SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
-------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 23, 1996
BEACON PROPERTIES CORPORATION
(Exact name of Registrant as specified in its Charter)
Maryland
(State of Incorporation)
1-12926 04-3224258
(Commission File Number) (IRS Employer Id. Number)
50 Rowes Wharf
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
(617) 330-1400
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
Beacon Properties Corporation (the "Company") has entered into contracts
to purchase two portfolios of office buildings.
Fairfax County Portfolio:
In June 1996, the Company exercised an option to acquire three office
buildings and a parcel of developable land located in Fairfax County,
Virginia for an aggregate purchase price of $77 million. The Company will
assume approximately $55.4 million of mortgage debt secured by the properties
and issue approximately 840,000 Limited Partnership Units.
<TABLE>
<CAPTION>
Mortgage
Balance
Property Name Seller Lender Assumed
- ----------------- --------------------------- ----------------------------------- -------------
<S> <C> <C> <C>
E.J. Randolph Greensboro Associates, Teachers Insurance and Annuity
a Virginia Limited Association of America, $18,016,426
Partnership a New York Corporation (1)
John Marshall I John Marshall Associates
and Limited Partnership,
John Marshall a Virginia Limited American National Insurance
III Partnership Company $21,067,610
Northridge Woodland-Northridge I
Limited Partnership,
a Virginia Limited The Northwestern Mutual Life
Partnership Insurance Company $16,306,041
-----------
$55,390,077
===========
</TABLE>
(1) The Company intends to draw on its Credit Facility provided by The First
National Bank of Boston (the "Credit Facility") and repay this mortgage
debt after assumption.
The Fairfax County Portfolio consists of the (i) the 11-story John
Marshall I building located in the Tysons Corner area of McLean, Virginia,
built in 1981 comprising approximately 261,000 square feet of office space;
(ii) the 11-story E.J. Randolph building located in the Tysons Corner area of
McLean, Virginia, built in 1983 comprising approximately 165,000 square feet
of office space; (iii) the 6-story Northridge I building located in
Reston/Herndon area of Virginia, built in 1988 comprising approximately
124,000 square feet of office space; and (iv) the John Marshall III parcel of
developable land located in the Tysons Corner area of McLean, Virginia. The
aggregate occupancy rate of the Fairfax County Portfolio as of June 30, 1996
was approximately 94%.
New York Life Portfolio:
In July 1996, the Company entered into a contract to acquire a portfolio
of office properties, comprised of seven buildings, from New York Life
Insurance Company (the "New York Life Portfolio") for an aggregate
consideration of approximately $150 million in cash.
The New York Life Portfolio consists of (i) the 8-story AT&T Plaza located
in Oak Brook (suburban Chicago), Illinois built in 1984 comprising
approximately 225,000 square feet of office space; (ii) the five-building
Tri-State International office park located in Lincolnshire (suburban
Chicago), Illinois built in 1986 comprising approximately 548,000 square
feet; and (iii) an 11-story office property located at 1333 H Street in
Washington, D.C. comprising approximately 239,000 square feet (approximately
205,000 square feet of which was built in 1982). The aggregate occupancy rate
for the New York Life Portfolio as of June 30, 1996 was approximately 81%.
Additionally, on July 23, 1996, the Company filed a prospectus supplement
to its Form S-3 Registration Statement (No. 333-02544) with the Securities
and Exchange Commission pursuant to which it proposes to offer 5,000,000
shares of common stock, $.01 par value (excluding the underwriter's
overallotment option).
2
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements Under Rule 3-14 of Regulation S-X
Statement of Excess of Revenues over Specific Operating Expenses of
Fairfax County Portfolio in Tysons Corner and Herndon, Virginia for the year
ended December 31, 1995 and (unaudited) for the six months ended June 30,
1996
Statement of Excess of Revenues over Specific Operating Expenses of AT&T
Plaza in Oak Brook, Illinois for the year ended December 31, 1995 and
(unaudited) for the six months ended June 30, 1996
Statement of Excess of Revenues over Specific Operating Expenses of
Tri-State International in Lincolnshire, Illinois for the year ended December
31, 1995 and (unaudited) for the six months ended June 30, 1996
Statement of Excess of Revenues over Specific Operating Expenses of 1333 H
Street in Washington, D.C. for the year ended December 31, 1995 and
(unaudited) for the six months ended June 30, 1996
(b) Pro Forma Financial Statements
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1996
(Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Year
Ended December 31, 1995 (Unaudited)
Pro Forma Condensed Consolidated Statement of Operations for the Six
Months Ended June 30, 1996 (Unaudited)
(c) Exhibits
1.1 Form of Underwriting Agreement
2.1 Option Agreement dated March 18, 1996 among John Marshall Associates
Limited Partnership, Greensboro Associates Limited Partnership,
Woodland-Northridge I Limited Partnership, Pimpernell Estates Limited
Partnership, Goodridge Drive Associates Limited Partnership and Beacon
Properties, L.P.
2.2 First Amendment to Option Agreement dated May 17, 1996 among John
Marshall Associates Limited Partnership, Greensboro Associates Limited
Partnership, Woodland-Northridge I Limited Partnership, Pimpernell
Estates Limited Partnership, Goodridge Drive Associates Limited
Partnership and Beacon Properties, L.P.
2.3 Second Amendment to Option Agreement dated May 31, 1996 among John
Marshall Associates Limited Partnership, Greensboro Associates Limited
Partnership, Woodland-Northridge I Limited Partnership, Pimpernell
Estates Limited Partnership, Goodridge Drive Associates Limited
Partnership and Beacon Properties, L.P.
2.4 Third Amendment to Option Agreement dated June 21, 1996 among John
Marshall Associates Limited Partnership, Greensboro Associates Limited
Partnership, Woodland-Northridge I Limited Partnership, Pimpernell
Estates Limited Partnership, Goodridge Drive Associates Limited
Partnership and Beacon Properties, L.P.
2.5 Sale and Purchase Agreement between New York Life Insurance Company
and Beacon Properties, L.P., dated as of July 19, 1996.
23.1 Consent of Coopers & Lybrand, L.L.P., Independent Accountants.
3
<PAGE>
FAIRFAX COUNTY PORTFOLIO
TYSONS CORNER AND HERNDON, VIRGINIA
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
F-1
<PAGE>
[Coopers & Lybrand Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Beacon Properties Corporation:
We have audited the accompanying statement of excess of revenues over
specific operating expenses of Fairfax County Portfolio in Tysons Corner and
Herndon, Virginia (the "Properties") for the year ended December 31, 1995.
This financial statement is the responsibility of the Properties' management.
Our responsibility is to express an opinion on this financial statement based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of excess of revenues
over specific operating expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain income
and expenses which would not be comparable with those resulting from the
operations of the Properties after acquisition by Beacon Properties
Corporation. The accompanying financial statement was prepared for the
purpose of complying with the rules and regulations of the Securities and
exchange Commission and is not intended to be a complete presentation of the
Properties' revenues and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the excess of revenues over specific operating
expenses (exclusive of income and expenses described in Note 2) of Fairfax
County Portfolio in Tysons Corner and Herndon, Virginia, for the year ended
December 31, 1995 in conformity with generally accepted accounting
principles.
[Signature of Coopers & Lybrand L.L.P]
Coopers & Lybrand L.L.P
Boston, Massachusetts
April 19, 1996
F-2
<PAGE>
FAIRFAX COUNTY PORTFOLIO
TYSONS CORNER AND HERNDON, VIRGINIA
STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
<TABLE>
<CAPTION>
For the Year For the Six
Ended Months Ended
December 31, June 30, 1996
1995 (Unaudited)
-------------- -------------
<S> <C> <C>
Revenues:
Base rent $11,239,294 $5,366,522
Recoveries from tenants 864,654 398,875
Other income 115,165 53,074
----------- ----------
12,219,113 5,818,471
----------- ----------
Specific operating expenses (Note 2):
Utilities 835,757 425,293
Janitorial and cleaning 401,187 238,377
Security 33,981 10,555
General and administrative 61,576 58,617
Repairs and maintenance 868,557 344,539
Insurance 29,000 5,272
Property taxes 536,687 268,344
Landscaping 68,106 140,849
----------- ----------
2,834,851 1,491,846
----------- ----------
Excess of revenues over specific operating
expenses $ 9,384,262 $4,326,625
=========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statement.
F-3
<PAGE>
FAIRFAX COUNTY PORTFOLIO
TYSONS CORNER AND HERNDON, VIRGINIA
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
1. Organization and Significant Accounting Policies:
Description of Properties
Fairfax County Portfolio (the "Properties") is an office portfolio located
in Tysons Corner and Herndon, Virginia consisting of three office buildings
and a parcel of developable land, together encompassing approximately 550,000
square feet. Beacon Properties Corporation intends to acquire the entire fee
interest in the Properties.
Rental Revenues
Rental income is recognized on the straight-line method over the terms of
the related leases. Two of the buildings are occupied by a single tenant. The
excess of recognized rentals over amounts due pursuant to lease terms is
recorded as accrued rent. The impact of the straight-line rent adjustment
increased revenues by approximately $1,108,000 for the year ended December
31, 1995.
Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
2. Basis of Accounting:
The accompanying statement of excess of revenues over specific operating
expenses is presented on the accrual basis. This statement has been prepared
in accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired or to be acquired.
Accordingly, the statement excludes certain historical income and expenses
not comparable to the operations of the property after acquisition, such as
interest income, management fees, depreciation, amortization, and interest
expense.
3. Description of Leasing Arrangements:
The commercial and office space is leased to tenants under leases with
terms that vary in length. Certain of the leases contain real estate tax
reimbursement clauses, operating expense reimbursement clauses and renewal
options. Minimum lease payments to be received during the next five years for
noncancelable operating leases in effect at December 31, 1995 are
approximately as follows:
Year Ending December 31,
- -----------------------
1996 $ 9,960,180
1997 9,964,210
1998 10,293,681
1999 8,186,519
2000 8,039,037
Thereafter 57,135,438
As of December 31, 1995, two tenants occupied approximately 86% of leasable
square feet and represented 81% of total 1995 revenue.
F-4
<PAGE>
AT&T PLAZA
OAK BROOK, ILLINOIS
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 10, 1995
F-5
<PAGE>
[Coopers & Lybrand Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Beacon Properties Corporation:
We have audited the accompanying statement of excess of revenues over
specific operating expenses of AT&T Plaza in Oak Brook, Illinois (the
"Property") for the year ended December 10, 1995. This financial statement is
the responsibility of the Property's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of excess of revenues
over specific operating expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain income
and expenses which would not be comparable with those resulting from the
operations of the Property after acquisition by Beacon Properties
Corporation. The accompanying financial statement was prepared for the
purpose of complying with the rules and regulations of the Securities and
exchange Commission and is not intended to be a complete presentation of the
Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the excess of revenues over specific operating
expenses (exclusive of income and expenses described in Note 2) of AT&T Plaza
in Oak Brook, Illinois, for the year ended December 10, 1995 in conformity
with generally accepted accounting principles.
[Signature of Coopers & Lybrand L.L.P]
Coopers & Lybrand L.L.P
Boston, Massachusetts
July 8, 1996
F-6
<PAGE>
AT&T PLAZA
OAK BROOK, ILLINOIS
STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
<TABLE>
<CAPTION>
For the Year For the Six
Ended Months Ended
December 10, June 20, 1996
1995 (Unaudited)
-------------- -------------
<S> <C> <C>
Revenues:
Base rent $2,953,158 $1,537,005
Recoveries from tenants 1,279,105 714,002
Other income 277,736 216,925
---------- ----------
4,509,999 2,467,932
---------- ----------
Specific operating expenses (Note 2):
Utilities 217,867 100,526
Janitorial and cleaning 209,917 108,416
Security 128,409 65,403
General and administrative 409,713 136,552
Repairs and maintenance 343,485 155,672
Insurance 50,822 25,411
Property taxes 290,263 152,052
Landscaping 51,559 11,160
---------- ----------
1,702,035 755,192
---------- ----------
Excess of revenues over specific operating
expenses $2,807,964 $1,712,740
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statement.
F-7
<PAGE>
AT&T PLAZA
OAK BROOK, ILLINOIS
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
1. Organization and Significant Accounting Policies:
Description of Properties
AT&T Plaza (the "Property") is an 8-story office building located in Oak
Brook, Illinois and encompassing approximately 225,316 square feet. Beacon
Properties Corporation intends to acquire the entire fee interest in the
Property.
Rental Revenues
Rental income is recognized on the straight-line method over the terms of
the related leases. The excess of recognized rentals over amounts due
pursuant to lease terms is recorded as accrued rent. The impact of the
straight-line rent adjustment decreased revenues by approximately $27,740
for the year ended December 10, 1995.
Risk and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
2. Basis of Accounting:
The accompanying statement of excess of revenues over specific operating
expenses is presented on the accrual basis. This statement has been prepared
in accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired or to be acquired.
Accordingly, the statement excludes certain historical income and expenses
not comparable to the operations of the property after acquisition, such as
interest income, management fees, depreciation, amortization, and interest
expense.
3. Description of Leasing Arrangements:
The commercial and office space is leased to tenants under leases with
terms that vary in length. Certain of the leases contain real estate tax
reimbursement clauses, operating expense reimbursement clauses and renewal
options. Minimum lease payments to be received during the next five years for
noncancelable operating leases in effect at December 10, 1995 are
approximately as follows:
Year Ending December 31,
- -----------------------
1996 $2,994,263
1997 2,950,914
1998 2,931,507
1999 2,370,315
2000 2,486,410
Thereafter 2,529,826
As of December 10, 1995, four tenants occupied 56% of leasable square feet
and represented 63% of total 1995 revenue.
F-8
<PAGE>
TRI-STATE INTERNATIONAL
LINCOLNSHIRE, ILLINOIS
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
F-9
<PAGE>
[Coopers & Lybrand Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Beacon Properties Corporation:
We have audited the accompanying statement of excess of revenues over
specific operating expenses of Tri-State International in Lincolnshire,
Illinois (the "Properties") for the year ended December 31, 1995. This
financial statement is the responsibility of the Properties' management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of excess of revenues
over specific operating expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain income
and expenses which would not be comparable with those resulting from the
operations of the Properties after acquisition by Beacon Properties
Corporation. The accompanying financial statement was prepared for the
purpose of complying with the rules and regulations of the Securities and
exchange Commission and is not intended to be a complete presentation of the
Properties' revenues and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the excess of revenues over specific operating
expenses (exclusive of income and expenses described in Note 2) of Tri-State
International in Lincolnshire, Illinois for the year ended December 31, 1995
in conformity with generally accepted accounting principles.
[Signature of Coopers & Lybrand L.L.P]
Coopers & Lybrand L.L.P
Boston, Massachusetts
July 8, 1996
F-10
<PAGE>
TRI-STATE INTERNATIONAL
LINCOLNSHIRE, ILLINOIS
STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
<TABLE>
<CAPTION>
For the Year For the Six
Ended Months Ended
December 31, June 30, 1996
1995 (Unaudited)
-------------- -------------
<S> <C> <C>
Revenues:
Base rent $ 8,914,417 $4,437,176
Recoveries from tenants 3,324,734 1,515,961
Other income 200,659 117,337
----------- ----------
12,439,810 6,070,474
----------- ----------
Specific operating expenses (Note 2):
Utilities 788,667 399,052
Janitorial and cleaning 446,883 240,419
Security 152,589 74,327
General and administrative 585,706 299,790
Repairs and maintenance 1,254,054 668,666
Insurance 104,130 52,065
Property taxes 979,717 489,185
Landscaping 190,515 77,592
----------- ----------
4,502,261 2,301,096
----------- ----------
Excess of revenues over specific operating
expenses $ 7,937,549 $3,769,378
=========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statement.
F-11
<PAGE>
TRI-STATE INTERNATIONAL
LINCOLNSHIRE, ILLINOIS
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
1. Organization and Significant Accounting Policies:
Description of Properties
Tri-State International (the "Properties") is an office portfolio located
in Lincolnshire, Illinois consisting of five office buildings and
encompassing approximately 548,059 square feet. Beacon Properties Corporation
intends to acquire the entire fee interest in the Properties.
Rental Revenues
Rental income is recognized on the straight-line method over the terms of
the related leases. The excess of recognized rentals over amounts due
pursuant to lease terms is recorded as accrued rent. The impact of the
straight-line rent adjustment increased revenues by approximately $62,000
for the year ended December 31, 1995.
Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
2. Basis of Accounting:
The accompanying statement of excess of revenues over specific operating
expenses is presented on the accrual basis. This statement has been prepared
in accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired or to be acquired.
Accordingly, the statement excludes certain historical income and expenses
not comparable to the operations of the property after acquisition, such as
interest income, management fees, depreciation, amortization, and interest
expense.
3. Description of Leasing Arrangements:
The commercial and office space is leased to tenants under leases with
terms that vary in length. Certain of the leases contain real estate tax
reimbursement clauses, operating expense reimbursement clauses and renewal
options. Minimum lease payments to be received during the next five years for
noncancelable operating leases in effect at December 31, 1995 are
approximately as follows:
Year Ending December 31,
- -----------------------
1996 $5,398,394
1997 4,185,513
1998 3,773,817
1999 3,291,343
2000 2,549,439
Thereafter 3,030,997
As of December 31, 1995, four tenants occupied 36% of leasable square feet
and represented 77% of total 1995 base revenues.
F-12
<PAGE>
1333 H STREET
WASHINGTON, D.C.
STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1995
F-13
<PAGE>
[Coopers & Lybrand Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Beacon Properties Corporation:
We have audited the accompanying statement of excess of revenues over
specific operating expenses of 1333 H Street in Washington, D.C. (the
"Property") for the year ended December 31, 1995. This financial statement is
the responsibility of the Property's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of excess of revenues
over specific operating expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
As described in Note 2, this financial statement excludes certain income
and expenses which would not be comparable with those resulting from the
operations of the Property after acquisition by Beacon Properties
Corporation. The accompanying financial statement was prepared for the
purpose of complying with the rules and regulations of the Securities and
exchange Commission and is not intended to be a complete presentation of the
Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the excess of revenues over specific operating
expenses (exclusive of income and expenses described in Note 2) of 1333 H
Street in Washington, D.C. for the year ended December 31, 1995 in conformity
with generally accepted accounting principles.
[Signature of Coopers & Lybrand L.L.P]
Coopers & Lybrand L.L.P
Boston, Massachusetts
July 3, 1996
F-14
<PAGE>
1333 H STREET
WASHINGTON, D.C.
STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
<TABLE>
<CAPTION>
For the
For the Six Months
Year Ended Ended
December 31, June 30, 1996
1995 (Unaudited)
-------------- -------------
<S> <C> <C>
Revenues:
Base rent $5,783,708 $2,883,943
Recoveries from tenants 839,093 373,152
Other income 517,206 286,087
---------- ----------
7,140,007 3,543,182
---------- ----------
Specific operating expenses (Note 2):
Utilities 556,960 266,582
Janitorial and cleaning 235,798 118,962
Security 136,497 81,881
General and administrative 195,563 149,898
Repairs and maintenance 302,494 156,049
Insurance 56,347 28,174
Property taxes 873,438 436,719
Landscaping 23,393 11,979
---------- ----------
2,380,490 1,250,244
---------- ----------
Excess of revenues over specific operating expenses $4,759,517 $2,292,938
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statement.
F-15
<PAGE>
1333 H STREET
WASHINGTON, D.C.
NOTES TO STATEMENT OF EXCESS OF REVENUES
OVER SPECIFIC OPERATING EXPENSES
1. Organization and Significant Accounting Policies:
Description of Properties
1333 H Street in Washington, D.C. (the "Property") is an office building
located in Washington, D.C. encompassing approximately 239,000 net rentable
square feet. Beacon Properties Corporation intends to acquire the entire fee
interest in the Property.
Rental Revenues
Rental income is recognized on the straight-line method over the terms of
the related leases. The excess of recognized rentals over amounts due
pursuant to lease terms is recorded as accrued rent. The impact of the
straight- line rent adjustment decreased revenues by approximately $158,000
for the year ended December 31, 1995.
Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
2. Basis of Accounting:
The accompanying statement of excess of revenues over specific operating
expenses is presented on the accrual basis. This statement has been prepared
in accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired or to be acquired.
Accordingly, the statement excludes certain historical income and expenses
not comparable to the operations of the property after acquisition, such as
interest income and management fees.
3. Description of Leasing Arrangements:
The commercial and office space is leased to tenants under leases with
terms that vary in length. Certain of the leases contain real estate tax
reimbursement clauses, operating expense reimbursement clauses and renewal
options. Minimum lease payments to be received during the next five years for
noncancelable operating leases in effect at December 31, 1995 are
approximately as follows:
Year Ending December 31,
- -----------------------
1996 $ 6,091,000
1997 5,941,000
1998 5,870,000
1999 5,791,000
2000 6,008,000
Thereafter 22,424,000
As of December 31, 1995, two tenants occupied 67% of leasable square feet and
represented 72% of total 1995 revenue.
F-16
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma Condensed Consolidated Balance Sheet of
Beacon Properties Corporation (the "Company") as of June 30, 1996, is
presented as if the acquisition of the Pending Acquisitions had occurred on
June 30, 1996. The pro forma Condensed Consolidated Statements of Operations
are presented as if the Offering, the acquisition of the Properties acquired
since January 1, 1995 (including Perimeter Center) and the closing of the
MetLife Mortgage loan, the acquisition of the Pending Acquisitions and
related assumption of debt had occurred as of January 1, 1995; the Company
qualified as a REIT, distributed all of its taxable income and, therefore,
incurred no income tax expense during the period.
In management's opinion, all adjustments necessary to reflect the above
discussed transactions have been made. The unaudited pro forma Condensed
Consolidated Balance Sheet and Statement of Operations are not necessarily
indicative of what actual results of operations of the Company would have
been for the period, nor does it purport to represent the Company's results
of operations for future periods.
F-17
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Beacon
Properties
Corporation Pro Forma Pro Forma
Historical Adjustments Consolidated
--------- ---------- -------------
(dollars in thousands)
<S> <C> <C> <C>
Assets
Real estate, net $746,007 $227,000(A) $ 973,007
Deferred financing and leasing costs, net 14,730 14,730
Cash and cash equivalents 37,978 (26,388)(B) 11,591
Mortgage notes receivable 51,486 51,486
Other assets 20,554 (2,000)(C) 18,554
Investments in and note receivable from joint
ventures and corporations 57,082 57,082
------- -------- ----------
Total assets $927,837 $198,613 $1,126,450
======= ======== ==========
Liabilities and Stockholders' Equity
Mortgage notes payable $403,218 $ 37,374(D) $ 440,592
Note payable, Credit Facility 18,016(E) 18,016
Other liabilities 24,335 24,335
Investment in joint ventures 24,303 24,303
------- --------- ----------
Total liabilities 451,856 55,390 507,246
Minority interest in Operating Partnership 49,051 21,610(F) 70,661
Stockholders' equity 426,930 121,613(G) 548,543
------- --------- ----------
Total liabilities and stockholders' equity $927,837 $198,613 $1,126,450
======= ========= ==========
</TABLE>
Notes:
(A) Acquisition of Pending Acquisitions.
(B) Cash utilized.
(C) Application of deposit on Fairfax County Portfolio.
(D) Fairfax County Portfolio debt assumed.
(E) Credit Facility utilized to repay certain Fairfax County Portfolio debt.
(F) Value of units issued to seller of Fairfax County Portfolio.
(G) Net increase in stockholders' equity:
Proceeds of Offering $129,375
Expenses of Offering (7,763)
--------
$121,613
========
F-18
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Beacon Properties
Properties Acquired Perimeter Pending
Corporation In 1995 Center Acquisitions Pro Forma Pro Forma
Historical (A) (B) (F) Adjustments Consolidated
--------- -------- -------- ----------- ---------- -------------
(dollars in thousands except per share amounts and shares outstanding)
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income $71,050 $5,339 $52,117 $30,623 $ 159,129
Management fees 2,203 $ 723(H) 2,926
Recoveries from tenants 9,742 1,193 2,244 6,308 19,487
Mortgage interest
income 2,546 3,027(I) 5,573
Other income 5,502 26 862 1,111 7,501
------- ------ ------- ------- ------- ----------
Total revenue 91,043 6,558 55,223 38,042 3,750 194,616
------- ------ ------- ------- ------- ----------
Expenses:
Property expenses 18,090 1,560 12,376 7,485 39,511
Real estate taxes 10,217 949 4,107 2,680 17,953
General and
administrative 9,755 111 2,116 1,254 750(J) 13,986
Mortgage interest
expense 15,226 15,434(C) 4,438(G) (1,783)(K) 33,315
Interest--amortization
of financing costs 1,370 120(D) 1,490
Depreciation and
amortization 17,428 1,047(E) 9,571(E) 6,810(E) 34,856
------- ------ ------- ------- ------- ----------
Total expenses 72,086 3,666 43,724 22,667 (1,033) 141,110
------- ------ ------- ------- ------- ----------
Income from operations 18,957 2,892 11,499 15,375 4,783 53,506
Equity in net income of
joint ventures and
corporations 3,222 1,338 4,560 (1)
------- ------ ------- ------- ------- ----------
Income before minority
interest 22,179 4,230 11,499 15,375 4,783 58,066
Minority interest in
Operating Partnership (4,119) (3,795)(L) (7,914)
------- ------ ------- ------- ------- ----------
Net income before
extraordinary items $18,060 $4,230 $11,499 $15,375 $ 988 $ 50,152 (2)
======= ====== ======= ======= ======= ===========
Common shares outstanding 32,368,263
Net income per common share $ 1.55
(1) Includes:
Depreciation and amortization $ 3,895
Amortization of financing costs $ 896
(2) Company share of Operating Partnership is
86.37%
</TABLE>
See accompanying notes to pro forma condensed consolidated statement of
operations.
F-19
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
(A) Results of operations of properties acquired during 1995 for the period
prior to their acquisitions:
<TABLE>
<CAPTION>
Wellesley Westlakes 75-101 2 Ten
Building Building Federal Oliver Canal
8 2 St. Street Park Total
--------- --------- ---------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Rental income $308 $1,010 $2,474 $1,547 $5,339
Management fees
Recoveries from tenants 425 112 656 1,193
Mortgage interest income
Other income 7 15 4 26
---- ------ ------ ------ ------ -----
Total revenue 308 1,442 2,601 2,207 6,558
---- ------ ------ ------ ------ -----
Expenses:
Property expenses 61 413 573 513 1,560
Real estate taxes 20 89 505 335 949
General and
administrative 8 27 18 58 111
Mortgage interest expense
Interest--amortization of
financing costs
Depreciation and
amortization 50 239 404 354 1,047
---- ------ ------ ------ ------ -----
Total expenses 138 768 1,500 1,260 3,666
---- ------ ------ ------ ------ -----
Income from operations 170 674 1,101 947 2,892
Equity in net income of joint
ventures and corporations $1,338 1,338
---- ------ ------ ------ ------ -----
Income before minority
interest 170 674 1,338 1,101 947 4,230
Minority interest in
Operating Partnership
---- ------ ------ ------ ------ -----
Net income before
extraordinary item $170 $ 674 $1,338 $1,101 $ 947 $4,230
==== ====== ====== ====== ====== ======
</TABLE>
(B) Results of operations of Perimeter Center for 1995.
(C) Interest expense associated with the MetLife Mortgage Loan in the amount
of $218 million based on a 7.08% interest rate.
(D) Amortization of the costs of obtaining the permanent financing at $1.2
million over 10 years.
F-20
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
(E) Detail of depreciation expense by property is presented as follows:
Basis Life Depreciation
------- ----- -------------
Previously Acquired
Properties:
Wellesley Building 8 $ 4,500 30 yrs $ 50
Westlakes Building 2 12,306 30 yrs 239
2 Oliver Street 16,174 30 yrs 404
Ten Canal Park 10,609 30 yrs 354
------
$1,047
======
Perimeter Center $287,130 30 yrs $9,571
======
Pending Acquisitions:
Fairfax County Portfolio $ 69,300 30 yrs $2,310
The New York Life Portfolio 135,000 30 yrs 4,500
------
$6,810
======
(F) Results of operations of the Fairfax County Portfolio and the New York
Life Portfolio for 1995.
(G) Fairfax County Portfolio interest expense on debt assumed:
Principal Rate Expense
--------- ---- -------
JOHN MARSHALL 21,068 8.38% 1,764
EJ RANDOLPH (1) 18,016 8.25% 1,486
NORTHRIDGE 16,306 7.28% 1,187
------ ---- -----
55,390 4,438
====== =====
(1) Paid off by Credit Facility proceeds at closing.
(H) Management fee from 75-101 Federal Street.
(I) Interest income related to the acquisition of the Rowes Wharf mortgage.
(J) Additional general and administrative expense attributable to
acquisitions.
(K) Credit facility activity:
<TABLE>
<CAPTION>
Draw Expense
Source/Use Date (Repayment) (Savings)
- ---------- ---- ----------- --------
<S> <C> <C> <C>
Offering proceeds March 20 ($ 58,000) ($ 1,065)
Rowes Wharf mortgage Various 23,700 780
Westlakes Building 2 July 26 13,500 632
Offering proceeds August 31 (66,500) (3,652)
75-101 Federal Street and 2 Oliver Street September 29 39,000 2,397
Ten Canal Park December 21 11,000 882
March 1996 offering proceeds Full year (21,300) (1,757)
------
($1,783)
=======
</TABLE>
(L) Reflects decrease for minority interest (13.63%) in Operating
Partnership.
F-21
<PAGE>
BEACON PROPERTIES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Beacon
Properties Perimeter Pending
Corporation Center Acquisitions Pro Forma Pro Forma
Historical (A) (B) Adjustments Consolidated
---------- ------- ----------- ---------- -------------
(dollars in thousands except per share amounts and shares
outstanding)
<S> <C> <C> <C> <C> <C>
Revenue:
Rental income $60,051 $6,420 $14,864 $ 81,335
Management fees 1,517 1,517
Recoveries from tenants 6,782 304 3,002 10,088
Mortgage interest income 2,165 $611(G) 2,776
Other income 4,591 208 673 5,472
------- ------ ------- ------- --------
Total revenue 75,106 6,932 18,539 611 101,188
------- ------ ------- ------- --------
Expenses:
Property expenses 14,770 1,562 3,806 20,138
Real estate taxes 7,831 591 1,346 9,768
General and administrative 7,362 378 646 188(H) 8,574
Mortgage interest expense 13,661 1,461(C) 2,146(F) (462)(I) 16,805
Interest--amortization of
financing costs 1,184 15(D) 1,199
Depreciation and amortization 13,346 1,196(E) 3,405(E) 17,947
------- ------ ------- ------- --------
Total expenses 58,154 5,203 11,349 (274) 74,431
------- ------ ------- ------- --------
Income from operations 16,952 1,729 7,190 886 26,757
Equity in net income of joint
ventures and corporations 1,582 1,582 (1)
------- ------ ------- ------- --------
Income before minority interest 18,534 1,729 7,190 886 28,339
Minority interest in Operating
Partnership (2,681) (1,181)(J) (3,862)
------- ------ ------- ------- --------
Net income before extraordinary
items $15,853 $1,729 $ 7,190 ($ 296) $ 24,476 (2)
======= ====== ======= ======== ========
Common shares outstanding 32,368,263
Net income per common share $0.76
(1) Includes:
Depreciation and amortization $1,994
Amortization of financing
costs $448
(2) Company share of Operating
Partnership is 86.37%
</TABLE>
See accompanying notes to pro forma condensed consolidated statement of
operations.
F-22
<PAGE>
BEACON PROPERTIES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996
(Unaudited)
(A) Results of operations of Perimeter Center for the period ended February
14, 1996.
(B) Results of operations of the Fairfax County Portfolio and the New York
Life Portfolio.
(C) Net interest expense associated with the MetLife Mortgage Loan in the
amount of $218 million based on a 7.08% interest rate for the period
ended prior to March 15, 1996.
(D) Amortization of the costs of obtaining the permanent financing at $1.2
million over 10 years.
(E) Detail of depreciation expense by property is presented as follows:
Basis Life Depreciation
----- ---- ------------
Perimeter Center $287,130 30 yrs $1,196
======
Pending Acquisitions:
Fairfax County Portfolio $ 69,300 30 yrs $1,155
The New York Life Portfolio 135,000 30 yrs 2,250
------
$3,405
======
(F) Fairfax County Portfolio interest expense on debt assumed:
Principal Rate Expense
-------- ---- -------
JOHN MARSHALL 21,068 8.38% 882
EJ RANDOLPH (1) 18,016 7.44% 670
NORTHRIDGE 16,306 7.28% 594
------ -----
55,390 2,146
====== ======
(1) Paid off by Credit Facility proceeds at closing.
(G) Interest income related to the acquisition of the Rowes Wharf mortgage.
(H) Additional general and administrative expense attributable to
acquisitions.
(I) Decrease in Credit Facility interest expense as the result of $21,300
repayment from proceeds of March 1996 offering.
(J) Reflects decrease for minority interest (13.63%) in Operating
Partnership.
F-23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BEACON PROPERTIES CORPORATION
/s/ Robert J. Perriello
-----------------------------
Robert J. Perriello,
Senior Vice President,
and Chief Financial Officer
Date: July 23, 1996
BEACON PROPERTIES CORPORATION
(a Maryland Corporation)
Common Stock
UNDERWRITING AGREEMENT
July __, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
New York, New York 10281-1305
Dear Sirs:
Beacon Properties Corporation, a Maryland corporation (the "Company"),
proposes to issue and sell shares of Common Stock, $.01 par value (the "Common
Stock" or the "Securities"), from time to time, in one or more offerings on
terms to be determined at the time of sale. As used herein, "you" and "your",
unless the context otherwise requires, shall mean the parties to whom this
underwriting agreement (this "Agreement") is addressed together with the other
parties, if any, identified in the applicable Terms Agreement (as defined
herein) as additional co- managers with respect to Underwritten Securities (as
hereinafter defined) purchased pursuant thereto. It is understood that the net
proceeds of an offering of securities to which this Agreement relates will be
contributed to Beacon Properties, L.P., a Delaware limited partnership (the
"Operating Partnership") in exchange for interests in the Operating Partnership.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Securities (the "Underwritten Securities") to, and the purchase and
offering thereof by, you and such other underwriters, if any, selected by you as
have authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the sale of
the Underwritten Securities or as a member of an underwriting syndicate and any
Underwriter substituted pursuant to Section 10 hereof). The Terms Agreement
relating to the offering of Underwritten Securities shall specify
<PAGE>
the number of Underwritten Securities to be initially issued (the "Initial
Underwritten Securities"), the names of the Underwriters participating in such
offering (subject to substitution as provided in Section 10 hereof), the number
of Initial Underwritten Securities which each such Underwriter severally agrees
to purchase, the names of such of you or such other Underwriters acting as
co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from the
Company, the initial public offering price, if any, the time, date and place of
delivery and payment and any delayed delivery arrangements of the Initial
Underwritten Securities. In addition, each Terms Agreement shall specify whether
the Company has agreed to grant to the Underwriters an option to purchase
additional Underwritten Securities to cover over-allotments, if any, and the
number of Underwritten Securities subject to such option (the "Option
Securities"). As used herein, the term "Underwritten Securities" shall include
the Initial Underwritten Securities and all or any portion of the Option
Securities agreed to be purchased by the Underwriters as provided herein, if
any. The Terms Agreement, which shall be substantially in the form of Exhibit A
hereto, may take the form of an exchange of any standard form of written
telecommunication between you and the Company. Each offering of Underwritten
Securities through you or through an underwriting syndicate managed by you will
be governed by this Agreement, as supplemented by the applicable Terms
Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333- ) for the
registration of the Securities, under the Securities Act of 1933, as amended
(the "1933 Act"), and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"), and the Company has filed such amendments thereto as
may have been required prior to the execution of the applicable Terms Agreement.
Such registration statement (as amended, if applicable) has been declared
effective by the Commission. Such registration statement and the prospectus
constituting a part thereof, in each case as supplemented by a prospectus
supplement relating to the offering of Underwritten Securities (the "Prospectus
Supplement"), including in each case all documents incorporated therein by
reference and the information, if any, deemed to be a part thereof pursuant to
Rule 430A(b) or Rule 434 of the 1933 Act Regulations as from time to time
amended or supplemented pursuant to the 1933 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), or otherwise, are collectively referred to
herein as the "Registration Statement" and the "Prospectus", respectively;
provided, however, that a Prospectus Supplement shall be deemed to have
supplemented the Prospectus only with respect to the offering of Underwritten
Securities to which it
2
<PAGE>
relates. All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement or the Prospectus (and all other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be incorporated by
reference in the Registration Statement or the Prospectus, as the case may be;
and all references in this Agreement to amendments or supplements to the
Registration Statement or the Prospectus shall be deemed to mean and include the
filing of any document under the 1934 Act which is or is deemed to be
incorporated by reference in the Registration Statement or the Prospectus, as
the case may be. If the Company elects to rely on Rule 434 under the 1933 Act
Regulations, all references to the Prospectus shall be deemed to include,
without limitation, the form of prospectus and the abbreviated term sheet, taken
together, provided to the Underwriters by the Company in reliance on Rule 434
under the 1933 Act (the "Rule 434 Prospectus"). If the Company files a
registration statement to register a portion of the Securities and relies on
Rule 462(b) for such registration statement to become effective upon filing with
the Commission (the "Rule 462 Registration Statement"), then any reference to
"Registration Statement" herein shall be deemed to be to both the registration
statement referred to above (No. 333- ) and the Rule 462 Registration Statement,
as each such registration statement may be amended pursuant to the 1933 Act.
Section 1. Representations and Warranties.
(a) The Company and the Operating Partnership each severally represents
and warrants to you, as of the date hereof, and to you and each other
Underwriter named in the applicable Terms Agreement, as of the date thereof (in
each case, a "Representation Date"), as follows:
(i) The Registration Statement and the Prospectus, at the
time the Registration Statement became effective and at each time
thereafter on which the Company filed an Annual Report on Form 10-K with
the Commission, complied, and as of each Representation Date will
comply, in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations; the Registration Statement, at the time
the Registration Statement became effective and at each time thereafter
on which the Company filed an Annual Report on From 10-K with the
Commission, did not, and at each time thereafter on which any amendment
to the Registration Statement becomes effective or the Company files an
Annual Report on Form 10-K with the Commission and as of each
Representation Date, and at the Closing Time (as hereinafter defined),
will not, contain an untrue statement of a material fact or omit to
state a material fact required to
3
<PAGE>
be stated therein or necessary to make the statements therein not
misleading; and the Prospectus, as of the date hereof, does not, and as
of each Representation Date will not, include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to
the Company in writing by any Underwriter through you expressly for use
in the Registration Statement or Prospectus.
(ii) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(iii) The historical financial statements of the Company and
the historical combined financial statements of the Predecessor (as
defined in Note 1 to the Financial Statements of the Company and the
Predecessor) including the notes thereto, included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the financial position of the Company and the Predecessor, as at
the dates indicated and the results of operations for the periods
specified. If applicable, the historical financial information including
the notes thereto for properties or other assets included in or
incorporated by reference into the Registration Statement and Prospectus
present fairly the stated financial information for such specific
property or asset. Except as otherwise stated in the Registration
Statement, said historical financial statements of the Company, the
Predecessor, and, if applicable, the specific properties or other
assets, have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved, and all adjustments necessary for a fair presentation
of results for such periods have been made. The supporting schedules
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information required to be stated
therein; and the selected financial data (both historical and pro forma)
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the information shown therein and have
been compiled on a basis consistent with the related financial
statements presented therein.
(iv) The unaudited pro forma condensed consolidated
financial statements included or incorporated by reference
4
<PAGE>
in the Registration Statement and the Prospectus present fairly the pro
forma financial position of the Company as of the dates indicated and
the results of its operations for the periods specified; and such
unaudited pro forma financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
basis substantially consistent with the audited financial statements of
the Company and the Predecessor included or incorporated by reference in
the Registration Statement and the Prospectus, the assumptions on which
such pro forma financial statements have been prepared are reasonable
and are set forth in the notes thereto, and such pro forma financial
statements have been prepared, and the pro forma adjustments set forth
therein have been applied, in accordance with the applicable accounting
requirements of the 1933 Act and the 1933 Act Regulations, and such pro
forma adjustments have been properly applied to the historical amounts
in the compilation of such statements.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (a) there has been no material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company, the Operating Partnership
and its subsidiaries considered as one enterprise, or any of the real
property or improvements thereon owned by either the Company, the
Operating Partnership or any of its subsidiaries (each individually a
"Property" and collectively the "Properties"), whether or not arising in
the ordinary course of business, (b) no material casualty loss or
material condemnation or other material adverse event with respect to
any of the Properties has occurred, (c) there have been no transactions
entered into or acquisitions by the Company, or the Operating
Partnership or any of its subsidiaries, other than those in the ordinary
course of business or disclosed in the Prospectus, which are material
with respect to the Company, the Operating Partnership and its
subsidiaries considered as one enterprise, and (d) except for regular
quarterly dividends on the Company's Common Stock or dividends or
distributions declared paid or made in accordance with the terms of any
series of the Company's Preferred Stock, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock or by the Operating Partnership or any of its
subsidiaries with respect to its partnership interests or any class of
its capital stock. As used in this Agreement, the term subsidiary as it
relates to the Operating Partnership includes the Subsidiary
Corporations (as such term is defined in the Prospectus), Beacon
Property Management, L.P. (the "Management Partnership") and Beacon
367917.1
5
<PAGE>
Design, L.P. (the "Design Partnership") as well as any corporation,
limited or general partnership, joint venture or other entity through
which the Operating Partnership owns an interest, either directly or
indirectly, in a Property.
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Maryland, with corporate power and authority to own, lease and
operate its Properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement and the Terms Agreement and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure to so qualify or to be in good standing would
not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company, the Operating Partnership and its subsidiaries considered
as one enterprise or the Properties, collectively; and, except with
respect to the Operating Partnership, and with respect to BCN
Management, Inc., BCN Crystal, Inc., BCN Center Plaza, Inc., Beacon
Properties Acquisition Corporation, BCN RWA, Inc. and BCN Wellesley,
Inc., each qualified REIT subsidiaries of the Company, and with respect
to Wellesley Holding, L.P., Wellesley Holding II, L.P., Crystal
Holdings, L.P., Rowes Wharf Holdings, L.P., Center Plaza Associates,
L.P., the Subsidiary Corporations, the Management Partnership and the
Design Partnership (collectively, the "Subsidiary Entities"), the
Company owns no material amounts of stock or other beneficial interest
in any corporation, partnership, joint ventures or other business
entity.
(vii) The Agreement of Limited Partnership of the Operating
Partnership (the "Partnership Agreement") has been duly and validly
authorized, executed and delivered by the Company and is a valid and
binding agreement, enforceable against the Company in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally and by general principles of equity. The Partnership
Agreement has been duly executed and delivered by the other parties
thereto and, to the Company's knowledge, is a valid and binding
agreement, enforceable against such parties in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally and by general principles of equity. The Operating
Partnership and each of its subsidiaries has been duly formed and is
validly
6
<PAGE>
existing as a limited partnership or corporation, as the case may be, in
good standing under the laws of its state of organization with
partnership or corporate power and authority, as the case may be, to
own, lease and operate its properties, to conduct the business in which
it is engaged or proposes to engage as described in the Prospectus and
to enter into and perform its obligations under this Agreement. The
Operating Partnership and each of its subsidiaries is duly qualified or
registered as a foreign partnership or corporation, as the case may be,
and is in good standing in each jurisdiction in which such qualification
or registration is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure
to so qualify or register would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise or the Properties,
collectively. The Company is the sole general partner of the Operating
Partnership. The Operating Partnership has no subsidiaries other than
the entities through which it owns interests in the Properties, the
Subsidiary Corporations, the Management Partnership and the Design
Partnership. Except as otherwise stated in the Prospectus, all of the
issued and outstanding capital stock or other ownership interests in
each Subsidiary Entity have been duly authorized and validly issued, are
fully paid and non-assessable and, except for a 90% limited partner
interest in Crystal Holdings, L.P., a 24% limited partner interest in
Center Plaza Associates, L.P., and 99% of the voting stock of each of
the Subsidiary Corporations, are owned by the Company or the Operating
Partnership, directly or indirectly, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, except
for security interests granted in respect of indebtedness of the Company
or the Operating Partnership or any of its subsidiaries as described in
the Prospectus and except for security interests which would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company, the
Operating Partnership, or any of its subsidiaries considered as one
enterprise or the Properties, collectively.
(viii) The authorized, issued and outstanding capital stock of
the Company is as set forth in the Prospectus under "Capitalization"
(except for subsequent issuances, if any, pursuant to reservations,
agreements, employee benefit plans, dividend reinvestment plans,
employee and director stock option plans or upon the exercise of options
or convertible securities referred to in the Prospectus); and such
shares of capital stock have been duly authorized and
7
<PAGE>
validly issued and are fully paid and non-assessable and are not subject
to preemptive or other similar rights. The Company has duly reserved a
sufficient number of shares of Common Stock for issuance upon exchange
of outstanding units of limited partner interest in the Operating
Partnership (the "Units").
(ix) The issued and outstanding Units have been duly
authorized and validly issued by the Operating Partnership and are fully
paid and non-assessable. The Units have been sold in compliance with all
applicable laws (including, without limitation, federal and state
securities laws).
(x) The Underwritten Securities being sold pursuant to this
Agreement and the applicable Terms Agreement have, as of each
Representation Date, been duly authorized for issuance and sale pursuant
to this Agreement and such Terms Agreement and such Underwritten
Securities, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth in such Terms
Agreement or any Delayed Delivery Contract (as hereinafter defined),
will be validly issued, fully paid and non-assessable, and the issuance
of such Underwritten Securities will not be subject to preemptive or
other similar rights; and the Underwritten Securities being sold
pursuant to the applicable Terms Agreement conform in all material
respects to all statements relating thereto contained in the Prospectus.
The form of stock certificate used to evidence the Underwritten
Securities is in due and proper form and complies with all applicable
legal requirements.
(xi) None of the Company, the Operating Partnership or any of its
subsidiaries is in violation of its charter, by-laws, agreement of
limited partnership or other organizational documents or in default in
the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company,
the Operating Partnership or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company, the Operating Partnership or any of its
subsidiaries is subject, except for any such violation or default that
would not have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company, the Operating Partnership or its subsidiaries considered as
one enterprise and the execution, delivery and performance of this
Agreement, the applicable Terms Agreement, if any, and the consummation
of the transactions contemplated herein and therein and compliance by
the Company and the Operating Partnership (with respect to this
Agreement), each
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severally, with obligations hereunder and thereunder have been duly
authorized by all necessary action, and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company, the Operating Partnership or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company, the
Operating Partnership or any of its subsidiaries is a party or by which
any of them may be bound, or to which any of the property or assets of
the Company, the Operating Partnership or any of its subsidiaries is
subject, except for any such violation or default that would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company, the
Operating Partnership or its subsidiaries considered as one enterprise,
nor will such action result in any violation of the charter, by-laws,
the agreement of limited partnership or other organizational documents
of the Company, the Operating Partnership or any of its subsidiaries or
any applicable law, administrative regulation or administrative or court
decree, except for any such violation or default that would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company, the
Operating Partnership or its subsidiaries considered as one enterprise.
