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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): NOVEMBER 14, 1997
ALEXANDRIA REAL ESTATE EQUITIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARACTER)
MARYLAND 1-12993 95-4502084
(State of other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
135 NORTH LOS ROBLES AVENUE, SUITE 250 91101
PASADENA, CALIFORNIA
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (626) 578-0777
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Item 2. Acquisition or Disposition of Assets
On November 14, 1997, Alexandria Real Estate Equities, Inc. completed a
series of four acquisitions. The properties ("Life Science Facilities") are
for lease principally to participants in the life science industry. The
properties were purchased from sellers which are unrelated to each other and
unaffiliated with the Company.
708 Quince Orchard Road is a property located in Gaithersburg, Maryland. The
purchase price was $3,945,000, which was based on arm's length negotiations.
The property is in the process of being converted to a Life Science Facility
containing 49,225 rentable square feet. The property, which was previously
vacant, has been 100% leased at a net effective annual rental rate of $21.75
per foot. The property was purchased on August 26, 1997 from Quince Orchard
Road Limited Partnership II, a Maryland limited partnership.
940 Clopper Road is a Life Science Facility located Gaithersburg, Maryland.
The property was purchased for $3,594,000, which was based on arm's length
negotiations. The property contains 44,464 rentable square feet. It is
presently 63% leased to two tenants at an average net effective annual rental
rate of $12.44 per square foot. The property was purchased on August 26,
1997 from The Variable Annuity Life Insurance Company.
1401 Research Boulevard is a Life Science Facility located in Rockville,
Maryland. The property was purchased for $5,800,000, which was based on arm's
length negotiations. The property contains 48,800 rentable square feet. It
is presently 100% leased at a net effective annual rental rate of $13.82 per
square foot. The property was purchased on September 4, 1997 from Research
Blvd. Partnership, a Maryland Partnership.
1500 East Gude Drive, 3 Taft Court and 3 1/2 Taft Court are Life Science
Facilities located in Rockville, Maryland. The acquisition, which consists
of three buildings, was purchased for $6,500,000, which was based on arm's
length negotiations. The property contains an aggregate of 70,449 rentable
square feet. It is presently 60% occupied at an average net effective
annual rental rate of $11.26 per square foot. A current tenant plans to
vacate the property on December 7, 1997. The foregoing occupancy percentage
gives effect to such vacancy. The property was purchased on November 14,
1997 from Aquila Biopharmaceuticals, Inc.
To finance these acquisitions, the company used approximately $12.8 million
of excess reserves and borrowed $7 million on its line of credit with Bank of
America NT & SA. Inclusive of these purchases, the Company's portfolio
consists of 19 Life Science Facilities comprised of 1,668,000 rentable square
feet.
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Item 7. Financial Statements and Exhibits
(a) Financial statements of properties acquired.
It is impracticable to provide the required financial statements at the time
of the filing of this report. The required financial statements for the
acquired properties will be filed as an amendment to this Form within 60 days.
(b) Pro forma financial information.
It is impracticable to provide the required pro forma financial information
at the time of the filing of this report. The required pro forms financial
information will be filed as an amendment to this Form within 60 days.
(c) Exhibits.
10.42 Purchase and Sale Agreement by and between Alexandria Real Estate
Equities, Inc., Buyer and Quince Orchard Road Limited Partnership
II, Seller.
10.43 Purchase and Sale Agreement and Escrow Instructions by and
between The Variable Annuity Life Insurance Company and
Alexandria Real Estate Equities, Inc.
10.44 First Amendment to Purchase and Sale Agreement by and between
The Variable Annuity Life Insurance Company and Alexandria
Real Estate Equities, Inc.
10.45 Purchase and Sale Agreement and Joint Escrow Instructions as of
June 26, 1997 by and between Alexandria Real Estate Equities,
Inc., Buyer and Research Blvd. Partnership, Seller.
10.46 Purchase Agreement by and between Aquila Biopharmaceuticals, Inc.
and Alexandria Real Estate Equities, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
Date : December 1, 1997 By: _____________________________
Peter J. Nelson
Chief Financial Officer
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PURCHASE AND SALE AGREEMENT
JULY __, 1997
BY AND BETWEEN
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
BUYER
AND
QUINCE ORCHARD ROAD LIMITED PARTNERSHIP II,
SELLER
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT"), is made and
entered into as of July ___, 1997, by and between ALEXANDRIA REAL ESTATE
EQUITIES, INC., a Maryland corporation or its assignee or nominee
(collectively, "BUYER"), and QUINCE ORCHARD ROAD LIMITED PARTNERSHIP II, a
Maryland limited partnership ("SELLER"), for the purposes of setting forth
the agreement of the parties with respect to the transactions contemplated by
this Agreement.
RECITALS
Upon and subject to the terms and conditions set forth in this
Agreement, Seller desires to sell and Buyer desires to purchase all of the
following (collectively, the "PROPERTY"): (i) the fee interest in that
certain real property located in the City of Gaithersburg, County of
Montgomery, State of Maryland, as legally described on EXHIBIT "A" attached
hereto, together with all rights, privileges and easements appurtenant
thereto or used in connection therewith, including, without limitation, all
minerals, oil, gas and other hydrocarbon substances thereon (but only to the
extent now or hereafter owned by Seller), all development rights, air rights,
water, water rights and water stock relating thereto, and any easements,
rights-of-way, or other rights appurtenant thereto or used in connection
therewith (collectively, the "LAND"); (ii) all buildings, improvements,
structures and fixtures included or located on or in the Land (collectively,
the "IMPROVEMENTS"), including, without limitation that certain building
commonly known as 708 Quince Orchard Road (the "BUILDING"), and all other
buildings and structures presently located on or in the Land, and all
apparatus, equipment and appliances now or hereafter owned by Seller and used
in connection with the operation or occupancy of the Land and the
Improvements, such as heating and air conditioning or mechanical systems and
facilities used to provide any utility services, refrigeration, ventilation,
waste disposal or other services now or hereafter located on or in the Land
or the Improvements; (iii) all tangible personal property (collectively, the
"PERSONAL PROPERTY"), if any, now or hereafter owned by Seller and located on
or about the Land or Improvements or attached thereto or used in connection
with the use, operation, maintenance or repair thereof; and (iv) all
intangible property (collectively, the "INTANGIBLE PROPERTY") now or
hereafter owned by Seller and used in connection with the Land, the
Improvements or the Personal Property, or any business or businesses
conducted thereon or with the use thereof, including, without limitation, the
"Service Contracts" (as hereinafter defined), building and trademarks and
trade names, transferable business licenses, permits, applications,
authorizations and other entitlements, transferable guarantees and warranties
covering the Land and/or Improvements, all contract rights, books, records,
reports, test results, environmental assessments, and other similar documents
and materials relating to the use or operation, maintenance or repair of the
Property or the construction or fabrication thereof, and all transferable
utility contracts.
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AGREEMENT
In consideration of the mutual covenants contained in this Agreement
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Buyer and Seller hereby agree as follows:
1. AGREEMENT TO PURCHASE AND SELL.
Subject to all of the terms and conditions of this Agreement, Seller
agrees to sell, transfer and convey to Buyer, and Buyer agrees to acquire and
purchase from Seller, the Property, upon the terms and conditions set forth
herein.
2. PURCHASE PRICE.
The purchase price for the Property (the "PURCHASE PRICE") shall be
the sum of THREE MILLION NINE HUNDRED FORTY-FIVE THOUSAND (United States)
Dollars (U.S. $3,945,000). The Purchase Price shall be payable as follows:
2.1 DEPOSIT. Upon the execution and delivery of this Agreement by the
parties hereto, Buyer shall deposit with Chicago Title Insurance Company, San
Diego Office, as "Escrow Agent," the sum of THREE HUNDRED THOUSAND (United
States) Dollars (U.S. $300,000) (the "DEPOSIT") by wire transfer or certified
or bank check payable to the order of Escrow Agent. The Escrow Agent shall
invest the Deposit in insured money market accounts, certificates of deposit,
United States Treasury Bills or such other instruments as Buyer may instruct
from time to time. In the event of the consummation of the purchase and sale
of the Property as contemplated hereunder, the Deposit together with all
interest accrued thereon shall be paid to Seller at the Closing (as defined
in Section 6 below) and credited against the Purchase Price. In the event
the sale of the Property is not consummated because of the termination of
this Agreement by Buyer in accordance with any right to so terminate provided
herein, or the failure of any condition or any other reason except for a
default under this Agreement solely on the part of the Buyer, the Deposit
together with all interest accrued thereon shall be returned to Buyer.
2.2 BALANCE. On the Closing Date (as defined in Section 6 below),
Buyer shall pay to Seller the balance of the Purchase Price over and above
the Deposit paid by Buyer under SECTION 2.1 above, by wire transfer of
federal funds at the Closing, net of all prorations and adjustments as
provided herein.
3. [Intentionally Omitted]
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4. ACTIONS PENDING CLOSING.
4.1 DUE DILIGENCE PERIOD.
4.1.1 DUE DILIGENCE.
4.1.1.1 PROPERTY DOCUMENTS. Not later than five (5) days
after the date hereof, Seller shall deliver to Buyer copies of all contracts,
documents, leases, books, records and other materials, if any, relating to
the Property, including, without limitation, as-built plans and
specifications, operating statements, rent rolls, leases, engineering tests,
soil tests, a Phase One environmental/asbestos audit of the Property, a Phase
Two environmental audit of the Property, service contracts, structural and
mechanical reports, maps, plans, agreements, governmental permits and
approvals, appraisals, title policies, surveys, construction warranties, land
studies and such other information as may be reasonably required by Buyer to
enable Buyer to complete property questionnaires to determine whether the
acquisition of the Property could result in Buyer losing its status as a real
estate investment trust, as defined in Section 856 of the Internal Revenue
Code of 1986, as amended (collectively, the "PROPERTY DOCUMENTS"), to the
extent that the Property Documents are in Seller's direct possession or
control, or in the direct control or possession of its management agents all
at Seller's sole cost and expense.
4.1.1.2 DILIGENCE TESTS. At all reasonable times from the
date hereof until the Closing or earlier termination of this Agreement,
Buyer, its agents and representatives shall be entitled at Buyer's sole cost
and expense to (i) enter onto the Property during normal business hours and
upon reasonable advance notice to Seller, to perform any inspections,
investigations, studies and tests of the Property, including, without
limitation, physical, structural, mechanical, architectural, engineering,
soils, geotechnical and environmental/asbestos tests that Buyer deems
reasonable; (ii) cause an environmental assessment of the Property to be
performed, upon reasonable notice to Seller; and (iii) review all Property
Documents and examine and copy any and all books and records maintained by
Seller or its agents relating to the Property (including, without limitation,
all documents relating to utilities, zoning, and the access, subdivision and
appraisal of the Property). Buyer shall use its reasonable efforts to
conduct its investigations upon or at the Property in such a manner as to
minimize any interference to the tenants and occupants of the Property.
4.1.1.3 [INTENTIONALLY OMITTED]
4.1.1.4 INSURANCE. Buyer agrees that during the Due
Diligence Period it shall carry, or cause its agent to carry, worker's
compensation and general liability insurance in the amount of $1,000,000 per
occurrence, which insurance shall name Seller as an additional insured; upon
request, Buyer shall provide Seller with a certificate of such insurance
prior to commencing Buyer's physical inspections of the Property.
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4.1.1.5 INDEMNITY AND REPAIR. Buyer agrees to indemnify and
hold harmless Seller from any loss, cost, damage or expense (including
reasonable attorneys' fees) arising from any actual damage to the Property or
any injury to persons caused by any act of Buyer or its agents or consultants
as a result of the inspections, investigations or tests performed pursuant to
Section 4.1.1.2 above, which indemnity shall survive the termination of this
Agreement or the Closing and delivery of the Deed (as hereinafter defined)
for a period of two (2) years; provided, however, that Buyer's indemnity
hereunder shall not include any losses, cost, damage or expenses resulting
from (x) the acts of Seller, its agents or representatives, or (y) the
discovery of any pre-existing condition of the Property. In addition, if
this Agreement is terminated, Buyer shall promptly repair any material damage
to the Property caused by its entry thereon and shall restore the Property
substantially to the condition in which it existed prior to such entry;
provided, however, that Buyer shall have no obligation to repair any damage
caused by Seller's negligence or willful misconduct or to remediate, contain,
abate or control any "Material of Environmental Concern" (as hereinafter
defined) or any hazardous defect that existed at the Property prior to
Buyer's entry thereon.
4.1.2 TERMINATION RIGHT. Buyer shall have the right at any time
during the period (the "DUE DILIGENCE PERIOD") beginning upon the date of
this Agreement and ending thirty (30) calendar days following the date of
mutual execution of this Agreement by both Buyer and Seller (the "DUE
DILIGENCE TERMINATION DATE") to terminate this Agreement if, during the
course of Buyer's due diligence investigation of the Property, Buyer
determines in its sole and absolute discretion that the Property is not
acceptable to Buyer. Buyer may exercise such termination right by delivering
written notice of termination to Seller on or before the Due Diligence
Termination Date. Upon such termination, (i) Escrow Agent shall return the
Deposit, together with all interest and earnings accrued thereon, to Buyer,
(ii) Buyer shall pay the cancellation charges of Escrow Agent, and (iii) this
Agreement shall automatically terminate and be of no further force or effect
and neither party shall have any further rights or obligations hereunder,
other than pursuant to any provision hereof which expressly survives the
termination of this Agreement. If Buyer does not exercise such termination
in writing prior to the Due Diligence Termination Date, then Buyer's right to
terminate this Agreement pursuant to this Section 4.1.2 shall automatically
lapse.
4.2 TITLE.
4.2.1 ITEMS OBTAINED BY BUYER. Seller hereby authorizes Buyer, on
Buyer's own behalf and at Buyer's sole cost and expense, to obtain (i) a
commitment (the "PTR") for title insurance issued by Chicago Title Insurance
Company (in such capacity, "TITLE COMPANY") showing the current status of
title to the Land and Improvements together with legible copies of all
documents and items referenced as exceptions therein, (ii) an as-built
American Land Title Association survey of the Land and Improvements (the
"SURVEY") prepared by a surveyor registered in the State of Maryland (the
"SURVEYOR"), showing all improvements and structures, all roads, access to
and from the Land, and encroachments and encumbrances affecting the same, in
form reasonably satisfactory to Buyer and Title Company,
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prepared and certified to Buyer, Title Company, and such other persons or
entities as Buyer may, in its discretion, request, and (iii) a UCC Search
with regard to the Personal Property (the "UCC SEARCH").
4.2.2 BUYER'S REVIEW OF TITLE. Buyer shall have until the Due
Diligence Termination Date to notify Seller in writing of any objection which
Buyer may have to any exception reported in the PTR or matter shown on the
Survey or the UCC Search. Exceptions reported in the PTR and matters shown on
the Survey or the UCC Search (or any updates thereof) not objected to by
Buyer as provided above shall be deemed to be "PERMITTED EXCEPTIONS." Seller
shall have until the fifth (5th) calendar day after the date on which Buyer
delivers such objections, if any, to Seller, to notify Buyer in writing as to
(a) whether Seller will not remove or cure the objections, (b) whether Seller
will remove from title to the Property any exceptions and matters so objected
to by the Buyer, or (c) whether Seller will obtain for Buyer title insurance
insuring over such exceptions or matters, such insurance to be in form and
substance satisfactory to Buyer. If Seller informs Buyer that Seller is
unwilling or unable to remove or satisfactorily insure over any exceptions or
matters objected to by Buyer and Buyer is unwilling to take title subject
thereto, then on or before the fifth (5th) calendar day after the date on
which Seller delivers such notice, Buyer, by written notice to Seller, may
either (a) waive such exceptions or matters, whereupon such exceptions or
matters shall be deemed Permitted Exceptions or (b) terminate this Agreement
(in which case Escrow Agent shall return to Buyer the Deposit together with
any interest thereon, Buyer shall pay the cancellation charges of Escrow
Agent, and neither party shall thereafter have any rights or obligation to
the other hereunder). Seller shall in any event be required to discharge and
remove any and all liens affecting the Property which secure an obligation to
pay money (other than installments of real estate taxes not delinquent as of
the Closing) and, even though Buyer does not expressly disapprove such liens,
such liens shall not be Permitted Exceptions and, in the event Seller fails
to discharge such liens at or prior to Closing (it being understood that the
proceeds of Closing may be used to discharge such liens), then Buyer may
discharge such liens at Closing and deduct from the cash portion of the
purchase price the amounts paid by Buyer to the holder of the liens. In the
event that Seller informs Buyer that Seller will either remove or
satisfactorily insure over such exceptions or matters and Seller fails to
either remove or satisfactorily insure over such exceptions or matters by the
Closing, then Seller shall be in default of this Agreement and accordingly,
Escrow Agent shall return the Deposit to Buyer together with all interest
earned thereon and Buyer shall be entitled to pursue any remedy available to
it under Section 11.2 hereof.
4.2.3 CONDITION OF TITLE AT CLOSING. Upon the Closing, Seller
shall sell, transfer and convey to Buyer fee simple title to the Land and
Improvements thereon by a duly executed and acknowledged special warranty
deed in the form of EXHIBIT "C" attached hereto (the "DEED"), subject only to
the Permitted Exceptions. Prior to Closing, Seller shall not take any action
or commit or suffer any acts which would give rise to a variance from the
current legal description of the Land, or cause the creation of any exception
or encumbrance against or respecting the Land without the prior written
consent of Buyer in its sole discretion. Nothing
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in this SECTION 4.2.3 shall preclude Buyer from disapproving title matters in
accordance with the provisions of SECTION 4.2.2 above.
5. CONDITIONS PRECEDENT TO CLOSING.
5.1 BUYER'S CONDITIONS. The obligation of Buyer to render performance
under this Agreement is subject to the following conditions precedent (and
conditions concurrent, with respect to deliveries to be made by the parties
at Closing) (the "CONDITIONS PRECEDENT"), which conditions may be waived, or
the time for satisfaction thereof extended (but not beyond the scheduled
Closing Date), by Buyer only in a writing executed by Buyer (provided,
however, that any such waiver shall not affect Buyer's ability to pursue any
remedy it may have with respect to any breach hereunder by Seller):
5.1.1 TITLE. Title Company shall be prepared and irrevocably
committed to issue to Buyer an American Land Title Association extended
coverage owner's policy of title insurance in favor of Buyer in an amount
equal to the Purchase Price showing fee title to the Property vested in
Buyer, with those endorsements requested by Buyer which Title Company has
agreed to issue as part of the PTR prior to the end of the Due Diligence
Period, subject only to the Permitted Exceptions (collectively, the "OWNER'S
TITLE POLICY").
5.1.2 SELLER'S DUE PERFORMANCE. All of the representations and
warranties of Seller set forth in SECTION 7 below shall be true and correct
as of the Closing Date in all material respects, and Seller, on or prior to
the Closing Date, shall have complied with and/or performed all of the
obligations, covenants and agreements required on the part of Seller to be
complied with or performed pursuant to the terms of this Agreement. On the
Closing Date, Seller shall deliver a certificate, in the form of EXHIBIT "D"
attached hereto, to Buyer certifying that all of the representations and
warranties of Seller as set forth in SECTION 7 below are true and correct in
all material respects as of such date.
5.1.3 PHYSICAL CONDITION OF PROPERTY. Subject to the provisions
of SECTION 10 below, the physical condition of the Property shall be
substantially the same on the Closing Date as on the date of the execution of
this Agreement, except for (i) reasonable wear and tear, and (ii) any damages
due to any act of Buyer or Buyer's Representatives.
5.1.4 BANKRUPTCY. No action or proceeding shall have been
commenced by or against Seller under the federal bankruptcy code or any state
law for the relief of debtors or for the enforcement of the rights of
creditors and no attachment, execution or levy shall have attached to or been
issued with respect to the Property or any portion thereof.
5.1.5 BILL OF SALE. On or before the Close of Escrow, Seller
shall deliver to Buyer a bill of sale and assignment (the "BILL OF SALE AND
ASSIGNMENT"), by which Seller shall transfer to Buyer all the Personal
Property and the Intangible Property, including,
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without limitation, the Property Documents, free of all liens and
encumbrances, in the form of EXHIBIT "F" attached hereto.
5.1.6 NONFOREIGN AFFIDAVIT. On or before the Close of Escrow,
Seller shall deliver to Buyer the Nonforeign Affidavit (the "NONFOREIGN
AFFIDAVIT") in the form of EXHIBIT "H" attached hereto, executed by Seller.
5.1.7 NO MORATORIA. After the Due Diligence Termination Date, no
moratorium, statute, regulation, ordinance, or federal, state, county or
local legislation, or order, judgment, ruling or decree of any governmental
agency or of any court shall have been enacted, adopted, issued, entered or
pending which would adversely affect Buyer's intended use of the Property;
PROVIDED, HOWEVER, that this condition shall not extend to any such
moratorium, statute, regulation, ordinance, or legislation, order, judgment,
ruling or decree that was enacted, adopted, issued, entered or pending on or
before the Due Diligence Termination Date.
5.2 FAILURE OF CONDITIONS PRECEDENT. Subject to Buyer's rights
hereunder, if any of the Conditions Precedent have not been fulfilled within
the applicable time periods, Buyer may:
5.2.1 WAIVE AND CLOSE. Waive the condition or disapproval and
close Escrow in accordance with this Agreement, with or without adjustment or
abatement of the Purchase Price; or
5.2.2 TERMINATE. Terminate this Agreement by written notice to
Seller and to Escrow Agent, in which event Escrow Agent shall return to Buyer
the Deposit together with any interest thereon, Buyer shall pay the
cancellation charges of Title Company and Escrow Agent, and neither party
shall thereafter have any rights or obligations to the other hereunder, other
than pursuant to any provision hereof which expressly survives the
termination of this Agreement.
5.3 SELLER'S CONDITIONS. The obligation of Seller to render
performance under this Agreement is subject to the following conditions
precedent (and conditions concurrent with respect to deliveries to be made by
the parties at Closing), which conditions may be waived, or the time for
satisfaction thereof extended, by Seller only in a writing executed by Seller
(PROVIDED, HOWEVER, that any such waiver shall not affect Seller's ability to
pursue any remedies it may have with respect to any breach hereunder by
Buyer):
5.3.1 BUYER'S DUE PERFORMANCE. All of the representations and
warranties of Buyer set forth in SECTION 8 shall be true and correct as of
the Closing Date, and Buyer, on or prior to the Closing Date, shall have
complied with and/or performed all of the obligations, covenants and
agreements required on the part of Buyer to be complied with or performed
pursuant to the terms of this Agreement. On the Closing Date, Buyer shall
deliver
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a certificate, in the form of EXHIBIT "I" attached hereto, to Seller
certifying that all of the representations and warranties of Buyer as set
forth in SECTION 8 below are true and correct as of such date.
5.4 FAILURE OF CONDITION. Subject to Seller's rights hereunder in the
event of a default by Buyer which results in the failure of a condition set
forth in Section 5.3, if any of the Seller's conditions have not been
fulfilled within the applicable time periods, Seller may terminate this
Agreement by delivery of written notice to Buyer and Escrow Agent, in which
event Escrow Agent shall return to Buyer the Deposit together with any
interest thereon, the Buyer shall pay the cancellation charges of Title
Company and Escrow Agent, and neither party shall thereafter have any rights
or obligations to the other hereunder.
6. CLOSING.
6.1 CLOSING DATE. Subject to the provisions of this Agreement, the
closing of the transactions contemplated by this Agreement (the "CLOSING")
shall (unless otherwise mutually agreed to by the parties) take place at 9:00
a.m. on or before the fifteenth calendar day following the Due Diligence
Termination Date, at a mutually agreeable location in the Baltimore,
Maryland, metropolitan area. As used herein, "CLOSING DATE" or "CLOSE OF
ESCROW" shall mean the date upon which Closing actually occurs.
6.2 DELIVERIES BY SELLER. At the Closing, Seller, at its sole cost and
expense, shall deliver or cause to be delivered the following documents and
instruments, each dated as of the Closing Date and executed by Seller, in
addition to the other items and payments required by this Agreement to be
delivered by Seller:
6.2.1 DEED. The original executed and acknowledged Deed
conveying the Property to Buyer or its nominee;
6.2.2 NONFOREIGN AFFIDAVIT. The original Nonforeign Affidavit
executed by Seller;
6.2.3 BILL OF SALE AND ASSIGNMENT. Two original counterparts of
the Bill of Sale and Assignment;
6.2.4 SELLER'S CERTIFICATE. A certificate, in the form of
attached EXHIBIT "D", executed by Seller providing that all conditions to
Seller's obligation to proceed to the Closing that Buyer was to satisfy or
perform have been satisfied and performed, and that Seller's representations,
covenants, and warranties made in or pursuant to this Agreement are true,
accurate, correct and complete in all material respects as of the Close of
Escrow;
6.2.5 PROOF OF AUTHORITY. Such proof of Seller's authority and
authorization to enter into this Agreement and the transaction contemplated
hereby, and such
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proof of the power and authority of the individual(s) executing or delivering
any instruments, documents or certificates on behalf of Seller to act for and
bind Seller as may be reasonably required by Title Company or Buyer; and
6.2.6 OTHER. Such other documents and instruments, signed and
properly acknowledged by Seller, if appropriate, as may be reasonably
acceptable to Seller and reasonably required by Buyer, Title Company or
otherwise in order to effectuate the provisions of this Agreement and the
Closing of the transactions contemplated herein.
6.3 DELIVERIES BY BUYER. At the Closing, Buyer, at its sole cost and
expense, shall deliver or cause to be delivered the balance of the Purchase
Price pursuant to SECTION 2 hereof and Buyer's share of prorations and
Closing costs, as provided in SECTIONS 6.5 AND 6.6, respectively; and such
other documents and instruments, signed and properly acknowledged by Buyer,
if appropriate, as may reasonably be required by Title Company or otherwise
in order to effectuate the provisions of this Agreement and the closing of
the transactions contemplated herein, including, without limitation, the
following:
6.3.1 BILL OF SALE AND ASSIGNMENT. Two original counterparts of
the Bill of Sale and Assignment duly executed and acknowledged by Buyer.
6.3.2 BUYER'S CERTIFICATE. A certificate, in the form of attached
EXHIBIT "I", executed by Buyer providing that Buyer's representations,
covenants, and warranties made in or pursuant to this Agreement are true,
accurate, correct and complete as of the Closing Date; and
6.3.3 EVIDENCE OF AUTHORITY. Reasonable evidence of Buyer's
authority and authorization to enter into this Agreement and the transaction
contemplated hereby, and reasonable evidence of the power and authority of
the individual(s) executing or delivering any instruments, documents or
certificates on behalf of Buyer to act for and bind Buyer.
6.4 ACTIONS BY ESCROW AGENT. Provided that Escrow Agent shall not have
received written notice from Buyer or Seller of the failure of any condition
to the Closing or of the termination this Agreement, at the Closing Escrow
Agent shall disburse the Deposit to Seller.
6.5 PRORATIONS. Rentals, revenues, and other income, if any, from the
Property, taxes, assessments, improvement bonds, service or other contract
fees, utility costs, and other expenses affecting the Property shall be
prorated between Buyer and Seller as of the Closing Date. For purposes of
calculating prorations, Buyer shall be deemed to be in title to the Property,
and therefore entitled to the income and responsible for the expenses, after
12:01 a.m. on the Closing Date. Delinquent rentals more than thirty (30)
days past due as of the Closing Date shall not be prorated on the Closing
Date, and Seller shall retain its entire right, title and interest in and to
such delinquent rentals (including the right to collect to same). All
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non-delinquent real estate taxes or assessments on the Property shall be
prorated based on the actual current tax bill, but if such tax bill has not
yet been received by Seller by the Closing Date or if supplemental taxes are
assessed after the Closing for the period prior to the Closing, the parties
shall make any necessary adjustment after the Closing by cash payment to the
party entitled thereto so that Seller shall have borne all taxes, including
all supplemental taxes, allocable to the period prior to the Closing and
Buyer shall bear all taxes, including all supplemental taxes, allocable to
the period after the Closing. If any expenses attributable to the Property
and allocable to the period prior to the Closing are discovered or billed
after the Closing, the parties shall make any necessary adjustment after the
Closing by cash payment to the party entitled thereto so that Seller shall
have borne all expenses allocable to the period prior to the Closing and
Buyer shall bear all expenses allocable to the period after the Closing.
Buyer shall use its reasonable, good faith efforts (provided that such
efforts will not require Buyer to incur any material out-of-pocket costs or
engage in any litigation) to collect any delinquent rentals attributable or
allocable to the period prior to the Closing, and if Buyer actually collects
any such delinquent rentals Buyer shall promptly remit such amount, less the
costs of collection thereof, to Seller following the Closing. At Closing,
Buyer shall also pay or cause to be paid to Seller the amount of $4,253 as
reimbursement to Seller of the costs of tax assessment appeals undertaken by
Seller, which appeals resulted in a reduction in the assessed value of the
Property. The provisions of this SECTION 6.5 shall survive the Closing for a
period of one (1) year.
6.6 CLOSING COSTS. Seller shall pay one-half (1/2) of all transfer,
recordation, stamp, sales and other taxes related to the transfer of the
Property, and Seller's recording fees. Buyer shall pay one-half (1/2) of all
transfer, recordation, stamp, sales and other taxes related to the transfer
of the Property, the cost of the Survey obtained by Buyer, all premiums,
costs and fees related to delivery of the Owner's Title Policy, Escrow
Agent's escrow fees and costs, Buyer's recording fees, and all other closing
costs. Buyer and Seller shall each pay their own respective attorney and
advisor fees.
6.7 DELIVERIES OUTSIDE OF ESCROW. Seller shall deliver possession of
the Property to Buyer upon the Closing. Further, Seller hereby covenants and
agrees to deliver to Buyer, on or prior to the Closing, the following items:
6.7.1 [INTENTIONALLY OMITTED.]
6.7.2 INTANGIBLE PROPERTY. The Intangible Property, including,
without limitation, the original Property Documents; and
6.7.3 PERSONAL PROPERTY. The Personal Property (other than the
Personal Property which will be left upon, at or in the Land or the
Improvements), including, without limitation, all keys to the Improvements.
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7. SELLER'S REPRESENTATIONS AND WARRANTIES.
Seller represents and warrants to and agrees with Buyer that, as of the
date hereof and as of the Closing:
7.1 TITLE.
7.1.1 OWNERSHIP. Seller is the legal and equitable owner of the
Property, with full right to convey the same. Seller has not granted any
options or rights of first refusal or rights of first offer to third parties
to purchase or otherwise acquire an interest in the Property.
7.1.2 ENCUMBRANCES. Other than Seller's mortgage in favor of
Metropolitan Life Insurance Company, as successor to New England Mutual Life
Insurance Company (the "FIRST MORTGAGE") and Seller's mortgage in favor of
The Board of Trustees of the Joint Municipal Employees Benefits System (the
"SECOND MORTGAGE" and together with the First Mortgage, the "MORTGAGE"),
which will be satisfied or released and will not encumber the Property on or
prior to the Closing (PROVIDED, that Sellers' liability on account of a
failure to satisfy or release the Mortgage shall be as specified in SECTION
9.3 hereof), the Property is now free and clear of all liens, encumbrances,
claims, rights, demands, easements, leases, agreements, covenants,
conditions, and restrictions of any kind created or suffered by Seller,
except for those special exceptions disclosed in Schedule B - Section II of
that certain Commitment for Title Insurance, dated effective November 16,
1992, issued by Chicago Title Insurance Company as no. BC-4625, and at the
Closing the Property will be free and clear of all liens, encumbrances,
claims, rights, demands, easements, leases, agreements, covenants,
conditions, and restrictions of any kind created or suffered by Seller,
except for (A) the Permitted Exceptions, and (B) the Service Contracts.
7.1.3 [Intentionally Omitted]
7.1.4 STREETS. Seller has received no notice of any existing,
proposed, or contemplated plans to widen, modify, or realign any street or
highway which affects the size of, use of, or set-backs on the Property.
7.2 PROPERTY DOCUMENTS. The Property Documents required to be
delivered by Seller pursuant to the terms hereof constitute all of the
material documents in Seller's direct possession or control or the direct
possession of control of Seller's managing agents and relating to the
Property and each such Property Document as delivered by Seller constitutes a
true, correct and complete copy of such Property Document in the possession
or control of Seller. There are no commitments or agreements affecting the
Property and entered into by or on behalf of Seller, or otherwise known to
Seller, which have not been (or will not be prior to the Closing, in
accordance herewith) disclosed by Seller to Buyer in writing.
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7.3 LEASES. There currently are (and at the Closing there will be) no
leases, tenancies or occupancies affecting, or in effect at, the Property,
and there are no agreements, options or similar rights in favor of any third
party which may give rise to any lease, tenancy or occupancy, and there are
(and at the Closing there will be) no rentals attributable to periods after
the Closing Date and no unrefunded security deposits.
7.4 CONDITION OF PROPERTY. Buyer understands and agrees that the
Property is being sold "AS-IS" with no representations or warranties as to
the physical condition of the Property except as expressly provided in this
Agreement.
7.5 SPECIAL ASSESSMENTS OR CONDEMNATION. To the best of Seller's
knowledge, there are not presently pending (i) any special assessments,
except those shown as exceptions on the PTR, or (ii) condemnation actions
against the Property or any part, and Seller has not received notice of any
contemplated special assessments or eminent domain proceedings that would
affect the Property.
7.6 UTILITIES. To the best of Seller's knowledge, all water, sewer,
electric, gas, telephone, and drainage facilities, and all other utilities
required by law or for the operation of the Property for general office and
warehouse use are installed to the property lines of the Property, have been
connected to the buildings upon the Property, pursuant to valid permits, are
in working order, and are adequate to service the Property.
7.7 PERMITS. Seller does not have in its possession any licenses,
permits, easements, rights of way or proofs of dedication, or evidence of any
of the foregoing, with respect to the Property.
7.8 SERVICE CONTRACTS. There are no service, maintenance, repair,
management, leasing, or supply contracts or other contracts (including,
without limitation, janitorial, elevator and landscaping agreements)
affecting the Property, oral or written, except as set forth on the Schedule
attached hereto as EXHIBIT "K" (the "SERVICE CONTRACTS") and, except as set
forth on such Schedule, all Service Contracts are cancelable without cost at
the option of Seller or the then owner of the Property upon not more than
thirty (30) days prior written notice.
7.9 EMPLOYEES. Seller has no employees.
7.10 DEFAULTS. Seller is not in default of Seller's obligations or
liabilities pertaining to the Property (other than with respect to the
Mortgage), and to the best of Seller's knowledge, there are no facts,
circumstances, conditions, or events which, after notice or lapse of time,
would constitute default. Seller has not received notice or information that
any party to any of the Property Documents considers a breach or default to
have occurred, and to the best of Seller's knowledge, Seller has no reason to
believe that there is likely to be a default under any of the documents.
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7.11 CONSENTS AND RELEASES. Seller has obtained (or by the Closing,
will obtain) all required consents, releases, and permissions to convey good
and marketable title to Buyer.
7.12 AUTHORITY. This Agreement and all other documents delivered prior
to or at the Closing (i) have been (or shall be prior to the delivery
thereof) duly authorized, executed, and delivered by Seller; (ii) are (or
shall be upon the delivery thereof) binding obligations of Seller; and (iii)
do not violate the formation documents of Seller. Seller further represents
that it is a limited partnership duly organized and existing in good standing
under the laws of the State of Maryland with its principal place of business
in Baltimore County, Maryland.
7.13 BANKRUPTCY. No filing or petition under the United States
Bankruptcy Law or any insolvency laws, or any laws for composition of
indebtedness or for the reorganization of debtors has been filed with regard
to Seller or any general partner of Seller.
7.14 CERTIFICATES OF OCCUPANCY. Seller has no knowledge of any fact or
circumstance which would prevent or inhibit Buyer's ability to receive a
certificate of occupancy, or the equivalent permitting required by the
applicable licensing agency, for the use and occupancy of the Property for
general office and warehouse use.
7.15 FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT. Seller is not a
foreign person within the meaning of 42 USCS Section 1445(f)(3).
7.16 APPROVALS. Seller has not received any notice from any
governmental entity to the effect that the Property is in violation of any
Laws (as hereinafter defined) or other applicable requirement of any
governmental entity for failure to obtain or maintain in effect any
certifications, approvals, consents, authorizations, licenses, and permits
required by any governmental authority in connection with the ownership, and
current use and occupancy of the Property.
7.17 INSURANCE. There are currently in effect such insurance policies
as are customarily maintained with respect to similar properties. All
premiums due on such insurance policies have been paid by Seller and Seller
will maintain such insurance policies from the date hereof through the
Closing Date or earlier termination of this Agreement. Seller has not
received and has no knowledge of any notice or request from any insurance
company requesting the performance of any work or alteration with respect to
the Property. Seller has received no notice from any insurance company
concerning, nor is Seller aware of, any defects or inadequacies in the
Property which, if not corrected, would result in the termination of
insurance coverage or increase its cost. Seller hereby covenants to name
Buyer as an additional insured during the period prior to Closing.
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7.18 LITIGATION. Except as set forth on the schedule attached hereto
as EXHIBIT "M", there are no actions, suits or proceedings before any
judicial or quasi-judicial body, by any governmental authority or other third
party, pending, or to Seller's best knowledge, threatened, against or
affecting all or any portion of the Property. There are no actions, suits or
proceedings pending, contemplated or threatened by Seller in connection with
all or any portion of the Property or Seller's ownership, rights, use,
development or maintenance thereof, including, without limitation, tax
reduction proceedings; and from and after the date hereof, Seller shall not
commence or allow to be commenced on its behalf any action, suit or
proceeding with respect to all or any portion of the Property without the
prior written consent of Buyer; provided, however, that Seller may, without
Buyer's consent, engage in tax reduction proceedings that do not adversely
affect Buyer provided that Seller keeps Buyer informed as to the nature,
status and progress of such proceedings. No attachments, execution
proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings are pending, or, to Seller's
best knowledge, threatened, against Seller. In the event any proceeding of
the character described in this SECTION 7.18 is initiated prior to the
Closing, Seller shall promptly advise Buyer in writing.
7.19 COMPLIANCE WITH LAWS. Seller has not received any notice that the
Property is not in full compliance with any existing laws, rules,
regulations, ordinances and orders of all applicable federal, state, city and
other governmental authorities in effect as of the date of this Agreement
(collectively, "LAWS"), including, without limitation, all Laws with respect
to zoning, building, fire and health codes, environmental protection and
sanitation and pollution control.
7.20 TOXIC OR HAZARDOUS MATERIALS.
7.20.1 DEFINITIONS.
(a) "ENVIRONMENTAL CLAIM" means any claim, action, cause of
action, investigation or notice (written or oral) by any person or entity
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, personal injuries, or
penalties) arising out of, based on or resulting from (i) the manufacture,
treatment, processing, distribution, use, transport, handling, deposit,
storage, disposal, leaking or other presence, or release into the environment
of any "Material of Environmental Concern" (as defined below) in, at, on,
under or about any location, whether or not owned or operated by Seller or
(ii) circumstances forming the basis of any violation, or alleged violation,
of any "Environmental Law" (as defined below).
(b) "ENVIRONMENTAL LAWS" means all federal, state, local and
foreign laws and regulations relating to pollution or protection of human
health or the environment (including, without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
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manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
(c) "MATERIAL OF ENVIRONMENTAL CONCERN" means chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum and petroleum
products.
7.20.2 REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to and agrees with Buyer that, as of the date hereof, and as of the
Closing Date: (i) except as disclosed in the Environmental Reports, Seller
has not received any notice that either the Property or Seller is not in full
compliance with any applicable Environmental Laws relating to the Property;
(ii) except as disclosed in the Environmental Reports, Seller has not
received any communication (written or oral), whether from a governmental
authority, citizens group, employee or otherwise, that alleges that Seller is
not in such full compliance; (iii) Seller has not received any notice that
there is any Environmental Claim pending or threatened with regard to the
Property; and (iv) without in any way limiting the generality of the
foregoing, except for materials used by tenants at the Property, Seller (it
being acknowledged that this representation is made solely as to Seller and
its employees and not Seller's predecessors-in-interest nor tenants of the
Property) has not stored, disposed or arranged for the disposal of Materials
of Environmental Concern on the Property.
7.21 NO RESTRICTION ON ACCESS. Except as contained in the Permitted
Exceptions, Seller has not received any notice that any fact or condition
exists which would prohibit or adversely affect the right of access to or
from the Property from or to the existing highways and roads (all of such
existing highways and roads being duly opened and dedicated to the
municipality having jurisdiction thereof) and Seller has not received any
notice of any pending or threatened restriction or denial, governmental or
otherwise, upon such ingress and egress.
7.22 SOILS. Seller has not received any notice of any adverse soil
conditions on the Property affecting the existing improvements thereon.
7.23 STORM DRAINAGE. Seller has not received any notice to the effect
that all storm water flowing from the Property does not drain either into a
public system or onto a permitted location and through easements for the
benefit of the Property.
7.24 NO CONFLICTS. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, and compliance with the
terms of this Agreement will not conflict with, or, with or without notice or
the passage of time or both, result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, deed of trust,
mortgage, loan agreement, or other document, or instrument or agreement, oral
or written, to which Seller is a party or by which Seller or the Property is
bound, or any applicable regulation of any governmental agency, or any
judgment, order or decree of any court having jurisdiction over Seller or all
or any portion of the Property.
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7.25 SURVIVAL. All of the representations, warranties and agreements
of Seller set forth in this Agreement shall be true upo~ the execution of
this Qgreement, shall be deemed to be repeated at and as of the Closing Date
without the necessity of a separate certificatu with respect thereto and
shall survive the delivery of the Deed and other Closing instruments and
documents for a period of two (2) years.
7.26 SELLER'S KNOWLEDGE. As used herein, the phrases "to Seller's best
knowledge", "to the best of Seller's knowledge" and words of similar import
shall mean the actual knowledge of only Dennis Townsend, Judy Waranch and
Daniel Cramer and no other person or entity. Seller represents and warrants
that the foregoing persons are the persons affiliated with Seller with the
primary responsibility for the Property, and that no other person or entity
affiliated with or controlling, controlled by, or under common control with
Seller possesses equal or superior knowledge with respect to the Property.
8. BUYER'S REPRESENTATIONS AND WARRANTIES.
Buyer represents and warrants to and agrees with Seller that, as of the
date hereof, and as of the Closing Date:
8.1 NO CONFLICTS. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, and compliance with the
terms of this Agreement will not conflict with, or, with or without notice or
the passage of time or both, result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, deed of trust,
mortgage, loan agreement, or other document or instrument to which Buyer is a
party or by which Buyer is bound, or any applicable regulation of any
governmental agency, or any judgment, order or decree of any court having
jurisdiction over Buyer or all or any portion of the Property.
8.2 DUE ORGANIZATION; CONSENTS. Buyer is a corporation duly organized
and existing in good standing under the laws of the State of Maryland with
its principal place of business in California. All requisite corporate
action has been taken by Buyer in connection with entering into this
Agreement, and will be taken prior to the Closing in connection with the
execution and delivery of the instruments referenced herein and the
consummation of the transactions contemplated hereby. No consent of any
partner, shareholder, beneficiary, creditor, investor, judicial or
administrative body, governmental authority or other party is required in
connection herewith which has not been obtained.
8.3 BUYER'S AUTHORITY; VALIDITY OF AGREEMENTS. Subject to Buyer's
board of directors' approval (which, unless Buyer has theretofore terminated
this Agreement, shall be obtained on or before the expiration of the Due
Diligence Period), Buyer has full right, power and authority to purchase the
Property from Seller as provided in this Agreement and to carry out its
obligations hereunder. The individual(s) executing this Agreement and the
instruments referenced herein on behalf of Buyer have the legal power, right
and actual authority to bind
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Buyer to the terms hereof and thereof. This Agreement is and all other
documents and instruments to be executed and delivered by Buyer in connection
with this Agreement shall be duly authorized, executed and delivered by Buyer
and shall be valid, binding and enforceable obligations of Buyer.
8.4 SURVIVAL. All of the representations, warranties and agreements of
Buyer set forth in this Agreement shall be true upon the execution of this
Agreement, shall be deemed to be repeated at and as of the Closing Date
without the necessity of a separate certificate with respect thereto and
shall survive the delivery of the Deed and other Closing instruments and
documents for a period of two (2) years.
9. ADDITIONAL COVENANTS OF SELLER.
Seller agrees that between the date hereof and the Closing Date:
9.1 TITLE. Except as may be expressly permitted hereby, Seller shall
not directly or indirectly sell, assign or create any right, title or
interest whatsoever in or to the Property, or create or permit to exist
thereon any lien, charge or encumbrance other than the Permitted Exceptions
and the Mortgage, or enter into any agreement to do any of the foregoing,
including, without limitation, any new leases, occupancies or tenancies or
new Service Contracts (other than Service Contracts which may be terminated
by Buyer without penalty upon not more than 30 days notice), without the
prior written consent of Buyer.
9.2 NOTICE OF CHANGE IN CIRCUMSTANCES. Seller shall promptly notify
Buyer of any change in any condition with respect to the Property or any
portion thereof or of any event or circumstance of which Seller becomes aware
subsequent to the date of this Agreement which (a) materially, adversely
affects the Property or any portion thereof or the use or operation of the
Property or any portion thereof, (b) makes any representation or warranty of
Seller to Buyer under this Agreement materially untrue or misleading or (c)
makes any covenant of Seller under this Agreement incapable or materially
less likely of being performed, it being expressly understood that Seller's
obligation to provide information to Buyer under this SECTION 9.2 shall in no
way relieve Seller of any liability for a breach by Seller of any of its
representations, warranties or covenants under this Agreement.
