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): November 13, 1997
HEALTH AND RETIREMENT PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 1-9317 04-6558834
(State or other (Commission (IRS Employer
jurisdiction of ) File Number) Identification No.)
incorporation)
400 Centre Street, Newton, MA 02158
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 617-332-3990
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Item 2. Acquisition or Disposition of Assets
On November 13, 1997, Health and Retirement Properties Trust and
Subsidiaries (the "Company") purchased an office building with approximately
608,161 square foot located at One Franklin Plaza, in Philadelphia, Pennsylvania
from Franklin Office Associates for $75.5 million plus closing costs in a
negotiated arms-length transaction. The building has been and will continue to
be rented as commercial office space. The building is approximately 100%
occupied with 98% leased to the corporate headquarters of SmithKline Beecham
Corporation, a wholly-owned subsidiary of SmithKline Beecham PLC.
Property agent and management services, for this property are currently
provided by an unaffiliated third party. The management contract is cancelable
upon 30 days written notice. Management fees are based on a percentage of
revenue derived from this property. The Company plans to retain the current
property manager under a transitional period. Subsequent to the transitional
period, the property will be managed by M&P Partners Limited Partnership
("M&P"), which provides property agent and management services for certain of
the Company's multi-tenant buildings. M&P is owned by its general partner, HRPT
Advisors, Inc., the Company's advisor, and Messrs. Gerard M. Martin and Barry M.
Portnoy, who are managing trustees of the Company. Management fees paid to M&P
are based on a percentage of revenue derived from the multi-tenant buildings
under its management.
The consideration for the acquisition was funded initially by drawing
under the Company's existing revolving line of credit with Dresdner Kleinwort
Benson North America LLC, as agent, and Fleet National Bank, as administrative
agent, and available cash.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
aFinancial Statements Under Rule 3-14 of Regulation S-X
The audited statement of gross income and certain expenses of the property
described in Item 2 of this Report is not filed herein but will be filed as an
amendment to this Form 8-K within 60 days of the date hereof.
(c) Exhibits
2.1 Purchase and Sale Agreement dated October 23,1997 by and between
Franklin Office Associates, as seller and the Company, as purchaser.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has dully caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEALTH AND RETIREMENT PROPERTIES TRUST
By: /s/ Ajay Saini
Ajay Saini, Treasurer and
Chief Financial Officer
Date: November 26, 1997
EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
SELLER:
FRANKLIN OFFICE ASSOCIATES
C/O AETNA REAL ESTATE INVESTMENT GROUP
151 FARMINGTON AVENUE
HARTFORD, CONNECTICUT 06156
PURCHASER:
HEALTH AND RETIREMENT PROPERTIES TRUST
400 CENTRE STREET
NEWTON, MASSACHUSETTS 02158
PROPERTY:
ONE FRANKLIN PLAZA
200 NORTH 16TH STREET
PHILADELPHIA, PENNSYLVANIA
October 23, 1997
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TABLE OF CONTENTS
Page
1. Agreement to Convey................................................ 1
1.1 Property.................................................. 1
1.2 "As-Is" Purchase.......................................... 2
2. Price, Payment and Closing......................................... 3
2.1 Purchase Price............................................ 3
2.2 Payment................................................... 3
2.3 Closing................................................... 4
3. Pre-Closing Due Diligence.......................................... 4
3.1 Inspections............................................... 4
3.2 Title and Survey.......................................... 5
3.3 Contracts................................................. 5
3.4 Purchaser's Right to Terminate............................ 6
3.5 Confidentiality........................................... 6
4. Prior to Closing................................................... 6
4.1 Insurance and Operation................................... 6
4.2 New Contracts............................................. 7
4.3 New Leases................................................ 7
5. Representations and Warranties..................................... 7
5.1 By Seller................................................. 7
5.2 By Purchaser.............................................. 10
5.3 Mutual.................................................... 10
6. Costs and Prorations............................................... 10
6.1 Purchaser's Costs......................................... 10
6.2 Seller's Costs............................................ 11
6.3 Other Closing Costs....................................... 11
6.4 Prorations................................................ 11
6.5 Certain Reimbursements.................................... 12
6.6 Purpose and Intent........................................ 13
7. Damage, Destruction or Condemnation................................ 13
7.1 Material Event............................................ 13
7.2 Immaterial Event.......................................... 13
7.3 Termination and Return of Deposit......................... 13
8. Notices............................................................ 13
9. Closing and Escrow................................................. 14
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9.1 Escrow Instructions....................................... 14
9.2 Seller's Deliveries....................................... 14
9.3 Purchaser's Deliveries.................................... 15
9.4 Possession................................................ 16
9.5 Insurance................................................. 16
9.6 Utility Service and Deposits.............................. 16
9.7 Notice Letters............................................ 16
9.8 Post-Closing Collections.................................. 16
10. Default; Failure of Condition...................................... 17
10.1 Purchaser Default......................................... 17
10.2 Seller Default............................................ 17
10.3 Failure of Condition...................................... 17
11. Miscellaneous...................................................... 18
11.1 Entire Agreement.......................................... 18
11.2 Severability.............................................. 18
11.3 Applicable Law............................................ 18
11.4 Assignability............................................. 18
11.5 Successors Bound.......................................... 18
11.6 Breach.................................................... 18
11.7 No Public Disclosure...................................... 19
11.8 Captions.................................................. 19
11.9 Certain Terms............................................. 19
11.10 Attorneys' Fees........................................... 19
11.11 No Partnership............................................ 19
11.12 Time of Essence........................................... 19
11.13 Counterparts.............................................. 19
11.14 Recordation............................................... 19
11.15 Proper Execution.......................................... 19
11.16 Tax Protest............................................... 20
11.17 Best Knowledge; Received Written Notice................... 20
11.18 Survival and Limitation of
Representations and Warranties............................ 20
11.19 Allocation of Liability................................... 20
11.20 Publicity................................................. 20
11.21 Nonliability of Trustees.................................. 21
11.22 Financials................................................ 21
11.23 Committee Approval........................................ 21
11.24 Time to Execute and Deliver............................... 21
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List of Exhibits
Exhibit 1.1.1 Legal Description
Exhibit 1.1.6 Schedule of Leases
Exhibit 1.1.7 Schedule of Contracts
Exhibit 4.3 Existing Leases for Which Purchaser is
Responsible for Build-Out Costs and
Commissions
Exhibit 5.1.6 Government Notices
Exhibit 5.1.7 Pending Litigation
Exhibit 5.1.9 Variations from Lease Representation
Exhibit 9.2.1 Form of Special or Limited Warranty Deed
Exhibit 9.2.2 Form of Bill of Sale
Exhibit 9.2.3 Form of Assignment and Assumption of
Leases
Exhibit 9.2.4 Form of Assignment and Assumption of
Contracts
Exhibit 9.2.5 Form of General Assignment
Exhibit 9.2.7 Form of FIRPTA Certificate
Exhibit 9.2.8 Form of Corporate Authorization
Exhibit 9.2.9 Form of Incumbency Certificate
Exhibit 9.2.10 Form of Statement to Title Company
Exhibit 9.2.11 Form of Designation Agreement
Exhibit 9.3 Form of ERISA Certificate
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (as amended from time to time, this
"Agreement") dated as of October 23, 1997 (the "Date of this Agreement"), is
made by and between FRANKLIN OFFICE ASSOCIATES, a Pennsylvania limited
partnership ("Seller"), with an office at c/o Aetna Real Estate Investment
Group, 151 Farmington Avenue, Hartford, Connecticut 06156, and HEALTH AND
RETIREMENT PROPERTIES TRUST, a Maryland real estate investment trust
("Purchaser"), with an office at 400 Centre Street, Newton, Massachusetts 02158.
R E C I T A L S :
Seller desires to sell certain improved real property commonly known as
One Franklin Plaza, located at 200 North 16th Street, Philadelphia,
Pennsylvania, along with certain related personal property, and Purchaser
desires to purchase such real and personal property.
