-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EQH/hcpNL/LSmCz06QEtHbgGIgWENONbmBbA1xFoF1vhtfz6sfWtA4hupnAVHdr3 nVaKZlvLxXSIbzLVlPKHCQ== 0000950146-96-001199.txt : 19960724 0000950146-96-001199.hdr.sgml : 19960724 ACCESSION NUMBER: 0000950146-96-001199 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19960623 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960723 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BEACON PROPERTIES CORP CENTRAL INDEX KEY: 0000920114 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 043224258 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12926 FILM NUMBER: 96597790 BUSINESS ADDRESS: STREET 1: 50 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173301400 MAIL ADDRESS: STREET 1: 50 ROWES WHARF CITY: BOSTON STATE: MA ZIP: 02110 FORMER COMPANY: FORMER CONFORMED NAME: BEACON OFFICE PROPERTIES INC DATE OF NAME CHANGE: 19940311 8-K 1 BEACON PROPERTIES FORM 8K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT ------------- Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): July 23, 1996 BEACON PROPERTIES CORPORATION (Exact name of Registrant as specified in its Charter) Maryland (State of Incorporation) 1-12926 04-3224258 (Commission File Number) (IRS Employer Id. Number) 50 Rowes Wharf Boston, Massachusetts 02110 (Address of principal executive offices) (Zip Code) (617) 330-1400 (Registrant's telephone number, including area code) Item 5. Other Events Beacon Properties Corporation (the "Company") has entered into contracts to purchase two portfolios of office buildings. Fairfax County Portfolio: In June 1996, the Company exercised an option to acquire three office buildings and a parcel of developable land located in Fairfax County, Virginia for an aggregate purchase price of $77 million. The Company will assume approximately $55.4 million of mortgage debt secured by the properties and issue approximately 840,000 Limited Partnership Units.
Mortgage Balance Property Name Seller Lender Assumed - ----------------- --------------------------- ----------------------------------- ------------- E.J. Randolph Greensboro Associates, Teachers Insurance and Annuity a Virginia Limited Association of America, $18,016,426 Partnership a New York Corporation (1) John Marshall I John Marshall Associates and Limited Partnership, John Marshall a Virginia Limited American National Insurance III Partnership Company $21,067,610 Northridge Woodland-Northridge I Limited Partnership, a Virginia Limited The Northwestern Mutual Life Partnership Insurance Company $16,306,041 ----------- $55,390,077 ===========
(1) The Company intends to draw on its Credit Facility provided by The First National Bank of Boston (the "Credit Facility") and repay this mortgage debt after assumption. The Fairfax County Portfolio consists of the (i) the 11-story John Marshall I building located in the Tysons Corner area of McLean, Virginia, built in 1981 comprising approximately 261,000 square feet of office space; (ii) the 11-story E.J. Randolph building located in the Tysons Corner area of McLean, Virginia, built in 1983 comprising approximately 165,000 square feet of office space; (iii) the 6-story Northridge I building located in Reston/Herndon area of Virginia, built in 1988 comprising approximately 124,000 square feet of office space; and (iv) the John Marshall III parcel of developable land located in the Tysons Corner area of McLean, Virginia. The aggregate occupancy rate of the Fairfax County Portfolio as of June 30, 1996 was approximately 94%. New York Life Portfolio: In July 1996, the Company entered into a contract to acquire a portfolio of office properties, comprised of seven buildings, from New York Life Insurance Company (the "New York Life Portfolio") for an aggregate consideration of approximately $150 million in cash. The New York Life Portfolio consists of (i) the 8-story AT&T Plaza located in Oak Brook (suburban Chicago), Illinois built in 1984 comprising approximately 225,000 square feet of office space; (ii) the five-building Tri-State International office park located in Lincolnshire (suburban Chicago), Illinois built in 1986 comprising approximately 548,000 square feet; and (iii) an 11-story office property located at 1333 H Street in Washington, D.C. comprising approximately 239,000 square feet (approximately 205,000 square feet of which was built in 1982). The aggregate occupancy rate for the New York Life Portfolio as of June 30, 1996 was approximately 81%. Additionally, on July 23, 1996, the Company filed a prospectus supplement to its Form S-3 Registration Statement (No. 333-02544) with the Securities and Exchange Commission pursuant to which it proposes to offer 5,000,000 shares of common stock, $.01 par value (excluding the underwriter's overallotment option). 