(xii) The Company has been organized in conformity with the
requirements for qualification as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended (the
"Code"), and the Company's method of operation will enable it to meet
the requirements for taxation as a REIT under the Code and it will make
a timely election to be taxed as a REIT with respect to the years ended
December 31, 1994 and thereafter.
(xiii) Neither the Company, the Operating Partnership nor any
of its subsidiaries is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
(xiv) Other than as disclosed or incorporated by reference
into the Prospectus, there is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or the Operating
Partnership threatened against or affecting the Company, the Operating
Partnership or any of its subsidiaries which is required to be disclosed
in the Prospectus (other than as disclosed therein), or which might
result in any material adverse change in the
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condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise, or which might materially and
adversely affect the property or assets thereof and the Properties,
collectively, or which might materially and adversely affect the
consummation of this Agreement or the applicable Terms Agreement, or the
transactions contemplated herein or therein; all pending legal or
governmental proceedings to which the Company, the Operating Partnership
or any of its subsidiaries is a party or of which any property or assets
of the Company, the Operating Partnership or any of its subsidiaries or
the Properties is subject which are not described in or incorporated by
reference into the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material; and there are no contracts or documents of the Company, the
Operating Partnership or any of its subsidiaries which are required to
be filed as exhibits to the Registration Statement by the 1933 Act or by
the 1933 Act Regulations which have not been so filed.
(xv) Each of the Company, the Operating Partnership and its
subsidiaries are not required to own or possess any trademarks, service
marks, trade names or copyrights in order to conduct the business to be
operated by them.
(xvi) No authorization, approval or consent of any court or
governmental authority or agency is required that has not been obtained
in connection with the consummation by the Company or the Operating
Partnership of the transactions contemplated by this Agreement or the
applicable Terms Agreement, except such as may be required under the
1933 Act or the 1933 Act Regulations, state securities laws, real estate
syndication laws or under the rules and regulations of the National
Association of Securities Dealers, Inc.
(xvii) Each of the Company, the Operating Partnership and its
subsidiaries possess such certificates, authorities or permits issued by
the appropriate state, federal or foreign regulatory agencies or bodies
necessary to conduct the businesses to be conducted by it, and neither
the Company, nor the Operating Partnership or any of its subsidiaries
has received any written notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise.
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(xviii) The Company has full right, power and authority to enter
into this Agreement, the applicable Terms Agreement and the Delayed
Delivery Contracts (as defined below), if any, and this Agreement has
been, and as of each Representation Date, the applicable Terms Agreement
and the Delayed Delivery Contracts, if any, will have been, duly
authorized, executed and delivered by the Company.
(xix) The Operating Partnership has full right, power and
authority to enter into this Agreement and this Agreement has been duly
authorized, executed and delivered by the Operating Partnership.
(xx) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective and
as of the applicable Representation Date or Closing Time (as defined
herein) or during the period specified in Section 3(f), did not and will
not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading.
[(xxi) (A) The following is a complete list of registration
rights agreements entered into by the Company: (1) agreement dated May
26, 1994 with Crystal Holdings Corporation; (2) agreement dated May 26,
1994 with SKW Real Estate Limited Partnership; (3) agreement dated May
26, 1994 with Richard L. Friedman and John L. Hall II; (4) agreement
dated May 26, 1994 with certain holders of Units; and (5) agreement
dated October 27, 1994 with Wellesley Office Realty Corp. and Federal
175 Realty Corp. (B) No person has exercised registration or other
similar rights to have any securities registered pursuant to the
Registration Statement.]
(xxii) (a) The Operating Partnership or its subsidiary, as the
case may be, has good and marketable title to all items of real property
owned by them, in each case free and clear of all liens, encumbrances,
claims, security interests and defects, other than those referred to in
the Prospectus or which are not material in amount; (b) all liens,
charges, encumbrances, claims, or restrictions on or affecting the
properties and assets owned by the Operating Partnership or any of its
subsidiaries which are
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required to be disclosed in the Prospectus are disclosed therein; (c)
except as disclosed in the Prospectus, none of the Company, the
Operating Partnership or any of its subsidiaries, or, to the best of the
knowledge of the Company and the Operating Partnership, any lessee under
a lease relating to any of the Properties, is in default under any of
the leases relating to the Properties and neither the Company nor the
Operating Partnership knows of any event which, but for the passage of
time or the giving of notice, or both, would constitute a default under
any of such leases, except such defaults that would not have a material
adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company, the
Operating Partnership and its subsidiaries considered as one enterprise;
(d) no tenant under any of the leases pursuant to which the Company, the
Operating Partnership or any of its subsidiaries leases any of its real
property or improvements has an option to purchase the premises demised
under such lease; (e) each of the Properties is in compliance with all
applicable codes and zoning laws and regulations, except for such
failures to comply which would not individually or in the aggregate have
a material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the Company,
the Operating Partnership and its subsidiaries considered as one
enterprise; and (f) neither the Company nor the Operating Partnership
has knowledge of any pending or threatened condemnation, zoning change,
or other proceeding or action that will in any manner affect the size
of, use of, improvements on, construction on, or access to the
Properties, except such proceedings or actions that would not have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company, the
Operating Partnership and its subsidiaries considered as one enterprise.
(xxiii) The Operating Partnership or its subsidiaries have
obtained title insurance on all the Properties described in the
Prospectus as owned by the Operating Partnership or its subsidiaries in
an amount at least equal to the greater of (a) the cost of acquisition
of such Property and (b) the cost of construction of the improvements
located on such Properties.
(xxiv) Except as disclosed in the Prospectus, each of the
Company and the Operating Partnership has no knowledge of (a) the
unlawful presence of any substance, material or waste which is regulated
by any federal, state or local governmental or quasi-governmental
authority, including, without limitation, (i) any substance, material or
waste defined, used or listed as a "hazardous waste", "extremely
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hazardous waste", "restricted hazardous waste", "hazardous substance",
"hazardous material", "toxic substance" or other similar terms as
defined or used in any Environmental Law (as defined below), (ii) any
petroleum products, asbestos, polychlorinated biphenyls, lead-based
paint, flammable explosives or radioactive materials and (iii) any
additional substances or materials which are hazardous or toxic
substances under any Environmental Law relating to the Properties
(collectively, "Hazardous Materials") on any of the Properties or of (b)
any spill, release, discharge or disposal of Hazardous Materials that
have occurred or are presently occurring at, from or onto any of the
Properties or any properties near or adjacent to the Properties, which
presence or occurrence would materially adversely affect the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company, the Operating Partnership and its subsidiaries
considered as one enterprise. Except as disclosed in the Prospectus, in
connection with the construction on or operation and use of the
Properties, the Company and the Operating Partnership represent that, as
of the date of this Agreement, each of the Company and the Operating
Partnership has no knowledge of any material failure to comply with all
applicable local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to the use,
generation, recycling, reuse, sale, storage, handling, transport and
disposal of any Hazardous Materials (collectively, "Environmental Laws")
that would have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects of
the Company, the Operating Partnership and its subsidiaries considered
as one enterprise.
(xxv) Each of the Company and the Operating Partnership does no
business with any person or affiliate located in Cuba within the meaning
of Florida Rule 3E- 900.001.
(b) Any certificate signed by any officer of the Company in such
capacity or as general partner of the Operating Partnership and delivered to you
or to counsel for the Underwriters in connection with the offering of the
Underwritten Securities shall be deemed a representation and warranty by the
Company or the Operating Partnership, as the case may be, to each Underwriter
participating in such offering as to the matters covered thereby on the date of
such certificate and, unless subsequently amended or supplemented, at each
Representation Date subsequent thereto.
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Section 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the applicable Terms Agreement relating to
the Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per Option Security as is
applicable to the Initial Underwritten Securities. Such option, if granted, will
expire 30 days or such lesser number of days as may be specified in the
applicable Terms Agreement after the Representation Date relating to the Initial
Underwritten Securities, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
you, but shall not be later than three full business days and not be earlier
than two full business days after the exercise of said option, unless otherwise
agreed upon by you and the Company. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of Option
Securities then being purchased which the number of Initial Underwritten
Securities each such Underwriter has severally agreed to purchase as set forth
in the applicable Terms Agreement bears to the total number of Initial
Underwritten Securities (except as otherwise provided in the applicable Terms
Agreement), subject to such adjustments as you in your discretion shall make to
eliminate any sales or purchases of fractional Initial Underwritten Securities.
(c) Payment of the purchase price for, and delivery of, the Underwritten
Securities to be purchased by the Underwriters shall be made at the offices of
Brown & Wood LLP, One World Trade Center, New York, New York 10048-0557, or at
such other place as shall be agreed upon by you and the Company, at 10:00 A.M.,
New York City time, on the third business day (unless postponed in accordance
with the provisions of Section 10) following the date of the applicable Terms
Agreement or, if pricing takes place after 4:30 p.m. New York City time on the
date of the applicable
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Terms Agreement, on the fourth business day (unless postponed in accordance with
the provisions of Section 10) following the date of the applicable Terms
Agreement or at such other time as shall be agreed upon by you and the Company
(each such time and date being referred to as a "Closing Time"). In addition, in
the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates
representing, such Option Securities, shall be made at the above-mentioned
offices of Brown & Wood LLP, or at such other place as shall be agreed upon by
you and the Company on each Date of Delivery as specified in the notice from you
to the Company. Unless otherwise specified in the applicable Terms Agreement,
payment shall be made to the Company by wire transfer of immediately available
funds to a bank account designated by the Company, against delivery to you for
the respective accounts of the Underwriters for the Underwritten Securities to
be purchased by them. The Underwritten Securities shall be in such authorized
denominations and registered in such names as you may request in writing at
least one business day prior to the applicable Closing Time or Date of Delivery,
as the case may be. The Underwritten Securities, which may be in temporary form,
will be made available for examination and packaging by you on or before the
first business day prior to the Closing Time or Date of Delivery, as the case
may be.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase Underwritten Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each of the
Underwritten Securities for which Delayed Delivery Contracts are made at the
Closing Time as is specified in the applicable Terms Agreement. Any Delayed
Delivery Contracts are to be with institutional investors of the types described
in the Prospectus. At the Closing Time, the Company will enter into Delayed
Delivery Contracts (for not less than the minimum number of Underwritten
Securities per Delayed Delivery Contract specified in the applicable Terms
Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate number of
Underwritten Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to the
Closing Time, the names of any institutional investors with which it is proposed
that the Company will enter into Delayed Delivery Contracts and the number of
Underwritten
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Securities to be purchased by each of them, and the Company will advise you, at
least two business days prior to the Closing Time, of the names of the
institutions with which the making of Delayed Delivery Contracts is approved by
the Company and the number of Underwritten Securities to be covered by each such
Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be reduced
by the number of Underwritten Securities covered by Delayed Delivery Contracts,
as to each Underwriter as set forth in a written notice delivered by you to the
Company; provided, however, that the total number of Underwritten Securities to
be purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten Securities covered by Delayed Delivery Contracts.
SECTION 3. Covenants of the Company and the Operating Partnership. Each
of the Company and the Operating Partnership covenants with you, and with each
Underwriter participating in the offering of Underwritten Securities, as
follows:
(a) Immediately following the execution of the applicable Terms
Agreement, the Company will prepare a Prospectus Supplement setting forth the
number of Underwritten Securities covered thereby and their terms not otherwise
specified in the Prospectus pursuant to which the Underwritten Securities are
being issued, the names of the Underwriters participating in the offering and
the number of Underwritten Securities which each severally has agreed to
purchase, the names of the Underwriters acting as co- managers in connection
with the offering, the price at which the Underwritten Securities are to be
purchased by the Underwriters from the Company, the initial public offering
price, if any, the selling concession and reallowance, if any, any delayed
delivery arrangements, and such other information as you and the Company deem
appropriate in connection with the offering of the Underwritten Securities; and
the Company will, by the close of business in New York on the business day
immediately succeeding the date of the applicable Terms Agreement, transmit
copies of the Prospectus Supplement to the Commission for filing pursuant to
Rule 424(b) of the 1933 Act Regulations and will furnish to the Underwriters
named therein as many copies of the Prospectus (including such Prospectus
Supplement) as you shall reasonably request. If the Company elects to rely on
Rule 434 under the 1933 Act Regulations, the Company will prepare an abbreviated
term sheet that complies with the requirements of Rule 434 under the 1933 Act
Regulations and will provide the Underwriters with copies of the form of Rule
434 Prospectus, in such number as the Underwriters may reasonably request, and
file or transmit for filing with the Commission the form of Prospectus complying
with Rule 434(c)(2) of the 1933 Act Regulations in accordance with
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Rule 424(b) of the 1933 Act Regulations by the close of business in New York on
the business day immediately succeeding the date of the applicable Terms
Agreement.
(b) The Company will notify you immediately, and confirm such notice in
writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus or any document to
be filed pursuant to the 1934 Act, (iii) the receipt of any comments from the
Commission, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose. The Company will make every reasonable effort
to prevent the issuance of any such stop order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment.
(c) At any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file or prepare
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus, whether pursuant to the 1933 Act, 1934 Act or otherwise,
(including any revised Prospectus which the Company proposes for use by the
Underwriters in connection with an offering of Underwritten Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
Prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations) and will furnish you with copies of any such amendment
or supplement a reasonable amount of time prior to such proposed filing or
preparation, as the case may be, and will not file or prepare any such amendment
or supplement or other documents in a form to which you or counsel for the
Underwriters shall reasonably object.
(d) The Company will deliver to each Underwriter as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as such Underwriter reasonably requests.
(e) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act or the 1934 Act in connection with sales of the Underwritten Securities,
such number of copies of
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the Prospectus (as amended or supplemented) as such Underwriter may reasonably
request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations,
the 1934 Act or the 1934 Act Regulations.
(f) If at any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or counsel for the
Company, to amend or supplement the Prospectus in order that the Prospectus will
not include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of either such counsel, at any such
time to amend or supplement the Registration Statement or the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, then the Company will promptly prepare and file with the Commission
such amendment or supplement, whether by filing documents pursuant to the 1933
Act, the 1934 Act or otherwise, as may be necessary to correct such untrue
statement or omission or to make the Registration Statement and Prospectus
comply, in the opinion of Counsel to the Underwriters, with such requirements,
and the Company will furnish to the Underwriters a reasonable number of copies
of such amendment or supplement.
(g) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Underwritten Securities for offering and sale under the applicable
securities laws and real estate syndication laws of such states and other
jurisdictions of the United States as you may designate; provided, however, that
the Company shall not be obligated to qualify as a foreign corporation in any
jurisdiction where it is not so qualified. In each jurisdiction in which the
Underwritten Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for so long as may be required for the
distribution of the Underwritten Securities; provided, however, that the Company
shall not be obligated to qualify as a foreign corporation in any jurisdiction
where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the Company
will make generally available to its security holders as soon as practicable,
but not later than 60 days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of Rule 158 of the
1933 Act Regulations) covering a twelve month period beginning not later than
the first day of the Company's fiscal quarter next following
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the "effective date" (as defined in such Rule 158) of the Regis-
tration Statement.
(i) The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the taxable year
in which sales of the Underwritten Securities are to occur.
(j) The Company will use the net proceeds received by it from the sale
of the Underwritten Securities in the manner specified in the Prospectus under
the caption "Use of Proceeds."
(k) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
(l) Neither the Company nor the Operating Partnership will, during a
period of 90 days from the date of the applicable Terms Agreement, with respect
to the Underwritten Securities covered thereby, without your prior written
consent, directly or indirectly, sell, offer to sell, grant any option for the
sale of, or otherwise dispose of, any of the Company's or the Operating
Partnership's equity securities (other than the Underwritten Securities which
are to be sold pursuant to such Terms Agreement) or any securities convertible
into or exchangeable into or exercisable for equity securities of either the
Company or the Operating Partnership, except in accordance with this Agreement,
pursuant to a dividend reinvestment plan, pursuant to employee or director stock
option plans, or as partial or full payment for properties to be acquired by the
Operating Partnership.
(m) If applicable, the Company will use its best efforts to list the
shares of Common Stock on the New York Stock Exchange or such other national
exchange on which the Company's shares of Common Stock are then listed.
Section 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement or the
applicable Terms Agreement, including (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)
the cost of reproducing and distributing to you copies of this Agreement and the
applicable Terms Agreement, (iii) the preparation, issuance and delivery of the
Underwritten Securities to the Underwriters, (iv) the fees and disbursements of
the Company's counsel and accountants, (v) the qualification of the Underwritten
Securities under securities laws and real estate syndication laws in accordance
with the provisions of Section 3(g), including filing
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fees and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey, (vi) the printing, reproduction and delivery to the Underwriters copies
of the Blue Sky Survey, (vii) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto, each preliminary prospectus and of the Prospectus and any amendments or
supplements thereto, (viii) any fees charged by nationally recognized
statistical rating organizations for the rating of the Securities, (ix) the fees
and expenses, if any, incurred with respect to the listing of the Underwritten
Securities on any national securities exchange, and (x) the fees and expenses,
if any, incurred with respect to any filing with the National Association of
Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in accordance
with the provisions of Section 5, Section 9(b)(i) or 9(b)(ii), the Company shall
reimburse the Underwriters named in such Terms Agreement for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase Underwritten Securities pursuant to
the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company and the Operating Partnership
herein contained, the performance by each of the Company and the Operating
Partnership of all of its covenants and other obligations hereunder, and to the
following further conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and (ii) there
shall not have come to your attention any facts that would cause you to believe
that the Prospectus, together with the applicable Prospectus Supplement, at the
time it was required to be delivered to purchasers of the Underwritten
Securities, included an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in light of
the circumstances existing at such time, not misleading.
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of Goodwin,
Procter & Hoar, LLP, counsel for the Company and the Operating
Partnership, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
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(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Maryland.
(ii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under
the laws of the State of Delaware. All of the issued and
outstanding partnership interests of the Operating Partnership
have been duly authorized and validly issued to the Company and
the entities or persons described in the Prospectus and are fully
paid. The Company is the sole general partner of the Operating
Partnership.
(iii) Each subsidiary of the Operating Partnership has
been duly organized and is validly existing as a partnership or
corporation, as the case may be, in good standing under the laws
of its state of organization.
(iv) Each of the Company, the Operating Partnership and
its subsidiaries has full corporate or partnership power and
authority, as the case may be, to own, lease and operate its
properties and to conduct its respective business as described in
the Prospectus.
(v) Each of the Company, the Operating Partnership and its
subsidiaries, respectively, is duly qualified or registered as a
foreign corporation or partnership, as the case may be, to
transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure to so qualify or to be in good standing
would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company, the Operating Partnership and
its subsidiaries considered as one enterprise.
(vi) The authorized issued and outstanding capital stock
of the Company is as set forth in the Prospectus under
"Capitalization" (as of the date set forth therein) and such
stock has been duly authorized, validly issued, fully paid and
non-assessable.
(vii) Each of this Agreement and the applicable Terms
Agreement has been duly authorized, executed and delivered by the
Company.
(viii) This Agreement has been duly authorized, executed
and delivered by the Operating Partnership.
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(ix) The Underwritten Securities being sold pursuant to
this Agreement and the applicable Terms Agreement have been duly
authorized for issuance and sale pursuant to this Agreement and
such Terms Agreement; and such Underwritten Securities, when
issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth in such Terms
Agreement or any Delayed Delivery Contract, will be validly
issued, fully paid and non-assessable, and the issuance of such
Underwritten Securities will not be subject to preemptive or
other similar rights arising out of the operation of law or, to
their knowledge, otherwise.
(x) The Registration Statement has been declared effective
under the 1933 Act and, to the best of their knowledge and
information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission.
(xi) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein, as of
their respective effective or issue dates, comply as to form in
all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations; it being understood, however, that no
opinion need be rendered with respect to the financial
statements, schedules and other financial and statistical data
included or incorporated by reference in the Registration
Statement or the Prospectus. If applicable, the Rule 434
Prospectus conforms to the requirements of Rule 434 under the
1933 Act Regulations.
(xii) Each document filed pursuant to the 1934 Act (other
than the financial statements, schedules and other financial and
statistical data included therein, as to which no opinion need be
rendered) and incorporated or deemed to be incorporated by
reference in the Prospectus complied when so filed as to form in
all material respects with the 1934 Act and the 1934 Act
Regulations.
(xiii) To their knowledge, no authorization, approval or
consent of any court or governmental authority or agency is
required that has not been obtained in connection with the
consummation by the Company, the Operating Partnership or any of
its subsidiaries of the transactions contemplated by this
Agreement and the applicable Terms Agreement except such as may
be required under the 1933 Act, the 1934
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Act and state securities laws or real estate syndication laws.
(xiv) None of the Company, the Operating Partnership or
any of its subsidiaries is required to be registered under the
Investment Company Act of 1940.
[(xv) To the best of such counsel's knowledge (A) the
following is a complete list of registration rights agreements
entered into by the Company: (1) agreement dated May 26, 1994
with Crystal Holdings Corporation; (2) agreement dated May 26,
1994 with SKW Real Estate Limited Partnership; (3) agreement
dated May 26, 1994 with Richard L. Friedman and John L. Hall II;
(4) agreement dated May 26, 1994 with certain holders of Units;
and (5) agreement dated October 27, 1994 with Wellesley Office
Realty Corp. and Federal 175 Realty Corp. (B) no persons have
exercised registration or other similar rights to have any
securities registered pursuant to the Registration Statement.]
(xvi) The Company has been organized in conformity with
the requirements for qualifications as a REIT under the Code and
the Company's method of operation will enable it to meet the
requirements for taxation as a REIT under the Code assuming it
makes a timely election to be taxed as a REIT with respect to
years ended December 31, 1994 and thereafter.
(xvii) The Underwritten Securities conform in all material
respects to the statements relating thereto contained in the
Prospectus and the form of certificate used to evidence the
Underwritten Securities is in due and proper form and complies in
all material respects with all applicable statutory requirements.
(xviii) The statements set forth in the Prospectus under
the captions "Description of Preferred Stock," "Description of
Common Stock," "Restrictions on Transfers of Capital Stock" and
"Federal Income Tax Considerations", to the extent such
statements constitute matters of law, or legal conclusions, have
been reviewed by them and are correct in all material respects.
(2) The favorable opinion, dated as of Closing Time, of Goulston
& Storrs, special counsel for the Company and the Operating Partnership,
in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
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(i) To the best of their knowledge, there are no legal or
governmental proceedings pending or threatened against the
Company, the Operating Partnership or any of its subsidiaries
which are required to be disclosed in the Prospectus, other than
those disclosed therein, and all pending legal or governmental
proceedings to which the Company, the Operating Partnership or
any of its subsidiaries is a party or of which any of the
Properties or assets of the Company, the Operating Partnership or
any of its subsidiaries is the subject which are not described in
the Prospectus, including ordinary routine litigation incidental
to the business, are, considered in the aggregate, not material.
(ii) To the best of their knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases
or other instruments required to be described or referred to in
the Registration Statement or the Prospectus or to be filed as
exhibits thereto other than those described or referred to
therein or filed as exhibits thereto other than those described
or referred to therein or filed as exhibits thereto and the
descriptions thereof or references thereto are correct in all
material respects, and, to the best of their knowledge and
information, no default exists in the due performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described, referred
to or filed.
(iii) The execution and delivery of this Agreement and the
applicable Terms Agreement and the consummation of the
transactions contemplated herein and therein and compliance by
each of the Company, the Operating Partnership or any of its
subsidiaries with its obligations hereunder and thereunder will
not conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any Property or assets of the Company, the
Operating Partnership or any of its subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, to which the
Company, the Operating Partnership or any of its subsidiaries is
a party or by which it or any of them may be bound or to which
any of the Properties or assets of the Company, the Operating
Partnership or any of its subsidiaries is subject, nor will such
action result in violation of the provisions of the charter,
by-laws, agreement of limited partnership or other organizational
documents of the Company, the Operating Partnership or any of its
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subsidiaries or any applicable law, administrative
regulation or administrative or court order or decree.
(3) The favorable opinion, dated as of Closing Time, of Brown &
Wood LLP, counsel for the Underwriters, with respect to the matters set
forth in (i), (vii) to (xiii), inclusive and (xix), of subsection
(b)(1).
(4) In giving their opinions required by subsections (b)(1),
(b)(2) and (b)(3), respectively, of this Section, Goodwin, Procter &
Hoar, LLP, Goulston & Storrs and Brown & Wood LLP shall each
additionally state that nothing has come to their attention that would
lead them to believe that the Registration Statement or any amendment
thereto, (except for financial statements and schedules and other
financial and statistical data, as to which counsel need make no
statement) at the time it became effective (or, if an amendment to the
Registration Statement or an Annual Report on Form 10-K has been filed
by the Company with the Commission, subsequent to the effectiveness of
the Registration Statement, then at the time such amendment becomes
effective or at the time of the most recent filing of such Annual
Report, as the case may be) or at the Representation Date, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus or any
amendment or supplement thereto, (except for financial statements and
schedules and other financial and statistical data, as to which such
counsel need make no statement) at the Representation Date or at Closing
Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. In giving their opinions required by
subsections (b)(1), (b)(2) and (b)(3), respectively, of this Section,
Goodwin, Procter & Hoar, LLP, Goulston & Storrs and Brown & Wood LLP may
rely, (1) as to all matters of fact, upon certificates and written
statements of officers and employees of and accountants for the Company
and Operating Partnership, (2) with respect to certain other matters,
upon certificates of appropriate government officials in such
jurisdiction, and (3) Brown & Wood LLP may additionally rely, as to
matters involving the laws of the State of Maryland, upon the opinion of
Goodwin, Procter & Hoar, LLP (or other counsel reasonably satisfactory
to counsel for the Underwriters) in form and substance satisfactory to
counsel for the Underwriters.
(c) At Closing Time, there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates
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as of which information is given in the Prospectus, any material adverse change
in the condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise, or the Properties, collectively,
whether or not arising in the ordinary course of business, from that set forth
in the Prospectus; no proceedings shall be pending or, to the knowledge of the
Company or Operating Partnership, threatened against the Company, the Operating
Partnership or any of its subsidiaries or any of the Properties before or by any
Federal, state or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding would materially and adversely affect
the business, property, financial condition or income of the Company, the
Operating Partnership and its subsidiaries considered as one enterprise or the
Properties, collectively, other than as set forth in the Prospectus or
incorporated therein by reference; and you shall have received a certificate of
the President and Chief Executive Officer and of the Chief Financial Officer of
the Company in such capacity, and of the general partner of the Operating
Partnership, dated as of such Closing Time, to the effect that (i) there has
been no such material adverse change and (ii) the representations and warranties
in Section 1 are true and correct with the same force and effect as though such
Closing Time were a Representation Date. As used in this Section 5(c), the term
"Prospectus" means the Prospectus in the form first used to confirm sales of the
Underwritten Securities.
(d) At the time of execution of the applicable Terms Agreement, you
shall have received a letter dated such date from Coopers & Lybrand L.L.P., in
form and substance satisfactory to you, to the effect that (i) they are
independent public accountants with respect to the Company and the Predecessor
within the meaning of the 1933 Act and the 1933 Act Regulations thereunder; (ii)
it is their opinion that the financial statements and financial statement
schedules included or incorporated by reference in the Registration Statement
and the Prospectus and covered by their opinions therein comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations; (iii) they have performed limited procedures,
not constituting an audit, including a reading of the latest available interim
financial statements of the Company, a reading of the minute books of the
Company, inquiries of officials of the Company who have responsibility for
financial and accounting matters and such other inquiries and procedures as may
be specified in such letter, and on the basis of such limited review and
procedures (which shall include, without limitation, the procedures specified by
the American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial Information,
with respect to the unaudited condensed consolidated financial
26
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statement of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement), nothing has come to their attention
which causes them to believe (A) that any material modifications should be made
to the unaudited condensed financial statements of the Company included in the
Registration Statement for them to be in conformity with generally accepted
accounting principles or that such unaudited financial statements do not comply
as to form in all material respects with the applicable accounting requirements
of the 1934 Act and the 1934 Act Regulations, (B) the unaudited financial data
of the Company included or incorporated by reference in the Registration
Statement and the Prospectus under the caption "Selected Financial Information"
was not determined on a basis substantially consistent with that used in
determining the corresponding amounts in the audited financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus, (C) the pro forma financial information included or incorporated by
reference in the Registration Statement was not prepared in accordance with the
requirements of the 1933 Act and the 1933 Act Regulations or that the pro forma
financial information included in or incorporated by reference in the
Registration Statement and the Prospectus has not been properly applied to the
historical amounts in the compilation of those statements, and (D) at a
specified date not more than three days prior to the date of the applicable
Terms Agreement, there has been any change in the capital stock of the Company
or any increase in the debt of the Company or any decrease in the net assets of
the Company, as compared with the amounts shown in the most recent consolidated
balance sheet included or incorporated by reference in the Registration
Statement and the Prospectus or, during the period from the date of the most
recent consolidated statement of operations included or incorporated by
reference in the Registration Statement and the Prospectus to a specified date
not more than three days prior to the date of the applicable Terms Agreement,
there were any decreases, as compared with the corresponding period in the
preceding year, in consolidated revenues, operating income, funds from
operations, net income or net income per share of the Company, except in all
instances for changes, increases or decreases which the Registration Statement
and the Prospectus disclose have occurred or may occur; and (iv) in addition to
the examination referred to in their opinion and the limited procedures referred
to in clause (iii) above, they have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts, percentages and
financial information which are included or incorporated by reference in the
Registration Statement and Prospectus and which are specified by you, and have
found such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of the Company
identified in such letter.
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(e) At Closing Time, you shall have received a letter, dated as of
Closing Time, from Coopers & Lybrand L.L.P. to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At the time of the execution of the applicable Terms Agreement, you
shall have received a letter dated such date from such independent accountants
that have prepared historical financial statements included in or incorporated
by reference into the Registration Statement and Prospectus which financial
statements relate to properties or assets acquired or to be acquired by the
Company, in form and substance satisfactory to the Underwriters, to the effect
that (i) they are independent accountants with respect to the Company and such
properties or assets within the meaning of the 1933 Act and the 1933 Act
Regulations; and (ii) it is their opinion that the historical financial
statements for such properties or assets that have been audited by them and
covered by their opinions included or incorporated by reference into the
Registration Statement and the Prospectus comply in form in all material
respects with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations.
(g) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Underwritten Securities, as herein contemplated shall be reasonably satisfactory
in form and substance to you and counsel for the Underwriters.
(h) In the event that the Underwriters exercise their option provided in
a Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company and the Operating Partnership contained herein and the statements in any
certificates furnished by the Company and the Operating Partnership hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, you shall have received:
(1) A certificate, dated such Date of Delivery, of the President
and Chief Executive Officer or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company on behalf
of the Company and on behalf of the Company in its capacity as general
partner of
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the Operating Partnership confirming that the certificate delivered at
the Closing Time pursuant to Section 5(c) hereof remains true and
correct as of such Date of Delivery.
(2) The favorable opinion of Goodwin, Procter & Hoar, LLP,
counsel for the Company and the Operating Partnership, in form and
substance reasonably satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the opinion
required by Sections 5(b)(1) and 5(b)(4) hereof.
(3) The favorable opinion of Goulston & Storrs special counsel
for the Company and the Operating Partnership in form and substance
reasonably satisfactory to counsel for the Underwriters, dated such Date
of Delivery, relating to the Option Shares and otherwise to the same
extent as the opinion required by Sections 5(b)(2) and 5(b)(4) hereof.
(4) The favorable opinion of Brown & Wood LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Sections 5(b)(3) and 5(b)(4)
hereof.
(5) A letter from Coopers & Lybrand L.L.P., in form and substance
satisfactory to you and dated such Date of Delivery, substantially the
same in scope and substance as the letter furnished to you pursuant to
Section 5(d) hereof, except that the "specified date" in the letter
furnished pursuant to this Section 5(h)(5) shall be a date not more than
three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, the applicable Terms Agreement may be
terminated by you by notice to the Company at any time at or prior to the
Closing Time or Date of Delivery, as the case may be, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof.
Section 6. Indemnification. (a) The Company and the Operating
Partnership, jointly and severally, hereby agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be
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part of the Registration Statement pursuant to Rule 430A(b) or Rule 434
of the 1933 Act Regulations, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (or any amendment or supplement thereto) or
the omission, or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the indemnifying party; and
(3) against any and all expense whatsoever (including, the
reasonable fees and disbursements of counsel chosen by you) reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceedings by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid
under (1) or (2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) and the Prospectus (or any amendment or supplement thereto);
and provided, further, that neither the Company nor the Operating Partnership
will be liable to any Underwriter or any person controlling such Underwriter
with respect to any untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus which is corrected in the Prospectus
(or any amendment or supplement thereto) if the Company or the Operating
Partnership sustains the burden of proving that such Underwriter sold
Underwritten Securities to the person asserting any such loss, claim, damage or
liability without sending or giving, at or prior to the written confirmation of
the sale of such Underwritten Securities to such person, a copy of the
Prospectus (or any
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amendment or supplement thereto), if the Company had previously furnished copies
thereof to such Underwriter.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company and the Operating Partnership, the directors, each of the officers who
signed the Registration Statement and each person, if any, who controls the
Company or the Operating Partnership within the meaning of Section 15 of the
1933 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or any preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may assume the defense of such action with counsel chosen by it and
approved by the indemnified parties defendant in such action, unless such
indemnified parties reasonably object to such assumption on the ground that
there may be legal defenses available to them which are different from or in
addition to those available to such indemnifying party. If an indemnifying party
assumes the defense of such action, the indemnifying parties shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
(d) For purposes of this Section 6, all references to the Registration
Statement, any preliminary prospectus or the Prospectus, or any amendment or
supplement to any of the foregoing, shall be deemed to include, without
limitation, any electronically transmitted copies thereof, including, without
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limitation, any copies filed with the Commission pursuant to EDGAR.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Operating
Partnership and the Underwriters with respect to the offering of the
Underwritten Securities shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, the Operating Partnership and one or more of
the Underwriters in respect of such offering, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus in respect of such offering bears to the initial public offering
price appearing thereon and the Company and the Operating Partnership are
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Underwritten Securities
purchased by it pursuant to the applicable Terms Agreement and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Operating Partnership within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company and the Operating
Partnership, respectively. The Underwriter's obligations to contribute pursuant
to this Section 7 are several in proportion to their respective underwriting
commitments and not joint. For purposes of this Section 7, the Company, the
Operating Partnership and its subsidiaries shall be deemed one party jointly and
severally liable for any obligations hereunder.
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Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or the applicable Terms Agreement, or contained in certificates of
officers of the Company and the Operating Partnership submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
termination of this Agreement or the applicable Terms Agreement, or
investigation made by or on behalf of any Underwriter or any controlling person,
or by or on behalf of the Company or the Operating Partnership, and shall
survive delivery of and payment for the Underwritten Securities.
Section 9. Termination of Agreement. (a) This Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company, the Operating Partnership or by you upon the giving of 30 days' written
notice of such termination to the other parties hereto.
(b) You may also terminate the applicable Terms Agreement, by notice to
the Company, at any time at or prior to the Closing Time (i) if there has been,
since the date of such Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, the Operating Partnership and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or any outbreak of
hostilities or escalation thereof or other calamity or crisis the effect of
which on the financial markets of the United States is such as to make it, in
your judgment, impracticable to market the Underwritten Securities or enforce
contracts for the sale of the Underwritten Securities, or (iii) if trading in
any of the securities of the Company has been suspended or limited by the
Commission, or the New York Stock Exchange, or if trading generally on either
the New York Stock Exchange or the American Stock Exchange has been suspended,
or minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said exchanges or by
order of the Commission or any other governmental authority, or if a banking
moratorium has been declared by Federal or New York authorities. As used in this
Section 9(b), the term "Prospectus" means the Prospectus in the form first used
to confirm sales of the Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set forth in
Section 3 with respect to any offering of Underwritten Securities shall remain
in effect so long as any Underwriter owns any such Underwritten Securities
purchased from the Company pursuant to the applicable Terms Agreement and (y)
the covenant set forth in Section 3(h) hereof, the provisions of
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Section 4 hereof, the indemnity and contribution agreements set forth in
Sections 6 and 7 hereof, and the provisions of Sections 8 and 13 hereof shall
remain in effect.
Section 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at the Closing Time to purchase the Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted Securities"), then you shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, you shall not have completed such
arrangements within such 24-hour period, then:
(a) if the total number of Defaulted Securities does not exceed 10% of
the total number of Underwritten Securities to be purchased pursuant to such
Terms Agreement, the non-defaulting Underwriters named in such Terms Agreement
shall be obligated, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of the total
number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination
of the applicable Terms Agreement, either you or the Company shall have the
right to postpone the Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
Section 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed c/o Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Merrill Lynch World Headquarters, North Tower,
World Financial Center, New York, New York 10281-1305, attention of John Brady,
Managing Director; and notices to the Company and the Operating Partnership
shall be directed to them at Beacon Properties Corporation, 50 Rowes Wharf,
Boston, Massachusetts 02110, attention of Alan M. Leventhal, President.
34
<PAGE>
Section 12. Parties. This Agreement and the applicable Terms Agreement
shall each inure to the benefit of and be binding upon you and the Company, the
Operating Partnership and any Underwriter who becomes a party to such Terms
Agreement, and their respective successors. Nothing expressed or mentioned in
this Agreement or the applicable Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than those referred to
in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or such
Terms Agreement or any provision herein or therein contained. This Agreement and
the applicable Terms Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the parties
hereto and thereto and their respective successors and said controlling persons
and officers and directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No purchaser of
Underwritten Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement and the
applicable Terms Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
agreements made and to be performed in said State. Specified
times of day refer to New York City time.
Section 14. Counterparts. This Agreement and the
applicable Terms Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart the
executed counterparts shall constitute a single instrument.
35
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts will become a binding agreement between
you, the Company and the Operating Partnership in accordance with its terms.
Very truly yours,
BEACON PROPERTIES L.P.
By: ------------------------------------
Name: Alan M. Leventhal
Title: President
BEACON PROPERTIES CORPORATION
By: Beacon Properties Corporation
(its general partner)
By: -----------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first
above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: --------------------------
Authorized Signatory
36
<PAGE>
Exhibit A
BEACON PROPERTIES CORPORATION
(a Maryland Corporation)
[Title of Securities]
TERMS AGREEMENT
Dated: , 199_
To: BEACON PROPERTIES CORPORATION
50 Rowes Wharf
Boston, Massachusetts 02110
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Representative") understand that Beacon Properties Corporation,
a Maryland corporation (the "Company"), proposes to issue and sell the number of
shares of its Common Stock, $.01 par value (such Common Stock being hereinafter
referred to as the "Underwritten Securities"). Subject to the terms and
conditions set forth or incorporated by reference herein, the underwriters named
below (the "Underwriters") offer to purchase, severally and not jointly, the
respective numbers of Initial Underwritten Securities (as defined in the
Underwriting Agreement referenced to below) set forth below opposite their
respective names, and a proportionate share of Option Securities (as defined in
the Underwriting Agreement referred to below) to the extent any are purchased)
at the purchase price set forth below.
A-1
<PAGE>
Number of Shares
of Initial
Underwritten Securities
Underwriter
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
----------
----------
Total $
==========
A-2
<PAGE>
The Underwritten Securities shall have the following terms:
Title of Securities:
Number of Shares:
Public offering price per share: $
Purchase price per share: $
Number of Option Securities, if any, that may be purchased by the Underwriters:
Delayed Delivery Contracts: [authorized] [not authorized]
[Date of Delivery:
Minimum Contract:
Maximum number of Shares:
Fee: ]
Additional co-managers, if any:
Other terms:
Closing date and location:
All the provisions contained in the document attached as Annex A hereto
entitled "Beacon Properties Corporation - Common Stock - Underwriting Agreement"
are hereby incorporated by reference in their entirety herein and shall be
deemed to be a part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Terms defined in such document are
used herein as therein defined.
A-3
<PAGE>
Please accept this offer no later than o'clock P.M. (New York City
time) on by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
-----------------------------------------
Acting on behalf of itself and the other
named Underwriters.
Accepted:
BEACON PROPERTIES CORPORATION
By
---------------------------------
Name:
Title:
A-4
<PAGE>
Exhibit B
BEACON PROPERTIES CORPORATION
(a Maryland corporation)
[Title of Securities]
DELAYED DELIVERY CONTRACT
, 199_
Beacon Properties Corporation
50 Rowes Wharf
Boston, Massachusetts 02110
Attention: Chairman of the Board of Directors
Dear Sirs:
The undersigned hereby agrees to purchase from Beacon Properties
Corporation (the "Company"), and the Company agrees to sell to the undersigned
on __________, 19__ (the "Delivery Date"),
of the Company's [insert title of security] (the "Securities"), offered by the
Company's Prospectus dated __________, 19__, as supplemented by its Prospectus
Supplement dated ___________, 19__, receipt of which is hereby acknowledged at a
purchase price of [$__________] to the Delivery Date, and on the further terms
and conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to purchase
on the Delivery Date shall be made to the Company or its order by certified or
official bank check in New York Clearing House funds at the office of
, on the Delivery Date, upon delivery
to the undersigned of the Securities to be purchased by the undersigned in
definitive form and in such denominations and registered in such names as the
undersigned may designate by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date shall be subject only to the conditions that
(1) the purchase of Securities to be
B-1
<PAGE>
made by the undersigned shall not on the Delivery Date be prohibited under the
laws of the jurisdiction to which the undersigned is subject and (2) the
Company, on or before __________, 19__, shall have sold to the Underwriters of
the Securities (the "Underwriters") such principal amount of the Securities as
is to be sold to them pursuant to the Terms Agreement dated __________, 19__
between the Company and the Underwriters. The obligation of the undersigned to
take delivery of and make payment for Securities shall not be affected by the
failure of any purchaser to take delivery of and make payments for Securities
pursuant to other contracts similar to this contract. The undersigned represents
and warrants to you that its investment in the Securities is not, as of the date
hereof, prohibited under the laws of any jurisdiction to which the undersigned
is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the
Company that all necessary corporate action for the due execution and delivery
of this contract and the payment for and purchase of the Securities has been
taken by it and no further authorization or approval of any governmental or
other regulatory authority is required for such execution, delivery, payment or
purchase, and that, upon acceptance hereof by the Company and mailing or
delivery of a copy as provided below, this contract will constitute a valid and
binding agreement of the undersigned in accordance with its terms.
This contract will inure to the benefit of and binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for a number of Securities in excess of ________ and that the
acceptance of any Delayed Delivery Contract is in the Company's sole discretion
and, without limiting the foregoing, need not be on a first-come, first-served
basis. If this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance on a copy hereof and mail or deliver a
signed copy hereof to the undersigned at its address set forth below. This will
become a binding contract between the Company and the undersigned when such copy
is so mailed or delivered.
B-2
<PAGE>
This Agreement shall be governed by the laws of the State of New York.
Yours very truly,
-----------------------------
(Name of Purchaser)
By
---------------------------
(Title)
-----------------------------
-----------------------------
(Address)
Accepted as of the date first above written.
BEACON PROPERTIES CORPORATION
By
-----------------------------
(Title)
PURCHASER-PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date may be discussed are as
follows: (Please print.)
Telephone No.
(including
Name Area Code)
B-3
OPTION AGREEMENT
This OPTION AGREEMENT (this "Agreement") is made as of the 18th day of
March, 1996 between John Marshall Associates Limited Partnership, a Virginia
limited partnership, with an address of c/o Goelet Realty Company, Three
Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware
19801, Greensboro Associates Limited Partnership, a Virginia limited
partnership, with an address of c/o Goelet Realty Company, Three Christine
Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801,
Woodland-Northridge I Limited Partnership, a Virginia limited partnership, with
an address of c/o Goelet Realty Company, Three Christine Centre, 201 North
Walnut Street, Suite 1002, Wilmington, Delaware 19801, Pimpernell Estates
Limited Partnership, a Virginia limited partnership, with an address of c/o
Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite
1002, Wilmington, Delaware 19801 and Goodridge Drive Associates Limited
Partnership, a Virginia limited partnership, with an address of c/o Goelet
Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002,
Wilmington, Delaware 19801, (the foregoing five (5) partnerships, individually
or collectively, "Seller"), and Beacon Properties, L.P., a Delaware limited
partnership, with an address of 50 Rowes Wharf, Boston, Massachusetts 02110
(together with its successors and assigns, "Buyer").
WITNESSETH:
WHEREAS, Seller is the owner of the real property with the buildings and
improvements located thereon in Fairfax County, Virginia, and commonly known as
described in Exhibit A attached hereto and incorporated herein, together with
any and all property, rights and easements related thereto, including, without
limitation, all appurtenant rights in any offsite improvements or amenities
servicing such real property, buildings and improvements (collectively, the
"Premises");
WHEREAS, Seller desires to grant to Buyer, and Buyer desires to obtain, an
irrevocable option to acquire the Premises;
WHEREAS, Seller is the owner of the real property with the buildings and
improvements located thereon in Fairfax County, Virginia, and more particularly
described in Exhibit B attached hereto and incorporated herein, together with
any and all property, rights and easements related thereto (collectively, the
"Additional Option Premises");
WHEREAS, if Buyer acquires the Premises, Seller desires to grant to Buyer,
and Buyer desires to obtain, an irrevocable option to acquire the Additional
Option Premises;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, Seller and Buyer hereby
agree as follows:
<PAGE>
1. Grant and Exercise of Option. Seller hereby gives and grants to
Buyer an irrevocable option to acquire the Premises (the "Option"), upon the
terms, covenants, conditions and provisions set forth in this Agreement. The
Option may be exercised by Buyer's giving written notice of Buyer's exercise to
Seller within the period commencing on the thirtieth (30th) day from the date of
this Agreement and ending on the sixtieth (60th) day from the date of this
Agreement (the date on which the Option is exercised, the "Option Exercise
Date"). The notice of exercise of the Option by Buyer shall be accompanied by,
and the effective exercise of the Option shall be conditioned upon, delivery to
Commonwealth Land Title Insurance Company (the "Title Company") of One and One
Half Million Dollars ($1,500,000) (together with all interest earned thereon,
the "Additional Deposit") to be held in escrow in accordance with terms of this
Agreement and the Escrow Agreement dated the date hereof among the Title
Company, Seller and Buyer (the "Escrow Agreement"). The notice of exercise of
Option shall also set a day and hour (the "Closing Date"), not less than thirty
(30) days nor more than sixty (60) days after the date such notice is given, for
consummation of the conveyance of the Premises as contemplated by this Agreement
(the "Closing"). The Closing shall occur at the offices of Shearman and
Sterling, 801 Pennsylvania Avenue, N.W., Washington, D.C. 20004-2604, unless the
parties shall agree in writing upon another place. Failure of Buyer to timely
exercise the Option or to so deposit the Additional Deposit shall render the
Option null and void and of no further force or effect. Time shall be of the
essence of this Agreement.