9.3 NO DEFAULTS; MAINTENANCE OF PROPERTY. Except with respect to the
Mortgage, Seller shall not materially default beyond any applicable grace
period with respect to the performance of any obligation relating to the
Property, such obligations to include, without limitation, the payment of all
amounts due and the performance of all obligations with respect to any
existing indebtedness or existing leases or contracts. Seller shall operate
and maintain the Property in accordance with Seller's practice as of the date
of this Agreement and all applicable laws, rules and regulations affecting
the Property or any portion thereof. With respect to the Mortgage, Seller
shall keep Buyer apprised of any action by or on behalf of the mortgagees
thereunder to exercise any remedies against the Property, and of any
agreement
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between Seller and such mortgagees with respect to the Mortgage and the
satisfaction thereof, and shall provide copies of all documents and
agreements executed by Seller and such mortgages and all correspondence to or
from such mortgagees. In the event that Seller is unable to convey the
Property to Buyer as required hereby as a result, directly or indirectly, of
the Mortgage, upon delivery of reasonable written evidence that Seller is
unable to convey the Property as required hereby, this Agreement shall
terminate and be of no further force or effect, in which event (x) Escrow
Agent shall return to Buyer the Deposit together with any interest thereon,
(y) Seller shall reimburse Buyer for all of Buyer's reasonable out-of-pocket
expenses incurred in connection with Buyer's investigations of the Property
and the negotiation and execution of this Agreement and any documents to be
delivered pursuant hereto (including, without limitation, cancellation
charges of Title Company and Escrow Agent, reasonable attorneys' and
consultants' fees, costs and disbursements), which reimbursement, in the
aggregate, shall not exceed $50,000, and (z) neither party shall thereafter
have any rights or obligations to the other hereunder. Seller and Buyer
acknowledge that (a) an affiliate of Seller ("SELLER AFFILIATE") (i) has
entered into a written agreement to purchase one of the loans constituting
part of the Mortgage (the "FIRST MORTGAGE AGREEMENT"), and (ii) has executed
and sent to the holder of the other loan constituting part of the Mortgage an
agreement to purchase such other loan (together with the First Mortgage
Agreement, the "MORTGAGE AGREEMENTS"), (b) the date by which Seller Affiliate
must close the transactions which are the subjects of the Mortgage Agreements
is prior to the date by which the Closing must occur hereunder, and (c)
neither Seller nor Seller Affiliate intends to use its own funds or the funds
of its principals or other affiliates to purchase the loans. Seller agrees
to use its good faith efforts to cause Seller Affiliate to fulfill its
obligations under the Mortgage Agreements, but such obligation shall not (X)
require Seller or Seller Affiliate to fund the purchases of the loans from
Seller's, Seller Affiliate's or any other affiliate's funds or from the funds
of the principals of Seller, Seller Affiliate or any other affiliate, (Y)
require Seller to refinance the Property before Closing on terms that Seller,
in its sole discretion, does not deem to be in its best interests, or (Z)
require Seller or Seller Affiliate to pay any extension fees to extend the
closing dates under the Mortgage Agreements except as Seller Affiliate deems
appropriate in its sole discretion; PROVIDED, HOWEVER, that nothing set forth
in clauses (a), (b), (c), (X), (Y) or (Z) of this SECTION 9.3 shall relieve
Seller of its obligations under SECTION 9.3(y) in the event Seller is unable
to convey the Property as required hereby.
9.4 EXCLUSIVE NEGOTIATIONS. Seller shall (i) remove the Property from
the market, (b) cease and refrain from any and all negotiations with any
other prospective optionees or purchasers of the Property, (c) advise Buyer
of any negotiations with current or potential tenants at the Property.
10. RISK OF LOSS.
10.1 CONDEMNATION. If, prior to the Closing Date, all or any portion
of the Property is taken by condemnation or eminent domain (or is the subject
of a pending or contemplated taking which has not been consummated), Seller
shall notify Buyer of such fact.
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In such event, Buyer shall have the option to terminate this Agreement upon
written notice to Seller given not later than fifteen (15) days after receipt
of such notice from Seller. Upon such termination, Escrow Agent shall return
the Deposit, together with all interest and earnings accrued thereon, to
Buyer, Buyer shall pay the cancellation charges of Escrow Agent and Title
Company, and neither party shall have any further rights or obligations
hereunder, other than pursuant to any provision hereof which expressly
survives the termination of this Agreement. If Buyer does not elect to
terminate this Agreement, Seller shall assign and turn over to Buyer at the
Closing, and Buyer shall be entitled to receive and keep, all awards for the
taking by condemnation and Buyer shall be deemed to have accepted the
Property subject to the taking without reduction in the Purchase Price.
10.2 CASUALTY. Prior to Closing and notwithstanding the pendency of
this Agreement, the entire risk of loss or damage by earthquake, flood,
landslide, fire or other casualty shall be borne and assumed by Seller. If,
prior to Closing any part of the Property is damaged or destroyed by
earthquake, flood, landslide, fire or other casualty, Seller shall
immediately notify Buyer of such fact. In such event, Buyer shall have the
option to terminate this Agreement in accordance with the preceding section
upon written notice to the Seller given not later than fifteen (15) days
after receipt of any such notice from Seller. At the Closing, if Buyer does
not elect to terminate this Agreement, Seller shall assign and turn over, and
Buyer shall be entitled to receive and keep, all insurance proceeds payable
with respect to such destruction (which shall then be repaired or not at
Buyer's option and cost), plus Seller shall pay over to Buyer an amount equal
to the deductible amount with respect to the insurance and the parties shall
proceed to Closing pursuant to the terms hereof without modification of the
terms of this Agreement and without any reduction in the Purchase Price. If
Buyer does not elect to terminate this Agreement by reason of any casualty,
Buyer shall have the right to participate in any adjustment of the insurance
claim.
11. LIQUIDATED DAMAGES; SPECIFIC PERFORMANCE.
11.1 LIQUIDATED DAMAGES. IN THE EVENT THAT THE ESCROW AND THIS
TRANSACTION FAIL TO CLOSE SOLELY AS A RESULT OF THE DEFAULT OF BUYER IN
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, BUYER AND SELLER AGREE
THAT SELLER'S ACTUAL DAMAGES WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO
FIX. THE PARTIES THEREFORE AGREE THAT IN THE EVENT THAT ESCROW AND THIS
TRANSACTION FAIL TO CLOSE SOLELY AS A RESULT OF THE DEFAULT OF BUYER IN THE
PERFORMANCE OF ITS OBLIGATIONS HEREUNDER AND SELLER IS READY, WILING AND ABLE
TO PERFORM ITS' OBLIGATIONS HEREUNDER, SELLER, AS SELLER'S SOLE AND EXCLUSIVE
REMEDY, IS ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF THE DEPOSIT,
INCLUSIVE OF INTEREST THEREON. IN THE EVENT ESCROW FAILS TO CLOSE SOLELY AS A
RESULT OF BUYER'S DEFAULT AND SELLER IS READY, WILLING AND ABLE TO PERFORM
ITS' OBLIGATIONS HEREUNDER, THEN (1) THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF
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BUYER AND SELLER HEREUNDER AND THE ESCROW CREATED HEREBY SHALL TERMINATE, AND
(2) ESCROW AGENT SHALL, AND IS HEREBY AUTHORIZED AND INSTRUCTED TO, DELIVER
THE DEPOSIT TO SELLER AND RETURN PROMPTLY TO BUYER AND SELLER ALL OTHER FUNDS
OR DOCUMENTS DEPOSITED BY THEM, RESPECTIVELY, INTO ESCROW WHICH ARE THEN HELD
BY ESCROW AGENT. SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THIS SECTION 11.1, AND BY THEIR INITIALS
IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
__________________ __________________
Seller Buyer
11.2 DEFAULT BY SELLER. In the event that Buyer is ready, willing and
able to perform its obligations hereunder but the Closing of the transaction
contemplated in this Agreement does not occur by reason of any default by
Seller, Escrow Agent shall return the Deposit to Buyer together with all
interest earned thereon. Buyer's sole remedy, at law or in equity, for a
default by Seller hereunder at or prior to the Closing shall be an action for
specific performance of this Agreement, Buyer having no right to bring an
action in connection with such a default for damages against Seller.
11.3 RIGHTS AND REMEDIES AFTER CLOSING. Nothing contained in either
Section 11.1 or 11.2 hereof is intended to limit the rights and remedies of
Buyer and Seller after the Closing.
12. BROKERS.
Seller and Buyer each hereby represent, warrant to and agree with each
other that there are no broker or finder fees or commissions payable in
connection with the transaction contemplated hereby, other than those payable
to Carey Winston and to Smithy Braedon/ONCOR International (which shall be
paid by Seller), and Seller hereby further represents, warrants to and agrees
with Buyer that there are no leasing commissions payable in connection with
the Property or any part thereof. Seller shall indemnify, protect, defend
and hold Buyer harmless from and against any and all claims, losses, damages,
costs and expenses (including attorney's fees) incurred by Buyer by reason of
any breach or inaccuracy of the representations, warranties and agreements of
Seller contained in this SECTION 12. Buyer shall indemnify, protect, defend
and hold Seller harmless from and against any and all claims, losses,
damages, costs and expenses (including attorneys' fees) incurred by Seller by
reason of any breach or inaccuracy of the representation, warranty and
agreement of Buyer contained in this SECTION 12. The provisions of this
SECTION 12 shall survive the Closing or earlier termination of this Agreement.
21
<PAGE>
13. CONFIDENTIALITY.
13.1 BUYER. Buyer agrees that until Closing, except as otherwise
provided herein or required by law, and except for the exercise by Buyer of
any remedy hereunder, Buyer shall (a) keep confidential the pendency of this
transaction and the documents and information supplied by Seller to Buyer,
(b) disclose such information only to Buyer's agents, employees, contractors,
consultants, advisors, investment bankers, investors, or attorneys, as well
as lenders (if any) and title company personnel, with a need to know in
connection with Buyer's review and consideration of the Property, provided
that Buyer shall inform all persons receiving such information from Buyer of
the confidentiality requirement and (to the extent within Buyer's control)
cause such confidence to be maintained, and (c) upon the termination of this
Agreement prior to Closing, return to Seller promptly upon request all copies
of documents and materials supplied by Seller. Disclosure of information by
Buyer shall not be prohibited if that disclosure is of information that is or
becomes a matter of public record or public knowledge as a result of the
Closing of this transaction or from sources other than Buyer or its agents,
employees, contractors, consultants or attorneys.
13.2 SELLER. Seller agrees that both prior to and after Closing,
except as otherwise provided herein or required by law, and except for the
exercise by Seller of any remedy hereunder, Seller shall (a) keep
confidential the pendency of this transaction with Buyer and the identity of
Buyer and the relationship between Buyer and the entity to which Buyer may
assign this Agreement or which Buyer designates as the party to whom Seller
shall convey the Property at the Closing, and (b) disclose such information
only to Seller's agents, employees, contractors, consultants, advisors,
investment bankers, investors, partners or attorneys, as well as lenders (if
any) and title company personnel, with a need to know such information in
connection with effecting this transaction, provided that Seller shall inform
all such persons receiving such confidential information from Seller of the
confidentiality requirement and (to the extent within Seller's control) cause
such confidence to be maintained. Disclosure of the pendency of this
transaction by Seller shall not be prohibited if that disclosure is of
information that is or becomes a matter of public record or public knowledge
as a result of the Closing of this transaction or from sources other than
Seller or its agents, employees, contractors, consultants or attorneys.
14. MISCELLANEOUS PROVISIONS.
14.1 GOVERNING LAW. The Agreement and the legal relations between the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Maryland, without regard to its principles of
conflicts of law. Each of the parties hereto consent and submit to
jurisdiction and venue in any competent court in the State of Maryland.
14.2 ENTIRE AGREEMENT; MODIFICATIONS; WAIVER.
22
<PAGE>
14.2.1 ENTIRE AGREEMENT. This Agreement, including the exhibits
and schedules hereto, constitutes the entire agreement between Buyer and
Seller pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, letters of intent, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements, express or implied, made to either party
by the other party in connection with the subject matter hereof except as
specifically set forth herein or in the documents delivered pursuant hereto
or in connection herewith. Without limiting the foregoing, upon execution of
this Agreement, that certain Letter of Intent dated June 13, 1997, as amended
to date, between Buyer and Seller, shall terminate and shall be of no further
force and effect.
14.2.2 MODIFICATION. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by
the party to be bound thereby. No waiver of any provision of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
14.3 NOTICES. All notices, consents, requests, reports, demands or
other communications hereunder (collectively, "NOTICES") shall be in writing
and may be given personally, by registered or certified mail, by Federal
Express (or other reputable overnight delivery service) or by facsimile
transmission.
To Buyer: Alexandria Real Estate Equities, Inc.
251 South Lake Avenue, Suite 700
Pasadena, California 91101
Attention: Mr. Joel S. Marcus
Telephone: (818) 578-0777
Facsimile: (818) 578-0770
With a Copy To: Alexandria Real Estate Equities, Inc.
11440 West Bernardo Court, Suite 170
San Diego, California 92127
Attention: Gary A. Kreitzer, Esq.
Telephone: (619) 592-6801
Facsimile: (619) 592-6814
And With A Skadden, Arps, Slate, Meagher & Flom LLP
Copy To: 300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: George M. Eshaghian, Esq.
Telephone: (213) 687-5215
Facsimile: (213) 687-5600
23
<PAGE>
To Seller: Quince Orchard Road Limited Partnership II
210 West Pennsylvania Avenue, Suite 610
Towson, Maryland 21204
Attention: Mr. Dennis Townsend
Telephone: (410) 321-1900
Facsimile: (410) 321-1901
With A Copy To: Lenrow, Kohn, Howard & Oliver
Seven St. Paul Street, Suite 940
Baltimore, Maryland 21202
Attention: James C. Oliver, Esq.
Telephone: (410) 962-0554
Facsimile: (410) 962-0558
or to such other address or such other person as the addressee party shall
have last designated by notice to the other party. Notices given by
facsimile transmission shall be deemed to be received when confirmed; and all
other Notices shall have been deemed to have been given when received.
14.4 EXPENSES. Subject to the allocation of closing costs provided in
SECTION 6.6 hereof, whether or not the transactions contemplated by this
Agreement shall be consummated, all fees and expenses incurred by any party
hereto in connection with this Agreement shall be borne by such party.
14.5 ASSIGNMENT.
14.5.1 SELLER'S RIGHT TO ASSIGN. Seller shall not have the right,
power, or authority to assign or mortgage this Agreement or any portion of
this Agreement, (except that Seller, without Buyer's consent, may assign its
rights to all proceeds of this Agreement to a lender but such assignment
shall in no way relieve Seller of its obligations hereunder) or to delegate
any duties or obligations arising under this Agreement, voluntarily,
involuntarily, or by operation of law, without Buyer's prior written consent.
14.5.2 BUYER'S RIGHT TO ASSIGN. Except as otherwise provided in
this Agreement, Buyer shall have the right, power, and authority to assign
this Agreement or any portion of this Agreement or to delegate any duties or
obligations arising under this Agreement, voluntarily, involuntarily or by
operation of law, without Seller's consent. Upon an assignment, Buyer shall
not be relieved of all obligations under this Agreement.
14.6 SEVERABILITY. Any provision or part of this Agreement which is
invalid or unenforceable in any situation in any jurisdiction shall, as to
such situation and such jurisdiction, be ineffective only to the extent of
such invalidity and shall not affect the enforceability of the remaining
provisions hereof of validity or enforceability of any such provision in any
other situation or in any other jurisdiction.
14.7 SUCCESSORS AND ASSIGNS; THIRD PARTIES. Subject to and without
waiver of the provisions of SECTION 14.5 hereof, all of the rights, duties,
benefits, liabilities and obligations of the parties shall inure to the
benefit of, and be binding upon, their respective successors and assigns.
Except as specifically set forth or referred to herein, nothing herein
24
<PAGE>
expressed or implied is intended or shall be construed to confer upon or give
to any person, other than the parties hereto and their successors or assigns,
any rights or remedies under or by reason of this Agreement.
14.8 COUNTERPARTS. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but
one and same instrument.
14.9 HEADINGS. The Section headings of this Agreement are for
convenience of reference only and shall not be deemed to modify, explain,
restrict, alter or affect the meaning or interpretation of any provision
hereof.
14.10 TIME OF THE ESSENCE. Time shall be of the essence with respect
to all matters contemplated by this Agreement.
14.11 FURTHER ASSISTANCE. In addition to the actions recited herein
and contemplated to be performed, executed, and/or delivered by Seller and
Buyer, Seller and Buyer agree to perform, execute and/or deliver or cause to
be performed, executed and/or delivered at Closing or after Closing any and
all such further acts, deeds, instruments and assurances as may be reasonably
required to consummate the transactions contemplated hereby, including,
without limitation, such further instruments as may be required to transfer
all of Seller's rights to the Property.
14.12 NUMBER AND GENDER. Whenever the singular number is used, and
when required by the context, the same includes the plural, and the masculine
gender includes the feminine and neuter genders.
14.13 CONSTRUCTION. This Agreement shall not be construed more
strictly against one party hereto than against any other party hereto merely
by virtue of the fact that it may have been prepared by counsel for one of
the parties.
14.14 POST-CLOSING ACCESS TO RECORDS. Upon receipt by Seller of Buyer's
reasonable written request at anytime and from time to time within a period
of two (2) years after the Closing, Seller shall make available (or cause its
property manager or asset manager, as applicable, to make available) to Buyer
and its accountants and designees, for inspection and copying during normal
business hours and at Buyer's sole cost and expense, (i) all accounting
records relating to the Property for the calendar year period ended December
31, 1996, and for the period from January 1, 1997 through the Closing Date,
including, without limitation, all general ledgers, cash receipts, cancelled
checks and other accounting documents or information reasonably requested by
Buyer and related to the Property, and (ii) all other records related to the
Property, in either case whether in the possession or control of Seller or
Seller's property manager, asset manager or other agent. In addition, in
connection with any such
25
<PAGE>
accounting information, Seller shall request that its managing agent and/or
auditors provide, at Buyer's expense, Buyer and Buyer's accountants with a
representation letter in form and substance customarily provided to certified
public accountants when performing an audit in accordance with generally
accepted auditing standards.
14.15 EXHIBITS. All exhibits attached hereto are hereby incorporated
by reference as though set out in full herein.
14.16 ATTORNEY'S FEES. Notwithstanding the provisions of Section 11.1
and 11.2, in the event that either party hereto brings an action or
proceeding against the other party to enforce or interpret any of the
covenants, conditions, agreements or provisions of this Agreement, the
prevailing party in such action or proceeding shall be entitled to recover
all costs and expenses of such action or proceeding, including, without
limitation, attorney's fees and fees and costs of expert witnesses. The
provisions of this Section 14.16 shall survive Closing.
14.17 BUSINESS DAYS. In the event that the date for performance of any
covenant or obligation hereunder shall fall on a Saturday, Sunday or other
day which is not a business day, the date for performance thereof shall be
extended to the next business day.
14.18 EXCHANGE. Seller may consummate the sale of the Property as part
of a so-called like kind exchange (the "Exchange") pursuant to Section 1031
of the Internal Revenue Code of 1986, as amended (the "Code"), provided that:
(i) the Closing shall not be delayed or affected in any way by reason of the
Exchange nor shall the consummation or accomplishment of the Exchange be a
condition to Seller's obligations under this Agreement; (ii) Seller shall
accomplish the Exchange through a qualified intermediary and Buyer shall not
be required to (A) acquire or hold title to any property, (B) incur any
expense or liability, or (C) diminish or waive any of its rights or remedies
against Seller, for purposes of consummating the Exchange; (iii) Seller shall
indemnify, defend and hold Buyer and its officers, directors, employees,
agents, affiliates and attorneys harmless from and against any and all
liabilities, claims, losses, actions, costs and expenses in connection with
the Exchange; and (iv) Seller shall pay and reimburse Buyer for any costs
and expenses (or any increased costs and expenses) associated with the
Exchange, including, without limitation, reasonable attorneys' fees, transfer
taxes and recording costs. Buyer shall not by this Agreement or acquiescence
or consent to the Exchange (1) have its rights under this Agreement affected
or diminished in any manner, or (2) be responsible for compliance with or be
deemed to have warranted to Seller that the Exchange complies with or
satisfies Section 1031 of the Code.
26
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BUYER:
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
a Maryland corporation
By: /s/ Alan D. Gold
----------------------------------------
Name: Alan D. Gold
---------------------------------
Its: President
----------------------------------
SELLER:
QUINCE ORCHARD ROAD LIMITED PARTNERSHIP II, a
Maryland limited partnership
By: DWT Venture, Incorporated,
a Maryland corporation
Its: General Partner
By: /s/ Dennis Townsend
---------------------------------------
Name: Dennis Townsend
------------------------------
Its: President
-------------------------------
ESCROW AGENT:
The undersigned Escrow Agent accepts the foregoing Agreement of Purchase and
Sale and agrees to act as Escrow Agent under this Agreement in strict
accordance with its terms.
Chicago Title Insurance Company,
a Missouri corporation
By: /s/ Charles S. Carroccio, Jr.
-------------------------------
Name: Charles S. Carroccio, Jr.
Its: Office Counsel
27
<PAGE>
LIST OF EXHIBITS
EXHIBIT "A" LEGAL DESCRIPTION
EXHIBIT "B" [INTENTIONALLY OMITTED]
EXHIBIT "C" FORM OF DEED
EXHIBIT "D" SELLER'S CERTIFICATE
EXHIBIT "E" [INTENTIONALLY OMITTED]
EXHIBIT "F" BILL OF SALE AND ASSIGNMENT
EXHIBIT "G" [INTENTIONALLY OMITTED]
EXHIBIT "H" NONFOREIGN AFFIDAVIT
EXHIBIT "I" BUYER'S CERTIFICATE
EXHIBIT "J"[INTENTIONALLY OMITTED]
EXHIBIT "K" SERVICE CONTRACTS
EXHIBIT "L" [INTENTIONALLY OMITTED]
EXHIBIT "M" LITIGATION
28
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
ATTACHED.
<PAGE>
All that lot or parcel of land located in the 9th Election District of
Montgomery County, Maryland and described as follows:
Lot Number Six (6) in Block Letter "C" in the subdivision known as "Diamond
Farms" as per plat filed in Plat Book 116 at Plat 136789, among the Land
Records of Montgomery County, Maryland.
Parcel I.D. No.: 9-206-2153278
<PAGE>
EXHIBIT "B"
[INTENTIONALLY OMITTED]
<PAGE>
EXHIBIT "C"
FORM OF DEED
ATTACHED.
<PAGE>
DEED
----
THIS DEED, made this __ day of __________, 199_, by and between
__________________, Maryland limited partnership ("Grantor") and
___________________, a ______________corporation ("Grantee"),
WITNESSETH. THAT IN CONSIDERATION of Grantee's payment to Grantor of
$__________ (which is the actual consideration paid or to be paid for the
within conveyance), and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged by Grantor, Grantor
hereby grants and conveys to Grantee and Grantee's successors and assigns, in
fee simple, all of that parcel of land ("the Land") in Montgomery County,
Maryland which is described in Exhibit A hereto,
BEING ALL OF THAT PROPERTY which______________
______________________________________________,
was conveyed by____________________ to Grantor,
TOGETHER WITH all improvements on the Land, and all rights, alleys,
ways, waters, privileges, appurtenances and advantages belonging or in any
way appurtenant to the Land or such improvements (all of which Land,
improvements and appurtenances are referred to collectively herein as "the
Property"),
TO HAVE AND TO HOLD the Property to the use and benefit of Grantee and
Grantee's successors and assigns, in fee simple.
GRANTOR HEREBY COVENANTS that Grantor will warrant specially such title,
and will give such further assurances thereof as may be requisite.
IN WITNESS WHEREOF, Grantor has executed and ensealed this Deed or
caused it to be executed and ensealed on its behalf by its duly authorized
representatives, the date first above written.
WITNESS: -------------------------------------
BY: _________________, a Maryland
Corporation, its general partner
By:
- --------------------------------- ---------------------------------
Name:
Title:
1
<PAGE>
STATE OF MARYLAND: COUNTY OF __________________: TO WIT:
I CERTIFY that on this __day of _____________, 1996, before me, a Notary
Public for the state and county aforesaid, personally appeared
______________, known to me or satisfactorily proven to be the person whose
name is subscribed to the foregoing instrument, who acknowledged that he/she
is the _________________ of ______________, the general partner of
__________________, a Maryland limited partnership; that he/she has been duly
authorized to execute, and has executed, such instrument on behalf of said
limited partnership for the purposes therein set forth; and that the same is
its act and deed.
IN WITNESS WHEREOF, I have set my hand and Notarial Seal, the date first
above written.
---------------------------------
Notary Public
My commission expires on ________________.
I CERTIFY that this instrument was prepared by or under the supervision
of the undersigned. An attorney duly admitted to practice before the Court
of Appeals of Maryland.
---------------------------------
James C. Oliver
2
<PAGE>
EXHIBIT A
---------
Description of Land
-------------------
ALL OF THAT LAND in Montgomery County, Maryland which is described as
follows:
3
<PAGE>
EXHIBIT "D"
SELLER'S CERTIFICATE
The undersigned hereby certifies as follows:
1. All conditions to Seller's obligations to proceed to Closing which were
to be satisfied or performed by ALEXANDRIA REAL ESTATE EQUITIES, INC., a
Maryland corporation ("BUYER"), as provided in that certain Purchase and Sale
Agreement (the "PURCHASE AGREEMENT") entered into between Quince Orchard Road
Limited Partnership II, a Maryland limited partnership ("SELLER") and Buyer,
dated as of __________, 1997 have either been satisfied or waived.
2. All representations, covenants, and warranties made in or pursuant to
the Purchase Agreement by Seller are true, accurate, correct and complete in all
material respects as of the date of this certificate.
3. Buyer is entitled to rely on this certificate in connection with the
Closing (as defined in the Purchase Agreement).
Seller has executed this certificate effective as of____________, 1997.
SELLER
QUINCE ORCHARD ROAD LIMITED PARTNERSHIP II, a
Maryland limited partnership
By: DWT Venture, Incorporated,
a Maryland corporation
Its: General Partner
By:
---------------------------------
Name:
Its:
<PAGE>
EXHIBIT "E"
[INTENTIONALLY OMITTED]
<PAGE>
EXHIBIT "F"
BILL OF SALE AND ASSIGNMENT
THIS BILL OF SALE AND ASSIGNMENT ("BILL OF SALE") is made as of the ____
day of ____________, 1997, by QUINCE ORCHARD ROAD LIMITED PARTNERSHIP II, a
Maryland limited partnership ("SELLER"), to ALEXANDRIA REAL ESTATE EQUITIES,
INC., a Maryland corporation ("BUYER").
R E C I T A L S
WHEREAS, Seller is the owner of that certain real property located in the
County of Montgomery, State of Maryland (the "REAL PROPERTY"), as more
particularly described on Exhibit "A" attached hereto and incorporated herein by
reference;
WHEREAS, Buyer and Seller have entered into that certain Purchase and Sale
Agreement (the "PURCHASE AGREEMENT"), dated as of ___________, 1997, with
respect to, among other things, the acquisition of the "Personal Property" and
the "Intangible Property" (each as defined below), and certain other property;
and
WHEREAS, the Purchase Agreement requires Seller to convey all of Seller's
right, title and interest in, to and under the Personal Property and the
Intangible Property to Buyer.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby agrees as follows:
A G R E E M E N T
1. Unless the context otherwise requires, all capitalized terms used but
not otherwise defined herein shall have the respective meanings provided
therefor in the Purchase Agreement.
2. Seller does hereby unconditionally, absolutely, and irrevocably grant,
bargain, sell, transfer, assign convey, set over and deliver unto Buyer all of
Seller's right, title and interest in and to:
a. all tangible personal property now or hereafter owned by Seller
and located on or about the Land or Improvements or attached thereto or used in
connection with the use, operation, maintenance or repair thereof (collectively,
the "PERSONAL PROPERTY"); and
b. all intangible property now or hereafter owned by Seller and used
in connection with the Land, the Improvements or the Personal Property, or any
business or businesses conducted thereon or with the use thereof, including,
without limitation, the Service
<PAGE>
Contracts, building and trademarks and trade names, transferable business
licenses, permits, applications, authorizations and other entitlements,
transferable guarantees and warranties covering the Land and/or Improvements,
all contract rights, books, records, reports, test results, environmental
assessments, and other similar documents and materials relating to the use or
operation, maintenance or repair of the Property or the construction or
fabrication thereof, and all transferable utility contracts (collectively,
the "INTANGIBLE PROPERTY" and, together with the Personal Property, the
"PROPERTY").
3. Buyer hereby expressly assumes, for itself and its successors, assigns
and legal representatives, the Service Contracts and all of the obligations and
liabilities, fixed and contingent, of Seller thereunder accruing from and after
the date hereof with respect thereto and agrees to (a) be fully bound by all of
the terms, covenants, agreements, provisions, conditions, obligations and
liability of Seller thereunder, which accrue from the date hereof, and (b) keep,
perform and observe all of the covenants and conditions contained therein on the
part of Seller to be kept, performed and observed, from and after the date
hereof.
4. Seller represents and warrants that its title to the Property is free
and clear of all liens, mortgages, pledges, security interests, prior
assignments, encumbrances and claims of any nature other than the Permitted
Exceptions.
5. Seller hereby agrees to indemnify, protect, defend and hold Buyer
harmless from and against any and all claims, losses, damages, costs and
expenses (including, without limitation, reasonable attorney's fees and
disbursements) incurred or suffered by Buyer in connection with the Property and
arising prior to the Closing. Buyer hereby agrees to indemnify, protect, defend
and hold Seller harmless from and against any and all claims, losses, damages,
costs and expenses (including, without limitation, reasonable attorney's fees
and disbursements) incurred or suffered by Seller in connection with the
Property and arising on or after the Closing.
6. This Bill of Sale shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, legal representatives, successors
and assigns.
7. This Bill of Sale and the legal relations of the parties hereto shall
be governed by and construed and enforced in accordance with the laws of the
State of Maryland, without regard to its principles of conflicts of law.
<PAGE>
IN WITNESS WHEREOF, this Bill of Sale was made and executed as of the date
first above written.
SELLER:
QUINCE ORCHARD ROAD LIMITED PARTNERSHIP II, a
Maryland limited partnership
By: DWT Venture, Incorporated,
a Maryland corporation
Its: General Partner
By:
---------------------------------
Name:
Its:
<PAGE>
EXHIBIT "G"
[INTENTIONALLY OMITTED]
6
<PAGE>
EXHIBIT "H"
NONFOREIGN AFFIDAVIT
1. Section 1445 of the Internal Revenue Code of 1986, as amended
(the "IRC") provides that a transferee of a United States real property interest
must withhold tax if the transferor is a foreign person.
2. In order to inform ALEXANDRIA REAL ESTATE EQUITIES, INC., a
Maryland corporation (the "TRANSFEREE") that withholding of tax is not required
upon the disposition by QUINCE ORCHARD ROAD LIMITED PARTNERSHIP II, a Maryland
limited partnership (the "TRANSFEROR") of the United States real property more
particularly described on Exhibit "A" attached hereto and incorporated herein by
reference (the "PROPERTY"), the undersigned Transferor certifies and declares by
means of this certification, the following:
3. The Transferor is not a foreign person, foreign corporation,
foreign partnership, foreign trust or foreign estate (as such terms are defined
in the IRC and the Income Tax Regulations).
4. Transferor's federal taxpayer identification number is
___________.
5. Transferor's address is:
__________
__________
__________
6. Transferor understands that this certification may be disclosed
to the Internal Revenue Service by Transferee and that any false statement
contained in this certification may be punished by fine, imprisonment or both.
1
<PAGE>
Under penalties of perjury, Transferor declares that it has carefully
examined this certification and it is true, correct and complete.
Executed this ____th day of ___________________, 199_ at
____________, Maryland.
QUINCE ORCHARD ROAD LIMITED PARTNERSHIP II, a Maryland
limited partnership
By: DWT Venture, Incorporated,
a Maryland corporation
Its: General Partner
By:____________________________________
Name:
Its:
2
<PAGE>
EXHIBIT "I"
BUYER'S CERTIFICATE
The undersigned hereby certifies as follows:
1. All conditions to Buyer's obligations to proceed to Closing which were
to be satisfied or performed by QUINCE ORCHARD ROAD LIMITED PARTNERSHIP II, a
Maryland limited partnership ("SELLER"), as provided in that certain Purchase
and Sale Agreement (the "PURCHASE AGREEMENT") entered into between ALEXANDRIA
REAL ESTATE EQUITIES, INC., a Maryland corporation, ("BUYER") and Seller, dated
as of __________, 1997 have either been satisfied or waived.
2. All representations, covenants, and warranties made in or pursuant to
the Purchase Agreement by Buyer are true, accurate, correct and complete in all
material respects as of the date of this certificate.
3. Seller is entitled to rely on this certificate in connection with the
Closing (as defined in the Purchase Agreement).
Buyer has executed this certificate effective as of____________, 1997.
BUYER
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
a Maryland corporation
By: _________________________________
Name:
Its:
<PAGE>
EXHIBIT "J"
[INTENTIONALLY OMITTED]
<PAGE>
EXHIBIT "K"
SERVICE CONTRACTS
<PAGE>
EXHIBIT "L"
[INTENTIONALLY OMITTED]
<PAGE>
EXHIBIT "M"
LITIGATION
NONE.
<PAGE>
EXHIBIT 10.43
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
(940 Clopper Road, Gaithersburg, Maryland)
BY AND BETWEEN
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
AND
ALEXANDRIA REAL ESTATE EQUITIES, INC.
<PAGE>
PURCHASE AND SALE AGREEMENT
AND ESCROW INSTRUCTIONS
(940 Clopper Road, Gaithersburg, Maryland)
This Purchase and Sale Agreement and Escrow Instructions
("Agreement") is made this ____ day of __________, 1997, between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, a Texas corporation ("Seller"), and
ALEXANDRIA REAL ESTATE EQUITIES, INC., a Maryland corporation ("Purchaser"),
effective on the date ("Effective Date"), a fully executed counterpart of
this Agreement is receipted by the Escrow Agent (defined below), for the
purposes of setting forth the agreement of Seller and Purchaser and of
instructing the Escrow Agent with respect to the transactions contemplated by
this Agreement.
WITNESSETH:
1. DEFINITIONS. As used in this Agreement and any exhibits annexed
hereto, unless the context otherwise requires or is otherwise herein
expressly provided, the following terms shall have the following meanings:
(a) AGENT: The Carey Winston Company, One Thomas Circle, Suite 1000,
Washington, D.C. 20005, Attention: Mr. John E. Duffy, as Agent for
Seller only; and Smithy Braedon/ONCOR International, 6550 Rock Springs
Drive, Bethesda, Maryland 20817-1132, as Agent for Purchaser, only.
(b) CASH: Cash shall mean legal tender of the United States for the payment
of debts, or a certified check or cashier's check or wire transfer of
current funds, the particular one of the aforesaid modes of payment to be
determined by Purchaser.
(c) CLOSING DATE: The fifteenth (15th) day after the Due Diligence
Termination Date or the next business day if such date falls on a weekend
or legal holiday or such other day as may be agreed upon in writing by
Seller and Purchaser.
(d) DUE DILIGENCE TERMINATION DATE: The last day of the Inspection Period
(I.E., the forty-fifth (45th) day after the Effective Date).
(e) EARNEST MONEY: The sum of (i) the "Initial Earnest Money" of Fifty
Thousand and No/100 Dollars ($50,000.00), Cash, which Purchaser shall
deposit with the Escrow Agent contemporaneously with the deposit of this
Agreement with the Escrow Agent and (ii) the "Interim Earnest Money" of
One Hundred Thousand and No/100 Dollars ($100,000.00), Cash, which
Purchaser shall deposit with the Escrow Agent on or before the Due
Diligence Termination Date. Immediately following receipt, the Escrow
Agent shall place the Initial Earnest Money and Interim Earnest Money
(together, the "Earnest
<PAGE>
Money") in an interest bearing account in an institution approved by
Seller and Purchaser. The interest thus derived shall become part of the
Earnest Money and shall be paid to the party entitled to the Earnest
Money in accordance with the terms hereof.
(f) EFFECTIVE DATE: The date a fully executed counterpart hereof
together with the Initial Earnest Money is receipted by the Escrow Agent.
(g) ESCROW AGENT: Watt, Tieder & Hoffar, L.L.P., 7929 Westpark Drive,
Suite 400, McLean, Virginia 22102, Attention: Wayne G. Tatusko, Esq.,
Telephone: (703) 749-1088; Facsimile: (703) 356-5388.
(h) INSPECTION PERIOD: The period commencing on the Effective Date and
terminating at the close of business of the forty-fifth (45th) day
thereafter. During the Inspection Period Purchaser may conduct the
inspection described in Section 13 below.
(i) LAND: That certain tract or parcel of land located in the City of
Gaithersburg, Montgomery County, Maryland and being more particularly
described on EXHIBIT A attached hereto, and made a part hereof for all
purposes, together with all rights, privileges and easements appurtenant
thereto or used in connection therewith, (but without warranty,
whether statutory, express or implied), including, without limitation,
all minerals, oil, gas and other hydrocarbon substances thereon, all
development rights, air rights, water, water rights and water stock
relating thereto, all strips and gores, and all of Seller's right, title
and interest, if any (but without warranty, whether statutory, express
or implied) in and to any streets, alleys, easements, rights-of-way, or
other rights appurtenant, adjacent or connected thereto or used in
connection therewith.
(j) OPTION CONSIDERATION: The sum of One Hundred and No/100 Dollars
($100.00) as consideration for Purchaser's right to terminate this
Agreement during the Inspection Period as provided in Section 13 below.
(k) PROPERTY: (a) The Land and (b) all buildings, together with all
other improvements owned by Seller situated on the Land, and all
fixtures and other property owned by Seller permanently affixed thereto
(the "Improvements"), and (c) all of Seller's right, title and interest
in and to the equipment, furnishings, furniture and other personal
property (the "Personal Property") owned by Seller and now located on or
within the Land and improvements and used in connection therewith: and
(d) all right, title and interest of Seller, as Landlord, under the
Tenant Leases.
(l) PURCHASE PRICE: The sum of Three Million Five Hundred Ninety-Four
Thousand Eight Hundred and No/100 Dollar ($3,594,800.00), payable in
Cash at the Closing (subject to customary adjustments and prorations as
hereinafter provided).
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(m) PURCHASER: ALEXANDRIA REAL ESTATE EQUITIES, INC., address for notice
is:
Alexandria Real Estate Equities, Inc.
251 South Lake Avenue, Suite 700
Pasadena, California 91101
Attn: Joel S. Marcus
Telephone: (818) 578-0777
Facsimile: (818) 578-0770
with a copy to:
Alexandria Real Estate Equities, Inc.
11440 West Bernardo Court, Suite 170
San Diego, California 92127
Attention: Alan D. Gold
Telephone: (619) 592-6801
Facsimile: (619) 592 6814
and with an additional copy to:
George M. Eshaghian, Esq.
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue
Los Angeles, California 90071-3144
Telephone: (213) 687-5000
Facsimile: (213) 687-5600
(n) SELLER: The Variable Annuity Life Insurance Company, a Texas
corporation, whose address for notice is:
c/o American General Realty Advisors, Inc.
2929 Allen Parkway, 40th Floor
Houston, Texas 77019
Attention: Mr. J. Brady Wilkins
Telephone: (713) 831-2761
Fax: (713) 831-2419
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With a copy to:
American General Realty Advisors, Inc.
2929 Allen Parkway, 36th Floor
Houston, Texas 77019
Attention: Ned W. Graber, Esquire
Telephone: (713) 831-2559
Fax: (713) 831-1266
With an additional copy to:
Wayne G. Tatusko, Esq.
Watt, Tieder & Hoffar, L.L.P.
7929 Westpark Drive, Suite 400
McLean, Virginia 22102
Telephone: (703) 749-1088
Fax: (703) 356-5388
2. PURCHASE AND SALE. For the consideration hereinafter set forth,
but subject to the terms, provisions, covenants and conditions herein
contained, Seller hereby agrees to sell and convey, and Purchaser hereby
agrees to purchase the Property and pay to Seller as consideration
therefor the Purchase Price.
3. EARNEST MONEY. Contemporaneously with the delivery of an executed
counterpart of this Agreement in escrow, Purchaser will (a) deposit with the
Escrow Agent in Cash the Initial Earnest Money, and (b) pay to Seller by check
in good and sufficient funds the non-refundable sum of $100.00 for Purchaser's
option rights in this Agreement. On or before the Due Diligence Termination
Date, unless this Agreement has theretofore been terminated, Purchaser shall
deposit with the Escrow Agent in Cash the Interim Earnest Money. If the sale
hereunder is consummated in accordance with the terms hereof, the Earnest Money
shall be applied to the Purchase Price to be paid by Purchaser at the Closing.
In the event of default hereunder by Purchaser or Seller, the Earnest Money
shall be applied as provided herein. If this Agreement is terminated by
Purchaser in accordance with Purchaser's right to do so under the terms hereof,
the Earnest Money shall be returned to Purchaser upon satisfaction of the
conditions set forth in Section 39. The Escrow Agent agrees promptly to deliver,
or cause to be delivered, to Seller and Purchaser a written acknowledgment by
Escrow Agent that the Initial Earnest Money and a copy of this Agreement have
been received by the Escrow Agent and that the Earnest Money is being held by
the Escrow Agent pursuant to the terms of this Agreement. In the event Purchaser
shall fail to deposit (i) the Initial Earnest Money in Cash with the Escrow
Agent within two (2) business days after delivery of a fully executed copy of
this Agreement to the Escrow Agent, or (ii) the Interim Earnest Money in Cash
with the Escrow Agent by the Due Diligence Termination Date, then in either such
event this Agreement shall automatically terminate with the same force
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<PAGE>
and affect as if Purchaser had duly terminated this Agreement.
4. REPRESENTATIONS OF SELLER. Seller represents to Purchaser that:
(a) (i) Seller is duly organized and legally existing under the laws
of the State of Texas, (ii) the execution and delivery by Seller of, and
Seller's performance under, this Agreement are within Seller's powers
and have been duly authorized by all requisite corporate action, and
(iii) the person executing this Agreement on behalf of Seller has the
authority to do so.
(b) To Seller's knowledge Seller has received no written notice from
any governmental authority having jurisdiction over the Property that
the Property is presently the subject of any condemnation, assessment or
similar proceeding or charge, and to Seller's knowledge, no such
condemnation, assessment or similar proceeding or charge is currently
threatened.
(c) Seller is not a "foreign person" within the meaning of Section
1445 of the Internal Revenue Code of 1986 (i.e., Seller is not a
non-resident alien, foreign corporation, foreign partnership, foreign
trust or foreign estate as those terms are defined in the Code and
regulations promulgated thereunder).
(d) This Agreement constitutes the legal, valid and binding
obligation of Seller enforceable in accordance with its terms, subject
to laws applicable generally to creditor's rights. Performance of this
Agreement will not result in any breach of, or constitute any default
under, any agreement or other instrument to which Seller is a party or
by which Seller might be bound.
As used in this Section 4, the term "to Seller's knowledge" (a)
shall mean and apply to the actual knowledge of the responsible
employees of Seller who are directly engaged in the management and sale
and purchase transaction described herein and not to any other parties,
(b) shall mean the actual knowledge of such responsible employees, it
being understood and acknowledged that such responsible employees are
not charged with knowledge of all of the acts and/or omissions of the
predecessors in title to the Property or with knowledge of all of the
acts and/or omissions of Seller's agents or employees, and (c) shall not
apply to or be construed to apply to information or material which may
be in the possession of Seller generally or incidentally, but which is
not actually known to the responsible employees of Seller who are
directly engaged in the sale and purchase transaction described herein.
The responsible employee of Seller directly engaged in the sale and
purchase transaction herein is J. Brady Wilkins.
If such representations are not true and correct as of Closing,
Purchaser may, at its option, and as its sole remedy, at law or in
equity, either waive such misrepresentations and close this
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<PAGE>
transaction, or terminate this Agreement by written notice thereof to
Seller, in which latter event the parties shall have no further rights
or obligations hereunder (other than Purchaser's confidentiality and
indemnity obligations set forth in Sections 13, 23 and 38) except that
the Earnest Money shall be paid to Purchaser.
5. REPRESENTATIONS OF PURCHASER. Purchaser represents to Seller that:
(a) (i) Purchaser is duly organized and legally existing under the
laws of the State of Maryland, (ii) the execution and delivery by
Purchaser of, and Purchaser's performance under, this Agreement, are
within Purchaser's powers and have been duly authorized by all requisite
corporate action, and (iii) the person executing this Agreement on
behalf of Purchaser has the authority to do so.
(b) This Agreement constitutes the legal, valid and binding
obligation of Purchaser enforceable in accordance with its terms,
subject to laws applicable generally to creditor's rights. Performance
of this Agreement will not result in any breach of, or constitute any
default under, any agreement or other instrument to which Purchaser is a
party or by which Purchaser might be bound,
(c) Purchaser is not in a significantly disparate bargaining
position with Seller.
(d) Purchaser is represented by legal counsel in the transaction
relating to this Agreement, and Purchaser has knowledge and experience
in financial and business matters that enable it to evaluate the merits
and risks of this transaction.
If such representations are not true and correct as of Closing, Seller may,
at its option, either waive such misrepresentations and close this transaction,
or terminate this Agreement by written notice thereof to Purchaser, in which
latter event the parties shall have no further rights or obligations hereunder
except that the Earnest Money shall be paid to Seller, if Seller otherwise is
ready, willing and able to close. The term "Purchaser" used in this Section
shall include any permitted assignee of Purchaser's interest under this
Agreement.
6. SURVEY. Purchaser may, at Purchaser's expense, obtain a new or updated
survey of the Property,
7. OWNER'S TITLE POLICY COMMITMENT. Purchaser, at Purchaser's sole expense,
shall obtain as soon as reasonably possible after the Effective Date a current
A.L.T.A. coverage commitment for title insurance (herein called the "Preliminary
Report") issued by a title company selected by Purchaser (the "Title Company"),
showing the status of title to the Property according to the Title Company and
committing to issue the owner's title policy to Purchaser called for under
Section 19(c) of this Agreement. The Title Company shall also deliver to
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<PAGE>
Purchaser copies of all documents referred to as exceptions in the
Preliminary Report. If any exceptions appear in the Preliminary Report, that
affect the Property and that are unacceptable to Purchaser, Purchaser shall,
not less than ten (10) days prior to expiration of the Inspection Period,
notify Seller in writing of such fact and the reasons therefor ("Purchaser's
Title Objections"). If Purchaser does not provide Seller with Purchaser's
Title Objections prior to said ten (10) day period, Purchaser shall be deemed
to have accepted all exceptions to title and all other matters shown on the
Preliminary Report (including the standard printed exceptions) and such
exceptions shall be included in the term "Permitted Encumbrances" as used
herein, except, however, those title matters to which Purchaser has timely
objected, in accordance with the preceding sentence. Notwithstanding anything
to the contrary contained herein, Seller shall have no obligation to bring
any action or proceeding or otherwise to incur any expense whatsoever to
eliminate or modify Purchaser's Title Objections. If Seller is unable or
unwilling to eliminate or modify Purchaser's Title Objections to the
reasonable satisfaction of Purchaser, Purchaser shall (as its sole and
exclusive remedy) terminate this Agreement by notice in writing to Seller by
the earlier to occur of (i) the Closing Date or (ii) five (5) business days
following notice from Seller that it is unwilling or unable to eliminate or
modify Purchaser's Title Objections or shall accept such title as Seller can
deliver without any reduction in the Purchase Price, in which event such
uncured Purchaser's Title Objections shall be included in the term "Permitted
Encumbrances." If Purchaser does not elect to terminate within the period
described in the immediately preceding sentence, Purchaser shall be deemed to
have accepted all exceptions to title and all other matters shown on the
Preliminary Report and such exceptions shall be included in the term
"Permitted Encumbrances." In the event of termination pursuant to this
Section, the parties shall have no further rights or obligations hereunder
(except for Purchaser's confidentiality and indemnity obligations set forth
in Sections 13, 23 and 38) and the Earnest Money shall be returned to
Purchaser upon satisfaction of the conditions set forth in Section 39.