2 Item 7. Financial Statements and Exhibits (a) Financial Statements Under Rule 3-14 of Regulation S-X Statement of Excess of Revenues over Specific Operating Expenses of Fairfax County Portfolio in Tysons Corner and Herndon, Virginia for the year ended December 31, 1995 and (unaudited) for the six months ended June 30, 1996 Statement of Excess of Revenues over Specific Operating Expenses of AT&T Plaza in Oak Brook, Illinois for the year ended December 31, 1995 and (unaudited) for the six months ended June 30, 1996 Statement of Excess of Revenues over Specific Operating Expenses of Tri-State International in Lincolnshire, Illinois for the year ended December 31, 1995 and (unaudited) for the six months ended June 30, 1996 Statement of Excess of Revenues over Specific Operating Expenses of 1333 H Street in Washington, D.C. for the year ended December 31, 1995 and (unaudited) for the six months ended June 30, 1996 (b) Pro Forma Financial Statements Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1996 (Unaudited) Pro Forma Condensed Consolidated Statement of Operations for the Year Ended December 31, 1995 (Unaudited) Pro Forma Condensed Consolidated Statement of Operations for the Six Months Ended June 30, 1996 (Unaudited) (c) Exhibits 1.1 Form of Underwriting Agreement 2.1 Option Agreement dated March 18, 1996 among John Marshall Associates Limited Partnership, Greensboro Associates Limited Partnership, Woodland-Northridge I Limited Partnership, Pimpernell Estates Limited Partnership, Goodridge Drive Associates Limited Partnership and Beacon Properties, L.P. 2.2 First Amendment to Option Agreement dated May 17, 1996 among John Marshall Associates Limited Partnership, Greensboro Associates Limited Partnership, Woodland-Northridge I Limited Partnership, Pimpernell Estates Limited Partnership, Goodridge Drive Associates Limited Partnership and Beacon Properties, L.P. 2.3 Second Amendment to Option Agreement dated May 31, 1996 among John Marshall Associates Limited Partnership, Greensboro Associates Limited Partnership, Woodland-Northridge I Limited Partnership, Pimpernell Estates Limited Partnership, Goodridge Drive Associates Limited Partnership and Beacon Properties, L.P. 2.4 Third Amendment to Option Agreement dated June 21, 1996 among John Marshall Associates Limited Partnership, Greensboro Associates Limited Partnership, Woodland-Northridge I Limited Partnership, Pimpernell Estates Limited Partnership, Goodridge Drive Associates Limited Partnership and Beacon Properties, L.P. 2.5 Sale and Purchase Agreement between New York Life Insurance Company and Beacon Properties, L.P., dated as of July 19, 1996. 23.1 Consent of Coopers & Lybrand, L.L.P., Independent Accountants. 3 FAIRFAX COUNTY PORTFOLIO TYSONS CORNER AND HERNDON, VIRGINIA STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1995 F-1 [Coopers & Lybrand Letterhead] REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Beacon Properties Corporation: We have audited the accompanying statement of excess of revenues over specific operating expenses of Fairfax County Portfolio in Tysons Corner and Herndon, Virginia (the "Properties") for the year ended December 31, 1995. This financial statement is the responsibility of the Properties' management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of excess of revenues over specific operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 2, this financial statement excludes certain income and expenses which would not be comparable with those resulting from the operations of the Properties after acquisition by Beacon Properties Corporation. The accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and exchange Commission and is not intended to be a complete presentation of the Properties' revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the excess of revenues over specific operating expenses (exclusive of income and expenses described in Note 2) of Fairfax County Portfolio in Tysons Corner and Herndon, Virginia, for the year ended December 31, 1995 in conformity with generally accepted accounting principles. [Signature of Coopers & Lybrand L.L.P] Coopers & Lybrand L.L.P Boston, Massachusetts April 19, 1996 F-2 FAIRFAX COUNTY PORTFOLIO TYSONS CORNER AND HERNDON, VIRGINIA STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
For the Year For the Six Ended Months Ended December 31, June 30, 1996 1995 (Unaudited) -------------- ------------- Revenues: Base rent $11,239,294 $5,366,522 Recoveries from tenants 864,654 398,875 Other income 115,165 53,074 ----------- ---------- 12,219,113 5,818,471 ----------- ---------- Specific operating expenses (Note 2): Utilities 835,757 425,293 Janitorial and cleaning 401,187 238,377 Security 33,981 10,555 General and administrative 61,576 58,617 Repairs and maintenance 868,557 344,539 Insurance 29,000 5,272 Property taxes 536,687 268,344 Landscaping 68,106 140,849 ----------- ---------- 2,834,851 1,491,846 ----------- ---------- Excess of revenues over specific operating expenses $ 9,384,262 $4,326,625 =========== ==========