2. Conveyance. At Closing, the Premises shall be conveyed to Buyer,
as a contribution to the capital of Buyer, by good and sufficient special
warranty deeds (collectively, the "Deeds") conveying good and clear record and
marketable title to the Premises, free and clear of all restrictions, liens,
encumbrances, rights, title and interest in others, whether or not of record,
except for (i) real estate taxes for the then current fiscal year not due and
payable on the date of delivery of the Deeds, (ii) any liens for municipal
betterments assessed after the date hereof, (iii) rights of tenants under the
Leases (as defined below), as tenants only in the case of all Leases other than
the Leases to SAIC of the Premises known as SAIC I and the Additional Option
Premises known as SAIC II, (iv) the Assumed Indebtedness, (v) such other
exceptions as are of record as of the Option Exercise Date and which do not
secure or evidence indebtedness or other amounts owing or claimed to be owing by
Seller other than the Assumed Indebtedness, including, without limitation, those
exceptions set forth on Exhibit M attached hereto and incorporated herein, and
(vi) matters which are the direct responsibility of tenants under Leases
(collectively, the "Permitted Encumbrances"). Seller agrees that, from and after
the Option Exercise Date through and including the Closing Date (the "Interim
Period"), there shall not be created, and Seller shall not permit or suffer to
exist, any new restrictions, liens, encumbrances, rights, title or interests in
others on all or any portion of the Premises, except for matters which are the
direct responsibility of tenants under Leases. Any clauses included in this
Agreement relating to the content of the Deeds, if omitted from the Deeds, shall
be deemed to survive the Closing, and Seller will give appropriate confirmatory
instruments to Buyer at any time or from time to time thereafter. The
immediately preceding sentence shall survive the Closing.
2
<PAGE>
3. Consideration. The total consideration (the "Consideration") to
be delivered to Seller for the Deeds and conveyance shall consist of limited
partner interests in Buyer ("OP Units") having a value, calculated as provided
below, equal to (i) the sum of all "Values" set forth with respect to the
Premises on Exhibit C attached hereto and incorporated herein, minus (ii) the
sum of all "Assumed Indebtedness" set forth with respect to the Premises on
Exhibit C (as reduced by regularly scheduled principal payments from the date of
this Agreement through the Closing Date). For purposes of determining the number
of OP Units to be delivered in satisfaction of payment of the Consideration, the
Consideration shall be calculated on the basis of an "Average Price" equal to
the average closing price on the NYSE of the common stock, $.01 par value, of
Beacon Properties Corporation, the general partner of Buyer, for each trading
day occurring during the thirty (30) consecutive calendar days commencing on the
first (1st) business day immediately following the date of this Agreement. The
number of OP Units to be issued in the name of each partnership comprising
Seller shall be as set forth in a schedule to be prepared by Seller and provided
to Buyer no later than fifteen (15) days prior to the Closing Date. Upon
Closing, the Deposit shall be returned to Buyer, and Buyer shall assume, or on
or after Closing repay, the outstanding balance of principal and interest on the
Assumed Indebtedness, as Buyer so elects. Buyer agrees to pay to the holder of
the Assumed Indebtedness on the John Marshall I Premises an amount not to exceed
$215,171 on account of an assumption or prepayment fee relating to such Assumed
Indebtedness, and if such prepayment or assumption fee is less than such amount,
Buyer agrees to pay the legal fees, title fees and other closing costs required
by the holder of such Assumed Indebtedness in connection with such prepayment or
assumption to the extent such legal, title and other fees, when taken together
with such prepayment fee, do not exceed in the aggregate $215,171. Buyer agrees
to pay to the holder of the Assumed Indebtedness on the SAIC I Premises a
prepayment or assumption fee not to exceed $1,400,000 on account of the
prepayment or assumption of such Assumed Indebtedness, and if such prepayment or
assumption fee is less than such amount, Buyer agrees to pay the legal fees,
title fees and other closing costs required by the holder of such Assumed
Indebtedness in connection with such prepayment or assumption to the extent such
legal, title and other fees, when taken together with such prepayment fee, do
not exceed in the aggregate $1,400,000. Seller agrees to pay all other
prepayments, due on sale or assumption fees and similar amounts, if any, payable
to holders of the Assumed Indebtedness in connection with the transfer of the
Premises to Buyer subject to the Assumed Indebtedness and the assumption of the
Assumed Indebtedness or the repayment of the Assumed Indebtedness in connection
therewith and, except as provided above with respect to John Marshall I and SAIC
I, Seller and Buyer each agree to pay fifty percent (50%) of all legal fees,
title fees and other closing costs required by the holders of Assumed
Indebtedness in connection with the assumption or prepayment thereof. Seller
agrees to cooperate with Buyer in accomplishing the assumption or payoff of the
Assumed Indebtedness, as elected by Buyer, including, without limitation, by
using diligent efforts to obtain payoff letters, confirmations and other
agreements reasonably requested by Buyer from the holders of the Assumed
Indebtedness, in each case in form and substance reasonably satisfactory to
Buyer.
3
<PAGE>
4. Deposit. Simultaneously with the execution and delivery of this
Agreement, Buyer shall deliver to the Title Company the amount of Five Hundred
Thousand Dollars ($500,000.00) (together with all interest earned thereon, the
"Initial Deposit"), to be held in escrow in accordance with the terms of this
Agreement and the Escrow Agreement. The Initial Deposit and the Additional
Deposit (collectively, the "Deposit") shall be held by the Title Company, as
escrow agent, in a segregated, interest-bearing account at The First National
Bank of Boston or other bank acceptable to Buyer and Seller and subject to and
otherwise in accordance with the terms of this Agreement and the Escrow
Agreement. The Deposit shall be delivered as provided in this Agreement and the
Escrow Agreement.
5. Termination. Buyer shall have the right, in its sole discretion,
to terminate this Agreement at any time on or before the Option Exercise Date.
Additionally, Buyer shall have the right, in its sole discretion, at any time
following any Event of Default (as hereinafter defined) under this Agreement, or
upon the failure of any condition precedent to Buyer's obligations under this
Agreement, to terminate this Agreement. Upon any such termination, the Deposit
shall immediately be refunded to Buyer, and, except as provided below in this
Section, the rights and obligations of each of the parties to this Agreement
shall cease and terminate and none of such parties shall have further liability
under this Agreement, except as otherwise expressly provided in this Agreement.
Upon any termination of this Agreement by Buyer following (i) an Event of
Default or (ii) failure of a condition precedent to Buyer's obligations under
this Agreement due to any intentional act or omission (where Seller has an
obligation or duty to act) of Seller, in addition to its right to receive the
Deposit, Buyer shall retain all of its rights at law and in equity. "Event of
Default" means any failure by Seller to perform any of its obligations under
this Agreement, which failure has not been cured, subject to the terms of this
Section below, on or before six (6) business days following delivery of written
notice thereof by Buyer (the "Cure Date"). If the Cure Date would occur after
the scheduled Closing Date, the Closing Date shall be extended, but only once,
to the first (1st) business day following the Cure Date, and Buyer shall retain
all of its rights under this Section with respect to the applicable Event of
Default. This provision shall survive Closing or termination of this Agreement.
6. Buyer's Review. Buyer, its authorized representatives, its agents
and its employees shall have the right to conduct any and all due diligence
relative to the Premises as may be deemed necessary or appropriate by Buyer in
its sole discretion. Without limiting the foregoing, Buyer shall have the right
to request copies of any and all materials and documents relating to all or any
portion of the Premises, including, without limitation, Leases, management
agreements, service and other contracts, financial reports, Rent Rolls (as
defined below), Permits (as defined below) and other similar or dissimilar
materials. Seller shall promptly, and in any event within five (5) days of
Buyer's request therefor, deliver or make available at the offices of The Evans
Company in McLean, Virginia to Buyer true, correct and complete copies of any
requested material in the possession of Seller or under Seller's control and all
of Seller's other materials, files, books, records and information relating to
the Premises, in each case to the extent such materials, files, books, records,
and information are
4
<PAGE>
not subject to confidentiality agreements prohibiting their disclosure to Buyer.
Buyer shall have the right to photocopy any or all of such materials, files,
books, records and information at Buyer's expense. Entry onto the Premises shall
be subject to the terms of Section 7. Buyer shall have the right to interview
tenants under Leases in the performance of its due diligence on the Premises.
7. Tests and Inspections. Seller hereby authorizes Buyer, its
authorized representatives, its agents and its employees, subject to the rights
of tenants under Leases, to enter upon the Premises from time to time and to
perform such tests and inspections as Buyer deems necessary or appropriate in
its sole discretion, including, without limitation, such soil boring and
compacting tests, test well and water table, soil porosity and liquid absorption
tests, other environmental inspections and tests, and engineering tests. Seller
agrees to cooperate with Buyer and use reasonable efforts to obtain access for
Buyer to all or any portion of the Premises requested by Buyer. Following such
tests, Buyer shall restore the Premises to the condition they were in
immediately prior to such tests. All expenses for such tests, inspections and
restoration shall be the responsibility of Buyer. Any entry by Buyer onto the
Premises in connection with its due diligence shall not unreasonably interfere
with the rights of tenants under Leases. Buyer agrees to indemnify and hold
Seller harmless from and against any and all loss or liability incurred by
Seller on account of any bodily injury or property damage caused by Buyer in
connection with such tests or inspections or restoration. This obligation to
restore and indemnify shall survive the Closing or termination of this
Agreement.
8. Estoppel Certificates and Subordination, Nondisturbance and
Attornment Agreements. Upon Buyer's request at any time after the Option
Exercise Date, Seller shall use diligent and good faith efforts to obtain from
those tenants or other occupants of the Premises requested by Buyer estoppel
certificates and subordination, nondisturbance and attornment agreements, in
form and substance reasonably satisfactory to Buyer. It shall be a condition
precedent to Buyer's obligations under this Agreement that Buyer shall have
received, no later than ten (10) days prior to Closing, such estoppel
certificates and subordination, nondisturbance and attornment agreements from
all Major Tenants (as defined below) and tenants (which may include such Major
Tenants) under Leases providing in the aggregate at least eighty-five percent
(85%) of the gross rental income of the Premises (such Major Tenants and
tenants, collectively, the "Required Tenants"), in each case which estoppel
certificates shall be dated no more than thirty (30) days prior to Closing and
which subordination, nondisturbance and attornment agreements shall be dated no
more than forty five (45) days prior to Closing. "Major Tenants" means,
collectively, Booz Allen Hamilton, Reed Smith, The Evans Company, Legg Mason,
SAIC and U.S. Sprint. An estoppel certificate covering the items required under
each Lease shall be deemed to be in form reasonably satisfactory to Buyer,
subject, however, to the reasonable additional requirements of any lender to
Buyer. Notwithstanding the foregoing, if Seller cannot obtain from SAIC or Legg
Mason a tenant estoppel certificate which, in addition to the other foregoing
requirements, meets the additional reasonable requirements of any lender to
Buyer,
5
<PAGE>
Seller shall have the right to provide an estoppel certificate executed by it in
satisfaction of such additional reasonable requirements.
9. Partnership Agreement; Admission. Buyer represents and warrants
to Seller that attached hereto as Exhibit D and incorporated herein is a true
and complete copy of the limited partnership agreement of Buyer in effect as of
the date of this Agreement (the "Partnership Agreement"). Upon Closing, the
general partner of Buyer (i) shall consent to the admission of each partnership
comprising Seller as a limited partner in Buyer and (ii) shall, upon execution
and delivery by each such partnership of an amendment to the Partnership
Agreement providing for the acceptance of the OP Units to be delivered to it
pursuant to the terms of this Agreement and containing an agreement to be bound
by all terms and conditions of the Partnership Agreement, the Schedule of
"Nonrecourse Built-in Gain" referred to in Section 11 and a Schedule showing the
"Value" of each Premises set forth in Exhibit C as the "704(c) Value" of such
Premises for purposes of the Partnership Agreement, in form and substance
reasonably satisfactory to Buyer (the "Amendment"), add the name of each such
partnership as a limited partner to the books and records of Buyer. Buyer agrees
that no other documentation shall be required to effect such admission pursuant
to the Partnership Agreement, unless required by any Law (as hereinafter
defined) or interpretation thereof becoming effective after the date hereof, and
Buyer agrees to take the actions required of it pursuant to Section 4.4 of the
Partnership Agreement in respect of the contribution to be made by Seller. The
Amendment shall also provide that Buyer shall use any convention permitted by
law and selected by the general partner of Buyer to make the allocations
contemplated in Section 12.2(C) of the Partnership Agreement in respect of the
conveyance to be made pursuant to this Agreement, except that capital gains and
losses shall be allocated to the partners in accordance with their interests on
the date of the transaction giving rise to the capital gain or loss, and shall
use the traditional method (specified in Regulation ss.1.704-3(b)) to allocate
book-tax differences with respect to the contribution of the Premises to Buyer.
Buyer agrees not to amend the Partnership Agreement from the date of this
Agreement through the Closing Date without the consent of Seller to the extent
any such amendment would otherwise require Seller's consent if Seller were a
limited partner in Buyer. The general partner of Buyer agrees not to amend its
articles of incorporation in a manner which would materially, adversely affect
the rights of Seller as limited partner in Buyer but not other holders of
limited partnership interests in Buyer. The general partner of Buyer shall use
good faith efforts to remain a REIT until the fifth (5th) anniversary of the
Closing Date. This provision shall survive Closing.
10. Seller's Representations, Warranties and Certain Covenants.
Each Seller represents and warrants to Buyer, but only with respect to its
portion of the Premises, that the following matters are true on the date of this
Agreement and, to the extent set forth below, shall be true on the Option
Exercise Date and, unless otherwise expressly
6
<PAGE>
indicated, shall, as a condition precedent to Buyer's obligations under this
Agreement, be true as of the Closing Date and, unless actually known to be
untrue by Buyer on the Option Exercise Date, deemed remade as of such dates, and
each Seller covenants as follows:
(a) Title. To the best of Seller's knowledge, Seller is the
legal fee simple titleholder of the portion of the Premises set forth opposite
its name in Exhibit A and has, and will on the Option Exercise Date have, good,
marketable and insurable title to such portion of the Premises. The
representation and warranty set forth in the immediately preceding sentence
shall not survive the Closing.
(b) Defaults. To the best of Seller's knowledge, except as set
forth in Exhibit E, Seller is not in monetary or material nonmonetary default
under any document, including, without limitation, any document executed in
connection with any Assumed Indebtedness, recorded or unrecorded, encumbering or
affecting its portion of the Premises, nor has Seller received any written
notice alleging the existence of any such default. To the best of Seller's
knowledge, except as set forth in Exhibit E, Seller is not in material default
under any Permit, Law or other requirement applicable to or encumbering its
portion of the Premises, nor has Seller received any written notice alleging the
existence of any such default. To the extent Seller obtains a duly authorized
and executed estoppel certificate meeting the requirements of Section 8 from a
tenant under a Lease certifying that Seller is not in monetary or material
nonmonetary default under its Lease, Seller shall not be deemed to remake as of
the Closing Date, nor shall the same survive Closing, such portion of the
representations and warranties contained in this item (b) as are so certified by
such tenant.
(c) Contracts; Continuing Obligations. Seller agrees to
terminate prior to Closing, at its own expense, all management agreements, and
service, maintenance and repair contracts affecting its portion of the Premises.
There shall be no such agreements or other contractual obligations with respect
to all or any portion of Seller's portion of the Premises that are binding on
Buyer or Seller's portion of the Premises following Closing, other than the
Leases, the Permitted Encumbrances, the Permits and other documents executed in
connection with the foregoing, copies of all of which have been delivered, or
made available in the offices of The Evans Company in McLean, Virginia, to Buyer
in accordance with the terms of Section 6.
(d) Physical Condition. Seller has no knowledge of any
existing defect in any structural component or system of Seller's portion of
the Premises (i) that would not be readily discoverable upon customary physical
inspection and (ii) that would require the expenditure of more than $250,000 to
permit the continued use, occupancy or operation of Seller's portion of the
Premises consistent in all material respects with prior usage, occupancy or
operations and in accordance in all material respects with all applicable Laws.
(e) Compliance with Laws and Codes. Except as set forth in
Exhibit E, Seller has not received any written notice containing allegations
that (i) all or any portion of
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Seller's portion of the Premises, or the use or operation of all or any portion
of Seller's portion of the Premises, is not in compliance with any municipal and
other governmental laws, ordinances, rules, regulations, codes, licenses,
permits and authorizations (collectively, "Laws"), which noncompliance remains
uncured, or that (ii) there are not presently and validly in effect all
licenses, permits, approvals and other authorizations (collectively, "Permits")
to be obtained by Seller that are necessary for the use, occupancy or operation
of all or any portion of Seller's portion of the Premises as it is presently
being used, occupied or operated or in accordance with all Laws.
(f) Litigation. Except as set forth in Exhibit E, as of the
date of this Agreement, there are no pending or, to the best of Seller's
knowledge, threatened, judicial, municipal or administrative proceedings
affecting Seller's portion of the Premises or in which Seller is or will be a
party by reason of Seller's ownership or operation of Seller's portion of the
Premises, including, without limitation, proceedings for or involving
collections, tax relief, condemnation, eminent domain, alleged building code or
environmental or zoning violations, or personal injuries or property damage
alleged to have occurred on or at Seller's portion of the Premises or by reason
of the condition, use of, or operations on Seller's portion of the Premises (any
of the foregoing, "Litigation"), in each case the liability under which will not
be fully covered by insurance proceeds which are available to Seller and that
would, if determined adversely to Seller, materially adversely affect (i) the
value of all or any portion of Seller's portion of the Premises, (ii) the
ability of Buyer to use Seller's portion of Premises for the purposes for which
it is being used on the date hereof or (iii) the ability of Seller to perform
its obligations under this Agreement. No attachments, execution proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy, reorganization
or other proceedings are pending, or to Seller's knowledge, threatened, against
Seller, nor are any of such proceedings contemplated by Seller.
(g) Financial Information. To the best of Seller's knowledge,
all partnership tax returns delivered to Buyer by Seller are complete, accurate,
true and correct in all material respects and in all material respects
accurately set forth the results of the operation of Seller's property for the
periods covered by such returns.
(i) Re-Zoning. To the best of Seller's knowledge, as of the date of
this Agreement, there is not pending or threatened any proceeding for the
re-zoning of all or any portion of Seller's portion of the Premises.
(j) Real Estate Taxes. The most recent real estate tax bills
received by Seller for (and, to the best of Seller's knowledge, the only
real estate tax bills applicable to) its portion of the Premises have been
delivered to Buyer.
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(k) Leases.
(i) Seller's Rent Roll in Exhibit F (each, a "Rent
Roll") lists all leases and other agreements for the use or occupancy of all or
any portion of Seller's portion of the Premises, other than subleases,
sub-subleases and assignments (all such leases and other agreements of all
Sellers, collectively, the "Leases"). Seller's Rent Roll (as updated through the
Option Exercise Date and Closing to reflect actions taken in according with
Sections 12(a) and 12(b)) is true, complete and correct in all material
respects. Seller has delivered, or made available, to Buyer in the offices of
The Evans Company in McLean, Virginia, true, complete and correct copies of all
Leases affecting its portion of the Premises. The subleases, sub-subleases and
assignments set forth in Exhibit I attached hereto and incorporated herein are
the only subleases, sub-subleases and assignments under or of Leases of which
Seller has knowledge, and Seller has delivered to Buyer true and complete copies
of such subleases, sub-subleases and assignments in Seller's possession.
(ii) As of the date of this Agreement, each of the
Leases affecting Seller's portion of the Premises is in full force and effect
according to the terms set forth therein and, except as set forth in Seller's
Rent Roll, has not been modified, amended or altered. As of the date of this
Agreement, to the best of Seller's knowledge, each tenant under a Lease
affecting Seller's portion of the Premises is legally required to pay all sums
and perform all material obligations set forth in its respective Lease, without
concessions, abatements, offsets or other basis for relief or adjustment.
(iii) Except as set forth in Exhibit E, all material
obligations of Seller under the Leases affecting Seller's portion of the
Premises have been performed, and, to the best of Seller's knowledge, each
tenant under each such Lease has unconditionally accepted Seller's performance
of such obligations. As of the date of this Agreement, no tenant under a Lease
affecting Seller's portion of the Premises has asserted any offset, defense or
claim against rent payable by it or other performance of material obligations
due from it under its Lease.
(iv) As of the date of this Agreement, no tenant
under a Lease affecting Seller's portion of the Premises is in default under any
material provision of its Lease, and no such tenant is in arrears in the
performance of any monetary obligation required of it under its Lease;
(v) As of the date of this Agreement, Seller has
received no written notice that any tenant under a Lease affecting Seller's
portion of the Premises is insolvent or that any such tenant is unable to
perform any or all of its material obligations under its Lease.
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(vi) No amount payable by any tenant under any Lease
affecting Seller's portion of the Premises has been prepaid for more than one
(1) month in advance of the due date thereof under the Lease, except for any
security deposits;
(vii) Except as set forth on Exhibit G attached
hereto and incorporated herein and except as disclosed to Buyer pursuant to
Section 12(a), there are no written agreements with any real estate broker,
leasing agent or other party, including, without limitation, The Evans Company
or the current manager of Seller's portion of the Premises, that entitle or will
entitle such real estate broker, agent or other party to any leasing or other
brokerage commission or payment as a result of any Lease existing as of the date
hereof or the exercise by any tenant under a Lease existing as of the date
hereof affecting Seller's portion of the Premises of an option to extend or
renew its Lease or expand its leased premises as such options exist as of the
date of this Agreement in its Lease, other than deferred commissions due to The
Evans Company in connection with Leases existing as of the date of this
Agreement which will be paid by Seller on or before Closing;
(viii) Each security deposit under a Lease affecting
Seller's portion of the Premises, other than the security deposits listed in
Exhibit H attached hereto and incorporated herein shall be assigned or credited
to Buyer, as Buyer elects, at the Closing. The security deposits listed on
Exhibit H have been applied or refunded by Seller in accordance with the terms
of the Lease in connection with which they were made;
(ix) Except for SAIC pursuant to its Lease affecting
the portion of the Premises known as SAIC I (the "SAIC I Option") and for SAIC
pursuant to its Lease affecting the portion of the Premises known as SAIC II
(the "SAIC II Option"), no tenant under a Lease affecting Seller's portion of
the Premises has any purchase option or right of first refusal to acquire all or
any portion of Seller's portion of the Premises. To the best of Seller's
knowledge, there are no outstanding requests from any tenant under a Lease
requesting consent to any sublease, sub-sublease or assignment; and
(x) As of the date of this Agreement, no material
proceeding, suit or litigation relating to any or all of the Leases affecting
Seller's portion of the Premises, is pending or, to the best of Seller's
knowledge, threatened.
(h) United States Person. Seller is a nonforeign person
within the meaning of Section 1445(f)(3) of the Internal Revenue Code, as
amended, and shall execute and deliver a nonforeign affidavit at Closing.
(i) Bulk Sales. The sale of the Premises to Buyer
hereunder is not subject to, and does not subject Buyer to, any liability for
bulk sales obligation under applicable law.
(j) Assumed Indebtedness. Seller is not in monetary or
material nonmonetary default under, and, to Seller's knowledge, there has not
occurred any event
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which, with the giving of notice and/or the passage of time, or both would
constitute a monetary or material nonmonetary default by Seller under, any
document or instrument executed in connection with all or any portion of the
Assumed Indebtedness. Seller will deliver, or make available at the offices of
The Evans Company in McLean, Virginia, to Buyer true, complete and accurate
copies of all of the documents evidencing, securing and otherwise executed in
connection with all or any portion of the Assumed Indebtedness in accordance
with the terms of Section 6.
(k) Disclosure. No representation or warranty made by Seller
in this Agreement and no Exhibit attached hereto with respect to Seller's
portion of the Premises contains any untrue statement of a material fact. Seller
has made available to Buyer in accordance with the terms of Section 6 at the
offices of The Evans Company in McLean, Virginia all of its files, books and
records relating to all or any portion of the Premises.
(l) Sale. Seller hereby represents that it is presently in
possession of its portion of the Premises, as owner, and that there are no
contractual obligations, other than the SAIC I Option, the SAIC II Option and
the matters set forth in Exhibit E, which would prevent Seller from selling its
portion of the Premises subject only to the Permitted Encumbrances and Leases or
from otherwise complying with the terms of this Agreement.
(m) OP Units. Seller acknowledges that any OP Units offered
hereby are being offered without registration under the Securities Act of 1933,
as amended (the "Securities Act"), and the securities laws of certain states.
The OP Units are being offered in reliance on an exemption from registration
under Regulation D of the Securities Act ("Regulation D") and similar state law
exemptions. Seller further acknowledges that, to satisfy the requirements of
these exemptions, Buyer must determine whether a prospective holder of OP Units
meets the Regulation D and state law definitions of "accredited investor" before
selling (or, in some states, offering) securities to such prospective holder.
Seller hereby represents that it is familiar with the federal and state law
definitions of an accredited investor and that Seller are accredited investors
under the federal and applicable state law definitions. Seller shall deliver to
Buyer on or before the Option Exercise Date subscriber questionnaires in the
form set forth in Exhibit J attached hereto and incorporated herein.
Additionally, in the event of any change in any securities or related Law or
interpretation thereof after the date of this Agreement, Seller shall deliver to
Buyer, upon Buyer's request, such other information, certificates and materials
as Buyer shall reasonably request. It shall be a condition precedent to Buyer's
and Seller's obligations under this Agreement that there shall have been no
change in any securities or related Law or interpretation thereof that would
render consummation of conveyance of the Premises as contemplated by this
Agreement a violation of Law or interpretation thereof.
11. Deferral of Seller's Gain. Buyer agrees to maintain nonrecourse
indebtedness on its properties such that the amount of such indebtedness
includable by each of John Marshall Associates Limited Partnership, Greensboro
Associates Limited Partnership and Woodland-
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Northridge I Limited Partnership (each a "Transferring Partnership") in each
such Transferring Partnership's respective Federal income tax basis for its
interest in Buyer (the "Nonrecourse Debt") is at least $13,000,000, $13,000,000
and $5,000,000, respectively, for a period of five (5) years from the Closing
Date. Subject to the terms of this Section below, Buyer's obligation to maintain
such indebtedness includable in each such Transferring Partnership's Federal
income tax basis for its interest in Buyer shall cease with respect to a
particular Transferring Partnership upon the sale or other transfer by Buyer in
a taxable transaction of the Premises transferred to Buyer by such Transferring
Partnership. Buyer agrees that if Buyer sells or otherwise transfers the SAIC I
or Northridge I Premises listed on Exhibit A prior to the third (3rd)
anniversary of the Closing Date or the John Marshall I or E.J. Randolph Premises
listed on Exhibit A prior to the seventh (7th) anniversary of the Closing Date,
in each case in a taxable transaction or a non-taxable transaction with "boot,"
or if the Nonrecourse Debt is reduced below the amounts set forth above within
the five (5) year period provided above, Buyer shall pay to Seller at the time
of each such sale or other transfer or reduction in Nonrecourse Debt such amount
as shall equal the sum of (i) the present value (using a ten (10%) discount
rate) of the hypothetical interest at ten percent (10%) per annum, compounded
monthly, on the Built in Tax Amount (as hereinafter defined) with respect to the
Premises sold or otherwise transferred or with respect to which the Nonrecourse
Debt was reduced, from the Tax Payment Date (as hereinafter defined) with
respect to such sale, other transfer or reduction to the Tax Payment Date which
would have applied if the sale, other transfer or reduction had occurred on the
third (3rd) or seventh (7th) anniversary, as applicable, of the Closing Date or
the Nonrecourse Debt reduction had occurred on the fifth (5th) anniversary of
the Closing Date, and (ii) the present value (using a ten percent (10%) discount
rate) of the federal and state income tax payable by such partners on such
hypothetical interest amounts (calculated at a federal and state tax rate of 36%
and 6%, respectively). Buyer agrees that to the extent of any conflict between
the terms of Section 11 of this Agreement and Section 7.1D of the Partnership
Agreement, Section 11 of this Agreement shall control. This provision shall
survive the Closing.
"Built in Tax Amount" with respect to a Premises means the amount of state
and federal taxes which would be payable by partners of Seller on the
Nonrecourse Built-in Gain with respect to such Premises as set forth in a
schedule to the Amendment at a rate of 36% and 6%, respectively, and taking into
account the deduction for federal income tax purposes of the amount of state
tax. Notwithstanding the foregoing, with respect to a non-taxable transaction
with "boot" or in the case of a reduction in Nonrecourse Debt below the amount
set forth above, "Built in Tax Amount" means the amount of state and federal
taxes which would be payable by partners of Seller on account of such
transaction at a rate of 36% and 6%, respectively, and taking into account the
deduction for federal income tax purposes of the amount of state tax.
"Tax Payment Date" with respect to a Premises shall mean the due date for
making an estimated tax payment with respect to taxable gain realized in
connection with a sale or other transfer of, or reduction in Non-Recourse Debt
with respect to, a Premises.
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12. Seller's Covenants; Certain of Buyer's Conditions Precedent.
(a) New Leases, Contracts and Other Agreements. Prior to the Option
Exercise Date, Seller shall neither amend nor enter into any new lease, license,
or other agreement for the use or occupancy of all or any portion of Seller's
portion of the Premises, unless the economic terms of such amendment, lease,
license or other agreement meet the guidelines set forth in Exhibit N attached
hereto and incorporated herein and Seller obtains Buyer's prior written
approval, which shall not be unreasonably withheld, with respect to all other
terms. During the Interim Period, Seller shall neither amend any Lease now or
hereafter existing in any economic or other material respect, nor execute any
new lease, license, or other agreement for the use or occupancy of all or any
portion of Seller's portion of the Premises, in each case without Buyer's prior
written approval which will not be unreasonably withheld. Prior to the Closing
Date, Seller shall not amend any term of the Assumed Indebtedness or any
document executed in connection therewith. Without limiting the terms of the
immediately preceding sentence, during the Interim Period, Seller shall neither
amend nor enter into any other agreement or contractual obligation, including,
without limitation, any Permit, Permitted Encumbrance or document executed in
connection with any of the foregoing, which will be binding on Buyer or on all
or any portion of Seller's portion of the Premises following Closing, in each
case without Buyer's prior written approval which will not be unreasonably
withheld. During the Interim Period, Seller shall not consent to any sublease or
assignment without Buyer's prior written approval unless Seller is obligated to
act reasonably under the applicable Lease, in which case Seller may so consent
if acting reasonably. Buyer agrees to respond to requests for approval under
this Section within ten (10) days of receipt of written request therefor,
accompanied by such information as Buyer shall reasonably request in connection
with such request. Any lease entered into by Seller affecting the Premises after
the date of this Agreement and in accordance with the terms of this Agreement,
including, without limitation the terms of this Section, shall constitute a
"Lease" under this Agreement.
(b) Enforcement of Leases. During the Interim Period, Seller shall
take such action with respect to the enforcement of Leases as is reasonably
requested by Buyer. Buyer hereby agrees to indemnify and hold Seller harmless
from and against any and all Losses (as hereinafter defined) incurred by Seller
as a result of taking any such action pursuant to the immediately preceding
sentence. This provision shall survive Closing or termination of this Agreement.
(c) Status of Leases and Tenants. It shall be a condition precedent
to Buyer's obligations under this Agreement that, as of the Closing Date: (i)
all Leases of the Required Tenants shall be in full force and effect according
to the terms set forth therein and, except as set forth in a Rent Roll, shall
not have been modified, amended or altered, (ii) each Required Tenant shall be
legally required to pay all sums and perform all material obligations set forth
in its Lease, without concession, abatement, offset or other basis for relief or
adjustment, (iii) except as set forth in Exhibit E, all material obligations of
Seller under the
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Leases with Required Tenants shall have been performed, (iv) no Required Tenant
under a Lease affecting Seller's portion of the Premises shall have asserted any
offset, defense or claim against rent payable by it or other performance of
material obligations due from it under its Lease, (v) no Required Tenant shall
be in default under any material provision of its Lease and no Required Tenant
shall be in arrears in the performance of any monetary obligation required of it
under its Lease, (vi) Seller shall have received no written notice that any
Required Tenant is insolvent or that any Required Tenant is unable to perform
any or all of its material obligations under its Lease, and (vii) Seller shall
certify that it has received no written notice described in item (vi).
(d) Insurance. Seller shall maintain reasonable amounts of insurance
on its portion of the Premises continuously in full force and effect through and
including the Closing Date.
(e) Operation of Premises. During the Interim Period, except to the
extent the direct obligations of a tenant under a Lease, Seller shall operate
and manage its portion of the Premises in a manner consistent with the manner in
which such portion is being operated as of the Option Exercise Date, subject to
ordinary wear and tear and fire and other casualty, and in accordance with all
applicable Law, shall maintain its portion of the Premises in the repair and
working order it is in as of the Option Exercise Date, and shall perform, when
due, all of Seller's material obligations under the Leases, the Permitted
Encumbrances and documents executed in connection with the Permitted
Encumbrances, in each case affecting its portion of the Premises, and all
Permits. Except for removal by tenants in accordance with the terms of their
Leases, none of the personal property or fixtures of Seller shall be removed
from its portion of the Premises, unless replaced by personal property or
fixtures of equal or greater utility and value. During the Interim Period,
Seller shall not change the use of all or any portion of the Premises.
(f) Preclosing Expenses and Construction. Except as provided below
in this item, all bills and invoices due for labor, goods, materials and
services of any kind, utility charges and all other expenses relating to
Seller's portion of the Premises for any period prior to Closing (to the extent
not the responsibility of a tenant under a Lease affecting Seller's portion of
the Premises to pay directly pursuant to the terms of its Lease) shall be paid
by Seller. Seller agrees to pay at or prior to Closing all leasing commissions,
broker's fees and finder's fees and costs of tenant improvement work due in
connection with Leases existing as of the date of this Agreement. Seller further
agrees to pay when due, and Buyer agrees to reimburse Seller upon Closing for,
all tenant improvement work performed and leasing commissions due, respectively,
pursuant to and in connection with each Lease entered into from and after the
date of this Agreement so long as (i) such Lease is entered into in accordance
with Section 12(a), (ii) such Lease covers space in the Premises which is vacant
as of the date of this Agreement and results in no economic benefit to Seller
other than that attributable to the fixed rent and recoupment of operating
expenses and taxes to be payable under the Lease over the term attributable to
the period from the date the Lease is entered into
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through the Closing Date and other reimbursement payments customary for leases
of a similar nature in the locale in which the Premises are located and (iii)
the party or parties to receive such commission(s) and the amount of such
commission(s) are specifically disclosed to Buyer in Seller's request for
approval of the applicable proposed lease under Section 12(a) and are approved
by Buyer, such approval not to be unreasonably withheld. Seller agrees to pay
when due and without reimbursement all leasing commissions, broker's fees and
finder's fees due and costs of tenant improvement work in connection with Leases
entered into from and after the date of this Agreement that are not the
responsibility of Buyer under the preceding sentence. Except as provided in this
item, any alterations, improvements and other work required to be performed by
the landlord under the Leases or the Seller prior to the Closing under any and
all agreements affecting Seller's portion of the Premises (collectively,
"Improvements") shall be completed and paid for in full by Seller as and when
due. Buyer shall have the right in its sole discretion to contract for the
performance of or otherwise cause to be performed by a party other than Buyer
any Improvements to be performed in connection with any Leases entered into
after the Option Exercise Date. If Buyer elects so to contract for or cause the
performance of any such Improvements, then, during the Interim Period, Buyer
shall cause such Improvements to be performed in accordance with the terms of
the Lease to which they relate. Whether or not Buyer elects to exercise its
rights to contract for or cause the performance of the Improvements, Buyer shall
be responsible for the costs of Improvements required under Leases entered into
after the date of this Agreement in accordance with the terms of Section 12(a),
so long as the amount of such costs are specifically disclosed to Buyer in
Seller's request for approval of the proposed lease to which they relate and
Buyer approves such costs and the party or parties to perform the Improvements.
Notwithstanding the foregoing, if the Closing does not occur, Buyer shall not be
liable for the cost of any tenant improvement work performed by either Buyer or
Seller and Seller shall reimburse Buyer upon demand for any such costs incurred
by Buyer pursuant to this Section. This provision shall survive the Closing.
Notwithstanding anything to the contrary contained in this Agreement, with
respect to any Lease entered into after the date hereof in accordance with the
terms of this Agreement that provides for a term (excluding renewals) of less
than twelve (12) months, each of Buyer and Seller shall pay a pro-rata portion
of all leasing commissions, broker's fees and finder's fees and all costs of
tenant improvement work due in connection with and pursuant to, respectively,
such Lease calculated on the basis of the number of days in such term for which
each of Buyer and Seller was in title to the Premises.
(g) Availability of Records. Upon Buyer's written request for a
period of one (1) year after the Closing, Seller shall (i) make its books and
records available to Buyer for inspection, copying and audit by Buyer's
designated accountants at Buyer's sole cost and expense, and cooperate with
Buyer in connection with any audit of such books and records necessary to comply
with any requirements of the Securities and Exchange Commission or law and (ii)
cooperate with Buyer to the extent reasonably necessary to obtain any Permits
not in existence on the Closing Date and necessary for the operation of all or
any portion of the Premises. This provision shall survive the Closing.
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(h) Change in Conditions. Seller shall promptly notify Buyer of the
occurrence of any event or circumstance known to Seller that will make any
representation or warranty of Seller to Buyer under this Agreement materially
untrue or materially misleading as of the Closing Date or any covenant of Seller
under this Agreement, the nonperformance of which would have a material adverse
effect on the value of all or any portion of the Premises, incapable of being
performed, it being understood that Seller's obligation to provide notice to
Buyer under this item shall in no way relieve Seller of any liability for breach
by Seller of any of its representations, warranties or covenants under this
Agreement subject to the other terms of this Agreement.
(i) Litigation. It shall be a condition precedent to Buyer's
obligations under this Agreement that there shall be, as of the Closing Date, no
pending Litigation (including, without limitation, relating to any Lease of a
Required Tenant), that would, if determined adversely to Seller, in Buyer's
reasonable judgement, materially adversely affect (i) the value of the Premises,
(ii) the ability of Buyer to use Seller's Premises for the purposes for which
they are being used on the date hereof or (iii) the ability of Seller to perform
its obligations under this Agreement.
(j) Title Insurance; Survey. Seller shall cooperate with Buyer in
its efforts to obtain satisfactory title insurance insuring its interest in the
Premises, including, without limitation, by executing and delivering such
authority documents, indemnities regarding mechanics' and materialmen's liens
and parties in possession and other materials (excluding indemnities other than
as described above in this sentence) as are reasonably required by the Title
Company (or other title insurer selected by Buyer). It shall be a condition
precedent to Buyer's obligations hereunder that the Title Company (or other
title insurer selected by Buyer) shall be prepared to issue, and if Buyer pays
the premium therefor, that Buyer shall receive from the Title Company (or other
title insurer selected by Buyer), at Buyer's expense, an ALTA title insurance
policy (1992 Form) insuring its interest in the Premises subject only to the
Permitted Encumbrances in an amount of not less than One Hundred Fifteen Million
Dollars ($115,000,000), having all standard and general printed exceptions
deleted so as to afford full extended form coverages, including, such
affirmative coverages and endorsements as Buyer shall reasonably require and
being otherwise consistent with the terms of this Agreement. It shall further be
a condition precedent to Buyer's obligations under this Agreement that, subject
to Section 16 hereof, Seller shall have made no change to the Premises from and
after the Option Exercise Date that would be shown on an accurate survey made as
of the Closing Date.
(k) Exercise of SAIC I Option; Conveyance of all Premises. It shall
be a condition precedent to Buyer's obligations under this Agreement that the
SAIC I Option shall not have been exercised. It shall be a condition precedent
to Buyer's obligations under this Agreement that the Closing shall occur with
respect to all but not less than all of the Premises, subject, however, to
Section 16 hereof.
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(l) Assumed Indebtedness. It shall be a condition precedent to
Buyer's obligations under this Agreement that Buyer shall have received from the
holder of any Assumed Indebtedness Buyer elects and is permitted by the holder
thereof to assume such confirmations and other agreements as Buyer reasonably
requests in form and substance reasonably satisfactory to Buyer. It shall be a
further condition precedent to Buyer's obligations hereunder that Buyer shall
receive payoff letters from the holders of all Assumed Indebtedness Buyer elects
to repay. If Buyer is able to achieve a waiver by the holder of any Assumed
Indebtedness of any amount Buyer has agreed to pay under Section 3, such savings
shall redound solely to the benefit of Buyer and shall have no impact on any of
Seller's rights or obligations under this Agreement.
(m) Lock-Up. Seller shall enter into a lock-up agreement in the form
of Exhibit K at Closing (the "Lock-Up Agreement").
(n) Transfer of OP Units and Registration Rights Following Lock-Up.
Seller acknowledges that Seller and all OP Units shall be subject to all terms
and conditions of the Lock-Up Agreement and the Partnership Agreement, including
without limitation, regarding transfer and redemption. Seller and the general
partner in Buyer agree to enter into a Registration Rights Agreement in the form
of the Exhibit L attached hereto and incorporated herein at Closing.
(o) Amendment to Partnership Agreement. Seller acknowledges that it
shall be bound by and subject to all terms of the Partnership Agreement and
shall enter into an amendment to the Partnership Agreement at Closing evidencing
Seller's admission to the Partnership as a limited partner and agreement to be
bound by all terms thereof and otherwise complying with the terms of this
Agreement.
13. Buyer's Covenants; Seller's Conditions Precedent
(a) Upon Seller's written request for a period of one (1) year after the
Closing, Buyer shall make its records pertaining to the Premises available to
Seller for inspection, copying and audit by Seller's designated accountants at
Seller's sole cost and expense, except as provided below in this item. In no
event shall Buyer be required to disclose any material, inside or nonpublic
information or make any other disclosure that would violate any securities Law
or interpretation thereof. This provision shall survive the Closing.
(b) Buyer shall promptly notify Seller of the occurrence of any event or
circumstance known to Buyer that will make any representation or warranty of
Buyer to Seller under this Agreement materially untrue or materially misleading
as of the Closing Date or any material covenant of Buyer under this Agreement
incapable of being performed, it being understood that Buyer's obligation to
provide notice to Seller under this item shall in no way relieve Buyer of any
liability for breach by Buyer of any of its representation, warranties or
covenants under this Agreement subject to the other terms of this Agreement.
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14. Seller's Closing Deliveries. At the Closing, Seller shall
deliver or cause to be delivered to Buyer, as a condition precedent to Buyer's
obligations under this Agreement, the following in form and substance reasonably
acceptable to Buyer and its counsel:
(a) Deed. Sufficient special warranty deeds executed by
Seller, in recordable form conveying the premises to Buyer free and clear of
all liens, claims and encumbrances except for the Permitted Encumbrances;
(b) Bill of Sale. A special warranty assignment and bill of sale,
executed by Seller, assigning, conveying and warranting to Buyer title to the
personal property of Seller, free and clear of all encumbrances other than the
Permitted Encumbrances;
(c) General Assignment. An assignment executed by Seller to
Buyer of all right, title and interest of Seller in and to any intangible
personal property of Seller relating to its portion of the Premises,
including, without limitation, warranties, trade names and any Permits, to
the extent assignable;
(d) Assignment of Leases, Estoppel Certificates and Subordination
Agreements. An assignment of Seller's right, title and interest in and to the
Leases (including all security deposits and/or other deposits thereunder except
those applied and described in Exhibit H) affecting its portion of the Premises,
with (i) the agreement of Seller to indemnify, protect, defend and hold Buyer
harmless from and against any and all Losses (as defined below) arising in
connection with such Leases and relating to the period of time prior to the
Closing Date and (ii) an assumption of Leases by Buyer and the corresponding
agreement of Buyer to indemnify, protect, defend, and hold Seller harmless from
and against any and all Losses arising in connection with such Leases relating
to the period of time from and after the Closing Date, together with the
estoppel certificates and agreements, required under Section 8 above;
(e) Letters to Tenants. Letters executed by Seller addressed to all
tenants under Leases affecting Seller's portion of the Premises and reasonably
approved by Buyer notifying all such tenants of the transfer of ownership and
directing payment of all rents accruing after the Closing Date to be made to
Buyer or at its direction;
(f) Original Documents. To the extent not previously delivered to
Buyer and in Seller's possession or control, originals of the Leases, Permitted
Encumbrances, Permits and copies of all other documents, files, materials and
information in Seller's possession or control reasonably requested by Buyer
related to the foregoing or otherwise affecting or applicable to Seller's
portion of the Premises;
(g) Plans and Specifications. All plans and specifications for
Seller's portion of the Premises in Seller's possession or control;
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(h) Section 1445 Affidavit. An affidavit from each Seller confirming
that such Seller is not a foreign person within the meaning of Section 1445 of
the Internal Revenue Code of 1986, as amended;
(i) Rent Roll. A Rent Roll from each Seller updated through
the Closing Date, certified by such Seller to be true, complete and correct
in all material respects as of the Closing Date;
(j) Registration Rights Agreement, Lock-Up Agreement and
Amendment to Partnership Agreement. A Registration Rights Agreement, a
Lock-Up Agreement and the Amendment, as provided in items (n), (o) and (p) of
Section 12;
(k) Management Agreement. A management agreement for the
Additional Option Properties, as described in Section 24, and evidence of
termination of any other management agreement(s) in effect prior to the
Closing Date.
(l) Assumed Indebtedness. Any and all documents reasonably required
by the holder of any Assumed Indebtedness Buyer is permitted and elects to
assume and any payoff letters and release and other documents reasonably
requested by Buyer in connection with any Assumed Indebtedness Buyer elects to
prepay.
(m) Title Documents. Such information, documents and affidavits
(excluding indemnities) as are required by the Title Company (or other title
insurer selected by Buyer) and such indemnities as are required under Section
12(h).
(n) Closing Statement. A closing statement conforming to the
proration and other relevant provisions of this Agreement.
(o) Evidence of Authority. Evidence of Seller's authority to
consummate the transactions which are the subject of this Agreement, including,
without limitation, consents of all partners in Seller.
(p) Other. Such other documents and instruments as may reasonably be
required by Buyer in connection with the consummation of the transactions that
are the subject of this Agreement and otherwise to effect the agreements of the
parties hereto, including, without limitations, all certifications required
under Section 12(c).