NOW, THEREFORE, in consideration of the foregoing and the covenants,
promises and undertakings set forth in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser agree as follows:
1. Agreement to Convey.
1.1 Property. Subject to the terms and conditions of this Agreement,
and for the consideration herein set forth, Seller agrees to sell and transfer,
and Purchaser agrees to purchase and acquire, all of Seller's right, title and
interest in and to the following (collectively, the "Property"):
1.1.1 certain land ("Land") located in Philadelphia,
Philadelphia County, Pennsylvania, more specifically described in
Exhibit 1.1.1 attached hereto;
1.1.2 the buildings, parking areas, improvements and fixtures
now situated on the Land (the "Improvements");
1.1.3 all furniture, furnishings, fittings, appliances,
machinery, apparatus, equipment and other items of tangible personal
property currently situated in
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or on the Land or the Improvements and used in the operation, repair or
maintenance thereof (collectively, the "Personal Property"), subject,
however, to depletions, replacements and additions in the ordinary
course of business;
1.1.4 any and all easements, hereditaments and appurtenances
pertaining to the Land or the Improvements;
1.1.5 any and all streets and roads abutting the Land;
1.1.6 all leases and occupancy agreements affecting all or any
portion of the Land or the Improvements (collectively, "Leases") that
are in effect as of Closing, including Leases currently in effect and
identified on the Schedule of Leases attached hereto as Exhibit 1.1.6
and Leases entered into after the Date of this Agreement pursuant to
Section 4.3, together with the benefit of any guaranties (collectively,
the "Guaranties") of the obligations of the tenants or other occupants
(collectively, "Tenants") under such Leases and any security deposits
(whether in the form of cash, letter of credit or otherwise) actually
held by Seller as of Closing with respect to any Leases then in effect;
1.1.7 subject to Section 3.3, any and all contracts and
agreements relating to the operation, repair or maintenance of the
Land, the Improvements or the Personal Property (collectively,
"Contracts") that are in effect as of Closing, including Contracts
currently in effect and identified on the Schedule of Contracts
attached hereto as Exhibit 1.1.7 and Contracts entered into after the
Date of this Agreement pursuant to Section 4.2;
1.1.8 the name "One Franklin Plaza";
1.1.9 any and all assignable warranties and guaranties
relating to the Improvements or the Personal Property that are in
effect as of Closing (collectively, the "Warranties"); and
1.1.10 any and all transferable consents, authorizations,
variances, waivers, licenses, permits and approvals from any
governmental or quasi-governmental
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agency, department, board, commission, bureau or other entity or
instrumentality solely relating to the Land or the Improvements that
are in effect as of Closing (collectively, the "Approvals").
1.2 "As-Is" Purchase.
1.2.1 The Property is being sold in an "AS IS" condition and
"WITH ALL FAULTS" as of the Date of this Agreement and as of Closing. Except as
expressly set forth in this Agreement, neither Seller nor any agent,
representative or other person acting or purporting to act on behalf of Seller
has made, assumed or otherwise undertaken, or makes, assumes or otherwise
undertakes, any representations, warranties or responsibilities with respect to
the Property, including any representations, warranties or responsibilities as
to the condition, repair, value, expense of operation, income potential, state
of title or state of compliance with applicable laws of all or any part of the
Property or as to any other fact or condition that has affected or might affect
the Property. Except as expressly set forth in this Agreement, Seller expressly
disclaims, and Purchaser expressly waives, any and all such representations,
warranties and responsibilities, whether express or implied, statutory or
otherwise, in fact or in law (including any and all warranties of
merchantability and fitness for a particular purpose), all such warranties,
representations and responsibilities being hereby expressly negated. Each of the
parties hereto acknowledges that it has not relied on any representation,
warranty or other statement by the other unless such representation, warranty or
statement is specifically set forth in this Agreement or the Exhibits attached
hereto.
1.2.2 Without limiting the generality of anything set forth in
this Agreement, neither Seller nor any agent, representative or other person
acting or purporting to act on behalf of Seller has made, assumed or otherwise
undertaken, or makes, assumes or otherwise undertakes, any representations,
warranties or responsibilities pertaining to the presence or non-presence of any
asbestos or harmful or toxic substances in, on, under or about the Property or
pertaining to the extent, location or nature of same. Purchaser waives and
releases Seller from any present or future claims arising from or relating to
the presence or alleged presence of asbestos or harmful or toxic substances in,
on, under or about the Property, including any claims
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under or on account of (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as the same may have been or may be
amended from time to time, and similar state statutes, and any regulations
promulgated thereunder, (ii) any other federal, state or local law, ordinance,
rule or regulation, now or hereafter in effect, dealing with or otherwise in any
manner relating to environmental matters of any kind, or (iii) this Agreement or
the common law.
1.2.3 Without limiting the generality of anything set forth in
this Agreement, neither Seller nor any agent, representative or other person
acting or purporting to act on behalf of Seller has made, assumed or otherwise
undertaken, or makes, assumes or otherwise undertakes, any representations,
warranties or responsibilities with respect to any reports, materials, data or
other information (including any reports, materials, data or other information
concerning asbestos or harmful or toxic substances) that may have been or
hereafter may be provided to Purchaser by Seller or any other person, including
any representations, warranties or responsibilities as to the truth, accuracy,
completeness, methodology of preparation or otherwise concerning the contents of
such reports, materials, data or other information. Purchaser acknowledges that
Seller has requested Purchaser to conduct any and all inspections,
investigations and examinations that Purchaser considers necessary, desirable or
otherwise relevant to Purchaser's decision to enter into this Agreement and to
purchase the Property and that Seller has cautioned Purchaser to rely solely
upon the results of Purchaser's own inspections, investigations and examinations
or on information obtained by or otherwise available to Purchaser from other
sources, rather than any reports, materials, data or other information that may
have been or hereafter may be provided to Purchaser by or on behalf of Seller.
Purchaser acknowledges that, to the extent any such reports, materials, data or
other information have been or may be provided to Purchaser, they have been or
will be so provided only for Purchaser's convenience in making its own
inspections, investigations, examinations and determinations relating to the
Property. Purchaser further acknowledges that, in deciding whether or not to
enter into this Agreement and to purchase the Property, Purchaser has not relied
and will not rely on any such reports, materials, data or other information
provided to Purchaser, but instead has relied and will rely solely on the
results of its own inspections, investigations and examinations or on
information
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obtained by or otherwise available to Purchaser from other sources (for which
Seller assumes no responsibility).
1.2.4 This Section 1.2 shall survive Closing and any
termination of this Agreement.
2. Price, Payment and Closing.
2.1 Purchase Price. The purchase price for the Property (the "Purchase
Price") is SEVENTY-FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($75,500,000).
2.2 Payment. The Purchase Price shall be paid as follows:
2.2.1 (a) Purchaser has made an earnest money deposit of One
Million Dollars ($1,000,000) (the "Initial Deposit") prior to or
contemporaneously with the execution of this Agreement.
(b) On or before the Approval Date (as defined in
Section 3.4), Purchaser shall make an additional deposit of Four
Million Dollars ($4,000,000) (the "Additional Deposit") (the Initial
Deposit and the Additional Deposit, together with any and all interest
earned thereon, being hereinafter collectively referred to as the
"Deposit").
(c) The Deposit, as installments of same are paid,
will be placed and held in escrow by Commonwealth Land Title Insurance
Company, Two Logan Square, Suite 500, Philadelphia Pennsylvania 19103
(the "Title Company"), in an interest-bearing account at a mutually
acceptable banking institution. Any interest earned on the Deposit
shall be considered to be part of the Deposit. Except as otherwise
provided in this Agreement, the Deposit will be applied to the Purchase
Price at Closing.
2.2.2 At Closing, Purchaser shall pay Seller SEVENTY-FIVE
MILLION FIVE HUNDRED THOUSAND DOLLARS ($75,500,000), inclusive of the
Deposit and subject to adjustment as provided herein, via wire transfer
of immediately available funds to a bank account designated by Seller.