The accompanying notes are an integral part of the financial statement. F-3 FAIRFAX COUNTY PORTFOLIO TYSONS CORNER AND HERNDON, VIRGINIA NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES 1. Organization and Significant Accounting Policies: Description of Properties Fairfax County Portfolio (the "Properties") is an office portfolio located in Tysons Corner and Herndon, Virginia consisting of three office buildings and a parcel of developable land, together encompassing approximately 550,000 square feet. Beacon Properties Corporation intends to acquire the entire fee interest in the Properties. Rental Revenues Rental income is recognized on the straight-line method over the terms of the related leases. Two of the buildings are occupied by a single tenant. The excess of recognized rentals over amounts due pursuant to lease terms is recorded as accrued rent. The impact of the straight-line rent adjustment increased revenues by approximately $1,108,000 for the year ended December 31, 1995. Risks and Uncertainties The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. Basis of Accounting: The accompanying statement of excess of revenues over specific operating expenses is presented on the accrual basis. This statement has been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for real estate properties acquired or to be acquired. Accordingly, the statement excludes certain historical income and expenses not comparable to the operations of the property after acquisition, such as interest income, management fees, depreciation, amortization, and interest expense. 3. Description of Leasing Arrangements: The commercial and office space is leased to tenants under leases with terms that vary in length. Certain of the leases contain real estate tax reimbursement clauses, operating expense reimbursement clauses and renewal options. Minimum lease payments to be received during the next five years for noncancelable operating leases in effect at December 31, 1995 are approximately as follows: Year Ending December 31, - ----------------------- 1996 $ 9,960,180 1997 9,964,210 1998 10,293,681 1999 8,186,519 2000 8,039,037 Thereafter 57,135,438 As of December 31, 1995, two tenants occupied approximately 86% of leasable square feet and represented 81% of total 1995 revenue. F-4 AT&T PLAZA OAK BROOK, ILLINOIS STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 10, 1995 F-5 [Coopers & Lybrand Letterhead] REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Beacon Properties Corporation: We have audited the accompanying statement of excess of revenues over specific operating expenses of AT&T Plaza in Oak Brook, Illinois (the "Property") for the year ended December 10, 1995. This financial statement is the responsibility of the Property's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of excess of revenues over specific operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 2, this financial statement excludes certain income and expenses which would not be comparable with those resulting from the operations of the Property after acquisition by Beacon Properties Corporation. The accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and exchange Commission and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the excess of revenues over specific operating expenses (exclusive of income and expenses described in Note 2) of AT&T Plaza in Oak Brook, Illinois, for the year ended December 10, 1995 in conformity with generally accepted accounting principles. [Signature of Coopers & Lybrand L.L.P] Coopers & Lybrand L.L.P Boston, Massachusetts July 8, 1996 F-6 AT&T PLAZA OAK BROOK, ILLINOIS STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
For the Year For the Six Ended Months Ended December 10, June 20, 1996 1995 (Unaudited) -------------- ------------- Revenues: Base rent $2,953,158 $1,537,005 Recoveries from tenants 1,279,105 714,002 Other income 277,736 216,925 ---------- ---------- 4,509,999 2,467,932 ---------- ---------- Specific operating expenses (Note 2): Utilities 217,867 100,526 Janitorial and cleaning 209,917 108,416 Security 128,409 65,403 General and administrative 409,713 136,552 Repairs and maintenance 343,485 155,672 Insurance 50,822 25,411 Property taxes 290,263 152,052 Landscaping 51,559 11,160 ---------- ---------- 1,702,035 755,192 ---------- ---------- Excess of revenues over specific operating expenses $2,807,964 $1,712,740 ========== ==========