15. Buyer's Closing Deliveries. At the Closing, Buyer shall deliver
or cause to be delivered to Seller, as a condition precedent to Seller's
obligations under this Agreement, the following in form and substance reasonably
acceptable to Seller and its counsel:
(a) The assignment of Leases contemplated in Section 13(d), the title
documents contemplated in Section 13(m), and the closing statement contemplated
in Section 13(n).
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(b) Evidence of Buyer's authority to consummate the transactions
which are the subject of this Agreement.
(c) Such other documents and instruments as may reasonably be required by
Seller in connection with the consummation of the transactions that are the
subject of this Agreement and otherwise to effect the agreements of the parties
hereto.
(d) Buyer shall cause the general partner of Buyer to enter into the
agreements contemplated in Sections 12 (n), (o) and (p) of this Agreement at the
Closing.
(e) Buyer shall cause Beacon Property Management Corporation (the
"Manager") to enter into the management agreement contemplated in Section 24.
16. Eminent Domain and Casualty. In the event all or any portion of
the Premises is damaged or destroyed by fire or other casualty or is taken or
made subject to condemnation, eminent domain or other governmental acquisition
proceedings, such that the cost to repair or restore would exceed Five Hundred
Thousand Dollars ($500,000), then Buyer may, at its option, (i) elect to
terminate this Agreement by written notice to Seller, in which event the Deposit
shall be forthwith returned to Buyer and, thereupon, the rights and obligations
of each of the parties to this Agreement and each other shall cease and
terminate, except as otherwise expressly provided in this Agreement, or (ii)
accept delivery of the Deeds. In such latter event Buyer shall deliver the full
Consideration for the Premises and have assigned to it the amount of any
insurance proceeds or award(s), as the case may be, allocable to the portion(s)
of the Premises so damaged, destroyed or taken and not reasonably applied by
Seller to repair or restoration of the Premises.
17. Environmental, Health and Safety Matters.
(a) Representations and Warranties. Each Seller hereby
represents and warrants as follows, but only with respect to its portion of
the Premises:
(i) To the best of Seller's knowledge, except as set
forth in Exhibit E, there have been no past, and there are no pending or, to the
best of Seller's knowledge, threatened (A) written claims, complaints, notices,
or requests for information received by Seller with respect to any alleged
violation of any federal, state, county, municipal or local statutes, laws,
ordinances, rules, regulations, directives, orders or the like in effect now or
in the future relating to environmental, health or safety matters (collectively,
"Environmental Laws") with respect to Seller's portion of the Premises, or (B)
written claims, complaints, notices, or requests for information to Seller
regarding potential or alleged liability under any Environmental Law with
respect to Seller's portion of the Premises;
(ii) To the best of Seller's knowledge, except as set
forth in Exhibit E, there have been no releases, including, without limitation,
migrations, of hazardous
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materials or any other substances or materials regulated under any Environmental
Law (collectively, "Hazardous Materials") at, on, under, onto, about or
emanating from Seller's portion of the Premises during its period of ownership,
and to the best of Seller's knowledge, there has been no such release at any
other time;
(iii) Seller has been issued, and Seller is in
material compliance with, all orders, directives, requirements, certificates and
Permits from applicable governmental authorities relating to Environmental Laws
applicable to Seller's portion of the Premises;
(iv) Neither Seller's portion of the Premises nor any
portion thereof is listed or, to the best of Seller's knowledge, proposed for
listing on the National Priorities List pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. ss.ss.9601 et
seq), as amended ("CERCLA") or on any state list of sites requiring remedial
action;
(v) To the best of Seller's knowledge, Seller has not
transported or arranged for the transportation of any Hazardous Material from
Seller's portion of the Premises to any location that is listed or proposed for
listing on the National Priorities List pursuant to CERCLA or on any similar
state list, or that is the subject of federal, state, or local enforcement
actions or other investigations that may lead to claims against Seller for any
remedial action, damage to natural resources, or personal injury, including, but
not limited to, claims under CERCLA;
(vi) Except as set forth in Exhibit E, Seller has not
removed (or required or requested the removal of) any polychlorinated
biphenyls or asbestos from Seller's portion of the Premises; and
(vii) Except as set forth in Exhibit E, to the best
of Seller's knowledge, there are no active or inactive underground storage tanks
("USTs") at Seller's portion of the Premises. Seller has not removed or
abandoned any USTs at Seller's portion of the Premises, and Seller has no
knowledge of the existence, abandonment or removal of USTs at Seller's portion
of the Premises by any other person or entity;
(b) Survival of Representations and Warranties. The representations
and warranties of Seller contained in this Section 17 shall be deemed made as of
the date of this Agreement and shall terminate on Closing.
18. Assignment. Except as provided below in this Section, this
Agreement shall not be assignable by Buyer or Seller. Buyer shall have the
right to assign its rights and obligations with respect to the Additional
Option Premises under this Agreement to a controlled affiliate of Buyer.
This provision shall survive the Closing.
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19. Contiguous Parcels. Seller represents that if any of the
properties comprising the Premises is composed of two (2) or more parcels, such
parcels are contiguous on their common boundary lines, but if it should be
determined that title to one (1) of such parcels is defective, then for the
purposes of this Agreement, title to both parcels shall be deemed to be
defective.
20. Accelerated Closing. Buyer, at Buyer's option exercised by not
less than five (5) days' written notice to Seller, may accelerate the date set
for Closing, in which event the Closing shall be held on such earlier date. Upon
receipt of Buyer's written notice of acceleration, Seller shall deliver proper
notice of termination of all contracts to be terminated in accordance with the
terms of this Agreement, and Buyer shall pay all amounts due in connection with
such terminations. Delivery of such notice by Seller shall satisfy Seller's
obligations under this Agreement regarding the termination of such contracts.
21. Buyer's and Seller's Breach. If Buyer, after exercising the
Option, shall fail to perform, fulfill or observe any of its representations,
warranties or agreements set forth herein, other than those in Sections 7, 9,
11, 12(b), 12(f), 12(g), 13(a), 22, 26, 28, 29, 32, 33, 34, 35 and 36, the sole
right of Seller shall be to retain the Deposit as liquidated damages for loss of
its bargain, and Seller shall not have any rights nor be entitled to bring any
action at law or in equity, including, without limitation, for specific
performance or for any other damages whatsoever. With respect to defaults by
Buyer or failure to observe its agreements, in each case under the
aforementioned Sections, in addition to its rights to retain the Deposit, Seller
shall retain all of its rights at law and in equity. Notwithstanding anything to
the contrary contained herein, Buyer shall retain all of its rights at law and
in equity in connection with any failure by Seller to perform, fulfill or
observe any of its representations, warranties, agreements or acknowledgements
under Section 12 hereof or this Agreement to be performed after Closing or which
survive termination of this Agreement or Closing.
22. Closing. The words, "closing of title," "closing", "delivery of
the Deeds" and words of similar import, as used in this Agreement, are intended
to mean the event of consummation of the conveyance to Buyer of the Premises in
accordance with the terms of this Agreement. The Closing shall occur pursuant to
arrangements consistent with local custom and reasonably satisfactory to Buyer
and Seller. Seller and Buyer agree that each of them shall bear fifty percent
(50%) of all transfer and similar taxes due in connection with the transactions
that are the subject of this Agreement. Seller and Buyer each agree to deliver
to the other following Closing any and all such other documents and instruments
as are reasonably requested by the other to achieve the purposes of this
Agreement. This provision shall survive Closing.
23. Additional Option. Upon Closing, Seller shall be deemed to have
given and granted to Buyer an irrevocable option to acquire the Additional
Option Premises, upon the terms, covenants, conditions and provisions set forth
in this Section (the "Additional Option"). The Additional Option may be
exercised by Buyer's giving written notice of Buyer's exercise,
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to Seller at any time prior to March 1, 1999 (the "Additional Option Exercise
Date"). The notice of exercise of the Additional Option shall set forth a day
and hour (the "Additional Option Closing Date"), not less than thirty (30) nor
more than sixty (60) days after the date such notice is given, for consummation
of the conveyance of the Additional Option Premises as contemplated by this
Agreement (the "Additional Closing"). Without limiting any other term of this
Agreement, Buyer and its permitted assignee shall have the right to perform all
such diligence on the Additional Option Premises as Buyer is permitted to
perform under this Agreement with respect to the Premises, and Seller shall have
such obligations with respect thereto as are set forth in this Agreement. Buyer
shall have the right to perform such diligence within any two (2) sixty (60)-day
periods selected by Buyer. If Buyer shall not have exercised the Additional
Option in accordance with the terms of this Agreement at the end of such second
(2nd) sixty (60)-day period, the Additional Option shall be null and void and of
no further force and effect. Except as expressly set forth to the contrary in
this Section, all terms and conditions of this Agreement pertaining to Seller,
Buyer or the Premises shall be applicable to the Additional Option Premises
Sellers, Buyer and the Additional Option Premises, respectively, as if so
expressly provided in each place, including, without limitation, those regarding
obligations and rights with respect to the Premises, arrangements regarding
conveyance of the Premises and matters pertaining to Closing or survival
following Closing, the parties hereto acknowledging that it is their intent that
Buyer or its permitted assignee and Additional Option Premises Sellers have the
same rights and obligations with respect to each other and the Additional Option
Premises as Buyer and Seller have with respect to each other and the Premises
under this Agreement. Additionally, except as expressly provided below in this
Section, all representations and warranties made by Seller in this Agreement as
of the date of this Agreement and/or the Option Exercise Date shall be deemed
made by the Additional Option Premises Sellers with respect to themselves and
their respective portions of the Additional Option Premises as of the Additional
Option Exercise Date, and all representations and warranties made by Seller in
this Agreement as of the Closing Date shall be deemed made by the Additional
Option Premises Sellers with respect to themselves and their respective portions
of the Additional Option Premises as of the Additional Option Closing Date.
Additional Option Premises Sellers shall notify Buyer (or its permitted
assignee, if applicable) within twenty (20) days after written request therefor
by Buyer if any representation or warranty to be deemed made by it as of the
Additional Option Exercise Date shall be untrue in any material respect as of
such date. It shall be a condition precedent to Buyer's obligations under this
Agreement that no such representation or warranty shall be untrue in any
material respect as of the Additional Option Closing Date, but Additional Option
Premises Sellers shall not be deemed to make any such representation or warranty
that would be untrue in any material respect with respect to which notice was so
delivered by Additional Option Premises Sellers. All representations and
warranties of the Additional Option Premises Sellers, other than those made
pursuant to this Section and Sections 10(a), 17, 28 and 32 (which may have a
longer or shorter survival period) or as otherwise provided in Section 10(b), if
applicable, shall survive the Additional Option Closing Date for a period of
twelve (12) months. Additional Option Premises Sellers shall have no liability
for any misrepresentation with respect to which a claim is made by Buyer or its
assignee after such twelve (12) month-period,
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except to the extent Buyer or such assignee commences litigation on or before
the expiration of such twelve (12) month-period on account of any alleged
misrepresentation. Additional Option Premises Sellers hereby agree to indemnify
and hold Buyer and its permitted assignee, if any, harmless from and against any
and all Losses suffered and occurred by Buyer or such assignee on account of any
misrepresentation for which Additional Option Premises Seller is liable under
this Section. The purchase price (the "Price") to be paid by Buyer or its
permitted assignee for the Additional Option Premises shall equal the sum,
discounted to net present value using a ten percent (10%) discount rate, of (i)
all "Fixed Annual Rental" due under the Lease of SAIC II by SAIC, in accordance
with the terms of such Lease in effect as of the date of this Agreement, from
the date on which the Additional Option is exercised through the end of the
"Initial Term", as such term is defined pursuant to the terms of such Lease in
effect as of the date of this Agreement, minus (ii) all regularly scheduled
payments of principal and interest for the period from the date on which the
Additional Option is exercised through the end of the "Initial Term" due or to
become due on account of indebtedness secured by the Additional Option Premises
pursuant to the terms of such indebtedness in effect as of the date of this
Agreement. Additional Option Premises Seller represents and warrants that the
Initial Term under the Lease of SAIC II to SAIC ends on March 31, 1999. Upon
exercise of the Additional Option, and as a condition to the valid exercise
thereof, Buyer or its permitted assignee shall deliver to Escrow Agent a deposit
in the amount of $100,000, which, together with all interest earned thereon,
shall be held and delivered in the manner as provided in this Agreement with
respect to the Deposit. The Price shall be paid in immediately available funds
to Additional Option Premises Seller at the Closing with respect to the
Additional Option Premises and shall be decreased by any prorations and
adjustment in Buyer's favor and increased by any prorations and adjustments in
Seller's favor, in each case as such prorations and adjustments are calculated
in accordance with the terms of this Agreement. From and after the Closing,
Additional Option Premises Seller shall permit Buyer to participate in any
discussions and negotiations regarding the Leases to SAIC for SAIC II and SAIC
III or any proposed new leases for such all or any portion of such Additional
Option Premises. From and after the Closing, Additional Option Premises Sellers
shall permit Buyer to participate in any discussions and negotiations regarding
the financing, refinancing or restructuring of financing on SAIC II and/or SAIC
III. Buyer shall take the Additional Option Premises subject to the indebtedness
existing thereon as of the date of this Agreement and shall be responsible for
any assumption, prepayment or other fees and expenses of the type described in
Section 3. This provision shall survive the Closing.
24. Management of the Additional Option Premises. Upon Closing, the
Manager shall become the property manager for the Additional Option Properties.
Seller agrees to terminate any existing management agreement(s) for the
Additional Option Properties, at its own expense, as of the Closing Date. Prior
to the Option Exercise Date, Buyer and Seller shall work together in good faith
to reach agreement on a mutually acceptable management agreement, which will be
executed and delivered by Seller and the Manager at Closing. It shall be a
condition precedent to Buyer's obligations under this Agreement that a
management agreement mutually and reasonably acceptable to Buyer and Seller
shall be agreed upon and
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entered into at Closing. Such management agreement shall survive Closing with
respect to the Premises.
25. Failure to Conform. Without limiting any of Buyer's rights under
Section 5, in the event that Seller is unable to give title or make conveyance
or deliver possession of the Premises as herein provided or, if at the time of
Closing, the Premises do not conform with the provisions hereof, then and in any
such event Buyer may, at its option, either (i) terminate this Agreement, in
which event the Deposit shall be returned to Buyer and thereupon the rights and
obligations of each of the parties to this Agreement shall cease and terminate,
except as otherwise expressly provided or (ii) accept such title as Seller can
then deliver to the Premises in their then condition and to pay therefor the
full Consideration, in which event Seller shall convey such title and so deliver
the Premises.
26. Prorations. Real estate taxes, other assessments, utilities,
fuel, water and/or sewer charges, if any, rents (including, without limitation,
base rent, additional rent, other amounts to be paid to the landlord under the
Leases and security deposits) and other income, telephone charges, interest on
the Assumed Indebtedness and other customary expenses shall be prorated at
Closing. Such prorations shall be made on the basis of final meter readings and
final invoices, but, to the extent final readings and invoices are not available
at Closing, such prorations shall be made on the basis of the most current,
available bills and reprorated upon issuance of final bills. No delinquent rents
shall be prorated at Closing in favor of Seller. Payments received by Buyer from
any tenant following Closing on account of rent shall be first applied to rents
then due and owing from such tenant for the month in which the Closing occurs,
then due rents for any period following Closing and the remainder, if any,
thereafter promptly delivered to Seller to the extent of delinquent rent owing
from such tenant as of Closing. Buyer shall use reasonable efforts to collect
rents delinquent as of Closing for Seller but shall in no event be obligated to
bring any action against any tenant or spend any money in the exertion of such
efforts. Any amounts received by Seller on account of rent or other income
following Closing shall be promptly delivered to Buyer for application and
delivery, if applicable, in accordance with the terms of this Section. For
purposes of making prorations, Buyer shall be deemed to be in title to the
Premises, and entitled to the income therefrom and responsible for the expenses
thereof, for the Closing Date, and Seller shall be entitled to the income from
and responsible for the expenses of the Premises for all periods prior to the
Closing Date. Any prorations not specifically addressed in this Section but
customarily made in transactions of the type that is the subject of this
Agreement shall be made in accordance with local custom. All prorations shall be
made on the basis of the actual number of days of the year and month that shall
have elapsed as of the Closing Date. Buyer shall be entitled to a proration in
its favor in the amount of $284,327. Seller represents to Buyer that such amount
is the amount to be paid by Booz Allen Hamilton in connection with the
termination of its Lease in the E.J. Randolph Premises. All prorations shall be
netted and paid by Seller to Buyer, or Buyer to Seller, as applicable, by wire
transfer to an account designated by the applicable party in immediately
available funds at the time of Closing. This provision shall survive Closing.
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27. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given and delivered three days after posting when
mailed, by registered or certified mail, postage and registration or
certification charges prepaid, or on the day of delivery when sent by hand or
recognized overnight courier service, addressed, in the case of Seller, to
Seller at c/o Rhode Island Corporation, 22 East 67th Street, New York, New York
10021, with a copy to Chris M. Smith, Esq., Shearman & Sterling, Citicorp
Center, 153 East 53 Street, New York, NY 10022-4676 and, in the case of Buyer,
to Buyer at 50 Rowes Wharf, Boston, MA 02110, Attention: Lionel P. Fortin, with
a copy to Goodwin, Procter & Hoar, Exchange Place, Boston, MA 02109, Attention:
Gilbert G. Menna, P.C., except that either party may by written notice to the
other designate another address which shall thereupon become the effective
address of such party for the purposes of this Section. This provision shall
survive the Closing.
28. Brokers. Seller represents and warrants to Buyer that it has
dealt with no brokers, finders or other parties who would be due a similar fee
in connection with the transactions that are the subject of this Agreement other
than Yarmouth Property Services Limited, Inc. Buyer represents and warrants to
Seller that it has dealt with no brokers or finders in connection with the
transactions that are the subject of this Agreement. The parties agree that
Seller shall be solely responsible for any broker's or finder's fee, commission
or other compensation payable to Yarmouth Property Services Limited, Inc. in
connection with this Agreement or the conveyance of the Premises. Seller agrees
to indemnify and hold Buyer harmless from and against all claims, suits,
obligations, liabilities and damages, including, without limitation, attorneys'
fees and disbursements (collectively, "Losses"), arising out of any such
broker's or finder's fee, commission or other compensation or any claim therefor
or from any misrepresentation by Seller under this Section. Buyer agrees to
indemnify and hold Seller harmless from and against any and all Losses arising
from any misrepresentation by Buyer under this Section. This provision shall
survive Closing.
29. Miscellaneous. In the event any period described in this
Agreement expires or any obligation under this Agreement is to be performed on
day which is not a business day, such period shall be extended to or such
obligation shall be performed on the business day next succeeding such day.
Section headings shall have no meaning in construing this Agreement. All
representations, warranties and agreements of Seller in this Agreement shall be
deemed both personal and covenants running with all land to which they apply and
shall be applicable to and binding upon Seller and such land both during and
after the period Seller's right, title and interest in such land shall continue.
All representations and warranties of Seller shall survive the Closing Date for
a period of twelve (12) months, other than those contained in Sections 10(a),
10(b), if applicable, 17 and 28 (which may have a longer or short survival
period). Seller shall have no liability for any misrepresentation with respect
to which a claim is made by Buyer after such twelve (12) month period, except to
the extent Buyer commences litigation on or before the expiration of such twelve
(12)-month period on account of any alleged misrepresentation. Seller and Buyer
each hereby agree to indemnify and hold the other harmless from and against any
and all Losses suffered or incurred by the other on account of a
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misrepresentation of Seller, or Buyer, as the case may be, for which Seller, or
Buyer, as the case may be, is liable under this Section. Notwithstanding
anything to the contrary that may be contained in this Agreement, those
obligations expressly provided to survive Closing or termination of this
Agreement and those which by their terms are to be performed after Closing or
termination of this Agreement shall survive Closing or termination of this
Agreement, as the case may be, and not merge into any other document or any
conveyance and each of Buyer and Seller shall retain all of their rights at law
and in equity for breaches by the other of its obligations under this Agreement
occurring prior to or following Closing. All rights and remedies of the parties
shall be cumulative and not alternative, in addition to and not exclusive of any
other right or remedy to which the parties may be lawfully entitled in case of
any breach of threatened breach of any term or provision hereof; the rights and
remedies of the parties shall be continuing and not exhausted by any one or more
uses thereof, and may be exercised at any time or from time to time and as often
as may be expedient; and any option or election to enforce any such right or
remedy may be exercised or changed at any time or from time to time. This
Agreement sets forth the entire agreement by the parties, and no custom, act,
forbearance, or words or silence at any time, gratuitous or otherwise, shall
impose any additional obligation or liability upon Buyer or Seller or waive or
release either party or act as a supplement, alteration, amendment or change of
any term hereof, including this clause, unless set forth in a written instrument
duly executed by such party expressly stating that it is intended to impose such
an additional obligation or liability or to constitute such a waiver or release,
or that it is intended to operate as such a supplement, alteration, amendment or
change. This Agreement shall be no more strictly construed against Buyer than
Seller or vice versa, both having contributed in a material fashion to the
negotiation and preparation hereof. Conditions precedent to a party's
obligations hereunder are for the benefit of such party only and may be waived
only by such party in its sole discretion. This Section shall survive Closing or
termination of this Agreement.
30. Governing Law and Binding Effect. This Agreement shall be
governed by the laws of the State of Virginia. This Agreement shall be
binding on and inure to the benefit of the successors and permitted assigns
of Seller and the successors and permitted assigns of Buyer. This provision
shall survive the Closing.
31. Severability. If any term or provision of this Agreement or the
application thereof to any person, property or circumstance which is not of
essence to this Agreement shall to any extent be invalid or unenforceable, the
remainder of this Agreement or the application of such term or provision to
persons, properties and circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law. This provision shall survive the Closing.
32. Authority. Each party signing this Agreement on behalf of Seller
and Buyer, respectively, represents and warrants that such person has full
authority to do so, that such person (on behalf of itself and the party for whom
it is signing) has obtained all necessary
27
<PAGE>
consents, approvals and authorizations from any person, entity or governmental
authority required to enter into this Agreement and perform its obligations
hereunder, including, without limitation, to convey the Premises to Buyer
subject to the terms and conditions hereof, and that this Agreement is binding
upon the entity or entities on behalf of which such person signed or such
person, if an individual. Except as set forth in Exhibit E, Seller represents
and warrants to Buyer that neither the execution of this Agreement nor the
consummation of the transactions contemplated hereby will (A) result in a breach
of, default under, or acceleration of, any agreement to which Seller is a party
or by which Seller or all or any portion of the Premises are bound; or (B)
violate any restriction, court order, agreement or other legal obligation to
which Seller and/or all or any portion of the Premises is subject. Buyer
represents and warrants to Seller that neither the execution of this Agreement
nor the consummation of the transactions contemplated hereby will (Y) result in
a breach of, default under, or acceleration of, any agreement to which Buyer is
a party or to which Buyer is bound; or (Z) violate any restriction, court order,
agreement or other legal obligation to which Buyer is subject. Seller represents
and warrants to Buyer that Seller has delivered to Buyer true, complete and
correct copies of each partnership agreement pursuant to which Seller was
formed, which partnership agreements are in effect as of the date of this
Agreement and are unmodified except as set forth in copies delivered to Buyer.
Buyer has delivered to Seller on or before the date of this Agreement a copy of
Buyer's general partner's articles of incorporation certified by the Secretary
of State of the State of Maryland.
33. Good Faith. Seller and Buyer shall work together in good faith
to accomplish the consummation of the transactions contemplated by this
Agreement, and Buyer and Seller shall each furnish the other with such documents
or further assurances as the other may reasonably require in connection with
such transactions. This provision shall survive Closing.
34. Confidentiality. Each party hereto agrees to maintain in
confidence, and not to discuss with or disclose to any person or entity who is
not a party to this Agreement, the existence of this Agreement, any term of this
Agreement or any aspect of the transactions contemplated hereby, except as
provided below in this Section. Each party hereto may discuss with and disclose
to its accountants, attorneys, existing or prospective lenders, investment
bankers, underwriters, ratings agencies, partners, consultants and other
advisors and, to the extent required to comply with the SAIC I and SAIC II Right
of First Refusal, to SAIC the matters described above to the extent such parties
reasonably need to know in connection with the transactions contemplated by this
Agreement and are bound by a confidentiality obligation identical in all
material respects to the one created in this Section. Additionally, each party
may discuss and disclose such matters to the extent necessary to comply with any
requirements of the Securities and Exchange Commission or in order to comply
with any securities Law or interpretation thereof. Each of Buyer and Seller
represents and warrants to the other that, to the best of their knowledge, no
fact or circumstance exists which would require such discussion or disclosure as
of the date of this Agreement. This provision shall survive termination of this
Agreement, but shall terminate upon Closing, except as provided below. Any press
release at any time to be made by any OP Unit Holder or Buyer, respectively,
28
<PAGE>
regarding any matter which is the subject of the confidentiality obligation
created in this Section shall be subject to the reasonable approval of Buyer or
Rhode Island Corporation, respectively, both as to timing and content.
Notwithstanding anything to the contrary contained herein, no disclosures shall
be made with respect to the existence or any terms of this Agreement until the
Option Exercise Date, except as Buyer is required to make pursuant to securities
Law or interpretations thereof.
35. No Other Representations or Warranties by Seller. Buyer
represents, warrants and agrees that (i) Buyer has examined or will examine the
Premises and is or will be familiar with the physical condition thereof and has
conducted or will conduct such investigation of the affairs of the Premises as
Buyer may consider appropriate, (ii) neither Seller nor any of the employees,
agents or attorneys of Seller have made any verbal or written representations,
warranties, promises or guaranties whatsoever to Buyer, whether express or
implied, and, in particular, that no such representations, warranties, promises
or guaranties have been made with respect to the physical condition or operation
of Premises, the actual or projected revenue and expenses of the Premises, the
zoning and other laws, regulations and rules applicable to the Premises or the
compliance of the Premises therewith, the quantity, quality or condition of the
articles or personal property and fixtures included in the transactions
contemplated hereby, the use or occupancy of the Premises or any part thereof or
any other matter or thing affecting or related to the Premises or the
transactions contemplated hereby, except as, and solely to the extent, herein
specifically set forth, and (iii) Buyer has not relied upon any such
representations, warranties, promises or guaranties other than those
representations, warranties, promises or guaranties herein specifically set
forth herein, and, then, only to the extent thereof, or upon any statements made
in an informational brochure with respect to the Premises and, except as set
forth hereinabove, has entered into this Agreement after having made and relied
solely on its own independent investigation, inspection, analysis, appraisal,
examination and evaluation of the facts and circumstances.
36. As-Is Acquisition. Buyer agrees to accept the Premises "AS IS",
"WHERE IS" and "WITH ALL FAULTS" in its condition as of the Option Exercise
Date, subject to ordinary wear and tear during the Interim Period, the
representations and warranties made in this Agreement and Section 16 hereof.
Seller agrees to deliver the Premises to Buyer at Closing in the condition in
which they are in as of the Option Exercise Date, subject to ordinary wear and
tear during the Interim Period, and free of tenants and occupants other than
tenants under Leases and sublessees, sub-sublessees and assignees set forth in
Exhibits F and I or otherwise occupying space in the Premises.
37. Multiple Counterparts. This Agreement may be executed in
multiple counterparts, all of which when taken together will constitute one
agreement.
29
<PAGE>
IN WITNESS WHEREOF, the parties here to have executed this Agreement as of
the date set forth above.
Limited Joinder
The general partner of Buyer hereby joins in and executes and delivers
this Agreement for the sole purpose of making the acknowledgments and agreements
contained in Section 9 and Section 12(0). All parties to this Agreement
acknowledge that the general partner of Buyer shall have no obligation or
liability in connection with this Agreement other than as set forth in and under
Section 9 and Section 12(0).
GENERAL PARTNER OF BUYER:
Beacon Properties Corporation
By: /s/ Lionel P. Fortin
Name: Lionel P. Fortin
Title: Chief Operating Officer
WITNESS: SELLER:
GREENSBORO ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited partnership
______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
______________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
______________________________ By: The Sotweed Corporation, a Delaware
corporation, as general partner
______________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
30
<PAGE>
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
JOHN MARSHALL ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited partnership
______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
______________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
______________________________ By: The Sotweed Corporation,
a Delaware corporation,
as general partner
______________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
PIMPERNELL ESTATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
______________________________ By: Pimpernell Corporation,
a Delaware corporation,
as general partner
31
<PAGE>
______________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
WOODLAND-NORTHRIDGE I LIMITED
PARTNERSHIP, a Virginia limited
partnership
______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
______________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
By: White Swan Oil Corporation, a
Delaware corporation,
as general partner
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Vice President
By: Green Highlander Corporation,
a Delaware corporation,
as general partner
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Vice President
32
<PAGE>
By: Windward Oil and Gas Corporation,
a Texas corporation,
as general partner
______________________________ By: /s/ Gilbert Kerlin
Name: Gilbert Kerlin
Title: President
By: Smoking Tree Corporation,
a Delaware corporation,
as general partner
______________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
GOODRIDGE DRIVE ASSOCIATES
LIMITED PARTNERSHIP,
a Virginia limited partnership
_______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
_______________________________ By: /s/ A.J. Clark
Name: A. J. Clark
Title: General Partner
By: RPC Associates, a Virginia
general partnership, General
Partner
33
<PAGE>
By: Rattlesnake Point
Corporation, a Delaware
corporation, its general
partner
By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
34
<PAGE>
BUYER:
BEACON PROPERTIES, L.P.,
a Delaware limited partnership
By: Beacon Properties Corporation,
a Maryland corporation,
its general partner
____________________________ By: /s/ Lionel P. Fortin
Name: Lionel P. Fortin
Title: Chief Operating Officer
35
<PAGE>
EXHIBIT A
DESCRIPTION OF THE PREMISES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Approximate
Seller Property Name Address TRA/Lot Size
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John Marshall Associates John Marshall I and 8283 Greensboro Drive 261,364 sf TRA
Limited Partnership John Marshall III Land McLean, Virginia 22102 111,176 sf Lot Size
- -----------------------------------------------------------------------------------------------
Greensboro Associates E. J. Randolph 8251 Greensboro Drive 164,695 sf TRA
Limited Partnership McLean, Virginia 22102
- -----------------------------------------------------------------------------------------------
Pimpernell Estates SAIC I 1710 Goodridge Drive 128,655 sf TRA
Limited Partnership McLean, Virginia 22102
- -----------------------------------------------------------------------------------------------
Woodland-Northridge I Northridge I 13221 Woodland Park Rd. 124,319 sf TRA
Limited Partnership Herndon, Virginia 22071
- -----------------------------------------------------------------------------------------------
</TABLE>
A-1
<PAGE>
EXHIBIT B
ADDITIONAL OPTION PREMISES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Approximate
Seller Property Name Address TRA/Lot Size
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Pimpernell Estates SAIC II 128,655 sf TRA
Limited Partnership
- -----------------------------------------------------------------------------------------------
Goodridge Drive SAIC III 124,319 sf TRA
Associates Limited
Partnership
- -----------------------------------------------------------------------------------------------
</TABLE>
B-1
<PAGE>
EXHIBIT C
ALLOCATIONS OF VALUE AND DEBT
Property Values Assumed Indebtedness
- -------------------------------------------------------------------------------
John Marshall I and $32,293,000 $21,517,000
John Marshall III
- -------------------------------------------------------------------------------
E.J. Randolph 23,467,000 18,056,000
- -------------------------------------------------------------------------------
SAIC I 37,378,000 27,879,000
- -------------------------------------------------------------------------------
Northridge I 21,862,000 16,642,000
---------- ----------
- -------------------------------------------------------------------------------
TOTAL $115,000,000 $84,094,000
- -------------------------------------------------------------------------------
C-1
<PAGE>
EXHIBIT D
PARTNERSHIP AGREEMENT
D-1
<PAGE>
EXHIBIT E
SELLER'S EXCEPTIONS
E-1
<PAGE>
EXHIBIT F
RENT ROLL OF JOHN MARSHALL ASSOCIATES LIMITED PARTNERSHIP
F-1
<PAGE>
EXHIBIT F (continued)
RENT ROLL OF GREENSBORO ASSOCIATES LIMITED PARTNERSHIP
F-2
<PAGE>
EXHIBIT F (continued)
RENT ROLL OF PIMPERNELL ESTATES LIMITED PARTNERSHIP
F-3
<PAGE>
EXHIBIT F (continued)
RENT ROLL OF WOODLAND-NORTHRIDGE I LIMITED PARTNERSHIP
F-4
<PAGE>
EXHIBIT G
LEASING AND RELATED AGREEMENTS
The Evans Company is owed a commission in the amount of $800,541.30 for
five year lease extension of Booz Allen and Hamilton in John Marshall I.
G-1
<PAGE>
EXHIBIT H
APPLIED SECURITY DEPOSITS
Sam's Deli $ 2,703.75
Park's Fabricare $ 1,212.00
DSC Communications $11,933.00
H-1
<PAGE>
EXHIBIT I
KNOWN SUBLEASES, SUB-SUBLEASES AND ASSIGNMENTS
None
I-1
<PAGE>
EXHIBIT J
SUBSCRIBER QUESTIONNAIRE
Name:______________________________________
PROSPECTIVE SUBSCRIBER QUESTIONNAIRE
------------
Beacon Properties, L.P.
50 Rowes Wharf
Boston, MA 02110
Tel: (617) 330-1400
------------
The units of limited partnership interest (the "Units") of Beacon
Properties, L.P. (the "Operating Partnership") are being offered without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), and the securities laws of certain states. The Units are being offered in
reliance on an exemption from registration under Regulation D of the Securities
Act ("Regulation D") and similar state law exemptions. To satisfy the
requirements of Regulation D and applicable state law exemptions, the Operating
Partnership must determine whether a prospective unitholder meets that
Regulation D and state law definitions of "accredited investor" before selling
(or, in some states, offering) securities to such person. This Questionnaire is
intended to assist the Operating Partnership in making this determination.
Please complete, execute and date this Prospective Subscriber
Questionnaire and deliver it to the address set forth above. Your answers will,
at all times, be kept confidential except as necessary to establish that the
offering and sale of the Units will not result in a violation of the
registration provisions of the Securities Act or a violation of the securities
laws of any state.
1) To establish the basis of the Subscriber's status as an accredited
investor, please answer the questions set forth below.
J-1
<PAGE>
a) Is the Subscriber an individual with a net worth (or net worth
with his or her spouse) in excess of $1 million:
Yes__________ No__________
b) Is the Subscriber an individual with net income (without
including any net income of the Subscriber's spouse) in excess
of $200,000, or joint income with the Subscriber's spouse, in
excess of $300,000, in each of the two most recent years, and
does the Subscriber reasonably expect to reach the same income
level in the current year?
Yes__________ No__________
c) Is the Subscriber an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of
1974 (hereinafter "ERISA") whose decision to invest in the
Operating Partnership is being made by a plan fiduciary
which is either a bank, savings and loan association,
insurance company or registered investment adviser or,
alternatively, does the employee benefit plan have total
assets in excess of $5,000,000 or is the employee benefit
plan "self-directed" with investment decisions made solely
by person(s) who answered "Yes" to item 1(a) or 1(b) above?
Yes__________ No__________
d) Is the Subscriber a retirement plan established and maintained
by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions for
the benefit of its employees with total assets in excess of
$5,000,000?
Yes__________ No__________
e) Is the Subscriber a trust (including an individual
retirement arrangement formed as a trust or a tax-qualified
pension and profit sharing plan (e.g., a Keogh Plan) formed
as a trust but not subject to ERISA) with total assets in
excess of $5,000,000 that was not formed for the specific
J-2
<PAGE>
purpose of acquiring the Units and whose purchase is
directed by a person with such knowledge and experience in
financial and business matters that such person is capable
of evaluating the merits and risks of the prospective
investment?
Yes__________ No__________
f) Is the Subscriber a corporation, partnership, Massachusetts or
similar business trust or an organization described in Section
501(c)(3) of the Internal Revenue Code that was not formed for
the specific purpose of acquiring the Units and whose total
assets exceed $5,000,000?
Yes__________ No__________
g) Is the Subscriber one of the following entities:
(i) A "bank" as defined in Section 3(a)(2) of the Securities
Act or any "savings and loan association" or other
institution as defined in Section 3(a)(5)(A) of the
Securities Act, whether acting in an individual or
fiduciary capacity;
(ii) A "broker/dealer" registered pursuant to Section 15
of the Securities Exchange Act of 1934, as amended;
(iii) An "insurance company," as defined in Section 2(13)
of the Securities Act;
(iv) An "investment company" registered under the Investment
Company Act of 1940 or a "business development company"
as defined in Section 2(a)(48) of the Investment Company
Act of 1940;
(v) A "Small Business Investment Company" licensed by the
U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of
1958; or
(vi) A "Private Business Development Company"as defined in
Section 202(a)(22) of the Investment Advisers Act of
1940?
J-3
<PAGE>
Yes__________ No__________
If yes, then which entity (i.e., (g)(i) through (vi) above)?
h) Is the Subscriber an entity (other than a trust, but including
a grantor trust) in which all of the equity owners can answer
"Yes" to any one question set forth in Sections 1(a) through
1(g) immediately above?
Yes__________ No__________
2) Is the Subscriber acquiring the Units of the Operating Partnership
as a principal for the purposes of investment and not with a view to
resale or distribution?
Yes__________ No__________
3) By signing this Questionnaire, the Subscriber hereby confirms the
following statements:
a) The Subscriber is aware that the offering of the Units will
involve securities for which no market exists, thereby
possibly requiring an investment to be held for an indefinite
period of time.
b) The Subscriber shall immediately provide the Operating
Partnership with corrected information in the event any
information given herein was untrue.
c) The Subscriber acknowledges that any delivery of the
Registration Statement on Form S-11 and other information
relating to the Operating Partnership prior to the
determination by the Operating Partnership of the suitability
of the Subscriber as a Unitholder shall not constitute an
offer of Units until such determination of suitability shall
be made.
d) The Subscriber acknowledges that the Operating Partnership
will rely on the Subscriber's representations contained herein
as a basis for exemption from registration.
e) The Subscriber, either alone or with his or her purchase
representative, has such knowledge and experience in financial
and business matters as
J-4
<PAGE>
to be capable of evaluating the risks and merits of the
prospective investment in the Units.
f) The answers of the Subscriber to the foregoing questions are
true and complete to the best of the information and belief of
the undersigned, and the Operating Partnership shall be
notified promptly (and, in particular, upon the acquisition of
additional Units by the Subscriber) of any changes in the
foregoing answers.
Notwithstanding the foregoing, the undersigned shall have no obligation to
furnish additional information after the acquisition of the Units except as may
be required to demonstrate the availability of an exemption from registration
under Regulation D with respect to the acquisition of Units or of the shares of
Common Stock which may be obtained upon their redemption or exchange.
- ------------------------------------ ------------------------------------
Signature of Subscriber Signature of Subscriber
(or duly authorized agent) (or duly authorized agent)
- ------------------------------------ ------------------------------------
Title: Title:
- ------------------------------------ ------------------------------------
Print Name Signed Above Print Name Signed Above
- ------------------------------------ ------------------------------------
Date Date
J-5
<PAGE>
EXHIBIT K
LOCK-UP AGREEMENT
[date]
Beacon Properties Corporation
50 Rowes Wharf
Boston, MA 02110
Beacon Properties, L.P.
50 Rowes Wharf
Boston, MA 02110
Ladies and Gentlemen:
In consideration of the Option Agreement between Beacon Properties, L.P.
("Purchaser"), and Greensboro Associates Limited Partnership, John Marshall
Associates Limited Partnership, Pimpernell Estates Limited Partnership,
Woodland-Northridge I Limited Partnership, and Goodridge Drive Associates
Limited Partnership ("Seller"), dated as of March ____ 1996, pursuant to which
Purchaser agreed to acquire certain assets of Seller for consideration including
units of limited partnership interest (the "Units") in Beacon Properties, L.P.,
a Maryland partnership (the "Operating Partnership"), the undersigned hereby
agrees that the undersigned will not sell, offer or contract to sell, grant any
option to purchase, pledge, redeem, convert or otherwise dispose of or transfer
any Units until the date that is one (1) year from the date of the issuance of
the Units, and that any such transaction prior to such date shall be null and
void and shall not be binding on or recognized by the Purchaser or Beacon
Properties Corporation.
Very truly yours,
WITNESS: GREENSBORO ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
______________________________ By: ____________________________________
Name: David W. Evans
Title: General Partner
______________________________ By: ____________________________________
K-1
<PAGE>
Name: A.J. Clark
Title: General Partner
______________________________ By: The Sotweed Corporation, a Delaware
corporation, as general partner
______________________________ By: _______________________________
Name: Robert G. Goelet
Title: President
______________________________ By: _______________________________
Name: Jonathan M. Rather
Title: Treasurer
JOHN MARSHALL ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited partnership
______________________________ By: ____________________________________
Name: David W. Evans
Title: General Partner
______________________________ By: ____________________________________
Name: A.J. Clark
Title: General Partner
______________________________ By: The Sotweed Corporation, a
Delaware corporation, as general
partner
______________________________ By: _______________________________
Name: Robert G. Goelet
Title: President
______________________________ By: _______________________________
Name: Jonathan M. Rather
Title: Treasurer
K-2
<PAGE>
PIMPERNELL ESTATES LIMITED
PARTNERSHIP, a Virginia limited partnership
______________________________ By: Pimpernell Corporation, a Delaware
corporation, as general partner
______________________________ By: _______________________________
Name: Robert G. Goelet
Title: President
______________________________ By: _______________________________
Name: Jonathan M. Rather
Title: Treasurer
WOODLAND-NORTHRIDGE I LIMITED
PARTNERSHIP, a Virginia limited partnership
______________________________ By: ____________________________________
Name: David W. Evans
Title: General Partner
______________________________ By: ____________________________________
Name: A.J. Clark
Title: General Partner
By: White Swan Oil Corporation,
a Delaware corporation,
as general partner
______________________________ By: _______________________________
Name: Jonathan M. Rather
Title: Vice President
K-3
<PAGE>
By: Green Highlander Corporation,
a Delaware corporation,
as general partner
______________________________ By: _______________________________
Name: Jonathan M. Rather
Title: Vice President
By: Windward Oil and Gas Corporation,
a Texas corporation,
as general partner
______________________________ By: _______________________________
Name: Gilbert Kerlin
Title: President
By: Smoking Tree Corporation,
a Delaware corporation,
as general partner
______________________________ By: _______________________________
Name: Robert G. Goelet
Title: President
______________________________ By: _______________________________
Name: Jonathan M. Rather
Title: Treasurer
GOODRIDGE DRIVE ASSOCIATES
LIMITED PARTNERSHIP,
a Virginia limited partnership
_______________________________ By: ____________________________________
Name:
Title:
K-4
<PAGE>
EXHIBIT L
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into as
of _____________, 1996 by and between Beacon Properties Corporation, a Maryland
corporation (the "Company") and John Marshall Associates Limited Partnership, a
Virginia limited partnership, Greensboro Associates Limited Partnership, a
Virginia limited partnership, Woodland-Northridge I Limited Partnership, a
Virginia limited partnership, Pimpernell Estates Limited Partnership, a Virginia
limited partnership, and Goodridge Drive Associates Limited Partnership, a
Virginia limited partnership (each a "Holder" and collectively the "Holders").
WHEREAS, the Holders are to receive units of limited partnership interest
("Units") in Beacon Properties, L.P. (the "Operating Partnership") which may be
redeemed for shares of the Company's common stock, no par value ("Common Stock")
issued without registration under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to an Option Agreement dated March 18, 1996 by and
between the Holders and the Operating Partnership.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Registration.
(a) Demand Registration. At any time after March 18, 1997 until the
earlier of (i) March 18, 2007 or (ii) the date on which all of the Registrable
Shares (as hereinafter defined) have become eligible for sale pursuant to Rule
144 promulgated under the Securities Act, subject to the conditions set forth in
this Agreement, Holders may request that the Company cause to be filed, a
registration statement (a "Demand Registration Statement") under Rule 415 under
the Securities Act relating to the sale by such Holders of their previously or
concurrently issued Registrable Shares in accordance with the terms hereof. As
used in this Agreement, the term "Registrable Shares" means shares of Common
Stock issued or to be issued to the Holders upon redemption or in exchange for
their Units, excluding (A) Common Stock for which a Registration Statement
relating to the sale thereof shall have become effective under the Securities
Act and which have been disposed of under such Registration Statement, (B)
Common Stock sold pursuant to Rule 144 under the Securities Act or (C) Common
Stock eligible for sale pursuant to Rule 144 under the Securities Act. Upon
receipt of any such request, the Company shall promptly give written notice of
such proposed registration to all Holders of Units and Registrable Shares. Such
Holders shall have the right, by giving written notice to the Company within
fifteen (15) days after such notice referred to
L-1
<PAGE>
in the preceding sentence has been given by the Company to elect to have
included in the Demand Registration Statement such of their Registrable Shares
as each Holder may request in such notice of election. Thereupon, the Company
shall use its best efforts to cause such Demand Registration Statement to be
declared effective by the Securities and Exchange Commission (the "SEC") for all
Registrable Shares which the Company has been requested to register as soon as
practicable thereafter. The Company agrees to use its best efforts to keep the
Demand Registration Statement continuously effective until the earliest of (a)
the date on which the Holders no longer hold any Registrable Shares registered
under the Demand Registration Statement, (b) the date on which the Registrable
Shares may be sold by the Holders pursuant to Rule 144 promulgated under the
Securities Act or (c) the date which is six (6) months from the effective date
of such Demand Registration Statement. The Company shall not be required to file
and effect a new Demand Registration Statement pursuant to this Section 1(a)
until a period of twelve (12) months has elapsed from the termination of the
registration statement with respect to Registrable Shares covered by a prior
registration request.
(b) Piggyback Registration. If at any time while any Registrable Shares
are outstanding the Company proposes to file a registration statement under the
Securities Act with respect to an offering of Common Stock solely for cash
(other than a registration statement (i) on Form S-8 or any successor form or in
connection with any employee or director welfare, benefit or compensation plan,
(ii) on Form S-4 or any successor form or in connection with an exchange offer,
(iii) in connection with a rights offering exclusively to existing holders of
Common Stock, (iv) in connection with an offering solely to employees of the
Company or its affiliates, or (v) relating to a transaction pursuant to Rule 145
of the Securities Act), whether or not for its own account (a "Piggyback
Registration Statement"), the Company shall give written notice of such proposed
filing at least 10 business days before filing to the Holders. The notice
referred to in the preceding sentence shall offer Holders the opportunity to
register such amount of Registrable Shares as each Holder may request (a
"Piggyback Registration"). Subject to the provisions of Section 2 below, the
Company shall include in such Piggyback Registration all Registrable Shares
requested to be included in the registration for which the Company has received
written requests for inclusion therein within fifteen (15) calendar days after
the notice referred to above has been given by the Company to the Holders.