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2.3 Closing. Payment of the Purchase Price and the closing hereunder
("Closing") will take place pursuant to an escrow closing at the offices of the
Title Company on or before the fifteenth (15th) business day after the Date of
this Agreement, at 10:00 a.m. local time, or at such other time and place as may
be agreed upon in writing by Seller and Purchaser (the aforesaid date, or such
other agreed date, being referred to in this Agreement as the "Closing Date").
3. Pre-Closing Due Diligence.
3.1 Inspections.
3.1.1 Seller shall allow Purchaser or Purchaser's agents or
other representatives reasonable access to the Property during business hours
for purposes of any non- intrusive physical or environmental inspection of the
Property (including an inspection of the Property for the presence of lead-based
paint or lead-based paint hazards) and review of the Leases, expenses and other
matters. Purchaser shall not conduct or allow any physically intrusive testing
in, on, under or about the Property without first obtaining Seller's written
consent as to the timing and scope of work to be performed and, upon request of
Seller, entering into an access agreement in a form acceptable to Seller. Any
breach of this Section 3.1.1 shall be deemed to be a material default under this
Agreement.
3.1.2 In making any non-intrusive physical or environmental
inspections of the Property, neither Purchaser nor any of its agents or other
representatives shall interfere with the activity of any Tenant or other person
occupying or providing service to the Property. Until completion of the Closing
and acquisition of the Property by Purchaser in accordance with this Agreement,
Purchaser shall not (except as and to the extent required by law) reveal to any
third party not approved by Seller (other than the Purchaser Parties) the
results of its inspections, and Purchaser shall not (except as and to the extent
permitted by law) permit or suffer any such revelation by any of its agents or
other representatives. Purchaser shall restore promptly any service
interruptions and any physical damage caused by any inspections of the Property
conducted by or on behalf of Purchaser. Purchaser shall give Seller reasonable
prior notice of its intention to conduct any inspections, and Seller reserves
the right to have a representative present. Upon Seller's written request,
Purchaser shall provide Seller with a copy of each inspection
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report heretofore or hereafter produced for Purchaser in connection with
Purchaser's determination to enter into this Agreement and to purchase the
Property. Purchaser shall indemnify, defend and hold Seller free and harmless
from and against any and all losses, injuries, damages, claims, liens,
liabilities, obligations, costs and expenses (including attorneys' fees and
costs) arising out of any breach of the foregoing agreements by Purchaser or
otherwise from the exercise by Purchaser or its agents or other representatives
of the opportunity to conduct such inspections. Any inspections shall be at
Purchaser's expense. This Section 3.1.2 shall survive Closing and any
termination of this Agreement.
3.2 Title and Survey.
3.2.1 Prior to or contemporaneously with execution of this
Agreement, Seller has caused to be delivered to Purchaser, and Purchaser
acknowledges receipt of, (i) a commitment for title insurance on the Land,
issued by the Title Company and identified as Order No. D172442-MN (the "Title
Commitment"), (ii) copies of all items shown as exceptions to title in the Title
Commitment, and (iii) a survey of the Land prepared by Barton & Martin Engineers
dated July 11, 1997 (the "Survey"). The parties acknowledge that Purchaser, at
Purchaser's own expense, may conduct a search of the appropriate Uniform
Commercial Code records with respect to any personal property forming part of
the Property (the "UCC Search").
3.2.2 Purchaser shall have until 5:00 p.m. (Hartford time) on
the fifth (5th) business day after the Date of this Agreement (the "Interim
Date"), to provide written notice to Seller identifying any matters shown by the
Title Commitment, the Survey or the UCC Search that are not satisfactory to
Purchaser. Such notice (the "Title Notice") must specify the reason each such
matter is not satisfactory and the curative steps necessary to remove the basis
for Purchaser's objection to each such matter. The parties shall then have until
the Approval Date to make such arrangements or take such steps as they shall
mutually agree to remove the basis for Purchaser's objection to each such
matter; provided, however, that Seller shall have no obligation to expend or
agree to expend any funds, to undertake or agree to undertake any obligations or
otherwise to take any curative steps with respect to any such objection, and
Seller shall not be deemed to have any such obligation unless Seller
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expressly undertakes such an obligation by a written notice to or written
agreement with Purchaser given or entered into on or before the Approval Date,
reciting that such notice is in response to a Title Notice. Purchaser's sole
right with respect to any such objection shall be to elect, on or before the
Approval Date, to terminate this Agreement pursuant to Section 3.4. All matters
shown by the Title Commitment, the Survey or the UCC Search with respect to
which Purchaser fails to give a timely Title Notice, or with respect to which a
timely Title Notice is given but Seller fails to undertake an express obligation
to cure as provided above, shall be deemed to be approved by Purchaser as
"Permitted Encumbrances", subject, however, to Purchaser's termination right
provided in Section 3.4.
3.3 Contracts. Purchaser shall have until 5:00 p.m. (Hartford time) on
the Interim Date to provide written notice to Seller identifying any Contracts
that Purchaser elects not to assume at Closing (the "Contract Notice"). If
Purchaser does not thereafter exercise its right to terminate this Agreement
pursuant to Section 3.4, Seller shall notify the other party(ies) to each
Contract identified in the Contract Notice of the termination of such Contract,
effective on or before the Closing Date or the earliest subsequent date when
such Contract may be terminated by Seller in accordance with its terms. Any such
Contract remaining in effect as of Closing shall be assigned to and assumed by
Purchaser as contemplated by this Agreement. At Closing, Purchaser shall
reimburse Seller for any and all fees, compensation and other charges required
to be paid by Seller at or before Closing as a result of the termination of any
such Contract, and (without limiting the generality of the immediately preceding
sentence) Purchaser shall assume the obligation to pay any and all fees,
compensation and other charges payable after Closing as a result of the
termination of any such Contract; provided, however. that Purchaser's liability
for any such termination costs shall not exceed Ten Thousand Dollars ($10,000)
in the aggregate. This Section shall survive Closing and any termination of this
Agreement.
3.4 Purchaser's Right to Terminate. If, as a result of its various
investigations, Purchaser determines that the Property is not a suitable
acquisition for its purposes, Purchaser shall have the right, by giving Seller
written notice (the "Termination Notice") on or before 5:00 p.m. (Hartford time)
on the tenth (10th) business day after the Date of this Agreement (the "Approval
Date"), to terminate its obligation to
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purchase the Property. If the Termination Notice is timely given, Seller shall
direct the Title Company promptly to return the Deposit to Purchaser, and, upon
receipt of such direction, the Title Company shall promptly return the Deposit
to Purchaser and this Agreement shall terminate. Thereafter, neither party shall
have any further obligation or liability under this Agreement, except as
otherwise expressly provided herein.
3.5 Confidentiality. Unless Seller specifically and expressly otherwise
agrees in writing, Purchaser agrees that all reports, materials, data and other
information regarding the Property made available to Purchaser by Seller or
Seller's agents or other representatives and not theretofore in the public
domain ("Proprietary Information") are confidential and shall not (except as and
to the extent required by law) be disclosed to any other person, except
Purchaser's affiliates, agents, employees, advisors and other representatives
actively involved in assisting Purchaser with its contemplated purchase of the
Property and any lender financing such purchase (collectively, the "Purchaser
Parties"), and then only upon Purchaser making such person aware of this
confidentiality restriction and procuring such person's agreement to be bound
thereby. If the purchase and sale contemplated hereby fails to close for any
reason, Purchaser shall cause all Proprietary Information to be promptly
returned to Seller. Purchaser shall not use or allow the use of any Proprietary
Information for any purpose other than to determine whether to proceed with the
contemplated purchase; provided, however, that, after completion of the Closing
and acquisition of the Property by Purchaser in accordance with this Agreement,
Purchaser may use such Proprietary Information in connection with the
post-Closing operation of the Property and, at its option, may disclose any such
Proprietary Information to any person or to the public generally. This Section
3.5 shall survive Closing and any termination of this Agreement.
