New England Portfolio
PURCHASE AND SALE AGREEMENT
by and between
MGI Properties and other entities,
Seller
and
BCIA Funding Corp.,
Purchaser
New England Portfolio
TABLE OF CONTENTS
ARTICLE 1. THE PROPERTIES................................................3
1.1 Properties....................................................3
1.2 Assumed Debt..................................................4
1.3 Prepayment of Existing Debt...................................5
1.4 Tenant Rights.................................................6
ARTICLE 2. THE PURCHASE PRICE; DEPOSIT...................................6
2.1 Purchase Price................................................6
2.2 Escrow........................................................7
2.3 Deposit.......................................................7
2.4 Allocation of Purchase Price..................................7
ARTICLE 3. THE CLOSING...................................................8
3.1 Closing Date..................................................8
ARTICLE 4. CLOSING CONDITIONS............................................8
4.1 Precondition to Purchaser's Obligations.......................8
4.2 Inspection Period; Due Diligence Materials and Termination....9
4.3 Title and Survey.............................................10
4.4 Precondition to Sellers'Obligations..........................11
4.5 Risk of Casualty Loss; Eminent Domain........................12
ARTICLE 5. ACTIONS PRIOR TO THE CLOSING.................................14
5.1 Access to Properties; Inspection Period......................14
5.2 Continuation of Operations...................................14
5.3 New Leases...................................................14
5.4 Service Contracts............................................15
5.5 Construction Contracts.......................................15
5.6 Insurance....................................................15
5.7 MGI Lease....................................................15
ARTICLE 6. CLOSING OBLIGATIONS..........................................16
6.1 Sellers'Deliverables.........................................16
6.2 Purchaser's Deliverables.....................................17
ARTICLE 7. MATTERS TO WHICH THE SALE IS SUBJECT.........................18
7.1 Condition of Title...........................................18
7.2 Application of Purchase Price to Liens.......................19
(i)
ARTICLE 8. REPRESENTATIONS AND WARRANTIES...............................19
8.1 Purchaser's Knowledge........................................19
8.2 Seller's Representations.....................................20
8.3 Knowledge....................................................22
8.4 Survival.....................................................22
8.5 Purchaser's Representations..................................23
8.6 Complete Agreement...........................................24
ARTICLE 9. ENVIRONMENTAL MATTERS........................................24
9.1 Hazardous Substances.........................................24
9.2 Survival.....................................................25
ARTICLE 10. CLOSING ADJUSTMENTS AND OBLIGATIONS..........................25
10.1 Prorations...................................................25
10.2 Reconciliations..............................................29
10.3 Survival.....................................................29
ARTICLE 11. EXTENSION; TERMINATION.......................................29
11.1 Extension to Satisfy Conditions..............................29
11.2 Failure to Satisfy Closing Conditions........................30
11.3 Return of Materials..........................................30
ARTICLE 12. DEFAULTS.....................................................31
12.1 Purchaser's Default..........................................31
12.2 Sellers'Default..............................................32
ARTICLE 13. BROKERS......................................................32
13.1 No Brokers...................................................32
ARTICLE 14. NOTICES......................................................32
14.1 Notices......................................................32
ARTICLE 15. MISCELLANEOUS................................................34
15.1 Amendments...................................................34
15.2 Governing Law; Waiver of Trial By Jury.......................34
15.3 Limitations on Assignability.................................34
15.4 Waivers......................................................34
15.5 Exhibits.....................................................34
15.6 Section Headings.............................................35
15.7 Recording and Binding Effect.................................35
15.8 Counterparts.................................................35
(ii)
15.9 Relationship of Parties......................................35
15.10 Business Day.................................................35
15.11 Time of the Essence..........................................35
15.12..............................................................36
15.13 Survival.....................................................36
15.14 Limitation of Liability......................................36
SCHEDULE 1
Identity of Sellers.................................................39
EXHIBIT A-1 through A-53
Legal Description of the Properties.................................40
EXHIBIT B
Schedule of Existing Debt..........................................41
EXHIBIT C
List of Purchase Rights............................................42
EXHIBIT D
Form of Tenant Estoppel............................................43
EXHIBIT E
List of Leases, Security Deposits and Letters of Credit............44
EXHIBIT F
Document Room Inventory List.......................................45
EXHIBIT G
Right of Entry Agreement...........................................46
EXHIBIT H
Schedule of Service Contracts......................................47
EXHIBIT I
Form of ▇▇▇▇ of Sale...............................................48
EXHIBIT J
Form of Assignment and Assumption of Leases........................49
EXHIBIT K
List of Existing Litigation........................................50
(iii)
EXHIBIT L
Schedule of New Leasing Cost Allocations...........................51
EXHIBIT M
Form of Assignment of Contracts....................................52
EXHIBIT N
List of Personal Property..........................................53
EXHIBIT O
Schedule of Purchase Price Allocations.............................54
EXHIBIT P
List of Brokerage Agreements.......................................55
EXHIBIT Q
List of Eminent Domain Matters.....................................56
EXHIBIT R
Schedule of Construction Contracts.................................57
EXHIBIT S
Escrow Agreement...................................................58
EXHIBIT T
Outstanding MGI Construction Obligations to Tenants................59
(iv)
New England Portfolio
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of this 12th day of March, 1999, by and
among MGI Properties, a trust organized and existing under the laws of the
Commonwealth of Massachusetts ("MGI"), for itself and as agent for each of the
entities more particularly described on Schedule 1 attached hereto (MGI and each
such entity are collectively, the "Sellers") each having an address at c/o MGI
Properties, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and BCIA Funding
Corp., a Massachusetts corporation, having an address c/o Boston Capital
Institutional Advisors, L.L.C., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Purchaser"). References herein to "Seller" shall, when
used in the context of representations and warranties, covenants and conveyance
obligations, mean MGI and that particular entity which owns a particular
Property, jointly and severally.
PRELIMINARY STATEMENT
I. Sellers own certain improved property listed below, as more
particularly described in Exhibits A-1 through A-53 hereto:
URBAN OFFICE PORTFOLIO (Exhibits A-1 through A-6)
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▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
Ten Winthrop Square, Boston, MA
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
Two Portland Square, Portland, ME
Portland Square Parking, Portland, ME
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
SUBURBAN OFFICE PORTFOLIO (Exhibits A-7 through A-19)
-------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
Point ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇ Portfolio
FLEX PORTFOLIO (Exhibits A-20 through A-33)
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▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇
BOSTON AREA PARKS PORTFOLIO (Exhibits A-34 through A-42)
---------------------------
One Andover Tech Center, Andover, MA
Two Andover Tech Center, Andover, MA
Four Andover Tech Center, Andover, MA
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
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New England Portfolio
OFFICE/R&D PORTFOLIO (Exhibits A-43 through A-53)
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▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
Five Federal Street, Billerica, MA
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
1925 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ("▇▇▇▇ Andover")
Two ▇▇▇▇▇▇▇ Road, Westford, MA
II. As of the date of this Agreement, certain of the Properties are
encumbered by certain mortgage debt which may be assumed by Purchaser pursuant
to the terms of this Agreement.
III. Sellers desire to sell to Purchaser, and Purchaser desires to
purchase from Sellers, the Properties (defined below) upon and subject to the
terms and conditions set forth in this Agreement.
ARTICLE I. THE PROPERTIES
--------------
1.1 Properties. For good and valuable consideration, Sellers hereby agree
to sell to Purchaser, and Purchaser hereby agrees to purchase from Sellers, at
the price and upon the terms and conditions set forth in this Agreement:
(a) All Sellers' right, title and interest in and to the land more
particularly described in Exhibits A-1 through A-53 hereto, together with all
rights and easements appurtenant thereto (the "Land");
(b) All Sellers' right, title and interest in and to the buildings and
other permanent improvements situated on the Land (the "Buildings"); and
3
(c) All Sellers' right, title and interest in and to all tangible and
intangible personal property of every kind and nature now or hereafter
installed, located, attached or used in connection with the operation of the
Land and Buildings, including, without limitation, the items of tangible
personal property described on Exhibit N attached hereto (the "Personal
Property"); provided, however, that in no event shall Personal Property include
any of the furniture, equipment, artwork or other personal property of MGI
located at the Property known as ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.
The Land, the Buildings and the Personal Property are hereinafter collectively
referred to as the "Properties".
1.2 Assumed Debt.
(a) Certain of the Properties are subject to mortgage liens which
secure existing indebtedness of Sellers more particularly described in Exhibit B
hereto ("Existing Debt"). Each holder of the Existing Debt shall hereinafter be
referred to as a "Lender" and collectively, as the "Lenders." Subject to the
provisions of subsection (c) below, it is a condition of Purchaser's obligations
hereunder that all of the Existing Debt with the exception of the Existing Debt
secured by the Property located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ (the
Property located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ shall be referred to as the "Andover
Street Property" and the Existing Debt which is secured by the Andover Street
Property shall be referred to as the "Andover Street Debt") will be prepaid at
the time of Closing (as defined in Section 3.1) and that Purchaser will acquire
the Properties subject to the Andover Street Debt and any liens securing such
debt, but free and clear of all other Existing Debt and the liens securing such
other Existing Debt.
(b) During the Inspection Period, the parties shall cooperate in good
faith and with reasonable diligence to obtain the approval of the holder of the
Andover Street Debt (the "Andover Lender") to (i) the conveyance of the Andover
Street Property to Purchaser subject to the Andover Street Debt and (ii) the
assumption of the Andover Street Debt by Purchaser on terms and conditions
substantially the same as those set forth in the documents which evidence and
secure the Andover Street Debt (the "Required Consent"). Purchaser acknowledges
that the initial communications with the Andover Lender or any other Lender
shall be through Sellers and Purchaser shall not initially directly contact or
communicate with any Lender without the prior written consent of Sellers.
Purchaser shall promptly provide Sellers and the Andover Lender with all
information reasonably requested by the Andover Lender in order to facilitate
obtaining the Required Consent and shall comply with all commercially reasonable
conditions precedent to the effectiveness of the Required Consent, including,
without limitation, assuming any obligations of Sellers which are non-recourse
carve-outs identical in all material respects to those obligations guaranteed by
Sellers (e.g. environmental indemnities, losses due to fraud or willful or
wanton acts or misconduct) and satisfying any commercially reasonable financial
or net worth requirements
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New England Portfolio
of the Andover Lender required to secure such obligations In any event,
Purchaser shall not be obligated to acquire the Andover Street Property subject
to the Andover Street Debt unless the terms and conditions of the Required
Consent are commercially reasonable. In no event shall any condition which
requires Purchaser to undertake any recourse obligation which is greater in
scope from the recourse obligations originally undertaken by the Seller or MGI
under the Andover Street Debt (and the loan documents evidencing and securing
such debt) or which increases the interest rate, the regular monthly
installments of debt service, the scope of the escrow requirements or the
prepayment premium or decreases the term or the period in which the loan may be
prepaid or otherwise changes in any materially adverse respect the default
provisions or the borrower's obligations under the documents evidencing or
securing the Andover Street Debt be deemed commercially reasonable. Provided
that the Required Consent is obtained, Purchaser shall assume the Andover Street
Debt which shall hereafter be referred to as "Assumed Debt" and Seller shall pay
at Closing any assumption fees which may be due and all other charges imposed by
the Andover Lender in connection with the granting of the Required Consent.
