SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 28, 1998
(April 13, 1998)
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Wellsford Real Properties, Inc.
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(Exact name of registrant as specified in its charter)
1-12917 13-3926898
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(Commission File Number) (IRS Employer Identification No.)
Maryland
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(State or other jurisdiction of incorporation)
610 Fifth Avenue, New York, New York 10020
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(Address of principal executive offices)
(Zip Code)
(212) 333-2300
(Registrant's telephone number, including area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On April 13, 1998, Wellsford Real Properties, Inc.'s (AMEX: "WRP")
unconsolidated subsidiary, Wellsford/Whitehall Properties, L.L.C. (the
"Company") entered into a definitive agreement to acquire 13 office
buildings (the "Saracen Portfolio"). The Saracen Portfolio contains
approximately 1,000,000 square feet and the transaction is valued at
approximately $146 million.
Pursuant to the terms of the agreement, the Company will issue $27 million
in operating partnership units and will assume approximately $68.4 million
of existing debt bearing interest at 8.035%. The Company will utilize
approximately $34.9 million of borrowings under its bank credit facilities
to complete the acquisition.
The Saracen Portfolio, which will be contributed by Saracen Properties,
Inc., a private, family-controlled office development and operating company,
and its affiliated entities (collectively, "Saracen"), is located
predominantly in prime in-fill locations in the "Route 128" corridor in
Massachusetts. The Saracen Portfolio has a 99% occupancy rate as of April
13, 1997.
Item 7. Financial Statements, Proforma Financial Information and Exhibits
(a) Financial Statements
The financial statements required to be filed with this Report on Form
8-K will be filed under cover of a Form 8-K/A as soon as
practicable, but not later than 60 days after the date that this
Report on Form 8-K must be filed.
(b) Proforma Financial Information
The proforma financial information required to be filled with this
Report on Form
8-K will be filled under cover of a Form 8-K/A as soon as
practicable, but not later than 60 days after the date that
this Report on Form 8-K must be filed.
(c) Exhibits
10.1 Contribution Agreement, dated as of February 12, 1998, among
Saracen Properties, Inc., Saraceno Holding Trust General
Partnership, Dominic J. Saraceno, 150 Wells Avenue Realty Trust,
River Park Realty Trust, Seventy Wells Avenue LLC, Newton
Acquisition LLC I, Saracen Portland L.L.C., KSA Newton Acquisition
Limited Partnership II and KSA Newton Limited Partnership I, as
Contributor, and Wellsford/Whitehall Properties, L.L.C., as
Contributee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized .
Wellsford Real Properties, Inc.
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(Registrant)
Date April 28, 1998 By: /s/ Gregory F. Hughes
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Gregory F. Hughes
Chief Financial Officer
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CONTRIBUTION AGREEMENT
among
SARACEN PROPERTIES, INC., SARACENO HOLDING TRUST GENERAL
PARTNERSHIP, DOMINIC J. SARACENO, 150 WELLS AVENUE
REALTY TRUST, RIVER PARK REALTY TRUST, SEVENTY WELLS
AVENUE LLC, NEWTON ACQUISITION LLC I, SARACEN PORTLAND
L.L.C., KSA NEWTON ACQUISITION LIMITED PARTNERSHIP II
AND KSA NEWTON LIMITED PARTNERSHIP I
as "Contributor"
and
WELLSFORD/WHITEHALL PROPERTIES, L.L.C.
as "Contributee"
Date: As of February 12, 1998
============================================================================
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3-
2. CONTRIBUTION AND CONVEYANCE . . . . . . . . . . . . . . . . . . . .-14-
2.1 Contribution of the Non-Nomura Properties (other than 70
Wells) . . . . . . . . . . . . . . . . . . . . . . . . . . . .-14-
2.2 Contribution of the Contributed LLC Interests. . . . . . . . .-15-
3. CONTRIBUTION AMOUNT . . . . . . . . . . . . . . . . . . . . . . . .-15-
3.1 Payment of the Contribution Amount . . . . . . . . . . . . . .-15-
3.2 Allocation of the Contribution Amount. . . . . . . . . . . . .-17-
3.3 Escrow of Deposit and Promissory Notes . . . . . . . . . . . .-17-
4. ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .-20-
(a) Fixed Rents. . . . . . . . . . . . . . . . . . . . . . . . . .-20-
(b) Overage Rents. . . . . . . . . . . . . . . . . . . . . . . . .-21-
(c) Taxes and Assessments. . . . . . . . . . . . . . . . . . . . .-23-
(d) Operating Expenses and Utilities.. . . . . . . . . . . . . . .-23-
(e) Nomura Loan. . . . . . . . . . . . . . . . . . . . . . . . . .-24-
(f) Service Contracts. . . . . . . . . . . . . . . . . . . . . . .-24-
(g) Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . .-24-
(h) Miscellaneous Revenues . . . . . . . . . . . . . . . . . . . .-24-
(i) Bank Accounts of Wells Senior. . . . . . . . . . . . . . . . .-24-
(j) Utility and Service Contract Deposits. . . . . . . . . . . . .-24-
(k) Prepayments Fees and Costs in Connection with Prepaying the
Existing Non-Nomura Mortgage Indebtedness. . . . . . . . . . .-24-
(l) Nomura Loan Reserves and Escrows . . . . . . . . . . . . . . .-25-
(m) Escrows Under the Existing Non-Nomura Mortgage Indebtedness. .-25-
(n) Unfunded Tenant Allowances and Leasing Commissions . . . . . .-25-
(o) Common Expenses and Assessments With Respect to the
Condominium. . . . . . . . . . . . . . . . . . . . . . . . . .-26-
(p) Prepayment Fee Adjustment for the Existing Non-Nomura
Mortgage Indebtedness Due to Exercise of Extension Right . . .-26-
(q) Certain Brokerage Commissions and Legal and Accounting Fees
Owed by Contributor. . . . . . . . . . . . . . . . . . . . . .-27-
(r) Lazard Mezzanine Loan. . . . . . . . . . . . . . . . . . . . .-27-
(s) Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . .-28-
6. CLOSING DELIVERIES. . . . . . . . . . . . . . . . . . . . . . . . .-29-
7. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR . . . . . . . . . . .-37-
7.1 Representations and Warranties Concerning the Saracen Persons
and the Saracen Members. . . . . . . . . . . . . . . . . . . .-37-
7.2 Additional Representations Relating to Wells Avenue Holdings
LLC, Wells Avenue Senior Holdings Inc., Wells Senior, Seventy
Wells Avenue Inc. and Seventy Wells Avenue LLC.. . . . . . . .-43-
7.3 Representations of Contributor Regarding the Contributor
Properties.. . . . . . . . . . . . . . . . . . . . . . . . . .-46-
7.4 Representations and Warranties of Contributor Concerning the
Nomura Loan. . . . . . . . . . . . . . . . . . . . . . . . . .-54-
7.5 Representations and Warranties of Contributor Concerning the
Lazard Mezzanine Loan. . . . . . . . . . . . . . . . . . . . .-55-
8. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTEE . . . . . . . . . . .-56-
8.1. Representations and Warranties Concerning the Contributee and
the Term Loan Borrower . . . . . . . . . . . . . . . . . . . .-56-
8.2 Additional Representations Relating to the Contributee
Property Owners. . . . . . . . . . . . . . . . . . . . . . . .-60-
8.3 Representations of Contributee Regarding the Contributee
Properties.. . . . . . . . . . . . . . . . . . . . . . . . . .-62-
8.4 Representations and Warranties Concerning the Term Loan and
the Revolving Credit Loan. . . . . . . . . . . . . . . . . . .-68-
9. SURVIVAL OF CERTAIN REPRESENTATIONS; REMEDIES FOR INACCURACIES AND
OTHER CHANGES TO REPRESENTATIONS. . . . . . . . . . . . . . . . . .-69-
9.1 Certificates of Contributor and Contributee. . . . . . . . . .-69-
9.2 Termination Remedies for Material Adverse Changes Discovered
Prior to Closing.. . . . . . . . . . . . . . . . . . . . . . .-70-
9.3 Post-Closing Damage Claim for Certain Discovered
Inaccuracies.. . . . . . . . . . . . . . . . . . . . . . . . .-73-
9.4 Representations and Warranties Which Survive Closing or
Termination. . . . . . . . . . . . . . . . . . . . . . . . . .-77-
10. TRANSACTION COSTS . . . . . . . . . . . . . . . . . . . . . . . . .-77-
10.1 Transaction Costs Payable by Contributor. . . . . . . . . . .-77-
10.2 Transaction Costs Payable by Contributee. . . . . . . . . . .-78-
11. TITLE AND PERMITTED EXCEPTIONS. . . . . . . . . . . . . . . . . . .-79-
11.1 Permitted Exceptions and Title Policy . . . . . . . . . . . .-79-
11.2 Use of Cash Balance to Discharge Title Exceptions . . . . . .-81-
11.3 Title Exceptions. . . . . . . . . . . . . . . . . . . . . . .-81-
11.4 Cooperation of Contributor and Contributee. . . . . . . . . .-83-
12. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . .-83-
13. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-86-
13.1 Operation of Premises. . . . . . . . . . . . . . . . . . . . .-86-
13.2 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . .-87-
13.3 Estoppel Certificates. . . . . . . . . . . . . . . . . . . . .-88-
13.4 Concerning the Nomura Loan . . . . . . . . . . . . . . . . . .-89-
13.5 Concerning the Lazard Mezzanine Loan and the Existing Non-
Nomura Mortgage Indebtedness . . . . . . . . . . . . . . . . .-89-
13.6 Operations of the Companies. . . . . . . . . . . . . . . . . .-89-
13.7 Condominium Documents. . . . . . . . . . . . . . . . . . . . .-90-
13.8 Closing Steps Summary Actions. . . . . . . . . . . . . . . . .-90-
13.9 Indemnity of Contributor . . . . . . . . . . . . . . . . . . .-90-
13.10 Concerning the Nomura Consent and the Lazard Consent. . .-91-
14. CASUALTY AND CONDEMNATION . . . . . . . . . . . . . . . . . . . . .-92-
14.1 Casualty . . . . . . . . . . . . . . . . . . . . . . . . . . .-92-
14.2 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . .-92-
15. DEFAULT; REMEDIES; SURVIVAL . . . . . . . . . . . . . . . . . . . .-93-
15.1. Default By Contributee Prior to Closing . . . . . . . . .-93-
15.2. Default By Contributor Prior to Closing . . . . . . . . .-93-
15.3. Definition of Default.. . . . . . . . . . . . . . . . . .-94-
15.4. Provisions which Survive Closing. . . . . . . . . . . . .-94-
15.5. Provisions which Survive Termination. . . . . . . . . . .-94-
16. BROKERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-94-
17. TAX CERTIORARI PROCEEDINGS. . . . . . . . . . . . . . . . . . . . .-94-
18. INSPECTION BY CONTRIBUTOR AND CONTRIBUTEE . . . . . . . . . . . . .-95-
19. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .-96-
20. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . .-97-
21. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . .-98-
(a) Governing Law. . . . . . . . . . . . . . . . . . . . . . . . .-98-
(b) Further Assurances . . . . . . . . . . . . . . . . . . . . . .-98-
(c) Successors . . . . . . . . . . . . . . . . . . . . . . . . . .-99-
(d) No Third Party Beneficiary . . . . . . . . . . . . . . . . . .-99-
(e) Entire Agreement . . . . . . . . . . . . . . . . . . . . . . .-99-
(f) Schedules and Exhibits . . . . . . . . . . . . . . . . . . . .-99-
(g) Severability . . . . . . . . . . . . . . . . . . . . . . . . .-99-
(h) Modification . . . . . . . . . . . . . . . . . . . . . . . . .-99-
(i) Waiver of Trial by Jury. . . . . . . . . . . . . . . . . . . .-99-
(j) No Recording . . . . . . . . . . . . . . . . . . . . . . . . .-99-
(k) Captions; Interpretation . . . . . . . . . . . . . . . . . . -100-
(l) No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . -100-
(m) Consent of Contributor . . . . . . . . . . . . . . . . . . . -100-
(n) Exculpation of Contributee, WCPT and Whitehall . . . . . . . -100-
(o) Exculpation of Contributor . . . . . . . . . . . . . . . . . -101-
(p) Modification of Saracen Companies, Inc. Lease. . . . . . . . -101-
(q) Exclusivity. . . . . . . . . . . . . . . . . . . . . . . . . -101-
(r) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . -101-
<PAGE>
EXHIBITS
Exhibit A - Closing Steps Summary
Exhibit B - Description of Contributor Properties
Exhibit C - List of Nomura Loan Documents
Exhibit D - Description of Contributee Properties
Exhibit E - List of Revolving Credit Loan Documents
Exhibit F - List of Term Loan Documents
Exhibit G - Contribution Amount Allocations
Exhibit H - Outstanding Required Repairs Under the Nomura Loan Documents
Exhibit I - Outstanding Contributee Membership Warrants and Options
Exhibit J - Enumerated Tangible Personal Property
Exhibit K - Existing Non-Nomura Mortgage Indebtedness
Exhibit L - Nomura Estoppel Certificate
Exhibit L-1 Lazard Mezzanine Loan Estoppel Certificate
Exhibit M - List of Lazard Mezzanine Loan Documents
Exhibit N - Permitted Exceptions
Exhibit O-1 - Form of Deed (Massachusetts properties)
Exhibit O-2 - Form of Deed (Maine property)
Exhibit P - Form of Assignment and Assumption of Member Interests in Wells
Avenue Holdings LLC
Exhibit Q - Form of Bill of Sale
Exhibit R - Form of Assignment and Assumption of Leases
Exhibit S - Form of Assignment and Assumption of Tenant Proceedings
Exhibit T - Form of Assignment and Assumption of Service Contracts, Permits,
Warranties and Intangible Personal Property
Exhibit U - Form of Tenant Notice Letters
Exhibit V - Form of Tenant Estoppel Certificates
Exhibit W-1 - Form of Contributor's Counsel Opinion Letter
Exhibit W-2 - Form of Contributee's Counsel Opinion Letter
Exhibit X - Form of Asset Management Agreement
Exhibit Y-1 - Form of Property Management Agreement (Nomura Properties)
Exhibit Y-2 - Form of Property Management Agreement (Non-Nomura Properties)
Exhibit Z - Form of Trustee Certificate Re Condominium
Exhibit AA - Title Endorsements
Exhibit AB - Non-Imputation Title Affidavit
Exhibit AC - Specified Allocation of Membership Units and Series A Preferred
Membership Units Among the Saracen Members
Exhibit AD - Form of Operating Agreement Amendment
Exhibit AE - Form of Registration Rights Agreement
Exhibit AF - Form of Section 4.2(j) Letter
<PAGE>
Contributor Schedules
Schedule A-1 - Pending Litigation
Schedule A-2 - Organization Documents of Companies
Schedule A-3 - Contributor Rent Rolls
Schedule A-4 - Leases
Schedule A-5 - Unfunded Tenant Improvement Allowances
Schedule A-6 - Brokerage Agreements & Unpaid Leasing Brokerage
Commissions
Schedule A-7 - List of Engineering Reports
Schedule A-8 - Outstanding Violations
Schedule A-9 - Service Contracts
Schedule A-10 - Insurance
Schedule A-11 - List of Environmental Reports
Schedule A-12 - Pending Special Assessments/Tax Certiorari Proceedings
Schedule A-13 - Property Escrows
Schedule A-14 - Permits
Schedule A-15 - Trade Names
<PAGE>
Contributee Schedules
Schedule B-1 - Pending Litigation
Schedule B-2 - Organization Documents of Contributed Companies
Schedule B-3 - Contributee Rent Rolls
Schedule B-4 - Leases
Schedule B-5 - Unfunded Tenant Improvement Allowances
Schedule B-6 - Brokerage Agreements & Unpaid Leasing Brokerage
Commissions
Schedule B-7 - List of Engineering Reports
Schedule B-8 - Outstanding Violations
Schedule B-9 - Insurance
Schedule B-10 - List of Environmental Reports
Schedule B-11 - Pending Special Assessments/Tax Certiorari Proceedings
Schedule B-12 - Trade Names
<PAGE>
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement"), made and effective
as of the 12th day of February, 1998, among SARACEN PROPERTIES, INC.,
SARACENO HOLDING TRUST GENERAL PARTNERSHIP, DOMINIC J. SARACENO, 150 WELLS
AVENUE REALTY TRUST, RIVER PARK REALTY TRUST, SEVENTY WELLS AVENUE LLC,
NEWTON ACQUISITION LLC I, SARACENO PORTLAND L.L.C., KSA NEWTON ACQUISITION
LIMITED PARTNERSHIP II and KSA NEWTON LIMITED PARTNERSHIP I, all having an
office at c/o the Saracen Companies, 57 Wells Avenue, Newton Centre, MA.
02159, and WELLSFORD/WHITEHALL PROPERTIES, L.L.C., having an office at c/o
Wellsford Commercial Properties Trust, 610 Fifth Avenue, New York, N.Y.
10020.
W I T N E S S E T H:
WHEREAS, Wells Avenue Senior Holdings LLC owns fee simple title to
the properties located at 333 Elm Street, Norfolk, Massachusetts ("333
Elm"), 128 Technology Center, Waltham, Massachusetts ("Technology Center"),
201 University Avenue, Westwood, Massachusetts ("201 University"), 7/57
Wells Avenue, Newton, Massachusetts ("7/57 Wells"), and 75/85/95 Wells
Avenue, Newton, Massachusetts ("75/85/95 Wells");
WHEREAS, Wells Avenue Senior Holdings LLC is the owner of the four
story office building condominium unit located in Dedham, Massachusetts, and
designated as "Unit O" in, and created by, that certain Master Deed of
Dedham Place Condominium made by Dedham Place Associates Joint Venture, and
recorded in the Norfolk County Registry of Deeds on November 27, 1991 at
Book 9118, Page 376 et. al. ("Dedham Place");
WHEREAS, 150 Wells Avenue Realty Trust owns fee simple title to
the property located at 150 Wells Avenue, Needham, Massachusetts ("150
Wells");
WHEREAS, River Park Realty Trust owns fee simple title to the
property located at 72 River Park, Needham, Massachusetts ("72 River Park");
WHEREAS, Wells Avenue Holdings LLC owns 100% of Seventy Wells
Avenue Inc. and owns a 99% interest in Seventy Wells Avenue LLC, and Seventy
Wells Avenue Inc. owns a 1% interest in Seventy Wells Avenue LLC;
WHEREAS, Seventy Wells Avenue LLC owns fee simple title to the
property located at 70 Wells Avenue, Newton, Massachusetts ("70 Wells");
WHEREAS, Newton Acquisition LLC I owns fee simple title to the
property located at 160 Wells Avenue, Newton, Massachusetts ("160 Wells");
WHEREAS, Saracen Portland LLC owns fee simple title to the
property located at 2331 Congress Street, Portland, Maine ("2331 Congress");
WHEREAS, KSA Newton Acquisition Limited Partnership II owns fee
simple title to the property located at 60 Turner Street, Waltham,
Massachusetts ("60 Turner");
WHEREAS, KSA Newton Limited Partnership I owns fee simple title to
the property located at 74 Turner Street, Waltham, Massachusetts ("74
Turner");
WHEREAS, Dominic J. Saraceno owns fee simple title to the property
located at 100 Wells Avenue, Waltham, Massachusetts ("100 Wells");
WHEREAS, Saracen Properties Inc. indirectly owns an interest in,
and controls, Wells Avenue Holdings LLC, which entity owns Wells Avenue
Senior Holdings, Inc., and Wells Avenue Holdings LLC and Wells Avenue Senior
Holdings, Inc., in turn, collectively own Wells Avenue Senior Holdings LLC;
WHEREAS, Saraceno Holding Trust General Partnership is the manager
of, and owns 99% of the member interests in, Wells Avenue Holdings LLC, and
Pacific Preferred LLC owns a 1% member interest in Wells Avenue Holdings
LLC;
WHEREAS, Contributee (as hereinafter defined) owns 100% of the
member interests in WEL/WH 1275 K Street L.L.C., and WEL/WH 1275 K Street
L.L.C., in turn, owns fee title to those certain properties commonly known
as 300 Atrium Drive, 400 Atrium Drive, 500 Atrium Drive and 700 Atrium
Drive, Franklin, New Jersey; 1275 K Street, Washington, D.C.; 1800 Valley
Road, Wayne, New Jersey; and Greenbrook Corporate Center located at 90-100
Passaic Avenue, Fairfield, New Jersey;
WHEREAS, Contributee owns, in addition to certain other
properties, fee title to those certain properties commonly known as One
Cyanamid Plaza (a/k/a Pointview), Wayne, New Jersey; 1700 Valley Road,
Wayne, New Jersey; and 26 Main Street, Chatham, New Jersey;
WHEREAS, each of the Contributor Property Owners (as hereinafter
defined), other than Wells Avenue Senior Holdings LLC and Seventy Wells
Avenue LLC, has agreed to contribute or otherwise convey to Contributee all
of the Contributor Property Owners' respective right, title and interest in
and to their respective Contributor Properties (as hereinafter defined), and
Contributee has agreed to accept the contribution and conveyance of such
Contributor Properties, subject to the terms and conditions hereof;
WHEREAS, Saracen Properties, Inc. has agreed to cause Saraceno
Holding Trust General Partnership to contribute or otherwise convey its
member interests in Wells Avenue Holdings LLC to Contributee, and
Contributee has agreed to accept the contribution and conveyance of such
interests, subject to the terms and conditions hereof;
WHEREAS, in connection with the transactions contemplated herein,
Contributee has agreed to (i) issue to the Saracen Members (as hereinafter
defined) certain member interests in Contributee, (ii) pay a specified sum
to Contributee and (iii) accept title to the Contributed LLC Interests (as
hereinafter defined) and the Contributor Properties subject to certain
existing liens and encumbrances, all as more particularly set forth in this
Agreement and in the Operating Agreement Amendment (as hereinafter defined);
WHEREAS, in connection with the transactions contemplated herein,
Contributee has agreed to (i) engage Asset Manager (as hereinafter defined)
as the asset manager for the Contributor Properties, pursuant to the Asset
Management Agreement (as hereinafter defined) and (ii) engage Property
Manager (as hereinafter defined) as the property manager for the Contributor
Properties, pursuant to the Property Management Agreement (as hereinafter
defined); and
WHEREAS, certain of the actions, steps and procedures to be taken
and/or performed by Contributor and Contributee, and their respective
affiliates and Subsidiaries, to consummate the foregoing, are set forth in
the "Closing Steps Summary" annexed hereto as Exhibit A (the "Closing Steps
Summary").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, Contributor and Contributee
agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings indicated:
"Actual Knowledge" means (i) with respect to Contributor, the
actual (and not constructive or imputed) knowledge of Dominic J. Saraceno,
Kurt W. Saraceno and/or William F. Rand, III, without any separate
obligation on their part to make any independent investigation of the
matters being represented, warranted or certified, and (ii) with respect to
Contributee, the actual (and not constructive or imputed) knowledge of
Edward Lowenthal, Richard Previdi and/or Gregory Hughes, without any
separate obligation on their part to make any independent investigation of
the matters being represented, warranted or certified.
"Asset Management Agreement" means that certain Asset Management
Agreement dated as of the Closing Date between Contributee, as owner, and
Asset Manager, as the asset manager, with respect to the Contributor
Properties, in the form of Exhibit X annexed hereto.
"Asset Manager" means Saracen Partners LLC, a Massachusetts
limited liability company to be formed and owned by William F. Rand, III,
Dominic J. Saraceno, Kurt W. Saraceno and Cary G. Tarpinian, and to be
designated as the asset manager under the Asset Management Agreement.
"Brokers" has the meaning given in Section 16.
"Business Day" means any day other than (i) a Saturday or Sunday,
or (ii) a day on which banking institutions in the Commonwealth of
Massachusetts or the State of New York are authorized or obligated by law or
executive order to be closed.
"Cash Balance" has the meaning given in Section 3.1(j).
"Closing" and "Closing Date" have the respective meanings given in
Section 5.
"Closing Steps Summary" has the meaning given in the Recitals.
"Companies" means, collectively, Wells Senior, Wells Avenue
Holdings LLC, Wells Avenue Senior Holdings, Inc., Seventy Wells Avenue Inc.
and Seventy Wells Avenue LLC, and each is individually called a "Company".
"Condominium" means Dedham Place Condominium.
"Condominium Documents" means, collectively, (i) that certain
Master Deed of Dedham Place Condominium (and all exhibits annexed thereto)
made by Dedham Place Associates Joint Venture, and recorded in the Norfolk
County Registry of Deeds on November 27, 1991 at Book 9118, Page 376 et.
al., and (ii) the Dedham Place Condominium Trust and By-Laws dated November
20, 1991 and made by Dominic J. Saraceno, as trustee.
"Contributed LLC Interests" means the 99% member interests in
Wells Avenue Holdings LLC which are held as of the date hereof by Saraceno
Holding Trust General Partnership.
"Contributee" means Wellsford/Whitehall Properties, L.L.C., a
Delaware limited liability company.
"Contributee Properties" means those certain parcels of land
described on Exhibits D-1 through Exhibits D-11 annexed hereto, and the
buildings and improvements located on such land, which properties are
commonly known as 300 Atrium Drive, 400 Atrium Drive, 500 Atrium Drive and
700 Atrium Drive, Franklin, New Jersey; 1275 K Street, Washington, D.C.; One
Cyanamid Plaza, Wayne, New Jersey; 1700 Valley Road, Wayne, New Jersey; 1800
Valley Road, Wayne, New Jersey; Greenbrook Corporate Center located at 90-
100 Passaic Avenue, Fairfield, New Jersey; and 26 Main Street, Chatham, New
Jersey. Each such property is herein individually called a "Contributee
Property".
"Contributee Property Owners" means, collectively, the Term Loan
Borrower and Contributee, and "Contributee Property Owner" means each of the
Term Loan Borrower and Contributee, individually.
"Contributee's Representation Certificate" has the meaning given
in Section 9.1.
"Contributor's Representation Certificate" has the meaning given
in Section 9.1.
"Contribution Amount" has the meaning given in Section 3.1.
"Contributor" means, collectively, Saracen Properties, Inc., a
Massachusetts corporation; Dominic J. Saraceno, an individual; Saraceno
Holding Trust General Partnership, a Massachusetts general partnership; 150
Wells Avenue Realty Trust, a Massachusetts nominee trust; River Park Realty
Trust, a Massachusetts nominee trust; Seventy Wells Avenue LLC, a
Massachusetts limited liability company; Newton Acquisition LLC I, a
Massachusetts limited liability company; Saracen Portland L.L.C., a Maine
limited liability company; KSA Newton Acquisition Limited Partnership II, a
Massachusetts limited partnership, and KSA Newton Limited Partnership I, a
Massachusetts limited partnership.
"Contributor Liquidated Damages Promissory Note" means that
certain promissory note dated as of the date hereof, made by Dominic J.
Saraceno and Kurt W. Saraceno in the original principal amount of
$1,000,000.
"Contributor Properties" means, collectively, the Nomura
Properties and the Non-Nomura Properties. Each such property is herein
individually called a "Contributor Property".
"Contributor Property Owners" means, collectively, 150 Wells
Avenue Realty Trust, River Park Realty Trust, Seventy Wells Avenue LLC,
Newton Acquisition LLC I, Saracen Portland L.L.C.; KSA Newton Acquisition
Limited Partnership II, KSA Newton Limited Partnership I, Wells Senior, and
Dominic J. Saraceno; "Contributor Property Owner" means each of the
foregoing Persons.
"Dedham Place Condominium Unit" means the condominium unit
designated as "Unit O" in the Condominium Documents, together with a 51%
appurtenant interest in the common areas and facilities of the Condominium.
"Deposit" shall have the meaning ascribed thereto in the Option
Agreement.
"Dollars" or "$" means lawful currency of the United States of
America, and all sums payable by either party to the other pursuant to this
Agreement shall be paid in Dollars.
"Environmental Law" shall mean any and all federal, state and
local statutes, laws, regulations, rules, orders, decrees, permits,
authorizations, judicial or administrative opinions, common law and agency
requirements relating to the protection of human health or the environment,
hazardous substances or indoor air quality.
"Escrow Agent" shall mean Robinson Silverman Pearce Aronsohn &
Berman LLP.
"Existing Non-Nomura Mortgage Indebtedness" means those certain
mortgage loans described on Exhibit K annexed hereto.
"First Loan" means that certain loan in the original principal
amount of $250,000 made by Contributee to Dominic J. Saraceno and Kurt W.
Saraceno, evidenced by the First Loan Note, and made by Contributee on
January 28, 1998.
"First Loan Note" means that certain promissory note for $250,000,
dated January 28, 1998, made by Dominic J. Saraceno and Kurt W. Saraceno to
Contributee, and evidencing the First Loan.
"Fixed Rents" has the meaning given in Section 4.
"Governmental Authority" means (i) with respect to Contributor,
the United States, the State in which each Contributor Property is located,
each county in which each Contributor Property is located, and any political
subdivision, agency, authority, department, court, commission, board, bureau
or instrumentality of any of the foregoing which has or is asserting
jurisdiction over any of the parties hereto or over any of the Contributor
Properties, and (ii) with respect to Contributee, the United States, the
State in which each Contributee Property is located, each county in which
each Contributee Property is located, and any political subdivision, agency,
authority, department, court, commission, board, bureau or instrumentality
of any of the foregoing which has or is asserting jurisdiction over any of
the parties hereto or over any of the Contributee Properties.
"Hazardous Substances" shall mean any substance in any
concentration which is listed, classified or regulated pursuant to any
Environmental Law including, but not limited to, (A) any petroleum products
or by-products, asbestos containing materials, polychlorinated biphenyls,
lead containing materials, radioactive materials, radon or solid waste; and
(B) any other substance where handling or exposure is prohibited, limited or
regulated because of potential risks to human health, safety or the
environment; provided that, the term "Hazardous Substances" shall not
include any cleaning products, copy machine fluids and other substances
commonly used in the maintenance or operation of a building similar to the
Contributor Properties or the Contributee Properties, to the extent that
such substances are used and stored in compliance with all applicable laws.
"Improvements" means all buildings and all other improvements of
every kind and nature located on the Land, including, without limitation,
heating and air conditioning systems, furnaces, engines, pipes, pumps,
tanks, motors, conduits, switch boards, plumbing, lifting, fire prevention,
fire extinguishing and refrigerating equipment and apparatus (provided,
however, that with respect to Dedham Place only, Improvements shall not
include any facilities and/or improvements which are a part of the common
areas and common facilities of the Condominium).
"Indebtedness" means, with respect to any Person, (i) all
indebtedness and obligations of or assumed by such Person in respect of
money borrowed (including any indebtedness which is nonrecourse to the
credit of such Person but which is secured by a Lien on any asset of such
Person) or evidenced by a promissory note, bond, debenture, letter of credit
reimbursement agreement or other written obligations to pay money for
borrowed money, (ii) any indebtedness or obligation of others secured by a
Lien on any asset of such Person, whether or not such indebtedness or
obligation is assumed by such Person; (iii) any guaranty, endorsement,
suretyship or other undertaking pursuant to which such Person may be liable
on account of any obligation of any third party other than a Subsidiary;
(iv) indebtedness for the deferred purchase price of property or services;
(v) obligations of such Person incurred in connection with entering into a
Lease which, in accordance with generally accepted accounting principles,
should be capitalized; and (v) the indebtedness or obligations of a
partnership or joint venture in which such person is a general partner or
joint venturer.
"Intangible Personal Property" means, collectively, (i) rights to
unpaid condemnation or insurance proceeds and other awards or compensation
arising from any taking, casualty or disposition, (ii) the right in and to
the use of any and all property names and logos which are specific to one or
more of the Contributor Properties (such as, by way of example, "Dedham
Place" and "Technology Center"); provided, however, that the foregoing shall
not include in any manner any interest in or to any of (x) tradenames or
trademarks of tenants or other third parties not controlled by Contributor,
(y) the name "Saracen", "Saracen Properties" or any other name or tradename
using the name "Saracen" or the like, or (z) any related logos of Saracen,
Saracen Properties, Saracen Companies and the like; (iii) all licenses,
consents and approvals required to make use of utilities serving the
Contributor Properties (or any of them), (iv) loans made by Contributor (or
any of the separate entities or persons constituting Contributor) to tenants
in lieu of tenant improvement allowances or similar inducements for any such
tenant's Lease and (v) any other intangible personal property of every kind
and character appurtenant to the ownership and use of the Contributor
Properties or any Contributor Property.
"Land" means the parcels of land described on Exhibit B-1 through
B-13 annexed hereto and made a part hereof.
"Lazard" means Lazard Freres Real Estate Fund II L.P., or any
successor holder of the Lazard Mezzanine Loan.
"Lazard Consent" shall have the meaning ascribed thereto in the
Option Agreement.
"Lazard Estoppel Certificate" means an estoppel certificate from
Lazard with respect to the Lazard Mezzanine Loan, substantially in the form
annexed hereto as Exhibit L-1.
"Lazard Mezzanine Loan" means that certain loan in the original
principal amount of $21,387,000 made by Lazard Freres Real Estate Fund II
L.P. to Wells Avenue Holdings LLC.