The accompanying notes are an integral part of the financial statement. F-7 AT&T PLAZA OAK BROOK, ILLINOIS NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES 1. Organization and Significant Accounting Policies: Description of Properties AT&T Plaza (the "Property") is an 8-story office building located in Oak Brook, Illinois and encompassing approximately 225,316 square feet. Beacon Properties Corporation intends to acquire the entire fee interest in the Property. Rental Revenues Rental income is recognized on the straight-line method over the terms of the related leases. The excess of recognized rentals over amounts due pursuant to lease terms is recorded as accrued rent. The impact of the straight-line rent adjustment decreased revenues by approximately $27,740 for the year ended December 10, 1995. Risk and Uncertainties The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. Basis of Accounting: The accompanying statement of excess of revenues over specific operating expenses is presented on the accrual basis. This statement has been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for real estate properties acquired or to be acquired. Accordingly, the statement excludes certain historical income and expenses not comparable to the operations of the property after acquisition, such as interest income, management fees, depreciation, amortization, and interest expense. 3. Description of Leasing Arrangements: The commercial and office space is leased to tenants under leases with terms that vary in length. Certain of the leases contain real estate tax reimbursement clauses, operating expense reimbursement clauses and renewal options. Minimum lease payments to be received during the next five years for noncancelable operating leases in effect at December 10, 1995 are approximately as follows: Year Ending December 31, - ----------------------- 1996 $2,994,263 1997 2,950,914 1998 2,931,507 1999 2,370,315 2000 2,486,410 Thereafter 2,529,826 As of December 10, 1995, four tenants occupied 56% of leasable square feet and represented 63% of total 1995 revenue. F-8 TRI-STATE INTERNATIONAL LINCOLNSHIRE, ILLINOIS STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1995 F-9 [Coopers & Lybrand Letterhead] REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Beacon Properties Corporation: We have audited the accompanying statement of excess of revenues over specific operating expenses of Tri-State International in Lincolnshire, Illinois (the "Properties") for the year ended December 31, 1995. This financial statement is the responsibility of the Properties' management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of excess of revenues over specific operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 2, this financial statement excludes certain income and expenses which would not be comparable with those resulting from the operations of the Properties after acquisition by Beacon Properties Corporation. The accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and exchange Commission and is not intended to be a complete presentation of the Properties' revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the excess of revenues over specific operating expenses (exclusive of income and expenses described in Note 2) of Tri-State International in Lincolnshire, Illinois for the year ended December 31, 1995 in conformity with generally accepted accounting principles. [Signature of Coopers & Lybrand L.L.P] Coopers & Lybrand L.L.P Boston, Massachusetts July 8, 1996 F-10 TRI-STATE INTERNATIONAL LINCOLNSHIRE, ILLINOIS STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
For the Year For the Six Ended Months Ended December 31, June 30, 1996 1995 (Unaudited) -------------- ------------- Revenues: Base rent $ 8,914,417 $4,437,176 Recoveries from tenants 3,324,734 1,515,961 Other income 200,659 117,337 ----------- ---------- 12,439,810 6,070,474 ----------- ---------- Specific operating expenses (Note 2): Utilities 788,667 399,052 Janitorial and cleaning 446,883 240,419 Security 152,589 74,327 General and administrative 585,706 299,790 Repairs and maintenance 1,254,054 668,666 Insurance 104,130 52,065 Property taxes 979,717 489,185 Landscaping 190,515 77,592 ----------- ---------- 4,502,261 2,301,096 ----------- ---------- Excess of revenues over specific operating expenses $ 7,937,549 $3,769,378 =========== ==========