8. CONDITIONS TO PURCHASER'S OBLIGATIONS. The following shall be
conditions precedent to Purchaser's obligations hereunder:
(a) All of the representations of Seller contained in Section 4 of
this Agreement shall be true at, and as of, the Closing in all material
respects unless otherwise disclosed in writing and approved by Purchaser.
(b) Seller shall not, as of the Closing, be in receivership or
dissolution, or admitted in writing its inability to pay its debts as
they mature, or have been adjudicated a bankrupt, or have filed a
petition in voluntary bankruptcy, a petition or answer seeking
reorganization, or an arrangement with creditors under the federal
bankruptcy law, or any other similar law or statute of the United States
or any state, and such petition shall not have been filed against Seller
which has not been dismissed within sixty (60) days of such filing.
(c) Seller shall have performed, observed and complied with all
covenants,
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<PAGE>
agreement and conditions required by this Agreement to be performed,
observed and complied with by Seller prior to, or as of, the Closing.
(d) Subject to the provisions of Section 17, the physical condition
of the Property shall be substantially the same on the Closing Date as
on the date of the execution of this Agreement, except for reasonable
wear and tear and any damages due to any act of Purchaser.
9. CONDITIONS TO SELLER'S OBLIGATIONS. The following shall be conditions
precedent to Seller's obligations hereunder:
(a) All of the representations of Purchaser contained in Section 5
of this Agreement shall be true at, and as of, the Closing in all
material respects unless otherwise disclosed in writing and approved by
Seller.
(b) Purchaser shall have performed, observed and complied with all
covenants, agreements and conditions required by this Agreement to be
performed, observed and complied with by Purchaser prior to, or as of,
the Closing.
(c) Purchaser shall not, as of the Closing, be in receivership or
dissolution, or have made any assignment for the benefit of creditors,
or admitted in writing its inability to pay its debts as they mature, or
have been adjudicated a bankrupt, or have filed a petition in voluntary
bankruptcy, a petition or answer seeking reorganization, or an
arrangement with creditors under the federal bankruptcy law, or any
other similar law or statute of the United States or any state, and such
petition shall not have been filed against Purchaser which has not been
dismissed within sixty (60) days of such filing.
(d) Purchaser shall have executed the Purchaser's Affidavit on
EXHIBIT C attached here attached hereto and made a part hereof.
10. COVENANTS OF PURCHASER AND SELLER. Purchaser and Seller covenant and
agree with each other that prior to the Closing, Purchaser and Seller will do
such further acts as may be reasonably necessary, desirable or proper to carry
out more effectively the purposes of this Agreement. Purchaser covenants that it
will not interfere unreasonably with or hinder the operation of the Property
prior to the delivery of possession thereof to Purchaser following the Closing
hereunder.
11. DELIVERY OF INFORMATION. Within five (5) days after the Effective Date,
Seller shall furnish, or cause to be furnished, to Purchaser, to the extent such
items are within seller's possession and to the extent such items have not
previously been furnished to Purchaser, the following:
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<PAGE>
(a) copies of all of the Tenant Leases;
(b) a current rent roll, prepared by Seller's manager of the
Property, listing tenant names and monthly rentals;
(c) copies of all the "Contracts" (defined in Section 14 below)
whether or not cancelable upon thirty (30) days' notice or less;
(d) copies of operating statements, prepared by Seller's manager of
the Property, for each of the last twelve (12) months that Seller
has owned the Property;
(e) copies of any environmental reports Seller has in its
possession; provided, however, Seller makes no representations or
warranties as to the accuracy of any such environmental reports
and shall have no liability with respect to any matters contained
therein (or omitted therefrom); and
(f) a copy of the survey in Seller's possession.
(g) any other information with respect to the operation and
maintenance of the Property relating to periods after Seller's
acquiring title thereto which is not confidential to Seller.
In addition, Seller agrees to use commercially reasonable efforts to
obtain estoppel certificates from the existing tenants prior to the
expiration of the Inspection Period. The form of the estoppel shall be
mutually acceptable to Purchaser and Seller.
12. LEASE EXPENSES.
(a) Leasing Commissions. Seller shall indemnify and hold Purchaser
harmless from any claims for leasing commissions payable during the
current terms of the Tenant Leases (specifically excluding therefrom any
future renewal terms or options or rights to expand) and any commissions
relating to any existing Tenant Leases or new leases which arose or
accrued subsequent to the' Effective Date but prior to the Closing
Date. Purchaser shall indemnify and hold Seller harmless from any claims
for leasing commissions under the Tenant Leases except those for which
Seller is liable as set forth herein. Purchaser agrees to cooperate with
and to assist Seller in obtaining a complete release of liability for
payment of all commissions for which Purchaser is liable hereunder and
to indemnify and hold Seller harmless from the same.
(b) Lease Expense Reimbursement. If the transaction is consummated,
Purchaser shall (i) reimburse Seller on the Closing Date for any and all
fees paid or
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<PAGE>
expenses (such as leasing commissions, tenant improvement costs,
attorney's fees and architect's fees) incurred by Seller arising out of
or in connection with (a) any extensions, renewals or expansions under the
Tenant Leases which were approved by Seller and Purchaser on or after the
Effective Date and (b) any new leases within the Project, which were
approved by Seller and Purchaser on or after the Effective Date
(collectively, the "Expenses") and (ii) assume all of Seller's
obligations for all Tenant Leases disclosed to Purchaser not entered into
or signed by Seller and shall assume the obligations for and indemnify
and hold Seller harmless from and against any and all claims for the
Expenses which remain unpaid for any reason at the time of Closing. If
Seller desires to execute a renewal, amendment, extension or expansion of
a Lease or a new lease with a potential tenant for space in the Property
after the Effective Date but prior to Closing, Seller shall promptly
provide Purchaser with a copy of the proposed document for its review,
together with a reasonably detailed summary of Seller's anticipated
improvement costs, tenant improvement allowances, brokerage commissions
and out-of-pocket costs and expenses in connection with the new lease or
extension, renewal, expansion or amendment. Purchaser shall advise
Seller, in writing, whether or not it approves such proposed document
within five (5) business days after receipt of the proposed document.
Prior to the end of the Inspection Period, Purchaser's approval shall not
be unreasonably withheld, delayed or conditioned. After the end of the
Inspection Period, Purchaser's approval may be withheld in Purchaser's
sole discretion. If Purchaser fails to notify Seller within such time
period, Purchaser shall be deemed to have approved the proposed document.
13. INSPECTION. During the Inspection Period Purchaser shall have the
right to inspect and investigate such matters as Purchaser, in its sole
discretion, deems necessary or advisable, and to cause one or more engineers
or other representatives or agents of Purchaser to physically inspect the
Property without unreasonably interfering with Seller's operation of the
Property. Purchaser shall make such inspections in good faith and with due
diligence. All inspection fees, appraisal fees, engineering fees and other
expenses of any kind incurred by Purchaser relating to the inspection of the
Property will be solely Purchaser's expense. Seller shall cooperate with
Purchaser in all reasonable respects in making such inspections; however,
Seller shall not be obligated to expend funds or other costs in connection
with such cooperation. Seller hereby reserves the right to have a
representative present at the time Purchaser conducts any inspection of the
Property. Purchaser shall notify Seller not less than one (1) business day in
advance of making any such inspection. In making any inspection, Purchaser
will treat, and will cause any representative of Purchaser to treat, all
information obtained by Purchaser pursuant to the terms of this Agreement as
strictly confidential. Purchaser agrees to indemnify and hold Seller, its
tenants, contractors and employees harmless from any and all injures, losses,
liens, claims, judgments, liabilities, costs, expenses or damages (including
reasonable attorneys' fees and court costs) sustained by or threatened
against Seller which result from or arise out of any inspections by Purchaser
or its authorized representatives pursuant to this Section. Notwithstanding
any provision herein to the contrary, the indemnity contained in the
preceding sentence shall survive
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the termination of this Agreement or the Closing. In the event Purchaser
determines as a result of the foregoing that the condition of the Property is
deficient in any respect or for any reason in Purchaser's sole and absolute
discretion, Purchaser may elect to terminate this Agreement by delivering
written notice thereof to Seller prior to the expiration of the Inspection
Period. Purchaser may continue to inspect the Property during the pendency of
this Agreement, subject to said indemnity, but without additional termination
rights after the expiration of the Inspection Period. Notwithstanding the
timely exercise of Purchaser's election to terminate this Agreement pursuant
to the preceding sentence, Purchaser shall not be entitled to a refund of
the Earnest Money until such time as Purchaser has satisfied the conditions
set forth in Section 39.
PURCHASER ACKNOWLEDGES THAT SELLER HAS NOT MADE, DOES NOT MAKE, AND
SPECIFICALLY NEGATES, RENOUNCES AND DISCLAIMS ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTEES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, OF, AS TO,
CONCERNING, OR WITH RESPECT TO, (i) THE VALUE, NATURE, QUALITY OR CONDITION
OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY,
(ii) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES
WHICH MAY BE CONDUCTED THEREON, (iii) THE COMPLIANCE OF OR BY THE PROPERTY
WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE
GOVERNMENTAL AUTHORITY OR BODY, (iv) THE HABITABILITY, MERCHANTABILITY,
MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
PROPERTY, OR (v) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY, AND
SPECIFICALLY, THAT SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY
NEGATES, RENOUNCES AND DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES, REGARDING
COMPLIANCE OF THE PROPERTY WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR
LAND USE LAWS, RULES. REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING, WITHOUT
LIMITATION, THOSE PERTAINING TO SOLID WASTE, AS DEFINED BY THE U.S.
ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, OR THE
DISPOSAL OR EXISTENCE, IN OR ON THE PROPERTY, OF ANY HAZARDOUS SUBSTANCES, AS
DEFINED BY THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND
LIABILITY ACT OF 1980, AS AMENDED, AND THE REGULATIONS PROMULGATED
THEREUNDER. PURCHASER SHALL RELY SOLELY ON ITS OWN INVESTIGATION OF THE
PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER, ITS
AGENTS OR CONTRACTORS. SELLER SHALL NOT BE LIABLE OR BOUND IN ANY MANNER BY
ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING
TO THE PROPERTY OR THE OPERATION THEREOF, FURNISHED BY ANY PARTY PURPORTING
TO ACT ON BEHALF OF SELLER.
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THE PARTIES AND EACH OF THEM MUTUALLY, EXPRESSLY, KNOWINGLY, AND
INTENTIONALLY, WAIVE ALL RIGHTS AND PROTECTIONS UNDER APPLICABLE LAW EXCEPT
FOR THOSE EXPRESSLY RESERVED OR PROVIDED FOR HEREIN.
14. MANAGEMENT, SERVICE, SUPPLY OR MAINTENANCE CONTRACTS, AFFECTING THE
PROPERTY. Seller shall cancel all service, supply or maintenance contracts
affecting the Property on the Closing Date (i) unless Purchaser notifies
Seller, in writing, within ten (10) business days after the receipt by
Purchaser of copies of such contracts or (ii) unless such contracts are not
cancelable on thirty (30) days or less notice. Purchaser's written notice
referred to in the preceding sentence shall specify the contracts it does not
want to cancel and Purchaser shall assume payment of all such sums due and
owing from and after the Closing Date on the contracts it assumes or is
deemed to have as turned under subpart (ii) above and all liability from and
after the Closing Date under such contracts it assumes or is deemed to have
assumed under subpart (ii) above (the "Contracts"). Seller's Management
Contract with Seller's Manager will not be assigned to Purchaser at Closing
but will be canceled by Seller at Closing.
15. PROPERTY INFORMATION FROM SELLER'S AGENTS. Subsequent to the Effective
Date of this Agreement, Purchaser may request from Seller's agents (brokers,
contractors, or similar individuals or entities engaged by Seller relating to
or involving the Property) information or opinions regarding the Property or
some aspect of the Property, its history, condition or prospects for future
use or development by Purchaser. While Seller is willing to cooperate with
Purchaser, and Seller has instructed its agents to cooperate with Purchaser,
SELLER IS UNWILLING TO SELL THE PROPERTY UNLESS SELLER IS RELEASED FROM
LIABILITY BY PURCHASER FOR (i) STATEMENTS OR OPINIONS MADE BY OR INFORMATION
FURNISHED BY SELLER'S AGENTS UNLESS THE STATEMENTS OR OPINIONS ARE
INCORPORATED AS SELLER REPRESENTATIONS INTO THE CLOSING DOCUMENTS EXECUTED BY
SELLER OR (ii) INFORMATION WITHHELD BY SELLER'S AGENTS UNLESS SUCH
INFORMATION WAS WITHHELD AT THE EXPRESS DIRECTION OF AN OFFICER OF SELLER.
16. PURCHASER'S AFFIDAVIT: CONDITION OF CLOSING. It is a condition
precedent to the Closing of this Transaction and Seller's obligation to
deliver the Special Warranty Deed that Seller receive at Closing from
Purchaser the form of sworn Affidavit and Agreement attached hereto as
EXHIBIT C, which reflects statements of fact together with supporting
documentation as outlined in this Section. The Affidavit is intended to
reflect and support the fact that Purchaser and experts of Purchaser's choice
have (i) physically inspected the Property, (ii) determined the fair market
value of the Property in its "AS IS" condition, (iii) analyzed the present
and projected uses, of the Property, (iv) independently verified the
completeness and accuracy of all information deemed necessary or material by
Purchaser to close and (v) independently tested and examined the Property
from a physical, structural and environmental standpoint and that Purchaser
accepts the Property AS IS and further releases Seller from and waives all
claims and
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liability against Seller for any structural, physical or environmental
condition at the Property and further releases Seller from and waives all
liability against Seller for, connected with or arising out of any and all
CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as may be amended from time to time) based claims or causes of
action or any related claims or causes of action or any other federal or
state based statutory or regulatory causes of action for environmental
contamination at, in or under the Property. The Affidavit shall confirm that
Purchaser is not relying upon any representation, inducement or unperformed
promise of Seller or Seller's agents except to the extent such inducement,
representation or unperformed promise as set forth in the Purchaser's
Affidavit or the Closing Documents to be executed by Seller as attached
hereto. A copy of Purchaser's property inspection and environmental
assessment reports shall be attached to the Affidavit with a representation
that Purchaser has relied upon Purchaser's reports in reaching its decision
to purchase the Property, and Purchaser is not relying upon Seller produced
inspection reports which are older and possibly incomplete and/or outdated.
IF THE AFFIDAVIT REFLECTS THAT PURCHASER IS RELYING UPON A REPRESENTATION,
INDUCEMENT OR UNPERFORMED PROMISE NOT AUTHORIZED IN WRITING BY AN OFFICER OF
SELLER, SELLER SHALL HAVE THE OPTION NOT TO CLOSE THIS TRANSACTION IN WHICH
EVENT AT SELLER'S OPTION THIS CONTRACT SHALL TERMINATE, THE EARNEST MONEY
(EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT) SHALL BE RETURNED TO
PURCHASER AND THEREAFTER SELLER AND PURCHASER SHALL HAVE NO FURTHER
OBLIGATIONS OR LIABILITIES ONE TO THE OTHER HEREUNDER. THE PARTIES AND EACH
OF THEM MUTUALLY, EXPRESSLY, KNOWINGLY, AND INTENTIONALLY, WAIVE ALL RIGHTS
AND PROTECTIONS UNDER APPLICABLE LAWS, EXCEPT FOR THOSE EXPRESSLY RESERVED
HEREIN.
17. FIRE AND OTHER CASUALTY. In the event of damage to or destruction of
all or any portion of the Property by fire or other casualty, Seller will
promptly notify Purchaser of the nature and extent of such damage or
destruction, the amount estimated to be expended to repair or restore the
damaged or destroyed Property or portion thereof, the amount, if any of
insurance proceeds that are available to make such repairs or restoration and
the estimated period of time it would take to make such repairs and
restoration. If the damage by fire or other casualty to the Property has not
been repaired to the reasonable satisfaction of Purchaser prior to the
Closing hereunder and requires less than One Hundred Thousand and No/100
Dollars ($100,000.00) (the "Casualty Threshold") to be expended to repair or
restore the damaged or destroyed Property or portion thereof, then, provided
that the aggregate amount of the insurance proceeds to be made available to
Purchaser and the amount of the reduction in the Purchase Price are
sufficient, in Purchaser's reasonable judgment, to complete the repair and
restoration of the Property, this Agreement shall remain in full force and
effect, and in such event Seller shall assign to Purchaser any and all claims
for the insurance proceeds of such damage to or destruction of the Property,
and Purchaser shall take title to the Property with the assignment of such
proceeds and subject to such damage to or destruction of the Property with a
reduction of the Purchase Price equal to the amount of any deductible due
under the terms of any applicable insurance policy. If the amount
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required to be expended to repair or restore the damaged or destroyed
Property or portion thereof is in excess of the Casualty Threshold as of the
Closing Date, Purchaser shall have, as its sole and exclusive remedies: (i)
the option to terminate this Agreement within five (5) days following notice
in writing to Purchaser of such casualty, in which event the parties shall
have no further rights or obligations hereunder (except for Purchaser's
confidentiality and indemnity obligations set forth in Sections 13, 23 and
38) and the Earnest Money shall be returned to Purchaser, subject to
Purchaser's satisfaction of the conditions set forth in Section 39; or (ii)
if Purchaser does not elect to terminate, this Agreement shall remain in full
force and effect, and in such event Seller shall assign to Purchaser any and
all claims for the insurance proceeds of such damage to or destruction of the
Property, and Purchaser shall take title to the Property with the assignment
of such proceeds and subject to such damage to or destruction of the Property
without reduction of the Purchase Price, except for (a) the amount of any
deductible under the terms of any applicable insurance policy and (b) any
further amount (not to exceed $100,000.00) which is sufficient to complete
the repair and restoration of the Property. If Purchaser does not elect to
terminate within five (5) day period following such notice by Seller,
Purchaser shall be deemed to have waived all rights to terminate pursuant to
this provision and this Agreement shall remain in full force and effect. If
Purchaser does not elect to terminate this Agreement, Purchaser shall have
the right to adjust the insurance claim if Purchaser elects to waive the
remainder of the Inspection Period and proceed as if the Inspection Period
had expired.
18. CONDEMNATION. Promptly upon obtaining knowledge of the institution of
the proceedings for the condemnation of any part of the Property, Seller or
Purchaser will notify the other of the pendency of such proceedings. In the
event of the condemnation of any portion of the Property or the sale of any
portion of the Property in lieu of condemnation, then the Purchaser may
terminate this Agreement by notice in writing to Seller within five (5) days
following receipt by Purchaser of notice in writing by Seller of such
condemnation of the Property, in which event the parties shall have no
further rights or obligations hereunder (except for Purchaser's
confidentiality and indemnity obligations set forth in Sections 13, 23 and
38) and the Earnest Money shall be returned to Purchaser, subject to
Purchaser's satisfaction of the conditions set forth in Section 39. If
Purchaser does not elect to terminate within said five (5) day period
following such notice by Seller, Purchaser shall be deemed to have waived all
rights to terminate pursuant to this provision and this Agreement shall
remain in full force and effect, and Seller shall assign and turn over to
Purchaser, and Purchaser shall be entitled to receive and keep, all awards
for the taking.
19. THE CLOSING. The closing ("Closing") of this transaction shall take
place at the offices of the Title Company in Montgomery County, Maryland on
the Closing Date.
(a) Seller shall deliver to Purchaser a duly executed and
acknowledged special warranty deed in substantially the form attached hereto
as EXHIBIT B and Seller shall deliver to Purchaser a duly executed and
acknowledged bill of sale and general assignment in substantially the form
attached hereto as EXHIBIT E.
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(b) Purchaser shall pay to the Title Company for the account of the
Seller (or in the alternative in Purchaser's discretion, directly to Seller
or an account designated by Seller) the Purchase Price in Cash to The Title
Company's account, plus or minus applicable prorations determined by the
Title Company in a manner consistent with this Agreement and approved by
Seller and Purchaser.
(c) Seller shall deliver to Purchaser, at Seller's expense, an
A.L.T.A. owner's title policy issued by the Title Company in the amount of
the Purchase Price insuring that Purchaser owns fee simple title to the
Property, subject to no exceptions other than the Permitted Encumbrances.
Seller shall execute and deliver to the Title Company an affidavit in form
reasonably acceptable to Seller as to mechanics' liens and parties in
possession. If Purchaser desires any special endorsements to the coverage
provided by the Title Policy (including, without limitation, extended ALTA
coverage), Purchaser shall obtain and pay for these endorsements and
coverage, and the issuance of the endorsements and/or coverage shall not
delay the Closing. The issuance of the Title Policy shall be in lieu of any
express or implied warranty of Seller concerning title to the Property, and
Purchaser agrees that its only remedy for damages incurred by reason of any
defect in title shall only be against the Title Company.
(d) General real estate taxes for the then current year relating to
the Property shall be prorated as of the Closing Date and Purchaser shall be
charged with taxes from and including the Closing Date. If Closing shall
occur before the actual taxes for the then current year are known, the
apportionment of taxes shall be upon the basis of taxes for the Property for
the immediately preceding year, provided that, if the taxes for the current
year are thereafter determined to be more or less than the taxes for the
preceding year (after any appeal of the assessed valuation thereof is
concluded), Seller and Purchaser promptly shall adjust the proration of such
taxes and Seller or Purchaser, as the case may be, shall pay to the other any
amount required as a result of such adjustment and this covenant shall not
merge with the deed delivered hereunder, but shall survive Closing. All
special taxes or assessments actually assessed prior to the Closing Date but
which are payable in installments shall be prorated as set forth above, and
those assessed after the Closing Date shall be paid by Purchaser. All real
estate taxes (other than transfer taxes) imposed due to a change of use or
ownership of the Property on or after the Closing Date shall be paid by
Purchaser.
(e) Seller shall be entitled to all rents (including any percentage
rent and any accrued tax and operating expense escalations, subject to the
provisions of subsection (k) hereof), charges, and other revenue of any kind
attributable to any period under the Tenant Leases to but not including the
Closing Date. Purchaser shall be entitled to all rents (including any
percentage rent and any accrued tax and operating expense escalations,
charges, and other revenue of any kind) attributable to any period under the
Tenant Leases on and after the Closing Date. Rents and expense escalations or
other reimbursements due landlord under the Leases collected prior to the
Closing Date and attributable to both Seller's and Purchaser's period of
ownership shall be prorated as of the Closing Date (provided that for any
such proration to occur, Seller must have
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taken actual physical possession of such sums). Uncollected rents and expense
escalations or other reimbursements due landlord under the Tenant Leases
shall not be prorated at the time of Closing, but Purchaser shall make a good
faith effort to collect the same on Seller's behalf and to tender the same to
Seller upon receipt, provided that all rents, escalations and other
reimbursements due landlord under the Tenant Leases collected by Purchaser on
or after the Closing Date shall first be applied to all amounts, due under
the Tenant Leases at the time of collection (i.e., current rents and sums due
Purchaser as the current owner and landlord) with the balance (if any)
payable to Seller, but only to the extent of amounts delinquent and actually
due Seller. Seller shall either deliver to Purchaser or Purchaser shall
receive a credit against the Purchase Price at Closing for all security
deposits actually transferred to and held by Seller under the Tenant Leases
in connection with Seller's acquisition of title and/or during Seller's
period of ownership, but not otherwise. Seller and Purchaser shall execute
and deliver to the other party the assignment and assumption of leases and
security deposits in the form attached hereto as EXHIBIT F. The provisions of
this subsection shall survive Closing hereunder.
(f) All other income from, and expenses of, the Property, including
but not limited to operating expenses, maintenance charges, service charges
and salaries of continuing employees (including all fringe benefits) shall be
prorated as of the Closing Date (except for these utility charges and
operating expenses payable by tenants in accordance with the Tenant Leases).
The provisions of this subsection shall survive Closing.
(g) Purchaser shall pay the sales tax, if any, resulting from the
sale of the Personal Property.
(h) As to any deposits delivered to Purchaser by Seller pursuant to
the subsection (e) above, Purchaser shall deliver to Seller an original and
one copy each of written notices signed by Purchaser addressed to each tenant
under the Tenant Leases notifying such tenant of the acquisition of the
Property by Purchaser in substantially the form attached hereto as EXHIBIT G,
acknowledging that Purchaser has received and is responsible for the security
deposit of said tenant, specifying the exact dollar amount of said deposit,
and containing appropriate instructions relating to the payment of future
rentals and the giving of future notices.
(i) Seller shall deliver to Purchaser all keys to all locks on the
Property within Seller's possession. To the extent within Seller's
possession, Seller shall deliver all documents pertaining to tenants of the
Property including, but not limited to, all applications, correspondence and
credit reports relating to each tenant.
(j) To the extent within Seller's possession, Seller shall deliver to
Purchaser originals of all the executed Tenant Leases, and if not available,
then copies.
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(k) If at any time following the Closing Date the amount of an item
listed in any subsection hereof shall prove to be incorrect, the party in
whose favor the error was made shall promptly pay to the other party the sum
necessary to correct such error upon receipt of proof of such error, provided
that such proof is delivered to the party from whom payment is requested on
or before one (1) year after Closing.
(l) The present insurance coverage and public utility service on the
Property shall be terminated as of the Closing Date and there shall be no
proration of insurance premiums or public utility bills.
(m) Any escrow fee charged by the Title Company shall be paid
one-half (1/2) by Seller and one-half (1/2) by Purchaser. Purchaser shall pay
for the cost of any audits or inspection. Title policy premiums shall be paid
as set forth in item (c) of this Section 19. All transfer taxes, recordation
taxes or other charges for recording the Deed shall be shared equally by
Purchaser and Seller. Each party shall be responsible for the payment of its
own attorneys' fees incurred in connection with the transaction which is the
subject to this Agreement.
(n) Possession of the Property shall be given to Purchaser, subject
to the Permitted Encumbrances.
(o) Seller shall deliver to Purchaser a "non-foreign affidavit"
acknowledging that Seller is not a "foreign person" within the meaning of
Section 1445 of the Internal Revenue Code.
(p) Purchaser and Seller shall deliver to each other such documentary
and other evidence as may be reasonably required by them or the Title Company
evidencing the status and capacity of Purchaser or Seller and the authority
of the person or persons who are executing the various documents on behalf of
Purchaser or Seller in connection with this Agreement.
(q) Purchaser shall deliver the Purchaser's Affidavit set forth as
EXHIBIT C attached hereto.
20. REMEDIES. IN THE EVENT THAT SELLER SHALL BREACH ANY OF ITS OBLIGATIONS
HEREUNDER OR SHALL FAIL TO CONSUMMATE THIS AGREEMENT FOR ANY REASON, EXCEPT
PURCHASER'S DEFAULT OR A TERMINATION OF THIS AGREEMENT BY PURCHASER OR SELLER
PURSUANT TO A RIGHT TO DO SO UNDER THE PROVISIONS HEREOF, PURCHASER MAY, AS ITS
SOLE AND EXCLUSIVE REMEDIES, AT LAW OR IN EQUITY, EITHER (A) TERMINATE THIS
AGREEMENT AND RECEIVE A REFUND OF THE EARNEST MONEY UPON SATISFACTION OF THE
CONDITIONS SET FORTH IN SECTION 39 OR (B) PROVIDED THAT (i) PURCHASER IS NOT IN
DEFAULT IN ANY OF ITS OBLIGATIONS
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HEREUNDER, (ii) PURCHASER IS READY, WILLING AND ABLE TO PERFORM ITS
OBLIGATIONS HEREUNDER, (iii) PURCHASER TENDERS TO THE TITLE COMPANY THE FULL
AMOUNT OF THE PURCHASE PRICE IN IMMEDIATELY AVAILABLE LOCAL FUNDS, (iv)
PURCHASER SHALL HAVE GIVEN NOTICE TO SELLER THAT PURCHASER HAS SO TENDERED
THE PURCHASE PRICE AND (v) SELLER FAILS, PRIOR TO THE CLOSE OF BUSINESS ON
THE FIFTH (5TH) BUSINESS DAY FOLLOWING RECEIPT BY SELLER OF SUCH NOTICE FROM
PURCHASER TO TENDER PERFORMANCE OF SELLER'S OBLIGATIONS HEREUNDER THEN IN
SUCH EVENT, PURCHASER SHALL HAVE THE RIGHT TO ENFORCE SPECIFIC PERFORMANCE OF
THIS AGREEMENT AGAINST SELLER, THEREBY WAIVING ALL OTHER CLAIMS AGAINST
SELLER FOR NON-PERFORMANCE OF ITS OBLIGATIONS HEREUNDER; PROVIDED FURTHER
THAT ANY SUCH SUIT FOR SPECIFIC PERFORMANCE MUST BE BROUGHT BY PURCHASER
WITHIN THIRTY (30) DAYS AFTER RECEIPT BY SELLER OF SUCH NOTICE OR BE FOREVER
BARRED.
IF PURCHASER FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY AS PROVIDED
IN THIS AGREEMENT FOR ANY REASON OTHER THAN SELLER'S DEFAULT (AS EVIDENCED BY
WRITTEN NOTICE FROM PURCHASER TO SELLER AND ESCROW AGENT) AND/OR THE
NONSATISFACTION OF THE CONDITIONS TO PURCHASER'S PERFORMANCE SET FORTH IN
SECTION 8 ABOVE, SELLER SHALL BE RELEASED FROM ALL OF ITS OBLIGATIONS UNDER
THIS AGREEMENT, ESCROW AGENT SHALL IMMEDIATELY DELIVER, DESPITE ANY
INSTRUCTIONS TO THE CONTRARY, THE EARNEST MONEY TO SELLER (IF IT HAS NOT DONE
SO PREVIOUSLY), AND SELLER SHALL BE ENTITLED TO RETAIN THE EARNEST MONEY AS
FULL COMPENSATION AND LIQUIDATED DAMAGES, SELLER SHALL INDEMNIFY ESCROW AGENT
FOR ANY LIABILITY, COSTS AND EXPENSES BY REASON OF ESCROW AGENT'S GOOD FAITH
COMPLIANCE WITH THIS PARAGRAPH, THE PARTIES EXPRESSLY AGREE THAT THE AMOUNT
OF THE EARNEST MONEY IS A REASONABLE ESTIMATE OF THE EXTENT TO WHICH SELLER
WOULD BE DAMAGED BY PURCHASER'S FAILURE TO COMPLETE THIS PURCHASE, IN LIGHT
OF THE DIFFICULTY THE PARTIES WOULD HAVE IN DETERMINING SELLER'S ACTUAL
DAMAGES AS A RESULT OF PURCHASER'S FAILING TO COMPLETE THE PURCHASE. SELLER'S
RETENTION OF THE EARNEST MONEY AS LIQUIDATED DAMAGES SHALL BE SELLER'S
EXCLUSIVE REMEDY FOR DAMAGES BY REASON OF PURCHASER'S FAILURE TO COMPLETE THE
PURCHASE OF THE PROPERTY UNDER THIS AGREEMENT. IF PURCHASER ATTEMPTS TO
INTERFERE WITH THE RELEASE OF THE EARNEST MONEY, OR IF PURCHASER COMMENCES
ANY ACTION AGAINST SELLER OR THE PROPERTY ARISING OUT OF THIS AGREEMENT, THEN
SELLER SHALL NOT BE LIMITED IN THE AMOUNT OF DAMAGES IT MAY RECOVER FROM
PURCHASER.
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THE PARTIES AND EACH OF THEM MUTUALLY, EXPRESSLY. KNOWINGLY, AND
INTENTIONALLY, WAIVE ALL RIGHTS AND PROTECTIONS UNDER APPLICABLE LAW, EXCEPT
FOR THOSE EXPRESSLY RESERVED HEREIN.
----------------- --------------------
Seller's Initials Purchaser's Initials
21. Intentionally Omitted.
22. FURTHER AGREEMENTS BY PURCHASER. Purchaser agrees to indemnify and
hold Seller harmless from and against, and to reimburse Seller with respect
to, any and all claims, demands, causes of action, losses, damages,
liabilities, costs, and expenses (including attorneys' fees and court costs)
asserted against or incurred by Seller relating to the period of time as of
and subsequent to (but not prior to) the Closing by reason of or arising out
of the ownership, physical condition, maintenance and/or operation of the
Property subsequent to (but not prior to) the Closing. This provision shall
expressly survive Closing.
23. REAL ESTATE COMMISSIONS. Seller agrees to pay upon the Closing of the
transaction contemplated hereby, and not otherwise, the agreed amount due to
Agent pursuant to a separate agreement (the "Commission") (to be payable out
of the proceeds of the sale received by Seller at Closing). The Commission to
the Agent shall in no event be payable unless and until the transaction
contemplated hereby is closed in accordance with this Agreement; if such
transaction is not closed for any reason, including, without limitation,
failure of title or default by Seller or Purchaser or termination of this
Agreement, then the Commission will not be deemed to have been earned and
shall not be clue or payable. Each party hereto represents to the other that
except for the Agent, it has not authorized any broker or finder to act on
its behalf in connection with the sale and purchase hereunder and that such
party has not dealt with any broker or finder purporting to act on behalf of
any other party. Each party hereto agrees to indemnify and hold harmless the
other party from and against any and all, losses, liens, claims, judgments,
liabilities, costs, expenses or damages (including reasonable attorneys' fees
and court costs) of any kind or character arising out of or resulting from
any agreement, arrangement or understanding alleged to have been made by such
party or on its behalf with any broker or finder in connection with this
Agreement or the transaction contemplated hereby. Notwithstanding anything to
the contrary contained herein, this Section shall survive the Closing or any
termination of this Agreement.
24. NOTICE. Any notice or communication required or permitted hereunder
shall be given in writing, sent by (a) personal delivery, (b) overnight
delivery service by Federal Express or other reputable delivery service with
proof of delivery, (c) United States, mail, postage prepaid, registered or
certified mail, (d) telecopy (provided that such telecopy is confirmed by
overnight delivery service or by mail in the manner previously described)
addressed as set forth in Section 1 hereof, or to such other address or to
the attention of such other persons as hereafter
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shall be designated in writing by the applicable party sent in
accordance herewith. Any such notice or communication shall be deemed to
have been given either at the time of personal delivery or, in the case
of delivery service or mail, as of the date of first attempted delivery
at the address and in the manner provided herein, or in the case of
telecopy upon receipt.
25. ASSIGNMENT. Purchaser shall not have the right to assign its
interest in this Agreement without obtaining the prior written consent
of Seller, which consent shall not be unreasonably withheld; provided,
however, that Purchaser may, without Seller's consent, assign this
Agreement to any entity controlled by, under common control with or
controlling Purchaser, or to Purchaser's lender. Purchaser hereby agrees
that any assignment by Purchaser in contravention of this provision
shall be void and shall not relieve Purchaser of its obligations and
liabilities hereunder.
26. NO REPRESENTATIONS. EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN
ANY OF THE INSTRUMENTS ATTACHED AS EXHIBITS HERETO, SELLER MAKES NO
WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PROPERTY, ITS PHYSICAL CONDITION, INCOME TO
BE DERIVED THEREFROM OR EXPENSES TO BE INCURRED WITH RESPECT THERETO, OR
WITH RESPECT TO INFORMATION OR DOCUMENTS PREVIOUSLY FURNISHED TO
PURCHASER OR FURNISHED TO PURCHASER PURSUANT TO THIS AGREEMENT, OR WITH
RESPECT TO SELLER'S OBLIGATIONS OR ANY OTHER MATTER OR THING RELATING TO
OR AFFECTING THE SAME, AND THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR
REPRESENTATIONS COLLATERAL TO OR AFFECTING THE PROPERTY EXCEPT AS MAY
OTHERWISE BE EXPRESSLY SET FORTH HEREIN. ANY SUIT BY PURCHASER FOR ANY
BREACH BY SELLER OF ANY REPRESENTATION, WARRANTY OR COVENANT CONTAINED
HEREIN MUST BE FILED ON OR BEFORE ONE (1) YEAR AFTER THE CLOSING DATE
OR SHALL BE FOREVER BARRED (THE "LIMITATION DATE"). NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, THIS SECTION SHALL SURVIVE
THE CLOSING OR ANY TERMINATION OF THIS AGREEMENT. THE PARTIES AND EACH
OF THEM MUTUALLY, EXPRESSLY, KNOWINGLY, AND INTENTIONALLY, WAIVE ALL
RIGHTS AND PROTECTIONS UNDER APPLICABLE LAW EXCEPT FOR THOSE EXPRESSLY
RESERVED HEREIN.
27. ATTORNEYS' FEES AND LEGAL EXPENSES. Should either party hereto
institute any action or proceeding in court to enforce any provision
hereof or for damages by reason of any alleged breach of any provision
of this Agreement or for any other judicial remedy, the prevailing party
shall be entitled to receive from the losing party all reasonable
attorneys' fees and all court costs in connection with said proceedings.
28. INTENTIONALLY OMITTED.
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29. SECTION HEADINGS. The Section headings contained in this
Agreement are for convenience only and shall in no way enlarge or limit
the scope or meaning of the various and several sections hereof.
30. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
between the parties hereto and supersedes any prior understandings or
written or oral agreements between the parties concerning the Property.
This Agreement cannot be varied, modified, amended, altered or
terminated except by the written agreement of the parties.
31. APPLICABILITY. The terms and provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns, except as expressly set
forth herein.
32. TIME. Time is of the essence in the performance of Purchaser's
obligations under this Agreement.
33. GENDER AND NUMBER. Within this Agreement, words of any gender
shall be held and construed to include any other gender, and words in
the singular number shall be held and construed to include the plural,
unless the context otherwise requires.
34. REPORTING OF FOREIGN INVESTMENT. Seller and Purchaser agree to
comply with any and all reporting requirements applicable to the
transaction which is the subject of this Agreement which are set forth
in any law, including, but not limited to, The International Investment
Survey Act of 1976, The Agricultural Foreign Investment Disclosure Act
of 1978, The Foreign Investment in Real Property Tax Act of 1980 and the
Tax Reform Act of 1984, and further agree upon request of one party to
furnish the other party with evidence of such compliance.
35. EXHIBITS. All exhibits described herein and attached hereto are
fully incorporated into this Agreement by this reference for all
purposes.
36. EXECUTION. This Agreement is executed in multiple counterparts,
each of which shall be deemed to be an original.
37. APPLICABLE LAW. All questions with respect to the construction
of this Agreement and the rights and liabilities of the parties under
this Agreement shall be determined in accordance with the laws of the
State of Maryland, without regard to the application of choice of law
principles, except to the extent that such laws are superseded by
federal law.
38. CONFIDENTIALITY. Seller and Purchaser hereby covenant and agree
that, at all times after the date of execution hereof and prior to the
Closing, unless consented to in writing by the other party, no press
release or other public disclosure concerning this transaction shall be
made,
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and each party agrees to use best efforts to prevent public disclosure
of this transaction, other than (a) to directors and officers of the
parties, and employees, agents, lenders, investment advisors, partners,
consultants, representatives and affiliates of the parties who are
involved in the ordinary course of business with this transaction, and
each party shall use their best efforts to instruct all of such persons
to comply with the non-disclosure provisions hereof, (b) in response to
lawful process or subpoena or other valid or enforceable order of a
court of competent jurisdiction; (c) in any filings with governmental
authorities required by reason of the transactions provided for herein,
and (d) in the exercise of any remedy hereunder.
39. REFUND OF EARNEST MONEY. Notwithstanding anything contained in
this Agreement to the contrary, as a condition precedent to Purchaser's
entitlement to the Earnest Money, Purchaser shall (a) execute and
deliver to Seller the Release in the form attached hereto as EXHIBIT D
and (b) deliver to Seller originals of any and all inspection reports
from third parties concerning the physical condition of the Property
which were obtained by Purchaser in connection with this Agreement.
40. EXPIRATION. The execution of this Agreement by Purchaser and
the delivery hereof to Seller shall constitute an offer which shall be
automatically revoked, withdrawn and terminated unless Seller accepts
same by executing this Agreement and delivering one fully executed copy
thereof to Purchaser prior to five o'clock p.m. Houston, Texas time on
the tenth (1Oth) day after receipt thereof by Seller.
41. GENERAL ESCROW PROVISIONS.
(a) ESCROW INSTRUCTIONS. This Agreement when signed by
Purchaser and Seller shall also constitute escrow instructions to Escrow
Agent, as escrow holder.
(b) OPENING OF ESCROW. When both (i) this Agreement, fully
signed, or in signed counterparts, and (ii) the Initial Earnest Money
are delivered to Escrow Agent, Escrow shall be deemed open, and Escrow
Agent shall immediately notify Purchaser and Seller by telephone and in
writing of the date of opening of Escrow.
(c) GENERAL PROVISIONS. If any requirements relating to the
duties or obligations of the Escrow Agent are unacceptable to the Escrow
Agent, or if the Escrow Agent requires additional instructions, the
parties agree to make such additional instructions as Purchaser and
Seller shall mutually approve and which do not materially alter the
terms of this Agreement. Any supplemental instructions shall be signed
only as an accommodation to Escrow Agent and shall not be deemed to
modify or amend the rights of Purchaser and Seller, as between
Purchaser and Seller, unless these supplemental instructions expressly
so provide.
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(d) RECORDATION AND DELIVERY OF DOCUMENTS. When Purchaser and
Seller have satisfied their respective closing obligations under Section
19, and each of the conditions under Sections 8 and 9 have either been
satisfied or waived, Title Company shall cause the Deed to be recorded
in the Land Records of Montgomery County, in a manner so that the Title
Company is in a position to issue the Title Policy as provided in
Section 19(c). Immediately after the Closing, Title Company shall
deliver to Seller and to Purchaser all documents and funds to which each
is entitled. After recordation, the Deed shall be returned to Purchaser.
Immediately after recordation, Title Company shall deliver a copy of all
documents recorded through escrow bearing the Recorder's identifying
information to Purchaser and Seller.
(e) PERFORMANCE BY ESCROW HOLDER. Escrow Agent is to be concerned
only with those paragraphs under this Agreement where Escrow Agent is
given instructions to perform certain acts or with those paragraphs
where escrow holders generally and reasonably would be expected to act.
42. JOINT AND SEVERAL LIABILITY. If Purchaser consists of more than one
person or entity, then the obligations of Purchaser under this Agreement shall
be the joint and several obligations of said persons and/or entities.
43. RULE OF CONSTRUCTION. Purchaser and Seller have each read and
fully understand the terms of this Agreement, and each has had the
opportunity to have this Agreement reviewed by its own counsel. The rule
of construction providing that ambiguities in an agreement shall be
construed against the party drafting the same shall not apply. If any
time limit stated herein would end on a non-business day (i.e., a
Saturday, Sunday or Federal holiday), such time limit shall be extended
so as to end on the next business day.
44. ARBITRATION OF DISPUTES. ANY AND ALL CONTROVERSIES ARISING OUT
OF OR RELATING TO THIS AGREEMENT, OR THE BREACH THEREOF, SHALL BE
SETTLED BY ARBITRATION IN ACCORDANCE WITH THE MARYLAND ARBITRATION ACT
(THE CODE OF MARYLAND, COURTS AND JUDICIAL PROCEEDINGS ARTICLE, TITLE 3,
SUBTITLE 2, HEREINAFTER "THE ACT") AND JUDGMENT UPON THE AWARD MAY BE
ENTERED IN THE CIRCUIT COURT OF MARYLAND FOR MONTGOMERY COUNTY, OR OTHER
MARYLAND COURT HAVING JURISDICTION THEREOF (THE "COURT"). UPON THE
REQUEST OF ONE OF THE PARTIES, THE PARTIES AGREE TO STIPULATE TO A
MUTUALLY ACCEPTABLE ARBITRATOR OR ARBITRATORS WITHIN THIRTY (30) DAYS OF
THE REQUEST. AS PART OF THE STIPULATION, THE PARTIES SHALL BE BOUND BY
THE DECISION OF THE ARBITRATOR(S) AND THE PARTIES WAIVE ALL RIGHT OF
APPEAL. IN THE EVENT THAT THE PARTIES ARE UNABLE TO REACH AGREEMENT
CONCERNING THE ARBITRATOR(S), ONE OR MORE ARBITRATORS WILL BE APPOINTED
BY THE COURT PURSUANT TO SECTION 3-201 OF THE ACT. IN ANY EVENT, THE
COST OF THE
23
<PAGE>
ARBITRATOR(S) SHALL BE DIVIDED EQUALLY BETWEEN THE PARTIES.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THIS AGREEMENT DECIDED BY NEUTRAL ARBITRATION AS
PROVIDED BY MARYLAND LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT
POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY
INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF SECTION 3-207 OF THE ACT. YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT
DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF
DISPUTES" PROVISION TO NEUTRAL ARBITRATION.
/s/ G
----------------- --------------------
Seller's Initials Purchaser's Initials
45. REGARDING BROKERS. As provided in Section 23 hereof, Seller
shall pay a real estate brokerage commission to The Carey Winston
Company and Smithy Braedon/ONCOR Realty, to be divided equally between
them. Purchaser and Seller hereby acknowledge their understanding of the
fact that The Carey Winston Company is acting as Seller's broker ONLY
and that Smithy Braedon/ONCOR Realty is acting as Purchaser's broker,
ONLY.
46. AUDIT RIGHTS. At Purchaser's request at any time from and after
the date hereof until the date that is one (1) year after the Closing
Date, Seller shall, at Purchaser's expense, provide to Purchaser's
designated independent auditor access to the books and records of the
Property, regarding the period for which Purchaser is required to have
audited financial statements prepared with respect to the Property from
January 1, 1996 through the Closing Date as may be required in order for
Purchaser to qualify as a "real estate investment trust" under the
applicable provisions of the Internal Revenue Code or to comply with the
disclosure and reporting requirements of the Securities and Exchange
Commission, to the extent that such books, records and related
information are in Seller's possession or control and relate to the
period during which Seller held title to the Property.
24
<PAGE>
IN WITNESS WHEREOF, this Agreement is executed in multiple originals by
Seller and Purchaser as of the date first above written.
SELLER:
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY, a Texas corporation
By: /s/ Lawrence Kupstas
--------------------------------
Name: LAWRENCE KUPSTAS
--------------------------------
Title: REAL ESTATE INVESTMENT OFFICER
--------------------------------
PURCHASER:
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
a Maryland Corporation
By: /s/ Alan D. Gold
--------------------------------
Name: ALAN D. GOLD
--------------------------------
Title: PRESIDENT
--------------------------------
25
<PAGE>
An original fully executed copy of this Agreement, together with the
Initial Earnest Money, has been received by the Escrow Agent this the
___ day of _________________, 1997 and by the execution hereof the Escrow
Agent hereby covenants and agrees to be bound by the terms of this Agreement.