4. Prior to Closing. Until Closing, Seller or Seller's on-site property manager
shall:
4.1 Insurance and Operation. Keep the Property insured against
fire and other hazards covered by extended coverage endorsement and
comprehensive public liability insurance against claims for bodily
injury, death and property damage occurring in, on or about the
Property, operate and maintain the Property in a
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businesslike manner and substantially in accordance with Seller's past
practices with respect to the Property and make any and all repairs and
replacements reasonably required to deliver the Property to Purchaser
at Closing in its present condition, normal wear and tear excepted;
provided, however, that Section 7 shall govern the rights and
responsibilities of the parties in the event of any loss or damage to
the Property described in Section 7.
4.2 New Contracts. Enter into only those Contracts that are
necessary to carry out Seller's obligations under Section 4.1, which
shall be cancelable without penalty on not more than thirty (30) days'
written notice (unless only a longer notice period can be obtained on a
commercially reasonable basis). Seller shall promptly provide written
notice to Purchaser of any such Contract entered into by Seller. Unless
Purchaser, within seven (7) days thereafter, notifies Seller in writing
of its intention to assume such Contract, Purchaser shall be deemed to
have elected not to assume such Contract as though Purchaser had given
a Contract Notice with respect to such Contract pursuant to Section
3.3.
4.3 New Leases. To the extent there is any vacant space
available to be leased, continue its rental program and efforts at the
Property to lease such space; provided, however, that, after the
Approval Date, Seller will not execute any new Leases or amendments of
any Leases, terminate or accept the surrender of any existing tenancies
or approve any subleases without the prior consent of Purchaser (which
shall not be unreasonably withheld, conditioned or delayed), except
that Seller is authorized to accept the termination of Leases at the
end of their existing terms. If any Lease identified on Exhibit 4.3 or
any Lease entered into with the consent of Purchaser after the Date of
this Agreement requires the construction or installation of tenant
fixtures or improvements or the payment of leasing or brokerage
commission(s) at the expense of the landlord, Purchaser shall be deemed
to have agreed to assume the obligation to pay (and to reimburse Seller
for any previously paid portion of) the cost of such tenant fixtures or
improvements and such leasing or brokerage commission(s), as well as
any other costs associated with such Lease, unless Seller and Purchaser
expressly agree in writing that Seller shall be responsible for any
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such costs. Any failure by Purchaser to consent or to expressly
withhold its consent (specifically stating the reasons for such
withholding) within forty-eight (48) hours after written request for
such consent shall be deemed to constitute consent.
5. Representations and Warranties.
5.1 By Seller. Seller represents and warrants to Purchaser that:
5.1.1 Seller is a limited partnership duly organized and
validly existing under the laws of the Commonwealth of Pennsylvania,
has duly authorized the execution and performance of this Agreement,
and such execution and performance will not violate any material term
of Seller's Certificate and Agreement of Limited Partnership, as
heretofore amended.
5.1.2 Aetna Life Insurance Company ("Aetna") is the sole
general partner in Seller. Aetna is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Connecticut, is authorized to do business in the Commonwealth of
Pennsylvania, has duly authorized the execution and performance of this
Agreement as general partner on behalf of Seller, and such execution
and performance will not violate any material term of Aetna's
certificate of incorporation or by-laws.
5.1.3 No petition in bankruptcy (voluntary or otherwise),
assignment for the benefit of creditors, or petition seeking
reorganization or arrangement or other action under Federal or State
bankruptcy laws is pending against or contemplated by Seller or Aetna.
5.1.4 To the best of Seller's knowledge, there are no Leases
except those listed on Exhibit 1.1.6 and Leases that may be entered
into after the Date of this Agreement pursuant to Section 4.3.
5.1.5 To the best of Seller's knowledge, there are no material
Contracts except those listed on Exhibit 1.1.7 and Contracts that may
be entered into after the Date of this Agreement pursuant to Section
4.2.
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5.1.6 To the best of Seller's knowledge, except as disclosed
on Exhibit 5.1.6 attached hereto, Seller has not received any written
notice from any governmental authority of (i) any intended or
threatened non-renewal, suspension or revocation of any Approval the
non-renewal, suspension or revocation of which could reasonably be
expected to have a material adverse impact on the post-Closing value or
operation of the Property, (ii) any uncured violations of any laws,
ordinances, orders or requirements of any governmental authority having
jurisdiction relating to the Property or the ownership or operation
thereof, (iii) any pending or threatened requests, applications or
proceedings seeking alteration of any zoning or other use restrictions
relating to the Property or the ownership or operation thereof, or (iv)
any pending or threatened condemnation of all or any part of the
Property by eminent domain proceedings or otherwise.
5.1.7 To the best of Seller's knowledge, except as disclosed
on Exhibit 5.1.7 attached hereto, Seller has not received any written
notice of the pendency of any actions, suits or proceedings against
Seller with respect to the Property or the ownership of operation
thereof which, in the event of a determination against Seller, could
reasonably be expected to have a material adverse impact on the
post-Closing value or operation of the Property.
5.1.8 To the best of Seller's knowledge, Seller has delivered
to Purchaser or its representatives true, correct and complete copies
of all Leases in effect as of the Date of this Agreement, including any
and all amendments thereto, and such Leases and amendments constitute
the entire agreement between the parties thereto with respect to the
subject matter thereof.
5.1.9 To the best of Seller's knowledge, except as otherwise
disclosed on Exhibit 5.1.9 (it being understood and agreed, however,
that, Seller shall have no responsibility or liability for any
inaccuracies in the following matters which may be disclosed by any
tenant estoppel certificate hereafter received by Purchaser in
connection with the transaction contemplated by this Agreement):
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(a) each of the Leases is in full force and effect on
the terms set forth therein, and each Tenant is legally
obligated to pay all sums and perform all material obligations
required to be paid and performed thereunder pursuant to the
terms thereof, in each case without concession, abatement,
offset, defense or other basis for relief or adjustment;
(b) Seller has not received any written notice from
any Tenant setting forth any defense to, or any offset or
claim against, the payment of rent pursuant to such Tenant's
Lease or the performance of any material obligations of such
Tenant thereunder;
(c) Seller has no outstanding obligation under any
Lease to provide the Tenant thereunder with an allowance to
construct, or to construct at its own expense, any tenant
improvements;
(d) no Tenant is in arrears beyond any applicable
grace or cure period in the payment of any sums or in the
performance of any material obligations required to be paid
and performed by such Tenant under its Lease, and no Tenant
has prepaid any rent or other charges payable by such Tenant
thereunder for more than the current month;
(e) (i) no Tenant has filed a petition in bankruptcy
or for the approval of a plan of reorganization or management
under the Federal Bankruptcy Code or under any other similar
state law, (ii) no Tenant has otherwise become the subject of
any proceeding under any federal or state bankruptcy or
insolvency law, (iii) no Tenant has admitted in writing its
inability to pay its debts as they become due or made an
assignment for the benefit or creditors, and (iv) no Tenant
has petitioned for the appointment of or has had appointed a
receiver, trustee or custodian for any of its property;
(f) Seller has not received from any Tenant any
written request for a modification of such Tenant's Lease or a
release of any material obligations of such Tenant thereunder,
Seller has not released any Tenant from any such material
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obligations, and Seller has not received from any Tenant any
written notice of termination of such Tenant's Lease or of any
material obligations of such Tenant thereunder prior to the
expiration of the term of such Lease pursuant to the terms
thereof;
(g) Seller has not intentionally released any person
from any material obligations under any of the Guaranties;
(h) Seller does not currently hold any security
deposits with respect to any of the Leases; and
(i) all tenant finish payments and lease commissions
due with respect to the Leases have been paid.
5.1.10 Seller is not a "foreign person" within the meaning of
Section 1445 of the United States Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder.
5.2 By Purchaser. Purchaser represents and warrants to Seller that:
5.2.1 Purchaser is a real estate investment trust duly
organized, validly existing and in good standing under the laws of the
State of Maryland, is authorized to do business in the Commonwealth of
Pennsylvania, has duly authorized the execution and performance of this
Agreement, and such execution and performance will not violate any
material term of any of its organizational documents or any documents
by which its affairs are governed.
5.2.2 Purchaser is acting as principal in this transaction
with authority to close the transaction.