The accompanying notes are an integral part of the financial statement. F-11 TRI-STATE INTERNATIONAL LINCOLNSHIRE, ILLINOIS NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES 1. Organization and Significant Accounting Policies: Description of Properties Tri-State International (the "Properties") is an office portfolio located in Lincolnshire, Illinois consisting of five office buildings and encompassing approximately 548,059 square feet. Beacon Properties Corporation intends to acquire the entire fee interest in the Properties. Rental Revenues Rental income is recognized on the straight-line method over the terms of the related leases. The excess of recognized rentals over amounts due pursuant to lease terms is recorded as accrued rent. The impact of the straight-line rent adjustment increased revenues by approximately $62,000 for the year ended December 31, 1995. Risks and Uncertainties The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. Basis of Accounting: The accompanying statement of excess of revenues over specific operating expenses is presented on the accrual basis. This statement has been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for real estate properties acquired or to be acquired. Accordingly, the statement excludes certain historical income and expenses not comparable to the operations of the property after acquisition, such as interest income, management fees, depreciation, amortization, and interest expense. 3. Description of Leasing Arrangements: The commercial and office space is leased to tenants under leases with terms that vary in length. Certain of the leases contain real estate tax reimbursement clauses, operating expense reimbursement clauses and renewal options. Minimum lease payments to be received during the next five years for noncancelable operating leases in effect at December 31, 1995 are approximately as follows: Year Ending December 31, - ----------------------- 1996 $5,398,394 1997 4,185,513 1998 3,773,817 1999 3,291,343 2000 2,549,439 Thereafter 3,030,997 As of December 31, 1995, four tenants occupied 36% of leasable square feet and represented 77% of total 1995 base revenues. F-12 1333 H STREET WASHINGTON, D.C. STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1995 F-13 [Coopers & Lybrand Letterhead] REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Stockholders of Beacon Properties Corporation: We have audited the accompanying statement of excess of revenues over specific operating expenses of 1333 H Street in Washington, D.C. (the "Property") for the year ended December 31, 1995. This financial statement is the responsibility of the Property's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of excess of revenues over specific operating expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As described in Note 2, this financial statement excludes certain income and expenses which would not be comparable with those resulting from the operations of the Property after acquisition by Beacon Properties Corporation. The accompanying financial statement was prepared for the purpose of complying with the rules and regulations of the Securities and exchange Commission and is not intended to be a complete presentation of the Property's revenues and expenses. In our opinion, the financial statement referred to above presents fairly, in all material respects, the excess of revenues over specific operating expenses (exclusive of income and expenses described in Note 2) of 1333 H Street in Washington, D.C. for the year ended December 31, 1995 in conformity with generally accepted accounting principles. [Signature of Coopers & Lybrand L.L.P] Coopers & Lybrand L.L.P Boston, Massachusetts July 3, 1996 F-14 1333 H STREET WASHINGTON, D.C. STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES
For the For the Six Months Year Ended Ended December 31, June 30, 1996 1995 (Unaudited) -------------- ------------- Revenues: Base rent $5,783,708 $2,883,943 Recoveries from tenants 839,093 373,152 Other income 517,206 286,087 ---------- ---------- 7,140,007 3,543,182 ---------- ---------- Specific operating expenses (Note 2): Utilities 556,960 266,582 Janitorial and cleaning 235,798 118,962 Security 136,497 81,881 General and administrative 195,563 149,898 Repairs and maintenance 302,494 156,049 Insurance 56,347 28,174 Property taxes 873,438 436,719 Landscaping 23,393 11,979 ---------- ---------- 2,380,490 1,250,244 ---------- ---------- Excess of revenues over specific operating expenses $4,759,517 $2,292,938 ========== ==========
The accompanying notes are an integral part of the financial statement. F-15 1333 H STREET WASHINGTON, D.C. NOTES TO STATEMENT OF EXCESS OF REVENUES OVER SPECIFIC OPERATING EXPENSES 1. Organization and Significant Accounting Policies: Description of Properties 1333 H Street in Washington, D.C. (the "Property") is an office building located in Washington, D.C. encompassing approximately 239,000 net rentable square feet. Beacon Properties Corporation intends to acquire the entire fee interest in the Property. Rental Revenues Rental income is recognized on the straight-line method over the terms of the related leases. The excess of recognized rentals over amounts due pursuant to lease terms is recorded as accrued rent. The impact of the straight- line rent adjustment decreased revenues by approximately $158,000 for the year ended December 31, 1995. Risks and Uncertainties The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. Basis of Accounting: The accompanying statement of excess of revenues over specific