UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) December 20, 1996
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BEACON PROPERTIES CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 1-12926 04-3224258
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
50 Rowes Wharf
Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Registrants telephone number including area code: (617)330-1400
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 2. Acquisition or Disposition of Assets
Shoreline Technology Park and Lake Marriott Business Park
On December 20, 1996, Beacon Properties Corporation (the "Company") acquired two
Silicon Valley office parks (the "Shoreline Technology Park" and "Lake Marriott
Business Park") for $183.0 million from Teachers Insurance and Annuity
Association ("TIAA"). The acquisition was funded with a $153.0 million draw on
the Company's $300 million Credit Facility for which BankBoston Corporation
serves as agent and $30.0 million of cash reserves. The Company and its
affiliates are not related to any of the parties to this transaction.
Shoreline Technology Park, built in 1985 and 1988, consists of a 727,000 square
foot, 12-building property in Mountain View, California and Lake Marriott
Business Park, built in 1981, consists of a 400,000 square foot, seven-building
property in Santa Clara, California. The occupancy rates of these properties are
currently 100 percent and 99 percent, respectively. Shoreline Technology Park is
the headquarters of Silicon Graphics, Inc., which is the sole tenant of the
property; major tenants in the Lake Marriott Business Park include Silicon
Valley Bank and Hitachi, Ltd.
President's Plaza
On December 27, 1996, the Company acquired President's Plaza for $77.0 million
from Metropolitan Life Insurance Co., New York. The acquisition was funded with
$38.0 million of cash reserves and the issuance of approximately $39.0 million
of units of limited partnership interest ("Units") in Beacon Properties, L.P.
(the "Operating Partnership"). The Company and its affiliates are not related to
any of the parties to this transaction.
President's Plaza, built in 1980 and 1982, consists of a 791,000 square foot,
four-tower office property located near O'Hare International Airport in Chicago,
Illinois. The property, 8600 and 8700 West Bryn Mawr Avenue, consists of two
sets of 10- and 12-story towers and is 91 percent leased. Major tenants in the
property include Cotter & Co., Wilson Sporting Goods and the Gas Research
Institute.
The Company based its determination of the price to be paid on these
acquisitions on the expected cash flow, physical condition, location,
competitive advantages, existing tenancy and opportunities to retain and attract
additional tenants. The Company did not obtain an independent appraisal on these
acquisitions.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Properties Acquired
The Company has determined that it is impracticable to file audited
financial statements of the Shoreline Technology Park for the year
ended December 31, 1995 as prescribed by Rule 3-14 of Regulation S-X.
Such statement will be filed by amendment as soon as practicable, but
in no event not later than March 7, 1997.
The Company has determined that it is impracticable to file audited
financial statements of the Lake Marriott Business Park for the year
ended December 31, 1995 as prescribed by Rule 3-14 of Regulation S-X.
Such statement will be filed by amendment as soon as practicable, but
in no event not later than March 7, 1997.
The Company has determined that it is impracticable to file audited
financial statements of the President's Plaza for the year ended
December 31, 1995 as prescribed by Rule 3-14 of Regulation S-X. Such
statement will be filed by amendment as soon as practicable, but in
no event not later than March 14, 1997.
(b) Pro Forma Financial Information
The Company has determined that it is impracticable to file pro forma
financial statements for the Company by Article 11 of Regulation S-X.
Such statements will be filed by amendment as soon as practicable,
but in no event not later than March 7, 1997.
(c) Exhibits
10.1 Contract of Sale between WRC Properties Inc. and Beacon
Properties, L.P., dated as of December 19, 1996.
10.2 Sale and Contribution Agreement between Metropolitan Life
Insurance Company and Beacon Properties, L.P. , dated as of
November 20, 1996, including Exhibit T to Sale and
Contribution Agreement.
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BEACON PROPERTIES CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BEACON PROPERTIES CORPORATION
/s/ Robert J. Perriello
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Robert J. Perriello,
Senior Vice President,
and Chief Financial Officer
Date: January 6, 1997
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Exhibit 10.1
RE-1385/RE-1427/RE-1432
CONTRACT OF SALE
This Contract of Sale ("Contract" or "Agreement") made as of this
19th day of December, 1996 between WRC PROPERTIES, INC., a Delaware
corporation, with its offices at 730 Third Avenue, New York, New York
10017 (hereinafter called "Seller"), and BEACON PROPERTIES, L.P., a
Delaware limited partnership, with an office at 50 Rowes Wharf, Boston,
Massachusetts 02110-3337 (hereinafter called "Purchaser").
W I T N E S S E T H:
1. The Seller agrees to sell and convey and the Purchaser agrees to
purchase certain real properties situated in the following locations (i)
City of Santa Clara, County of Santa Clara, State of California (the
"Lake Marriott Premises") and (ii) City of Mountain View, County of Santa
Clara, State of California (the "Shoreline Premises"), more particularly
described in Exhibits "A-1" through "A-3" attached hereto and made a part
hereof.
TOGETHER WITH the after-acquired title or reversion, if any, in and
to the beds of the ways, streets, avenues, and alleys adjoining the said
premises;
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TOGETHER WITH all and singular the tenements, hereditaments,
easements, appurtenances, passages, waters, water courses, riparian
rights, other rights, liberties and privileges thereof or in any way now
or hereafter appertaining, including any claim at law or in equity as
well as any after-acquired title, franchise or license and the reversion
and reversions, remainder and remainders thereof; and
TOGETHER WITH all buildings and improvements of every kind and
description now erected or placed thereon and all fixtures and articles
of personal property which may be owned by Seller and attached to or
contained in and used in connection with the real properties and the
buildings and improvements thereon (hereinafter collectively called
"Premises" or "the said Premises").
2. The Premises are sold and are to be conveyed subject to:
a) Any restrictions or regulations affecting the
Premises as to building upon or using the Premises by
virtue of any law, ordinance, or other lawful action
of any municipal or other public authority now or
hereafter adopted or in force;
b) All notices of violations of law or municipal
ordinances, orders, or requirements noted in
or issued by the Departments of Building,
Fire, Labor, Health, or other State, County
or Municipal Department as well as by the
Federal or State Environmental Protection
Agency having jurisdiction against or
affecting the Premises on the date hereof;
c) Covenants, restrictions and easements, if
any, contained in prior instruments of record
affecting the Premises;
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d) Rights, if any, acquired by any utility
company to maintain and operate lines, wires,
cables and distribution boxes in, over, and
upon the Premises;
e) Any state of facts which an accurate survey
may show;
f) Rights and options of tenants and lessees set
forth in the rent roll shown in Exhibits "B-1"
and "B-2" II attached hereto and by this
reference made a part hereof as contained in
the leases and agreements with such tenants
and lessees, subject to prorations and
adjustments of tenants security deposits, if
any, as hereinafter provided for;
g) Current taxes not now due and payable;
h) Rights and claims of any subtenants or
sublessees or any other party in possession
on the date hereof; and
i) Those items set forth in Exhibits "C-1"
through "C-3" attached hereto and made a part
hereof.
3. The purchase price is ONE HUNDRED EIGHTY THREE MILLION AND NO/100
($183,000,000.00) DOLLARS all cash, net to Seller (plus or minus any
adjustments as hereinafter provided), payable as follows:
a) FIVE MILLION AND NO/lOOTHS ($5,000,000.00) DOLLARS good faith
deposit, in immediately available federal funds by federal wire transfer
of immediately available funds to the order of Seller for deposit into
Seller's account ("Deposit"), as set forth in Exhibit "D" simultaneously
with the execution of this Contract; and
b) ONE HUNDRED SEVENTY EIGHT MILLION AND NO/lOOTHS ($178,000,000.00)
DOLLARS at Seller's election in immediately available federal funds by
federal wire transfer of immediately available funds to the order of
Seller for deposit into Seller's account, as set forth in Exhibit "D"
simultaneously with the delivery of the hereinafter referred to Deed.
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No interest will be payable by Seller to Purchaser on any Deposit.
The Deposit will not be held in a segregated or special account and may
be commingled with other funds of Seller.
4. All matters to be performed under this Contract incident to the
sale of the Premises and the payment of the purchase price (the
"Closing") shall be performed at the offices of Purchaser's counsel,
Goulston & Storrs, 400 Atlantic Avenue, Boston, Massachusetts 02110-2206,
or other mutually acceptable location, at 10:00 AM on December 20, 1996
(the "date of closing"). All documents to be delivered at the Closing and
all payments to be made shall be delivered to Chicago Title Insurance
Company ("Chicago Title") as escrow holder on the Closing Date, in
escrow, pending the prompt recording of the Deed and other instruments as
are required to be recorded to effect the transfer and conveyance of the
Premises, upon which recording, all instruments and funds shall then be
delivered out of escrow.
Seller hereby agrees to execute, acknowledge, and deliver to the
Purchaser at Closing, and the obligations of Purchaser to pay the
purchase price are conditioned upon receipt of, the following:
a) A good and sufficient Grant Deed (hereinafter referred to as the
"Deed") in the form annexed hereto as Exhibit "E" so as to convey to the
Purchaser title to the Premises free and clear of all encumbrances except
as permitted herein.
b) An Assignment and Assumption Agreement in the form annexed hereto
as Exhibit "F", together with (i) the original, signed leases for the
tenants listed on Exhibit "B" (the "Leases") and Seller's tenant lease
files related thereto, (ii) the original signed service contracts with
those service
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providers listed on Exhibits "G-1" and "G-2" (the "Service
Contracts").
c) A certification duly executed by Seller under penalty of perjury
stating that Seller is not a "foreign person" in the form annexed hereto
as Exhibit "H." If Seller shall fail or be unable to deliver the same,
then Purchaser shall have the right to withhold such portion of the
Purchase Price as may be necessary, in the opinion of Purchaser or its
counsel, to comply with said Section 1445.
d) Such books and records, plans and surveys of Seller, to the extent
that the same are in Seller's possession and readily accessible, as all
pertain in a material way to the operation of the Premises other than any
management or asset management agreement related thereto or any other
document deemed by Seller to be of a proprietary nature, and any and all
keys, lock and safe combinations, training and instruction manuals in
Seller's or Seller's property manager's possession relating to the
maintenance and operation of the Premises.
e) Such affidavits as Chicago Title may reasonably require in order
to omit from any title insurance policy issued to Purchaser or Purchaser's
mortgagee exceptions for (i) parties in possession (except for tenants
under the Leases) and (ii) mechanic's liens.
f) Evidence of the authority of the incumbency of any individuals to
execute any instruments executed and delivered of by Seller at Closing.
g) Estoppel certificates from Silicon Graphics, Silicon Valley Bank
and Hitachi dated no earlier than twenty (20) days prior to the Closing in
the form attached as Exhibit "I," provided, however that an estoppel
certificate containing only those statements identified with an "*" on
said Exhibit "I" shall nevertheless satisfy the obligation of Seller under
this paragraph 4g.
h) Evidence of the termination of Seller's property manager and any
leasing agent for the Premises.
i) Notice to tenants and service providers in the form attached as
Exhibit "J".
Title to the herein described Premises is not conveyed, but is
reserved in Seller until closing.
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5. Purchaser acknowledges that it has been given the opportunity to
examine the Leases, Service Contracts and other documents affecting the
Premises and understands and accepts the content thereof. It is further
understood that Purchaser has inspected the Premises or caused an
inspection to be made thereof on Purchaser's behalf and is familiar with
the physical condition thereof. Purchaser agrees to take "as is" the
Premises and to accept assignment of the Leases and Service Contracts
except as expressly provided hereunder, and that no representations are
made or responsibilities assumed by Seller as to the condition of the
Premises or any buildings or improvements thereon now or on the Closing
Date or the contents of such Leases or Service Contracts. Without limiting
the generality of the foregoing, Purchaser acknowledges that the
obligations related to the repair of certain wing walls located within the
property known as Shoreline Technology Park, Phase I and referenced as
Exhibit "A-2" will be assumed by Purchaser subject to a credit adjustment
to Purchaser as set forth in paragraph 12, in connection with the
assignment and assumption of the Lease with Silicon Graphics as further
described in Exhibit "B-2". Purchaser agrees to accept the Premises in
the condition existing on the date hereof, usual wear and tear excepted,
subject to all faults of every kind and nature whatsoever whether latent
or patent and whether now or hereafter existing. Purchaser represents that
prior to the execution and delivery of this Contract, Purchaser has made a
complete and independent investigation of all facts and data
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which Purchaser has deemed necessary in its decisions to acquire the
Premises, including, without limitation, all the facts and data
pertaining to environmental conditions at, in, on, under, or affecting
the Premises and does hereby accept the Premises subject to all federal,
state, county, and municipal laws, requirements, rules, orders,
ordinances, regulations relating, in any manner, thereto. Purchaser
further agrees that Seller shall not be liable or bound in any manner by
any express or implied warranties, guarantees, promises, statements,
representations or information pertaining to the Premises made or
furnished by any real estate broker, agent, employee, servant or other
person representing or purporting to represent Seller unless such
warranties, guarantees, promises, statements, representations or other
information pertaining to the Premises are expressly and specifically set
forth in this Contract which alone fully and completely expresses the
agreement between the parties.