5.2.3 No petition in bankruptcy (voluntary or otherwise),
assignment for the benefit of creditors, or petition seeking
reorganization or arrangement or other action under Federal or State
bankruptcy laws is pending against or contemplated by Purchaser.
5.2.4 Unless otherwise disclosed to Seller in writing,
Purchaser and all affiliates of and principals in Purchaser are
citizens of The United States of America
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or are legal persons (such as partnerships, corporations or limited
liability companies) domesticated in The United States of America.
5.2.5 Purchaser will not use the assets of an employee benefit
plan as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and covered under Title I,
Part 4 of ERISA or Section 4975 of the Internal Revenue Code of 1986,
as amended, in the performance or discharge of its obligations under
this Agreement, including the acquisition of the Property. Without
limiting the generality of any other restrictions on assignment set
forth in this Agreement, Purchaser shall not assign this Agreement to
any person unless such person shall expressly make this covenant and
warranty for the benefit of Seller.
5.3 Mutual. Each of Seller and Purchaser represents to the other that
it has had no dealings, negotiations or consultations with any broker,
representative, employee, agent or other intermediary in connection with this
Agreement or the sale of the Property, except Eastdil Realty, LLC (to be
compensated by Seller, as provided below), and CB Commercial Real Estate Group
(to be compensated by Purchaser, as provided below). Seller and Purchaser agree
that each will indemnify, defend and hold the other free and harmless from and
against the claims of any other broker(s), representative(s), employee(s),
agent(s) or other intermediary(ies) claiming to have represented Seller or
Purchaser, respectively, or otherwise to be entitled to compensation in
connection with this Agreement or in connection with the sale of the Property.
6. Costs and Prorations.
6.1 Purchaser's Costs. Purchaser will pay the following costs of
closing this transaction:
6.1.1 The fees and disbursements of its counsel, inspecting
architect and engineer and other consulting professionals, if any
(including any commission, brokerage fee or other compensation payable
to CB Commercial Real Estate Group);
6.1.2 Any title company closing charges or escrow fees;
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6.1.3 Any real estate transfer, stamp or documentary taxes
attributable to the transfer of the Property pursuant to this
Agreement;
6.1.4 Any sales or use taxes relating to the transfer of the
Personal Property pursuant to this Agreement;
6.1.5 The cost of an ALTA owner's title insurance policy (with
or without extended coverage or special endorsements) issued in
connection with this transaction, whether pursuant to the Title
Commitment or otherwise, including any premium charge(s) for
endorsements and/or deletion(s) of exception items and any cancellation
charge(s) imposed by any title company in the event a title insurance
policy is not issued, unless caused by willful default of Seller
hereunder;
6.1.6 The cost of the UCC Search, if any;
6.1.7 The cost of any revisions to the Survey requested by
Purchaser;
6.1.8 Any recording fees; and
6.1.9 Any other expense(s) incurred by Purchaser or its agents
or other representative(s) in inspecting or evaluating the Property or
closing this transaction.
6.2 Seller's Costs. Seller will pay the following costs of closing this
transaction::
6.2.1 The fees and disbursements of Seller's counsel;
6.2.2 The initial cost of the Survey; and
6.2.3 The broker's fee, to the extent any such fee is payable
pursuant to Seller's separate agreement with Eastdil Realty, LLC.
6.3 Other Closing Costs. Any costs or charges of closing this
transaction not specifically mentioned in this Agreement shall be paid by
Purchaser.
6.4 Prorations.
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6.4.1 Rents. Rents and any other amounts payable by Tenants
shall be prorated as of the Closing Date and adjusted against the Purchase Price
on the basis of a schedule (the "Rent Schedule") which shall be prepared by
Seller and delivered to Purchaser pursuant to Section 9.2.3. The Rent Schedule
shall set forth the rent and other amounts paid and the rent and other amounts
due but not yet paid for the then-current payment period under each of the
Leases (the "Current Rents"), as well as rental and other payment delinquencies
(excluding those for the then-current period) (the "Delinquencies"). The
proration of rent and any other amounts payable by Tenants and the adjustment
against the Purchase Price shall presume that the Current Rents will be
collected by Purchaser subsequent to Closing, and, accordingly, Seller shall be
entitled to be paid at Closing the portion of the Current Rents that relate to
the period prior to the Closing Date; provided, however, that, if any such
Current Rents are still uncollected six (6) months after the Closing Date,
Purchaser shall be entitled to reimbursement as provided in Section 9.8 for the
amount thereof that related to the period prior to the Closing Date and for
which Purchaser paid Seller through the prorations described herein.
6.4.2 Taxes. General real estate taxes, personal property
taxes, special assessments (and installments thereof) and other governmental
taxes and charges relating to the Property (collectively, "Taxes") and payable
during the year in which Closing occurs shall be prorated as of the Closing Date
and shall be adjusted against the Purchase Price. If Closing occurs before the
actual Taxes payable during such year are known, the proration of Taxes shall be
upon the basis of Taxes payable during the immediately preceding year; provided,
however, that, if the Taxes payable during the year in which Closing occurs are
thereafter determined to be more or less than the Taxes payable during the
preceding year (after conclusion of any pertinent appeal of assessed valuation),
Seller and Purchaser promptly (but no later than thirty (30) days after the
final invoices for such Taxes are issued by the applicable taxing
authority(ies), except in the case of an ongoing tax protest) shall adjust the
proration of Taxes, and Seller or Purchaser, as the case may be, shall pay to
the other any amount required as a result of such adjustment.
6.4.3 Operating Costs. Utility charges and normally prorated
operating expenses actually paid or payable as of the Closing Date shall be
prorated as of the
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Closing Date and adjusted against the Purchase Price; provided, however, that,
within sixty (60) days after the Closing Date, Purchaser and Seller will make a
further adjustment for such charges and expenses which may have been incurred
prior to the Closing Date, but not paid at that date. In addition, within ninety
(90) days after the close of the fiscal year(s) used in calculating the
pass-through to Tenants of operating expenses under the Leases (where such
fiscal year(s) include(s) the Closing Date), Seller and Purchaser shall, upon
the request of either, re-prorate on a fair and equitable basis in order to
adjust for the effect of any credits or payments due to or from Tenants for
periods prior to the Closing Date.
6.4.4 Survival. This Section 6.4 shall survive Closing.
6.5 Certain Reimbursements.
6.5.1 At Closing, Seller shall receive reimbursement from
Purchaser for fees prepaid by Seller for transferable Approvals (if any) and for
fees and other charges prepaid by Seller for telephone equipment and other items
(if any), but only to the extent the rights to such Approvals, equipment and
other items are assigned by Seller to Purchaser at Closing, in each case
prorated as of the Closing Date.
6.5.2 At Closing, Seller shall receive reimbursement from
Purchaser for any tax deposits, utility deposits and other deposits made by or
for the benefit of Seller, but only to the extent the rights to such deposits
are assigned by Seller to Purchaser at Closing.
6.6 Purpose and Intent. Except as expressly provided herein, the
purpose and intent of the provisions of this Agreement relating to prorations,
adjustments, apportionments and reimbursements is that Seller shall bear all
expenses of ownership and operation of the Property and shall receive all income
therefrom accruing through midnight at the end of the day preceding the Closing
and that Purchaser shall bear all such expenses and receive all such income
accruing thereafter. If the computation of the aforesaid prorations,
adjustments, apportionments and reimbursements shows that a net amount is owed
by Seller to Purchaser, such amount shall be credited against the Purchase Price
payable at Closing. If such computation
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shows that a net amount is owed by Purchaser to Seller, such amount shall be
paid by wire transfer to Seller by Purchaser at Closing in addition to the
Purchase Price payable at Closing.