"Lazard Mezzanine Loan Documents" means the documents and
instruments described on Exhibit M annexed hereto.
"Leases" means the leases, licenses and occupancy agreements
(including all modifications and amendments thereto and all subleases) for
space in the Contributor Properties or the Contributee Properties, as the
case may be.
"Lender" means, collectively, BankBoston, N.A., Goldman Sachs
Mortgage Company, and other lending institutions which may become parties
from time to time to that certain Revolving Credit Agreement executed in
connection with the Revolving Credit Loan and/or that certain Term Loan
Agreement executed in connection with the Term Loan.
"LF Member" means Pacific Preferred LLC, a New York limited
liability company, in its capacity as a member of Wells Avenue Holdings LLC
under the Wells Avenue Operating Agreement, or any successor holder of such
member interests.
"LF Redemption Amount" means the amount necessary to purchase or
otherwise redeem in full the member interest of the LF Member in Wells
Avenue Holdings LLC.
"Lien" means any lien, mortgage, charge, restriction, option,
right of first refusal or offer, contractual restriction on transfer,
security interest, tax lien, pledge, encumbrance, conditional sale or title
retention agreement, or other claim of any kind or nature against any real
or personal property securing any Indebtedness, or any agreement to create
or confer any of the foregoing, in each case whether arising by agreement or
under any statute or law or otherwise.
"Liquidated Sum Amount" means an amount equal to Five Hundred
Thousand ($500,000) Dollars.
"Liquidated Sum Title Exception" means a Title Exception that
arises on or after the date of this Agreement, but on or prior to the
Closing Date, which can be discharged solely by the payment of a liquidated
sum of money; provided, however, that the term "Liquidated Sum Title
Exception" as used in this Agreement shall not include the following: (i)
any Voluntary Title Exceptions; (ii) any Title Exceptions that are expressly
and specifically approved by Contributee in writing; and (iii) any Permitted
Exceptions.
"Membership Units" has the meaning ascribed thereto in the
Operating Agreement.
"NACC Member" means Property Acquisition Trust I, a Delaware
business trust, in its capacity as a special member of Wells Avenue Holdings
LLC under the Wells Avenue Operating Agreement, or any successor holder of
such member interests.
"NACC Redemption Amount" means the amount necessary to purchase or
otherwise redeem in full the member interest of the NACC Member in Wells
Avenue Holdings LLC.
"Nomura" means Nomura Asset Capital Corporation, and/or Amresco
Management Inc. acting in its capacity as the loan servicer for the Nomura
Loan, and/or any successor servicer of the Nomura Loan (acting in its
capacity as the loan servicer for the Nomura Loan), as the case may be.
"Nomura Consent" shall have the meaning ascribed thereto in the
Option Agreement.
"Nomura Estoppel Certificate" means an estoppel certificate from
Nomura, with respect to the Nomura Loan, substantially in the form annexed
hereto as Exhibit L.
"Nomura Loan" means that certain loan made by Nomura to Wells
Senior in the original principal amount of $69,000,000, as evidenced by the
Nomura Loan Documents.
"Nomura Loan Documents" means the documents and instruments
described on Exhibit C annexed hereto.
"Nomura Properties" means, collectively, (x) each of the parcels
of Land described on Exhibits B-1 through Exhibits B-5 annexed hereto and
the Improvements located on such Land and (y) the Dedham Place Condominium
Unit and all of the Appurtenant Interests (as such term is defined in the
Condominium Documents) relating to the Dedham Place Condominium Unit; each
of the foregoing being commonly known, respectively, as 333 Elm Street,
Norfolk, Massachusetts; 128 Technology Center, Westwood, Massachusetts; 201
University Avenue, Westwood, Massachusetts; 7/57 Wells Avenue, Newton
Massachusetts; 75/85/95 Wells Avenue, Newton, Massachusetts; and Dedham
Place, Dedham, Massachusetts.
"Non-Nomura Properties" means, collectively, each of the parcels
of Land described on Exhibits B-6 through Exhibits B-13 annexed hereto and
the Improvements located on such Land, and commonly known as 150 Wells
Avenue, Needham, Massachusetts; 72 River Park, Needham, Massachusetts; 70
Wells Avenue, Newton, Massachusetts; 100 Wells Avenue, Waltham,
Massachusetts; 160 Wells Avenue, Newton, Massachusetts; 2331 Congress
Street, Portland, Maine; 60 Turner Street, Waltham, Massachusetts; and 74
Turner Street, Waltham, Massachusetts.
"Non-Nomura Property Owners" means, collectively, all of the
Contributor Property Owners other than Wells Senior, and "Non-Nomura
Property Owner" means, individually, each of Contributor Property Owners
other than Wells Senior.
"Operating Agreement" means the limited liability company
operating agreement of Contributee dated as of August 28, 1997, as the same
may be amended from time to time after the date hereof and prior to the
Closing Date, provided that such amendment would have been permitted under
the provisions of Section 12.1 of the Operating Agreement Amendment (i.e.,
as if Section 12.1 of the Operating Agreement Amendment were in effect for
the benefit of the Saracen Members on the date hereof).
"Operating Agreement Amendment" means the amendment to the
Operating Agreement of Contributee (including with all exhibits and
schedules annexed thereto), dated as of the Closing Date, among the Saracen
Members, WCPT and Whitehall, the form of which agreement is annexed hereto
as Exhibit AD.
"Option Agreement" means that certain Option Agreement dated as of
the date hereof, between Contributor and Contributee with respect to this
Agreement.
"Organizational Documents" of a Person means (i) with respect to a
corporation, such Person's certificate of incorporation and by-laws, and any
shareholder agreement, voting trust or similar arrangement applicable to any
of such Person's authorized shares of capital stock, (ii) with respect to a
partnership, such Person's certificate of limited partnership, partnership
agreement, voting trusts or similar arrangements applicable to any of its
partnership interests, (iii) with respect to a limited liability company,
such Person's certificate of formation, limited liability company operating
agreement or other document affecting the rights of holders of limited
liability company interests, and (iv) with respect to a trust, such Person's
trust agreement, or any other document affecting the rights of the
trustee(s) and the beneficiaries of the trust.
"Overage Rent" has the meaning given in Section 4.
"Permits" means all governmental licenses, permits, approvals,
consents and certificates which are in effect on the Closing Date and are
required or used in connection with the ownership or operation of the
Contributor Properties and/or any Contributor Property.
"Permitted Exceptions" means (i) those matters of title which are
set forth on Exhibit N-1 through Exhibit N-14 annexed hereto and made a
part hereof, (ii) the Leases and rights of tenants thereunder as tenants
only, (iii) the standard printed exceptions to the ALTA extended coverage
title policy form (10-17-92 Form), (iv) with respect to the Nomura
Properties only, the Nomura Loan Documents, (v) subject to adjustment as
provided in Section 4, real estate taxes and water and sewer charges for the
current year, (vi) the affect of any laws, regulations, governmental actions
or governmental mandates affecting any one or more of the Contributor
Properties, and (vii) any other matters affecting title to any of the
Contributor Properties as of the date hereof, other than Liquidated Sum
Title Exceptions, Voluntary Title Exceptions and such other title matters
which (x) Contributor had Actual Knowledge of as of the date hereof and (y)
Contributee did not have Actual Knowledge of as of the date hereof (and
could not have discovered prior to the date hereof through the exercise of
reasonable due diligence activities).
"Person" means any individual, partnership, corporation, limited
liability company, trust or other legal entity.
"Property Management Agreement" means, collectively, (i) that
certain Property Management Agreement dated as of the Closing Date between
Wells Avenue Holdings LLC, as owner, and Property Manager, as the property
manager, with respect to the Nomura Properties, in the form of Exhibit Y-1
annexed hereto and (ii) that certain Property Management Agreement dated as
of the Closing Date between Contributee or an affiliate thereof, as owner,
and Property Manager, as the property manager, with respect to the Non-
Nomura Properties, in the form of Exhibit Y-2 annexed hereto.
"Property Manager" means Saracen Companies, LLC, a Massachusetts
limited liability company, which entity is to be designated as the property
manager under the Property Management Agreement.
"Records and Plans" means all of the following items relating to
the construction, improvement, ownership, use, maintenance, leasing and
operation of the Contributor Properties which are in the possession of
Contributor or Contributor's Subsidiaries, or their respective affiliates or
agents: (i) all files, correspondence, memoranda, operating manuals, logs
and similar records, including, without limitation, construction contracts
and other contracts and agreements entered into by or on behalf of
Contributor or its Subsidiaries; (ii) all structural reviews, environmental
assessments or audits, architectural drawings and engineering, geophysical,
soils, seismic, geologic, environmental (including any with respect to the
impact of materials used in the construction of the Improvements) and
architectural reports, studies and certificates; (iii) all preliminary,
final and proposed construction and building plans and specifications
(including elevations, floor plans, schematic design drawings, renderings,
working drawings, "as-built" drawings and structural calculations)
respecting the Improvements; and (iv) all accounting, financial and similar
books and records maintained by or on behalf of Contributor or its
Subsidiaries.
"Registration Rights Agreement" means that certain Registration
Rights Agreement to be entered into at the Closing among WCPT and each of
the Saracen Members, in the form annexed hereto as Exhibit AE.
"Revolving Credit Loan Documents" means the documents and
instruments described on Exhibit E annexed hereto.
"Revolving Credit Loan" means that certain revolving credit
facility made by Lender to Contributee in the maximum principal amount of
$150,000,000, as evidenced by the Revolving Credit Loan Documents.
"Saracen Members" means, collectively, Dominic J. Saraceno, Kurt
W. Saraceno, William F. Rand, III, Ingeborg B. Saraceno, Heidi Lawler, Leas
Saraceno, Stephen Davis, Edward Werner, Carleton G. Tarpinian and George
McLaughlin; each such Person is herein individually called a "Saracen
Member".
"Saracen Persons" means, collectively, Saracen Properties, Inc., a
Massachusetts corporation; Dominic J. Saraceno, an individual; 150 Wells
Avenue Realty Trust, a Massachusetts nominee trust; River Park Realty Trust,
a Massachusetts nominee trust; Seventy Wells Avenue LLC, a Massachusetts
limited liability company; Newton Acquisition LLC I, a Massachusetts limited
liability company; Saracen Portland L.L.C., a Maine limited liability
company; KSA Newton Acquisition Limited Partnership II, a Massachusetts
limited partnership; KSA Newton Limited Partnership I, a Massachusetts
limited partnership; Saraceno Holding Trust General Partnership, a
Massachusetts general partnership; Wells Avenue Holdings LLC, a
Massachusetts limited liability company; Wells Avenue Senior Holdings Inc.,
a Massachusetts corporation (and any successor thereto); and Wells Avenue
Senior Holdings LLC, a Massachusetts limited liability company; "Saracen
Person" means each of the foregoing.
"Second Loan" means that certain loan in the original principal
amount of $250,000 made by Contributee to Dominic J. Saraceno and Kurt W.
Saraceno, evidenced by the Second Loan Note, and made by Contributee
concurrently with its execution of the Option Agreement.
"Second Loan Note" means that certain promissory note for
$250,000, dated the same date as the Option Agreement, made by Dominic J.
Saraceno and Kurt W. Saraceno to Contributee, and evidencing the Second
Loan.
"Section 4.2(j) Letter" means that certain letter agreement, in
the form of Exhibit AF annexed hereto, referred to in Section 4.2(j) of the
Operating Agreement (as amended by the Operating Agreement Amendment).
"Series A Preferred Membership Units" has the meaning ascribed
thereto in the Operating Agreement Amendment.
"Service Contracts" means the service contracts, management
contracts, maintenance contracts, union contracts, concession agreements,
agency agreements and other written contracts or agreements (including all
modifications and amendments thereto) affecting one or more of the
Contributor Properties or the Contributee Properties (as the case may be) or
the operation thereof.
"Subsidiary" means (i) in the case of Contributor, any Person more
than 50% owned, directly or indirectly, by one or more of the entities
constituting Contributor, or any Person over which Contributor (or one or
more of the persons or entities constituting Contributor), has management
control and (ii) in the case of Contributee, any Person more than 50% owned,
directly or indirectly, by Contributee, or any Person over which Contributee
has management control.
"Tangible Personal Property" means all equipment, appliances,
tools, machinery, supplies, building material, furniture, fittings, fixtures
and articles of personal property affixed or attached to, installed or
placed in or upon and to be used for or useable in any present or future
enjoyment, occupancy or operation of the Improvements or the Land or any
part thereof (other than those items of personal property which are owned by
the Property Manager or any tenants of any part of the Contributor
Properties).
"Term Loan" means that certain term loan facility made by Lender
to Term Loan Borrower in the maximum principal amount of $225,000,000, as
evidenced by the Term Loan Documents.
"Term Loan Borrower" means WEL\WH 1275 K Street L.L.C, a Delaware
limited liability company.
"Term Loan Documents" means the documents and instruments
described on Exhibit F annexed hereto.
"Title Exception(s)" means any lien, encumbrance, security
interest, charge, reservation, lease, tenancy, easement, right-of-way,
encroachment, restrictive covenant, condition, limitation or other matter
affecting title to any of the Contributor Properties.
"Title Insurers" means (i) with respect to the Non-Nomura
Properties, Commonwealth Land Title Insurance Company and (ii) with respect
to the Nomura Properties, Chicago Title Insurance Company.
"Title Policies" has the meaning given in Section 11.1(c).
"Voluntary Title Exceptions" means Title Exceptions that are
knowingly and intentionally created by an instrument executed by any one or
more of the Contributor Property Owners after the date hereof, including any
mortgage lien; provided, however, that the term "Voluntary Title Exceptions"
as used in this Agreement shall not include the following: (i) any
Permitted Exceptions; (ii) any leases entered into after the date hereof, in
accordance with the terms of this Agreement; or (iii) any Title Exceptions
that are approved by Contributee in writing.
"Warranties" means all warranties and guaranties, express or
implied, given in connection with the acquisition, development,
construction, maintenance, repair, renovation or inspection of the
Contributor Properties or any Contributor Property.
"WCPT" means Wellsford Commercial Properties Trust.
"Wells Avenue Operating Agreement" means that certain Amended and
Restated Operating Agreement for Wells Avenue Holdings LLC, dated as of
March 27, 1997, as amended by (i) the First Amendment of Amended and
Restated Operating Agreement for Wells Avenue Holdings LLC, dated as of June
30, 1997 and (ii) the Second Amendment of Amended and Restated Operating
Agreement for Wells Avenue Holdings LLC, dated as of December ___, 1997.
"Wells Senior" means Wells Avenue Senior Holdings LLC.
"Whitehall" means WHWEL Real Estate Limited Partnership.
2. CONTRIBUTION AND CONVEYANCE.
2.1 Contribution of the Non-Nomura Properties (other than 70
Wells). Subject to the terms and conditions set forth in this Agreement,
Contributor agrees to contribute and otherwise convey to Contributee and
Contributee agrees to accept such contribution and conveyance from
Contributor, with respect to the following:
(a) the Non-Nomura Properties (other than 70 Wells);
(b) (i) all of the Tangible Personal Property listed on Exhibit J
annexed hereto and (ii) all of Contributor's right, title and interest in
and to all other Tangible Personal Property relating or in anyway
appertaining to the Non-Nomura Properties or any Non-Nomura Property (other
than 70 Wells);
(c) all of Contributor's right, title and interest in and to the
Service Contracts and the Leases in effect on the Closing Date and relating
to the Non-Nomura Properties or any Non-Nomura Property (other than 70
Wells) (including, subject to adjustment as set forth in Section 4 hereof,
all rents, issues and profits thereunder);
(d) all of Contributor's right, title and interest in and to any
strips and gores adjacent to each Non-Nomura Property (other than 70 Wells)
and any land lying in the bed of any right-of-way, street, road or avenue
opened or proposed, in front of or adjoining each Non-Nomura Property (other
than 70 Wells), to the center line thereof;
(e) all of Contributor's right, title and interest in and to all
of the easements, rights, privileges and appurtenances belonging or in any
way appertaining to the Non-Nomura Properties or any Non-Nomura Property
(other than 70 Wells);
(f) all of Contributor's right, title and interest in and to the
Intangible Personal Property relating or in anyway appertaining to the Non-
Nomura Properties or any Non-Nomura Property (other than 70 Wells);
(g) all of Contributor's right, title and interest in and to the
transferable Permits for the Non-Nomura Properties (other than 70 Wells);
(h) all of Contributor's right, title and interest in and to the
transferable Warranties relating or in any way appertaining to the Non-
Nomura Properties or any Non-Nomura Property (other than 70 Wells);
(i) all of Contributor's right, title and interest in and to any
unpaid awards for any taking by condemnation or any damage to any of the
Contributor Properties by reason of a change of grade of any street or
highway, or any award paid to any of the Contributors and not used or
applied by the Contributors to the restoration of the affected Contributed
Property(s); and
(j) all of Contributor's right, title and interest in and to any
unpaid proceeds for any damage to any of the Contributor Properties by
reason of a Casualty, or any proceeds paid to any of the Contributors and
not used or applied by the Contributors to the restoration of the affected
Contributor Property(s).
2.2 Contribution of the Contributed LLC Interests. Subject to
the terms and conditions set forth in this Agreement, Contributor agrees to
contribute and otherwise convey the Contributed LLC Interests to
Contributee, and Contributee agrees to accept such contribution and
conveyance of the Contributed LLC Interests from Contributor, in the manner
set forth in this Agreement and the Closing Steps Summary.
3. CONTRIBUTION AMOUNT.
3.1 Payment of the Contribution Amount. The consideration (the
"Contribution Amount") for (i) the contribution or other conveyance of the
Non-Nomura Properties to Contributee and (ii) the contribution or other
conveyance of the Contributed LLC Interests to Contributee, is ONE HUNDRED
FORTY ONE MILLION EIGHT HUNDRED FIFTY THOUSAND ($141,850,000.00) DOLLARS.
The Contribution Amount shall be paid at the Closing, subject to adjustments
and apportionments as provided in Section 4 hereof, as follows:
(a) By Escrow Agent releasing the Deposit to Contributor at the
Closing pursuant to the provisions of subsection 3.3(c) below;
(b) Seven Million Five Hundred Ninety Nine Thousand Nine Hundred
Ninety Four and 54/100 ($7,599,994.54) Dollars by Contributee issuing
to the respective Saracen Members, in accordance with the specified
allocations among the respective Saracen Members as set forth on
Exhibit AC annexed hereto (subject to any reallocation by Contributor
in accordance with subsection 6(al) below), 468,557 Membership Units in
Contributee (each such Membership Unit having, on the Closing Date, a
Deemed Value Per Membership Unit (as defined in the Operating Agreement
Amendment) of $16.22), as more particularly set forth in the Closing
Steps Summary and the Operating Agreement Amendment;
(c) Nineteen Million ($19,000,000) Dollars by Contributee issuing
to the Saracen Members, in accordance with the specified allocations
among the respective Saracen Members as set forth on Exhibit AC annexed
hereto, 760,000 Series A Preferred Membership Units (each such Series A
Preferred Membership Unit having, on the Closing Date, a liquidation
preference of $25.00 per unit), as more particularly set forth in the
Closing Steps Summary and the Operating Agreement Amendment;
(d) Sixty Eight Million Four Hundred Twenty Eight Thousand Five
Hundred ($68,428,500) Dollars (or such other amount as is equal to the
outstanding principal balance of the Nomura Loan on the Closing Date)
in connection with the Nomura Loan which is to remain outstanding after
the Closing;
(e) Twenty One Million Three Hundred Eighty Seven Thousand
($21,387,000) Dollars (or such other amount as is equal to the
outstanding principal balance of the Lazard Mezzanine Loan on the
Closing Date) in connection with the Lazard Mezzanine Loan;
(f) An amount equal to the aggregate of the outstanding principal
balance of all of the Existing Non-Nomura Mortgage Indebtedness as of
the Closing Date, by Contributor causing the Non-Nomura Properties to
be transferred to Contributee subject to the Liens securing the
Existing Non-Nomura Mortgage Indebtedness;
(g) $500,000 by Contributee forgiving the First Loan and the
Second Loan in full (said loans being deemed to be paid in full upon
Closing);
(h) The NACC Redemption Amount, by Contributee paying such sum to
Nomura in connection with redeeming the member interest of the NACC
Member in Wells Avenue Holdings LLC; and
(i) A cash payment (the "Cash Balance"), if any, subject to
adjustment pursuant to Section 4 below, equal to the excess of (i)
$141,850,000.00 less (ii) the sum of all of the amounts set forth or
otherwise described in clauses (a) through (h) of this subsection 3.1
above, by wire transfer of immediately available federal funds to an
account or accounts designated by Contributor in writing at least 5
Business Days prior to the Closing.
3.2 Allocation of the Contribution Amount. Contributor and
Contributee agree that the Contribution Amount shall be allocated among the
respective Contributor Properties in accordance with the Contribution Amount
allocations set forth on Exhibit G annexed hereto. The parties agree that
such allocation has been arrived at by a process of arm's length
negotiations, including the parties' best judgment as to the fair market
value of each respective Contributor Property. The parties agree to the
allocation as final and binding, and will consistently reflect those
allocations on their respective Federal, State and local tax returns. The
terms and provisions of this Section shall survive the Closing.
3.3 Escrow of Deposit and Promissory Notes. The Deposit, the
Contributor Liquidated Damages Promissory Note, the First Loan Note and the
Second Loan Note (said promissory notes being herein collectively called the
"Promissory Notes") shall be held, paid over and/or released (as the case
may be), by the Escrow Agent in accordance with the following provisions:
(a) Escrow Agent shall hold the Deposit in an interest-bearing
bank account (or as otherwise agreed in writing by Contributor, Contributee
and Escrow Agent) until the Closing or sooner termination of this Agreement.
Any interest earned on the Deposit shall be paid to the same party entitled
to be paid the Deposit hereunder (as and when such party is entitled to the
Deposit). If Contributor shall receive such interest, then Saracen
Properties, Inc. shall pay any income taxes thereon. If Contributee shall
receive such interest, then Contributee shall pay any income taxes thereon.
For purposes hereof, the tax identification number of Saracen Properties,
Inc. is 04-3206720, and the tax identification number of Contributee is 13-
3962848.
(b) Prior to the execution of this Agreement by Contributee,
Escrow Agent has been holding the First Loan Note, the Second Loan Note and
the Contributor Liquidated Damages Promissory Note (collectively, the
"Promissory Notes") in escrow pursuant to the terms of the Option Agreement.
Upon the effective exercise of the option under and pursuant to the terms of
the Option Agreement, the Option Agreement terminates by its terms, and
Escrow Agent shall thereafter continue to hold the Promissory Notes in
escrow pursuant to the terms of this Agreement.
(c) Upon the Closing, the Deposit and the interest accrued
thereon, if any, shall be paid by Escrow Agent to Contributor (or as
Contributor shall direct in writing to Contributee and Escrow Agent). In
addition, upon the Closing Escrow Agent shall mark the Promissory Notes as
"Cancelled" and shall release the Promissory Notes to Contributor.
(d) If for any reason the Closing does not occur, then either
party hereto may make a written demand (the "Demand Notice") upon Escrow
Agent for payment of the Deposit and/or the release of the Promissory Notes.
The party giving such Demand Notice shall specify therein the basis for such
demand. If Escrow Agent receives such Demand Notice, then within two (2)
Business Days after its receipt of the Demand Notice Escrow Agent shall
deliver a copy of such Demand Notice to the other party to this Agreement.
If, within five (5) Business Days after such other party's receipt from
Escrow Agent of a copy of the Demand Notice, Escrow Agent does not receive
from such other party a written objection (the "Objection Notice") to the
proposed payment of the Deposit and/or the release of the Promissory Notes,
then Escrow Agent is hereby authorized to make, and promptly thereafter
shall make, such payment and release. The party giving such Objection
Notice shall specify therein the basis for such objection. If Escrow Agent
does receive such Objection Notice within such five (5) Business Day period,
then Escrow Agent shall continue to hold the Deposit and the Promissory
Notes in escrow until otherwise directed by joint written instructions from
both Contributor and Contributee or a final judgment of a court of competent
jurisdiction.
(e) Contributor and Contributee acknowledge that Escrow Agent is
acting solely as a stakeholder at their request and for their convenience,
that Escrow Agent shall not be deemed to be the agent of either of the
parties, and that Escrow Agent shall not be liable to either of the parties
for any act or omission on its part unless taken or suffered in bad faith,
in willful disregard of this Agreement or involving gross negligence. Each
of Contributor and Contributee shall indemnify and hold Escrow Agent
harmless from and against one-half (1/2) of all costs, claims and expenses,
including reasonable attorneys' fees, incurred in connection with the
performance of Escrow Agent's duties hereunder, except with respect to
actions or omissions taken or suffered by Escrow Agent in bad faith, in
willful disregard of this Agreement or involving gross negligence on the
part of Escrow Agent.
(f) Escrow Agent may consult with counsel of its choice, and
shall not be liable for any action taken, suffered or omitted by it in good
faith and in accordance with the advice of such counsel. Escrow Agent shall
not be bound in any way by the terms of any other agreement to which
Contributor and Contributee are parties, whether or not it has knowledge
thereof, and Escrow Agent shall not in any way be required to determine
whether or not any other agreement has been complied with by Contributor,
Contributee or any other party thereto. Escrow Agent shall not be bound by
any modification, amendment, termination, cancellation, rescission or
supersession of this Agreement unless the same shall be in writing and
signed jointly by Contributor and Contributee and (i) acknowledged by Escrow
Agent or (ii) if and to the extent the same relates to or effects the Escrow
Agent or its obligations hereunder, agreed to in writing by Escrow Agent.
In the event that Escrow Agent shall be uncertain as to its duties or rights
hereunder or shall receive instructions, claims or demands which, in its
reasonable opinion, are in conflict with any of the provisions of this
Agreement, it shall be entitled to refrain from taking any action other than
to keep safely all property held in escrow until it shall jointly be
directed otherwise in writing by Contributor and Contributee, or by a final
judgment of a court of competent jurisdiction.
(g) Escrow Agent shall be fully protected in relying upon any
written notice, demand, certificate or document which it, in good faith,
believes to be genuine. Escrow Agent shall not be responsible or liable in
any respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any such notice,
demand, certificate or document.
(h) If Escrow Agent at any time, in its sole discretion, deems it
necessary or advisable to relinquish custody of the Deposit and the
Promissory Notes, it may do so by delivering the same to any other escrow
agent mutually acceptable to Contributor and Contributee, and if no such
escrow agent shall be selected, then Escrow Agent may do so by delivering
the Deposit and the Promissory Notes to any court having jurisdiction and
bringing any action of interpleader or any other applicable proceeding.
Escrow Agent shall give written notice of such deposit to Contributor and
Contributee. Upon such delivery, Escrow Agent shall be discharged from any
and all responsibility or liability with respect to the Deposit and the
Promissory Notes.
(i) This Agreement shall not create any fiduciary duty on Escrow
Agent's part to Contributor or Contributee, nor disqualify Escrow Agent from
representing Contributee or any affiliate, principal, partner or member
thereof in any dispute with Contributor, including, without limitation, any
dispute with respect to this Agreement, the Deposit and/or the Promissory
Notes.
(j) In the event that the Closing does not occur, and either
party hereto shall commence litigation against the other with respect to the
Deposit and/or the Promissory Notes, or if the parties hereto do not
otherwise agree, in writing, as to which party is entitled to receive the
Deposit and the Promissory Notes, then the losing party in such action (or,
if no such action is commenced, the party who ultimately does not receive
the Deposit and the Promissory Notes) shall reimburse the prevailing party
for all reasonable attorneys' fees and disbursements incurred by such
prevailing party with respect to such action or disagreement.
(k) Whenever Escrow Agent is obligated to release any one or more
of the Promissory Notes and/or the Deposit (and any interest accrued
thereon) to Contributor, then Escrow Agent shall release the requisite
Promissory Notes, and the Deposit and such accrued interest directly to
Saracen Properties, Inc. as the duly authorized and appointed agent and
representative of all of the Saracen Persons constituting Contributor. Each
of the Saracen Persons constituting Contributor hereby irrevocably appoints
and designates Saracen Properties, Inc. as its duly authorized agent and
representative to accept such receipt from Escrow Agent of such Promissory
Notes and/or the Deposit (and any interest accrued thereon) under this
Agreement.
(l) Escrow Agent has acknowledged its agreement to the foregoing
provisions of this Section 3.3 by signing in the place indicated on the
signature page of this Agreement.
4. ADJUSTMENTS. On the Closing Date, Contributor and Contributee
shall collectively determine and calculate, with respect to (i) each
Contributor Property, (ii) the Nomura Loan (iii) the Existing Non-Nomura
Mortgage Indebtedness, (iv) the Lazard Mezzanine Loan, (v) the LF Redemption
Amount, and (vi) certain other items expressly set forth herein, the
adjustments and prorations with respect to the items set forth below. Such
adjustments and prorations shall be calculated effective as of 11:59 P.M. on
the day preceding the Closing Date, based upon a 365 day year, and the net
amount thereof shall be added to (if such net amount is in Contributor's
favor) or deducted from (if such net amount is in Contributee's favor) the
Cash Balance of the Contribution Amount. If the net amount in favor of
Contributee exceeds the amount of the Cash Balance, then the amount of such
excess shall be paid by Contributor at Closing. Prior to the Closing,
Contributee and Contributor shall cause their respective accountants to
prepare a preliminary schedule of adjustments, which schedule shall be
finalized on or prior to the Closing Date. If, however, the amounts of any
of the adjustment items are not determinable by the Closing Date, then such
adjustments shall be determined as soon as practicable following the Closing
when such adjustments can be determined, and the requisite net amount shall
be paid by Contributee to Contributor, or by Contributor to Contributee, as
the case may be, within 10 days after such adjustment amounts have been
determined. Any errors or omissions in computing adjustments on the Closing
Date (calculated as of the day prior to the Closing Date) shall be promptly
corrected, provided that the party seeking to correct such errors or
omissions shall have notified the other party of such errors or omissions on
or prior to the date that is twelve (12) months following the Closing Date.
The provisions of this Section 4 shall survive the Closing for fifteen (15)
months following the Closing Date.
(a) Fixed Rents.
(i) Fixed rents, base rents, minimum rents or basic rentals
payable in fixed installments for stated periods (collectively, "Fixed
Rents") paid or payable by tenants under the Leases in connection with their
occupancy of all or any portion of the Contributor Properties shall be
adjusted and prorated on an if, as and when collected basis. For purposes
of this subsection (a), any Fixed Rents with respect to the Nomura
Properties which have been deposited into the Deposit Account (as such term
is defined in the Nomura Loan Documents) prior to the Closing Date shall be
deemed to have been received by or on behalf of Contributor, and any such
Fixed Rents which have been deposited into the Deposit Account from and
after the Closing shall be deemed to have been received by or on behalf of
Contributee.
(ii) Any Fixed Rents collected by or on behalf of Contributee
or Contributor after the Closing from tenants of all or any part of the
Contributor Properties who owe Fixed Rents relating to periods prior to the
Closing, shall be applied as follows:
- first, in payment of Fixed Rents for the month in which the Closing
Date occurs, to be apportioned between Contributor and Contributee as
of the Closing Date,
- second, in payment of Fixed Rents then due and payable for the
period (if any) after the month in which the Closing Date occurs
through the end of the month in which such amount is collected, and
- third, in payment of Fixed Rents for the period prior to the month
in which the Closing Date occurs.
(iii) Each such amount, less any reasonable costs of
collection (including reasonable counsel fees) reasonably allocable thereto,
shall be adjusted and prorated as provided above, and the party who receives
such amount shall promptly pay over to the other party the portion thereof
to which it is so entitled. In furtherance and not in limitation of the
preceding provisions of this subsection (a), with respect to any tenant
which has paid all Fixed Rents due and payable to the Closing Date, if,
prior to the Closing, Contributor shall receive any prepaid Fixed Rents from
such tenant attributable to a period following the Closing, then, subject to
the netting of all adjustments under this Section 4, Contributee shall be
entitled to a payment equal to the amount of such prepaid Fixed Rents.
(b) Overage Rents.
(i) With respect to any Lease of all or any portion of the
Contributor Properties that provides for so-called common area maintenance
or "cam" charges, or provides for so-called "escalation rent", "operating
cost pass-throughs" or "expense reimbursements" based upon increases in real
estate taxes or operating expenses or labor costs or cost of living or
porter's wages or otherwise, or provides for the tenant to make additional
rent payments based upon real estate taxes or operating expenses (such cam
charges, additional rent, escalation rent, operating cost pass-throughs and
expense reimbursements being collectively called "Overage Rent"), such
Overage Rent shall be adjusted and prorated on an if, as and when collected
basis as provided in this Section 4(b). For purposes of this subsection
(b), any Overage Rents with respect to the Nomura Properties which have been
deposited into the Deposit Account (as such term is defined in the Nomura
Loan Documents) prior to the Closing Date shall be deemed to have been
received by or on behalf of Contributor, and any such Fixed Rents which have
been deposited into the Deposit Account from and after the Closing shall be
deemed to have been received by or on behalf of Contributee.
(ii) If the Closing Date shall occur prior to the time when
any such Overage Rent is payable, then such Overage Rent for the applicable
accounting period in which the Closing Date occurs shall be apportioned
subsequent to the Closing promptly after the collection thereof.