6. In the event Seller shall be unable to convey the Premises in
accordance with the terms of this Contract, Purchaser shall, at
Purchaser's election, have the right to accept such title as Seller is
able to convey without any claim on the part of Purchaser for abatement
in the purchase price for any defects or objections of title; or,
Purchaser shall have the right to rescind this Agreement, and upon such
rescission pursuant to this paragraph, the Purchaser shall be entitled to
a return of the Deposit and upon such payment being made by the Seller to
the Purchaser, the parties hereto shall be deemed released of and
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from all obligations by reason of this Agreement in like manner as if the
Agreement had not been made. Seller may, but shall not be required to,
take any measures of any kind, or bring any action or proceeding, or
incur any expense in order to perfect Seller's title to the Premises or
otherwise convey title in accordance with the terms and provisions of
this Agreement, and if Seller so elects, the date of closing shall be
extended for thirty (30) days within which time Seller may dispose of
such defects. Purchaser hereby acknowledges and agrees that the
acceptance of the Deed by Purchaser shall be deemed to be full
performance and discharge of every agreement and obligation on the part
of Seller to be performed under this Agreement except those, if any,
which are herein specifically stated to survive delivery of the Deed or
the Closing. Unless so specifically stated, no agreement or
representation made herein by Seller shall survive the delivery of the
Deed.
7. Purchaser shall within at least ten (10) days prior to the date
set for delivery of the Deed notify the attorney for Seller in writing of
any objection to title other than those permitted in accordance with the
terms of this Contract. In the event Purchaser shall notify the attorney
for Seller of such objections to title, Seller shall have a period of
thirty (30) days from the date of closing herein provided, and this
Agreement shall automatically be extended for such thirty (30) day period
within which time Seller may dispose of such objections, but
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Seller shall be under no obligation to remove or dispose of the same,
except as expressly provided hereunder.
8. The existence of mortgages, liens, or other encumbrances not
permitted hereby shall not be objections to title provided that properly
executed instruments in recordable form necessary to satisfy the same are
delivered to the Purchaser at the Closing together with recording and/or
filing fees (or an appropriate credit against the purchase price given
for such fees), and Purchaser agrees that such mortgages, liens, or
encumbrances may be paid out of the cash consideration to be paid by
Purchaser.
9. If on the date of closing there shall be financing statements
relating to the Premises or any portion thereof which were filed or
refiled on a day less than five (5) years prior to Closing of title,
these shall not be deemed to be an objection to title provided Seller
executes and delivers to Purchaser an affidavit setting forth that the
property covered by such financing statements is no longer on the
Premises or if such property is still on the Premises, that such property
has been fully paid for and a satisfaction is delivered to Purchaser at
the Closing. Without limiting the generality of the foregoing, any
financing statements in favor of Seller as secured party shall be
terminated by Seller at Closing.
10. Franchise taxes against owners in chain of title
shall not be an objection to title provided Seller obtains the
agreement of Chicago Title insuring Purchaser's title to
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eliminate any exception as to franchise taxes or to insure
against collection out of the Premises.
11. Work performed or to be performed by and on behalf of a tenant
or subtenant in the Premises under Leases to which this Contract is
subject shall not be Seller's responsibility. Accordingly, notices of
commencement of work to be performed by contractors or subcontractors
engaged by such tenants or subtenants shall not constitute objections to
title. Additionally, mechanic's liens filed against the Premises shall
not constitute objections to title (a) if said mechanic's liens are for
work performed by or on behalf of any such tenant or subtenant as long as
the lease is not terminated and Seller has caused the tenant or caused
tenant to cause its subtenant to remove the lien; or (b) if said
mechanic's liens are filed for work performed for any other reason and
Seller posts a bond or gives other assurances to the Chicago Title so as
to enable the Chicago Title to insure title to the Premises against
enforcement of the lien.
12. The following are to be apportioned on a pro-rata basis as to
ownership the date of the closing of this transaction (provided, however,
that in the event that any of the leases or subleases, if any, covering
all or part of the Premises provided that the tenants or subtenants
thereunder are responsible for payment of any of the expenses, such
expenses shall not be apportioned as between Seller and Purchaser, but
such lessees and sublessees shall continue to make such payments):
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a) Taxes in accordance with the practice prevailing
in the city, county and state where the Premises
are located;
b) Rents as and when collected;
c) Water, gas and electric and service contracts; and
d) Sewer charges and water waste charges and any
other charges assessed against the Premises.
13. If a search of the title discloses judgments, bankruptcies or
other returns against other persons having names the same as or similar
to that of Seller, Seller will, on request, deliver to Purchaser an
affidavit showing that such judgments, bankruptcies or other returns are
not against Seller.
14. If at Closing there are past due rents owed by tenants to Seller
not exceeding a one (1) month period, Purchaser agrees to allow Seller a
credit at Closing for the past due rentals. Purchaser shall receive a
credit for all prepaid rents and security deposits, if any, paid by any
lessees.
15. In the event the closing does not occur because of any default
by Purchaser in the terms of this Agreement, Seller shall retain the
Deposit as liquidated damages, and not as a penalty, and this shall be
Seller's sole and exclusive remedy, and neither party shall have any
further rights hereunder against the other. The parties agree that
Seller's actual damages would be difficult or impossible to determine if
Buyer defaults, and the Deposit is the best estimate of the amount of
damages Seller would suffer.
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16. If a condemnation or eminent domain proceeding shall have been
commenced against the Premises, then either party shall have the right to
terminate this agreement. If Purchaser and Seller elect to proceed with
the transaction in such event, Purchaser shall complete the transaction
contemplated hereby without abatement or reduction in the purchase price,
and Seller shall assign to Purchaser all rights to receive the award
payable as a result of such proceedings.
17. No contracts will be entered into by Seller for the making of
leasehold improvements between the date of this Agreement and the date of
Closing unless for usual and customary leasehold improvements without the
same first being submitted to Purchaser for its approval, which may be
given or withheld in Purchaser's sole discretion.
18. Seller agrees that it shall not enter into any lease from and
after the date hereof prior to closing without first obtaining the
consent of Purchaser, which may be given or withheld at Purchaser's sole
discretion. Purchaser shall be deemed to have approved and consented to
such lease unless objections are received by Seller specifically setting
forth the areas of objections within five (5) days following receipt by
Purchaser of the lease. Purchaser shall acquire the Premises subject to
the executory obligations of the landlord under any such approved or
deemed approved lease.
19. If at the date of closing the Premises or any part
thereof shall be or shall have been affected by an assessment or
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assessments which are payable in annual installments, of which any such
annual installment covers a fiscal period which commenced less than (1)
year prior to the date of closing, such annual installment shall be
apportioned pro-rata between Seller and Purchaser as of the date of
closing of this transaction and shall be paid and discharged at that
time.
20. Purchaser hereby agrees to indemnify and hold Seller harmless
against any liability incurred by Seller because of non-payment of any
tax which may be imposed by any governmental agency upon the sale of any
items of personal property owned by Seller and included in this
transaction. This paragraph shall survive Closing.
21. Seller and Purchaser agree that Eastdil Realty Company, L.L.C.
("Eastdil") was the sole broker with whom the parties negotiated in
connection with the sale and purchase of the Premises. Seller agrees to
pay Eastdil a commission in accordance with the terms of a separate
agreement, if, as, and when the Closing shall occur, but not otherwise.
Seller and Purchaser represent to each other that no broker or finder
other than Eastdil can properly claim a right to a commission or
finder's fee based upon contacts between the claimant and the warranting
party with respect to the other party or the Premises. Seller and
Purchaser shall indemnify, defend and hold the other party harmless from
and against any loss, cost or expense, including, but not limited to,
attorneys' fees and court costs, resulting from any claim for a fee or
commission by any broker or
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finder in connection with the Premises and this Agreement resulting from
the indemnifying party's actions. The foregoing indemnities shall survive
the Closing.
22. Other than Seller's legal fees and Eastdil's brokerage
commission and any apportionment that may be made pursuant to paragraph
12, Purchaser agrees to pay for any and all costs and expenses in
connection with this transaction including, but not limited to, all state
and local documentary stamps, transfer taxes, recording and filing fees,
title and survey costs, title examination costs, title insurance
premiums, escrow charges and expenses, and all other expenses in
connection with this Closing (other than those for counsel engaged by
Seller and expenses that Seller might incur in connection with its
election to remove any objections to title). Purchaser understands,
acknowledges and agrees that the purchase price is absolutely net to
Seller except as otherwise provided in this Contract, including without
limitation prorations required hereunder.
23. This Contract may not be modified in any respect except by an
instrument in writing and duly signed by the parties hereto. The parties
agree that this Contract contains all of the terms and conditions of the
understanding between the parties hereto and that there are no oral
understandings whatsoever between them.
24. All notices required or permitted hereunder shall
be in writing and shall be sent:
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To Seller: Teachers Insurance and Annuity
Association of America
730 Third Avenue - 7th Floor
New York, NY 10017
Attention: James P. Garofalo
With a copy to: Harold D. Piazza, Esq.
Senior Counsel.
Teachers Insurance and Annuity
Association of America
730 Third Avenue - 9th Floor
New York, NY 10017
To Purchaser: Beacon Properties, L.P.
50 Rowes Wharf
Boston, Massachusetts 02110
Attention: Thomas J. O'Connor
With a copy to: Steven R. Astrove, Esq.
Goulston & Storrs
400 Atlantic Avenue
Boston, Massachusetts 02110-2206
Such notice shall be deposited in the United States mails, certified or
return receipt requested and shall be deemed received by the party to
whom addressed three (3) days following the post-marking of same.
25. Purchaser shall not assign this Contract or its rights hereunder
without Seller's prior written consent. Any assignment by Purchaser shall
be conditioned in any and all events upon Purchaser's assignee executing
an assumption agreement in form satisfactory to Seller.
26. Purchaser and Seller hereby agree to complete, execute and
deliver to the appropriate governmental authorities any returns,
affidavits or other instruments that may be required with respect to any
transfer, gains, sales, stamps and similar
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taxes, if any, arising out of this transaction. The provisions
of this paragraph shall survive Closing.
27. All security deposits made by any of the tenants now held by
Seller shall be turned over to the Purchaser at the time of Closing, and
the Purchaser shall sign an agreement in form reasonably satisfactory to
Seller holding Seller harmless and free from any liability in reference
thereto.
28. Upon the closing, Purchaser shall assume and agree to perform for
the unexpired term those contracts more particularly described on Exhibits
"G-1" and "G-2" attached hereto and by this reference made a part hereof.
29. Purchaser shall pay for the cost of fuel and supplies, if any,
on the Premises purchased by Seller.
30. This Contract shall be governed by and construed in accordance
with the laws of the State of New York.
31. Time is of the essence concerning the fulfillment of all
obligations of the parties hereunder.
32. This Contract shall not constitute a binding agreement by and
between the parties hereto until such time as this Contract has been duly
executed and delivered by each of the respective parties to the other.
33. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, this Contract has been duly executed by
the parties hereto.
WRC PROPERTIES, INC.,
Seller
By: /s/Philip R. DiGennaro
Name: Philip R. DiGennaro
Title: Vice President
BEACON PROPERTIES, L.P.,
Purchaser
By: Beacon Properties Corporation,
general partner
By: _________________________
Name: _________________________
Title: _________________________
Federal Tax Identification No:
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IN WITNESS WHEREOF, this Contract has been duly executed by
the parties hereto.