(c) Notwithstanding anything herein to the contrary, if the Required
Consent is not obtained by the Closing Date, the parties shall close on all of
the Properties other than the Andover Street Property, subject to all of the
other terms and conditions of this Agreement, except that the Purchase Price
shall be reduced by the Allocable Purchase Price (as defined in Section 2.4) of
the Andover Street Property as set forth in Exhibit O and a portion of the
Deposit equal to 3.65% of the Allocable Purchase Price of the Andover Street
Property shall be retained by Escrow Agent to bind Purchaser's obligations to
purchase the Andover Street Property as hereinafter set forth in this
subsection. If within the sixty (60) day period following the Closing, the
Required Consent is obtained, Sellers shall sell and Purchaser shall acquire the
Andover Street Property for a purchase price equal to the Allocable Purchase
Price of the Andover Street Property and otherwise on the terms and conditions
set forth in this Agreement. The closing of the Andover Street Property shall
occur ten (10) days after the Required Consent is obtained. If within such sixty
(60) day period, the Required Consent is not obtained, then that portion of the
Deposit allocable to the Andover Street Property shall be returned to Purchaser
and all obligations of the parties hereto with respect to the Andover Street
Property shall cease and this Agreement with respect to the Andover Street
Property shall be void and without recourse to the parties (except those
provisions which are expressly intended to survive such termination).
1.3. Prepayment of Existing Debt. In connection with the Existing Debt
to be prepaid at the time of Closing, the Purchaser shall reimburse Sellers for
all prepayment premiums or prepayment penalties incurred by the Sellers in
connection with the prepayment of all of the Existing Debt other than the
Assumed Debt (collectively, the "Prepayment Charges") consistent with the terms
of the prepayment obligations set forth in the promissory notes evidencing such
Existing Debt, copies of which are attached hereto as Exhibit B-1 - B-6. Such
reimbursement shall be in the form of an adjustment at the Closing.
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New England Portfolio
The Sellers shall use diligent efforts to obtain from the applicable Lenders the
amount of the Prepayment Charges prior to the expiration of the Inspection
Period.
1.4 Tenant Rights. Attached hereto as Exhibit C is a list of tenants who
have rights to acquire a Property or Properties pursuant to their rights under
Leases or otherwise (collectively, the "Purchase Rights"). Sellers either have,
prior to the date of this Agreement, offered or shall, following the execution
of this Agreement, offer each such tenant the right to buy the Property or
Properties covered by the Purchase Right so as to enable Sellers to convey such
Property or Properties to Purchaser free and clear of the Purchase Right. The
form of any such offer made to such tenant or tenants after the execution of
this Agreement shall be subject to the prior written consent of Purchaser, such
consent not to be unreasonably withheld or delayed. Notwithstanding anything
herein to the contrary, if any tenant duly exercises its Purchase Right, Sellers
shall notify Purchaser of such fact within two (2) Business Days after receipt
of notice and thereupon the Property or Properties which are the subject of such
Purchase Right shall be eliminated from the transaction contemplated hereunder
and the Purchase Price shall be reduced by an amount equal to the Allocable
Purchase Price (defined below) for the Property or Properties so eliminated.
With respect to any Property or Properties subject to a Purchase Right not so
eliminated, each party agrees to waive any rights or claims it may have against
the other on account of (i) any claim brought by a tenant with respect to
Purchase Rights and/or (ii) Seller's inability, for any reason, to convey such
Property or Properties as a result of such a claim by a tenant.
ARTICLE 2. THE PURCHASE PRICE; DEPOSIT
---------------------------
2.1 Purchase Price. The purchase price (the "Purchase Price") shall be paid
by Purchaser to Sellers for the Properties in the amount of Four Hundred Ten
Million Dollars ($410,000,000), payable as follows:
(a) Ten Million Dollars ($10,000,000) (the "Initial Deposit") to be
paid on the date of this Agreement by a wire transfer of immediately
available federal funds to Fidelity National Title Insurance Company of New
York, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇/▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇▇
President as Escrow Agent (the "Escrow Agent");
(b) Five Million Dollars ($5,000,000) (the "Additional Deposit" and,
together with the Initial Deposit, the "Deposit") to be paid prior to the
expiration of the Inspection Period unless this Agreement is sooner
terminated in accordance with the terms of this Agreement, by a wire
transfer of immediately available federal funds to Escrow Agent;
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New England Portfolio
(c) Approximately Seven Million Eight Hundred Twenty-Seven Thousand
Seven Hundred Fifty-Nine Dollars ($7,827,759) by the assumption of the
Assumed Debt; and
(d) The balance of the Purchase Price, subject to adjustments as
herein provided, by a wire transfer of immediately available federal funds
to Seller at the Closing.
2.2 Escrow. Escrow Agent shall accept and hold the Deposit (including any
standby letters of credit) pursuant to the terms of a certain Escrow Agreement
in the form attached hereto as Exhibit S (the "Escrow Agreement") dated of even
date herewith to be executed contemporaneously with the execution of this
Agreement by and among Sellers, Purchaser and Escrow Agent.
2.3 Deposit. Subject to all terms, covenants, conditions and provisions of
the Escrow Agreement, and notwithstanding anything to the contrary contained in
this Agreement:
(a) If any provision of this Agreement requires Sellers to refund to
Purchaser the Deposit or other sums previously paid by Purchaser on account
of the Purchase Price, the Deposit shall be paid to Purchaser not later
than five (5) Business Days (as hereinafter defined) after Escrow Agent's
receipt of Purchaser's written demand therefor; and
(b) If any provision of this Agreement entitles Sellers to retain the
Deposit or any amount previously paid by Purchaser on account of the
Purchase Price, the Deposit shall be payable to Sellers not later than five
(5) Business Days after Escrow Agent's receipt of Sellers' written demand
therefor.
(c) In any event, Purchaser shall be entitled to all interest earned
on the Deposit which shall be payable by the Escrow Agent to the Purchaser
on a periodic basis during the term of this Agreement.
2.4. Allocation of Purchase Price. The parties agree that for all purposes
of this Agreement, the Purchase Price shall be deemed allocated among the
Properties in accordance with the schedule attached hereto as Exhibit O. That
portion of the Purchase Price allocated to each Property or Properties shall be
deemed the "Allocable Purchase Price" for such Property or Properties. The
parties agree that on the date of execution of this Agreement, Exhibit O shall
consist of the Allocable Purchase Prices for the Properties which are subject to
Purchase Rights. To the extent required for state transfer tax purposes or as
otherwise agreed by the parties, the Purchaser shall propose Allocable Purchase
Prices for each of the other Properties, subject to the consent of Sellers.
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New England Portfolio
ARTICLE 3. THE CLOSING
-----------
3.1 Closing Date. The delivery of the Deeds (as hereinafter defined) and
the payment of the balance of the Purchase Price by Purchaser to Sellers and the
compliance with the other closing obligations set forth in Article 6 (the
"Closing") shall be held in the offices of Sellers' attorneys, ▇▇▇▇▇▇▇, Procter
& ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. on June 1,
1999 (such date as it may be extended pursuant to the express terms hereof, the
"Closing Date") or such other place or earlier time as may be mutually agreeable
to the parties, time being of the essence on the part of the parties to perform
their obligations on said Closing Date.
ARTICLE 4. CLOSING CONDITIONS
------------------
4.1. Precondition to Purchaser's Obligations. Purchaser shall not be
obligated to purchase the Properties and pay the Purchase Price unless on the
Closing Date each of the following conditions has been satisfied in all material
respects or waived by Purchaser. Subject to the rights of the parties set forth
in Article 12, provided that all of the conditions listed below in this Article
4 for the benefit of Purchaser are satisfied as of the Closing Date, the Deposit
shall be non-refundable to Purchaser following the conclusion of the Inspection
Period.
(a) Representations and Warranties. The representations and warranties
made by Seller in this Agreement shall be true and correct in all material
respects on the Closing Date with the same effect as though such
representations and warranties had been made or given as of such date.
(b) Performance of Obligations. Seller shall have performed and
complied in all material respects with all of its obligations under this
Agreement which are to be performed or complied with by Seller prior to or
at the Closing.
(c) Condition of Properties. Subject to the provisions of Section 4.5
hereof, the Properties shall be in substantially the same condition on the
Closing Date as on the date of this Agreement, reasonable wear and tear
excepted.
(d) Estoppel Certificates. Purchaser shall have received by the
Closing Date estoppel certificates reasonably satisfactory to Purchaser
substantially in the form attached as Exhibit D and dated no earlier than
April 1, 1999 from (i) any tenant of a Property who has leased all of the
rentable square footage of the Building thereon and (ii) tenants generating
in the aggregate at least eighty percent (80%) of the rental income of
multi-tenanted Buildings of each of the Properties under the leases as
listed on Exhibit E (all of the leases referred to on Exhibit E shall be
the
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"Leases"). Notwithstanding the above, with respect to any multi-tenanted
Building, if Landlord has received estoppel certificates from tenants
generating in the aggregate at least sixty-five percent (65%) of the rental
income of such Building, Seller, at its option, may satisfy the eighty
percent (80%) requirement set forth in (ii) above for such Building by
delivering one or more estoppel certificate from Seller as to the matters
set forth in Exhibit D with respect to one or more of the remaining Leases
of such Building as are necessary to satisfy such requirement; provided
that Sellers certifications to Purchaser in such estoppel certificate shall
be deemed warranties and representations of Sellers hereunder which shall
survive only until the expiration of the Survival Period (as defined in
Section 8.4) and shall be subject to the limitation on the maximum amount
of liability set forth in Section 8.4. Any estoppel certificate from a
tenant delivered to Purchaser at least three (3) Business Days prior to the
end of the Inspection Period shall be deemed acceptable to Purchaser for
purposes of this condition if Purchaser fails to terminate this Agreement
in accordance with the terms of Section 4.2. After the end of the
Inspection Period, Purchaser shall have the right, at its sole cost and
expense, to (i) request updated estoppel certificates from tenants who
delivered an estoppel certificate prior to the end of the Inspection
Period, (ii) contact tenants who failed to deliver an estoppel certificate
prior to the end of the Inspection Period for the purpose of obtaining
estoppel certificates from such tenants, and (iii) request subordination,
non-disturbance and attornment agreements from tenants. Notwithstanding the
foregoing, neither receipt of any such requested updates nor receipt of any
subordination, non-disturbance and attornment agreements shall constitute a
closing condition.
(e) Intentionally Deleted.
(f) Title. Purchaser shall have received title to the Properties as
required by this Agreement.