WATT, TIEDER & HOFFAR, L.L.P.
By:
---------------------------------
Wayne G. Tatusko, Partner
26
<PAGE>
LIST OF EXHIBITS
EXHIBIT A Legal Description
EXHIBIT B Special Warranty Deed
EXHIBIT C Purchaser's Affidavit
EXHIBIT D Release
EXHIBIT E Bill of Sale and General Assignment
EXHIBIT F Assignment and Assumption of Leases and Security Deposits
EXHIBIT G Tenant Notice
27
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
Parcel X-6 in a subdivision known as "Parcel X-6, PHEASANT RUN" as per plat (the
"Record Plat") thereof recorded in Plat Book 169 at Plat 19055 among the Land
Records of Montgomery County, Maryland.
<PAGE>
EXHIBIT B
Recording requested by and
when recorded mail to and
mail tax statements to:
- ---------------------------
- ---------------------------
- ---------------------------
- ---------------------------
SPECIAL WARRANTY DEED
THIS SPECIAL WARRANTY DEED is made this ___ day of
_________________, 199_, by THE VARIABLE ANNUALLY LIFE INSURANCE
COMPANY, a Texas corporation (the "Grantor") and ALEXANDRIA REAL ESTATE
EQUITIES, INC., a Maryland corporation (the "Grantee").
WITNESSETH:
In consideration of Ten Dollars ($l0.00) and other good and
valuable consideration, Grantor does hereby grant and convey unto
Grantee in fee simple all that property described on EXHIBIT A attached
hereto and incorporated herein by this reference, together with the
buildings and improvements located thereon, and known generally as 940
Clopper Road in Gaithersburg, Maryland (the "Property").
This conveyance is made and accepted subject to (a) the matters
herein stated, (b) the matters described on EXHIBIT B attached hereto,
to the full extent same are valid and pertain to the Property, (c) any
and all matters on the ground that a true and correct survey would
reveal and (d) real and personal property taxes and general or special
assessments against the Property, a lien not yet delinquent.
TO HAVE AND TO HOLD said Property, together with each and every
title, right, privilege, appurtenance and advantage thereunto belonging,
or in anywise appertaining, unto and for the proper use only, benefit
and behoof forever of the Grantee, its successors and assigns, in fee
simple.
And the Grantor does hereby covenant to warrant specially the Property
hereby conveyed, and to execute such further assurances of the Property as may
be requisite.
<PAGE>
IN WITNESS WHEREOF, the undersigned hereby executes this Special Warranty
Deed as of the ___ day of _______________, 1997.
THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY, a Texas corporation
By:
---------------------------------
Name (typed):
------------------------
Title:
-------------------------------
The undersigned hereby certifies that this SPECIAL WARRANTY DEED was
prepared by the undersigned, who is an attorney duly admitted to
practice law before the Court of Appeals of Maryland.
----------------------------------------
STATE OF MARYLAND )
)
COUNTY OF )
On this ____ day of ____________, 1997, before me,_____________, the
undersigned officer, personally appeared ____________________, who acknowledged
himself to be the _____________ of The Variable Annuity Life Insurance Company,
a Texas corporation, and that he, as such ______________, being authorized so to
do, executed the foregoing instrument for the purposes therein contained, by
signing the name of the corporation by himself as __________________________.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-----------------------------------
Notary Public
[Notarial Seal] My commission expires:
--------------
<PAGE>
EXHIBIT A - Legal Description
Exhibit B - Permitted Encumbrances
Pursuant to the provisions of Section 3.501 of Subtitle 5, Real
Property Article, Annotated Code of Maryland (1988 Repl. Vol.) the following
additional information is provided:
(a) The address of the Grantee is: Alexandria Real Estate Equities, Inc.
251 South Lake Avenue, Suite 700
Pasadena, California 91101
(b) The address of the Grantor is: American General Realty Advisors, Inc.
2929 Allen Parkway, 40th Floor
Houston, Texas 77019
Attention: Mr. J. Brady Wilkins
(c) The name and address of the title insurer insuring this instrument is:
(d) The street address of the Property is: 940 Clopper Road
Gaithersburg, Maryland
(e) The parcel identifier number is:
(f) The record legal description of the Property is shown as Exhibit A of
this Deed.
<PAGE>
EXHIBIT C
PURCHASER'S AFFIDAVIT AND AGREEMENT
This day personally came and appeared before me, the undersigned
authority, _________________________, the _________________ of ALEXANDRIA
REAL ESTATE EQUITIES, INC. ("Purchaser"), who is knowledgeable of the facts
stated herein who, on being duly sworn, stated under oath as follows that:
1. Pursuant to Section 13 of that certain Purchase and Sale
Agreement ("Agreement") dated __________, 1997, by and between Purchaser
and THE VARIABLE ANNUITY LIFE INSURANCE COMPANY ("Seller"), Purchaser
has had full access to and has (to Purchaser's satisfaction) exercised
its option to inspect and evaluate for potential purchase that certain
property known as 940 Clopper Road, Gaithersburg, Montgomery County,
Maryland, and more particularly described on EXHIBIT A attached hereto
("Property").
2. Purchaser and experts of Purchaser's choice have had full access
to and have (to Purchaser's satisfaction) (i) physically inspected the
Property, (ii) analyzed the present, past and Purchaser's projected use
of the Property, (iii) determined the fair market value of the Property
in its "AS IS" condition as of the closing date and (iv) independently
verified all material documents and information provided to Purchaser by
Seller and Seller's Agents (as hereinafter defined).
3. Purchaser has not relied upon and is not relying upon any
document, representation or information provided to Purchaser by Seller
(except as set forth in the Agreement) or Seller's Agents (as defined in
Section 6 below).
4. There are no verbal promises or verbal representations which
have been made by Seller or Seller's Agents nor relied upon by Purchaser
in connection with the Property or the Agreement. There are no
underperformed written promises by Seller or Seller's Agents in
connection with the Property or the Agreement except as follows:
___________________________________
___________________________________
___________________________________
___________________________________
5. The Property inspection reports attached hereto as EXHIBIT B were
prepared at Purchaser's request for Purchaser's benefit and constitute
all reports of such type which were obtained by Purchaser in connection
with Purchaser's evaluation and decision to purchase the Property; and
said reports are the primary source of information
<PAGE>
relied upon by Purchaser in making Purchaser's decision to purchase the
Property and Purchaser has not relied upon Seller's information or
reports.
6. Purchaser hereby releases Seller from and waives any and all
causes of action, claims, liabilities, damages or injury arising from,
connected with or otherwise caused by: (a) statements, opinions or
information obtained from Seller's brokers, contractors, property
managers or similar individuals or entities engaged by Seller ("Seller's
Agents") related to or involving the Property or (b) information
withheld by Seller's Agents unless withheld at the express direction of
Seller and related to or involving the Property; or (c) environmental
contamination existing in, at or under the Property, including but not
limited to all CERCLA (Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 as amended) based or related
claims, liabilities or damages or environmental claims or causes of
action arising from any other federal or state based statutory or
regulatory cause of action. Seller's agents include, but are not limited
to, Seller's listing broker, The Carey Winston Company, and any other
agent or representative of Seller who discussed the Property with or
provided information to Purchaser or Purchaser's representatives.
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Sworn to and subscribed to before me by __________________________, the
_____________________ of ALEXANDRIA REAL ESTATE EQUITIES, INC., this ___ day of
________________, 1997.
-------------------------------------
Notary Public
State of
-----------------------------
<PAGE>
EXHIBIT D
RELEASE
This Release ("Release") is entered into this day of ______________,
1997, between THE VARIABLE ANNUITY LIFE INSURANCE COMPANY, as "Seller" and
ALEXANDRIA REAL ESTATE EQUITIES, INC., as "Purchaser."
RECITALS
A. Seller and Purchaser entered into that certain Purchase and Sale
Agreement (the "Agreement) dates effective ________________, 1997,
provided for the purchase and sale of the Property situated in
Gaithersburg, Maryland.
B. Purchaser has terminated the Agreement and is entitled to a
refund of the Initial Earnest Money. Under Section 39 of the Agreement,
Purchaser must execute and deliver to Seller this Release.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser hereby agree as follows:
1. Seller and Purchaser hereby ratify and confirm the above recitals. All
defined terms used in this Release shall have the same meanings assigned
them in the Agreement.
2. Purchaser hereby releases and discharges Seller, its agents and contractors,
from any and all claims, liabilities and expenses (including reasonable
attorney's fees) in connection with the Agreement, and does further ratify
and confirm that Purchaser has no rights in and to the Property.
3. Seller does hereby release and discharge Purchaser, its agents and
contractors, from any and all claims, liabilities and expenses
(including reasonable attorney's fees) in connection with the Agreement.
4. Seller and Purchaser hereby instruct the Escrow Agent to deliver to
Purchaser the Initial Earnest Money.
5. This Release does not purport to release the matters set forth below, and
Seller and Purchaser hereby reserve all rights and remedies relating to:
(a) any breach by Purchaser under Section 38 of the Agreement;
<PAGE>
(b) the indemnity made by Purchaser in Section 13 of the Agreement; and
(c) the joint indemnity made in Section 23 of the Agreement.
6. Seller and Purchaser hereby represent and warrant to the other that each
has the power and authority to enter into this Release and that each
party is the owner and holder of all claims and causes of action purported
to be released hereunder.
SELLER
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
PURCHASER:
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
35
<PAGE>
EXHIBIT E
BILL OF SALE AND GENERAL ASSIGNMENT
Concurrently with the execution and delivery hereof, THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY ("Assignor") is conveying to ALEXANDRIA
REAL ESTATE EQUITIES, INC. ("Assignee") by Special Warranty Deed, that
certain tract of land together with the improvements thereon
("Property") lying and being situated in Montgomery County, Maryland,
and being more particularly described on EXHIBIT A attached hereto and
made a part hereof for all purposes.
It is the desire of Assignor to hereby ASSIGN, TRANSFER and CONVEY
to Assignee all fixtures, fittings, appliances, apparatus equipment,
machinery and other items of personal property, affixed or attached to,
or placed or situated upon, the Property, except those not owned by
Assignor, and any and all other incidental rights and appurtenances
relating thereto as more fully described below (such properties being
collectively called the "Assigned Properties").
NOW, THEREFORE, in consideration of the receipt of Ten Dollars ($10.00)
and other good and valuable consideration in hand paid by Assignee to
Assignor, the receipt and sufficiency of which are hereby acknowledged and
confessed by Assignor, Assignor does hereby ASSIGN, TRANSFER, SET OVER and
DELIVER to Assignee, its successors and assigns, all of the Assigned
Properties, without warranty whether statutory, express or implied,
including, without limitation, the following:
1. All equipment, furniture, building supplies, appliances,
fixtures and all other personal property of every kind and
character, if any, owned by Assignor and located in or on the
Property;
2. All of Assignor's interest, if any, in and to all use,
occupancy, building and operating permits, licenses and
approvals, if any, issued from time to time with respect to the
Property or the Assigned Properties;
3. All of Assignor's interest in and to all management, maintenance,
service and supply contracts, if any, relating to the Property or the
Assigned Properties;
4. All of Assignor's interest in and to all existing and assignable
guaranties and warranties (express or implied), if any, issued in
connection with the construction, alteration and repair of the
Property and/or the purchase, installation and the repair of the
Assigned Properties; and
5. All rights, which Assignor may have, if any, in and to any
telephone numbers and listings, all master keys, all goodwill, if any,
and any and all other rights,
<PAGE>
privileges and appurtenances owned by Assignor and related to or used in
connection with the existing business operation of the Property.
TO HAVE AND TO HOLD the Assigned Properties unto Assignee, its
successors and assigns, forever, and Assignor does hereby bind itself, its
successors and assigns, to WARRANT and FOREVER DEFEND, all and singular,
title to the Assigned Properties unto Assignee, its successors and assigns,
against every person whomsoever lawfully claiming or to claim the same, or
any part thereof, by, through or under Assignor but not otherwise.
ASSIGNEE ACKNOWLEDGES THAT ASSIGNOR HAS NOT MADE, DOES NOT MAKE, AND
SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OF CHARACTER WHATSOEVER,
WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, OF, AS TO, CONCERNING, OR WITH
RESPECT TO, (i) THE VALUE, NATURE, QUALITY OR CONDITION OF THE ASSIGNED
PROPERTIES, (ii) THE SUITABILITY OR ACCURACY OF THE ASSIGNED PROPERTIES,
(iii) THE COMPLIANCE OF OR BY THE ASSIGNED PROPERTIES WITH ANY LAWS, RULES,
ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OF BODY,
(iv) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF THE ASSIGNED PROPERTIES, OR (v) ANY OTHER
MATTER WITH RESPECT TO THE ASSIGNED PROPERTIES, AND SPECIFICALLY, THAT
ASSIGNOR HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS
ANY REPRESENTATIONS OR WARRANTEES REGARDING COMPLIANCE OF THE ASSIGNED
PROPERTIES WITH ANY ENVIRONMENTAL PROTECTION OR POLLUTION LAWS, RULES,
REGULATIONS, ORDERS OR REQUIREMENTS, INCLUDING, WITHOUT LIMITATION, THOSE
PERTAINING TO SOLID WASTE, AS DEFINED BY THE U.S. ENVIRONMENTAL PROTECTION
AGENCY REGULATIONS AT 40 C.F.R., PART 261, OR THE DISPOSAL OR EXISTENCE, IN
OR ON THE ASSIGNED PROPERTIES, OF ANY HAZARDOUS SUBSTANCES, AS DEFINED BY THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980,
AS AMENDED, AND THE REGULATIONS PROMULGATED THEREUNDER. ASSIGNEE SHALL RELY
SOLELY ON ITS OWN INVESTIGATION OF THE ASSIGNED PROPERTIES AND NOT ON ANY
INFORMATION PROVIDED OR TO BE PROVIDED BY ASSIGNOR, ITS AGENTS OR
CONTRACTORS. ASSIGNOR SHALL NOT BE LIABLE OR BOUND IN ANY MANNER BY ANY
VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO
THE ASSIGNED PROPERTIES OR THE OPERATION THEREOF, FURNISHED BY ANY PARTY
PURPORTING TO ACT ON BEHALF OF ASSIGNOR.
<PAGE>
Assignee hereby agrees to assume and perform all obligations accruing under
the management, maintenance, service and supply contracts listed on EXHIBIT B
attached hereto and made a part hereof from and after the date hereof, and
Assignee does hereby agree to indemnify and hold Assignor harmless from all such
obligations.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
executed on this ___ day of ___________________, 1997
ASSIGNOR:
THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
ASSIGNEE:
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
<PAGE>
EXHIBIT F
ASSIGNMENT AND ASSUMPTION OF
LEASES AND SECURITY DEPOSITS
This Agreement is executed by THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY ("Seller"), and ALEXANDRIA REAL ESTATE EQUITIES, INC.
("Purchaser"), as of the ____ day of ______________, 1997.
RECITALS:
A. Purchaser is contemporaneously purchasing from Seller and Seller
is conveying to Purchaser the real property described on EXHIBIT A
attached hereto and made a part hereof together with all improvements
thereon and appurtenances thereto ("Property").
B. The Property is occupied by various tenants ("Tenants") claiming
under written space leases listed and described on EXHIBIT B attached
hereto and made a part hereof (the "Rent Roll").
C. The Rent Roll includes a list of which Tenants from whom
security deposits were collected (herein the total of all such deposits
being transferred are referred to as the "Security Deposits").
D. Seller desires to transfer and assign all of Seller's rights,
title and interests in and to (i) the Leases, and (ii) the Security
Deposits actually collected by Seller.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Seller hereby transfers and assigns to
Purchaser all right, title and interest of Seller in and to (i) the
Leases, and (ii) the Security Deposits actually collected by Seller.
Purchaser hereby assumes all obligations (i) of the landlord under
the Leases arising from and after the date hereof, and (ii) under the
Leases to pay or account for the Security Deposits, regardless of
whether actually transferred to Purchaser.
Seller does not hereby transfer or assign to Purchaser any Security
Deposits paid by the Tenants to any former owners of the Property other
than Seller unless such Security Deposits were actually transferred to
Seller. It is further agreed that rents under the Leases shall be
prorated as of the date hereof, except that no proration shall be made
for rents delinquent as of the date hereof (herein called the
"Delinquent Rents"). Purchaser shall make a good faith and diligent
effort to collect all Delinquent Rents for the benefit of Seller and
such collections shall be remitted to Seller promptly upon receipt by
Purchaser. Amounts collected by Purchaser from Tenants owing
<PAGE>
Delinquent Rents shall be applied first to current rents owed by such
Tenant and then to Delinquent Rents. Nothing in this Section shall
restrict Seller's right to collect Delinquent Rents directly from a
Tenant by any legal means.
The terms and provisions of this Agreement shall be binding upon
and inure to the benefit of the respective parties hereto and their
respective heirs, executors, administrators, successors and assigns.
EXECUTED the day and year first written above.
SELLER:
THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
PURCHASER:
ALEXANDRIA REAL ESTATE EQUITIES, INC.
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
<PAGE>
EXHIBIT G
TENANT NOTICE
_______________________
_______________________
_______________________
Re: Your lease (the "Lease") at 940 Clopper Road, Gaithersburg,
Maryland (the "Project")
------------------------------------------------------------
Gentlemen:
You are hereby notified that The Variable Annuity Life Insurance
Company ("Seller") has sold the Project to ALEXANDRIA REAL ESTATE
EQUITIES, INC. ("Purchaser") as of the date of this Tenant Notice, and in
connection with such sale Seller has assigned and transferred its
interest in the Lease and any and all security deposits to Purchaser,
and Purchaser has assumed and agreed to perform all of the landlord's
obligations under the Lease (including any obligations set forth in the
Lease to repay or account for any security deposits thereunder) from and
after such date. Accordingly, (a) all of your obligations under the
Lease from and after the date of this Tenant Notice (including your
obligation to pay rent) shall be performable to and for the benefit of
Purchaser, its successors and assigns, and (b) all of the obligations of
the landlord under the Lease (including any obligations to repay or
account for any security deposits) shall be the binding obligations of
Purchaser and its successors and assigns. The current amount of the
security deposit for which Purchaser is responsible with respect to the
Lease is $__________.
The address of Purchaser for all purposes under the Lease (including the
payment of rent) is __________________.
Very truly yours,
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
"SELLER"
<PAGE>
AGREED AND ACCEPTED:
______________________________
______________________________
<PAGE>
Exhibit 10.44
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT is made this day
of August, 1997 by and between (i) THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY, a Texas corporation ("Seller"), and (ii) ALEXANDRIA REAL ESTATE
EQUITIES, INC., a Maryland corporation ("Purchaser").
RECITALS
A. Purchaser and Seller have entered into a Purchase and Sale Agreement
dated June 23, 1997, the effective date of which is June 25, 1997 (the
"Purchase Agreement").
B. The parties hereto desire to amend the Purchase Agreement as
hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. RECITALS: DEFINED TERMS. The foregoing recitals are true and correct
and are hereby incorporated herein by reference. The defined terms used in
the Purchase Agreement shall have the same meaning when used herein, unless a
contrary intent is indicated.
2. EXTENSION OF INSPECTION PERIOD. The Inspection Period prescribed
pursuant to Section 13 of the Purchase Agreement is hereby extended and shall
terminate at the close of business on August 15, 1997.
3. CLOSING DATE. The Closing Date shall be on or before August 26, 1997,
notwithstanding the extension to the Inspection Period granted hereinabove.
4. NO OTHER CHANGES. Except as set forth above, the Purchase Agreement
remains in full force and effect and is ratified and confirmed by the parties
hereto.
WITNESS the signatures of the parties hereto.
WITNESS: SELLER:
THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY
/s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
- ----------------------------- -------------------------------------
Name: [ILLEGIBLE]
----------------------------------
Title: Real Estate Investment Officer
---------------------------------
<PAGE>
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
AS OF JUNE 26, 1997
BY AND BETWEEN
ALEXANDRIA REAL ESTATE EQUITIES, INC.
BUYER
AND
RESEARCH BLVD. PARTNERSHIP,
SELLER
<PAGE>
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this
"AGREEMENT") is made and entered into as of ________, 1997, by and between
ALEXANDRIA REAL ESTATE EQUITIES, INC., a Maryland corporation, or its assignee
or nominee (collectively, "BUYER"), and RESEARCH BLVD. PARTNERSHIP, a Maryland
partnership ("SELLER"), for the purposes of setting forth the agreement of the
parties and of instructing Chicago Title Insurance Company ("ESCROW AGENT"),
with respect to the transactions contemplated by this Agreement.
RECITALS
Upon and subject to the terms and conditions set forth in this
Agreement, Seller desires to sell and Buyer desires to purchase all of
Seller's right, title and interest in and to the following (collectively, the
"PROPERTY"): (i) the fee interest in that certain real property located in
the City of Rockville, County of Montgomery, State of Maryland, as legally
described on EXHIBIT "A" attached hereto, together with all rights,
privileges and easements appurtenant thereto or used in connection therewith,
including, without limitation, all minerals, oil, gas and other hydrocarbon
substances thereon, all development rights, air rights, water, water rights
and water stock relating thereto, all strips and gores, and all of Seller's
right, title and interest in and to any streets, alleys, easements,
rights-of-way, public ways, or other rights appurtenant, adjacent or
connected thereto or used in connection therewith (collectively, the "LAND");
(ii) all buildings, improvements, structures and fixtures now or hereafter
included or located on or in the Land (collectively, the "IMPROVEMENTS"),
including, without limitation, that certain building commonly known as 1401
Research Boulevard (the "BUILDING"), and all other fixtures used in
connection with the operation or occupancy of the Land and the Improvements,
such as heating, air conditioning, electrical, plumbing, security or
mechanical systems and facilities used to provide any utility services,
refrigeration, ventilation, steam, water, gas, emergency power generation,
vacuum, security systems, waste disposal or other services now or hereafter
located on or in the Land or the Improvements; (iii) all tangible personal
property (the "PERSONAL PROPERTY") now or hereafter owned by Seller and
located on or about the Land or the Improvements or attached thereto or used
in connection with the use, operation, maintenance or repair thereof; and
(iv) all intangible property (collectively, the "INTANGIBLE PROPERTY") now or
hereafter owned by Seller and used in connection with the Land, the
Improvements or the Personal Property, or any business or businesses
conducted thereon or with the use thereof, including, without limitation, the
Service Contracts (as hereinafter defined), building and trademark and trade
names, transferable business licenses, architectural, site, landscaping or
other permits, applications, approvals, authorizations and other
entitlements, transferable guarantees and warranties covering the Land and/or
Improvements, all contract rights, books, records, reports, test results,
environmental assessments, as-built plans, specifications and other similar
documents and materials relating to the use or
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operation, maintenance or repair of the Property or the construction or
fabrication thereof, and all transferable utility contracts. Seller has
advised Buyer that record title to the Land and the Improvements is in Union
Land and Management Company; that Union Land and Management Company is
Seller's nominee; and that Seller is the beneficial owner of the Land and the
Improvements.
AGREEMENT
In consideration of the mutual covenants contained in this Agreement
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Buyer and Seller hereby agree, and instruct
Escrow Agent, as follows:
1. AGREEMENT TO PURCHASE AND SELL.
Subject to all of the terms and conditions of this Agreement, Seller
agrees to sell, transfer and convey to Buyer, and Buyer agrees to acquire and
purchase from Seller, the Property, upon the terms and conditions set forth
herein.
2. PURCHASE PRICE.
The purchase price for the Property (the "PURCHASE PRICE") shall be
the sum of FIVE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($5,800,000), payable as
follows:
2.1 DEPOSIT. Within three (3) Business Days (as hereinafter
defined) following the execution and delivery of this Agreement by the parties
hereto, Buyer shall deposit into Escrow (as hereinafter defined) the sum of TWO
HUNDRED THOUSAND DOLLARS ($200,000) (which amount, together with any and all
interest and dividends earned thereon, shall hereinafter be referred to as the
"DEPOSIT") by wire transfer, or by certified or bank check, payable to the order
of Escrow Agent.
Escrow Agent shall invest the Deposit in insured money market accounts,
certificates of deposit, United States Treasury Bills or such other instruments
as Buyer may instruct from time to time. In the event of the consummation of
the purchase and sale of the Property as contemplated hereunder, the Deposit
shall be paid to Seller at the Closing (as defined in SECTION 6 below) and
credited against the Purchase Price. In the event the sale of the Property is
not consummated because of the termination of this Agreement by Buyer in
accordance with any right to so terminate provided herein, or the failure of any
condition or any other reason except for a default under this Agreement solely
on the part of Buyer, the Deposit shall be returned to Buyer contemporaneously
with the return to Seller of the Property Documents (as hereinafter defined) and
a copy of all third party reports and surveys prepared for Buyer in connection
with its due diligence review of the Property, all without cost, lien or expense
to Seller.
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2.2 BALANCE. On the Closing Date (as defined in SECTION 6 below),
Buyer shall pay to Seller the Purchase Price by wire transfer of federal funds
to Escrow Agent, net of all prorations and adjustments as provided herein, and
Seller shall pay to Buyer an amount equal to the Deposit, by wire transfer of
federal funds to Escrow Agent.
3. OPENING OF ESCROW.
Promptly following the mutual execution of this Agreement, Buyer and
Seller shall cause a purchase and sale escrow ("ESCROW") to be opened with
Escrow Agent by delivery to Escrow Agent of a fully executed copy of this
Agreement (the "OPENING OF ESCROW"). This Agreement shall constitute escrow
instructions to Escrow Agent as well as the agreement of the parties. Escrow
Agent is hereby appointed and designated to act as the Escrow Agent and
instructed to deliver, pursuant to the terms of this Agreement, the documents
and funds to be deposited into Escrow as herein provided. The parties hereto
shall execute such additional escrow instructions, not inconsistent with this
Agreement as determined by counsel for Buyer and Seller, as Escrow Agent shall
deem reasonably necessary for its protection, including Escrow Agent's general
provisions, if any (as may be modified by Buyer, Seller and Escrow Agent). In
the event of any inconsistency between this Agreement and such additional escrow
instructions, the provisions of this Agreement shall govern.
4. ACTIONS PENDING CLOSING.
4.1 DUE DILIGENCE PERIOD.
4.1.1 DUE DILIGENCE.
4.1.1.1 PROPERTY DOCUMENTS. Not later than five (5)
Business Days after the date hereof, Seller shall deliver or make available to
Buyer, to the extent the same exist, copies of all contracts, documents, leases,
reports, books, records and other materials relating to the Property, including,
without limitation, as-built plans and specifications, operating statements,
income and expense records, rent rolls, engineering tests, soil tests, a Phase
One environmental/asbestos audit of the Property, a Phase Two environmental
audit of the Property, Service Contracts, structural and mechanical reports,
maps, plans, agreements, governmental permits and approvals, appraisals, title
policies, surveys, construction warranties, and land studies (collectively, the
"PROPERTY DOCUMENTS"), and the documents specified in Section 5.1.11 relating to
Seller (the "SELLER DOCUMENTS"), whether in Seller's possession or in the
control or possession of its agents, auditors or independent contractors, all at
Seller's sole cost and expense.
4.1.1.2 DILIGENCE TESTS. At all reasonable times from the
date hereof until the Closing or earlier termination of this Agreement, Buyer,
its agents and representatives shall be entitled, subject to the rights of
tenants under the Tenant Leases (as hereinafter defined) at Buyer's sole cost
and expense to (i) enter onto the Property during
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normal business hours and upon reasonable advance notice to Seller, to
perform any inspections, investigations, studies and tests of the Property,
including, without limitation, physical, structural, mechanical,
architectural, engineering, soils, geotechnical and environmental/asbestos
tests that Buyer deems reasonable; (ii) cause an environmental assessment of
the Property to be performed, upon reasonable notice to Seller; and (iii)
review all Property Documents and Seller Documents and examine and copy any
and all books and records maintained by Seller or its agents relating to the
Property (including, without limitation, all documents relating to utilities,
zoning, and the access, subdivision and appraisal of the Property). Seller
shall use its commercially reasonable best efforts to cause the tenants under
the Tenant Leases to permit Buyer and its agents to enter the Property for
the purpose of performing Buyer's due diligence review of the Property.
Buyer shall use its commercially reasonably best efforts to cause as little
interference as practicable with the business operations of the tenants under
the Tenant Leases.
4.1.1.3 INTENTIONALLY OMITTED.
4.1.1.4 INSURANCE. Buyer agrees that during the Due
Diligence Period (as hereinafter defined) it shall carry, or cause its agent to
carry, worker's compensation and general liability insurance in the amount of
$1,000,000 per occurrence, which insurance shall name Seller as an additional
insured; upon request, Buyer shall provide Seller with proof of such insurance
prior to commencing Buyer's physical inspections of the Property.
4.1.1.5 INDEMNITY AND REPAIR. Buyer agrees to indemnify
and hold harmless Seller from any losses resulting from any final judgment by a
court of competent jurisdiction arising from any actual damage to the Property
or any injury to persons caused by any act of Buyer as a result of the
inspections, investigations or tests performed pursuant to SECTION 4.1.1.2
above, which indemnity shall survive the termination of this Agreement or the
Closing and delivery of the Deed (as hereinafter defined) for a period of ninety
(90) days; provided, however, that Buyer's indemnity hereunder shall not include
any losses, cost, damage or expenses resulting from (x) the acts of Seller, its
agents or representatives, or (y) the discovery of any pre-existing condition of
the Property. In addition, Buyer, at its sole cost and expense, shall promptly
repair any damage to the Property caused by its entry thereon and shall restore
the Property substantially to the condition in which it existed prior to such
entry; provided, however, that Buyer shall have no obligation to repair any
damage caused by Seller's negligence or willful misconduct or to remediate,
contain, abate or control any Material of Environmental Concern (as hereinafter
defined) or any hazardous defect that existed at the Property prior to Buyer's
entry thereon.
4.1.2 TERMINATION RIGHT. Buyer shall have the right at any time
during the period (the "DUE DILIGENCE PERIOD") beginning upon the date of this
Agreement and ending at 6:00 p.m. on the forty fifth (45th) calendar day
following the date of mutual execution of this Agreement by both Buyer and
Seller (the "DUE DILIGENCE TERMINATION DATE") to terminate
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this Agreement if, during the course of Buyer's due diligence investigation
of the Property, Buyer determines in its sole and absolute discretion that
the Property is not acceptable to Buyer. Buyer may exercise such termination
right by delivering written notice of termination to Seller and Escrow Agent
on or before the Due Diligence Termination Date. Upon such termination, (i)
Escrow Agent shall return the Deposit to Buyer, (ii) the parties shall
equally share the cancellation charges of Escrow Agent and Title Company (as
hereinafter defined), (iii) Buyer shall, contemporaneously with the return to
Buyer of the Deposit, deliver to Seller the Property Documents and a copy of
all third party reports and surveys prepared for Buyer in connection with its
due diligence review of the Property, all without cost, lien or expense to
Seller, and (iv) this Agreement shall automatically terminate and be of no
further force or effect and neither party shall have any further rights or
obligations hereunder, other than pursuant to any provision hereof which
expressly survives the termination of this Agreement. If Buyer does not
exercise such termination in writing prior to the Due Diligence Termination
Date, then Buyer's right to terminate this Agreement pursuant to this SECTION
4.1.2 shall automatically lapse. From time to time during the Due Diligence
Period Buyer shall communicate to Seller by telephone or in writing the
progress being made by Buyer in its due diligence review of the Property.
4.2 TITLE.
4.2.1 TITLE REPORT; SURVEY. Buyer has obtained an ALTA extended
coverage preliminary title report (the "PTR") issued by Chicago Title Insurance
Company (in such capacity, "TITLE COMPANY"), together with legible copies of all
documents referenced as exceptions therein describing encumbrances, liens and/or
defects in title that would affect the value or use of the Property. Not later
than twenty (20) days after the date of this Agreement, Buyer shall have
obtained (a) a current As-Built American Land Title Association survey of the
Property (the "SURVEY"), in form reasonably satisfactory to Buyer, Title Company
and any lenders designated by Buyer (the "NEW LENDERS"), prepared and certified
to Buyer, Title Company, the New Lenders, and such other persons or entities as
Buyer may, in its discretion, request, by a surveyor licensed in the State of
Maryland, showing any and all matters which Buyer and the New Lenders may
reasonably require, including, without limitation, all Improvements, all
easements, all roads, all utilities, the number of parking spaces, access to and
from the Land, and drainage ditches, set-back lines, protrusions, encroachments,
and encumbrances affecting the same; and (b) at Buyer's sole cost and expense, a
UCC Search with regard to the Personal Property (the "UCC SEARCH").
4.2.2 BUYER'S REVIEW OF TITLE. Attached hereto as EXHIBIT "A-1"
is a schedule of those matters shown on the PTR that are acceptable to Buyer
(the "PTR Permitted Exceptions"). Buyer shall have until the Due Diligence
Termination Date to notify Seller in writing of any objection which Buyer may
have to any matter shown on the Survey or the UCC Search (or any updates thereof
or any update of the PTR; provided, however, that if any such updates are
received by Buyer, Buyer shall have an additional five (5) Business Days,
regardless of the Due Diligence Termination Date, following Buyer's receipt of
such update
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and legible copies of all documents referenced therein to notify Seller of
objections to items shown on any such update). The PTR Permitted Exceptions
and matters shown on the Survey or the UCC Search (or any updates thereof or
any updates of the PTR) not objected to by Buyer as provided above shall be
deemed to be "PERMITTED EXCEPTIONS." As a condition to Closing, Seller shall
take all action necessary to remove from title to the Property any exceptions
and matters so objected to by Buyer, or in the alternative, Seller shall
obtain for Buyer title insurance insuring over such exceptions or matters,
such insurance to be in form and substance satisfactory to Buyer. If, prior
to the Closing, Seller is unable to remove or satisfactorily insure over any
exceptions or matters objected to by Buyer and Buyer is unwilling to take
title subject thereto, then, in addition to any and all other rights and
remedies which Buyer may have hereunder, Buyer may terminate this Agreement
(in which case Escrow Agent shall return the Deposit to Buyer, the parties
shall equally share the cancellation charges of Escrow Agent and Title
Company, and neither party shall thereafter have any rights or obligations to
the other hereunder); PROVIDED, HOWEVER, that if such objected to exceptions
or matters are not removed by the Closing Date, Buyer may elect, upon written
notice on or prior to such date, to (a) discharge any objected to exceptions
or matters which can be discharged by the payment of money and to deduct from
the cash portion of the Purchase Price the amount necessary to do so, (b)
extend the Closing Date to allow Seller a reasonable period of time to remove
such objected to exceptions or matters or (c) proceed to a timely Closing
whereupon such objected to exceptions or matters shall be deemed Permitted
Exceptions. Seller shall in any event be required to discharge and remove
any and all liens and encumbrances affecting the Property which secure an
obligation to pay money (other than installments of real estate taxes not
delinquent as of the Closing) and, even though Buyer does not expressly
disapprove such liens and encumbrances, such liens shall not be Permitted
Exceptions. Notwithstanding anything to the contrary contained elsewhere in
this Agreement, if Seller refuses or fails to correct any survey objection
made by Buyer, Buyer's sole and exclusive remedy shall be to terminate this
Agreement.
4.2.3 CONDITION OF TITLE AT CLOSING. Upon the Closing, Seller
shall sell, transfer and convey to Buyer indefeasible fee simple title to the
Land and the Improvements thereon by a duly executed and acknowledged special
warranty deed from Union Land and Management Company in the form of EXHIBIT "B"
attached hereto (the "DEED"), subject only to the Permitted Exceptions. Prior
to Closing, Seller shall not take any action or commit or suffer any acts which
would give rise to a variance from the current legal description of the Land, or
cause the creation of any exception or encumbrance against or respecting the
Land without the prior written consent of Buyer, which consent Buyer may
withhold in its sole discretion. Nothing in this SECTION 4.2.3 shall preclude
Buyer from disapproving title matters in accordance with the provisions of
SECTION 4.2.2 above.
5. CONDITIONS PRECEDENT TO CLOSING.
5.1 BUYER'S CONDITIONS. The obligation of Buyer to render
performance under this Agreement is subject to the following conditions
precedent (and conditions concurrent,
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with respect to deliveries to be made by the parties at Closing) (the
"CONDITIONS PRECEDENT"), which conditions may be waived by Buyer only in a
writing executed by Buyer (provided, however, that any such waiver shall not
affect Buyer's ability to pursue any remedy it may have with respect to any
breach hereunder by Seller):
5.1.1 TITLE. Title Company shall be prepared and irrevocably
committed to issue (a) to Buyer an American Land Title Association extended
coverage owner's policy of title insurance in favor of Buyer in an amount equal
to the Purchase Price showing indefeasible fee simple title to the Property
vested in Buyer, with those endorsements reasonably requested by Buyer, subject
only to the Permitted Exceptions (collectively, the "OWNER'S TITLE POLICY") and
(b) to the New Lenders an American Land Title Association loan policy of title
insurance in favor of the New Lenders, with those endorsements reasonably
requested by the New Lenders, subject only to the Permitted Exceptions (the
"Lenders' Title Policy").
5.1.2 SELLER'S DUE PERFORMANCE. All of the representations and
warranties of Seller set forth herein shall be true and correct as of the
Closing Date, and Seller, on or prior to the Closing Date, shall have complied
with and/or performed all of the obligations, covenants and agreements required
on the part of Seller to be complied with or performed pursuant to the terms of
this Agreement. On the Closing Date, Seller shall deliver a certificate, in the
form of EXHIBIT "C" attached hereto (the "SELLER'S CERTIFICATE"), to Buyer
certifying that (i) all of the representations, covenants and warranties of
Seller made in or pursuant to this Agreement are true, accurate, correct and
complete as of the Closing, (ii) all conditions to the Closing that Seller was
to satisfy or perform have been satisfied and performed, and (iii) all
conditions to the Closing that Buyer was to satisfy or perform have been
satisfied and performed.
5.1.3 PHYSICAL CONDITION OF PROPERTY. Subject to the provisions
of SECTION 10 below, the physical condition of the Property shall be
substantially the same on the Closing Date as on the date of the execution of
this Agreement, except for reasonable wear and tear and any damages due to any
act of Buyer or Buyer's representatives.
5.1.4 BANKRUPTCY. No action or proceeding shall have been
commenced by or against Seller under the federal bankruptcy code or any state
law for the relief of debtors or for the enforcement of the rights of creditors
and no attachment, execution, lien or levy shall have attached to or been issued
with respect to the Property or any portion thereof.
5.1.5 TENANT LEASES. At the Closing, Seller shall assign all of
Seller's rights and remedies under the Tenant Leases, including, without
limitation, the right to any security deposits and prepaid rent, to Buyer
pursuant to an assignment of leases and security deposits (the "ASSIGNMENT OF
LEASES") in the form of EXHIBIT "D" attached hereto.
5.1.6 BILL OF SALE. At the Closing, Seller shall deliver to
Buyer a bill of sale and assignment (the "BILL OF SALE AND ASSIGNMENT"), by
which Seller shall transfer to
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Buyer all the Personal Property and the Intangible Property, including,
without limitation, the Property Documents, in each case free of all liens
and encumbrances, in the form of EXHIBIT "E" attached hereto.
5.1.7 ESTOPPEL CERTIFICATES. Seller shall use commercially
reasonable best efforts to deliver to Buyer within thirty (30) Business Days
after the date of this Agreement, but not later than three (3) Business Days
prior to the end of the Due Diligence Termination Date, estoppel certificates,
each substantially in the form of attached EXHIBIT "F", executed by each tenant
under the Tenant Leases (collectively, the "ESTOPPEL CERTIFICATES"). Within the
Due Diligence Period, Buyer shall review and approve or disapprove the Estoppel
Certificates, in Buyer's sole discretion. In addition, not more than five (5)
days prior to the Closing Date, Seller shall deliver to Buyer an update for each
of the Estoppel Certificates executed by each tenant under the Tenant Leases
(collectively, the "ESTOPPEL UPDATES"), which Estoppel Updates shall reflect
that there have been no material adverse changes since the date of the Estoppel
Certificate and that any of Buyer's objections to the Estoppel Certificates have
been corrected or cured to Buyer's satisfaction. Buyer shall review and approve
or disapprove the Estoppel Updates, in Buyer's sole discretion, prior to the
Closing Date.
5.1.8 NONFOREIGN AFFIDAVIT. At the Closing, Seller shall
deliver to Buyer the Nonforeign Affidavit (the "NONFOREIGN AFFIDAVIT") in the
form of EXHIBIT "G" attached hereto, executed by Seller and Seller shall cause
Union Land and Management Company to execute and deliver to Buyer a similar
Nonforeign Affidavit.
5.1.9 NO MORATORIA. No moratorium, statute, regulation,
ordinance, or federal, state, county or local legislation, or order, judgment,
ruling or decree of any governmental agency or of any court shall have been
enacted, adopted, issued, entered or pending which would adversely affect
Buyer's intended use of the Property.
5.1.10 At or prior to Closing, Seller shall have obtained and
delivered to Buyer a valid, final, unconditional certificate of occupancy, or
the equivalent permitting required by the applicable licensing agency, for the
current use and occupancy of the Improvements. In no event shall Seller be
obligated to perform any work or make any repairs to the Improvements in order
to obtain such certificate.
5.1.11 INTENTIONALLY OMITTED.
5.2 FAILURE OF CONDITIONS PRECEDENT. Subject and without limitation
to Buyer's rights hereunder, including, without limitation, Section 11.2 hereof,
if any of the Conditions Precedent have not been fulfilled within the applicable
time periods, Buyer may:
5.2.1 WAIVE AND CLOSE. Waive the Condition Precedent and close
Escrow in accordance with this Agreement, without adjustment or abatement of the
Purchase Price; or
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5.2.2 TERMINATE. Terminate this Agreement by written notice to
Seller and to Escrow Agent, in which event Escrow Agent shall return the
Deposit to Buyer, Seller shall pay the cancellation charges of Title Company
and Escrow Agent, and Buyer shall, contemporaneously with the return to Buyer
of the Deposit, deliver to Seller the Property Documents and a copy of all
third party reports and surveys prepared for Buyer in connection with its due
diligence review of the Property.
5.3 SELLER'S CONDITIONS. The obligation of Seller to render
performance under this Agreement is subject to the following conditions
precedent (and conditions concurrent with respect to deliveries to be made by
the parties at Closing), which conditions may be waived, or the time for
satisfaction thereof extended, by Seller only in a writing executed by Seller
(PROVIDED, HOWEVER, that any such waiver shall not affect Seller's ability to
pursue any remedies it may have with respect to any breach hereunder by
Buyer):
5.3.1 BUYER'S DUE PERFORMANCE. All of the representations and
warranties of Buyer set forth in SECTION 8 hereof shall be true and correct
as of the Closing Date, and Buyer, on or prior to the Closing Date, shall
have complied with and/or performed all of the obligations, covenants and
agreements required on the part of Buyer to be complied with or performed
pursuant to the terms of this Agreement.
5.4 FAILURE OF CONDITION. Subject to Seller's rights hereunder, in
the event of a default by Buyer which results in the failure of a condition
set forth in SECTION 5.3, Seller may terminate this Agreement by delivery of
written notice to Buyer and Escrow Agent, in which event Escrow Agent shall
return the Deposit to Buyer, the parties shall equally share the cancellation
charges of Title Company and Escrow Agent. Buyer shall, contemporaneously
with the return to Buyer of the Deposit, deliver to Seller the Property
Documents and a copy of all third party reports and surveys prepared for
Buyer in connection with its due diligence review of the Property, and
neither party shall thereafter have any rights or obligations to the other
hereunder.
6. CLOSING.
6.1 CLOSING DATE. Subject to the provisions of this Agreement, the
"Closing" (as defined below) shall take place on or before the thirtieth
(30th) day after the Due Diligence Termination Date or on such other date as
the parties hereto may agree. As used herein, the "CLOSING" shall mean the
recordation of the Deed in the Official Records of the County of Montgomery,
State of Maryland (the "OFFICIAL RECORDS"), and the "CLOSING DATE" shall mean
the date upon which the Closing actually occurs. Seller shall have the right
to postpone the Closing for a period not in excess of thirty (30) days by
giving to Buyer notice of Seller's election to postpone, such notice to be
given no later than fifteen (15) days prior to the scheduled Closing Date and
which notice shall set forth the new Closing Date. In the event that Seller
elects to so postpone the Closing, the Purchase Price shall be reduced by the
sum of Twenty Thousand Dollars ($20,000). In the event that Seller postpones
the Closing, Seller
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shall have the right to postpone the Closing for an additional period not in
excess of thirty (30) days by giving to Buyer notice of Seller's election to
postpone, such notice to be given no later than fifteen (15) days prior to
the rescheduled Closing Date and which notice shall set forth the new Closing
Date. In the event that Seller elects to so postpone the Closing, the
Purchase Price shall be reduced by the sum of Twenty Thousand Dollars
($20,000). Seller's right to postpone shall only be exercisable in
connection with Seller's efforts to effect an Internal Revenue Code Section
1031 like-kind exchange. Buyer agrees to cooperate with Seller in connection
with Seller's efforts to effect a Section 1031 like-kind exchange; provided,
however, that in no event shall Buyer be obligated to incur any cost or
expense in so doing and in no event shall Buyer be exposed to any potential
liability to accommodate Seller's desire to effect such exchange.
6.2 DELIVERIES BY SELLER. Not less than two (2) Business Days prior
to the Closing Date, Seller, at its sole cost and expense, shall deliver or
cause to be delivered into Escrow the following documents and instruments,
each dated as of the Closing Date and executed by Seller, in addition to the
other items and payments required by this Agreement to be delivered by Seller:
6.2.1 DEED. The original executed and acknowledged Deed
conveying the Property to Buyer or its nominee;
6.2.2 NONFOREIGN AFFIDAVITS. The original Nonforeign Affidavits
executed by Seller and Union Land and Management Company;
6.2.3 BILL OF SALE. Two (2) original executed counterparts of the
Bill of Sale;
6.2.4 ASSIGNMENT OF LEASES. Two (2) original executed
counterparts of the Assignment of Leases;
6.2.5 SELLER'S CERTIFICATE. Two (2) original Seller's
Certificates, executed by Seller;
6.2.6 TENANT LEASES. An original, fully executed counterpart of
each of the Tenant Leases and any amendments, supplements or restatements
thereto;
6.2.7 PROOF OF AUTHORITY. Such proof of Seller's authority and
authorization to enter into this Agreement and the transaction contemplated
hereby, and such proof of the power and authority of the individual(s)
executing or delivering any instruments, documents or certificates on behalf
of Seller to act for and bind Seller as may be reasonably required by Title
Company, the New Lenders or Buyer; and
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6.2.8 OTHER. Such other documents and instruments, signed and
properly acknowledged by Seller, if appropriate, as may be reasonably
required by Buyer, Escrow Agent, the New Lenders or otherwise in order to
effectuate the provisions of this Agreement and the Closing of the
transactions contemplated herein, including, without limitation, reasonable
or customary title affidavits and indemnities.