WRC PROPERTIES, INC.,
Seller
By: ____________________________
Name: ____________________________
Title: ____________________________
BEACON PROPERTIES, L.P.,
Purchaser
By: Beacon Properties Corporation,
general partner
By: /s/Charles H. Cremens
Name: Charles H. Cremens
Title: Senior Vice President
Federal Tax Identification No: 04-322-4259
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Exhibit 10.2
PRESIDENT'S PLAZA I & II
SALE AND CONTRIBUTION AGREEMENT
BETWEEN
METROPOLITAN LIFE INSURANCE COMPANY,
a New York corporation,
AS SELLER,
AND
BEACON PROPERTIES, L.P.,
a Delaware limited partnership,
AS PURCHASER
As of November 20, 1996
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TABLE OF CONTENTS
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Page #
<S> <C> <C>
ARTICLE I - PURCHASE AND SALE
Section 1.1 Agreement of Purchase and Sale....................................................... 1
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Section 1.2 Property Defined..................................................................... 2
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Section 1.3 Purchase Price....................................................................... 2
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Section 1.4 Payment of Purchase Price............................................................ 2
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Section 1.5 Deposit.............................................................................. 3
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Section 1.6 Escrow Agent......................................................................... 3
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ARTICLE II - TITLE AND SURVEY
Section 2.1 Title Inspection Period.............................................................. 4
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Section 2.2 Title Examination.................................................................... 4
-----------------
Section 2.3 Pre-Closing "Gap" Title Defects...................................................... 5
-------------------------------
Section 2.4 Permitted Exceptions................................................................. 5
--------------------
Section 2.5 Conveyance of Title.................................................................. 6
-------------------
ARTICLE III - REVIEW OF PROPERTY
Section 3.1 Right of Inspection.................................................................. 6
-------------------
Section 3.2 Environmental Reports................................................................ 7
---------------------
Section 3.3 Right of Termination................................................................. 7
--------------------
Section 3.4 Review of Tenant Estoppel Certificates............................................... 8
--------------------------------------
ARTICLE IV - CLOSING
Section 4.1 Time and Place....................................................................... 9
--------------
Section 4.2 Seller's Obligations at Closing...................................................... 9
-------------------------------
Section 4.3 Purchaser's Obligations at Closing................................................... 11
----------------------------------
Section 4.4 Credits and Prorations............................................................... 12
----------------------
Section 4.5 Transaction Taxes and Closing Costs.................................................. 16
-----------------------------------
Section 4.6 Conditions Precedent to Obligation of
-------------------------------------
Purchaser............................................................................ 17
Section 4.7 Conditions Precedent to Obligation of
Seller............................................................................... 17
ARTICLE V - REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.1 Representations and Warranties of
Seller............................................................................... 18
Section 5.2 Knowledge Defined.................................................................... 20
-----------------
Section 5.3 Survival of Seller's Representations and
Warranties........................................................................... 20
Section 5.4 Covenants of Seller.................................................................. 20
-------------------
Section 5.5 Representations and Warranties of
Purchaser............................................................................ 21
Section 5.6 Survival of Purchaser's Representations
and Warranties....................................................................... 22
ARTICLE VI - DEFAULT
Section 6.1 Default by Purchaser................................................................. 22
--------------------
Section 6.2 Default by Seller.................................................................... 23
-----------------
Section 6.3 Recoverable Damages.................................................................. 23
-------------------
i
<PAGE>
ARTICLE VII - RISK OF LOSS
Section 7.1 Minor Damage......................................................................... 23
------------
Section 7.2 Major Damage......................................................................... 24
------------
Section 7.3 Definition of "Major" Loss or Damage................................................. 24
------------------------------------
ARTICLE VIII - COMMISSIONS
Section 8.1 Brokerage Commissions................................................................ 24
---------------------
ARTICLE IX - DISCLAIMERS AND WAIVERS
Section 9.1 No Reliance on Documents............................................................. 25
------------------------
Section 9.2 AS-IS SALE; DISCLAIMERS.............................................................. 25
-----------------------
Section 9.3 Survival of Disclaimers.............................................................. 26
-----------------------
ARTICLE X - Intentionally Deleted
ARTICLE XI - MISCELLANEOUS
Section 11.1 Confidentiality...................................................................... 26
---------------
Section 11.2 Press Release........................................................................ 27
-------------
Section 11.3 Right to Audit....................................................................... 27
--------------
Section 11.4 No Assignment........................................................................ 28
-------------
Section 11.5 Notices.............................................................................. 28
-------
Section 11.6 Modifications........................................................................ 29
-------------
Section 11.7 Entire Agreement..................................................................... 29
----------------
Section 11.8 Further Assurances................................................................... 29
------------------
Section 11.9 Counterparts......................................................................... 30
------------
Section 11.10 Facsimile Signatures................................................................. 30
--------------------
Section 11.11 Severability......................................................................... 30
------------
Section 11.12 Applicable Law....................................................................... 30
--------------
Section 11.13 No Third-Party Beneficiary........................................................... 30
--------------------------
Section 11.14 Captions............................................................................. 30
--------
Section 11.15 Construction......................................................................... 30
------------
Section 11.16 Recordation.......................................................................... 31
-----------
Section 11.17 Seller Approval...................................................................... 31
---------------
</TABLE>
ii
<PAGE>
A DESCRIPTION OF LAND
B LIST OF PERSONAL PROPERTY
C LIST OF OPERATING AGREEMENTS
D LIST OF ENVIRONMENTAL REPORTS
E FORM OF TENANT ESTOPPEL CERTIFICATE
F TENANT ESTOPPEL STANDARDS
G FORM OF DEED
H FORM OF BILL OF SALE
I FORM OF ASSIGNMENT OF LEASES
J FORM OF ASSIGNMENT OF CONTRACTS
K FORM OF TENANT NOTICE
L FORM OF FIRPTA CERTIFICATE
M LIST OF CERTAIN TENANT COSTS AND COMMISSIONS
N LIST OF BROKERAGE AGREEMENTS
O LIST OF SPECIFIED LITIGATION
P LIST OF VIOLATION NOTICES
Q RENT ROLL
R SELLER'S OBLIGATIONS
S LEASING COMMISSION AGREEMENTS
T CONTRIBUTION AGREEMENT
U ACKNOWLEDGMENT OF INSPECTION
iii
<PAGE>
SALE AND CONTRIBUTION AGREEMENT
THIS SALE AND CONTRIBUTION AGREEMENT (this "Agreement") is made as of
November 20, 1996 (the "Effective Date"), by and between METROPOLITAN LIFE
INSURANCE COMPANY, a New York corporation and BEACON PROPERTIES, L.P., a
Delaware limited partnership ("Purchaser").
W I T N E S S E T H:
ARTICLE I
PURCHASE AND SALE
Section 1.1 Agreement of Purchase and Sale. Although referred to herein as a
contribution and sale of the Property (as hereinafter defined), Seller and
Purchaser agree that this transaction is a Contribution of the Property from
Seller to Purchaser in exchange for the OP Units and a sale for cash, all as
referred to in Section 1.4 hereof. References to "purchase" and "sale" are for
convenience only and for all purposes shall mean the contribution and sale of
the Property as aforesaid. Therefore, subject to the terms and conditions
hereinafter set forth, Seller agrees to sell and convey to Purchaser, and
Purchaser agrees to purchase and accept from Seller, the following:
(a) that certain tract or parcel of land situated in Cook County,
Illinois, more particularly described in Exhibit A attached hereto and made a
part hereof, together with all rights and appurtenances pertaining to such
property, including any right, title and interest of Seller in and to adjacent
streets, alleys or rights-of-way (the property described in clause (a) of this
Section 1.1 being herein referred to collectively as the "Land");
(b) the buildings, structures, fixtures and other improvements affixed
to or located on the Land, excluding fixtures owned by tenants (the property
described in clause (b) of this Section 1.1 being herein referred to
collectively as the "Improvements");
(c) any and all of Seller's right, title and interest in and to all
tangible personal property located upon the Land or within the Improvements,
including, without limitation, any and all appliances, furniture, carpeting,
draperies and curtains, tools and supplies, and other items of personal property
owned by Seller (excluding cash and any software), located on and used
exclusively in connection with the operation of the Land and the Improvements,
which personal property includes without limitation the personal property listed
on Exhibit B attached hereto (the property described in clause (c) of this
Section 1.1 being herein referred to collectively as the "Personal Property");
<PAGE>
(d) any and all of Seller's right, title and interest in and to the
leases, licenses and occupancy agreements covering all or any portion of the
Real Property, to the extent they are in effect on the date of the Closing (as
such term is defined in Section 4.1 hereof) (the property described in clause
(d) of this Section 1.1 being herein referred to collectively as the "Leases"),
together with all rents and other sums due thereunder (the "Rents") and any and
all security deposits in Seller's possession in connection therewith (the
"Security Deposits"); and
(e) any and all of Seller's right, title and interest in and to (i) all
assignable contracts and agreements (collectively, the "Operating Agreements")
listed and described on Exhibit C attached hereto and made a part hereof,
relating to the upkeep, repair, maintenance or operation of the Land,
Improvements or Personal Property, and (ii) all assignable existing warranties
and guaranties (express or implied) issued to Seller in connection with the
Improvements or the Personal Property, and (iii) all assignable existing
permits, licenses, approvals and authorizations issued by any governmental
authority in connection with the Property and (iv) the non-exclusive right to
the name "President's Plaza I & II" (the property described in clause (e) of
this Section 1.1 being sometimes herein referred to collectively as the
"Intangibles").
Section 1.2 Property Defined. The Land and the Improvements are
hereinafter sometimes referred to collectively as the "Real
Property." The Land, the Improvements, the Personal Property, the
Leases and the Intangibles are hereinafter sometimes referred to
collectively as the "Property."
Section 1.3 Purchase Price. Seller is to sell and Purchaser is to purchase the
Property for the amount of SEVENTY-SEVEN MILLION AND NO/100 DOLLARS
($77,000,000.00) (the "Purchase Price").
Section 1.4 Payment of Purchase Price. The Purchase Price shall
be payable at Closing as follows:
(a) The Purchase Price, as increased or decreased by prorations and
adjustments as herein provided, less the Agreed Value of the OP Units (as
hereinafter defined), shall be payable in full at Closing in cash by wire
transfer of immediately available funds to a bank account designated by Seller
in writing to Purchaser prior to the Closing;
(b) Purchaser shall issue to Seller at Closing limited partnership
units in Purchaser (the "OP Units") having an Agreed Value equal to THIRTY-NINE
MILLION AND NO/100 DOLLARS ($39,000,000.00) (the "Agreed Value"), rounded down
to the nearest round lot (the difference being payable in cash as set forth in
Section 1.4(a) above), determined by taking the average closing sales price on
the New York Stock Exchange of Beacon Properties Corporation's common stock for
the twenty (20) consecutive trading days ending on the second business day
immediately preceding the
2
<PAGE>
Closing and in accordance with Exhibit T attached hereto and made a part hereof
(the "Contribution Agreement").
Notwithstanding anything to the contrary contained herein, the parties hereto
hereby agree that any prorations or adjustments to the Purchase Price provided
for herein shall be made to the cash portion of the Purchase Price, and not to
the OP Units.
Section 1.5 Deposit. Within five (5) days of the execution and delivery of this
Agreement by Seller, Purchaser shall deposit with Chicago Title Insurance
Company (the "Escrow Agent"), having its office at 171 North Clark Street,
Chicago, Illinois 60601 Attention: Ms. Janet Johnson-West, the sum of TWO
MILLION AND NO/100 DOLLARS ($2,000,000.00) (such sum, together with any earnings
thereon, shall be the "Deposit") in good funds, either by certified bank or
cashier's check or by federal wire transfer. The Escrow Agent shall hold the
Deposit in an interest-bearing account reasonably acceptable to Seller and
Purchaser, in accordance with the terms and conditions of this Agreement. All
interest on such sum shall be deemed income of Purchaser, and Purchaser shall be
responsible for the payment of all costs and fees imposed on the Deposit
account. The Deposit and all accrued interest shall be distributed in accordance
with the terms of this Agreement. The failure of Purchaser to timely deliver any
Deposit hereunder shall be a material default, and shall entitle Seller, at
Seller's sole option, to terminate this Agreement immediately.
Section 1.6 Escrow Agent. Escrow Agent shall hold and dispose of the Deposit in
accordance with the terms of this Agreement. Seller and Purchaser agree that the
duties of the Escrow Agent hereunder are purely ministerial in nature and shall
be expressly limited to the safekeeping and disposition of the Deposit in
accordance with this Agreement. Escrow Agent shall incur no liability in
connection with the safekeeping or disposition of the Deposit for any reason
other than Escrow Agent's willful misconduct or gross negligence. In the event
that Escrow Agent shall be in doubt as to its duties or obligations with regard
to the Deposit, or in the event that Escrow Agent receives conflicting
instructions from Purchaser and Seller with respect to the Deposit, Escrow Agent
shall not be required to disburse the Deposit and may, at its option, continue
to hold the Deposit until both Purchaser and Seller agree as to its disposition,
or until a final judgment is entered by a court of competent jurisdiction
directing its disposition, or Escrow Agent may interplead the Deposit in
accordance with the laws of the state in which the Property is located.
Escrow Agent shall not be responsible for any interest on the Deposit
except as is actually earned, or for the loss of any interest resulting from the
withdrawal of the Deposit prior to the date interest is posted thereon.
3
<PAGE>
Escrow Agent shall execute this Agreement solely for the purpose of
being bound by the provisions of Sections 1.5 and 1.6 hereof.
ARTICLE II
TITLE AND SURVEY
Section 2.1 Title Inspection Period. During the period beginning upon the
Effective Date and ending at 5:00 p.m. (local time at the Property) on December
20, 1996 (hereinafter referred to as the "Title Inspection Period"), Purchaser
shall have the right to review and Purchaser hereby acknowledges that it has
received from Seller: (a) a current preliminary title report on the Real
Property, accompanied by copies of all documents referred to in the report; (b)
copies of the most recent property tax bills for the Property; and (c) a survey
of the Real Property prepared by Nakawatase, Wyns & Associates, Inc. (the
"Survey").