4.2. Inspection Period; Due Diligence Materials and Termination.
(a) Inspection Period. Purchaser acknowledges that commencing prior to
the execution of this Agreement and continuing until 5:00 p.m. Boston time
on April 28, 1999 (the "Inspection Period"), Purchaser has conducted, and
shall continue to conduct, its reviews, inspections, and investigations of
the Properties and all information relating to the physical, legal,
economic and environmental condition of the Properties. During the
Inspection Period, Purchaser shall review and inspect all of the materials
referenced in the "Document Room Inventory List" attached hereto as Exhibit
F located at the offices of MGI (the "Due Diligence Materials") and shall
make such other reviews, inspections and investigations of the Properties
and all information relating to the physical, legal, economic and
environmental condition of
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the Properties as the Purchaser may in its sole discretion elect to make.
Purchaser's obligations hereunder shall be conditioned upon Purchaser
having approved in its sole and absolute discretion by the end of the
Inspection Period the results of its reviews, inspections, and
investigations of the Properties and all information relating to the
physical, legal, economic and environmental condition of the Properties.
Upon reasonable advance notice to Sellers and always affording Sellers the
opportunity to accompany Purchaser or Purchaser's representative, during
the Inspection Period, Purchaser shall have the right to interview tenants
of the Properties. Purchaser shall evidence approval or waiver of the
conditions set forth in this Section by (i) a written notice to Sellers
delivered prior to the expiration of the Inspection Period expressly
stating that Purchaser has unconditionally waived the condition set forth
in this Section 4.2(a) and (ii) the delivery prior to the expiration of the
Inspection Period of the Additional Deposit. Upon evidencing such approval
or waiver, this provision shall be deemed waived and of no further force
and effect.
(b) Termination of Agreement. If the conditions set forth in
subsection (a) above (items (i) and (ii)) for whatever reason have not been
satisfied by the end of the Inspection Period, this Agreement shall
terminate whereupon the Deposit shall be refunded to Purchaser and all
obligations of the parties hereto shall cease and this Agreement shall be
void and without recourse to the parties (except those provisions which are
expressly intended to survive such termination).
4.3 Title and Survey. Sellers have arranged with Fidelity National Title
Insurance Company of New York (the "Title Company') for the issuance of title
commitments by the Title Company for the benefit of Purchaser for each of the
Properties. In any event, Purchaser shall obtain (i) a complete updated ALTA
title commitment with such endorsements as Purchaser may elect for each of the
Properties dated no earlier than the date of this Agreement with respect to each
of the Properties (with copies of all instruments listed as exceptions to title)
from the Title Company or one or more nationally recognized title insurance
companies (each a "Title Commitment") and, at Purchaser's option, (ii) an ALTA
"as-built" instrument survey of each Property (each a "Survey"). Purchaser shall
have until the end of the Inspection Period to examine all of the Title
Commitments and Surveys. If Purchaser objects to any matters disclosed or which
should have been disclosed in any Title Commitment or Survey, Purchaser shall by
the end of the Inspection Period send one written notice to Sellers (the
"Adverse Matters Notice") specifying all objectionable title and survey matters
(any such objectionable title or survey matter, a "Title Objection"). All title
or survey matters existing as of the date of this Agreement (whether or not
disclosed in the Title Commitments or Surveys) not objected to in writing by
Purchaser in the Adverse Matters Notice to Sellers by the conclusion of the
Inspection Period shall be deemed to be "Permitted Encumbrances". Sellers shall
be obligated to cure any Title Objection or Title Objections which constitute
liens voluntarily created by Sellers to secure the payment of money (other than
liens evidencing or securing the Assumed Debt,
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which liens shall be deemed Permitted Encumbrances. With respect to all other
Title Objections, subject to Sellers' rights set forth below, Sellers shall use
reasonable efforts to cure such other Title Objections; provided that in no
event shall Sellers be obligated to expend more than Fifty Thousand Dollars
($50,000) in the aggregate to cure such other Title Objections with respect to
any one Property or Five Hundred Thousand Dollars ($500,000) in the aggregate to
cure such other Title Objections with respect to all of the Properties.
Notwithstanding the foregoing, with respect to any Title Objections which
Sellers are not obligated to cure as provided above and are not reasonably
susceptible to cure by the payment of money or are not reasonably susceptible to
cure through the expenditure of money within the dollar limits specified in the
immediately preceding sentence, Sellers may notify Purchaser in writing within
five (5) Business Days after the expiration of the Inspection Period (the "Title
Response") that Sellers do not intend to attempt to cure such Title Objections.
In such event, Seller shall have no obligation to cure the Title Objections
described in the Title Response and Purchaser shall have three (3) Business Days
after receipt of a Title Response to notify Seller that Purchaser elects to
waive such Title Objections. If Purchaser duly elects to waive such Title
Objections, such Title Objections shall be deemed Permitted Encumbrances. In the
event Purchaser fails to waive all Title Objections described in the Title
Response, this Agreement shall terminate whereupon the Deposit shall be refunded
to Purchaser and all obligations of the parties hereto shall cease and this
Agreement shall be void and without recourse to the parties (except those
provisions which are expressly intended to survive such termination). Title to
the Properties shall be delivered at Closing free and clear of all encumbrances,
including without limitation, all existing mortgages (other than liens
evidencing or securing the Assumed Debt, which liens shall be deemed Permitted
Encumbrances), except the Permitted Encumbrances and except as provided in
Section 7.1 hereof. Purchaser's failure to deliver an Adverse Matters Notice to
Sellers on or before the expiration of the Inspection Period shall be deemed
conclusively as Purchaser's confirmation of the absence of any Title Objections
respecting the Properties. Sellers' failure to deliver a Title Response with
respect to any Title Objections to Purchaser within the time period set forth
above shall be deemed Sellers' election to use reasonable efforts to cure such
Title Objections, in each case subject to the dollar limitations set forth
herein and the terms of Article 11.
4.4. Precondition to Sellers' Obligations. Sellers shall not be required to
sell the Properties unless on the Closing Date all of the following conditions
have been satisfied or waived in writing by Sellers.
(a) Representations and Warranties. The representations and warranties
by Purchaser in this Agreement shall be true and correct in all material
respects on the Closing Date with the same effect as though such
representations and warranties had been made or given as of such date;
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(b) Performance of Obligations. Purchaser shall have paid the balance
of the Purchase Price and shall have performed and complied in all material
respects with all of its obligations under this Agreement which are to be
performed or complied with by Purchaser prior to or at the Closing;
(c) Intentionally Deleted.
(d) Title Insurance. Sellers shall have obtained prior to the end of
the Inspection Period, at their expense, a title commitment from the Title
Company in form and substance reasonably satisfactory to Sellers
affirmatively insuring Sellers against any claim brought on account of the
Purchase Rights before or after the Closing. If this condition is not
timely satisfied, this Agreement shall terminate whereupon the Deposit
shall be refunded to Purchaser and all obligations of the parties hereto
shall cease and this Agreement shall be void and without recourse to the
parties (except those provisions which are expressly intended to survive
such termination).
(e) Approval of Purchaser's Diligence. Purchaser shall have delivered
both the notice to Seller waiving the conditions to Purchaser's obligations
set forth in Section 4.2(a) and the Additional Deposit in accordance with
the terms of this Agreement. If this condition is not timely satisfied,
this Agreement shall terminate whereupon the Deposit shall be refunded to
Purchaser and all obligations of the parties hereto shall cease and this
Agreement shall be void and without recourse to the parties (except those
provisions which are expressly intended to survive such termination).
(f) Board of Trustees Approval. Sellers shall have received within
five (5) Business Days after the date of execution and delivery of this
Agreement by both parties, the approval of the transactions contemplated by
this Agreement from MGI's Board of Trustees. Seller shall promptly notify
Purchaser in writing if and when this condition is satisfied. If this
condition is not satisfied, Seller shall promptly notify Purchaser, the
Deposit shall be refunded to Purchaser and all obligations of the parties
hereto shall cease and this Agreement shall be void and without recourse to
the parties hereto (except those provisions which are expressly intended to
survive such termination).
4.5 Risk of Casualty Loss; Eminent Domain.
(a) Risk of Casualty. If prior to the time of Closing, any part of the
Buildings are damaged by fire or other casualty, Sellers shall promptly
give written notice of such event to Purchaser. If (a) one or more of the
Properties is damaged by fire or other casualty (b) the cost of restoration
is less than One Million Dollars
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($1,000,000) per Property or Three Million Dollars ($3,000,000) in the
aggregate and (c) any Property which has been damaged is not restored prior
to Closing, so long as (i) the casualty is a fully insured loss under
Sellers' insurance policy (ii) Sellers assign to Purchaser (without
recourse to Sellers) all of Sellers' rights in any insurance proceeds,
including, without limitation, loss of rent insurance (less any amounts
expended or committed by Seller for any restoration), (iii) Sellers agree
to pay Purchaser the amount of any deductible under Sellers' applicable
insurance policy (the "Deductible Amount") and (iv) no Lease of all or a
substantial portion of a Building is reasonably susceptible to termination
by the tenant thereunder as a result of the inability of the landlord
thereunder to restore the premises within the time period permitted under
such Lease. Purchaser shall be required to accept conveyance of the
Properties, together with such assignment of all Seller's rights in any
insurance proceeds and a credit against the Purchase Price in an amount
equal to the Deductible Amount. If one or more of the Properties is damaged
by fire or other casualty and not restored prior to Closing and the
conditions set forth above are not applicable, Purchaser shall have the
option, exercisable by giving written notice to Seller on or before the
Closing to (a) take title to all of the Properties, in their condition
after such casualty together with an assignment (without recourse to
Sellers) of Sellers' rights in any insurance proceeds (less any amounts
expended or committed by Sellers for any restoration) without any reduction
in the Purchase Price other than the Deductible Amount as described above,
or (b) terminate this Agreement whereupon the Deposit shall be refunded to
Purchaser and all obligations of the parties hereto (other than those which
expressly survive termination) shall cease and this Agreement shall be void
and without recourse to the parties. Purchaser shall not expend or commit
any insurance proceeds received on account of a casualty which occurs after
the date of this Agreement for restoration without Purchaser's prior
approval, which approval shall not be unreasonably withheld or delayed.
(b) Eminent Domain. In the event any eminent domain proceeding not
disclosed in the Due Diligence Materials or known to Purchaser prior to the
end of the Inspection Period involving either (i) a total taking of one or
more Properties or (ii) a partial taking which reduces the fair market
value of any one Property by One Million Dollars ($1,000,000) or more or
all of the Properties by Three Million Dollars ($3,000,000) or more in the
aggregate shall be initiated or be pending prior to the Closing, then, at
Purchaser's election by written notice to Sellers prior to the Closing,
this Agreement shall be terminated whereupon the Deposit shall be refunded
to Purchaser and all obligations of the parties hereto (other than those
which expressly survive termination) shall cease and this Agreement shall
be void and without recourse to the parties. In the event of any eminent
domain proceeding not disclosed in the Due Diligence Materials or known to
Purchaser prior to the end of the Inspection Period which does not result
in the termination of this Agreement
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by Purchaser, this Agreement shall remain in full force and effect and the
rights and obligations of the parties hereto shall continue and Purchaser
shall take title to all of the Properties without any reduction of the
Purchase Price but with an assignment of Sellers' rights to recover any
eminent domain awards (less any amounts expended or committed by Sellers to
obtain the same).
