Seller may either
(i) conduct such audit at its sole cost and expense,
in which case Seller shall consult with Purchaser in
the conduct of same and Purchaser shall reasonably
cooperate with Seller and provide Seller with
reasonable access to any books and records reasonably
necessary to conduct such audit or (ii) decline to
conduct such audit, in which case Seller shall
reimburse Purchaser for the reasonable costs incurred
by Purchaser to
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conduct such audit relating to the time period prior
to the Adjustment Point.
6) Notwithstanding anything to the contrary set forth
in this Section, Seller (or such parties as may be
directed by Seller) shall be entitled to receive, and
Purchaser shall pay to Seller (or such parties as may
be directed by Seller) promptly after receipt
thereof, net of costs of collection and reasonable
attorneys' fees, if any, properly allocable thereto,
(i) all amounts payable by tenants on account of all
real estate and personal property taxes, general and
special assessments, water and sewer charges, license
fees and other fees and charges assessed or imposed
by governmental authorities upon the Properties (the
"Impositions") which, pursuant to the terms of this
Section, it is Seller's obligation to pay and
discharge (to the extent Seller either paid such
amounts or Purchaser received a credit therefor
pursuant to this Section), which amounts shall be
apportioned between Seller and Purchaser in the same
manner as the Impositions to which they relate and
(ii) all amounts payable by tenants on account of
utilities which, pursuant to the terms of this
Section, it is Seller's obligation to pay and
discharge (to the extent Seller either paid such
amounts or Purchaser received a credit therefor
pursuant to this Section), which amounts shall be
apportioned between Seller or such Joint Venture and
Purchaser in the same manner as the utilities to
which they relate. Notwithstanding anything to the
contrary set forth in this Section, Purchaser shall
be entitled to receive, and Seller shall pay to
Purchaser promptly after receipt thereof, net of
costs of collection and reasonable attorneys' fees,
if any, properly allocable thereto, (i) all amounts
payable by tenants on account of Impositions which,
pursuant to the terms of this Section, it is
Purchaser's obligation to pay and discharge (to the
extent Purchaser either paid such amounts or Seller
received a credit therefor pursuant to this Section),
which amounts shall be apportioned between Seller and
Purchaser in the same manner as the Impositions to
which they relate and (ii) all amounts payable by
tenants on account of utilities which, pursuant to
the terms of this Section, it is Purchaser's
obligation to pay and discharge (to the extent
Purchaser either paid such amounts or Seller (or a
party designated by Seller) received a credit
therefor pursuant to this Section), which amounts
shall be apportioned between Seller and Purchaser in
the same manner as the utilities to which they
relate.
7) Any advance rental deposits or payments held by
Seller, a Joint Venture or their respective
Subsidiaries on the Closing Date and applicable to
periods of time subsequent to the Adjustment Point,
and any security deposits held by such parties on the
Closing Date, together with interest thereon, if any,
which, under the terms
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of the applicable Leases, is payable to the tenants
thereunder, shall be paid or credited to Purchaser at
the Closing.
(c) Leasing Costs:
1) Seller and the Joint Ventures shall pay and
indemnify Purchaser in respect of all unpaid leasing
commissions in respect of the initial terms of all
Leases and Lease amendments which were fully executed
and delivered on or prior to the Due Diligence Date
and renewals or extensions thereof executed on or
prior to the Due Diligence Date; provided, however,
that Purchaser, rather than Seller and the Joint
Ventures, shall be responsible for all other leasing
commissions, costs of tenant alterations and
improvements performed or to be performed for tenants
under Leases at the expense of the landlord thereof,
moving and other allowances and inducements, if any,
and fees and disbursements of architects, engineers
and attorneys (collectively "Leasing Costs"),
including all Leasing Costs on behalf of Seller and
the Joint Ventures in respect of any Lease renewal or
extension which occurs pursuant to the exercise after
the Due Diligence Date of any tenant's renewal or
extension option under any Lease which was fully
executed and delivered on or prior to the Due
Diligence Date. At the Closing, Seller shall deliver
an itemized statement, in form and substance
reasonably satisfactory to Purchaser, certifying (i)
all Leasing Costs paid by Seller and the Joint
Ventures pursuant to this Section after the date
hereof and on or prior to the Closing Date, (ii) the
remaining unpaid Leasing Costs for which Seller and
the Joint Ventures are responsible under this Section
and (iii) attaching documentation reasonably
sufficient to demonstrate the payment of such Leasing
Costs. The aggregate unpaid amount of Leasing Costs
so certified shall be deducted from and reduce the
Purchase Price at Closing, and Seller and the Joint
Ventures shall have no further liability under this
Section following the Closing other than for any
inaccuracy in the aforesaid itemized statement or
documentation and Purchaser shall assume the
obligation to pay such unpaid Leasing Costs.
Notwithstanding the provisions of this Section
5(C)(i)(c), (I) Seller, as opposed to Purchaser,
shall be obligated to pay the Leasing Costs
associated with the lease amendments listed on
Schedule 3(C) and Purchaser shall receive a credit at
Closing for any such amounts that have not been paid
by Seller at or prior to Closing and (II) Seller
shall receive a credit at Closing, not to exceed
Seventy-Five Thousand Dollars ($75,000), for any
amounts actually expended by Seller, the Joint
Ventures or their Subsidiaries in connection with the
installation of a reception desk in the lobby of the
Premises located at 675 West Kendall Street,
Cambridge, MA, and Seller shall provide Purchaser
with
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reasonable substantiating backup documentation
regarding the same at Closing.
2) If the Closing shall occur, Purchaser shall and
hereby does assume and agree to pay and indemnify
Seller and the Joint Ventures in respect of (i) all
Leasing Costs payable by Purchaser pursuant to this
Section and (ii) all Leasing Costs payable in respect
of any Leases or Lease amendments which are fully
executed and delivered after the date hereof. If any
Leasing Costs shall be paid by Seller or the Joint
Ventures prior to the Closing, which, in accordance
with this Section, it is Purchaser's obligation to
pay, Purchaser shall reimburse Seller (or such
parties as may be directed by Seller) for the
documented amount thereof at the Closing. Purchaser's
obligation to pay any Leasing Costs that Purchaser is
obligated to pay hereunder shall survive the Closing
indefinitely.
(d) Utilities and fuel charges, including, without
limitation, water, telephone, sewer, steam, electricity, gas, oil charges and
fuel on hand and any assignable deposits with utility companies, on the basis of
current bills and readings obtained by Seller or the Joint Ventures within
thirty (30) days prior to the Adjustment Point (or, if none, on the basis of the
most recent previous bills and readings); provided that, upon the taking of
subsequent actual readings that are as of a date closer in time to the Closing
Date than the date of the readings used to determine the adjustment made at the
Closing pursuant to this sentence, such adjustment shall be recalculated based
upon the subsequent readings, and any necessary compensating adjustments shall
be made to the Purchase Price. No apportionment shall be made in respect of any
utility or fuel, the charges for which are payable by any tenant directly to the
provider of such utility pursuant to the terms of its Lease, unless the tenant
is not current in its payment obligations under its Lease on the Closing Date.
(e) amounts due and prepayments under the Assigned
Contracts and equipment leases.
(f) amounts due, prepayments and the costs of
performing the obligations of Seller or a Joint Venture, as applicable, under
the Assigned Contracts and the Other Documents. Seller shall receive a credit
towards the Purchase Price for any funds deposited with or in escrow with
respect to the Assigned Contracts or Other Documents that are assigned to
Purchaser at Closing, in each case that are not returned to Seller, the Joint
Ventures or their respective Subsidiaries.
(g) assignable license and permit fees.
(h) if a Property is sold subject to an Assumed Loan,
all interest payments related to same and any fees or expenses that have accrued
and remain unpaid or have been paid as of the Closing Date under the Assumed
Loan Documents. In addition, Seller and the Joint Ventures, as applicable, shall
receive a credit towards the Purchase Price for any escrowed funds or funds in
any reserve or impound accounts with respect to the Assumed
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Loans that are assigned to Purchaser at Closing and that are not returned to
Seller, the Joint Ventures or their respective Subsidiaries.
(i) other expenses of operation and similar items,
including without limitation, advertising and marketing expenses.
(j) any other operating expenses and any other items
relating to a Property which, in accordance with customary business practice,
customarily would be apportioned between sellers and buyers of real estate.
(k) any common area maintenance charges with respect
to the Properties located at 675 West Kendall Street, Cambridge, MA and 500
Kendall Street, Cambridge, MA, which are payable under the CER.
(l) except as otherwise specifically provided in this
Agreement or in any other written agreement that may be entered into between
Seller and Purchaser, Seller has paid or will pay in full, prior to Closing (but
subject to apportionment hereunder), all bills and invoices for labor, goods,
material and services of any kind relating to the Properties and utility charges
(except if and to the extent such utility charges are billed directly to
tenants), that are due and payable on or prior to the Closing, and Purchaser
will pay in full, after the Closing (but subject to apportionment hereunder),
all bills and invoices for labor, goods, material and services of any kind
relating to the Properties and utility charges (except if and to the extent such
utility charges are billed directly to tenants), that are due and payable after
Closing.
(ii) Certiorari: Purchaser acknowledges that proceedings for
certiorari or other proceedings to determine the assessed value of the Premises
or the real property taxes payable with respect to each Property as indicated on
Schedule 5(C)(ii) have been commenced prior to the date hereof and may be
continuing as of the Closing Date. Seller and the Joint Ventures, as applicable,
shall be entitled to control the prosecution of any such proceeding or
proceedings for the years prior to but not including the year in which the
Closing occurs to completion and to settle or compromise any Claim therein.
Purchaser, subject to the reasonable consent and approval of Seller and the
Joint Ventures, as applicable, shall be entitled to control the prosecution of
any such proceeding or proceedings for the year in which the Closing occurs to
completion and to settle or compromise any Claim therein, subject to the
reasonable consent of Seller. Purchaser shall keep Seller informed on a timely
basis of all matters with respect to any such proceeding and seek Seller's
consent and approval as required hereunder. The parties hereto agree to
cooperate with each other and to execute any and all documents reasonably
requested by the other parties in furtherance of the foregoing. Seller and the
Joint Ventures, as applicable, shall be entitled to any awards for the years
prior to the year in which the Closing occurs. With respect to any awards for
the year in which the Closing occurs, Seller, the Joint Ventures and their
respective Subsidiaries shall be entitled to first recover the reasonable costs
they have expended in obtaining such awards and Purchaser shall then be entitled
to recover the reasonable cost it has expended in obtaining any such awards and
then, Seller, the Joint Ventures and Purchaser shall apportion the remainder of
such awards between the period prior to Closing and the period subsequent to
Closing. In connection with the foregoing, Seller, the Joint Ventures and their
respective Subsidiaries agree to assign, subject to the provisions of this
Section, to Purchaser at the Closing all of their respective right, title and
interest to the foregoing
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certiorari proceedings that are for the year in which the Closing occurs and all
refunds relating thereto. Each party shall promptly remit to the other monies
received which are to be paid and/or shared as provided herein. No party will
settle or compromise any proceeding that involves an impact to a tax year in
which another party has the right to control, without the consent of such other
party. Notwithstanding the other terms of this Section 5(C)(ii), Seller, the
Joint Ventures and Purchaser each covenants to comply with any terms of any
Lease regarding the obligation of the lessor thereunder to refund any sums
recovered in connection with or as a result of any tax certiorari proceedings
with respect to the Properties. Nothing contained in this paragraph shall be
interpreted to diminish any tenant's right to control an applicable certiorari
proceeding to the extent such tenant has such right under any Lease and has
exercised the same. The provisions of this Section 5(C)(ii) shall survive
Closing until all proceedings with respect to the tax year of the Closing and
prior years are resolved.
(iii) Except with respect to general real estate and personal
property taxes (which shall be re-prorated upon the issuance of the actual
bills, if necessary), any other proration which must be estimated at Closing
shall be re-prorated and finally adjusted as soon as practicable after the
Closing Date but no later than one (1) year from the Closing Date; otherwise all
prorations shall be final.
(iv) The provisions of this Section 5(C) shall survive Closing
for one (1) year, except if a longer time is stated herein.
(D) Closing Costs.
Seller and the Joint Ventures shall be responsible for (i)
their own legal counsel expenses, (ii) all costs incurred to repay any liens and
other expenses due from or incurred by Seller or the Joint Ventures, if
applicable, in connection with the transaction (including prepayment fees or
expenses, if any, regarding any existing liens or mortgages on the Properties,
other than Permitted Exceptions and the Assumed Loans), (iii) one-half of the
escrow fee, if any, which may be charged by the Escrow Agent; (iv) any and all
real estate excise or transfer taxes that are incurred in connection with the
transfer of the Properties and (v) any reasonable and customary attorneys fees
and loan processing fees required by the holders of the Assumed Loans in
connection with the assumption of the Assumed Loans in connection with this
transaction and any fees to Seller's mortgage broker Peter Goedecke ("Goedecke")
in connection with this transaction. Notwithstanding anything to the contrary
contained in this Section, Seller and the Joint Ventures shall be responsible
for transfer fees expressly set forth in the Assumed Loan Documents to the
extent payable in connection with the transactions set forth herein. Purchaser
shall pay for (i) its own legal counsel expenses, the owner's title insurance
costs (including without limitation, any recording fees) and premiums, any title
endorsements required by Purchaser, and survey expenses; (ii) the cost and
premiums of any lender's title insurance policies (including any such policies
required by lenders under any Assumed Loans), any escrow fees, any fees or
expenses of Purchaser's lender and any UCC and violation search fees; (iii) the
costs of Purchaser negotiating, executing and complying with the Assumption
Documents and Instruments, the Assumed Loan Indemnities and any other documents
that Purchaser must enter into pursuant to Section 8 hereof; (iv) one-half of
the escrow fee, if any, which may be charged by the Escrow Agent; and (v) costs
and expenses of Purchaser's own due diligence activities
-23-
including, without limitation engineering, environmental reports and lease and
expense audits. The provisions of this Section 5(D) shall survive closing or any
termination of this Agreement.