Section 2.2 Title Examination. Purchaser shall notify Seller in writing (the
"Title Notice") prior to the expiration of the Title Inspection Period which
exceptions to title (including survey matters), if any, will not be accepted by
Purchaser. If Purchaser fails to notify Seller in writing of its disapproval of
any exceptions to title by the expiration of the Title Inspection Period,
Purchaser shall be deemed to have approved the condition of title to the Real
Property. If Purchaser notifies Seller in writing that Purchaser objects to any
exceptions to title, Seller shall have ten (10) business days after receipt of
the Title Notice to notify Purchaser (a) that Seller will remove such
objectionable exceptions from title on or before the Closing; provided that
Seller may extend the Closing for such period as shall be required to effect
such cure, but not beyond thirty (30) days; or (b) that Seller elects not to
cause such exceptions to be removed. The procurement by Seller of a commitment
for the issuance of the Title Policy (as defined in Section 2.5 hereof) or an
endorsement thereto insuring Purchaser against any title exception which was
disapproved pursuant to this Section 2.2 shall be deemed a cure by Seller of
such disapproval only so long as Seller has obtained a commitment from the Title
Company that the Title Company will insure subsequent Purchasers and/or
Mortgagees against such title exceptions. If Seller gives Purchaser notice under
clause (b) above, Purchaser shall have five (5) business days in which to notify
Seller that Purchaser will nevertheless proceed with the purchase and take title
to the Property subject to such exceptions, or that Purchaser will terminate
this Agreement. If this Agreement is terminated pursuant to the foregoing
provisions of this paragraph, then neither party shall have any further rights
or obligations hereunder (except for any indemnity obligations of either party
pursuant to the other provisions of this Agreement), the Deposit shall be
returned to Purchaser and each party shall bear its own costs incurred
hereunder. If Purchaser shall fail to notify Seller of its election within said
five-day period,
4
<PAGE>
Purchaser shall be deemed to have elected to proceed with the purchase and take
title to the Property subject to such exceptions.
Section 2.3 Pre-Closing "Gap" Title Defects. Purchaser may, at or prior to
Closing, notify Seller in writing (the "Gap Notice") of any objections to title
(a) raised by the Title Company between the Effective Date and the Closing and
(b) not disclosed by the Title Company or otherwise known to Purchaser prior to
the Effective Date; provided that Purchaser must notify Seller of such objection
to title within two (2) business days of being made aware of the existence of
such exception. If Purchaser sends a Gap Notice to Seller, Seller shall have ten
(10) business days after receipt of the Gap Notice to notify Purchaser (a) that
Seller will remove such objectionable exceptions from title on or before the
Closing; provided that Seller may extend the Closing for such period as shall be
required to effect such cure, but not beyond thirty (30) days; or (b) that
Seller elects not to cause such exceptions to be removed. The procurement by
Seller of a commitment for the issuance of the Title Policy or an endorsement
thereto insuring Purchaser against any title exception which was disapproved
pursuant to this Section 2.3 shall be deemed a cure by Seller of such
disapproval only so long as Seller has obtained a commitment from the Title
Company that the Title Company will insure subsequent Purchasers and/or
Mortgagees against such title exceptions. If Seller gives Purchaser notice under
clause (b) above, Purchaser shall have five (5) business days in which to notify
Seller that Purchaser will nevertheless proceed with the purchase and take title
to the Property subject to such exceptions, or that Purchaser will terminate
this Agreement. If this Agreement is terminated pursuant to the foregoing
provisions of this paragraph, then neither party shall have any further rights
or obligations hereunder (except for any indemnity obligations of either party
pursuant to the other provisions of this Agreement), the Deposit shall be
returned to Purchaser and each party shall bear its own costs incurred
hereunder. If Purchaser shall fail to notify Seller of its election within said
five-day period, Purchaser shall be deemed to have elected to proceed with the
purchase and take title to the Property subject to such exceptions.
Notwithstanding the foregoing provisions of this Section 2.3, Seller
shall be obligated to (a) remove, by satisfaction, bonding or otherwise, any
lien created as a result of affirmative action of Seller after the Effective
Date, (b) remove, by satisfaction, bonding or otherwise, all encumbrances
created other than as a result of affirmative action of Seller after the
Effective Date to the extent the same can be accomplished at a cost not
exceeding $100,000, and (c) cure all title objections which Seller has elected
to cure under the provisions of this Section 2.3.
Section 2.4 Permitted Exceptions. The Property shall be
conveyed subject to the following matters, which are hereinafter
referred to as the "Permitted Exceptions":
5
<PAGE>
(a) those matters that either are not objected to in writing within the
time periods provided in Sections 2.2 and 2.3 hereof, or if objected to in
writing by Purchaser, are those which Seller has elected not to remove or cure,
or has been unable to remove or cure, and subject to which Purchaser has elected
or is deemed to have elected to accept the conveyance of the Property;
(b) the rights of tenants under the Leases;
(c) the lien of all ad valorem real estate taxes and assessments not
yet due and payable as of the date of Closing, subject to adjustment as herein
provided; and
(d) local, state and federal laws, ordinances or governmental
regulations, including but not limited to, building and zoning laws, ordinances
and regulations, now or hereafter in effect relating to the Property.
Section 2.5 Conveyance of Title. At Closing, Seller shall convey and transfer to
Purchaser fee simple title to the Land and Improvements, by execution and
delivery of the Deed (as defined in Section 4.2(a) hereof). Evidence of delivery
of such title shall be the issuance by Chicago Title Insurance Company (the
"Title Company"), or another national title company, of an ALTA Form B (10-17-70
revision with 1984 amendments), or other form acceptable to Purchaser in its
sole discretion, owner's title insurance policy with respect to the Property in
the amount of the Purchase Price, insuring that the fee simple estate to the
Property is vested in Purchaser with exceptions only for Permitted Exceptions,
and without standard exceptions (the "Title Policy").
ARTICLE III
REVIEW OF PROPERTY
Section 3.1 Right of Inspection. During the period beginning upon the Effective
Date and ending at 5:00 p.m. (local time at the Property) on December 20, 1996
(hereinafter referred to as the "Inspection Period"), Purchaser shall have the
right to make a physical inspection of the Real Property, including an
inspection of the environmental condition thereof pursuant to the terms and
conditions of this Agreement, and to examine at the Property (or the property
manager's office, as the case may be) documents and files located at the
Property or the property manager's office concerning the leasing, maintenance
and operation of the Property, but excluding Seller's partnership or corporate
records, internal memoranda, financial projections, budgets, appraisals and
similar proprietary, confidential or privileged information (collectively, the
"Confidential Documents").
Purchaser understands and agrees that any on-site inspections of the
Property shall occur at reasonable times agreed upon by Seller and Purchaser
after reasonable prior written notice to
6
<PAGE>
Seller and shall be conducted so as not to interfere unreasonably with the use
of the Property by Seller or its tenants. Seller reserves the right to have a
representative present during any such inspections. If Purchaser desires to do
any invasive testing at the Property, Purchaser shall do so only after notifying
Seller and obtaining Seller's prior written consent thereto, which consent may
be subject to any terms and conditions imposed by Seller in its sole discretion,
including without limitation the prompt restoration of the Property to its
condition prior to any such inspections or tests, at Purchaser's sole cost and
expense.
At Seller's option, Purchaser will furnish to Seller copies of any
reports received by Purchaser relating to any inspections of the Property.
Purchaser agrees to protect, indemnify, defend and hold Seller harmless from and
against any claim for liabilities, losses, costs, expenses (including reasonable
attorneys' fees), damages or injuries arising out of or resulting from the
inspection of the Property by Purchaser or its agents or consultants, and
notwithstanding anything to the contrary in this Agreement, such obligation to
indemnify and hold harmless Seller shall survive Closing or any termination of
this Agreement.
At Closing, Purchaser agrees to deliver to Seller an executed copy of
the "Acknowledgment of Inspection" in the form attached hereto as Exhibit U.
Section 3.2 Environmental Reports. PURCHASER ACKNOWLEDGES THAT (1) PURCHASER HAS
RECEIVED COPIES OF THE ENVIRONMENTAL REPORTS LISTED ON EXHIBIT D ATTACHED
HERETO, (2) IF SELLER DELIVERS ANY ADDITIONAL ENVIRONMENTAL REPORTS TO
PURCHASER, PURCHASER WILL ACKNOWLEDGE IN WRITING THAT IT HAS RECEIVED SUCH
REPORTS PROMPTLY UPON RECEIPT THEREOF, AND (3) ANY ENVIRONMENTAL REPORTS
DELIVERED OR TO BE DELIVERED BY SELLER OR ITS AGENTS OR CONSULTANTS TO PURCHASER
ARE BEING MADE AVAILABLE SOLELY AS AN ACCOMMODATION TO PURCHASER AND MAY NOT BE
RELIED UPON BY PURCHASER IN CONNECTION WITH THE PURCHASE OF THE PROPERTY.
PURCHASER AGREES THAT SELLER SHALL HAVE NO LIABILITY OR OBLIGATION WHATSOEVER
FOR ANY INACCURACY IN OR OMISSION FROM ANY ENVIRONMENTAL REPORT. PURCHASER HAS
CONDUCTED, OR WILL CONDUCT PRIOR TO THE EXPIRATION OF THE INSPECTION PERIOD, ITS
OWN INVESTIGATION OF THE ENVIRONMENTAL CONDITION OF THE PROPERTY TO THE EXTENT
PURCHASER DEEMS SUCH AN INVESTIGATION TO BE NECESSARY OR APPROPRIATE.
Section 3.3 Right of Termination. If for any reason whatsoever
Purchaser determines that the Property or any aspect thereof is unsuitable for
Purchaser's acquisition, Purchaser shall have the right to terminate this
Agreement by giving written notice thereof to Seller prior to the expiration of
the Inspection Period, and if Purchaser gives such notice of termination within
the Inspection Period, this Agreement shall terminate. If this Agreement is
terminated pursuant to the foregoing provisions of this paragraph, then neither
party shall have any further rights or obligations hereunder (except for any
indemnity obligations of
7
<PAGE>
either party pursuant to the other provisions of this Agreement), the Deposit
shall be returned to Purchaser and each party shall bear its own costs incurred
hereunder. If Purchaser fails to give Seller a notice of termination prior to
the expiration of the Inspection Period, Purchaser shall be deemed to have
approved all aspects of the Property (except title and survey, which shall be
governed by Article II hereof) and to have elected to proceed with the purchase
of the Property pursuant to the terms hereof.
Section 3.4 Review of Tenant Estoppel Certificates. Seller shall deliver to each
tenant of the Property an estoppel certificate in substantially the form of
Exhibit E attached hereto (the "Tenant Estoppel Certificates"), and shall use
reasonable efforts to have the tenants complete and sign the Tenant Estoppel
Certificates and return them to Seller. Seller shall deliver copies of the
completed Tenant Estoppel Certificates to Purchaser as Seller receives them.
Purchaser shall notify Seller within five (5) business days of receipt of any
Tenant Estoppel Certificate in the event Purchaser determines such Tenant
Estoppel Certificate is not acceptable to Purchaser along with the reasons for
such determination. In the event Purchaser fails to give such notice within such
five (5) day period then any such Tenant Estoppel Certificate shall be deemed to
be acceptable to Purchaser. In the event that Seller fails to obtain the Tenant
Estoppel Certificates [or in lieu thereof, Seller Estoppel Certificates (as
defined and to the extent provided for in Exhibit F) therefor] that are
satisfactory to Purchaser with respect to tenants of the Property that meet the
tenant estoppel standards described on Exhibit F attached hereto on or before
five (5) days prior to Closing, Purchaser shall have the right to terminate this
Agreement by written notice to Seller. If this Agreement is terminated pursuant
to the foregoing provisions of this paragraph, then neither party shall have any
further rights or obligations hereunder (except for any indemnity obligations of
either party pursuant to the other provisions of this Agreement), the Deposit
shall be returned to Purchaser and each party shall bear its own costs incurred
hereunder. If Purchaser fails to give Seller a notice of termination as set
forth above, Purchaser shall be deemed to have approved the Tenant Estoppel
Certificates (and Seller Estoppel Certificates, if applicable) and to have
elected to proceed with the purchase of the Property pursuant to the terms
hereof. Any Tenant Estoppel Certificate which is received from a tenant after
Seller provides its own estoppel may be substituted for Seller's estoppel and
Seller shall have no further liability thereunder, provided that such Tenant
Estoppel Certificate contains no changes or, if changed, is otherwise reasonably
acceptable to Purchaser. The provisions of this Section 3.4 shall survive the
Closing.
8
<PAGE>
ARTICLE IV
CLOSING
Section 4.1 Time and Place. The consummation of the transaction contemplated
hereby (the "Closing") shall be held at the offices of Escrow Agent on December
27, 1996 or such other date as the parties hereto may agree. At the Closing,
Seller and Purchaser shall perform the obligations set forth in, respectively,
Section 4.2 and Section 4.3 hereof, the performance of which obligations shall
be concurrent conditions; provided that the Deed shall not be recorded until
Seller receives confirmation that Seller has received the full amount of the
Purchase Price, adjusted by prorations as set forth herein. The Closing shall be
consummated through an escrow administered by Escrow Agent. In such event, the
Purchase Price and all documents shall be deposited with the Escrow Agent as
escrowee.