Holders of Registrable Shares shall be permitted to withdraw all or part of the
Registrable Shares from a Piggyback Registration at any time prior to the
effective date of such Piggyback Registration. If a Piggyback Registration is an
underwritten registration on behalf of the Company and the managing underwriter
advises the Company that the total number of shares of Common Stock requested to
be included in such registration exceeds the number of shares of Common Stock
which can be sold in such offering, the Company will include in such
registration in the following priority: (i) first, all shares of Common Stock
the Company proposes to sell and (ii) second, up to the full number of
applicable Registrable Shares requested to be included in such registration and,
which in the opinion of such managing underwriter, can be sold without adversely
affecting the price range or probability of success of such offering, which
shall be allocated among the Holders and all other stockholders requesting
registration on a pro rata basis. No Registrable Securities or other shares of
Common Stock requested to be included in
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<PAGE>
a registration pursuant to demand registration rights shall be excluded from the
underwriting unless all securities other than such securities are first
excluded.
(c) Registration Statement Covering Issuance of Common Stock. In lieu of
the registration rights set forth in Section 1(a) and 1(b) above, the Company
may, in its sole discretion, prior to the first date upon which the Units held
by the Holders may be redeemed (or such other date as may be required under
applicable provisions of the Securities Act) file a registration statement (the
"Shelf Registration Statement") under Rule 415 under the Securities Act relating
to the issuance to Holders of shares of Common Stock upon the redemption or in
exchange for their Units. Thereupon, the Company shall use its best efforts to
cause such Registration Statement to be declared effective by the SEC for all
shares of Common Stock covered thereby. The Company agrees to use its best
efforts to keep the Shelf Registration Statement continuously effective until
the date on which each Holder has redeemed or exchanged such Holder's Units for
Common Stock. In the event that the Company is unable to cause such Registration
Statement to be declared effective by the SEC or is unable to keep such
Registration Statement effective until the date on which each Holder has
redeemed or exchanged such Holder's Units for Common Stock, then the rights of
each Holder set forth in Section 1(a) and 1(b) above shall be restored. Any
Demand Registration Statement, Piggyback Registration Statement or Shelf
Registration Statement are sometimes referred to as a "Registration Statement."
2. Registration Procedures.
(a) The Company shall notify each Holder of the effectiveness of the
Registration Statement and shall furnish to each Holder such number of copies of
the Registration Statement (including any amendments, supplements and exhibits),
the prospectus contained therein (including each preliminary prospectus), any
documents incorporated by reference in the Registration Statement and such other
documents as the Holder may reasonably request in order to facilitate its sale
of the Registrable Shares in the manner described in the Registration Statement.
(b) The Company shall prepare and file with the SEC from time to time such
amendments and supplements to the Registration Statement and prospectus used in
connection therewith as may be necessary to keep the Registration Statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all the Registrable Shares until the earlier of (i) such
time as all of the Registrable Shares have been disposed of in accordance with
the intended methods of disposition by the Holders as set forth in the
Registration Statement or (ii) the date on which the Registration Statement
ceases to be effective in accordance with the terms of Section 1. Upon ten (10)
business days' notice, the Company shall file any supplement or post-effective
amendment to the Registration Statement with respect to such Holder's interests
in or plan of distribution of Registrable Shares that is reasonably necessary to
permit the sale of the Holder's Registrable Shares pursuant to the Registration
Statement and the Company shall file any necessary listing applications or
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<PAGE>
amendments to the existing applications to cause the shares to be then listed or
quoted on the primary exchange or quotation system on which the Common Stock is
then listed or quoted.
(c) The Company shall promptly notify each Holder of, and confirm in
writing, any request by the SEC for amendments or supplements to the
Registration Statement or the prospectus related thereto or for additional
information. In addition, the Company shall promptly notify each Holder of, and
confirm in writing, the filing of the Registration Statement, any prospectus
supplement related thereto or any post-effective amendment to the Registration
Statement and the effectiveness of any post-effective amendment.
(d) The Company shall immediately notify each Holder, at any time when a
prospectus relating to the Registration Statement is required to be delivered
under the Securities Act, of the happening of any event as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. In such
event and subject to paragraph 7 of this Agreement, the Company shall promptly
prepare and furnish to each Holder a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of Registrable Shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading.
3. State Securities Laws. Subject to the conditions set forth in this
Agreement, the Company shall, promptly upon the filing of a Registration
Statement including Registrable Shares, file such documents as may be necessary
to register or qualify the Registrable Shares under the securities or "Blue Sky"
laws of such states as any Holder may reasonably request, and the Company shall
use its best efforts to cause such filings to become qualified; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation to do business under the laws of any such state in which it is not
then qualified or to file any general consent to service of process in any such
state. Once qualified, the Company shall use its best efforts to keep such
filings qualified until the earlier of (a) such time as all of the Registrable
Shares have been disposed of in accordance with the intended methods of
disposition by the Holder as set forth in the Registration Statement, (b) in the
case of a particular state, a Holder has notified the Company that it no longer
requires qualified filing in such state in accordance with its original request
for filing or (c) the date on which the Registration Statement ceases to be
effective. The Company shall promptly notify each Holder of, and confirm in
writing, the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Shares for sale under the
securities or "Blue Sky" laws of any jurisdiction or the initiation or threat of
any proceeding for such purpose.
4. Expenses. The Company shall bear all expenses incurred in connection
with the registration of the Registrable Shares pursuant to Section 1(b) and
Section 1(c) of this
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<PAGE>
Agreement. Additionally, the Company shall bear all expenses incurred in
connection with the registration of the Registrable Shares pursuant to Section
1(a) of this Agreement for each Registration Statement registering $1 million or
more of Registrable Shares, and the Holders shall bear their ratable shares of
all expenses incurred by the Company in connection with a registration in which
the Holders are included pursuant to Section 1(a) of this Agreement based on the
number of Registrable Shares included to the total number of shares of Common
Stock so registered for each Registration Statement registering less than $1
million of Registrable Shares. Such expenses shall include, without limitation,
all printing, legal and accounting expenses incurred by the Company and all
registration and filing fees imposed by the SEC, any state securities commission
or the New York Stock Exchange or, if the Common Stock is not then listed on the
New York Stock Exchange, the principal national securities exchange or national
market system on which the Common Stock is then traded or quoted. In addition,
Holders shall be responsible for any brokerage or underwriting commissions and
taxes of any kind (including, without limitation, transfer taxes) with respect
to any disposition, sale or transfer of Registrable Shares and for any legal,
accounting and other expenses incurred by them.
5. Indemnification by the Company. The Company agrees to indemnify each of
the Holders and their respective officers, directors, employees, agents,
representatives and affiliates, and each person or entity, if any, that controls
a Holder within the meaning of the Securities Act, and each other person or
entity, if any, subject to liability because of his, her or its connection with
a Holder, and any underwriter and any person who controls the underwriter within
the meaning of the Securities Act (an "Indemnitee") against any and all losses,
claims, damages, actions, liabilities, costs and expenses (including without
limitation reasonable attorneys' fees, expenses and disbursements documented in
writing), joint or several, arising out of or based upon any untrue or alleged
untrue statement of material fact contained in the Registration Statement or any
prospectus contained therein, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except insofar as and to the extent that such statement or
omission arose out of or was based upon information regarding the Indemnitee or
its plan of distribution which was furnished to the Company by the Indemnitee
for use therein, provided, further that the Company shall not be liable to any
person who participates as an underwriter in the offering or sale of Registrable
Shares or any other person, if any, who controls such underwriter within the
meaning of the Securities Act, in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in such Registration Statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with information furnished to
the Company for use in connection with the Registration Statement or the
prospectus contained therein by such Indemnitee or (ii) such Indemnitee's
failure to send or give a copy of the final prospectus furnished to it by the
Company at or prior to the time such action is required by the Securities Act to
the person claiming an untrue statement or alleged untrue statement or omission
or alleged omission if such statement or omission was corrected
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<PAGE>
in such final prospectus. The obligations of the Company under this Section 5
shall survive the completion of any offering of Registrable Shares pursuant to a
Registration Statement under this Agreement or otherwise and shall survive the
termination of this Agreement.
6. Covenants of Holders. Each of the Holders hereby agrees (a) to
cooperate with the Company and to furnish to the Company all such information in
connection with the preparation of the Registration Statement and any filings
with any state securities commissions as the Company may reasonably request, (b)
to deliver or cause delivery of the prospectus contained in the Registration
Statement to any purchaser of the shares covered by the Registration Statement
from the Holder, (c) to indemnify the Company, its officers, directors,
employees, agents, representatives and affiliates, and each person, if any, who
controls the Company within the meaning of the Securities Act, and each other
person, if any, subject to liability because of his connection with the Company,
against any and all losses, claims, damages, actions, liabilities, costs and
expenses arising out of or based upon (i) any untrue statement or alleged untrue
statement of material fact contained in either Registration Statement or the
prospectus contained therein, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, if and to the extent that such statement or omission arose out
of or was based upon information regarding the Holder or its plan of
distribution which was furnished to the Company by the Holder expressly for use
therein, or (ii) the failure by the Holder to deliver or cause to be delivered
the prospectus contained in the Registration Statement (as amended or
supplemented, if applicable) furnished by the Company to the Holder to any
purchaser of the shares covered by the Registration Statement from the Holder.
Notwithstanding the foregoing, (i) in no event will a Holder have any obligation
under this Section 6 for amounts the Company pays in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder (which consent shall not be unreasonably withheld) and
(ii) the total amount for which a Holder shall be liable under this Section 6
shall not in any event exceed the aggregate proceeds received by him or it from
the sale of the Holder's Registrable Shares in such registration. The
obligations of the Holders under this Section 6 shall survive the completion of
any offering of Registrable Shares pursuant to a Registration Statement under
this Agreement or otherwise and shall survive the termination of this Agreement.
7. Suspension of Registration Requirement.
(a) The Company shall promptly notify each Holder of, and confirm in
writing, the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose. The Company shall use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of the Registration Statement at the earliest
possible moment.
(b) Notwithstanding anything to the contrary set forth in this Agreement,
the Company's obligation under this Agreement to use its best efforts to cause
the Registration Statement and any filings with any state securities commission
to be made or to become
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<PAGE>
effective or to amend or supplement the Registration Statement shall be
suspended in the event and during such period pending negotiations relating to,
or consummation of, a transaction or the occurrence of an event that would
require additional disclosure of material information by the Company in the
Registration Statement or such filing, as to which the Company has a bona fide
business purpose for preserving confidentiality or which renders the Company
unable to comply with SEC requirements (such circumstances being hereinafter
referred to as a "Suspension Event") that would make it impractical or
unadvisable to cause the Registration Statement or such filings to be made or to
become effective or to amend or supplement the Registration Statement, but such
suspension shall continue only for so long as such event or its effect is
continuing but in no event will that suspension exceed 60 days. The Company
agrees not to exercise the rights set forth in this Section 7(b) more than twice
in any twelve month period and further agrees that the 60-day periods shall be
non-consecutive. The Company shall notify the Holder of the existence of any
Suspension Event.
(c) Each holder of Registrable Shares whose Registrable Shares are covered
by a Registration Statement filed pursuant to Section 1 hereof agrees, if
requested by the Company in the case of a nonunderwritten offering (a
"Nonunderwritten Offering") or if requested by the managing underwriter or
underwriters in an underwritten offering (an "Underwritten Offering,"
collectively with Nonunderwritten Offering, the "Offering"), not to effect any
public sale or distribution of any of the securities of the Company of any class
included in such Offering, including a sale pursuant to Rule 144 or Rule 144A
under the Securities Act (except as part of such Underwritten Offering), during
the 15-day period prior to, and during the 60-day period (or such longer period
as may be required by the managing underwriter or underwriters) beginning on,
the date of pricing of each Offering, to the extent timely notified in writing
by the Company or the managing underwriters.
8. Black-Out Period. Following the effectiveness of the Registration
Statement and the filings with any state securities commissions, the Holders
agree that they will not effect any sales of the Registrable Shares pursuant to
the Registration Statement or any such filings at any time after they have
received notice from the Company to suspend sales as a result of the occurrence
or existence of any Suspension Event, during any Offering or so that the Company
may correct or update the Registration Statement or such filing pursuant to
Section 2(c) or 2(d). The Holder may recommence effecting sales of the
Registrable Shares pursuant to the Registration Statement or such filings
following further notice to such effect from the Company, which notice shall be
given by the Company not later than five (5) days after the conclusion of any
such Suspension Event or Offering.
9. Additional Shares. The Company, at its option, may register, under any
registration statement and any filings with any state securities commissions
filed pursuant to this Agreement, any number of unissued shares of Common Stock
or any shares of Common Stock owned by any other shareholder or shareholders of
the Company.
10. Contribution. If the indemnification provided for in Sections 5 and 6
is unavailable to an indemnified party with respect to any losses, claims,
damages, actions,
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<PAGE>
liabilities, costs or expenses referred to therein or is insufficient to hold
the indemnified party harmless as contemplated therein, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, actions, liabilities, costs or expenses in such proportion as
is appropriate to reflect the relative fault of the Company, on the one hand,
and the Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, actions, liabilities,
costs or expenses as well as any other relevant equitable considerations. The
relative fault of the Company, on the one hand, and of the Holder, on the other
hand, shall be determined by reference to, among other factors, whether the
untrue or alleged untrue statement of a material fact or omission to state a
material fact relates to information supplied by the Company or by the Holder
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided, however,
that in no event shall the obligation of any indemnifying party to contribute
under this Section 10 exceed the amount that such indemnifying party would have
been obligated to pay by way of indemnification if the indemnification provided
for under Sections 5 or 6 hereof had been available under the circumstances.
The Company and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 10 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No indemnified party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party who was not guilty of such fraudulent
misrepresentation.
11. No Other Obligation to Register. Except as otherwise expressly
provided in this Agreement, the Company shall have no obligation to the
Holders to register the Registrable Shares under the Securities Act.
12. Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented without the prior written consent of the
Company and Holders holding in excess of 50% of the Registrable Shares.
13. Notices. Except as set forth below, all notices and other
communications provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by telex or
telecopier, registered or certified mail (return receipt requested), postage
prepaid or courier or overnight delivery service to the Company at the following
address and to the Holder at the address set forth on his signature page to this
Agreement (or at such other address for any party as shall be specified by like
notice, provided that notices of a change of address shall be effective only
upon receipt thereof), and further provided that in case of directions to amend
the Registration Statement pursuant to Section 2(b) or Section 6, a Holder must
confirm such notice in writing by overnight express delivery with confirmation
of receipt:
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<PAGE>
If to the Company: Beacon Properties Corporation
50 Rowes Wharf
Boston, MA 02110
Attn: Alan M. Leventhal,
Chief Executive Officer
With a copy to: Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Attn: Gilbert G. Menna, P.C.
In addition to the manner of notice permitted above, notices given pursuant to
Sections 1, 7 and 8 hereof may be effected telephonically and confirmed in
writing thereafter in the manner described above.
14. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company. This Agreement may
not be assigned by any Holder and any attempted assignment hereof by any Holder
will be void and of no effect and shall terminate all obligations of the Company
hereunder with respect to such Holder.
15. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
16. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Maryland applicable to contracts
made and to be performed wholly within said State.
17. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
18. Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be the complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to such subject matter. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
BEACON PROPERTIES CORPORATION
________________________________
Name:
Title:
L-10
<PAGE>
GREENSBORO ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
By: ______________________________
Name: David W. Evans
Title: General Partner
By: ______________________________
Name: A.J. Clark
Title: General Partner
By: The Sotweed Corporation, a
Delaware corporation, as
general partner
By: _____________________________
Name: Robert G. Goelet
Title: President
By: _____________________________
Name: Jonathan M. Rather
Title: Treasurer
JOHN MARSHALL ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
By: ______________________________
Name: David W. Evans
Title: General Partner
By: ______________________________
Name: A.J. Clark
Title: General Partner
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<PAGE>
By: The Sotweed Corporation,
a Delaware corporation,
as general partner
By: ____________________________
Name: Robert G. Goelet
Title: President
By: ____________________________
Name: Jonathan M. Rather
Title: Treasurer
PIMPERNELL ESTATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
By: Pimpernell Corporation,
a Delaware corporation,
as general partner
By: _____________________________
Name: Robert G. Goelet
Title: President
By: _____________________________
Name: Jonathan M. Rather
Title: Treasurer
WOODLAND-NORTHRIDGE I LIMITED
PARTNERSHIP, a Virginia limited
partnership
By: _________________________________
Name: David W. Evans
Title: General Partner
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<PAGE>
By: ______________________________
Name: A.J. Clark
Title: General Partner
By: White Swan Oil Corporation,
a Delaware corporation,
as general partner
By: _____________________________
Name: Jonathan M. Rather
Title: Vice President
By: Green Highlander Corporation,
a Delaware corporation,
as general partner
By: _____________________________
Name: Jonathan M. Rather
Title: Vice President
By: Windward Oil and Gas Corporation,
a Texas corporation,
as general partner
By: _____________________________
Name: Gilbert Kerlin
Title: President
By: Smoking Tree Corporation,
a Delaware corporation,
as general partner
By: _____________________________
Name: Robert G. Goelet
Title: President
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<PAGE>
By: ______________________________
Name: Jonathan M. Rather
Title: Treasurer
GOODRIDGE DRIVE ASSOCIATES
LIMITED PARTNERSHIP,
a Virginia limited partnership
By: _______________________________
Name: David W. Evans
Title: General Partner
By: _______________________________
Name: A. J. Clark
Title: General Partner
By: RPC Associates, a Virginia
general partnership, General
Partner
By: Rattlesnake Point Corporation,
a Delaware corporation,
its general partner
By: _________________________
Name: Robert G. Goelet
Title: President
By: __________________________
Name: Jonathan M. Rather
Title: Treasurer
Each Holder's address: c/o Goelet Realty Company, Three Christine Centre, 201
North Walnut Street, Suite 1002, Wilmington, Delaware 19801
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<PAGE>
EXHIBIT M
TITLE EXCEPTIONS
M-1
<PAGE>
EXHIBIT N
PRE-OPTION EXERCISE DATE ECONOMIC LEASE TERM GUIDELINES
299699.c1
N-1
FIRST AMENDMENT TO OPTION AGREEMENT
THIS FIRST AMENDMENT TO OPTION AGREEMENT is made as of the 17th day of
May, 1996 by and among John Marshall Associates Limited Partnership, a Virginia
limited partnership, with an address of c/o Goelet Realty Company, Three
Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware
19801, Greensboro Associates Limited Partnership, a Virginia limited
partnership, with an address of c/o Goelet Realty Company, Three Christine
Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801,
Woodland-Northridge I Limited Partnership, a Virginia limited partnership, with
an address of c/o Goelet Realty Company, Three Christine Centre, 201 North
Walnut Street, Suite 1002, Wilmington, Delaware 19801, Pimpernell Estates
Limited Partnership, a Virginia limited partnership, with an address of c/o
Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite
1002, Wilmington, Delaware 19801 and Goodridge Drive Associates Limited
Partnership, a Virginia limited partnership, with an address of c/o Goelet
Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002,
Wilmington, Delaware 19801, (the foregoing five (5) partnerships, individually
or collectively, "Seller"), and Beacon Properties, L.P., a Delaware limited
partnership, with an address of 50 Rowes Wharf, Boston, Massachusetts 02110
(together with its successors and assigns, "Buyer"). Capitalized terms used
herein without definition shall have the same meaning ascribed to such terms in
the Option Agreement.
W I T N E S S E T H :
WHEREAS, Seller and Buyer entered into that certain Option Agreement
dated as of March 18, 1996 (the "Option Agreement") pursuant to which Seller
granted Buyer an option to purchase the Premises, and provided Buyer purchases
the Premises, Seller also granted Buyer an option to purchase the Additional
Option Premises, all as more fully described in the Option Agreement; and
WHEREAS, Seller and Buyer desire to change the date by which Buyer must
exercise the Option and amend the Option Agreement to exclude the Premises known
as SAIC I and the Additional Option Premises (as such terms are defined in the
Option Agreement), subject to the terms of this Amendment below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, Seller and Buyer hereby
agree as follows:
1. The second sentence of Section 1 of the Option
Agreement is hereby deleted and the following substituted therefor:
"The Option may be exercised by Buyer's giving written notice
of Buyer's exercise to Seller on or before May 31, 1996 (the date on
which the Option is exercised, the 'Option Exercise Date')."
<PAGE>
2. Except as provided in paragraph 3 below, SAIC I and the
Additional Option Premises shall be excluded from the Option Agreement,
the Option Agreement shall have no force or effect with respect thereto
and all references thereto in the Option Agreement including, without
limitation, on Exhibits A and B of the Option Agreement shall be deemed
deleted.
3. In the event that, on or before May 31, 1996, both (i)
Seller has not entered into a contract with SAIC for the sale of, or
grant of an option to purchase, SAIC I and the Additional Option
Premises and (ii) SAIC has irrevocably waived in writing its rights of
first refusal under the SAIC I Option and the SAIC II Option with
respect to the Option Agreement, then SAIC I and the Additional Option
Premises shall be reinstated into the Option Agreement and paragraph 2
hereof shall be of no further force or effect.
4. Except as modified hereby, the Option Agreement shall
remain in full force and effect.
EXECUTED under seal as of the date first above written.
WITNESS: SELLER:
GREENSBORO ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
______________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
2
<PAGE>
______________________________ By: The Sotweed Corporation, a
Delaware corporation, as general
partner
______________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
JOHN MARSHALL ASSOCIATES
LIMITED PARTNERSHIP, a Virginia
limited partnership
______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
______________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
By: The Sotweed Corporation, a
Delaware corporation, as general
partner
______________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
3
<PAGE>
PIMPERNELL ESTATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
By: Pimpernell Corporation, a Delaware
corporation, as general partner
______________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
WOODLAND-NORTHRIDGE I LIMITED
PARTNERSHIP, a Virginia limited
partnership
______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
______________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
By: White Swan Oil Corporation,
a Delaware corporation,
as general partner
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Vice President
4
<PAGE>
By: Green Highlander Corporation,
a Delaware corporation,
as general partner
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Vice President
By: Windward Oil and Gas Corporation,
a Texas corporation, as general
partner
______________________________ By: /s/ Gilbert Kerlin
Name: Gilbert Kerlin
Title: President
By: Smoking Tree Corporation,
a Delaware corporation,
as general partner
______________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
GOODRIDGE DRIVE ASSOCIATES
LIMITED PARTNERSHIP, a Virginia
limited partnership
_______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
5
<PAGE>
_______________________________ By: /s/ A.J. Clark
Name: A. J. Clark
Title: General Partner
By: RPC Associates, a Virginia general
partnership, General Partner
By: Rattlesnake Point Corporation,
a Delaware corporation,
its general partner
______________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
BUYER:
BEACON PROPERTIES, L.P., a
Delaware limited partnership
By: Beacon Properties Corporation, a
Maryland corporation, its general
partner
____________________________ By: /s/ Lionel P. Fortin
Name: Lionel P. Fortin
Title: Chief Operating Officer
299748.c1
6
<PAGE>
SECOND AMENDMENT TO OPTION AGREEMENT
This SECOND AMENDMENT TO OPTION AGREEMENT is made as of the 31st day of
May, 1996 by and among John Marshall Associates Limited Partnership, a Virginia
limited partnership, with an address of c/o Goelet Realty Company, Three
Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware
19801, Greensboro Associates Limited Partnership, a Virginia limited
partnership, with an address of c/o Goelet Realty Company, Three Christine
Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801,
Woodland-Northridge I Limited Partnership, a Virginia limited partnership, with
an address of c/o Goelet Realty Company, Three Christine Centre, 201 North
Walnut Street, Suite 1002, Wilmington, Delaware 19801, Pimpernell Estates
Limited Partnership, a Virginia limited partnership, with an address of c/o
Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite
1002, Wilmington, Delaware 19801 and Goodridge Drive Associates Limited
Partnership, a Virginia limited partnership, with an address of c/o Goelet
Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002,
Wilmington, Delaware 19801 (the foregoing five (5) partnerships, individually or
collectively, "Seller"), and Beacon Properties, L.P., a Delaware limited
partnership, with an address of 50 Rowes Wharf, Boston, Massachusetts 02110
(together with its successors and assigns, "Buyer"). Capitalized terms used
herein without definition shall have the same meaning ascribed to such terms in
the Option Agreement.
WITNESSETH:
WHEREAS, Seller and Buyer entered into that certain Option Agreement
dated as of March 18, 1996, as amended by a First Amendment to Option Agreement
by and between Seller and Buyer dated as of May 17, 1996 (as amended, the
"Option Agreement") pursuant to which Seller granted buyer an option to
purchaser the Premises, and provided Buyer purchases the Premises, Seller also
granted Buyer an option to purchase the Additional Option Premises, all as more
fully described in the Option Agreement; and
WHEREAS, Seller and Buyer desire to change the date by which Buyer must
exercise the Option (as such term is defined in the Option Agreement), subject
to the terms of this Amendment below.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledge, Seller and Buyer hereby
agree as follows:
1. All references in the First Amendment to "May 31, 1996" are hereby
deleted and "June 14, 1996" is hereby substituted therefor.
2. Except as modified hereby, the Option Agreement shall remain in
full force and effect.
<PAGE>
EXECUTED under sale as of the date first above written.
WITNESS: SELLER:
GREENSBORO ASSOCIATES LIMITED PARTNERSHIP,
a Virginia limited partnership
________________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
________________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
By: The Sotweed Corporation, a Delaware
corporation, as general partner
________________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
________________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
JOHN MARSHALL ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited partnership
________________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
________________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
2
<PAGE>
By: The Sotweed Corporation, a Delaware
corporation, as general partner
________________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
________________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
PIMPERNELL ESTATES LIMITED
PARTNERSHIP, a Virginia limited partnership
By: Pimpernel Corporation, a Delaware
corporation, as general partner
________________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
________________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
WOODLAND-NORTHRIDGE I LIMITED
PARTNERSHIP, a Virginia limited partnership
________________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
________________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
3
<PAGE>
By: White Swan Oil Corporation,
a Delaware corporation,
as general partner
________________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Vice President
By: Green Highlander Corporation,
a Delaware corporation,
as general partner
________________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Vice President
By: Windward Oil and Gas Corporation,
a Texas corporation,
as general partner
________________________________ By: /s/ Gilbert Kerlin
Name: Gilbert Kerlin
Title: President
By: Smoking Tree Corporation,
a Delaware corporation,
as general partner
________________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
________________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
GOODRIDGE DRIVE ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
________________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
4
<PAGE>
________________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
By: RPC Associates, a Virginia general
partnership, General Partner
By: Rattlesnake Point Corporation,
a Delaware corporation,
its general partner
________________________________ By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
________________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
BUYER:
BEACON PROPERTIES, L.P., a Delaware
limited partnership
By: Beacon Properties Corporation,
a Maryland corporation,
its general partner
________________________________ By: /s/ Charles H. Cremens
Name: Charles H. Cremens
Title: Senior Vice President
299814.c1
5
<PAGE>
THIRD AMENDMENT TO OPTION AGREEMENT
This THIRD AMENDMENT TO OPTION AGREEMENT (this "Amendment") is made as of
the 21st day of June, 1996 by and among John Marshall Associates Limited
Partnership, a Virginia limited partnership, with an address of c/o Goelet
Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002,
Wilmington, Delaware 19801, Greensboro Associates Limited Partnership, a
Virginia limited partnership, with an address of c/o Goelet Realty Company,
Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington,
Delaware 19801, Woodland-Northridge I Limited Partnership, a Virginia limited
partnership, with an address of c/o Goelet Realty Company, Three Christine
Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801,
Pimpernell Estates Limited Partnership, a Virginia limited partnership, with an
address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut
Street, Suite 1002, Wilmington, Delaware 19801 and Goodridge Drive Associates
Limited Partnership, a Virginia limited partnership, with an address of c/o
Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite
1002, Wilmington, Delaware 19801, (the foregoing five (5) partnerships,
individually or collectively, "Seller"), and Beacon Properties, L.P., a Delaware
limited partnership, with an address of 50 Rowes Wharf, Boston, Massachusetts
02110 (together with its successors and assigns, "Buyer"). Capitalized terms
used herein without definition shall have the same meaning ascribed to such
terms in the Agreement (as hereinafter defined).
WITNESSETH:
WHEREAS, Seller and Buyer entered into that certain Option Agreement dated
as of March 18, 1996 (the "Initial Agreement"), as amended by First Amendment to
Option Agreement dated as of May 17, 1996 (the "First Amendment"), and by Second
Amendment to Option Agreement dated as of May 31, 1996 (the "Second Amendment")
(the Initial Agreement, as amended by the First Amendment and the Second
Amendment is referred to herein as "the Agreement" or "this Agreement) pursuant
to which Seller granted Buyer an option to purchase the Premises, more fully
described in the Agreement;
WHEREAS, Seller and Buyer desire to modify and add certain provisions of
the Agreement, as more particularly described herein; and
WHEREAS, Buyer desires to exercise the Option and set a Closing Date.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, Seller and Buyer hereby
agree as follows:
1. "Agreement" as used in the Initial Agreement means the
Agreement (as defined above).
2. Buyer hereby exercises the Option and on this date is delivering
the Additional Deposit to the Title Company to be held in escrow in accordance
with the terms of the Option
<PAGE>
Agreement and the Escrow Agreement. Subject to the terms of the Agreement, the
Closing Date shall be 10:00 a.m. on the date which is thirty (30) days following
the Remediation Plan Approval Date (as defined below).
3. The first two (2) sentences of Section 3 of the Agreement are
hereby deleted in their entirety and the following is substituted therefor:
"3. Consideration. The total consideration (the "Consideration") to
be delivered to Seller for the Deeds and conveyance of the Premises other
than SAIC I shall consist of limited partner interests in Buyer
(collectively, the "OP Units") equal in number to (i) Seventy-Seven
Million Dollars ($77,000,000), minus the sum of all Assumed Indebtedness
set forth with respect to the Premises other than SAIC I in Exhibit C (as
reduced by regularly scheduled principal payments from the date of the
Agreement through the Closing Date), divided by (ii) $25.75, which
constitutes the average of the closing prices on the NYSE of the common
stock, $.01 par value, of Beacon Properties Corporation for each trading
day that occurred during the thirty (30) consecutive calendar days
commencing on March 19, 1996."
4. Section 5 of the Option is hereby amended by inserting the
following after the first sentence thereof:
"Buyer shall have the right, in its sole discretion, to terminate this
Agreement by written notice to Seller at any time on or before the date
which is thirty (30) days following the date of the Third Amendment (the
"Remediation Plan Approval Date") if Buyer is not satisfied, in its sole
discretion, with the environmental condition of the Premises, the
Remediation Plan (as defined in Section 12(p)), any proposed arrangement
for the escrow and disbursement of funds or other security therefor, as
requested by Buyer in its sole discretion, the implementation of any such
proposed remediation plan or any matters relating to any of the
foregoing."
5. Section 12 of the Agreement is hereby amended by inserting the
following paragraph after paragraph (o):
"(p) Remediation Plan. On or before the Remediation Plan Approval
Date, Seller shall deliver to Buyer a plan for the remediation of
environmental contamination found at the Premises ("Remediation"), (such
plan, the "Remediation Plan"). Without limiting the foregoing, Seller
shall include in the Remediation Plan the establishment of an escrow for
the costs of remediation with security, deposit and disbursement
arrangements. Seller shall perform the Remediation in accordance with the
Remediation Plan.
6. Section 8 of the Agreement is hereby amended by inserting the
following new paragraph:
2
<PAGE>
"Without limiting any other term of this Agreement, it shall be a
condition to Closing that Buyer shall have received, no later than ten
(10) days prior to Closing, estoppel certificates with respect to the John
Marshall Associates Limited Partnership Declaration of Easements,
Covenants and Conditions dated September 26, 1994, the Goodridge Drive
Associates Limited Partnership Declaration of Easements, Covenants and
Conditions dated July 10, 1987 and the Declaration of Protective Covenants
for Woodland Park dated February 25, 1986, each as it may have been
amended, in the form required thereunder."
7. Section 10 of the Agreement is hereby amended by:
(a) The second (2nd) sentence of paragraph (c) is deleted and
the following inserted in lieu thereof:
"There shall be no such agreements or other
contractual obligations with respect to all or any portion of
Seller's portion of the Premises that are binding on Buyer or
Seller's portion of the Premises following Closing, other than
the Leases, the Permitted Encumbrances and other documents
executed in connection with the Permitted Encumbrances, the
Permits, and the Real Estate Conveyance Agreement dated as of
September 27, 1994 between John Marshall Associates Limited
Partnership and CC - JM II Associates, copies of all of which
have been delivered, or made available in the offices of The
Evans Company in McLean, Virginia, to Buyer in accordance with
the terms of Section 6."
(b) Relettering each of the paragraphs after "(g) Financial
Information" alphabetically.
(c) Inserting the following at the end of paragraph (n):
"Set forth on Exhibit Q are all environmental
assessments, reports and investigations relating to the
Premises in the files of Seller and, to the best of Seller's
knowledge, otherwise obtained by or on behalf of Seller within
the calendar year prior to the date of the Third Amendment,
true, complete and correct copies of all of which have been
delivered to Buyer."
8. The second to last sentence of Section 12(j) of the Agreement is
hereby amended by deleting "One Hundred Fifteen Million Dollars ($115,000,000)"
therefrom and substituting "Seventy-Seven Million Dollars ($77,000,000), subject
to the terms of Section 39 of this Agreement by which the parties intend such
number to revert to One Hundred Fifteen Million Dollars ($115,000,000) when
Buyer becomes entitled to exercise its rights with respect to SAIC I" therefor.
3
<PAGE>
9. Section 14(l) is hereby amended (i) by inserting the following
immediately before the first word "Any": "Notwithstanding anything to the
contrary contained in this Section, it shall be solely a condition precedent to
Buyer's obligations under this Agreement that the following be delivered to
Buyer:" and (ii) by inserting the following in the second line thereof after
"assume":", including, without limitation, the certifications set forth in
Exhibit P with respect to such Assumed Indebtedness."
10. The first sentence of Section 26 of the Agreement is hereby
amended by inserting the following in the fourth line thereof after "Assumed
Indebtedness": ", any other adjustments provided for herein".
11. Section 36 of the Agreement is hereby amended by (a)
inserting the following at the end of the second line thereof after "subject
to": "Seller's obligations under the Remediation Plan,".
12. The following new sections are added to the Agreement:
"38. VEPCO Easement at E.J. Randolph Premises. Seller and Buyer
hereby acknowledge that a certain easement (the "VEPCO Easement") to
Virginia Electric and Power Company ("VEPCO") granted April 8, 1983,
recorded in Book 5783, Page 1722 among the Land Records of Fairfax County,
Virginia, runs underneath the parking structure at the E.J. Randolph
Premises. Seller and Buyer further acknowledge that, pursuant to the terms
of the VEPCO Easement, structures may not be constructed over such
easement. Seller agrees that Buyer shall have the right to seek from VEPCO
such confirmations as are requested by Buyer's title insurer in order to
issue to Buyer title insurance insuring against any Losses, including,
without limitation, forced removal or forfeiture of title, as a result of
the exercise of any rights under the VEPCO Easement.
39. SAIC I and II.
(a) Section 3 of the First Amendment is hereby deleted and the
following inserted in lieu thereof:
"In the event (the "SAIC Reinstatement Event")
that, on or before January 1, 1997, (i) Seller has not entered
into a contract with SAIC for the sale of, or grant of an
option to purchase, SAIC I and the Additional Option Premises,
which contract remains in full force and effect, (ii) SAIC has
irrevocably waived in writing its rights of first refusal
under the SAIC I Option and the SAIC II Option which exist on
account of this Agreement and (iii) Seller has no legal
obligation under the SAIC I Option or the SAIC II Option to
reoffer SAIC I or the Additional Option Premises to SAIC, then
Buyer's and Seller's rights and obligations with respect to
SAIC I and the Additional Option
4
<PAGE>
Premises shall be reinstated into this Agreement, subject to
the terms of this Section below, and paragraph 2 hereof shall
be of no further force or effect. Seller shall promptly
deliver written notice of the occurrence of the SAIC
Reinstatement Event to Buyer. The Consideration for
acquisition of SAIC I and/or the Additional Option shall be OP
Units in the amount of (i) $38,000,000 minus the sum of all
Assumed Indebtedness set forth with respect to SAIC I on
Exhibit C (as reduced by regularly scheduled principal
payments from the date of the Agreement through the Closing
Date), divided by (ii) $25.75. The Option Exercise Date shall
become the date that is sixty (60) days following receipt by
Buyer of written notice of the SAIC Reinstatement Event, and
the Closing Date shall become the date specified in accordance
with this Agreement in Buyer's notice of exercise with respect
to SAIC I and the Additional Option Premises. No Deposit shall
be required. Seller and Buyer shall cooperate with each other
and use good faith efforts to resolve objections of Buyer to
rights of SAIC and objections of Buyer and Seller to
liabilities and obligations of Seller to SAIC, (provided,
however, that Seller shall not be required to pay any
consideration to SAIC therefor) and it shall be a condition to
Buyer's and Seller's obligation to close on SAIC I and the
Additional Option that such objections shall be resolved in a
manner satisfactory to Buyer and Seller. With respect to its
obligation to make representations and warranties regarding
SAIC I and the Additional Option Premises pursuant to this
Section and the other provisions of this Agreement, Seller
shall remake such representations and warranties as of the
date which is five (5) business days prior to the Option
Exercise Date with such modifications as are necessary to
cause the same to be true, including, without limitation, to
reflect changes required by the passage of time or the current
state of facts, and, if Buyer exercises its option to acquire
SAIC I and the Additional Option, as of the Closing Date
without further modification. If, on or before January 1,
1997, the SAIC Reinstatement Event has not occurred, the terms
of this Section shall terminate and be of no further force and
effect. Subject to the terms of the immediately preceding
sentence, the terms of this Section shall survive Closing.
13. Exhibit C to the Agreement is hereby deleted and Exhibit C
hereto substituted therefor.
5
<PAGE>
14. Exhibit E to the Agreement is hereby amended as follows:
(a) The following sentence shall be added at the end of 1: "It
shall be a condition to Buyer's obligation to close under this
Agreement that Seller shall have completed and paid for
reconstruction of the fountain area and provided and paid for
required substitute parking.
(b) There shall be added the following:
"9. Two UST's exist at SAIC I, and two UST's exist at
Northridge."
15. Exhibit F-1 attached hereto containing Seller's Rent Roll
updated through the date hereof shall be added to Exhibit F of the Agreement.
16. Section 10(k)(vii) and Exhibit G to the Agreement are hereby
amended by inserting the following at the end of each:
"Seller shall be liable for the payment of the commissions described on
Exhibit G."
17. Section 20 is amended by inserting in the sixth (6th) line
following the word "terminations" the following:
", to the extent in excess of amounts that would have been payable by
Seller had the date for Closing not been accelerated by Buyer and other than in
connection with the termination of any management agreement."
18. All references to "Option Agreement" in the Escrow Agreement
dated as of March 18, 1996 between Seller, Buyer and Commonwealth Land Title
Insurance Company shall refer to the Agreement, as previously and hereafter
amended.
Except as modified hereby, the Agreement remains in full force and effect.
6
<PAGE>
IN WITNESS WHEREOF, the parties here to have executed this Agreement as of
the date set forth above.
WITNESS: SELLER:
GREENSBORO ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
______________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
______________________________ By: The Sotweed Corporation, a
Delaware corporation, as
general partner
/s/ Theresa A. Kiernan By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
JOHN MARSHALL ASSOCIATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
7
<PAGE>
______________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
______________________________ By: The Sotweed Corporation, a
Delaware corporation, as
general partner
/s/ Theresa A. Kiernan By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
PIMPERNELL ESTATES LIMITED
PARTNERSHIP, a Virginia limited
partnership
______________________________ By: Pimpernell Corporation, a
Delaware corporation, as
general partner
/s/ Theresa A. Kiernan By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
8
<PAGE>
WOODLAND-NORTHRIDGE I LIMITED
PARTNERSHIP, a Virginia limited
partnership
______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
______________________________ By: /s/ A.J. Clark
Name: A.J. Clark
Title: General Partner
By: White Swan Oil Corporation,
a Delaware corporation,
as general partner
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Vice President
By: Green Highlander Corporation,
a Delaware corporation,
as general partner
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Vice President
By: Windward Oil and Gas Corporation,
a Texas corporation,
as general partner
______________________________ By: /s/ Gilbert Kerlin
Name: Gilbert Kerlin
Title: President
9
<PAGE>
By: Smoking Tree Corporation, a
Delaware corporation, as
general partner
/s/ Theresa A. Kiernan By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
______________________________ By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
GOODRIDGE DRIVE ASSOCIATES
LIMITED PARTNERSHIP, a Virginia
limited partnership
_______________________________ By: /s/ David W. Evans
Name: David W. Evans
Title: General Partner
_______________________________ By: /s/ A.J. Clark
Name: A. J. Clark
Title: General Partner
By: RPC Associates, a Virginia
general partnership, General
Partner
By: Rattlesnake Point Corporation,
a Delaware corporation, its
general partner
/s/ Theresa A. Kiernan By: /s/ Robert G. Goelet
Name: Robert G. Goelet
Title: President
10
<PAGE>
By: /s/ Jonathan M. Rather
Name: Jonathan M. Rather
Title: Treasurer
BUYER:
BEACON PROPERTIES, L.P.,
a Delaware limited partnership
By: Beacon Properties Corporation,
a Maryland corporation,
its general partner
____________________________ By: /s/ Lionel P. Fortin
Name: Lionel P. Fortin
Title: Chief Operating Officer
11
<PAGE>
EXHIBIT C
ALLOCATIONS OF VALUE AND DEBT
Property Value Assumed Indebtedness
- -------------------------------------------------------------------------------
John Marshall I, $33,072,774 $21,517,000 for John
John Marshall III and Marshall I and John
SAIC I Option Marshall III
- -------------------------------------------------------------------------------
E.J. Randolph $22,904,982 18,056,000
- -------------------------------------------------------------------------------
Northridge I $21,022,244 16,642,000
----------- ----------
- -------------------------------------------------------------------------------
TOTAL $77,000,000 $56,215,000
- -------------------------------------------------------------------------------
SAIC I $38,000,000 $27,879,000
- --------------------------------------------------------------------------------
C-1
<PAGE>
EXHIBIT F-1
RENT ROLLS
<PAGE>
EXHIBIT P
CERTIFICATION
A. The following is a complete list of all documents executed or delivered in
connection with such the debt held by American National Insurance Company
and secured by the John Marshall I and John Marshall III Buildings, located
at 8283 Greensboro Drive, McLean, Virginia 22102:
1. Promissory Note, dated September 30, 1993, from John Marshall Associates
Limited Partnership to American National Insurance Company in the
original principal amount of $24,000,000.
2. Deed of Trust, Security Agreement and Financing Statement, dated
September 30, 1993, among John Marshall Associates Limited Partnership
as maker and Lois J. Vermillion and Frank W. Stearns, as Trustees for
the benefit of American National Insurance Company.
3. Absolute Assignment of Leases and Rents dated September 30, 1993.
4. UCC-1 Financing Statements filed with the Virginia State Corporation
Commission and with the chattel records of Fairfax County, Virginia.
5. Letter dated January 14, 1994 from American National Insurance Company
to John Marshall Associates LP [sic] relating to waiver of insurance
escrow.
6. Modification to Promissory Note, Deed of Trust and Assignment of Rents,
dated September 26, 1994.
7. Letter, dated October 27, 1994, from American National Insurance Company
to John Marshall Associates Limited Partnership, correcting principal
balance of Loan referred to in Section 2(c) of Modification.
8. Mortgage Loan Application, Loan Commitment No. 93-128 dated August 2,
1993, together with Proposed Changes Conditioning Acceptance for 8283
Greensboro Drive (John Marshall Building).
9. Certificate and Indemnity Regarding Hazardous Substances, dated
September 30, 1993.
P-1
<PAGE>
B. The following is a complete list of all documents executed or delivered in
connection with the debt held by Teachers Insurance and Annuity Association
of America and secured by the Edmund Jennings Randolph Building, located at
8251 Greensboro Drive, McLean, Virginia 22102:
(a) Certificate of Transfer of Note, dated July 11, 1984 from Dominion
Bankshares Mortgage Corporation to Teachers Insurance and Annuity
Association of America.
(b) Deed of Trust Note (Demand), dated July 10, 1984, made by Greensboro
Associates and payable to the order of Teachers Insurance and Annuity
Association of America, in the principal sum of $2,725,000.00.
(c) Agreement of Consolidation, Modification and Restatement of Deed of
Trust Notes, dated as of July 10, 1984, by and between Greensboro
Associates and Teachers Insurance and Annuity Association of America.
(d) Deed of Trust ($2,725,000), dated July 10, 1984, from Greensboro
Associates to Robert A. Armstrong and Richard W. Klein, Jr., as trustees
for the use and benefit of Teachers Insurance and Annuity Association of
America, securing the aforesaid $2,750,000.00 Note.
(e) Agreement of Consolidation, Modification and Restatement of Deeds of
Trust, dated as of July 10, 1984, by and among Greensboro Associates,
Teachers Insurance and Annuity Association of America, Robert A.
Armstrong and Richard W. Klein, Jr., securing a principal sum of
$18,525,000.00.
(f) Assignment of Leases and Rents, dated as of July 10, 1984, from
Greensboro Associates to Teachers Insurance and Annuity Association of
America.
(g) Deed of Appointment and Removal, dated as of July 10, 1984, from
Teachers Insurance and Annuity Association of America appointing Robert
A. Armstrong and Richard W. Klein, Jr. trustees under various loan
documents.
(h) Uniform Commercial Code Financing Statement (UCC-1), undated, listing
Greensboro Associates as Debtor and Teachers Insurance and Annuity
Association of America as the Secured Party (Including Exhibit A).
(i) Borrower's Settlement Statement in connection with the loan closing,
dated July 11, 1984.
(j) Letter, dated July 11, 1984, from Teachers Insurance and Annuity
Association of America to Greensboro Associates, clarifying the
definition of "default" in the loan documents.
P-2
<PAGE>
(k) Letter, dated October 26, 1983, from Teachers Insurance and Annuity
Association of America to Greensboro Associates, agreeing to defer
escrows.
(l) Letter, dated October 26, 1983, from Teachers Insurance and Annuity
Association of America to Greensboro Associates, setting forth
conditions under which secondary financing would be considered.
(m) Letter, dated October 26, 1983 from Teachers Insurance and Annuity
Association of America to Greensboro Associates, setting forth
conditions under which junior liens would be permitted.
(n) Escrow Agreement dated as of September 26, 1994 by and among Greensboro
Associates Limited Partnership, Teachers Insurance and Annuity
Association of America, and Real Title Company, Inc., as Escrow Agent,
executed in connection with Booz Allen's surrender of certain space in
the E. J. Randolph Building.