7. Damage, Destruction or Condemnation.
7.1 Material Event. Purchaser may elect to terminate this Agreement (by
giving Seller written notice of such election) if, prior to Closing, there is
damage to, or destruction or taking under power of eminent domain of, all or any
portion of the Land and the Improvements, and the cost to restore same in the
event of damage or destruction, or the diminution of value in the case of a
taking, is more than Five Million Dollars ($5,000,000) (the "Termination
Amount"); provided, however, that, if such damage or destruction is of a type
not covered by insurance, the Termination Amount shall be Two Hundred Fifty
Thousand Dollars ($250,000). If Purchaser does not give Seller written notice of
such election to terminate within fourteen (14) days after receiving notice of
such damage, destruction or taking, this transaction shall be consummated on the
date and at the Purchase Price provided for in Section 2. In connection
therewith, Seller will assign to Purchaser the physical damage proceeds of any
insurance policy(ies) payable to Seller or Seller's portion of any condemnation
award (as the case may be), in either case, up to the amount of the Purchase
Price, and, if such event shall have been an insured casualty, Seller shall pay
to Purchaser the amount of any deductible (but not to exceed the amount of the
loss).
7.2 Immaterial Event. Except as provided in Section 7.1, Purchaser
shall not have the right to terminate this Agreement in the event of any damage,
destruction or taking under power of eminent domain affecting the Property or
any portion thereof, and, in any such event, this transaction shall be
consummated on the date and at the Purchase Price provided for in Section 2. In
connection therewith, Seller will assign to Purchaser the physical damage
proceeds of any insurance policy(ies) payable to Seller or Seller's portion of
any condemnation award (as the case may be), in either case, up to the amount of
the Purchase Price, and, if such event shall have been an insured casualty,
Seller shall pay to Purchaser the amount of any deductible (but not to exceed
the amount of the loss).
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7.3 Termination and Return of Deposit. If Purchaser elects to terminate
this Agreement pursuant to this Section 7, and, if Purchaser is not then in
default under this Agreement, Seller shall promptly direct the Title Company to
return the Deposit to Purchaser, and, upon receipt of such direction, the Title
Company shall promptly return the Deposit to Purchaser. Thereafter, neither
party shall have any further obligation or liability under this Agreement,
except as otherwise expressly provided herein.
8. Notices. Any notice required or permitted to be given hereunder shall be
deemed to be given when delivered by hand or by Federal Express or similar
overnight express service or when delivered by telefacsimile transmission with
written acknowledgment of receipt, in any case addressed to the parties at their
respective addresses referenced below:
If to Seller: c/o Aetna Real Estate Investment
Group
151 Farmington Avenue
Hartford, Connecticut 06156
Attention: Mr. Thomas G. Dudeck
Phone: (860) 273-2381
Fax: (860) 273-1620
With a copy to: Hebb & Gitlin, A Professional Corporation
One State Street
Hartford, Connecticut 06103
Attention: Eric W. Johnson, Esq.
Phone: (860) 240-2794
Fax: (860) 278-8968
If to Purchaser: Health and Retirement Properties Trust
400 Centre Street
Newton, Massachusetts 02158
Attention: Mr. David J. Hegarty
Phone: (617) 332-3990
Fax: (617) 332-2261
With a copy to: Sullivan & Worcester LLP
One Post Office Square
Boston, Massachusetts 02109
Attention: Jennifer B. Clark, Esq.
Phone: (617) 338-2406
Fax: (617) 338-2880
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or, in each case, to such other address or fax number (as the case may be) as
either party may from time to time designate by giving notice in writing to the
other party. Telephone numbers are for informational purposes only. Effective
notice will be deemed given only as provided above.
9. Closing and Escrow.
9.1 Escrow Instructions. Upon execution of this Agreement, the parties
shall deliver an executed counterpart of this Agreement to the Title Company to
serve as the instructions to the Title Company as the escrow holder for
consummation of the transaction contemplated herein. Seller and Purchaser agree
to execute such additional and supplementary escrow instructions as may be
appropriate to enable the Title Company to comply with the terms of this
Agreement; provided, however, that, in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall prevail.
9.2 Seller's Deliveries. Seller shall deliver to Purchaser or its
designee, either at Closing or by making available at the Property, as
appropriate, in addition to any other deliveries required of Seller under this
Agreement, the following original documents, each executed and, if required,
acknowledged:
9.2.1 a special or limited warranty deed to the Land and the
Improvements, in the form attached hereto as Exhibit 9.2.1;
9.2.2 a bill of sale to the Personal Property, in the form
attached hereto as Exhibit 9.2.2;
9.2.3 (i) the Leases that are in effect as of Closing, (ii)
the Rent Schedule, (iii) a current listing of any tenant security
deposits and prepaid rents held by Seller with respect to the Property,
and (iv) an assignment and assumption agreement with respect to such
Leases, the Guaranties (if any), security deposits (whether in the form
of cash, letter of credit or otherwise) and prepaid rents, in the form
attached hereto as Exhibit 9.2.3;
9.2.4 (i) copies of all Contracts to be assigned to Purchaser
pursuant to this Agreement, and (ii) an assignment and assumption
agreement with respect to
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such Contracts, in the form attached hereto as Exhibit 9.2.4;
9.2.5 a general assignment with respect to the Warranties and
the Approvals and, if requested by Purchaser, Seller's right, title and
interest (if any) in and to the name "One Franklin Plaza", in the form
attached hereto as Exhibit 9.2.5;
9.2.6 all books and records at the Property held by or for the
account of Seller, including plans and specifications and lease
applications, as available;
9.2.7 a certificate pursuant to the Foreign Investment and
Real Property Tax Act in the form attached hereto as Exhibit 9.2.7;
9.2.8 a corporate authorization in the form attached hereto as
Exhibit 9.2.8;
9.2.9 an incumbency certificate in the form attached hereto as
Exhibit 9.2.9;
9.2.10 a statement to the Title Company in the form attached
hereto as Exhibit 9.2.10;
9.2.11 a designation agreement in the form attached hereto as
Exhibit 9.2.11; and
9.2.12 an estoppel certificate, dated within thirty (30) days
prior to the Closing Date, from SmithKline Beacham Corporation relating
to its Lease, in form and substance reasonably satisfactory to
Purchaser (it being agreed that Purchaser will accept an estoppel
certificate in form and substance substantially similar to the form of
estoppel attached to such Lease).
9.3 Purchaser's Deliveries. At Closing, Purchaser shall (i) pay Seller
the Purchase Price, and (ii) deliver to Seller, in addition to any other
deliveries required of Purchaser under this Agreement, the assignment and
assumption agreements referred to in Sections 9.2.3(iv) and 9.2.4(ii), as well
as the designation agreement referred in to Section 9.2.11, an ERISA certificate
in the form attached hereto as Exhibit 9.3.
9.4 Possession. Purchaser shall be entitled to possession of the
Property upon conclusion of the Closing,
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subject to the Permitted Encumbrances and the rights of Tenants and
concessionaires of the Property.
9.5 Insurance. Seller shall terminate its policies of insurance as of
noon on the Closing Date, and Purchaser shall be responsible for obtaining its
own insurance thereafter.
9.6 Utility Service and Deposits. Except to the extent of any
adjustment in the Purchase Price received by Seller at Closing on account of any
such deposits, Seller shall be entitled to the return of any deposit(s) posted
by it with any utility company, and Seller shall notify each utility company
serving the Property to terminate Seller's account, effective at noon on the
Closing Date.
9.7 Notice Letters. If requested by Purchaser, at or subsequent to
Closing, Seller shall provide to Purchaser copies of form letters to Tenants and
to contractors and utility companies serving the Property, advising them of the
sale of the Property to Purchaser and directing to Purchaser all rent payments
to be made after the Closing Date and all bills for the services provided to the
Property on and after the Closing Date.