Section 4.2 Seller's Obligations at Closing. At Closing, Seller
shall:
(a) deliver to Purchaser a duly executed special warranty deed (the
"Deed") in the form attached hereto as Exhibit G, conveying the Land and
Improvements, subject only to the Permitted Exceptions; the warranty of title in
the Deed will be only as to claims made by, through or under Seller and not
otherwise;
(b) deliver to Purchaser a duly executed bill of sale (the "Bill of
Sale") conveying the Personal Property with warranty of title but without
warranty of use and without warranty, express or implied, as to merchantability
and fitness for any purpose and in the form attached hereto as Exhibit H;
(c) assign to Purchaser, and Purchaser shall assume, the
landlord/lessor interest in and to the Leases, Rents and Security Deposits, and
any and all obligations to pay leasing commissions and finder's fees with
respect to the Leases and amendments, renewals and expansions thereof, to the
extent provided in Section 4.4(b)(v) hereof, by duly executed assignment and
assumption agreement (the "Assignment of Leases") in the form attached hereto as
Exhibit I pursuant to which (i) Seller shall indemnify Purchaser and hold
Purchaser harmless from and against any and all claims pertaining thereto
arising prior to Closing and (ii) Purchaser shall indemnify Seller and hold
Seller harmless from and against any and all claims pertaining thereto arising
from and after the Closing, including without limitation, claims made by tenants
with respect to tenants' Security Deposits to the extent paid, credited or
assigned to Purchaser;
(d) to the extent assignable, assign to Purchaser, and Purchaser shall
assume, Seller's interest in the Operating Agreements and the other Intangibles
by duly executed assignment and assumption agreement (the "Assignment of
Contracts") in the
9
<PAGE>
form attached hereto as Exhibit J pursuant to which (i) Seller shall indemnify
Purchaser and hold Purchaser harmless from and against any and all claims
pertaining thereto arising prior to Closing and (ii) Purchaser shall indemnify
Seller and hold Seller harmless from and against any and all claims pertaining
thereto arising from and after the Closing;
(e) join with Purchaser to execute a notice (the "Tenant Notice") in
the form attached hereto as Exhibit K, which Purchaser shall send to each tenant
under each of the Leases promptly after the Closing, informing such tenant of
the sale of the Property and of the assignment to Purchaser of Seller's interest
in, and obligations under, the Leases (including, if applicable, any Security
Deposits), and directing that all Rent and other sums payable after the Closing
under each such Lease be paid as set forth in the notice;
(f) deliver to Purchaser a certificate, dated as of the date of Closing
and executed on behalf of Seller by a duly authorized officer thereof,
identifying any representation or warranty which is not, or no longer is, true
and correct and explaining the state of facts giving rise to the change and
reconfirming all other representations or warranties delivered by Seller to
Purchaser hereunder. In no event shall Seller be liable to Purchaser for, or be
deemed to be in default hereunder by reason of, any breach of representation or
warranty which results from any change that (i) occurs between the Effective
Date and the date of Closing and (ii) is expressly permitted under the terms of
this Agreement or is beyond the reasonable control of Seller to prevent;
provided, however, that the occurrence of a change which is not permitted
hereunder or is beyond the reasonable control of Seller to prevent shall, if
materially adverse to Purchaser (it being understood by the parties hereto that
"materially adverse to Purchaser" shall mean that the damage to Purchaser with
respect to all such defaults exceeds, in the aggregate, the sum of $100,000),
constitute the non-fulfillment of the condition set forth in Section 4.6(b)
hereof; if, despite changes or other matters described in such certificate, the
Closing occurs, Seller's representations and warranties set forth in this
Agreement shall be deemed to have been modified by all statements made in such
certificate;
(g) deliver to Purchaser such evidence as the Title Company may
reasonably require as to the authority of the person or persons executing
documents on behalf of Seller;
(h) deliver to Purchaser a certificate in the form attached hereto as
Exhibit L duly executed by Seller stating that Seller is not a "foreign person"
as defined in the Federal Foreign Investment in Real Property Tax Act of 1980;
(i) deliver to Purchaser originals of the Leases and the Operating
Agreements, together with such leasing and property files and records located at
the Property or the property manager's
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office which are material in connection with the continued operation, leasing
and maintenance of the Property, but excluding any Confidential Documents. For a
period of three (3) years after the Closing, Purchaser shall allow Seller and
its agents and representatives access without charge to all files, records and
documents delivered to Purchaser at the Closing, upon reasonable advance notice
and at all reasonable times, to examine and make copies of any and all such
files, records and documents, which right shall survive the Closing;
(j) deliver such affidavits as may be customarily and reasonably
required by the Title Company, in a form reasonably acceptable to Seller;
(k) deliver to Purchaser possession and occupancy of the Property,
subject to the Permitted Exceptions;
(l) execute a closing statement acceptable to Seller;
(m) deliver to Purchaser a copy of the termination of the Management
Agreement, duly executed by Seller and the management company;
(n) deliver to Purchaser evidence of the payment of the Broker's
commissions; and
(o) deliver such additional documents as shall be reasonably required
to consummate the transaction contemplated by this Agreement.
Section 4.3 Purchaser's Obligations at Closing. At Closing,
Purchaser shall:
(a) pay to Seller the full amount of the Purchase Price in the manner
set forth in Section 1.4 hereof (which amount shall include the Deposit), as
increased or decreased by prorations and adjustments as herein provided, in
immediately available wire transferred funds pursuant to Section 1.4 hereof;
(b) join Seller in execution of the Assignment of Leases, Assignment
of Contracts and Tenant Notices;
(c) deliver to Seller a certificate, dated as of the date of Closing
and executed on behalf of Purchaser by a duly authorized representative thereof,
identifying any representation or warranty of Purchaser set forth in Sections
5.5(a) or (b) hereof which is not, or no longer is, true and correct and
explaining the state of facts giving rise to the change and reconfirming all
other representations or warranties delivered by Purchaser to Seller hereunder.
In no event shall Purchaser be liable to Seller for, or be deemed to be in
default hereunder by reason of, any breach of representation or warranty set
forth in Sections 5.5(a) or (b) hereof which results from any change that (i)
occurs between the
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Effective Date and the date of Closing and (ii) is expressly permitted under the
terms of this Agreement or is beyond the reasonable control of Purchaser to
prevent; provided, however, that the occurrence of a change which is not
permitted hereunder or is beyond the reasonable control of Purchaser to prevent
shall, if materially adverse to Seller, constitute the non-fulfillment of the
condition set forth in Section 4.7(c) hereof; if, despite changes or other
matters described in such certificate, the Closing occurs, Purchaser's
representations and warranties set forth in this Agreement shall be deemed to
have been modified by all statements made in such certificate;
(d) deliver to Seller such evidence as the Title Company may reasonably
require as to the authority of the person or persons executing documents on
behalf of Purchaser;
(e) deliver such affidavits as may be customarily and reasonably
required by the Title Company, in a form reasonably acceptable to Purchaser;
(f) execute a closing statement acceptable to Purchaser; and
(g) deliver such additional documents as shall be reasonably required
to consummate the transaction contemplated by this Agreement.
Section 4.4 Credits and Prorations.
(a) All income and expenses of the Property shall be apportioned as of
12:01 a.m., on the day of Closing, as if Purchaser were vested with title to the
Property during the entire day upon which Closing occurs. Such prorated items
shall include without limitation the following:
(i) all Rents, if any;
(ii) taxes and assessments (including personal property
taxes on the Personal Property) levied against the Property;
(iii) utility charges for which Seller is liable, if any, such
charges to be apportioned at Closing on the basis of the most recent
meter reading occurring prior to Closing (dated not more than fifteen
(15) days prior to Closing) or, if unmetered, on the basis of a current
bill for each such utility;
(iv) all amounts payable under brokerage agreements and
Operating Agreements, pursuant to the terms of this Agreement;
and
(v) any other operating expenses or other items
pertaining to the Property which are customarily prorated
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between a purchaser and a seller in the county in which the
Property is located.
(b) Notwithstanding anything contained in Section 4.4(a) hereof:
(i) At Closing, (A) Seller shall, at Seller's option, either
deliver to Purchaser any Security Deposits actually held by Seller
pursuant to the Leases or credit to the account of Purchaser the amount
of such Security Deposits plus interest accrued or required to have
accrued under the terms of such Leases, if any (to the extent such
Security Deposits have not been applied against delinquent Rents or
otherwise as provided in the Leases), and (B) Purchaser shall credit to
the account of Seller all refundable cash or other deposits posted with
utility companies serving the Property, or, at Seller's option, Seller
shall be entitled to receive and retain such refundable cash and
deposits;
(ii) Real estate taxes in Illinois are paid in arrears. By way
of example, real estate taxes assessed for calendar year 1996 are
payable in 1997. Seller and Purchaser shall each be responsible for the
real estate taxes assessed for their respective periods of ownership of
the Property, irrespective of when such taxes are due and payable, and
such taxes shall be apportioned accordingly. Consequently, Purchaser
shall receive a credit at Closing for the 1996 taxes due in 1997 for
the period of Seller's ownership. Any such apportionment made with
respect to a tax year for which the tax rate or assessed valuation, or
both, have not yet been fixed shall be based upon the tax rate and/or
assessed valuation last fixed. To the extent that the actual taxes and
assessments for the current year differ from the amount apportioned at
Closing, the parties shall make all necessary adjustments by
appropriate payments between themselves within thirty (30) days after
such amounts are determined following Closing, subject to the
provisions of Section 4.4(d) hereof;
(iii) Charges referred to in Section 4.4(a) hereof which are
payable by any tenant to a third party shall not be apportioned
hereunder, and Purchaser shall accept title subject to any of such
charges unpaid and Purchaser shall look solely to the tenant
responsible therefor for the payment of the same. If Seller shall have
paid any of such charges on behalf of any tenant, and shall not have
been reimbursed therefor by the time of Closing, Purchaser shall credit
to Seller an amount equal to all such charges so paid by Seller;
(iv) As to utility charges referred to in Section 4.4(a)(iii)
hereof, Seller may on notice to Purchaser elect to pay one or more of
all of said items accrued to the date hereinabove fixed for
apportionment directly to the person or entity entitled thereto, and to
the extent Seller so elects,
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such item shall not be apportioned hereunder, and Seller's obligation
to pay such item directly in such case shall survive the Closing or any
termination of this Agreement;
(v) Purchaser shall be responsible for the payment of (A) all
Tenant Inducement Costs (as hereinafter defined) and leasing
commissions which become due and payable (whether before or after
Closing) as a result of any new Leases, or any renewals, amendments or
expansions of existing Leases, signed during the Lease Approval Period
(as hereinafter defined) and, if required, approved or deemed approved
in accordance with Section 5.4 hereof; and (B) all Tenant Inducement
Costs and leasing commissions with respect to new Leases, or renewals,
amendments or expansions of existing Leases, signed or entered into
from and after the date of Closing; and (C) all Tenant Inducement Costs
and leasing commissions listed on Exhibit M attached hereto. If, as of
the date of Closing, Seller shall have paid any Tenant Inducement Costs
or leasing commissions for which Purchaser is responsible pursuant to
the foregoing provisions, Purchaser shall reimburse Seller therefor at
Closing. For purposes hereof, the term "Tenant Inducement Costs" shall
mean any out-of-pocket payments required under a Lease to be paid by
the landlord thereunder to or for the benefit of the tenant thereunder
which is in the nature of a tenant inducement, including specifically,
without limitation, tenant improvement costs, lease buyout costs, and
moving, design, refurbishment and club membership allowances. The term
"Tenant Inducement Costs" shall not include loss of income resulting
from any free rental period, it being agreed that Seller shall bear the
loss resulting from any free rental period until the date of Closing
and that Purchaser shall bear such loss from and after the date of
Closing. For purposes hereof, the term "Lease Approval Period" shall
mean the period from the date Seller executes and delivers this
Agreement until the date of Closing;
(vi) Unpaid and delinquent Rent collected by Seller and
Purchaser after the date of Closing shall be delivered as follows: (a)
if Seller collects any unpaid or delinquent Rent for the Property,
Seller shall, within fifteen (15) days after the receipt thereof,
deliver to Purchaser any such Rent which Purchaser is entitled to
hereunder relating to the date of Closing and any period thereafter,
and (b) if Purchaser collects any unpaid or delinquent Rent from the
Property, Purchaser shall, within fifteen (15) days after the receipt
thereof, deliver to Seller any such Rent which Seller is entitled to
hereunder relating to the period prior to the date of Closing. Seller
and Purchaser agree that (i) any Rent received by Seller or Purchaser
within the first thirty (30) day period after the date of Closing and
attributable to delinquent Rent due the thirty (30) day period
immediately prior to Closing shall be applied to such delinquent Rent,
and (ii) all Rent received by Seller or Purchaser not described in
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clause (i) above, shall be applied first to current Rent and then to
delinquent Rent, if any, in the inverse order of maturity. Purchaser
will make a good faith effort after Closing to collect all Rents in the
usual course of Purchaser's operation of the Property, but Purchaser
will not be obligated to institute any lawsuit or other collection
procedures to collect delinquent Rents or to terminate any Lease.