Contributee shall pay to Contributor the proportion of such Overage Rent
that the portion of such accounting period prior to the Closing Date bears
to the entire accounting period, less a like portion of all reasonable costs
and expenses (including reasonable attorneys fees and disbursements)
incurred by Contributee in collecting such Overage Rent, provided that the
tenant paying such Overage Rent has made all payments of Fixed Rents and
Overage Rents then due to Contributee pursuant to the terms of such tenant's
Lease.
(iii) With respect to any Overage Rent relating to an
accounting period that shall have expired prior to the Closing Date, but
which Overage Rent shall become payable after the Closing Date, Contributee
shall pay the entire amount over to Contributor upon Contributee's receipt
thereof, less the reasonable costs and expenses (including reasonable
attorneys' fees and disbursements) incurred by Contributee in collecting
such Overage Rent, provided that the tenant paying such Overage Rent has
made all payments of Fixed Rents and Overage Rents then due to Contributee
pursuant to the terms of such tenant's Lease.
(iv) If, prior to the Closing Date, Contributor shall have
collected any sums on account of Overage Rent for a year or other period, or
any portion of such period, beginning prior but ending subsequent to the
Closing Date, then such sum shall be apportioned as of the day preceding the
Closing Date. To the extent that any portion of the Overage Rent is
required by any Lease(s) to be paid monthly on account of estimated amounts
for the current period, and at the end of each calendar year (or, if
applicable, at the end of the applicable lease year), such estimated amounts
are to be recalculated based upon the actual expenses and other relevant
factors for that calendar (or lease) year, with the appropriate adjustments
being made with the tenant(s), then such portion of the Overage Rent shall
be prorated between Contributor and Contributee at the Closing based on the
estimated payments received to the Closing Date for the calendar or lease
year in which the Closing Date occurs. At the time(s) of final calculation
and collection from (or refund to) tenants under the Leases of the amounts
in reconciliation of actual Overage Rent for a period for which estimated
amounts have been prorated, there shall be a re-proration between
Contributor and Contributee, with the net credit resulting from such re-
proration being payable to the appropriate party (i.e., to Contributor if
the recalculated amounts exceed the estimated amounts and to Contributee if
the recalculated amounts are less than the estimated amounts).
(c) Taxes and Assessments. Except to the extent paid directly by
tenants pursuant to their Leases, all real estate taxes, assessments and
personal property taxes on the Contributor Properties shall be prorated
based upon the current actual tax bill. If the most current actual tax bill
which has been received by the Closing Date is not for the current tax year,
then, after the Closing, Contributee and Contributor shall re-prorate the
real estate taxes, assessments and/or personal property taxes (except to the
extent real estate taxes, assessments and/or personal property taxes are
paid directly by tenants pursuant to their Leases) as soon as the current
actual tax bill is available. All amounts payable for real estate taxes,
assessments and/or personal property taxes attributable for the period prior
to the Closing Date shall be the obligation of Contributor and all amounts
payable for real estate taxes, assessments and/or personal property taxes
attributable for the period from and after the Closing Date shall be the
obligation of Contributee. If, after the Closing Date, there is any change
to the amount of real estate taxes, assessments and/or personal property
taxes assessed against the Contributor Properties (or any of them) with
respect to the taxes and/or assessments payable prior to the Closing Date
(or payable with respect to an tax accounting period in which the Closing
occurs), by reason of back assessments, corrections to previous tax bills or
other events, then, except to the extent the same are directly paid by
tenants pursuant to their Leases, Contributee and Contributor shall
re-prorate the real estate taxes, assessments and/or personal property taxes
following the Closing to determine the appropriate credit to Contributor or
Contributee, as the case may be. The party owing such credit shall pay the
amount thereof to the other promptly after such re-proration is completed.
(d) Operating Expenses and Utilities. All service charges and
fees for sewer, water, electricity and other utilities, and any operating
costs incurred in the ordinary course of business in connection with the
normal operation of the Contributor Properties, that are not paid directly
by tenants pursuant to their Leases, shall be initially prorated as of the
Closing Date on an accrual basis based upon the most current available bills
or meter readings. Contributor shall be responsible for all such expenses
that are payable or accrue prior to the Closing and Contributee shall be
responsible for all such expenses which are payable or accrue from and after
the Closing. Contributor shall be credited as of the Closing Date with an
amount equal to any such expenses prepaid by Contributor which relate to the
period from and after the Closing Date. After the Closing Date, Contributee
and Contributor shall re-prorate the expenses as soon as the actual bills
are available.
(e) Nomura Loan. All interest and any other charges due under
the Nomura Loan for the period prior to the Closing Date shall be the
obligation of Contributor, and all interest and other charges due under the
Nomura Loan from and after the Closing Date shall be the obligation of
Contributee.
(f) Service Contracts. Except and to the extent prorated
pursuant to Section 4(d) above, charges and payments under all Service
Contracts relating to the Contributor Properties and being transferred to
Contributee at Closing shall be prorated as of the Closing on an accrual
basis.
(g) Permits. Except and to the extent prorated pursuant to
Section 4(d) above, periodic license and permit fees on transferable Permits
relating to the Contributor Properties shall be prorated as of the Closing
on an accrual basis.
(h) Miscellaneous Revenues. Revenues, if any, arising out of
telephone booths, vending machines, or other income-producing agreements
relating to the Contributor Properties shall be prorated as of the Closing
on an accrual basis.
(i) Bank Accounts of Wells Senior and Seventy Wells Avenue LLC.
At Closing, (i) Wells Senior shall retain all security deposits under the
Leases with respect to the Nomura Properties, including all interest thereon
(if and to the extent required pursuant to such Leases or applicable law),
and Contributor shall be entitled to all other amounts in the bank accounts
of Wells Senior and (ii) Seventy Wells Avenue LLC shall retain all security
deposits under the Leases with respect to 70 Wells, including all interest
thereon (if and to the extent required pursuant to such Leases or applicable
law), and Contributor shall be entitled to all other amounts in the bank
accounts of Seventy Wells Avenue LLC.
(j) Utility and Service Contract Deposits. Deposits under
transferred Service Contracts and transferable utility deposits relating to
the Contributor Properties shall be credited to Contributor, and from and
after the Closing, Contributor shall have no further right or interest in
and to any such deposits.
(k) Prepayments Fees and Costs in Connection with Prepaying the
Existing Non-Nomura Mortgage Indebtedness. Contributor acknowledges that
pursuant to the terms of the Closing Steps Summary, at the Closing
Contributee will refinance all of the Existing Non-Nomura Mortgage
Indebtedness with one or more loans from the Lender and/or BankBoston, N.A.
and/or Goldman Sachs Mortgage Company. In connection therewith, Contributee
shall receive a credit against the Contribution Amount in an amount equal to
the aggregate of all prepayment charges and fees (including, without
limitation, all sums in the nature of "yield maintenance" payments, charges
or fees), accrued and unpaid interest (including, without limitation, all
deferred interest), and all other costs, fees and expenses (including
lenders' attorneys' fees and disbursements and all recording fees and
charges necessary to discharge of record or otherwise transfer any security
interests securing the Existing Non-Nomura Mortgage Indebtedness or any part
thereof) payable by or on behalf of Contributee to or at the direction of
the respective lenders of the Existing Non-Nomura Mortgage Indebtedness in
connection with refinancing the Existing Non-Nomura Mortgage Indebtedness at
Closing, and Contributee shall pay (or shall cause its Lender to so pay) all
such amounts at Closing.
(l) Nomura Loan Reserves and Escrows. All amounts on deposit
with Nomura pursuant to the Nomura Loan Documents with respect to (i) the
Tax and Insurance Escrow Fund (as defined in the Nomura Loan Documents),
(ii) the Rollover Reserve Fund (as defined in the Nomura Loan Documents),
(iii) the Required Repair Fund (as defined in the Nomura Loan Documents),
(iv) the Capital Reserve Fund (as defined in the Nomura Loan Documents) and
(v) the Reserve (as such term is defined in that certain letter agreement
dated December 31, 1996 between Nomura Asset Capital Corporation and Wells
Senior regarding certain environmental matters, and hereinafter referred to
as the "Side Letter Reserve") shall be credited to Contributor; provided,
however, that such credit shall not exceed $374,000 in the aggregate in
respect of amounts contained in the applicable reserve funds and escrow
accounts described in items (iii), (iv) and (v) of this subsection (l).
(m) Escrows Under the Existing Non-Nomura Mortgage Indebtedness.
If (i) at the Closing there are any sums being held in escrow by the
respective lenders of the Existing Non-Nomura Mortgage Indebtedness and (ii)
such lenders agree to off-set the amounts of such escrows against the
outstanding principal balance and accrued and unpaid interest owed, as of
the Closing, in connection with the prepayment by Contributee of such
Existing Non-Nomura Mortgage Indebtedness at the Closing, then the amounts
of such escrows shall be credited to Contributor. In the event that any
such escrowed sums are not so off-set by such lenders against the amounts
necessary to prepay the Existing Non-Nomura Mortgage Indebtedness, and if at
any time after the Closing Contributee receives any such escrowed sums from
the respective lenders, then Contributee promptly shall remit such sums to
Contributor.
(n) Unfunded Tenant Allowances and Leasing Commissions.
Contributee shall be credited with an amount equal to the sum of (i) all
unfunded tenant allowances, and the amount necessary to complete all
uncompleted tenant work to be completed and paid for by the landlord, with
respect to Leases for the Contributor Properties in effect as of the date of
this Agreement (but, except as and to the extent set forth in the next
succeeding sentence, not with respect to any renewals, expansions,
extensions or replacements thereof exercised after the date hereof) and (ii)
all unpaid leasing brokerage commissions relating to Leases in effect as of
the date of this Agreement (but, except as and to the extent set forth in
the next succeeding sentence, not with respect to any renewals, expansions,
extensions or replacements thereof exercised after the date hereof), to the
extent that as of the Closing Date the same remain unpaid (and/or
unperformed in connection with any uncompleted tenant work to be completed
and paid for by the landlord) in connection with any of the Leases
(inclusive of all renewals, expansions, extensions or replacements thereof
exercised prior to the date hereof) relating to the Contributor Properties
and which are in effect as of the date of this Agreement. Notwithstanding
the foregoing, if, after the date of this Agreement and prior to the
Closing, (i) a tenant under a Lease existing as of the date of this
Agreement exercises a renewal option or an expansion option pursuant to the
terms of its Lease and (ii) such exercise triggers an obligation of the
landlord under such lease to pay for any tenant allowances or brokers'
commissions relating to the renewal of or expansion under, such Lease, or
triggers an obligation of the landlord to perform certain tenant work, then
the payment of such allowances and brokers' commissions, and the payment for
the cost of the tenant improvement work, shall be allocated between
Contributor and Contributee in the manner set forth in Section 13.2(c)
hereof as if such Lease were a new Lease.
(o) Common Expenses and Assessments With Respect to the
Condominium. All amounts attributable to common expenses and assessments
payable to the trustees under the Condominium Documents with respect to
Dedham Place, for the period prior to the Closing Date, shall be the
obligation of Contributor, and all amounts attributable to common expenses
and assessments payable to the trustees under the Condominium Documents with
respect to Dedham Place, for the period from and after the Closing Date,
shall be the obligation of Contributee.
(p) Prepayment Fee Adjustment for the Existing Non-Nomura
Mortgage Indebtedness Due to Exercise of Extension Right. For purposes of
this subsection 4(p), the following terms shall have the following meanings:
"Interest Rate Index" shall mean the interest rate index used to
calculate the applicable prepayment fee payable in connection with
prepaying any of the Existing Non-Nomura Mortgage Indebtedness and,
provided that such prepayment fee is calculated based upon a "yield
maintenance" type formula, where the applicable prepayment fee is
determined based upon the excess of the applicable loan interest rate
over an interest rate tied to a specified interest rate index (e.g. a
rate tied to U.S. Treasury Bills of a specified maturity);
"Old Interest Rate" shall mean the interest rate, using the applicable
Interest Rate Index, that would have applied in calculating an
applicable prepayment fee if the loan in question had been prepaid on
March 23, 1998;
"New Interest Rate" shall mean the interest rate, using the applicable
Interest Rate Index, that applies in calculating an applicable
prepayment fee where the loan in question is prepaid on the Closing
Date.
If (i) Contributor shall have exercised its right to extend the Option
Exercise Date (as defined in the Option Agreement) and the scheduled Closing
Date, in accordance with the terms of the Option Agreement, (ii) the
prepayment fee payable in connection with prepaying any of the Existing Non-
Nomura Mortgage Indebtedness is calculated based upon an Interest Rate
Index, and (iii) the interest rate for such Interest Rate Index in effect on
the extended Closing Date differs from the interest rate for such Interest
Rate Index that would have applied in calculating the prepayment fee if
Contributee had not so exercised its extension option, then the following
shall apply:
(A) to the extent that the prepayment fee payable on the Closing Date
for the loan in question, using the New Interest Rate, exceeds the
prepayment fee that would have been payable on the Closing Date if the
Old Interest Rate had applied on the Closing Date, then the Cash
Balance of the Contribution Amount shall be increased by such excess
amount; and
(B) to the extent that the prepayment fee payable on the Closing Date
for the loan in question, using the New Interest Rate, is less than the
prepayment fee that would have been payable on the Closing Date if the
Old Interest Rate had applied on the Closing Date, then the Cash
Balance of the Contribution Amount shall be decreased by the amount of
such difference.
(q) Certain Brokerage Commissions and Legal and Accounting Fees
Owed by Contributor. At the Closing Contributee shall receive a credit of
$1,500,000 against the Cash Balance in respect of Contributee's paying, at
Closing (i) $1,000,000 of the Broker's Fees pursuant to subsection 10.2(d)
below and (ii) $500,000 (in the aggregate) of Contributor's attorneys' fees
and accountants' fees pursuant to subsection 10.2(e) below.
(r) Lazard Mezzanine Loan. At the Closing Contributee shall
receive a credit against the Cash Balance in an amount equal to the sum of:
(i) all accrued and unpaid interest at the "pay rate" of 10% for the
period prior to the Closing Date,
(ii) all accrued and unpaid Additional Cash Flow Interest (as such term
is defined in the Lazard Mezzanine Loan Documents) for the period prior
to the Closing Date,
(iii) all other accrued and unpaid charges under the Lazard Mezzanine
Loan attributable to the period prior to the Closing Date, other than
any interest which is part of the Additional IRR Interest (as such term
is defined in the Lazard Mezzanine Loan Documents) and any charges
which are the express responsibility of Contributee pursuant to the
provisions of this subsection; and
(iv) an amount equal to the LF Redemption Amount.
All interest and other charges accrued under the Lazard Mezzanine
Loan and attributable to the period from and after the Closing Date shall be
the obligation of Contributee. In addition, all Additional IRR Interest (as
such term is defined in the Lazard Mezzanine Loan Documents) and all other
prepayment fees and charges payable in connection with any prepayment of the
Lazard Mezzanine Loan by Contributee at or after Closing (including any
prepayment fees or sums in the nature of "yield-maintenance" payments), or
any "buy-down" of the interest rate on the Lazard Mezzanine Loan by
Contributee (other than any sums described in the first sentence of this
subsection), shall be the obligation of Contributee.
If any portion of the Contribution Amount which is allocated to 70
Wells (as set forth on Exhibit G annexed hereto), in excess of the amount
necessary to pay in full the existing Non-Nomura Mortgage Indebtedness
encumbering 70 Wells, is deemed to be "Total Revenues" (as such term is
defined in the Lazard Mezzanine Loan Documents), and pursuant to the terms
of the Lazard Mezzanine Loan Documents, Contributor is required by Lazard to
apply such excess amount (herein called the "Excess Amount") to pay down any
accrued and unpaid Additional IRR Interest, then at Closing the Cash Balance
shall be increased by an amount equal to the Excess Amount.
(s) Other. Any other item which, under the terms of this
Agreement, is to be apportioned at Closing shall be prorated as of the
Closing on an accrual basis.
5. CLOSING. (a) The Closing shall be held at the offices of
Robinson Silverman Pearce Aronsohn & Berman LLP, 1290 Avenue of the
Americas, New York, New York 10104, at 10:00 a.m., on or about May 27, 1998
(such date, as the same may be extended by either party hereto pursuant to
the express terms of this Agreement, or as otherwise extended by mutual
agreement of the parties hereto, being herein called the "Closing Date").
For purposes of this Agreement, the "Closing" means the consummation of the
contribution and conveyance to Contributee of the Non-Nomura Properties, the
contribution and conveyance to Contributee of the Contributed LLC Interests
as contemplated by this Agreement and the Closing Steps Summary, the payment
of the Cash Balance by Contributee to Contributor (or to such Persons as
Contributor may direct in writing), the issuance to the Saracen Members of
the requisite Membership Units and the Series A Preferred Membership Units
described in Section 3 above, the execution and delivery of the documents
enumerated in Section 6 below, and the consummation of each of the steps and
actions set forth in this Agreement and/or in the Closing Steps Summary.
(b) TIME SHALL BE OF THE ESSENCE with respect to the respective
obligations of Contributor and Contributee to be performed on the Closing
Date. Notwithstanding the foregoing, if (i) either Contributor or
Contributee will not be able to perform its respective obligations hereunder
which are to be performed on the Closing Date, (ii) such inability is due to
one or more events or circumstances beyond the reasonable control of the
nonperforming party, and (iii) any such inability on the part of Contributee
does not relate to the Nomura Loan, the Lazard Mezzanine Loan, the Nomura
Consent and/or the Lazard Consent, then either party hereto may elect by
written notice to the other party hereto, to extend the Closing Date from
May 27, 1998 to a date which is not later than June 10, 1998. Such written
notice shall set forth the new Closing Date (which shall not be later than
June 10, 1998), and TIME SHALL BE OF THE ESSENCE with respect to such new
Closing Date.
6. CLOSING DELIVERIES. At the Closing the following shall occur:
(a) The Saracen Members, Whitehall and WCPT shall each execute
and deliver the Operating Agreement, as amended by the Operating Agreement
Amendment in the form annexed hereto as Exhibit AD, and Contributee shall
issue to the Saracen Members the requisite Membership Units and the Series A
Preferred Membership Units described in Section 3 above (it being
acknowledged that such issuance shall be evidenced by Schedule 5.1(h) of the
Operating Agreement Amendment, and Contributee will not be delivering
separate certificates in respect of such Membership Units or such Series A
Preferred Membership Units);
(b) Contributee shall pay the Cash Balance to such Persons as
Contributor shall direct in writing;
(c) Each of the Non-Nomura Property Owners (other than Seventy
Wells Avenue LLC with respect to 70 Wells) shall execute, acknowledge and
deliver to Contributee a Massachusetts quitclaim deed for its Non-Nomura
Property, substantially in the form of Exhibit O-1 annexed hereto and in
proper form for recording (except that the deed for 2331 Congress shall be a
Maine quitclaim deed with covenants, substantially in the form of Exhibit O-
2 annexed hereto), together with such signed transfer tax returns and/or
transfer tax affidavits as are required by applicable law in connection with
the conveyance of the Non-Nomura Properties (other than 70 Wells),
including, without limitation, the required Real Estate Transfer Tax form
required to be filed with the applicable County Registry of Deeds in Maine
in connection with the transfer of 2331 Congress;
(d) Contributor and Contributee shall each execute, acknowledge
and deliver to the other an instrument of assignment and assumption, in the
form of Exhibit P annexed hereto, duly executed, acknowledged and delivered
by Saraceno Holding Trust General Partnership and Contributee, sufficient to
(i) transfer to Contributee all of the Contributed LLC Interests, free and
clear of all liens and encumbrances affecting such member interests (other
than any liens securing the Lazard Mezzanine Loan) and (ii) provide that
Contributee shall assume all of the obligations of Saraceno Holding Trust
General Partnership under the operating agreement of Wells Avenue Holdings
LLC arising from and after the Closing Date.
(e) Contributor shall cause each of the Saracen Members to
execute and deliver the Section 4.2(j) Letter. Contributee shall execute
and deliver, and shall cause each of WCPT, Whitehall and Wellsford Real
Properties Inc. to execute and deliver, the Section 4.2(j) Letter.
(f) Each of the Non-Nomura Property Owners (other than Seventy
Wells Avenue LLC with respect to 70 Wells) shall duly execute, acknowledge
and deliver to Contributee a general bill of sale, in substantially the form
of Exhibit Q annexed hereto, conveying to Contributee all of such Non-Nomura
Property Owners' right, title and interest in and to the Tangible Personal
Property relating to their respective Non-Nomura Properties, free and clear
of all liens and encumbrances, other than the Permitted Exceptions;
(g) Each of the Non-Nomura Property Owners (other than Seventy
Wells Avenue LLC with respect to 70 Wells) and Contributee shall duly
execute, acknowledge and deliver an assignment and assumption of the Leases
in effect on the Closing Date with respect to the Non-Nomura Properties
(other than 70 Wells), in substantially the form of Exhibit R annexed
hereto, which provides for the assignment by each of such Non-Nomura
Property Owners of their respective right, title and interest as landlord in
and to such Leases and the assumption by Contributee of all of such Non-
Nomura Property Owners' obligations (including, without limitation, the
obligation to apply or remit each security deposit in accordance with the
terms of the applicable Lease) as landlord under such Leases arising from
and after the Closing Date;
(h) Each of the Non-Nomura Property Owners (other than Seventy
Wells Avenue LLC) and Contributee shall duly execute, acknowledge and
deliver an assignment and assumption of all pending tenant proceedings with
respect to the Leases for the Non-Nomura Properties (other than 70 Wells),
in the form of Exhibit S annexed hereto (including, without limitation, all
dispossess proceedings and/or rent arrearage proceedings) which provides for
the assignment by each of such Non-Nomura Property Owners of their
respective right, title and interest in and to such tenant proceedings and
the assumption by Contributee of all of such Non-Nomura Property Owners'
obligations as landlord with respect to such tenant proceedings arising from
and after the Closing Date (it being agreed that any tenant arrearages
collected in connection with such tenant proceedings, less all reasonable
costs and expenses incurred by Contributee in connection therewith, shall be
apportioned in accordance with the provisions of subsections 4(a) and 4(b)
above);
(i) Each of the Non-Nomura Property Owners (other than Seventy
Wells Avenue LLC) and Contributee shall duly execute, acknowledge and
deliver an assignment and assumption of Service Contracts, Permits,
Warranties and Intangible Personal Property with respect to the Non-Nomura
Properties (other than 70 Wells), in substantially the form of Exhibit T
annexed hereto, which assignment shall assign to Contributee all of the
right, title and interest of each of the Non-Nomura Property Owners (other
than Seventy Wells Avenue LLC) in and to the Service Contracts, the
transferable Permits, the transferable Warranties and the Intangible
Personal Property with respect to, or used in connection with, the Non-
Nomura Properties (other than 70 Wells) and the assumption by Contributee of
all of the Non-Nomura Property Owners' obligations (other than the
obligations of Seventy Wells Avenue LLC) under the same arising from and
after the Closing Date; in connection with the foregoing, each of the Non-
Nomura Property Owners (other than Seventy Wells Avenue LLC) shall at the
Closing deliver to Contributee notice letters to each of the contract
vendors whose Service Contracts are being assigned to Contributee, notifying
such vendors of the aforesaid assignment and assumption;
(j) The Non-Nomura Property Owners (other than Seventy Wells
Avenue LLC) shall each deliver to Contributee the security deposits held by
such Non-Nomura Property Owners under their respective Leases (together with
all accrued interest thereon, if any, which is payable to the applicable
tenants under applicable law or the terms of their respective Leases) by (i)
a credit to Contributee against the Cash Balance or (ii) assignment to
Contributee of any tenants' securities in form other than cash or bank
accounts by way of appropriate instruments of transfer or assignment in form
reasonably acceptable to Contributee and Contributor;
(k) Each of the Contributor Property Owners shall deliver to
Contributee the executed original counterparts or, to the extent executed
original counterparts are not in the possession of Contributor, its property
manager or the Contributor Property Owners, copies (certified by Contributor
as true and correct in all material respects) of all Leases and Service
Contracts relating to the Contributor Properties;
(l) Contributor shall duly execute and deliver to Contributee a
certification of non-foreign status, in form required by the Internal
Revenue Code Section 1445 and the regulations issued thereunder.
Contributor understands that such certification will be retained by
Contributee and will be made available to the Internal Revenue Service on
request;
(m) The Non-Nomura Property Owners (other than Seventy Wells
Avenue LLC) and Contributee shall jointly and duly execute notice letters,
in the form of Exhibit U annexed hereto and dated as of the date of Closing,
to the tenants under the Leases for the Non-Nomura Properties (other than 70
Wells), which notice letters shall (A) advise such tenants and other
entities of the conveyance, (B) to the extent applicable, advise such
tenants and other entities that their security deposit (or other form of
security), if any, and any interest thereon, has been transferred to
Contributee and that all obligations arising from and after the date of such
letter in connection with such security deposits shall thereafter be assumed
by Contributee, (C) set forth Contributee's name and address and the manner
in which future payments of rental are to be made and (D) direct the tenant
to name Contributee and the Property Manager as additional insureds under
any insurance the tenant is required to maintain under its Lease. Such
notice letters shall be retained by Contributee and delivered by Contributee
to each tenant and other such entity promptly following Closing;
(n) [Intentionally Deleted]
(o) Each of the Contributor Property Owners shall deliver to
Contributee written notices dated as of the Closing Date to all taxing
authorities having jurisdiction over the Contributor Properties changing the
address for service and delivery of statements and bills;
(p) Each of the Non-Nomura Property Owners (other than Seventy
Wells Avenue LLC) and Contributee shall jointly execute a letter to each of
the applicable utility companies for the Non-Nomura Properties (other than
70 Wells), in form and substance reasonably satisfactory to both Contributor
and Contributee, advising such utility companies of the termination of the
Non-Nomura Property Owners' responsibility (other than with respect to
Seventy Wells Avenue LLC) for such charges for utilities furnished to the
Non-Nomura Properties (other than 70 Wells) from and after the Closing;
(q) Each of the Contributor Property Owners shall deliver to
Contributee, by leaving same at the respective Contributor Properties,
originals or the best copies available to Contributor or the Contributor
Property Owners, of all Permits which are evidenced by a written document or
instrument;
(r) Contributor shall (or shall cause the respective Contributor
Property Owners to) deliver to Contributee possession of the Records and
Plans by leaving same at the respective Contributor Properties in the
location in which such Records and Plans are presently located;
(s) Contributor shall (or shall cause each of the respective
Contributor Property Owners to) deliver to Contributee all keys and entrance
cards to all of the doors and all parking passes to the Improvements (not
held by the tenants) and keys to any of the respective Contributor Property
Owners' Tangible Personal Property requiring same which are in
Contributor's, its property manager's or the respective Contributor Property
Owners' possession, by leaving same at the respective Contributor Property;
(t) Contributor shall deliver to Contributee a letter duly
executed by each of the Contributor Property Owners, terminating all
existing property management agreements and listing agreements (if any) with
respect to the Contributor Properties, which property management agreements
and listing agreements shall be identified in such letter;
(u) Contributor shall deliver to Contributee tenant estoppel
certificates, substantially in form of Exhibit V annexed hereto, duly
executed by tenants who in the aggregate represent both (i) not less than
75% of all of the tenants of the Contributor Properties and (ii) not less
than 90% of the total leased rentable square footage for all of the
Contributor Properties;
(v) Contributee shall deliver to Contributor tenant estoppel
certificates, substantially in form of Exhibit V annexed hereto, duly
executed by tenants who in the aggregate represent both (i) not less than
75% of all of the tenants of the Contributee Properties and (ii) not less
than 90% of the total leased rentable square footage for all of the
Contributee Properties;
(w) Contributor shall deliver to Contributee an opinion letter of
Contributor's counsel with respect to the matters set forth on Exhibit W-1
annexed hereto;
(x) Contributee shall deliver to Contributor an opinion letter of
Contributor's counsel with respect to the matters set forth on Exhibit W-2
annexed hereto;
(y) Each entity constituting Contributor shall deliver to
Contributee (i) a copy of its Organizational Documents, certified as true
and correct by an officer, a managing member, a general partner or a trustee
(as applicable) of each such entity and (ii) a certified copy of such
authorizing documents of each of the entities constituting Contributor as
are reasonably necessary to demonstrate that the transactions contemplated
hereby have been authorized by all necessary action of Contributor, and as
may be otherwise reasonably required by the Title Insurers at the Closing;
(z) Contributor shall deliver to Contributee (i) a copy of the
respective Organizational Documents in effect as of the Closing Date for
each of the Companies, certified as true and correct by an officer or
managing member (as applicable) of each respective Company, (ii) a certified
copy of such authorizing documents of each of the Companies as are
reasonably necessary to demonstrate that the transactions contemplated
hereby have been authorized by all necessary corporate action of each of the
Companies, and as may be otherwise reasonably required by the Title Insurers
at the Closing and (iii) all books and records of each of the respective
Companies;
(aa) Contributee shall deliver to Contributor (i) a copy of its
Organizational Documents, certified as true and correct by a member of such
entity and (ii) a certified copy of such authorizing documents of
Contributee as are reasonably necessary to demonstrate that the transactions
contemplated hereby have been authorized by all necessary action of
Contributee, and as may be otherwise reasonably required by the Title
Insurers at the Closing;
(ab) Contributor shall deliver to Contributee pay-off letters and
wiring instructions in form reasonably satisfactory to Contributor,
Contributee and the Title Insurers, dated not earlier than 10 days prior to
the Closing Date, from each of the holders of any portion of the Existing
Non-Nomura Mortgage Indebtedness, setting forth all sums necessary to pay
all of the Existing Non-Nomura Mortgage Indebtedness in full as of the
Closing Date (including all outstanding principal amounts, prepayment fees,
accrued and unpaid interest, per diem charges, lenders' attorneys' fees and
disbursements, etc.), together with such other documents (if any) that the
Title Insurers may reasonably require in order to issue the Title Policies
to Contributee without any exceptions for any mortgages, deeds of trust,
UCC-1 financing statements, pledge agreements, assignments of leases and
rents, security agreements, Liens or other security interests in connection
with or otherwise securing any of the Existing Non-Nomura Mortgage
Indebtedness
(upon payment by Contributee of the amounts set forth in such pay-off
letters relating to the Existing Non-Nomura Mortgage Indebtedness);
(ac) Contributor shall deliver to Contributee a pay-off letter
and wiring instructions, in form reasonably satisfactory to Contributor and
Contributee, dated not earlier than 10 days prior to the Closing Date, from
the NACC Member, specifying the amount necessary to pay the NACC Redemption
Amount as of the Closing Date;
(ad) Contributor shall execute and deliver to Contributee the
Contributor's Representation Certificate;
(ae) Contributee shall execute and deliver to Contributor the
Contributee's Representation Certificate;
(af) [Intentionally Deleted]
(ag) Contributee and the Asset Manager shall each execute and
deliver to the other the Asset Management Agreement in the form of Exhibit X
annexed hereto, Wells Avenue Holdings LLC and the Property Manager shall
each execute and deliver to the other the Property Management Agreement in
the form of Exhibit Y-1 annexed hereto (and Contributee shall execute such
agreement for certain limited purposes as set forth therein), and
Contributee (or 1275 K Street LLC, a wholly owned subsidiary of Contributee)
and the Property Manager shall each execute and deliver to the other the
Property Management Agreement in the form of Exhibit Y-2 annexed hereto;
(ah) Contributor and Contributee shall receive the Nomura
Estoppel Certificate, duly executed by Nomura or its authorized
representatives (provided, however, that the parties hereto acknowledge that
the Nomura Estoppel Certificate shall be deemed received even if such
estoppel certificate does not include any one or more of items (4) through
(9) set forth on Exhibit L, and/or even if such estoppel certificate does
not expressly state that Contributor, Contributee, the Lender, BankBoston,
N.A. and/or Goldman Sachs Mortgage Company may rely on the accuracy of the
statements set forth in the Nomura Estoppel Certificate);
(ai) Contributor and Contributee shall receive the Lazard Estoppel
Certificate, duly executed by Lazard or its authorized representatives
(provided, however, that the parties hereto acknowledge that the Lazard
Estoppel Certificate shall be deemed received even if such estoppel
certificate does not include any one or more of items (4) through (7) set
forth on Exhibit L-1, and/or even if such estoppel certificate does not
expressly state that Contributor, Contributee, the Lender, BankBoston, N.A.
and/or Goldman Sachs Mortgage Company may rely on the accuracy of the
statements set forth in the Lazard Estoppel Certificate);
(aj) Contributor shall deliver to Contributee a letter from each
of the Brokers, which letter shall set forth the full amount of all
commissions and fees due to such Broker in connection with the transactions
contemplated by this Agreement and the Closing Steps Summary, and stating
that no other sums are owed to such Broker in connection with such
transactions;
(ak) Contributor shall cause the trustees of the Condominium to
deliver to Contributee a certificate, on behalf of the Condominium, in the
form of Exhibit Z annexed hereto, together with a letter addressed to
Contributee stating that the owner of the Hotel Unit (as such term is
defined in the Condominium Documents) has paid all common charges and
assessments due and payable with respect to the Hotel Unit;
(al) Contributor shall deliver to Contributee
(i) a letter directing Contributee to issue the Membership Units and
the Series A Preferred Membership Units to the Saracen Members in the
respective allocated amounts set forth on Exhibit AC annexed hereto;
provided, however, that prior to Closing, Contributor shall have the
right to reallocate among the Saracen Members the number of Membership
Units and Series A Preferred Membership Units to be issued to each of
the respective Saracen Members (and thereby change the allocation
numbers set forth on Exhibit AC), so long as (x) Contributor delivers a
revised allocation statement, in the form of Exhibit AC, to Contributee
not less than 15 days prior to the Closing Date and (y) any such
reallocation shall not result in Dominic J. Saraceno having a
Percentage Interest (as such term is defined in the Operating Agreement
Amendment) (assuming for purposes of determining Dominic J. Saraceno's
Percentage Interest pursuant to this subsection only, all of his
outstanding Series A Preferred Membership Units were converted into
Membership Units) equal to or greater than 10%, and
(ii) a separate letter from each Saracen Member, confirming the number
of Membership Units and Series A Preferred Membership Units to be
issued to such Saracen Member;
(am) Contributee shall cause WCPT, and Contributor shall cause
each of the Saracen Members, to execute and deliver the Registration Rights
Agreement in the form annexed hereto as Exhibit AE;
(an) Contributor shall cause the Saracen Companies, Inc. to, and
Contributee shall, execute and deliver the lease modification agreement
described in subsection 21(p) below;
(ao) Contributee shall deliver to Contributor documentation
reasonably satisfactory to Contributor evidencing that the holder of the
Lazard Mezzanine Loan has released Dominic J. Saraceno, Kurt W. Saraceno,
William F. Rand, III, and Saraceno Holding Trust General Partnership from
their respective guarantee obligations under the guaranty dated as of
December 31, 1996 in favor of Lazard Freres Real Estate Fund II LP with
respect to the Lazard Mezzanine Loan;
(ap) Contributee and the owner of the Hotel Unit (as such term is
defined in the Condominium Documents) shall, at closing, enter into a
license agreement in form and substance reasonably satisfactory to
Contributee, which agreement shall provide (i) a license to the owner of the
Hotel Unit to permit the existing letter "H" (or, if the name, franchise or
license of the hotel at the Hotel Unit is changed, any sign similar in type,
size, style and location and reasonably acceptable to Contributee, which is
used in connection with identifying the name, franchise or license of the
hotel being operated at the Hotel Unit) to remain on the exterior of Dedham
Place in its existing location, (ii) a term of 99 years commencing on the
Closing Date, (iii) a fixed rent of $1,000 per month payable monthly in
advance commencing on January 1, 1999, (iv) a right of the licensee to
terminate such license on not less than 90 days prior written notice and (v)
that the owner of Dedham Place will not be required to perform any services
under the license agreement;
(aq) Provided that (i) Contributee has obtained all consents from
Nomura, Lazard, the NACC Member (to the extent applicable) and the LF Member
which are necessary to consummate the transactions contemplated by this
Agreement and the Closing Steps Summary and (ii) Contributee has taken each
step or action which is a condition precedent to the next step or action to
be taken by Contributor as set forth in the Closing Steps Summary, then
Contributor shall execute and deliver to Contributee such documents and
instruments as are reasonably necessary to effectuate the transactions
described in the Closing Steps Summary;
(ar) Provided that Contributor has taken each step or action which
Contributor is required to take pursuant to subsection 6(aq) above, then
Contributee shall execute and deliver to Contributor such documents and
instruments as are reasonably necessary to effectuate the transactions
described in the Closing Steps Summary;
(as) Provided that (i) Contributee has obtained all consents from
Nomura, Lazard, the NACC Member (to the extent applicable) and the LF Member
which are necessary to consummate the transactions contemplated by this
Agreement, and (ii) Contributee has taken each step or action required under
this Agreement which is a condition precedent to the next step or action to
be taken by Contributor under this Agreement, then the Persons constituting
Contributor shall execute and/or deliver such other instruments or documents
which either (x) by the terms of this Agreement are to be delivered by each
of such Persons at Closing, or (y) are reasonably necessary in order for
Contributor and Contributee to consummate the transactions specifically
contemplated and intended by this Agreement; and
(at) Provided that Contributor has taken each step or action which
Contributor is required to take pursuant to subsection 6(as) above, then
Contributee and the Term Loan Borrower shall execute and/or deliver such
other instruments or documents which either (i) by the terms of this
Agreement are to be delivered by each of Contributee and/or the Term Loan
Borrower at Closing, or (ii) are reasonably necessary in order for
Contributor and Contributee to consummate the transactions specifically
contemplated and intended by this Agreement.
7. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR. Contributor hereby
represents and warrants to Contributee, as of the date hereof, as follows:
7.1 Representations and Warranties Concerning the Saracen Persons
and the Saracen Members.
(a) Organization and Authority of Saracen Properties Inc.
Saracen Properties Inc. is a Massachusetts corporation which has been duly
organized and is validly existing and in good standing in Massachusetts and
is duly licensed or qualified to transact business in each jurisdiction in
which the nature of its business activities or assets requires such
licensing or qualification. Saracen Properties Inc. has the requisite power
and authority to carry on its business as it is now being conducted.
(b) Organization and Authority of Saraceno Holding Trust General
Partnership. Saraceno Holding Trust General Partnership is a Massachusetts
general partnership which has been duly organized and is validly existing
and in good standing in Massachusetts and is duly licensed or qualified to
transact business in each jurisdiction in which the nature of its business
activities or assets requires such licensing or qualification. Saraceno
Holding Trust General Partnership has the requisite power and authority to
carry on its business as it is now being conducted.
(c) Organization and Authority of Wells Avenue Holdings LLC,
Wells Avenue Holdings Inc. and Seventy Wells Avenue Inc.
(i) Wells Avenue Holdings LLC is a Massachusetts limited liability
company which has been duly formed and is validly existing and in good
standing in Massachusetts and is duly licensed or qualified to transact
business in each jurisdiction in which the nature of its business activities
or assets requires such licensing or qualification. Wells Avenue Holdings
LLC has the requisite power and authority to carry on its business as it is
now being conducted.
(ii) Wells Avenue Senior Holdings Inc. is a Massachusetts
corporation which has been duly formed and is validly existing and in good
standing in Massachusetts and is duly licensed or qualified to transact
business in each jurisdiction in which the nature of its business activities
or assets requires such licensing or qualification. Wells Avenue Senior
Holdings Inc. has the requisite power and authority to carry on its business
as it is now being conducted.
(iii) Seventy Wells Avenue Inc. is a Massachusetts corporation
which has been duly formed and is validly existing and in good standing in
Massachusetts and is duly licensed or qualified to transact business in each
jurisdiction in which the nature of its business activities or assets
requires such licensing or qualification. Seventy Wells Avenue Inc. has the
requisite power and authority to carry on its business as it is now being
conducted.
(d) Organization and Authority of the respective Contributor
Property Owners.
(i) 150 Wells Avenue Realty Trust and River Park Realty Trust are
both Massachusetts nominee trusts which have been duly formed and are
validly existing and in good standing in Massachusetts and are duly licensed
or qualified to transact business in each jurisdiction in which the nature
of their respective business activities or assets requires such licensing or
qualification.
(ii) Wells Senior, Seventy Wells Avenue LLC, Newton Acquisition
LLC I, KSA Newton Acquisition Limited Partnership II and KSA Newton Limited
Partnership I are all Massachusetts limited liability companies or
Massachusetts limited partnerships, as the case may be, which have been duly
formed, and are validly existing and in good standing in Massachusetts and
are duly licensed or qualified to transact business in each jurisdiction in
which the nature of their respective business activities or assets requires
such licensing or qualification.
(iii) Saracen Portland L.L.C. is a Maine limited liability company
which has been duly formed, and is validly existing and in good standing in
Maine and is duly licensed or qualified to transact business in each
jurisdiction in which the nature of its business activities or assets
requires such licensing or qualification.
(iv) Each of the respective Contributor Property Owners has the
requisite power and authority to carry on its business as it is now being
conducted.
(e) Due Authorization; Binding Agreements.
(i) This Agreement has been duly authorized, executed and
delivered by each of the Persons constituting Contributor. Assuming that
this Agreement is a legal, valid and binding obligation of Contributee, this
Agreement constitutes a legal, valid and binding obligation of each of such
Persons, enforceable against each such Person in accordance with its terms,
except as limited by bankruptcy, insolvency, receivership and similar laws
affecting creditors' rights from time to time in effect.
(ii) Each of the instruments, documents and agreements to be
executed by any one or more of the Saracen Persons on the Closing Date in
connection with the consummation of the transactions contemplated by this
Agreement or otherwise set forth in the Closing Steps Summary, including,
without limitation, any of the documents listed in Section 6 above (x) will,
as of the Closing Date, be duly authorized, executed and delivered by each
of the Saracen Persons, and (y) assuming that (A) each of the aforesaid
instruments, documents and agreements will, on the Closing Date, constitute
a legal, valid and binding obligation of Contributee, to the extent that
Contributee is a party thereto, (B) with respect to the Registration Rights
Agreement, assuming that the Registration Rights Agreement constitutes a
legal, valid and binding obligation of WCPT, and (C) with respect to the
Section 4.2(j) Letter, assuming that the Section 4.2(j) Letter constitutes a
legal, valid and binding obligation of Contributee, Whitehall, WCPT and
Wellsford Real Properties, Inc., on the Closing Date each of the aforesaid
instruments, documents and agreements, when executed and delivered by the
requisite Saracen Persons, will constitute a legal, valid and binding
obligation of each of such Saracen Persons, enforceable against each such
Saracen Person in accordance with its terms, except as limited by
bankruptcy, insolvency, receivership and similar laws affecting creditors'
rights from time to time in effect.
(iii) The Operating Agreement, as amended by the Operating
Agreement Amendment, has been duly authorized, and as of the Closing Date
will be executed and delivered, by each of the Saracen Members. Assuming
that the Operating Agreement, as amended by the Operating Agreement
Amendment, will, on the Closing Date, constitute a legal, valid and binding
obligation of WCPT and Whitehall, the Operating Agreement, as amended by the
Operating Agreement Amendment, will, when executed and delivered by the
Saracen Members, constitutes a legal, valid and binding obligation of each
of the Saracen Members, enforceable against each of the Saracen Members in
accordance with its terms, except as limited by bankruptcy, insolvency,
receivership and similar laws affecting creditors' rights from time to time
in effect.
(f) Consents and Approvals. To the Actual Knowledge of
Contributor, no order, permission, consent, approval, license,
authorization, registration or filing by or with any government agency
having jurisdiction over any of the Saracen Persons, any of the Saracen
Members or any other Person is required for the consummation of the Closing,
the contribution of the Non-Nomura Properties and the Contributed LLC
Interests to Contributee in the manner set forth in the Closing Steps
Summary, or the execution, delivery or performance by (i) any of the Saracen
Persons of this Agreement or any other document or instrument to be executed
and delivered by any of the Saracen Persons (in their respective individual
capacities or as a partner, member or other equity holder of any other
Saracen Person) in connection with the Closing and the consummation of the
transactions contemplated by this Agreement or otherwise set forth in the
Closing Steps Summary, and (ii) each of the Saracen Members of the Operating
Agreement, as amended by the Operating Agreement Amendment; except for such
orders, permissions, consents, approvals, licenses, authorizations,
registrations and filings as have already been obtained, given or made.
(g) No Violation. To the Actual Knowledge of Contributor, the
execution, delivery and performance of (w) this Agreement and the
consummation of the Closing and the other transactions contemplated hereby
and by the Closing Steps Summary by the Saracen Persons (or any of them) and
(x) the Operating Agreement, as amended by the Operating Agreement
Amendment, by each of the Saracen Members, do not and will not (including
with the giving of notice, lapse of time or both) (i) materially violate,
materially conflict with, result in a material breach of any of the
provisions of, or constitute a material default under,
(1) any of the respective Organizational Documents of any Saracen
Person (assuming, however, that with respect to the Wells Avenue
Operating Agreement, the existing mortgage loan encumbering 70 Wells
Avenue has been satisfied, and the NACC Redemption Amount and the LF
Redemption Amount have (in accordance with, and subject to the terms
and conditions of, the Wells Avenue Operating Agreement) been paid in
full at the Closing by Contributee as contemplated by this Agreement
and the Closing Steps Summary),
(2) any bond, note or other evidence of Indebtedness, indenture,
mortgage, deed of trust, loan agreement or similar instrument by which
any one or more of the Saracen Persons and/or the Saracen Members, or
their respective assets, is subject or bound (including, without
limitation, the Nomura Loan Documents); provided, however, that the
foregoing provisions of this clause (2) shall not apply to any
documents evidencing or otherwise securing any portion of the Existing
Non-Nomura Mortgage Indebtedness, and, with respect to the Nomura Loan
and the Lazard Mezzanine Loan, are subject to the assumption that the
consent of Nomura and Lazard is obtained with respect to the transfer
of the Contributed LLC Interests to Contributee,
(3) any lease or any other material agreement or contract by
which any one or more of the Saracen Persons and/or the Saracen
Members, or their respective assets, is subject or bound; provided,
however, that the foregoing provisions of this clause (3) shall not
apply to any documents evidencing or otherwise securing any portion of
the Existing Non-Nomura Mortgage Indebtedness, the Nomura Loan or the
Lazard Mezzanine Loan,
(4) any applicable statute, law, order, rule or regulation of any
court or governmental agency having jurisdiction over any one or more
of the Saracen Persons and/or the Saracen Members or their respective
assets, or
(5) any term or provision of any judgment, decree, order, statute,
writ, injunction, rule or regulation of any arbitrator, court or
Governmental Authority binding on one or more of the Saracen Persons
and/or the Saracen Members or their respective assets,
or (ii) result in the creation of any Lien upon any of the Contributed LLC
Interests, the stock or assets of Wells Avenue Senior Holdings Inc. and/or
Seventy Wells Avenue Inc., the member interests or assets of Wells Senior
and/or Seventy Wells Avenue LLC, or any one or more of the Contributor
Properties (except for any Liens expressly contemplated to be created by
Contributee at the Closing in connection with securing the Term Loan and/or
the Revolving Credit Loan and/or refinancing the Existing Non-Nomura
Mortgage Indebtedness and/or refinancing or acquiring the Lazard Mezzanine
Loan).
(h) Disclosure. To the Actual Knowledge of Contributor, none of
the information furnished or made available by or on behalf of any of the
Saracen Persons or any of their respective subsidiaries, affiliates, agents
or representatives to Contributee or its affiliates or representatives
concerning or relating to any of the Saracen Persons, the Contributed LLC
Interests, the Companies, any Contributor Property, the Nomura Loan
(including the Nomura Loan Documents), the Lazard Mezzanine Loan, the NACC
Member and/or the LF Member (and the redemption of such member interests
under the Wells Avenue Operating Agreement), or any other transaction
contemplated by this Agreement (including, without limitation, the
consummation of Closing and the consummation of the actions to be taken at
Closing as set forth in the Closing Steps Summary) is false or misleading in
any material respect, contains any untrue statement of material fact or
omits to state a material fact necessary to make the same not misleading,
and except as heretofore disclosed to Contributee or its affiliates or
representatives in writing, none of the Saracen Persons has any Actual
Knowledge of any facts or circumstances that would have a material adverse
effect on the operations, use or value of any Contributor Property, the
Contributed LLC Interests, or any of the Companies.
(i) Litigation. Other than as set forth on Schedule A-1, none of
the Persons constituting Contributor is a party to any legal action, suit,
arbitration, inquiry or proceeding (and no investigation in respect of any
of such Persons is pending) before any court, governmental authority or
arbitrator, which, if adversely determined, would have a material adverse
affect on the ability of Contributor to consummate the transactions
contemplated hereby, and, to the Actual Knowledge of Contributor, no such
action, suit, proceeding or investigation is threatened in each case. Other
than as set forth on Schedule A-1, none of Wells Avenue Holdings LLC, Wells
Avenue Senior Holdings Inc. or Wells Senior is a party to any legal action,
suit, arbitration, inquiry or proceeding (and no investigation in respect of
any of the foregoing entities is pending) before any court, governmental
authority or arbitrator which, if adversely determined, would have a
material adverse affect on the Companies, taken as a whole, or on the value
or operation of the Nomura Properties, and, to the Actual Knowledge of
Contributor, no such action, suit, proceeding or investigation is threatened
in each case.
(j) Condition of each Saracen Person and the Saracen Members.
None of the Saracen Persons or the Saracen Members has filed (or is
contemplating filing) any petition seeking or acquiescing in any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any law relating to bankruptcy or
insolvency, nor has any such petition been filed against any of the
foregoing. No general assignment of any assets of any of the Saracen
Persons or the Saracen Members has been made for the benefit of creditors,
and no receiver, master, liquidator or trustee has been appointed for any of
the foregoing Persons or any of their respective assets. None of the Saracen
Persons or the Saracen Members is insolvent and the consummation of the
Closing and the transactions contemplated by this Agreement and the Closing
Steps Summary will not render any of the foregoing Persons insolvent.
(k) Ownership of Tenants. To the Actual Knowledge of
Contributor, none of the Saracen Persons, the Asset Manager, the Property
Manager, or the Saracen Members owns, directly or indirectly, (i) one
percent (1%) or more of the total combined voting power of all classes of
stock entitled to vote, or one percent (1%) or more of the total amount of
shares of all classes of stock, partnership interests, member interests or
beneficial interests of any Person that is a tenant of any Contributor
Property or (ii) an interest of one percent (1%) or more in the assets or
net profits of any such tenant, except that the Saracen Companies occupies
approximately 5,540 rentable square feet of office space at 57 Wells Avenue
pursuant to a Lease listed on Schedule A-4 hereto.
(l) Ownership of the Contributed LLC Interests. (i) Saraceno
Holding Trust General Partnership is the managing member of, and owns 99%
of, and to the Actual Knowledge of Contributor, Pacific Preferred LLC owns
1% of, the legal and beneficial interest in Wells Avenue Holdings LLC, and
the NACC Member has an economic interest in Wells Avenue Holdings LLC as set
forth in the Wells Avenue Operating Agreement. Wells Avenue Holdings LLC
owns 100% of the legal and beneficial interest in Wells Avenue Senior
Holdings Inc. and 99% of the member interests in Wells Senior. Wells Avenue
Senior Holdings Inc. owns 1% of the member interests in Wells Senior and is
the managing member of Wells Senior. Wells Avenue Holdings LLC owns 100% of
the legal and beneficial interest in Seventy Wells Avenue Inc., and 99% of
the member interests in (and is the non-managing member of) Seventy Wells
Avenue LLC. Seventy Wells Avenue Inc. owns 1% of the member interests in
Seventy Wells Avenue LLC and is the managing member of Seventy Wells Avenue
LLC.
(m) Indebtedness. Upon the consummation of the transactions
contemplated by this Agreement and the Closing Steps Summary, none of the
Contributed LLC Interests will be subject to any Indebtedness and none of
the Companies shall, upon Closing, have any obligation with respect to any
such Indebtedness, other than (i) the Nomura Loan, (ii) the Lazard Mezzanine
Loan, (iii) the Existing Non-Nomura Mortgage Indebtedness, (iv) real estate
taxes which have been adjusted for pursuant to Section 4 above, (v) accounts
payable or other indebtedness incurred in the ordinary course of business
and which are substantially similar in nature and amount to those accounts
payable or other indebtedness shown on the most recent financial statements
of the Companies which have been delivered to Contributee prior to the date
hereof, and (vi) any other Indebtedness and/or Liens as shall be created by
or at the direction of Contributee at or after the Closing or are otherwise
specifically permitted by the terms of this Agreement.
(n) Non-Imputation. To the Actual Knowledge of Contributor, none
of the Saracen Persons has any Actual Knowledge of a defect in title that
would allow the Title Insurers insuring any Contributor Property as of the
Closing Date to deny coverage of such defect based on knowledge of the
insured.
7.2 Additional Representations Relating to Wells Avenue Holdings
LLC, Wells Avenue Senior Holdings Inc., Wells Senior, Seventy Wells Avenue
Inc. and Seventy Wells Avenue LLC.
(a) Subsidiaries. None of the Companies owns any equity interest
in any corporation, partnership or any other Person, other than (i) Wells
Avenue Holdings LLC owning 100% of the stock of Wells Avenue Senior Holdings
Inc., 99% of the member interests of Wells Senior, 100% of the stock of
Seventy Wells Avenue Inc. and 99% of the member interests of Seventy Wells
Avenue LLC, (ii) Wells Avenue Senior Holdings Inc. owning 1% of the member
interests of Wells Senior and (iii) Seventy Wells Avenue Inc. owning 1% of
the member interests in Seventy Wells Avenue LLC. To the Actual Knowledge
of Contributor, except for the Nomura Properties, the personal property
necessary or appropriate for the ownership and operation of the Nomura
Properties, cash and cash equivalents, and as provided in the immediately
preceding sentence, none of the Companies owns any other material real or
personal property or other assets.
(b) Business Activities. Since its formation, no Company has
engaged in any business other than the ownership, operation, maintenance and
financing of, or has owned, directly or indirectly, any real property, other
than the Nomura Properties and 70 Wells.
(c) Absence of Undisclosed Liabilities and Contractual
Obligations. Except for (i) the Nomura Loan, (ii) the Lazard Mezzanine
Loan, (iii) obligations under Leases relating to the Nomura Properties (all
of which have been disclosed in writing to Contributee), (iv) obligations
under Service Contracts relating to the Nomura Properties (all of which have
been disclosed in writing to Contributee), (v) unpaid leasing brokerage
obligations (all of which have been disclosed in writing to Contributee),
(vi) real estate taxes which have been adjusted for pursuant to Section 4
above, (vi) the existing mortgage loan in the original principal amount of
$2,000,000 made by Nomura Asset Capital Corporation to 70 Wells Avenue LLC
and encumbering 70 Wells, (viii) accounts payable or other indebtedness
incurred in the ordinary course of business and which are substantially
similar in nature and amount to those accounts payable or other indebtedness
shown on the most recent financial statements of the Companies which have
been delivered to Contributee prior to the date hereof, none of the
Companies has any liabilities of any nature (other than de minimis
liabilities incurred in the ordinary course of business), whether matured or
unmatured, fixed or contingent, accrued or unaccrued, liquidated or
unliquidated, whether due or to become due, regardless of whether the
disclosure thereof otherwise would be required by GAAP.
(d) Rights. Except with respect to certain rights under the
Lazard Mezzanine Loan (copies of all of the material loan documents, setting
forth all such rights, having been delivered to Contributee), there are no
rights, options, warrants or convertible or exchangeable securities (or
instruments exchangeable or convertible into any of the foregoing) or
commitments, agreements, arrangements or undertakings of any kind (any or
all of the foregoing, for purposes of this subsection, being referred to as
"rights") to which any of the Companies is a party or by which any of them
is bound, obligating any such entity (or its Subsidiaries) to issue,
deliver, grant, sell or create, or cause to be issued, delivered, granted,
sold or created, assets of such entity (or of its Subsidiaries) or
additional partnership interests, membership interests, shares of capital
stock or other voting or non-voting securities of or ownership interests in
such entity (or its Subsidiaries) or equivalents of any of the foregoing (or
instruments exchangeable or convertible into any of the foregoing) or
obligating any such entity (or its Subsidiaries) to issue, deliver, grant,
sell, create, extend or enter into any such rights. Except with respect to
certain rights under the Lazard Mezzanine Loan, there are no outstanding
contractual obligations of any of the Companies or any of their respective
Subsidiaries to repurchase, redeem or otherwise acquire any partnership
interests, membership interests, shares of capital stock or other voting or
non-voting securities of or ownership interests in such entity (or its
Subsidiaries).
(e) Organizational Documents. Set forth on Schedule A-2 is a
list of all Organizational Documents of each Company, which Organizational
Documents are in full force and effect and true and complete copies of such
Organizational Documents have been delivered by Contributor to Contributee.
No amendments or modifications to any of such Organizational Documents have
been approved. None of the members or shareholders of any Company is in
material default of any of its obligations under the foregoing
Organizational Documents, and no event has occurred or is continuing, and no
condition exists, which, with the passage of time or the giving of notice,
or both, would constitute a material default by any such members or
shareholders under such Organizational Documents or permit any other party
thereto to terminate the rights of such defaulting party.
(f) Employees. There are no employees of any of the Companies.
(g) Taxes. Subject to the provisions of subsection 4(c) above,
each of the Companies has paid, or made adequate provision for the payment
of, all taxes which are due and payable on any assessment made against such
Company or any of its properties and all other taxes, assessments, fees,
liabilities or other charges imposed on such Company or any of its
properties by any Governmental Authority. Each Company has filed all
necessary tax returns that are required by law to be filed as of the date
hereof.
(h) Concerning the NACC Member and the LF Member Interests. The
NACC Redemption Amount and the LF Redemption Amount are the full amounts
necessary, respectively, to redeem the interests of the NACC Member and the
LF Member in Wells Avenue Holdings LLC (assuming the payment in full of the
Lazard Mezzanine Loan). Pursuant to the terms of the Wells Avenue Operating
Agreement, upon payment to the NACC Member of the NACC Redemption Amount,
the interests of the NACC Member in Wells Avenue Holdings LLC shall
automatically, without any further action necessary on the part of the NACC
Member, Wells Avenue Holdings LLC or any other Person (including the
execution of any instrument or document), be deemed redeemed by Wells Avenue
Holdings LLC and the NACC Member shall no longer hold any interest in Wells
Avenue Holdings LLC. Pursuant to the terms of the Wells Avenue Operating
Agreement, upon payment to the LF Member of the LF Redemption Amount (and
assuming the payment in full of the Lazard Mezzanine Loan), the interests of
the LF Member in Wells Avenue Holdings LLC shall automatically, without any
further action necessary on the part of the LF Member, Wells Avenue Holdings
LLC or any other Person (including the execution of any instrument or
document), be deemed redeemed by Wells Avenue Holdings LLC and the LF Member
shall no longer hold any interest in Wells Avenue Holdings LLC. To the
Actual Knowledge of Contributor, as of February 10, 1998, the NACC
Redemption Amount is approximately $4,984,304.43 and the LF Redemption
Amount is approximately $130,000.00. All LF Monthly Preferred Distributions
(as defined in the Wells Avenue Operating Agreement) owed to the LF Member
as of the date hereof, and all NACC Monthly Preferred Distributions (as
defined in the Wells Avenue Operating Agreement) owed to the NACC Member as
of the date hereof under the Lazard Mezzanine Loan Documents and the Wells
Avenue Operating Agreement, have been paid in full. Saraceno Holding Trust
General Partnership has paid NACC the $900,000 payment required under
Paragraph 1 of the Second Amendment of Amended and Restated Operating
Agreement for Wells Avenue Holdings LLC, and the right of NACC to receive an
additional 10% interest in Wells Avenue Holdings LLC pursuant to said
Paragraph 1 is no longer in force or effect. That certain promissory note
entitled "Convertible Note" dated December 31, 1996 and made by Wells Avenue
Holdings LLC to Nomura Asset Capital Corporation, evidencing an indebtedness
of $5,500,000, is no longer in force or effect. The right of the NACC
Member to convert said "Convertible Note" into a membership interest in
Wells Avenue Holdings LLC, pursuant to the terms of that certain Conversion
Agreement dated as of December 31, 1996, has been exercised, and said
Conversion Agreement is no longer in force or effect.
7.3 Representations of Contributor Regarding the Contributor
Properties.
(a) Leases. (i) To the Actual Knowledge of Contributor, the rent
roll for each Contributor Property annexed hereto as Schedule A-3 (each, a
"Contributor Rent Roll" and collectively, the "Contributor Rent Rolls"), is
a true, correct and complete list of all Tenants (as hereinafter defined) at
such Contributor Property and the amount of rental payments and security
deposits set forth on each Contributor Rent Roll is true and correct in all
material respects. Set forth on Schedule A-4 is a true, accurate and
complete list of all existing Leases for each Contributor Property,
including all amendments or other modifications thereto, and there are no
leases, tenancies, licenses or other rights of occupancy or use for any
portion of any of the Contributor Properties other than the Leases set forth
on Schedule A-4. A true and complete copy of each Lease (including all
amendments and modifications) for each Contributor Property has heretofore
been delivered to Contributee. To the Actual Knowledge of Contributor,
except as set forth on Schedule A-4, each Lease for the Contributor
Properties is in full force and effect and has not been amended, modified,
waived or changed in any manner. For purposes of this Section 7.3, "Tenant"
means any Person occupying (or permitted to occupy) space at any Contributor
Property pursuant to any lease, sublease, license, occupancy or other
agreement to which any Contributor Property Owner (or its predecessor in
interest) is a party, whether written or oral, covering or permitting the
occupancy of space at such Contributor Property or any portion thereof
(including any renewals, extensions, amendments or modifications thereof).
(ii) Except as set forth in the Contributor Rent Rolls, the Leases
or Schedule A-4, (A) to the Actual Knowledge of Contributor, the rents set
forth in the Leases for the Contributor Properties are being collected on a
current basis and there are no arrearages in excess of one month, (B)
Contributor has no Actual Knowledge of, and has no Actual Knowledge of
having received any notices with respect to, any termination, surrender,
vacating, assignment, renewal options or exercise of any other similar
rights under any Lease of any Contributor Property or that any Tenant
intends either to cease such operation or to vacate any Contributor Property
(other than temporarily due to casualty, remodeling, renovation or similar
causes); (C) there are no security deposits relating to the Leases for the
Contributor Properties (including letters of credit), all security deposits
listed on the relevant Contributor Rent Roll are held in segregated accounts
if and to the extent required pursuant to applicable law and regulation or
the terms of the respective Leases, and except as set forth in Schedule A-4,
none of the security deposits required to be deposited by a tenant under its
Lease with the landlord has been applied in whole or in part by the landlord
under such Lease (other than any such security deposits that have been
replaced by such tenant(s)); (D) to the Actual Knowledge of Contributor, no
Contributor Property Owner has sent or received any notice that there is any
default or any condition which, with the giving of notice or the passage of
time, or both, would constitute a default under any Lease (other than with
respect to any default that has been cured and is not continuing), and to
the Actual Knowledge of Contributor, no Tenant has asserted any claim,
offset or defense which would in any way affect the collection of rent from
such Tenant; (E) except for any collateral assignments of leases and rents
which secure the Nomura Loan and/or any of Existing Non-Nomura Mortgage
Indebtedness, no Contributor Property Owner has pledged, encumbered,
assigned or otherwise transferred any Lease or their interest therein with
respect to the Contributor Properties; (F) each Contributor Property Owner
has the sole right to collect rents and all other amounts due under each
Lease for its respective Contributor Property; (G) to the Actual Knowledge
of Contributor there are no (and, to the Actual Knowledge of Contributor,
after the Closing there will not be any) prepaid rentals or free rent
periods; (H) no Tenant has any option, right of first offer or first refusal
or other preferential right to purchase (or any other similar right to
acquire any ownership or profit participation interest) or lease (including
any renewal of an existing lease or right of expansion or extension) any
improvements at any Contributor Property or any portion thereof, and no
Tenant has any right of termination of its Lease; (I) to the Actual
Knowledge of Contributor, all liabilities and obligations relating to any
lease "buy out" agreement, "take-over" agreements or assumed lease incurred
in connection with any Lease with respect to the Contributor Properties have
been fully performed, satisfied or paid; (J) to the Actual Knowledge of
Contributor, all material obligations of the landlord to be performed prior
to the date hereof under each Lease for the Contributor Properties have been
performed; (K) except as set forth on Schedule A-5, all decorating,
alterations and other work required to be performed by each Contributor
Property Owner pursuant to each Lease for the Contributor Properties in
order to prepare the premises demised thereunder for initial occupancy, or
any cost thereof to be reimbursed to any such tenants as incident of such
initial occupancy (including, without limitation, all tenant improvement
allowances and similar tenant contributions), has been performed or
reimbursed in full, (L) except as set forth on Schedule A-5, all free rent
periods, rent concessions and abatement of rents which have been granted to
Tenants have expired, and (M) Schedule A-5 sets forth, on a Lease-by-Lease
basis, the unfunded tenant improvement allowance due by each Contributor
Property Owner to each of its respective Tenants.
(iii) Except as set forth in the brokerage contracts provided to
Contributee prior to the date hereof, to the Actual Knowledge of
Contributor, no brokerage or leasing commission or other compensation is or
will be due or payable to any person, firm, corporation or other entity with
respect to or on account of any Lease and no real estate broker or other
person has any interest in any Lease. Set forth on Schedule A-6 is a list
of all leasing brokerage contracts to which any Contributor Property Owner
is a party and, to the Actual Knowledge of Contributor, all other leasing
brokerage contracts to which any Contributor Property Owner is bound.
Except as set forth on Schedule A-6, to the Actual Knowledge of Contributor,
no brokerage or leasing commissions or other compensation is now, or at
anytime hereafter will be, due and payable to any broker or finder with
respect to any one or more of the Leases, other than in respect of any
unexercised renewal options, expansion options, extension options, rights of
first offer or first refusal or similar options which have not been
exercised.