(o) Side letter dated October 18, 1994 between The Evans Company and Goelet
Corporation relating to the accrual of management fees in excess of 3%
(the "Management Fee Letter").
C. The only existing debt on the property of the SAIC I Building, located at
1710 Goodridge Drive, McLean, Virginia 22102, is held by the Northwestern
Mutual Life Insurance Company, and the following is a complete list of all
documents executed or delivered in connection with such debt:
1. Second Amendment and Restatement of Promissory Note, dated July 10,
1987, from Goodridge Drive Associates Limited Partnership to The
Northwestern Mutual Life Insurance Company in the principal amount of
$28,750,000.
2. Second Amendment and Restatement of Deed of Trust dated July 10, 1987,
by and between Goodridge Drive Associates Limited Partnership, The
Northwestern Mutual Life Insurance Company and William Norton, as
Trustee.
D. The following is a complete list of all documents executed or delivered in
connection with the debt held by The Northwestern Mutual Life Insurance
Company and secured by the Woodland-Northridge Building, located at 13221
Woodland Park Road, Herndon, Virginia 22071:
1. Loan Commitment dated June 21, 1988 by and between Woodland-Northridge I
Limited Partnership and The Northwestern Mutual Life Insurance Company.
P-3
<PAGE>
2. Letter dated June 21, 1988 from Woodland-Northridge I Limited
Partnership to The Northwestern Mutual Life Insurance Company regarding
changes to the Loan Commitment.
3. Letter dated November 1, 1988 from Woodland-Northridge I Limited
Partnership to The Northwestern Mutual Life Insurance Company requesting
a 30 day extension of the Loan Commitment Expiration Date from November
15 to December 15.
4. Letter dated December 14, 1988 from The Northwestern Mutual Life
Insurance Company to Woodland-Northridge I Limited Partnership granting
30 day extension of the Loan Commitment Expiration Date.
5. Promissory Note dated December 16, 1988 from Woodland-Northridge I
Limited Partnership to The Northwestern Mutual Life Insurance Company in
the amount of $17,000,000.
6. Deed of Trust and Security Agreement dated December 16, 1988 between
Woodland-Northridge I Limited Partnership, William H. Norton and Craig
E. Cuzmanko, as Trustee, and The Northwestern Mutual Life Insurance
Company.
7. Absolute Assignment of Rents and Leases dated ___ between
Woodland-Northridge I Limited Partnership and The Northwestern Mutual
Life Insurance Company.
8. UCC Financing Statements.
(i) Master Lease Agreement dated December 16, 1988, by and between
Woodland-Northridge I Limited Partnership, as landlord, and David W.
Evans and A.J. Clark, as tenant.
(j) Letter dated September 12, 1995 from The Evans Company to
Northwestern Mutual Life Insurance Company extending the loan term
for one year ending December 14, 1996.
(k) Letter dated September 21, 1995 from Northwestern Mutual Life
Insurance Company to Woodland-Northridge I Limited Partnership
setting a New Annual Interest Rate.
P-4
<PAGE>
EXHIBIT Q
ENVIRONMENTAL ASSESSMENTS, REPORTS & INVESTIGATIONS:
January 1, 1995 to Present
GREENSBORO ASSOCIATES L.P. (Randolph Building)
None
JOHN MARSHALL ASSOCIATES L.P. (John Marshall I Building and John Marshall III
Land):
1. September 27, 1995 Contaminated Soil Consultants, Inc. Waste Disposal
Questionnaire
2. September 8, 1995 Evans' letter to VA Dept. Of Environmental Quality
3. October 9, 1995 ECS, Ltd.'s Initial Abatement Report
4. May 15, 1996 ECS, Ltd.'s fax with the following attached
documents: Letters from VA Dept. Of Environmental
Quality to Tysons Auto dated 9/26/95 and 4/1/96.
5. June 11, 1996 Preliminary Environmental Sampling Report,
John Marshall III site prepared by ECS, Ltd.
PIMPERNELL ESTATES L.P. & GOODRIDGE DRIVE ASSOCIATES L.P. (SAIC I & II)
June 11, 1996 Preliminary Environmental Sampling Report, SAIC site
prepared by ECS, Ltd.
WOODLAND-NORTHRIDGE I L.P. (Northridge)
None
299824.c1
Q-1
- --------------------------------------------------------------------------------
SALE AND PURCHASE AGREEMENT
between
NEW YORK LIFE INSURANCE COMPANY
as "Seller"
and
BEACON PROPERTIES, L.P.
as "Purchaser"
Date: As of July 19, 1996
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS
-----------
Section 1.1. "Affiliate".............................................. 1
Section 1.2. "Antitrust Division"..................................... 1
Section 1.3. "Assets"................................................. 1
Section 1.4. "Asset File"............................................. 1
Section 1.5. "Bid Date"............................................... 1
Section 1.6. "Business Day"........................................... 1
Section 1.7. "Cash Balance"........................................... 1
Section 1.8. "CERCLA"................................................. 2
Section 1.9. "Closing" and "Closing Date"............................. 2
Section 1.10. "Contingent Commission Event"........................... 2
Section 1.11. "Deposit"............................................... 2
Section 1.12. "Dollars" or "$"........................................ 2
Section 1.13. "Due Diligence Expiration Date"......................... 2
Section 1.14. "Escrow Agent".......................................... 2
Section 1.15. "Existing Leases"....................................... 2
Section 1.16. "Existing Service Contracts"............................ 2
Section 1.17. "Fixed Rents"........................................... 2
Section 1.18. "FTC"................................................... 2
Section 1.19. "Governmental Authority"................................ 2
Section 1.20. "Hazardous Substances".................................. 2
Section 1.21. "HSR Act"............................................... 3
Section 1.22. "HSR Adjournment Fee"................................... 3
Section 1.23. "Improvements".......................................... 3
Section 1.24. "Land".................................................. 3
Section 1.25. "Leases"................................................ 3
Section 1.26. "Liquidated Sum Amount"................................. 3
Section 1.27. "Liquidated Sum Title Exception"........................ 3
Section 1.28. "Major Casualty"........................................ 4
Section 1.29. "New Leases"............................................ 4
Section 1.30. "New Service Contracts"................................. 4
Section 1.31. "Nonpermitted Exceptions"............................... 4
Section 1.32. "Overage Rent".......................................... 4
Section 1.33. "Permits"............................................... 4
Section 1.34. "Permitted Exceptions".................................. 4
Section 1.35. "Person"................................................ 4
Section 1.36. "Personal Property"..................................... 4
Section 1.37. "Premises".............................................. 4
Section 1.38. "Property".............................................. 4
Section 1.39. "Property Judgment"..................................... 5
Section 1.40. "Purchase Price"........................................ 5
Section 1.41. "Purchaser's Adverse Changes............................ 5
i
<PAGE>
Section 1.42. "Purchaser's Representation Certificate"................ 5
Section 1.43. "RCRA".................................................. 5
Section 1.45. "Restoration Costs"..................................... 6
Section 1.46. "Schedule Price"........................................ 6
Section 1.47. "Scheduled Closing Date"................................ 6
Section 1.48. "Seller Liquidated Sum Title Exception Notice".......... 6
Section 1.49. "Seller's Adverse Changes............................... 6
Section 1.50. "Seller's Representation Certificate"................... 6
Section 1.51. "Service Contracts"..................................... 6
Section 1.52. "Specified Estoppel Leases"............................. 6
Section 1.53. "Structural Defect"..................................... 6
Section 1.54. "Survival Period"....................................... 6
Section 1.55. "Tenant Estoppel Certificate"........................... 7
Section 1.56. "Title Exception(s)".................................... 7
Section 1.57. "Title Insurer"......................................... 7
Section 1.58. "Voluntary Title Exceptions"............................ 7
Section 1.59. "Warranties"............................................ 7
ARTICLE II
ASSETS
------
Section 2.1. Sale and Purchase of Assets.............................. 7
ARTICLE III
PURCHASE PRICE
--------------
Section 3.1. Payment of Purchase Price................................ 8
Section 3.2. Allocation of Purchase Price............................. 9
Section 3.3. Escrow of Deposit........................................ 9
ARTICLE IV
ADJUSTMENTS
-----------
Section 4.1. Fixed Rents.............................................. 11
Section 4.2. Overage Rents............................................ 12
Section 4.3. Taxes and Assessments.................................... 14
Section 4.4. Water and Sewer Charges.................................. 14
Section 4.5. Utility Charges.......................................... 14
Section 4.6. Service Contracts........................................ 15
Section 4.7. Permits.................................................. 15
Section 4.8. Miscellaneous Revenues................................... 15
Section 4.9. Supplies................................................. 15
Section 4.10. Other................................................... 15
ARTICLE V
ii
<PAGE>
TITLE AND PERMITTED EXCEPTIONS
------------------------------
Section 5.1. Permitted Exceptions..................................... 15
Section 5.2. Title Report............................................. 15
Section 5.4. Inability to Convey...................................... 16
Section 5.5. Rights in Respect of Inability to Convey................. 16
Section 5.6. Voluntary Title Exceptions............................... 17
Section 5.7. Liquidated Sum Title Exceptions.......................... 17
Section 5.8. Purchaser's Right to Accept Title........................ 18
Section 5.9. Cooperation.............................................. 18
ARTICLE VI
CONDITION OF PROPERTY
---------------------
Section 6.1. Condition of Property.................................... 19
ARTICLE VII
CLOSING
-------
Section 7.1. Closing Date............................................. 19
ARTICLE VIII
CLOSING DELIVERIES
------------------
Section 8.1. Documents and Payments to be Delivered at the Closing.... 20
Section 9.1. Conditions to Purchaser's Obligation to Close............ 22
Section 9.2. Conditions to Seller's Obligation to Close............... 23
Section 9.3. Multiple Properties...................................... 24
Section 9.4. Failure to Satisfy Conditions to Close................... 24
ARTICLE X
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 10.1. Representations and Warranties by Seller as to Seller... 24
(a) Authority; Binding on Seller; Enforceability............. 24
(b) Conflict with Existing Laws or Contracts................. 24
(c) Legal Action Against Seller.............................. 25
(d) Bankruptcy of Seller..................................... 25
Section 10.2. Representations and Warranties by Seller as to the
Property............................................... 25
(a) Owner.................................................... 25
(b) Leases................................................... 25
(c) Brokerage................................................ 26
(d) Service Contracts........................................ 26
(e) Litigation............................................... 27
(f) Condemnation............................................. 27
iii
<PAGE>
(g) Compliance with Laws; Permits............................ 27
(h) Insurance................................................ 27
(i) Environmental Matters.................................... 28
(j) Condition of the Improvements............................ 28
(k) Personal Property........................................ 28
Section 10.3. Representations and Warranties of Purchaser............. 28
(a) Authority; Binding on Purchaser; Enforceability.......... 28
(b) Conflict with Existing Laws or Contracts................. 28
(c) Legal Action Against Purchaser........................... 28
(d) Bankruptcy or Debt of Purchaser; Financial Condition..... 29
Section 10.4. Closing Certificates of Seller and Purchaser............ 29
(a) Purchaser's Closing Certificate.......................... 29
(b) Seller's Closing Certificate............................. 29
Section 10.5. Survival of Representations and Warranties.............. 30
ARTICLE XI
COVENANTS
---------
Section 11.1. Operation of Premises................................... 30
Section 11.2. Insurance............................................... 31
Section 11.3. Modification of Leases.................................. 31
Section 11.4. Termination of Leases................................... 31
Section 11.5. New Leases.............................................. 32
Section 11.6. Payment of Leasing Costs................................ 32
Section 11.7. Estoppel Certificates................................... 34
Section 11.8. Non-Disturbance Agreements.............................. 34
ARTICLE XII
INSPECTION
----------
Section 12.1. Right of Inspection..................................... 34
Section 12.2. Due Diligence Period.................................... 34
ARTICLE XIII
TRANSACTION COSTS
-----------------
Section 13.1. Seller's Transaction Costs.............................. 35
Section 13.2. Purchaser's Transaction Costs........................... 35
Section 13.3. Hart-Scott-Rodino Filing Fees........................... 36
ARTICLE XIV
BROKERAGE
---------
iv
<PAGE>
Section 14.1. Payment of Broker; Representations...................... 36
ARTICLE XV
CASUALTY AND CONDEMNATION
-------------------------
Section 15.1. Casualty................................................ 36
Section 15.2. Condemnation............................................ 37
ARTICLE XVI
ASSIGNMENT
----------
Section 16.1. No Assignment by Purchaser.............................. 38
Section 16.2. Permitted Assignment to Affiliate....................... 38
ARTICLE XVII
TAX CERTIORARI PROCEEDINGS
--------------------------
Section 17.1. Prosecution and Settlement of Proceedings............... 39
Section 17.2. Application of Refunds or Savings....................... 39
Section 17.3. Survival................................................ 39
ARTICLE XVIII
DEFAULT; REMEDIES; SURVIVAL
---------------------------
Section 18.1. Purchaser's Default On or Before Closing................ 40
Section 18.2. Seller's Default On or Before Closing................... 40
Section 18.3. Survival................................................ 41
Section 18.4. Determination of Material Inaccuracy.................... 42
ARTICLE XIX
NOTICES
-------
Section 19.1. Notices................................................. 42
ARTICLE XX
MISCELLANEOUS
-------------
Section 20.1. Governing Law; Jurisdiction and Venue................... 43
Section 20.2. Further Assurances...................................... 44
Section 20.3. Successors.............................................. 44
Section 20.4. No Third Party Beneficiary.............................. 44
Section 20.5. Entire Agreement........................................ 44
Section 20.6. Severability............................................ 44
v
<PAGE>
Section 20.7. Modification............................................ 45
Section 20.8. Waiver of Trial by Jury................................. 45
Section 20.9. No Recording............................................ 45
Section 20.10. Captions; Interpretation............................... 45
Section 20.11. Counterparts........................................... 45
Section 20.12. No Waiver.............................................. 46
Section 20.13. Time of Essence........................................ 46
Section 20.14. Attorney's Fees........................................ 46
Section 20.15. Addendum A............................................. 46
ARTICLE XXI
HART-SCOTT-RODINO
-----------------
Section 21.1. Filing Requirements..................................... 46
Section 21.2. Condition Precedent..................................... 46
Section 21.3. Purchaser's Delay....................................... 47
ARTICLE XXII
AUDIT
-----
Section 22.1. Compliance with SEC Regulations......................... 47
ARTICLE XXIII
CONFIDENTIALITY AND PRESS RELEASE
---------------------------------
Section 23.1. SEC Disclosure.......................................... 48
Section 23.2. Press Release........................................... 49
vi
<PAGE>
SALE AND PURCHASE AGREEMENT
THIS AGREEMENT, made as of the 19th day of July, 1996, between NEW
YORK LIFE INSURANCE COMPANY, a New York mutual insurance company with an office
at 51 Madison Avenue, New York, New York 10010 ("Seller"), and BEACON
PROPERTIES, L.P., a Delaware limited partnership with an office at 50 Rowes
Wharf, Boston, Massachusetts 02110 ("Purchaser").
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings indicated:
Section 1.1. "Affiliate" means, with respect to any specified
Person, any other Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
specified Person. For purposes of this definition, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting stock, by contract or otherwise.
Section 1.2. "Antitrust Division" has the meaning given in Section
21.1 of this Agreement.
Section 1.3. "Assets" means the property or properties that
Purchaser is purchasing from Seller and Seller is selling to Purchaser, a list
of which is set forth on Schedule 1 annexed hereto and made a part hereof.
"Asset" means any one of the Assets.
Section 1.4. "Asset File" means that certain file for the Assets
containing copies of financial information, leases, service contracts, reports,
title information and other due diligence information and documentation
delivered to Purchaser under cover of a letter, dated May 7, 1996, from Mr.
Jeffrey Silver of Merrill Lynch & Co., and the updates of such file delivered
under cover of letters, dated May 7, 1996, May 23, 1996 and June 5, 1996, in
each case from Mr. Silver.
Section 1.5. "Bid Date" means June 11, 1996.
Section 1.6. "Business Day" means any day other than a Saturday,
Sunday or day on which the banks in New York, New York are authorized or
obligated by law to be closed.
Section 1.7. "Cash Balance" has the meaning given in Section 3.1.
<PAGE>
Section 1.8. "CERCLA" means the Comprehensive Environmental,
Response, Compensation and Liability Act, 42 U.S.C. ss.ss. 9601 and 9657 et
seq., as amended.
Section 1.9. "Closing" and "Closing Date" have the respective
meanings given in Section 7.1.
Section 1.10. "Contingent Commission Event" has the meaning given in
Section 10.2(c).
Section 1.11. "Deposit" has the meaning given in Section 3.1.
Section 1.12. "Dollars" or "$" means lawful currency of the United
States of America, and all sums payable by either party to the other pursuant to
this Agreement shall be paid in Dollars.
Section 1.13. "Due Diligence Expiration Date" has the meaning given
in Section 12.2.
Section 1.14. "Escrow Agent" means Robinson Silverman Pearce
Aronsohn & Berman LLP.
Section 1.15. "Existing Leases" means, with respect to each
Premises, the leases, licenses and occupancy agreements (including all material
modifications and amendments thereto) for space in such Premises which are in
effect on the Bid Date and listed on Exhibit B annexed hereto and made a part
hereof.
Section 1.16. "Existing Service Contracts" means, with respect to
each Premises, the service contracts, maintenance contracts, union contracts,
concession agreements, agency agreements and other written contracts or
agreements affecting such Premises or the operation thereof which are in effect
on the Bid Date and listed on Exhibit D annexed hereto and made a part hereof.
Section 1.17. "Fixed Rents" has the meaning given in Section 4.1.
Section 1.18. "FTC" has the meaning given in Section 21.1 of this
Agreement.
Section 1.19. "Governmental Authority" means, with respect to each
Premises, the United States, the State, county and city in which such Premises
is located, and any political subdivision, agency, authority, department, court,
commission, board, bureau or instrumentality of any of the foregoing asserting
jurisdiction over any of the parties hereto or over such Premises.
Section 1.20. "Hazardous Substances" means (a) those substances
included within the definitions of any one or more of the terms "hazardous
substances," "hazardous materials," "toxic substances," and "hazardous waste" in
CERCLA, RCRA and the Hazardous Materials Transportation Act, as amended, 49
U.S.C. Sections 1801 et seq., and in the
2
<PAGE>
regulations promulgated pursuant to such laws; and (b) such other substances,
materials and wastes as are regulated under applicable local, state or federal
environmental laws or regulations, or which are classified as hazardous or toxic
under federal, state or local environmental laws or regulations; and (c) any
materials, wastes or substances that are (i) petroleum; (ii) friable asbestos;
(iii) polychlorinated biphenyls; (iv) designated as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act, as amended, 13 U.S.C. ss. 1321
et seq. (33 U.S.C. ss. 1321) or designated as "toxic pollutants" pursuant to ss.
307 of the Clean Water Act (33 U.S.C. ss. 1317); (v) flammable explosives; or
(vi) radioactive materials. Hazardous Substances shall not include materials or
substances (A) lawfully sold by tenants of any Property in the ordinary course
of business or (B) customarily used in the day-to-day operation and maintenance
of any Property, such as cleaning fluids and similar substances and materials.
Section 1.21. "HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
Section 1.22. "HSR Adjournment Fee" has the meaning given in Section
21.3 of this Agreement.
Section 1.23. "Improvements" means, with respect to the Land
comprising each Asset, all buildings and improvements located on such Land which
are owned by Seller, including, without limitation, all sidewalks, roads,
heating, air conditioning and ventilating systems, sewer systems, waste water
treatment systems, electrical substations, lines, feeders, switches and
transformers, emergency generators, lighting systems, furnaces, boilers,
engines, pipes, pumps, tanks, motors, conduits, switch boards, and all plumbing,
lifting, fire prevention, fire extinguishing, fire alarm, sprinkler, security
(including video camera surveillance equipment), refrigerating, ventilating,
cooking, and communications and telecommunications equipment, apparatus and
systems.
Section 1.24. "Land" means, with respect to each Asset, the parcel
or parcels of land which comprise such Asset as described on Exhibit A annexed
hereto and made a part hereof.
Section 1.25. "Leases" means, with respect to each Premises,
collectively, (a) the Existing Leases affecting such Premises which are in
effect on the Closing Date and (b) all New Leases affecting such Premises which
are in effect on the Closing Date.
Section 1.26. "Liquidated Sum Amount" means an amount equal to
one-half of one (.5%) percent of the Purchase Price, but in no event more than
Two Hundred Fifty Thousand ($250,000) Dollars.
Section 1.27. "Liquidated Sum Title Exception" means, with respect
to any Property, a Title Exception affecting such Property that arises after the
date of this Agreement, but on or prior to the Closing Date, which can be
discharged solely by the payment of a liquidated sum of money; provided,
however, that the term "Liquidated Sum Title Exception" as used in this
Agreement shall not include the following: (a) any Voluntary Title Exceptions
applicable to such Property; (b) any Title Exceptions that are approved, waived
or deemed to
3
<PAGE>
have been approved or waived by Purchaser or that are created in accordance with
the provisions of this Agreement; (c) any Permitted Exceptions for such Property
or (d) any judgments against Seller which are docketed against the applicable
Premises but which are not Property Judgments (it being agreed that, for the
purposes of this Agreement, a Property Judgment shall constitute a Liquidated
Sum Title Exception).
Section 1.28. "Major Casualty" has the meaning given in Section
15.1.
Section 1.29. "New Leases" means, with respect to each Premises, all
new leases, licenses and occupancy agreements affecting such Premises which are
entered into by Seller after the Bid Date in accordance with the provisions of
this Agreement.
Section 1.30. "New Service Contracts" means, with respect to each
Premises, such maintenance contracts, union contracts, concession agreements,
agency agreements and other written contracts or agreements affecting such
Premises or the operation thereof which are entered into by Seller after the Bid
Date in accordance with the terms of this Agreement.
Section 1.31. "Nonpermitted Exceptions" has the meaning given in
Section 5.4.
Section 1.32. "Overage Rent" has the meaning given in Section 4.2.
Section 1.33. "Permits" means all transferable governmental
licenses, permits, approvals and certificates which are in effect on the Closing
Date and are required or used in connection with the ownership or operation of
each Premises.
Section 1.34. "Permitted Exceptions" has the meaning given in
Section 5.1.
Section 1.35. "Person" means an individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, or government or any agency or subdivision thereof.
Section 1.36. "Personal Property" means, with respect to each
Premises, all equipment, furniture, fittings, fixtures and articles of personal
property affixed or attached to, installed or placed in or upon and used for or
useable in any present or future enjoyment, occupancy or operation of such
Premises which is owned by Seller, including, without limitation, those items
set forth in Schedule B to Exhibit G attached hereto.
Section 1.37. "Premises" means, with respect to each Asset, the Land
comprising such Asset and the Improvements located thereon.
Section 1.38. "Property" means, with respect to each Asset, the
following (in each case, to the extent applicable to such Asset):
(a) The Land;
4
<PAGE>
(b) The Improvements;
(c) The Personal Property;
(d) The Service Contracts and Leases;
(e) The Permits;
(f) any strips and gores adjacent to such Land and any land
lying in the bed of any street, road or avenue opened or proposed, in front of
or adjoining such Land, to the center line thereof;
(g) all of the easements, rights, privileges and appurtenances
belonging or in anyway appertaining to such Land and Improvements;
(h) to the extent assignable, all Warranties, if any;
(i) to the extent assignable, all trade names and general
intangibles used in connection with the ownership and operation of such Land and
Improvements, if any;
(j) any award made after the date of this Agreement for any
taking by condemnation of such Land and Improvements or any damage to such Land
and Improvements by reason of a change of grade of any street or highway; and
(k) subject to the provisions of Article 15 below, any
insurance proceeds that are payable after the date of this Agreement on account
of any damage to such Improvements that results from a fire or other casualty
that occurs after the date of this Agreement.
"Properties" means more than one Property.
Section 1.39. "Property Judgment" means, with respect to each
Premises, a judgment which (a) is entered against Seller, (b) is docketed
against such Premises and (c) arises from a law suit that relates to and
directly involves Seller's ownership and/or operation of the applicable
Premises.
Section 1.40. "Purchase Price" has the meaning given in Section 3.1.
Section 1.41. "Purchaser's Adverse Changes" has the meaning given in
Section 10.4(a).
Section 1.42. "Purchaser's Representation Certificate" has the
meaning given in Section 10.4(a).
Section 1.43. "RCRA" means the Resource Conservation and Recovery
Act of 1976, as amended, 42 U.S.C. ss. 6901 et seq.
5
<PAGE>
Section 1.44. "Rent Differential Escrow Agreement" means that
certain Rent Differential Escrow Agreement dated February 1, 1996 among American
Association for the Advancement of Science, Seller and NationsBank, National
Association.
Section 1.45. "Restoration Costs" has the meaning given in Section
15.1.
Section 1.46. "Schedule Price" means, with respect to a Property (a)
if this Agreement is for the sale of one Property, the Purchase Price and (b) if
this Agreement is for the sale of more than one Property, the allocated portion
of the Purchase Price for such Property as set forth on Schedule 1 annexed
hereto.
Section 1.47. "Scheduled Closing Date" has the meaning given in
Section 7.1.
Section 1.48. "Seller Liquidated Sum Title Exception Notice" has the
meaning given in Section 5.7.
Section 1.49. "Seller's Adverse Changes" has the meaning given in
Section 10.4(b).
Section 1.50. "Seller's Representation Certificate" has the meaning
given in Section 10.4(b).
Section 1.51. "Service Contracts" means, with respect to each
Premises, collectively, (a) the Existing Service Contracts affecting such
Premises which are in effect on the Closing Date and (b) the New Service
Contracts affecting such Premises which are in effect on the Closing Date.
Section 1.52. "Specified Estoppel Leases" has the meaning given in
Section 9.1(c).
Section 1.53. "Structural Defect" means, with respect to any
Property, a structural defect in the footings, foundation, roofplate or weight
bearing walls of the Improvements comprising such Property which existed prior
to the Closing Date and was not actually known or disclosed to Purchaser prior
to the Bid Date. No Improvement shall be deemed to have a Structural Defect
solely by reason of (a) the failure of such Improvement to have a design or
function satisfactory for a new or unintended use or purpose developed
subsequent to the date of construction of such Improvement, (b) the absence of
any building or improvement not necessary for the structural integrity of such
Improvements, (c) wear and tear associated with the normal operation of such
Improvements, (d) a condition or defect which is to be repaired as part of a
standard program of deferred maintenance, (e) failure of such Improvement to
comply with any law, rule, regulation or code applicable to such Improvement
which was promulgated, amended, supplemented or otherwise effectuated or
modified after the construction of such Improvement or (f) such Improvement
having outlived its useful life or functional utility.
Section 1.54. "Survival Period" means (a) with respect to the
representations and warranties set forth in Sections 10.1, 10.2(d), 10.2(e),
10.2(g), 10.2(i) 10.2(j) and 10.2(k),
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the period from the Closing Date to the date which is one hundred eighty (180)
days after the Closing Date and (b) with respect to the representations and
warranties contained in Sections 10.2(b) and 10.2(c), the period from the
Closing Date to the date which is the one (1) year anniversary of the Closing
Date.
Section 1.55. "Tenant Estoppel Certificate" has the meaning given in
Section 11.7.
Section 1.56. "Title Exception(s)" means, with respect to any
Property, any lien, encumbrance, security interest, charge, reservation, lease,
tenancy, easement, right-of-way, encroachment, restrictive covenant, condition
or limitation affecting such Property.
Section 1.57. "Title Insurer" means First American Title Insurance
Company.
Section 1.58. "Voluntary Title Exceptions" means, with respect to
any Property, Title Exceptions affecting such Property that are knowingly and
intentionally created by Seller after the Bid Date through the execution by
Seller of one or more instruments creating or granting such Title Exceptions;
provided, however, that the term "Voluntary Title Exceptions" as used in this
Agreement shall not include the following: (a) any Permitted Exceptions for such
Property; (b) Leases for such Property or any Title Exception created pursuant
to a Lease for such Property by the tenant thereunder; (c) any Title Exceptions
that are approved, waived or deemed to have been approved or waived by Purchaser
or that are created in accordance with the provisions of this Agreement; (d) any
Title Exceptions which, pursuant to a Lease for such Property or otherwise, are
to be discharged by a tenant or occupant of the applicable Property; (e)
mechanic's or materialmen's liens or (f) any federal tax liens.
Section 1.59. "Warranties" means, with respect to any Improvements,
any warranties and guaranties given by any contractor or manufacturer in favor
of Seller in connection with the construction, repair or renovation of such
Improvements.
ARTICLE II
ASSETS
Section 2.1. Sale and Purchase of Assets. With respect to each
Asset, Seller agrees to sell and convey, and Purchaser agrees to purchase, all
of Seller's right, title and interest in and to the Property applicable to such
Asset.
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ARTICLE III
PURCHASE PRICE
Section 3.1. Payment of Purchase Price.
(a) The purchase price (the "Purchase Price") for the Assets
is One Hundred Forty-Nine Million Six Hundred Seventy-Five Thousand and 00/100
($149,675,000.00) Dollars, payable by Purchaser as follows:
(i) Five Million and 00/100 ($5,000,000) Dollars on the
signing of this Agreement (the "Deposit"), by wire transfer of immediately
available federal funds to an account of Escrow Agent designated by
Seller, which Deposit shall be held and disbursed in accordance with the
provisions set forth in Section 3.3 below; and
(ii) One Hundred Forty-Four Million Six Hundred Seventy-Five
Thousand and 00/100 ($144,675,000.00) Dollars (the "Cash Balance") at the
Closing, to be paid by Purchaser to Seller pursuant to the provisions of
Section 3.1(b) below.
(b) The Cash Balance shall be paid at Closing by wire transfer
of immediately available federal funds transferred to one or more bank accounts
designated by Seller, provided that Seller shall have the right, to be exercised
by notice given to Purchaser at least two (2) Business Days prior to the
Closing, to require Purchaser to pay a portion of the Cash Balance by one or
more separate official bank checks, each to be drawn on the New York office of a
member bank of the New York Clearinghouse Association, and each to be payable to
the unendorsed order of Seller or Seller's designee. If Seller elects to cause
Purchaser to pay a portion of the Cash Balance by official bank check(s) as
aforesaid, then Seller's exercise notice shall set forth (i) the portion of the
Cash Balance to be so paid, (ii) the number of official bank checks to be drawn
and (iii) the payee(s) thereof. With respect to the portion of the Cash Balance
to be paid by wire transfer, Seller, at least two (2) Business Days prior to the
Closing, shall notify Purchaser of the designated bank account(s) and the wiring
instructions therefor.
(c) Pursuant to Section 10.1 of a lease, dated July 31, 1995,
between Greystone Realty Corporation, as agent for Seller, as landlord, and the
Postal Rate Commission, as tenant, as modified by First Amendment dated November
16, 1995 (the "Postal Commission Lease"), the tenant is entitled to an allowance
(the "Allowance") from the landlord to renovate and/or refurbish its demised
premises, which Allowance may be paid by payment of the cost of renovation
and/or refurbishment by landlord or application by tenant against the rental
payments due under the lease. The amount of the Allowance remaining as of the
date hereof is approximately $139,062.14. At Closing, Purchaser shall be
entitled to a credit against the Cash Balance in an amount equal to the
remaining balance of the Allowance as of the Closing Date (i.e., $139,062.14, as
reduced by expenses paid by Seller and/or credits against rental payments taken
by tenant on account of the Allowance between the date hereof and the Closing
Date, evidence of which additional expenses and/or rent credits shall be
furnished to Purchaser at Closing).
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(d) Seller and Purchaser acknowledge that Seller has commenced
negotiations with the Public Service Commission of the District of Columbia
("PSC") regarding a lease of certain premises (the "7th Floor Premises") located
on the seventh floor of the Washington, D.C. Asset formerly occupied by the
American Association for the Advancement of Science ("AAAS"). In connection
therewith, if (i) on or before the Closing Date, Seller and PSC enter into
either a binding letter of intent or lease with respect to a lease of all of the
7th Floor Premises, the Cash Balance shall be increased by the Adjustment Amount
or (ii) after the Closing Date, Purchaser and PSC enter into a binding letter of
intent or lease with respect to a lease of all of the 7th Floor Premises,
Purchaser, within five (5) Business Days after the rent commencement date under
such letter of intent or lease, shall pay to Seller an amount equal to the
Adjustment Amount. For purposes of this Section 3.1(d), the term "Adjustment
Amount" means an amount equal to the Rent Recoupment Amount less Seventy-Five
Thousand ($75,000) Dollars; provided, however, in no event shall the Adjustment
Amount be less than zero or greater than $625,000. For purposes hereof, the term
"Rent Recoupment Amount" means (A) $39,790 multiplied by (B) the number of
months between (x) the later of the Closing Date and the rent commencement date
of such lease and (y) the date which is nine (9) months after the Closing Date
(pro-rated in the case of any partial month). Purchaser agrees to consent to any
lease with PSC which is on substantially the same terms as the proposed letter
of intent, dated May 2, 1996, from Randall H. Hagner & Company, as agent for
Greystone Realty Corporation, to Mark E. Teitelbaum and the lease
abstract/analysis thereof, dated July 3, 1996 prepared by Greystone Realty
Corporation (the "Letter of Intent"). Notwithstanding the foregoing provisions
of this Section 3.1(d), if the rental and workletter terms of the actual binding
letter of intent or lease with PSC are materially different from the terms set
forth in the Letter of Intent, then Seller and Purchaser agree to negotiate in
good faith to modify the Adjustment Amount in light of such material
differences; provided, however, in no event shall any such modification result
in the Adjustment Amount being greater than $625,000 or less than zero.
Section 3.2. Allocation of Purchase Price. If there is more than one
Property being sold and purchased pursuant to this Agreement, a portion of the
Purchase Price shall be deemed allocated to each Property in the amount set
forth on Schedule 1 annexed hereto.
Section 3.3. Escrow of Deposit.
(a) The Deposit shall be delivered to Escrow Agent in accordance
with the provisions of Section 3.1 hereof, and shall be held by Escrow Agent
until the Closing or sooner termination of this Agreement. Escrow Agent shall
pay over or apply the Deposit in accordance with the terms of this Section 3.3.
Any interest earned on the Deposit shall be paid to the same party entitled to
the Deposit hereunder (as and when such party is entitled to the Deposit), and
the party receiving such interest shall pay any income taxes thereon, except
that at the Closing, the interest earned on the Deposit shall be paid to
Purchaser. For purposes thereof, the tax identification numbers of the parties
hereto is as follows: 13-5582869 (Seller); and 04-3224259 (Purchaser).
(b) At the Closing, the Deposit shall be paid by Escrow Agent to
Seller.
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(c) If for any reason the Closing does not occur, then Escrow Agent
shall continue to hold the Deposit and the interest thereon, if any, until
otherwise directed by joint written instructions from Seller and Purchaser or a
final judgment of a court having jurisdiction. Escrow Agent, however, shall have
the right at any time to deposit the Deposit and the interest thereon with the
clerk of any federal or state court sitting in the State of New York or a court
having jurisdiction in the county in which any Premises is located. Escrow Agent
shall give written notice of such deposit to Seller and Purchaser. Upon such
deposit, Escrow Agent shall be relieved and discharged of all further
obligations and responsibilities hereunder.
(d) The parties acknowledge that Escrow Agent (i) is acting solely
as a stakeholder at their request and for their convenience, (ii) shall not be
deemed to be the agent of either of the parties and (iii) shall not be liable to
either of the parties for any act or omission on its part unless taken or
suffered in bad faith, willful disregard of this Agreement or involving gross
negligence. Seller and Purchaser shall jointly and severally indemnify and hold
Escrow Agent harmless from and against all costs, claims and expenses, including
reasonable attorneys' fees, incurred in connection with the performance of
Escrow Agent's duties hereunder, except with respect to actions or omissions
taken or suffered by Escrow Agent in bad faith, willful disregard of this
Agreement or involving gross negligence on the part of Escrow Agent.
(e) Escrow Agent shall invest the Deposit in savings accounts,
treasury bills, certificates of deposit and/or other money market instruments as
requested by Purchaser, subject to the reasonable approval of Seller. Escrow
Agent shall not be liable for any losses suffered in connection with any such
investment and shall have no obligation to obtain the best, or otherwise seek to
maximize, the rate of interest earned on any such investment. Any fees or
charges in connection with such investment shall be paid out of the amounts held
in escrow before any other payments shall be required to be made from such
amounts.
(f) Upon any delivery of the amount remaining in escrow as provided
in Section 3.3(b) or 3.3(c) above, Escrow Agent shall be relieved of all
liability, responsibility or obligation with respect to or arising out of the
escrow or under this Agreement. Escrow Agent shall not be bound by any
modification to this Section 3.3 unless Escrow Agent shall have agreed to such
modification in writing.
(g) Escrow Agent shall be entitled to rely or act upon any notice,
instrument or document believed by Escrow Agent to be genuine and to be executed
and delivered by the proper person, and shall have no obligation to verify any
statements contained in any notice, instrument or document or the accuracy or
due authorization of the execution of any notice, instrument or document.
(h) Escrow Agent shall be entitled to retain attorneys of its
choice, including itself, in connection with this escrow and Escrow Agent may
continue to represent Seller in connection with this Agreement, or any dispute
which may arise hereunder or otherwise.
(i) Escrow Agent has acknowledged agreement to the foregoing
provisions of this Section 3.3 by signing in the place indicated on the
signature page of this Agreement.
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ARTICLE IV
ADJUSTMENTS
The following are to be adjusted and prorated between Seller and Purchaser
as of 11:59 P.M. on the day preceding the Closing Date, based upon a 365 day
year, and the net amount thereof shall be added to (if such net amount is in
Seller's favor) or deducted from (if such net amount is in Purchaser's favor)
the Cash Balance of the Purchase Price:
Section 4.1. Fixed Rents.
(a) Fixed rents (collectively, "Fixed Rents") paid or payable
by tenants under the Leases in connection with their occupancy of the applicable
Premises shall be adjusted and prorated on an if, as and when collected basis.
Any Fixed Rents collected by Purchaser or Seller after the Closing from any
tenant who owes Fixed Rents for periods prior to the Closing, shall be applied
(i) first, in payment of Fixed Rents owed by such tenant for the month in which
the Closing Date occurs, (ii) second, in payment of Fixed Rents owed by such
tenant for the period (if any) after the month in which the Closing Date occurs
through the end of the month in which such amount is collected and (iii) third,
after Fixed Rents for all current periods have been paid in full, in payment of
Fixed Rents owed by such tenant for the period prior to the month in which the
Closing Date occurs. Each such amount, less any costs of collection (including
reasonable counsel fees) reasonably allocable thereto, shall be adjusted and
prorated as provided above, and the party who receives such amount shall
promptly pay over to the other party the portion thereof to which it is so
entitled. In furtherance and not in limitation of the preceding sentence, with
respect to any tenant which has paid all Fixed Rents for periods through the
Closing, if, prior to the Closing, Seller shall receive any prepaid Fixed Rents
from such tenant attributable to a period following the Closing, at the Closing,
Seller shall pay over to Purchaser the amount of such prepaid Fixed Rents.
(b) Purchaser shall bill tenants who owe Fixed Rents for
periods prior to the Closing on a monthly basis for a period of six consecutive
months following the Closing Date and shall use commercially reasonable efforts
to collect such past due Fixed Rents; provided, however, that Purchaser shall
have no obligation to commence any actions or proceedings to collect any such
past due Fixed Rents. Notwithstanding the foregoing, if Purchaser shall be
unable to collect such past due Fixed Rents, Seller shall have the right, upon
prior written notice to Purchaser, to pursue tenants to collect such
delinquencies (including, without limitation, the prosecution of one or more
lawsuits), but Seller shall not be entitled to evict (by summary proceedings or
otherwise) any such tenants. Any payment by a tenant in an amount less than the
full amount of Fixed Rents and Overage Rent then due and payable by such tenant
shall be applied first to Fixed Rents (in the order of priority as to time
periods as is set forth in Section 4.1(a) above) to the extent of all such Fixed
Rents then due and payable by such tenant, and thereafter to Overage Rents (in
the order of priority as to time periods as is set forth in Section 4.2 below).
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Section 4.2. Overage Rents.
(a) With respect to any Lease that provides for (i) the
payment of additional rent based upon a percentage of the tenant's business
during a specified annual or other period (sometimes referred to as "percentage
rent"), (ii) so called common area maintenance or "cam" charges or (iii)
so-called "escalation rent" or additional rent based upon increases in real
estate taxes or operating expenses or labor costs or cost of living or porter's
wages or otherwise (such percentage rent, cam charges, escalation rent and
additional rent being collectively called "Overage Rent"), such Overage Rent
shall be adjusted and prorated on an if, as and when collected basis.
(b) As to any Overage Rent in respect of an accounting period
that shall have expired prior to the Closing but which shall be paid after the
Closing, Purchaser agrees that it will pay the entire amount over to Seller upon
receipt thereof, less any costs of collection (including reasonable counsel
fees) reasonably allocable thereto. Purchaser agrees that it shall (i) promptly
render bills for any Overage Rent in respect of an accounting period that shall
have expired prior to the Closing but which shall be paid after the Closing,
(ii) bill tenants such Overage Rent attributable to an accounting period that
shall have expired prior to the Closing on a monthly basis for a period of six
consecutive months thereafter and (iii) use commercially reasonable efforts to
collect Overage Rent; provided, however, that Purchaser shall have no obligation
to commence any actions or proceedings to collect any such Overage Rents.
Notwithstanding the foregoing, if Purchaser shall be unable to collect such
Overage Rent, Seller shall have the right, upon prior written notice to
Purchaser, to pursue tenants to collect such delinquencies (including, without
limitation, the prosecution of one or more lawsuits), but Seller shall not be
entitled to evict (by summary proceedings or otherwise) any such tenants. Seller
shall furnish to Purchaser all information relating to the period prior to the
Closing that is reasonably necessary for the billing of such Overage Rent; and
Purchaser will deliver to Seller, concurrently with the delivery to tenants,
copies of all statements relating to Overage Rent for a period prior to the
Closing. Purchaser shall bill tenants for Overage Rents for accounting periods
prior to the Closing in accordance with and on the basis of such information
furnished by Seller.
(c) Overage Rent in respect of the accounting period in which
the Closing occurs shall be apportioned between Seller and Purchaser as of 11:59
P.M. of the day preceding the Closing Date, with Seller receiving the proportion
of such Overage Rent (less a like portion of any costs and expenses (including
reasonable counsel fees) incurred in the collection of such Overage Rent) that
the portion of such accounting period prior to the Closing Date bears to the
entire such accounting period, and Purchaser receiving the proportion of such
Overage Rent (less a like portion of any costs and expenses (including
reasonable counsel fees) incurred in the collection of such Overage Rent) that
the portion of such accounting period from and after the Closing Date bears to
the entire such accounting period. If, prior to the Closing, Seller shall
receive any installments of Overage Rent attributable to Overage Rent for
periods from and after the Closing Date, such sum shall be apportioned at the
Closing. If, after the Closing, Purchaser shall receive any installments of
Overage Rent attributable to Overage Rent for periods prior to the Closing, such
sum (less any costs and expenses (including reasonable counsel fees) incurred by
Purchaser in the collection of such Overage Rent) shall be paid by Purchaser to
Seller promptly after Purchaser receives payment thereof.
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(d) Any payment by a tenant on account of Overage Rent (to the
extent not applied against Fixed Rents due and payable by such tenant in
accordance with Section 4.1(b) above) shall be applied to Overage Rents then due
and payable in the following order of priority, (i) first, in payment of Overage
Rent for the accounting period in which the Closing Date occurs and (ii) second,
in payment of Overage Rent for the accounting period preceding the accounting
period in which the Closing Date occurs, in the chronological order in which
such payments are due for such accounting period pursuant to the applicable
lease.
(e) To the extent that any portion of Overage Rent is required
to be paid monthly by tenants on account of estimated amounts for any calendar
year (or, if applicable, any lease year or tax year or any other applicable
accounting period), and at the end of such calendar year (or lease year, tax
year or other applicable accounting period, as the case may be), such estimated
amounts are to be recalculated based upon the actual expenses, taxes and other
relevant factors for that calendar (lease or tax) year or other applicable
accounting period, with the appropriate adjustments being made with such
tenants, then such portion of the Overage Rent shall be prorated between Seller
and Purchaser at the Closing based on such estimated payments actually paid by
tenants (i.e., with Seller entitled to retain all monthly or other periodic
installments of such amounts paid by tenants with respect to periods prior to
the calendar month or other applicable installment period in which the Closing
occurs, Seller to pay to Purchaser at the Closing all monthly or other periodic
installments of such amounts theretofore received by Seller with respect to
periods following the calendar month or other applicable installment period in
which the Closing occurs and Seller and Purchaser to apportion as of the Closing
Date all monthly or other periodic installments of such amounts paid by tenants
with respect to the calendar month or other applicable installment period in
which the Closing occurs). At the time(s) of final calculation and collection
from (or refund to) each tenant of the amounts in reconciliation of actual
Overage Rent for a period for which estimated amounts paid by such tenant have
been prorated, there shall be a re-proration between Seller and Purchaser. If,
with respect to any tenant, the recalculated Overage Rent exceeds the estimated
amount paid by such tenant, upon collection from the tenant, (i) the entire
excess shall be paid by Purchaser to Seller, if the accounting period for which
such recalculation was made expired prior to the Closing and (ii) such excess
shall be apportioned between Seller and Purchaser as of the Closing Date (on the
basis described in the first sentence of Section 4.2(c) above), if the Closing
occurred during the accounting period for which such recalculation was made,
with Purchaser paying to Seller the portion of such excess which Seller is so
entitled to receive. If, with respect to any tenant, the recalculated Overage
Rent is less than the estimated amount paid by such tenant, (1) the entire
shortfall shall be paid by Seller to Purchaser (or, at Seller's option, directly
to the tenant in question), if the accounting period for which such
recalculation was made expired prior to the Closing and (2) such shortfall shall
be apportioned between Seller and Purchaser as of the Closing Date (on the basis
described in the first sentence of Section 4.2(c) above), if the Closing
occurred during the accounting period for which such recalculation was made,
with Seller paying to Purchaser (or, at Seller's option, directly to the tenant
in question) the portion of such shortfall so allocable to Seller.
(f) Until such time as all amounts required to be paid to
Seller by Purchaser pursuant to Section 4.1 and this Section 4.2 shall have been
paid in full, Purchaser shall furnish to Seller not less frequently than monthly
a reasonably detailed accounting of such
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amounts payable by Purchaser, which accounting shall be delivered to Seller on
or prior to the 15th day following the last day of each calendar month from and
after the calendar month in which the Closing occurs. Seller shall have the
right from time to time following the Closing, on prior notice to Purchaser,
during ordinary business hours on Business Days, to review Purchaser's rental
records with respect to each Property to ascertain the accuracy of such
accountings.