operating expenses is presented on the accrual basis. This statement has been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission for real estate properties acquired or to be acquired. Accordingly, the statement excludes certain historical income and expenses not comparable to the operations of the property after acquisition, such as interest income and management fees. 3. Description of Leasing Arrangements: The commercial and office space is leased to tenants under leases with terms that vary in length. Certain of the leases contain real estate tax reimbursement clauses, operating expense reimbursement clauses and renewal options. Minimum lease payments to be received during the next five years for noncancelable operating leases in effect at December 31, 1995 are approximately as follows: Year Ending December 31, - ----------------------- 1996 $ 6,091,000 1997 5,941,000 1998 5,870,000 1999 5,791,000 2000 6,008,000 Thereafter 22,424,000 As of December 31, 1995, two tenants occupied 67% of leasable square feet and represented 72% of total 1995 revenue. F-16 BEACON PROPERTIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION The following unaudited pro forma Condensed Consolidated Balance Sheet of Beacon Properties Corporation (the "Company") as of June 30, 1996, is presented as if the acquisition of the Pending Acquisitions had occurred on June 30, 1996. The pro forma Condensed Consolidated Statements of Operations are presented as if the Offering, the acquisition of the Properties acquired since January 1, 1995 (including Perimeter Center) and the closing of the MetLife Mortgage loan, the acquisition of the Pending Acquisitions and related assumption of debt had occurred as of January 1, 1995; the Company qualified as a REIT, distributed all of its taxable income and, therefore, incurred no income tax expense during the period. In management's opinion, all adjustments necessary to reflect the above discussed transactions have been made. The unaudited pro forma Condensed Consolidated Balance Sheet and Statement of Operations are not necessarily indicative of what actual results of operations of the Company would have been for the period, nor does it purport to represent the Company's results of operations for future periods. F-17 BEACON PROPERTIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET June 30, 1996 (Unaudited)
Beacon Properties Corporation Pro Forma Pro Forma Historical Adjustments Consolidated --------- ---------- ------------- (dollars in thousands) Assets Real estate, net $746,007 $227,000(A) $ 973,007 Deferred financing and leasing costs, net 14,730 14,730 Cash and cash equivalents 37,978 (26,388)(B) 11,591 Mortgage notes receivable 51,486 51,486 Other assets 20,554 (2,000)(C) 18,554 Investments in and note receivable from joint ventures and corporations 57,082 57,082 ------- -------- ---------- Total assets $927,837 $198,613 $1,126,450 ======= ======== ========== Liabilities and Stockholders' Equity Mortgage notes payable $403,218 $ 37,374(D) $ 440,592 Note payable, Credit Facility 18,016(E) 18,016 Other liabilities 24,335 24,335 Investment in joint ventures 24,303 24,303 ------- --------- ---------- Total liabilities 451,856 55,390 507,246 Minority interest in Operating Partnership 49,051 21,610(F) 70,661 Stockholders' equity 426,930 121,613(G) 548,543 ------- --------- ---------- Total liabilities and stockholders' equity $927,837 $198,613 $1,126,450 ======= ========= ==========
Notes: (A) Acquisition of Pending Acquisitions. (B) Cash utilized. (C) Application of deposit on Fairfax County Portfolio. (D) Fairfax County Portfolio debt assumed. (E) Credit Facility utilized to repay certain Fairfax County Portfolio debt. (F) Value of units issued to seller of Fairfax County Portfolio. (G) Net increase in stockholders' equity: Proceeds of Offering $129,375 Expenses of Offering (7,763) -------- $121,613 ======== F-18 BEACON PROPERTIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended December 31, 1995 (Unaudited)
Beacon Properties Properties Acquired Perimeter Pending Corporation In 1995 Center Acquisitions Pro Forma Pro Forma Historical (A) (B) (F) Adjustments Consolidated --------- -------- -------- ----------- ---------- ------------- (dollars in thousands except per share amounts and shares outstanding) Revenue: Rental income $71,050 $5,339 $52,117 $30,623 $ 159,129 Management fees 2,203 $ 723(H) 2,926 Recoveries from tenants 9,742 1,193 2,244 6,308 19,487 Mortgage interest income 2,546 3,027(I) 5,573 Other income 5,502 26 862 1,111 7,501 ------- ------ ------- ------- ------- ---------- Total revenue 91,043 6,558 55,223 38,042 3,750 194,616 ------- ------ ------- ------- ------- ---------- Expenses: Property expenses 18,090 1,560 12,376 7,485 39,511 Real estate taxes 10,217 949 4,107 2,680 17,953 General and administrative 9,755 111 