9.8 Post-Closing Collections. Purchaser shall use reasonable efforts
during the six (6) month period immediately following the Closing Date to
collect Current Rents and Delinquencies. Amounts collected from Tenants which,
as of the Closing Date, were obligors with respect to Current Rents or
Delinquencies shall be applied first to satisfy Current Rents, second to satisfy
Delinquencies, third, to satisfy such Tenants' obligation for the payment period
during which collection occurred, and the balance to satisfy any other payment
obligations of such Tenant to Purchaser. Amounts collected and applicable to
satisfy Delinquencies shall be paid promptly to Seller. At the end of the six
(6) month period following the Closing Date, Purchaser shall prepare and deliver
to Seller a statement (the "Collection Statement") identifying all payments
collected during such six (6) months from Tenants who were listed on the Rent
Schedule as obligors with respect to Current Rents or Delinquencies. If the
Collection Statement shows that Current Rents presumed to be collectible and
paid to Seller by Purchaser at Closing as provided in Section 6.4 in fact have
not been collected, Seller promptly shall reimburse Purchaser therefor net of
any amounts collected and applied
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to satisfy Delinquencies but not yet paid by Purchaser to Seller. If any
uncollected Current Rents or then-unsatisfied Delinquencies exist at such time
(except for any such Current Rents or Delinquencies under the Lease to
SmithKline Beacham Corporation), Purchaser shall assign (and shall be deemed to
have assigned) to Seller any and all rights afforded the obligee with respect
thereto, whereupon Seller shall be entitled to take such steps (including the
filing of lawsuits) as Seller in its sole and absolute discretion deems
necessary or appropriate to collect such sums, excepting only the right to
dispossess any Tenant still in possession of its further right to occupy the
premises demised to it under the pertinent Lease. Such assignment shall be
effective automatically, without the need for execution or delivery of any
instrument of assignment. Upon request of Seller, however, Purchaser shall
execute and deliver to Seller such instruments as Seller may reasonably request
to confirm such assignment. Purchaser agrees, at no cost to Purchaser, to
cooperate with Seller in any manner reasonably requested by Seller in connection
with any such collection effort. This Section 9.8 shall survive Closing.
10. Default; Failure of Condition.
10.1 Purchaser Default. If Purchaser shall become in breach of or
default under this Agreement and the breach or default continues beyond the
expiration of the cure period, if any, provided in Section 11.6, the Deposit
shall be retained by Seller as liquidated damages, and both parties shall be
relieved of and released from any further obligation or liability under this
Agreement, except for Purchaser's indemnity obligations under this Agreement.
Seller and Purchaser agree that the Deposit is a fair and reasonable amount to
be retained by Seller as agreed and liquidated damages in light of Seller's
removal of the Property from the market and the costs incurred by Seller and
shall not constitute a penalty or a forfeiture.
10.2 Seller Default. If Seller shall default in the performance of any
of its material obligations under this Agreement, then (provided Purchaser is
not then in breach of or default under this Agreement) Purchaser may elect as
its sole and exclusive remedy either to terminate this Agreement and recover the
Deposit or to specifically enforce Seller's obligation to convey the Property,
provided that no such action in specific performance shall seek to require the
Seller to do any of the following: (a) change the condition of the Property
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or restore the same after any fire or other casualty; (b) subject to Section
10.3, expend money or post a bond to remove a title encumbrance or defect or
correct any matter shown on a survey of the Property; (c) secure any permit,
approval, or consent with respect to the Property or Seller's conveyance of the
Property; or (d) any other thing Seller is not required to do under the express
terms of this Agreement.
10.3 Failure of Condition. If, prior to Closing, Seller discloses to
Purchaser or Purchaser discovers that (i) title to the Property is subject to
defects, limitations or encumbrances other than Permitted Encumbrances, or (ii)
any representation or warranty of Seller contained in this Agreement is or, as
of the Closing Date, will be untrue or misleading in any material respect, then
Purchaser shall promptly give Seller written notice of its objection thereto. In
such event, Seller may elect to postpone the Closing for thirty (30) days and
attempt to cure such objection. Seller shall have no obligation to cure any such
title objection, other than liens and encumbrances intentionally and voluntarily
created by Seller and removable by payment of a liquidated sum (which liens and
encumbrances Seller shall be obligated to remove at Closing). If Purchaser fails
to waive any such title objection within ten (10) days after notice from Seller
that Seller will not cure such objection, this Agreement will terminate
automatically. In the event of any such termination, provided Purchaser shall
not then be in default under this Agreement, Seller shall promptly direct the
Title Company to return the Deposit to Purchaser, and, upon receipt of such
direction, the Title Company shall promptly return the Deposit to Purchaser.
Thereafter, neither party shall have any further obligation or liability under
this Agreement, except as otherwise expressly provided herein. For purposes of
this Agreement, any title defect, limitation or encumbrance other than a
Permitted Encumbrance shall be deemed cured if the Title Company or another
title company reasonably acceptable to Purchaser and authorized to do business
in Pennsylvania, will agree to issue an ALTA owner's title insurance policy to
Purchaser for the Purchase Price, which policy takes no exception for such
defect, limitation or encumbrance and is issued for no additional premium or for
an additional premium if Seller agrees to pay such additional premium upon
Closing (provided the Title Company or such other title company commits to issue
future policies without an exception for such defect, limitation or encumbrance,
without an additional premium for the omission of such exception).
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11. Miscellaneous.
11.1 Entire Agreement. The Exhibits attached hereto are incorporated in
this Agreement by this reference. This Agreement and any other writing signed by
the parties hereto expressly stated to be supplemental to this Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede any and all prior understandings and agreements
between the parties or their respective agents or other representatives. No
alteration, modification, waiver, termination or interpretation of this
Agreement shall be binding unless in writing and signed by Seller and Purchaser.
11.2 Severability. If any portion of this Agreement or the application
of this Agreement (or any portion hereof) to any party or circumstance shall be
determined by any court of competent jurisdiction to be invalid or unenforceable
to any extent, the remainder of this Agreement or the application of this
Agreement (or such portion) to any other person or circumstance (as the case may
be) shall not be affected thereby, and each portion of this Agreement shall be
valid and shall be enforced to the fullest extent permitted by law.
11.3 Applicable Law. This Agreement shall be construed and enforced in
accordance with the internal laws of the Commonwealth of Pennsylvania, without
regard to principles of conflicts of laws.
11.4 Assignability. Purchaser may not assign this Agreement to any
person other than an entity wholly owned and controlled, directly or indirectly,
by Purchaser, without first obtaining Seller's written consent. Consent to any
particular assignment shall not be deemed to be a consent to any other
assignment or a waiver of the requirement that consent be obtained in the case
of any other assignment. Any assignment in contravention of this provision shall
be void. No assignment, whether or not permitted, shall release the Purchaser
herein named (or any intervening assignee) from any obligation or liability
under this Agreement. The Purchaser herein named and any permitted assignee
shall be jointly and severally liable for all such obligations and liabilities.
Any permitted assignee shall be deemed to have made any and all representations
and warranties made by Purchaser hereunder, as if the assignee were the original
signatory hereto.
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11.5 Successors Bound. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
11.6 Breach. Should either party be in breach of or default under or
otherwise fail to comply with any of the terms of this Agreement, except as
otherwise provided in this Agreement, the complying party shall have the option
to cancel this Agreement upon ten (10) days written notice to the other party of
the alleged breach and failure by such other party to cure such breach within
such ten (10) day period. The non-defaulting party shall promptly notify the
defaulting party in writing of any alleged default upon obtaining knowledge
thereof. The Closing Date shall be extended to the extent necessary to afford
the defaulting party the full ten-day period within which to cure such default;
provided, however, that the failure or refusal by a party to perform on the
scheduled Closing Date (except in respect of a Pending Default by the other
party) shall be deemed to be an immediate default without the necessity of
notice; provided, further, that, if the Closing Date shall have been once
extended as a result of default by a party, such party shall be not be entitled
to any further notice or cure rights with respect to that or any other default.
For purposes of this Section 11.6, a "Pending Default" shall be a default for
which (i) written notice was given by the non-defaulting party, and (ii) the
cure period extends beyond the scheduled Closing Date.
11.7 No Public Disclosure. Purchaser shall make no public disclosure of
the terms of this transaction without the prior written consent of Seller,
except that Purchaser may discuss the transaction in confidence with proposed
joint venturers or prospective mortgagees.
11.8 Captions. The captions in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope of this Agreement or the scope or content of any of it provisions.