6. CASUALTY LOSS AND CONDEMNATION
(A) If, from and after the date hereof and prior to Closing, any
Property or any part thereof shall be (x) subject to a taking by any public or
quasi-public authority through condemnation, eminent domain or otherwise
(including, but not limited to, any transfer made in lieu of or in anticipation
of the exercise of such taking) (collectively, "Condemnation") or (y) destroyed
or damaged by fire or other casualty and in either case the parties reasonably
estimate the proceeds from such Condemnation or the cost to repair the damage or
destruction to be in excess of twenty percent (20%) of the Allocated Purchase
Price of such Property (a "Major Event"), Purchaser shall have the option
exercisable within ten (10) days after Purchaser, Seller and the Joint Ventures,
as applicable, agree on such estimate either (a) to terminate this Agreement by
written notice to Seller and the Joint Ventures, whereupon all rights and
obligations hereunder of each party shall cease and terminate and be of no
further force or effect except those rights and obligations hereunder that
expressly survive the termination of this Agreement, or (b) to elect to take
title to such affected Property without any reduction in, abatement of, or
credit against the Purchase Price, notwithstanding such Condemnation,
destruction or damage; if Purchaser fails to make either such election,
Purchaser shall be deemed to have elected option (b). If the parties fail to
agree to the reasonable estimate of the proceeds from such Condemnation or the
cost to repair the damage or destruction within thirty (30) days after the date
of the applicable Condemnation or casualty, then Seller, Purchaser, or the
applicable Joint Venture, if any, may submit the dispute to the American
Arbitration Association in New York City pursuant to the Expedited Procedures of
the Commercial Dispute Resolution Procedures thereof (and the Closing will be
adjourned pending the resolution of such arbitration). If Purchaser elects to
consummate the transaction contemplated by this Agreement, subject to the terms
and provisions of the Assumed Loan Documents and the Partnership Documents, if
applicable, at the Closing, Seller and the Joint Ventures shall or shall cause
their respective Subsidiaries to assign to Purchaser (without recourse) (x) the
rights of Seller, the Joint Ventures and their respective Subsidiaries in and to
the Condemnation proceeds or insurance proceeds with respect to such Major
Event, net of the amount of the reasonable costs and expenses incurred by
Seller, the Joint Ventures and their respective Subsidiaries (including, but not
limited to, reasonable legal fees and closing costs under a sale in lieu of or
in anticipation of the exercise of a taking), if any in collecting same ("Net
Proceeds"), including without duplication, giving Purchaser a credit against the
Purchase Price in the amount of the Net Proceeds received by Seller, the Joint
Ventures and their respective Subsidiaries prior to Closing (provided, however,
Seller and the Joint Ventures, as applicable, shall receive without duplication,
a credit toward the Purchase Price for any such costs and expenses not recovered
prior to Closing) and (y) the rights to settle any Condemnation proceeding or
the loss under all policies of insurance applicable to the Major Event, and
Seller and the Joint Ventures shall or shall cause their respective
Subsidiaries, at Closing and thereafter, to execute and deliver to Purchaser all
required proofs of loss, assignments of claims and other similar items.
(B) If, from and after the date hereof and prior to Closing, any
Property or any part thereof shall be (x) subject to a Condemnation or (y)
destroyed or damaged by fire or other casualty and, in either case, it is not a
Major Event, then the transaction contemplated by this
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Agreement shall be consummated, without any reduction in, abatement of, or
credit against the Purchase Price and Seller, or a Joint Venture, as applicable,
shall, at its option, subject to the terms and provisions of the Assumed Loan
Documents and the Partnership Documents, if applicable, either (i) repair such
damage prior to Closing and Seller or such Joint Venture, or their respective
Subsidiaries, as applicable, shall keep any insurance or Condemnation proceeds,
(ii) allow Purchaser a credit against the Purchase Price in an amount equal to
the reasonably estimated cost of repair and Seller or such Joint Venture, or
their respective Subsidiaries, as applicable, shall keep any insurance or
Condemnation proceeds, or (iii) assign to Purchaser (without recourse) the
rights of Seller or such Joint Venture, or their respective Subsidiaries, as
applicable, to Net Proceeds, including without duplication, giving Purchaser a
credit against the Purchase Price in the amount of the Net Proceeds received by
Seller or such Joint Venture, or their respective Subsidiaries, as applicable,
prior to Closing (provided, however, Seller or such Joint Venture shall receive
without duplication, a credit toward the Purchase Price for any such costs and
expenses not recovered prior to Closing) and the rights to settle any
Condemnation proceeding or the loss under all policies of insurance applicable
to the Condemnation, destruction or damage, and Seller and the Joint Ventures
shall or shall cause their respective Subsidiaries, at Closing and thereafter,
to execute and deliver to Purchaser all required proofs of loss, assignments of
claims and other similar items.
(C) In the event that (i) a casualty occurs at a Property prior to the
Closing, (ii) a deductible is payable in connection with obtaining insurance
proceeds with respect to such casualty and (iii) Purchaser elects to consummate
the transaction notwithstanding such casualty and receive an assignment of the
Net Proceeds pursuant to Section 6(A) or Section 6(B), Seller shall pay such
deductible or shall give Purchaser a credit against the Purchase Price at
Closing for such deductible and such deductible shall not be considered in
determining Net Proceeds.
7. REPRESENTATIONS AND WARRANTIES
(A) Seller and each of the Joint Ventures, in each case with respect to
only themselves, their respective Subsidiaries and the Properties set forth
opposite their names on Schedule 1, represent and warrant to Purchaser that the
following are true, complete and correct as of the date of this Agreement and,
subject to Section 7(B) below, as of the Closing:
(i) A list of all current Leases affecting each Premises,
except for certain leases of equipment which are set forth in the list of
Service Contracts (such list being referred to in this Agreement as the "List of
Leases") is attached to this Agreement as Schedule 7(A)(i). Each of the Leases
is in effect, and, except as disclosed on the List of Leases, has not been
assigned, modified, amended or rescinded. Except as set forth on Schedule
7(A)(i), no commissions to any broker or leasing agent are due or will become
due on account of any of the Leases which were executed on or prior to the date
hereof and/or on account of any renewals or extensions thereof which were
exercised on or prior to the date hereof. Schedule 7(A)(i) discloses all
security and other deposits made by each of the tenants under the Leases which
have not been applied. Seller, the Joint Ventures and their respective
Subsidiaries have not received any advance payment of rent (other than for the
current month) on account of any of the Leases except as shown on Schedule
7(A)(i). There are no written or oral leases, tenancies or occupancy agreements
affecting the Properties other than those listed in List of Leases, except for
subleases and licenses to which Seller, the Joint Ventures and their respective
Subsidiaries
-25-
are not parties to and for certain leases of equipment which are set forth in
the list of Service Contracts. The documents constituting the Leases that are
delivered to Purchaser pursuant to this Agreement are, or at the time they are
delivered to Purchaser will be, true, correct and complete copies of all of the
Leases affecting the Property, including any and all amendments or supplements
thereto, and guaranties or other security in connection therewith. Except as
disclosed in the Tenant Estoppels or otherwise in writing to Purchaser at least
one (1) business day before the Closing Date, to Seller's knowledge, neither
Seller nor any Joint Venture has received any written notice from any tenant
asserting any material breach of landlord's covenants under a Lease which has
not been cured.
(ii) Except as provided on Schedule 7(A)(ii), to Seller's and
the Joint Ventures' knowledge, as applicable, there is no action, proceeding or
investigation pending against Seller, the Joint Ventures and their respective
Subsidiaries with respect to any Property or any part thereof before any court
or governmental department, commission, board, agency or instrumentality,
including without limitation with respect to any Condemnation that is a Major
Event. To Seller's knowledge, Seller has all material licenses, permits and
certificates necessary for the use and operation of the Property, including,
without limitation, all certificates of occupancy necessary for the lawful
occupancy of the Property.
(iii) Except as provided on Schedule 7(A)(iii), Schedule
7(A)(ii), in the Reports listed on Schedule 7(A)(x), the Permitted Exceptions
and in any Due Diligence Materials, to Seller's and the Joint Ventures'
knowledge, as applicable, Seller, the Joint Ventures and their respective
Subsidiaries have not received from any governmental authority written notice of
any material violation of any zoning, building, fire or health code or any other
statute, ordinance rule or regulation applicable (or alleged to be applicable)
to any Property which has not been resolved.
(iv) Schedule 7(A)(iv) contains a true and complete list and
description of all insurance policies owned by or on behalf of Seller, the Joint
Ventures and their respective Subsidiaries with respect to the Properties or any
part thereof. Such policies are in full force and effect. No written notice has
been received by Seller, the Joint Ventures and their respective Subsidiaries
from any insurer with respect to any defects or inadequacies of all or any part
of the Properties or the use or operation thereof. To Seller's knowledge, Seller
or its applicable Subsidiary is the owner of the Personal Property and, to
Seller's knowledge Seller has not assigned, transferred, hypothecated or
conveyed the property to any other person or entity, except pursuant to an
Assumed Loan, in the ordinary course of business or in connection with ordinary
course equipment leasing and financings.
(v) The service, vendor, maintenance and construction
contracts (the "Service Contracts") listed on Schedule 7(A)(v) attached hereto,
comprise every Service Contract which materially affects the Properties and to
which any of Seller, the Joint Ventures and their respective Subsidiaries is a
party as of the date hereof and that will exist as of the Closing (other than
those that will be duly terminated and such Service Contracts that are entered
into, modified or renewed after the date hereof not in violation of this
Agreement). Seller, the Joint Ventures and their respective Subsidiaries have
not given or received any written notice of any material uncured default under
the terms of any such Service Contract under which the total face value of the
contract exceeds Twenty Five Thousand dollars ($25,000). Seller and the Joint
-26-
Ventures make no representation as to the ability to assign any Service Contract
or that any such assignment will not be void under the terms of any Service
Contract (which shall not be a default of Seller hereunder, even if such Service
Contract is an Assigned Contract). The list of Service Contracts to be delivered
to Purchaser pursuant to this Agreement is or will be true, correct, and
complete in all material respects as of the date of its delivery.
(vi) Each of Seller, the Joint Ventures and their respective
Subsidiaries is duly organized and validly existing under the laws of its
jurisdiction of organization and has the power and authority to carry on its
business as now being conducted.
(vii) Each of Seller, the Joint Ventures and their respective
Subsidiaries is duly qualified to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership and/or leasing
of its properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified or licensed, individually or
in the aggregate, would not reasonably be expected to have a material adverse
effect on its business or operations as currently conducted or its ability to
consummate the transactions contemplated herein.
(viii) Each of Seller and the Joint Ventures has full power
and authority to enter into (or ratify, in the case of the Joint Ventures) and
fully perform and comply with the terms of this Agreement. Upon obtaining the
written consent of the Trustees of Dartmouth College with regard to the Property
at Centerra Lot 26, Seller and the Joint Ventures shall have obtained the
Partnership Consents for all Properties that are not directly or indirectly
under the control of Seller.
(ix) Subject to obtaining the Third Party Consents, neither
the execution and delivery of this Agreement nor its performance by Seller or
the Joint Ventures conflicts with or results in the breach of any material
contract (except to the extent any Service Contract may be breached by assigning
same), agreement, law, rule or regulation to which Seller or the Joint Ventures
are parties or by which Seller or the Joint Ventures are bound. This Agreement
is valid and enforceable against Seller and the Joint Ventures in accordance
with its terms and each instrument to be executed by Seller, the Joint Ventures
and their respective Subsidiaries pursuant to this Agreement or in connection
herewith, will, when executed and delivered, be valid and enforceable against
Seller, the Joint Ventures and their respective Subsidiaries, as applicable, in
accordance with its terms.
(x) Schedule 7(A)(x) contains a list of certain environmental
and hazardous waste reports and engineering reports in the possession or control
of Seller, the Joint Ventures and/or the Subsidiaries relating to the Properties
(collectively, the "Reports"). Seller has delivered or made available, or caused
the Joint Ventures and the Subsidiaries to deliver or make available, true,
correct and complete copies of each Report listed on Schedule 7(A)(x) to
Purchaser (including by delivering the Due Diligence Materials to Purchaser by
hard copy or by making such materials available electronically). Purchaser
acknowledges that the Properties are or may be subject to Environmental Defects
and that no representations or warranties are being made with respect to
environmental matters associated with the Properties. For purposes of this
section, "Environmental Defects" shall mean an environmentally related
commission, omission, activity, or condition that either: (1) constitutes a
material violation of an environmental statute,
-27-
regulation or ordinance; (2) would require remedial activity under an
environmental statute, regulation or ordinance; (3) presents a substantial
endangerment to the public health, public welfare or the environment; (4) would
have a material, adverse effect on the market value of the property or of an
abutting property; or (5) would prevent or materially interfere with another
party's ability to obtain a permit or license that is required under an
environmental statute, regulation or ordinance.
(xi) The outstanding principal balances of the Assumed Loans
and the amounts in the impound and reserve accounts, as of December 31, 2004 are
set forth on Schedule 7(A)(xi). The Assumed Loan Documents comprise all of the
documents and instruments evidencing the Assumed Loans. Except as disclosed on
Schedule 7(A)(xi), none of the Assumed Loan Documents has been assigned,
modified, amended or rescinded. Seller, the Joint Ventures and their respective
Subsidiaries have not given or received any written notice of an uncured default
under the terms of any Assumed Loans or the Assumed Loan Documents.
(xii) Seller or its agents or representatives have delivered
true, correct and complete copies of the Other Documents to Purchaser.