(b) Physical Condition. Except as disclosed in the engineering
reports listed on Schedule A-7 and delivered to Contributee prior to the
date hereof, Contributor has no Actual Knowledge of (i) any structural or
other material defect in or any damage to any Contributor Property, whether
latent or otherwise, or (ii) any capital expenditure in excess of $100,000
which would need to be made at any individual Contributor Property within
six (6) months of the date hereof in order to maintain each Contributor
Property in good repair and order.
(c) Compliance with Laws. Except as set forth on Schedule A-8,
to Contributor's Actual Knowledge, each Contributor Property Owner is in
material compliance with all applicable laws and each of them has obtained
and complied with all material consents, approvals, permits and licenses of
Governmental Authorities required to conduct their respective businesses as
presently operated, and such consents, approvals, permits and licenses have
not been terminated. Except as set forth on Schedule A-8, no Contributor
Property Owner has received any written notice from any Governmental
Authority or insurer that a Contributor Property Owner or a Contributor
Property is not in such compliance. Except as set forth on Schedule A-8,
each Contributor Property Owner has delivered to Contributee true and
complete copies of all certificates of occupancy in its possession
pertaining to all or any portion of the Contributor Properties.
(d) Contracts. Set forth on Schedule A-9 is a true, correct and
complete list of (i) all contracts (including Service Contracts) affecting
the ownership, use and operation of any Contributor Property and (ii) all
contracts to which any of Wells Avenue Holdings LLC, Wells Avenue Senior
Holdings, Inc., or Wells Senior is a party (collectively, the "Contracts").
Except as set forth on Schedule A-9, none of the Contracts is with any
Person which is an Affiliate of, or is otherwise related to, any of the
Saracen Persons. Copies of the Contracts have been made available by
Contributor to Contributee for review. None of the Persons constituting
Contributor is a party to any employment, union or other similar agreement.
Except as set forth on Schedule A-9, no written notice of material default
under any Contract has been sent or received by or on behalf of any
Contributor Property Owner, other than any default notice setting forth a
material default which, as of the Closing Date, has been cured. Except as
set forth on Schedule A-9, all of the Service Contracts are cancelable upon
not more than 30 days notice without fee or penalty.
(e) Condemnation Proceedings. To the Actual Knowledge of
Contributor, no proceedings have been commenced or threatened by an
authority having the power of eminent domain to condemn any part of any
Contributor Property or any Improvements thereon or any property owned by a
party to a reciprocal easement agreement affecting any Contributor Property.
(f) Insurance. Attached hereto as Schedule A-10 is a true and
correct copy of the certificates of insurance evidencing all of the existing
insurance coverage for each of the Contributor Properties, such policies are
in full force and effect and all premiums thereunder have been paid to the
extent due, no notice of cancellation has been received with respect thereto
and, to the Actual Knowledge of Contributor, no such cancellation has been
threatened. Except as set forth on Schedule A-10 annexed hereto, no
Contributor Property Owner has made any claim under any of such insurance
policies which remains unpaid or outstanding. No Contributor Property Owner
has made any claim under any of the title insurance policies relating to the
relevant Contributor Property. Neither Contributor nor, to the Actual
Knowledge of Contributor, any affiliate or representative of Contributor,
has received any written notice from any insurance company which has issued
a policy with respect to any of the Contributor Properties or from any board
of fire underwriters (or other body exercising similar functions) (i)
claiming any defects or deficiencies which have not been cured or corrected,
(ii) requesting the performance of any repairs, alterations or other work
which have not been performed or (iii) stating, in effect, that any of such
policies will not be renewed or will be renewed at a higher premium than is
presently payable therefor.
(g) Easements and Restrictive Covenants. No Contributor Property
Owner has received or been informed in writing of the receipt of any written
notice that there exists, and, to the Actual Knowledge of Contributor, there
does not exist, any violation of a condition or agreement contained in any
easement, restrictive covenant or any similar instrument or agreement
affecting any Contributor Property, or any portion thereof, that would,
under the terms of such instrument or agreement, permit any other party to,
or any other beneficiary of, or owner of property benefitted or burdened by,
any such easement, restrictive covenant or similar instrument or agreement
to cancel its obligations under any such easement, restrictive covenant or
similar instrument or agreement or to be relieved of its operating covenants
thereunder.
(h) Third-Party Rights. Except as set forth in the Leases or on
the Contributor Rent Rolls annexed hereto as Schedule A-3, there are no
agreements (and no Person other than the Contributor Property Owners has the
right) to sell, mortgage or otherwise encumber any Contributor Property or
any portion thereof or interest therein. Except as set forth in the Leases
or on the Contributor Rent Rolls annexed hereto as Schedule A-3, no Person
has an option to purchase or right of first offer or right of first refusal
(or any similar right) over all or any part of any Contributor Property (or
any interest therein), or any right to participate in the profits or
proceeds of any Contributor Property. The tenant under that certain lease
between Dominic J. Saraceno and Cullinane Database Systems, Inc. (formerly
d/b/a Cullinet Software and now generally known as Computer Associates),
dated April 23, 1983, as amended by (i) that certain First Amendment to
Lease dated July 20, 1984, (ii) that certain First Addendum to Lease dated
July 9, 1987, and (iii) that certain letter agreement dated December 30.
1996, with respect to 201 University, has waived in writing its right of
first offer to acquire title to 201 University as set forth in such lease.
The consummation of the transactions contemplated by this Agreement will not
violate or conflict with, in any material manner, the terms and provisions
of such lease (including, without limitation, the said tenant's right of
first offer with respect to 201 University Avenue).
(i) Environmental Matters. Except as set forth in the
environmental reports previously provided to Contributor, a list of which
environmental reports is set forth on Schedule A-11: to the Actual
Knowledge of Contributor, (i) none of the Contributor Property Owners has
caused or permitted any Hazardous Substance (as defined below) to be
maintained, released or disposed of on, under or at any of the Contributor
Properties or any part thereof in violation of any applicable laws, (ii) the
Contributor Properties and the Contributor Property Owners are in material
compliance, and have heretofore complied in all material respects, with all
Environmental Laws, (iii) neither Contributor or any Contributor Property
Owner or affiliate or Subsidiary of any of the foregoing has received any
written notice with respect to any Contributor Property alleging any
violation of, or liability under, any Environmental Law, from any
Governmental Authority, insurer or any tenant of any of the Contributor
Properties, (iv) there are no administrative, regulatory or judicial
proceedings pending or threatened against any Contributor or any Contributor
Property Owner in connection with any of the Contributor Properties pursuant
to, or alleging any material violation of, or material liability under, any
Environmental Laws, (v) none of the Contributor Properties have been
contaminated with any Hazardous Substance at levels which equal or exceed
the minimum levels for reporting or remediation standards under applicable
laws, (vi) there are no underground storage tanks located on any Contributor
Property or asbestos which might be expected to require abatement,
monitoring or remediation (other than in the event that tenant improvements
or other construction is commenced at such Contributor Property), and (vii)
Contributor has delivered to Contributee copies of all environmental
reports, studies, sampling data, environmental permits and governmental
submissions relating to Hazardous Substances or Environmental Laws with
respect to the Contributor Properties that are in the possession or control
of Contributor or its affiliates.
(j) Project Equipment. As to each Contributor Property, to the
Actual Knowledge of Contributor, the equipment and other personal, tangible
and intangible property located at such Contributor Property (including all
Tangible Personal Property), which will be owned by Contributee immediately
after the Closing, will be sufficient to permit the operation of the
Contributor Property in the same manner of operation as existed prior to the
Closing.
(k) Independent Units. To the Actual Knowledge of Contributor,
each Contributor Property is an independent unit that does not now rely on
any facilities (other than facilities of municipalities or public utility
and water companies) located on any property not included in such
Contributor Property or otherwise controlled by the relevant Contributor
Property Owner to fulfill any municipal or governmental requirement or for
the furnishing to such Contributor Property of any essential building
systems or utilities, except where such Contributor Property is served by a
beneficial easement or other agreement of record (each, a "Utility
Easement") that provides such Contributor Property with access to such
facilities in a manner sufficient to fulfill such municipal or governmental
requirements or to furnish building systems or utilities to such Contributor
Property; and which respect to those Contributor Properties that are
benefited by any such Utility Easement, each such Utility Easement is in
full force and effect, has not been violated by Contributor, any Contributor
Property Owner or any Improvements located on the Land, and neither
Contributor, Wells Senior nor any of their respective affiliates or
representatives have received any notice of any such violation. Upon the
contribution and conveyance of each of the Non-Nomura Properties to
Contributee, Contributee shall be entitled to the full benefit and rights
granted under such Utility Easements.
(l) Assessed Value. Except as set forth on Schedule A-12,
neither Contributor nor any Contributor Property Owner has received any
notice of, and Contributor has no Actual Knowledge of, any proposed change
in the assessed value of all or any portion of any Contributor Properties,
other than the customary scheduled increases in the state, county and city
where such Contributor Property is located, or such change as would not have
a material adverse effect on the owner of such Contributor Property or the
value thereof. Except as set forth on Schedule A-12, neither Contributor
nor the Contributor Property Owners, or (to the Actual Knowledge of
Contributor) any of their respective representatives, have received any
written notice of any proposed or pending special assessments which affect
any Contributor Property or any portion thereof, other than such special
assessment that would not have a material adverse effect on the owner of
such Contributor Property or the value thereof.
(m) Separate Tax Parcel. Each of the Contributor Properties is
separately assessed by all applicable governmental authorities for taxing
purposes. Contributor has delivered to Contributee a copy of the latest
real estate tax bill in Contributor's possession with respect to each
Contributor Property. Other than as set forth in Schedule A-12, to the
Actual Knowledge of Contributor, there are no applications or proceedings
before any governmental authority, department or agency with respect to the
taxing of any of the Contributor Properties.
(n) Zoning. Neither Contributor nor any Contributor Property
Owner, or any of their respective representatives, has made any currently
pending application for variances, special permits or rezoning of any
Contributor Property. To the Actual Knowledge of Contributor, (i) the
present use of each of the Contributor Properties, and the specific uses
identified in the Leases for the Contributor Properties, is not in material
violation of the applicable zoning laws, ordinances and regulations
pertaining to the Contributor Properties, and (ii) all roads necessary for
the utilization of each of the Contributor Properties have been completed
and have been dedicated to public use and accepted by the appropriate
Governmental Authorities.
(o) Contributor Escrow. Except as set forth in Schedule A-13
annexed hereto, no amounts are currently required to be held in escrow for
the benefit of any of Contributor Property Owner in connection with its
acquisition of any of the Contributor Properties (other than escrow in the
nature of tenant security deposits, the escrows required under the Nomura
Loan Documents and any escrows required in connection with the Existing Non-
Nomura Mortgage Indebtedness). To the Actual Knowledge of Contributor,
Schedule A-13 accurately sets forth the amounts remaining on deposit with
respect to such escrows and each respective Contributor Property Owner is in
compliance in all material respects with all escrow agreements entered into
in connection with the escrow sums set forth on Schedule A-13.
(p) Permits. Schedule A-14 is a complete and correct list of
each material license or permit held by each Contributor Property Owner in
connection with the ownership and operation of the Contributor Properties,
and to the Actual Knowledge of Contributor, such Permits are all of the
material Permits necessary for the use and operation by the Contributor
Property Owners of the Contributor Properties as the same are currently used
and operated. All charges and fees currently due and payable for such
Permits have been paid in full.
(q) No Public Commitments. To the Actual Knowledge of
Contributor, no commitments have been made to any governmental authority,
school board, church or other religious body, to any homeowners or
homeowners' association, or to any other organization, group or individual,
relating to any of the Contributor's Properties which would impose an
obligation upon Contributee, or any of the Companies to make any
contributions or dedications of money or land, or to construct, install or
maintain any improvements of a public or private nature on or off any of the
Contributor's Properties. The provisions of this subparagraph shall not
apply to any regular or non-discriminatory local real estate or school taxes
assessed against any of Contributor's Properties.
(r) The Condominium. The Condominium has been duly formed and is
validly existing pursuant to applicable law, including Massachusetts General
Law c. 183A, as amended. The percentage interest in the common areas of the
Condominium which are appurtenant to Dedham Place is 51%. The Condominium
Documents (i) are all of the material documents and instruments which have
been entered into in connection with the creation of the Condominium, (ii)
have not been modified or amended and (iii) are in full force and effect.
All common expenses and assessments which are due and payable with respect
to the Dedham Place Condominium Unit have been paid in full, and to the
Actual Knowledge of Contributor, all common expenses and assessments which
are due and payable with respect to the Hotel Unit have been paid in full.
To the Actual Knowledge of Contributor, no increase in the annual common
expenses and assessments payable with respect to the Dedham Place
Condominium Unit is currently contemplated or pending. To the Actual
Knowledge of Contributor, Contributor is not in default of any of its
material obligations under or with respect to the Condominium Documents, and
Contributor has not received any written notice of any such default which
remains uncured. The trustees with respect to the Dedham Place Condominium
Trust are William F. Rand, III and Kurt W. Saraceno. The insurance required
to be maintained by the trustees pursuant to Section 5.7.1 of the Dedham
Place Condominium Trust and By-Laws is in full force and effect, and true
and correct copies of the insurance certificate evidencing the same is
annexed hereto as part of Schedule A-10. Contributor has informed
Contributee that historically there has not been a separate budget for
common area expenses of the Condominium, and each unit owner has paid
separately for maintenance of the common areas of the Condominium. Promptly
after the date hereof Contributor shall develop a proposed 1998 budget for
the common area expenses of the Condominium, which budget shall be subject
to the reasonable prior approval of Contributee.
7.4 Representations and Warranties of Contributor Concerning the
Nomura Loan.
(a) Nomura Loan Documents. Exhibit C annexed hereto lists all of
the agreements, instruments and documents evidencing, securing or otherwise
relating to the Nomura Loan, true and correct copies of which have been
delivered to Contributee. None of the Nomura Loan Documents have been
modified or amended.
(b) Balances. As of the date of this Agreement (and after giving
effect to the loan payment due February 11, 1998), the outstanding principal
balance of the Nomura Loan is $68,505,270.89. To the Actual Knowledge of
Contributor, as of February 11, 1998 (and after giving effect to the loan
payment due February 11, 1998), (i) the accrued and unpaid interest on the
Nomura Loan is $0, (ii) the amount on deposit in the Tax and Insurance
Escrow Fund (as defined in the Nomura Loan Documents) is approximately
$193,322.70, (iii) the amount on deposit in the Capital Reserve Fund (as
defined in the Nomura Loan Documents) is approximately $143,568.65, and (iv)
the amount on deposit in the Rollover Reserve Fund (as defined in the Nomura
Loan Documents) is approximately $544,812.64.
(c) No Default. Each of the Nomura Loan Documents is in full
force and effect. No written notice of a default on the part of Nomura
under any of the Nomura Loan Documents has been sent by or on behalf of any
Saracen Person (including, without limitation, a default notice describing
an event which, with the passage of time or the giving of notice (or both),
would constitute a so-called "event of default" or conditional limitation
under a Nomura Loan Document), other than a default notice setting forth a
default which, as of the Closing Date, has been cured. No written notice of
a default on the part of any Saracen Person (or any Subsidiary of any
Saracen Person) under any of the Nomura Loan Documents has been received by
or on behalf of any Saracen Person (including, without limitation, a default
notice describing an event which, with the passage of time or the giving of
notice (or both), would constitute a so-called "event of default" or
conditional limitation under a Nomura Loan Document), other than a default
notice setting forth a default which, as of the Closing Date, has been
cured.
Wells Senior is in compliance with all of the material terms, covenants and
conditions of the Nomura Loan Documents. All of the obligations of
Contributor set forth in (i) that certain letter agreement dated December
31, 1996 between Nomura Asset Captial Corporation and Wells Senior with
respect to certain environmental reports and certain environmental
remediation issues and (ii) that certain letter agreement dated December 31,
1996 between Nomura Asset Captial Corporation and Wells Senior with respect
surveys for the Nomura Properties and certain Clearing Bank Agreements, have
been satisfied in full or waived.
(d) Reserve Fund Payments. All payments required to be made to
the Tax and Insurance Escrow Fund, the Capital Reserve Fund the Rollover
Reserve Fund and the Side Letter Reserve, as of the Closing Date, have been
made in full. The outstanding balance remaining in (i) the Required Repair
Fund as of the date of this Agreement is approximately $215,968.87
($154,562.62 for certain enumerated deferred maintenance items and
$61,406.25 for certain enumerated "ADA" repair related work) and (ii) the
Side Letter Reserve is approximately $10,700. Except as set forth on
Exhibit H annexed hereto, all of the Required Repairs (as defined in the
Nomura Loan Documents) have been completed.
(e) No Defeasance. Wells Senior has not exercised any right to
defease all or any portion of the Nomura Loan, and has not delivered any
notice to Nomura or any other Person that Wells Senior intends to exercise
such right of defeasance.
7.5 Representations and Warranties of Contributor Concerning the
Lazard Mezzanine Loan.
(a) Lazard Mezzanine Loan Documents. Exhibit M annexed hereto
lists all of the agreements, instruments and documents evidencing, securing
or otherwise relating to the Lazard Mezzanine Loan, true and correct copies
of which have been delivered to Contributee. None of the Lazard Mezzanine
Loan Documents have been modified or amended.
(b) Balances. As of February 28, 1998, to the Actual Knowledge
of Contributor, (i) the outstanding principal balance of the Lazard
Mezzanine Loan will be $21,387,000, (ii) the Additional IRR Interest will be
$1,277,171.03, and (iii) the accrued interest at the 10% "pay rate" will be
$106,935.00.
(c) No Default. Each of the Lazard Mezzanine Loan Documents is
in full force and effect. No written notice of a default on the part of
Lazard under any of the Lazard Mezzanine Loan Documents has been sent by or
on behalf of any Saracen Person (including, without limitation, a default
notice describing an event which, with the passage of time or the giving of
notice (or both), would constitute a so-called "event of default" or
conditional limitation under a Lazard Mezzanine Loan Document), other than a
default notice setting forth a default which, as of the Closing Date, has
been cured. No written notice of a default on the part of any Saracen
Person (or any Subsidiary of any Saracen Person) under any of the Lazard
Mezzanine Loan Documents has been received by or on behalf of any Saracen
Person (including, without limitation, a default notice describing an event
which, with the passage of time or the giving of notice (or both), would
constitute a so-called "event of default" or conditional limitation under
any of the Lazard Mezzanine Loan Documents), other than a default notice
setting forth a default which, as of the Closing Date, has been cured.
Wells Senior is in compliance with all of the material terms, covenants and
conditions of the Lazard Mezzanine Loan Documents.
(d) No Defeasance. Wells Senior has not exercised any right to
defease or prepay all or any portion of the Lazard Mezzanine Loan Documents,
and has not delivered any notice to Lazard or any other Person that Wells
Senior intends to exercise such right of defeasance or prepayment.
8. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTEE. Contributee hereby
represents and warrants to Contributor, as of the date hereof, as follows:
8.1. Representations and Warranties Concerning the Contributee and
the Term Loan Borrower.
(a) Organization and Authority of Contributee. Contributee is a
Delaware limited liability company which has been duly organized and is
validly existing and in good standing in Delaware and is duly licensed or
qualified to transact business in each jurisdiction in which the nature of
its business activities or assets requires such licensing or qualification.
Contributee has the requisite power and authority to carry on its business
as it is now being conducted.
(b) Organization and Authority of the Term Loan Borrower. The
Term Loan Borrower is a Delaware limited liability company which has been
duly organized and is validly existing and in good standing in Delaware and
is duly licensed or qualified to transact business in each jurisdiction in
which the nature of its business activities or assets requires such
licensing or qualification. The Term Loan Borrower has the requisite power
and authority to carry on its business as it is now being conducted.
(c) Due Authorization: Binding Agreements.
(i) This Agreement has been duly authorized, executed and
delivered by Contributee. Assuming that this Agreement is a legal, valid
and binding obligation of each of the Persons constituting Contributor, this
Agreement constitutes a legal, valid and binding obligation of Contributee,
enforceable against Contributee in accordance with its terms, except as
limited by bankruptcy, insolvency, receivership and similar laws affecting
creditors' rights from time to time in effect.
(ii) Each of the instruments, documents and agreements to be
executed by any one or more of the Contributee Property Owners on the
Closing Date in connection with the consummation of the transactions
contemplated by this Agreement or otherwise set forth in the Closing Steps
Summary, including, without limitation, any of the documents listed in
Section 6 above, (x) will, as of the Closing Date, be duly authorized,
executed and delivered by each of the Contributee Property Owners, and (y)
assuming that each of the aforesaid instruments, documents and agreements
will, on the Closing Date, constitute a legal, valid and binding obligation
of Contributor to the extent that Contributor is a party thereto, on the
Closing Date each of the aforesaid instruments, documents and agreements,
when executed and delivered by the requisite Contributee Property Owners,
will constitute a legal, valid and binding obligation of Contributee or the
Term Loan Borrower, as the case may be, enforceable against each such Person
in accordance with its terms, except as limited by bankruptcy, insolvency,
receivership and similar laws affecting creditors' rights from time to time
in effect.
(iii) The Operating Agreement, as amended by the Operating
Agreement Amendment, has been duly authorized, and as of the Closing Date
will be executed and delivered by each of WCPT and Whitehall. Assuming that
the Operating Agreement, as amended by the Operating Agreement Amendment,
will, on the Closing Date, constitute a legal, valid and binding obligation
of the Saracen Members, then the Operating Agreement, as amended by the
Operating Agreement Amendment, will, when executed and delivered by WCPT and
Whitehall, constitute a legal, valid and binding obligation of each of WCPT
and Whitehall, enforceable against each of WCPT and Whitehall in accordance
with its terms, except as limited by bankruptcy, insolvency, receivership
and similar laws affecting creditors' rights from time to time in effect.
(iv) The Registration Rights Agreement has been duly authorized,
and as of the Closing Date will be executed and delivered by WCPT. Assuming
that the Registration Rights Agreement will, on the Closing Date, constitute
a legal, valid and binding obligation of the Saracen Members, then the
Registration Rights Agreement will, when executed and delivered by WCPT,
constitute a legal, valid and binding obligation of WCPT, enforceable
against WCPT in accordance with its terms, except as limited by bankruptcy,
insolvency, receivership and similar laws affecting creditors' rights from
time to time in effect.
(v) The Section 4.2(j) Letter has been duly authorized, and as of
the Closing Date will be executed and delivered by each of Contributee,
Whitehall, WCPT and Wellsford Real Properties, Inc. Assuming that the
Section 4.2(j) Letter will, on the Closing Date, constitute a legal, valid
and binding obligation of each of the Saracen Members, then the Section
4.2(j) Letter will, when executed and delivered by Contributee, Whitehall,
WCPT and Wellsford Real Properties, Inc., constitute a legal, valid and
binding obligation of each of Contributee, Whitehall, WCPT and Wellsford
Real Properties, Inc., enforceable against each of such parties in
accordance with its terms, except as limited by bankruptcy, insolvency,
receivership and similar laws affecting creditors' rights from time to time
in effect.
(d) Consents and Approvals. To the Actual Knowledge of
Contributee, no order, permission, consent, approval, license,
authorization, registration or filing by or with any government agency
having jurisdiction over any of the Contributee Property Owners is required
for the consummation of the Closing, the contribution of the Non-Nomura
Properties and the Contributed LLC Interests to Contributee in the manner
set forth in the Closing Steps Summary, or the execution, delivery or
performance by (i) any of the Contributee Property Owners of this Agreement
or any other document or instrument to be executed and delivered by any of
the Contributee Property Owners (in their respective individual capacities
or as a partner, member or other equity holder of any other Person) in
connection with the Closing and the consummation of the transactions
contemplated by this Agreement or otherwise set forth in the Closing Steps
Summary and (ii) each of WCPT and Whitehall of the Operating Agreement, as
amended by the Operating Agreement Amendment, except for such orders,
permissions, consents, approvals, licenses, authorizations, registrations
and filings as have already been obtained, given or made.
(e) No Violation. To the Actual Knowledge of Contributee, the
execution, delivery and performance of this Agreement and the consummation
of the Closing and the other transactions contemplated hereby and by the
Closing Steps Summary by any of the Contributee Property Owners do not and
will not (including with the giving of notice, lapse of time or both) (i)
materially violate, materially conflict with, result in a material breach of
any of the provisions of, or constitute a material default under, (1) any of
the respective Organizational Documents of any Contributee Property Owner
(including, without limitation, the Operating Agreement), (2) any bond, note
or other evidence of Indebtedness, indenture, mortgage, deed of trust, loan
agreement or similar instrument by which any one of the Contributee Property
Owners, or their respective assets, is subject or bound (including, without
limitation, the Term Loan Documents and the Revolving Credit Loan
Documents); provided, however, that the foregoing provisions of this clause
(2) shall not apply to any documents evidencing or otherwise securing any
portion of the Existing Non-Nomura Mortgage Indebtedness and/or the Lazard
Mezzanine Loan, (3) any lease or any other material agreement or contract by
which any one or more of the Contributee Property Owners, or their
respective assets, is subject or bound; provided, however, that the
foregoing provisions of this clause (3) shall not apply to any documents
evidencing or otherwise securing any portion of the Existing Non-Nomura
Mortgage Indebtedness and/or the Lazard Mezzanine Loan, (4) any applicable
statute, law, order, rule or regulation of any court or governmental agency
having jurisdiction over any one or more of the Contributee Property Owners,
or their respective assets or (5) any term or provision of any judgment,
decree, order, statute, writ, injunction, rule or regulation of any
arbitrator, court or Governmental Authority binding on one or more of the
Contributee Property Owners or their respective assets, or (ii) result in
the creation of any Lien upon any of the Contributee Properties (except for
any Liens expressly contemplated to be created by Contributee at the Closing
in connection with securing the Term Loan and/or the Revolver Loan and/or
refinancing the Existing Non-Nomura Mortgage Indebtedness and/or acquiring
the Lazard Mezzanine Loan).
(f) Disclosure. To the Actual Knowledge of Contributee, none of
the information furnished or made available by or on behalf of Contributee
or its representatives, subsidiaries, affiliates or agents to Contributor or
its affiliates or representatives, concerning or relating to any of
Contributee, the Term Loan Borrower, the Contributee Properties, the Term
Loan (including the Term Loan Documents), the Revolving Credit Loan
(including the Revolving Credit Loan Documents) or any transaction
contemplated by this Agreement (including, without limitation, the
consummation of Closing and the consummation of the actions to be taken at
Closing as set forth in the Closing Steps Summary) is false or misleading in
any material respect, contains any untrue statement of material fact or
omits to state a material fact necessary to make the same not misleading,
and except as heretofore disclosed to Contributor or its affiliates or
representatives in writing, Contributee has no Actual Knowledge of any facts
or circumstances that would have a material adverse effect on the
operations, use or value of any Contributee Property. For purposes of this
Agreement, whenever the term "delivered to Contributor" or any similar
phrase is used in connection with the delivery of any documents to
Contributor or its representatives (other than documents to be delivered by
Contributee or any Contributee Property Owner at the Closing), such term
shall be deemed to include "or made available to Contributor, its attorneys
or consultants at the offices of Contributee's attorneys for study, review
and copying."
(g) Litigation. Other than as set forth on Schedule B-1, none of
the Contributee Property Owners is a party to any legal action, suit,
arbitration, inquiry or proceeding (and no investigation in respect of any
of the Contributee Property Owners is pending) before any court,
governmental authority or arbitrator, which, if adversely determined, would
have a material adverse affect on the ability of Contributee to consummate
the transactions contemplated hereby, and, to the Actual Knowledge of
Contributee, no such action, suit, proceeding or investigation is threatened
in each case.
(h) Condition of each Contributee Property Owner. None of the
Contributee Property Owners has filed (or is contemplating filing) any
petition seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any law relating to bankruptcy or insolvency, nor has any such petition been
filed against any of the foregoing. No general assignment of any assets of
any Contributee Property Owner has been made for the benefit of creditors,
and no receiver, master, liquidator or trustee has been appointed for any of
the foregoing Persons or any of their respective assets. None of the
Contributee Property Owners is insolvent and the consummation of the Closing
and the transactions contemplated by this Agreement and the Closing Steps
Summary will not render any of the Contributee Property Owners insolvent.
(i) Ownership of Tenants. To the Actual Knowledge of
Contributee, none of the Contributee Property Owners owns, directly or
indirectly, (i) one percent (1%) or more of the total combined voting power
of all classes of stock entitled to vote, or one percent (1%) or more of the
total amount of shares of all classes of stock, partnership interests,
member interests or beneficial interests of any Person that is a tenant of
any Contributee Property or (ii) an interest of one percent (1%) or more in
the assets or net profits of any such tenant, except that WCPT and its
Subsidiaries and affiliates occupy approximately 5,000 rentable square feet
in the Contributee Property known as 26 Main Street, Chatham, New Jersey.
(j) Indebtedness. Upon the consummation of the transactions
contemplated by this Agreement and the Closing Steps Summary, none of the
Contributee Property Owners will be subject to any Indebtedness, other than
(i) the Nomura Loan, the Lazard Mezzanine Loan, the Term Loan, the Revolving
Credit Loan and borrowings from time to time from Wellsford Real Properties
Inc., (ii) any other Indebtedness contemplated to be entered into in
connection with refinancing the Existing Non-Nomura Mortgage Indebtedness
and/or any other Indebtedness that may be entered into if Contributee
arranges to have a new lender acquire or otherwise refinance the Lazard
Mezzanine Loan, (iii) real estate taxes, (iv) accounts payable or other
indebtedness incurred in the ordinary course of business and which are
substantially similar in nature and amount to those amounts payable or other
indebtedness shown on the most recent financial statements of Contributee
which have been delivered to Contributor prior to the date hereof, and (v)
any other Indebtedness and/or Liens as shall be created by or at the
direction of Contributee at or after the Closing or are otherwise
specifically permitted by the terms of this Agreement.
(k) Non-Imputation. To the Actual Knowledge of Contributee, none
of the Contributee Property Owners has any knowledge of a defect in title
that would allow the title insurance company insuring any Contributee
Property as of the Closing Date to deny coverage of such defect based on
knowledge of the insured.
8.2 Additional Representations Relating to the Contributee
Property Owners.
(a) Subsidiaries. Contributee does not own any equity interest
in any corporation, partnership or any other Person other than the Term Loan
Borrower and certain other entities that are not engaged in any trade or
business and, to the Actual Knowledge of Contributee, have no or de minimis
assets.
(b) Business Activities. Since the respective dates of their
formation, none of the Contributee Property Owners have engaged in any
business other than the ownership, operation, maintenance and financing of,
or have owned, directly or indirectly, any real property, other than the
Contributee Properties; 15 Broad Street, Boston, Massachusetts; 600 Atrium
Drive, Franklin, New Jersey; 169 Lackawanna Avenue, Parsippany, New Jersey;
430 Mountain Avenue, Berkeley Heights, New Jersey; and the Garden State
Convention Center, having an address at 50 Atrium Drive, Franklin, New
Jersey.
(c) Absence of Undisclosed Liabilities and Contractual
Obligations. Except for (i) the Term Loan, the Revolving Credit Loan, and
borrowings from Wellsford Real Properties, Inc., (ii) obligations under
Leases relating to the Contributee Properties (all of which have been
disclosed in writing to Contributor), (iii) obligations under service
contracts relating to the Contributee Properties, (v) unpaid leasing
brokerage obligations (all of which have been disclosed in writing to
Contributor), (vi) real estate taxes and (vii) accounts payable or other
indebtedness incurred in the ordinary course of business and which are
substantially similar in nature and amount to those accounts payable or
other indebtedness shown on the most recent financial statements of the
Contributee Property Owners which have been delivered to Contributor prior
to the date hereof, none of the Contributee Property Owners has any
liabilities of any nature (other than de minimis liabilities incurred in the
ordinary course of business), whether matured or unmatured, fixed or
contingent, accrued or unaccrued, liquidated or unliquidated, whether due or
to become due, regardless of whether the disclosure thereof otherwise would
be required by GAAP.
(d) Rights. Except as set forth in the Operating Agreement or on
Exhibit I annexed hereto, there are no rights, options, warrants or
convertible or exchangeable securities (or instruments exchangeable or
convertible into any of the foregoing) or commitments, agreements,
arrangements or undertakings of any kind (any or all of the foregoing for
purposes of this subsection being referred to as "rights") to which
Contributee or any Contributee Property Owner is a party or by which any of
them is bound obligating any such entity (or its Subsidiaries) to issue,
deliver, grant, sell or create, or cause to be issued, delivered, granted,
sold or created, assets of such entity (or of its Subsidiaries) or
additional partnership interests, membership interests, shares of capital
stock or other voting or non-voting securities of or ownership interests in
such entity (or its Subsidiaries) or equivalents of any of the foregoing (or
instruments exchangeable or convertible into any of the foregoing) or
obligating any such entity (or its Subsidiaries) to issue, deliver, grant,
sell, create, extend or enter into any such rights. Except as set forth in
the Operating Agreement or on Exhibit I annexed hereto, there are no
outstanding contractual obligations of Contributee, or any Contributee
Property Owner, or any of their respective Subsidiaries, to repurchase,
redeem or otherwise acquire any partnership interests, membership interests,
shares of capital stock or other voting or non-voting securities of or
ownership interests in such entity (or its Subsidiaries).