6.3 DELIVERIES BY BUYER. On or before the Closing, Buyer, at its sole
cost and expense, shall deliver or cause to be delivered into Escrow the
following: (i) the balance of the Purchase Price pursuant to SECTION 2 hereof
and Buyer's share of prorations and Closing Costs (as hereinafter defined),
as provided in SECTIONS 6.5 AND 6.6, respectively; (ii) two (2) original
executed counterparts of the Bill of Sale and the Assignment of Leases; and
(ii) such other documents and instruments, signed and properly acknowledged
by Buyer, if appropriate, as may reasonably be required by Escrow Agent or
otherwise in order to effectuate the provisions of this Agreement and the
closing of the transactions contemplated herein.
6.4 ACTIONS BY ESCROW AGENT. Provided that Escrow Agent shall not have
received written notice from Buyer or Seller of the failure of any condition to
the Closing or of the termination of the Escrow and this Agreement, when Buyer
and Seller have deposited into Escrow the documents and funds required by this
Agreement, and Title Company is committed to issue the Owner's Title Policy and
the Lenders' Title Policy concurrently with the Closing, Escrow Agent shall, in
the order and manner herein below indicated, take the following actions:
6.4.1 RECORDING. Following Title Company's acknowledgement that it
is prepared and irrevocably committed to issue the Owner's Title Policy to
Buyer and the Lenders' Title Policy to the New Lenders, cause the Deed and
any other documents which the parties hereto may mutually direct to be
recorded in the Official Records and obtain conformed copies thereof for
distribution to Buyer and Seller.
6.4.2 FUNDS. Upon receipt of confirmation of the recordation of
the Deed and such other documents as were recorded pursuant to SECTION 6.4.1
above, disburse all funds deposited with it by Buyer as follows:
(a) Pursuant to the Closing Statement (as hereinafter defined),
retain for Escrow Agent's own account all escrow fees and costs, disburse to
Title Company the fees and expenses incurred in connection with the issuance
of the Owner's Title Policy and the Lenders' Title Policy, and disburse to
any other persons or entities entitled thereto the amount of any other
Closing Costs;
(b) Disburse to Seller an amount equal to the Purchase Price,
less or plus the net debit or credit to Seller by reason of the prorations
and allocation of Closing Costs provided for in this SECTION 6. Seller's
portion (as provided in SECTION 6.6 below) of the escrow fees, title fees and
other Closing Costs shall be paid pursuant to clause (a) above; and
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(c) Disburse to Buyer any remaining funds in the possession of
Escrow Agent after payments pursuant to (a) and (b) above have been completed.
6.4.3 OWNER'S TITLE POLICY AND LENDERS' TITLE POLICY. Cause Title
Company to issue the Owner's Title Policy to Buyer and to issue the Lenders'
Title Policy to the New Lenders.
6.4.4 DELIVERY OF DOCUMENTS. Deliver to Buyer and Seller each one
original of all documents, other than the Deed and the Nonforeign Affidavit,
deposited into Escrow.
6.5 PRORATIONS. Rentals, revenues, and other income, if any, from the
Property, taxes, assessments, improvement bonds, service or other contract
fees, utility costs, and other expenses affecting the Property shall be
prorated between Buyer and Seller as of the Closing Date. For purposes of
calculating prorations, Buyer shall be deemed to be in title to the Property,
and therefore entitled to the income and responsible for the expenses, after
12:01 a.m. on the Closing Date. Delinquent rentals as of the Closing Date
shall not be prorated, but when paid shall be the sole property of Buyer and
Seller hereby irrevocably assigns, as of the Closing Date, its entire right,
title and interest in and to such delinquent rentals (including the right to
collect to same) to Buyer. On the Closing Date, Buyer shall be fully
credited for (i) security deposits which were paid by tenants to Seller, (ii)
reimbursement expenses and other sums owed by Seller to tenants for work or
disputes which occurred prior to the Closing Date or for work to be performed
or allowances to be granted to any tenants upon or after the Closing Date
pursuant to any Tenant Leases in existence as of the Closing Date, (iii) any
commissions or brokerage fees payable upon or after the Closing Date in
connection with any Tenant Leases in existence as of the Closing Date, and
(v) rentals already received by Seller attributable to periods after the
Closing Date. All non-delinquent real estate taxes or assessments on the
Property shall be prorated based on the actual current tax bill, but if such
tax bill has not yet been received by Seller by the Closing Date or if
supplemental taxes are assessed after the Closing for the period prior to the
Closing, the parties shall make any necessary adjustment after the Closing by
cash payment to the party entitled thereto so that Seller shall have borne
all taxes, including all supplemental taxes, allocable to the period prior to
the Closing and Buyer shall bear all taxes, including all supplemental taxes,
allocable to the period after the Closing. If any expenses attributable to
the Property and allocable to the period prior to the Closing are discovered
or billed after the Closing, the parties shall make any necessary adjustment
after the Closing by cash payment to the party entitled thereto so that
Seller shall have borne all expenses allocable to the period prior to the
Closing. Notwithstanding anything to the contrary in this Agreement or in
the Novation Agreement to be entered into pursuant to Section 6.8 hereof,
Buyer agrees that Seller (i) is entitled to rent under that certain lease,
dated July 13, 1976 (as amended through the date hereof, the "GSA Lease"),
between Seller, as landlord, and The United States of America, as tenant to
the Closing Date, (ii) is entitled to reimbursement by the tenant under the
GSA Lease for the cost of a phase II environmental audit previously performed
and (iii) has advised Buyer that Seller has billed the tenant under
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the GSA Lease $13,990.68 in respect of real estate taxes and $8,081.58 in
respect of trash removal. In the event that any of the aforesaid sums are
received by Buyer, Buyer shall promptly pay such amounts to Seller. The
provisions of this SECTION 6.5 shall survive the Closing for a period of one
(1) year.
Ten (10) days prior to the Closing, Escrow Agent shall deliver to
each of the parties for their review and approval a preliminary closing
statement (the "PRELIMINARY CLOSING STATEMENT") based on an income expense
statement prepared by Seller, approved by Buyer, and delivered to Escrow
Agent prior to said date, setting forth (i) the proration amounts allocable
to each of the parties pursuant to this SECTION 6.5 and (ii) the Closing
Costs allocable to each of the parties pursuant to SECTION 6.6 hereof. Based
on each of the party's comments, if any, regarding the Preliminary Closing
Statement, Escrow Agent shall revise the Preliminary Closing Statement and
deliver a final, signed version of a closing statement to each of the parties
at the Closing (the "CLOSING STATEMENT").
6.6 CLOSING COSTS. Each party shall pay its own costs and expenses
arising in connection with the Closing (including, without limitation, its
own attorney and advisor fees), except the following costs (the "CLOSING
COSTS"), which shall be allocated between the parties as follows:
(i) Seller shall pay one-half of all State and County
recordation and transfer taxes on the Deed, one-half of the cost of any
recording fees, one-half of Escrow Agent's escrow fees and costs, one-half of
all premiums, costs and fees related to the Owner's Title Policy and the
Lenders' Title Policy, one-half of the cost of the Survey, and all of the
brokerage commission payable to Morris McNair & Associates, Inc.
(ii) Buyer shall pay one-half of all State and County
recordation and transfer taxes on the Deed, one-half of the cost of any
recording fees, one-half of Escrow Agent's escrow fees and costs, one-half of
all premiums, costs and fees related to the Owner's Title Policy and the
Lenders' Title Policy and one-half of the cost of the Survey.
6.7 DELIVERIES OUTSIDE OF ESCROW. Seller shall deliver possession of
the Property to Buyer upon the Closing. Further, Seller hereby covenants and
agrees to deliver to Buyer, on or prior to the Closing, the following items:
6.7.1 APPROVALS. Originals of the Approvals (as hereinafter
defined);
6.7.2 INTANGIBLE PROPERTY. The Intangible Property, including,
without limitation, the original Property Documents; and
6.7.3 PERSONAL PROPERTY. The Personal Property, including,
without limitation, all keys, pass cards, remote controls, security codes,
computer software and other devices relating to access to the Improvements.
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6.8 POST CLOSING NOVATION AGREEMENT. Promptly after the Closing,
pursuant to the Federal Acquisition Regulations, 42 C.F.R. Sections 42.1204,
Buyer and Seller shall cooperate each with the other, in good faith, to
obtain from the United States Government a Novation Agreement with respect to
the GSA Lease in substantially the form of EXHIBIT "H" attached hereto.
Until a Novation Agreement is executed with respect to the GSA Lease, Seller
shall promptly remit to Buyer any and all rent and other payments received by
Seller from the United States Government with respect to periods subsequent
to the Closing Date. The provisions of this SECTION 6.8 shall survive the
Closing indefinitely.
7. SELLER'S REPRESENTATIONS AND WARRANTIES.
Seller represents and warrants to and agrees with Buyer that, as of
the date hereof and as of the Closing Date:
7.1 TITLE.
7.1.1 OWNERSHIP. Seller is the legal and equitable owner of the
Property, with full right to convey the same. Seller has not granted any
options or rights of first refusal or rights of first offer to third parties
to purchase or otherwise acquire an interest in the Property.
7.1.2 ENCUMBRANCES. The Property is free and clear of all liens,
encumbrances, claims, rights, demands, rights of way, easements, leases,
agreements, covenants, conditions, and restrictions of any kind, except for
the Permitted Exceptions.
7.1.3 ENCROACHMENTS. To Seller's best knowledge (without having
made any independent investigation or inquiry), there are no encroachments on
the Property from adjoining property, and the Property does not encroach on
adjoining property, easements, or streets.
7.1.4 STREETS. To Seller's best knowledge (without having made any
independent investigation or inquiry), there are no existing, proposed, or
contemplated plans to widen, modify, or realign any street or highway which
affects the size of, use of, or set-backs on the Property.
7.2 PROPERTY DOCUMENTS. The Property Documents required to be
delivered by Seller pursuant to the terms hereof constitute all of the
material documents relating to the Property that are in Seller's possession
or in the control or possession of its agents, auditors or independent
contractors, and each such Property Document as delivered by Seller
constitutes, to Seller's best knowledge, a true, correct and complete copy of
such Property Document. There are no commitments or agreements affecting the
Property which have not been disclosed by Seller to Buyer in writing.
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7.3 LEASES.
7.3.1 The Schedule attached hereto as EXHIBIT "I" (the "SCHEDULE
OF LEASES") is a true, correct and complete statement of all (i) the leases,
tenancies and occupancies, including any extensions, modifications,
amendments or guarantees thereof in effect at the Property (the "TENANT
LEASES"), (ii) the tenants at the property, (iii) the dates of the Tenant
Leases (including the commencement and expiration dates thereof), (iv) the
annual base rents payable, the base year for escalations, the currently
escalated rents and contributions to common area maintenance, operating
expenses and insurance under the Tenant Leases, (v) the security deposits
held by or deposited with Seller under the Tenant Leases, (vi) any and all
options to extend, renew or cancel any Tenant Leases or to expand or decrease
the space covered by any Tenant Lease (including any rights of first
refusal), and (vii) any and all concessions, allowances, credits, rebates,
offsets or other cases for relief or adjustment, including, without
limitation, any unpaid reimbursements for tenant improvements and any "free"
or "reduced" rent.
7.3.2 There are no security deposits or arrearages in rent or
additional rent under any of the Tenant Leases except as set forth on the
Schedule of Leases. No rent has been prepaid under any Tenant Lease except
as set forth on the Schedule of Leases.
7.3.3 To Seller's best knowledge (without having made any
independent investigation or inquiry), all of the services required to be
supplied to each tenant and maintained in connection with the Property are
presently being supplied and maintained and will continue to be supplied and
maintained up to and as of the Closing Date.
7.3.4 Seller has received no notices of any failure of Seller to
supply any services which Seller is required to furnish pursuant to any
Tenant Lease.
7.3.5 Seller has received no notices of any items of work, repair,
maintenance or construction to be completed by Seller pursuant to any Tenant
Lease for the benefit of any tenant and Seller has no knowledge of any such
work to be done.
7.3.6 As of the Closing Date, no tenant shall be entitled to any
additional work during the term of its Tenant Lease, except as set forth on
the Schedule of Leases. Without respect to Sections 7.3.4, 7.3.5 and 7.3.6,
Buyer hereby acknowledges that Seller has advised Buyer that from time to
time the tenant under the GSA Lease has made claims to the effect that
Seller, as landlord under the GSA Lease, has the obligations to maintain,
repair and replace a free-standing identification sign on the Property.
7.3.7 Except as set forth on the Schedule of Leases, Seller has
received no notice from any tenant (i) to cancel any Tenant Lease, (ii) that
such tenant is or may become unable or unwilling to perform any or all of its
obligations under its Tenant Lease, whether for financial or other reasons,
or that an action or proceeding, voluntary or involun-
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tary, is pending or threatened against such tenant under any section or
sections of any bankruptcy or insolvency law, or (iii) that such tenant
disputes the base rent or escalation rents or the computation of escalation
rents pursuant to its Tenant Lease.
7.3.8 The Tenant Leases are in full force and effect and Seller
has received no notice of any default by the landlord thereunder and has no
knowledge of any fact or facts which would now or with the giving of notice
or the passage of time or both be a default under the terms thereof, except
as otherwise set forth on the Schedule of Leases.
7.3.9 As of the Closing Date, there will be no brokerage or other
leasing commissions payable in connection with any of the tenants or the
Tenant Leases or any new leases or amendments of existing Tenant Leases.
7.3.10 All of the Tenant Leases (other than the GSA Lease in
respect of which a Novation Agreement shall be obtained) are assignable to
Buyer in connection with its purchase of the Property without the necessity
for any approval, consent or additional payment.
7.4 INTENTIONALLY OMITTED.
7.5 SPECIAL ASSESSMENTS OR CONDEMNATION. There are not presently
pending (i.e., Seller has not received written notice of) (i) any special
assessments, except those shown as exceptions on the PTR, or (ii)
condemnation actions against the Property or any part thereof, and Seller has
not received notice of any contemplated special assessments or eminent domain
proceedings that would affect the Property.
7.6 INTENTIONALLY OMITTED.
7.7 INTENTIONALLY OMITTED.
7.8 SERVICE CONTRACTS. Seller is not a party to any service,
maintenance, repair, management, leasing, or supply contracts or other
contracts (including, without limitation, janitorial, elevator and
landscaping agreements) affecting the Property, oral or written, except as
set forth on the Schedule attached hereto as EXHIBIT "J" (the "SERVICE
CONTRACTS") and, except as set forth on such Schedule, all Service Contracts
are cancelable without cost at the option of Seller or the then owner of the
Property upon not more than thirty (30) days prior written notice. All of
the Service Contracts are assignable to Buyer in connection with its purchase
of the Property without the necessity for any approval, consent or additional
payment.
7.9 EMPLOYEES. Attached hereto as EXHIBIT "K" is a schedule of
employees who are employed by Seller or the manager of the Property in the
operation, management or maintenance of the Property and the wages and
benefits that are paid to such employees, all of
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which are true and correct as of the date hereof; there are no contracts
covering such employees other than as set forth on such Schedule and the
employment of each may be terminated without cost at the option of Seller or
the then owner of the Property upon not more than thirty (30) days prior
written notice.
7.10 DEFAULTS. To the best of Seller's knowledge (without independent
investigation or verification), Seller is not in material default of Seller's
obligations or liabilities pursuant to any of the Property Documents; nor are
there facts, circumstances, conditions, or events of which Seller has notice
which, after notice or lapse of time, would constitute a material default
thereunder. Seller has not received notice or information that any party to
any of the Property Documents considers a material breach or material default
to have occurred.
7.11 CONSENTS AND RELEASES. Seller has obtained all required consents,
releases, and permissions to convey good and indefeasible title to Buyer,
subject only to the Permitted Exceptions.
7.12 AUTHORITY. This Agreement and all other documents delivered prior
to or at the Closing (i) have been duly authorized, executed, and delivered
by Seller; (ii) are binding obligations of Seller; (iii) are collectively
sufficient to transfer all of Seller's rights to the Property; and (iv) do
not violate the formation documents of Seller. Seller further represents
that it is a partnership duly organized and existing in good standing under
the laws of the State of Maryland with its principal place of business at 481
Carlisle Drive, Herndon, Virginia 20170.
7.13 BANKRUPTCY. No filing or petition under the United States
Bankruptcy Law or any insolvency laws, or any laws for composition of
indebtedness or for the reorganization of debtors has been filed with regard
to Seller.
7.14 INTENTIONALLY OMITTED.
7.15 FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT. Seller is not a
foreign person within the meaning of 42 USCS Section 1445(f)(3).
7.16 EXISTING APPROVALS. The documents set forth on EXHIBIT "L"
attached hereto (collectively, the "APPROVALS") are in full force and effect
and constitute all necessary or appropriate certifications, approvals,
consents, authorizations, licenses, and permits required by any governmental
authority in connection with the ownership, development, use and maintenance
of the Property. All of the Approvals are transferable to Buyer without the
necessity of any approval or consent or additional payment and no such
transfer will affect the validity thereof.
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7.17 INSURANCE. There are currently in effect such insurance policies
as are listed on EXHIBIT "M" attached hereto. All premiums due on such
insurance policies have been paid by Seller and Seller will maintain such
insurance policies from the date hereof through the Closing Date or earlier
termination of this Agreement. Seller has not received and has no knowledge
of any notice or request from any insurance company requesting the
performance of any work or alteration with respect to the Property. Seller
has received no notice from any insurance company concerning, nor is Seller
aware of, any defects or inadequacies in the Property which, if not
corrected, would result in the termination of insurance coverage or increase
its cost. Seller hereby covenants to name Buyer as an additional insured
during the period prior to the Closing or the earlier termination of this
Agreement.
7.18 LITIGATION. Except as set forth on the schedule attached hereto
as EXHIBIT "N", there are no actions, suits or proceedings before any
judicial or quasi-judicial body, by any governmental authority or other third
party, pending (i.e., Seller has not been served with written notice
commencing any such action, suit or proceeding), or to Seller's best
knowledge, threatened, against or affecting all or any portion of the
Property and to Seller's best knowledge, there is no basis for any such
action. There are no actions, suits or proceedings pending, contemplated or
threatened by Seller in connection with all or any portion of the Property or
Seller's ownership, rights, use, development or maintenance thereof,
including, without limitation, tax reduction proceedings; and from and after
the date hereof, Seller shall not commence or allow to be commenced on its
behalf any action, suit or proceeding with respect to all or any portion of
the Property without the prior written consent of Buyer, which consent shall
not be unreasonably withheld, conditioned or delayed. No attachments,
execution proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings are pending, or, to Seller's
best knowledge, threatened, against Seller. In the event any proceeding of
the character described in this SECTION 7.18 is initiated prior to the
Closing, Seller shall promptly advise Buyer in writing.
7.19 COMPLIANCE WITH LAWS. Seller has received no actual notice of,
and has no knowledge of, any condition currently or previously existing on
the Property or any portion thereof which may give rise to any violation of
any existing Law applicable to the Property if it were disclosed to the
authorities having jurisdiction over the Property.
7.20 INTENTIONALLY OMITTED.
7.21 NO RESTRICTION ON ACCESS. To Seller's best knowledge, no fact or
condition exists which would prohibit or adversely affect the right of access
to or from the Property from or to the existing highways and roads (all of
such existing highways and roads being duly opened and dedicated to the
municipality having jurisdiction thereof) and Seller has no knowledge of any
pending or threatened restriction or denial, governmental or otherwise, upon
such ingress and egress.
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7.22 STORM DRAINAGE. To Seller's best knowledge (without having made
any independent investigation or inquiry), all storm water flowing from the
Property drains either into a public system or onto a permitted location and
through easements for the benefit of the Property.
7.23 SOILS. Without having made any independent investigation or
inquiry, Seller has no knowledge of any soil conditions adversely affecting the
Property or any part thereof or Buyer's intended use and development thereof.
7.24 NO CONFLICTS. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, and compliance with the
terms of this Agreement will not conflict with, or, with or without notice or
the passage of time or both, result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, deed of trust,
mortgage, loan agreement, or other document, or instrument or agreement, oral or
written, to which Seller is a party or by which Seller or the Property is bound,
or any applicable regulation of any governmental agency, or any judgment, order
or decree of any court having jurisdiction over Seller or all or any portion of
the Property.
7.25 SURVIVAL. All of the representations, warranties and agreements
of Seller set forth in this Agreement shall be true upon the execution of this
Agreement, shall be deemed to be repeated at and as of the Closing Date without
the necessity of a separate certificate with respect thereto and shall survive
the delivery of the Deed and other Closing instruments and documents for a
period of one year.
7.26 AS-IS. Except as expressly set forth herein, including, without
limitation elsewhere in this Article 7, Seller shall convey the Property to
Buyer in its present "AS-IS" condition, without any warranties, expressed or
implied.
8. BUYER'S REPRESENTATIONS AND WARRANTIES.
Buyer represents and warrants to and agrees with Seller that, as of
the date hereof, and as of the Closing Date:
8.1 NO CONFLICTS. The execution and delivery of this Agreement, the
consummation of the transactions herein contemplated, and compliance with the
terms of this Agreement will not conflict with, or, with or without notice or
the passage of time or both, result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, deed of trust,
mortgage, loan agreement, or other document or instrument to which Buyer is a
party or by which Buyer is bound, or any applicable regulation of any
governmental agency, or any judgment, order or decree of any court having
jurisdiction over Buyer or all or any portion of the Property.
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8.2 DUE ORGANIZATION; CONSENTS. Buyer is a corporation duly
organized and existing in good standing under the laws of the State of Maryland
with its principal place of business in the State of California. All requisite
corporate action has been taken by Buyer in connection with entering into this
Agreement, and will be taken prior to the Closing in connection with the
execution and delivery of the instruments referenced herein and the consummation
of the transactions contemplated hereby. No consent of any partner,
shareholder, beneficiary, creditor, investor, judicial or administrative body,
governmental authority or other party is required in connection herewith which
has not been obtained.
8.3 BUYER'S AUTHORITY; VALIDITY OF AGREEMENTS. Buyer has full right,
power and authority to purchase the Property from Seller as provided in this
Agreement and to carry out its obligations hereunder. The individual(s)
executing this Agreement and the instruments referenced herein on behalf of
Buyer have the legal power, right and actual authority to bind Buyer to the
terms hereof and thereof. This Agreement is and all other documents and
instruments to be executed and delivered by Buyer in connection with this
Agreement shall be duly authorized, executed and delivered by Buyer and shall be
valid, binding and enforceable obligations of Buyer.
8.4 SURVIVAL. Buyer's representations and warranties shall survive
the Closing for a period of one year.
9. ADDITIONAL COVENANTS OF SELLER.
In addition to the covenants and agreements of Seller set forth
elsewhere in this Agreement, Seller covenants and agrees that between the date
hereof and the Closing Date:
9.1 TITLE. Seller shall not directly or indirectly sell, assign or
create any right, title or interest whatsoever in or to the Property, or create
or permit to exist thereon any lien, charge or encumbrance other than the
Permitted Exceptions, or enter into any agreement to do any of the foregoing,
including, without limitation, any leases or Service Contracts, without the
prior written consent of Buyer, which consent shall not be unreasonably
withheld.
9.2 NOTICE OF CHANGE IN CIRCUMSTANCES. Seller shall promptly notify
Buyer of any change in any condition with respect to the Property or any portion
thereof or of any event or circumstance of which Seller becomes aware subsequent
to the date of this Agreement which (a) materially, adversely affects the
Property or any portion thereof or the use or operation of the Property or any
portion thereof, (b) makes any representation or warranty of Seller to Buyer
under this Agreement untrue or misleading, or (c) makes any covenant or
agreement of Seller under this Agreement incapable or less likely of being
performed, it being expressly understood that Seller's obligation to provide
information to Buyer under this SECTION 9.2 shall in no way relieve Seller of
any liability for a breach by Seller of any of its representations, warranties,
covenants or agreements under this Agreement.
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9.3 NO DEFAULTS; MAINTENANCE OF PROPERTY. Seller shall not default
with respect to the performance of any obligation relating to the Property,
including, without limitation, the payment of all amounts due and the
performance of all obligations with respect to the Tenant Leases, the Service
Contracts and any existing indebtedness relating to the Property. Seller shall
operate and maintain the Property in accordance with Seller's past practice and
all applicable Laws affecting the Property or any portion thereof.
9.4 EXCLUSIVE NEGOTIATIONS. Between the date hereof and the date of
the termination of this Agreement, Seller shall (i) remove the Property from the
market, (ii) cease and refrain from any and all negotiations with any other
prospective optionees or purchasers of the Property, and (iii) advise Buyer of
any negotiations with potential tenants at the Property.
10. RISK OF LOSS.
10.1 CONDEMNATION. If, prior to the Closing Date, all or any portion
of the Property is taken by condemnation or eminent domain (or is the subject of
a pending or contemplated taking which has not been consummated), Seller shall
promptly notify Buyer of such fact. In such event, Buyer shall have the option
to terminate this Agreement upon written notice to Seller given not later than
thirty (30) days after receipt of such notice from Seller. Upon such
termination, Escrow Agent shall return the Deposit to Buyer, the parties shall
equally share the cancellation charges of Escrow Agent and Title Company, and
neither party shall have any further rights or obligations hereunder, other than
pursuant to any provision hereof which expressly survives the termination of
this Agreement. If Buyer does not elect to terminate this Agreement, Seller
shall assign and turn over to Buyer, and Buyer shall be entitled to receive and
keep, all awards for the taking by condemnation or Buyer shall be deemed to have
accepted the Property subject to the taking without reduction in the Purchase
Price.
10.2 CASUALTY. Prior to the Closing and notwithstanding the pendency
of this Agreement, the entire risk of loss or damage by earthquake, flood,
landslide, fire, hurricane, tornado or other casualty shall be borne and assumed
by Seller. If, prior to Closing any part of the Property is damaged or
destroyed by earthquake, flood, landslide, fire, hurricane, tornado or other
casualty, Seller shall promptly notify Buyer of such fact. In such event, Buyer
shall have the option to terminate this Agreement in accordance with the
preceding section upon written notice to Seller given not later than thirty (30)
days after receipt of any such notice from Seller. If Buyer does not elect to
terminate this Agreement, Seller shall assign and turn over, and Buyer shall be
entitled to receive and keep, all insurance proceeds payable with respect to
such destruction (which shall then be repaired or not at Buyer's option and
cost), plus Seller shall pay over to Buyer an amount equal to the deductible
amount with respect to the insurance and the parties shall proceed to Closing
pursuant to the terms hereof without modification of the terms of this Agreement
and without any reduction in the Purchase Price. If Buyer does not elect to
terminate this Agreement by reason of any casualty, Buyer shall have the right
to participate in any adjustment of the insurance claim.
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11. LIQUIDATED DAMAGES; SPECIFIC PERFORMANCE.
11.1 LIQUIDATED DAMAGES. IN THE EVENT THAT THE ESCROW AND THIS
TRANSACTION FAIL TO CLOSE AS A RESULT OF THE DEFAULT OF BUYER IN THE PERFORMANCE
OF ITS OBLIGATIONS UNDER THIS AGREEMENT, BUYER AND SELLER AGREE THAT SELLER'S
ACTUAL DAMAGES WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX. THE
PARTIES THEREFORE AGREE THAT IN THE EVENT THAT ESCROW AND THIS TRANSACTION FAIL
TO CLOSE AS A RESULT OF THE DEFAULT OF BUYER IN THE PERFORMANCE OF ITS
OBLIGATIONS HEREUNDER AND SELLER IS READY, WILLING AND ABLE TO PERFORM ITS
OBLIGATIONS HEREUNDER, SELLER, AS SELLER'S SOLE AND EXCLUSIVE REMEDY, IS
ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF THE DEPOSIT (INCLUSIVE OF
INTEREST AND DIVIDENDS EARNED THEREON) THEN HELD BY ESCROW AGENT. IN THE EVENT
ESCROW FAILS TO CLOSE AS A RESULT OF BUYER'S DEFAULT AND SELLER IS READY,
WILLING AND ABLE TO PERFORM ITS OBLIGATIONS HEREUNDER, THEN (1) THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF BUYER AND SELLER HEREUNDER AND THE ESCROW
CREATED HEREBY SHALL TERMINATE, (2) ESCROW AGENT SHALL, AND IS HEREBY AUTHORIZED
AND INSTRUCTED TO, RETURN PROMPTLY TO BUYER AND SELLER ALL DOCUMENTS AND
INSTRUMENTS TO THE PARTIES WHO DEPOSITED THE SAME, (3) ESCROW AGENT SHALL
DELIVER THE DEPOSIT (INCLUSIVE OF INTEREST AND DIVIDENDS EARNED THEREON) THEN
HELD BY ESCROW AGENT TO SELLER PURSUANT TO SELLER'S INSTRUCTIONS, AND THE SAME
SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES, AND (4) ESCROW AGENT SHALL
DELIVER TO BUYER ALL INTEREST AND DIVIDENDS EARNED ON THE DEPOSIT. SELLER AND
BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS
SECTION 11.1, AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS
TERMS. NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION 11.1, BUYER
SHALL REMAIN RESPONSIBLE FOR (A) ANY DAMAGE CAUSED TO THE PROPERTY IN THE
PERFORMANCE OF ITS DUE DILIGENCE REVIEW OF THE PROPERTY AND (B) THE DELIVERY TO
SELLER OF THE PROPERTY DOCUMENTS AND THE THIRD PARTY REPORTS AND SURVEYS
PREPARED FOR BUYER IN CONNECTION WITH ITS DUE DILIGENCE REVIEW OF THE PROPERTY.
__________________ __________________
Seller's Initials Buyer's Initials
11.2 DEFAULT BY SELLER. In the event that the Closing of the
transaction contemplated in this Agreement does not occur by reason of any
default by Seller, then (i) Escrow Agent shall return the Deposit to Buyer and
(ii) Buyer shall be entitled to pursue any remedy available to it hereunder, at
law or in equity, including, without limitation, the specific perfor-
22
<PAGE>
mance of this Agreement; provided, however, that Buyer shall have the right
to claim damages against Seller only in the event that Seller's default was
an intentional default.
12. BROKERS.
Seller and Buyer each hereby represent, warrant to and agree with each
other that there are no broker or finder fees or commissions payable in
connection with the transaction contemplated hereby, other than those payable to
Morris McNair & Associates, Inc. (which shall be paid by Seller in accordance
with a separate agreement). Seller shall indemnify, protect, defend and hold
Buyer harmless from and against any and all claims, losses, damages, costs and
expenses (including attorneys' fees, charges and disbursements) incurred by
Buyer by reason of any breach or inaccuracy of the representation, warranty and
agreement of Seller contained in this SECTION 12. Buyer shall indemnify,
protect, defend and hold Seller harmless from and against any and all claims,
losses, damages, costs and expenses (including attorneys' fees, charges and
disbursements) incurred by Seller by reason of any breach or inaccuracy of the
representation, warranty and agreement of Buyer contained in this SECTION 12.
The provisions of this SECTION 12 shall survive the Closing or earlier
termination of this Agreement.
13. CONFIDENTIALITY.
13.1 BUYER. Buyer agrees that until the Closing, except as otherwise
provided herein or required by law and except for the exercise by Buyer of any
remedy hereunder, Buyer shall (a) keep confidential the pendency of this
transaction, the documents and information supplied by Seller to Buyer and all
studies and reports obtained by Buyer as part of its due diligence
investigations of Seller and the Property, (b) disclose such information only to
Buyer's agents, employees, contractors, consultants or attorneys, as well as
lenders (if any), investment bankers, venture capital groups, investors and
title company personnel, with a need to know in connection with Buyer's review
and consideration of the Property, provided that Buyer shall inform all persons
receiving such information from Buyer of the confidentiality requirement and (to
the extent within Buyer's control) cause such confidence to be maintained, and
(c) upon the termination of this Agreement prior to the Closing, return to
Seller promptly upon request all copies of documents and materials supplied by
Seller. Disclosure of information by Buyer shall not be prohibited if that
disclosure is of information that is or becomes a matter of public record or
public knowledge as a result of the Closing of this transaction or from sources
other than Buyer or its agents, employees, contractors, consultants or
attorneys.
13.2 SELLER. Seller agrees that both prior to and after the Closing,
except as otherwise provided herein or required by law, and except for the
exercise by Seller of any remedy hereunder, Seller shall (a) keep confidential
the pendency of this transaction with Buyer and the identity of Buyer and the
relationship between Buyer and the entity to which Buyer may assign this
Agreement or which Buyer designates as the party to whom Seller shall convey the
Property at the Closing, and (b) disclose such information only to Seller's
agents,
23
<PAGE>
employees, contractors, consultants or attorneys, as well as title company
personnel, with a need to know such information in connection with effecting
this transaction, provided that Seller shall inform all such persons
receiving such confidential information from Seller of the confidentiality
requirement and (to the extent within Seller's control) cause such confidence
to be maintained. Disclosure of the pendency of this transaction by Seller
shall not be prohibited if that disclosure is of information that is or
becomes a matter of public record or public knowledge as a result of the
Closing of this transaction or from sources other than Seller or its agents,
employees, contractors, consultants or attorneys.
14. INDEMNIFICATION.
Seller hereby agrees to indemnify, defend and hold Buyer harmless from
and against any claims, demands, obligations, losses, costs, damages,
liabilities, judgments or expenses (including reasonable attorneys' fees,
charges and disbursements) arising out of or in connection with the ownership,
operation or maintenance of the Property prior to the Closing. Seller shall do,
execute and deliver, or shall cause to be done, executed and delivered, all such
further acts and instruments which Buyer may reasonably request in order to more
fully effectuate the indemnification provided for in this Agreement. The
provisions of this SECTION 14 shall survive the Closing.
15. MISCELLANEOUS PROVISIONS.
15.1 GOVERNING LAW. This Agreement and the legal relations between
the parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Maryland, without regard to its principles of
conflicts of law.
15.2 ENTIRE AGREEMENT; MODIFICATIONS; WAIVER.
15.2.1 ENTIRE AGREEMENT. This Agreement, including the exhibits
and schedules attached hereto, constitutes the entire agreement between Buyer
and Seller pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, letters of intent, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements, express or implied, made to either party by
the other party in connection with the subject matter hereof except as
specifically set forth herein or in the documents delivered pursuant hereto or
in connection herewith. Without limiting the foregoing, upon the execution of
this Agreement, that certain Letter of Intent, dated as of May 6, 1997 between
Buyer and Seller, shall terminate and be of no further force or effect.
15.2.2 MODIFICATION. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any provision of this Agreement shall
be deemed or shall consti-
24
<PAGE>
tute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
15.3 NOTICES. All notices, consents, requests, reports, demands or
other communications hereunder (collectively, "NOTICES") shall be in writing and
may be given personally, by registered or certified mail, by Federal Express (or
other reputable overnight delivery service) by telex or telegram or by facsimile
transmission.
To Buyer: Alexandria Real Estate Equities, Inc.
251 South Lake Drive
Pasadena, California 91101
Attention: Joel S. Marcus
Peter Nelson
Telephone: (818) 578-0777
Facsimile: (818) 578-0770
With A Copy To: Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, CA 90071-3144
Attention: Rand April
Telephone: (213) 687-5060
Facsimile: (213) 687-5600
With A Copy To: Alexandria Real Estate Equities, Inc.
11440 West Bernardo Court
Suite 170
San Diego, California 92127
Attention: Alan D. Gold
Telephone: (619) 592-6801
Facsimile: (619) 592-6814
To Seller: Research Blvd. Partnership
c/o Sugar Oak Realty
481 Carlisle Drive
Herndon, Virginia 20170
Attention: Daniel R. Baker
Telephone: (703) 471-7332
Facsimile: (703) 435-1707
With A Copy To: Odin, Feldman & Pittleman, P.C.
9302 Lee Highway, Suite 1100
Fairfax, Virginia 22031
Attention: David E. Feldman, Esq.
25
<PAGE>
Telephone: (703) 218-2108
Facsimile: (703) 218-2160
To Escrow Agent: Chicago Title Insurance Company
51 Monroe St. P.H. III
Rockville, MD 20850
Attention: Charles Carroccio
Telephone: (301) 340-9555
Facsimile: (301) 340-7882
or to such other address or such other person as the addressee party shall have
last designated by notice to the other party. Notices given by telex shall be
deemed to be received when answered back; notices given by facsimile
transmission shall be deemed to be received when confirmed; and all other
Notices shall have been deemed to have been given when received.
15.4 EXPENSES. Subject to the allocation of Closing Costs provided
in SECTION 6.6 hereof, whether or not the transactions contemplated by this
Agreement shall be consummated, all fees and expenses incurred by any party
hereto in connection with this Agreement shall be borne by such party.
15.5 ASSIGNMENT.
15.5.1 SELLER'S RIGHT TO ASSIGN. Seller shall not have the
right, power, or authority to assign, pledge or mortgage this Agreement or any
portion of this Agreement, or to delegate any duties or obligations arising
under this Agreement, voluntarily, involuntarily, or by operation of law,
without Buyer's prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed.
15.5.2 BUYER'S RIGHT TO ASSIGN. Except as otherwise
specifically provided in this SECTION 15.5.2, Buyer shall not have the right,
power, and authority to assign this Agreement or any portion of this Agreement
or to delegate any duties or obligations arising under this Agreement,
voluntarily, involuntarily or by operation of law, without Seller's consent,
which consent shall not be unreasonably withheld, conditioned or delayed. Upon
an assignment, Buyer shall not be relieved of any obligations under this
Agreement and the Escrow. Notwithstanding anything to the contrary contained
herein, Buyer shall have the right to assign this Agreement to any entity
controlled by, under common control with or controlling Buyer, without Seller's
consent.
15.6 SEVERABILITY. Any provision or part of this Agreement which is
invalid or unenforceable in any situation in any jurisdiction shall, as to such
situation and such jurisdiction, be ineffective only to the extent of such
invalidity and shall not affect the enforceability of the remaining provisions
hereof or the validity or enforceability of any such provision in any other
situation or in any other jurisdiction.
26
<PAGE>
15.7 SUCCESSORS AND ASSIGNS; THIRD PARTIES. Subject to and without
waiver of the provisions of SECTION 15.5 hereof, all of the rights, duties,
benefits, liabilities and obligations of the parties shall inure to the benefit
of, and be binding upon, their respective successors and assigns. Except as
specifically set forth or referred to herein, nothing herein expressed or
implied is intended or shall be construed to confer upon or give to any person
or entity, other than the parties hereto and their successors or assigns, any
rights or remedies under or by reason of this Agreement.
15.8 COUNTERPARTS. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
15.9 HEADINGS. The Section headings of this Agreement are for
convenience of reference only and shall not be deemed to modify, explain,
restrict, alter or affect the meaning or interpretation of any provision hereof.
15.10 TIME OF THE ESSENCE. Time shall be of the essence with respect
to all matters contemplated by this Agreement.
15.11 FURTHER ASSISTANCE. In addition to the actions recited herein
and contemplated to be performed, executed, and/or delivered by Seller and
Buyer, Seller and Buyer agree to perform, execute and/or deliver or cause to be
performed, executed and/or delivered at the Closing or after the Closing any and
all such further acts, instruments, deeds and assurances as may be reasonably
required to consummate the transactions contemplated hereby.
15.12 NUMBER AND GENDER. Whenever the singular number is used, and
when required by the context, the same includes the plural, and the masculine
gender includes the feminine and neuter genders.
15.13 CONSTRUCTION. This Agreement shall not be construed more
strictly against one party hereto than against any other party hereto merely by
virtue of the fact that it may have been prepared by counsel for one of the
parties.
15.14 POST-CLOSING ACCESS TO RECORDS. Upon receipt by Seller of
Buyer's reasonable written request at any time and from time to time within a
period of one (1) year after the Closing, Seller shall, at Seller's principal
place of business, during Seller's normal business hours, make available to
Buyer for inspection and copying (at Buyer's sole cost and expense) all of
Seller's books and records for the period for which Buyer is required to have
audited financial statements prepared with respect to the Property as may be
required by the Securities and Exchange Commission and/or Buyer's auditors to
the extent that such books and records and related information are in Seller's
possession or control. Seller agrees to provide
27
<PAGE>
to Buyer's auditor a representation letter, in substantially the form of
EXHIBIT "O" attached hereto, regarding such books and records. The
provisions of this Section 15.14 shall survive the Closing for a period of
one (1) year.
15.15 EXHIBITS. All exhibits attached hereto are hereby incorporated
by reference as though set out in full herein.
15.16 ATTORNEYS' FEES. In the event that either party hereto brings
an action or proceeding against the other party to enforce or interpret any of
the covenants, conditions, agreements or provisions of this Agreement, the
prevailing party in such action or proceeding shall be entitled to recover all
costs and expenses of such action or proceeding, including, without limitation,
reasonable attorneys' fees, charges and disbursements, and the fees and costs of
expert witnesses.
15.17 BUSINESS DAYS. As used herein, the term "BUSINESS DAY" shall
mean a day that is not a Saturday, Sunday or legal holiday. In the event that
the date for the performance of any covenant or obligation under this Agreement
shall fall on a Saturday, Sunday or legal holiday, the date for performance
thereof shall be extended to the next Business Day.
15.18 ESCROW AGENT. Escrow Agent's performance of its duties and
responsibilities hereunder shall be subject to the terms, conditions and
limitations set forth in EXHIBIT "P" hereto, which are incorporated herein by
this reference.
15.19 RECORDATION. Neither Buyer nor Seller shall record this
Agreement or a memorandum hereof.
28
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BUYER:
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
a Maryland corporation
By: /s/ Alan D. Gold
----------------------------------
Name: Alan D. Gold
----------------------------
Its: President
----------------------------
SELLER:
RESEARCH BLVD. PARTNERSHIP,
a Maryland partnership
By: /s/ Daniel R. Baker
----------------------------------
Name: Daniel R. Baker
----------------------------
Its:
----------------------------
ESCROW AGENT:
The undersigned Escrow Agent accepts the foregoing Agreement of Purchase and
Sale and Joint Escrow Instructions and agrees to act as Escrow Agent under this
Agreement in strict accordance with its terms (including, without limitation,
the conditions set forth in Exhibit "P" hereto.)
CHICAGO TITLE INSURANCE COMPANY Date: June 27, 1997
a Missouri corporation ------------------------
By: /s/ Charles S. Carroccio, Jr.
----------------------------------
Name: Charles S. Carroccio, Jr.
----------------------------
Its: Office Counsel
----------------------------
29
<PAGE>
LIST OF EXHIBITS
EXHIBIT "A" LEGAL DESCRIPTION
EXHIBIT "A-1" PTR PERMITTED EXCEPTIONS
EXHIBIT "B" DEED
EXHIBIT "C" SELLER'S CERTIFICATE
EXHIBIT "D" ASSIGNMENT OF LEASES
EXHIBIT "E" BILL OF SALE
EXHIBIT "F" ESTOPPEL CERTIFICATE
EXHIBIT "G" NONFOREIGN AFFIDAVIT
EXHIBIT "H" NOVATION AGREEMENT
EXHIBIT "I" LEASES
EXHIBIT "J" SERVICE CONTRACTS
EXHIBIT "K" EMPLOYEES
EXHIBIT "L" APPROVALS
EXHIBIT "M" INSURANCE
EXHIBIT "N" LITIGATION
EXHIBIT "O" REPRESENTATION LETTER
EXHIBIT "P" ESCROW AGENT PROVISIONS
30
<PAGE>
EXHIBIT "A"
LEGAL DESCRIPTION
Lot numbered 2 in the subdivision known as "NATIONAL CAPITAL RESEARCH PARK"
as per plat thereof recorded among the Land Records of Montgomery County,
Maryland, in Plat Book 81 at Plat 8278 TOGETHER WITH a Right of Way recorded
in Liber 5078 at Folio 667, the same being more particularly described as
follows:
Being a strip of land, in, through, over and across Lot 6, as shown on a plat
of subdivision entitled "Lot 6, Part of National Capital Research Park,
recorded among the Land Records of Montgomery County, Maryland, in Plat Book
86 at Plat No. 9080, and being more particularly described in two (2) parts
as follows:
PART I:
BEGINNING for part one at a point on the northwesterly or North 62 degrees
19 minutes 34 seconds East 156.12 foot line of the aforesaid Lot 6, 92.89 feet
from the beginning thereof, said line also being a part of the southeasterly or
South 62 degrees 18 minutes 50 seconds West 194.00 foot line of Lot 2, as shown
on a plat of subdivision entitled "Lots 2 and 3, National Capital Research Park,
recorded among the aforesaid Land Records in Plat Book 81 at Plat No. 8278, and
running thence, in the meridian of said plat of Lots 2 and 3, with a part of
said northwesterly line,
1. North 62 degree 18 minutes 50 seconds East 51.97 feet to a point; thence
leaving said line and crossing Lot 6 the following three (3) courses and
distances:
2. South 37 degrees 16 minutes 13 seconds West 103.85 feet to a point;
3. South 23 degrees 54 minutes 38 seconds West 45.00 feet to a point;
4. South 62 degrees 18 minutes 50 seconds West 12.00 feet to a point on the
southwest or North 30 degrees 27 minutes 50 seconds West 304.77 foot line
of said Lot 6; thence with a part of said line;
5. North 30 degrees 28 minutes 34 seconds West 38.00 feet to a point on said
line 34.00 feet from the end thereof; thence leaving said line and crossing
Lot 6;
6. North 60 degrees 18 minutes 00 seconds East 20.07 feet to a point; and
7. North 37 degrees 16 minutes 13 seconds East 78.56 feet to the place of
beginning, containing 3,215 square feet or 0.0738 of an acre of land.
A-1
<PAGE>
PART II:
BEGINNING for Part 2 at a point on the southwesterly or North 27 degrees 40
minutes 26 seconds West 15.00 foot line of said Lot 6, 4.84 feet from the
beginning thereof, said line also being the northeasterly or South 27 degrees 41
minutes 10 seconds East 15.00 foot line of the aforesaid Lot 2, and running
thence, in the meridian as aforesaid in Part I, with a part of said line,
1. North 27 degrees 41 minutes 10 seconds West 10.16 feet to the end thereof;
thence with a part of the northwesterly or North 55 degrees 08 minutes 24
seconds East 222.70 foot line of Lot 6, said line also being the
southeasterly or South 55 degrees 07 minutes 40 seconds West 222.81 foot
line of the aforesaid Lot 2,
2. North 55 degrees 07 minutes 40 seconds East 212.01 feet to a point; thence
leaving said line and crossing Lot 6, the following three courses and
distances:
3. 33.94 feet along the arc of a curve deflecting to the right, having a
radius of 31.00 feet and a chord bearing South 26 degrees 24 minutes 23
seconds West 32.27 feet, to a point of tangency;
4. South 57 degrees 46 minutes 13 seconds West 161.73 feet to a point of
curvature; and
5. 23.59 feet along the arc of a curve deflecting to the left, having a radius
of 89.00 feet and a chord bearing South 50 degrees 10 minutes 42 seconds
West 23.52 feet, to the place of beginning, containing 2,415 square feet or
0.0554 of an acre of land.