11.9 Certain Terms. As used in this Agreement, unless the context
requires otherwise, (i) the words "herein," "hereof," hereunder," "hereinafter"
and "hereto" and words of similar import shall be deemed to refer to this
Agreement as a whole and not to any particular Section, paragraph, Recital,
Exhibit or Schedule, and (ii) the words "include" and "including" shall be
deemed to be followed by the words "without limitation." Each reference in this
Agreement to any gender
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shall be deemed also to refer to any other gender, and the use in this Agreement
of the singular shall be deemed also to include the plural and vice versa,
unless the context requires otherwise. Each reference in this Agreement to
Dollars shall be deemed to refer to United States Dollars. As used in this
Agreement, the term "person" means any natural person, sole proprietorship,
partnership, joint venture, association, trust, estate, business trust, limited
liability company, corporation (non-profit or otherwise), financial institution,
government (or any agency, instrumentality or political subdivision thereof), or
any other entity, authority or organization of any type.
11.10 Attorneys' Fees. In the event of any litigation arising out of
this Agreement, the prevailing party shall be entitled to reasonable attorneys'
fees and costs.
11.11 No Partnership. Nothing contained in this Agreement shall be
construed to create a partnership or joint venture between the parties or their
successors in interest.
11.12 Time of Essence. Time is of the essence for all purposes of this
Agreement.
11.13 Counterparts. This Agreement may be executed and delivered in any
number of counterparts, each of which shall be deemed to be an original and all
of which, taken together, shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a
single counterpart so that all pertinent signature pages are physically attached
to the same document.
11.14 Recordation. Purchaser and Seller agree not to record this
Agreement or any memorandum hereof.
11.15 Proper Execution. The submission by Seller to Purchaser of this
Agreement in unsigned form shall be deemed to be a submission solely for
Purchaser's consideration and not for acceptance and execution. Such submission
shall have no binding force and effect, shall not constitute an option, and
shall not confer any rights upon Purchaser or impose any obligations upon Seller
irrespective of any reliance thereon, change of position or partial performance.
The submission by Seller of this Agreement for execution by Purchaser and the
actual execution and delivery thereof by Purchaser to Seller shall similarly
have no binding force and effect on Seller unless and until Seller shall have
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executed this Agreement (and the Initial Deposit shall have been received by the
Title Company) and a counterpart thereof shall have been delivered to Purchaser.
11.16 Tax Protest. If, as a result of any tax protest or otherwise, any
refund or reduction of any real property or other tax or assessment relating to
the Property during the period for which, under the terms of this Agreement,
Seller is responsible, Seller shall be entitled to receive or retain such refund
or the benefit of such reduction, less equitably prorated costs of collection
and any portion of such refund payable to Tenants.
11.17 Best Knowledge; Received Written Notice. Whenever a
representation, warranty or other statement is made in this Agreement or in any
document or instrument to be delivered at Closing pursuant to this Agreement, on
the basis of the best of Seller's knowledge or is qualified by Seller's having
received written notice, such representation, warranty or other statement is
made solely on the basis of the actual (as distinguished from implied, imputed
or constructive) knowledge on the date such representation, warranty or
statement is made, without inquiry or investigation or duty thereof, of Thomas
G. Dudeck (the officer of Aetna having responsibility for the management and
sale of the Property), without attribution to such specific officer of facts and
matters otherwise within the personal knowledge of any limited partner in
Seller, any other officers, employees or representatives of Seller, Aetna or any
such limited partner or any third parties, including Tenants and property
managers of the Property, and excluding, whether or not actually known by such
specific officer, any matter known to Purchaser or its agents or other
representatives at the time of Closing.
11.18 Survival and Limitation of Representations and Warranties. The
representations and warranties of Seller set forth in Section 5.1 shall survive
the Closing, but written notification of any claim arising therefrom must be
received by Seller within six (6) months after the Closing Date or such claim
shall be forever barred and Seller shall have no liability with respect thereto.
The aggregate liability of Seller with respect to all claims hereunder shall not
exceed One Million Dollars ($1,000,000).
11.19 Allocation of Liability. It is expressly understood and agreed
that Seller shall remain liable to third parties for any and all obligations,
claims, losses, damages, liabilities
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and expenses arising out of events, contractual obligations, acts or omission of
Seller that occurred in connection with Seller's ownership or operation of the
Property prior to Closing, and Purchaser shall be liable to third parties for
any and all obligations, claims, losses, damages, liabilities and expenses
arising out of events, contractual obligations, acts or omission of Purchaser
that occur in connection with Purchaser's ownership or operation of the Property
from and after Closing. This Section shall survive Closing.
11.20 Publicity. The parties agree that no party shall, with respect to
this Agreement and the transactions contemplated hereby, contact or conduct
negotiations with public officials, make any public pronouncements, issue press
releases or otherwise furnish information regarding this Agreement or the
transactions contemplated hereby to any third party without the consent of the
other party, which consent shall not be unreasonably withheld or delayed. Seller
acknowledges that Purchaser is a publicly-traded real estate investment trust.
11.21 Nonliability of Trustees. THE DECLARATION OF TRUST ESTABLISHING
PURCHASER (A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
THE STATE OF MARYLAND) PROVIDES THAT THE NAME "HEALTH AND RETIREMENT PROPERTIES
TRUST" REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF PURCHASER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY
OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, PURCHASER. ALL PERSONS
DEALING WITH PURCHASER, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF PURCHASER
FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION. THIS SECTION
SHALL SURVIVE CLOSING AND ANY TERMINATION OF THIS AGREEMENT.
11.22 Financials. Seller shall provide Purchaser with access to the
books and records for the Property (to the extent available to Seller) for the
purpose of preparing audited financial statements for the Property with respect
to the 1996 and 1997 calendar years, at Purchaser's sole cost.
This Section shall survive Closing.
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11.23 Committee Approval. This Agreement is, and any amendments hereto
will be, subject to receipt by Seller of all required committee and other
internal approvals. Such approvals shall be deemed to have been obtained unless
Seller notifies Purchaser to the contrary within five (5) business days after
the Date of this Agreement.
Initial: Seller /s/ TD Purchaser /s/ AS
11.24 Time to Execute and Deliver. This Agreement shall be void if one
fully executed copy is not received by Seller, along with confirmation that the
Initial Deposit has been received by the Title Company, on or before 5:00 p.m.
(Hartford time) on October 27, 1997.
[Remainder of page intentionally left blank; signature page follows]
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IN WITNESS WHEREOF, Purchaser and Seller have executed this Agreement
as of the date set forth above.
SELLER: FRANKLIN OFFICE ASSOCIATES
By Aetna Life Insurance Company
Its General Partner
By: /s/ Thomas G. Dudeck
Printed name: Thomas G. Dudeck
Its: Assistant Vice President
PURCHASER: HEALTH AND RETIREMENT
PROPERTIES TRUST
By: /s/ Ajay Saini
Printed name: Ajay Saini
Its: Treasurer
SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT BETWEEN
FRANKLIN OFFICE ASSOCIATES, AS SELLER, AND HEALTH AND
RETIREMENT PROPERTIES TRUST, AS PURCHASER
<PAGE>
An original, fully executed copy of this Agreement, together with the
Initial Deposit, has been received by the Title Company (or its agent) this 23rd
day of October, 1997, and, by execution hereof, the Title Company (by itself or
acting through its agent) hereby covenants and agrees to be bound by the terms
of this Agreement [and hereby covenants and agrees to enter into a designation
agreement in the form attached hereto as Exhibit 9.2.11.
COMMONWEALTH LAND TITLE
INSURANCE COMPANY
By: /s/ Marvin H. New
Printed name: Marvin H. New
Its: Consultant
TITLE COMPANY SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT
BETWEEN FRANKLIN OFFICE ASSOCIATES, AS SELLER, AND HEALTH AND
RETIREMENT PROPERTIES TRUST, AS PURCHASER
<PAGE>
The exhibits to this agreement, which are summarized above in the table of
contents, have been omitted pursuant to Regulation S-K, Item 601(2). A copy of
such exhibits will be provided to the Securities and Exchange Commission upon
request.