(e) Organizational Documents. Set forth on Schedule B-2 is a
list of all Organizational Documents of Contributee, which Organizational
Documents are in full force and effect and true and complete copies of such
Organizational Documents have been delivered by Contributee to Contributor.
No amendments or modifications to any of such Organizational Documents have
been approved, other than the Operating Agreement Amendment. None of the
members of Contributee is in material default of any of its obligations
under the foregoing Organizational Documents, and no event has occurred or
is continuing, and no condition exists, which, with the passage of time or
the giving of notice, or both, would constitute a material default by any
such member under such Organizational Documents or permit any other party
thereto to terminate the rights of such defaulting party.
(f) Employees. There are no employees of Contributee.
(g) Taxes. Each Contributee Property Owner has paid, or made
adequate provision for the payment of, all taxes which are due and payable
on any assessment made against each Contributee Property Owner or any of its
respective properties and all other taxes, assessments, fees, liabilities or
other charges imposed on each Contributee Property Owner or any of the
Contributee Properties by any Governmental Authority. Each Contributee
Property Owner has filed all necessary tax returns that are required by law
to be filed as of the date hereof.
8.3 Representations of Contributee Regarding the Contributee
Properties.
(a) Leases. (i) To the Actual Knowledge of Contributee, the
rent roll for each Contributee Property annexed hereto as Schedule B-3
(each, a "Contributee Rent Roll" and collectively, the "Contributee Rent
Rolls"), is a true, correct and complete list of all Tenants (as hereinafter
defined) at such Contributee Property and the amount of rental payments and
security deposits set forth on each Contributee Rent Roll is true and
correct in all material respects. Set forth on Schedule B-4 is a true,
accurate and complete list of all existing Leases for each Contributee
Property, including all amendments or other modifications thereto, and there
are no leases, tenancies, licenses or other rights of occupancy or use for
any portion of any of the Contributee Properties other than the Leases set
forth on Schedule B-4. A true and complete copy of each Lease (including
all amendments and modifications) for each Contributee Property has
heretofore been delivered to Contributee. To the Actual Knowledge of
Contributee, except as set forth on Schedule B-4, each Lease for the
Contributee Properties is in full force and effect and has not been amended,
modified, waived or changed in any manner. For purposes of this Section
8.3, "Tenant" means any Person occupying (or permitted to occupy) space at
any Contributee Property pursuant to any lease, sublease, license, occupancy
or other agreement to which any Contributee Property Owner (or its
predecessor in interest) is a party, whether written or oral, covering or
permitting the occupancy of space at such Contributee Property or any
portion thereof (including any renewals, extensions, amendments or
modifications thereof).
(ii) Except as set forth in the Contributee Rent Rolls, the
Leases or Schedule B-4, (A) to the Actual Knowledge of Contributee, the
rents set forth in the Leases for the Contributee Properties are being
collected on a current basis and there are no arrearages in excess of one
month, (B) Contributee has no Actual Knowledge of, and has no Actual
Knowledge of having received any notices with respect to, any termination,
surrender, vacating, assignment, renewal options or exercise of any other
similar rights under any Lease of any Contributee Property or that any
Tenant intends either to cease such operation (other than temporarily due to
casualty, remodeling, renovation or similar causes) or vacate any
Contributee Property; (C) there are no security deposits relating to the
Leases for the Contributee Properties (including letters of credit), all
security deposits listed on the relevant Contributee Rent Roll are held in
segregated accounts if and to the extent required pursuant to applicable law
and regulation or the terms of the respective Leases, and except as set
forth in Schedule B-4, none of the security deposits required to be
deposited by a tenant under its Lease with the landlord has been applied in
whole or in part by the landlord under such Lease (other than any such
security deposits that have been replaced by such tenant(s)); (D) to the
Actual Knowledge of Contributee, no Contributee Property Owner has sent or
received any notice that there is any default or any condition which, with
the giving of notice or the passage of time, or both, would constitute a
default under any Lease (other than with respect to any default that has
been cured and is not continuing), and to the Actual Knowledge of
Contributee, no Tenant has asserted any claim, offset or defense which would
in any way affect the collection of rent from such Tenant; (E) except for
any collateral assignments of leases and rents which secure the Term Loan or
the Revolving Credit Loan, no Contributee Property Owner has pledged,
encumbered, assigned or otherwise transferred any Lease or their interest
therein with respect to the Contributee Properties; (F) the Contributee
Property Owners have the sole right to collect rents and all other amounts
due under each Lease for the Contributee Properties; (G) to the Actual
Knowledge of Contributee, there are no (and after the Closing, to the Actual
Knowledge of Contributee, there will not be any) prepaid rentals or free
rent periods; (H) no Tenant has any option, right of first offer or first
refusal or other preferential right to purchase (or any other similar right
to acquire any ownership or profit participation interest) or lease
(including any renewal or of an existing lease or right of expansion or
extension) any improvements at any Contributee Property or any portion
thereof, and no Tenant has any right of termination of its Lease; (I) to the
Actual Knowledge of Contributee, all liabilities and obligations relating to
any lease "buy out" agreement, "take-over" agreements or assumed lease
incurred in connection with any Lease with respect to the Contributee
Properties have been fully performed, satisfied or paid; (J) to the Actual
Knowledge of Contributee, all material obligations of the landlord to be
performed prior to the date hereof under each Lease for the Contributee
Properties have been performed; (K) except as set forth on Schedule B-5, all
decorating, alterations and other work required to be performed by each
Contributee Property Owner pursuant to each Lease for the Contributee
Properties in order to prepare the premises demised thereunder for initial
occupancy, or any cost thereof to be reimbursed to any such tenants as
incident of such initial occupancy (including, without limitation, all
tenant improvement allowances and similar tenant contributions), has been
performed or reimbursed in full; (L) except as set forth on Schedule B-5,
all free rent periods, rent concessions and abatement of rents which have
been granted to Tenants have expired; and (M) Schedule B-5 sets forth, on a
Lease-by-Lease basis, the unfunded tenant improvement allowance due by each
Contributee Property Owner to each of its respective Tenants.
(iii) Except as set forth in the brokerage contracts delivered
to Contributor prior to the date hereof, to the Actual Knowledge of
Contributee, no brokerage or leasing commission or other compensation is or
will be due or payable to any person, firm, corporation or other entity with
respect to or on account of any Lease and no real estate broker or other
person has any interest in any Lease. Set forth on Schedule B-6 is a list
of all leasing brokerage contracts to which any Contributee Property Owner
is a party with respect to the Contributee Properties and, to the Actual
Knowledge of Contributee, all other leasing brokerage contracts relating to
the Contributee Properties to which any Contributee Property Owner is bound.
Except as set forth on Schedule B-6, to the Actual Knowledge of Contributee,
no brokerage or leasing commissions or other compensation is now, or at
anytime hereafter will be, due and payable to any broker or finder with
respect to any one or more of the Leases, other than in respect of any
unexercised renewal options, expansion options, extension options, rights of
first offer or first refusal or similar options which have not been
exercised.
(b) Physical Condition. Except as disclosed in the engineering
reports listed on Schedule B-7 and delivered to Contributor prior to the
date hereof, Contributee has no Actual Knowledge of (i) any structural or
other material defect in or any damage to any Contributee Property, whether
latent or otherwise, or (ii) any capital expenditure in excess of $100,000
which would need to be made at any individual Contributee Property within
six (6) months of the date hereof, in order to maintain each Contributee
Property in good repair and order.
(c) Compliance with Laws. Except as set forth on Schedule B-8,
to Contributee's Actual Knowledge, each Contributee Property Owner is in
material compliance with all applicable laws and each of them has obtained
and complied with all material consents, approvals, permits and licenses of
Governmental Authorities required to conduct their respective businesses as
presently operated, and such consents, approvals, permits and licenses have
not been terminated. Except as set forth on Schedule B-8, no Contributee
Property Owner has received any written notice from any Governmental
Authority or insurer that a Contributee Property Owner or a Contributee
Property is not in such compliance. Except as set forth on Schedule B-8,
each Contributee Property Owner has delivered to Contributor true and
complete copies of all certificates of occupancy in its possession
pertaining to all or any portion of the Contributee Properties.
(d) Condemnation Proceedings. To the Actual Knowledge of
Contributee, no proceedings have been commenced or threatened by an
authority having the power of eminent domain to condemn any part of any
Contributee Property or any Improvements thereon or any property owned by a
party to a reciprocal easement agreement affecting any Contributee Property.
(e) Insurance. Attached hereto as Schedule B-9 is a true and
correct copy of the certificates of insurance evidencing all of the existing
insurance coverage for each of the Contributee Properties, such policies are
in full force and effect and all premiums thereunder have been paid to the
extent due, no notice of cancellation has been received with respect thereto
and, to the Actual Knowledge of Contributee, no such cancellation has been
threatened. Except as set forth on Schedule B-9 annexed hereto, no
Contributee Property Owner has made any claim under any of such insurance
policies which remains unpaid or outstanding. No Contributee Property Owner
has made any claim under any of the title insurance policies relating to the
relevant Contributee Property. Neither Contributee nor, to the Actual
Knowledge of Contributee, any affiliate or representative of Contributee has
received any written notice from any insurance company which has issued a
policy with respect to any of the Contributee Properties or from any board
of fire underwriters (or other body exercising similar functions) (i)
claiming any defects or deficiencies which have not been cured or corrected,
(ii) requesting the performance of any repairs, alterations or other work
which have not been performed or (iii) stating, in effect, that any of such
policies will not be renewed or will be renewed at a higher premium than is
presently payable therefor.
(f) Easements and Restrictive Covenants. No Contributee Property
Owner has received or been informed in writing of the receipt of any written
notice still in effect that there exists, and, to the Actual Knowledge of
Contributee, there does not exist, any violation of a condition or agreement
contained in any easement, restrictive covenant or any similar instrument or
agreement affecting any Contributee Property, or any portion thereof, that
would, under the terms of such instrument or agreement, permit any other
party to, or any other beneficiary of, or owner of property benefitted by,
any such easement, restrictive covenant or similar instrument or agreement
to cancel its obligations under any such easement, restrictive covenant or
similar instrument or agreement or to be relieved of its operating covenants
thereunder.
(g) Third-Party Rights. Except as set forth in the Leases, on
the Contributee Rent Rolls annexed hereto as Schedule B-3, or in the Term
Loan Documents or in the Revolving Credit Loan Documents, there are no
agreements (and no Person other than the Contributee Property Owners has the
right) to sell, mortgage or otherwise encumber any Contributee Property or
any portion thereof or interest therein. Except as set forth in the Leases,
or on the Contributee Rent Rolls annexed hereto as Schedule B-3, no Person
has an option to purchase or right of first offer or right of first refusal
(or any similar right) over all or any part of any Contributor Property (or
any interest therein), or any right to participate in the profits or
proceeds of any Contributee Property.
(h) Environmental Matters. Except as set forth in the
environmental reports previously provided to Contributee, a list of which is
set forth on Schedule B-10: to the Actual Knowledge of Contributee, (i)
none of the Contributee Property Owners has caused or permitted any
Hazardous Substance (as defined below) to be maintained, released or
disposed of on, under or at any of the Contributee Properties or any part
thereof in violation of any applicable laws, (ii) the Contributee Properties
and the Contributee Property Owners are in material compliance, and, have
heretofore complied in all material respects, with all Environmental Laws,
(iii) none of Contributee Property Owners or affiliate of any of the
foregoing has received any written notice with respect to any Contributee
Property alleging any violation of, or liability under any Environmental
Law, from any Governmental Authority, insurer or any tenant of any of the
Contributee Properties, (iv) there are no administrative, regulatory or
judicial proceedings pending or threatened against any Contributee Property
Owner in connection with any of the Contributee Properties pursuant to, or
alleging any material violation of, or material liability under, any
Environmental Laws, (v) none of the Contributee Properties have been
contaminated with any Hazardous Substance at levels which equal or exceed
the minimum levels for reporting or remediation standards under applicable
laws, (vi) there are no underground storage tanks located on any Contributee
Property or asbestos which might be expected to require abatement,
monitoring or remediation (other than in the event that tenant improvements
or other construction is commenced at such Contributee Property), and (vii)
Contributee has delivered to Contributor copies of all environmental
reports, studies, sampling data, environmental permits and governmental
submissions relating to Hazardous Substances or Environmental Laws with
respect to the Contributee Properties that are in the possession or control
of Contributee or its affiliates.
(i) Independent Units. To the Actual Knowledge of Contributee,
each Contributee Property is an independent unit that does not now rely on
any facilities (other than facilities of municipalities or public utility
and water companies) located on any property not included in such
Contributee Property or otherwise controlled by the relevant Contributee
Property Owner to fulfill any municipal or governmental requirement or for
the furnishing to such Contributee Property of any essential building
systems or utilities, except where such Contributee Property is served by a
beneficial easement or other agreement of record (each, a "Utility
Easement") that provides such Contributee Property with access to such
facilities in a manner sufficient to fulfill such municipal or governmental
requirements or to furnish building systems or utilities to such Contributee
Property; and which respect to those Contributee Properties that are
benefited by any such Utility Easement, each such Utility Easement is in
full force and effect, has not been violated by any Contributee Property
Owner or any Improvements located on the Land, and no Contributee Property
Owner, nor any of their respective affiliates or representatives, has
received any notice of any such violation. The Contributee Property Owners
are entitled to the full benefit and rights granted under such Utility
Easements.
(j) Assessed Value. Except as set forth on Schedule B-11, no
Contributee Property Owner has received any notice of, and Contributee has
no Actual Knowledge of, any proposed change in the assessed value of all or
any portion of any Contributee Properties, other than the customary
scheduled increases in the state, county and city where such Contributee
Property is located, or such change as would not have a material adverse
effect on the owner of such Contributee Property or the value thereof.
Except as set forth on Schedule B-11, no Contributee Property Owners or (to
the Actual Knowledge of Contributee) any of their respective
representatives, have received any written notice of any proposed or pending
special assessments which affect any Contributee Property or any portion
thereof, other than such special assessment that would not have a material
adverse effect on the owner of such Contributee Property or the value
thereof.
(k) Separate Tax Parcel. Each of the Contributee Properties is
separately assessed by all applicable governmental authorities for taxing
purposes. Other than as set forth in Schedule B-11, to the Actual Knowledge
of Contributee, there are no applications or proceedings before any
governmental authority, department or agency with respect to the taxing of
any of the Contributee Properties.
(l) Zoning. No Contributee Property Owner, or any of their
respective representatives, has made any currently pending application for
variances, special permits or rezoning of any Contributee Property. To the
Actual Knowledge of Contributee, (i) the present use of each of the
Contributee Properties, and the specific uses identified in the Leases for
the Contributee Properties, is not in material violation of the applicable
zoning laws, ordinances and regulations pertaining to the Contributee
Properties and (ii) all roads necessary for the utilization of each of the
Contributee Properties have been completed and have been dedicated to public
use and accepted by the appropriate Governmental Authorities.
(m) No Public Commitments. To the Actual Knowledge of
Contributee, no commitments have been made to any governmental authority,
school board, church or other religious body, to any homeowners or
homeowners' association, or to any other organization, group or individual,
relating to any of the Contributee Properties which would impose an
obligation upon any Contributee Property Owner to make any contributions or
dedications of money or land, or to construct, install or maintain any
improvements of a public or private nature on or off any of the Contributee
Properties. The provisions of this subparagraph shall not apply to any
regular or non-discriminatory local real estate or school taxes assessed
against any of the Contributee Properties.
(n) Permits. To the Actual Knowledge of Contributee, Contributee
has obtained all of the material permits and licenses necessary for the use
and operation by the Contributee Property Owners of the Contributee
Properties as the same are currently used and operated. All charges and
fees currently due and payable for such permits and licenses have been paid
in full.
8.4 Representations and Warranties Concerning the Term Loan and
the Revolving Credit Loan.
(a) Term Loan and Revolving Credit Loan Documents. Exhibit F
annexed hereto lists all of the material agreements, instruments and
documents evidencing, securing or otherwise relating to the Term Loan, and
Exhibit E annexed hereto lists all of the material agreements, instruments
and documents evidencing, securing or otherwise relating to the Revolving
Credit Loan. True and correct copies of the material Term Loan Documents and
the material Revolving Credit Loan Documents have been delivered to
Contributor. None of the Term Loan Documents or Revolving Credit Loan
Documents have been modified or amended.
(b) Balances. As of the date of this Agreement, to the Actual
Knowledge of Contributee, the outstanding principal balance of the Term Loan
is $107,925,000 and the outstanding principal balance of the Revolving
Credit Loan is $38,984,000.
(c) No Default. Each of the Term Loan Documents and the
Revolving Credit Loan Documents is in full force and effect. No written
notice of a default on the part of the Lender under any of the Term Loan
Documents and/or the Revolving Credit Loan Documents has been sent by or on
behalf of any Contributee Property Owner (including, without limitation, a
default notice describing an event which, with the passage of time or the
giving of notice (or both), would constitute a so-called "event of default"
or conditional limitation under a Term Loan Document or a Revolving Credit
Loan Document), other than a default notice setting forth a default which,
as of the Closing Date, has been cured. No written notice of a default on
the part of any Contributee Property Owner under any of the Term Loan
Documents and/or the Revolving Credit Loan Documents has been received by or
on behalf of any Contributee Property Owner (including, without limitation,
a default notice describing an event which, with the passage of time or the
giving of notice (or both), would constitute a so-called "event of default"
or conditional limitation under a Term Loan Document or a Revolving Credit
Loan Document), other than a default notice setting forth a default which,
as of the Closing Date, has been cured. The Term Loan Borrower is in
compliance with all of the material terms, covenants and conditions of the
Term Loan Documents, and Contributee is in compliance with all of the
material terms, covenants and conditions of the Revolving Credit Loan
Documents.
9. SURVIVAL OF CERTAIN REPRESENTATIONS; REMEDIES FOR INACCURACIES
AND OTHER CHANGES TO REPRESENTATIONS.
9.1 Certificates of Contributor and Contributee.
(a) On the Closing Date, Contributee shall execute and deliver to
Contributor an instrument by which Contributee shall certify to Contributor
that (i) Contributee has no Actual Knowledge that the representations and
warranties made pursuant to Article 8, and made as of the date of this
Agreement, were untrue when made and (ii) Contributee has not knowingly and
intentionally taken any action (and has not knowingly and intentionally
failed to take any action), other than as expressly permitted by this
Agreement or otherwise consented to in writing by Contributor, which would
cause any of such representations and warranties to be untrue as of the
Closing Date (or, alternatively, if Contributee states that it does have
such Actual Knowledge and/or that it has knowingly and intentionally taken
any such action (or that it has knowingly and intentionally failed to take
any such action), then it shall describe with particularity the affected
representations and/or warranties and/or the actions so taken (or failed to
be so taken) in contravention of the terms of this Agreement). Such
instrument is herein called "Contributee's Representation Certificate".
(b) On the Closing Date, Contributor shall execute and deliver to
Contributee an instrument by which Contributor shall certify to Contributee
that (i) Contributor has no Actual Knowledge that the representations and
warranties made pursuant to Article 7, and made as of the date of this
Agreement, were untrue when made and (ii) Contributor has not knowingly and
intentionally taken any action (and has not knowingly and intentionally
failed to take any action), other than as expressly permitted by this
Agreement or otherwise consented to in writing by Contributee, which would
cause any of such representations and warranties to be untrue as of the
Closing Date (or, alternatively, if Contributor states that it does have
such Actual Knowledge and/or that it has knowingly and intentionally taken
any such action (or that it has knowingly and intentionally failed to take
any such action), then it shall describe with particularity the affected
representations and/or warranties and/or the actions so taken (or failed to
be so taken) in contravention of the terms of this Agreement). Such
instrument is herein called "Contributor's Representation Certificate".
9.2 Termination Remedies for Material Adverse Changes Discovered
Prior to Closing.
(a) For purposes of this Article 9:
(A) a "Contributee Caused Material Adverse Change" shall mean
(i) if (A) either (x) in Contributee's Representation Certificate
Contributee states that on the date of this Agreement Contributee had
Actual Knowledge that one or more representations and warranties made
pursuant to Article 8, and made as of the date of this Agreement, were
untrue when made, and describes the affected representations and
warranties or (y) after the date of this Agreement Contributor
discovers that on the date of this Agreement Contributee then had
Actual Knowledge that one or more representations and warranties made
pursuant to Article 8, and made as of the date of this Agreement, were
untrue when made, and (B) Contributor had no Actual Knowledge that such
representations and warranties were untrue when made, and the
inaccuracy could not have been readily discovered by Contributor prior
to the date hereof from information or facts contained in any Lease,
brokerage agreement, management agreement, environmental report,
structural report, title commitment (including copies of recorded title
documents), documents included in closing binders, rent rolls, title
policies or surveys, in each case which was delivered by Contributee to
Contributor or its attorneys and representatives at least 10 Business
Days prior to the date of this Agreement; and/or
(ii) if either (x) in Contributee's Representation Certificate
Contributee states that it has knowingly and intentionally taken any
action (or that it has knowingly and intentionally failed to take any
action), other than as expressly permitted by this Agreement or
otherwise consented to in writing by Contributor, which would cause any
of the representations and warranties set forth in Article 8 to be
untrue as of the Closing Date or (y) after the date of this Agreement
Contributor discovers that Contributee has knowingly and intentionally
taken any action (or that it has knowingly and intentionally failed to
take any action), other than as expressly permitted by this Agreement
or otherwise consented to in writing by Contributor, which would cause
any of the representations and warranties set forth in Article 8 to be
untrue as of the Closing Date, and
(iii) the damages suffered by Contributor, taken as a whole, exceeds
five hundred thousand ($500,000) dollars in the aggregate, as a result
of (x) one or more representations and warranties made by Contributee
pursuant to Article 8 being untrue when made (other than those
inaccuracies which were readily discoverable by Contributor prior to
the date of this Agreement as set forth in Section 9.2(a)(A)(i) above)
and/or (y) as the result of Contributee's knowingly and intentionally
having taken any action (or Contributee's knowingly and intentionally
failing to have taken any action), other than as expressly permitted by
this Agreement or otherwise consented to in writing by Contributor,
which cause any of the representations and warranties set forth in
Article 8 to be untrue as of the Closing Date.
(B) a "Contributor Caused Material Adverse Change" shall mean
(i) if (A) either (x) in Contributor's Representation Certificate
Contributor states that on the date of this Agreement Contributor had
Actual Knowledge that one or more representations and warranties made
pursuant to Article 7, and made as of the date of this Agreement, were
untrue when made, and describes the affected representations and
warranties or (y) after the date of this Agreement Contributee
discovers that on the date of this Agreement Contributor then had
Actual Knowledge that one or more representations and warranties made
pursuant to Article 7, and made as of the date of this Agreement, were
untrue when made, and (B) Contributee had no Actual Knowledge that such
representations and warranties were untrue when made, and the
inaccuracy could not have been readily discovered by Contributee prior
to the date hereof from information or facts contained in any Lease,
brokerage agreement, management agreement, environmental report,
structural report, title commitment (including copies of recorded title
documents), documents included in closing binders, rent rolls, title
policies or surveys, in each case which was delivered by Contributor to
Contributee or its attorneys and representatives at least 10 Business
Days prior to the date hereof; and/or
(ii) if either (x) in Contributor's Representation Certificate
Contributor states that it has knowingly and intentionally taken any
action (or knowingly and intentionally failed to take any action),
other than as expressly permitted by this Agreement or otherwise
consented to in writing by Contributee, which would cause any of the
representations and warranties set forth in Article 7 to be untrue as
of the Closing Date or (y) after the date of this Agreement Contributee
discovers that Contributor has knowingly and intentionally taken any
action (or knowingly and intentionally failed to take any action),
other than as expressly permitted by this Agreement or otherwise
consented to in writing by Contributee, which would cause any of the
representations and warranties set forth in Article 7 to be untrue as
of the Closing Date, and
(iii) the damages suffered by Contributee, taken as a whole, exceeds
five hundred thousand ($500,000) dollars in the aggregate, as a result
of (x) one or more representations and warranties made by Contributor
pursuant to Article 7 being untrue when made (other than those
inaccuracies which were readily discoverable by Contributee prior to
the date of this Agreement as set forth in Section 9.2(a)(B)(i) above)
and/or (y) as the result of Contributor's knowingly and intentionally
having taken any action (or Contributor's knowingly and intentionally
failing to have taken any action), other than as expressly permitted by
this Agreement or otherwise consented to in writing by Contributee,
which cause any of the representations and warranties set forth in
Article 7 to be untrue as of the Closing Date.
(b) The remedies of Contributor for any Contributee Caused
Material Adverse Change, and the remedies of Contributee for any Contributor
Caused Material Adverse Change, as the case may be, which are discovered
prior to Closing, shall be as set forth in the following provisions of this
Section 9.2. Each of Contributor and Contributee hereby acknowledges that
it has no right to terminate this Agreement under this Section 9.2 for any
inaccuracy in any representations or warranties made to it pursuant to
Article 7 or Article 8 (as the case may be) and discovered prior to Closing,
unless the same, taken as a whole, constitutes a Contributor Caused Material
Adverse Change or a Contributee Caused Material Adverse Change, as the case
may be.
(c) If, after the date hereof and prior to the Closing,
Contributor shall learn of one or more Contributee Caused Material Adverse
Changes, then Contributor shall have the right to terminate this Agreement
by written notice to Contributee at any time prior to the Closing. In such
event, the Deposit, together with any interest accrued thereon, shall be
paid to Contributor as liquidated damages hereunder, the Contributor
Liquidated Damages Promissory Note shall be returned to Contributor, and the
First Loan Note and the Second Loan Note shall be marked "cancelled" by the
Escrow Agent and returned to Contributor, all pursuant to the provisions of
Article 3.3(d) above. Thereafter, neither party shall have any further
rights or obligations hereunder other than those which, pursuant to Section
15.5 hereof, expressly survive the termination of this Agreement.
(d) If, after the date hereof and prior to the Closing,
Contributee shall learn of one or more Contributor Caused Material Adverse
Changes, then Contributee shall have the right to terminate this Agreement
by written notice to Contributor at any time prior to the Closing. In such
event, the Deposit (together with any interest accrued thereon) and the
First Loan Note and the Second Loan Note shall be released to Contributee,
all pursuant to the provisions of Article 3.3(d) above. In addition,
Contributee shall have liquidated damages of $1,000,000 against Contributor,
and the Contributor Liquidated Damages Promissory Note shall be released to
Contributee (pursuant to the provisions of Article 3.3(d) above) as evidence
of Contributee's claim for liquidated damages on account thereof.
Thereafter, neither party shall have any further rights or obligations
hereunder other than those which, pursuant to Section 15.5 hereof, expressly
survive the termination of this Agreement.
(e) Notwithstanding any other provision of this Article 9 to the
contrary, Contributor shall not have the right to make a claim for damages
or otherwise terminate this Agreement based upon an inaccurate
representation or warranty of Contributee under this Agreement where the
inaccuracy could have been readily discovered by Contributor prior to the
date hereof from information or facts contained in any Lease, brokerage
agreement, management agreement, environmental report, structural report,
title commitment (including copies of recorded title documents), documents
included in closing binders, rent rolls, title policies or surveys, in each
case which was delivered by Contributee to Contributor or its attorneys and
representatives at least 10 Business Days prior to the date hereof.
Similarly, and notwithstanding any other provision of this Article 9 to the
contrary, Contributee shall not have the right to make a claim for damages
or otherwise terminate this Agreement based upon an inaccurate
representation or warranty of Contributor under this Agreement where the
inaccuracy could have been readily discovered by Contributee prior to the
date hereof from information or facts contained in any Lease, brokerage
agreement, management agreement, environmental report, structural report,
title commitment (including copies of recorded title documents), documents
included in closing binders, rent rolls, title policies or surveys, in each
case which was delivered by Contributor to Contributee or its attorneys and
representatives at least 10 Business Days prior to the date hereof.
9.3 Post-Closing Damage Claim for Certain Discovered
Inaccuracies.
(a) If, at any time prior to the first anniversary of the
Closing Date,
(i) (A) Contributor shall first learn of one or more inaccuracies in
any representations or warranties of Contributee (as set forth in
Article 8 hereof) made as of the date of this Agreement, and provided
that the inaccuracy could not have been readily discovered by
Contributor prior to the date of this Agreement from information or
facts contained in any Lease, brokerage agreement, management
agreement, environmental report, structural report, title commitment
(including copies of recorded title documents), documents included in
closing binders, rent rolls, title policies or surveys, in each case
which was delivered by Contributee to Contributor or its attorneys and
representatives at least 10 Business Days prior to the date hereof,
and/or (B) Contributor shall first learn that Contributee had, after
the date of this Agreement and prior to the Closing, knowingly and
intentionally taken any action (or knowingly and intentionally failed
to have taken any action), other than as expressly permitted by this
Agreement or otherwise consented to in writing by Contributor, which
caused any of Contributee's representations and warranties (as set
forth in Article 8 hereof) to be untrue as of the Closing Date; and
(ii) the affected representation(s) or warranty(s) of Contributee
expressly survives the Closing pursuant to Section 9.4 hereof; and
(iii) Contributor has not terminated this Agreement prior to the
Closing pursuant to Section 9.2 above; and
(iv) the damages suffered by Contributor, taken as a whole, exceeds
five hundred thousand ($500,000) dollars in the aggregate, as a result
of (x) one or more representations and warranties made by Contributee
pursuant to Article 8 being untrue when made (other than those
inaccuracies which were readily discoverable by Contributor prior to
the date of this Agreement as set forth in Section 9.3(a)(i)(A) above)
and/or (y) as the result of Contributee's knowingly and intentionally
having taken any action (or knowingly and intentionally failed to have
taken any action), other than as expressly permitted by this Agreement
or otherwise consented to in writing by Contributor, which cause any
the representations and warranties set forth in Article 8 to be untrue
as of the Closing Date,
then Contributor shall have a post-Closing claim for all damages in excess
of $500,000 (i.e., Contributee shall not be responsible for the first
$500,000 of damages) on account thereof (as limited in amount pursuant to
the provisions of subsection 9.3(c) below), but any such claim not brought
within one (1) year after the Closing shall be deemed waived.
(b) If, at any time prior to the first anniversary of the
Closing Date,
(i) (A) Contributee shall first learn of one or more inaccuracies in
any representations or warranties of Contributor (as set forth in
Article 7 hereof) made as of the date of this Agreement, and provided
that the inaccuracy could not have been readily discovered by
Contributee prior to the date of this Agreement from information or
facts contained in any Lease, brokerage agreement, management
agreement, environmental report, structural report, title commitment
(including copies of recorded title documents), documents included in
closing binders, rent rolls, title policies or surveys, in each case
which was delivered by Contributor to Contributee or its attorneys and
representatives at least 10 Business Days prior to the date hereof,
and/or (B) Contributee shall first learn that Contributor had, after
the date of this Agreement and prior to the Closing, knowingly and
intentionally taken any action (or knowingly and intentionally failed
to have taken any action), other than as expressly permitted by this
Agreement or otherwise consented to in writing by Contributee, which
caused any of Contributor's representations and warranties (as set
forth in Article 7 hereof) to be untrue as of the Closing Date; and
(ii) the affected representation(s) or warranty(s) of Contributor
expressly survives the Closing pursuant to Section 9.4 hereof; and
(iii) Contributee has not terminated this Agreement prior to the
Closing pursuant to Section 9.2 above; and
(iv) the damages suffered by Contributee, taken as a whole, exceeds
five hundred thousand ($500,000) dollars in the aggregate, as a result
of (x) one or more representations and warranties made by Contributor
pursuant to Article 7 being untrue when made (other than those
inaccuracies which were readily discoverable by Contributee prior to
the date of this Agreement as set forth in Section 9.3(b)(i)(A) above)
and/or (y) as the result of Contributor's knowingly and intentionally
having taken any action (or knowingly and intentionally failed to have
taken any action), other than as expressly permitted by this Agreement
or otherwise consented to in writing by Contributee, which cause any
the representations and warranties set forth in Article 7 to be untrue
as of the Closing Date,
then Contributee shall have a post-Closing claim for all damages in excess
of $500,000 (i.e., Contributor shall not be responsible for the first
$500,000 of damages) on account thereof (as limited in amount pursuant to
the provisions of subsection 9.3(d) below), but any such claim not brought
within one (1) year after the Closing shall be deemed waived.
(c) Notwithstanding anything contained in this Agreement to
the contrary, if Contributor shall have a post-Closing claim for damages
pursuant to subsection 9.3(a) above, then:
(i) if and to the extent that any such damage claim is based upon one
or more inaccuracies in any of the Contributee Lower Limit
Representations (as defined below), any resulting damage award shall
not exceed Five Million ($5,000,000) Dollars in the aggregate as a
result of any such inaccuracies,
(ii) if and to the extent that any such damage claim is based upon one
or more inaccuracies in any of the Contributee Upper Limit
Representations (as defined below), any resulting damage award shall
not exceed Twenty Nine Million ($29,000,000) Dollars in the aggregate
as a result of any such inaccuracies, and
(iii) the aggregate post-Closing damage award permissible under this
Agreement for any inaccuracies of any representations or warranties of
Contributee under this Agreement, to the extent that same survive the
Closing, shall not exceed $29,000,000, it being agreed that Contributor
hereby expressly waives the right to seek or enforce any judgment
against Contributee in excess of $29,000,000 on account of any such
inaccuracies.