ARTICLE 5. ACTIONS PRIOR TO THE CLOSING
----------------------------
5.1 Access to Properties; Inspection Period. Sellers shall give Purchaser
reasonable rights to enter the Properties during and after the Inspection Period
in accordance with the Right of Entry Agreement attached as Exhibit G, which
agreement shall be executed by the parties at the time of execution and delivery
of this Agreement. Following the Inspection Period, Purchaser shall have the
continuing right of inspection and review, but no right to terminate this
Agreement on the basis of such review.
5.2. Continuation of Operations. Sellers shall continue to operate and
maintain the Properties in a commercially reasonable manner consistent with the
operations at the time of the signing of this Agreement. Sellers make no
representations and assumes no responsibility with respect to continued
occupancy of any Building by any tenant or tenants now in possession. Sellers
shall maintain casualty insurance on the Properties through the Closing as
currently insured.
5.3. New Leases. Except as otherwise provided herein, Sellers agree not to
enter into any new leases or any amendments of or modifications to, the existing
Leases with respect to the Properties (each, a "New Lease") prior to the Closing
without the prior written consent of Purchaser, which consent shall not be
unreasonably withheld and which shall be deemed granted if Purchaser does not
respond within three (3) Business Days after delivery of any written request for
consent setting forth the business terms of the proposed lease, including, all
material information with respect to leasing commissions, tenant improvements to
be paid or performed by landlord, other tenant allowance items and any
information in Sellers' possession regarding the creditworthiness of the
proposed tenant. Sellers shall deliver to Purchaser a true and complete copy of
each such New Lease, if any, promptly after the execution and delivery thereof.
All such New Leases which have been consented to or deemed consented to by
Purchaser shall hereinafter be referred to as "Approved Leases". Notwithstanding
the above, each Seller may enter into any New Lease at any time prior to the
date three (3) Business Days before the expiration of the Inspection Period
(such date, the "Notice Date") without Purchaser's consent and such New Lease
shall be an Approved Lease, provided that on or before the Notice Date, Seller
delivers a fully executed copy of such New Lease to Purchaser together with the
information described above. Sellers agree to keep Purchaser generally informed
of any potential new leases and the status of all material lease negotiations.
Notwithstanding the above, the exercise of any
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existing renewal, expansion or extension option granted to a Tenant under a
Lease shall not be deemed a New Lease or subject to the provisions of this
Section and Purchaser shall accept the Properties subject to such Lease, as so
renewed, expanded or extended. Seller shall promptly notify Purchaser of the
exercise of any existing renewal, expansion or extension option by a Tenant.
5.4 Service Contracts. Unless otherwise instructed by Purchaser in writing
on or before the end of the Inspection Period, Sellers shall terminate all
service, equipment, supply, maintenance or concession agreements listed on the
attached Exhibit H and all brokerage agreements listed on Exhibit P
(collectively, "Service Contracts") between Sellers and any third party with
respect to each Property as of the Closing and shall not enter into any new
service contract, unless such contract is terminable by Sellers at the time of
Closing. Any Service Contracts which Purchaser requests Sellers not to terminate
and which by their terms are assignable shall be referred to as the "Assumed
Service Contracts."
5.5 Construction Contracts; Work in Progress. Prior to Closing, Sellers
shall continue to perform, and use good faith efforts to complete, the work in
progress and work scheduled to begin after the date of this Agreement and prior
to the Closing Date described in Exhibit R attached hereto and made a part
hereof to the extent such work is contemplated to be performed prior to the
Closing Date as set forth on Exhibit R. To the extent any work described in
Exhibit R is identified thereon as a "Seller's Expense" and is not paid for by
Sellers prior to Closing, Purchaser shall receive a credit at Closing equal to
the amount necessary to complete such work after the Closing and/or the balance
due under such contracts. To the extent any work described in Exhibit R is paid
for by Sellers prior to Closing, including, without limitation, work described
in Exhibit R as completed but not yet paid for as of the date of this Agreement,
and is identified on Exhibit R as a "Purchaser's Expense" Sellers shall be
reimbursed by Purchaser at Closing. At Closing, Seller shall assign and
Purchaser shall assume, pursuant to the Assignment of Contracts (defined below),
all of Sellers' obligations under the construction contracts listed in Exhibit R
for which the work has not yet been completed and paid in full and all
construction contracts for Approved Leases.
5.6 Insurance. Sellers shall maintain the property insurance currently in
effect for the Properties through the Closing Date, including full replacement
cost casualty insurance and loss of rent insurance for a period of up to twelve
(12) months.
5.7 MGI Lease. The parties agree to renegotiate the Lease of MGI's space in
the Property located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ within
twenty-one (21) days after the date of this Agreement upon reasonable, mutually
satisfactory terms, with due regard given to MGI's announced plan of liquidation
and its need for a flexible term.
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ARTICLE 6. CLOSING OBLIGATIONS
-------------------
6.1 Sellers' Deliverables. At the Closing, Sellers shall deliver the
following to Purchaser:
(a) Deeds in the forms of (i) statutory quitclaim deeds with respect
to Properties located in Massachusetts and New Hampshire, (ii) quitclaim
deeds with covenants with respect to Properties located in Maine and (iii)
limited warranty deeds with respect to Properties located in Connecticut
(collectively, the "Deeds") conveying good, record and marketable fee
simple title thereto subject to the Permitted Encumbrances, executed in
proper form for recording and registration, if applicable, so as to convey
the title to the Land and Buildings as required by this Agreement to
Purchaser;
(b) Such customary affidavits as Purchaser's title insurer shall
reasonably require in order to issue, without extra charge, an owner's
policy of title insurance free of any exceptions for unfiled mechanics' or
materialmens' liens for work performed prior to the Closing Date, or for
rights of parties in possession other than the tenants under the Leases and
any Approved Leases;
(c) Bills of sale for the Personal Property in the form attached
hereto as Exhibit I, duly executed and acknowledged by each Seller.
(d) Assignment and assumption of the Leases and any Approved Leases
(the "Assignments of Leases") in the form attached hereto as Exhibit J;
(e) A certification of non-foreign status, in form required by Section
1445(f)(3) of the Internal Revenue Code;
(f) Evidence satisfactory to Purchaser's title insurer of Sellers'
authority to convey the Properties, deliver the Deeds and the Assignment.
(g) Copies of all Leases and Approved Leases and all amendments and
modifications thereto;
(h) A letter, executed by Seller advising each of the tenants under
the Leases and the Approved Leases of the sale of the Properties to
Purchaser and directing that rents and other payments after the Closing
Date be sent to Purchaser;
(i) Such estoppel certificates from each tenant of the Leases as to
the matters set forth in Exhibit D as Sellers have obtained;
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(j) Any estoppel certificates from Sellers required under Section
4.1(d);
(k) A general assignment (non-recourse to Seller as to obligations of
third parties) of all permits, licenses, warranties and guarantees relating
to the Properties together with original copies of any such permits,
licenses, warranties and guarantees in Seller's possession;
(l) An Assignment and Assumption of any Assumed Service Contracts and
Construction Contracts which Purchaser is required to assume (the
"Assignments of Contracts") in the form attached hereto as Exhibit M;
(m) Any other customary documents that Purchaser's title insurer may
reasonably require for the proper consummation of the transactions
contemplated by this Agreement, provided such documents do not impose any
contingent liability on Seller after the Closing;
(n) An executed counterpart of the Settlement Statement;
(o) Transfer tax declarations or forms to the extent required by
applicable Law (defined below);
(p) Lease files, books and records for the Properties and plans and
specifications for the Properties all to the extent in the Seller's
possession;
(q) Originals or copies to the extent in Sellers' possession of all
service and construction contracts being assumed by Purchaser at Closing;
(r) A release from the Broker;
(s) Keys to locks at the Properties to the extent in Seller's
possession;
(t) Assignments of insurance and/or eminent domain proceeds if
applicable;
(u) Excise tax lien waivers to the extent required by applicable Law
(defined below); and
(v) Evidence of termination of all property management contracts and
evidence of termination of other service contracts not being assumed by
Purchaser at Closing.
6.2 Purchaser's Deliverables. At the Closing, Purchaser shall deliver the
following to Sellers:
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(a). All documents reasonably required by the Andover Lender for the
transfer of the Assumed Debt to Purchaser;
(b) The balance of the cash portion of the Purchase Price payable at
the Closing;
(c) The Assignments of Leases duly executed and acknowledged by
Purchaser;
(d) The Assignments of Contracts duly executed and acknowledged by
Purchaser;
(e) Evidence reasonably satisfactory to Seller of Purchaser's
authority to purchase of the Properties, deliver the Purchase Price, the
Assignments of Leases, Assignment of Contracts and perform and consummate
all other transactions contemplated by this Agreement;
(f) An agreement in form and substance satisfactory to Sellers
indemnifying and holding Sellers harmless from any loss, cost or expense
incurred by Sellers arising out of any failure of Purchaser to perform all
obligations of Sellers under all documents or agreements evidencing or
securing the Assumed Debt which accrue from and after the Closing;
(g) Any other customary documents that Sellers or the Title Insurer
may reasonably require for the proper consummation of the transactions
contemplated by this Agreement; and
(h) An executed counterpart of the Settlement Statement.
ARTICLE 7. MATTERS TO WHICH THE SALE IS SUBJECT
------------------------------------
7.1 Condition of Title. The Properties are to be conveyed by Sellers and
accepted by Purchaser subject only to the following matters:
(a) Any state of facts which a survey of the Land or an examination of
title would disclose and not objected to by Purchaser by the conclusion of
the Inspection Period;
(b) all laws, statutes, ordinances, codes, rules, regulations,
requirements, or executive mandates (collectively, the "Laws") including,
without limitation, all environmental, building and zoning restrictions,
ordinances and regulations, affecting the Properties adopted by the United
States, the applicable state and
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municipal authorities, and any and every other agency, department,
instrumentality and/or political subdivision of government of every kind
whatsoever having jurisdiction thereof, and all amendments or additions
thereto now in effect or which may be in force and effect on the Closing
Date;
(c) The Leases and all Approved Leases;
(d) Unpaid real estate taxes, assessments, water, sewer and utility
charges not yet due and payable, subject to subsequent adjustment as
hereinafter provided;
(e) The Permitted Encumbrances, including, without limitation, the
liens of all Assumed Debt.
7.2 Application of Purchase Price to Liens. To enable Sellers to make
conveyance as herein provided, Sellers may, at the time of Closing, use the
Purchase Price or any portion thereof to clear the title of any or all
encumbrances or interests; provided that all instruments so procured are
recorded at Sellers' expense simultaneously with the recording of the Deeds, or
pursuant to reasonable and customary arrangements made with the Title Company so
as to enable it to issue Purchaser's title insurance policies without exception
for such liens.
ARTICLE 8. REPRESENTATIONS AND WARRANTIES
------------------------------
8.1 Purchaser's Knowledge. Purchaser represents and warrants to Sellers
that it is a sophisticated and experienced owner and manager of commercial real
estate. Purchaser acknowledges that Sellers are providing Purchaser satisfactory
opportunity for full and complete reviews, inspections and investigations of the
Properties and all information relating to the physical, legal, economic and
environmental condition of the Properties as the Purchaser may in its sole
discretion elect to make. Purchaser has assumed fully the risk that Purchaser
will fail to completely and adequately review and consider any or all of the Due
Diligence Materials or to complete its other due diligence prior to the end of
the Inspection Period. But for Purchaser's willingness to assume the risk as to
the character of its reviews, inspections and investigations of the Properties
and all information relating to the physical, legal, economic and environmental
condition of the Properties as the Purchaser may in its sole discretion elect to
make, Sellers would not have entered into this Agreement. As a material part of
the consideration for this Agreement, Sellers and Purchaser agree that, except
for representations and warranties expressly set forth in this Agreement,
Purchaser is taking the Properties "as is, where is and with all faults" with
any and all latent and patent defects and that there is no warranty by Sellers
that the Properties are fit for a particular purpose. Except as expressly
provided in this Agreement, Sellers have not made and are not making any express
or implied representation or warranty of any kind or nature, including, but
without limitation, any representation or warranty regarding quality of
construction, condition, state of repair, safety, merchantability or fitness for
any particular
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purpose, accuracy of dimensions, whether the improvements are structurally
sound, in good condition or repair or in compliance with insurance requirements
or applicable laws, ordinances, rules, regulations of any nature, any past,
present or future operating results, forecasts or projections of income or
operating expenses, the financial viability of the Properties or the
completeness or accuracy of the Due Diligence Materials or Sellers books and
records. Purchaser acknowledges that, except for the specific warranties set
forth in this Agreement, it is not relying upon any representation, statement or
other assertion with respect to the Properties' condition, but is relying upon
its own inspections, investigations, examinations and financial analysis of the
Properties. Purchaser takes the Properties under the express understanding that
there are no express or implied warranties (except for the limited warranties
expressly set forth in this Agreement). The provisions of this Section 8.1 shall
survive closing.
8.2. Seller's Representations. Each of the Sellers hereby represents and
warrants and agrees as follows, both as of the date of this Agreement and as of
the Closing Date with respect to the Property owned by such Seller.
(a) Legal Existence. Seller is an entity duly formed and validly
existing under the laws of a state or commonwealth and is duly qualified to
do business in the state or commonwealth where the respective Properties
are located; the signatory of this Agreement has full power and authority
as a representative to enter into this Agreement and to perform all of its
obligations required hereunder.
(b) Authority. Subject to Section 4.4(f) hereof, Seller has been
authorized by all necessary parties to execute and deliver this Agreement
and to carry out its obligations hereunder and the transactions
contemplated hereby. This Agreement has been, and the documents
contemplated hereby will be, duly executed and delivered by Seller and
constitute legal, valid and binding obligations enforceable against Seller
in accordance with their respective terms. The consummation by Seller of
the sale of the Properties is not in violation of or conflict with nor does
it constitute a default under any term or provision of the organizational
documents of Seller, or of any provision of any applicable law, ordinance,
rule or regulation of any governmental authority or of any provision of any
applicable order, judgment or decree of any court, arbitrator or
governmental authority.
(c) Litigation. Except as set forth in Exhibit K, Sellers have
received no written notices of any actions or proceedings pending before
any court, administrative agency or arbitrator against Seller or arising
out of the ownership, management or operation of the Properties, this
Agreement or the transactions contemplated hereby, other than litigation
which is covered by insurance and with respect to which the insurance
carrier has acknowledged coverage and to Seller's knowledge, none are
threatened.
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(d) Bankruptcy. No proceedings have been filed by Seller and, to
Seller's knowledge, no proceedings have been filed against Seller under the
United States Bankruptcy Code, or any state law relating to bankruptcy or
insolvency, seeking liquidation of Seller or its reorganization nor has
there been any general assignment for the benefit of Seller's creditors, or
an appointment of a trustee or receiver for its assets.
(e) Eminent Domain. Except as generally disclosed in and identified on
Exhibit Q the details of which are included in the Due Diligence Materials,
Sellers have received no written notices of any pending eminent domain
proceedings against any Property or any part thereof and to Seller's
knowledge none are threatened.
(f) Leases. To Seller's knowledge, (i) there are no leases, occupancy
agreements or, subject to the provisions of Section 15.5 below, licenses
affecting the Property except for the Leases (or at the time of Closing,
the New Leases); (ii) the Leases are valid and in full force effect, and
except as referred to in Exhibit E, have not been modified, in writing or
otherwise; (iii) except set forth in Exhibit E, no tenant under any Lease
is in default in the payment of fixed rent by more than thirty (30) days or
otherwise in default after the expiration of any applicable notice and
grace periods under the applicable Lease, (iv) Seller is not holding any
security deposit or letter of credit securing the obligations of any tenant
under a Lease, except as provided in Exhibit E, (v) Seller is not in
default of any material construction or tenant improvement obligation under
any existing Lease except as set forth in Exhibit T, and (vi) true and
complete copies of the Leases have been included in the Due Diligence
Materials.
(g) FIRPTA. Seller is not a "foreign person" as defined in Section
1445(f)(3) of the Internal Revenue Code.
(h) Service Contracts. To Seller's knowledge, there are no service
contracts affecting the Properties except for the agreements listed on
Exhibit H (the "Service Contracts");
(i) Brokerage Agreements. To Seller's knowledge there are no brokerage
agreements or tenant representation agreements affecting the Property
except for the brokerage agreements and tenant representation agreements
listed on Exhibit P.
(j) Andover Street Loan Documents. The documents listed in Exhibit B-7
attached hereto constitute all of the documents evidencing and securing the
Andover Street Debt (the "Andover Street Loan Documents") and the Andover
Street Loan Documents have not been altered, modified or amended except as
set
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forth in such Exhibit B-7. Seller is not in default of any material
obligation of Seller under the Andover Street Loan Documents.
8.3 Knowledge. The reference to "the Seller's knowledge" as used in Section
8.2 shall be deemed to mean the actual knowledge of the executive officers of
MGI (meaning any officer of MGI with a title of vice president or above) with no
independent inquiry having been made by such person or persons; provided,
however, that as used in subsection 8.2(f),(h) and (i) the term "Seller's
knowledge" shall mean, even if none of the executive officers have actual
knowledge of a matter referred to in subsection 8.2(f), Seller shall be deemed
to have knowledge of any service contract, brokerage agreement, lease agreement,
lease amendment or other agreement affecting the Property executed by an
executive officer of MGI during the period of Seller's ownership of the relevant
Property. Sellers have made no independent examination of the facts related to
the physical condition of the Properties and no representation is made by any
Seller with respect thereto except as specifically set forth in this Agreement.
Sellers shall not be responsible for any errors or misrepresentations of any
third parties including, without limitation, as may be included in promotional
materials, environmental reports, structural reports or other third-party
materials delivered in connection with this Agreement unless actually known to
Sellers to be incorrect or untrue and unknown to Purchaser as of the Closing
Date. Further, to the extent Sellers or any third party have provided
information in summary form (such as rent rolls or lease abstracts), Sellers
shall not be responsible for good faith errors or omissions made in preparing
such summaries as long as the accurate information is included in other
materials (such as Leases) delivered in full to Purchaser.
8.4. Survival. The representations and warranties of Sellers set forth in
Section 8.2 shall not survive the termination or cancellation of this Agreement
but shall survive the Closing for a period of six (6) months (the "Survival
Period"). In no event shall Sellers be liable for breach of any representation
or warranty with respect to any matter which is covered in the Due Diligence
Materials or in any estoppel certificate delivered to Purchaser prior to Closing
or is known by Purchaser to be inaccurate as of the date of Closing. The
reference "known by Purchaser" as used herein shall be deemed to mean the actual
knowledge of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇▇. Further, Sellers shall have no liability under any estoppel
certificate delivered by Sellers hereunder with respect to any matter which is
confirmed in a subsequent estoppel certificate from a tenant received by
Purchaser from a tenant under an applicable Lease. Sellers shall be permitted to
update the representations and warranties made by Sellers herein at Closing to
reflect matters which become known to Sellers after the date of this Agreement
and changes in facts occurring after the date of this Agreement. All such
updated representations and warranties shall be deemed acceptable to Purchaser
unless such updated representations and warranties disclose a materially adverse
change in the condition of any of the Properties. Furthermore, Purchaser agrees
not to look to Sellers and Purchaser shall have no claim against Sellers on
account of any loss, cost or expense
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incurred by Purchaser as the result of any breach of the warranties and
representations set forth herein, except to the extent such losses, costs and
expenses exceed Seven Hundred and Fifty Thousand Dollars ($750,000) in the
aggregate, but in no event shall Sellers' aggregate liability to Purchaser for
any breach of its warranties and representations hereunder, including, without
limitation, in any estoppel certificate delivered to Purchaser by Seller, exceed
the sum of Ten Million Dollars ($10,000,000) in the aggregate. In addition,
Purchaser shall have no rights against Seller for breach of warranties and
representations unless Purchaser institutes legal proceedings against any Seller
or Sellers for such breach within the Survival Period. Purchaser acknowledges
that the Board of Trustees of MGI will rely on the agreements set forth in this
Section in connection with the distribution of funds to its shareholders
pursuant to its adopted plan of liquidation and that this provision is a
material inducement to Sellers entering into this Agreement. During the term of
this Agreement and, if Purchaser acquires the Properties in accordance with the
terms of this Agreement, continuing until the end of the Survival Period (or, if
Purchaser institutes legal proceedings against any Seller or Sellers for such
breach within the Survival Period, until the final adjudication or resolution of
such proceedings), Sellers agree that if the stock of MGI ceases to be listed
for trading on the New York Stock Exchange, Sellers shall thereafter
collectively maintain a minimum net worth, calculated in accordance with
generally accepted principals of accounting of at least Twenty Million Dollars
($20,000,000) or in the alternative, Sellers shall provide collateral reasonably
acceptable to Purchaser to satisfy its contingent liability for breach of its
warranties and representations set forth herein which survive the Closing.
8.5 Purchaser's Representations. Purchaser hereby represents, warrants and
agrees as follows, both as of the date of this Agreement and as of the Closing
Date.
(a) Corporate Existence - Purchaser. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and is (or will be, prior to the Closing)
duly qualified to do business in the states where the Properties are
located and has full power and authority to enter into this Agreement and
to perform all of its obligations required hereunder.
(b) Authority - Purchaser. Purchaser (including any individuals
executing on behalf of Purchaser) has all requisite power and authority to
execute and deliver this Agreement and to carry out its obligations
hereunder and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Purchaser and constitutes legal, valid and
binding obligations enforceable against Purchaser in accordance with their
respective terms. The consummation by Purchaser of the purchase of the
Properties as contemplated hereby is not in violation of or conflict with
nor does it constitute a default under any term or provision of the
organizational documents of Purchaser, or any of the terms of any agreement
or
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instrument to which it is a party, or by which it is bound, or of any
provision of any applicable law, ordinance, rule or regulation of any
governmental authority or of any provision of any applicable order,
judgment or decree of any court, arbitrator or governmental authority.
(c) No Further Consents Required. Purchaser has obtained all necessary
approvals and consents to the due execution and delivery of this Agreement
and the consummation of the transactions herein described.
8.6 Complete Agreement. This Agreement, including the Exhibits attached to
this Agreement and references contained in this Agreement, together with the
Escrow Agreement and the Right of Entry Agreement constitute the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements, proposals, offers,
counteroffers, letter agreements, correspondence and understandings of the
parties regarding said subject matter, whether written or oral, with respect to
the transactions provided for herein, including, without limitation, the
Principal Indemnity and Confidentiality Statement dated August 24, 1998, as
amended by a letter dated March 4, 1999, all of which are hereby merged into and
superseded by this Agreement.
ARTICLE 9. ENVIRONMENTAL MATTERS
9.1 Hazardous Substances. As of the Closing Date, Purchaser shall waive,
release, acquit and forever discharge Sellers of and from any and all claims,
actions, causes of action, demands, rights, damages, costs, expenses, or
compensation whatsoever, direct or indirect, known or unknown, foreseen or
unforeseen, statutory or at common law, which Purchaser, or any person claiming
by, through or under Purchaser, now has or which may arise in the future on
account of or in any way growing out of or in connection with the existence of
any Hazardous Substance or Hazardous Discharge (as hereinafter defined) on or
from the Properties. For purposes of this Agreement, the term "Hazardous
Substances" shall include, without limitation, (a) any element, compound or
chemical that is defined, listed or otherwise classified as a pollutant, toxic
pollutant, toxic or hazardous substance, hazardous waste, special waste,
extremely hazardous substance or chemical under any environmental laws; (b)
petroleum and its refined products and petroleum-derived substances; (c) any
electrical equipment containing oil that has more than 50 parts per million of
polychlorinated biphenyls ("PCBs"); (d) any flammable substances, explosives or
radioactive materials; and (e) building components, including but not limited
to, asbestos-containing materials and manufactured products containing Hazardous
Substances. For purposes of this Section, the term "Hazardous Discharge" means
any releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping of Hazardous
Substances from or onto the Land and Buildings.
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9.2 Survival. The provisions of Section 9.1 shall survive the Closing or
any termination or cancellation of this Agreement.
ARTICLE 10. CLOSING ADJUSTMENTS AND OBLIGATIONS
-----------------------------------
10.1 Prorations. In addition to the costs and expenses in connection with
Assumed Debt which are covered elsewhere in this Agreement, the following items
shall be apportioned and adjusted between Sellers and Purchaser as of the
Closing Date and the net amount determined to be payable to Sellers, or to
Purchaser, as the case may be, is to be paid (or credited against the Purchase
Price) on the Closing Date, except as otherwise expressly provided in this
Article 10.
(a) Taxes. Real estate taxes, personal property taxes and any general
or special assessments with respect to the Properties which are not the
direct payment obligation of tenants pursuant to the Leases or Approved
Leases (as opposed to a reimbursement obligation) shall be prorated as of
the Closing Date -- to the end that Sellers shall be responsible for all
taxes and assessments that are allocable to any period prior to the Closing
Date and Purchaser shall be responsible for all taxes and assessments that
are allocable to any period from and after the Closing Date. If the actual
amount of taxes, assessments or other amounts to be prorated for the year
in which the Closing occurs is not known as of the Closing Date, the
proration shall be based on the parties' reasonable estimates of such
taxes, assessments and other amounts. To the extent any real or personal
property taxes subject to apportionment in accordance with the foregoing
are, as of the Closing Date, the subject of any appeal filed by or on
behalf of Sellers, then notwithstanding anything to the contrary contained
in this subparagraph, the proration shall be based on the amount of taxes
previously paid with an adjustment to be made promptly after the outcome of
the appeal is final and the amount of taxes owing becomes fixed. To the
extent any taxes which are the subject of an appeal have been paid by
Sellers under protest and the appeal results in Purchaser receiving a
credit toward future tax liability or a refund, then Purchaser shall,
within ten (10) days following receipt of such refund or notice of such
credit, pay to Sellers the full amount of such refund or credit allocable
to the period prior to the Closing Date, excluding, however, any portion of
such refund or credit that is required to be passed through to the tenants
pursuant to any Lease or to other parties by existing contract. Seller
shall retain the right to prosecute and receive the proceeds of any appeals
of taxes for any tax year prior to the current tax year. Seller shall turn
over to Purchaser all of its rights to prosecute any appeals of taxes for
the current tax year.
(b) Prepaid Expenses. Purchaser shall be charged for those prepaid
expenses paid by Sellers directly or indirectly allocable to any period
from and after the Closing Date, including, without limitation, annual
permit and confirmation fees,
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fees for licenses and all security or other deposits paid by Sellers to
third parties which Purchaser elects to assume and to which Purchaser then
shall be entitled to the benefits and any refunds following the Closing
Date.
(c) Property Income and Expense. The following prorations and
adjustments shall occur as of the Closing. Prior to the Closing Date,
Sellers shall provide all information to Purchaser required to calculate
such prorations and adjustments and representatives of Purchaser and Seller
shall together make such calculations:
(i) General. Subject to the specific provisions of clauses (ii),
(iii) and (iv) below, income and expenses shall be prorated on the
basis of a 30-day month. All such items attributable to the period
prior to the Closing Date shall be credited to Sellers; all such items
attributable to the period on and following the Closing Date shall be
credited to Purchaser. Purchaser shall be credited with (A) any
security deposits or other lease payments which are refundable to the
tenants and have not been applied to outstanding tenant obligations in
accordance with the terms of the applicable Lease; provided that
during the period of this Agreement, Sellers shall not apply any
security deposit to the payment of fixed rent unless the Lease expires
prior to the Closing and (B) rent prepaid beyond the Closing Date.
Sellers shall transfer Sellers' entire interest in any letters of
credit or certificates of deposit held by Sellers as security deposits
described in clause (A) above and shall diligently cooperate with
Purchaser in obtaining any reissuance or confirmation of the effect of
the transfer of such instruments. Purchaser shall not be entitled to
any interest on rental agreement or lease deposits or prepaid rent
accrued on or before the Closing Date, except to the extent any such
amount of interest is refundable or payable to any tenant under a
Lease. Sellers shall be credited with any refundable deposits or bonds
held by any utility, governmental agency or service contractor, to the
extent such deposits or bonds are assigned to Purchaser on the Closing
Date.
(ii) Leasing Costs. Except as otherwise expressly set forth in
the attached Exhibit L, (A) Purchaser shall be credited with any
leasing commissions, tenant improvements costs or other allowances to
be paid or assumed by Purchaser on or after the Closing Date with
respect to the current term of any Lease or Lease modification
executed, or any extension term or expansion of premises exercised, in
each case, prior to the date of this Agreement or with respect to any
Approved Lease, the effective lease commencement date under which is
prior to June 1, 1999, and Sellers shall pay on or before the Closing
Date all such items payable prior to the Closing Date; (B) Sellers
shall be credited with any leasing commissions, tenant
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improvement or other allowances paid or endured by Sellers after the
date hereof with respect to any Approved Lease, the effective lease
commencement date under such Approved Lease is June 1, 1999 or
thereafter; and (C) Purchaser shall assume all obligations for any
leasing commissions, tenant improvement or other allowances payable
following the Closing Date with respect to such Approved Leases, the
effective lease commencement date under which is June 1, 1999 or
thereafter. Any expenditures or commitments to expenditures (and,
therefore, any credit to Sellers based on Sellers' expenditures prior
to the Closing Date) relating to the Approved Leases, to the extent
they were not referenced in the Approved Leases, shall be subject to
Purchaser's specific approval, which approval shall not be
unreasonably withheld or delayed.
(iii) Rents. (A) Rents payable by tenants under the Leases and
any Approved Leases, if applicable, shall be prorated as and when
collected (whether such collection occurs prior to, on or after the
Closing Date). Purchaser shall receive a credit for the amounts
actually received by Seller before the Closing Date and which pertain
to any period after the Closing Date. Purchaser shall not receive a
credit at the Closing for any rents for the month in which the Closing
occurs which are in arrears and have not then been received. As to any
tenants who are delinquent in the payment of rent on the Closing Date,
Purchaser shall use reasonable efforts (but shall not be required to
commence legal action or terminate or evict a tenant) to collect or
cause to be collected such delinquent rents following the Closing
Date. Any and all rents so collected by Purchaser following the
Closing shall be successively applied to the payment of (x) rent due
and payable in the month in which the Closing occurs, (y) rent due and
payable in the months succeeding the month in which the Closing occurs
(through and including the month in which payment is made) and (z)
rent due and payable in the months preceding the month in which the
Closing occurs. If all or part of any rents or other charges received
by Purchaser following the Closing are allocable to Sellers pursuant
to the foregoing sentence, then such sums shall be promptly paid to
Sellers. Sellers reserve the right to pursue any damages remedy
Sellers may have against any tenant with respect to such delinquent
rents, but shall have no right to exercise any other remedy under a
Lease (including, without limitation, termination or eviction) and
shall not commence any legal action against a tenant for a period of
90 days following the Closing Date.