Section 4.3. Taxes and Assessments. Real estate taxes shall be
adjusted and prorated on the basis of the fiscal year for which assessed. If,
with respect to any Premises, the Closing shall occur before the tax rate or
assessed valuation is fixed for such Premises, the apportionment of real estate
taxes for such Premises shall be upon the basis of the tax rate for the
preceding year applied to the most recently applicable assessed valuation of
such Premises, subject to further and final adjustment when the tax rate and/or
assessed valuation for such Premises is fixed for the year in which the Closing
occurs. In the event that any Premises or any part thereof shall be or shall
have been affected by an assessment or assessments, whether or not the same
become payable in annual installments, Seller shall, at the Closing, be
responsible for any installments due prior to the Closing and Purchaser shall be
responsible for any installments due on or after the Closing.
Section 4.4. Water and Sewer Charges. Water rates, water meter
charges, sewer rents and vault charges, if any (other than any such charges,
rates or rents which are payable by tenants of each Premises pursuant to such
tenants' leases), shall be adjusted and prorated on the basis of the fiscal
period for which assessed. If there be a water meter, or meters, on any
Premises, Seller agrees that it shall at the Closing furnish a reading of same
to a date not more than 30 days prior to the Closing and the unfixed meter
charges and the unfixed sewer rent thereon for the time intervening from the
date of the last reading shall be apportioned on the basis of such last reading,
and shall be appropriately readjusted after the Closing on the basis of the next
subsequent bills. Unmetered water charges shall be apportioned on the basis of
the charges therefor for the same period of the preceding calendar year, but
applying the current rate thereto. As to any unpaid water charges or sewer rents
payable directly by tenants, Purchaser shall close title and accept the delivery
of the deed for the applicable Premises subject to such unpaid charges and rents
and any lien resulting therefrom, without credit against the Purchase Price or
any claim or right of action against Seller.
Section 4.5. Utility Charges. Gas, steam, electricity and other
public utility charges (other than any such charges which are payable by tenants
of each Premises pursuant to such tenants' leases) will be paid by Seller to the
utility company to the Closing Date. Seller shall arrange for a final reading of
all utility meters (covering gas, water, steam and electricity) as of the
Closing, except meters the charges of which are payable by tenants of each
Premises pursuant to such tenants' leases. Seller and Purchaser shall jointly
execute a letter to each of such utility companies advising such utility
companies of the termination of Seller's responsibility for such charges for
utilities furnished to the applicable Premises as of the date of the Closing and
commencement of Purchaser's responsibilities therefor from and after such date.
If a bill is obtained from any such utility company as of the Closing, Seller
shall pay such bill on or before the Closing. If such bill shall not have been
obtained on or before the Closing, Seller shall, upon receipt of such bill, pay
all such utility charges as evidenced by such bill or bills pertaining to the
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period prior to the Closing, and Purchaser shall pay all such utility charges
pertaining to the period thereafter. Any bill which shall be rendered which
shall cover a period both before and after the date of Closing shall be
apportioned between Purchaser and Seller as of the Closing.
Section 4.6. Service Contracts. Charges and payments under all
Service Contracts.
Section 4.7. Permits. License and permit fees on Permits.
Section 4.8. Miscellaneous Revenues. Revenues, if any, arising out
of telephone booths, vending machines, or other income-producing agreements.
Section 4.9. Supplies. Maintenance supplies in unopened containers
based on Seller's actual cost therefor, including sales and/or use tax.
Section 4.10. Other. Any other item which, under the terms of this
Agreement, is to be apportioned at Closing.
If any such items are not determinable at the Closing, the
adjustment shall be made subsequent to the Closing when the charge is
determined. Any errors or omissions in computing adjustments at the Closing
shall be promptly corrected, provided that the party seeking to correct such
error or omission shall have notified the other party of such error or omission
on or prior to the date that is one (1) year following the Closing Date. The
provisions of this Article 4 shall survive the Closing.
ARTICLE V
TITLE AND PERMITTED EXCEPTIONS
------------------------------
Section 5.1. Permitted Exceptions. Each Property shall be sold and
is to be conveyed, and Purchaser agrees to purchase such Property, subject to
(a) those matters set forth on Exhibit E annexed hereto with respect to such
Property, (b) such Title Exceptions affecting such Property as any reputable
title insurance company authorized to do business in the State in which the
applicable Property is located shall be willing to (i) omit as exceptions to
coverage or (ii) except with insurance against collection out of or enforcement
against such Property with respect to Purchaser's insurance policy, and omit as
exceptions to coverage with respect to any lender's mortgage insurance policy,
(c) the standard exceptions and provisions contained in the form of insuring
agreement employed by the Title Insurer and (d) the exceptions and matters
specifically set forth in this Agreement (the liens, claims, encumbrances,
exceptions and matters set forth in subclauses (a) through (d) above with
respect to any Property being collectively referred to as the "Permitted
Exceptions").
Section 5.2. Title Report. Purchaser has received and/or reviewed a
copy of a recent title report with respect to each Property. Purchaser shall (a)
instruct the Title Insurer, in writing, to furnish copies of all title
continuations to Seller's counsel at the address set forth in
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Article 19 hereof and (b) within two (2) Business Days after issuance of any
such continuation, give notice to Seller specifying all Title Exceptions set
forth in such continuation which Purchaser claims are not Permitted Exceptions.
Section 5.3. Use of Purchase Price to Discharge Title Exceptions.
With respect to any Property, if, at the Closing, there are any Title Exceptions
applicable to such Property which are not Permitted Exceptions for such Property
and which Seller is obligated by this Agreement or elects to pay and discharge,
Seller may use any portion of the Cash Balance of the Purchase Price to satisfy
the same, provided that Seller shall have delivered to Purchaser at the Closing
instruments in recordable form sufficient to satisfy such Title Exceptions of
record, together with the cost of any applicable recording or filing fees.
Purchaser, if request is made within a reasonable time prior to the Closing,
agrees to provide at the Closing separate certified or cashier's checks as
requested, aggregating up to the amount of the Cash Balance of the Purchase
Price, to facilitate the satisfaction of any such Title Exceptions. The
existence of any such liens or encumbrances shall not be deemed objections to
title if Seller shall comply with the foregoing requirements. Any unpaid liens
for taxes, water charges and assessments applicable to the period prior to the
Closing Date shall not be objections to title, but the amount thereof plus any
interest and penalties thereon shall be deducted from the Cash Balance of the
Purchase Price, subject to the provisions for apportionment of taxes, water
charges and assessments contained in Article 4 of this Agreement.
Section 5.4. Inability to Convey. Except as expressly set forth in
Sections 5.6 and 5.7, nothing contained in this Agreement shall be deemed to
require Seller to take or bring any action or proceeding or any other steps to
remove any Title Exception or to expend any moneys therefor, nor shall Purchaser
have any right of action against Seller, at law or in equity, for Seller's
inability to convey title subject only to the Permitted Exceptions, except that,
at the Closing, Seller shall cause those Title Exceptions set forth in Exhibit
E-1 attached hereto (collectively, the "Nonpermitted Exceptions") to be omitted
from Purchaser's title insurance policy.
Section 5.5. Rights in Respect of Inability to Convey. In the event
that Seller shall be unable to convey title to each Property, subject only to
the Permitted Exceptions applicable to such Property, and Purchaser shall not,
prior to the Scheduled Closing Date (as it may have been adjourned in accordance
with this Agreement), give notice to Seller that Purchaser is willing to waive
objection to each Title Exception which is not a Permitted Exception for the
applicable Property and close this transaction without abatement of the Purchase
Price, credit or allowance of any kind or any claim or right of action against
Seller for damages or otherwise, Seller shall have the right, at Seller's sole
election, to either (1) take such action as Seller shall deem advisable to
discharge each such Title Exception which is not a Permitted Exception or (2)
terminate this Agreement. In the event Seller shall elect to take action to
discharge each such Title Exception which is not a Permitted Exception, Seller
shall be entitled to one or more adjournments of the Scheduled Closing Date for
a period not to exceed ninety (90) days in the aggregate (inclusive of any
adjournments made by Seller pursuant to Sections 5.6 and 5.7 hereof), and the
Closing shall be adjourned to a date specified by Seller not beyond such ninety
(90) day period. If, for any reason whatsoever, Seller shall not have succeeded
in discharging each such Title Exception at the expiration of such
adjournment(s) and if Purchaser
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shall not, prior to the expiration of the last of such adjournments, give notice
to Seller that Purchaser is willing to waive objection to each such Title
Exception and to close this transaction without abatement of the Purchase Price,
credit or allowance of any kind or any claim or right of action against Seller
for damages or otherwise, this Agreement shall be deemed to be terminated as of
the last date to which the Scheduled Closing Date was adjourned by Seller
pursuant to this Article 5. Upon any termination of this Agreement pursuant to
this Section 5.5, then (I) the Deposit shall be refunded to Purchaser and (II)
neither party shall have any further rights or obligations hereunder other than
those which expressly survive the termination of this Agreement. No action taken
by Seller to discharge, or attempt to discharge, any purported Title Exception
shall be an admission that any such purported Title Exception is not a Permitted
Exception. The provisions of this Section 5.5 shall be subject to Seller's and
Purchaser's rights and obligations with respect to Nonpermitted Exceptions,
Voluntary Title Exceptions and Liquidated Sum Title Exceptions set forth in
Sections 5.4, 5.6 and 5.7, respectively.
Section 5.6. Voluntary Title Exceptions. If, from time to time prior
to the Closing, Purchaser shall become aware of any Voluntary Title Exceptions,
then Purchaser shall promptly notify Seller thereof, which notice shall describe
in reasonable detail the Voluntary Title Exceptions(s) and the Property at
issue. Seller shall discharge all Voluntary Title Exceptions on or prior to
Closing. Seller shall be entitled to one or more adjournments of the Scheduled
Closing Date not to exceed ninety (90) days in the aggregate (inclusive of any
adjournments made by Seller pursuant to Sections 5.5 and 5.7 hereof) to
discharge Voluntary Title Exceptions. If Seller shall not discharge all
Voluntary Title Exceptions on or prior to Closing, then Purchaser, as and for
its sole and exclusive remedy, shall have the rights set forth in Section
18.2(a) hereof.
Section 5.7. Liquidated Sum Title Exceptions. On or prior to
Closing, Seller shall discharge all Liquidated Sum Title Exceptions with respect
to each Property; provided, however, that Seller's obligations under this
Section 5.7 shall be subject to and limited by the following provisions:
(a) Notwithstanding the foregoing provisions of this Section
5.7, Seller shall have no obligation to expend more than the Liquidated Sum
Amount in the aggregate in order to cause all Liquidated Sum Title Exceptions
with respect to all Properties to be discharged. Seller shall be entitled to one
or more adjournments of the Scheduled Closing Date not to exceed ninety (90)
days in the aggregate (inclusive of any adjournments made by Seller pursuant to
Sections 5.5 and 5.6 above) to discharge Liquidated Sum Title Exceptions.
(b) If, from time to time and at any time at or prior to the
Closing, Seller shall determine that the sum of (i) the cost to discharge all
then undischarged Liquidated Sum Title Exceptions, plus (ii) all amounts
expended by Seller on or prior to such date (but after the date of this
Agreement) to discharge any Liquidated Sum Title Exceptions shall exceed the
Liquidated Sum Amount, then Seller may (but shall not be obligated to) notify
Purchaser thereof (the "Seller Liquidated Sum Title Exception Notice"), which
notice shall describe in reasonable detail (x) the Liquidated Sum Title
Exceptions that are then in existence and have not been discharged and (y) the
amounts expended by Seller on or prior to such date (but after the date of this
Agreement) to discharge any Liquidated Sum Title Exceptions, together with
documentation reasonably evidencing the same. If Seller shall give a Seller
Liquidated Sum Title Exception
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Notice to Purchaser, then Purchaser shall have the right, as and for its sole
and exclusive remedy, to elect one of the following two alternatives:
(i) Purchaser may elect to close otherwise in accordance with this
Agreement, notwithstanding the existence of such Liquidated Sum Title
Exceptions. If Purchaser so elects, then, subject to Purchaser's rights
with respect to any Voluntary Title Exceptions as set forth in Section 5.6
above, (1) Purchaser shall be deemed to have waived all of the Title
Exceptions (including, without limitation, the Liquidated Sum Title
Exceptions) applicable to each Property that were not discharged on or
prior to the Closing and the same shall not be grounds for an objection to
title, (2) Purchaser shall not have any right of action against Seller for
or in connection with such undischarged Title Exceptions, at law or in
equity and (3) Purchaser shall receive a credit against the Purchase Price
in an amount equal to the lesser of (x) the aggregate amount needed to
discharge such undischarged Liquidated Sum Title Exceptions and (y) the
excess of the Liquidated Sum Amount over the amounts expended by Seller on
or prior to the Closing Date (but after the date of this Agreement) to
discharge any Liquidated Sum Title Exceptions; or
(ii) Purchaser, by written notice given to Seller on or prior to the
Scheduled Closing Date (as so adjourned), may elect to terminate this
Agreement. If Purchaser shall fail to notify Seller of such election on or
prior to the Scheduled Closing Date (as so adjourned), then Purchaser
shall irrevocably be deemed to have elected to proceed to Closing as
provided in clause (i) of this Section 5.7(b). If this Agreement is
terminated pursuant to this clause (ii), then (I) the Deposit shall be
refunded to Purchaser and (II) neither party shall have any further rights
or obligations hereunder other than those which expressly survive the
termination of this Agreement.
Section 5.8. Purchaser's Right to Accept Title. Notwithstanding the
foregoing provisions of this Article 5, Purchaser may, by notice given to Seller
at any time prior to the Scheduled Closing Date (as it may have been adjourned
by Seller pursuant to this Article 5), elect to accept such title as Seller can
convey, notwithstanding the existence of any Title Exceptions which are not
Permitted Exceptions. In such event, this Agreement shall remain in effect and
the parties shall proceed to Closing but, except to the extent set forth in
Sections 5.6 and 5.7, Purchaser shall not be entitled to any abatement of the
Purchase Price, any credit or allowance of any kind or any claim or right of
action against Seller for damages or otherwise by reason of the existence of any
Title Exceptions which are not Permitted Exceptions.
Section 5.9. Cooperation. Purchaser and Seller shall cooperate with
the Title Insurer in connection with obtaining title insurance insuring title to
each Property subject only to the Permitted Exceptions for such Property. In
furtherance and not in limitation of the foregoing, at or prior to the Closing,
Purchaser and Seller shall deliver to the Title Insurer such affidavits,
certificates and other instruments as are reasonably requested by the Title
Insurer and customarily furnished in connection with the issuance of owner's
policies of title insurance, including, without limitation, (i) evidence
sufficient to establish (x) the legal existence of Purchaser and Seller and (y)
the authority of the respective signatories of Seller and Purchaser to bind
Seller and Purchaser, as the case may be, and (ii) a certificate of good
standing of Seller.
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ARTICLE VI
CONDITION OF PROPERTY
---------------------
Section 6.1. Condition of Property. Purchaser is a sophisticated
investor and its valuation of, bid and decision to purchase each Property is
based upon its own independent expert evaluations of such facts and materials
deemed relevant by Purchaser and its agents. Purchaser acknowledges receipt of
the Asset File. Other than the representations and warranties of Seller and
specifically set forth herein, Purchaser has not relied in entering into this
Agreement upon any oral or written information from Seller, in any capacity, or
any of its employees, affiliates, agents, consultants, advisors or
representatives, including, without limitation, any appraisals, projections or
evaluations of credit quality prepared by Seller or any of its employees,
affiliates, agents, consultants, advisors or representatives, whether or not
contained in the Asset File. Purchaser further acknowledges that no employee,
agent, consultant, advisor or representative of Seller has been authorized to
make, and that Purchaser has not relied upon, any statements or representations
other than those specifically contained in this Agreement. Without limiting the
generality of the foregoing, Purchaser acknowledges and agrees that, except as
expressly set forth in Section 10.2 hereof, Purchaser is purchasing each
Property "as is" and "where is" on the Closing Date, and, except as expressly
set forth in Section 10.2 hereof, Seller is making no representation or
warranty, express or implied, and Purchaser has not relied on any representation
or warranty, express or implied, regarding any Property, including, without
limitation, any representation or warranty with respect to (a) the business or
financial condition of any tenant of any Property, (b) the physical condition of
any Improvement or Personal Property comprising all or a part of any Property,
or its fitness, merchantability or suitability for any use or purpose, (c) the
leases, rents, income or expenses of any Property, (d) the compliance or
non-compliance with any laws, codes, ordinances, rules or regulations of any
Governmental Authority and any violations thereof or (e) the current or future
use of any Property, including, but not limited to, any Property's use for
commercial, retail, industrial or other purposes. Seller is not liable or bound
in any manner by any verbal or written statements, representations, real estate
brokers' "set-ups", offering memorandum or information pertaining to any
Property furnished by any real estate broker, advisor, consultant, agent,
employee, representative or other Person.
ARTICLE VII
CLOSING
-------
Section 7.1. Closing Date. The closing of the transactions
contemplated by this Agreement (the "Closing") shall be held at the offices of
Robinson Silverman Pearce Aronsohn & Berman LLP, 1290 Avenue of the Americas,
New York, New York 10104, at 10:00 a.m., on August 15, 1996 (such date, as it
may be adjourned pursuant to one or more of the provisions of this Agreement,
being herein called the "Scheduled Closing Date"). Seller, in addition to any
other right of Seller to adjourn the Scheduled Closing Date set forth in this
Agreement, shall have the right from time to time, by written notice given to
Purchaser on or before any Scheduled Closing Date, to adjourn the Closing to a
Business Day occurring on or before (i) the ninetieth (90th) day after the date
of this Agreement, if, in Seller's sole and
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absolute discretion, Seller will be unable to (a) comply with any covenant of
Seller in this Agreement or (b) satisfy every condition precedent to Purchaser's
obligation to close set forth in this Agreement, as of such Scheduled Closing
Date (i.e., the Scheduled Closing Date existing prior to such adjournment) or
(ii) September 6, 1996, for any reason. Purchaser shall have the right, by
written notice given to Seller on or before any Scheduled Closing Date, to
adjourn the Closing to a Business Day occurring on or before August 30, 1996.
Subject to Seller's right to adjourn the Closing as set forth in the second
preceding sentence, TIME SHALL BE OF THE ESSENCE with respect to Purchaser's and
Seller's obligation to close by any Scheduled Closing Date which is on or after
September 6, 1996. (The actual date on which the Closing occurs is referred to
herein as the "Closing Date"). In no event may Seller or Purchaser accelerate
the Closing to a date on or before August 15, 1996.
ARTICLE VIII
CLOSING DELIVERIES
------------------
Section 8.1. Documents and Payments to be Delivered at the Closing.
At the Closing:
(a) Purchaser shall deliver to Seller the Cash Balance of the
Purchase Price and any other amounts payable by Purchaser to Seller, at the
Closing, pursuant to this Agreement;
(b) Seller shall execute, acknowledge and deliver to Purchaser
a deed for each Property in the form of Exhibit F attached hereto, in proper
form for recording;
(c) Seller shall execute, acknowledge and deliver to Purchaser
a general bill of sale for each Property, in the form of Exhibit G attached
hereto, conveying to Purchaser all of Seller's right, title and interest in and
to the Personal Property applicable to such Property;
(d) Seller and Purchaser shall each execute, acknowledge and
deliver an assignment and assumption for each Property, in the form of Exhibit H
attached hereto, which provides for the assignment by Seller to Purchaser, in
accordance with this Agreement, of all of Seller's right, title and interest as
landlord in and to the Leases for such Property and the assumption by Purchaser
of all of Seller's obligations as landlord under such Leases arising from and
after the Closing Date;
(e) Seller and Purchaser shall each execute, acknowledge and
deliver an assignment and assumption for each Property, in the form of Exhibit I
attached hereto, which provides for the assignment by Seller to Purchaser, in
accordance with this Agreement, of all of Seller's right, title and interest in
and to the Service Contracts, Rent Differential Escrow Agreement, Permits,
Warranties, trade names and general intangibles for such Property and the
assumption by Purchaser of all of Seller's obligations under such Service
Contracts, Rent Differential Escrow Agreement, and Permits arising from and
after the Closing Date;
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(f) Seller shall deliver to Purchaser the security deposits
held by Seller under the Leases (together with accrued interest thereon, if any,
less Seller's proportionate share of administrative fees, if any, to the extent
such administrative fees are allowed by the applicable lease or by law) by, at
Seller's option, (i) payment of the amount thereof to Purchaser, (ii) a credit
to Purchaser against the Cash Balance of the Purchase Price and/or (iii)
assignment to Purchaser of the bank accounts (or other security) in which same
are held, which assignment shall be in form reasonably acceptable to the
depositary bank. Any such tenants' securities in form other than cash shall be
transferred to Purchaser by way of appropriate instruments of transfer or
assignment;
(g) Seller shall deliver to Purchaser executed original
counterparts or copies of all Leases and Service Contracts in Seller's
possession;
(h) Seller shall execute and deliver to Purchaser a
certification of non-foreign status, in form required by the Internal Revenue
Code Section 1445 and the regulations issued thereunder. Seller understands that
such certification will be retained by Purchaser and will be made available to
the Internal Revenue Service on request;
(i) Purchaser and Seller shall jointly execute notice letters,
in the form of Exhibit J attached hereto, to the tenants under the Leases, which
notice letters shall (A) advise such tenants and other entities of the sale, (B)
to the extent applicable, advise such tenants and other entities that their
security deposit (or other form of security), if any, and any interest thereon,
has been turned over to Purchaser and (C) set forth Purchaser's name and address
and the manner in which future payments of rental are to be made. Such notice
letters shall be retained by Seller and delivered by Seller to each tenant and
other such entity promptly following Closing;
(j) If a return is required to be filed for the transaction
herein described under Section 6045(e) of the Internal Revenue Code of 1986,
Seller's attorney shall be the "Reporting Person" or have the Title Insurer
designated as the "Reporting Person";
(k) Seller shall execute and/or deliver such other instruments
or documents which by the terms of this Agreement are to be delivered by Seller
at Closing, and Purchaser shall execute and/or deliver such other instruments or
documents which by the terms of this Agreement are to be delivered by Purchaser
at Closing;
(l) Purchaser shall deliver to Seller (i) a copy of the
partnership agreement of Purchaser, certified as true and correct by an officer
of the general partner of Purchaser, (ii) an instrument, executed by each of the
general partners of Purchaser, in which each such general partner consents to
the transactions contemplated hereby, (iii) a copy of the certificate of
incorporation of the corporate general partner of Purchaser and (iv) a certified
copy of such corporate documents of the corporate general partner of Purchaser
as are reasonably necessary to demonstrate that the transactions contemplated
hereby have been authorized by all necessary corporate action of the corporate
general partner of Purchaser;
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(m) To the extent that any of the Personal Property includes
motor vehicles which are registered, Seller shall execute and deliver to
Purchaser the certificates of title for such vehicles, together with an
assignment, without recourse, representation or warranty, express or implied
(except as set forth in Section 10.2(k) of this Agreement), of such certificates
of title;
(n) Seller and Purchaser shall each execute and deliver a
closing statement setting forth the adjustments made in accordance with Article
IV of this Agreement, which statement shall set forth in reasonable detail the
basis for such adjustments;
(o) With respect to each Property, Purchaser and Seller shall
jointly execute and deliver such real estate transfer tax returns or
declarations as may be required by any governmental authority having
jurisdiction in connection with the sale of such Property pursuant to this
Agreement; and
(p) Seller shall deliver to Purchaser a letter, duly executed
by Seller, terminating the property management agreement with Seller's property
manager at each Property effective as of the Closing Date.
ARTICLE IX
CONDITIONS TO CLOSING
---------------------
Section 9.1. Conditions to Purchaser's Obligation to Close.
Purchaser's obligation to purchase each Property is subject to the satisfaction
of the following conditions precedent, any or all of which may be waived by
Purchaser:
(a) This Agreement shall be in full force and effect and there
shall not then exist any event which would allow Purchaser to terminate this
Agreement pursuant to the express terms hereof;
(b) Seller shall have complied, in all material respects, with
its obligations under this Agreement;
(c) With respect to each Property, Seller shall have delivered
to Purchaser, Tenant Estoppel Certificates, dated as of a date not more than
sixty (60) days prior to the Scheduled Closing Date (as the Scheduled Closing
Date may be adjourned by Seller (but not by Purchaser) from time to time in
accordance with this Agreement), from (i) the specific tenants of such Property
under the leases set forth on Exhibit N annexed hereto (the "Specified Estoppel
Leases") and (ii) the holders of the tenant's interest under Leases for such
Property which demise an aggregate number of rentable square feet equal to at
least eighty (80%) percent of the aggregate number of rentable square feet of
that portion of the Improvements applicable to such Property which is demised as
of the date of this Agreement (it being understood that a Tenant Estoppel
Certificate from the tenant under any Specified Estoppel Lease shall count
toward such percentage requirement); provided, however, if, with respect to any
Property, Seller obtains Tenant Estoppel Certificates from the holders of the
tenant's interest under Leases for such
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Property which demise an aggregate number of rentable square feet equal to at
least sixty-five (65%) percent, but less than eighty (80%) percent, of the
aggregate number of rentable square feet of that portion of the Improvements
applicable to such Property which is demised as of the date of this Agreement,
Seller shall execute and deliver to Purchaser at Closing a certificate from
Seller as to the matters which would be set forth in the Tenant Estoppel
Certificate for the tenant(s) under any Lease(s) selected by Seller which did
not execute and deliver a Tenant Estoppel Certificate to the extent, and only to
the extent, necessary to increase to eighty (80%) the rentable square footage of
the Leases with respect to which a Tenant Estoppel Certificate is obtained from
the tenant and a certificate as described in this sentence is delivered by
Seller, it being understood that the rentable square footage demised pursuant to
the lease for any tenant with respect to which such a certificate is delivered
by Seller shall be counted toward satisfaction of the percentage requirement set
forth in this subclause (c), but in no event may Seller deliver any such
certificate executed by Seller in lieu of a Tenant Estoppel Certificate by a
tenant under a Specified Estoppel Lease. Any such certificate given by Seller
shall state that the certifications made by Seller therein shall survive the
Closing for a period of twelve (12) months or until such earlier date on which
the applicable tenant shall deliver a Tenant Estoppel Certificate to Purchaser;
(d) With respect to the Lincolnshire Asset, Seller shall have
delivered to Purchaser (i) an estoppel certificate from the Tri-State
International Office Center Association, in the form required by Section 12.7 of
the Declaration of Covenants, Conditions, Restrictions and Certain Reciprocal
Rights and Easements dated March 30, 1987 relating to Phase I of the Tri-State
International Office Center, and (ii) an estoppel certificate from the Tri-
State International Phase II Association, in the form required by Section 12.6
of the Declaration of Covenants, Conditions, Restrictions and Easements dated
August 11, 1987 relating to Phase II of the Tri-State International Office
Center;
(e) The replacement of a portion of the sidewalk adjacent to
the 14th Street elevation of the Improvements applicable to the Washington, D.C.
Asset shall be substantially completed; and
(f) The above-ground storage tank located in the basement of
the Improvements applicable to the Washington, D.C. Asset shall be removed in
accordance with all applicable laws, and any Hazardous Substances present and
caused by the existence of such storage tank which are discovered upon its
removal shall be removed, encapsulated or abated to the extent required by
applicable laws. Purchaser shall be afforded reasonable advance notice of the
removal of such storage tank, and the opportunity to observe such removal.
Section 9.2. Conditions to Seller's Obligation to Close. Seller's
obligation to sell each Property is subject to the satisfaction of the following
conditions precedent, any or all of which may be waived by Seller:
(a) This Agreement shall be in full force and effect and there
shall not then exist any event which would allow Seller to terminate this
Agreement pursuant to the express terms hereof; and
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(b) Purchaser shall have complied, in all material respects,
with its obligations under this Agreement.
Section 9.3. Multiple Properties. If this Agreement shall provide
for the purchase and sale of more than one Property, then the conditions
applicable to Seller's and Purchaser's obligations hereunder shall be construed
such that Seller only shall have the right and obligation to sell, and Purchaser
shall only have the right and obligation to purchase, all of the Properties
(i.e., if there is a failure of a condition with respect to one Property, Seller
shall not have the obligation to sell, and Purchaser shall not have the
obligation to purchase, the other Properties).
Section 9.4. Failure to Satisfy Conditions to Close. Notwithstanding
any provision of this Agreement to the contrary, in no event shall there be any
express or implied covenant, agreement or obligation of (a) Seller to cause any
condition precedent set forth in Section 9.1 above to be satisfied or (b)
Purchaser to cause any condition precedent set forth in Section 9.2 above to be
satisfied, unless the failure to satisfy such condition precedent results from
such party's failure to comply with a covenant, agreement or obligation of such
party set forth in another Article of this Agreement.
ARTICLE X
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 10.1. Representations and Warranties by Seller as to Seller.
Seller represents and warrants to Purchaser that, as of the date hereof:
(a) Authority; Binding on Seller; Enforceability. Seller is
duly organized, validly existing and in good standing in its jurisdiction of
incorporation. Seller has corporate powers adequate for the making and
performing of this Agreement, has taken all corporate action required to
execute, deliver and perform this Agreement and to make all of the provisions of
this Agreement the valid and enforceable obligations they purport to be and has
caused this Agreement to be executed by a duly authorized officer or officers of
Seller.
(b) Conflict with Existing Laws or Contracts. The execution
and delivery of this Agreement and all related documents and the performance of
its obligations hereunder and thereunder by Seller does not conflict with any
provision of any law or regulation to which Seller is subject, conflict with or
result in a breach of or constitute a default under any of the terms, conditions
or provisions of any agreement or instrument to which Seller is a party or by
which Seller is bound or any order or decree applicable to Seller or result in
the creation or imposition of any lien on any of its assets or property, which
would materially and adversely affect the ability of Seller to perform its
obligations under this Agreement; and Seller has obtained all consents,
approvals, authorizations or orders of any court or governmental agency or body,
if any, required for the execution, delivery and performance by Seller of this
Agreement.
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(c) Legal Action Against Seller. There is no action, suit or
proceeding pending against Seller in any court or by or before any other
governmental agency or instrumentality which would materially and adversely
affect the ability of Seller to perform its obligations under this Agreement.
(d) Bankruptcy of Seller. Seller has not filed any petition
seeking or acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any law relating
to bankruptcy or insolvency, nor has any such petition been filed against
Seller. Seller is not insolvent and the consummation of the transactions
contemplated by this Agreement shall not render Seller insolvent.
Section 10.2. Representations and Warranties by Seller as to the
Property. Except as disclosed or set forth in the Asset File (whether or not
also disclosed or set forth in an exhibit to this Agreement), Seller represents
and warrants to Purchaser that, as of the date hereof:
(a) Owner. Seller is the owner of record title to each
Premises, and has the right to sell such Premises pursuant to the terms of this
Agreement, subject to the terms and provisions of Addendum A annexed hereto, if
any.
(b) Leases.
(i) With respect to each Premises, there are no
leases, licenses, subleases or other occupancy agreements which are in effect as
of the Bid Date with respect to such Premises and under which Seller is the
holder of the landlord's interest, other than the Existing Leases applicable to
such Premises. Except as set forth in Exhibit B, copies of the Existing Leases
contained in the Asset File are true, correct and complete in all material
respects. The information provided in the rent roll attached hereto as Exhibit
B, including the fixed rents payable under the Existing Leases, lease expiration
dates and security deposits, is true, correct and complete in all material
respects; provided, however, since Purchaser has reviewed each of the Existing
Leases, in the event that there is any discrepancy between the information
contained in Exhibit B and the terms and provisions of any of the Existing
Leases, the terms and provisions of the Existing Leases shall be effective as
against Seller and Purchaser, and Seller shall not be deemed to have breached
the representation contained in this subclause (b)(i) by reason of such
discrepancy.
(ii) Except as otherwise noted on Exhibit B, (1) each
of the Existing Leases is in full force and effect, (2) no written notice of a
material default on the part of the tenant under any of the Existing Leases has
been sent by Seller, other than a default notice setting forth a material
default which, as of the date hereof, has been cured, (3) no written notice of a
material default on the part of the landlord under any of the Existing Leases
has been received by Seller, other than a default notice setting forth a
material default which, as of the date hereof, has been cured, (4) no Fixed Rent
or recurring monthly Overage Rent payable under any Existing Lease is more than
thirty (30) days in arrears of the date that the same is required to be paid
under the terms of such Existing Lease and (5) subject to the provisions of
Section 11.6, all decorating, alterations and other work required to be
performed by Seller pursuant to each
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Existing Lease prior to the Closing Date in order to prepare the premises
demised thereunder for initial occupancy, or any cost thereof to be reimbursed
to any such tenants as an incident of such initial occupancy, has been performed
or reimbursed, or will be performed or reimbursed, prior to the Closing Date,
except that, with respect to the Postal Commission Lease, in consideration of
the credit to the Cash Balance being given to Purchaser pursuant to Section
3.1(c), Seller shall not be required to perform or pay for the alterations and
other work to which the Allowance is to be applied.
(c) Brokerage. Subject to the provisions of Section 11.6 and
except as otherwise noted on Exhibit C, all brokerage commissions payable in
connection with the Existing Leases have been or will be paid in full prior to
the Closing, other than any brokerage commissions which may be payable as a
result of or in connection with (i) any renewal terms which shall not yet have
commenced on the Bid Date and extension options or expansion options the term
for which have not yet commenced on the Bid Date, (ii) any space which is leased
pursuant to rights of first refusal or first offer or similar rights contained
in Existing Leases and the term for which has not yet commenced on the Bid Date,
and (iii) the failure to timely exercise or the expiration of any right to
terminate or cancel any Existing Lease (any such event as described in the
preceding subclauses (i), (ii) and (iii) being a "Contingent Commission Event").
A true and complete schedule of the brokerage agreements entered into by Seller
and requiring the payment of any brokerage commissions upon a Contingent
Commission Event is contained in Exhibit C; provided, however, subject to the
provisions of Section 18.4, Seller shall not be deemed to have breached the
representation and warranty contained in this sentence unless a brokerage
agreement entered into by Seller and not listed on Exhibit C is binding upon
Purchaser and requires the payment by Purchaser of a brokerage commission upon a
Contingent Commission Event which is in excess of the standard commission
payable upon the occurrence of such Contingent Commission Event for properties
similar to and located in the same area as the Property in question.
(d) Service Contracts.
(i) With respect to each Premises, Seller (after
inquiry of Seller's property manager of such Premises), has no actual knowledge
of any service contracts, management agreements, maintenance contracts,
brokerage agreements, union contracts, management contracts, concession
agreements, agency agreements or any other written contracts or agreements by
which Seller is bound and which affect such Premises on the Bid Date, except for
(1) the Existing Service Contracts applicable to such Premises, (2) the Existing
Leases applicable to such Premises and (3) written contracts or agreements which
are cancelable upon not more than 60 days notice. Except as set forth in Exhibit
D, copies of the Existing Service Contracts contained in the Asset File are
true, correct and complete in all material respects. The information with
respect to the Existing Service Contracts set forth on Exhibit D is true,
complete and correct in all material respects; provided, however, since
Purchaser has reviewed and is familiar with each of the Existing Service
Contracts, in the event that there is any discrepancy between the information
contained in Exhibit D and the terms and provisions of any of the Existing
Service Contracts, the terms and provisions of the Existing Service Contracts
shall be effective as against Seller and Purchaser, and Seller shall not be
deemed to have breached the representation contained in this subclause (d)(i) by
reason of such discrepancy. Nothing
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contained in this Agreement shall be deemed to be a representation, warranty or
assurance that the Existing Service Contracts, or any of them, will be in effect
at the Closing, the termination of any Existing Service Contract prior to the
Closing shall not affect Purchaser's obligations hereunder, which shall remain
in full force and effect notwithstanding such termination and Seller expressly
reserves the right to terminate any of the Existing Service Contracts (or any
additional such agreements entered into between the date of this Agreement and
the Closing Date) at any time on or prior to the Closing Date.
(ii) To Seller's actual knowledge, except as otherwise
noted on Exhibit D, (1) each of the Existing Service Contracts is in full force
and effect, (2) no written notice of material default on the part of the other
party to any of the Existing Service Contracts has been sent by Seller, other
than a default notice setting forth a material default which, as of the date
hereof, has been cured and (3) no written notice of material default or breach
on the part of Seller under any of the Existing Service Contracts has been
received by Seller, other than a default notice setting forth a material default
which, as of the date hereof, has been cured.
(e) Litigation. Except as set forth on Exhibit L, to the
actual knowledge of Seller (after inquiry of Seller's property manager of each
Property), there are no actions, suits or proceedings pending, or any order,
injunction or decree outstanding, existing or relating to any Property, which
(i) has not been disclosed in writing by Seller to Purchaser on or before the
Bid Date and (ii) could have a material adverse effect upon such Property or
title thereto.
(f) Condemnation. As of the date hereof, there are no pending
or, to Seller's actual knowledge, threatened condemnation or eminent domain
proceedings that would affect any part of any Premises which could have a
material adverse effect upon the current use of such Premises for its intended
purposes.
(g) Compliance with Laws; Permits. No written notice has been
received by Seller from any Governmental Authority to the effect that (i) any
zoning law, ordinance or regulation has been violated by the current operation,
occupancy or use of any Property which violation has not been cured and would
materially and adversely affect the current operation, occupancy or use of such
Property, (ii) any federal, state or municipal law, ordinance or regulation has
been violated by the current operation, occupancy or use of any Property which
violation has not been cured and would materially and adversely affect the
current operation, occupancy or use of such Property or (iii) any Permits have
not been issued and paid for and are not in full force and effect, in each case,
without which the operation of the applicable Property would be materially and
adversely affected. Notwithstanding the foregoing provisions of this Section
10.2(g), no representation is made by Seller with respect to compliance with or
any violation of the Americans With Disabilities Act of 1991, 42 U.S.C. Section
12101 et seq. or the Energy Policy Act of 1992, 42 U.S.C. Section 13201 et seq.
(h) Insurance. The insurance coverages with respect to each
Premises set forth on Exhibit M attached hereto are in full force and effect.
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(i) Environmental Matters. To the actual knowledge of Seller,
no Hazardous Substances has been disposed of, or identified on, under or at, any
Property in violation of any applicable federal, state or municipal law,
ordinance or regulation, except to the extent that remediation (by removal,
elimination or encapsulation) has occurred or will occur prior to the Closing
Date. Seller has not received written notice from any Governmental Authority
that any Property is in violation of any applicable federal, state or municipal
law, ordinance or regulation regarding Hazardous Substances.
(j) Condition of the Improvements. To the actual knowledge of
Seller, the Improvements of each Property are free from Structural Defects.
(k) Personal Property. The Personal Property with respect to
each Property is owned by Seller free and clear of any lien or encumbrance other
than the Permitted Exceptions applicable to such Property and any lien or
encumbrance that shall be discharged at or prior to Closing.
Section 10.3. Representations and Warranties of Purchaser. Purchaser
represents to Seller that, as of the date hereof:
(a) Authority; Binding on Purchaser; Enforceability. Purchaser
is a limited partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware, with corporate and/or partnership
powers adequate for the making and performing of this Agreement and for carrying
on the business now conducted or proposed to be conducted by it. Purchaser has
taken all corporate and/or partnership action required to execute, deliver and
perform this Agreement and to make all of the provisions of this Agreement the
valid and enforceable obligations they purport to be and has caused this
Agreement to be executed by a duly authorized officer. Purchaser is duly
qualified and in good standing as a foreign corporation and/or partnership in
all jurisdictions where it is required so to be qualified, except for failures
to be so qualified that do not in the aggregate have any material adverse effect
on Purchaser and which will not affect the validity of this Agreement.
(b) Conflict with Existing Laws or Contracts. The execution
and delivery of this Agreement and all related documents and the performance of
its obligations hereunder and thereunder by Purchaser do not conflict with any
provision of any law or regulation to which Purchaser is subject, conflict with
or result in a breach of or constitute a default under any of the terms,
conditions or provisions of any agreement or instrument to which Purchaser is a
party or by which Purchaser is bound or any order or decree applicable to
Purchaser, or result in the creation or imposition of any lien on any of
Purchaser's assets or property, which would materially and adversely affect the
ability of Purchaser to perform its obligations under this Agreement; and
Purchaser has obtained all consents, approvals, authorizations or orders of any
court or governmental agency or body, if any, required for the execution,
delivery and performance by Purchaser of this Agreement.
(c) Legal Action Against Purchaser. There are no judgments,
orders or decrees of any kind against Purchaser unpaid or unsatisfied of record
or any legal action, suit or other legal or administrative proceeding pending,
threatened or reasonably
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anticipated which could be filed before any court or administrative agency which
has, or is likely to have, any material adverse effect on (i) the business or
assets or the condition, financial or otherwise, of Purchaser or (ii) the
ability of Purchaser to perform its obligations under this Agreement.
(d) Bankruptcy or Debt of Purchaser; Financial Condition.
Purchaser has not filed any petition seeking or acquiescing in any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any law relating to bankruptcy or insolvency, nor has
any such petition been filed against Purchaser. No general assignment of
Purchaser's property has been made for the benefit of creditors, and no
receiver, master, liquidator or trustee has been appointed for Purchaser or any
of its property. Purchaser is not insolvent and the consummation of the
transactions contemplated by this Agreement shall not render Purchaser
insolvent. Purchaser has now and will have as of the Closing Date sufficient
capital or net worth to meet its current obligations. Purchaser certifies that
any financial statements and any financial statements of Purchaser and/or any
Affiliate of Purchaser submitted to Seller have been prepared in accordance with
generally accepted accounting principles recognized by the American Institute of
Certified Public Accountants or the Financial Accounting Standards Board, or any
successors thereto, and are true and correct and that no circumstances have
occurred or come to its attention since the date of such financial statements
which would have a material adverse impact on the financial condition of
Purchaser or such Affiliate as indicated on any such financial statements
delivered to Seller.
Section 10.4. Closing Certificates of Seller and Purchaser.
(a) Purchaser's Closing Certificate. At the Closing, Purchaser
shall execute and deliver to Seller an instrument in which Purchaser shall
remake the representations and warranties made by Purchaser pursuant to Section
10.3 above as of the Closing Date; provided, however, that Purchaser, in such
instrument, may also (i) advise Seller of any events occurring between the date
hereof and the Closing Date which affect the accuracy of such representations
and warranties (as made as of the Closing Date) and (ii) correct such
representations and warranties (as made as of the date hereof) to reflect any
discovered inaccuracy therein; such instrument being herein called "Purchaser's
Representation Certificate"; any updated information set forth in the
Purchaser's Representation Certificate pursuant to the preceding subclause (i)
which has a material adverse effect on Seller, together with any correction of
any representation and warranty as set forth in the Purchaser's Representation
Certificate pursuant to the preceding subclause (ii) which has a material
adverse effect on Seller, are herein collectively called "Purchaser's Adverse
Changes".
(b) Seller's Closing Certificate. At the Closing, Seller shall
execute and deliver to Purchaser an instrument ("Seller's Representation
Certificate") in which Seller shall remake the representations and warranties
made by Seller pursuant to Section 10.1 and, subject to the following provisions
of this Section 10.4(b), Section 10.2 above as of the Closing Date; provided,
however, that
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(i) the representations and warranties contained in Section 10.2(b)
of this Agreement shall be remade in the Seller's Representation
Certificate as to the New Leases only (i.e., not as to the Existing
Leases);
(ii) Seller shall not be obligated or deemed to remake the
representations and warranties contained in Section 10.2(c) as of the
Closing Date (the respective rights and obligations of Seller and
Purchaser with respect to brokerage commissions payable under any New
Leases being set forth in Section 11.6 hereof);
(iii) the representations and warranties contained in Section
10.2(d) of this Agreement shall be remade in the Seller's Representation
Certificate as to the New Service Contracts only (i.e., not as to the
Existing Service Contracts);
(iv) Seller shall not be obligated or deemed to remake the
representations and warranties contained in Section 10.2(h) as of the
Closing Date; and
(v) Seller, in Seller's Representation Certificate, may also (A)
advise Purchaser of any events occurring between the date hereof and the
Closing Date which affect the accuracy of such representations and
warranties (as made as of the Closing Date), including, without
limitation, those made pursuant to subclauses (i) and (iii) of this
sentence, and (B) correct such representations and warranties (as made as
of the date hereof) to reflect any discovered inaccuracy therein.
Any updated information set forth in the Seller's Representation Certificate
pursuant to subclause (v)(A) of the preceding sentence which has a material
adverse effect on Purchaser, together with any correction of any representation
and warranty as set forth in the Seller's Representation Certificate pursuant to
subclause (v)(B) of the preceding sentence which has a material adverse effect
on Purchaser, are herein collectively called "Seller's Adverse Changes".
Section 10.5. Survival of Representations and Warranties. The
representations and warranties of Seller set forth in Sections 10.1, 10.2(b),
10.2(c), 10.2(d), 10.2(e), 10.2(g), 10.2(i) 10.2(j) and 10.2(k), and the
representations and warranties of Purchaser set forth in Section 10.3,
including, without limitation, any remake of such representations and warranties
in the Seller's Representation Certificate and Purchaser's Representation
Certificate, as the case may be, shall survive the Closing for the applicable
Survival Period.
ARTICLE XI
COVENANTS
---------
Section 11.1. Operation of Premises. Between the date hereof and the
Closing Date, Seller shall continue to maintain each Premises in the ordinary
course and substantially in accordance with the practices and procedures
customarily followed by Seller in the maintenance of such Premises prior to the
date hereof; provided, however, that Seller shall
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have no obligation to make any repairs or expenditures that are capital in
nature. Purchaser shall receive a credit against the Cash Balance at the Closing
equal to Twenty-Two Thousand Five Hundred and 00/100 ($22,500) Dollars in full
and complete satisfaction of any obligation of Seller to perform or complete any
capital improvements, replacements or repairs with respect to any of the
Properties after the date hereof, including, without limitation, all capital
improvement work scheduled for 1996 pursuant to any budget or otherwise at any
Property, completion of any gazebo or auditorium work at the Lincolnshire Asset
and completion of the elevator cab refurbishment, sprinkler work and energy
management system work at the Washington, D.C.
Asset.
Section 11.2. Insurance. Between the date hereof and the Closing
Date, Seller shall either (a) maintain in full force and effect all insurance
policies owned by Seller and relating to fire or other casualty in effect on the
date hereof with respect to the Improvements at each Property or (b) replace
such insurance policies with other policies providing coverage equivalent
thereto.