For purposes hereof, the term "Contributee Upper Limit Representations"
shall mean the representations and warranties of Contributee contained in
the following subsections of Article 8 hereof: 8.1(g); 8.1(j); 8.2(c);
8.2(d); 8.2(g); 8.3(a)(i) (with respect to the second and third sentences
only); 8.3(a)(ii) (with respect to clauses (I), (K), (L) and (M) only);
8.3(a)(iii); and 8.4(a)-(c). The term "Contributee Lower Limit
Representations" shall mean each of the representations and warranties of
Contributee contained in Article 8 of this Agreement which expressly survive
the Closing pursuant to the terms of Section 9.4(a) below, other than the
Contributee Upper Limit Representations.
(d) Notwithstanding anything contained in this Agreement to
the contrary, if Contributee shall have a post-Closing claim for damages
pursuant to subsection 9.3(b) above, then:
(i) if and to the extent that any such damage claim is based upon one
or more inaccuracies in any of the Contributor Lower Limit
Representations (as defined below), any resulting damage award shall
not exceed Five Million ($5,000,000) Dollars in the aggregate as a
result of any such inaccuracies,
(ii) if and to the extent that any such damage claim is based upon one
or more inaccuracies in any of the Contributor Upper Limit
Representations (as defined below), any resulting damage award shall
not exceed Twenty Nine Million ($29,000,000) Dollars in the aggregate
as a result of any such inaccuracies,
(iii) the aggregate post-Closing damage award permissible under this
Agreement for any inaccuracies of any representations or warranties of
Contributor under this Agreement, to the extent that same survive the
Closing, shall not exceed $29,000,000, it being agreed that Contributee
hereby expressly waives the right to seek or enforce any judgment
against Contributor in excess of $29,000,000 on account of any such
inaccuracies, and
(iv) any such post-Closing damage award shall be enforceable and
collectible only as and to the extent set forth in Section 5.1(l) of
the Operating Agreement (as amended by the Operating Agreement
Amendment); it being agreed that any such post-closing allowed damage
claim of Contributee against Contributor (x) shall be nonrecourse to
the Persons constituting Contributor, (y) shall not create any personal
liability of any of the Saracen Members, and (z) shall be limited only
to the interests of the Saracen Members in Contributee as set forth in
Section 5.1(l) of the Operating Agreement (as amended by the Operating
Agreement Amendment).
For purposes hereof, the term "Contributor Upper Limit Representations"
shall mean the representations and warranties of Contributor contained in
the following subsections and clauses of Article 7 hereof: 7.1(i) (with
respect to the last sentence only); 7.1(l); 7.1(m); 7.2(c); 7.2(d); 7.2(g);
7.2(h); 7.3(a)(i) (with respect to the second and third sentences only);
7.3(a)(ii) (with respect to clauses (I), (K), (L) and (M) only);
7.3(a)(iii); 7.3(h) (as such representation relates to the Nomura Properties
only, and not with respect to the Non-Nomura Properties); 7.3(r) (with
respect to the third sentence only); 7.4(a)-(e); and 7.5. The term
"Contributor Lower Limit Representations" shall mean each of the
representations and warranties of Contributor contained in Article 7 of this
Agreement which expressly survive the Closing pursuant to the terms of
Section 9.4(b) below, other than the Contributor Upper Limit
Representations.
9.4 Representations and Warranties Which Survive Closing or
Termination.
(a) The representations and warranties of Contributor set forth in
the following subsections and clauses shall survive the Closing or earlier
termination of this Agreement, for a period of one year from the Closing
Date or the date of termination (as the case may be): 7.1(a); 7.1(b);
7.1(c); 7.1(d); 7.1(e); 7.1(g)(i) (with respect to clause (1) only) and
7.1(g)(ii); 7.1(h); 7.1(i); 7.1(j); 7.1(l); 7.1(m); 7.2(a) through 7.2(h);
7.3(a)(i), 7.3(a)(ii) (except that clauses (A),(D) and (G) do not survive)
and 7.3(a)(iii); 7.3(d) (with respect to the third sentence only); 7.3(e);
7.3(f) (with respect to the last sentence only); 7.3(g); 7.3(h) (as such
representation relates to the Nomura Properties only, and not with respect
to the Non-Nomura Properties); 7.3(j); 7.3(l) (with respect to the last
sentence only); 7.3(o); 7.3(q); 7.3(r); 7.4(a)-(e); and 7.5.
(b) The representations and warranties of Contributee set forth in
the following subsections and clauses shall survive the Closing or earlier
termination of this Agreement, for a period of one year from the Closing
Date or the date of termination (as the case may be): 8.1(a); 8.1(b);
8.1(c); 8.1(e)(i) (with respect to clause (1) only) and 8.1(e)(ii); 8.1(f);
8.1(g); 8.1(h); 8.1(j); 8.2(a) through 8.2(g); 8.3(a)(i), 8.3(a)(ii) (except
that clauses (A),(D) and (G) do not survive) and 8.3(a)(iii); 8.3(d); 8.3(e)
(with respect to the last sentence only); 8.3(f); 8.3(j) (with respect to
the last sentence only); 8.3(m); and 8.4(a)-(c).
10. TRANSACTION COSTS.
10.1 Transaction Costs Payable by Contributor.
Contributor shall pay at the Closing:
(a) the first $175,000 of all transfer taxes, sales taxes
and/or deed stamps payable as a result of the contribution and conveyance of
title to the Non-Nomura Properties and the contribution and conveyance of
the Contributed LLC Interests to Contributee pursuant to this Agreement; in
addition, if the total costs for all of the foregoing exceeds $350,000,
Contributor shall pay one-half of all such costs in excess of $350,000;
(b) one-half of the sum of (i) all fees and charges payable
to Nomura Asset Capital Corporation and/or Nomura in connection with
obtaining the any requisite Nomura consent to the transfer of the
Contributed LLC Interests to Contributee and (ii) all out-of-pocket legal
fees, fees and costs owed to or in connection with any rating agencies,
title insurance premiums and survey costs incurred by Nomura and any other
related costs owed to Nomura in connection with the contribution of the
Contributed LLC Interests by Contributor to Contributee and the preparation,
negotiation and execution by Nomura of the Nomura Loan Modification
Documents (all of the foregoing fees, costs and other charges described in
this sentence being herein collectively called the "Nomura Transfer
Expenses"); provided, however, that the obligations of Contributor with
respect to the Nomura Transfer Expenses shall not exceed $150,000 in the
aggregate;
(c) all brokerage fees and expenses which exceed $1,000,000
in the aggregate, owed to the Brokers in connection with the consummation of
the transactions contemplated by this Agreement and the Closing Steps
Summary (it being agreed that the first $1,000,000 of said brokerage fees
will be paid by Contributee pursuant to Section 10.2(d) below);
(d) all apportionment obligations of Contributor hereunder,
if any; Contributor shall also shall be responsible for the cost of its
legal counsel, environmental consultants, engineers, accountants, advisors
and the other professionals and consultants employed by it in connection
with the contribution of the Non-Nomura Properties to Contributee, the
contribution of the Contributed LLC Interests to Contributee, and the
consummation of the transactions contemplated by this Agreement and the
Closing Steps Summary; provided, however, that notwithstanding the
foregoing, Contributee shall be responsible for paying, at Closing, $500,000
of the aggregate fees owed by Contributor to its attorneys and accountants
and incurred by Contributor in connection with the consummation of the
transactions contemplated by this Agreement, pursuant to subsection 10.2(e)
below; and
(e) all other costs and expenses which, pursuant to the
express terms of this Agreement, are the obligation of Contributor to pay at
the Closing.
10.2 Transaction Costs Payable by Contributee.
Contributee shall pay at the Closing:
(a) after Contributor has paid the first $175,000 of all
transfer taxes, sales taxes and/or deed stamps payable as a result of the
contribution and conveyance of title to the Non-Nomura Properties and the
contribution and conveyance of the Contributed LLC Interests to Contributee
pursuant to this Agreement (as provided in Section 10.1(a) above),
Contributee shall be responsible for up to an additional $175,000 which is
owed with respect to the foregoing taxes, deed stamps and costs; in
addition, if the total costs for all of the foregoing exceeds $350,000,
Contributee shall pay one-half of all such costs in excess of $350,000;
(b) one-half of the Nomura Transfer Expenses, to the extent
that the Nomura Transfer Expenses do not exceed $300,000 in the aggregate;
and all Nomura Transfer Expenses in excess of $300,000 in the aggregate;
(c) the cost of the title reports or abstracts issued by the
Title Insurer in connection with the transactions contemplated by this
Agreement, as well as all survey and search costs related thereto, and all
title insurance premiums incurred in connection with the issuance of title
insurance at Closing (other than any title insurance costs and premiums
which are part of the Nomura Transfer Expenses);
(d) the first $1,000,000 of brokerage fees and expenses owed
to the Brokers in connection with the consummation of the transactions
contemplated by this Agreement and the Closing Steps Summary (it being
agreed that all such fees and expenses in excess of $1,000,000 owed to the
Brokers will be paid by Contributor pursuant to subsection 10.1(c) above);
(e) $500,000 of the aggregate fees owed by Contributor to
its attorneys and accountants and incurred by Contributor in connection with
the consummation of the transactions contemplated by this Agreement shall be
paid by Contributee at Closing (it being agreed that all such fees and
expenses in excess of $500,000 owed by Contributor to such attorneys and
accountants will be paid by Contributor pursuant to subsection 10.1(d)
above):
(f) all apportionment obligations of Contributee hereunder,
if any; Contributee shall also shall be responsible for the cost of its
legal counsel, environmental consultants, engineers, accountants, advisors
and the other professionals and consultants employed by it in connection
with the contribution of the Non-Nomura Properties to Contributee, the
contribution of the Contributed LLC Interests to Contributee, and the
consummation of the transactions contemplated by this Agreement and the
Closing Steps Summary; and
(g) all other costs and expenses which, pursuant to the
express terms of this Agreement, are the obligation of Contributee to pay at
the Closing.
11. TITLE AND PERMITTED EXCEPTIONS.
11.1 Permitted Exceptions and Title Policy.
(a) Permitted Exceptions. Contributor agrees to contribute and
convey the Non-Nomura Properties to Contributee, and Contributee agrees to
accept such contribution and conveyance, subject only to the Permitted
Exceptions applicable to each of such properties. Contributor agrees to
contribute and convey the Contributed LLC Interests, and Contributee agrees
to accept such contribution and conveyance, with the Nomura Properties being
subject only to the Permitted Exceptions applicable to each of such
properties.
(b) Title Reports. Contributor and Contributee have each
received (i) a copy of each of the following numbered title reports from
Commonwealth Land Title Insurance Company with respect to the Non-Nomura
Properties: 72 River Park - 971220-BOS; 60 Turner Street - 971219-BOS; 2331
Congress Street - 971235-BOS; 160 Wells Avenue - 971218-BOS; 150 Wells
Avenue - 971217-BOS; 70 Wells Avenue - 971312-BOS; and 74 Turner Street -
971305-BOS; and (ii) a copy of each of the following title reports from
Chicago Title Insurance Company with respect to the Nomura Properties:
Dedham Place - 9851-00019; 128 Technology Center - 9851-00018; 7-57 Wells
Avenue - 9851-00016; 201 University Avenue - 9851-00015; 75/85/95 Wells
Avenue - 9851-00021; and 333 Elm Street - 9851-00017 (all of the foregoing
title reports being herein collectively called the "Title Reports").
Contributee shall instruct each Title Insurer, in writing, to furnish copies
of all title continuations to Contributee's counsel at the address set forth
in Article 19 hereof.
(c) Title Policy. If Contributee shall have paid the premiums
for such title insurance, then at the Closing the following title insurance
policies (the "Title Policies") shall each be issued, in the respective
amounts for each Contributor Property equal to the portion of the
Contribution Amount allocated to each Contributor Property as set forth on
Exhibit G annexed hereto:
(i) Commonwealth Land Title Insurance Company shall issue to
Contributee, (at Contributee's expense), an ALTA extended coverage
owner's title policy (10-17-92 Form), which title policy may consist of
a marked up title report, with those title endorsements set forth in
Exhibit AA annexed hereto and made a part hereof, insuring the entire
fee simple title to each of the Non-Nomura Properties is vested in
Contributee (or in the Term Loan Borrower with respect to those Non-
Nomura Properties that Contributee elects to contribute to the Term
Loan Borrower as set forth in the Closing Steps Summary, as the case
may be), subject only to the applicable Permitted Exceptions, and
(ii) Chicago Title Insurance Company shall issue to Contributee, (at
Contributee's expense), an ALTA extended coverage owner's title policy
(10-17-92 Form), which title policy may consist of a marked up title
report, with those title endorsements set forth in Exhibit AA annexed
hereto and made a part hereof, insuring the entire fee simple title to
each of the Nomura Properties is vested in Wells Senior, subject only
to the applicable Permitted Exceptions.
(d) Reinsurance. Contributee shall have the right, at its sole
cost and expense, to require the Title Insurers to obtain facultative
reinsurance (together with agreements in a form and content reasonably
satisfactory to Contributee providing the right of "direct access" against
the reinsurance) with respect to the Title Policies. Any such reinsurance
required by Contributee shall be with such title companies and in such
amounts as Contributee determines in Contributee's sole discretion.
11.2 Use of Cash Balance to Discharge Title Exceptions.
If, at the Closing, there are any Title Exceptions which are not
Permitted Exceptions and which Contributor is obligated by this Agreement or
elects to pay and discharge, Contributor may use any portion of the Cash
Balance and the Deposit (as adjusted pursuant to Article 4 hereof) to
satisfy the same, provided that Contributor shall have delivered to the
applicable Title Insurer at the Closing instruments in recordable form
sufficient to satisfy such Title Exception of record, together with the cost
of any applicable recording or filing fees. The existence of any such Title
Exceptions shall not be deemed objections to title if Contributor shall
comply with the foregoing requirements. Unpaid liens for taxes, water
charges and assessments which are due and payable and are applicable to the
period prior to the Closing Date shall not be objections to title if (i) the
amount thereof plus interest and penalties thereon shall be deducted from
the Cash Balance and (ii) payment of same to the Title Insurer at Closing
will result in such items being omitted as an exception from the applicable
Title Policies.
11.3 Title Exceptions.
(a) State of Title to be Transferred. Contributor shall
contribute and otherwise convey title to each respective Contributor
Property subject only to the Permitted Exceptions.
(b) Voluntary Title Exceptions. If, from time to time prior to
the Closing, either Contributor or Contributee shall become aware of any
Voluntary Title Exceptions, then Contributor or Contributee shall promptly
notify the other party thereof, which notice shall describe in reasonable
detail the Voluntary Title Exceptions(s) at issue. Contributor shall
discharge of record all Voluntary Title Exceptions on or prior to the
Closing Date. As used in this subsection (b), the term "discharge of
record" shall mean to discharge and eliminate the applicable Voluntary Title
Exception(s) from title to the Property. The willingness of the Title
Insurer to insure over or issue the Title Policy without exception for such
Voluntary Title Exception(s) shall not by itself constitute discharging from
title the Voluntary Title Exception(s); it being understood, however, that a
discharge that occurs concurrently with the Closing shall be sufficient to
discharge of record any such Voluntary Title Exception(s).
(c) Liquidated Sum Title Exceptions. On or prior to the Closing
Date, Contributor shall discharge all Liquidated Sum Title Exceptions.
Contributor may discharge a Liquidated Sum Title Exception by (i) payment of
a sum certain to the lienor in return for a discharge of lien delivered at
or prior to Closing with respect to the related lien, and which is
sufficient to satisfy the related lien of record, (ii) payment to the Title
Insurer at Closing of a sum certain, for subsequent unconditional payment to
the lienor, provided that payment of such sum to the lienor will be
sufficient to obtain from the lienor a discharge of the related lien and
satisfy such lien of record, or (iii) posting (at Contributor's sole cost
and expense) an appropriate bond, as permitted by applicable law, which is
sufficient to discharge the related lien of record with respect to the
affected Contributor Property, provided that in each of the foregoing
instances set forth in this subsection 11.3(c) the Title Insurer omits such
Liquidated Sum Title Exception from the applicable Title Policy.
Notwithstanding the foregoing, Contributor's obligations under
this Section 11.3(c) shall be subject to and limited by the following
provisions:
(i) Notwithstanding the foregoing provisions of this Section
11.3(c), Contributor shall have no obligation to expend more than the
Liquidated Sum Amount in the aggregate in order to cause such Liquidated Sum
Title Exceptions to be discharged.
(ii) If prior to the Closing, Contributor shall determine that the
cost to discharge all then undischarged Liquidated Sum Title Exceptions
shall exceed the Liquidated Sum Amount, then Contributor shall notify
Contributee thereof (the "Contributor Liquidated Sum Title Exception
Notice"), which notice shall describe in reasonable detail the Liquidated
Sum Title Exceptions that are then in existence and have not been
discharged. If Contributor shall give a Contributor Liquidated Sum Title
Exception Notice to Contributee, then Contributee shall have the right to
elect one of the following two alternatives:
(A) Contributee may elect to close otherwise in accordance with
this Agreement, notwithstanding the existence of such Liquidated Sum Title
Exceptions. If Contributee so elects, then, subject to Contributee's rights
with respect to any Voluntary Title Exceptions as set forth in Section
11.3(b) above, (1) Contributee shall be deemed to have waived all of the
Liquidated Sum Title Exceptions that were not discharged on or prior to the
Closing, and the same shall not be grounds for an objection to title, (2)
Contributee shall not have any right of action against Contributor for or in
connection with such undischarged Liquidated Sum Title Exceptions, at law or
in equity and (3) Contributee shall receive a credit against the Cash
Balance in an amount equal to the Liquidated Sum Amount; or
(B) Contributee, by written notice given to Contributor on or
prior to the Closing Date, may elect to terminate this Agreement. If this
Agreement is terminated pursuant to this clause 11.3(c)(ii)(B), then (I) the
Deposit (together with all accrued interest) shall be refunded to
Contributee, the First Loan Note and the Second Loan Note shall be released
to Contributee, and the Contributor Liquidated Damages Promissory Note shall
be released to Contributor and (II) neither party shall have any further
rights or obligations hereunder other than those which expressly survive the
termination of this Agreement.
(d) Contributee's Right to Accept Title. Notwithstanding the
foregoing provisions of this Article 11, Contributee may at any time prior
to the Closing Date, by an express written waiver executed by Contributee,
accept such title as Contributor can convey, notwithstanding the existence
of any Title Exceptions which are not Permitted Exceptions, without
adjustment of the Contribution Amount or any claim or right of action
against Contributor for damages or otherwise.
11.4 Cooperation of Contributor and Contributee. Contributor and
Contributee shall each cooperate with the Title Insurers in connection with
the issuance of the Title Insurance Policies to be issued by the Title
Insurers insuring title to the Contributor Properties subject only to the
Permitted Exceptions. In furtherance and not in limitation of the
foregoing, at or prior to the Closing, (i) Contributor shall deliver to the
Title Insurers such affidavits, certificates and other instruments as are
reasonably requested by the Title Insurers and customarily furnished to the
title insurer by sellers of real property similar to the Contributor
Properties and (ii) Contributee shall deliver to the Title Insurers such
affidavits, certificates and other instruments as are reasonably requested
by the Title Insurers and customarily furnished to the title insurer by
purchasers of real property similar to the Contributor Properties. In
addition, Contributor shall cause Dominic J. Saraceno and Kurt W. Saraceno
to execute and deliver to Chicago Title Insurance Company a title affidavit
substantially in the form of Exhibit AB annexed hereto in connection with
the issuance by each of the Title Insurers of a "non-imputation" endorsement
to the Title Policies.
12. CONDITIONS TO CLOSING.
(a) Contributee's obligation to pay the Contribution Amount and
accept the contribution of the Non-Nomura Properties and the Contributed LLC
Interests is subject to the satisfaction of the following conditions prece-
dent, any or all of which may be waived by Contributee, which waivers shall
be expressly and specifically made in writing to be enforceable against
Contributee:
(i) This Agreement shall be in full force and effect and there
shall not then exist any event which would allow Contributee to terminate
this Agreement pursuant to the express terms hereof;
(ii) Contributor shall have performed all material covenants,
undertakings and obligations required to be performed by Contributor under
this Agreement, including, without limitation, all of Contributor's
obligations under Article 6 hereof;
(iii) Contributor shall have delivered to Contributee the tenant
estoppel certificates required pursuant to subsection 6(u) hereof;
(iv) Contributee shall have received from Nomura the Nomura
Estoppel Certificate, substantially in the form of Exhibit L annexed hereto,
executed by Nomura or its duly authorized representative (except that this
condition shall be deemed satisfied even if the Nomura Estoppel Certificate
does not include any one or more of items (4) through (9) set forth on
Exhibit L, and/or does not expressly state that Contributor, Contributee,
the Lender, BankBoston, N.A. and/or Goldman Sachs Mortgage Company may rely
on the accuracy of the statements set forth in the Nomura Estoppel
Certificate);
(v) Contributee shall have received the Lazard Mezzanine Loan
Estoppel Certificate, substantially in the form of Exhibit L-1 annexed
hereto, executed by Lazard or its duly authorized representative (except
that this condition shall be deemed satisfied even if the Lazard Mezzanine
Loan Estoppel Certificate does not include any one or more of items (4)
through (7) set forth on Exhibit L-1, and/or does not expressly state that
Contributor, Contributee, the Lender, BankBoston, N.A. and/or Goldman Sachs
Mortgage Company may rely on the accuracy of the statements set forth in the
Lazard Mezzanine Loan Estoppel Certificate);
(vi) Contributee shall have received (x) a pay-off letter and
wiring instructions from the NACC Member (or its duly authorized
representative) sufficient for Contributee to redeem the interest of the
NACC Member in Wells Avenue Holdings LLC at Closing and (y) if requested by
Contributee in writing not less than 10 Business Days prior to the Closing
Date (which request shall state that Contributee intends to redeem the
interests of the LF Member in Wells Avenue Holdings LLC and satisfy the
Lazard Mezzanine Loan), a pay-off letter and wiring instructions from the LF
Member (or its duly authorized representative) setting forth the amount that
would be necessary, as of the Closing Date, if Contributee were to elect to
redeem the interest of the LF Member in Wells Avenue Holdings LLC and pay
off the Lazard Mezzanine Loan;
(vii) the Asset Manager shall have executed and delivered to
Contributee the Asset Management Agreement and the Property Manager shall
have executed and delivered to Contributee the Property Management
Agreement;
(viii) Provided that (i) Contributee has obtained all consents
from Nomura, Lazard, the NACC Member (to the extent applicable) and the LF
Member which are necessary to consummate the transactions contemplated by
this Agreement and the Closing Steps Summary and (ii) Contributee has taken
each step or action which is a condition precedent to the next step or
action to be taken by Contributor as set forth in the Closing Steps Summary,
then Contributor shall have performed all of its obligations and actions set
forth on, and in accordance with the terms of, items A(3), A(6), A(7), A(9),
B(a)(1), B(b) through B(h) (except for the last sentence of each of items
B(b) through B(h)) set forth on the Closing Steps Summary;
(ix) Contributor shall have delivered the Contributor's
Representation Certificate; and
(x) Each of the Saracen Members shall have duly executed and
delivered to Contributee the Operating Agreement Amendment.
(b) Contributor's obligation to contribute the Non-Nomura
Properties and the Contributed LLC Interests to Contributee is subject to
the satisfaction of the following conditions precedent, any or all of which
may be waived by Contributor, which waivers shall be expressly and
specifically made in writing to be enforceable against Contributor:
(i) This Agreement shall be in full force and effect and there
shall not then exist any event which would allow Contributor to terminate
this Agreement pursuant to the express terms hereof;
(ii) Contributee shall have performed all material covenants,
undertakings and obligations required to be performed by Contributee under
this Agreement, including, without limitation, all of Contributee's
obligations under Article 6 hereof;
(iii) Contributee shall have paid the Cash Balance (as adjusted
pursuant to the terms of this Agreement) to Contributor, and shall have
issued the Membership Units and the Series A Preferred Membership Units that
are to be issued to the Saracen Members pursuant to the terms hereof;
(iv) Contributee shall have delivered to Contributor the tenant
estoppel certificates required pursuant to subsection 6(v) hereof;
(v) Provided that Contributor has taken each step or action which
is a condition precedent to the next step or action to be taken by
Contributor as set forth in the Closing Steps Summary, then Contributee
shall have performed all of its obligations and actions set forth on, and in
accordance with the terms of, items A(1), A(2), A(3), A(4), A(5), A(6),
A(8), A(10), B(a)(2), and the last sentence of each of items B(b) through
B(h), set forth on the Closing Steps Summary;
(vi) Contributee shall have delivered the Contributee's
Representation Certificate;
(vii) Each of WCPT and Whitehall shall have duly executed and
delivered to Contributee the Operating Agreement Amendment and the Saracen
Members shall be admitted as members of Contributee;
(viii) WCPT shall have executed and delivered the Registration
Rights Agreement;
(ix) Contributee, Wells Avenue Holdings LLC and 1275 K Street
LLC (as applicable) shall have executed and delivered the Asset Management
Agreement and the respective Property Management Agreements;
(x) Contributee shall have caused Dominic J. Saraceno, Kurt W.
Saraceno, William F. Rand III and the Saraceno Holding Trust General
Partnership to have been released from their respective existing guarantee
obligations with respect to the Lazard Mezzanine Loan;
(xi) Dominic J. Saraceno, Kurt W. Saraceno, William R. Rand III
and the Saraceno Holding Trust General Partnership shall have been released
from the environmental indemnity given in connection with the Lazard
Mezzanine Loan (provided, however, that if the holder of the Lazard
Mezzanine Loan (or any successor thereto) refuses to so release such parties
from the environmental indemnity, this condition shall be deemed satisfied
if Contributee agrees to indemnify such parties from any liability arising
under such environmental indemnity agreement); and
(xii) Escrow Agent shall have delivered to Contributor the First
Loan Note and the Second Loan Note (both marked "cancelled") and the
Liquidated Damages Promissory Note.
13. COVENANTS.
13.1 Operation of Premises. (a) Between the date hereof and the
Closing Date, Contributor shall cause each of the Contributor Property
Owners to (i) continue to maintain the Contributor Properties substantially
in accordance with the annual budget for each such property delivered by
Contributor to Contributee prior to the date hereof, and in accordance with
the ordinary course and practices and procedures customarily followed by
each of the Contributor Property Owners in the maintenance of each of the
Contributor Properties prior to the date hereof (ordinary wear and tear and
damage by fire, casualty or condemnation excepted), and (ii) continue to
operate and manage each of the Contributor Properties in the same manner as
such properties have been operated prior to the date hereof.
(b) Between the date hereof and the Closing Date, Contributor
shall not permit any of the Contributor Property Owners to enter into any
new Service Contracts (or any amendment or modification to a Service
Contract without the consent of Contributee, which consent will not be
unreasonably withheld or delayed.
(c) Between the date hereof and the Closing Date, Contributor
shall cause each of the Contributor Property Owners to observe and keep in
full force and effect all licenses and permits which are in effect as of the
date hereof and which are necessary for the lawful operation and maintenance
of each of the Contributor Properties as they are now being operated.
(d) Between the date hereof and the Closing Date, Contributor
shall maintain in full force and effect the insurance policies listed on
Schedule A-10 hereto.
13.2 Leases.
(a) Between the date hereof and the Closing Date, Contributor
shall cause each of the Contributor Property Owners to not enter into any
new lease, or to renew, modify or extend any existing lease, for space in
any of the Contributor Properties, without Contributee's prior written
consent in each instance (which consent shall not be unreasonably withheld
or delayed, provided that Contributor complies with the procedures set forth
in subsection 13.2(b) below); provided, however, Contributor shall have the
right, without Contributee's consent, to renew, modify or extend any
existing lease pursuant to the exercise of any right of renewal or extension
by the tenant under the existing terms of any such lease or that is
otherwise required pursuant to the existing terms of any such lease,
provided that Contributor provides Contributee with written notice of any
such renewal, modification or extension within 5 Business Days after the
date of execution thereof by the applicable Contributor Property Owner.
(b) If any Contributor Property Owner shall desire to enter into,
renew, extend or modify any Lease (other than any such renewal, extension or
modification which does not require the consent of Contributee as provided
in subsection 13.2(a) above), then prior to the commencement of any lease
negotiations which are commenced after the date hereof (and with respect to
any ongoing lease negotiations that have commenced prior to the date hereof,
then prior to the execution of any applicable lease or lease amendment),
Contributor shall cause such Contributor Property Owner to so notify
Contributee (the "Lease Notice"). The Lease Notice shall be accompanied by
(i) a copy of the term sheet setting forth (x) all of the material business
related terms and conditions of the proposed lease, renewal, extension or
modification and (y) if a new lease, setting forth in reasonable detail the
identity of the proposed tenant, the nature of its business and its use or
proposed use of the demised premises, (ii) a copy of the applicable floor
plan for the lease and (iii) if a new lease, a credit report for the
proposed tenant and current financial information with respect to the
proposed tenant.
(c) If Contributor complies with the provisions of subsection
13.2(b) above, Contributee agrees that it shall not unreasonably withhold or
delay its consent to any such lease, extension, renewal and/or modification,
provided that with respect such proposed lease, renewal, extension or
modification, (i) if it affects any one of the Nomura Properties, such
proposed lease, renewal, extension or modification does not violate any of
the terms of the Nomura Loan Documents (including, without limitation, being
on the form of lease approved by Nomura), (ii) the economic terms thereof
comply in all material respects with the most recent budget, for the
applicable property in question, that has been received by Contributee prior
to the date of this Agreement, (iii) it is on commercially reasonable terms
for the demised premises in question, and (iv) it has been negotiated at
arms length between the Contributor Property Owner and a tenant or proposed
tenant that is not affiliated with any Saracen Person. If Contributee fails
to disapprove any such proposed lease, renewal, extension or modification
within five (5) days following receipt by Contributee of the Leasing Notice
(accompanied by the materials required by subsection 13.2(b) above) and such
other information relevant thereto as shall be reasonably requested by
Contributee, then Contributee's consent to such proposed lease, renewal,
extension or modification shall be deemed given.
(d) If (i) at any time after the date of this Agreement but prior
to Closing, any one or more of the Contributor Property Owners, with the
consent or deemed consent of Contributee, shall enter into a new lease for
all or a portion of the demised premises for one or more Contributor
Properties and (ii) such lease shall obligate the Contributor Property Owner
to (x) incur reasonable costs ("TI Costs") with respect to the construction
of tenant improvements to the space demised thereunder (by obligating the
landlord under the lease in question to perform such work or to make a
contribution towards costs thereof incurred by the tenant thereunder) and/or
(y) to pay any fees or commissions to the tenant's broker with respect to
such lease (the "Leasing Brokerage Fee"), then the TI Costs and Leasing
Brokerage Fee with respect to each such lease shall be apportioned and
prorated on the following basis: (x) Contributor shall be obligated to pay
the portion of such TI Costs and Leasing Brokerage Fee equal to a fraction,
the numerator of which is equal to the portion of the base rental under such
lease that is payable prior to the date of Closing and the denominator of
which is equal to the total amount of the base rental payable under such
lease; and (y) Contributee shall be obligated to pay the portion of such TI
Costs and Leasing Brokerage Fee equal to the fraction the numerator of which
is equal to the portion of the base rental under such lease that is payable
on or after the date of Closing and the denominator of which is equal to the
total amount of the base rental payable under such lease.
(e) Between the date hereof and the Closing Date, Contributor
shall cause each of the Contributor Property Owners to not cancel, accept
the surrender of, or terminate any Lease
without Contributee's prior written consent in each instance, which consent
shall not be unreasonably withheld or delayed. In addition, between the
date hereof and the Closing Date, Contributor shall not allow any of the
Contributor Property Owners to apply any of the security deposits under the
Leases for the Contributor Properties, except (i) with respect to those
Leases terminated with Contributee's consent pursuant to this subsection
13.2(e) or (ii) where Contributee has expressly consented in writing to such
application of such security deposits (which consent shall not be
unreasonably withheld or delayed).
13.3 Estoppel Certificates. (a) Contributor shall, promptly
after the date of this Agreement, cause each of the Contributor Property
Owners to request estoppel certificates, in the form hereto attached as
Exhibit "V", from each of the tenants of the Contributor Properties, and
Contributor shall make diligent good faith efforts to obtain executed
counterparts thereof from each of such tenants prior to Closing.
(b) Contributee shall, promptly after the date of this Agreement,
cause each of the Contributee Property Owners to request estoppel
certificates, in the form hereto attached as Exhibit "V", from each of the
tenants of the Contributee Properties, and Contributee shall make diligent
good faith efforts to obtain executed counterparts thereof from each of such
tenants prior to Closing.
13.4 Concerning the Nomura Loan. (a) Contributor shall cause
Wells Senior to perform all of its covenants and obligations under the
Nomura Loan Documents and to keep the Nomura Loan and the Nomura Loan
Documents in good standing and in full force and effect. Contributor shall
not permit Wells Senior to amend or modify the Nomura Loan Documents (other
than as contemplated by the Nomura Loan Modification Documents) or waive any
provisions thereof, without the prior written consent of Contributee.