(B) Any percentage rent, escalation charges for real estate
taxes, parking charges, operating and maintenance expenses, escalation
rents or charges, electricity charges, cost of living increases or any
other charges of a similar nature other than fixed or base rent under
the Leases and any
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Approved Leases, if applicable (collectively, the "Additional Rents")
shall be prorated as of the Closing Date based on estimated amounts
charged and collected. Prior to the end of the calendar year in which
the Closing occurs, Sellers shall provide Purchaser with information
regarding Additional Rents which were received by Sellers prior to
Closing and the amount of reimbursable expenses paid by Sellers prior
to Closing. On or before the date ninety (90) days after the Closing
and periodically thereafter, Purchaser shall deliver to Sellers a
reconciliation of all Additional Rents due or expenses reimbursable by
tenants under the Leases and any Approved Leases, if applicable, and
the amount of Additional Rents received by Sellers and Purchaser
relating thereto (the "Reconciliation"). The Reconciliation shall be
based upon Additional Rents actually collected by Purchaser and the
corresponding expenses. To the extent Additional Rents due from
tenants have not been received by Purchaser, that portion of the
Reconciliation shall be delayed until such amounts are collected and
Purchaser shall continue to use diligent efforts to collect such
Additional Rents from tenants. Purchaser shall deliver additional
Reconciliation statements on a periodic basis, not more frequently
than monthly, after the date ninety (90) days after Closing. Upon
reasonable notice and during normal business hours, each party shall
make available to the other all information reasonably required to
confirm the Reconciliation. In the event of any overpayment of
Additional Rents by the tenants to Sellers, Sellers shall promptly,
but in no event later than fifteen (15) days after receipt of a
Reconciliation, pay to Purchaser the amount of such overpayment and
Purchaser, as the landlord under the particular Leases or Approved
Leases, if applicable, shall pay or credit to each applicable tenant
the amount of such overpayment. In the event of an underpayment of
Additional Rents by the tenants to Sellers, Purchaser shall pay to
Sellers the amount of such underpayment within fifteen (15) days
following Purchaser's receipt of any such amounts from the tenants.
(d) Sellers shall receive credit for any maintenance or other
reserves, ad valorem taxes and hazard insurance escrows held by any Lender
of the Assumed Debt and such reserves and escrows shall be transferred to
Purchaser.
(e) Sellers shall receive a credit in an amount equal to all
prepayment penalties and premiums and all other charges imposed by any
Lender (other than the Andover Street Lender) in connection with the
prepayment of the Existing Debt.
(f) Each party shall be responsible for its own legal fees.
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(g) Purchaser shall be responsible for the cost of the Title
Commitments and any title insurance premiums or costs and any endorsements
thereto, the costs of the Surveys and the cost of recording the Deeds.
(h) Transfer taxes, deed stamps or similar conveyance fees shall be
adjusted such that Purchaser and Sellers are each responsible for fifty
percent (50%), except with respect to Properties located in Connecticut and
Massachusetts where Sellers shall be responsible for all transfer taxes,
deeds stamps or similar conveyance fees.
10.2 Reconciliations. If any of the amounts to be apportioned under this
Article 10 (a) were not prorated and apportioned at the Closing due to the
unavailability of the information necessary to compute such proration, (b) were
prorated or apportioned at the Closing based upon estimated or incomplete
information or (c) were based on any errors or omissions in computing prorations
which errors or omissions are discovered subsequent to the Closing, such
apportionments shall be recalculated as soon as possible after the availability
of required information, and any overpayment or underpayment due either party
shall be adjusted by suitable payment of one to the other. Unless otherwise
specified herein, all such reimbursements shall be made on or before thirty (30)
days after receipt of notice of the amount due. Any such reimbursements not
timely paid shall bear interest at a per annum rate equal to ten percent (10%)
from the due date until all such unpaid sums together with all interest accrued
thereon is paid if payment is not made within ten (10) days after receipt of a
▇▇▇▇ therefor.
10.3 Survival. Sellers' obligations under this Article shall survive the
Closing for a period of no longer than nine (9) months. If with respect to real
estate taxes, a final reconciliation cannot be made within nine (9) months of
Closing, then the parties shall make a final adjustment based on the best
information available.
ARTICLE II. EXTENSION; TERMINATION
The following provisions shall govern the extension, termination or
abandonment of this Agreement.
11.1 Extension to Satisfy Conditions. If on the Closing Date, Sellers have
not cured any Title Objection which Seller is obligated to cure or Sellers are
unable to make conveyance or to deliver possession of any of the Properties, all
as herein set forth, or any of the closing conditions listed in Section 4.1 have
not been satisfied, then, Sellers shall use reasonable efforts to cure such
Title Objection or make conveyance or otherwise deliver possession or satisfy
such closing conditions as provided herein, and the Closing Date shall be
extended for a period not to exceed ninety (90) days; provided that in the
exercise of such reasonable efforts, Sellers shall not be obligated to expend
more than Fifty Thousand
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Dollars ($50,000) in the aggregate for any one Property or Five Hundred Thousand
Dollars ($500,000) in the aggregate for all of the Properties unless such
failure is otherwise a breach of a representation or warranty of Seller or
breach of an obligation hereunder, in which event, the dollar limitation shall
not be applicable and the exercise of reasonable efforts shall not be deemed an
excuse for non-performance. In addition, if on the Closing Date, Sellers are
unable to cure any Title Objections which Sellers elect but are not obligated to
cure, Sellers may elect, by written notice to Purchaser, to extend the Closing
Date for a period not to exceed ninety (90) days, and in such event Sellers
shall use reasonable efforts to cure such objection, subject to the dollar
limitations set forth above. If the time of Closing is extended as provided in
this Section and Sellers are able to cure all Title Objections, make conveyance
and deliver possession of the Properties, all as herein set forth and satisfy
such closing conditions as provided herein within the extended period, Sellers
may specify an earlier Closing Date upon ten (10) days notice to Purchaser.
11.2. Failure to Satisfy Closing Conditions. If (a) on the Closing Date,
there are Title Objections which Sellers are not obligated to cure and Sellers
have not elected to extend the Closing Date under Section 11.1 or (b) the
Closing Date is extended pursuant to Section 11.1, and, if on the extended
Closing Date, Sellers shall remain unable to cure any Title Objections which
they are not obligated to cure or make conveyance, or any of the closing
conditions listed in Section 4.1 have not been satisfied, then, in any such
event, unless such failure is otherwise a breach of a representation or warranty
of Seller or the failure of Seller to perform an obligation hereunder, this
Agreement shall terminate whereupon the Deposit shall be refunded to Purchaser
and all obligations of the parties hereto shall cease and this Agreement shall
be void and without recourse to the parties hereto, except as otherwise provided
herein (e.g. the rights of the parties set forth in Article 12), unless, in
either event, Purchaser, by written notice to Sellers exercised not later than
five (5) Business Days prior to the scheduled Closing Date, elects to waive such
title or survey objection or condition and accept title under prevailing
conditions without any reduction in the Purchase Price.
11.3. Return of Materials. In the event of a termination of this Agreement,
then Purchaser shall promptly return to Sellers all materials delivered
hereunder, including, without limitation, the Due Diligence Materials and any
copies thereof, and keep confidential (except as already disclosed to
Purchaser's attorneys, consultants etc. in connection with conducting its due
diligence hereunder) any proprietary information delivered to Purchaser by
Sellers pursuant to this Agreement, except as otherwise provided in the Right of
Entry Agreement.
11.4 Sellers' Right to Terminate. Notwithstanding anything contained in
this Agreement to the contrary, if prior to Closing, any person, entity or group
acquires or proposes to acquire (a) the Properties and all or substantially all
of the remaining assets directly or indirectly owned by MGI or (b) by means of a
merger, consolidation, tender
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offer, exchange offer, private or public market purchases or otherwise, fifty
percent (50%) or more of the outstanding common stock of MGI (any such event
described in (a) or (b) a "Company Event") and the Board of Trustees of MGI has
determined to pursue such Company Event, Sellers shall have the right to
terminate this Agreement upon delivery of written notice to Purchaser whereupon
the Deposit shall be refunded to Purchaser and all obligations of the parties
hereto shall cease and this Agreement shall be void and without recourse to the
parties hereto (except those provisions which are expressly intended to survive
such termination). MGI agrees to provide Purchaser with prompt notice of the
Board of Trustees' determination to pursue such Company Event involving any of
the Properties, including, in such notice, the nature of such Company Event and
the parties known to MGI to be involved. Purchaser shall keep confidential all
communications from MGI regarding such Company Event. If and only if this
Agreement is terminated by Sellers pursuant to this Section, Sellers shall pay
to Purchaser a break-up fee in the amount of Three Million Dollars ($3,000,000)
(the "Break-Up Fee") and shall reimburse Purchaser for all reasonable third
party out-of-pocket costs incurred by Purchaser in connection with its proposed
purchase of the Properties including, without limitation, fees paid to
prospective lenders or other capital sources up to a maximum amount of Two
Million Dollars ($2,000,000) if such termination occurs during the Inspection
Period, or, in the alternative, if such termination occurs after the end of the
Inspection Period, up to a maximum amount of Four Million Dollars ($4,000,000)
(in either case, the "Reimbursed Costs"). Purchaser shall provide Sellers with
copies of paid invoices or such other evidence satisfactory to Sellers with
respect to the Reimbursed Costs. The Break-Up Fee and Reimbursed Costs, if
earned, shall be paid by Sellers to Purchaser no later than thirty (30) days
after the termination of this Agreement. Payment of the Break-Up Fee, the
Reimbursed Costs and the return of the Deposit shall be in the nature of
liquidated damages and Purchaser shall have no recourse to Sellers for any other
amount due and owing under this Agreement or at law and equity as a result of
the termination of this Agreement. The parties agree that if this Agreement is
terminated pursuant to any other Section of this Agreement, including, without
limitation, Sections 4.2, 4.4, 4.5 or 12.1, Sellers shall not be liable for
payment of the Break-Up Fee or Reimbursed Costs.
ARTICLE 12. DEFAULTS
--------
12.1. Purchaser's Default. In the event of a material default by Purchaser
in the performance of any of the terms of this Agreement, Sellers shall be
entitled to retain the Deposit (which shall include any interest earned
thereon), as liquidated damages, as Sellers' sole and exclusive remedy, it being
agreed that Sellers' actual damages would be difficult or impossible to
ascertain in such event, and that such amount constitutes a fair and reasonable
amount of damages under the circumstances. Thereafter, this Agreement shall
become null and void, and neither party shall have further rights against the
other, except for those rights specifically stated herein to survive the
termination or cancellation of this Agreement.
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12.2. Sellers' Default. In the event of a material default by Sellers in
the performance of any of the obligations of Sellers under this Agreement, the
Deposit shall be returned to Purchaser and Purchaser may, as its sole and
exclusive remedy at law and equity, seek specific performance of such
obligation, or in the event the remedy of specific performance is unavailable or
denied to Purchaser, be reimbursed by Sellers for all costs and expenses
incurred in connection with this transaction, including without limitation all
fees and expenses of third parties, financing fees and deposits and the like,
and in enforcing its remedies hereunder; provided that in no event shall
Sellers' liability for costs and expenses exceed Four Million Dollars
($4,000,000) in the aggregate. In no event shall Sellers be liable for any
punitive, direct, indirect or consequential damages.
ARTICLE 13. BROKERS
-------
13.1 No Brokers. Sellers and Purchaser mutually represent and warrant to
the other that each has dealt with no broker or finder in connection with this
Agreement or the sale and purchase of the Properties other than Fallon, ▇▇▇▇▇ &
▇'▇▇▇▇▇▇, Inc. and Ernst & Young (together, the "Broker") and that neither
Sellers nor Purchaser knows of any broker or finder other than Broker who has
claimed or may have a right to claim a commission or other fee or compensation
in connection with this Agreement or the sale and purchase of the Properties.
The commission due Broker shall be paid by Sellers pursuant to a separate
agreement to which Purchaser is not a party subject to all terms and conditions
thereof and Sellers shall indemnify and hold Purchaser harmless from any claim
for a commission, fee or other compensation by Broker. Sellers and Purchaser
agree that Purchaser shall be solely responsible for any claims for a
commission, fee or other compensation by any broker or finder engaged by
Purchaser in connection with this Agreement or the sale and purchase of the
Properties. Sellers and Purchaser agree to indemnify and defend the other
against any claims, costs or expenses (including reasonable attorneys' fees and
disbursements) arising out of the breach, on their respective parts, of any
representations, warranties or agreements contained in this Section. The
representations and obligations under this Section shall survive the Closing or,
if the Closing does not occur, the termination or cancellation of this
Agreement.
ARTICLE 14. NOTICES
-------
14.1 Notices. Any notice, request or demand which, under the provisions of
this Agreement or otherwise, must or may be given or made by any party hereto,
shall be in writing, and shall be sent by (a) registered or certified mail,
return receipt requested, with postage prepaid, (b) express mail or courier
(next day delivery), or (c) personal delivery (receipt acknowledged in writing),
or (d) via facsimile, addressed as follows:
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If to Sellers:
MGI Properties
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
FAX (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP
Exchange Place
Boston, Massachusetts 02109
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
FAX (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
Boston Capital Institutional Advisors LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
FAX (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Goulston & Storrs, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Jordan ▇. ▇▇▇▇▇▇▇, Esq.
FAX (▇▇▇) ▇▇▇-▇▇▇▇
Either party may designate by notice in writing a new or other address to which
such notice or demand shall thereafter be so given, made or mailed. Any notice
given hereunder by mail shall be deemed delivered (i) two (2) Business Days
after it is deposited in a United States post office, enclosed in a registered
or certified, prepaid envelope, addressed as hereinbefore provided, or (ii) the
date it is sent if sent by fax, express mail, courier or personal delivery.
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ARTICLE 15. MISCELLANEOUS
-------------
15.1 Amendments. This Agreement shall not be altered, amended, changed,
waived, terminated or otherwise modified in any respect or particular unless the
same shall be in writing and signed by or on behalf of the party to be charged
therewith.
15.2 Governing Law; Waiver of Trial By Jury. This Agreement shall be
interpreted and enforced in accordance with the laws of the Commonwealth of
Massachusetts. Each of Purchaser and Sellers agree to submit to jurisdiction in
the Commonwealth of Massachusetts with respect to any dispute under or arising
out of this Agreement and agree that any such dispute shall be brought either in
the courts of the Commonwealth of Massachusetts or in the applicable federal
district court located in Massachusetts. If any provisions of this Agreement
shall be unenforceable or invalid, the same shall not affect the remaining
provisions of this Agreement and to this end the provisions of this Agreement
are intended to be and shall be severable. Purchaser and Sellers hereby each
waive trial by jury in any action, proceeding or counterclaim brought by either
against the other, on or in respect of any matter whatsoever arising out of or
in any way connected with this Agreement or the relationship of Purchaser and
Sellers.
15.3 Limitations on Assignability. This Agreement may not be assigned by
Purchaser without the prior written consent of Sellers, in Sellers' sole and
absolute discretion, and any purported assignment in violation of this provision
shall be null and void. Notwithstanding the foregoing, Purchaser shall be
permitted to assign this Agreement to one or more affiliated entities, each of
which is controlled by Purchaser or the principals of Boston Capital
Institutional Advisors, provided (a) Purchaser effectuates such assignment in
writing prior to the Closing, (b) each assignee assumes the obligations of
Purchaser under the terms of this Agreement, and (c) Purchaser remains liable to
Seller under the terms of this Agreement. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and to their respective
heirs, executors, administrators, successors and permitted assigns.
15.4 Waivers. No failure or delay of either party in the exercise of any
right given to such party hereunder or the waiver by any party of any condition
hereunder for its benefit shall constitute a waiver of any other or further
right or condition nor shall any single or partial exercise of any right
preclude other or further exercise thereof or any other right. The waiver of any
breach hereunder shall not be deemed to be a waiver of any other or any
subsequent breach hereof.
15.5 Exhibits. Each of the Exhibits referred to herein is attached hereto,
made a part hereof and is incorporated in this Agreement by this reference as
though fully set forth herein. During the fourteen (14) day period following the
date of this Agreement, Sellers
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shall have the right to update the Exhibits attached to this Agreement in order
to provide additional information that becomes known to Sellers, including, but
not limited to, the addition of license agreements affecting the Properties to
Exhibit E. Purchaser acknowledges and agrees that Sellers have informed
Purchaser that notwithstanding the provisions of Section 8.2(f), Exhibit E does
not list all of the license agreements affecting the Properties.
15.6 Section Headings. The section headings in this Agreement are for
convenience only and are not intended to be a part of this Agreement and shall
not be construed to modify, explain or alter any of the terms, covenants or
conditions herein contained.
15.7 Recording and Binding Effect. This Agreement shall not be recorded or
registered by or for the benefit of Purchaser and any recordation or
registration by or for the benefit of Purchaser hereof shall be void and shall
constitute a default by Purchaser hereunder. The submission of this document for
examination and negotiation does not constitute an offer to sell or an option to
buy the Properties and this document shall become effective and binding only
upon the execution and delivery by Sellers and Purchaser.
15.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which taken together shall constitute but one and the same
instrument. All signatures need not appear on any single counterpart.
15.9 Relationship of Parties. It is the intention of this Agreement to
create the relationship of seller and buyer between the parties hereto and no
other relationship whatsoever, and nothing herein contained shall be construed
to make the parties hereto partners or joint venturers, or to render either
party liable for any of the debts or obligations of the other party. No broker
or finder (including, without limitation, Broker), mortgagee, partner or other
person or entity not a party to this Agreement is intended, or shall be deemed
to be, a third-party beneficiary of this Agreement.
15.10 Business Day. A Business Day shall be any day other than a Saturday,
Sunday, official Federal holiday or legal holiday in the Commonwealth of
Massachusetts. If any payment to be made or obligation to be performed hereunder
is to be made or performed on a day other than a Business Day, it shall be
deemed to be made or performed in a timely manner if done on the next succeeding
Business Day.
15.11 Time of the Essence. It is agreed that time is of the essence of this
Agreement.
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15.12 Confidentiality; Publicity. Purchaser acknowledges that any
information furnished to Purchaser with respect to the Properties is and has
been so furnished on the condition that Purchaser maintain the confidentiality
thereof. Accordingly, Purchaser shall hold, and shall cause its directors,
officers and other personnel and representatives to hold, in strict confidence,
and not disclose to any other person without the prior written consent of Seller
until the Closing shall have been consummated, any of the information in respect
of any of the Properties delivered to or for the benefit of Purchaser by Seller
or any of its agents, representatives or employees, including, without
limitation, the Broker. In the event the Closing does not occur and this
Agreement is terminated, Purchaser shall promptly return to Seller all copies of
documents containing any of such information without retaining any copy thereof
or extract therefrom. Notwithstanding anything to the contrary hereinabove set
forth, both parties may disclose such information on a need-to-know basis to
their respective agents, employees, members of professional firms serving it or
lenders to the extent reasonably necessary to perform due diligence and complete
the transaction contemplated hereby; provided that all such parties shall agree
to keep such information strictly confidential in accordance with the terms of
this Section 15.12. Prior to the Closing, without the consent of the other
party, neither party shall (a) disclose the terms and provisions of this
Agreement, (b) the fact that negotiations with respect to the matters described
herein have taken place, or (c) the terms and provisions of documents delivered
to the other party in connection with this transaction, except to the extent
such disclosure is (i) required by Law, including, without limitation, any
securities laws, any reporting requirement or any accounting or auditing
standard, (ii) required to enforce the provisions of this Agreement, or (iii) is
of a matter which has become public through no fault of the party who thereafter
discloses such matter. Notwithstanding anything to the contrary contained
herein, while Sellers shall consult with Purchaser and use reasonable efforts to
reach mutual agreement with Purchaser regarding public announcements, Sellers
shall have the sole right to determine the form, timing and substance of, and to
issue, all publicity (including, without limitation, SEC filings) concerning the
transaction contemplated by this Agreement, which may include publicity or other
announcements at any time on or after the execution of this Agreement. The
provisions of this Section 15.12 shall survive the expiration or earlier
termination of this Agreement.
15.13 Survival. Unless otherwise expressly stated in this Agreement, none
of the warranties, representations and covenants of Seller or Purchaser shall
survive the delivery of the deed and other closing documents by Seller to
Purchaser. The acceptance of a deed by Purchaser (or Purchaser's nominee) shall
be deemed full performance and shall discharge every agreement and obligation of
Sellers herein contained except any agreements which by their express terms are
to be performed after the Closing Date.
15.14 Limitation of Liability. MGI is a Massachusetts trust and all persons
dealing with MGI must look solely to the property of MGI for the enforcement of
any claims against
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MGI. Neither the trustees, officers, agents nor shareholders of MGI assume any
personal liability for obligations entered into on its behalf. In no event shall
Purchaser seek or attempt to obtain any recovery or judgment against any
trustee, officer, director, employee or shareholder of any Seller or against MGI
or any trustee, officer, director, employee or shareholder of MGI.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the day and year first above written.
SELLERS:
MGI Properties, for itself and as duly
authorized agent for each of the named
Sellers as set forth on Schedule 1
attached hereto.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
PURCHASER:
BCIA Funding Corp.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
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SCHEDULE 1
----------
Identity of Sellers
-------------------
MGI Winthrop Associates, Inc.
MGI Ten Winthrop Square, Inc.
MGI One Portland Square, Inc.
MGI Two Portland Square, Inc.
MGI Elm Street, Inc.
MGI ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
+MGI Glastonbury Corp.
MGI ▇▇▇▇▇▇ Drive, Inc.
MGI Chelmsford Corp.
MGI Point West Corp.
6 TSC, Inc.
15 TSC, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
MGI Bulfinch Drive, Inc.
MGI 8 Forge Park, Inc.
MGI 9 Forge Park, Inc.
MGI 15 Forge Park, Inc.
MGI ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Inc.
MGI Forest Street, Inc.
MGI Harvard Street Corp.
MGI ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
MGI Ballardvale Corp.
MGI Research Drive Corp.
MGI ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, Inc.
MGI One Tech Andover Corp.
MGI Andover Corp.
MGI Tech Center Corp.
MGI ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
MGI ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
MGI Riverside Drive, Inc.
MGI 805 Middle Corp.
MGI Federal Street, Inc.
MGI Two Federal Street, Inc.
MGI Five Federal Street, Inc.
MGI Billerica Road, Inc.
MGI ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, Inc.
MGI One Park West, Inc.
MGI Andover Street, Inc.
MGI ▇▇▇▇▇▇▇ Road, Inc.
MGI GLAS Two Corp.
39