SAVING & EXCEPTING THEREFROM ALL THAT LAND CONVEYED TO THE STATE OF MARYLAND TO
THE USE OF THE STATE HIGHWAY ADMINISTRATION OF THE DEPARTMENT OF TRANSPORTATION
BY DEEDS RECORDED IN LIBER 6460 FOLIO 22 AND LIBER 13700 FOLIO 412.
A-2
<PAGE>
EXHIBIT "A-1"
PTR PERMITTED EXCEPTIONS
1. Declaration to Extinguish Easements and to Establish New Easements recorded
in Montgomery County, MD in Liber 5078 Folio 667.
2. Plat entitled "Lots 2 & 3, National Capital Research Park, City of
Rockville" recorded in Montgomery County, MD in Plat Book 81 at Plat
8278 (except Minimum Building Restriction Line per Owner's Dedication
and 150 ft. Building Restriction Line shown).
3. Rights of GSA as tenant under the GSA Lease.
4. Right of Way Agreement to Transcontinental Gas Pipe Line Corporation
recorded in Montgomery County, MD in Liber CKW 1418 Folio 363;
supplemented by Supplemental Right of Way Agreements recorded in Liber
2890 Folio 186 and Liber 3551 Folio 168 and corrected by Corrective
Agreement recorded in Liber 3589 Folio 314.
<PAGE>
EXHIBIT "B"
SPECIAL WARRANTY DEED
-------------------------
Tax Account No./Parcel ID
Made this ___ day of __________, 1997, by and between UNION LAND AND
MANAGEMENT COMPANY, a Delaware corporation, party of the first part, and
ALEXANDRIA REAL ESTATE EQUITIES, INC., a Maryland corporation, party of the
second part:
Witnesseth, that in consideration of FIVE MILLION EIGHT HUNDRED
THOUSAND DOLLARS ($5,800,000.00), the receipt of which is hereby acknowledged,
and which the party of the first part certifies under the penalty of perjury as
the actual consideration paid, the said party of the first part does hereby
grant, convey, bargain and sell unto the party of the second part, its
successors and assigns in fee simple absolute all that improved property
situate, lying and being in Montgomery County, State of Maryland and more
particularly described on EXHIBIT "A", attached hereto and made a part hereof
for all purposes (the "PROPERTY");
SUBJECT to covenants, easements, rights of way and restrictions of
record.
TO HAVE AND TO HOLD the Property hereby intended to be conveyed,
together with the buildings and improvements thereupon erected, made or being,
and all and every title, rights, privileges, appurtenances and advantages
thereunto belonging, or in any wise appertaining, unto and for the proper use
only, benefit and behoof forever of said party of the second part, its
successors and assigns, in fee simple absolute.
AND the said party of the first part covenants that it will warrant
specially the property hereby conveyed, and that it will execute such further
assurances of the Property as may be requisite or necessary.
<PAGE>
IN TESTIMONY WHEREOF, the said party of the first part has set its
hand and seal the year and day first above written.
UNION LAND AND MANAGEMENT COMPANY,
a Delaware corporation
By:
- ------------------------------ -------------------------------
(SEAL)
By:
STATE OF )
COUNTY OF ) SS.
I HEREBY CERTIFY that on this __ day of __________, 1997, before me,
the undersigned officer, a Notary Public in and for the State and County
aforesaid, personally appeared ___________________________, who acknowledged
himself to be the ______________________ of Union Land and Management Company,
and that he, as such officer, being duly authorized so to do, executed the
foregoing instrument for the purposes therein contained by signing the name of
said corporation by himself as such officer.
WITNESS MY HAND AND NOTARIAL SEAL.
-------------------------------
, Notary
B-2
<PAGE>
EXHIBIT "C"
SELLER'S CERTIFICATE
The undersigned hereby certifies to Alexandria Real Estate Equities,
Inc. ("Buyer") that, as of the date hereof,
(i) all of the representations, covenants and warranties of
Research Blvd. Partnership ("Seller") made in or pursuant to that certain
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
___________, 1997, between Seller and Buyer (the "Agreement") are true,
accurate, correct and complete;
(ii) all conditions to the Closing (as such term is defined in the
Agreement) that Seller was to satisfy or perform have been satisfied and
performed; and
(iii) all conditions to the Closing that Buyer was to satisfy or
perform to obligate Seller to consummate the Closing have been satisfied and
performed.
Dated: RESEARCH BLVD. PARTNERSHIP
--------------
By:
------------------------------------
Name:
Title:
<PAGE>
EXHIBIT "D"
ASSIGNMENT OF LEASES AND SECURITY DEPOSITS
THIS ASSIGNMENT OF LEASES AND SECURITY DEPOSITS ("ASSIGNMENT") is entered
into as of the ____ day of ________________, 1997, by and between RESEARCH BLVD.
PARTNERSHIP, a Maryland partnership ("ASSIGNOR"), and ALEXANDRIA REAL ESTATE
EQUITIES, INC., a Maryland corporation ("ASSIGNEE").
R E C I T A L S
WHEREAS, Assignor, as landlord, has entered into those certain leases
identified on Exhibit "E-1" attached hereto and incorporated herein by reference
(collectively, together with all amendments, modifications, supplements,
restatements and guarantees thereof, the "LEASES"), for certain property located
in the City of Rockville, County of Montgomery, State of Maryland;
WHEREAS, Assignor and Assignee have entered into that certain Purchase and
Sale Agreement and Joint Escrow Instructions, dated as of ________________, 1997
(the "PURCHASE AGREEMENT"); and
WHEREAS, the Purchase Agreement requires Assignor and Assignee to execute
this Assignment;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
A G R E E M E N T
1. ASSIGNMENT AND ASSUMPTION. From and after the date hereof for the
remainder of the term of each of the Leases, Assignor hereby irrevocably
assigns, sets over, transfers and conveys to Assignee all of Assignor's right,
title and interest in and to (i) the Leases and (ii) all security deposits made
under the Leases (the "SECURITY DEPOSITS"). Subject to the terms and conditions
of the Purchase Agreement, Assignee hereby accepts this Assignment of the Leases
and Security Deposits and the rights granted herein. Assignee hereby expressly
assumes, for itself and its successors, assigns and legal representatives, the
Leases and all of the obligations and liabilities, fixed and contingent, of
Assignor thereunder accruing from and after the date hereof with respect to the
Leases and agrees to (a) be fully bound by all of the terms, covenants,
agreements, provisions, conditions, obligations and liability of Assignor
thereunder, which accrue from the date hereof, and (b) keep, perform and observe
all of the covenants and conditions contained therein on the part of Assignor to
be kept, performed and observed, from and after the date hereof.
<PAGE>
2. INDEMNIFICATIONS. Assignor hereby agrees to indemnify, protect,
defend and hold Assignee harmless from and against any and all claims, losses,
damages, costs and expenses (including, without limitation, reasonable
attorney's fees and disbursements) incurred or suffered by Assignee in
connection with the Leases and arising prior to the Closing (as defined in the
Purchase Agreement). Assignee hereby agrees to indemnify, protect, defend and
hold Assignor harmless from and against any and all claims, losses, damages,
costs and expenses (including, without limitation, reasonable attorney's fees
and disbursements) incurred or suffered by Assignor (i) in connection with the
Leases and arising on or after the Closing and (ii) pursuant to Paragraph 8 of
that certain Novation Agreement to be entered into by and among Assignor,
Assignee and the United States of America.
3. GENERAL PROVISIONS.
a. SUCCESSORS. This Assignment shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
b. COUNTERPARTS. This Assignment may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
c. GOVERNING LAW. This Assignment and the legal relations of the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Maryland, without regard to its principles of
conflicts of law.
D-2
<PAGE>
IN WITNESS WHEREOF, this Assignment was made and executed as of the date
first above written.
ASSIGNOR
RESEARCH BLVD. PARTNERSHIP
a Maryland partnership
By:
-------------------------------
-------------------------------
Name:
Its:
ASSIGNEE
ALEXANDRIA REAL ESTATE EQUITIES,
INC., a Maryland corporation
By:
-------------------------------
-------------------------------
Name:
Its:
<PAGE>
EXHIBIT "D-1"
(to Exhibit "D" -- Assignment of Leases)
LIST OF LEASES
1. [Name of Lease], dated as of ________, by and between _________________ and
_____________.
2. [Name of Lease], dated as of ________, by and between _________________ and
_____________.
3. [Name of Lease], dated as of ________, by and between _________________ and
_____________.
<PAGE>
EXHIBIT "E"
BILL OF SALE
THIS BILL OF SALE ("BILL OF SALE") is made as of the ____ day of
____________, 1997, by RESEARCH BLVD. PARTNERSHIP, a Maryland partnership
("SELLER"), to ALEXANDRIA REAL ESTATE EQUITIES, INC., a Maryland partnership
("BUYER").
R E C I T A L S
WHEREAS, Seller is the owner of that certain real property located in the
City of Rockville, County of Montgomery, State of Maryland (the "REAL
PROPERTY"), as more particularly described on Exhibit "A" attached hereto and
incorporated herein by reference;
WHEREAS, Buyer and Seller have entered into that certain Purchase and Sale
Agreement and Joint Escrow Instructions (the "PURCHASE AGREEMENT"), dated as of
__________, 1997, with respect to, among other things, the acquisition of the
"Personal Property" and the "Intangible Property" (each as defined below), and
certain other property; and
WHEREAS, the Purchase Agreement requires Seller to convey all of Seller's
right, title and interest in, to and under the Personal Property and the
Intangible Property to Buyer;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby agrees as follows:
A G R E E M E N T
1. Unless the context otherwise requires, all capitalized terms used but
not otherwise defined herein shall have the respective meanings provided
therefor in the Purchase Agreement.
2. Seller does hereby unconditionally, absolutely, and irrevocably grant,
bargain, sell, transfer, assign, convey, set over and deliver unto Buyer all of
Seller's right, title and interest in and to:
a. all of that certain tangible personal property now or hereafter
owned by Seller and located on or about the Land or Improvements or attached
thereto or used in connection with the use, operation, maintenance or repair
thereof, (collectively, the "PERSONAL PROPERTY"); and
b. all of that certain intangible property now or hereafter owned by
Seller and used in connection with the Land, the Improvements or the Personal
Property, or any business or businesses conducted thereon or with the use
thereof, including, without limitation, the Tenant Leases and the Service
Contracts, building and trademarks and trade names, transferable business
licenses, architectural, site, landscaping or other permits, applications,
authorizations and other entitlements,
<PAGE>
transferable guarantees and warranties covering the Land and/or Improvements,
all contract rights, books, records, reports, test results, environmental
assessments, as-built plans, specifications and other similar documents and
materials relating to the use or operation, maintenance or repair of the
Property or the construction or fabrication thereof, and all transferable
utility contracts (collectively, the "INTANGIBLE PROPERTY" and, together with
the Personal Property, the "PROPERTY").
3. Buyer hereby expressly assumes, for itself and its successors, assigns
and legal representatives, the Tenant Leases and the Service Contracts and all
of the obligations and liabilities, fixed and contingent, of Seller thereunder
accruing from and after the date hereof with respect thereto and agrees to (a)
be fully bound by all of the terms, covenants, agreements, provisions,
conditions, obligations and liability of Seller thereunder, which accrue from
the date hereof, and (b) keep, perform and observe all of the covenants and
conditions contained therein on the part of Seller to be kept, performed and
observed, from and after the date hereof.
4. Seller represents and warrants that the Property is free and clear of
all options, liens, mortgages, pledges, security interests, covenants, prior
assignments, encumbrances and claims of any nature, other than the Permitted
Exceptions.
5. Seller hereby agrees to indemnify, protect, defend and hold Buyer
harmless from and against any and all claims, losses, damages, costs and
expenses (including, without limitation, reasonable attorney's fees and
disbursements) incurred or suffered by Buyer in connection with the Property and
arising prior to the Closing. Buyer hereby agrees to indemnify, protect, defend
and hold Seller harmless from and against any and all claims, losses, damages,
costs and expenses (including, without limitation, reasonable attorney's fees
and disbursements) incurred or suffered by Seller in connection with the
Property and arising on or after the Closing.
6. This Bill of Sale shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, legal representatives, successors
and assigns.
7. This Bill of Sale and the legal relations of the parties hereto shall
be governed by and construed and enforced in accordance with the laws of the
State of Maryland, without regard to its principles of conflicts of law.
E-2
<PAGE>
IN WITNESS WHEREOF, this Bill of Sale was made and executed as of the date
first above written.
SELLER:
RESEARCH BLVD. PARTNERSHIP,
a Maryland partnership
By:
---------------------------------
Name:
Its:
BUYER:
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
a Maryland corporation
By:
---------------------------------
Name:
Its:
E-3
<PAGE>
EXHIBIT "F"
ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("CERTIFICATE"), dated as of ________,
1997, is executed by _________________________ ("TENANT") in favor of
Alexandria Real Estate Equities, Inc., a Maryland corporation, together with its
nominees, assignees and assigns (collectively, "BUYER") and in the favor of
___________________________________, a _________ corporation, together with its
nominees, designees and assigns (collectively, "LENDER").
R E C I T A L S
A. Buyer and Research Blvd. Partnership, a Maryland partnership
("LANDLORD"), have entered into that certain Purchase and Sale Agreement and
Joint Escrow Instructions, dated as of _________, 1997 (the "PURCHASE
AGREEMENT"), whereby Buyer has agreed to purchase, among other things, the
improved real property located in the City of Rockville, County of Montgomery,
State of Maryland, more particularly described on Exhibit "A" attached to the
Purchase Agreement (the "PROPERTY").
B. Tenant and Landlord have entered into that certain Lease Agreement,
dated as of ___________ (together with all amendments, modifications,
supplements, guarantees and restatements thereof, the "LEASE"), for a portion of
the Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request of
Landlord, Tenant would execute and deliver an estoppel certificate certifying
the status of the Lease.
D. In connection with the Purchase Agreement, Landlord has requested that
Tenant execute this Certificate with an understanding that Lender will rely on
the representations and agreements below in granting to Buyer a loan.
NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer and
Lender as follows:
A G R E E M E N T
SECTION 1. LEASE.
Attached hereto as Exhibit "1" is a true, correct and complete copy of the
Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements, guarantees and restatements thereof:
_____________________________________________________________________________
_____________________________________________________________________________.
(If none, please state "None.")
<PAGE>
SECTION 2. LEASED PREMISES.
Pursuant to the Lease, Tenant leases those certain premises (the "LEASED
PREMISES") consisting of approximately _______________ (________) rentable
square feet within the Property, as more particularly described in the Lease.
In addition, pursuant to the terms of the Lease, Tenant has the [non-exclusive]
right to use [_____ parking spaces/the parking area] located on the Property
during the term of the Lease. [Cross-out the preceding sentence or portions
thereof if inapplicable.]
SECTION 3. FULL FORCE OF LEASE.
The Lease has been duly authorized, executed and delivered by Tenant, is in
full force and effect has not been terminated and constitutes a legally valid
instrument, binding and enforceable against Tenant in accordance with its terms,
subject only to applicable limitations imposed by laws relating to bankruptcy
and creditor's rights.
SECTION 4. COMPLETE AGREEMENT.
The Lease constitutes the complete agreement between Landlord and Tenant
for the Leased Premises and the Property, except as modified by the Lease
amendments noted above (if any), has not been modified, altered or amended.
SECTION 5. ACCEPTANCE OF LEASED PREMISES.
Tenant has accepted possession and is currently occupying the Leased
Premises.
SECTION 6. LEASE TERM.
The term of the Lease commenced on ______________ and ends on
_______________, subject to the following options to extend: __________________
______________________________.
(If none, please state "None.")
SECTION 7. PURCHASE RIGHTS.
Tenant has no option, right of first refusal, right of first offer, or
other right to acquire or purchase all or any portion of the Leased Premises or
all or any portion of, or interest in, the Property, except as follows:
_____________________________________________________________________________
____________________________________.
(If none, please state "None.")
SECTION 8. RIGHTS OF TENANT.
F-2
<PAGE>
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of the Leased
Premises or all or any part of the Property;
(c) has no right, title, or interest in the Leased Premises, other than as
Tenant under the Lease.
SECTION 9. RENT.
(a) The obligation to pay rent under the Lease commenced on
___________. The rent under the Lease is current, and Tenant is not in default
in the performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the
amount of ___________________ Dollars ($__________) per month. Tenant has not
received and is not, presently, entitled to any abatement, refunds, rebates,
concessions or forgiveness of rent or other charges, free rent, partial rent, or
credits, offsets or reductions in rent, except as follows: _____________________
________________________________________________________________.
(If none, please state "None.")
(c) Tenant's estimated share of operating expenses, common area
charges, insurance, real estate taxes and administrative and overhead expenses
is __________ percent (______%) and is currently being paid at the rate of
_____________________ Dollars ($__________) per month, payable
to ______________________________________.
(d) There are no existing defenses or offsets against rent due
or to become due under the terms of the Lease, and there presently is no default
or other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Leased Premises, nor is there a state
of facts which with the passage of time or the giving of notice or both could
ripen into a default on the part of Tenant, or to the best knowledge of Tenant,
could ripen into a default on the part of Landlord under the Lease, except as
follows: ____________________________________________________________________
_____________________________________________________________________________
______________.
(If none, please state "None.")
SECTION 10. SECURITY DEPOSIT.
The amount of Tenant's security deposit held by Landlord under the Lease is
_________________ Dollars ($ __________).
F-3
<PAGE>
SECTION 11. PREPAID RENT.
The amount of prepaid rent, separate from the security deposit, is
__________________________ Dollars ($___________), covering the period from
___________ to _______________.
SECTION 12. INSURANCE.
All insurance, if any, required to be maintained by Tenant under the Lease
is presently in effect.
SECTION 13. PENDING ACTIONS.
There is not pending or, to the knowledge of Tenant, threatened against or
contemplated by the Tenant, any petition in bankruptcy, whether voluntary or
otherwise, any assignment for the benefit of creditors, or any petition seeking
reorganization or arrangement under the federal bankruptcy laws or those of any
state.
SECTION 14. TENANT IMPROVEMENTS.
As of the date of this Certificate, to the best of Tenant's knowledge,
Landlord has performed all obligations required of Landlord pursuant to the
Lease; no offsets, counterclaims, or defenses of Tenant under the Lease exist
against Landlord; and no events have occurred that, with the passage of time or
the giving of notice, would constitute a basis for offsets, counterclaims, or
defenses against Landlord, except as follows: ________________________________
________________________________________________.
(If none, please state "None.")
SECTION 15. ASSIGNMENTS BY LANDLORD.
Tenant has received no notice of any assignment, hypothecation or pledge of
the Lease or rentals under the Lease by Landlord. Tenant hereby consents to an
assignment of the lease and rents to be executed by Landlord to Buyer or Lender
in connection with the Loan and acknowledges that said assignment does not
violate the provisions of the Lease. Tenant acknowledges that the interest of
the Landlord under the Lease is to be assigned to Buyer or Lender solely is
security for the purposes specified in said assignment and Buyer or Lender shall
have no duty, liability or obligation whatsoever under the Lease or any
extension or renewal thereof, either by virtue of said assignment or by any
subsequent receipt or collection of rents thereunder, unless Buyer or Lender
shall specifically undertake such liability in writing. Tenant agrees that upon
receipt of a written notice from Buyer or Lender of a default by Landlord under
the Loan, Tenant will thereafter pay rent to Buyer or Lender in accordance with
the terms of the Lease.
SECTION 16. ASSIGNMENTS BY TENANT.
F-4
<PAGE>
Tenant has not sublet or assigned the Leased Premises or the Lease or any
portion thereof to any sublessee or assignee. No one except Tenant and its
employees will occupy the Leased Premises. The address for notices to be sent
to Tenant is as set forth in the Lease.
SECTION 17. ENVIRONMENTAL MATTERS.
The operation and use of the Leased Premises does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials and/or solid waste, except those used
in the ordinary course of operating a retail store or otherwise used in
accordance with all applicable laws.
SECTION 18. SUCCESSION OF INTEREST.
Tenant agrees that, in the event Buyer or Lender succeeds to interest
of Landlord under the Lease:
(a) Buyer or Lender shall not be liable for any act or omission of
any prior landlord (including Landlord);
(b) Buyer or Lender shall not be liable for the return of any
security deposit;
(c) Buyer or Lender shall not be bound by any rent or additional rent
which Tenant might have prepaid under the Lease for more than the current month;
(d) Buyer or Lender shall not be bound by any amendments or
modifications of the Lease made without prior consent of Buyer or Lender;
(e) Buyer or Lender shall not be subject to any offsets or defenses
which Tenant might have against any prior landlord (including Landlord); or
(f) Buyer or Lender shall not be liable under the Lease to Tenant for
the performance of Landlord's obligations under the Lease beyond Buyer or
Lender's interest in the Property.
SECTION 19. NOTICE OF DEFAULT.
Tenant agrees to give Buyer and Lender a copy of any notice of default
under the Lease served upon Landlord at the same time as such notice is given to
the Landlord. Tenant further agrees that if Landlord shall fail to cure such
default within the applicable grace period, if any, provided in the Lease, then
Buyer or Lender shall have an additional sixty (60) days within which to cure
such default, or if such default cannot be cured within such sixty (60) day
period, such sixty (60) day period shall be extended so long as Buyer or Lender
has commenced and is diligently pursuing the remedies necessary to cure such
default (including, but not limited to, commencement of foreclosure
F-5
<PAGE>
proceedings, if necessary to effect (such cure), in which event the Lease
shall not be terminated while such remedies are being pursued.
SECTION 20. NOTIFICATION BY TENANT.
From the date of this Certificate and continuing until ____________, Tenant
agrees to immediately notify Buyer and Lender, in writing by registered or
certified mail, return receipt requested, at the following addresses, on the
occurrence of any event or the discovery of any fact that would make any
representation contained in this Certificate inaccurate:
If To Buyer: Alexandria Real Estate Equities, Inc.
251 South Lake Avenue, Suite 535
Pasadena, California 91101
Attention: Joel S. Marcus
With A Copy To: Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Rand S. April
If To Lender: ________________________________
________________________________
________________________________
Attention:________________________
Tenant makes this Certificate with the knowledge that it will be relied
upon by Buyer and Lender in agreeing to purchase the Property.
F-6
<PAGE>
Tenant has executed this Certificate as of the date first written above by
the person named below, who is duly authorized to do so.
TENANT
___________________________________________
By: _______________________________
Name:
Its:
F-7
<PAGE>
EXHIBIT "G"
NONFOREIGN AFFIDAVIT
1. Section 1445 of the Internal Revenue Code of 1986, as amended
(the "IRC"), provides that a transferee of a United States real property
interest must withhold tax if the transferor is a foreign person.
2. In order to Alexandria Real Estate Equities, Inc., a Maryland
corporation, and nominees, designees and assigns (collectively, the
"TRANSFEREE"), that withholding of tax is not required upon the disposition by
Research Blvd. Partnership, a Maryland partnership (the "TRANSFEROR"), of the
United States real property more particularly described on Exhibit "A" attached
hereto and incorporated herein by reference (the "PROPERTY"), the undersigned
Transferor certifies and declares by means of this certification, the following:
a. The Transferor is not a foreign person, foreign corporation,
foreign partnership, foreign trust or foreign estate (as such
terms are defined in the IRC and the Income Tax Regulations).
b. Transferor's federal taxpayer identification number is:
______________________.
c. Transferor's address is:
c/o Daniel R. Baker
Sugar Oak Realty
481 Carlisle Drive
Herndon, Virginia 20170
3. Transferor understands that this certification may be disclosed
to the Internal Revenue Service by Transferee and that any false statement
contained in this certification may be punished by fine, imprisonment or both.
<PAGE>
Under penalties of perjury, Transferor declares that it has carefully
examined this certification and it is true, correct and complete.
Executed this _____ day of ________, 1997 at ______, __________.
RESEARCH BLVD. PARTNERSHIP,
a Maryland partnership
By: ___________________________
Name:
Its:
<PAGE>
EXHIBIT "H"
NOVATION AGREEMENT
RESEARCH BLVD. PARTNERSHIP ("Transferor"), a partnership duly
organized and existing under the laws of the State of Maryland with its
principal office in __________________ [INSERT CITY]; ALEXANDRIA REAL ESTATE
EQUITIES, INC. ("Transferee"), a corporation duly organized and existing under
the laws of the State of Maryland with its principal office in San Diego,
California and the UNITED STATES OF AMERICA (the "Government") enter into this
Agreement as of _____________ [INSERT THE DATE TRANSFER OF ASSETS BECAME
EFFECTIVE UNDER APPLICABLE STATE LAW].
(A) THE PARTIES AGREE TO THE FOLLOWING FACTS:
(1) The Government, represented by various Contracting
Officers of the General Services Administration has entered into a
certain lease with the Transferor, namely: [Identify Lease with
specific information to identify the same]. The term "the contract"
as used in this Agreement, means the above referenced Lease, including
all modifications, made between the Government and the Transferor
before the effective date of this Agreement (whether or not performance
and payment have been completed and releases executed if the Government
or the Transferor has any remaining rights, duties, or obligations
under the Lease. Included in the term "the contract" are also all
modifications made under the terms and conditions of the Lease between
the Government and the Transferee, on or after the effective date of
this Agreement.
(2) As of ______________________, 1997, the Transferor has
transferred to the Transferee the land and the improvements
thereon commonly known as 1401 Research Boulevard, Rockville, MD
by virtue of a Special Warranty Deed from the Transferor
to the Transferee.
(3) The Transferee has acquired all the assets of the
Transferor by virtue of the above transfer.
(4) The Transferee has assumed all obligations and
liabilities of the Transferor under the contract by virtue of the
above transfer.
(5) The Transferee is in a position to fully perform all
obligations that may exist under the contract.
(6) It is consistent with the Government's interest to recognize
the Transferee as the successor party to the contract.
<PAGE>
(7) Evidence of the above transfer has been filed with the
Government.
(B) IN CONSIDERATION OF THESE FACTS, THE PARTIES AGREE THAT BY THIS
AGREEMENT
(1) The Transferor confirms that the transfer to the Transferee
has occurred, and waives any claims and rights against the Government
that it now has or may have in the future in connection with the
contract.
(2) The Transferee agrees to be bound by and to perform the
contract in accordance with the conditions contained in the
contract. The Transferee also assumes all obligations and
liabilities of, and all claims against, the Transferor under the
contract as if the Transferee were the original party to the contract.
(3) The Transferee ratifies all previous actions taken by the
Transferor with respect to the contract, with the same force and
effect as if the action had been taken by the Transferee.
(4) The Government recognizes the Transferee as the
Transferor's successor in interest in and to the contract. The
Transferee by this Agreement becomes entitled to all rights, titles,
and interests of the Transferor in and to the contract as if the
Transferee were the original party to the contract. Following the
effective date of this Agreement, the term ["Landlord"] ["Lessor"],"
as used in the contract, shall refer to the Transferee.
(5) Except as expressly provided in this Agreement, nothing
in it shall be construed as a waiver of any rights of the
Government against the Transferor.
(6) All payments and reimbursements previously made by the
Government to the Transferor, and all other previous actions taken
by the Government under the contract, shall be considered to have
discharged those parts of the Government's obligations under the
contract. All payments and reimbursements made by the Government
after the date of this Agreement in the name of or to the
Transferor shall have the same force and effects as if made to
the Transferee, and shall constitute a complete discharge of the
Government's obligations under the contract, to the extent of the
amounts paid or reimbursed.
(7) The Transferor and the Transferee agree that the Government
is not obligated to pay or reimburse either of them for, or otherwise
give effect to, any costs, taxes, or other expenses, or any related
increases, directly or indi-
H-2
<PAGE>
rectly arising out of or resulting from the transfer or this
Agreement, other than those that the Government in the absence of
this transfer or Agreement would have been obligated to pay or
reimburse under the terms of the contract.
(8) The Transferor guarantees payment of all liabilities and the
performance of all obligations that the Transferee (i) assumes under
this Agreement or (ii) may undertake in the future should the contract
be modified under its terms and conditions. The Transferor waives
notice of, and consents to, any such future modifications.
(9) The contract shall remain in full force and effect,
except as modified by this Agreement. Each party has executed this
Agreement as of the day and year first above written.
UNITED STATES OF AMERICA,
BY BY
-------------------------------- --------------------------------
TITLE TITLE
---------------------------- -----------------------------
ALEXANDRIA REAL ESTATE RESEARCH BLVD. PARTNERSHIP
EQUITIES, INC.
BY BY
-------------------------------- --------------------------------
TITLE TITLE
---------------------------- -----------------------------
[CORPORATE SEAL]
H-3
<PAGE>
CERTIFICATE
I, _____________________________________________ certify that am the
Secretary of Alexandria Real Estate Equities, Inc.; that _________________,
who signed this Agreement for this corporation, was then __________________
of this corporation; and that this Agreement was duly signed for and on behalf
of this corporation by authority of its governing body and within the scope
of its corporate powers. Witness my hand and the seal of this corporation
this day of __________, 1997, by ___________________________________
-----------------------------------
[Corporate Seal] Name:
Title
CERTIFICATE
I, _____________________________________________ certify that am the
General Partner of Research Blvd. Partnership; that _________________,
who signed this Agreement for this partnership, was then __________________
of this partnership; and that this Agreement was duly signed for and on behalf
of this partnership by authority of its governing body and within the scope
of its partnership powers. Witness my hand and the seal of this corporation
this day of __________, 1997, by ___________________________________
-----------------------------------
Name:
Title
H-4
<PAGE>
EXHIBIT "I"
LEASES
The GSA Lease.
<PAGE>
EXHIBIT "J"
SERVICE CONTRACTS
None.
<PAGE>
EXHIBIT "K"
EMPLOYEES
None.
<PAGE>
EXHIBIT "L"
APPROVALS
None.
<PAGE>
EXHIBIT "M"
INSURANCE
Attached.
<PAGE>
EXHIBIT "N"
LITIGATION
None.
<PAGE>
EXHIBIT "O"
Form of representation letter (attached).
<PAGE>
FORM OF REPRESENTATION LETTER
EXHIBIT 0
Date
Ernst & Young LLP
2049 Century Park East
Suite 1700
Los Angeles, CA 90067
Re: The statement of revenue and certain expense of "NAME OF PROPERTY"
In connection with your audits of the statement of revenue and certain expenses
of "NAME OF PROPERTY" for the period, we recognize that obtaining
representations from us concerning the information contained in this letter is a
significant procedure in enabling you to form an opinion whether the statement
of revenue and certain expenses presently fairly, in all material respects, the
results of operations of "NAME OF PROPERTY" in conformity with generally
accepted accounting principles and accordingly, we make the following
representations, which are true to the best of our knowledge and belief.
GENERAL
We recognize that, as members of management of "NAME OF PROPERTY" we are
responsible for the fair presentation of its statement of revenue and certain
expenses. We believe the statement of revenue and certain expenses is fairly
presented in conformity with generally accepted accounting principles applied on
a consistent basis.
We have provided to your representatives all financial records and related data.
We had no plans or intentions that would have materially affect all carrying
value or classification of the property's assets and liabilities.
INTERNAL CONTROL
There are no material transactions that have not been properly recorded in the
accounting records underlying the statement of revenue and certain expenses.
There are no material weaknesses in internal control, including any for which we
believe the cost of corrective actions exceeds the benefits. There have been no
significant changes in internal controls since the date of acquisition.
<PAGE>
Page 2
Ernst & Young LLP ________________, 1997
RISKS AND UNCERTAINTIES
To the best of our knowledge there are no risks and uncertainties related to
certain significant estimates and current vulnerabilities due to certain
concentrations that have not been disclosed.
RECEIVABLES
Adequate provision has been made for material losses, costs and expenses that
may be incurred subsequent to the date of acquisition for uncollectible
accounts and discounts, etc., that may be incurred in the collection of
receivables at that date.
CONTINGENT LIABILITIES
There are no unasserted claims or assessments, including those our lawyers
have advised us of, that are probable of assertion and must be disclosed.
There have been no violations or possible violations of laws or regulations
in any jurisdiction whose effects should be considered for disclosure in the
statement of revenue and certain expenses or as a basis for recording a loss
contingency.
There are no other material liabilities or gain or loss contingencies that
are required to be accrued or disclosed.
IRREGULARITIES
There have been no irregularities involving management or employees who have
significant roles in internal control. There have been no irregularities
involving other employees that could have a material effect on the statement of
revenue and certain expenses.
There are no instances where any officer of employee of "NAME OF PROPERTY" has
an interest in a company that which "NAME OF PROPERTY" does business that
would be considered a "conflict of interest." Such an interest would be
contrary to "NAME OF PROPERTY" policy.
SUBSEQUENT EVENT
No event or transactions have occurred since the date of acquisition or are
pending that would have a material effect on the financial statement at that
date or for the period then ended, or that are of such signifcance in relation
to "NAME OF PROPERTY" affairs to require mention in a note to the statement of
revenue and certain expenses in order to make them not misleading regarding
the results of operations of "NAME OF PROPERTY".
<PAGE>
Page 3
Ernst & Young LLP ________________, 1997
We understand that your audits were conducted in accordance with generally
accepted auditing standards as defined and described by the American Institute
of Certified Public Accountants and were, therefore, designed primarily for the
purpose of expressing an opinion on the statement of revenue and certain
expenses of "NAME OF PROPERTY" taken as a whole, and that your tests of the
accounting records and other auditing procedures were limited to those that you
considered neccessary for that purpose.
Very truly yours,
- ------------------------------
By:
---------------------------
By:
------------------------
By:
-----------------
- ------------------------------
By:
---------------------------
By:
------------------------
By:
-----------------
- ------------------------------
By:
---------------------------
By:
------------------------
By:
-----------------
<PAGE>
EXHIBIT "P"
ESCROW AGENT PROVISIONS
The scope of liability and obligations of the Escrow Agent are as follows:
(A) Except as set forth in the Purchase Agreement or as may be agreed to
in writing by the parties hereto, Escrow Agent shall have no
obligations to take any action or perform any act other than to
receive and hold the deposits and funds of the parties to the Purchase
Agreement, and comply with the Purchase Agreement upon joint written
instructions of the parties thereto.
(B) Escrow Agent agrees to invest the deposits and funds in an account
designated by the Buyer in its sole discretion, it being understood
and agreed that all interest and other amounts earned thereon shall
be for the account of Buyer, Social Security/Federal ID
No.: ____________________. All interest and other amounts earned
thereon shall be held and remitted to Buyer in accordance with the
Purchase Agreement.
(C) Escrow Agent shall perform the duties herein required to the best of
its ability. Escrow Agent is acting in the capacity of a mere
stakeholder only, and as such, shall not be answerable, liable or
accountable except for its willful misconduct, fraud, bad faith or
gross negligence. The parties to the Purchase Agreement agree that
the limitation contained herein on liability of Escrow Agent is for
the benefit and protection of Escrow Agent only and not for the other
parties to the Purchase Agreement.
(D) The parties hereto hereby agree to indemnify Escrow Agent against, and
to hold Escrow Agent harmless from, any and all liability, loss,
expense or damage which it may incur under or by reason of the
exercise and performance, without willful misconduct, fraud, bad faith
or gross negligence, of any of its powers and duties under this
Purchase Agreement.
(E) Escrow Agent shall be obligated to perform such duties and only such
duties as are set forth in the Purchase Agreement pursuant to joint
written instructions of the parties thereto, and no implied duties or
obligations shall be read into the Purchase Agreement.
(F) In the event of any dispute regarding the Purchase Agreement, Escrow
Agent is hereby directed, authorized and empowered, at Escrow
Agent's option, to deliver the deposits and funds of the parties
hereto in interpleader to the Clerk of the Circuit Court of
Montgomery County, Maryland, whereupon Escrow Agent shall be released
from any further obligations or liabilities under the Purchase
Agreement.
<PAGE>
(G) The Escrow Agent (in its capacity as escrow holder only) shall not
have any responsibility to the parties to the Purchase Agreement for
the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Purchase Agreement or any other instrument
or document delivered thereunder. The Escrow Agent (in its capacity
as escrow holder only) shall not have any responsibility to review or
verify the accuracy or completeness of any information contained in
any notice, certificate, instruction or other communication received
by the Escrow Agent in connection with the Purchase Agreement by
acting upon any notice, consent, certificate, instruction or other
instrument or writing believed by it to be genuine and signed or sent
by the proper party or parties.
P-2
<PAGE>
PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into by and between (i)
AQUILA BIOPHARMACEUTICALS, INC., A DELAWARE CORPORATION ("SELLER") and (ii)
ALEXANDRIA REAL ESTATE EQUITIES, INC., A MARYLAND CORPORATION ("Purchaser"),
to provide for the purchase and sale of the property herein described.
IN CONSIDERATION OF TEN DOLLARS ($10.00), and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser agree as follows:
ARTICLE I - SALE OF PROPERTY
SECTION 1. 1 . Seller shall sell to Purchaser, and Purchaser shall
purchase from Seller, upon the terms and conditions hereinafter set forth,
all of Seller's right, title, and interest (if any) in and to the following
property: (i) those two (2) parcels of land located in Rockville, Montgomery
County, Maryland, and described in EXHIBIT "A" attached hereto, together with
all rights, privileges and easements appurtenant thereto or used in
connection therewith, including, without limitation, all minerals, oil, gas
and other hydrocarbon substances thereon, all development rights, air rights,
water, water rights and water stock relating thereto (the "Land"); (ii) the
building and improvements located on the Land (the "Improvements"), which are
commonly known as 1500 East Gude Drive, 3 Taft Court and 3-1/2 Taft Court,
including all fixtures used in connection with the operation or occupancy of
the Land and the improvements, such as heating, air conditioning, electrical,
plumbing, security and mechanical systems and facilities used to provide any
utility services, refrigeration, waste disposal and other services; (iii) all
appliances, furnishings, furniture, fixtures, machinery, heating, ventilating
and air conditioning equipment, maintenance equipment, supplies, tools, and
other personal property attached to, located at or used in connection with
the management, operation, maintenance and repair of the Land and/or
Improvements, a complete list of which is attached hereto as EXHIBIT "B";
(iv) any land lying in the bed of any street, road, avenue or alley, open or
closed, in front of or adjoining the Land, to the center line thereof; and
(v) ( 1 ) all tenant leases, (2) rents and profits from and after the Closing
Date, (3) all security and/or tenant deposits, and other deposits, as more
fully described in Section 10.2 hereof, and (4) all intangible property now
or hereafter owned by Seller and UseD in connection with the Land, the
Improvements or the personal property, including, without limitation, the
Service Contracts (as hereinafter defined), building and trademark and trade
names, business licenses, architectural, site, landscaping and other permits,
applications, approvals, authorizations and other entitlements, guarantees
and warranties, all contract rights, books, records, reports, test results,
environmental assessments, as-built plans, specifications and other similar
documents and materials relating to the use, operation, maintenance or repair
of the Property or the construction or fabrication thereof, all utility
contracts, and all franchises, relating to the
<PAGE>
2
operation of the Property which are owned by Seller, to the extent same are
assignable. (All of the foregoing real and personal property is herein
collectively referred to as the "Property").
ARTICLE II - PURCHASE PRICE; DEPOSIT
SECTION 2.1. The purchase price for the Property shall be SIX MILLION
FIVE HUNDRED THOUSAND DOLLARS ($6,500,000.00) (the "Purchase Price"),
subject, however, to the adjustments and prorations provided for herein.
SECTION 2.2. The Purchase Price shall be paid to Seller by Purchaser by
wire transfer of immediately available funds for credit at Closing, and the
Deposit (as hereinafter defined) shall be applied to the Purchase Price.
SECTION 2.3. Purchaser shall, not later than three (3) business days
after the receipt by Purchaser of a fully executed original of this
Agreement, deliver to Chicago Title Insurance Company (the "Escrow Agent"
and/or the "Title Company"), with its business offices located at 51 Monroe
Street, Penthouse III, Rockville, Maryland 20850, as escrow agent, as a good
faith earnest money deposit hereunder, the amount of Three Hundred
Twenty-Five Thousand Dollars ($325,000.00) (such deposit and all interest
thereon is hereinafter referred to as the "Deposit"), by wire transfer of
immediately available funds. Escrow Agent shall deposit the funds comprising
the Deposit in a money market account, overnight repurchase agreements, or
other similar federally-insured investments, as directed by Purchaser and
reasonably approved by Seller. Within four (4) business days of receipt of
the Deposit, Escrow Agent shall give written notice to Seller and Purchaser
of its receipt of the Deposit, and of the name of the institution and the
account number in which the Deposit shall be held. The Deposit shall be held
and delivered by the Escrow Agent in accordance with the provisions of this
Agreement.
ARTICLE III - RIGHT OF ACCESS TO PROPERTY - FEASIBILITY
SECTION 3.1 Purchaser, and Purchaser's attorneys, accountants,
employees, agents, contractors, and representatives shall have the right at
any time and from time to time after the Execution Date (as defined in the
last paragraph of this Agreement) to examine and review all data and
financial information relating to the Property, to make studies, perform
financial analyses and inspect the Property for defects, to survey and make
other tests, including, without limitation, physical, structural, mechanical,
architectural, engineering, soils, geo-technical and environmental/asbestos
tests, all at Purchaser's sole cost and expenses. Any and all entries by
Purchaser and/or its representatives, agents, employees or contractors upon
the Property shall be subject to the rights of tenants in and to the
Improvements and the Land. All such studies shall be conducted in a
reasonable manner by Purchaser, and by its representatives, agents, employees
or contractors, and all entries
<PAGE>
3
into the Improvements shall be conducted during normal business hours. In the
event that Purchaser's studies require access to occupied space of a tenant,
then Purchaser shall give Seller not less than twenty-four (24) hours
telephone notice of its desire to inspect the premises; in the event that
Purchaser's studies do not require access to occupied space of a tenant, then
Purchaser shall give Seller reasonable advance telephone notice of its
inspection of the premises. Purchaser shall conduct its studies in a manner
so as not to unreasonably interfere with the business operations of Seller or
of any of the tenants of the Property. Neither Purchaser nor Purchaser's
representatives, agents, employees or contractors shall disclose to tenants
of the Property the possible sale of the Property by Seller. Seller (or a
representative of Seller) shall have the right to accompany Purchaser and/or
its representatives, agents, employees or contractors to any meeting with a
tenant. Seller agrees to cooperate with Purchaser in such investigations and
reviews, at no cost to Seller. Purchaser, its representatives, agents,
employees, and contractors shall maintain public liability insurance policies
insuring against claims arising as a result of the studies of the Property
being conducted by Purchaser. Before entering the Property to conduct any
studies therein, Purchaser shall supply Seller with individual insurance
certificates naming Seller as an additional insured. Purchaser shall conduct
no destructive testing or examinations on the Property without first
acquiring Seller's prior written consent to the scope, nature and locations
of such tests and examinations, which consent shall not be unreasonably
withheld, conditioned or delayed (but subject to the rights of tenants of the
Property at all times). Purchaser shall, and hereby does, indemnify, defend
and hold Seller harmless from any loss, costs (including reasonable
attorneys' fees), liability or damages which Seller or the Property may
suffer or incur resulting from the activities of Purchaser or Purchaser's
employees, agents, representatives and contractors, including without
limitation, liability for mechanics' lien claims. Purchaser shall promptly
repair any and all damage to the Property caused by Purchaser, or by any of
Purchaser's employees, agents, representatives or contractors in the course
of their studies, inspections, and other activities on the Property prior to
the Closing Date. The obligations of Purchaser described in this Section
shall survive termination or expiration of this Agreement.
SECTION 3.2 Not later than three (3) Business Days after the Execution
Date, Seller shall deliver or make available to Purchaser, copies of all
contracts, documents, leases, reports, books, records and other materials
relating to the Property which are within its possession or control,
including, without limitation, as-built plans and tests, soil tests,
structural and mechanical reports, environmental studies, maps, plans,
agreements, governmental permits and approvals, surveys, construction
warranties, an appraisal of the Land and Improvements performed in 1991, and
land studies; and expressly including a copy of the year-end 1996 Operating
Statements for the Property and a copy of the year-to-date 1997 Operating
Statements for the Property as described in Section 6.1.(I) hereof; current
rent roll for the Property as described in Section 6.1(J) hereof; copies of
all Leases as identified in Section 6.1 (J) hereof; copies of the most recent
bills for real estate taxes and
<PAGE>
4
insurance premiums received by Seller which pertain to the Property; copies
of all Service Contracts as identified in Section 6.1 (K) hereof; and a copy
of Seller's Owner's Title Insurance Policy pertaining to the Property (but
expressly excluding any internal evaluations or attorney-client privileged
materials) (collectively, the "Seller's Documents").
SECTION 3.3 Promptly after the Execution Date, Seller shall submit to
bioMerieux, Inc. ("BMI") and to BTRL Contracts and Services, Inc. ("BTRL"),
both of the tenants of the Property under the Leases, an estoppel
certificate, substantially in the form of attached EXHIBIT "G". Each of said
estoppel certificates is referred to individually hereinafter as an "Estoppel
Certificate", or collectively as the "Estoppel Certificates". Within
twenty-five (25) days after the Execution Date, Seller shall deliver to
Purchaser an Estoppel Certificate executed by BMI, provided that so long as
Seller has used reasonable efforts to acquire same from BMI, it shall not be
deemed to be in default of any of its obligations under this Agreement in the
event that BMI refuses to deliver the Estoppel Certificate substantially in
the form of attached EXHIBIT "G", or to deliver any estoppel certificate at
all. Within the aforesaid twenty-five (25) day period after the Execution
Date, Seller shall also deliver to Purchaser an Estoppel Certificate from
BTRL if the same is received by Seller. Within the Study Period, (as such
term is hereinafter defined), Purchaser shall review, and shall approve or
disapprove, each of the Estoppel Certificates delivered by Seller to
Purchaser, in Purchaser's sole discretion. Other than as set forth herein,
Seller shall have no obligation to acquire estoppel certificates from tenants
in connection with the sale of the Property to Purchaser.