Seller may attempt to collect any delinquent Rents owed Seller and may
institute any lawsuit or collection procedures within one (1) year from
the date of Closing, but may not evict any tenant. In the event that
there shall be any Rents or other charges under any Leases which,
although relating to a period prior to Closing, do not become due and
payable until after Closing or are paid prior to Closing but are
subject to adjustment after Closing (such as year end common area
expense reimbursements and the like), then any Rents or charges of such
type received by Purchaser or its agents or Seller or its agents
subsequent to Closing shall, to the extent applicable to a period
extending through the Closing, be prorated between Seller and Purchaser
as of Closing and Seller's portion thereof shall be remitted promptly
to Seller by Purchaser.
(c) Seller owns and holds all right, title and interest in and to any
appeals of real estate taxes for periods prior to the Closing, and all amounts
payable in connection therewith shall be paid directly to Seller by the
applicable authorities. If such refund or any part thereof is received by
Purchaser, Purchaser shall promptly pay such amount to Seller. Any refund
received by Seller shall be distributed as follows: first, to reimburse Seller
for all costs incurred in connection with the appeal; second, with respect to
refunds payable to tenants of the Real Property pursuant to the Leases, to such
tenants in accordance with the terms of such Leases; and third, to Seller to the
extent such appeal covers the period prior to the Closing, and to Purchaser to
the extent such appeal covers the period as of the Closing and thereafter. If
and to the extent any such appeal covers the period after the Closing, Purchaser
shall have the right to participate in such appeal.
(d) Except as otherwise provided herein, any revenue or expense amount
which cannot be ascertained with certainty as of Closing shall be prorated on
the basis of the parties' reasonable estimates of such amount, and shall be the
subject of a final proration on or before January 31, 1998, or as soon
thereafter as the precise amounts can be ascertained. Purchaser shall promptly
notify Seller when it becomes aware that any such estimated amount has been
ascertained. Once all revenue and expense amounts have been ascertained,
Purchaser shall prepare, and certify as correct, a final proration statement
which shall be subject to Seller's approval. Upon Seller's acceptance and
approval of any final proration statement submitted by Purchaser, such statement
shall be conclusively deemed to be accurate and final.
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(e) Subject to the final sentence of Section 4.4(d) hereof, the
provisions of this Section 4.4 shall survive Closing.
Section 4.5 Transaction Taxes and Closing Costs.
(a) Seller and Purchaser shall execute such returns, questionnaires and
other documents as shall be required with regard to all applicable real property
transaction taxes imposed by applicable federal, state or local law or
ordinance;
(b) Seller shall pay the fees of any counsel representing Seller in
connection with this transaction and the fees for Seller's Broker. Seller shall
also pay the following costs and expenses:
(i) one-half of the cost of the Phase I Environmental
Report as set forth in Section 3.2 hereof; and
(ii) any state or county transfer tax which becomes payable by
reason of the transfer of the Property.
(c) Purchaser shall pay the fees of any counsel representing Purchaser
in connection with this transaction. Purchaser shall also pay the following
costs and expenses:
(i) one-half of the cost of the Phase I Environmental
Report as set forth in Section 3.2 hereof;
(ii) the escrow fee, if any, which may be charged by the
Escrow Agent or Title Company;
(iii) the fee for any title examination and Title Commitment
and the premium and the fees for all endorsements to be issued to the
Owner's Policy of Title Insurance to be issued to Purchaser by the
Title Company at Closing;
(iv) the cost of the Survey;
(v) the fees for recording the Deed;
(vi) any local or city transfer tax, or any sales tax,
documentary stamp tax or similar tax which becomes payable by reason of
the transfer of the Property; and
(vii) the fees for Purchaser's Broker.
(d) All costs and expenses incident to this transaction and the closing
thereof, and not specifically described above, shall be paid by the party
incurring same; and
(e) The provisions of this Section 4.5 shall survive the Closing.
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Section 4.6 Conditions Precedent to Obligation of Purchaser.
The obligation of Purchaser to consummate the transaction hereunder
shall be subject to the fulfillment on or before the date of
Closing of all of the following conditions, any or all of which may
be waived by Purchaser in its sole discretion:
(a) Seller shall have delivered to Purchaser all of the items required
to be delivered to Purchaser pursuant to the terms of this Agreement, including
but not limited to, those provided for in Section 4.2 hereof;
(b) All of the representations and warranties of Seller contained in
this Agreement shall be true and correct in all material respects as of the date
of Closing (with appropriate modifications permitted under this Agreement); and
(c) Seller shall have performed and observed, in all material respects,
all covenants and agreements of this Agreement to be performed and observed by
Seller as of the date of Closing.
(d) The Improvements (including but not limited to the mechanical
systems, plumbing, electrical, wiring, appliances, fixtures, heating,
air-conditioning and ventilating equipment, elevators, boilers, equipment,
roofs, structural members and furnaces) shall be at Closing in substantially the
same condition as on the Effective Date except for normal wear and tear and such
damage from casualty or condemnation that is waived or accepted under Article
VII hereof.
(e) There shall not be pending at Closing with any governmental body or
agency, an application, ordinance or similar matter to effect a material adverse
change in the zoning of any of the Property.
(f) Seller shall have delivered to Purchaser a rent roll for the
Property dated as of a date not later than the third day preceding the Closing
substantially in the form of Exhibit Q hereto, and the information in such rent
roll will not materially vary (it being understood by the parties hereto that
"materially vary" shall mean that the damage to Purchaser with respect to all
such variances exceeds in the aggregate the sum of $100,000) from the
information included in Exhibit Q and the copies of the Leases made available to
Purchaser for its review.
(g) The Title Company shall be prepared to issue and shall issue to
Purchaser, at standard rates, the Title Policy.
Section 4.7 Conditions Precedent to Obligation of Seller. The
obligation of Seller to consummate the transaction hereunder shall
be subject to the fulfillment on or before the date of Closing of
all of the following conditions, any or all of which may be waived
by Seller in its sole discretion:
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(a) Seller shall have received the Purchase Price as adjusted as
provided herein, pursuant to and payable in the manner provided for in this
Agreement;
(b) Purchaser shall have delivered to Seller all of the items required
to be delivered to Seller pursuant to the terms of this Agreement, including but
not limited to, those provided for in Section 4.3 hereof;
(c) All of the representations and warranties of Purchaser contained in
this Agreement shall be true and correct in all material respects as of the date
of Closing (with appropriate modifications permitted under this Agreement); and
(d) Purchaser shall have performed and observed, in all material
respects, all covenants and agreements of this Agreement to be performed and
observed by Purchaser as of the date of Closing.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.1 Representations and Warranties of Seller. Seller
hereby makes the following representations and warranties to Purchaser as of the
Effective Date, which representations and warranties shall be deemed to have
been made again as of the Closing, subject to Section 4.2(f) hereof:
(a) Organization and Authority. Seller has been duly organized and is
validly existing under the laws of the State of New York. Subject to the
provisions of Section 11.17 hereof, Seller has the full right and authority to
enter into this Agreement and to transfer all of the Property and to consummate
or cause to be consummated the transaction contemplated by this Agreement. The
person signing this Agreement on behalf of Seller is authorized to do so.
(b) Pending Actions. To Seller's knowledge, Seller has not received
written notice of any action, suit, arbitration, unsatisfied order or judgment,
government investigation or proceeding pending against Seller which, if
adversely determined, could individually or in the aggregate materially
interfere with the consummation of the transaction contemplated by this
Agreement.
(c) Operating Agreements. To Seller's knowledge, the Operating
Agreements listed on Exhibit C are all of the agreements concerning the
operation and maintenance of the Property entered into by Seller and affecting
the Property, except those operating agreements that are not assignable or are
to be terminated by Seller within thirty (30) days after the Closing, and except
any agreement with Seller's property manager, which shall be terminated by
Seller.
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(d) Lease Brokerage. To Seller's knowledge, there are no agreements
with brokers providing for the payment from and after the Closing by Seller or
Seller's successor-in-interest of leasing commissions or fees for procuring
tenants with respect to the Property, except as disclosed in Exhibit N hereto;
(e) Condemnation. To Seller's knowledge, Seller has received no
written notice of any condemnation proceedings relating to the Property.
(f) Litigation. To Seller's knowledge, except as set forth on Exhibit O
attached hereto, and except tenant eviction proceedings, tenant bankruptcies,
proceedings for the collection of delinquent rentals from tenants and
proceedings related to claims for personal injury or damage to property due to
events occurring at the Property, Seller has not received written notice of any
litigation which has been filed against Seller that arises out of the ownership
of the Property and would materially affect the Property or use thereof, or
Seller's ability to perform hereunder;
(g) Violations. To Seller's knowledge, except as set forth on Exhibit P
attached hereto, Seller has not received written notice of any uncured violation
of any federal, state or local law relating to the use or operation of the
Property which would materially adversely affect the Property or use thereof;
(h) Leases. To Seller's knowledge, the rent roll attached
hereto as Exhibit Q is accurate in all material respects, and lists
all of the leases currently affecting the Property;
(i) Bankruptcy. To Seller's knowledge, there are not any attachments,
executions, assignments for the benefit of creditors, or voluntary or
involuntary bankruptcy proceedings, or proceedings under any debtor relief laws,
contemplated by or pending or threatened against Seller, any tenant under any of
the Leases, or the Property. There are no voluntary bankruptcy, insolvency or
other proceedings under any debtor relief laws contemplated by or pending or
threatened against Seller;
(j) Insurance Compliance. Seller currently has in place with respect
to the Property, the public liability, casualty and other insurance required
pursuant to the Leases;
(k) Employees. Seller has no employees engaged in the day to day
operations or management of the Property;
(l) Documents. To Seller's knowledge, Seller has made available for
Purchaser's inspection full and complete copies of (i) each Lease and any and
all amendments thereto and modifications thereof; and (ii) all of the Contracts
and all amendments thereto; and
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(m) Fees and Commissions. To Seller's knowledge, except for commissions
set forth on Exhibit R hereto ("Seller's Obligations"), which shall be paid by
Seller at or prior to Closing, there are no brokerage fees, commissions or any
other payments owed or payable by the "Lessor" under any of the Leases, now or
in the future, to any parties in connection with any of the Leases, except for
commissions that may become payable for future, unexercised renewals, extensions
or expansions of Leases, future installments of commissions payable over time,
and commissions that may become payable because of the non-exercise of
cancellation rights of tenants, all as specifically set forth in the leasing
commission agreements described on Exhibit S hereto ("Leasing Commission
Agreements"), the responsibility for which Purchaser is assuming pursuant to
Section 4.4 hereof.
Section 5.2 Knowledge Defined. References to the "knowledge" of Seller shall
refer only to the current actual knowledge of (a) Lynn C. Jones, Assistant
Vice-president in charge of Seller's Chicago regional real estate office, and
(b) A. Edward Mantel, Jr., Senior Asset Manager for Seller's Chicago regional
real estate office, without investigation or inquiry except for inquiry of
Kathleen Fera as to all matters other than leasing and of Matthew Ward as to
leasing, and shall not be construed, by imputation or otherwise, to refer to the
knowledge of Seller or any affiliate of Seller, to any property manager, or to
any other officer, agent, manager, representative or employee of Seller or any
affiliate thereof or to impose upon such persons to investigate the matter to
which such actual knowledge, or the absence thereof, pertains, except as set
forth herein.
Section 5.3 Survival of Seller's Representations and Warranties. The
representations and warranties of Seller set forth in Section 5.1 hereof as
updated as of the Closing in accordance with the terms of this Agreement, shall
survive Closing for a period of one (1) year. No claim for a breach of any
representation or warranty of Seller shall be actionable or payable if the
breach in question results from or is based on a condition, state of facts or
other matter which was known to Purchaser prior to Closing. Seller shall have no
liability to Purchaser for a breach of any representation or warranty (a) unless
the valid claims for all such breaches collectively aggregate more than ONE
HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00), in which event the full
amount of such valid claims shall be actionable, up to the Cap (as defined in
this Section), and (b) unless written notice containing a description of the
specific nature of such breach shall have been given by Purchaser to Seller
prior to the expiration of said one (1) year period and an action shall have
been commenced by Purchaser against Seller within two hundred forty (240) days
of Closing. As used herein, the term "Cap" shall mean the total aggregate amount
of $2,000,000.00.