(B) The foregoing warranties and representations of Seller and the
Joint Ventures are made solely for the benefit of Purchaser and shall survive
the Closing for nine (9) months after the Closing (the "Representation Survival
Period"). Each representation and warranty of Seller and the Joint Ventures in
this Agreement shall automatically be null and void and of no further force and
effect on the expiration date of the Representation Survival Period unless, on
or before such expiration date, Purchaser shall have provided written notice to
Seller or the applicable Joint Venture alleging that Seller or such Joint
Venture shall be in breach of such representation or warranty (which breach has
been discovered by Purchaser after the Closing). Purchaser shall then have forty
five (45) days following delivery of such notice to commence a legal proceeding
against Seller or such Joint Venture. If Purchaser has not commenced a legal
proceeding against Seller or such Joint Venture within such forty five (45) day
period following delivery of notice, then such representation and warranty of
Seller or such Joint Venture in this Agreement shall automatically be null and
void and of no further force and effect. Seller's and the Joint Ventures'
aggregate liability for the breach of any such representation and warranty
during the Representation Survival Period (together with any other Claims
against Seller and the Joint Ventures under this Agreement or with respect to
the transaction contemplated by this Agreement) shall be limited to the Damage
Cap (except where expressly stated to the contrary herein). In addition to
Seller's right to update the applicable Schedules attached hereto and modify the
applicable representations and warranties made by Seller and the Joint Ventures
five (5) days prior to the Due Diligence Date, Seller and the Joint Ventures
shall also have the right from time to time prior to the Closing by notice to
Purchaser to amend or supplement its qualifications to the representations and
warranties in Section 7(A), by amendment of the Schedules hereto or otherwise to
reflect changes in facts or conditions or to correct any immaterial factual
inaccuracies; provided that (y) so long as such change was not the result of any
act or omission of Seller or the applicable Subsidiaries in breach or violation
of such parties' covenants under this Agreement Purchaser shall not have the
right to claim a breach or default of Seller or the applicable Subsidiaries
hereunder and Purchaser's sole remedy with respect to such amendment or
supplement shall be to terminate this Agreement due to a failure of a condition
precedent pursuant to Section 8(L)(i)(b) (it being understood that if such
change is in
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fact the result of any act or omission of Seller or the applicable Subsidiaries
in breach or violation of such parties' covenants under this Agreement Purchaser
shall have any remedies granted to Purchaser pursuant to Section 10(A), but
subject to any limitations on such remedies contained in such Section 10(A) and
elsewhere in this Agreement with respect to such breach or violation (including,
without limitation, the Damage Cap and the Representation Survival Period) and
(z) any change in facts or conditions after this Agreement was entered into
relating to the Leases and the representations and warranties contained in
Section 7(A)(i) will be deemed to modify the representations and warranties of
Seller hereunder with respect to such representations and warranties and
Purchaser shall not have the right claim a breach, default or failure of a
condition at Closing with respect to such change in facts or conditions so long
as (I) such change was not the result of any act or omission of Seller or the
Joint Ventures in breach or violation of such parties' covenants under this
Agreement, (II) Seller is not in default under the applicable Lease in a manner
that would permit Purchaser to claim a failure of condition precedent pursuant
to Section 8(L)(i)(b) and (III) Purchaser has received the Tenant Estoppel or
Seller Tenant Estoppel Certificate with respect to such applicable Lease.
(C) Purchaser represents, warrants and covenants to Seller and the
Joint Ventures as follows, and such representations and warranties are true on
the date hereof and shall be true on the Closing Date and shall survive the
Closing or any termination of this Agreement indefinitely:
(i) PURCHASER IS PURCHASING EACH PROPERTY "AS-IS, WHERE IS AND
WITH ALL FAULTS" IN ITS PRESENT CONDITION, SUBJECT TO REASONABLE USE, WEAR, TEAR
AND NATURAL DETERIORATION OF EACH PROPERTY BETWEEN THE DATE HEREOF AND THE
CLOSING DATE AND FURTHER AGREES THAT (i) SELLER AND THE JOINT VENTURES SHALL NOT
BE LIABLE FOR ANY LATENT OR PATENT DEFECTS IN ANY PROPERTY AND (ii) NEITHER
SELLER, ANY JOINT VENTURE, ANY OF THEIR RESPECTIVE SUBSIDIARIES, NOR ANY AGENT,
DIRECT OR INDIRECT PARTNER, DIRECT OR INDIRECT MEMBER, EMPLOYEE OR
REPRESENTATIVE OF THE FOREGOING HAS MADE ANY REPRESENTATION WHATSOEVER REGARDING
ANY PROPERTY OR ANY PART THEREOF, OR ANYTHING RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, AND (iii) PURCHASER, IN
EXECUTING, DELIVERING AND PERFORMING THIS AGREEMENT, HAS NOT AND DOES NOT RELY
UPON ANY STATEMENT, INFORMATION, OR REPRESENTATION TO WHOMSOEVER MADE OR GIVEN,
WHETHER TO PURCHASER OR OTHERS, AND WHETHER DIRECTLY OR INDIRECTLY, ORALLY OR IN
WRITING, MADE BY ANY PERSON, FIRM OR CORPORATION, EXCEPT AS EXPRESSLY SET FORTH
HEREIN. IN ADDITION TO THE FOREGOING, EXCEPT AS OTHERWISE PROVIDED HEREIN,
PURCHASER REPRESENTS THAT BEFORE THE DUE DILIGENCE DATE (I) PURCHASER WILL HAVE
EXAMINED EACH PROPERTY AND THE REPORTS LISTED ON SCHEDULE 7(A)(X) AND THE DUE
DILIGENCE MATERIALS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL
DISCLOSURES THEREIN) AND IS FAMILIAR WITH THE PHYSICAL AND ENVIRONMENTAL
CONDITION THEREOF AND HAS CONDUCTED SUCH INVESTIGATION OF THE AFFAIRS AND
CONDITION OF EACH PROPERTY AS PURCHASER CONSIDERS APPROPRIATE; (II) NEITHER
SELLER, ANY JOINT VENTURE NOR ANY OF
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THEIR RESPECTIVE SUBSIDIARIES, NOR ANY AGENT, DIRECT OR INDIRECT PARTNER, DIRECT
OR INDIRECT MEMBER, EMPLOYEE OR REPRESENTATIVE OF THE FOREGOING HAVE MADE OR
WILL MAKE OR WILL BE ALLEGED TO HAVE MADE ANY ORAL OR WRITTEN REPRESENTATIONS,
WARRANTIES, PROMISES OR GUARANTIES WHATSOEVER TO PURCHASER, WHETHER EXPRESS OR
IMPLIED, AND, IN PARTICULAR, THAT NO SUCH REPRESENTATIONS, WARRANTIES, PROMISES
OR GUARANTIES HAVE BEEN MADE OR WILL BE MADE OR WILL BE ALLEGED TO HAVE BEEN
MADE WITH RESPECT TO THE PHYSICAL CONDITION, ENVIRONMENTAL CONDITION OR
OPERATION OF ANY PROPERTY, THE ACTUAL OR PROJECTED REVENUE AND EXPENSES OF ANY
PROPERTY, THE ZONING AND OTHER LAWS, REGULATIONS AND RULES APPLICABLE TO ANY
PROPERTY OR THE COMPLIANCE OF ANY PROPERTY THEREWITH, THE QUANTITY, QUALITY OR
CONDITION OF THE ARTICLES OF PERSONAL PROPERTY AND FIXTURES INCLUDED IN THE
TRANSACTIONS CONTEMPLATED HEREBY, THE USE OR OCCUPANCY OF ANY PROPERTY OR ANY
PART THEREOF OR ANY OTHER MATTER OR THING AFFECTING OR RELATED TO ANY PROPERTY
OR THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT AS, AND SOLELY TO THE EXTENT,
HEREIN SPECIFICALLY SET FORTH; (III) NEITHER SELLER, ANY JOINT VENTURE NOR ANY
OF THEIR RESPECTIVE SUBSIDIARIES, NOR ANY AGENT, DIRECT OR INDIRECT PARTNER,
DIRECT OR INDIRECT MEMBER, EMPLOYEE OR REPRESENTATIVE OF THE FOREGOING HAVE MADE
OR WILL MAKE ANY ORAL OR WRITTEN REPRESENTATIONS, WARRANTIES, PROMISES OR
GUARANTIES WHATSOEVER TO PURCHASER, WHETHER EXPRESS OR IMPLIED, AND, IN
PARTICULAR, THAT NO SUCH REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTIES
HAVE BEEN MADE OR WILL BE MADE WITH RESPECT TO THE TRUTH, ACCURACY OR
COMPLETENESS OF ANY MATERIALS, DATA OR OTHER INFORMATION, INCLUDING WITHOUT
LIMITATION THE CONTENTS OF THE BOOKS AND RECORDS OF SELLER, THE JOINT VENTURES
AND THEIR RESPECTIVE SUBSIDIARIES, CONTRACTS, REPORTS LISTED ON SCHEDULE
7(A)(x), THE DUE DILIGENCE MATERIALS (INCLUDING, WITHOUT LIMITATION, ANY
ENVIRONMENTAL DISCLOSURES THEREIN), PHYSICAL CONDITION SURVEYS, INFORMATIONAL
BROCHURES WITH RESPECT TO ANY PROPERTY, RENT ROLLS OR INCOME AND EXPENSE
STATEMENTS, WHICH SELLER OR ITS REPRESENTATIVES MAY HAVE DELIVERED, MADE
AVAILABLE OR FURNISHED TO PURCHASER IN CONNECTION WITH ANY PROPERTY AND
PURCHASER REPRESENTS, WARRANTS AND AGREES THAT ANY SUCH MATERIALS, DATA AND
OTHER INFORMATION DELIVERED, MADE AVAILABLE OR FURNISHED TO PURCHASER ARE
DELIVERED, MADE AVAILABLE OR FURNISHED TO PURCHASER AS A CONVENIENCE AND
ACCOMMODATION ONLY AND EXPRESSLY DISCLAIMS ANY INTENT TO RELY ON ANY SUCH
MATERIALS, DATA AND OTHER INFORMATION AND HAS ENTERED INTO THIS AGREEMENT, AFTER
HAVING MADE AND RELIED SOLELY ON ITS OWN INDEPENDENT INVESTIGATION, INSPECTION,
ANALYSIS, APPRAISAL, EXAMINATION AND EVALUATION OF THE FACTS AND CIRCUMSTANCES;
(IV)
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PURCHASER HAS NOT RELIED UPON ANY SUCH REPRESENTATIONS, WARRANTIES, PROMISES OR
GUARANTIES OR UPON ANY STATEMENTS MADE IN ANY INFORMATIONAL BROCHURE WITH
RESPECT TO ANY PROPERTY AND HAS ENTERED INTO THIS AGREEMENT AFTER HAVING MADE
AND RELIED SOLELY ON ITS OWN INDEPENDENT INVESTIGATION, INSPECTION, ANALYSIS,
APPRAISAL, EXAMINATION AND EVALUATION OF THE FACTS AND CIRCUMSTANCES AND THE
REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN; AND (V) PURCHASER ACKNOWLEDGES
THAT THE PROPERTIES MAY NOT BE IN COMPLIANCE WITH THE AMERICANS WITH
DISABILITIES ACT OF 1990, AS AMENDED, AND SELLER AND THE JOINT VENTURES AND THE
SUBSIDIARIES MAKE NO REPRESENTATIONS WITH RESPECT TO SAME. WITHOUT LIMITING THE
FOREGOING, EXCEPT AS, AND SOLELY TO THE EXTENT, HEREIN SPECIFICALLY SET FORTH,
NEITHER SELLER, ANY JOINT VENTURE NOR ANY OF THEIR RESPECTIVE SUBSIDIARIES, NOR
ANY AGENT, DIRECT OR INDIRECT PARTNER, DIRECT OR INDIRECT MEMBER, EMPLOYEE OR
REPRESENTATIVE OF THE FOREGOING HAS MADE ANY REPRESENTATION OR WARRANTY
WHATSOEVER REGARDING HAZARDOUS MATERIALS OF ANY KIND OR NATURE ON, ABOUT OR
WITHIN ANY PROPERTY OR THE PHYSICAL CONDITION OF ANY PROPERTY AND PURCHASER
AGREES TO ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO,
CONSTRUCTION OR MECHANICAL DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL
CONDITIONS MAY NOT HAVE BEEN REVEALED BY PURCHASER'S INVESTIGATIONS OR THE
REPORTS LISTED ON SCHEDULE 7(A)(X) AND THE DUE DILIGENCE MATERIALS (INCLUDING,
WITHOUT LIMITATION, ANY ENVIRONMENTAL DISCLOSURES THEREIN).
(ii) Purchaser is duly organized and validly existing under
the laws of its jurisdiction of organization and has the power and authority to
carry on its business as now being conducted.
(iii) Purchaser is duly qualified to do business and is in
good standing in each jurisdiction in which the nature of its business or the
ownership and/or leasing of its properties makes such qualification necessary,
other than in such jurisdictions where the failure to be so qualified or
licensed, individually or in the aggregate, would not reasonably be expected to
have a material adverse effect on its business or operations as currently
conducted or its ability to consummate the transactions contemplated herein.
(iv) Purchaser has full power and authority to enter into and
fully perform and comply with the terms of this Agreement.
(v) Neither the execution and delivery of this Agreement nor
its performance by Purchaser conflicts with or results in the breach of any
material contract, agreement, law, rule or regulation to which Purchaser is a
party or by which Purchaser is bound. This Agreement is valid and enforceable
against Purchaser in accordance with its terms and each instrument to be
executed by Purchaser pursuant to this Agreement or in connection herewith,
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will, when executed and delivered, be valid and enforceable against Purchaser in
accordance with its terms.
(vi) As of the Closing Date, Purchaser will have the financial
resources necessary to consummate the transactions contemplated under this
Agreement, provided that nothing contained herein shall be construed to grant
Purchaser any financing contingency.