SECTION 3.4 Notwithstanding anything herein to the contrarY, if Purchaser
determines in its sole and absolute discretion that the Property, or any
information acquired by Purchaser as a result of its studies concerning same
(including, without limitation, any information contained in any of the
Estoppel Certificates acquired by Seller and delivered to Purchaser, or any
information contained in the Title Commitment, the Survey or the UCC Searches
acquired by Purchaser which Seller does not expressly agree to cure in the
manner provided in Section 4.1), is unacceptable to Purchaser in any respect,
then in any such event, Purchaser shall have the right at its sole option to
terminate this Agreement by written notice sent to and received by Seller on
or before 5:00 p.m. East Coast time on the thirtieth (30th) calendar day
following the receipt by Purchaser of a fully executed original of this
Agreement. The period between such date and 5:00 p.m. East Coast time on the
thirtieth (30th) calendar day following such date is herein referred to as
the "Study, Period". Upon termination of this Agreement by Purchaser during
the Study Period as aforesaid, Purchaser will return to Seller all of the
Seller's Documents previously delivered to Purchaser; Purchaser shall repair
any damage to the Property caused by its studies and investigations; the
Deposit shall be returned to Purchaser; and the parties shall be relieved of
all furtherr obligations hereunder (except as otherwise expressly set forth
herein). If Purchaser terminates this Agreement prior to the end of the Study
Period as permitted hereby,
<PAGE>
5
Purchaser shall keep confidential all information and material pertaining to
the Property which was acquired by it during the Study Period (other than as
required by applicable law or regulation), which obligation of
confidentiality shall expire on the second (2nd) anniversary following the
date of termination of this Agreement by Purchaser.
If Seller shall not receive Purchaser's notice terminating this Agreement
prior to 5:00 p.m. East Coast time on the last day of the Study Period, then
this Agreement shall remain in full force and effect and the parties shall
proceed to Closing in the manner set forth herein.
Notwithstanding anything to the contrary contained in this Agreement,
wherever a reference is made herein to a return of the Deposit to Purchaser
after a termination of this Agreement, if there exists on the date the
Deposit is to be returned to Purchaser any damage to the Property which
Purchaser is obligated to repair, a portion of the Deposit in an amount
reasonably determined by the parties to be sufficient to repair said damage
shall continue to be held by Escrow Agent in escrow until the damage is
repaired, after which time it shall be returned promptly to Purchaser. Seller
shall have the right to use said funds to repair the Property in the event
that all such damage to the Property has not been repaired by Purchaser
within thirty (30) days after the date of termination of this Agreement;
provided, however, the establishment of said escrow shall not limit or in any
way mitigate Purchaser's obligation to pay for the full cost of repairing all
damage to the Property caused by its studies, tests and examinations.
ARTICLE IV - TITLE AND PROPERTY CONDITION
SECTION 4.1. Not later than twenty (20) days after the Execution Date,
Purchaser shall have obtained a Commitment for Title Insurance (the "Title
Commitment") issued by the Title Company, together with legible copies of all
documents referenced as exceptions therein describing encumbrances, liens
and/or defects in title that would affect the value or use of the Property.
Not later than twenty-five (25) days after the Execution Date, Purchaser also
shall have obtained (a) a current As-Built American Land Title Association
survey of the Property (the "Survey"), in form reasonably satisfactory to
Purchaser, the Title Company and any lenders designated by Purchaser (the
"New Lenders"), prepared and certified to Purchaser, the Title Company, the
New Lenders, and such other persons or entities as Purchaser may, in its
discretion, request, by a surveyor licensed in the State of Maryland, showing
any and all matters which Purchaser and the New Lenders may reasonably
require, including, without limitation, all Improvements, all easements, all
roads, all utilities, the number of parking spaces, access to and from the
Land, and drainage ditches, set-back lines, protrusions, encroachments, and
encumbrances affecting the same; and (b) a UCC Search with regard to the
personal property included in the sale (the "UCC Search").
<PAGE>
6
Purchaser shall have until the last day of the Study Period to notify
Seller in writing of any objection which Purchaser may have to any exception
reported in the Title Commitment or matter shown on the Survey or the UCC
Search (or any updates thereof, but, as to such updates, only as to matters
arising during the period of time after the effective date of the Title
Commitment the Survey, or the UCC Search [as applicable]; provided, however,
that if any such updates are received by Purchaser, Purchaser shall have an
additional five (5) Business Days, regardless of the occurrence of the last
day of the Study Period, following Purchaser's receipt of such update to
notify Seller of objections to items shown on any such update). Exceptions
reported in the Title Commitment and matters shown on the Survey or the UCC
Search (or any updates thereof) not objected to by Purchaser as provided
above, as well as any other matters or exceptions which existed prior to the
effective date of the Title Commitment, the Survey or the UCC Search (as
applicable) which were not reported therein, shall be deemed to be "Permitted
Exceptions." Seller shall notify Purchaser within three (3) Business Days of
receipt of written notice of Purchaser's objection to title whether it shall
take action to remove from title to the Property any exceptions and matters
so objected to by Purchaser. The failure of Seller to so notify Purchaser
shall be deemed an election by Seller to take no action. If Seller elects not
to take such action, then any such matter objected to by Purchaser shall be
deemed a Permitted Exception unless Purchaser terminates this Agreement by
the date which is the later to occur of (i) three (3) Business Days after
receipt of Seller's notice electing whether to take such remedial action (or
the expiration of the aforesaid 3 Business Day period during which Seller
failed to respond), or (ii) the last day of the Study Period. As a condition
to Closing, Seller shall take all action necessary either (y) to remove from
title to the Property any exceptions and matters so objected to by Purchaser
which Seller has elected to cure in the manner set forth above, or in the
alternative, (z) to obtain for Purchaser title insurance insuring over such
exceptions or matters which Seller has elected to cure, such insurance to be
in form and substance satisfactory to Purchaser, as determined in its
reasonable discretion. If, prior to the Closing, Seller is unable to remove
or satisfactorily insure over any exceptions or matters objected to by
Purchaser which Seller has elected to cure in the manner set forth above, and
Purchaser is unwilling to take title subject thereto, then, Purchaser may
terminate this Agreement (in which case Escrow Agent shall return the Deposit
to Purchaser, Purchaser shall repair any damage to the Property caused by
Purchaser or its representatives, employees, agents or contractors, and
neither party shall thereafter have any rights or obligations to the other
hereunder); PROVIDED, HOWEVER, that if such objected to exceptions or matters
as described above are not removed by the Closing Date (after Seller elected
to do so) Purchaser may elect, upon written notice delivered to Seller on or
prior to such date, to (a) extend the Closing Date to allow Seller a
reasonable period of time to remove such objected to exceptions or matters or
(b) proceed to a timely Closing whereupon such objected to exceptions or
matters shall be deemed Permitted Exceptions. Seller shall in any event be
required to discharge and remove any and all liens and encumbrances affecting
the Property which secure an obligation to pay money (other than installments
of
<PAGE>
7
real estate taxes not delinquent as of the Closing) and, even though
Purchaser does not expressly disapprove such liens and encumbrances, such
liens shall not be Permitted Exceptions.
SECTION 4.2. Seller covenants and agrees not to create or consent to the
imposition of any lien, encumbrance, easement, reservation, limitation,
covenant, condition or restriction upon the Property between the Execution
Date and the Closing Date without obtaining the prior written consent of
Purchaser.
SECTION 4.3. CONDITION OF PROPERTY. Other than as expressly set forth in
this Agreement, at the Closing, Seller shall deliver the Property to
Purchaser in the same "AS IS, WHERE IS" condition which existed on the date
hereof, ordinary wear and tear excepted and in the condition permitted by the
terms of Article XI.
ARTICLE V - CLOSING
SECTION 5.1. Purchaser hereby authorizes the Title Company to act as the
settlement agent for purposes of conducting the Closing. Closing of this
Agreement (the "Closing") shall be held at the office of the Title Company
which are located at 51 Monroe Street, Penthouse III, Rockville, Maryland
20850. If all conditions precedent as set forth in this Agreement are fully
satisfied (except those conditions for the benefit of Purchaser, if any,
which Purchaser in its sole discretion may waive in writing, and those
conditions for the benefit of Seller, if any, which Seller in its sole
discretion may waive in writing), Purchaser and Seller shall make full
settlement hereunder pursuant to the terms hereof on a date and at a time
selected by Purchaser, and mutually convenient to both Seller and Purchaser,
but in no event shall said date be later than fifteen (15) days following the
expiration date of the Study Period. Purchaser shall give to Seller at least
five (5) days prior written notice of its proposed date and time of Closing.
Purchaser acknowledges that Seller's business offices are in Massachusetts,
and accordingly, Purchaser agrees to use all reasonable efforts to cause the
Title Company to deliver to Seller for execution the deed of conveyance, the
settlement statement, and all other documents necessary for the consummation
of the transactions contemplated by this Agreement, in advance of the
proposed date of Closing, and, under such circumstances, Closing shall occur
without the necessity of a formal meeting of both Seller and Purchaser in the
offices of the Title Company as otherwise described herein. The date of
Closing is sometimes referred to as the "Closing date" in this Agreement.
<PAGE>
8
ARTICLE VI - SELLER'S AND PURCHASER'S
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Seller represents, warrants and covenants to Purchaser that,
as of the Execution Date:
(A) Seller is a corporation duly formed, validly existing and in good
standing under the laws of the state of its incorporation, is in good
standing and is qualified to do business in the State of Maryland. Seller has
the authority and power to enter into this Agreement and to consummate the
transaction provided for herein, and such action will not breach any court
order, the organizational documents of Seller or other existing agreement or
agreements to which Seller is a party. No governmental or third party
approvals or consents are required for Sellers execution and delivery of this
Agreement, or performance of its obligations hereunder, and Sellers execution
and performance hereof do not and shall not violate, and are not restricted
by, any other contractual obligations or any legal requirements to which
Seller is a party or by which Seller is bound.
(B) There is no action, suit, proceeding or investigation pending or, to
Seller's actual knowledge, threatened before any agency, court or other
governmental authority which relates specifically to Seller, the Property or
Seller's operation thereof (other than minor property damage and personal
injury cases in the nature of slip and fall cases which are being handled in
due course by Seller's insurance carrier, if any). On the Effective Date,
(but not necessarily on the Closing Date), no such minor property damage or
personal injury cases exist. If any such minor property damage or personal
injury cases exist on the Closing Date, Seller shall so advise Purchaser (but
the existence thereof shall not be a breach of Seller's representations or
warranties as set forth herein). There are no actions, suits or proceedings
pending, contemplated or threatened to be initiated by Seller in connection
with all or any portion of the Property or Seller's ownership, rights, use,
development or maintenance thereof, including, without limitation, tax
reduction proceedings; and from and after the Execution Date, Seller shall
not commence or allow to be commenced on its behalf any action, suit or
proceeding with respect to all or any portion of the Property without the
prior written consent of Purchaser, which consent shall not be unreasonably
withheld, delayed or conditioned. No attachments, execution proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy,
reorganization or other proceedings are pending, or, to Seller's actual
knowledge, threatened, against Seller. In the event any proceeding of the
character described herein is initiated prior to the Closing, Seller shall
promptly advise Purchaser in writing.
(C) There is no condemnation proceeding affecting the Property currently
pending, Seller has not received notice of any contemplated condemnation
proceedings nor, to Seller's actual knowledge, is any such proceeding
threatened.
<PAGE>
9
(D) To Seller's actual knowledge, Seller has obtained all permits,
licenses and consents necessary to own, operate, develop, use and maintain
the Property as commercial office buildings. To Seller's actual knowledge,
all such permits, licenses and consents are, or will be on the Closing Date,
in full force and effect. The list of documents set forth on EXHIBIT "H"
attached hereto (collectively, the "Approvals") are the permits, licenses,
certifications, approvals, consents, and authorizations in the possession of
Seller which are applicable to its operation of the Property. To Seller's
actual knowledge, the Approvals are in full force and effect. To Seller's
actual knowledge, all of the Approvals are transferable to Purchaser without
the necessity of any approval or consent or additional payment (other than a
de minimis payment) and no such transfer will affect the validity thereof.
Seller has not received notice of any failure of the Property to comply with
any applicable governmental requirements in regard to the use, occupation and
construction thereof, including, but not limited to, environmental, zoning,
platting and other land use requirements and Seller has not received notice
of and has no actual knowledge of any violations or investigations relating
thereto.
(E) Seller has not received notice of any default or breach by Seller
under any covenants, conditions, restrictions, rights-of-way or easements
which may affect the Property, and, to Seller's actual knowledge, no such
default or breach now exists.
(F) To Seller's actual knowledge, there are no presently pending special
or general assessments against the Property, and no new special or general
assessments are threatened against the Property.
(G) To Seller's actual knowledge, all Exhibits hereto are current,
complete and correct in all material respects.
(H) Seller has not received notice of any proposed increase in the
assessed valuation of the Property.
(I) The actual income and expenses of the Property for (i) the full
calendar year l996 and (ii) the partial calendar year 1997 are fully, truly
and accurately set forth in all material respects on EXHIBIT "C" which is
attached hereto.
(J) EXHIBIT "D" attached hereto contains a current, correct and complete
rent roll including a list of all leases (sometimes, "Leases") with tenants
of the Property as of the Execution Date. Seller has delivered to Purchaser a
current, correct and complete copy of each of the Leases, including all
amendments thereto and guarantees thereof. The information contained in
EXHIBIT "D;)" (as updated by Seller to Purchaser from time to time) is and
will continue to be current, correct and complete in all material respects.
Each of the Leases listed in EXHIBIT "D:)" is in full force and effect. To
Seller's actual
<PAGE>
10
knowledge, Seller is not in default under any of the Leases in any material
respect. Except as otherwise provided in EXHIBIT "D", as of the Execution
Date (but not as of the date of Closing), none of the tenants under the
Leases is in default in the payment of any rent under its Lease, or, to
Seller's actual knowledge, in the performance or observance of any covenant
or condition to be kept, observed or performed by the tenant under such
Lease. Except as otherwise provided in EXHIBIT "D)" or in a Lease, none of
such tenants is or will be entitled to any rent rebate, concession, deduction
or offset. No tenant has paid any rent, additional rent or other charge for a
period of more than thirty (30) days in advance, which shall not be adjusted
by and between Seller and Purchaser at Closing. Seller has no actual
knowledge of any claims, defenses or counterclaims that would affect payment
of rent or other sums or performance of any obligations by the tenants under
the Leases except as described in EXHIBIT "D". Seller has received no notices
of any failure of Seller to supply any services which Seller is required to
furnish pursuant to any Lease. Seller has received no notices of any items of
work, repair, maintenance or construction to be completed by Seller pursuant
to any Lease for the benefit of any tenant and Seller has no knowledge of any
such work to be done. Except as set forth on the Exhibit "D", as of the
Execution Date (but not as of the date of Closing), Seller has received no
notice from any tenant (i) to cancel any Lease prior to its natural date of
expiration, (ii) that such tenant is or may become unable or unwilling to
perform any or all of its obligations under its Lease, whether for financial
or other reasons, or that an action or proceeding, voluntary or involuntary,
is pending or threatened against such tenant under any section or sections of
any bankruptcy or insolvency law, or (iii) that such tenant disputes the base
rent or escalation rents or the computation of escalation rents pursuant to
its Lease. Seller has received no notice of any default by the landlord under
any Lease and has no actual knowledge of any fact or facts which would now or
with the giving of notice or the passage of time or both be a default under
the terms thereof, except as otherwise set forth on EXHIBIT "D".
As of the Closing Date, there will be no brokerage or other leasing
commissions payable in connection with any of the existing tenants or the
Leases, or with any new leases or amendments of existing Leases which were
acquired without Purchaser's prior written consent [which consent shall be
granted or withheld in the manner set forth in Section 7.1(D)]. Purchaser
acknowledges that it shall be obligated to pay any brokerage or other leasing
commissions payable in connection with any new leases for space in the
Improvements, or any amendments of existing Leases, executed after the
Execution Date with Purchaser's prior written consent as aforesaid.
For all purposes of Seller's representations and warranties contained in
this Section 6.1(J), any reference to "tenant" shall be deemed a reference
only to BMI (and any references to Leases shall be deemed a reference only to
the Lease with BMI), unless
<PAGE>
11
BTRL is still a tenant of the Property on the Closing Date, in which event
all such representations and warranties shall apply to BTRL as well as to BMI.
(K) EXHIBIT "E" attached hereto contains a current, complete and
correct list and copy of all contracts or agreements ("Service Contracts") to
which Seller is a party relating to the management, leasing, operation,
maintenance or repair of the Property in effect on the Execution Date. Except
as set forth in EXHIBIT "E", all of such Service Contracts may be terminated
by Seller or the then owner of the Property without cost or penalty (other
than a de minimis payment) upon no more than thirty (30) days written notice
without cause. Seller is not in default under any such Service Contracts to
its actual knowledge.
(L) All bills and claims for labor and construction performed and
materials, equipment or services furnished to or for the benefit of the
Property for all periods prior to the Closing Date which could result in a
valid mechanic's lien being filed against the Property will be paid in full
as of the Closing Date, or, if not paid, will be bonded to the reasonable
satisfaction of Purchaser and the Title Company. As of the Closing Date,
there will be no mechanic's liens or materialmen's liens (whether or not
perfected) on the Property.
(M) To Seller's actual knowledge, except as set forth in EXHIBIT "F"
attached hereto, (i) no toxic materials, hazardous waste or hazardous
substance (as these terms are defined in the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. Section 6901 ET. SEQ.) or in the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. Section 9601 ET. SEQ.)) including, without
limitation, any asbestos or asbestos-related products or materials and any
oils, lead, lead based products or materials, petroleum-derived compounds or
pesticides (hereinafter referred to as the "Hazardous Materials") are located
on or about the Property, other than commercially reasonable amounts of such
materials which are used by tenants of the Property in the ordinary conduct
of their businesses as permitted by their Leases, and oil and gas stored in
vehicles located on the Property; (ii) the Property has not been used for the
storage, manufacture or disposal of Hazardous Materials or as a dump site for
Hazardous Materials; and (iii) Seller has complied with all federal, state
and local environmental laws and regulations affecting the Property. Further,
no complaint, order, citation or notice with regard to air emissions, water
discharges, noise emissions, Hazardous Materials or any other environmental,
health or safety matters affecting the Property or any portion thereof from
any person, government or entity has been received by Seller, and to Seller's
actual knowledge, no such complaint, order, citation, or notice has been
issued (but not received) by Seller. To Seller's actual knowledge, any
Hazardous Materials used by tenants of the Property as set forth in
subsection (i) above, are stored and used on the Property in accordance with
applicable law pertaining to the hazardous nature of such materials. To
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12
Seller's actual knowledge, except as set forth in EXHIBIT "F", the Property
does not contain any underground tanks for the storage or disposal of
Hazardous Materials.
(N) All fixtures, equipment and personal property listed in EXHIBIT
"B" and included in this sale are, and at Closing will be, owned by Seller
(except to the extent that such items are consumed or are discarded after
becoming broken, damaged or obsolete in the ordinary course of Seller's
operation of the Property), and at Closing all of the foregoing will be free
and clear of any chattel mortgages, conditional bills of sale, security
agreements or financing statements and other liens and encumbrances of any
kind.
(O) Seller is the legal and equitable owner of the Property, with
full right to convey the same. Seller has not granted any options or rights
of first refusal or rights of first offer to third parties to purchase or
otherwise acquire an interest in the Property (other than extension rights or
options to renew leasehold interests as may be set forth in the Leases).
(P) Seller has received no notice of any filing or petition, under
the United States Bankruptcy Law or any insolvency laws, or any laws for
composition of indebtedness or for the reorganization of debtors, which
pertains to Seller, and Seller has filed no such notice or petition.
(Q) Seller is not a foreign person within the meaning of 42 USCS
Section 1445(f)(3).
(R) There are currently in effect such insurance policies as are
listed on EXHIBIT "I" attached hereto. All premiums due on such insurance
policies have been paid by Seller and Seller will maintain such insurance
policies from the Execution Date through the Closing Date or earlier
termination of this Agreement. Seller has not received and has no actual
knowledge of any notice or request from any insurance company requesting the
performance of any repair work or alteration with respect to the Property
which has not been complied with. Seller has received no notice from any
insurance company concerning, nor does Seller have actual knowledge of, any
defects or inadequacies in the Property which, if not corrected, would result
in the termination of the insurance coverage identified on EXHIBIT "I", or
increase its cost.
(S) There are no employees who are employed by Seller in the
operation, management or maintenance of the Property for whom Purchaser shall
have any obligation after the Closing Date.
(T) Seller has not received written notice that any party to any of
the Property Documents considers a breach or default by Seller to have
occurred.
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As used in this Agreement, the term "Seller's actual knowledge" means the
actual (and not the constructive) current knowledge of Stephen J. DiPalma,
Chief Financial Officer of Seller, and does not imply any inspection,
examination or other inquiry undertaken by Seller or said individual to
determine the accuracy of any representation, warranty or other statement
made "to Seller's actual knowledge" in this Agreement, or in any of the
documents to be executed by Seller and delivered to Purchaser at Closing.
SECTION 6.2. Purchaser represents, warrants and covenants to Seller that,
as of the Execution Date:
(A) Purchaser is a corporation duly formed, validly existing and in
good standing under the laws of the state of its incorporation, and is in
good standing and qualified to do business in the State of Maryland.
Purchaser has the authority and power to enter into this Agreement and to
consummate the transactions provided for herein, and such action will not
breach any court order, the organizational documents of Purchaser or other
existing agreement or agreements to which Purchaser is a party.
(B) This Agreement constitutes the valid and binding obligation of
Purchaser.
(C) No governmental or third party approvals or consents are required
for Purchaser's execution and delivery of this Agreement, or performance of
its obligations hereunder, and Purchaser's execution and performance hereof
do not and shall not violate, and are not restricted by, any other
contractual obligations or any legal requirements to which Purchaser is a
party or by which Purchaser is bound.
SECTION 6.3. All of the representations, warranties and covenants of
Seller contained in this Article VI or elsewhere herein are material
inducements to Purchaser's execution of this Agreement and to its agreement
to purchase the Property, and all of the representations, warranties and
covenants of Purchaser contained in this Article VI or elsewhere herein are
material inducements to Seller's execution of this Agreement and to its
agreement to sell the Property. At Closing, Seller and Purchaser each shall
reconfirm to the other party in writing, by certification in the form which
is attached hereto as EXHIBIT "L", its representations and warranties made
herein as of the Closing Date, including any non-material modifications
thereto which are necessitated by a change of circumstances, and shall
deliver said written certification to the other party. All representations
and warranties of both parties hereunder shall be deemed to be continuing
representations and warranties, and shall continue in force through Closing
and shall survive the Closing of the sale and purchase of the Property under
this Agreement for a period of one (1) year from the Closing Date, at which
time they shall expire and be of no further force or effect. If any
representations or warranties of Seller are not correct as of the Closing
Date, then Purchaser at its sole option and discretion may elect to (i)
terminate this Agreement whereupon the
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Deposit shall be promptly returned to Purchaser, and both Seller and
Purchaser shall perform the obligations required of each of them upon
a termination of this Agreement as otherwise described herein, after
which this Agreement shall be null and void, or (ii) waive in writing
such inaccuracies or nonperformance and proceed hereunder without
regard thereto, or (iii) institute actions against Seller for specific
performance or other relief in equity [provided, if said failure of
such representations and/or warranties to be true is not the result of
the willful action or inaction of Seller in disregard of its obligations
to Purchaser as set forth in this Agreement, and if Seller can cause said
representation or warranty to become true, then Seller shall not be obligated
to perform any work to the Property or to expend any monies other than as
expressly set forth herein, and Seller shall be obligated only to deliver the
Property to Purchaser on the Closing Date in the same "AS IS, WHERE IS"
condition which existed on the Execution Date, excepting therefrom changes
in the condition of the Property caused by ordinary wear and tear or as set
forth in Article XI.] Similarly, if any representations or warranties of
Purchaser are not correct as of the Closing Date, then Seller at its sole
option and discretion may elect to proceed in the same manner as Purchaser
as set forth in subsections (i)-(iii) above.
SECTION 6.4. Other than as expressly set forth in this Article VI or
elsewhere in this Agreement, Purchaser shall have no claim for any damage or
remedy by reason of the existence or nonexistence of (i) any fact not
represented herein, or (ii) any condition of the Property, the nature of any
tenancy or the terms of any Leases, or any other circumstance surrounding the
Property or its sale by Seller to Purchaser, which is not specifically
addressed by this Agreement.
ARTICLE VII - SELLER'S OBLIGATIONS PENDING CLOSING
SECTION 7.1. During the continuance of this Agreement, until the Closing
Date, Seller covenants to perform the following obligations:
(A) Seller shall continue to operate the Property as commercial
office buildings in the same manner as presently operated. In this respect,
Seller shall (1) continue to repair and maintain the Property (including the
repair, maintenance and, if necessary, the replacement of equipment,
furniture, furnishings, fixtures and appliances) in the same manner as
presently repaired and maintained, in all material respects (but subject to
the provisions of Section 4.3); (2) not knowingly violate any lawful order or
directive of a governmental agency with respect to the Property; (3) manage
the Property by collecting rents and otherwise enforcing the Leases and
rental agreements of the various tenants; (4) perform all obligations
required of it pursuant to the Service Contracts; and (5) maintain, keep in
effect, and pay the premiums for the insurance on the Property which is in
effect on the Execution Date.
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15
(B) Seller will not directly or indirectly sell, assign, convey or
create any right, title, or interest in the Property to any third party, or
enter into any agreement to do any of the foregoing, without first acquiring
the prior written consent of Purchaser thereto, as Purchaser shall determine
in its sole discretion (except as otherwise expressly provided herein).
Except for the Permitted Exceptions, Seller will not create or permit to
exist any lien, encumbrance, or charge on the Property, without discharging
the same at or prior to Closing (except as otherwise expressly provided
herein).
(C) Seller will not enter into any new contracts, or amend or
terminate any existing Service Contracts which may not be canceled on thirty
(30) days' notice, or permit any major management or operational changes
relating to the management, leasing, operation, maintenance or repair of the
Property, without Purchaser's prior written approval which approval shall not
be unreasonably withheld, conditioned or delayed.
(D) Seller will not enter into any new leases, or amend or terminate
any existing Leases between the Execution Date and the expiration date of the
Study Period without Purchaser's prior written consent, which consent shall
not be unreasonably withheld, conditioned or delayed; Seller will not enter
into any new leases, or amend or terminate any existing Leases between the
expiration date of the Study Period and the Closing Date without Purchaser's
prior written consent, which consent may be granted, conditioned or withheld
as Purchaser shall determine in its sole discretion. Purchaser shall be
deemed to have acted unreasonably in not approving a new lease or an
amendment of an existing Lease between the Execution Date and the expiration
date of the Study Period if the proposed use of the premises is for lab
and/or related office purposes, and the rent to be paid by the proposed
tenant is consistent with the fair market rental value of said premises.
(E) Seller shall promptly notify Purchaser of any change in any
condition with respect to the Property or any portion thereof or of any event
or circumstance of which Seller acquires actual knowledge subsequent to the
Execution Date which (a) materially, adversely affects the Property or any
portion thereof or the use or operation of the Property or any portion
thereof, (b) makes any representation or warranty of Seller to Purchaser
under this Agreement untrue or misleading, or (c) makes any covenant or
agreement of Seller under this Agreement incapable or unlikely of being
performed, it being expressly understood that Seller's obligation to provide
information to Purchaser under this Section 7.1 shall in no way relieve
Seller of any liability for a breach by Seller of any of its representations,
warranties, covenants or agreements under this Agreement.
(F) Seller shall have the right to maintain the Property on the
market, and to commence and/or continue any and all negotiations with any
other
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16
prospective optionees or purchasers of the Property, until such time as the
Study Period has expired and the parties are proceeding to Closing in
accordance with the terms of this Agreement. At all times after the Execution
Date, Seller shall advise Purchaser of the status of any negotiations with
potential tenants at the Property.
ARTICLE VIII - CLOSING REQUIREMENTS
SECTION 8.1. At Closing, Seller shall do the following:
(A) Deliver to Purchaser all Seller's Documents including the
original Leases (to the extent said original instruments are in the
possession or control of Seller, otherwise copies shall be delivered to
Purchaser), to the extent not previously delivered pursuant to Article III
above;
(B) Execute and deliver to Purchaser an assignment of all Service
Contracts;
(C) Execute and deliver to the Title Company an affidavit in form and
substance satisfactory to the Title Company and consistent with customary
practices in Montgomery County, Maryland, permitting the Title Company to
delete from Purchaser's title policy exceptions for mechanics' liens and
parties in possession (other than tenants under recorded leases, if any, and
specifically identified tenants then occupying space in the Property under
unrecorded leases);
(D) Execute and deliver to Purchaser and the Title Company a sworn
statement that Seller is not a "foreign person" and containing such other
information as may be required by Section 1445(b)(2) of the Internal Revenue
Code, and regulations thereunder;
(E) Execute and deliver to Purchaser an assignment of all Leases, and
assign and deliver any deposits related thereto in the form attached hereto
as EXHIBIT "M" [with security and/or tenant deposits being equal to the
deposits made by current tenants, accrued interest, if any, earned by tenants
in accordance with their respective Leases and local law, and deposit refunds
plus interest due, but not yet paid, less any monies expended by Seller (or
its predecessors-in-interest, as landlord) from said security and/or tenant
deposits to cure defaults by tenants of the Property];
(F) Execute and deliver to Purchaser an assignment of (i) the Project
Plans, and (ii) all licenses, franchises, permits and contract rights
relating to the operation of the Property, to the extent the same are
assignable;
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17
(G) Execute and deliver to Purchaser (i) a good and sufficient bill
of sale in the form attached hereto as EXHIBIT "N" conveying to Purchaser
good title to all personal property described on EXHIBIT "B";
(H) Execute and deliver to Purchaser a certification that all
representations and warranties set forth in Section 6.1 are true and correct
on the Closing Date (as same may be modified in a non-material manner
resulting from a change in circumstances);
(I) Such proof of Seller's authority and authorization to enter into
this Agreement and the transactions contemplated hereby, and such proof of
the power and authority of the individual(s) executing any instruments,
documents or certificates on behalf of Seller as may be reasonably required
by Title Company, Purchaser or the New Lenders;
(J) Such other documents and instruments, signed and properly
acknowledged by Seller, if appropriate, as may be reasonably required by
Purchaser, Escrow Agent, the New Lenders or otherwise in order to effectuate
the provisions of this Agreement and the Closing of the transactions
contemplated herein (but only to the extent that any such document does not
enlarge or extend the obligations of Seller as provided in this Agreement);
and
(K) Seller shall deliver possession of the Property to Purchaser upon
the Closing, subject to the rights of tenants under the Leases. Further,
Seller hereby covenants and agrees to deliver to Purchaser, on or prior to
the Closing, the following items:
(a) Originals of the Approvals (to the extent same are in
Seller's possession or under its control);
(b) The Intangible Property, including, without limitation,
the original Seller's Documents (to the extent same are
in Seller's possession or under its control and have not
been previously delivered); and
(c) The Personal Property, including, without limitation, all
keys, pass cards, remote controls, security codes,
computer software and other devices relating to access
to the Improvements.
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18
(L) Execute and/or deliver such other documents as Seller and
Purchaser may have agreed for Seller to deliver at Closing.
(M) Execute and deliver to Purchaser a Special Warranty Deed to the
Land and Improvements in the form attached hereto as EXHIBIT "J".
SECTION 8.2. At Closing, Purchaser shall deliver the Purchase Price to
Seller, and shall do the following:
(A) Execute and deliver to Seller an assumption of all Seller's
obligations from and after the Closing Date set forth in the Service
Contracts which are assigned by Seller to Purchaser pursuant to
Section 8.1(B) hereof;
(B) Execute and deliver to Seller an assumption of all Seller's
obligations from and after the Closing Date set forth in Leases which are
assigned by Seller to Purchaser pursuant to Section 8.1(E) hereof
(including, without limitation, all obligations relating to deposits held by
landlord under said Leases and delivered by Seller to Purchaser);
(C) Deliver to Seller and the Title Company evidence reasonably
satisfactory to Seller and the Title Company that (i) Purchaser is duly
formed and validly existing in the state of its formation and is in good
standing and qualified to do business under the laws of the State of
Maryland, and (ii) Purchaser has the authority and power to enter into this
Agreement and to consummate the transaction provided for herein, (iii) the
consummation of the transaction provided for herein will not breach the
organizational documents of Purchaser, and (iv) the individuals executing all
documents in connection herewith on behalf of Purchaser have the authority
and power so to do;
(D) Execute and deliver to Seller a certification that all
representations and warranties set forth in Section 6.2 are true and correct
on the Closing Date;
(E) Execute and/or deliver such other documents as Seller and
Purchaser may have agreed for Purchaser to deliver at Closing;
(F) Such proof of Purchaser's authority and authorization to enter
into this Agreement and the transactions contemplated hereby, and such proof
of the power and authority of the individual(s) executing any instruments,
documents or certificates on behalf of Purchaser as may be reasonably
required by Title Company or Seller; and
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19
(G) Such other documents and instruments, signed and properly
acknowledged by Purchaser, if appropriate, as may be reasonably required by
Seller, Escrow Agent, or otherwise in order to effectuate the provisions of
this Agreement and the Closing of the transactions contemplated herein (but
only to the extent that any such document does not enlarge or extend the
obligations of Purchaser as provided in this Agreement).
The delivery to the Title Company of the Purchase Price, the executed
deed of conveyance, bill of sale, assignment of the Leases and security
deposits, assignment of the Service Contracts, and all other documents and
instruments required to be delivered by either party to the other by the
terms of this Agreement shall be deemed to be a good and sufficient tender of
performance of the terms hereof.
ARTICLE IX - CONDITIONS TO OBLIGATIONS OF PURCHASER
AND SELLER TO CLOSE
SECTION 9.1. The obligations of Purchaser to close hereunder shall be
conditioned upon the fulfillment of the following conditions at or prior to
Closing:
(A) Seller shall have performed all agreements, undertakings and
obligations and complied with all conditions required by this Agreement to be
performed and/or complied with by Seller in all material respects.
(B) All representations and warranties made by Seller set forth in
Article VI shall be true and correct on the Closing Date, in all material
respects, as if made on and as of the Closing Date.
(C) No action or proceeding shall have been commenced by or against
Seller under the federal bankruptcy code or any state law for the relief of
debtors or for the enforcement of the rights of creditors and no attachment,
execution, lien or levy shall have attached to or been issued with respect to
the Property or any portion thereof.
(D) BTRL is no longer in possession of any portion of the Property,
or alternatively, Seller shall have performed its obligations to Purchaser to
acquire an Estoppel Certificate from BTRL prior to the expiration of the
Study Period in conformance with the requirements of Section 3.3 (the
contents of which Purchaser shall have approved or disapproved in connection
with its determination whether to proceed to Closing or to terminate the
Agreement prior to the expiration of the Study Period).
(E) No damage, destruction or loss to the Property in excess of
$100,000.00, whether or not covered by insurance, shall have occurred and not
be repaired prior to the Closing Date.
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20
In the event that any of the conditions set forth above in this Section
9.1 have not been fulfilled in all material respects on the Closing Date,
Purchaser shall have the right, at its option, to terminate this Agreement by
giving written notice to Seller, in which event Purchaser shall return the
Seller's Documents to Seller and repair any damage to the Property caused by
its studies and investigations, the Deposit shall be returned to Purchaser
and the parties hereto shall be relieved of all obligations hereunder, except
that the foregoing shall not relieve Seller of any liability to Purchaser for
the breach of any representation or warranty set forth in this Agreement in
the manner set forth in Section 6.3, or for a default in the performance of
its obligations set forth in this Agreement in the manner set forth in
Article XII.
SECTION 9.2. The obligations of Seller to close hereunder shall be
conditioned upon the fulfillment of the following conditions at or
prior to Closing:
(A) Purchaser shall have performed all agreements, undertakings
and obligations and complied with all conditions required by this
Agreement to be performed and/or complied with by Purchaser in all
material respects.
(B) All representations and warranties made by Purchaser set forth in
Article VI shall be true and correct on the Closing Date, in all material
respects, as if made on and as of the Closing Date.
In the event that any of the conditions set forth above in this Section
9.2 have not been fulfilled in all material respects on the Closing Date,
Seller shall have the right, at its option, to terminate this Agreement by
giving written notice to Purchaser, in which event the Deposit shall be
returned to Purchaser and the parties hereto shall be relieved of all
obligations hereunder, except that the foregoing shall not relieve Purchaser
of any liability to Seller for the breach of any representation or warranty
set forth in this Agreement in the manner set forth in Section 6.3 hereof, or
for a default in the performance of its obligations set forth in this
Agreement in the manner set forth in Article XII.
SECTION 9.3. Either party shall have the right at its option to waive in
writing any conditions of this Agreement which are included for its benefit,
and to proceed hereunder without regard to any nonperformance or
non-satisfaction thereof.
ARTICLE X - PRORATION AND ADJUSTMENTS; CLOSING COSTS
SECTION 10.1. All items of income and expense including, but not limited to
water and sewer connection charges, rents and other payments under the Leases,
water and sewer charges, charges for electricity, gas, fuel oil, telephone, and
other utilities and license fees (of transferable licenses), and charges under
all Service Contracts in effect on the Closing Date shall be adjusted and
apportioned between the parties hereto as of 11:59 P.M.
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21
on the day immediately preceding the Closing, and the net amount thereof
shall be added to or deducted from, as the case may be, the amount of the
Purchase Price to be paid at the time of Closing. Taxes, general and special,
are to be adjusted as aforesaid (and assumed by Purchaser as of the Closing
Date) according to the certificate of taxes issued by the appropriate
governmental taxing authorities having jurisdiction of the Property,
including, without limitation, assessments for any improvements which are
levied or assessed prior to the Closing Date. In making the adjustments
required by this Section, Seller shall receive credit for all prepaid
expenses and similar items that are due on or after the Closing Date, and
Seller shall be charged with any unpaid charges for the period prior to the
Closing Date. In adjusting for uncollected rents, no adjustment shall be made
in Seller's favor for rents which are accrued or are unpaid as of the time of
Closing, but Purchaser shall make reasonable efforts (without being obligated
to incur any costs or expenses which are not reimbursable by Seller) to
collect any arrearages of rent existing on the Closing Date, and shall pay
Seller such accrued and unpaid rents as and when collected by Purchaser after
Closing (less reasonable expenses of collection thereof), it being understood
that Purchaser shall not be deemed to have collected any such arrearages
attributable to the period prior to the Closing Date until such time as the
tenant(s) from whom the late rent is collected shall become current in the
payment of all rents accruing after the Closing Date. Notwithstanding the
foregoing, Seller shall have the right after the Closing Date to commence an
action against any tenant to collect amounts due Seller from any such tenant
with respect to periods of time prior to the Closing Date, provided that
Seller shall not be entitled to dispossess any such tenant as a result of
such action.
On the Closing Date, Purchaser shall be fully credited for (i)
reimbursement expenses and other sums owed by Seller to tenants for work
which occurred prior to the Closing Date which Seller is obligated to
reimburse tenants, or for work to be performed or allowances to be granted to
any tenants upon or after the Closing Date pursuant to any Leases in
existence as of the Execution Date (provided that Purchaser agrees to pay for
any such work to be performed or allowances to be granted to any tenants
under leases approved by Purchaser between the Execution Date and the Closing
Date), (ii) any commissions or brokerage fees payable upon or after the
Closing Date in connection with any Leases in existence as of the Execution
Date (provided that Purchaser agrees to pay for any such commissions or
brokerage fees under leases approved by Purchaser between the Execution Date
and the Closing Date), and (iii) rentals already received by Seller
attributable to periods after the Closing Date. If real estate tax bills have
not yet been received by Seller by the Closing Date or if supplemental taxes
are assessed (or taxes are reduced) after the Closing for the period prior to
the Closing, the parties shall make any necessary adjustment after the
Closing by cash payment to the party entitled thereto so that Seller shall
have borne all taxes, including all supplemental taxes, allocable to the
period prior to the Closing and Purchaser shall bear all taxes, including all
supplemental taxes, allocable to the period after the Closing. If any
expenses attributable to the Property and allocable to the period prior to
the Closing are discovered or billed after the
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22
Closing, then, if and only to the extent that Seller is obligated for the
payment of said expenses pursuant to the terms of this Agreement, the parties
shall make any necessary adjustment after the Closing by cash payment to the
party entitled thereto so that Seller shall have borne all expenses allocable
to the period prior to the Closing, and Purchaser shall have borne all
expenses allocable to the period on and after the date of Closing. The
provisions of this Section 9.2 shall survive the Closing for a period of one
(1) year.
Not later than three (3) Business Days prior to the Closing, Escrow Agent
shall deliver to each of the parties for their review and approval a
preliminary closing statement (the "Preliminary Closing Statement") based on
an income expense statement prepared by Seller, approved by Purchaser, and
delivered to Escrow Agent prior to said date, setting forth (i) the proration
amounts allocable to each of the parties pursuant to this Section 10.1 and
(ii) the Closing Costs allocable to each of the parties pursuant to Section
10.4 hereof. Based on each of the party's comments, if any, regarding the
Preliminary Closing Statement, Escrow Agent shall revise the Preliminary
Closing Statement and deliver a final, signed version of a closing statement
to each of the parties at the Closing (the "Closing Statement").
SECTION 10.2 Seller represents that EXHIBIT "D" sets forth a complete
list of all security deposits and other deposits (and the interest thereon,
if any) held by Seller under the Leases as of the Execution Date, to the
extent not theretofore lawfully applied to cure a default by any tenants in
accordance with the Leases (hereinafter collectively referred to as the
"Security Deposits"). At the Closing, (i) the Purchase Price shall be
adjusted to the credit of Purchaser in an amount equal to the total of the
Security Deposits as of the Closing Date, and (ii) Seller shall assign in
writing to Purchaser all of Seller's right, title and interest in and to the
Security Deposits, and Purchaser shall assume in writing Seller's obligation
for the refund or other proper application thereof as set forth in Sections
8.1 and 8.2 respectively.
SECTION 10.3. At Closing, the net adjustment, if in favor of Seller,
shall be paid to Seller in the same manner as the Purchase Price or, if in
favor of Purchaser, shall be paid by setoff against the Purchase Price.
SECTION 10.4. All costs associated with (i) the issuance of an owner's
title insurance policy (without issuance of any endorsements to standard
coverage), (ii) the preparation of the Survey, and (iii) State, county and
municipal recordation tax and transfer tax with respect to the deed of
conveyance of the Property to Purchaser shall be borne and paid one-half
(1/2) by Seller and one-half (1/2) by Purchaser. Seller and Purchaser shall
pay, respectively, the fees and expenses of its own attorneys in connection
with negotiation and settlement of this Agreement. Purchaser shall pay any
and all other fees and expenses associated with Closing unless Seller is
otherwise expressly obligated by the terms of this Agreement to pay same,
including, without limitation the costs of issuance of a mortgagee's
<PAGE>
23
title insurance policy and any endorsements to standard title insurance
coverage provided to either Purchaser or its mortgagee, and the cost of the
UCC Searches. If, on the Closing Date, title to the Property is not in the
form required by this Agreement and the cause thereof is within the
reasonable control of Seller, and such matters are not timely addressed by
and at the sole expense of Seller in the manner required hereby, then, if
Purchaser terminates this Agreement by reason of any such title matters,
Seller will promptly pay all costs incurred for the title examination and
survey of the Property in an amount not to exceed Eight Thousand Eight
Hundred Dollars ($8,800.00).
ARTICLE XI - CASUALTY LOSS; CONDEMNATION
SECTION 11.1. If, prior to Closing, all or any portion of the Property is
taken by condemnation or eminent domain, (or is the subject of a pending
taking which has not been consummated but only to the extent such a taking
would materially interfere with the use and operation of the Property by
Purchaser), Seller shall so notify Purchaser within three (3) days after the
occurrence of such event. In such event, Purchaser shall have the option to
terminate this Agreement upon written notice to Seller given not later than
fifteen (15) days after receipt of such notice from Seller. If Purchaser
elects to terminate this Agreement under Article IX or Article XI, then the
Seller's Documents will be returned to Seller, any damage to the Property
caused by Purchaser studies thereon shall be repaired by Purchaser, and the
Deposit shall be returned to Purchaser and neither party shall have any
further liability to the other (except as expressly provided herein). If
Purchaser does not elect to terminate this Agreement as aforesaid, it shall
accept title to the Property without any abatement of the Purchase Price
whatsoever, in which event, at the Closing, all of the condemnation award, or
right to such condemnation award, which have not been applied on account of
any reasonably necessary repairs or restorations, shall be assigned by Seller
to Purchaser and any moneys theretofore received by Seller in connection with
such condemnation shall be paid over to Purchaser, except for rent loss
coverage for periods prior to the Closing Date and proceeds used for
reasonably necessary restorations or repairs.
SECTION 11.2. Prior to the Closing and notwithstanding the pendency of
this Agreement, the entire risk of loss or damage by earthquake, flood,
landslide, fire, hurricane, tornado or other casualty shall be borne and
assumed by Seller in the manner set forth herein. If prior to Closing any
part of the Property is damaged or destroyed by earthquake, flood, landslide,
fire, hurricane, tornado or other casualty, Seller shall promptly notify
Purchaser of such fact. In such event, and only in the event that the cost of
restorations or repairs of said damage exceeds $100,000.00, Purchaser shall
have the option to terminate this Agreement upon written notice to Seller
given not later than fifteen (15) days after receipt of any such notice from
Seller. If Purchaser does not elect to terminate this Agreement, Seller shall
assign and turn over, and Purchaser shall be entitled to receive and keep,
all insurance proceeds payable with respect to such destruction (which shall
then be repaired or not at Purchaser's option and cost), plus Seller shall
pay over to Purchaser at Closing an
<PAGE>
24
amount equal to the deductible amount with respect to the casualty insurance
(except for rent loss coverage for periods prior to the Closing Date, and
insurance proceeds and the deductible amount applied by Seller for reasonably
necessary restorations or repairs) and the parties shall proceed to Closing
pursuant to the terms hereof without modification of the terms of this
Agreement and without any reduction in the Purchase Price. If Purchaser does
not elect to terminate this Agreement by reason of any casualty, Purchaser
shall have the right to participate in any adjustment of the insurance claim.
Purchaser shall accept title to the Property without any abatement of the
Purchase Price whatsoever, in which event, at the Closing, the insurance
proceeds or right to such proceeds shall be assigned by Seller to Purchaser
and any moneys theretofore received by Seller in connection with such fire or
other casualty shall be paid over to Purchaser, except for rent loss coverage
for periods prior to the Closing Date and proceeds used by Seller for
reasonably necessary restorations or repairs incurred prior to the Closing
Date. At Closing, Purchaser shall be entitled to a credit of Two Thousand
Five Hundred Dollars ($2,500.00) for Seller's deductible under its casualty
insurance policy, less any amount of expenses incurred by Seller prior to the
Closing Date for reasonably necessary restorations or repairs of the
Property. Seller represents to Purchaser that the deductible under its
casualty insurance policy covering the Improvements is Two Thousand Five
Hundred Dollars ($2,500.00).