Section 5.4 Covenants of Seller. Seller hereby covenants with
Purchaser as follows:
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(a) From the Effective Date hereof until the Closing or earlier
termination of this Agreement, Seller shall use reasonable efforts to operate
and maintain the Property in a manner generally consistent with the manner in
which Seller has operated and maintained the Property prior to the date hereof;
(b) Except as provided hereinbelow, a copy of any amendment, renewal or
expansion of an existing Lease or of any new Lease which Seller wishes to
execute between the Effective Date and the date of Closing will be submitted to
Purchaser prior to execution by Seller. Purchaser agrees to notify Seller in
writing within five (5) business days after its receipt thereof of either its
approval or disapproval thereof, including all Tenant Inducement Costs and
leasing commissions to be incurred in connection therewith. In the event
Purchaser informs Seller within such five business day period that Purchaser
does not approve the amendment, renewal or expansion of the existing Lease or
the new Lease, which approval shall not be unreasonably withheld, Seller shall
have the right to notify Purchaser that it intends to execute such instrument in
any event and proceed with the Closing. In the event Purchaser fails to notify
Seller in writing of its approval or disapproval within the five (5) business
day period set forth above, Purchaser shall be deemed to have approved such new
Lease, amendment, renewal or expansion. At Closing, Purchaser shall reimburse
Seller for any Tenant Inducement Costs, leasing commissions or other expenses,
including legal fees, incurred by Seller pursuant to an amendment, a renewal, an
expansion or a new Lease approved (or deemed approved) by Purchaser;
(c) Seller shall maintain or cause to be maintained all casualty,
liability and hazard insurance currently in force with respect to the Property;
(d) Seller shall not cause the Property, or any interest therein, to be
alienated, encumbered (other than by mechanic's or materialmen's liens or claims
which Seller shall promptly pay or bond over) or otherwise transferred; and
(e) Seller shall not enter into any Contracts after the Effective Date
without the prior written consent of Purchaser which consent Purchaser agrees
not to unreasonably withhold or delay.
Section 5.5 Representations and Warranties of Purchaser. Purchaser hereby
makes the following representations and warranties to Seller as of the Effective
Date, which representations and warranties shall be deemed to have been made
again as of the Closing, subject to Section 4.3(c) hereof:
(a) Organization and Authority. Purchaser has been duly organized and
is validly existing under the laws of the State of Delaware. Purchaser has the
full right and authority to enter into this Agreement and to consummate or cause
to be consummated the
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transaction contemplated by this Agreement. The person signing this Agreement
on behalf of Purchaser is authorized to do so;
(b) Pending Actions. To Purchaser's knowledge, there is no action,
suit, arbitration, unsatisfied order or judgment, government investigation or
proceeding pending against Purchaser which, if adversely determined, could
individually or in the aggregate materially interfere with the consummation of
the transaction contemplated by this Agreement.
(c) ERISA. As of the Closing, (1) Purchaser will not be an employee
benefit plan as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), which is subject to Title I of
ERISA, nor a plan as defined in Section 4975(e)(1) of the Internal Revenue Code
of 1986, as amended (each of the foregoing hereinafter referred to collectively
as "Plan"), and (2) the assets of the Purchaser will not constitute "plan
assets" of one or more such Plans within the meaning of Department of Labor
("DOL") Regulation Section 2510.3-101.
Purchaser is not and will not be upon the consummation of the
transactions contemplated hereby a "governmental plan" as defined in Section
3(32) of ERISA.
As of the Closing, Purchaser will be acting on its own behalf.
Purchaser has no present intent to transfer the Property to any entity,
person or Plan which will cause a violation of ERISA.
Purchaser shall not assign its interest under this contract of sale to
any entity, person, or Plan which will cause a violation of ERISA.
Section 5.6 Survival of Purchaser's Representations and Warranties. The
representations and warranties of Purchaser set forth in Section 5.5 hereof as
updated as of the Closing in accordance with the terms of this Agreement, shall
survive Closing for a period of one (1) year. Purchaser shall have no liability
to Seller for a breach of any representation or warranty unless written notice
containing a description of the specific nature of such breach shall have been
given by Seller to Purchaser prior to the expiration of said one (1) year period
and an action shall have been commenced by Seller against Purchaser within two
hundred forty (240) days of Closing.
ARTICLE VI
DEFAULT
Section 6.1 Default by Purchaser. In the event the sale of the Property
as contemplated hereunder is not consummated due to Purchaser's default
hereunder, Seller shall be entitled, as its sole and exclusive remedy, to
terminate this Agreement and receive
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<PAGE>
the Deposit as liquidated damages for the breach of this Agreement, it being
agreed between the parties hereto that the actual damages to Seller in the event
of such breach are impractical to ascertain and the amount of the Deposit is a
reasonable estimate thereof.
Section 6.2 Default by Seller. In the event the sale of the Property as
contemplated hereunder is not consummated due to Seller's default hereunder,
Purchaser shall be entitled, as its sole remedy, to do any one of the following:
(a) to receive the return of the Deposit, which return shall operate to
terminate this Agreement and release Seller from any and all liability
hereunder, or (b) to enforce specific performance of Seller's obligation to
convey the Property to Purchaser in accordance with the terms of this Agreement,
it being understood and agreed that the remedy of specific performance shall not
be available to enforce any other obligation of Seller hereunder or (c) to elect
to take title to the Property and waive any such default, without abatement of
the Purchase Price. Purchaser expressly waives its rights to seek damages in the
event of Seller's default hereunder. Purchaser shall be deemed to have elected
to terminate this Agreement and receive back the Deposit if Purchaser fails to
file suit for specific performance against Seller in a court having jurisdiction
in the county and state in which the Property is located, on or before thirty
(30) days following the date upon which Closing was to have occurred or to have
given written notice to Seller prior to the Closing that it elects to take title
and waive any such default.
Section 6.3 Recoverable Damages. Notwithstanding Sections 6.1 and 6.2 hereof, in
no event shall the provisions of Sections 6.1 and 6.2 limit the damages
recoverable by either party against the other party due to the other party's
obligation to indemnify such party in accordance with this Agreement.
ARTICLE VII
RISK OF LOSS
Section 7.1 Minor Damage. In the event of loss or damage to the Property or any
portion thereof which is not "Major" (as hereinafter defined), this Agreement
shall remain in full force and effect provided that Seller shall, at Seller's
option, either (a) perform any necessary repairs, or (b) assign to Purchaser all
of Seller's right, title and interest in and to any claims and proceeds Seller
may have with respect to any casualty insurance policies or condemnation awards
relating to the premises in question. In the event that Seller elects to perform
repairs upon the Property, Seller shall use reasonable efforts to complete such
repairs promptly and the date of Closing shall be extended a reasonable time in
order to allow for the completion of such repairs. If Seller elects to assign a
casualty claim to Purchaser, the Purchase Price shall be reduced by an amount
equal to the lesser of the deductible amount under Seller's insurance policy or
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<PAGE>
the cost of such repairs as determined in accordance with Section 7.3 hereof.
Upon Closing, full risk of loss with respect to the Property shall pass to
Purchaser.
Section 7.2 Major Damage. In the event of a "Major" loss or damage, either
Seller or Purchaser may terminate this Agreement by written notice to the other
party, in which event the Deposit shall be returned to Purchaser. If neither
Seller nor Purchaser elects to terminate this Agreement within ten (10) days
after Seller sends Purchaser written notice of the occurrence of such Major loss
or damage (which notice shall state the cost of repair or restoration thereof as
opined by an architect in accordance with Section 7.3 hereof), then Seller and
Purchaser shall be deemed to have elected to proceed with Closing, in which
event Seller shall, at Seller's option, either (a) perform any necessary
repairs, or (b) assign to Purchaser all of Seller's right, title and interest in
and to any claims and proceeds Seller may have with respect to any casualty
insurance policies or condemnation awards relating to the premises in question.
In the event that Seller elects to perform repairs upon the Property, Seller
shall use reasonable efforts to complete such repairs promptly and the date of
Closing shall be extended a reasonable time in order to allow for the completion
of such repairs. If Seller elects to assign a casualty claim to Purchaser, the
Purchase Price shall be reduced by an amount equal to the lesser of the
deductible amount under Seller's insurance policy or the cost of such repairs as
determined in accordance with Section 7.3 hereof. Upon Closing, full risk of
loss with respect to the Property shall pass to Purchaser.
Section 7.3 Definition of "Major" Loss or Damage. For purposes of Sections 7.1
and 7.2, "Major" loss or damage refers to the following: (a) loss or damage to
the Property hereof such that the cost of repairing or restoring the premises in
question to substantially the same condition which existed prior to the event of
damage would be, in the opinion of an architect selected by Seller and
reasonably approved by Purchaser, equal to or greater than ONE MILLION AND
NO/100 DOLLARS ($1,000,000.00), and (b) any loss due to a condemnation which
permanently and materially impairs the current use of the Property. If Purchaser
does not give written notice to Seller of Purchaser's reasons for disapproving
an architect within five (5) business days after receipt of notice of the
proposed architect, Purchaser shall be deemed to have approved the architect
selected by Seller.
ARTICLE VIII
COMMISSIONS
Section 8.1 Brokerage Commissions. With respect to the transaction contemplated
by this Agreement, Seller represents that its sole broker is Eastdil Realty
Company, L.L.C. ("Seller's Broker"). Each party hereto agrees that if any
person or entity, other than the Seller's Broker, makes a claim for brokerage
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<PAGE>
commissions or finder's fees related to the sale of the Property by Seller to
Purchaser, and such claim is made by, through or on account of any acts or
alleged acts of said party or its representatives, said party will protect,
indemnify, defend and hold the other party free and harmless from and against
any and all loss, liability, cost, damage and expense (including reasonable
attorneys' fees) in connection therewith. The provisions of this paragraph shall
survive Closing or any termination of this Agreement.
ARTICLE IX
DISCLAIMERS AND WAIVERS
Section 9.1 No Reliance on Documents. Except as expressly stated herein, Seller
makes no representation or warranty as to the truth, accuracy or completeness of
any materials, data or information delivered by Seller or its brokers or agents
to Purchaser in connection with the transaction contemplated hereby. Purchaser
acknowledges and agrees that all materials, data and information delivered by
Seller to Purchaser in connection with the transaction contemplated hereby are
provided to Purchaser as a convenience only and that any reliance on or use of
such materials, data or information by Purchaser shall be at the sole risk of
Purchaser, except as otherwise expressly stated herein. Neither Seller, nor any
affiliate of Seller, nor the person or entity which prepared any report or
reports delivered by Seller to Purchaser shall have any liability to Purchaser
for any inaccuracy in or omission from any such reports.
Section 9.2 AS-IS SALE; DISCLAIMERS. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT
ANY TIME MADE ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER,
EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO,
ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING SELLER SHALL SELL
AND CONVEY TO PURCHASER AND PURCHASER SHALL ACCEPT THE PROPERTY "AS IS, WHERE
IS, WITH ALL FAULTS", EXCEPT TO THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS
AGREEMENT. PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT
LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES,
STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR
RELATING THERETO (INCLUDING SPECIFICALLY, WITHOUT LIMITATION, OFFERING PACKAGES
DISTRIBUTED WITH RESPECT TO THE PROPERTY) MADE OR FURNISHED BY SELLER, THE
MANAGERS OF THE PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR
PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR
INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS
AGREEMENT. PURCHASER ALSO ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS AND
TAKES INTO ACCOUNT THAT THE PROPERTY IS BEING SOLD "AS-IS."
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PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS CONDUCTED, OR WILL
CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING BUT NOT
LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER
DEEMS NECESSARY OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE
PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN WITH
RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PROPERTY,
AND WILL RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON
BEHALF OF SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN
SUCH REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE EXPRESSLY SET
FORTH IN THIS AGREEMENT. UPON CLOSING, PURCHASER SHALL ASSUME THE RISK THAT
ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE
PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER'S
INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED,
RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES,
LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) OF ANY
AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE
ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF
ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF
ANY APPLICABLE LAWS AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES
OR MATTERS REGARDING THE PROPERTY.
Section 9.3 Survival of Disclaimers. The provisions of this Article IX shall
survive Closing or any termination of this Agreement.
ARTICLE X
INTENTIONALLY DELETED
ARTICLE XI
MISCELLANEOUS
Section 11.1 Confidentiality. Purchaser and Seller agree not to record this
Agreement and, until Closing, to hold all information related to this
transaction in strict confidence and not to disclose same to any person except
that Seller acknowledges that Beacon Properties Corporation, the general partner
of Purchaser, is a publicly owned corporation subject to regulation by the
Securities and Exchange Commission ("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. Accordingly,
Seller expressly consents to the disclosure of the terms and conditions of this
transaction, this Agreement itself, and terms of any documents by
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<PAGE>
which Purchaser in good faith believes should be disclosed in connection with
fulfillment of its disclosure requirements under SEC regulations. Purchaser
agrees to give advance written notice to Seller prior to any 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 of
any documents to the partners, advisors, underwriters, employees, affiliates,
officers, directors, consultants, lenders, accountants or legal counsel of any
of the foregoing on a "need to know" basis (as determined in good faith by the
disclosing party) provided that Purchaser shall advise any of its partners,
advisors, underwriters, employees, affiliates, officers, directors, consultants,
lenders, accountants or legal counsel of any of the foregoing of the
confidential nature of such materials and shall obtain from them an undertaking
to keep such materials confidential.
In the event this Agreement is terminated or Purchaser fails to perform
hereunder, Purchaser shall promptly return to Seller any statements, documents,
schedules, exhibits or other written information obtained from Seller in
connection with this Agreement or the transaction contemplated herein. It is
understood and agreed that, with respect to any provision of this Agreement
which refers to the termination of this Agreement and the return of the Deposit
to Purchaser, such Deposit shall not be returned to Purchaser unless and until
Purchaser has fulfilled its obligation to return to Seller the materials
described in the preceding sentence. In the event of a breach or threatened
breach by Purchaser or its agents or representatives of this Section 11.1,
Seller shall be entitled to an injunction restraining Purchaser or its agents or
representatives from disclosing, in whole or in part, such confidential
information. Nothing herein shall be construed as prohibiting Seller from
pursuing any other available remedy at law or in equity for such breach or
threatened breach. The provisions of this Section 11.1 shall survive Closing or
any termination of this Agreement.
Section 11.2 Press Release. Prior to the Closing, any press release with respect
to the sale contemplated herein or any matters set forth in this Agreement will
be made only in the form approved by Purchaser and Seller, and such approval
shall not be unreasonably withheld or delayed. Thereafter, any press release
which (a) contains information regarding Seller or previous owner which is not
in the public domain and/or (b) contains any reference to the purchase or sale
of OP Units, will be made only in the form approved by Purchaser and Seller, and
such approval shall not be unreasonably withheld or delayed. The provisions of
this Section 11.2 shall survive the Closing or any termination of this
Agreement.
Section 11.3 Right to Audit. Pursuant to Section 3.1 hereof, Seller is
obligated to make available to Purchaser certain financial statements and
balance sheets for the Property. In order
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<PAGE>
to comply with SEC regulations, Purchaser may need the right prior to or
subsequent to Closing, to conduct an audit of Seller's books and records for and
located at the Property in conformity with Section 3.14 of SEC Regulation SX for
1994 and/or Seller's period of ownership in 1995 for purposes of verifying
historical information. Seller hereby agrees to permit Purchaser and Purchaser's
accountants access to such books and records (including those maintained by
Seller's management agent for the Property) and, at no cost to Seller, to
cooperate and to cause Seller's accountants to cooperate with Purchaser to
enable such audit to be performed. Purchaser agrees that no information
disclosed in such audit will alter any obligation of Seller. Within sixty (60)
days after Closing, Seller shall provide Purchaser with a statement and evidence
of its tax basis in the Property as of the Closing Date. The provisions of this
Section 11.3 shall survive the Closing.
Section 11.4 No Assignment. Purchaser hereby agrees that its rights under this
Agreement shall not be assignable or otherwise transferable whether voluntarily
or by operation of law, by Purchaser without the prior written consent of
Seller. Any assignment without Seller's written consent or any change in
Purchaser's structure (if Purchaser is a legal entity other than an individual),
including but not limited to, a change in partners, trustees or beneficiaries,
or their respective interests, without Seller's prior written consent, shall
constitute default and inter alia releases Seller from any obligation it may
have to complete the transactions contemplated by this Agreement. The provisions
of this Section 11.4 shall survive the Closing or any termination of this
Agreement.
Section 11.5 Notices. Any notice pursuant to this Agreement shall be given in
writing by (a) personal delivery, (b) reputable overnight delivery service with
proof of delivery, (c) United States Mail, postage prepaid, registered or
certified mail, return receipt requested, or (d) legible facsimile transmission,
sent to the intended addressee at the address set forth below, or to such other
address or to the attention of such other person as the addressee shall have
designated by written notice sent in accordance herewith, and shall be deemed to
have been given upon receipt or refusal to accept delivery, or, in the case of
facsimile transmission, as of the date of the facsimile transmission provided
that an original of such facsimile is also sent to the intended addressee by
means described in clauses (a), (b) or (c) above. Unless changed in accordance
with the preceding sentence, the addresses for notices given pursuant to this
Agreement shall be as follows:
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If to Seller:
METROPOLITAN LIFE INSURANCE COMPANY
2021 Spring Road, Suite 350
Oak Brook, Illinois 60521
Attention: Regional Officer
Telephone No. (630) 645-5000
Telecopy No. (630) 645-5050
with a copy to:
METROPOLITAN LIFE INSURANCE COMPANY
2001 Spring Road, Suite 400
Oak Brook, Illinois 60521
Attention: Associate General Counsel
Telephone No. (630) 574-5680
Telecopy No. (630) 574-5695
If to Purchaser:
BEACON PROPERTIES, L.P.
50 Rowes Wharf
Boston, Massachusetts 02110
Attention: Ms. Erin O'Boyle
Telephone No. (617) 330-1400
Telecopy No. (617) 261-0152
with a copy to:
GOULSTON & STORRS P.C.
400 Atlantic Avenue
Boston, Massachusetts 02110
Attention: Jordan P. Krasnow, Esq.
Telephone No. (617) 482-1776
Telecopy No. (617) 574-4112
Section 11.6 Modifications. This Agreement cannot be changed orally, and no
executory agreement shall be effective to waive, change, modify or discharge it
in whole or in part unless such executory agreement is in writing and is signed
by the parties against whom enforcement of any waiver, change, modification or
discharge is sought.
Section 11.7 Entire Agreement. This Agreement, including the exhibits and
schedules hereto, contains the entire agreement between the parties hereto
pertaining to the subject matter hereof and fully supersedes all prior written
or oral agreements and understandings between the parties pertaining to such
subject matter, other than any confidentiality agreement executed by Purchaser
in connection with the Property.
Section 11.8 Further Assurances. Each party agrees that it will execute and
deliver such other documents and take such other
29
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action, whether prior or subsequent to Closing, as may be reasonably requested
by the other party to consummate the transaction contemplated by this Agreement.
The provisions of this Section 11.8 shall survive Closing.
Section 11.9 Counterparts. This Agreement may be executed in counterparts, all
such executed counterparts shall constitute the same agreement, and the
signature of any party to any counterpart shall be deemed a signature to, and
may be appended to, any other counterpart.
Section 11.10 Facsimile Signatures. In order to expedite the transaction
contemplated herein, telecopied signatures may be used in place of original
signatures on this Agreement. Seller and Purchaser intend to be bound by the
signatures on the telecopied document, are aware that the other party will rely
on the telecopied signatures, and hereby waive any defenses to the enforcement
of the terms of this Agreement based on the form of signature.
Section 11.11 Severability. If any provision of this Agreement is determined by
a court of competent jurisdiction to be invalid or unenforceable, the remainder
of this Agreement shall nonetheless remain in full force and effect; provided
that the invalidity or unenforceability of such provision does not materially
adversely affect the benefits accruing to any party hereunder.
Section 11.12 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State in which the Property is located.
Purchaser and Seller agree that the provisions of this Section 11.12 shall
survive the Closing or any termination of this Agreement.
Section 11.13 No Third-Party Beneficiary. The provisions of this Agreement and
of the documents to be executed and delivered at Closing are and will be for the
benefit of Seller and Purchaser only and are not for the benefit of any third
party, and accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and delivered at
Closing.
Section 11.14 Captions. The section headings appearing in this Agreement are
for convenience of reference only and are not intended, to any extent and for
any purpose, to limit or define the text of any section or any subsection
hereof.
Section 11.15 Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any exhibits or amendments hereto.
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Section 11.16 Recordation. This Agreement may not be recorded by any party
hereto without the prior written consent of the other party hereto. The
provisions of this Section 11.16 shall survive the Closing or any termination of
this Agreement.
Section 11.17 Seller Approval. Notwithstanding any other provision of this
Agreement, the obligation of Seller to consummate the transaction contemplated
herein shall be subject to the condition that the Real Estate Investments
Committee, the National Investments Committee and the Investments Committee of
the Board of Directors of Seller shall have approved the sale of the Property to
Purchaser, pursuant to the terms and conditions of this Agreement, on or prior
to December 20, 1996 (the "Committee Approval Date"). If Seller fails to give
Purchaser notice within five (5) business days after the Committee Approval Date
that such committees have approved the sale of the Property to Purchaser
pursuant to the terms hereof, then this Agreement shall terminate and neither
party shall have any further rights or obligations hereunder (except for any
indemnity obligations of either party pursuant to the other provisions of this
Agreement), the Deposit shall be returned to Purchaser and each party shall bear
its own costs hereunder.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the Effective Date.
SELLER:
METROPOLITAN LIFE INSURANCE COMPANY,
a New York corporation
By: /s/Jeffrey S. Moe
Name: Jeffrey S. Moe
Title: Assistant Vice-President
PURCHASER:
BEACON PROPERTIES, L.P.,
a Delaware limited partnership
By: Beacon Properties Corporation,
a Maryland corporation,
its sole general partner
By: /s/Charles H. Cremens
Name: Charles H. Cremens
Title: Senior Vice President
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Escrow Agent executes this Agreement below solely for the purpose of
acknowledging that it agrees to be bound by the provisions of Sections 1.5 and
1.6 hereof.
ESCROW AGENT:
CHICAGO TITLE INSURANCE COMPANY,
a Missouri corporation
By: _______________________
Name: _____________________
Title: ____________________
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EXHIBIT T TO SALE AND CONTRIBUTION AGREEMENT
Dated As of December , 1996
By And Between
Metropolitan Life Insurance Company
and
Beacon Properties, L.P.
Private Placement of Operating Partnership Units
- -------------------------------------------------------------------------------
Issuer: Beacon Properties, L. P. (the "Operating Partnership")
Contributor: Metropolitan Life Insurance Company (the "Contributor").
The Contributor represents that it is, and it will be at
the Closing Date, an accredited investor within the
meaning of Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Securities Act").
Type of Securities: Units of limited partnership of the Operating Partnership
("Units"), which, at any time after the respective Lock-Up
Period (as hereinafter defined), and in accordance with
the terms of the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, as amended (the
"Partnership Agreement"), are redeemable in exchange for
cash, or, at the sole option of Beacon Properties
Corporation (the "Company") for shares of common stock,
$.01 par value (the "Common Stock"), of the Company on a
one-for-one basis.
Price: The value per Unit will equal the result of Thirty Nine
Million Dollars ($39,000,000), divided by the average
closing sales price on the NYSE of the Company's Common
Stock for the twenty (20) consecutive trading days ending
on the second business day immediately preceding the
Closing Date (the "Average Stock Price").
Amount: $39,000,000, as adjusted under the Sale Agreement.
Distributions: In accordance with Section 12.2.C of the Partnership
Agreement, the Contributor will receive pro rata
distributions payable for the portion of the fourth
quarter of 1996 commencing on the Closing Date and ending
<PAGE>
December 31, 1996 on all outstanding Units held by the
Contributor on the declaration date for dividends declared
on the Common Stock for the fourth quarter of 1996.
Restrictions: The Contributor shall not sell, offer or contract to sell,
grant any option to purchase, pledge, convert, distribute
or otherwise dispose of ("Transfer") one-half of the Units
issued hereunder for a period of six (6) months from the
Closing Date. Additionally, the Contributor shall not
Transfer the remaining one-half of the Units issued
hereunder for a period of one (1) year from the Closing
Date. Such restrictions are collectively referred to as
the Lock-Up Period. This restriction does not apply to
shares of Common Stock currently held by the Contributor
or acquired by the Contributor in the open market.
Termination: Contributor may terminate its purchase obligations
hereunder if the Company or its assigns does not acquire
the Property (as defined below) on the Closing Date.
Closing Date: Concurrently with the acquisition of President's
Plaza, Chicago, Illinois (the "Property") which shall
occur on December 27, 1996 or as otherwise provided in the
Sale Agreement.
Registration Rights: The Company will grant certain registration rights
to the Contributor in accordance with the terms of that
certain Registration Rights Agreement attached as Exhibit
A hereto.
Additional
Deliveries: At or prior to the execution of the Sale Agreement to
which this Exhibit T is a part, the Contributor shall
deliver to the Operating Partnership a fully-executed
Prospective Subscriber Questionnaire, a form of which is
attached hereto as Exhibit B. At or prior to the Closing,
the Contributor shall deliver to the Operating Partnership
fully-executed copies of the following agreements (i) an
Agreement Regarding Foreign Persons in substantially the
form attached hereto as Exhibit C, and (ii) a Contribution
of Property and Sixth Amendment to Agreement of Limited
Partnership in substantially the form attached hereto as
Exhibit D. Contributor shall also deliver to the Operating
Partnership, upon the Operating Partnership's reasonable
request, such other information, certificates and
materials as the Operating Partnership may reasonably
request in connection with offering the Units without
registration under the Securities Act and the securities
laws of applicable states and other jurisdictions.
2
<PAGE>
If these terms are acceptable to you, please countersign this term
sheet and return it to the undersigned.
BEACON PROPERTIES, L.P.
By: Beacon Properties Corporation
Its: General Partner
/s/ Charles H. Cremens
----------------------
By: Charles H. Cremens
Its: Senior Vice President
AGREED AND ACCEPTED:
METROPOLITAN LIFE INSURANCE COMPANY
/s/ Jeffrey S. Moe
- -----------------
By: Jeffrey S. Moe
Its: Assistant Vice President
3