(vii) As of the Due Diligence Date, Purchaser will have
inspected (and will be deemed to have inspected and to have knowledge of) all of
the documents referred to in this Agreement (and made available through the Due
Diligence Materials) as having been delivered, made available or furnished to
Purchaser for inspection and that in such inspection Purchaser will be deemed
not to have discovered any matter which would form the basis for a claim by
Purchaser that Seller or the Joint Ventures have breached any representation,
warranty or covenant of Seller or of the Joint Ventures made in this Agreement,
provided that the foregoing shall not diminish Purchaser's rights under Section
13(B). Notwithstanding anything to the contrary set forth in this Agreement, if
prior to the Closing Purchaser has or obtains knowledge (or is deemed to have
knowledge pursuant to the immediately preceding sentence) that any of Seller's
or the Joint Ventures' representations or warranties set forth in Section 7(A)
are untrue in any respect, and Purchaser nevertheless proceeds with the Closing
despite such knowledge or deemed knowledge (as opposed to exercising its rights,
to the extent applicable, under Section 10(A)), then such knowledge shall be
attributed to Purchaser and the breach by Seller or such Joint Venture of the
representations and warranties as to which Purchaser shall have such knowledge
shall be waived by Purchaser, such representations and warranties shall be
deemed modified to conform them to the information that Purchaser shall have
knowledge of and Seller or such Joint Venture shall have no liability to
Purchaser or its successors or assigns in respect thereof. To the extent that
prior to the Closing a tenant provides to Purchaser an estoppel letter addressed
to Purchaser and delivered in response to a request made pursuant to this
Agreement which sets forth information with respect to any item as to which
Seller and the Joint Ventures have made a representation or warranty, then
Seller's and the Joint Ventures' representation and warranty in respect of such
information shall thereafter be null and void and of no further force or effect,
such representation and warranty shall not be deemed to have been remade as of
the Closing to such extent and Purchaser shall rely solely on the information
set forth in such estoppel letter.
8. CONSENTS AND ESTOPPELS; CONDITIONS TO CLOSING
(A) Seller, at its sole cost and expense, shall have until the Closing
Date to obtain, or cause the Joint Ventures or the Subsidiaries to obtain, with
respect to each Property that is subject to an Assumed Loan: (a) the consent or
authorization of the lenders under the Assumed Loans to the transfer of the
Properties from Seller, the Joint Ventures or their Subsidiaries to Purchaser
(or a special purpose entity designated by Purchaser at Closing (an "SPE")), (b)
the assumption of the obligations and liabilities arising on and after the
Closing Date under the Assumed Loan Documents by Purchaser (with respect to the
guarantor and indemnitor obligations and other matters required of Purchaser
pursuant to the applicable Assumption Documents and Instruments) and the
applicable SPE (with respect to the borrower obligations and other matters
required of such SPEs pursuant to the applicable Assumption Documents and
Instruments), as more specifically set forth in Section 8(A)(ii) below, and (c)
the
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release (in form and substance reasonably acceptable to Seller and its
applicable Subsidiaries) of Seller, the Joint Ventures and their respective
Subsidiaries and affiliates from all obligations and liabilities under such
Assumed Loan Documents (the "Assumed Loan Releases") (collectively (a), (b) and
(c) referred to as the "Loan Consents"). If a lender under an Assumed Loan does
not agree to provide an Assumed Loan Release at Closing, then the same will not
be required in order to have obtained the applicable Loan Consent (and neither
party shall have the right to adjourn the Closing solely based upon such fact)
and in lieu thereof, Purchaser shall deliver to Seller and such applicable
Subsidiaries and affiliates at Closing an indemnification agreement holding such
parties harmless from and against all obligations and liabilities arising under
the applicable Assumed Loan and/or the Assumed Loan Documents after the Closing
(such indemnification agreement to be known as an "Assumed Loan Indemnity").
(i) Seller shall use good faith, commercially reasonable
efforts to obtain, or cause the Joint Ventures or the Subsidiaries to obtain,
the Loan Consents and shall notify Purchaser in writing of the progress of its
attempts to obtain the Loan Consents and permit Purchaser to participate in
obtaining such Loan Consents. Purchaser shall, at no cost or expense to it other
than as specifically set forth in this Agreement, reasonably cooperate with
Seller, the Joint Ventures and the Subsidiaries, as applicable, in obtaining the
Loan Consents.
(ii) In connection with the assumption by Purchaser and the
applicable SPEs of the Assumed Loans, at Closing Purchaser shall (a) execute and
deliver to the lender under the applicable Assumed Loan any alternate security,
credit, indemnity, guarantee and/or other liquidity enhancement documents
(including without limitation, any substitute letters of credit) as are
reasonably required by the holders of the Assumed Loans in connection with the
Loan Consents including any such documents or instruments as are required to
replace the corresponding documents listed on Schedule 8(A)(ii) to which Seller,
the Joint Ventures and their respective Subsidiaries and affiliates are parties
(such documents, the "Credit Enhancement Documents") in connection with the
Assumed Loans, (b) execute and deliver any and all other documents, instruments,
certificates and opinions (or cause such items to be executed and delivered, as
appropriate) reasonably required by the holders of the Assumed Loans in
connection with the Loan Consents to be delivered in form and substance
reasonably satisfactory to the holders of the Assumed Loans in order to cause
the assumption by Purchaser and the SPEs, as applicable, of the Assumed Loans,
the Assumed Loan Documents and all rights and obligations of Seller, the Joint
Ventures, and their respective Subsidiaries and affiliates under such Assumed
Loans (collectively, (a) and (b) to be referred to as the "Assumption Documents
and Instruments"); provided that (I) Purchaser or any SPE shall not be required
to execute and deliver any Assumption Documents and Instruments that expand such
parties' liabilities or obligations, other than to a de minimis extent, from
that of the parties to such Assumed Loans as of the date hereof, (II) Purchaser
or any SPE shall not be obligated to assume any obligations or liabilities that
arose or accrued prior to the Closing Date under the Assumed Loans, and (III)
where affiliates of Seller or the Joint Ventures which are SPEs are the
borrowers or borrower affiliates under the Assumed Loans, Purchaser shall cause
equivalent entities which are affiliates of Purchaser to (x) assume all
obligations of the corresponding SPEs under the applicable Assumed Loan
Documents, and (y) comply with the "special purpose entity" requirements of the
Assumed Loan Documents and any other reasonable requirements of the holders of
the Assumed Loans in connection with the Loan Consents. Purchaser shall have
five (5) days after receipt of the initial drafts of the applicable Assumption
Documents and Instruments to reasonably approve
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and provide reasonable comments, if any, with respect to the same provided that
Purchaser's reasonable approval and reasonable review shall be consistent with
the requirements and limitations contained in this Section 8(A)(ii). In the
event the final drafts of the Assumption Documents and Instruments do not
incorporate Purchaser's reasonable comments that are consistent with the
requirements and limitations contained in this Section 8(A)(ii), Purchaser shall
have the right to terminate this Agreement upon notice to Seller, in which event
this Agreement shall become null and void and no party shall have any further
rights or obligations under this Agreement, except for the return of the Earnest
Money to Purchaser and the provisions that are expressly stated to survive the
termination of this Agreement.
(iii) Purchaser hereby acknowledges that on or prior to the
date hereof Seller has delivered to Purchaser a checklist in the form attached
hereto as Exhibit I (the "AIG Checklist") requesting certain information and
deliverables required by the holders of the following Assumed Loans in
connection with the Loan Consent related thereto: (a) the Assumed Loan evidenced
by that certain Promissory Note, dated as of July 29, 1998, by and between
Sunamerica Life Insurance Company, as lender, and David E. Clem and David M.
Roby, as trustees of Fort Washington Realty Trust with respect to the Property
located at 40 Erie Street, Cambridge, Massachusetts (the "40 Erie Loan"), (b)
the Assumed Loan evidenced by that certain Promissory Note, dated as of May 16,
2001, by and between Sunamerica Life Insurance Company, as lender, and David E.
Clem and David M. Roby, as trustees of 200 Sidney Street Realty Trust with
respect to the Property located at 200 Sidney Street, Cambridge, Massachusetts
(the "200 Sidney Loan"), and (c) the Assumed Loan evidenced by that certain
Promissory Note, dated as of November 21, 2003, by and between The Variable
Annuity Life Insurance Company, as lender, and KS Parcel D, LLC, as borrower,
with respect to the Property located at 500 West Kendall Street, Cambridge,
Massachusetts (the "Kendall Square D Loan" and, together with the 40 Erie Loan
and the 200 Sidney Loan, the "AIG Assumed Loans"). Purchaser shall make all
deliverables under and satisfy all other requirements of the AIG Checklist in
writing and deliver the same to Seller on or before April 11, 2005 (time being
of the essence with respect to such date) ; provided, however, (a) Purchaser may
deliver a form limited liability company agreement to Seller on or before April
11, 2005 in satisfaction of its obligation under the AIG Checklist to deliver
the entity documents for each wholly-owned subsidiary that takes title to any of
the Properties at Closing; and (b) Purchaser shall not be required to deliver a
legal opinion to Seller on or before April 11, 2005, and provided, further, that
Purchaser's counsel shall deliver a legal opinion to the lender, if required, on
or before Closing in a form reasonably acceptable to the lender and to
Purchaser's counsel. If Purchaser fails to make all such deliverables and
satisfy all such requirements under the AIG Checklist (and send the same to
Seller) by 5:00pm EST on April 11, 2005, then Purchaser shall be in material
default under this Agreement and Seller shall have all remedies available to
Seller hereunder. If (x) Goedecke delivers a letter to Seller and Purchaser
based upon the AIG Checklist indicating that the lenders under the AIG Assumed
Loans are not likely to provide the applicable Loan Consents, or (y) Goedecke
does not send any letter opining as to the status of the Loan Consents under the
AIG Assumed Loans by the date that is 30 days after the expiration of the Due
Diligence Date, then either party may terminate this Agreement by written notice
to the other party, in which case this Agreement shall become null and void and
no party shall have any further rights or obligations under this Agreement,
except for the return of the Earnest Money to Purchaser and the provisions that
are expressly stated to survive the termination of this Agreement. If Goedecke
delivers a letter to Seller and Purchaser based upon the AIG Checklist
indicating that the lenders under the AIG Assumed
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Loans are likely to provide the applicable Loan Consents (the "Positive Status
Letter") , then Purchaser shall comply with any reasonable requirements set
forth by the holders of such Assumed Loans in connection with the assumption of
such loans (which shall be set forth in a letter from such lenders), but subject
to the limitations set forth in the last sentence of Section 8(A)(ii) above.
(B) Purchaser acknowledges that the following loans are not Assumed
Loans and will be prepaid (and the liens securing same will be discharged) by
Seller, a Joint Venture or a Subsidiary at or prior to Closing: (a) the loan
made pursuant to that certain Loan Agreement, dated as of November 9, 1998, by
and between Massachusetts Institute of Technology, as lender, and David E. Clem
and David M. Roby, Trustees of 270 Albany Street Realty Trust, as Borrower, with
respect to the Property located at 270 Albany Street, Cambridge, Massachusetts
(the "MIT Loan"), (b) the loan made pursuant to that certain Construction and
Interim Loan Agreement, dated as of July 17, 2002, by and between Anglo Irish
Bank Construction PLC, as lender, and KS Parcel A/D, LLC (nka KS Parcel A, LLC)
as Borrower, as amended by that certain First Amendment to Construction and
Interim Loan Agreement, dated as of November 27, 2002, with respect to the
Property located at 675 West Kendall Street, Cambridge, Massachusetts (the
"Kendall Square A Loan") and (c) the loan, dated as of January 1, 2001, by and
between Yankee Farm Credit, ACA, as lender, and David E. Clem and David M. Roby,
as trustees of 325 Vassar Street Realty Trust with respect to the Property
located at 325 Vassar Street, Cambridge, Massachusetts (the "325 Vassar Street
Loan") (the "Discharged Loans"). Seller, the applicable Joint Venture or their
Subsidiaries may extend the Closing Date for up to sixty (60) days in order to
effect the prepayment of the Discharged Loans and Seller will be responsible for
any prepayment fees or expenses relating thereto.
(C) If Seller is unable to obtain, or cause the Joint Ventures or the
Subsidiaries to obtain, any of the Loan Consents on or before the Closing Date,
then either party shall have the right to adjourn the Closing Date for such
periods of time as such party deems desirable to enable such party to obtain the
Loan Consents with respect to such Assumed Loan by giving the other party notice
thereof prior to the Closing. This Section 8(C) shall apply again upon such
extended Closing Date, but the Closing Date shall not be extended under this
Section 8(C) for more than ninety (90) days in the aggregate from the original
Closing Date set forth in this Agreement. In the event that at the Closing (as
so extended) the applicable Loan Consent(s) have not been obtained, then Seller
shall provide Purchaser with written notice of same and Seller shall have the
following options, in Seller's sole and absolute discretion, of which Seller may
elect prior to the Closing (as extended) by written notice to Purchaser:
(i) pay off and discharge its obligations with respect to any
such Assumed Loan at Closing (as so extended), in which case such loan shall not
be assumed by Purchaser at Closing and the Cash Balance delivered by Purchaser
at Closing will be adjusted as described in Section 2(D); or
(ii) terminate this Agreement upon notice to Purchaser, in
which event this Agreement shall become null and void and no party shall have
any further rights or obligations under this Agreement, except for the return of
the Earnest Money to the Purchaser and the provisions that are expressly stated
to survive the termination of this Agreement.
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(D) Seller, at its sole cost and expense, shall have until the Due
Diligence Date to obtain, with respect to each Joint Venture, the consent or
authorization of all parties required by the relevant partnership or operating
agreement or other organizational documents, as applicable, and in each case all
amendments thereto through the date of this Agreement (the "Partnership
Documents") to cause such Joint Venture to (a) convey the Property or Properties
owned by such Joint Venture and its Subsidiaries to Purchaser at Closing, (b) be
bound by the terms and conditions of this Agreement applicable to such Joint
Venture and reasonably cooperate with Seller with respect to Seller's
obligations hereunder (including, without limitation, delivery of all documents
and other items required to be delivered by Seller or such Joint Venture
hereunder), (c) pay its proportionate share of all obligations and liabilities
attributable to it under this Agreement (including, without limitation, the
prorations and adjustments described in Section 5(C) and the deposit of such
Joint Venture's pro rata portion of the Post-Closing Escrow Funds), (d) ratify
any actions taken by Seller on behalf of such Joint Venture in accordance with
the terms of this Agreement, (e) ratify each of the representations, warranties
and covenants made by such Joint Venture under this Agreement, and (f) agree to
the Allocated Purchase Price applicable to each Property owned by such Joint
Venture (collectively, the "Partnership Consents"). Nothing in this Section 8(D)
shall be deemed to require any consents of Seller or any of its wholly owned and
wholly controlled affiliates and subsidiaries and Seller represents and warrants
to Purchaser that Seller and its wholly owned and wholly controlled affiliates
and subsidiaries have authorized the transaction contemplated hereby.
(E) Seller shall use good faith, diligence and commercially reasonable
efforts to obtain the Partnership Consents, which efforts Seller shall commence
promptly on the date hereof, including, without limitation agreeing to (a)
transfer or direct any funds properly allocable to Joint Ventures hereunder to
such Joint Ventures (including, without limitation, the Earnest Money, if
applicable, and any amounts due pursuant to prorations and adjustments described
in Section 5(C)), and (b) reasonably cooperate with the Joint Ventures with
respect to such Joint Ventures' obligations hereunder. Seller shall notify
Purchaser in writing of the progress of its attempts to obtain the Partnership
Consents and permit Purchaser to participate in obtaining such Partnership
Consents. Purchaser shall not be responsible for obtaining the Partnership
Consents, but shall, at no cost or expense to it, reasonably cooperate with
Seller in obtaining the Partnership Consents.
(i) If Seller is unable to obtain, or cause the Joint Ventures
or the Subsidiaries to obtain, any of the Partnership Consents (other than the
Partnership Consent of the Trustees of Dartmouth College with respect to the
Property located at Centerra Lot 26 (the "Dartmouth Consent")) on or before the
Due Diligence Date, then either party shall have the right to terminate this
Agreement upon notice to the other party, in which event this Agreement shall
become null and void and no party shall have any further rights or obligations
under this Agreement, except for the return of the Earnest Money to the
Purchaser and the provisions that are expressly stated to survive the
termination of this Agreement.
(ii) If Seller is unable to obtain, or cause the Joint
Ventures or the Subsidiaries to obtain, the Dartmouth Consent on or before the
Due Diligence Date, then the Property located at Centerra Lot 26 shall not be
conveyed to Purchaser hereunder and the Purchase Price shall be decreased by the
Allocated Purchase Price for such Property.
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(F) Seller, at its sole cost and expense (including without limitation,
any transfer fees), shall have until the Closing Date to obtain, or cause the
Joint Ventures or the Subsidiaries to obtain, with respect to each document that
is set forth on Schedule 8(F) (the "Other Documents"): (a) if required pursuant
to the terms of the Other Documents, the consent or authorization of all
necessary parties to the transfer of the Properties from Seller, the Joint
Ventures or their Subsidiaries to Purchaser (including without limitation,
approval of any substitute letter of credit, guaranties and/or other liquidity
enhancement including, without limitation, any documents required to effectuate
the assignment, assumption, release and other matters set forth on Schedule
8(F)), (b) the release (in form and substance reasonably acceptable to Seller
and the Joint Ventures, as applicable) of Seller, the Joint Ventures and their
respective Subsidiaries and affiliates from liability in connection with the
Other Documents to the extent required by Schedule 8(F), and (c) the assumption
of the obligations under the Other Documents by Purchaser, as required by such
documents (collectively, the "Other Consents").
(G) Seller shall use good faith, commercially reasonable efforts to
obtain, or cause the Joint Ventures or the Subsidiaries to obtain, the Other
Consents and shall notify Purchaser in writing of the progress of its attempts
to obtain the Other Consents and permit Purchaser to participate in obtaining
such Other Consents. Purchaser shall provide any alternate security or credit
and/or liquidity enhancements required by the third parties to the Other
Documents in connection with the Other Consents. Purchaser shall not be
responsible for obtaining the Other Consents, but shall, at no cost or expense
to it, reasonably cooperate with Seller, the Joint Ventures or the Subsidiaries,
as applicable, in obtaining the Other Consents.
(H) If Seller is unable to obtain, or cause the Joint Ventures or
Subsidiaries to obtain, the Other Consents on or before the Closing Date, Seller
shall provide Purchaser with written notice of same and Seller shall have the
following options with respect to each Property for which such party is unable
to obtain an Other Consent, if applicable, of which Seller may elect prior to
the Closing by written notice to Purchaser:
(i) adjourn the Closing Date for such periods of time as
Seller deems desirable to enable such party to obtain the Other Consents with
respect to such Other Documents. This Section 8(H)(i) shall apply again upon
such extended Closing Date, but the Closing Date shall not be extended under
this Section 8(H)(i) for more than sixty (60) days in the aggregate from the
original Closing Date set forth in this Agreement; or
(ii) terminate this Agreement upon notice to Purchaser, in
which event this Agreement shall become null and void and no party shall have
any further rights or obligations under this Agreement, except for the return of
the Earnest Money to the Purchaser and the provisions that are expressly stated
to survive the termination of this Agreement.
(iii) If Seller shall have elected option (i) above and the
time period for which Seller adjourned the Closing Date (including any
additional adjournments permitted under option (i)) shall have expired, then
either Seller or Purchaser may elect to terminate this Agreement upon notice to
all other parties, in which event this Agreement shall become null and void, and
no party shall have any further rights or obligations under this Agreement,
except for the return of the Earnest Money to the Purchaser and the provisions
that are expressly stated to survive the termination of this Agreement.
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(I) If Seller is unable to obtain, or cause the Joint Ventures or the
Subsidiaries to obtain, any of the Tenant Estoppels, the Lender Estoppels or the
CER Estoppels (each, an "Estoppel Certificate") on or before the Closing Date,
Seller shall provide Purchaser with written notice of same. Seller shall have
the option, with respect to each Estoppel Certificate which Seller is unable to
obtain (or cause the Joint Ventures or the Subsidiaries to obtain), which it may
elect prior to the Closing Date by written notice to Purchaser, to adjourn the
Closing Date for such periods of time as Seller deems desirable to enable Seller
to obtain, or cause the Joint Ventures or the Subsidiaries to obtain, such
Estoppel Certificate. This Section 8(I) shall apply again upon such extended
Closing Date, but the Closing Date shall not be extended under this Section 8(I)
for more than sixty (60) days in the aggregate from the original Closing Date
set forth in this Agreement. If (i) Seller shall not have elected to so adjourn
the Closing Date with respect to such Estoppel Certificate, or (ii) Seller shall
have elected to so adjourn the Closing Date with respect to such Estoppel
Certificate and the time period for which Seller adjourned the Closing Date with
respect to such Estoppel Certificate (including any additional adjournments
permitted under this Section 8(I)) shall have expired, then Purchaser may elect
to terminate this Agreement upon notice to all parties hereunder, in which event
this Agreement shall become null and void, and no party shall have any further
rights or obligations under this Agreement, except for the return of the Earnest
Money to Purchaser and the provisions that are expressly stated to survive the
termination of this Agreement. Purchaser's election to terminate this Agreement
pursuant to this Section must be made on or prior to the Closing Date and if
Purchaser does not terminate this Agreement due to such failure to obtain the
required Estoppel Certificate(s) on or prior to the Closing Date, then Purchaser
shall be deemed to have waived such requirement. Nothing in this Section 8(I)
shall limit Seller's ability to deliver a Seller Tenant Estoppel Certificate, a
Seller Lender Estoppel Certificate or a Seller CER Estoppel Certificate in lieu
of such corresponding Estoppel Certificate to the extent permitted hereunder.
(J) Promptly after the date hereof, Seller shall cause 270 Albany
Street Realty Trust ("Albany"), which is a Subsidiary, to take such actions as
are reasonably necessary pursuant to that certain Agreement of First Offer and
First Refusal, dated as of November 9, 1998, between Albany and Massachusetts
Institute of Technology ("MIT") to trigger MIT's right of first refusal under
such agreement with respect to the Property located at 270 Albany Street,
Cambridge, Massachusetts ("270 Albany"). In the event that MIT elects to
purchase 270 Albany pursuant to such agreement prior to Closing, then such
Property shall not be conveyed to Purchaser hereunder and the Purchase Price
shall be decreased by the Allocated Purchase Price for 270 Albany.
(K) Commercially Reasonable Efforts. For purposes of this Agreement,
including, without limitation, this Article 8, and without intending to expand
the meaning of the phrase "commercially reasonable efforts", the parties hereto
acknowledge that commercially reasonable efforts will not be interpreted as
requiring the initiation or settlement of litigation, disproportionate payouts
to any partners or other equity investors or lenders or the payment of money
(other than usual and customary expenses associated with negotiating and closing
transactions of the nature set forth herein, including, without limitation, fees
and expenses required to be paid under existing contractual obligations and
processing or review fees and reimbursement for legal fees and other
out-of-pocket expenses customarily required by the equity partners,
counterparties to contracts and holders of indebtedness).
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(L) Conditions to Closing.
(i) Conditions Precedent to Obligations of Purchaser. The
obligation of Purchaser to consummate the transactions contemplated herein shall
be subject to fulfillment (or waiver by Purchaser, to the extent waiver is not
prohibited hereunder) on or before the Closing Date, of all of the following
conditions:
(a) Closing Deliveries. Seller has delivered all the
items required to be delivered pursuant to Section 5(B)(i).
(b) Accuracy of Representations and Warranties. As of
the Closing, each of the warranties and representations set forth in Section
7(A) herein shall be true, complete and correct in all material respects except
for changes due to the operation of the Properties occurring prior to Closing
which are not prohibited by this Agreement. Purchaser, in its sole and absolute
discretion, may waive such condition. If the Closing occurs, Purchaser shall be
deemed to have waived such condition precedent.
(c) Observance of Covenants. Seller and the Joint
Ventures shall have performed and observed, in all material respects, all
covenants and agreements in this Agreement to be performed and observed by such
parties as of the Closing Date.
(d) No Injunction. No action, suit or legal or
administrative proceedings shall have been instituted by or before any agency,
bureau, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign (referred to herein, as "Governmental Authority"), seeking
to enjoin the transactions contemplated by this Agreement and intended to occur
at the Closing, other than any such proceeding that has been subsequently
terminated without the desired result or has been dismissed with prejudice or
any such proceeding initiated by or on behalf of Purchaser. The condition set
forth in this Section shall not be waivable by Purchaser and must be fulfilled
on the Closing Date unless the Seller, in its sole discretion, consents
otherwise.
(e) Estoppel Requirement. Purchaser shall have
received all Estoppel Certificates (or the Seller Tenant Estoppel Certificates,
Seller Lender Estoppel Certificates or Seller CER Estoppel Certificates, if
applicable).
(f) Third Party Consents. Each of the Loan Consents,
the Partnership Consents and the Other Consents (collectively, the "Third Party
Consents") has been obtained.
(g) Title. Upon the sole condition of payment of the
premium, at Closing, the Title Company shall irrevocably commit to issue to
Purchaser an ALTA Owner's Policy of title insurance (Revised 10-13-70 and
10-17-84) for each of the Properties (such commitments being the "Title
Commitments"), with extended coverage, dated as of the date and time of the
recording of the deed vesting title in Purchaser, in the amount of the Allocated
Purchase Price for such Property, insuring Purchaser as owner of good,
marketable and indefeasible fee simple title to such Property, subject only to
the Permitted Exceptions.
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(h) Bankruptcy. No proceeding has been commenced
against Seller under the federal Bankruptcy Code or any state law for relief of
debtors.
(i) Moratorium. No moratorium, statute or regulation
of any governmental agency or order or ruling of any court has been enacted,
adopted, or issued which would adversely affect Purchaser's use or development
of the Properties.
(j) Loan Condition. Seller shall not be in default
under any of the Assumed Loans.
If the Closing occurs, Purchaser shall be deemed to have waived all unsatisfied
conditions precedent (but without releasing Seller or the Joint Ventures from
any liability under their respective representations, warranties and covenants
in this Agreement that survive Closing) except as otherwise provided herein.
(ii) Conditions Precedent to Obligations of Seller. The
obligation of Seller to consummate the transactions contemplated herein shall be
subject to the fulfillment (or waiver by Seller) on or before the Closing Date
of each of the following conditions:
(a) Receipt of Consideration. Seller (or such parties
as may be directed by Seller) shall have received the Purchase Price (adjusted
pursuant to and payable in the manner provided for in this Agreement).
(b) Closing Deliveries. Purchaser shall have
delivered all the items required to be delivered pursuant to Section 5(B)(ii).
(c) Accuracy of Representations and Warranties. The
representations and warranties of Purchaser contained in Section 7(C) of this
Agreement shall be true and correct in all material respects.
(d) Observance of Covenants. Purchaser shall have
performed and observed, in all material respects, all covenants and agreements
in this Agreement to be performed and observed by Purchaser as of the Closing
Date.
(e) No Injunction. No action, suit or legal or
administrative proceedings shall have been instituted by or before any court or
Governmental Authority seeking to enjoin Purchaser from consummating the
transactions contemplated by this Agreement and intended to occur at the
Closing, other than any such proceeding that has been subsequently terminated
without the desired result or has been dismissed with prejudice or any such
proceeding initiated by or on behalf of Seller. The condition set forth in this
Section shall not be waivable by Seller and must be fulfilled on the Closing
Date unless Purchaser, in its sole discretion, consents otherwise.
(f) Third Party Consents. Each of the Third Party
Consents has been obtained.
If the Closing occurs, Seller shall be deemed to have waived all unsatisfied
conditions precedent (but without releasing Purchaser from any liability under
their respective representations,
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warranties and covenants in this Agreement that survive Closing) except as
otherwise provided herein.
9. BROKERAGE
Each party represents to the other that they dealt with no broker in
connection with this transaction, except that (i) Morgan Stanley acted as
Seller's and the Joint Ventures' financial advisor for the transaction and any
fees payable to Morgan Stanley will be paid by Seller and the Joint Ventures
pursuant to a separate agreement, and (ii) Raymond James acted as Purchaser's
financial advisor for the transaction and any fees payable to Raymond James will
be paid by Purchaser pursuant to a separate agreement. Seller and the Joint
Ventures shall indemnify and hold Purchaser harmless from and against any and
all Claims of all brokers and finders claiming by, through or under Seller and
the Joint Ventures and in any way related to the sale and purchase of the
Properties pursuant to this Agreement, including, without limitation, reasonable
attorneys' fees and disbursements incurred by Purchaser in connection with such
Claims. Purchaser shall indemnify and hold Seller and the Joint Ventures
harmless from and against any and all Claims of all brokers and finders claiming
by, through or under Purchaser and in any way related to the sale and purchase
of the Properties pursuant to this Agreement, including, without limitation,
reasonable attorneys' fees and disbursements incurred by Seller and the Joint
Ventures in connection with such Claims. Notwithstanding anything to the
contrary contained in this Agreement, Seller's, the Joint Ventures' and
Purchaser's obligations in this Section 9 shall survive Closing or any
termination of this Agreement.
10. DEFAULTS AND REMEDIES
(A) Notwithstanding anything to the contrary contained in this
Agreement, if Seller or the Joint Ventures fail to perform in any material
respect any covenant of Seller or of the Joint Ventures, as applicable, in
accordance with the terms of this Agreement or if any of Seller's or the Joint
Ventures' representations or warranties set forth in Section 7(A) of this
Agreement shall not be true, correct and complete in any material respect upon
Closing, except (x) for changes due to the operation of the Properties occurring
prior to Closing which are not prohibited by this Agreement (therefore there is
no breach), (y) if the dollar amount of the damages resulting from any breach of
representation or failure to perform any covenant together with all dollar
amounts of all other damages resulting from any breach of representation or
failure to perform any other covenant is less than Two Hundred Fifty Thousand
Dollars ($250,000) (in which case the breach is deemed waived by Purchaser, the
"Threshold Amount") or (z) if otherwise waived by Purchaser, then Purchaser's
sole and exclusive remedy shall be either:
(i) if and only if the breach by Seller or the Joint Ventures,
as applicable, is a breach of any of such entity's covenants hereunder, sue for
specific performance with respect to the performance of same, subject to the
limitations set forth in Sections 4(D), 4(F) and 10(E);
(ii) terminate this Agreement at the Closing (as it may be
adjourned under this Agreement) in which event this Agreement, without further
action of the parties, shall become null and void and no party shall have any
further rights or obligations under this
- 41 -
Agreement, except for the return of the Earnest Money to the Purchaser and the
provisions that are expressly stated to survive the termination of this
Agreement; or
(iii) waive such default and proceed to Closing without any
reduction in, abatement of, or credit against the Purchase Price;
if Purchaser fails to make any such election, Purchaser shall
be deemed to have elected the remedy set forth in Section 10(A)(iii).
(B) Notwithstanding anything herein to the contrary, Purchaser
shall give Seller and the Joint Ventures, as applicable, written notice
specifying any failure to perform by Seller and the Joint Ventures of any of
Seller's or such Joint Venture's covenants hereunder or breach of any
representation by Seller or the Joint Ventures hereunder, which notice shall be
given within five (5) business days of the date Purchaser obtains actual
knowledge of such breach or failure to perform (or on or prior to the Closing
Date, if the date Purchaser obtains such actual knowledge is within 5 business
days of the Closing Date); if Purchaser fails to deliver such notice within such
five-day period (or by Closing, if earlier), such failure or breach shall be
deemed waived by Purchaser. Upon receipt of such notice, Seller and the Joint
Ventures, as applicable, shall have until Closing (and may adjourn the Closing
for up to sixty (60) days if such adjournment is reasonably necessary to cure
such breach or failure to perform) to cure such breach or failure to perform. At
the option of Seller or the Joint Ventures, as applicable, Seller or such Joint
Venture may cure such breach or failure to perform by giving Purchaser a credit
against the Purchase Price at the Closing for a reasonable estimate of the
dollar amount to cure same if quantifiable in excess of the Threshold Amount,
but such credit shall only be that amount that exceeds the Threshold Amount.
(C) Notwithstanding anything to the contrary contained in this
Agreement, if Purchaser fails to perform in accordance with the terms of this
Agreement, or materially breaches its representations or warranties (such
failure or breach shall also be deemed a failure of a condition precedent to
Seller's and the Joint Ventures' obligations to consummate their respective
obligations under this Agreement), the Earnest Money shall be forfeited to
Seller as liquidated damages (which shall be Seller's and the Joint Ventures'
sole and exclusive remedy against Purchaser), at which time this Agreement shall
be null and void and no party shall have any rights or obligations under this
Agreement, except for such provisions that are expressly stated to survive the
termination of this Agreement. Seller, the Joint Ventures and Purchaser
acknowledge and agree that (i) the Earnest Money is a reasonable estimate of and
bears a reasonable relationship to the damages that would be suffered and costs
incurred by Seller and the Joint Ventures as a result of having withdrawn the
Properties from sale and the failure of Closing to occur due to a default of
Purchaser under this Agreement; (ii) the actual damages suffered and costs
incurred by Seller and the Joint Ventures as a result of such withdrawal and
failure to close due to a default of Purchaser under this Agreement would be
extremely difficult and impractical to determine; (iii) Purchaser seeks to limit
its liability under this Agreement to the amount of the Earnest Money in the
event this Agreement is terminated and the transaction contemplated by this
Agreement does not close due to a default of Purchaser under this Agreement; and
(iv) the Earnest Money shall be and constitutes valid liquidated damages;
provided, however, Purchaser, Seller and the Joint Ventures agree that the
liquidated damages do not apply to any indemnity obligation of the Purchaser
under this Agreement.
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(D) In the event any party hereto fails to perform any of its
obligations under this Agreement or in the event a dispute arises concerning the
meaning or interpretation of any provision of this Agreement, the defaulting
party or the party not prevailing in such dispute, as the case may be, shall pay
any and all costs and expenses reasonably incurred by the other parties in
enforcing or establishing their rights hereunder, including, without being
limited to, court costs and reasonable attorneys' fees.
(E) Notwithstanding anything to the contrary contained in this
Agreement, and subject to the limitation of Purchaser's remedies set forth in
Section 10(A), the maximum aggregate liability of the Seller and the Joint
Ventures, together, for any and all damages or Claims hereunder or in connection
herewith, including without limitation, any Claims for indemnification hereunder
and Claims under any documents delivered in connection herewith, shall be Seven
Million Five Hundred Thousand Dollars ($7,500,000) (the "Damage Cap"); provided,
however, that Seller and the Joint Ventures, together, shall not have any
liability for any such damages or Claims until the aggregate amount of same is
in excess of the Threshold Amount (in which case the amount of said damages or
Claims up to the Threshold Amount are deemed waived by Purchaser); and provided
further, that Seller and the Joint Ventures shall not be liable for any
consequential, special, punitive or indirect damages. The provisions of this
Section 10(E) shall survive Closing or earlier termination of this Agreement.
(F) As security for Seller's obligations, if any, during the
Representation Survival Period, at the Closing Seller and the Joint Ventures
shall either (i) deposit in an account designated by the Escrowee an amount
equal to the Damage Cap in immediately available funds, or (ii) deliver to
Escrowee a Letter of Credit in a form reasonably acceptable to Purchaser in the
stated amount of the Damage Cap (such funds, together with any interest earned
thereon, net of investment costs, or such Letter of Credit, the "Post-Closing
Escrow Funds"). Such Post-Closing Escrow Funds shall be held by Escrowee
pursuant to the Escrow Instructions in the form attached hereto as Exhibit G
(the "Post-Closing Escrow Agreement") until the expiration of the Representation
Survival Period (unless, prior to the expiration of the Representation Survival
Period, a claim for such Post-Closing Escrow Funds is made by Purchaser, in
which event the Post-Closing Escrow Funds shall continue to be held in
accordance with the terms of the Post-Closing Escrow Agreement) and disbursed in
accordance with the terms of such Post-Closing Escrow Agreement.
11. SELLER AND THE JOINT VENTURES
(A) Seller shall act as agent for the Joint Ventures and their
respective Subsidiaries for all matters under or in connection with this
Agreement.
(B) Notwithstanding anything to the contrary contained in this
Agreement, each and every term and provision of this Agreement shall be
applicable to Seller and, subject to the execution of the Partnership Consents,
each of the Joint Ventures hereunder only to the extent such term or provision
applies to a Property or a Subsidiary set forth opposite such entity's name on
Schedule 1. For example, a Joint Venture will be liable to Purchaser hereunder
with respect to, and to the extent that, representations, warranties and
covenants hereunder are applicable to the Properties set forth opposite such
Joint Venture's name on Schedule 1, and Seller and the other Joint Ventures will
not be liable to Purchaser hereunder for breaches by such
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Joint Venture of such representations, warranties and covenants as they affect
such Joint Venture's Properties set forth opposite such Joint Venture's name on
Schedule 1. Similarly, Seller and the Joint Ventures shall have rights in and to
this Agreement and against Purchaser only to the extent that such rights are
applicable to a Property or a Subsidiary set forth opposite such entity's name
on Schedule 1, including, without limitation, the Allocated Purchase Price for
such Property.
12. INTENTIONALLY OMITTED
13. MISCELLANEOUS
(A) Access:
(i) From the date of this Agreement through Closing (or
earlier termination hereof, if applicable), provided Purchaser shall have
obtained Purchaser's Liability Insurance (defined below), Purchaser and any of
its agents, employees or contractors (collectively, "Purchaser's
Representatives") shall have the right to enter upon the Properties, subject to
the rights of tenants under their Leases and applicable law, without material
interruption of Seller's, any Joint Venture's or any tenant's management of any
Property or any tenant's use of its premises or any Property, to enter upon any
Property (i) for the purpose of updating surveys, inspections, engineering
studies, environmental assessments and any other tests, examinations or studies
which Purchaser may reasonably deem necessary and (ii) to inspect the Property
and all books, records and accounts relating to the operation thereof
(collectively, clauses (i) and (ii), "Investigations"). Purchaser shall be
solely responsible for all of the costs and expenses of any Investigations and
shall conduct such Investigations in good faith and with due diligence.
Notwithstanding the foregoing, Seller's and/or the applicable Joint Venture's
prior written consent shall be required for any Investigations which involve
invasive or destructive testing of any Property (or any portion thereof and
including, without limitation, any boring of such Property in connection with an
environmental audit or otherwise) or any alteration of such Property (or any
portion thereof). In the event Seller and/or the applicable Joint Venture does
provide its consent to any such invasive testing or alteration, Purchaser shall
promptly restore the Property with respect to which same was performed
substantially to its condition immediately prior to, as applicable, such test or
alteration. Prior to any entry upon any Property, Purchaser shall provide Seller
or the applicable Joint Venture with evidence that applicable contractors have
named Seller or the applicable Joint Venture as an additional insured to their
respective insurance policies, which insurance policies must be approved by
Seller or the applicable Joint Venture in its reasonable discretion. Purchaser
shall (i) fully comply with all laws, rules and regulations applicable to the
Property and/or the Investigations and all other activities undertaken in
connection therewith, (ii) not unreasonably interfere with the use, occupancy,
management, maintenance or operation of any Property (or any portion thereof) by
Seller, the applicable Joint Venture or Subsidiary or any tenants (or any of
their respective agents, representatives, guests, invitees, contractors, or
employees), and (iii) permit Seller or the applicable Joint Venture or
Subsidiary to have a representative present during all Investigations undertaken
hereunder. Purchaser hereby agrees to indemnify, defend and hold harmless
Seller, the applicable Joint Venture, the applicable Subsidiary and their
affiliates, any direct or indirect partner, member, trustee, beneficiary,
director, shareholder, controlling person, affiliate, officer, attorney,
employee, agent, contractor, tenant, representative or broker of any of the
foregoing,
- 44 -
and any of their respective heirs, successors, personal representatives,
devisees, donees and assigns (collectively, "Released Parties"; each
individually, a "Released Party") from and against any and all loss, cost,
expense, damage, claim and liability (including, without limitation, reasonable
attorneys' fees and disbursements), suffered or incurred by Seller or any other
Released Party and arising out of or in connection with (i) Purchaser's and/or
Purchaser's Representatives' entry upon any Property, (ii) any Investigations
and other activities conducted on any Property by Purchaser or Purchaser's
Representatives, and (iii) any liens or encumbrances filed or recorded against
any Property as a consequence of any and all Investigations and other activities
undertaken by Purchaser or Purchaser's Representatives; provided, however,
Purchaser shall not indemnify, defend or hold harmless Seller against any loss,
cost, expense, damage, claim or liability caused by Seller's gross negligence or
willful misconduct, or loss, cost, expense, damage, claim or liability arising
out of conditions that were present before Purchaser entered any of the
Properties, except to the extent that Purchaser's negligence or willful
misconduct exacerbate such existing conditions. Purchaser shall procure, prior
to entry upon any Property, and maintain for at least one (1) year after the
date hereof commercial general liability insurance covering Purchaser, Seller,
the Joint Ventures, the Subsidiaries and the Properties on an occurrence, as
opposed to claims made, basis and providing for a combined single limit for
bodily injury and property damage of not less than Five Million and 00/100
($5,000,000) per occurrence issued by companies and in form and substance
reasonably satisfactory to Seller and the Joint Ventures ("Purchaser's Liability
Insurance"). From the date of this Agreement through Closing, Seller and the
Joint Ventures shall make all of Seller's, the Joint Ventures' and their
respective Subsidiaries' books, files and records relating to any Property
available for examination by Purchaser or Purchaser's Representatives, at
Seller's offices in Cambridge, MA; provided, however, that such documentation
shall not include any employee medical records or any other employee records
reasonably determined by Seller and the Joint Ventures to be of a confidential
nature.
(ii) Purchaser shall give Seller and the Joint Ventures, as
applicable, reasonable prior notice of each entry onto any Property, which
notice shall include sufficient information to permit Seller or such Joint
Venture to review the scope of the proposed Investigation. Purchaser shall fully
comply with all laws, rules and regulations applicable to the Investigation and
all other activities undertaken in connection therewith and shall permit Seller
to have a representative present during all Investigations undertaken hereunder.
(iii) Any entry upon any Property and all Investigations shall
be at the sole risk and expense of Purchaser and Purchaser's Representatives,
and shall not unreasonably interfere with the activities on or about the
Property of Seller, the Joint Ventures, their respective Subsidiaries, their
respective tenants and their respective invitees.
(B) Purchaser's Acknowledgement /Due Diligence Date: Purchaser
shall have until 5:00 p.m. EST on April 29, 2005 (the "Due Diligence Date") to
perform, subject to Section 13(A) above, any physical and non-physical due
diligence on the Properties including reviewing any materials delivered and/or
made available to Purchaser and/or Purchaser's Representatives prior to the date
hereof (including, without limitation, the Reports and those items contained in
that certain data room website located at
https://extranet.piperrudnick.com/eRoom/lyme/LymeeRoom1) (collectively, the "Due
Diligence Materials") with respect to the Properties. If Purchaser determines in
its sole and absolute
- 45 -
discretion that Purchaser desires to terminate this Agreement, for any reason or
no reason, on or prior to the Due Diligence Date, then Purchaser may terminate
this Agreement by delivering a written notice (a "Purchaser's Termination
Notice") to Seller and the Joint Ventures promptly upon making such
determination and, in any event, not later than 5:00 p.m. EST on the Due
Diligence Date. If Purchaser terminates this Agreement pursuant to this Section,
this Agreement shall become null and void and no party shall have any further
rights or obligations under this Agreement, except for the return of the Earnest
Money to Purchaser and the provisions that are expressly stated to survive the
termination of this Agreement; provided that Purchaser shall promptly deliver to
Seller a copy of any updated diligence reports or materials that may be
generated in connection with Purchaser's due diligence (other than materials
subject to attorney-client privilege). If Purchaser does not elect to terminate
this Agreement (including by not delivering the Purchaser's Termination Notice
within the required time period) in accordance with this Section 13(B),
Purchaser shall be deemed to have approved all physical and non-physical due
diligence investigation of the Properties. Any new conditions or information
either (i) discovered as a result of the due diligence performed by Purchaser on
and prior to the Due Diligence Date or (ii) disclosed by Seller or any Joint
Venture to Purchaser in writing on or before the date that is five (5) days
prior to the Due Diligence Date shall automatically be deemed to update the
applicable Schedules attached hereto and modify the applicable representations
and warranties made by Seller and the Joint Ventures herein to reflect such new
conditions or information. TIME IS OF THE ESSENCE WITH RESPECT TO THE DATES AND
TIME PERIODS SET FORTH IN THIS SECTION 13(B).
(C) No Assignment: Except pursuant to Section 13(L), neither this
Agreement nor any interest hereunder shall be assigned or transferred by Seller,
the Joint Ventures or Purchaser; provided, however, Purchaser may designate one
or multiple entities that are wholly-owned and controlled by Purchaser to take
title to one or more of the Properties and to execute the Assumption Documents
and Instruments, where applicable and consistent with Section 8(A). For purposes
of clarity, Purchaser shall have the right to assign its right to take title to
one or more Properties under this Agreement to one or more separate entities
that are wholly-owned and controlled by Purchaser solely for the purposes of
such entity taking title at Closing and executing the Assumption Documents and
Instruments, where applicable and consistent with Section 8(A), but the
Purchaser named herein (i.e., BioMed Realty, L.P.) shall not be released
hereunder and shall continue to be liable for all covenants and obligations of
"Purchaser" hereunder and shall execute and deliver at Closing any required
instruments and documents that "Purchaser" (as opposed to the single purpose
entities, pursuant to Section 8(A)) is required to deliver hereunder (including,
without limitation, the applicable Assumption Documents and Instruments to be
executed by "Purchaser" and the Assumed Loan Indemnities). As used in this
Agreement, the term "Purchaser" shall be deemed to include the initial Purchaser
and any permitted designee of the initial Purchaser and all such Purchaser
entities shall be jointly and severally liable under this Agreement. Subject to
the foregoing, this Agreement shall inure to the benefit of and shall be binding
upon Seller, the Joint Ventures and Purchaser and their respective successors
and assigns.
(D) Entire Agreement; Severability: This Agreement constitutes the
entire agreement between Seller, the Joint Ventures and Purchaser with respect
to the Properties and shall not be modified or amended except in a written
document signed by Seller and Purchaser and ratified by the Joint Ventures. Any
prior agreement or understanding between Seller, the
- 46 -
Joint Ventures and Purchaser concerning the Properties is hereby rendered null
and void. The provisions of this Agreement are severable, and if any provision
or part hereof or the application thereof to any person or circumstance shall
ever be held by any court of competent jurisdiction to be invalid or
unconstitutional for any reason, the remainder of this Agreement and the
application of such provision or part hereof to other persons or circumstances
shall not be affected thereby, unless the invalidation of such provision or its
application materially interferes with the intent of the parties hereto.
(E) Timing: Except with respect to the Closing Date (for which
there are express adjournments set forth herein), time is of the essence of this
Agreement. In the computation of any period of time provided for in this
Agreement or by law, the day of the act or event from which the period of time
runs shall be excluded, and the last day of such period shall be included,
unless it is a Saturday, Sunday, or legal holiday, in which case the period
shall be deemed to run until the end of the next day which is not a Saturday,
Sunday, or legal holiday.
(F) Notices: All notices, requests, demands or other
communications required or permitted under this Agreement shall be in writing
and delivered personally or by certified mail, return receipt requested, postage
prepaid, or by Federal Express or Airborne Express, or by facsimile
transmission, evidenced by confirmed receipt and concurrently followed by a
"hard" copy of same delivered to the party by one of the other methods described
above addressed as follows:
1. If to Seller:
c/o Lyme Properties LLC
23 South Main Street, 3rd Floor
Hanover, New Hampshire 03755
Attention: George Lightbody
Phone: (603) 643-3300 ext. 130
Telecopier: (603) 643-0331
With a copies to:
c/o Lyme Properties LLC
23 South Main Street, 3rd Floor
Hanover, New Hampshire 03755
Attention: David Clem
Phone: (603) 643-3300 ext. 130
Telecopier: (603) 643-0331
c/o The Lyme Timber Company
16 On the Common
P.O. Box 266
Lyme, New Hampshire 03768
Attention: David Roby
Phone: (603) 795-2129
Telecopier: (603) 795-4789
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and
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Attention: Eugene A. Pinover, Esq.
Phone: (212) 728-8000
Telecopier: (212) 728-8111
2. If to the Joint Ventures:
c/o Lyme Properties LLC
23 South Main Street, 3rd Floor
Hanover, New Hampshire 03755
Attention: George Lightbody
Phone: (603) 643-3300 ext. 130
Telecopier: (603) 643-0331
With copies to:
c/o Lyme Properties LLC
23 South Main Street, 3rd Floor
Hanover, New Hampshire 03755
Attention: David Clem
Phone: (603) 643-3300 ext. 130
Telecopier: (603) 643-0331
c/o The Lyme Timber Company
16 On the Common
P.O. Box 266
Lyme, New Hampshire 03768
Attention: David Roby
Phone: (603) 795-2129
Telecopier: (603) 795-4789
and
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Attention: Eugene A. Pinover, Esq.
Phone: (212) 728-8000
Telecopier: (212) 728-8111
3. If to Purchaser:
17140 Bernardo Center Drive
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Suite 222
San Diego, California 92128
Attention: General Counsel
Phone: (858) 485-9840
Telecopier: (858) 485-9843
with a copy to:
Latham & Watkins LLP
600 West Broadway, Suite 1800
San Diego, CA 92101-3375
Attention: Steven Levine, Esq.
Phone: (619) 236-1234
Telecopier: (619) 696-7419
Notice deposited in the mail in the manner hereinabove described shall be
effective upon receipt or refusal of delivery. Each party hereto may change the
address for receiving notices, requests, demands or other communication by
notice sent in accordance with the terms of this Section.
(G) Governing Law: This Agreement shall be governed and
interpreted in accordance with the laws of the State of Massachusetts, without
giving effect to the conflicts of laws principles thereof, except to the extent
the law of the State where the Property is located governs the transfer of the
Properties. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. Any legal action or proceeding with respect to this
Agreement or any of the transactions contemplated herein may be brought in the
courts of the State of Massachusetts located in the County of Middlesex or of
the United States of America for the District of Massachusetts, and, by
execution and delivery of this Agreement, each of the parties hereto hereby
accepts generally and unconditionally, the exclusive jurisdiction of the
aforesaid courts. Each of the parties hereto hereby irrevocably waives, in
connection with any such action or proceeding, any objection, including, without
limitation, any objection to the laying of venue or based on the grounds of
forum non conveniens, which it may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(H) Counterparts: This Agreement may be executed by original or
facsimile in any number of identical counterparts, any or all of which may
contain the signatures of fewer than all of the parties but all of which shall
be taken together as a single instrument.
(I) No Offer: This Agreement does not constitute an offer to sell
or an offer to buy and shall not bind Seller, the Joint Ventures or Purchaser
unless and until each such party elects to be bound hereby by executing and
delivering to the other party an executed original counterpart hereof and the
Escrowee receives the first deposit of the Earnest Money.
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(J) Confidentiality: Notwithstanding anything herein to the
contrary, Purchaser confirms and ratifies all of its obligations set forth in
the confidentiality agreement executed by it (the "Confidentiality Agreement"),
an executed copy of which is attached hereto as Exhibit H, and such obligations
are incorporated herein. Purchaser and any of Purchaser's Representatives that
engage in any due diligence activities for or on behalf of Purchaser in
connection with this Agreement shall each agree to be bound by the provisions of
such Confidentiality Agreement as if each such party was an original signatory
thereto, and such parties will be deemed subject to the provisions of such
Confidentiality Agreement for purposes of this Agreement. Purchaser confirms
that Seller and the Joint Ventures are the intended beneficiaries of such
Confidentiality Agreement and Seller and the Joint Ventures have the right to
enforce any provision contained therein. Purchaser, Seller and the Joint
Ventures shall not make any press releases relating to this Agreement or any
public announcement with respect to the purchase and sale of the Properties,
except as may be required by applicable law or to enforce such parties' legal or
equitable rights under this Agreement, without the prior written consent of the
other party hereto, which consent may be granted or denied in its sole
discretion; provided, however, that nothing in this section shall prevent any of
Purchaser, Seller or any Joint Venture from disclosing any information to such
party's partners, affiliates, officers, directors, attorneys, accountants,
brokers, lenders, investment bankers or financial consultants, which disclosure
is reasonably necessary in order to consummate the transactions contemplated
hereby.
(K) Knowledge: For purposes of this Agreement, "knowledge" with
respect to Seller and the Joint Ventures shall mean matters as to which David M.
Roby, David Clem and Robert Green have actual knowledge without any duty or
responsibilities to make any inquiry, review or investigation.
(L) 1031 Transaction: Notwithstanding anything to the contrary set
forth herein, Seller and the Joint Ventures, as applicable, may take such steps
as Seller or such Joint Venture shall deem necessary or desirable to qualify the
sale of each Property (or any portion thereof) under Section 1031 of the Code (a
"1031 Transaction"), including the use of, and/or assignment of this Agreement
to, a "qualified intermediary" within the meaning of Treas. Regs. Section
1.1031(k)-(g)(4), or the use of any other multiparty arrangement described in
Treas. Regs. Section 1.1031(k)-1(g). Purchaser shall cooperate (which
cooperation shall be at Seller's or such Joint Venture's expense) in so
structuring a 1031 Transaction, if so desired by Seller or such Joint Venture;
provided that such structuring shall not affect Purchaser's rights hereunder
except to a de minimis extent. Notwithstanding anything to the contrary
contained herein, in no event shall Purchaser be required to accept title to any
property other than the Properties in connection with any such 1031 Transaction.
Seller and the Joint Ventures agree to indemnify Purchaser from and against all
losses resulting from any claim made against Purchaser in connection with such
1031 Transaction. Notwithstanding anything to the contrary set forth herein,
Purchaser may take such steps as Purchaser shall deem necessary or desirable to
qualify the purchase of each Property (or any portion thereof) as a 1031
Transaction. Seller and the Joint Ventures, as applicable, shall cooperate
(which cooperation shall be at Purchaser's expense) in so structuring a 1031
Transaction, if so desired by Purchaser; provided that such structuring shall
not affect Seller's or such Joint Venture's rights hereunder except to a de
minimis extent. Notwithstanding anything to the contrary contained herein, in no
event shall Seller or such Joint Venture be required to accept title to any
property in connection with any such 1031 Transaction. Purchaser agrees to
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indemnify Seller and the Joint Ventures from and against all losses resulting
from any claim made against Seller and the Joint Ventures in connection with
such 1031 Transaction.
(M) Intentionally Omitted
(N) Release by Purchaser: Without limiting any provision in this
Agreement, Purchaser, for itself and any of its successors and assigns and their
affiliates, hereby irrevocably and absolutely waives its right to recover from,
and forever releases and discharges, and covenants not to file or otherwise
pursue any legal action (whether based on contract, statutory rights, common law
or otherwise) against, any Released Party with respect to any and all suits,
actions, proceedings, investigations, demands, claims, liabilities, obligations,
fines, penalties, liens, judgments, losses, injuries, damages, settlement
expenses or costs of whatever kind or nature, whether direct or indirect, known
or unknown, contingent or otherwise (including any action or proceeding brought
or threatened or ordered by any governmental authority), including, without
limitation, attorneys' and experts' fees and expenses, and investigation and
remediation costs that may arise on account of or in any way be connected with
any Property or any portion thereof (collectively, "Claims"), including, without
limitation, the physical, environmental and structural condition of any Property
or any law or regulation applicable thereto, or any other matter relating to the
use, presence or discharge of Hazardous Materials on, under, in, above or about
any of the Properties. For purposes of this Agreement, the term "Hazardous
Materials" means any substance, chemical, compound, product, solid, gas, liquid,
waste, byproduct, pollutant, contaminant or other material that is hazardous,
toxic, ignitable, corrosive, carcinogenic or otherwise presents a risk of danger
to human, plant or animal life or the environment or that is defined, determined
or identified as such in any federal, state or local law, rule or regulation
(whether now existing or hereafter enacted or promulgated) and any judicial or
administrative order or judgment, in each case relating to the protection of
human health, safety and/or the environment, including, but not limited to, any
materials, wastes or substances that are included within the definition of (A)
"hazardous waste" in the federal Recourse Conservation and Recovery Act; (B)
"hazardous substances" in the federal Comprehensive Environmental Response,
Comprehension and Liability Act; (C) "pollutants" in the federal Clean Water
Act; (D) "toxic substances" in the federal Toxic Substances Control Act; (E)
"oil or hazardous materials" in the laws or regulations of any State, and (F)
any substance, material, waste, pollutant or contaminant listed or defined as
hazardous or toxic under any Environmental Law. The term "Environmental Laws"
includes without limitation the Resource Conservation and Recovery Act and the
Comprehensive Environmental Response Compensation and Liability Act and other
federal laws governing the environment as in effect on the date of this
Agreement, together with their implementing regulations, guidelines, rules or
orders as of the date of this Agreement, and all state, regional, county,
municipal and other local laws, regulations, ordinances, rules or orders that
are equivalent or similar to the federal laws recited above or that purport to
regulate Hazardous Materials.
(O) Survival: The provisions of the foregoing Sections 13(A)(i),
(C), (F), (G), (J), (K), (L) and (N) in this Section shall survive the Closing
or any termination of this Agreement.
(P) Regulation S-X: Seller shall, and shall request that its
accountants, assist Purchaser, at Purchaser's request and sole cost and expense
(which costs and expenses Purchaser
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covenants to pay promptly when due), by providing information relating to the
Properties and their operation that may be reasonably necessary for Purchaser to
produce the financial statements required under Rule 3-14 of regulation S-X of
the U.S. securities laws. Subject to Seller's obligations with respect to its
representations and warranties hereunder, Purchaser agrees to indemnify the
Released Parties and hold them harmless from and against any and all Claims
arising out of the preparation or use by Purchaser of any such information
provided by Seller or Seller's accountants pursuant to this Section 13(P) (but
excluding any Claims arising out of the mere discovery of information by
Purchaser).
14. INDEMNIFICATION PROCEDURES
(i) For purposes of this Section the term "Asserting Party"
shall mean the party against whom a Claim is asserted and who seeks
indemnification under this Agreement, and the term "Defending Party" shall mean
the party from whom indemnification is sought under this Agreement.
(ii) If a Claim is made against the Asserting Party which the
Asserting Party believes to be covered by the Defending Party's indemnification
obligation under this Agreement, the Asserting Party shall promptly notify the
Defending Party of the Claim and, in such notice, shall offer to the Defending
Party the opportunity to assume the defense of the Claim within ten (10)
business days after receipt of the notice (with counsel reasonably acceptable to
the Asserting Party). If the Defending Party timely elects to assume the defense
of the Claim, the Defending Party shall do so on behalf of both the Asserting
Party and the Defending Party, unless both the Asserting Party and the Defending
Party are named in the same litigation and representation of both of them by the
same counsel would be inappropriate.
(iii) If the Defending Party timely elects to assume the
defense of the Claim, the Defending Party shall have the right to settle the
Claim on any terms it considers reasonable as long as the settlement shall not
require the Asserting Party to render any performance or pay any consideration
without its consent and provides for an unconditional release from all liability
with respect to such Claim of the Asserting Party.
(iv) If the Defending Party fails timely to elect to assume
the defense of the Claim, or if the Defending Party timely elects to assume the
defense of the Claim but thereafter fails to defend the Claim with diligence and
continuity, the Asserting Party shall have the right, after giving prior written
notice to the Defending Party, to take over the defense of the Claim and to
settle the Claim on any terms it considers reasonable. Any such settlement shall
be valid as against the Defending Party.
(v) If the Defending Party assumes the defense of a Claim, the
Asserting Party may employ its own counsel but such employment shall be at the
sole expense of the Asserting Party. If the Defending Party assumes the defense
of a Claim but the same counsel may not represent both the Asserting Party and
the Defending Party, or if the Defending Party fails timely to assume the
defense of the Claim or, after having elected to assume the defense fails to
defend the Claim with diligence and continuity, the Asserting Party may employ
its own counsel and such employment shall be at the sole expense of the
Defending Party.
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(vi) Whether or not the Defending Party elects to assume the
defense of a Claim, the Defending Party shall cooperate with the Asserting Party
in the defense of the Claim. If the Defending Party elects to assume the defense
of a Claim, the Asserting Party will cooperate with the Defending Party in such
defense.
(vii) If the Asserting Party is obligated to pay amounts for
which it is entitled to be indemnified hereunder, then Defending Party shall be
obligated, unless such amounts shall be reimbursed to the Asserting Party within
ten (10) days of demand therefor, to pay interest on such amounts thereafter
until paid at a per annum rate equal to 2% above the rate announced as its
"prime rate" by Citibank, N.A. (or any successor bank thereto).
(viii) If the Asserting Party is obligated to perform repairs
or other work in connection with any Claims for which it is entitled to
indemnification hereunder then, except in the case of any emergency situation
which involves immediate threat of damage or injury to persons or property (as
to which no such notice shall be required to be given until the earliest
practicable opportunity), the Asserting Party shall give a written notice to
Defending Party setting forth the general nature of such repairs or other work
and, if the Defending Party fails to commence or, in the case of the foregoing
emergency situation assume the continuation of such repairs or other work within
ten (10) days after such written notice or, having commenced such repairs or
other work, fails to diligently prosecute such repairs or other work to
completion, then such Asserting Party shall be entitled to (and shall at all
times) perform such repair or other work in a manner which a reasonable and
prudent owner of buildings similar to the applicable Property located where such
Property is located would cause such work to be performed.
(ix) The provisions of this Section shall survive the Closing
or termination of this Agreement for so long as and be applicable to any
indemnity herein that survives the Closing or termination of this Agreement.
15. TABLE OF DEFINED TERMS
The terms set forth below are defined on the following pages of this
Agreement:
1031 Transaction................................ 50
200 Sidney Loan................................. 34
270 Albany...................................... 38
325 Vassar Street Loan.......................... 35
40 Erie Loan.................................... 34
Adjustment Point................................ 16
Agreement....................................... 1
AIG Assumed Loans............................... 34
AIG Checklist................................... 34
Albany.......................................... 38
Allocated Purchase Price........................ 3
AS-IS, WHERE IS AND WITH ALL FAULTS............. 29
Asserting Party................................. 52
Assigned Contracts.............................. 6
Assumed Loan Documents.......................... 9
Assumed Loan Indemnity.......................... 33
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Assumed Loan Releases........................... 33
Assumed Loans................................... 9
Assumption Documents and Instruments............ 33
Cash Balance.................................... 4
Cash Escrow Agreement........................... 43
CER............................................. 8
CER Counterparty................................ 8
CER Estoppels................................... 8
Claims.......................................... 51
Closing......................................... 13
Closing Date.................................... 13
Closing Month................................... 17
Code............................................ 5
Condemnation.................................... 24
Confidentiality Agreement....................... 50
costs of collection............................. 16
Credit Enhancement Documents.................... 33
Damage Cap...................................... 43
Dartmouth Consent............................... 36
Defending Party................................. 52
Discharged Loans................................ 35
Due Diligence Date.............................. 45
Due Diligence Materials......................... 45
Earnest Money................................... 3
Earnest Money Escrow Instructions............... 3
Environmental Defects........................... 27
Environmental Laws.............................. 51
Escrow Account.................................. 3
Escrowee........................................ 3, 43
Estoppel Certificate............................ 38
Excluded Property............................... 2
Genzyme Lease................................... 6
Genzyme Work.................................... 6
Genzyme Work Payment Request.................... 6
Goedecke........................................ 23
Governmental Authority.......................... 39
hard............................................ 47
Hazardous Materials............................. 51
hazardous substances............................ 51
hazardous waste................................. 51
Impositions..................................... 19
Improvements.................................... 2
Intellectual Property........................... 3
Investigations.................................. 44
Joint Ventures.................................. 1
Kendall Square A Loan........................... 35
Kendall Square D Loan........................... 34
knowledge....................................... 50
Land............................................ 2
Leases.......................................... 3
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Leasing Costs................................... 20
Lender Estoppels................................ 7
Letter of Credit................................ 3
List of Leases.................................. 25
Loan Consents................................... 33
Major Event..................................... 24
Material Violation.............................. 12
Material Violation Notice....................... 12
MIT............................................. 38
MIT Loan........................................ 35
Net Proceeds.................................... 24
Objection Cut Off Date.......................... 11
oil or hazardous materials...................... 51
Other Consents.................................. 37
Other Documents................................. 37
Partnership Consents............................ 36
Partnership Documents........................... 36
Permitted Exceptions............................ 8
Personal Property............................... 2
pollutants...................................... 51
Positive Status Letter.......................... 35
Post-Closing Escrow Funds....................... 43
Premises........................................ 2
prime rate...................................... 53
Properties...................................... 1
Property........................................ 1
Property Name................................... 2
Purchase Price.................................. 3
Purchaser....................................... 1, 46
Purchaser's Liability Insurance................. 45
Purchaser's Notice.............................. 10
Purchaser's REIT Entity......................... 5
Purchaser's Representatives..................... 44
Purchaser's Termination Notice.................. 46
qualified intermediary.......................... 50
Released Parties................................ 45
Released Party.................................. 45
Rents........................................... 16
Reports......................................... 27
Representation Survival Period.................. 28
Second Deposit.................................. 3
Seller.......................................... 1
Seller Lender Estoppel Certificate.............. 8
Seller Removal Obligations...................... 8
Seller Tenant Estoppel Certificate.............. 7
Seller's Response............................... 10
Service Contracts............................... 26
SPE............................................. 32
Subsidiaries.................................... 1
Subsidiary...................................... 1
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Survey.......................................... 10
Tenant Estoppels................................ 7
Third Party Consents............................ 39
Threshold Amount................................ 41
Title and Violations Cure Cap................... 11
Title Commitment................................ 10
Title Commitments............................... 10, 39
Title Insurer................................... 10
toxic substances................................ 51
Vertex.......................................... 7
16. TABLE OF EXHIBITS
The exhibits set forth below are attached to and hereby made a part
of this Agreement:
Exhibit Section(s)
- ------- ----------
A Form of Earnest Money Escrow 2(B)(i)
Instructions
B Form of Tenant Estoppel 3(H)(i)
C Form of Seller Tenant Estoppel 3(H)(i)
Certificate
D-1 Form of Deed - Massachusetts 5(B)(i)(a)
D-2 Form of Deed - New Hampshire 5(B)(i)(a)
E Form of Omnibus Bill of Sale and 5(B)(i)(b)
Assignment and Assumption of Leases,
Security Deposits, Assumed
Contracts, Personal Property, Other
Documents, and Other Property
F Form of FIRPTA Certificate 5(B)(i)(g)
G Form of Post-Closing Escrow Agreement 10(F)
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H Confidentiality Agreement 13(J)
I AIG Checklist 8(A)(iii)
17. TABLE OF SCHEDULES
The schedules set forth below are attached to and hereby made a part
of this Agreement:
Schedule Section
- --------- ------------------------------------
1 Description of Properties Recitals, 1, 1(A), 2(A), 7(A), 11(B)
1(A) Legal Description 1(A)
1(D)-1 Included Personal Property 1(D)
1(D)-2 Excluded Personal Property 1(D)
3(C) Approved Lease Amendments 3(C)
3(F)-1 Pre-Closing Construction and Repair Work 3(F)
3(F)-2 Post Closing Construction and Repair Work 3(F)
4(A)(ii) Other Permitted Exceptions 4(A)(ii)
4(B)(i) List of Title Commitments 4(B)(i)
4(B)(iii) List of Surveys 4(B)(iii)
5(C)(ii) Tax Certiorari 5(C)(ii)
7(A)(i) List of Leases 7(A)(i)
7(A)(ii) Actions, Proceedings and Investigations 4(F), 7(A)(ii), 7(A)(iii)
7(A)(iii) Notices of violations 7(A)(iii)
7(A)(iv) Insurance Coverage 3(G), 7(A)(iv)
7(A)(v) Service Contracts 7(A)(v)
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7(A)(x) List of Environmental and Engineering Reports 7(A)(iii), 7(A)(x), 7(C)(i)
7(A)(xi) Assumed Loan Documents 4(A)(viii), 7(A)(xi)
8(A)(ii) Credit Enhancement Documents 8(A)(ii)
8(F) Other Documents Requiring Consent 5(B)(i)(i), 8(F)
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
SELLER:
THE LYME TIMBER COMPANY
By: WOODLAND MANAGEMENT ASSOCIATES, LLC
its general partner
By: /s/ DAVID M. ROBY
----------------------
Name: David Roby
Title: Managing Member
PURCHASER:
BIOMED REALTY, L.P.
By: /s/ ALAN D. GOLD
-------------------------
Name: Alan D. Gold
Title: President and CEO
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