ARTICLE XII - SELLER'S AND PURCHASER'S REMEDIES
SECTION 12.1. IN THE EVENT THAT THIS TRANSACTION FAILS TO CLOSE AS A
RESULT OF THE DEFAULT OF PURCHASER IN THE PERFORMANCE OF ITS OBLIGATIONS
UNDER THIS AGREEMENT, PURCHASER AND SELLER AGREE THAT SELLER'S ACTUAL DAMAGES
WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX. THE PARTIES THEREFORE
AGREE THAT IN THE EVENT THAT THIS TRANSACTION FAILS TO CLOSE AS A RESULT OF
THE DEFAULT OF PURCHASER IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER AND
SELLER IS READY, WILLING AND ABLE TO PERFORM ITS OBLIGATIONS HEREUNDER,
SELLER, AS SELLER'S SOLE AND EXCLUSIVE REMEDY, IS ENTITLED TO LIQUIDATED
DAMAGES IN THE AMOUNT OF THE DEPOSIT (INCLUSIVE OF INTEREST EARNED THEREON)
THEN HELD BY ESCROW AGENT. IN THE EVENT THIS TRANSACTION FAILS TO CLOSE AS A
RESULT OF PURCHASER'S DEFAULT AND SELLER IS READY, WILLING AND ABLE TO
PERFORM ITS OBLIGATIONS HEREUNDER, THEN (1) ESCROW AGENT SHALL, AND IS HEREBY
AUTHORIZED AND INSTRUCTED TO, RETURN PROMPTLY TO PURCHASER AND SELLER ALL
DOCUMENTS AND INSTRUMENTS TO THE PARTIES WHO DEPOSITED THE SAME, (2) ESCROW
AGENT SHALL DELIVER THE DEPOSIT (INCLUSIVE OF INTEREST EARNED THEREON) THEN
HELD BY ESCROW AGENT TO SELLER PURSUANT TO SELLER'S INSTRUCTIONS, AND THE
SAME SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES, AND (3) THIS AGREEMENT
AND THE RIGHTS AND
<PAGE>
25
OBLIGATIONS OF PURCHASER AND SELLER HEREUNDER AND THE ESCROW CREATED HEREBY
SHALL TERMINATE UPON THE COMPLETION OF THE OBLIGATIONS SET FORTH IN CLAUSES
(1) AND (2) ABOVE. SELLER AND PURCHASER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THIS SECTION 12.1, AND BY THEIR INITIALS
IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
/s/ /s/
_____________________ _____________________________
Seller's Initials Purchaser's initials
SECTION 12.2. If Seller defaults hereunder prior to Closing, and provided
Purchaser is not in default hereunder, then Purchaser shall have the right
either (i) to terminate this Agreement by giving written notice to Seller,
whereupon Escrow Agent shall return the Deposit to Purchaser, this Agreement
shall be null and void and the parties shall have no further liability to one
another; or (ii) in lieu of terminating this Agreement, to pursue any remedy
available to Purchaser hereunder, at law or in equity, including specific
performance of this Agreement, without any reduction in the Purchase Price;
provided, however, unless said failure by Seller is the result of the willful
action or inaction of Seller in disregard of its obligations to Purchaser as
set forth in this Agreement, Seller shall not be obligated to perform any
work to the Property or to expend any monies other than as expressly set
forth herein, and Seller shall be obligated only to deliver the Property to
Purchaser on the Closing Date in the same "AS IS, WHERE IS" condition which
existed on the Execution Date, and subject further to any changes in the
condition of the Property caused by ordinary wear and tear or as set forth in
Article XI.
ARTICLE XIII - INDEMNIFICATION
SECTION 13.1 Except for and subject to any limitation expressly set forth
herein, Seller hereby agrees to indemnify, defend and hold harmless Purchaser
from and against any and all claims, demands, liabilities, costs, expenses,
penalties, damages and losses, including, without limitation, reasonable
attorneys' fees and court costs, resulting from or in any way relating to
Seller's ownership, maintenance, operation or leasing of the Property prior
to the Closing Date, or from business done, transactions entered into or
other events occurring prior to the Closing Date with respect to the
ownership, management, operation, maintenance and repair of the Property,
other than the debts, liabilities, claims and obligations which are being
adjusted between Seller and Purchaser as of the Closing Date pursuant to this
Agreement. Seller shall do, execute and deliver, or shall cause to be done,
executed and delivered, all such further acts and instruments which Purchaser
may reasonably request in order to more fully effectuate the indemnification
provided for in this Agreement. The provisions of this Section 13.1 shall
survive the Closing for a period of one (1) year from the Closing Date.
<PAGE>
26
SECTION 13.2 Except for and subject to any limitation expressly set forth
herein, Purchaser hereby agrees to indemnify, defend and hold harmless Seller
from and against any and all claims, demands, liabilities, costs, expenses,
penalties, damages and losses, including, without limitation, reasonable
attorneys' fees and court costs, resulting from or in any way relating to
Purchaser's ownership, maintenance, operation or leasing of the Property on
or after the Closing Date, or from business done, transactions entered into
or other events occurring on or after the Closing Date with respect to the
ownership, management, operation, maintenance and repair of the Property,
other than the debts, liabilities, claims and obligations which are being
adjusted between Seller and Purchaser as of the Closing Date. Purchaser shall
do, execute and deliver, or shall cause to be done, executed and delivered,
all such further acts and instruments which Seller may reasonably request in
order to more fully effectuate the indemnification provided for in this
Agreement. The provisions of this Section 13.2 shall survive the Closing for
a period of one (1) year from the Closing Date.
ARTICLE XIV - AGENCY
SECTION 14.1 Seller and Purchaser each represents and warrants to the
other that it has not dealt with any real estate broker, agent, or finder,
other than Scheer Partners, Inc. and CB Commercial Real Estate Group, Inc.
(together, the "Brokers") in connection with this Agreement or the
transactions contemplated by this Agreement. Seller represents and warrants
to Purchaser that it shall pay all commissions, fees, and other payments due
to the Brokers, as a result of the transactions contemplated by this
Agreement, pursuant to a separate written agreement executed by and between
said parties. Seller and Purchaser shall mutually indemnify and defend the
other against any costs, claims or expenses, including reasonable attorney's
fees, arising out of the breach on their respective part of any of their
above representations in this paragraph. The obligations of Seller and
Purchaser set forth above shall survive the Closing and the execution and
delivery of the deed and shall not be merged therein for a period of one (1)
year from the Closing Date.
ARTICLE XV - CONFIDENTIALITY
SECTION 15.1 Purchaser agrees that until the Closing, except as otherwise
provided herein or required by law and except for the exercise by Purchaser
of any remedy hereunder, Purchaser shall (a) keep confidential the pendency
of this transaction, the documents and information supplied by Seller to
Purchaser and all studies and reports obtained by Purchaser as part of its
due diligence investigations of Seller and the Property, (b) disclose such
information only to Purchaser's agents, employees, contractors, consultants
or attorneys, as well as lenders (if any), investment bankers, venture
capital groups, investors and title company personnel, with a need to know in
connection with Purchaser's review and consideration of the Property,
provided that Purchaser shall inform all persons receiving such information
from Purchaser of the confidentiality requirement and (to the extent within
<PAGE>
27
Purchaser's control) cause such confidence to be maintained, and (c) upon the
termination of this Agreement prior to the Closing, return promptly to Seller
all Seller's Documents and all other documents and materials supplied by
Seller. Disclosure of information by Purchaser shall not be prohibited if
that disclosure is of information that is or becomes a matter of public
record or public knowledge as a result of the Closing of this transaction or
from sources other than Purchaser or its agents, employees, contractors,
consultants or attorneys.
SECTION 15.2. Seller agrees that both prior to and after the Closing,
except as otherwise provided herein or required by law, and except for the
exercise by Seller of any remedy hereunder, Seller shall (a) keep
confidential the pendency of this transaction with Purchaser and the identity
of Purchaser and the relationship between Purchaser and the entity to which
Purchaser may assign this Agreement or which Purchaser designates as the
party to whom Seller shall convey the property at the Closing, and (b)
disclose such information only to Seller's agents, employees, contractors,
consultants or attorneys, as well as title company personnel, with a need to
know such information in connection with effecting this transaction, provided
that Seller shall inform all such persons receiving such confidential
information from Seller of the confidentiality requirement and (to the extent
within Seller's control) cause such confidence to be maintained. Disclosure
of the pendency of this transaction by Seller shall not be prohibited if that
disclosure is of information that is or becomes a matter of public record or
public knowledge as a result of the Closing of this transaction or from
sources other than Seller or its agents, employees, contractors, consultants
or attorneys.
ARTICLE XVI - MISCELLANEOUS
SECTION 16.1. APPLICABLE LAW.
This Agreement shall be construed in accordance with and governed by the
laws of the State of Maryland.
SECTION 16.2. INTEGRATION; SURVIVAL.
This Agreement constitutes the entire agreement between Seller and
Purchaser pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto. No covenant, representation
or condition not expressed in this Agreement shall affect or be deemed to
interpret, change or restrict the express provisions hereof. Except as
otherwise expressly set forth herein, the rights, powers, privileges, duties,
obligations, commitments, representations and warranties set forth herein
shall survive the Closing and the execution and delivery of the deed and
shall not be merged therein for a period of one (1) year from the Closing
Date.
<PAGE>
28
SECTION 16.3. AMENDMENT.
This Agreement may be modified or amended only with the written approval
of Seller and Purchaser.
SECTION 16.4. WAIVER.
No failure by Seller or Purchaser to insist upon the strict performance
of any covenant, duty, agreement, or condition of this Agreement or to
exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or of such or any other covenant,
agreement, term or condition. No waiver shall affect or alter the remainder
of this Agreement, but each and every covenant, agreement, term and condition
hereof shall continue in full force and effect with respect to any other then
existing or subsequent breach.
SECTION 16.5. COUNTERPARTS.
This Agreement may be executed in counterparts, all of which taken
together shall constitute one agreement binding on all the parties
notwithstanding that all the parties are not signatories to the original or
the same counterpart. Each party shall become bound by this Agreement
immediately upon affixing its signature hereto, independently of the
signature of any other party. The parties agree that this Agreement (and any
subsequent agreement of modification or amendment thereto) may be transmitted
between them by facsimile machine. The parties intend that faxed signatures
constitute original signatures and that a faxed copy of the Agreement
containing the signatures (original or faxed) of all the parties is binding
on the parties.
SECTION 16.6. NOTICES.
All notices hereunder shall be in writing and shall be delivered by hand
or overnight delivery service or, if mailed, sent by United States registered
or certified mail, postage prepaid, return receipt requested, addressed to
the appropriate party at its address set forth below, or at such other
address as such parties shall have last designated by written notice to the
other. Notices, demands, consents, approvals, and other communications shall
be deemed given on the second (2nd) business day after being postmarked, if
sent by mail, or on the date when received by the party to whom it is
addressed (or the date on which delivery is refused, if attempted), if
delivered by hand or by overnight delivery service. Seller or Purchaser each
shall have the right to send any and all notices by electronic facsimile
transmission ("Fax") to a party at the receiving number set forth below each
party's name in this Section 16.6, as well as by sending such notices by
another means of delivery as set forth herein. Any such notices transmitted
by Fax shall be deemed given on the date of completion of the Fax (as
evidenced by the telecopier confirmation sheet of the
<PAGE>
29
sender) provided that such Fax is confirmed within two (2) business days by a
duplicate notice sent in a manner otherwise provided herein.
To Seller: AQUILA BIOPHARMACEUTICALS, INC.
365 Plantation Street
Worcester, Massachusetts 01605
Attention: Stephen DiPalma
Telephone: (508) 797-5777, ext. 513
Facsimile: (508) 797-4014
With a copy to: Shulman, Rogers, Gandal, Pordy &
Ecker, P.A.,
11921 Rockville Pike, Third Floor,
Rockville, Maryland 20852,
Attention: Edward M. Hanson, Esquire
Telephone: (301) 230-5210
Facsimile: (301) 230-2891
To Purchaser: Alexandria Real Estate Equities, Inc.
251 South Lake Drive, Suite 700
Pasadena, California 91101
Attention: Joel S. Marcus
Peter Nelson
Telephone: (818) 578-0777
Facsimile: (818) 578-0770
With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Los Angeles, CA 90071 -3144
Attention: Rand April
Telephone: (213) 687-5060
Facsimile: (213) 687-5600
With a copy to: Alexandria Real Estate Equities, Inc.
11440 West Bernardo Court, Suite 170
San Diego, California 92127
Attention: Alan D. Gold
Telephone: (619) 592-6801
Facsimile: (619) 592-6814
<PAGE>
30
SECTION l6.7. SUCCESSORS BOUND.
The provisions of this Agreement shall extend to, bind and inure to the
benefit of the parties hereto and their respective personal representatives,
heirs, successors, and permitted assigns.
SECTION 16.8. ASSIGNMENT OF RIGHTS.
This Agreement may be assigned by Purchaser to any third party without
Seller's prior written consent, provided that, prior to the effective date of
any such assignment (i) Purchaser shall deliver an executed copy of the
instrument of assignment to Seller and (ii) the assignee shall execute,
acknowledge and deliver to Seller (in a form reasonably satisfactory to Seller)
an agreement whereby the assignee agrees to be bound by and to perform all of
the obligations of purchaser as set forth in this Agreement. Such an assignment
shall in no way relieve Purchaser of its duty to perform fully all of its
obligations under this Agreement, and Purchaser and its assigns shall thereafter
be jointly and severally liable for the obligations of the purchaser as
described herein. Any assignment made in violation of this Section shall be
without force or effect.
SECTION 16.9. TIME.
Time is of the essence in the performance of the obligations of each party
as set forth in this Agreement. In the computation of any period of time
provided for in this Agreement or by law, the day of the act or event from which
said period of time runs shall be excluded, and the last day of such period
shall be included, unless it is not a business day, in which case the period
shall be deemed to run until the end of the next day which is a business day.
For all purposes of this Agreement, a "business day" means any day other than a
Saturday, Sunday, or other day on which commercial banks are authorized or
required to close under the laws of the State of Maryland.
SECTION 16. 10. EXHIBITS.
All Exhibits to this Agreement are incorporated herein by reference.
SECTION 16.11. CAPTIONS.
The captions of the various sections and paragraphs of this Agreement have
been inserted only for the purpose of convenience; such captions are not a part
of this Agreement and shall not be deemed in any manner to modify, explain,
enlarge or restrict any of the provisions of this Agreement.
<PAGE>
31
SECTION 16.12. INVALIDITY.
If any term, covenant, or condition of this Agreement or the application
thereof to any person or circumstances shall be invalid or unenforceable (other
than a provision imposing limited liability upon a party), the remainder of this
Agreement, or the application of such term, covenant or condition to persons or
circumstances other than those to which it is held invalid or unenforceable,
shall not be affected thereby, and each term, covenant and condition shall be
valid and enforceable to the fullest extent permitted by law.
SECTION 16. 13. ESCROW AGENT.
Escrow Agent's signature hereto constitutes acknowledgment of receipt of
the Deposit only. Seller and Purchaser agree that Escrow Agent assumes no
responsibility for, and shall not be liable for, the performance of the
obligations of either Seller or Purchaser as contained in this Agreement. Escrow
Agent is only obligated to hold the Deposit in escrow and to deliver it in the
manner described herein. Escrow Agent may act upon any instrument or other
writing (and upon signatures of the parties hereto) believed by it in good faith
to be genuine, without any further duty of independent verification. In the
event of any dispute with respect to the transactions described in this
Agreement, Escrow Agent shall be entitled to deliver the Deposit to a court
with appropriate jurisdiction without first acquiring the approval or either
Seller or Purchaser, thereby relieving itself from all further duties or
responsibilities with respect thereto.
SECTION 16.14. POST CLOSING ACCESS TO RECORDS. Upon receipt by Seller of
Purchaser's reasonably written request at any time and from time to time within
a period of one (1) year after the Closing, Seller shall, at Seller's principal
place of business, during Seller's normal business hours, make available to
Purchaser for inspection and copying (at Purchaser's sole cost and expense) all
of Seller's books and records for the period for which Purchaser is required to
have audited financial statements prepared with respect to the Property as may
be required by the Securities and Exchange Commission and/or Purchaser's
auditors to the extent that such books and records and related information are
in Seller's possession or control. Seller agrees to provide to Purchaser's
auditor a representation letter, in substantially the form of EXHIBIT "K"
attached hereto, regarding such books and records. The provisions of this
Section 16.14 shall survive the Closing for a period of one (1) year.
[SIGNATURES ON NEXT PAGE]
<PAGE>
32
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties on
the day and year noted below for each, and the "Execution Date" of this
Agreement shall be the latest date on which Seller and Purchaser shall have
executed this Agreement.
SELLER:
AQUILA BIOPHARMACEUTICALS, INC.
WITNESS:
/s/ Stephen Di Palma By: /s/ ALISON TAUNTON-RIGBY
- ----------------------- ------------------------------
Name: ALISON TAUNTON-RIGBY
----------------------------
Title: PRESIDENT & CEO
---------------------------
DATED: 9/29/97
-----------------
PURCHASER:
ALEXANDRIA REAL ESTATE
EQUITIES, INC.
WITNESS:
/s/ Gary A. Kreitzer By: /s/ ALAN D. GOLD
- ----------------------- ------------------------------
Name: ALAN D. GOLD
----------------------------
Title: PRESIDENT
---------------------------
DATED: SEPT 29, 1997
-----------------
<PAGE>
ACKNOWLEDGMENT BY ESCROW AGENT
The undersigned joins in the execution of this Agreement solely to serve as
the "Escrow Agent" pursuant to this Agreement and agrees to hold the Deposit in
escrow and to disburse same in accordance with the provisions of this Agreement.
Chicago Title Insurance Company
By: /s/ Charles S. Carroccio Jr.
----------------------------
Name: Charles S. Carroccio Jr.
--------------------------
Title: Office Counsel
-------------------------
Date: October 1, 1997
----------------
<PAGE>
LIST OF EXHIBITS
Exhibit "A" - Legal Description of the Land
Exhibit "B" - List of Personal Property being Conveyed to Purchaser
Exhibit "C" - Operating Statements for the Property (full 1996;
partial 1997)
Exhibit "D" - Rent Roll and Description of Leases
Exhibit "E" - List of Service Contracts (with copies thereof)
Exhibit "F" - Qualifications to Seller's Representation re: Hazardous
Materials
Exhibit "G" - Form of Tenant Estoppel Certificate
Exhibit "H" - List of Approvals
Exhibit "I" - List of Insurance Policies Maintained by Seller in
connection with its Ownership of the Property
Exhibit "J" - Form of Special Warranty Deed
Exhibit "K" - Form of Representation Letter
Exhibit "L" - Form of Certificate of Seller and Purchaser
Exhibit "M" - Form of Assignment of Leases
Exhibit "N" - Form of Bill of Sale
<PAGE>
EXHIBIT "A"
DESCRIPTION OF LAND
Those two (2) certain properties located in Montgomery County, Maryland more
particularly described as follows:
Lot numbered Five (5) in Block lettered "A" in the subdivision known as "RED
GATE INDUSTRIAL PARK" as shown on a plat thereof recorded in Plat Book 102,
Plat 11503 among the Land Records of Montgomery County, Maryland, more
commonly known as 3 Taft Court, Rockville, Maryland 20850.
Lot numbered Nine (9) in Block lettered "B" in the subdivision known as "RED
GATE INDUSTRIAL PARK" as shown on a plat thereof recorded in Plat Book 114
at Plat 13548 among the Land Records of Montgomery County, Maryland, together
with Access Easement for Lot Nine (9) across Lot Ten (10) as shown on the
plat recorded at Plat Book 114 at Plat 13548 among the Land Records of
Montgomery County, Maryland, more commonly known as 1500 East Gude Drive,
Rockville, Maryland 20850.
<PAGE>
EXHIBIT "B"
LIST OF PERSONAL PROPERTY BEING CONVEYED TO PURCHASER
NONE
<PAGE>
EXHIBIT C
TOTAL 1997 thru
1996 8/31/97
---------- -----------
RENTAL INCOME:
BBI @ 3 Taft Court 268,840 193,013
CBC @ 1500 EGD & 3 1/2 Taft 92,671 317,730
Expense reimbursement 42,089 73,405
---------- -----------
Totals 403,600 584,148
RENTAL EXPENSES:
Mortgage payments 112,731 366,224
Depreciation 136,976 103,188
Real estate taxes 101,437 69,772
Insurance 16,165 10,777
Building maintenance 7,195 6,827
Building cleaning 2,430 0
Building security 23,542 0
---------- -----------
Totals 400,476 556,788
---------- -----------
Net rental income/(loss) 3,124 27,360
---------- -----------
---------- -----------
<PAGE>
EXHIBIT "D"
RENT ROLL AND DESCRIPTION OF LEASES
<PAGE>
EXHIBIT "E"
List of Service Contracts (with copies thereof)
NONE
<PAGE>
EXHIBIT F
There is one underground tank used to store diesel fuel for emergency
generators located behind 3 Taft Court.
<PAGE>
EXHIBIT "G"
Form of Tenant Estoppel Certificate
ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("CERTIFICATE"), dated as of
_______________, 1997, is executed by ______ ("TENANT") in favor of
Alexandria Real Estate Equities, Inc., a Maryland corporation, together with
its nominees, assignees and assigns (collectively, "BUYER") and in the favor
of _______________-_______________________, a _______________ corporation,
together with its nominees, designees and assigns (collectively, "LENDER").
RECITALS
A. Buyer and Aquila BioPharmaceuticals, Inc., a Delaware corporation
("LANDLORD"), have entered into that certain Purchase Agreement, dated as of
_____________, 1997 (the "PURCHASE AGREEMENT"), whereby Buyer has agreed to
purchase, among other things, the improved real property located in the City
of Rockville, County of Montgomery, State of Maryland, more particularly
described on Exhibit "A" attached to the Purchase Agreement (the "PROPERTY").
B. Tenant and Landlord (or its predecessor-in-interest) have entered
into that certain Lease Agreement, dated as of ________________ (together
with all amendments, modifications, supplements, guarantees and restatements
thereof, the "Lease"), for a portion of the Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request of
Landlord, Tenant would execute and deliver an estoppel certificate certifying
the status of the Lease.
D. In connection with the Purchase Agreement, Landlord has requested that
Tenant execute this Certificate with an understanding that Lender will rely on
the representations and agreements below in granting to Buyer a loan.
NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer and
Lender as follows:
<PAGE>
AGREEMENT
SECTION 1. LEASE.
Attached hereto as Exhibit "1" is a true, correct and complete copy of
the Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements, guarantees and restatements thereof:
____________________________________________________________________________
______________________________________________________________________.
(If none, please state "None.")
SECTION 2. LEASED PREMISES.
Pursuant to the Lease, Tenant leases those certain premises (the "LEASED
PREMISES:") consisting of approximately _________________ (___________)
rentable square feet within the Property, as more particularly described in
the Lease. In addition, pursuant to the terms of the Lease, Tenant has the
[non-exclusive] right to use [____________ parking spaces/the parking area]
located on the Property during the term of the Lease. [Cross-out the preceding
sentence or portions thereof if inapplicable.]
SECTION 3. FULL FORCE OF LEASE.
The Lease has been duly authorized, executed and delivered by Tenant, is
in full force and effect has not been terminated and constitutes a legally
valid instrument, binding and enforceable against Tenant in accordance with
its terms, subject only to applicable limitations imposed by laws relating to
bankruptcy and creditor's rights.
SECTION 4. COMPLETE AGREEMENT.
The Lease constitutes the complete agreement between Landlord and Tenant
for the Leased Premises and the Property, except as modified by the Lease
amendments noted above (if any), has not been modified, altered or amended.
SECTION 5. ACCEPTANCE OF LEASED PREMISES.
Tenant has accepted possession and is currently occupying the Leased
Premises.
<PAGE>
SECTION 6. LEASE TERM.
The term of the Lease commenced on _________________ and ends on
_______________, subject to the following options to extend: ________________
__________________________________________________________________.
(If none, please state "None.")
SECTION 7. PURCHASE RIGHTS.
Tenant has no option, right of first refusal, right of first offer, or
other right to acquire or purchase all or any portion of the Leased Premises or
all or any portion of, or interest in, the Property, except as follows:_________
_______________________________________________________________________________.
(If none, please state "None.")
SECTION 8. RIGHTS OF TENANT.
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of the Leased
Premises or all or any part of the Property;
(c) has no right, title, or interest in the Leased Premises, other than as
Tenant under the Lease.
SECTION 9. RENT.
(a) The obligation to pay rent under the Lease commenced on
____________. The rent under the Lease is current, and Tenant is not in
default in the performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the
amount of _______________ Dollars ($_________) per month. Tenant has not
received and is not, presently, entitled to any abatement, refunds, rebates,
concessions or forgiveness of rent or other charges, free rent, partial rent,
or credits, offsets or reductions in rent, except as follows:________________
_____________________________________________________.
(If none, please state "None.")
<PAGE>
(c) Tenant's estimated share of operating expenses, common area
charges, insurance, real estate taxes and administrative and overhead
expenses is ______ percent (____%) and is currently being paid at the rate
of ___________________ Dollars ($______) per month, payable to
_________________.
(d) There are no existing defenses or offsets against rent due or
to become due under the terms of the Lease, and there presently is no default
or other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Leased Premises, nor is there a
state of facts which with the passage of time or the giving of notice or both
could ripen into a default on the part of Tenant, or to the best knowledge of
Tenant, could ripen into a default on the part of Landlord under the Lease,
except as follows: _________________________________________________________
____________________________________________________________________________
(If none, please state "None.")
SECTION 10. SECURITY DEPOSIT.
The amount of Tenant's security deposit held by Landlord under the Lease is
______________________ Dollars ($______).
SECTION 11. PREPAID RENT.
The amount of prepaid rent, separate from the security deposit, is
_____________________ Dollars ($______ ), covering the period from
_________________ to _________________________.
SECTION 12. INSURANCE.
All insurance, if any, required to be maintained by Tenant under the Lease
is presently in effect.
SECTION 13. PENDING ACTIONS.
There is not pending or, to the knowledge of Tenant, threatened against
or contemplated by the Tenant, any petition in bankruptcy, whether voluntary
or otherwise, any assignment for the benefit of creditors, or any petition
seeking reorganization or arrangement under the federal bankruptcy laws or
those of any state.
<PAGE>
SECTION 14. TENANT IMPROVEMENTS.
As of the date of this Certificate, to the best of Tenant's knowledge,
Landlord has performed all obligations required of Landlord pursuant to the
Lease; no offsets, counterclaims, or defenses of Tenant under the Lease exist
against Landlord; and no events have occurred that, with the passage of time
or the giving of notice, would constitute a basis for offsets, counterclaims,
or defenses against Landlord, except as follows:_______________________________
____________________________________________________________________________.
(If none, please state "None.")
SECTION 15. ASSIGNMENTS BY LANDLORD.
Tenant has received no notice of any assignment, hypothecation or pledge
of the Lease or rentals under the Lease by Landlord. Tenant hereby consents
to an assignment of the lease and rents to be executed by Landlord to Buyer
or Lender in connection with the Loan and acknowledges that said assignment
does not violate the provisions of the Lease. Tenant acknowledges that the
interest of the Landlord under the Lease is to be assigned to Buyer or Lender
solely is security for the purposes specified in said assignment and Buyer or
Lender shall have no duty, liability or obligation whatsoever under the Lease
or any extension or renewal thereof, either by virtue of said assignment or
by any subsequent receipt or collection of rents thereunder, unless Buyer or
Lender shall specifically undertake such liability in writing. Tenant agrees
that upon receipt of a written notice from Buyer or Lender of a default by
Landlord under the Loan, Tenant will thereafter pay rent to Buyer or Lender
in accordance with the terms of the Lease.
SECTION 16. ASSIGNMENTS BY TENANT.
Tenant has not sublet or assigned the Leased Premises or the Lease or
any portion thereof to any sublessee or assignee. No one except Tenant and
its employees will occupy the Leased Premises. The address for notices to be
sent to Tenant is as set forth in the Lease.
SECTION 17. ENVIRONMENTAL MATTERS.
The operation and use of the Leased Premises does not involve the
generation, treatment, storage, disposal or release into the environment of
any hazardous materials, regulated materials and/or solid waste, except those
used in the ordinary course of operating Tenant's business and in all events
are generated, used stored and disposed of in accordance with all applicable
laws.
<PAGE>
SECTION 18. SUCCESSION OF INTEREST.
Tenant agrees that, in the event Buyer or Lender succeeds to interest of
Landlord under the Lease:
(a) Buyer or Lender shall not be liable for any act or omission of
any prior landlord (including Landlord);
(b) Buyer or Lender shall not be liable for the return of any
security deposit;
(c) Buyer or Lender shall not be bound by any rent or additional
rent which Tenant might have prepaid under the Lease for more than the
current month;
(d) Buyer or Lender shall not be bound by any amendments or
modifications of the Lease made without prior consent of Buyer or Lender;
(e) Buyer or Lender shall not be subject to any offsets or defenses
which Tenant might have against any prior landlord (including Landlord); or
(f) Buyer or Lender shall not be liable under the Lease to Tenant
for the performance of Landlord's obligations under the Lease beyond Buyer or
Lender's interest in the Property.
SECTION 19. NOTICE OF DEFAULT.
Tenant agrees to give Buyer and Lender a copy of any notice of default
under the Lease served upon Landlord at the same time as such notice is given
to the Landlord. Tenant further agrees that if Landlord shall fail to cure
such default within the applicable grace period, if any, provided in the
Lease, then Buyer or Lender shall have an additional sixty (60) days within
which to cure such default, or if such default cannot be cured within such
sixty (60) day period, such sixty (60) day period shall be extended so long
as Buyer or Lender has commenced and is diligently pursuing the remedies
necessary to cure such default (including, but not limited to, commencement
of foreclosure proceedings, if necessary to effect (such cure), in which
event the Lease shall not be terminated while such remedies are being pursued.
SECTION 20. NOTIFICATION BY TENANT.
From the date of this Certificate and continuing until ___________,
Tenant agrees to immediately notify Buyer and Lender, in writing by
registered or certified mail, return receipt requested, at the following
addresses, on the occurrence of any event or the
<PAGE>
discovery of any fact that would make any representation contained in this
Certificate inaccurate:
If To Buyer: Alexandria Real Estate Equities, Inc.
251 South Lake Avenue, Suite 535
Pasadena, California 91101
Attention: Joel S. Marcus
With A Copy To: Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Rand S. April
If To Lender:
-----------------------------------------
-----------------------------------------
-----------------------------------------
Attention:
------------------------------
Tenant makes this Certificate with the knowledge that it will be relied
upon by Buyer and Lender in agreeing to purchase the Property.
Tenant has executed this Certificate as of the date first written above
by the person named below, who is duly authorized to do so.
TENANT
-------------------------------------
By:
----------------------------------
Name:
Its:
<PAGE>
EXHIBIT H
None
<PAGE>
EXHIBIT I
Package Policy, including:
Property & Casualty
General Liability
Rent Loss
Boiler & Machinery
Umbrella Liability
Excess Umbrella Liability
<PAGE>
EXHIBIT J"
FORM OF SPECIAL WARRANTY DEED
SPECIAL WARRANTY DEED
-------------------------
Tax Account No./Parcel ID
Made this __ day of ________________ , 1997, by and between
AQUILA BIOPHARMACEUTICALS, INC., a Delaware corporation, party of the
first part, and ALEXANDRIA REAL ESTATE EQUITIES, INC., a Maryland corporation,
party of the second part:
Witnesseth, that in consideration of SIX MILLION FIVE HUNDRED THOUSAND
DOLLARS ($6,500,000.00), the receipt of which is hereby acknowledged, and
which the party of the first part certifies under the penalty of perjury as
the actual consideration paid, the said party of the first part does hereby
grant, convey, bargain and sell unto the party of the second part, its
successors and assigns in fee simple absolute all that improved property
situate, lying and being in Montgomery County, State of Maryland and more
particularly described on EXHIBIT "A", attached hereto and made a part hereof
for all purposes (the "PROPERTY");
SUBJECT to covenants, easements, rights of way and restrictions of record.
TO HAVE AND TO HOLD the Property hereby intended to be conveyed,
together with the buildings and improvements thereupon erected, made or
being, and all and every title, rights, privileges, appurtenances and
advantages "thereunto belonging, or in any wise appertaining, unto and for the
proper use only, benefit and behoof forever of said party of the second part,
its successors and assigns, in fee simple absolute.
AND the said party of the first part covenants that it will warrant
specially the property hereby conveyed, and that it will execute such further
assurances of the Property as may be requisite or necessary.
<PAGE>
IN TESTIMONY WHEREOF, the said party of the first part has set its hand and
seal the year and day first above written.
AQUILA BIOPHARMACEUTICALS, INC.,
a Delaware corporation
(SEAL)
- ---------------------------- ----------------------------------
By:
(SEAL)
- ---------------------------- ----------------------------------
By:
STATE OF _______________ )
COUNTY OF _______________) SS.
I HEREBY CERTIFY that on this ___ day of _____________, 1997, before
me, the undersigned officer, a Notary Public in and for the State and County
aforesaid, personally appeared __________________, who acknowledged himself
to be the ______________________ of AQUILA BIOPHARMACEUTICALS, INC., and that
he, as such officer, being duly authorized so to do, executed the foregoing
instrument for the purposes therein contained by signing the name of said
corporation by himself as such officer.
WITNESS MY HAND AND NOTARIAL SEAL.
----------------------------------
, Notary
<PAGE>
EXHIBIT "K"
FORM OF REPRESENTATION LETTER
<PAGE>
EXHIBIT K
Date
Ernst & Young LLP
2049 Century Park East
Suite 1700
Los Angeles, CA 90067
Re: The statement of revenue and certain expense of "NAME OF PROPERTY"
In connection with your audits of the statement of revenue and certain expenses
of "NAME OF PROPERTY" for the period, we recognize that obtaining
representations from us concerning the information contained in this letter is a
significant procedure in enabling you to form an opinion whether the statement
of revenue and certain expenses presently fairly, in all material respects, the
results of operations of "NAME OF PROPERTY" in conformity with generally
accepted accounting principles and accordingly, we make the following
representations, which are true to the best of our knowledge and belief.
GENERAL
We recognize that, as members of management of "NAME OF PROPERTY" we are
responsible for the fair presentation of its statement of revenue and certain
expenses. We believe the statement of revenue and certain expenses is fairly
presented in conformity with generally accepted accounting principles applied on
a consistent basis.
We have provided to your representatives all financial records and related data.
We had no plans or intentions that would have materially affect all carrying
value or classification of the property's assets and liabilities.
INTERNAL CONTROL
There are no material transactions that have not been properly recorded in the
accounting records underlying the statement of revenue and certain expenses.
There are no material weaknesses in internal control, including any for which we
believe the cost of corrective actions exceeds the benefits. There have been no
significant changes in internal controls since the date of acquisition.
<PAGE>
Page 2
Ernst & Young LLP ________________, 1997
RISKS AND UNCERTAINTIES
To the best of our knowledge there are no risks and uncertainties related to
certain significant estimates and current vulnerabilities due to certain
concentrations that have not been disclosed.
RECEIVABLES
Adequate provision has been made for material losses, costs and expenses that
may be incurred subsequent to the date of acquisition for uncollectible
accounts and discounts, etc., that may be incurred in the collection of
receivables at that date.
CONTINGENT LIABILITIES
There are no unasserted claims or assessments, including those our lawyers
have advised us of, that are probable of assertion and must be disclosed.
There have been no violations or possible violations of laws or regulations
in any jurisdiction whose effects should be considered for disclosure in the
statement of revenue and certain expenses or as a basis for recording a loss
contingency.
There are no other material liabilities or gain or loss contingencies that
are required to be accrued or disclosed.
IRREGULARITIES
There have been no irregularities involving management or employees who have
significant roles in internal control. There have been no irregularities
involving other employees that could have a material effect on the statement of
revenue and certain expenses.
There are no instances where any officer of employee of "NAME OF PROPERTY" has
an interest in a company that which "NAME OF PROPERTY" does business that
would be considered a "conflict of interest." Such an interest would be
contrary to "NAME OF PROPERTY" policy.
SUBSEQUENT EVENT
No event or transactions have occurred since the date of acquisition or are
pending that would have a material effect on the financial statement at that
date or for the period then ended, or that are of such signifcance in relation
to "NAME OF PROPERTY" affairs to require mention in a note to the statement of
revenue and certain expenses in order to make them not misleading regarding
the results of operations of "NAME OF PROPERTY".
<PAGE>
Page 3
Ernst & Young LLP ________________, 1997
We understand that your audits were conducted in accordance with generally
accepted auditing standards as defined and described by the American Institute
of Certified Public Accountants and were, therefore, designed primarily for the
purpose of expressing an opinion on the statement of revenue and certain
expenses of "NAME OF PROPERTY" taken as a whole, and that your tests of the
accounting records and other auditing procedures were limited to those that you
considered neccessary for that purpose.
Very truly yours,
- ------------------------------
By:
---------------------------
By:
------------------------
By:
-----------------
- ------------------------------
By:
---------------------------
By:
------------------------
By:
-----------------
- ------------------------------
By:
---------------------------
By:
------------------------
By:
-----------------
<PAGE>
EXHIBIT "L"
FORM OF CERTIFICATE OF SELLER AND PURCHASER
SELLER'S [PURCHASER'S] CERTIFICATE
The undersigned hereby certifies to ALEXANDRIA REAL ESTATE EQUITIES,
INC. ("Buyer") [AQUILA BIOPHARMACEUTICALS, INC. ("Seller")] that, as of the
date hereof,
(i) all of the representations, covenants and warranties of AQUILA
BIOPHARMACEUTICALS, INC. ("Seller") [ALEXANDRIA REAL ESTATE EQUITIES, INC.
("Buyer")] made in or pursuant to that certain Purchase Agreement, dated as
of ________________, 1997, between Seller and Buyer (the "Agreement") are
true, accurate, correct and complete in all material respects, except as
otherwise expressly disclosed in the schedule of exceptions attached to this
Certificate;
(ii) all conditions to the Closing (as such term is defined in the
Agreement) that Seller [Buyer] was to satisfy or perform have been satisfied and
performed in all material respects, except as otherwise expressly disclosed in
the schedule of exceptions attached to this Certificate; and
(iii) all conditions to the Closing that Buyer [Seller] was to satisfy or
perform to obligate Seller [Buyer] to consummate the Closing have been satisfied
and performed in all material respects, except as otherwise expressly disclosed
in the schedule of exceptions attached to this Certificate.
Dated: AQUILA BIOPHARMACEUTICALS, INC.
--------------- [ALEXANDRIA REAL ESTATE EQUITIES, INC.]
By:
------------------------------------
Name:
Title:
<PAGE>
EXHIBIT "M"
FORM OF ASSIGNMENT OF LEASES
ASSIGNMENT OF LEASES AND SECURITY DEPOSITS
THIS ASSIGNMENT OF LEASES AND SECURITY DEPOSITS ("ASSIGNMENT") is entered
into as of the __day of _____________, 1997, by and between AQUILA
BIOPHARMACEUTICALS, INC., a Delaware corporation ("ASSIGNOR"), and ALEXANDRIA
REAL ESTATE EQUITIES, INC., a Maryland corporation ("ASSIGNEE").
R E C I T A L S
WHEREAS, Assignor (or its predecessor-in-interest), as landlord, has
entered into those certain leases identified on Exhibit " __" attached hereto
and incorporated herein by reference (collectively, together with all
amendments, modifications, supplements, restatements and guarantees thereof,
the "LEASES"), for certain property located in the City of Rockville, County of
Montgomery, State of Maryland;
WHEREAS, Assignor and Assignee have entered into that certain Purchase
Agreement, dated as of , 1997 (the "PURCHASE AGREEMENT"); and
WHEREAS, the Purchase Agreement requires Assignor and Assignee to execute
this Assignment;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
AGREEMENT
1. ASSIGNMENT AND ASSUMPTION. Assignor hereby irrevocably assigns, sets
over, transfers and conveys to Assignee all of Assignor's right, title and
interest in and to (i) the Leases and (ii) all security deposits made under the
Leases (the "SECURITY DEPOSITS"), which assignment shall be effective from and
after the date hereof for the remainder of the term of each of the Leases.
Subject to the terms and conditions of the Purchase Agreement, Assignee hereby
accepts this Assignment of the Leases and Security Deposits and the rights
granted herein. Assignee hereby expressly assumes, for itself and its
successors, assigns and legal representatives, the Leases and all of the
obligations and liabilities, fixed and contingent, of Assignor thereunder
accruing from and after the date hereof with respect to the Leases and agrees to
(a) be fully bound by all of the terms, covenants, agreements, provisions,
conditions, obligations and liability of Assignor thereunder, which accrue from
the date hereof, and (b) keep, perform and observe all of
<PAGE>
the covenants and conditions contained therein on the part of Assignor to be
kept, performed and observed, from and after the date hereof.
2. INDEMNIFICATIONS. Assignor hereby agrees to indemnify, protect,
defend and hold Assignee harmless from and against any and all claims,
losses, damages, costs and expenses (including, without limitation,
reasonable attorney's fees and disbursements) incurred or suffered by
Assignee in connection with the Leases and arising prior to the Closing (as
defined in the Purchase Agreement). Assignee hereby agrees to indemnify,
protect, defend and hold Assignor harmless from and against any and all
claims, losses, damages, costs and expenses (including, without limitation,
reasonable attorney's fees and disbursements) incurred or suffered by
Assignor in connection with the Leases and arising on or after the Closing.
3. GENERAL PROVISIONS.
a. SUCCESSORS. This Assignment shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.
b. COUNTERPARTS. This Assignment may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which when so executed,
shall be deemed an original, but all such counterparts shall constitute one
and the same instrument.
c. GOVERNING LAW. This Assignment and the legal relations of the
parties hereto shall be governed by and construed and enforced in accordance
with the laws of the State of Maryland, without regard to its principles of
conflicts of law.
<PAGE>
IN WITNESS WHEREOF, this Assignment was made and executed as of the date
first above written.
ASSIGNOR
AQUILA BIOPHARMACEUTICALS, INC.
a Delaware corporation
By:
----------------------------
Name:
Its:
ASSIGNEE
ALEXANDRIA REAL ESTATE EQUITIES,
INC., a Maryland corporation
By:
----------------------------
Name:
Its:
<PAGE>
EXHIBIT " "
(to Exhibit "M" -- Assignment of Leases)
LIST OF LEASES
1. [Name of Lease], dated as of ______, by and between
____________________ and ______________.
2. [Name of Lease], dated as of ______ , by and between
____________________ and ______________.
3. [Name of Lease], dated as of ______ , by and between
____________________ and ______________.
<PAGE>
EXHIBIT "N"
FORM OF BILL OF SALE
BILL OF SALE
THIS BILL OF SALE ("BILL OF SALE") is made as of the ____ day of
______________, 1997, by AQUILA BIOPHARMACEUTICALS, INC., a Delaware
corporation ("SELLER"), to ALEXANDRIA REAL ESTATE EQUITIES,
[INC., a Maryland partnership ("BUYER").
R E C I T A L S
WHEREAS, Seller is the owner of that certain real property located in
the City of Rockville, County of Montgomery, State of Maryland (the "REAL
PROPERTY"), as more particularly described on Exhibit "A" attached hereto and
incorporated herein by reference;
WHEREAS, Buyer and Seller have entered into that certain Purchase
Agreement (the "PURCHASE AGREEMENT"), dated as of _______________, 1997, with
respect to, among other things, the acquisition of the "Personal Property"
and the "Intangible Property" (each as defined below), and certain other
property; and
WHEREAS, the Purchase Agreement requires Seller to convey all of
Seller's right, title and interest in, to and under the Personal Property and
the Intangible Property to Buyer;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby agrees as follows:
A G R E E M E N T
1. Unless the context otherwise requires, all capitalized terms used but
not otherwise defined herein shall have the respective meanings provided
therefor in the Purchase Agreement.
2. Seller does hereby unconditionally, absolutely, and irrevocably grant,
bargain, sell, transfer, assign, convey, set over and deliver unto Buyer all
of Seller's right, title and interest in and to:
a. all of that certain tangible personal property now owned by
Seller and located on the Land or Improvements or attached thereto, and used
in connection with the use, operation, maintenance or repair thereof,
(collectively, the "PERSONAL PROPERTY"), all as more particularly described
on Exhibit "B" attached hereto and incorporated herein by reference; and
<PAGE>
b. all of that certain intangible property now or hereafter owned
by Seller and used in connection with the Land, the Improvements or the
Personal Property, including, without limitation, the Leases and the Service
Contracts, building names, architectural, site, landscaping or other permits,
applications, authorizations and other entitlement, transferable guarantees
and warranties covering the Land and/or Improvements, together with all
transferable contract rights, books, records, reports, test results,
environmental assessments, as-built plans, specifications and other similar
documents and materials relating to the use or operation, maintenance or
repair of the Property or the construction or fabrication thereof, and all
transferable utility contracts (collectively, the "INTANGIBLE PROPERTY" and,
together with the Personal Property, the "PROPERTY").
3. Buyer hereby expressly assumes, for itself and its successors,
assigns and legal representatives, the Leases and the Service Contracts and
all of the obligations and liabilities, fixed and contingent, of Seller
thereunder accruing from and after the date hereof with respect thereto and
agrees to (a) be fully bound by all of the terms, covenants, agreements,
provisions, conditions, obligations and liability of Seller thereunder, which
accrue from the date hereof, and (b) keep, perform and observe all of the
covenants and conditions contained therein on the part of Seller to be kept,
performed and observed, from and after the date hereof.
4. Seller represents and warrants that the Property is free and clear of
all options, liens, mortgages, pledges, security interests, covenants, prior
assignments, encumbrances and claims of any nature, other than the Permitted
Exceptions.
5. Seller hereby agrees to indemnify, protect, defend and hold Buyer
harmless from and against any and all claims, losses, damages, costs and
expenses (including, without limitation, reasonable attorney's fees and
disbursements) incurred or suffered by Buyer in connection with the Property
and arising prior to the Closing. Buyer hereby agrees to indemnify, protect,
defend and hold Seller harmless from and against any and all claims, losses,
damages, costs and expenses (including, without limitation, reasonable
attorney's fees and disbursements) incurred or suffered by Seller in
connection with the Property and arising on or after the Closing.
6. This Bill of Sale shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, legal representatives,
successors and assigns.
7. This Bill of Sale and the legal relations of the parties hereto shall
be governed by and construed and enforced in accordance with the laws of the
State of Maryland, without regard to its principles of conflicts of law.
<PAGE>
IN WITNESS WHEREOF, this Bill of Sale was made and executed as of the date
first above written.
SELLER:
AQUILA BIOPHARMACEUTICALS, INC.,
a Delaware corporation
By:
----------------------------
Name:
Its:
BUYER:
ALEXANDRIA REAL ESTATE EQUITIES, INC.,
a Maryland corporation
By:
----------------------------
Name:
Its:
