SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-3
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 18, 1996
BEACON PROPERTIES CORPORATION
(Exact name of Registrant as specified in its Charter)
Maryland
(State of Incorporation)
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1-12926 04-3224258
(Commission File Number) (IRS Employer Id. Number)
50 Rowes Wharf
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
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(617) 330-1400
(Registrant's telephone number, including area code)
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Item 7. Financial Statements and Exhibits
(c) Exhibits
*2.1 Purchase and Sale Agreement between LaSalle Fund II and Beacon
Properties, L.P., dated as of September 20, 1996.
*2.2 First Amendment to Purchase and Sale Agreement between LaSalle Fund II
and Beacon Properties, L.P., dated October 2, 1996.
*2.3 Purchase and Sale Contract between New England Executive Park Limited
Partnership, et al and Beacon Properties, L.P., dated as of November 1,
1996.
2.4 Agreement of Purchase and Sale and Joint Escrow Instructions between
10960 Property Corporation and Beacon Properties, L.P. dated October 3,
1996.
*23.1 Consent of Coopers & Lybrand, L.L.P., Independent Accountants.
__________
*Previously filed as part of this Form 8-K, as amended.
2
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BEACON PROPERTIES CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BEACON PROPERTIES CORPORATION
/s/ Robert J. Perriello
Robert J. Perriello,
Senior Vice President,
and Chief Financial Officer
Date: December 2, 1996
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
BETWEEN
10960 PROPERTY CORPORATION
AS SELLER
AND
BEACON PROPERTIES L.P.
AS BUYER
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TABLE OF CONTENTS
1. Purchase and Sale ..................................................
2. Purchase Price .....................................................
(a) Deposit ...................................................
(b) Second Deposit.............................................
(c) Treatment of Deposit.......................................
(d) Cash Balance...............................................
3. Escrow .............................................................
(a) Opening of Escrow..........................................
(b) Close of Escrow............................................
4. Conditions to the Close of Escrow ..................................
(a) Matters Expressly Waived by Buyer..........................
(i) Due Diligence.....................................
(ii) Tenant Estoppel Certificates......................
(b) Conditions Precedent to Buyer's Obligations................
(i) Title Insurance...................................
(ii) Representations, Warranties and
Covenants of Seller...............................
(c) Failure of Conditions Precedent to Buyer's Obligations.....
(d) Conditions Precedent to Seller's Obligations...............
5. Deliveries to Escrow Holder.........................................
(a) Seller's Deliveries........................................
(i) Deed..............................................
(ii) Bill of Sale......................................
(iii) General Assignment of Leases and
Intangible Personal Property......................
(iv) Non-Foreign Certification.........................
(v) Tenant Notice Letter..............................
(vi) Date-Down Certificate.............................
(vii) Proof of Authority................................
(viii) Proration Schedule................................
(b) Buyer's Deliveries.........................................
(i) Bill of Sale......................................
(ii) General Assignment................................
(iii) Proof of Authority ...............................
(iv) Proration Schedule................................
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6. Deliveries Upon Close of Escrow.....................................
(a) Documents..................................................
(b) Tangible Personal Property.................................
(c) Title Insurance ...........................................
7 Costs and Expenses .................................................
8. Prorations .........................................................
(a) General ...................................................
(b) Rentals ...................................................
(c) Delinquent Rentals.........................................
(d) Additional Rentals.........................................
(e) Prepaid Rentals............................................
(f) Taxes and Assessments......................................
(g) Operating Expenses.........................................
(h) Tenant Deposits............................................
(i) Seller Deposits............................................
(j) Leasing Commissions........................................
(k) Capital Expenditures and Tenant
Improvement Costs..........................................
(l) Method of Proration........................................
(m) Arbitration of Remaining Prorations........................
9. Disbursements and Other Actions by Escrow Holder....................
(a) Funds .....................................................
(b) Recording..................................................
(c) Title Policy...............................................
(d) Disbursement of Documents to Buyer.........................
(e) Disbursement of Documents to Seller........................
(f) Tenant Notice Letters......................................
10. AS-IS Sale; Release.................................................
(a) Buyer's Acknowledgment.....................................
(i) AS IS.............................................
(ii) No Representations................................
(iii) No Implied Warranties.............................
(iv) Information Supplied by Seller....................
(v) Negotiated Purchase Price.........................
(b) Release ...................................................
11. Seller's Representations and Warranties.............................
(a) Power ..................................................
(b) Requisite Action...........................................
(c) Authority..................................................
(d) Due Diligence Documents....................................
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12. Buyer's Representations and Warranties..............................
(a) Power .....................................................
(b) Requisite Action...........................................
(c) Authority..................................................
(d) Principal..................................................
13. Covenants of Buyer and Seller.......................................
(a) Access by Buyer............................................
(b) Confidentiality............................................
(c) Publicity..................................................
(d) Termination of Seller's Agent..............................
(e) Continued Operation........................................
(f) Access by Seller ..........................................
(g) Audit Rights...............................................
14. Casualty and Condemnation...........................................
15. Notices ............................................................
16. Commissions ........................................................
17. Legal and Equitable Enforcement of this Agreement...................
(a) Default by Seller..........................................
(b) Default by Buyer...........................................
(c) Waiver of Right to Record Lis Pendens......................
18. Assignment, Exchange, and Back-up Offers............................
(a) Assignment.................................................
(b) Back-Up Offers.............................................
19. Miscellaneous ......................................................
(a) Governing Law..............................................
(b) Partial Invalidity.........................................
(c) Waivers ...................................................
(d) Successors and Assigns.....................................
(e) Professional Fees..........................................
(f) Entire Agreement...........................................
(g) Time of Essence............................................
(h) Construction...............................................
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TABLE OF EXHIBITS
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First Reference:
Paragraph and Page
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Exhibit "A" - Legal Description..............................................Recital A p.
Exhibit "B" - Schedule of Tangible Personal Property.........................Recital A, p.
Exhibit "IC" - Schedule of Intangible Personal Property.......................Recital A, p.
Exhibit "D" - Schedule of Tenant Deposits....................................Recital A, p.
Exhibit "E" - Schedule of Due Diligence Documents............................Section 4(a)(i), p.
Exhibit "F-1" - Form of Tenant Estoppel Certificate............................Section 4(a)(ii), p.
Exhibit "F-2" - Schedule of Executed Estoppel Certificates.....................Section 4(a)(ii), p.
Exhibit "G" - Permitted Title Exceptions.....................................Section 4(b)(i), p.
Exhibit "H" - Grant Deed.....................................................Section 5(a)(i), p.
Exhibit "I" - Bill of Sale...................................................Section 5(a)(ii), p.
Exhibit "J" - General Assignment.............................................Section 5(a)(iii), p.
Exhibit "K" - Transferor's Certification of Non-Foreign Status...............Section 5(a)(iv), p.
Exhibit "L" - Tenant Notice Letter...........................................Section 5(a)(v), p.
Exhibit "M" - Date-Down Certificate..........................................Section 5(a)(vi), p.
Exhibit "N" - Operating Cost Pass-Throughs...................................Section 8(d), p.
Exhibit "O" - Schedule of Seller Deposits....................................Section 8(i), p.
Exhibit "P" - Schedule of Capital Expenditures and Tenant
Improvement Be Paid by Seller..................................Section 8(k), p.
Exhibit "Q" - Access, Insurance and Indemnification Agreement................Section 13(a), p.
Exhibit "R" - Leasing Guidelines.............................................Section 13(e), p.
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SCHEDULE OF DEFINED TERMS
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Agreement .........................................................................Introduction, p.
Approved Title Conditions..........................................................Section 4(b)(i), p
Bill of Sale ......................................................................Section 5(a)(ii), p
Buyer .............................................................................Introduction, p.
Claims ............................................................................Section 10(b)(i), p.
Close of Escrow ...................................................................Section 3(b), p.
Closing Date ......................................................................Section 3(b), p
Date-Down Certificate..............................................................Section 5(a)(vi), p.
Deed ..............................................................................Section 5(a)(i), p.
Deposit ...........................................................................Section 2(b), p.
Due Diligence Date.................................................................Recital B
Due Diligence Documents............................................................Section 4(a)(i), p.
Due Diligence Investigations.......................................................Recital B
Effective Date ....................................................................Introduction, p.
Escrow Holder .....................................................................Section 2(a), p.
Escrow Instructions................................................................Section 3(a), p.
Estoppel Certificates..............................................................Section 4(a)(ii), p.
General Assignment.................................................................Section 5(a)(iii), p.
Governmental Regulations...........................................................Section 10(a)(ii), p.
Hazardous Materials................................................................Section 10(a)(ii), p.
Improvements ......................................................................Recital A, p.
Initial Deposit ...................................................................Section 2(a), p.
Intangible Personal Property.......................................................Recital A, p.
Land .............................................................................Recital A, p.
Leases ............................................................................Recital A, p.
Property ..........................................................................Recital A, p.
Proprietary Documents..............................................................Section 4(a)(i), p.
Purchase Price ....................................................................Section 2, p.
Real Property .....................................................................Recital A, p.
Second Deposit ....................................................................Section 2(b), p.
Seller ............................................................................Introduction, p.
Seller's Agent ....................................................................Recital A, p.
Seller Group ......................................................................Section 10(a)(ii), p.
Tangible Personal Property.........................................................Recital A, p.
Tenant Deposits ...................................................................Recital A, p.
Tenant Notice Letter...............................................................Section 5(a)(v), p.
Title Company .....................................................................Section 4(b)(i), p.
Title Policy ......................................................................Section 4(b)(i), p.
Unresolved Proration Issues........................................................Section 8(1), p.
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AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
To: Commerce Escrow Company Escrow No. 96-25237-MM 1545
Wilshire Boulevard, Suite 600 Escrow Officer: Mr. Mark Minsky
Los Angeles, California 90017
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of the 3rd day of October, 1996 (the
"Effective Date"), by and between 10960 PROPERTY CORPORATION, a Delaware
corporation ("Seller"), and BEACON PROPERTIES, L.P., a Delaware limited
partnership ("Buyer").
RECITALS:
A. The property being sold pursuant to this Agreement (collectively,
the "Property") consists of (i) the fee interest in the land located at 10960
Wilshire Boulevard, Los Angeles, California and more particularly described on
Exhibit "A" attached hereto, together with all easements, rights-of-way,
privileges and appurtenances pertaining thereto, including any right, title and
interest of Seller in and to any street adjoining any portion thereof
(collectively, the "Land"); (ii) all of Seller's right, title and interest
(including the fee interest) in and to all structures, buildings, fixtures,
parking facilities, landscaping and other improvements currently constructed and
located on the Land, as well as any addition; to or replacements of same
occurring following the Effective Date, together with all machinery and
mechanical, electrical, HVAC and plumbing systems used in the operation thereof,
but excluding any such items owned by tenants, public or private utilities,
contractors under contract or other third parties (the "Improvements", which
Improvements together with the Land are hereinafter collectively referred to as
the "Real Property"), (iii) all of Seller's right, title and interest in and to
all equipment, appliances, tools, machinery, supplies, building materials,
furniture, artwork, and other tangible personal property located at the Real
Property and used exclusively in the ownership, management, operation or
marketing thereof, to the extent listed on Exhibit "B" attached hereto (the
"Tangible Personal Property"); (iv) all of Seller's right, title and interest in
and to all Intangible personal property used exclusively in the ownership,
management, operation or marketing of the Real Property, including all
transferable licenses, permits, certificates of occupancy, trade names,
trademarks, service marks, logos and other marks used by Seller in the operation
and identification of the Real Property, all building plans and specifications
regarding the Improvements which are in the possession of Seller, and any and
all service contracts, maintenance agreements, construction contracts,
architects agreements, parking agreements, warranties, guaranties, and other
contracts and agreements relating exclusively to the Real Property which by the
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express terms thereof are assignable without the consent of any third party and
which continue following the Close of Escrow (as defined below), to the extent
same are described on Exhibit "C" attached hereto (the "Intangible Personal
Property"), and (v) all written or oral agreements granting any party the right
to use or occupy any portion of the Real Property (the "Leases"), together with
any security deposits and other deposits held by or under the control of Seller
or Seller's property manager and leasing agent, Hines Interests Limited
Partnership ("Seller's Agent") as of the Close of Escrow with respect to the
Leases (collectively, the "Tenant Deposits"). A schedule of the Tenant Deposits
as of the Effective Date is attached hereto as Exhibit "D".
B. Seller and Seller's Agent have conducted a multi-party bid process
for the sale of the Property which has culminated in Seller's selection of Buyer
as the party that Seller is willing to sell the Property to in accordance with
the provisions of this Agreement. Commencing prior to the Effective Date and
ending at 5:00 P.M. Pacific Standard Time on November 7, 1996 (the "Due
Diligence Date"), Buyer shall have the opportunity to conduct all due diligence
with regard to the Property as Buyer deems necessary or appropriate in Buyer's
sole and absolute discretion (collectively, the "Due Diligence Investigations").
Buyer shall have the right to terminate this Agreement and receive a return of
the Initial Deposit described in Section 2(a) below if Buyer is dissatisfied
with the Due Diligence Investigations in Buyer's sole discretion by delivering
notice thereof to Seller and Escrow Holder on or before the Due Diligence Date.
Any change in circumstances following the Effective Date will not result in any
adjustment to the Purchase Price, except as expressly provided in this
Agreement.
NOW, THEREFORE, in consideration of these covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Buyer and Seller hereby agree as follows, and hereby
instruct Escrow Holder as follows:
1. Purchase and Sale. Seller agrees to sell to Buyer, and Buyer agrees
to purchase from Seller, the Property upon the terms and conditions set forth in
this Agreement, including, without limitation, the foregoing Recitals.
2. Purchase Price. The purchase price ("Purchase Price") for the
Property shall be One Hundred Thirty-Three Million Dollars ($133,000,000). The
Purchase Price shall be payable as follows:
(a) Initial Deposit. Buyer and Seller hereby irrevocably
instruct Commerce Escrow Company ("Escrow Holder") to transfer from
Escrow No. 96-24964-MM, into the escrow described at the top of page 1
hereof the amount of Two Million Dollars ($2,000,000) (the "Initial
Deposit") which Buyer delivered to Escrow Holder prior to the Effective
Date. The Initial Deposit shall be held by Escrow Holder while this
Agreement is in effect in an interest bearing money market account,
with all interest accruing thereon being for the benefit of Buyer. All
interest accrued on the Initial Deposit shall be added to and be deemed
a part
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of the sum comprising the Initial Deposit. If Buyer elects to terminate
this Agreement by giving written notice thereof to Seller and Escrow
Holder on or before the Due Diligence Date, Escrow Holder shall return
the Initial Deposit to Buyer in accordance with Buyer's instructions
within two (2) business days following Buyer's delivery of a
certificate to Seller and Escrow Holder representing that Buyer has
delivered to Seller, at no charge, copies of all surveys, engineering
studies, soils reports, environmental reports, and similar studies and
reports prepared by or for Buyer that pertain to the Property.
(b) Second Deposit. If Buyer has not timely terminated this
Agreement by giving written notice thereof to Seller and Escrow Holder
on or before the Due Diligence Date, then Buyer hereby covenants to
deliver to Escrow Holder the sum of Five Million Dollars ($5,000,000)
(the "Second Deposit"). The Second Deposit shall be delivered by a
confirmed wire transfer of funds not later than one (1) business day
after the Due Diligence Date. The Second Deposit shall be added to the
Initial Deposit and shall continue to be invested in an interest
bearing money market account, with all interest accruing thereon being
for the benefit of Buyer. The Initial Deposit, the Second Deposit, and
all interest accrued thereon, are sometimes hereafter collectively
referred to as the "Deposit".
(c) Treatment of Deposit. If the Second Deposit is not timely
delivered as required herein, Escrow Holder shall deliver the Initial
Deposit to Seller, whereupon this Agreement shall terminate. If the
Second Deposit is timely delivered, thereafter, the Deposit shall
either be (i) applied and credited toward payment of the Purchase
Price at the Close of Escrow, or (ii) retained by Seller as liquidated
damages pursuant to Section 17(b) below, or (iii) returned to Buyer if
the Close of Escrow does not occur, this Agreement is terminated, and
the provisions of Sections 4(c), 14, or 17(a) apply.
(d) Cash Balance. Not later than 12:00 Noon one (1) business
day prior to the "Closing Date" (as defined in Section 3(b) below),
Buyer shall deposit with Escrow Holder cash by means of a confirmed
wire transfer through the Federal Reserve System in the amount of the
balance of the Purchase Price, plus Buyer's share of expenses and
prorations as described in this Agreement.
3. Escrow.
(a) Opening of Escrow. Buyer and Seller shall promptly deliver
a fully executed copy of this Agreement to Escrow Holder at the address
shown on Page 1 following the Effective Date, it being understood and
agreed that Buyer shall have no obligations hereunder unless and until
Buyer and Seller execute this Agreement and a fully executed copy of
this Agreement is delivered to Escrow Holder. Seller hereby authorizes
Seller's Agent to execute and deliver to Escrow Holder any additional
or supplementary instructions (which if they are binding upon Buyer
must have first been reasonably approved by Buyer) as may be
<PAGE>
necessary or convenient to implement the terms of this Agreement and
close the transactions contemplated hereby, provided such instructions
are consistent with and merely supplement this Agreement and shall not
in any way modify, amend or supersede this Agreement. Such
supplementary instructions, together with the escrow instructions set
forth in this Agreement, as they may be amended from time to time by
the parties, shall collectively be referred to as the "Escrow
Instructions." The Escrow Instructions may be amended and supplemented
by such standard terms and provisions as the Escrow Holder may request
the parties hereto to execute; provided, however, that the parties
hereto and Escrow Holder acknowledge and agree that in the event of a
conflict between any provision of such standard terms and provisions
supplied by the Escrow Holder and the Escrow Instructions, the Escrow
Instructions shall prevail.
(b) Close of Escrow. For purposes of this Agreement, the
"Close of Escrow" shall mean the date on which the "Deed" (as defined
in Section 5(a)(i) below) is recorded in the Official Records of Los
Angeles County. The Close of Escrow shall occur on November 21, 1996
(the "Closing Date"). Buyer acknowledges that there shall be no
extensions of the Closing Date, and agrees that Buyer's failure to
perform its obligations hereunder, including without limitation the
timely delivery of the balance of the Purchase Price, shall constitute
a material and non-curable default under this Agreement.
4. Conditions to the Close of Escrow.
(a) Matters Expressly Waived by Buyer. Buyer and Seller
expressly acknowledge and agree that if Buyer has not terminated this
Agreement by giving written notice thereof to Seller and Escrow Holder
on or before the Due Diligence Date, Buyer's obligations under this
Agreement will not be further conditioned upon the matters described in
this Section 4(a):
(i) Due Diligence. Prior to the Due Diligence Date,
Buyer shall have the opportunity to conduct and review the
results of all inspections, investigations, tests (including
environmental testing) and studies which Buyer elects to make
or obtain in connection with its proposed purchase and
operation of the Property. In addition, Seller has made and
shall continue to make available to Buyer for review a
document referred to as the Confidential Memorandum, copies of
the Leases, copies of the Intangible Personal Property, copies
of any notice alleging uncured violations of "Governmental
Regulations" (as defined in Section 10(a)(ii) below), copies
of documents relating to pending litigation or written
threats of litigation, reports, studies, operating expense
information, tenant correspondence, and all similar data and
documents which Seller's Agent believes a prudent
institutional purchaser of institutional real estate in Los
Angeles, California, would reasonably deem relevant, to the
extent same are within the possession of Seller or Seller's
Agent, excluding
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"Proprietary Documents" (collectively, the "Due Diligence
Documents"). The Due Diligence Documents are described on
Exhibit "E" attached hereto. For purposes of this Agreement,
"Proprietary Documents" means documents subject to the
attorney-client privilege or attorney work product privilege,
appraisals, contracts and communications between Seller and
Seller's Agent, financial feasibility analyses, business
plans, third-party offers to purchase the Property, and
similar proprietary financial data and documents, all of which
Buyer acknowledges Seller had and has no obligation to
disclose or deliver to Buyer. Buyer hereby acknowledges that
except as described herein, neither Seller nor Seller's Agent
has made nor will make any representation or warranty
regarding the accuracy or completeness of the Due Diligence
Documents or the sources thereof. Neither Seller nor Seller's
Agent has undertaken any independent investigation as to the
accuracy or completeness of the Due Diligence Documents, and
Buyer has been provided with access to the Due Diligence
Documents solely as an accommodation to Buyer. A decision by
Buyer to proceed with its purchase hereunder after the Due
Diligence Date shall be an acknowledgment by Buyer that Buyer
has had the opportunity to review, and has independently and
on its own behalf reviewed the accuracy and completeness of
the Due Diligence Documents through all independent
investigations which Buyer has deemed necessary or desirable.
All information actually discovered by Buyer in reviewing the
Due Diligence Documents and conducting its own investigations
and studies shall be imputed to Buyer, and any express
representations or warranties of Seller made in this Agreement
shall be deemed correspondingly modified or qualified to
reflect such information discovered by Buyer. Buyer further
acknowledges and agrees that Seller has no obligation to
correct or cure any defects or deficiencies disclosed by the
Due Diligence Investigations, and that the Purchase Price
adequately reflects Buyer's determination, made in Buyer's
sole and absolute discretion, as to the net economic detriment
which will be incurred by Buyer in purchasing the Property
subject to all of such defects and deficiencies While Buyer
shall have the right to continue its Due Diligence
Investigations pursuant to the provisions of Section 13(a)
below while this Agreement remains in effect, Buyer
acknowledges and agrees that no information discovered after
the Due Diligence Date, nor any change in circumstances not
caused by Seller in breach of this Agreement following the Due
Diligence Date (subject to Section 14 below), will relieve
Buyer of its obligations to purchase the Property in
accordance with the terms hereof.
(ii) Tenant Estoppel Certificates. Prior to the
Effective Date, Seller's Agent has exercised commercially
reasonable efforts to obtain the execution by each tenant
under the Leases of tenant estoppel certificates substantially
in the form attached to each Lease, which tenant estoppel
<PAGE>
certificates are substantially in the form of Exhibit "F-I"
attached hereto ("Estoppel Certificates"). Attached hereto as
Exhibit "F-2" is a schedule of all Estoppel Certificates which
were executed prior to the Effective Date and which have been
delivered to Buyer for Buyer's review and which cover at least
eighty percent (80%) of the net rentable area of the
Improvements demised by Leases as of the Effective Date.
Seller shall cause Seller's Agent to continue to use
commercially reasonable efforts to obtain executed Estoppel
Certificates from all tenants under Leases not shown on
Exhibit "F-2" , and to deliver copies of such executed
Estoppel Certificates to Buyer promptly after receipt thereof.
Further, to the extent Buyer determines it necessary to
satisfy its line of credit lender, Seller agrees to cause
Seller's Agent to use commercially reasonable efforts to
obtain updates to the Estoppel Certificates listed on Exhibit
"F-2" to a date more current to Close of Escrow. Buyer
acknowledges and agrees that delivery of any executed Estoppel
Certificates other than those listed on Exhibit "F-2", or
delivery of executed Estoppel Certificates other than those
listed on Exhibit "F-2" which contain information not
otherwise disclosed by the Due Diligence Investigations, or
delivery of such updates, shall not be a condition to Buyer's
obligations hereunder nor relieve Buyer of any of its
obligations hereunder.
(b) Conditions Precedent to Buyer's Obligations. The Close of
Escrow and Buyer's obligations with respect to the transactions
contemplated by this Agreement are subject to the satisfaction or
waiver of the following conditions, and the obligations of the parties
with respect to such conditions are as follows:
(i) Title Insurance. As of the Close of Escrow,
Chicago Title Insurance Company ("Title Company") shall have
committed to issue a standard coverage owner's policy of title
insurance showing title to the Real Property vested in Buyer
subject only to the "Approved Title Conditions," with a
liability amount equal to the Purchase Price, together with
reasonable and customary endorsements thereto to the extent
specified by Buyer in writing prior to the Due Diligence Date
(the "Title Policy"). For purposes of this Agreement,
"Approved Title Conditions" means (to the extent Buyer
approves of the same in the exercise of its due diligence
review rights hereunder): (A) the permitted title exceptions
shown on Exhibit "G" attached hereto; (B) liens for taxes,
assessments and other charges of governmental or
quasi-governmental authorities which are not yet delinquent;
(C) zoning, building, access, environmental, and other similar
restrictions imposed bylaws, ordinances, rules, requirements,
resolutions, policy statements and regulations of governmental
and quasi-governmental authorities claiming jurisdiction over
the Property, (D) the fights and obligations of parties under
the Leases and other parties in possess on; (E) all matters
which would be disclosed by an inspection of the Property or a
survey of the Real Property; and (F) any other matters
<PAGE>
heretofore or hereafter existing, whether or not of record or
discoverable by inspection, which have been approved, accepted
or waived by Buyer pursuant to the terms of this Agreement.
Buyer shall have the right to obtain an ALTA extended coverage
form of Owner's policy of title insurance, provided that
Seller is not required to incur any expense or liability in
connection therewith, including but not limited to the
execution of affidavits or indemnities in favor of Title
Company, other than customary parties-in-possession,
mechanics' lien and comprehensive endorsement affidavit; as
may be requested by Title Company. If Buyer elects to obtain
an ALTA extended coverage form of title insurance policy, or
elects to obtain any endorsements (other than as described in
the first sentence of this subsection), requests reinsurance
or coinsurance, or otherwise elects to obtain any different or
additional title insurance coverage in excess of that provided
by the Title Policy, obtaining same shall not be a condition
to Close of Escrow.
(ii) Representations, Warranties and Covenants of
Seller. Seller shall have duly performed in all material
respects all material covenants to be performed by Seller
hereunder (including delivering the documents described in
Section 5(a) executed by Seller), and Seller's representations
and warranties set forth in this Agreement shall be true and
correct as of the Closing Date in all material respects as
described in the Date-Down Certificate (as defined in Section
5(a)(vi) below). The consummation of the Close of Escrow shall
evidence Buyer's acknowledgment that to the best of Buyer's
knowledge, Seller has duly performed in all material respects
Seller's material covenants and that to the best of Buyer's
knowledge, Seller is not in breach of Seller's representations
and warranties.
(c) Failure of Conditions Precedent to Buyer Obligations. If
at any time Buyer becomes aware that any condition precedent to Buyer's
obligations hereunder (i.e., as described in Sections 4(b)(i) or
4(b)(ii) above) has failed or is reasonably likely to fail as of the
Closing Date, Buyer shall use best efforts to promptly notify Seller in
writing of such failure or the reasonable likelihood of failure of such
condition precedent. All disapprovals of a condition precedent
described in Section 4(b) above must be in writing pursuant to the
notice provisions of Section 15 below, and the consummation of the
Close of Escrow shall be conclusively deemed the approval, acceptance,
or waiver by Buyer of the conditions precedent set forth in Section
4(b) above. If Buyer timely disapproves a condition precedent pursuant
to Section 4(b) above, this Agreement shall not terminate if Seller
notifies Buyer in writing within five (5) business days after receipt
of written notice of such disapproval from Buyer stating that Seller
has elected, in Seller's sole and absolute discretion, to attempt to
cure or ameliorate such disapproved condition precedent to Buyer's
reasonable satisfaction, in which event the Closing Date shall be
extended for a period not to exceed thirty (30)
<PAGE>
days in order to permit Seller adequate time to attempt such cure or
amelioration. If Seller is successful in curing or ameliorating such
disapproved condition precedent, within the time period specified in
the preceding sentence, the Close of Escrow shall thereupon occur not
later than five (5) business days thereafter. If Seller does not give
timely written notice to Buyer electing to cure or to ameliorate such
disapproved condition precedent, or if Seller gives such notice to
Buyer but thereafter is unable to effect such cure or amelioration,
then this Agreement shall thereupon terminate and neither Buyer nor
Seller shall have any further rights or obligations hereunder except as
are specifically described in this Agreement as surviving the
termination of this Agreement. If this Agreement so terminates, then
Escrow Holder shall, as a covenant which survives the termination of
this Agreement, return the Deposit to Buyer in accordance with Buyer's
written instructions within two (2) business days following Buyer's
delivery of a written certification to Seller and Escrow Holder that
Buyer has delivered to Seller, at no charge, copies of all surveys,
engineering studies, soils reports, environmental reports, and similar
studies and reports prepared by or for Buyer that pertain to the
Property.
(d) Conditions Precedent to Seller's Obligations. The Close of
Escrow and Seller's obligations with respect to the transactions
contemplated by this Agreement are subject to the timely satisfaction
or waiver of the following conditions: Buyer shall have duly performed
in all material respects each and every covenant of Buyer hereunder,
and Buyer's representations and warranties set forth in this Agreement
shall be true and correct as of the Closing Date in all material
respects. Without limitation on the foregoing , Buyer shall have timely
delivered the Second Deposit and the balance of the Purchase Price
pursuant to the provisions of Section 2 above, and shall have timely
delivered all of the duly executed documents required to be delivered
by Buyer pursuant to Section 5(b) below. All disapprovals given by
Seller under this Section 4(d) shall be in writing, and the failure of
Seller to disapprove any matter requiring its approval under this
Section 4(d) in a timely manner shall be deemed approval thereof by
Seller.
5. Deliveries to Escrow Holder.
(a) Seller's Deliveries. Seller hereby covenants and agrees to
deliver or cause to be delivered to Escrow Holder at least one business
day prior to the Closing Date the following instruments and documents,
the delivery of each of which shall be a condition to the Close of
Escrow:
(i) Deed. A grant deed ("Deed"), duly executed and
acknowledged in recordable form by Seller, conveying Seller's
interest in the Real Property to Buyer, subject to the
Approved Title Conditions. The Deed shall be in the form of
Exhibit "H" attached hereto.
<PAGE>
(ii) Bill of Sale. Two (2) counterpart originals of a
bill of sale ("Bill of Sale") duly executed by Seller,
conveying to Buyer, without warranty, except as may be
expressly contained in this Agreement, all of Seller's right,
title and interest in and to the Tangible Personal Property.
The Bill of Sale shall be in the form of Exhibit "I" attached
hereto.
(iii) General Assignment of Leases and Intangible
Personal Property. Two (2) counterpart originals of an
assignment and assumption ("General Assignment"), duly
executed by Seller, assigning to Buyer, without warranty,
except as may be expressly contained in this Agreement, all of
Seller's right, title and interest in and to all Leases and
Intangible Personal Property, all to the extent transferable
by Seller. The General Assignment shall be in the form of
Exhibit "J", attached hereto.
(iv) Non-Foreign Certification. A certificate duly
executed by Seller in the form of Exhibit "K" attached hereto.
(v) Tenant Notice Letter. A letter addressed to each
tenant under the Leases ("Tenant Notice Letter"), duly
executed by Seller or Seller's Agent, notifying such tenants
of the Close of Escrow, the address where rent should be paid
following the Close of Escrow, the transfer of any Tenant
Deposits, and identification of the Buyer as the benefited
party with respect to the executed Estoppel Certificates. The
Tenant Notice Letter shall be in the form of Exhibit "U"
attached hereto.
(vi) Date-Down Certificate. A certificate duly
executed by Seller, reaffirming the continued truth and
accuracy as of the Closing Date of Seller's representations
and warranties contained in this Agreement (the "Date-Down
Certificate"). The Date-Down Certificate shall be in the form
of Exhibit "M" attached hereto.
(vii) Proof of Authority. Such proof of Seller's
authority and authorization to enter into this Agreement and
the transactions contemplated hereby, and such proof of the
power and authority of the individual(s) executing and/or
delivering any instruments, documents or certificates on
behalf of Seller to act for and bind Seller, as may be
reasonably required by Title Company.
(viii) Proration Schedule. Three (3) duly executed
counterpart originals of the proration schedule described in
Section 8(l).(b) Buyer's Deliveries. Buyer hereby covenants
and agrees to deliver or cause to be delivered to Escrow
Holder at least one business day prior to the Closing Date the
following instruments and documents, the delivery of each of
which shall be a condition to the Close of Escrow:
<PAGE>
(i) Bill of Sale. Two (2) duly executed
counterpart originals of the Bill of Sale.
(ii) General Assignment. Two (2) duly
executed counterpart originals of the General
Assignment.
(iii) Proof of Authority. Such proof of
Buyer's authority and authorization to enter into
this Agreement and the transactions contemplated
hereby, and such proof of the power and authority of
the individual(s) executing and/or delivering any
instruments, documents or certificates on behalf of
Buyer to act for and bind Buyer, as reasonably may be
required by Title Company.
(iv) Proration Schedule. Three (3) duly
executed counterpart originals of the proration
schedule described in Section 8(l).
6. Deliveries Upon Close of Escrow. Upon the Close of Escrow, the
following items shall be delivered:
(a) Documents. Seller shall deliver to Buyer outside of Escrow
(by leaving same at the Improvements) copies (or originals, to the
extent available) of all of the executed Estoppel Certificates (and
updates thereof to the extent obtained), Leases and Intangible Personal
Property, subject to Section 10 below. All of said documents shall be
certified pursuant to the Date-Down Certificate.
(b) Tangible Personal Property. Seller shall deliver to Buyer
(by leaving same at the Improvements) possession of the Tangible
Personal Property, including all keys to the Improvements.
(c) Title Insurance. The Title Company shall issue the Title
Policy to Buyer.
7. Costs and Expenses. Seller shall pay one-half (l/2) of the escrow
fee charged by Escrow Holder, and in addition Seller shall pay outside of escrow
all legal and professional fees and costs of attorneys and other consultants and
agents retained by Seller, including but not limited to any fees payable to
Seller's Agent. Except as described in the preceding sentence, Buyer shall be
responsible for paying all other costs and expenses incurred in connection with
the Due Diligence Investigations and consummating the Close of Escrow. Without
limiting the generality of the preceding sentence, Buyer shall pay through
Escrow, pursuant to Section 2(d) above, all title premiums for the Title Policy,
any title premiums associated with, extended coverage ALTA liability (if
requested by Buyer) and any title endorsements requested by Buyer, all recording
charges, or one-half (1/2) of the escrow fee of Escrow Holder, all city and
county transfer taxes, and all sales, use, intangibles, privilege or other taxes
or
<PAGE>
assessments (other than real property taxes which shall be prorated as described
in Section 8 below), assessed with respect to the Property or resulting from the
consummation of the Close of Escrow. Buyer shall pay outside of escrow all costs
and expenses related to the Due Diligence Investigations, and all legal and
professional fees and costs of attorneys and other consultants and agents
retained by Buyer.
8. Prorations.
(a) General. Except as specifically described in this Section
8, rentals, revenues, and other income, if any, from the Property, and
real property taxes and operating expenses, if any, affecting the
Property shall be prorated as of midnight on the day preceding the
Close of Escrow, based upon the tentative proration schedule described
in Section 8(1), as updated by the parties to the Close of Escrow. For
purposes of calculating prorations, Buyer shall be deemed to be in
title to the Property, and therefore entitled to the income and
responsible for the expenses, for the entire day upon which the Close
of Escrow occurs.
(b) Rentals. Subject to the provisions of Sections 8(c) and
8(d), rentals shall be prorated as of the Close of Escrow, based upon
the tentative proration schedule described in Section 8(1), as updated
by the parties to the Close of Escrow. "Rentals" as used herein
includes fixed rentals, additional rentals, percentage rentals,
escalation rentals, retroactive rentals, prepaid rentals, operating
cost pass-throughs and all other sums and charges payable by tenants
under the Leases.
(c) Delinquent Rentals. Rentals are delinquent when payment
thereof is more than forty-five (45) days delinquent as of the Close of
Escrow. Rentals which have not been paid when due but which are not yet
more than forty-five (45) days delinquent as of the Close of Escrow are
not deemed delinquent and shall be prorated pursuant to Section 8(b)
above. All rights to delinquent rentals shall be conveyed by Seller to
Buyer pursuant to the General Assignment. Any delinquent rentals which
are collected by Buyer following the Close of Escrow (even though same
are attributable to a period prior to Close of Escrow) shall become the
sole property of Buyer, and any such delinquent rentals which are
received by Seller following the Close of Escrow shall, as a covenant
which survives the Close of Escrow, be delivered by Seller to Buyer
promptly following receipt thereof. In consideration for the right to
collect and retain such delinquent rentals, Buyer shall pay to Seller
through escrow upon the Close of Escrow an amount in addition to the
Purchase Price calculated as described in this section. Seller shall be
paid an amount equal to fifty percent (50%) (if all delinquent rentals
which are more than forty-five (45) and less than ninety-one (91) days
overdue, Seller shall receive no credit for all delinquent rentals
which are more than ninety (90) days overdue as of the Close of Escrow.
<PAGE>
(d) Additional Rentals. Operating cost pass-throughs,
percentage rentals, additional rentals and other retroactive rental
escalations, sums or charges payable by tenants under the Leases which
accrue as of the Close of Escrow but are not then due and payable shall
be prorated as of the Close of Escrow based upon the projected
reconciliations as of December 31, 1996 as described on Exhibit "N"
attached hereto. Said projected reconciliations are based upon the
actual expenses accrued through September 30, 1996 (as shown on Exhibit
"N") and projected expenses for the final quarter of 1996. There shall
be no adjustment following the Close of Escrow if actual expenses for
1996 (and correspondingly, the amounts owed to or owed by tenants under
the Leases) are more or less than the projected reconciliations shown
on Exhibit "N".
(e) Prepaid Rentals. Rentals received by Seller attributable
to periods after the Close of Escrow shall be credited to Buyer and
debited to Seller at the Close of Escrow.
(f) Taxes and Assessments. All non-delinquent real estate
taxes and current installments of assessments affecting the Property
which are payable by Seller shall be prorated as of the Close of Escrow
based on the actual 1996-97 tax bill. All delinquent taxes and
assessments, if any, affecting the Property which are payable by Seller
shall be paid at the Close of Escrow from funds accruing to Seller. Any
pending or future refunds of real estate taxes and assessments
attributable to the period prior to the Close of Escrow and rights
thereto shall be conveyed by Seller to Buyer pursuant to the General
Assignment. Seller anticipates that a portion of any such property tax
refunds attributable to fiscal years 1994-95, 1995-96 and 1996-97 must
be refunded or credited to certain tenants pursuant to the terms of the
Leases. Buyer shall pay to Seller through escrow upon the Close of
Escrow an amount in addition to the Purchase Price equal to the sum of
the projected property tax refunds for fiscal years 1994-95, 1995-96
and 1996-97, less the amounts to be paid or credited to tenants under
the Leases, such amount to be mutually agreed upon by Buyer and Seller
prior to the Due Diligence Date. There shall be no adjustment following
the Close of Escrow if the amount of property tax refunds actually
received by Buyer and/or the amounts actually paid or credited to
tenants are more or less than the amounts projected by Buyer and Seller
prior to the Due Diligence Date. In consideration for the right to
receive said property tax refunds, as a covenant which shall survive
the Close of Escrow, Buyer hereby agrees to indemnify, defend and hold
"Seller Group" harmless from and against all "Claims" (as those terms
are defined in Section 10 below) arising from or relating to, directly
or indirectly, any Claims asserted by tenants under Leases regarding
such refund of property taxes. If for any reason a refund check is made
payable to Seller, as a covenant which shall survive the Close of
Escrow, the amount of such refund shall be paid to Buyer by Seller
promptly upon receipt following the Close of Escrow.
<PAGE>
(g) Operating Expenses. All utility, service charges for
electricity, heat and air conditioning service, other utilities,
elevator maintenance, common area maintenance, taxes (other than real
estate taxes and income taxes) such as rental taxes, and other expenses
affecting the Property which are payable by Seller and any other costs
incurred in the ordinary course of business or the management and
operation of the Property shall be prorated on an accrual basis. Seller
shall pay all such expenses that accrue prior to the Close of Escrow
and Buyer shall pay all such expenses accruing on the Close of Escrow
and thereafter. To the extent possible, Seller and Buyer shall obtain
billings and meter readings as of the Close of Escrow to aid in such
prorations.
(h) Tenant Deposits. Buyer shall be credited and Seller shall
be debited with an amount equal to all Tenant Deposits which are held
in the form of cash (and any interest accrued thereon for the benefit
of a tenant pursuant to Leases) by Seller or Seller's Agent under the
Leases as of the Close of Escrow. All non-cash Tenant Deposits, such as
certificates of deposit or letters of credit, shall not be prorated but
shall be assigned to Buyer to the extent assignable. To the extent such
non-cash Tenant Deposits are not assignable, as a covenant which shall
survive the Close of Escrow, Seller shall cooperate with Buyer and the
applicable tenants in order to release security interests in
certificates of deposit, return original letters of credit, and similar
actions to permit Buyer to obtain directly from such tenants new
security interests in certificates of deposit, replacement letters of
credit, and the like. A schedule of the Tenant Deposits as of the
Effective Date is attached hereto as Exhibit "D".
(i) Seller Deposits. Seller shall be credited and Buyer shall
be debited with an amount equal to all refundable deposits, retentions,
and holdbacks, if any, being held as of the Close of Escrow by any
governmental entity, any utility company, or other third party as
described in the Intangible Personal Property, together with all
interest then accrued thereon for the benefit of Seller. A "Schedule of
Seller's Deposits" as of the Effective Date is attached hereto as
Exhibit "0".
(j) Leasing Commissions. Seller shall pay in full when due,
either before or after the Close of Escrow, all leasing commissions
payable with respect to Leases which were fully executed prior to the
Effective Date. Notwithstanding the preceding sentence, Buyer shall
pay, if and when same become due, any leasing commission(s) which may
become due or payable with respect to an expansion or Effective
extension of any Lease executed prior to the Date, if such extension or
expansion becomes effective on or following the Effective Date. If
Seller pays any leasing commissions prior to the Close of Escrow with
respect to Leases which were fully executed following the Effective
Date, Buyer shall reimburse Seller for the aggregate amount of such
payments through escrow as an addition to the Purchase Price as
described in Section 2(d) above. All other
<PAGE>
leasing commissions which become due and payable with respect to Leases
shall be paid when due by Buyer following the Close of Escrow.
(k) Capital Expenditures and Tenant Improvement Costs. Seller
has made provision to pay when due certain capital expenditures and
tenant improvement costs which are more particularly described in the
1996 column on Exhibit "P" attached hereto. Prior to the Close of
Escrow, Seller or Seller's Agent shall provide Buyer with copies of
canceled checks or other reasonably satisfactory documentation of the
payment when due of the amounts described in the 1996 column on Exhibit
"P". Buyer shall be credited and Seller shall be debited with an amount
equal to the aggregate amount shown in the 1996 column on Exhibit "P"
which has not been so paid by Seller prior to the Close of Escrow, and
Seller shall thereupon be relieved of further obligation to make any
further payments with regard to the matters described on Exhibit "P".
Any such capital expenditure and tenant improvement costs which have
not been paid to Seller pursuant to the preceding sentence and which
are required to be paid to a third party under an executory contract
shall be paid by Buyer when due, and Seller shall be indemnified in
connection therewith, pursuant to the terms of the General Assignment.
Except as specifically described in this Section 8, Seller has no
obligation to pay any other amounts relating to the Leases (or any
other Intangible Personal Property) or the Real Property.
(l) Method of Proration. Seller shall prepare and deliver to
Buyer a schedule of tentative prorations on or before the fifth (5th)
business day prior to the Due Diligence Date with respect to the
Property. Such prorations, if and to the extent known and agreed upon
as of the Close of Escrow, shall be paid by Buyer to Seller (if the
prorations result in a net credit to the Seller) or by Seller to Buyer
(if the prorations result in a net credit to the Buyer) by increasing
or reducing the cash to be paid by Buyer at the Close of Escrow. Any
such prorations not determined or not agreed upon as of the Close of
Escrow (the "Unresolved Proration Issues") shall be paid by Buyer to
Seller, or by Seller to Buyer, as the case may be, in cash as soon is
practicable following the Close of Escrow, but in no event more than
sixty (60) days following the Close of Escrow, as a covenant which
survives the Close of Escrow. A copy of the final schedule of
prorations as agreed upon by Buyer and Seller, which shall also
identify all Unresolved Proration Issues, shall be delivered to Escrow
Holder prior to the Close of Escrow.
(m) Arbitration of Remaining Prorations. If Buyer and Seller
are unable to mutually agree upon the final allocation of all
Unresolved Proration Issues within sixty (60) days following the Close
of Escrow, then all such remaining Unresolved Proration Issues shall be
submitted to binding arbitration as described in this section as the
sole remedy therefor. Buyer and Seller shall jointly select a single
so-called "Big 6" accounting firm which has not performed substantial
work for either party in the preceding two (2) years. If Buyer and
<PAGE>
Seller are unable to agree, then all of the "Big 6" accounting firms
which have not performed substantial work for either party in the
preceding two (2) years shall be compiled on a single list. Buyer and
Seller shall each delete a name from said list in turn (with the
identity of the party making the first deletion determined by a
coin-flip) until only one name remains, which accounting firm shall be
the arbitrator for purposes of this subsection. Buyer and Seller shall,
in a single session, each present such oral and written documentation
to support such party's position as the accounting firm deems relevant
to the proration issues in dispute. As soon as reasonably possible
thereafter, the accounting firm shall render a decision based upon the
evidence submitted and the provisions of this Agreement. Such decision
shall be final and non-appealable. The aggregate net amount due as
determined, by the accounting firm shall be paid by Buyer to Seller, or
Seller to Buyer, as the case may be, within five (5) days following
such determination. All fees, costs and expenses of said accounting
firm shall be paid by the party which owed the net amount to the other
party hereto as described in the preceding sentence.
9. Disbursements and Other Actions by Escrow Holder. At the Closing
Date, Escrow Holder shall promptly undertake all of the following in the manner
hereinbelow indicated:
(a) Funds. Disburse all funds deposited with Escrow Holder by
Buyer in payment of the Purchase Price as follows:
(i) Deduct all items chargeable to the account of
Seller pursuant to Section 7.
(ii) If, as the result of the net prorations and
credits pursuant to Section 8, amounts are to be charged to
the account of Seller, deduct the total amount of such
charges.
(iii) Disburse the Purchase Price, less the Deposit
and the amounts described in subclauses (i) and (ii) above, to
Seller promptly upon the Close of Escrow in accordance with
Seller's wire transfer instructions.
(iv) Disburse any remaining balance in accordance
with Buyer's instructions.
(b) Recording. Cause the Deed (with documentary transfer tax
information to be affixed after recording), and any other documents
which the parties hereto may mutually direct to be recorded in the
Official Records of Los Angeles County and obtain conformed copies
thereof for distribution to Buyer and Seller.
<PAGE>
(c) Title Policy. Direct the Title Company to issue the Title
Policy to Buyer.
(d) Disbursement of Documents to Buyer. Disburse to Buyer
fully executed originals of the Bill of Sale, the General Assignment,
the Date-Down Certificate, and any other documents (or copies thereof)
deposited into Escrow by Seller pursuant hereto.
(e) Disbursement of Documents to Seller. Disburse to Seller
fully executed originals of the Bill of Sale, the General Assignment,
and any other documents (or copies thereof) deposited into Escrow by
Buyer pursuant hereto.
(f) Tenant Notice Letters. Deliver the Tenant Notice Letters
to the addressees thereof.
10. AS-IS Sale and Purchase, Release. Buyer acknowledges, by its
initials as set forth below, that the provisions of this Section 10 have been
required by Seller as a material inducement to enter into the contemplated
transactions, and the intent and effect of such provisions have been explained
to Buyer by Buyer's counsel and have been understood and agreed to by Buyer.
(a) Buyer's Acknowledgment. As a material inducement to
Seller to enter into this Agreement and to convey the Property to
Buyer, Buyer hereby acknowledges and agrees that, subject to the terms
and conditions of this Agreement and except as otherwise expressly set
forth in this Agreement:
(i) AS IS. Buyer is purchasing the Property in its
existing condition, "AS-IS, WHERE-IS, WITH ALL FAULTS," and
has made or has waived all inspections and investigations of
the Property and its vicinity which Buyer believes are
necessary to protect its own interest in, and its contemplated
use of the Property
-------------------
Buyer's Initials
(ii) No Representations. Other than the express
representations and warranties of Seller contained in this
Agreement, neither Seller, nor Seller's Agent, nor any person
or entity acting by or on behalf of Seller or Seller's Agent,
nor any officer, director, employee, agent, affiliate,
successor or assign of any of the foregoing (collectively, the
"Seller Group") has made any representation, warranty,
inducement, promise, agreement, & assurance or statement, oral
or written, of any kind to Buyer upon which Buyer is relying,
or in connection with which Buyer has made or will make any
decisions concerning the Property or its vicinity including,
without limitation, its use, condition, value, compliance with
<PAGE>
"Governmental Regulations," status of Intangible Personal
Property and Leases, amounts of money owed to or owed by
Seller, disputes with third parties, existence or absence of
"Hazardous Materials," the status of the construction of
tenant improvements, whether completed or in progress, or the
permissibility, feasibility, or convertibility of all or any
portion of the Property for any particular use or purpose,
including without limitation its present or future prospects
for sale, lease, development, occupancy or suitability as
security for financing. As used herein, the term "Governmental
Regulation" means any laws, ordinances, rules, requirements,
resolutions, policy statements and regulations (including,
without limitation, those relating to land use, subdivision,
zoning, "Hazardous Materials," occupational health and safety,
handicapped access, water, earthquake hazard reduction, and
building and fire codes) of any governmental or
quasi-governmental body or agency claiming jurisdiction over
the property. As used herein, the term "Hazardous Materials"
means any hazardous or toxic substance, material or waste
which is now or hereafter the subject of Governmental
Regulations, including without limitation any material or
substance which is (A) defined as a "hazardous waste,"
"extremely hazardous waste" or "restricted hazardous waste"
under Section 25115, 25117 or 25122.7, or listed pursuant to
Section 25140, or the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law), (B)
defined as a "hazardous substance" under Section 25316 of the
California Health and Safety Code, Division 2), Chapter 6.8
(Carpenter-Presley Tanner Hazardous Substance Account Act),
(C) defined as a "hazardous material," "hazardous substance,"
or "hazardous waste" under Section 25501 of the California
Health and Safety Code, Division 20, Chapter 6.7 (Underground
Storage of Hazardous Substances), (D) petroleum and other
hydrocarbons, (E) asbestos or any asbestos-containing
material, (F) listed under Article 9 or defined as hazardous
or extremely hazardous pursuant to Article II of Title 22 of
California Administrative Code, Division 4, Chapter 20, (G)
designated as a "hazardous substance" pursuant to Section 311
of the Federal Water Pollution Control Act 33 U.S.C.
(section)1251 et seq., (33 U.S.C. (section)1321) or as listed
pursuant to (section)307 of the Federal Water Pollution
Control Act (33 U.S.C. (section)1317), (H) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal
Resource Conservation and Recovery Act, 42 U.S.C.
(section)6901 et seq. (42 U.S.C. (section)9601), (1) defined
as a "hazardous substance" pursuant to Section 101 of the
Compulsive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S. C. (section)9601 et seq., or
(J) associated with the so-called "sick building syndrome".
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Buyer's Initials
<PAGE>
(iii) No Implied Warranties. SELLER HEREBY DISCLAIMS
ALL WARRANTIES IMPLIED BY LAW ARISING OUT OF OR WITH RESPECT
TO THE EXECUTION OF THIS AGREEMENT, ANY ASPECT OR ELEMENT OF
THE PROPERTY, OR THE PERFORMANCE OF SELLER'S OBLIGATIONS
HEREUNDER INCLUDING, WITHOUT LIMITATION, ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR
PURPOSE.
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Buyer's Initials
(iv) Information Supplied by Seller. Buyer
specifically acknowledges and agrees that, except as expressly
contained herein, the Seller Group has made, is making, and
shall make no representation or warranty of any nature
concerning the accuracy or completeness of the Due Diligence
Documents. As to certain of the Due Diligence Documents, Buyer
specifically acknowledges that they have been prepared by
third parties with whom Buyer has no privity and Buyer
acknowledges and agrees that no warranty or representation,
express or implied, has been made, nor shall any be deemed to
have been made, to Buyer with respect thereto, either by the
Seller Group or by any third parties that prepared the same.
Buyer waives any claim of any nature against anyone should any
information, conclusion, projection, or other statement of any
nature contained in any of such materials prove not to be true
or accurate for any reason.
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Buyer's Initials
<PAGE>
(v) Negotiated Purchase Price. Subject to completion
of the Due Diligence Investigations, Buyer represent; and
warrants to Seller that Buyer is specifically familiar with
the Property and that Buyer has inspected and examined, or
will inspect and examine, all aspects of the Property and its
current condition that Buyer believes to be relevant to its
decision to purchase the Property. Buyer further acknowledges
and agrees that the Purchase Price negotiated by Seller and
Buyer reflects the known and unknown risks and liabilities
assumed by Buyer under the Agreement, Seller's unwillingness
to conduct any investigation or due diligence with respect to
the Property on behalf of Buyer, and Seller's desire to
receive an absolutely net, fixed amount as consideration for
the sale of the Property regardless of any facts known or
discovered before or following the Close of Escrow which might
result in a diminution in value of the Property.
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Buyer's Initials
(b) Release. In consideration of the covenants contained in
this Agreement, Buyer hereby agrees on behalf of itself and Buyer's
successors and assigns as follows:
(i) Effective upon the Office of Escrow, Buyer and
Buyer's successors and assigns each hereby forever released
and discharge the Seller Group of and from any and all claims,
demands, obligations, liabilities, indebtedness, breaches of
contract, breaches of duty or any relationship, acts,
omissions, misfeasance, malfeasance, cause or causes of
action, debts, sums of money, accounts, compensations,
contracts, controversies, promises, damages, costs, losses and
expenses, of every type, kind, nature, description or
character which in any way arise out of are connected with or
relate to the Property (collectively, "Claims"), including
without limitation, any Claims which arise out of or relate to
the presence at, under, on or near the Real Property of any
Hazardous Materials, irrespective of how, why or by reason of
what facts, whether heretofore, now existing or hereafter
arising, or which could, might or be claimed to exist, of
whatever kind or name, whether known or unknown, suspected or
unsuspected, liquidated or unliquidated. Notwithstanding
anything to the contrary contained herein, nothing contained
herein shall be deemed or construed to be a release or
discharge of Seller from any of Seller's obligations under
this Agreement.
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Buyer's Initials
(ii) Buyer hereby agrees, represents and warrants
that Buyer realizes and acknowledges that factual matters now
unknown to Buyer
<PAGE>
may have given or may hereafter give rise to Claims which are
presently unknown, unanticipated or unsuspected, and Buyer
further agrees, represents and warrants that this Agreement
has been negotiated and agreed upon in light of that
realization and that Buyer nevertheless intends hereby to
release and discharge the Seller Group from any such unknown
Claims which are in any way related to the Property except as
expressly provided to the contrary in this Agreement. In
furtherance of this intention, Buyer expressly waives any and
all rights conferred upon Buyer or Buyer's successors and
assigns by the provisions of California Civil Code Section
1542, and expressly consents that this Agreement shall be
given full force and effect according to each of its express
provisions. Section 1542 provides.- "A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
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Buyer's Initials
(iii) Buyer hereby understands and agrees that
Seller's requirement that the preceding provisions be agreed
to by Buyer shall not be deemed or construed as an admission
of liability by Seller, and Seller hereby expressly denies
liability of any nature whatsoever arising from or related to
the Property.
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Buyer's Initials
(iv) Buyer hereby agrees, represents and warrants
that Buyer has had advice of counsel of its own choosing in
the negotiation of this Agreement, that Buyer has read this
Agreement or has had the same read to it by Buyer's counsel,
that Buyer has had this Agreement fully explained by such
counsel, and that Buyer is fully aware of the contents and
legal effect of this Agreement.
-------------------
Buyer's Initials
11. Seller's Representations and Warranties. In addition to any express
agreements of Seller contained herein, the following constitute representations
and warranties of Seller:
<PAGE>
(a) Power. Seller has the legal power, right and authority to
enter into this Agreement and the instruments referenced herein, and to
consummate the transactions contemplated hereby.
(b) Requisite Action. All requisite action (corporate, trust,
partnership or otherwise) has been taken by Seller in connection with
the entering into this Agreement and the instruments referenced herein
and the consummation of the transactions contemplated herein.
(c) Authority. The individuals executing this Agreement and
the instruments referenced herein on behalf of Seller have the legal
power, right and actual authority to bind Seller to the terms and
conditions hereof and thereof.
(d) Due Diligence Documents. To Seller's actual knowledge, the
Due Diligence Documents represent all of the document; and materials
(other than Proprietary Documents) which as of the Effective Date were
within the possession of Seller or Seller's Agent which currently
affect or relate to the Property and which a prudent institutional
purchaser of institutional real estate in Los Angeles, California would
reasonably deem relevant in connection with a potential purchase of
such real estate. As used herein, the phrase "to Seller's actual
knowledge" means the actual, conscious knowledge of Colin Shepherd and
Mary McCubbin, following a review of all files maintained by Seller's
Agent relating to the Property, and the actual, conscious knowledge of
William A. Roche. Seller represents and warrants that: (i) William A.
Roche is the President of Seller and the individual within Seller's
organization with primary responsibility for the Property, (ii) Colin
Shepherd and Mary McCubbin, both of whom are officers or employees of
Seller's Agent, are the individuals with primary responsibility for
managing the business activities and overseeing all employees of
Seller's Agent with respect to the Property, and (iii) no officer or
employee of Seller is likely to possess any knowledge with respect to
the Property which is not also possessed by William A. Roche, Colin
Shepherd or Mary McCubbin.
(e) All notices received by Seller of pending or threatened
litigation or alleged violations of Government Regulations pertaining
to the Property and all currently effective Leases, service contracts,
maintenance agreements, construction contracts, listing agreements and
similar agreements, if any, relating to the Real Property which are in
writing and which have been duly executed by Seller or Seller's Agent
are included in the Due Diligence Documents made available for Buyer's
review.
Buyer and Seller expressly acknowledge and agree that the representations and
warranties of Seller contained in this Agreement shall survive the Close of
Escrow, but any and all liability of Seller for breach of any such
representation or warranty shall terminate and such representations and
warranties shall thereafter be null and void if Buyer does not deliver a written
claim of breach, specifying such representation or warranty which has
<PAGE>
allegedly been breached and the supporting evidence for the alleged breach, on
or prior to the date which is one hundred eighty (180) days following the Close
of Escrow. In the event that such written claim of breach of representation or
warranty is timely delivered, and it is thereafter determined that Seller did in
fact breach such representation or warranty, Seller's liability to pay damages
therefor shall not apply with respect to the first One Hundred Thousand Dollars
($100,000) of such damages in the aggregate, with the intent and effect that
Seller shall only owe damages to Buyer for such breach of such representation or
warranty if Buyer's damages in connection therewith are determined to exceed One
Hundred Thousand Dollars ($100,000) in the aggregate.
12. Buyer's Representations and Warranties. In addition to any express
agreements of Buyer contained herein, the following constitute representations
and warranties of Buyer which shall survive the Close of Escrow:
(a) Power. Buyer has the legal power, right and authority to
enter into this Agreement and the instruments referenced herein, and to
consummate the transactions contemplated hereby.
(b) Requisite Action. All requisite action (corporate, trust,
partnership or otherwise) has been taken by Buyer in connection with
the entering into this Agreement and the instruments referenced herein,
and the consummation of the transactions contemplated hereby.
(c) Authority. The individuals executing this Agreement and
the instruments referenced herein on behalf of Buyer have the legal
power, right and actual authority to bind Buyer to the terms and
conditions hereof and thereof.
(d) Principal. Buyer has executed this Agreement as a
principal on its own behalf and not as an agent of undisclosed third
parties.
13. Covenants of Buyer and Seller.
(a) Access by Buyer. On or before the Effective Date, Buyer
shall execute that certain Access, Insurance and Indemnification
Agreement in favor of Seller in connection with Buyer's Due Diligence
Investigations in the form attached hereto as Exhibit "Q". While this
Agreement remains in effect, Buyer shall continue to be entitled to
enter upon the Real Property pursuant and subject to the provisions of
said Access, Insurance and Indemnification Agreement.
(b) Confidentiality. Prior to the effective Date, Buyer
executed that certain Confidentiality Agreement dated June 28, 1996.
Buyer acknowledges that Buyer continues to be bound by the provisions
of said Confidentiality Agreement until the Close of Escrow occurs,
whereupon the Confidentiality Agreement shall thereupon terminate
except with respect to obligations or liabilities theretofore accrued.
Notwithstanding anything to the contrary contained in the
<PAGE>
Confidentiality Agreement, Seller acknowledges that Beacon Properties
Corporation, the general partner of Buyer, is a publicly-owned
corporation subject to regulation by the Securities and Exchange
Commission, and that the regulations of the Securities and Exchange
Commission may require that Buyer disclose the existence of this
Agreement and the contents of some or all of the documents delivered by
Seller in connection therewith. Accordingly, Seller expressly consents
to such disclosure of the terms and conditions of this Agreement and
the transactions contemplated hereby, provided, however, if such
disclosure is to be made prior to the Close of Escrow, Buyer shall
deliver to Seller an opinion of Buyer's counsel that in such counsel's
reasonable judgment the Securities and Exchange Commission regulations
require disclosure of the documents and/or information described in
such opinion of counsel. In addition to the disclosure contemplated by
the preceding sentence, and without limitation thereof, either party
may disclose the existence of this Agreement or the contents thereof
or of any documents to be executed and/or delivered in connection
herewith to any partners, advisors, underwriters, analysts, employees,
affiliates, officers, directors, consultants, lenders, accountants or
legal counsel of any of the foregoing, provided that such party has a
reasonable need to know the disclosed information and such party is
advised as to the confidential nature of such information and is
instructed to maintain such confidentiality. Following the Due
Diligence Date, either Seller or Buyer may issue a press release with
respect to this Agreement and the transactions contemplated hereby
(excluding any reference to the Purchase Price unless such press
release is issued following the Close of Escrow), subject to the
approval of the other party hereto, which approval shall not be
unreasonably withheld or delayed.
(c) Publicity. Neither Seller nor Buyer shall make any public
announcement or press release with respect to the execution of this
Agreement, or the termination of this Agreement, if such termination
occurs. Neither Buyer nor Seller shall make any public announcement or
press release with respect to the occurrence of Close of Escrow without
first giving the other party hereto prior written notice thereof and
providing such other party a reasonable opportunity to approve the
contents of such public announcement or press release.
(d) Termination of Seller's Agent. Seller shall take all
actions necessary or appropriate regarding its contractual arrangements
with Seller's Agent in order that upon the Close of Escrow, Seller's
Agent shall have no further rights or obligations with respect to the
Property and so that Seller's Agent shall have no claim against Buyer,
and Buyer shall have no claim against Seller's Agent, with respect
thereto.
(e) Continued Operation. While his Agreement is in effect,
until the Close of Escrow, Seller covenants to own, operate and
maintain (subject to Section 14) the Property in substantially the same
manner as presently owned, operated and maintained, and in accordance
with commercially reasonable
<PAGE>
business practices. While this Agreement is in effect, until the Due
Diligence Date, Seller agrees not to (i) enter into any new Lease
(unless such new Lease is executed on Seller's standard form of Lease
for the Property, with such substantially similar modifications as
Seller has permitted in other Leases to tenants of similar size and
credit-worthiness, and contains economic terms consistent with the
leasing guidelines attached hereto as Exhibit "R", (ii) materially
amend or terminate any existing Lease (except to extend the term of the
Lease and/or expand the demised premises on terms consistent with the
leasing guidelines attached as Exhibit "R"), or (iii) enter into any
other obligation (other than contracts to perform tenant improvements
for Leases, and contracts relating to capital expenditures as
contemplated by Exhibit "P") which shall bind the Property following
the Close of Escrow and which is not terminable without penalty upon
not more than thirty (30) days notice, without first obtaining the
prior consent of Buyer. Following the Due Diligence Date, while this
Agreement is in effect, Seller agrees not to: (i) enter into any new
Lease, (ii) materially amend or terminate any existing Lease, or (iii)
enter into any other obligation which shall bind the Property following
the Close of Escrow and which is not terminable without penalty upon
not more than thirty (30) days notice, without first obtaining the
prior consent of Buyer. Any consent required from Buyer hereunder shall
not be unreasonably withheld or delayed and shall be deemed given if
not disapproved within five (5) business days following Buyer's receipt
of request for such approval, provided, however, if Buyer notifies
Seller in writing within two (2) business days following receipt of
such request that the information supplied by Seller is insufficient to
reasonably evaluate such request, then said five (5) business day
period shall not commence until the requested information has been
supplied. Seller shall cause Seller's Agent to use commercially
reasonable efforts to notify Buyer promptly following the execution of
any document described in the preceding sentences which did not require
Buyer's prior written consent.
(f) Access by Seller. Buyer covenants that from and after the
Close of Escrow, Buyer shall allow Seller and its representatives,
attorneys and accountants, upon reasonable prior notice and during
normal business hours, access to such documents and materials relating
to the Property as Seller may request for the purpose of examining and
copying same, and shall otherwise cooperate with Seller, in connection
with any litigation between Seller and third parties, the preparation
of any required tax returns, any tax procedure or litigation, any
obligation or duty hereunder or under the foregoing, or compliance with
any legal duty or obligation.
(g) Audit Rights. To comply with the regulations of the
Securities and Exchange Commission with respect to the verification of
historical information, Buyer shall have the right, prior to or
subsequent to the Close of Escrow, to conduct an audit, at Buyer's sole
cost and expense, of Seller's books and records for and with respect to
the Property for the shorter of (i) three (3) years prior to the Close
of Escrow, or (ii) the period of Seller's ownership thereof Seller
hereby
<PAGE>
agrees to permit Buyer and Buyer's accountants access to Seller's books
and records (including those maintained by Seller's Agent) and, at
Buyer's sole cost and expense, to reasonably cooperate and to cause
Seller's accountants to cooperate with Buyer to enable such audit to be
performed. The provisions of this subsection shall survive Close of
Escrow. Buyer acknowledges and agrees that whether such audit is
conducted before or following the Close of Escrow, there shall be no
extension of the Closing Date, no extension of the survival period of
Seller's representations and warranties contained herein, no adjustment
to the Purchase Price or any prorations described herein (except to the
extent Buyer would have such right absent the provisions of this
Section 13(g)) and Seller shall be at absolutely no cost, expense, or
liability in connection with any such audit.
14. Casualty and Condemnation. In the event that all or any portion of
the Property is materially damaged, or in the event that a material portion of
the Property is condemned, while this Agreement is in effect and prior to the
Close of Escrow, Buyer shall have the right to terminate this Agreement by
giving written notice thereof to Seller and Escrow Holder within five (5)
business days after learning of same. For purposes hereof, "material" shall mean
a repair, reconstruction or replacement cost reasonable, estimated to be in
excess of One Million Dollars ($1,000,000). If Buyer elects to terminate this
Agreement pursuant to this Section 14, the Deposit shall be refunded to Buyer
pursuant to Section 4(c) above. In the event the damage or condemnation is not
"material" or if Buyer does not timely elect to terminate this Agreement as
aforesaid, this Agreement shall remain in full force and effect and the parties
shall proceed to the Close of Escrow without reduction in the Purchase Price,
except that Seller shall assign to Buyer any insurance or condemnation proceeds
received or receivable by Seller, if any, as a result of such damage or
condemnation.
15. Notices. All notices or other communications required or permitted
hereunder shall be in writing, and shall be personally delivered (including by
means of professional messenger service or reputable air express service
utilizing receipts) or sent by telecopy, receipt confirmed, and shall be deemed
received upon the date of receipt thereof if received prior to 5:00 p.m. (of the
recipient's time zone) of the recipient's business day, and if not so received,
shall be deemed received upon the following business day.
To Seller: 10960 Property Corporation
222 Broadway - Second Floor
New York, New York 10038
Attn: William A. Roche (222-02-E)
Telecopy No. (212) 574-3162
<PAGE>
With copies to: Hines Interests Limited Partnership
10880 Wilshire Boulevard, Suite 880
Los Angeles, California 90024
Attn: Mary P. McCubbin and Colin P. Shepherd
Telecopy No. (310) 234-5601
and Allen, Matkins, Leck, Gamble & Mallory LLP
515 South Figueroa Street, 7th Floor
Los Angeles, California 90071
Attn: David A.B. Burton, Esq.
Telecopy No. (213) 620-8816
To Buyer: Beacon Properties, L.P.
50 Rowes Wharf
Boston, MA 02110
Attn: Charles Cremers
Telecopy No. (617) 261-0152
With copies to: Goulston & Storrs, P.C.
400 Atlantic Avenue
Boston, MA 02110
Attn: Jordan P. Krasnow, Esq.
Telecopy No. (617) 574-4112
To Escrow Holder: Commerce Escrow Company
1545 Wilshire Boulevard, Suite 600
Los Angeles, California 90017
Attn: Mark Minsky
Telecopy No. (213) 444-0417
Notice of change of address shall be given by written notice in the manner
detailed in this Section 15.
16. Commissions. If the Close of Escrow occurs, Seller shall pay to
Seller's Agent a fee pursuant to a separate agreement with Seller's Agent. Other
than as specified in the preceding sentence, Seller represents and warrants to
Buyer, and Buyer represents and warrants to Seller, that no other advisor,
broker or finder has been engaged by it, respectively, in connection with any of
the transactions contemplated by this Agreement, or to its knowledge is in any
way connected with any of such transactions. In the event of any such claims for
additional advisor's, brokers' or finders' fees or commissions in connection
with the negotiation, execution or consummation of this Agreement, then as a
covenant which shall survive the termination of this Agreement or the Close of
Escrow, Buyer shall indemnify, save harmless and defend Seller from and against
such claims if they shall be based upon any statement or representation or
agreement by Buyer, and
<PAGE>
Seller shall indemnify, save harmless and defend Buyer if such claims shall be
based upon any statement, representation or agreement made by Seller.
17. Legal and Equitable Enforcement of this Agreement.
(a) Default by Seller. IN THE EVENT THE CLOSE OF ESCROW AND
THE CONSUMMATION OF THE TRANSACTIONS HEREIN CONTEMPLATED DO NOT OCCUR
BY REASON OF ANY DEFAULT BY SELLER, BUYER SHALL BE ENTITLED TO EITHER
(i) TERMINATE THIS AGREEMENT AND THE ESCROW AND RECOVER FROM SELLER ALL
OF ITS OUT-OF-POCKET EXPENSES INCURRED IN CONNECTION WITH THE
TRANSACTION, INCLUDING THE DEPOSIT, OR (ii) SEEK THE SPECIFIC
PERFORMANCE HEREOF.
(b) Default by Buyer. IN THE EVENT THE CLOSE OF ESCROW DOES
NOT OCCUR AS HEREIN PROVIDED BY REASON OF ANY DEFAULT OF BUYER, BUYER
AND SELLER AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT
TO ESTIMATE THE DAMAGES WHICH SELLER MAY SUFFER. THEREFORE BUYER AND
SELLER DO HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET
DETRIMENT THAT SELLER WOULD SUFFER IN THE EVENT THAT BUYER DEFAULTS AND
FALLS TO COMPLETE THE PURCHASE OF THE PROPERTY IS AND SHALL BE, AS
SELLER'S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), AN
AMOUNT EQUAL TO THE DEPOSIT. SAID AMOUNT SHALL BE THE FULL, AGREED AND
LIQUIDATED DAMAGES FOR A BREACH OF THIS AGREEMENT BY BUYER WHICH
RESULTS IN THE CLOSE OF ESCROW NOT OCCURRING, ALL OTHER CLAIMS TO
DAMAGES OR OTHER REMEDIES BEING HEREIN EXPRESSLY WAIVED BY SELLER.
NOTHING CONTAINED IN THIS SECTION SHALL LIMIT SELLER'S RIGHT TO RECEIVE
REIMBURSEMENT FOR COSTS AND EXPENSES PURSUANT TO SECTION 19(e) BELOW,
NOR WAIVE OR AFFECT BUYER'S INDEMNITY OBLIGATIONS AND OBLIGATIONS WHICH
BY THEIR TERMS SURVIVE THE CLOSE OF ESCROW.
(c) Waiver of Right to Record Lis Pendens. AS PARTIAL
CONSIDERATION FOR SELLER ENTERING INTO THIS AGREEMENT, BUYER EXPRESSLY
WAIVES ANY RIGHT (AT COMMON LAW OR OTHERWISE) TO RECORD OR FILE A LIS
PENDENS OR A NOTICE OF PENDENCY OF ACTION OR SIMILAR NOTICE AGAINST ALL
OR ANY PORTION OF THE PROPERTY IN CONNECTION WITH ANY ALLEGED DEFAULT
BY SELLER HEREUNDER.
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Buyer's Initials Seller's Initials
<PAGE>
18. Assignment, Exchange, and Back-up Offers.
(a) Assignment. Prior to the Close of Escrow, Buyer shall not
assign, transfer or convey its rights and obligations under this
Agreement or in the Property without the prior written consent of
Seller, and any purported assignment, transfer or conveyance without
such consent of Seller shall be null and void. Seller may withhold its
consent to any proposed assignee of Buyer in Seller's sole and absolute
discretion. Notwithstanding anything to the contrary contained herein,
Buyer shall have the right to assign all, but not less than all, of
Buyer's rights and obligations hereunder to any entity which is
controlled by, controlling, or under common control with, Buyer without
obtaining Seller's prior written consent, provided that Seller receives
at least five (5) business days prior to the Closing Date a copy of the
Fully executed assignment and assumption documentation between Buyer
and Buyer's assignee, together with documentation evidencing that such
assignee is affiliated with Buyer as described in this sentence. Any
permitted assignee shall succeed to all of Buyer's rights and remedies
hereunder. Notwithstanding the foregoing, no such permitted assignment
shall relieve Buyer from its liability under this Agreement.
(b) Back-Up Offers. Until the Close of Escrow, Seller shall
have the right to continue to present the Property for sale and accept
"back-up" offers contingent upon Buyer's failure to perform under the
terms of the Agreement. Any such "back-up" offer may permit the
purchaser thereunder to review the Due Diligence Documents but shall
prohibit any other due diligence with respect to the Property while
this Agreement is in effect.
19. Miscellaneous.
(a) Governing Law. The parties hereto acknowledge that this
Agreement has been negotiated and entered into in California. The
parties hereto expressly agree that this Agreement shall be governed
by, interpreted under, and construed and enforced in accordance with
the laws of the State of California.
(b) Partial Invalidity. If any term or provision or portion
thereof of this is Agreement or the application thereof to any person
or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement, or the application of such term or
provision or portion thereof to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each such term and provision of this Agreement
shall be valid and be enforced to the fullest extent permitted by law.
(c) Waivers. No waiver of any breach of any covenant or
provision herein contained shall be deemed a waiver of any preceding or
succeeding breach thereof, or of any other covenant or provision herein
contained. No extension of
<PAGE>
time for performance of any obligation or act shall be deemed an
extension of the time for performance of any other obligation or act.
(d) Successors and Assigns. Subject to Section 18(a) above,
this Agreement shall be binding upon and shall inure to the benefit of
the permitted successors and assigns of the parties hereto.
(e) Professional Fees. In the event of the bringing of any
action or suit by a party hereto against another party hereunder by
reason of any breach of any of the covenants, agreements or provisions
on the part of the other party arising out of this Agreement, then in
that event the prevailing party shall be entitled to have and recover
of and from the other party all costs and expenses of the action or
suit and any appeals therefrom, and enforcement of any judgment in
connection therewith, including actual attorneys' fees, accounting and
engineering fees, and any other professional fees resulting therefrom.
(f) Entire Agreement. This Agreement (including all Exhibits
attached hereto) is the final expression of, and contains the entire
agreement between, the parties with respect to the subject matter
hereof and supersedes all prior understandings with respect thereto.
This Agreement may not be modified, changed, supplemented or
terminated, nor may any obligations hereunder be waived, except by
written instrument signed by the party to be charged or by its agent
duly authorized in writing or as otherwise expressly permitted herein.
This Agreement may be executed in one or more counterparts, each of
which shall be an original, and all of which together shall constitute
a single instrument. The parties do not intend to confer any benefit
hereunder on any person, firm or corporation other than the parties
hereto.
(g) Time of Essence. Seller and Buyer hereby acknowledge and
agree that time is strictly of the essence with respect to each and
every term, condition, obligation and provision hereof and that failure
to timely perform any of the terms, conditions, obligations or
provisions hereof by either party shall constitute a material breach of
and a non-curable (but waivable) default under this Agreement by the
party so failing to perform.
(h) Construction. Headings at the beginning of each paragraph
and subparagraph are solely for the convenience of the parties and are
not a part of the Agreement. Whenever required by the context of this
Agreement, the singular shall include the plural and the masculine
shall include the feminine and vice versa. This Agreement shall not be
construed as if it had been prepared by one of the parties, but rather
as if both parties had prepared the same. Unless otherwise indicated,
all references to sections are to this Agreement. All exhibits referred
to in this Agreement are attached and incorporated by this reference.
In the event the date on which Buyer or Seller is required to take any
action under the terms of this
<PAGE>
Agreement is not a business day, the action shall be taken on the next
succeeding business day.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year hereinabove written.
"SELLER" 10960 PROPERTY CORPORATION,
a Delaware corporation
By: ______________________________
Its: ________________________
By: ______________________________
Its: ________________________
"BUYER" BEACON PROPERTIES, L.P.,
a Delaware limited partnership
By: Beacon Properties Corporation,
its general partner
By: __________________________
Its:______________________