(b) Promptly after the date hereof, Contributor shall request
that Nomura execute and deliver to Contributor the Nomura Estoppel
Certificate, substantially in the form hereto attached as Exhibit "L", and
Contributor shall make diligent good faith efforts to obtain the executed
Nomura Estoppel Certificate prior to Closing.
13.5 Concerning the Lazard Mezzanine Loan and the Existing Non-
Nomura Mortgage Indebtedness.
(a) Contributor shall cause Wells Senior to perform all of its
covenants and obligations under the Lazard Mezzanine Loan Documents, and
shall keep the Lazard Mezzanine Loan and the Lazard Mezzanine Loan Documents
in good standing and in full force and effect. Contributor shall not permit
Wells Avenue Holdings LLC to amend or modify the Lazard Mezzanine Loan
Documents or waive any provisions thereof, without the prior written consent
of Contributee.
(b) Contributor shall cause each of the Saracen Persons to
perform all of their respective material covenants and obligations under
each of the material documents evidencing and/or securing the Existing Non-
Nomura Mortgage Indebtedness, such that there shall not be any default with
respect thereto at or immediately prior to the Closing.
(c) Contributor shall use reasonable good faith efforts to obtain
from the holder of the Lazard Mezzanine Loan (or its duly authorized
representative) an estoppel certificate, substantially in the form of
Exhibit L-1 annexed hereto, executed by the holder of the Lazard Mezzanine
Loan or its duly authorized representative.
13.6 Operations of the Companies. Except as otherwise expressly
contemplated by Section 13.8 below and the Closing Steps Summary,
Contributor shall not (a) permit any amendment or modification to any of the
respective Organizational Documents of any of the Companies, (b) transfer or
assign (other than among the Saracen Members) or otherwise encumber any of
the interests in or with respect to any of the respective Companies or (c)
admit any new members or shareholders to any of the Companies. Between the
date hereof and the Closing, Contributor shall continue to operate each of
the Companies, and carry out their business, in the same manner as such
Companies have been operated prior to the date hereof, except that such
Companies shall not incur any new or additional Indebtedness, enter into any
contracts (other than Service Contracts which can be terminated without
penalty upon not more than 30 days notice) or incur any liabilities (other
than in the ordinary course of business consistent with the budgets
heretofore received by Contributee from Contributor).
13.7 Condominium Documents. Contributor shall cause Wells Senior
to (i) perform all of its material covenants and obligations under the
Condominium Documents and (ii) keep the Condominium and the Condominium
Documents in good standing and in full force and effect. Contributor shall
not permit Wells Senior to amend or modify the Condominium Documents or
waive any provisions thereof, without the prior written consent of
Contributee. In addition, promptly after the date hereof, Contributor shall
use reasonable efforts to obtain an estoppel certificate from Teachers
Insurance and Annuity Association of America ("TIAA"), in its capacity as
the holder of the first mortgage encumbering the hotel unit of the
Condominium, stating that (i) TIAA has not sent any default notices with
respect to such mortgage and (ii) all monthly debt service payments that are
due and payable with respect to such mortgage have been paid in full.
13.8 Closing Steps Summary Actions. At the Closing, Contributor
shall perform all of the actions that are within Contributor's control and
that are necessary to consummate the transactions described on the Closing
Steps Summary. At the Closing, Contributee shall perform all of the actions
that are within Contributee's control and that are necessary to consummate
the transactions described on the Closing Steps Summary.
13.9 Indemnity of Contributor. Contributor hereby covenants and
agrees to indemnify and hold harmless Contributee, Wells Senior and Wells
Avenue Holdings LLC (or any successor thereto) from and against any and all
liabilities, obligations, damages and reasonable costs and expenses incurred
by Contributee and/or Wells Senior and/or Wells Avenue Holdings LLC (or any
successor thereto) from and after the Closing Date, and which arise out of
or are related to the indemnification obligations of Wells Senior (as set
forth in Section 3.1 of the operating agreement in effect on the date hereof
for Wells Senior) to the Special Members, Additional Managers, Substitute
Manager and Advising Managers (as all such capitalized terms are defined in
the operating agreement for Wells Senior in effect on the date hereof),
provided that such indemnification obligations of Wells Senior arise out of,
or are related to, any events, actions, circumstances or costs which
occurred prior to the Closing Date. The foregoing indemnification
obligations of Contributor shall not apply to any indemnification
obligations of Wells Senior which arise out of, or relate to, any events,
actions, circumstances or costs which occur from and after the Closing Date
(including, without limitation, any actions taken by or on behalf of Wells
Senior or any member thereof on or after the Closing Date). The terms and
provisions of this Section 13.9 shall survive the Closing.
13.10 Concerning the Nomura Consent and the Lazard Consent.
(a) Promptly after the date hereof, Contributee shall contact
Nomura regarding (i) obtaining the Nomura Consent and (ii) modifying the
Nomura Loan Documents to incorporate the items set forth in the Nomura
Consent (as well as to incorporate such other changes as Contributee may
reasonably request). Contributee shall provide to Contributor copies of all
correspondence, proposals, requests and proposed modifications to the Nomura
Loan Documents which Contributee delivers to or receives from Nomura, and
shall keep Contributor appraised of the status of all discussions and
negotiations with Nomura with respect to the Nomura Consent and any
requested modifications to the Nomura Loan Documents. Contributor and
Contributee agree that (i) Contributee shall control all discussions,
processes, negotiations and document deliveries to Nomura in connection with
obtaining the Nomura Consent and any desired modifications to the Nomura
Loan Documents and (ii) Contributor shall reasonably cooperate in good faith
with Contributee (and shall use all reasonable efforts to assist
Contributee) in connection with the foregoing, including, without limitation
and upon request from Contributee from time to time, attending meetings and
participating in conferences and discussions with Contributee and
representatives of Nomura or other applicable persons with respect to the
foregoing.
(c) Promptly after the date hereof, Contributee shall contact
Lazard regarding (i) obtaining the Lazard Consent, (ii) modifying the Lazard
Mezzanine Loan Documents to incorporate the items set forth in the Lazard
Consent (as well as to incorporate such other changes as Contributee may
reasonably request) and (iii) releasing Dominic J. Saraceno, Kurt W.
Saraceno, William F. Rand III and Saraceno Holding Trust General Partnership
from their respective guarantee obligations under the guaranty, dated as of
December 31, 1996, in favor of Lazard with respect to the Lazard Mezzanine
Loan, in return for a similar guarantee obligation from Contributee.
Contributee shall provide to Contributor copies of all correspondence,
proposals, requests and proposed modifications to the Lazard Mezzanine Loan
Documents which Contributee delivers to or receives from Lazard, and shall
keep Contributor appraised of the status of all discussions and negotiations
with Lazard with respect to the Lazard Consent and any requested
modifications to the Lazard Loan Documents. Contributor and Contributee
agree that (i) Contributee shall control all discussions, processes,
negotiations and document deliveries to Lazard in connection with obtaining
the Lazard Consent and any desired modifications to the Lazard Mezzanine
Loan Documents and (ii) Contributor shall reasonably cooperate in good faith
with Contributee (and shall use all reasonable efforts to assist
Contributee) in connection with the foregoing, including, without limitation
and upon request from Contributee from time to time, attending meetings and
participating in conferences and discussions with Contributee and
representatives of Lazard or other applicable persons with respect to the
foregoing.
14. CASUALTY AND CONDEMNATION.
14.1 Casualty. If a fire, vandalism, act of God, or other
casualty which causes damage or injury to a Contributor Property (herein
called a "Casualty") shall occur prior to the Closing, Contributor shall
deliver to Contributee a written notice describing the Casualty in question.
Such notice shall be accompanied by a statement from Contributor stating
whether any of the tenants of the affected Contributor Properties has/have a
right to terminate their respective Leases as a result of such Casualty. In
the event that a Casualty shall occur prior to the Closing Date, then (i)
neither Contributor nor Contributee shall have any right to terminate this
Agreement on account thereof and (ii) Contributor shall contribute the
Nomura Properties and the Contributed LLC Interests to Contributee, and
Contributee shall accept such contribution, with the respective Contributor
Properties in their damaged condition, without reduction of or offset
against the Contribution Amount. Contributor shall cause the Contributor
Property Owner of each applicable property to assign to Contributee the
right to receive any insurance proceeds payable to such Contributor Property
Owner as a result of such fire or other casualty (including, without
limitation, any rental interruption insurance proceeds attributable to any
lost rental income for any period from and after the Closing). If prior to
the Closing Contributor shall have received any such insurance proceeds in
respect of any such Casualty, then at the Closing Contributor shall remit
such insurance proceeds to Contributee. If, however, such casualty
insurance proceeds will not be payable at or prior to the Closing, then
Contributee shall receive a credit against the Cash Balance due at Closing
to the extent of the damage as reasonably estimated by a licensed architect
or licensed engineer mutually acceptable to Contributor and Contributee
(less an amount equal to the applicable deductible which would apply under
the applicable Contributor Property Owner's casualty insurance policy for
the damaged Contributor Property(s)). In the event of such credit to
Contributee, any such casualty insurance proceeds that are received shall be
payable to Contributor.
14.2 Condemnation. If, between the date hereof and the Closing,
any condemnation or eminent domain proceedings are initiated with respect to
any one or more of the Contributor Properties or any part thereof, then (i)
neither Contributor nor Contributee shall have any right to terminate this
Agreement on account thereof, (ii) Contributor shall not settle or
compromise any claim with respect to such condemnation or eminent domain
proceedings without the prior written consent of Contributor (which consent
shall not be unreasonably withheld or delayed), and (iii) the parties hereto
shall proceed to the Closing without reduction of or offset against the
Contribution Amount. In such event, all of the right, title and interest of
the applicable Contributor Property Owner (with respect to such Contributor
Property in question) in and to any condemnation proceeds paid or payable in
connection therewith shall be assigned to Contributee at the Closing (or
shall be remitted to Contributee at the Closing, if such proceeds have been
received by the Contributor Property Owner prior to the Closing).
15. DEFAULT; REMEDIES; SURVIVAL.
15.1. Default By Contributee Prior to Closing. If Contributee
(i) defaults in its Closing obligations (i.e., defaults in the payment of
the Cash Balance, the issuance of the Membership Units and/or the Series A
Preferred Membership Units, or otherwise in the performance of any of its
obligations hereunder which are to be performed on, or as of, the Closing
Date), or (ii) otherwise materially defaults hereunder and such other
material default is not cured within the earlier of ten (10) days after
notice thereof from Contributor to Contributee and the scheduled Closing
Date, then, and in any of such events, Contributor may, as its sole remedy
therefor, either (x) pursue an action for specific performance of this
Agreement by Contributee or (y) terminate this Agreement by written notice
to Contributee. If Contributor elects to terminate this Agreement on
account of such default, then the Deposit, together with any interest
accrued thereon, shall be paid to Contributor as liquidated damages
hereunder, the Contributor Liquidated Damages Promissory Note shall be
returned to Contributor, and the First Loan Note and the Second Loan Note
shall be marked "cancelled" by the Escrow Agent and returned to Contributor,
all pursuant to the provisions of Article 3.3(d) above. Thereafter, neither
party shall have any further rights or obligations hereunder other than
those which, pursuant to Section 15.5 hereof, expressly survive the
termination of this Agreement. Contributor and Contributee agree that the
aforesaid liquidated damages are a fair and reasonable amount to be retained
by Contributor as agreed and liquidated damages in light of Contributor's
removal of the Contributor Properties from the market and the costs incurred
by Contributor and shall not constitute a penalty or a forfeiture.
15.2. Default By Contributor Prior to Closing. If Contributor
(i) defaults in its Closing obligations (i.e., defaults in the performance
of any of its obligations hereunder which are to be performed on, or as of,
the Closing Date), or (ii) otherwise materially defaults hereunder and such
material default is not cured within the earlier of ten (10) days after
notice thereof from Contributor to Contributee and the scheduled Closing
Date, then, and in either such event, Contributee may, as its sole remedy
therefor, either (x) pursue an action for specific performance of this
Agreement by Contributor or (y) terminate this Agreement by written notice
to Contributor. If Contributee elects to terminate this Agreement on
account of such default, then the Deposit (together with all accrued
interest) shall be refunded to Contributee, the First Loan Note and the
Second Loan Note shall be released to Contributee, and the Contributor
Liquidated Damages Promissory Note shall be released to Contributee
evidencing a $1,000,000 liquidated damages claim of Contributee against
Contributor, all pursuant to the provisions of Article 3.3(d) above.
Thereafter, neither party shall have any further rights or obligations
hereunder other than those which, pursuant to Section 15.5 hereof, expressly
survive the termination of this Agreement. Contributor and Contributee
agree that the aforesaid $1,000,000 liquidated damages are a fair and
reasonable amount to be paid by Contributor to Contributee as agreed and
liquidated damages in light of the costs incurred by Contributee in
connection with its due diligence activities and pursuit of the Contributor
Properties, and shall not constitute a penalty or a forfeiture.
15.3. Definition of Default. The term "default", as used
herein, shall mean the failure to perform an obligation or covenant, and
shall not be deemed to include an inaccuracy in any representation or
warranty. Without limiting the generality of the foregoing, it is
understood and agreed that Section 9.2 hereof sets forth the exclusive
remedies of Contributor and Contributee for any claim which might arise out
of any breach of a representation or warranty (and, accordingly, the
provisions of Sections 15.1 and 15.2 shall not apply to any such claims).
15.4. Provisions which Survive Closing. The provisions of
Articles 4, 10, 16, 19 and 21 and Sections 3.2, 9.3, 9.4, 13.9, 15.4 and
17(b) of this Agreement shall survive the Closing.
15.5. Provisions which Survive Termination. The provisions of
Articles 15, 19 and 21 and Sections 3.3, 9.2 and 9.4 of this Agreement shall
survive the termination of this Agreement.
16. BROKERAGE. Contributee and Contributor each represents and
warrants to the other that such party has not had any conversations or
dealings with any broker, finder or other similar party in connection with
the transactions contemplated hereby other than (i) Fallon Hines & O'Connor,
Inc. and (ii) Vallace Associates (collectively, the "Brokers"). Contributee
and Contributor (each, an "indemnifying party") shall indemnify, defend and
hold the other harmless from and against any and all claims, liabilities,
losses, damages, costs or expenses (including, without limitation,
reasonable attorneys' fees and expenses), arising out of a breach of the
representation made by such indemnifying party pursuant to the immediately
preceding sentence. If the Closing occurs, then (i) pursuant to the
provisions of subsection 10.2(d), Contributee shall pay the first $1,000,000
of all commissions, fees and expenses owed to the Brokers in connection with
this Agreement and the transactions contemplated hereby, and (ii) pursuant
to the provisions of subsection 10.1(c) hereof, Contributor shall pay all
other commissions, fees and expenses owed to the Brokers in connection with
this Agreement and the transactions contemplated hereby pursuant to separate
agreements between Contributor and the Brokers. The provisions of this
Section 16 shall survive the Closing.
17. TAX CERTIORARI PROCEEDINGS.
(a) If any tax reduction proceedings in respect of any
Contributor Property, relating to any fiscal years ending prior to the
fiscal year in which the Closing occurs, are pending at the time of the
Closing, then Contributor agrees not to withdraw, settle or otherwise
compromise any such tax reduction proceeding without the consent of
Contributee, which consent shall not be unreasonably withheld or delayed.
(b) If any tax reduction proceedings in respect of any
Contributor Property, relating to the fiscal year in which the Closing
occurs (or, to the extent applicable, relating to any fiscal year commencing
after the Closing Date), are pending at the time of Closing, then (i) at the
Closing Contributor shall assign over and transfer to Contributee all of
Contributor's rights in and to such proceedings to Contributee, Contributee
shall assume all obligations of Contributor thereunder arising from and
after the Closing, and Contributee shall have the right to continue to
prosecute and/or settle the same; provided, however, that Contributee shall
not settle any such proceeding without Contributor's prior written consent,
which consent shall not be unreasonably withheld or delayed.
(c) Any refunds or savings in the payment of taxes resulting from
such tax reduction proceedings applicable to the period prior to the date of
the Closing shall belong to and be the property of Contributor, and any
refunds or savings in the payment of taxes applicable to the period from and
after the date of the Closing shall belong to and be the property of
Contributee; provided, however, that if any such refund creates an
obligation to reimburse any tenants under Leases for any rents or additional
rents paid or to be paid, that portion of such refund equal to the amount of
such required reimbursement (after deduction of allocable expenses as may be
provided in the Lease to such tenant) shall be paid to Contributee and
Contributee shall, at Contributee's election, either (x) disburse the same
to such tenants or (y) credit the tenants the same against the next
installments of such tenant's Overage Rents (unless the requirements of the
applicable Lease requires that such reimbursement be applied in a different
manner, in which event Contributee shall apply such reimbursement amount
according to the terms of the applicable Lease). All reasonable attorneys'
fees and other expenses incurred in obtaining such refunds or savings shall
be apportioned between Contributor and Contributee in proportion to the
gross amount of such refunds or savings payable to Contributor and
Contributee, respectively.
18. INSPECTION BY CONTRIBUTOR AND CONTRIBUTEE.
(a) Contributor and its agents shall have the right to inspect
each of the Contributee Properties during business hours of Business Days,
and make surveys, studies and generally obtain such other information and
data as shall be reasonably necessary to Contributor in connection with the
transactions contemplated by this Agreement, provided that Contributor shall
first give Contributee reasonable advance notice of Contributor's intention
to conduct any such inspection or otherwise enter any of the Contributee
Properties. Contributor's right of inspection of each of the Contributee
Properties shall be subject to the rights of the tenants of each such
property.
(b) Contributee and its agents shall have the right to inspect
each of the Contributor Properties during business hours of Business Days,
and make surveys, studies and generally obtain such other information and
data as shall be reasonably necessary to Contributee in connection with the
transactions contemplated by this Agreement, provided that Contributee shall
first give Contributor reasonable advance notice of Contributee's intention
to conduct any such inspection or otherwise enter any of the Contributor
Properties. Contributee's right of inspection of each of the Contributor
Properties shall be subject to the rights of the tenants of each such
property.
19. NOTICES. All notices, demands, requests and other communications
required hereunder shall be in writing and shall be deemed to have been
given: (a) upon delivery, if personally delivered; (b) three (3) days after
deposit in the United States Mail when delivered, postage prepaid, by
certified or registered mail; or (c) one (1) business day after deposit with
a nationally recognized overnight delivery service marked for delivery on
the next business day, addressed to the party for whom it is intended at its
address hereinafter set forth:
To the Contributor:
Saracen Companies, Inc.
57 Wells Avenue
Newton Centre, MA. 02159
Attn: Mr. William F. Rand III
with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA. 02109
Att: Ross D. Gillman, Esq.
To the Contributee:
Wellsford/Whitehall Properties, L.L.C.
c/o Wellsford Commercial Properties Trust
610 Fifth Avenue
New York, New York 10020
Att: Mr. Edward Lowenthal
with a copy to each of:
Whitehall Street Real Estate Limited Partnership VII
85 Broad Street
New York, New York 10004
Attn: Mr. Ronald Bernstein
and
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Attn: Alan Pearce, Esq.
To the Escrow Agent:
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Attn: Sandor A. Green, Esq.
or at such other address in the United States of America as may be
designated by either of the parties in a written notice given in accordance
with the provisions of this Section. The attorney for any party may send
notices on that party's behalf.
20. CONFIDENTIALITY. (a) Contributor and Contributee shall (and shall
cause their respective Subsidiaries, affiliates, members, shareholders,
partners and representatives to) hold this Agreement and the terms hereof in
strict confidence, and in connection therewith neither party shall (or shall
permit any of its Subsidiaries, affiliates, members, shareholders, partners
or representatives to) show this Agreement (or any summary of the terms
hereof) to any third party other than as set forth below. No press release
or publicity notice or announcement of the terms of this Agreement, or the
transactions contemplated hereby, shall be made by either Contributor or
Contributee without the consent of the other, which consent shall not be
unreasonably withheld or delayed. Contributor and Contributee shall each
furnish to the other advance copies of any release or other publicity notice
or announcement which it proposes to make public with respect to this
Agreement and/or the transactions contemplated hereby.
(b) Notwithstanding anything to the contrary contained herein,
Contributee shall be entitled to disclose this Agreement, and any
information related to the transactions contemplated hereby, (i) which was
or becomes generally available to the public other than as a result of
disclosure by Contributor or any of its employees, agents, representatives
or consultants to the public or to any third party in violation of this
Agreement; (ii) which becomes available to Contributee from a source other
than Contributor or its representatives, provided that Contributee has no
reason to believe (in its reasonable judgment) that such source is itself
bound by any nondisclosure obligation in favor of Contributor; (iii) which
was rightfully in the possession of Contributee prior to its receipt from
Contributor or its representatives; (iv) which is independently developed by
Contributee; (v) which Contributee is required to disclose by law or by
court or governmental agency of competent jurisdiction, provided, to the
extent practicable, Contributee shall provide Contributor with reasonable
prior written notice of such disclosure obligation; (vi) to a Governmental
Authority (including, without limitation, to the Securities and Exchange
Commission and the American Stock Exchange pursuant to the terms and
requirements of their respective rules and regulations); (vii) to
Contributee's attorneys, accountants and other professionals engaged by
Contributee, (viii) to Contributee's lenders and prospective lenders, and
their representatives and counsel, and (ix) to Contributee's existing and
prospective members, partners, shareholders, officers, directors, investors
(both actual and prospective), and their respective representatives and
counsel.
(c) Notwithstanding anything to the contrary contained herein,
Contributor shall be entitled to disclose this Agreement, and any
information related to the transactions contemplated hereby (i) which was
or becomes generally available to the public other than as a result of
disclosure by Contributor or any of its employees, agents, representatives
or consultants to the public or to any third party in violation of this
Agreement; (ii) which becomes available to Contributor from a source other
than Contributee or its representatives, provided that Contributor has no
reason to believe (in its reasonable judgment) that such source is itself
bound by any nondisclosure obligation in favor of Contributee; (iii) which
was rightfully in the possession of Contributor prior to its receipt from
Contributee or its representatives; (iv) which is independently developed by
Contributor; (v) which Contributor is required to disclose by law or by
court or governmental agency of competent jurisdiction, provided, to the
extent practicable, Contributor shall provide Contributee with reasonable
prior written notice of such disclosure obligation; (vi) to a Governmental
Authority, (vii) to Contributor's attorneys, accountants and other
professionals engaged by Contributor, (viii) to Contributor's lenders and
prospective lenders, and their representatives and counsel, and (ix) to
Contributor's existing and prospective members, partners, shareholders,
officers, directors, investors (both actual and prospective), and their
respective representatives and counsel.
21. MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts,
without regard to conflict of law provisions thereof.
(b) Further Assurances. In addition to the obligations required
to be performed hereunder by Contributor and Contributee at the Closing,
each party, from and after the Closing, shall execute, acknowledge and/or
deliver such other instruments, as may reasonably be requested in order to
effectuate the purposes of this Agreement; provided, however, that the
foregoing provisions of this Section 21(b) shall not obligate either party
to execute, acknowledge or deliver any instrument which would or might
impose upon such party any additional liability or obligation (beyond that
imposed upon on it under the documents delivered by such party at the
Closing and the other provisions of this Agreement which survive the
Closing).
(c) Successors. All of the provisions of this Agreement and of
any of the documents and instruments executed in connection herewith shall
apply to and be binding upon, and inure to the benefit of Contributor and
Contributee, their successors and permitted assigns.
(d) No Third Party Beneficiary. This Agreement and each of the
provisions hereof are solely for the benefit of Contributee, Contributor,
the Escrow Agent and their permitted assigns. No provisions of this
Agreement, or of any of the documents and instruments executed in connection
herewith, shall be construed as creating in any person or entity other than
Contributee, Contributor, the Escrow Agent and their respective permitted
assigns any rights of any nature whatsoever.
(e) Entire Agreement. This Agreement, together with the
documents and instruments executed and delivered in connection herewith,
sets forth the entire agreement between Contributee and Contributor relating
to the transactions contemplated hereby and all other prior agreements,
understandings, representations or statements, oral or written, relating
directly to the transactions contemplated herein are superseded hereby.
(f) Schedules and Exhibits. All schedules and exhibits attached
to this Agreement are incorporated into this Agreement by reference.
(g) Severability. If any provision in this Agreement is found by
a court of competent jurisdiction to be in violation of any applicable law,
and if such court should declare such provision of this Agreement to be
unlawful, void, illegal or unenforceable in any respect, the remainder of
this Agreement shall be construed as if such unlawful, void, illegal or
unenforceable provision were not contained herein, and the rights,
obligations and interests of the parties hereto under the remainder of this
Agreement shall continue in full force and effect undisturbed and unmodified
in any way.
(h) Modification. This Agreement and the terms hereof may not be
changed, waived, modified, supplemented, canceled, discharged or terminated
orally, but only by an instrument or instruments in writing executed and
delivered by Contributee and each of the Persons constituting Contributor.
(i) Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON,
UNDER OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE
DOCUMENTS EXECUTED IN CONNECTION HEREWITH, OR ANY CLAIMS, DEFENSES, RIGHTS
OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.
(j) No Recording. Neither this Agreement nor any memorandum
hereof shall be recorded. Each party hereby agrees to indemnify and hold
harmless the others for all liabilities, losses, damages, liens, suits,
claims, costs and expenses (including reasonable attorneys' fees) incurred
by the other by reason of a breach of the foregoing covenant.
(k) Captions; Interpretation.
(i) The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the
scope or intent of this Agreement or any of the provisions hereof.
(ii) As used in this Agreement, the masculine shall include
the feminine and neuter, the singular shall include the plural and the
plural shall include the singular, as the context may require.
(iii) Both Contributor and Contributee have been
represented by competent counsel in connection with the negotiation of this
Agreement, and no canon of interpretation shall be applied so as to construe
provisions against the party preparing the initial or subsequent drafts of
this Agreement.
(l) No Waiver. Neither the failure of either party to exercise
any power given such party hereunder or to insist upon strict compliance by
the other party with its obligations hereunder, nor any custom or practice
of the parties at variance with the terms hereof shall constitute a waiver
of either party's right to demand exact compliance with the terms hereof.
(m) Consent of Contributor. Whenever the consent, approval or
decision of Contributor (or any of the Persons constituting Contributor, or
any of the Companies) is required pursuant to any of the terms of this
Agreement, such consent, approval or decision shall be deemed given by, and
binding on, each of the respective Persons constituting Contributor and on
each of the Companies if Contributee obtains the written consent, approval
or decision of Saracen Properties, Inc., and each of the respective Persons
constituting Contributor, and each of the respective Companies, hereby
agrees that Saracen Properties, Inc. shall have the power and authority to
grant any such written consent or approval, or make any such decision, on
behalf of, and as the duly authorized agent and representative of, such
respective Persons.
(n) Exculpation of Contributee, WCPT and Whitehall. This
Agreement and all documents, agreements, understandings and arrangements
relating to this Agreement and the transactions contemplated hereby have
been executed by an officer or trustee of WCPT in his capacity as an officer
or trustee of WCPT, and not individually. WCPT, in turn, is executing this
Agreement in its capacity as the managing member of Contributee, and not on
behalf of WCPT individually. None of WCPT, Whitehall, or the respective
trustees, officers, shareholders, partners or members of WCPT or Whitehall
shall be bound or have any personal liability hereunder or thereunder.
Contributor shall look solely to the assets of Contributee for satisfaction
of any liability, if any, of Contributee in respect of this Agreement and
will not seek recourse or commence any action against WCPT, Whitehall, or
any of the respective trustees, officers, shareholders, members or partners
of WCPT or Whitehall, or any of their respective personal assets, for the
performance or payment of any obligation hereunder. The foregoing shall
also apply to any future documents, agreements, understandings, arrangements
and transactions between or among the parties hereto.
(o) Exculpation of Contributor. In the event that this Agreement
has been terminated and Contributee seeks to enforce any claim for damages
against Contributor arising out of or in connection with this Agreement, the
sole remedy of Contributee hereunder shall be to seek recovery of the
liquidated damages against Dominic J. Saraceno and Kurt Saraceno pursuant to
the terms of the Contributor Liquidated Damages Promissory Note. In the
event of any post-Closing claim against Contributor arising under this
Agreement, Contributee agrees that it shall look only to the membership
interests of the Saracen Members in Contributee (including the Membership
Units, the Series A Preferred Membership Units, and any distributions
otherwise payable by Contributee to the Saracen Members under the Operating
Agreement as amended by the Operating Agreement Amendment). Except as set
forth above, Contributee will not seek recourse or commence any action
personally against any of the Persons constituting Contributor, or against
any of the trustees, members, officers, shareholders or partners of any of
such Persons, or any of their respective personal assets, for the
performance or payment of any obligation or liability hereunder.
(p) Modification of Saracen Companies, Inc. Lease. At the
Closing, Contributor shall cause the Saracen Companies, Inc. to, and
Contributee shall, amend that certain lease between Wells Senior and the
Saracen Companies, Inc. dated June 1, 1991 with respect to approximately
5,540 square feet at 7-57 Wells Avenue (the "Saracen Lease") to provide, in
substance, that for so long as the Asset Management Agreement shall remain
in full force and effect, the tenant under the Saracen Lease shall not have
the right to terminate or assign such Lease or to sublet all or any portion
of the applicable leased premises (except that while the Asset Management
Agreement is in effect, the tenant under the Saracen Lease may, from time to
time, sublet portions of such leased premises pursuant to the terms of the
Saracen Lease, for so long as the Asset Manager continues to maintain its
principal management office within such leased premises).
(q) Exclusivity. Until the earlier to occur of (i) the
Closing or (ii) the termination of this Agreement pursuant to its terms,
Contributor covenants and agrees that it will not negotiate or enter into
discussions with, or entertain or solicit offers from, any person or entity
other than Contributee with respect to the sale, disposition or other direct
or indirect transfer of any one or more of the Contributor Properties or the
Companies or any direct or indirect interest therein.
(r) Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the
same original, and the execution of separate counterparts by Contributee and
Contributor shall bind Contributee and Contributor as if they had each
executed the same counterpart.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into as of the
day and year first above written.
CONTRIBUTOR:
SARACEN PROPERTIES, INC.
a Massachusetts corporation
By:/s/ William F. Rand, III
_____________________________
Name: William F. Rand, III
Title: V.P. - Treasurer
SARACENO HOLDING TRUST GENERAL PARTNERSHIP
a Massachusetts general partnership
By: Saraceno Holding Trust Limited Partnership I
General Partner
By: Saracen Properties, Inc.
its General Partner
By:/s/ William F. Rand, III
_______________________
Name: William F. Rand, III
Title: V.P. - Treasurer
/s/ Dominic J. Saraceno
____________________________
DOMINIC J. SARACENO
150 WELLS AVENUE REALTY TRUST
a Massachusetts trust
By:/s/ Dominic J. Saraceno
____________________________
Name: Dominic J. Saraceno
Title: Trustee
RIVER PARK REALTY TRUST
a Massachusetts trust
By:/s/ Kurt W. Saraceno
____________________________
Name: Kurt W. Saraceno
Title: Trustee
SEVENTY WELLS AVENUE LLC
a Massachusetts limited liability company
By: Seventy Wells Avenue Inc.
Manager
By:/s/ William F. Rand, III
_____________________________
Name: William F. Rand, III
Title: V.P. Treasurer
NEWTON ACQUISITION LLC I,
a Massachusetts limited liability company
By: Saracen Properties, Inc.
Manager
By:/s/ William F. Rand, III
_____________________________
Name: William F. Rand, III
Title: V.P. Treasurer
SARACEN PORTLAND L.L.C.
a Maine limited liability company
By: Saracen Properties, Inc.
Manager
By:/s/ William F. Rand, III
_____________________________
Name: William F. Rand, III
Title: V.P. Treasurer
KSA NEWTON ACQUISITION LIMITED PARTNERSHIP II
a Massachusetts limited partnership
By: Saracen Properties, Inc.
General Partner
By:/s/ William F. Rand, III
_____________________________
Name: William F. Rand, III
Title: V.P. Treasurer
KSA NEWTON LIMITED PARTNERSHIP I
a Massachusetts limited liability company
By:/s/ Dominic J. Saraceno
____________________________
Name: Dominic J. Saraceno
Title: General Partner
CONTRIBUTEE:
WELLSFORD/WHITEHALL PROPERTIES, L.L.C.,
a Delaware limited liability company
By: Wellsford Commercial Properties Trust,
managing member
By:/s/ Edward Lowenthal
________________________________
Name: Edward Lowenthal
Title: President
RECEIPT BY ESCROW AGENT:
The undersigned Escrow Agent hereby acknowledges receipt of (i) the Deposit,
(ii) the First Loan Note, (iii) the Second Loan Note and (iv) the
Contributor Liquidated Damages Promissory Note, to be held in escrow
pursuant to the provisions of Section 3.3 of this Agreement.
ROBINSON SILVERMAN PEARCE ARONSOHN & BERMAN LLP
By: /s/ Sandor A. Green
_____________________________
Name: Sandor A. Green, Esq.
Title: Partner