Section 11.3. Modification of Leases. Between the day following the
Due Diligence Expiration Date and the Closing Date, Seller shall not modify or
amend any of the Existing Leases or New Leases in any material respect without
Purchaser's prior written consent in each instance, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, Seller shall
have the right, without Purchaser's consent, to enter into any modification or
amendment of any Existing Lease or New Lease (a) that is required pursuant to
the terms of any Existing Lease or New Lease or that is entered into to
effectuate or memorialize the exercise of any right or option contained in any
Existing Lease or New Lease and (b) if Purchaser shall default in any material
respect under any representation, warranty, covenant, agreement or other
obligation of Purchaser set forth in this Agreement. If required, Purchaser's
consent shall be deemed granted if not denied by notice (stating the grounds for
denial with reasonable specificity) given to Seller within five (5) Business
Days after request for such consent by Seller.
Section 11.4. Termination of Leases. Between the day following the
Due Diligence Expiration Date and the Closing Date, Seller shall not cancel,
accept the surrender of, or terminate any of the Existing Leases or New Leases
without Purchaser's prior written consent in each instance, which consent shall
not be unreasonably withheld, conditioned or delayed; provided, however, Seller
shall have the right, without Purchaser's consent, to cancel, accept the
surrender of, or terminate an Existing Lease or New Lease (a) if, with respect
to any Lease other than the Specified Estoppel Leases, such cancellation,
surrender or termination is predicated upon a default of the tenant thereunder,
(b) if such cancellation, surrender or termination is made by the tenant
pursuant to the terms of such Existing Lease or New Lease or (c) if Purchaser
shall default in any material respect under any representation, warranty,
covenant, agreement or other obligation of Purchaser set forth in this
Agreement. If required, Purchaser's consent shall be deemed granted if not
denied by notice (stating the grounds for denial with reasonable specificity)
given to Seller within five (5) Business Days after request for such consent by
Seller. Purchaser agrees that (i) no representation or warranty has been made,
and no responsibility is assumed, by Seller with respect to the continued
occupancy of any portion of any Premises by any tenant, and Seller does not
guarantee or undertake to insure that any tenant will be in occupancy at the
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Closing, (ii) prior to the Closing, Seller shall have the right, but not the
obligation, to enforce its rights against any tenant(s), by summary proceedings
or otherwise and (iii) the dispossession or removal of any tenant(s) prior to
the Closing predicated upon a default by such tenant under its lease shall not
be the basis for any claim by Purchaser against Seller or affect any of
Purchaser's covenants and obligations under this Agreement.
Section 11.5. New Leases.
(a) With respect to each Property, between the day following
the Due Diligence Expiration Date and the Closing Date, Seller shall not enter
into any new lease or renew or extend any Existing Lease without Purchaser's
prior written consent in each instance, which consent shall not be unreasonably
withheld, conditioned or delayed; provided, however, Seller shall have the
right, without Purchaser's consent, (i) to renew or extend any Existing Lease or
New Lease pursuant to the exercise of any right of renewal or extension by the
tenant under the terms of any Existing Lease or New Lease and (ii) to enter into
any new lease or renew or extend any Existing Lease if Purchaser shall default
in any material respect under any representation, warranty, covenant, agreement
or other obligation of Purchaser set forth in this Agreement. If required,
Purchaser's consent shall be deemed granted if not denied by notice (stating the
grounds for denial with reasonable specificity) given to Seller within five (5)
Business Days after request for such consent by Seller.
(b) The provisions of this Section 11.5(b) shall apply only to
the Lincolnshire Asset but shall be in addition to the provisions of Section
11.5(a) above: in order to provide an efficient process for the review and
approval of any proposed new lease at the Lincolnshire Asset, Seller shall
instruct its leasing agent to meet with Purchaser from time to time to afford
Purchaser a reasonable opportunity to provide suggested general guidelines for
new leases of a particular space at the Lincolnshire Asset. As any proposal for
a new lease is received by Seller's leasing agent, it shall notify Purchaser and
afford Purchaser an opportunity to comment upon the proposal to Seller prior to
such leasing agent's responding to such proposal. Seller, however, shall not be
bound by the proposed leasing guidelines of Purchaser or the comments or
suggestions of Purchaser. In addition, Purchaser shall be entitled to attend all
meetings and site visits between Seller or the leasing agent and the prospective
tenant, it being understood that Seller and/or its leasing agent shall control
and conduct all negotiations during any such meeting or visit. Seller shall
provide or cause its leasing agent to provide Purchaser with reasonable prior
notice (which may be oral) of any such meeting or visit. At such time as Seller
decides to enter into a New Lease with a new or existing tenant, Seller shall
provide Purchaser with written notice thereof, which notice shall include the
terms of the proposed New Lease, including without limitation Seller's
construction manager's estimate of the tenant improvement costs, and all tenant
concessions and the terms of any brokerage commission payable in connection
therewith.
Section 11.6. Payment of Leasing Costs.
(a) Purchaser, in the manner set forth in this Section 11.6,
shall pay and be solely responsible for the payment of (or, to extent paid by
Seller, shall reimburse Seller at the Closing for), all or a portion of any
Leasing Costs paid or payable by the landlord in
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connection with (i) any New Lease or any modification or amendment of any New
Lease, (ii) any modification or amendment of any Existing Lease executed after
the Bid Date, (iii) any renewal options, extension options or expansion options
which are exercised or become effective between the Bid Date and the Closing
Date pursuant to the terms of each respective Existing Lease and New Lease and
(iv) any space leased pursuant to rights of first refusal or first offer or
similar rights which are exercised between the Bid Date and the Closing Date
(each of the foregoing leases and events with respect to leases is referred to
as a "Lease Cost Transaction"). For purposes of this Agreement, "Leasing Costs"
shall mean leasing and brokerage commissions, any direct payments, work
allowances and workletters paid or granted to or for the benefit of the tenant
under a lease and any free rent, rent allowances or rent credits paid or granted
to such tenant (and, in the case of any such inducement not paid in cash, the
dollar value thereof), advertising expenses and legal fees and disbursements.
(b) If the commencement date or effective date of any Lease
Cost Transaction is after the Closing Date, then Purchaser shall be responsible
for all of the Leasing Costs arising out of such Lease Cost Transaction. If the
commencement date or effective date of any Lease Cost Transaction is before the
Closing Date, then (i) Seller shall be responsible for a portion of the Leasing
Costs arising out of such Lease Cost Transaction equal to the product obtained
by multiplying such Leasing Costs by a fraction, the numerator of which is the
number of days from the commencement date or effective date of such Lease Cost
Transaction to (but not including) the Closing Date and the denominator of which
is the number of days from the commencement date or effective date of such Lease
Cost Transaction to the stated expiration date of such lease and (ii) Purchaser
shall be responsible for the balance of such Leasing Costs.
(c) If, in any instance described in Section 11.6(b) above,
Seller, as of the Closing Date, shall not have theretofore paid or incurred the
portion of such Leasing Costs for which Seller is responsible, then Purchaser
shall be entitled to a credit against the Cash Balance of the Purchase Price in
an amount equal to such unpaid and un-incurred portion for which Seller is
responsible and, to the extent that the same has been so credited, Purchaser
shall make payment of such portion of such Leasing Costs. If, in any instance
described in Section 11.6(b) above, Seller, as of the Closing Date, shall have
paid or incurred any portion of such Leasing Costs for which Purchaser is
responsible, then the Cash Balance of the Purchase Price shall be increased by
an amount equal to such paid or incurred portion.
(d) In the case of any proposed new lease or renewal of any
Existing Lease to which Purchaser's consent is required pursuant to the
provisions of Section 11.5(a) above, Purchaser shall have the right, within five
(5) Business Days after the expiration of the five Business Day period described
in Section 11.5 with respect to such new lease or renewal, to submit to Seller
the name of a contractor and a proposal by such contractor for the performance
of any tenant improvement work required to be performed by the landlord pursuant
to such new lease or renewal. Seller agrees to review such proposal in good
faith, but Seller shall retain the sole and exclusive right to engage any
contractor selected by Seller for the performance of such work.
(e) The provisions of this Section 11.6 shall survive the
Closing.
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Section 11.7. Estoppel Certificates. Seller shall request that the
tenant under each Existing Lease and New Lease execute and deliver to Seller an
estoppel certificate in the form attached hereto as Exhibit K; provided,
however, that if an Existing Lease or New Lease prescribes the form or contents
of an estoppel certificate to be delivered by the tenant, then Seller may elect
to request that the tenant thereunder execute and deliver an estoppel
certificate in the form required pursuant to the applicable Existing Lease or
New Lease, as the case may be. Each estoppel certificate so requested pursuant
to this Section 11.7 is herein referred to as a "Tenant Estoppel Certificate".
Section 11.8. Non-Disturbance Agreements. Between the date hereof
and the Closing Date, Purchaser shall have the right to request that tenants
under the Leases execute non-disturbance and attornment agreements with any
lender which may be providing financing to Purchaser secured by a mortgage on
the applicable Property; provided, however, no such non-disturbance and
attornment agreement shall be effective unless and until the Closing shall
occur. Nothing contained in this Section 11.8 is intended or shall be construed
to condition any of Purchaser's obligations under this Agreement upon Purchaser
obtaining (a) any such non-disturbance and attornment agreements from any tenant
or tenants or (b) financing in connection with the purchase of any one or more
of the Properties.
ARTICLE XII
INSPECTION
----------
Section 12.1. Right of Inspection. Purchaser and its agents shall
have the right to inspect each Property during business hours on Business Days,
including the right to interview the tenants under Existing Leases, provided
that (a) Purchaser shall first give Seller reasonable advance notification of
its intention to conduct any such inspection or interview, (b) Purchaser shall
permit a representative of Seller to accompany Purchaser and/or its agents
during any such inspection or interview if Seller shall make such a
representative available and (c) such inspection or interview shall not
unreasonably impede the normal day-to-day business operation of such Property.
Purchaser's right of inspection of each Property shall be subject to the rights
of tenants. Purchaser hereby indemnifies and agrees to defend and hold Seller
harmless from all loss, cost (including, without limitation, reasonable
attorneys' fees), claim or damage arising in connection with or from any such
inspection by Purchaser or its agents. The provisions of this Article 12 shall
survive the Closing.
Section 12.2. Due Diligence Period.
(a) Purchaser confirms to Seller that Purchaser has conducted
a detailed inspection of the Asset File, has made multiple site visits and in
certain instances consulted with third party professionals in satisfying itself
that each Property is appropriate for Purchaser's acquisition. Notwithstanding
the foregoing, in order to confirm preliminary information with third party
professionals, review materials requested but not delivered, clarify certain
discrepancies, conduct a more complete Phase I environmental analysis and
complete its
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investigation, Purchaser, for the period ending on July 22, 1996 (the "Due
Diligence Expiration Date"), shall have the right to conduct or cause to be
conducted, at Purchaser's sole cost, risk and expense, such inspections, tests,
examinations and studies of each Property as Purchaser deems necessary or
appropriate; to further examine all applicable records relating to the income,
operation and maintenance of each Property; to interview tenants; to determine
compliance of each Property with applicable laws and regulations, including,
without limitation, zoning, building, land use and environmental protection
laws; to conduct an asbestos study; and to further confirm certain title
matters. The provisions of Section 12.1 above shall apply to any on-site
investigations or inspections to be made by Purchaser.
(b) If Purchaser, in its judgment reasonably exercised,
determines that (i) there are capital items required for any Property (in
addition to those identified in the capital budget included in the Asset File
and those of which Purchaser had knowledge as of the execution and delivery of
this Agreement) exceeding in the aggregate $250,000, (ii) there are violations
of any of the aforesaid applicable laws, (iii) any new materials not previously
furnished as a part of the Asset File or further investigation of materials
previously furnished provide results unsatisfactory to Purchaser or (iv) there
are environmental matters which Purchaser is unwilling to assume, Purchaser
shall have the right to terminate this Agreement by written notice given to
Seller prior to 5:00 p.m. (E.D.T) on the Due Diligence Expiration Date (TIME
BEING OF THE ESSENCE). If Purchaser shall elect to terminate this Agreement in
the time and manner set forth in this Section 12.2(b), then the Deposit shall be
returned to Purchaser, this Agreement shall be deemed terminated and neither
party shall have any further rights or obligations to the other, except for
those expressly stated to survive the termination of this Agreement. If
Purchaser shall fail to terminate this Agreement in the time and manner set
forth in this Section 12.2(b), then Purchaser shall be deemed to have
irrevocably waived its right to terminate this Agreement pursuant to this
Section 12.2(b).
ARTICLE XIII
TRANSACTION COSTS
-----------------
Section 13.1. Seller's Transaction Costs. At the Closing, Seller
shall pay all transfer taxes and/or deed stamps payable as a result of the
conveyance of title to each Property to Purchaser pursuant to this Agreement.
Seller, in addition to its apportionments obligations hereunder, if any, also
shall be responsible for the cost of its legal counsel, advisors and the other
professionals employed by it in connection with the sale of the Properties.
Section 13.2. Purchaser's Transaction Costs. Purchaser, in addition
to its apportionments (if any) and its other payment obligations hereunder,
shall be responsible for all costs and expenses associated with (a) Purchaser's
due diligence, (b) Purchaser's legal counsel, advisors, engineers, consultants
and the other professionals employed by it in connection with Purchaser's due
diligence and the purchase of the Properties, (c) title reports or abstracts
issued by the Title Insurer, as well as all survey and search costs and updates
related thereto, (d) the policy premiums in respect of any fee title insurance
obtained by Purchaser and any mortgage title insurance required by Purchaser's
lender (if any), (e) payment, at the Closing, of the recording fees and
recordation taxes for the deed(s) and (f) all costs and expenses of obtaining
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any financing Purchaser may elect to obtain (including any fees, financing
costs, transfer taxes, mortgage and recordation taxes and intangible taxes in
connection therewith).
Section 13.3. Hart-Scott-Rodino Filing Fees. Purchaser shall be
responsible for paying all filing fees necessary in connection with all filings
required under the HSR Act with respect to the sale of any Property to
Purchaser, as more particularly provided for in Article 21 hereof.
ARTICLE XIV
BROKERAGE
---------
Section 14.1. Payment of Broker; Representations. Purchaser and
Seller each represents and warrants to the other that such party has not had any
conversations or dealings with any broker, finder or other similar party in
connection with the transactions contemplated hereby other than Merrill Lynch
and Company and Koch Asset Management Company (collectively, the "Broker").
Purchaser and Seller (each, an "indemnifying party") shall indemnify, defend and
hold the other harmless from and against any and all claims, liabilities,
losses, damages, costs or expenses (including, without limitation, reasonable
attorneys' fees and expenses), arising out of a claim of a breach of the
representation made by such indemnifying party pursuant to the immediately
preceding sentence. Seller shall pay any brokerage commission or similar
compensation due to the Broker pursuant to a separate written agreement. The
provisions of this Article 14 shall survive the Closing or termination of this
Agreement.
ARTICLE XV
CASUALTY AND CONDEMNATION
-------------------------
Section 15.1. Casualty.
(a) For purposes of this Article 15, the following terms shall
have the meanings indicated:
"Major Casualty" means, with respect to the Improvements at
any Property, a fire in or other casualty to such Improvements which causes
damage or injury to such Improvements and results in Restoration Costs in excess
of an amount equal to Ten Million ($10,000,000) Dollars.
"Restoration Costs" means, as of any date with respect to any
fire or other casualty affecting the Improvements at any Property, the cost to
be incurred, from and after such date, to repair or restore (as reasonably
determined by an architect or engineer selected by Seller) the damage to such
Improvements at such Property caused by such fire or other casualty, exclusive
of the cost of any such repair or restoration for which Seller, as the landlord
under any Existing Lease or New Lease for such Property, is not responsible.
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(b) If, between the date hereof and the Closing, there shall
occur a fire or other casualty affecting the Improvements at any Property which
is not a Major Casualty, then Purchaser shall have no right to terminate this
Agreement and shall purchase such Property in its damaged condition (and all
other Properties) without reduction of or offset against the Purchase Price or
any other claim against Seller (other than a credit against the Cash Balance in
an amount equal to the deductible, if any, under Seller's insurance policy
applicable to such casualty). Seller shall assign to Purchaser the right to
receive any insurance proceeds payable to Seller as a result of such fire or
other casualty; provided, however, that Seller shall be entitled to retain (to
the extent theretofore paid to Seller), and shall not be obligated to assign the
right to receive (to the extent not theretofore paid to Seller), an amount of
such insurance proceeds equal to Seller's expenses, if any, incurred in
collecting such proceeds and repairing such fire or other casualty. Upon the
assignment to Purchaser of any insurance proceeds payable with respect to such
fire or other casualty, Seller shall reasonably cooperate with Purchaser with
respect to Purchaser's efforts to collect such proceeds.
(c) If, between the date hereof and the Closing, there shall
occur a fire or other casualty affecting the Improvements at any Property which
is a Major Casualty, then Purchaser shall have the option, to be exercised by
notice given to Seller within fifteen (15) days after the date of such casualty,
to terminate this Agreement. If Purchaser shall so elect to terminate this
Agreement, then (i) Purchaser shall be entitled to the return of the Deposit and
(ii) neither party hereto shall have any further obligations or liabilities to
the other hereunder, except for those which expressly survive the termination of
this Agreement. If Purchaser shall not elect to terminate this Agreement with
respect to such Property as provided in this subclause (c), then this Agreement
shall remain in full force and effect with respect to such Property (and all
other Properties) and the provisions of Section 15.1(b) above shall apply to
such damage and any insurance proceeds payable in connection therewith.
(d) In no event shall Seller have any obligation to repair any
damage or destruction to any Property, but Seller shall have the right to do so
and utilize insurance proceeds for such purpose.
Section 15.2. Condemnation.
(a) If, between the date hereof and the Closing, any
condemnation or eminent domain proceedings are initiated with respect to any
Property which would result in (i) the elimination of more than 10% of the
parking spaces at such Property or (ii) a taking of a portion of such Property
requiring in excess of Ten Million ($10,000,000) Dollars to restore the Property
to its physical and economic condition prior to such taking, then either Seller
or Purchaser may elect to terminate this Agreement by giving written notice of
its election to the other party within fifteen (15) days after receiving notice
of such prospective taking. If Purchaser or Seller shall so elect to terminate
this Agreement, then (x) Purchaser shall be entitled to the return of the
Deposit and (y) neither party hereto shall have any further obligations or
liabilities hereunder, except for those which expressly survive the termination
of this Agreement. If neither party so elects to terminate this Agreement, then
the parties hereto shall proceed to the Closing without reduction of or offset
against the Purchase Price and Purchaser shall have no other claim against
Seller. In such event, all of Seller's right, title and interest in and to any
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condemnation proceeds paid or payable in connection therewith shall be assigned
to Purchaser. In no event shall Seller have any obligation to repair or restore
any Property or any portion thereof.
(b) If, between the date hereof and the Closing, any
condemnation or eminent domain proceedings are initiated which would result in
the taking of less than a material portion of any Property, then neither Seller
nor Purchaser may terminate this Agreement with respect to such Property (or any
other Properties) and the parties shall proceed to the Closing without reduction
of or offset against the Purchase Price and Purchaser shall have no other claim
against Seller. In such event, all of Seller's right, title and interest in and
to any condemnation proceeds paid or payable in connection therewith shall be
assigned to Purchaser. In no event shall Seller have any obligation to repair or
restore any Property or any portion thereof.
ARTICLE XVI
ASSIGNMENT
----------
Section 16.1. No Assignment by Purchaser. Neither this Agreement nor
any of the rights of Purchaser hereunder (nor the benefits of such rights) may
be assigned, transferred or encumbered without Seller's prior written consent
and any purported assignment, transfer or encumbrance without Seller's prior
written consent shall be void. Purchaser expressly covenants and agrees that (a)
if Purchaser is a corporation, a sale or transfer of more than fifty percent
(50%) (at any one time or, in the aggregate from time to time) of the shares of
any class of the issued and outstanding stock of Purchaser, its successors or
assigns, or the issuance of additional shares of any class of its stock to the
extent of more than 50% (at any one time or, in the aggregate from time to time)
of the number of shares of said class of stock issued and outstanding on the
date hereof or (b) if Purchaser is a partnership, joint venture or limited
liability company, a sale or transfer of more than fifty percent (50%) (at any
one time or, in the aggregate from time to time) of the partnership, joint
venture, membership or other unincorporated association interests of Purchaser,
its successors or assigns, or the issuance of additional partnership, joint
venture or member interests of any class to the extent of more than 50% (at any
one time or, in the aggregate from time to time) of the amount of partnership,
joint venture or member interests issued on the date hereof shall, in any such
case, constitute an assignment of this Agreement. Unless, in each instance, the
prior written consent of Seller has been obtained, any such assignment shall
constitute a material default under this Agreement and shall entitle Seller to
exercise all rights and remedies under this Agreement, at law or equity, in the
case of such a default.
Section 16.2. Permitted Assignment to Affiliate. Notwithstanding the
provisions of Section 16.1 to the contrary, the named Purchaser in this
Agreement shall have the one-time right to assign its rights and obligations
under this Agreement to an Affiliate of such named Purchaser effective on or
prior to the Closing, provided that (a) Seller shall consent to such assignment,
such consent not to be unreasonably withheld or delayed, (b) at least ten (10)
Business Days prior to the effective date of such assignment, Purchaser delivers
to Seller
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evidence of the ownership of Purchaser and the proposed assignee so as to permit
Seller to verify that such proposed assignee is an Affiliate of Purchaser and
(c) on or prior to the effective date of such assignment, the Purchaser shall
deliver to Seller a written assumption, in form reasonably satisfactory to
Seller and duly executed and acknowledged by the assignee, in which the assignee
agrees to assume all of Purchaser's covenants, agreements and obligations under
this Agreement. Purchaser shall remain fully liable for all of Purchaser's
covenants, agreements and obligations under this Agreement notwithstanding any
such permitted assignment pursuant to this Section 16.2.
ARTICLE XVII
TAX CERTIORARI PROCEEDINGS
--------------------------
Section 17.1. Prosecution and Settlement of Proceedings. If any tax
reduction proceedings in respect of any Premises, relating to any fiscal years
ending prior to the fiscal year in which the Closing occurs, are pending at the
time of the Closing, Seller reserves and shall have the right to continue to
prosecute and/or settle the same. If any tax reduction proceedings in respect of
any Premises, relating to the fiscal year in which the Closing occurs, are
pending at the time of Closing, then Seller reserves and shall have the right to
continue to prosecute and/or settle the same; provided, however, that Seller
shall not settle any such proceeding without Purchaser's prior written consent,
which consent shall not be unreasonably withheld or delayed. Purchaser shall
reasonably cooperate with Seller in connection with the prosecution of any such
tax reduction proceedings.
Section 17.2. Application of Refunds or Savings. Any refunds or
savings in the payment of taxes resulting from such tax reduction proceedings
applicable to the period prior to the date of the Closing shall belong to and be
the property of Seller, and any refunds or savings in the payment of taxes
applicable to the period from and after the date of the Closing shall belong to
and be the property of Purchaser; provided, however, that if any such refund
creates an obligation to reimburse any tenants under Leases for any rents or
additional rents paid or to be paid, that portion of such refund equal to the
amount of such required reimbursement (after deduction of allocable expenses as
may be provided in the Lease to such tenant) shall, at Seller's election, either
(a) be paid to Purchaser and Purchaser shall disburse the same to such tenants
or (b) be paid by Seller directly to the tenants entitled thereto. All
attorneys' fees and other expenses incurred in obtaining such refunds or savings
shall be apportioned between Seller and Purchaser in proportion to the gross
amount of such refunds or savings payable to Seller and Purchaser, respectively
(without regard to any amounts reimbursable to tenants).
Section 17.3. Survival. The provisions of this Article 17 shall
survive the Closing.
ARTICLE XVIII
DEFAULT; REMEDIES; SURVIVAL
---------------------------
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Section 18.1. Purchaser's Default On or Before Closing.
(a) If, on or prior to the Closing Date, (i) Purchaser
defaults in any of the covenants, agreements or obligations to be performed by
Purchaser under this Agreement on or as of the Closing Date (or at the Closing),
(ii) Seller shall become aware of an inaccuracy in any representation or
warranty made by Purchaser pursuant to Section 10.3 hereof (as made as of the
date hereof) which has a material adverse effect on Seller, (iii) Seller shall
become aware of an inaccuracy in any representation or warranty made by
Purchaser pursuant to Purchaser's Representation Certificate (as made as of the
Closing Date) which has a material adverse effect on Seller, (iv) Purchaser's
Representation Certificate shall set forth any Purchaser's Adverse Changes or
(v) Purchaser otherwise materially defaults hereunder and such other material
default is not cured by the earlier of (A) the Scheduled Closing Date (as it may
have been adjourned in accordance with this Agreement) or (B) the date which is
ten (10) days after notice of such default from Seller to Purchaser, then, and
in any of such events, Seller, as its sole remedy therefor, may terminate this
Agreement by written notice to Purchaser, whereupon, as liquidated damages on
account thereof, Purchaser shall be liable to Seller for an amount equal to the
Deposit, and the Deposit shall be paid to Seller by Escrow Agent and credited
against Purchaser's liability. Upon any such termination of this Agreement,
neither party shall have any further rights or obligations hereunder other than
those which expressly survive the termination of this Agreement. Seller and
Purchaser agree that the damages that Seller will sustain as a result of such
termination will be substantial but will be difficult to ascertain, and the
aforesaid liquidated damages are a fair and reasonable amount to be retained by
Seller as agreed and liquidated damages in light of Seller's removal of each
Property from the market and the damages incurred by Seller and shall not
constitute a penalty or a forfeiture.
(b) If Seller, with knowledge of (i) a default in any of the
covenants, agreements or obligations to be performed by Purchaser under this
Agreement, (ii) a material inaccuracy in any representation or warranty of
Purchaser made in this Agreement or pursuant to Purchaser's Representation
Certificate and/or (iii) any Purchaser's Adverse Changes, elects to proceed to
Closing, then, upon the consummation of the Closing, Seller shall be deemed to
have waived any such default, material inaccuracy and/or Purchaser's Adverse
Changes and shall have no claim against Purchaser on account thereof.
Section 18.2. Seller's Default On or Before Closing.
(a) If, on or prior to the Closing Date, (i) Seller defaults
in any of the covenants, agreements or obligations to be performed by Seller
under this Agreement on or as of the Closing Date (or at the Closing) or (ii)
Seller otherwise materially defaults hereunder and such other material default
is not cured by the earlier of (A) the Scheduled Closing Date (as it may have
been adjourned in accordance with this Agreement) or (B) the date which is ten
(10) days after notice of such default from Purchaser to Seller, then, and in
any of such events, Purchaser, as its sole remedy therefor, may either (1) seek
specific performance of Seller's obligations hereunder, without abatement,
credit against or reduction of the Purchase Price or (2) terminate this
Agreement by written notice to Seller, whereupon the Deposit shall be refunded
to Purchaser, it being understood and agreed that in no event shall Purchaser be
entitled to monetary damages. If Purchaser shall elect to terminate this
Agreement then, upon such election, neither
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party shall have any further rights or obligations hereunder other than those
which expressly survive the termination of this Agreement.
(b) If, on or prior to the Closing Date, (i) Purchaser shall
become aware of an inaccuracy in any representation or warranty made by Seller
pursuant to Section 10.1 or 10.2 hereof (as made as of the date hereof) which
has a material adverse effect on Purchaser, (ii) Purchaser shall become aware of
an inaccuracy in any representation or warranty made by Seller pursuant to
Seller's Representation Certificate (as made as of the Closing Date) which has a
material adverse effect on Purchaser or (iii) Seller's Representation
Certificate shall set forth any Seller's Adverse Changes, then, and in any of
such events, Purchaser, as its sole remedy therefor, may either (1) elect to
proceed to the Closing, without abatement, credit against or reduction of the
Purchase Price or (2) terminate this Agreement by written notice to Seller,
whereupon the Deposit shall be refunded to Purchaser, it being understood and
agreed that in no event shall Purchaser be entitled to monetary damages. If
Purchaser shall elect to terminate this Agreement then, upon such election,
neither party shall have any further rights or obligations hereunder other than
those which expressly survive the termination of this Agreement. Without
limiting the generality of this Section 18.2(b), in no event shall the
occurrence of any of the events or circumstances described in the preceding
subclauses (i), (ii) and (iii) of this Section 18.2(b) give rise to any
obligation of Seller to cure an inaccuracy in any representation or warranty or
otherwise make Seller liable for damages on account thereof.
(c) If Purchaser, with knowledge of (i) a default in any of
the covenants, agreements or obligations to be performed by Seller under this
Agreement, (ii) a material inaccuracy in any representation or warranty of
Seller made in this Agreement or pursuant to Seller's Representation Certificate
and/or (iii) any Seller's Adverse Changes, elects to proceed to Closing, then,
upon the consummation of the Closing, Purchaser shall be deemed to have waived
any such default, material inaccuracy and/or Seller's Adverse Changes and shall
have no claim against Seller on account thereof.
Section 18.3. Survival.
(a) Except as otherwise expressly provided in this Agreement,
no provision of this Agreement (i.e., no representation, warranty, covenant,
agreement or other obligation set forth in any provision of this Agreement,
including, without limitation, any representation or warranty set forth in
Seller's Closing Certificate and Purchaser's Closing Certificate) shall survive
the Closing (and, accordingly, no claim arising out of the same may be commenced
after the Closing), and the delivery and acceptance of the deed shall be deemed
to be full performance and discharge of each such representation, warranty,
covenant, agreement or other obligation.
(b) If, after the Closing, Seller shall first learn of (i) an
inaccuracy in any representation or warranty of Purchaser made pursuant to
Section 10.3 hereof (as made as of the date hereof) or pursuant to Purchaser's
Closing Certificate (as made as of the Closing Date) which, in any case, has a
material adverse effect on Seller and expressly survives the Closing pursuant to
this Agreement or (ii) a default in any of the covenants, agreements or
obligations to be performed by Purchaser under this Agreement which expressly
survives the
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Closing, then Seller shall have a claim for damages on account thereof, provided
that (1) any such claim not brought within the Survival Period shall be deemed
waived and (2) Seller hereby waives the right to collect or seek to collect
consequential or punitive damages.
(c) If, after the Closing, Purchaser shall first learn of (i)
an inaccuracy in any representation or warranty of Seller made pursuant to
Section 10.1 or 10.2 hereof (as made as of the date hereof) or pursuant to
Seller's Closing Certificate (as made as of the Closing Date) which, in any
case, has a material adverse effect on Purchaser and expressly survives the
Closing pursuant to this Agreement or (ii) a default in any of the covenants,
agreements or obligations to be performed by Seller under this Agreement which
expressly survives the Closing, then Purchaser shall have a claim for damages on
account thereof, provided that (1) any such claim not brought within the
applicable Survival Period shall be deemed waived and (2) Purchaser hereby
waives the right to collect or seek to collect consequential or punitive
damages.
Section 18.4. Determination of Material Inaccuracy. Notwithstanding
any provision of this Agreement to the contrary, no inaccuracy in any
representation or warranty made by Seller pursuant to Section 10.2 hereof or
pursuant to Seller's Closing Certificate (to the extent making or remaking any
representation or warranty pursuant to Section 10.2), or any Seller's Adverse
Change (to the extent affecting any representation or warranty made or remade
pursuant to Section 10.2), with respect to any Property shall be deemed to have
a material adverse effect on Purchaser unless Purchaser can reasonably
demonstrate that the cost to cure the condition causing such inaccuracy or
Seller's Adverse Change or the reduction in economic value of such Property
resulting from such inaccuracy or Seller's Adverse Change, is more than the sum
of (i) Five Hundred Thousand ($500,000) Dollars, plus (ii) all insurance
proceeds, if any, payable to Purchaser by reason or arising out of the
circumstances giving rise to such inaccuracy or Seller's Adverse Change. If any
such inaccuracy in any representation or warranty under Section 10.2 or in
Seller's Representation Certificate, or any Seller's Adverse Change, shall not
have a material adverse effect on Purchaser, as determined in accordance with
this Section 18.4, then Purchaser shall not be entitled to any right or remedy
under this Agreement, at law or equity as a result of such inaccuracy or
Seller's Adverse Change, including, without limitation, the right to terminate
this Agreement if Purchaser shall become aware of such inaccuracy or Seller's
Adverse Change on or before the Closing.
ARTICLE XIX
NOTICES
-------
Section 19.1. Notices. All notices, demands, requests and other
communications required hereunder shall be in writing and shall be deemed to
have been given: (a) upon delivery, if personally delivered; (b) three (3) days
after deposit in the United States Mail when delivered, postage prepaid, by
certified or registered mail; or (c) one (1) Business Day after deposit with a
nationally recognized overnight delivery service marked for delivery on the next
Business Day, addressed to the party for whom it is intended at its address
hereinafter set forth:
To the Seller:
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New York Life Insurance Company
51 Madison Avenue
New York, New York 10010
Att: Marilyn Goldstein, Esq.
with a copy to:
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Att: Robert J. Sorin, Esq.
To the Purchaser:
Beacon Properties, L.P.
50 Rowes Wharf
Boston, Massachusetts 02110
Att: Ms. Erin O'Boyle
with a copy to:
Goulston & Storrs P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110
Att: Jordan P. Krasnow, Esq.
or at such other address in the United States of America as may be designated by
either of the parties in a written notice given in accordance with the
provisions of this Section. The attorney for any party may send notices on that
party's behalf.
ARTICLE XX
MISCELLANEOUS
-------------
Section 20.1. Governing Law; Jurisdiction and Venue.
(a) This Agreement shall be governed by, and construed in
accordance with, the substantive laws of the State of New York, without regard
to conflict of law principles.
(b) For the purposes of any suit, action or proceeding
involving this Agreement, Purchaser hereby expressly submits to the jurisdiction
of all federal and state courts sitting in the State of New York and consents
that any order, process, notice of motion or other application to or by any such
court or a judge thereof may be served within or without such court's
jurisdiction by registered mail or by personal service, provided that a
reasonable time for
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appearance is allowed, and Purchaser agrees that such courts shall have the
exclusive jurisdiction over any such suit, action or proceeding commenced by
either or both of said parties. In furtherance of such agreement, Purchaser
agrees upon the request of Seller to discontinue (or agree to the discontinuance
of) any such suit, action or proceeding pending in any other jurisdiction.
(c) Purchaser hereby irrevocably waives any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement brought in any federal
or state court sitting in the State of New York and hereby further irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.
Section 20.2. Further Assurances. In addition to the obligations
required to be performed hereunder by Seller and Purchaser at or prior to the
Closing, each party, from and after the Closing, shall execute, acknowledge
and/or deliver such other instruments, as may reasonably be requested in order
to effectuate the purposes of this Agreement; provided, however, that the
foregoing provisions of this Section 20.2 shall not obligate either party to
execute, acknowledge or deliver any instrument which would or might impose upon
such party any additional liability or obligation (beyond that imposed upon on
it under the documents delivered by such party at the Closing and the other
provisions of this Agreement which survive the Closing).
Section 20.3. Successors. All of the provisions of this Agreement
and of any of the documents and instruments executed in connection herewith
shall apply to and be binding upon, and inure to the benefit of Seller and
Purchaser, their successors and permitted assigns.
Section 20.4. No Third Party Beneficiary. This Agreement and each of
the provisions hereof are solely for the benefit of Purchaser and Seller and
their permitted assigns. No provisions of this Agreement, or of any of the
documents and instruments executed in connection herewith, shall be construed as
creating in any person or entity other than Purchaser and Seller and their
permitted assigns any rights of any nature whatsoever.
Section 20.5. Entire Agreement. This Agreement, together with the
documents and instruments executed and delivered in connection herewith, sets
forth the entire agreement between Purchaser and Seller relating to the
transactions contemplated hereby and all other prior or contemporaneous
agreements, understandings, representations or statements, oral or written,
relating directly to each Property are superseded hereby.
Section 20.6. Severability. If any provision in this Agreement is
found by a court of competent jurisdiction to be in violation of any applicable
law, and if such court should declare such provision of this Agreement to be
unlawful, void, illegal or unenforceable in any respect, the remainder of this
Agreement shall be construed as if such unlawful, void, illegal or unenforceable
provision were not contained herein, and the rights, obligations and interests
of the parties hereto under the remainder of this Agreement shall continue in
full force and effect undisturbed and unmodified in any way.
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Section 20.7. Modification. This Agreement and the terms hereof may
not be changed, waived, modified, supplemented, canceled, discharged or
terminated orally, but only by an instrument or instruments in writing executed
and delivered by Purchaser and Seller.
Section 20.8. Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES,
IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER
OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS
EXECUTED IN CONNECTION HEREWITH, THE PROPERTIES, OR ANY CLAIMS, DEFENSES, RIGHTS
OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING.
Section 20.9. No Recording. Neither this Agreement nor any
memorandum hereof shall be recorded. Each party hereby agrees to indemnify and
hold harmless the others for all liabilities, losses, damages, liens, suits,
claims, costs and expenses (including reasonable attorneys' fees) incurred by
the other by reason of a breach of the foregoing covenant.
Section 20.10. Captions; Interpretation.
(a) The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Agreement or any of the provisions hereof. All references to
"Articles" and "Sections" without reference to a document other than this
Agreement, are intended to designate articles and sections of this Agreement,
and the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article or Section,
unless specifically designated otherwise.
(b) As used in this Agreement, the masculine shall include the
feminine and neuter, the singular shall include the plural and the plural shall
include the singular, as the context may require.
(c) The use of the term "including" shall mean in all cases
"including but not limited to" unless specifically designated otherwise.
(d) Use of the phrase "to the actual knowledge of Seller" and
words of similar import means that Seller has actual, and not constructive,
knowledge of the facts in question at the time in question, without any express
or implied duty or obligation to conduct any inquiry or investigation.
(e) No rules of construction against the drafter of this
Agreement shall apply in any interpretation or enforcement of this Agreement,
any documents or certificates executed pursuant hereto, or any provisions of any
of the foregoing.
Section 20.11. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same original,
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and the execution of separate counterparts by Purchaser and Seller shall bind
Purchaser and Seller as if they had each executed the same counterpart.
Section 20.12. No Waiver. Neither the failure of either party to
exercise any power given such party hereunder or to insist upon strict
compliance by the other party with its obligations hereunder, nor any custom or
practice of the parties at variance with the terms hereof shall constitute a
waiver of either party's right to demand exact compliance with the terms hereof.
Section 20.13. Time of Essence. Time shall be of the essence with
respect to this Agreement and the covenants and obligations of the parties
hereunder.
Section 20.14. Attorney's Fees. In the event that either party
hereto shall commence litigation against the other in connection herewith, the
losing party in such action shall reimburse the attorneys' fees and
disbursements of the prevailing party in such action.
Section 20.15. Addendum A. Please see the rider to this Agreement
contained in Addendum A attached hereto and made a part hereof.
ARTICLE XXI
HART-SCOTT-RODINO
-----------------
If a filing or filings are required under the HSR Act in connection with the
transactions contemplated by this Agreement, then the following provisions shall
apply:
Section 21.1. Filing Requirements. Simultaneously with the execution
of this Agreement, Purchaser shall duly complete, execute, acknowledge, and
deliver to Seller the Notification and Report Forms required to be completed and
executed by Purchaser under the HSR Act. Seller, promptly after the date hereof,
shall (a) complete, execute and acknowledge the Notification and Report Forms
required to be completed and executed by Seller under the HSR Act and (b) file
with the Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") the Notification and Report
Forms required to be so filed under the HSR Act. Purchaser shall, promptly upon
request of Seller, deliver a check to Seller in the amount necessary to cover
all filing fees customarily paid by a purchaser of real property in connection
with filing the Notification and Report Forms required to be filed under the HSR
Act. Each of Seller and Purchaser, within 10 Business Days after its receipt
thereof, shall respond to all inquiries received by it from the FTC and the
Antitrust Division for additional documentation and information regarding the
transactions contemplated by this Agreement.
Section 21.2. Condition Precedent. It shall be a condition precedent
to both parties' obligations to close that the waiting period applicable under
the HSR Act shall have expired or shall have otherwise terminated without
objection from either the FTC or the Antitrust Division. The Scheduled Closing
Date shall be adjourned until such condition precedent is satisfied; provided,
however, that in no event shall the Scheduled Closing Date be adjourned
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pursuant to this Article beyond the date which is one hundred eighty (180) days
after the original Scheduled Closing Date.
Section 21.3. Purchaser's Delay. If (a) Purchaser does not respond
timely to any inquiry received by it from the FTC, the Antitrust Division or any
other antitrust enforcement agencies, or otherwise does not cooperate fully with
Seller's efforts to satisfy promptly the condition precedent described in
Section 21.2 above, and (b) as a result thereof the Scheduled Closing Date must
be adjourned beyond the date which is ninety (90) days after the original
Scheduled Closing Date, then, in addition to all other remedies available to
Seller under this Agreement, at law or equity, Purchaser shall pay to Seller, by
wire transfer of immediately available federal funds or by official bank check
drawn on the New York office of a member bank of the New York Clearinghouse
Association and payable to the unendorsed order of Seller, an amount (the "HSR
Adjournment Fee") equal to the product obtained by multiplying (i) $10,000, by
(ii) the number of days by which the Scheduled Closing Date is adjourned beyond
the date which is ninety (90) days after the original Scheduled Closing Date as
a result of Purchaser's failure to respond timely to any inquiry received by it
from the FTC or the Antitrust Division or otherwise to cooperate fully with
Seller's efforts to satisfy promptly the condition precedent described in
Section 21.2 above.
ARTICLE XXII
AUDIT
-----
Section 22.1. Compliance with SEC Regulations. To comply with the
Securities and Exchange Commission ("SEC") regulations with respect to the
verification of historical information, Purchaser shall have the right prior to
or subsequent to Closing to conduct an audit, at Purchaser's sole cost and
expense, of Seller's books and records for and with respect to the respective
Properties for the shorter of (i) three years prior to Closing or (ii) the
period of Seller's ownership thereof. Seller hereby agrees to permit Purchaser
and Purchaser's accountants access to such books and records (including those
maintained by Seller's managing agents) and, at Purchaser's sole cost and
expense, to reasonably cooperate and to cause Seller's accountants to cooperate
with Purchaser to enable such audit to be performed. Nothing contained in this
Section 22.1 is intended or shall be construed to increase or modify any of the
obligations, covenants, agreements, representations or warranties of Seller
otherwise set forth in this Agreement, including, without limitation, the
Survival Period which may be applicable thereto. The provisions of this Section
22.1 shall survive the Closing.
ARTICLE XXIII
CONFIDENTIALITY AND PRESS RELEASE
---------------------------------
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Section 23.1. SEC Disclosure. Seller acknowledges that Beacon
Properties Corporation, the general partner of Purchaser, is a publicly owned
corporation subject to regulation by the SEC, and that the regulations of the
SEC may require that Purchaser 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 the disclosure of the terms
and conditions of this Agreement and the transactions contemplated hereby to the
extent that Purchaser in the exercise of its reasonable judgment has determined
that the SEC requires such disclosure. In addition to the disclosure
contemplated by the preceding sentence, and without limitation thereof, either
party may disclose this Agreement or the contents thereof or of any documents to
be executed and/or delivered in connection herewith to any partners, advisers,
underwriters, analysts, employees, affiliates, officers, directors, consultants,
lenders, accountants or legal counsel of any of the foregoing, provided that
they are advised as to the confidential nature of such information and are
instructed to maintain such confidentiality. The foregoing shall constitute a
modification of any prior confidentiality agreement that may have been entered
into by the parties.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
48
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Section 23.2. Press Release. Seller or Purchaser may issue a press
release with respect to this Agreement and the transactions contemplated hereby,
provided that the content of any such press release shall be subject to the
prior written consent of the other party hereto, which consent shall not be
unreasonably withheld or delayed.
IN WITNESS WHEREOF, this Agreement has been entered into as of the day and
year first above written.
SELLER:
NEW YORK LIFE INSURANCE COMPANY
By:_________________________
Richard M. Kernan, Jr.
Executive Vice President
PURCHASER:
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation,
its sole general partner
By:[Signature of Charles H. Cremens]
--------------------------------
Charles H. Cremens
Senior Vice President
49
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Section 23.2. Press Release. Seller or Purchaser may issue a press
release with respect to this Agreement and the transactions contemplated hereby,
provided that the content of any such press release shall be subject to the
prior written consent of the other party hereto, which consent shall not be
unreasonably withheld or delayed.
IN WITNESS WHEREOF, this Agreement has been entered into as of the day and
year first above written.
SELLER:
NEW YORK LIFE INSURANCE COMPANY
By:[Signature of Richard M. Kernan, Jr.]
-------------------------------------
Richard M. Kernan, Jr.
Executive Vice President
PURCHASER:
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation,
its sole general partner
By:
--------------------------------
Charles H. Cremens
Senior Vice President
49
<PAGE>
AGREEMENT OF ESCROW AGENT:
The undersigned Escrow Agent hereby acknowledges receipt of $5,000,000, and
agrees to hold such sum in escrow pursuant to the provisions of Section 3.3 of
this Agreement.
ROBINSON SILVERMAN PEARCE
ARONSOHN & BERMAN LLP
By:[Signature of ]
--------------------------
Name:
Title:
50
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List of Exhibits and Schedules
Schedule 1 Asset Schedule
Exhibit A Land
Exhibit B Rent Roll for Existing Leases
Exhibit C Brokerage Agreements
Exhibit D Existing Service Contracts
Exhibit E Permitted Exceptions
Exhibit E-1 Nonpermitted Exceptions
Exhibit F Deed
Exhibit G Bill of Sale
Exhibit H Assignment and Assumption of Leases
Exhibit I Assignment and Assumption of Service Contracts,
Warranties, Permits, Trade Names and General Intangibles
Exhibit J Notice Letter to Tenants
Exhibit K Tenant Estoppel Certificate
Exhibit L Litigation
Exhibit M Insurance Coverages
Exhibit N Specified Estoppel Leases
Addendum A
The Company will furnish the Commission with copies of any exhibits or schedules
hereto upon request.
[Coopers & Lybrand Letterhead]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
Beacon Properties Corporation on Form S-3 (No. 333-02544) of our report dated
April 19, 1996, on our audit of the statement of excess of revenues over
specific operating expenses of Fairfax County Portfolio in Tysons Corner and
Herndon, Virginia for the year ended December 31, 1995, which report is included
in this Form 8-K, of our report dated July 3, 1996, on our audit of the
statement of excess of revenues over specific operating expenses of 1333 H
Street in Washington, DC for the year ended December 31, 1995, which report is
included in this Form 8-K, of our report dated July 8, 1996, on our audit of the
statement of excess of revenues over specific operating expenses of AT&T Plaza
in Oak Brook, Illinois for the year ended December 31, 1995, which report is
included in this Form 8-K, and of our report dated July 8, 1996, on our audit
of the statement of excess of revenues over specific operating expenses of
Tri-State International in Lincolnshire, Illinois for the year ended December
31, 1995, which report is included in this Form 8-K.
We also consent to the reference to our Firm under the caption "Experts" in such
Prospectus.
[Signature of Coopers & Lybrand L.L.P.]
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
July 23, 1996