2,116 1,254 750(J) 13,986 Mortgage interest expense 15,226 15,434(C) 4,438(G) (1,783)(K) 33,315 Interest--amortization of financing costs 1,370 120(D) 1,490 Depreciation and amortization 17,428 1,047(E) 9,571(E) 6,810(E) 34,856 ------- ------ ------- ------- ------- ---------- Total expenses 72,086 3,666 43,724 22,667 (1,033) 141,110 ------- ------ ------- ------- ------- ---------- Income from operations 18,957 2,892 11,499 15,375 4,783 53,506 Equity in net income of joint ventures and corporations 3,222 1,338 4,560 (1) ------- ------ ------- ------- ------- ---------- Income before minority interest 22,179 4,230 11,499 15,375 4,783 58,066 Minority interest in Operating Partnership (4,119) (3,795)(L) (7,914) ------- ------ ------- ------- ------- ---------- Net income before extraordinary items $18,060 $4,230 $11,499 $15,375 $ 988 $ 50,152 (2) ======= ====== ======= ======= ======= =========== Common shares outstanding 32,368,263 Net income per common share $ 1.55 (1) Includes: Depreciation and amortization $ 3,895 Amortization of financing costs $ 896 (2) Company share of Operating Partnership is 86.37%
See accompanying notes to pro forma condensed consolidated statement of operations. F-19 BEACON PROPERTIES CORPORATION NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended December 31, 1995 (Unaudited) (A) Results of operations of properties acquired during 1995 for the period prior to their acquisitions:
Wellesley Westlakes 75-101 2 Ten Building Building Federal Oliver Canal 8 2 St. Street Park Total --------- --------- ---------- ------ ------- ------- Revenue: Rental income $308 $1,010 $2,474 $1,547 $5,339 Management fees Recoveries from tenants 425 112 656 1,193 Mortgage interest income Other income 7 15 4 26 ---- ------ ------ ------ ------ ----- Total revenue 308 1,442 2,601 2,207 6,558 ---- ------ ------ ------ ------ ----- Expenses: Property expenses 61 413 573 513 1,560 Real estate taxes 20 89 505 335 949 General and administrative 8 27 18 58 111 Mortgage interest expense Interest--amortization of financing costs Depreciation and amortization 50 239 404 354 1,047 ---- ------ ------ ------ ------ ----- Total expenses 138 768 1,500 1,260 3,666 ---- ------ ------ ------ ------ ----- Income from operations 170 674 1,101 947 2,892 Equity in net income of joint ventures and corporations $1,338 1,338 ---- ------ ------ ------ ------ ----- Income before minority interest 170 674 1,338 1,101 947 4,230 Minority interest in Operating Partnership ---- ------ ------ ------ ------ ----- Net income before extraordinary item $170 $ 674 $1,338 $1,101 $ 947 $4,230 ==== ====== ====== ====== ====== ======
(B) Results of operations of Perimeter Center for 1995. (C) Interest expense associated with the MetLife Mortgage Loan in the amount of $218 million based on a 7.08% interest rate. (D) Amortization of the costs of obtaining the permanent financing at $1.2 million over 10 years. F-20 BEACON PROPERTIES CORPORATION NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended December 31, 1995 (Unaudited) (E) Detail of depreciation expense by property is presented as follows: Basis Life Depreciation ------- ----- ------------- Previously Acquired Properties: Wellesley Building 8 $ 4,500 30 yrs $ 50 Westlakes Building 2 12,306 30 yrs 239 2 Oliver Street 16,174 30 yrs 404 Ten Canal Park 10,609 30 yrs 354 ------ $1,047 ====== Perimeter Center $287,130 30 yrs $9,571 ====== Pending Acquisitions: Fairfax County Portfolio $ 69,300 30 yrs $2,310 The New York Life Portfolio 135,000 30 yrs 4,500 ------ $6,810 ====== (F) Results of operations of the Fairfax County Portfolio and the New York Life Portfolio for 1995. (G) Fairfax County Portfolio interest expense on debt assumed: Principal Rate Expense --------- ---- ------- JOHN MARSHALL 21,068 8.38% 1,764 EJ RANDOLPH (1) 18,016 8.25% 1,486 NORTHRIDGE 16,306 7.28% 1,187 ------ ---- ----- 55,390 4,438 ====== ===== (1) Paid off by Credit Facility proceeds at closing. (H) Management fee from 75-101 Federal Street. (I) Interest income related to the acquisition of the Rowes Wharf mortgage. (J) Additional general and administrative expense attributable to acquisitions. (K) Credit facility activity:
Draw Expense Source/Use Date (Repayment) (Savings) - ---------- ---- ----------- -------- Offering proceeds March 20 ($ 58,000) ($ 1,065) Rowes Wharf mortgage Various 23,700 780 Westlakes Building 2 July 26 13,500 632 Offering proceeds August 31 (66,500) (3,652) 75-101 Federal Street and 2 Oliver Street September 29 39,000 2,397 Ten Canal Park December 21 11,000 882 March 1996 offering proceeds Full year (21,300) (1,757) ------ ($1,783) =======
(L) Reflects decrease for minority interest (13.63%) in Operating Partnership. F-21 BEACON PROPERTIES CORPORATION PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Six Months Ended June 30, 1996 (Unaudited)
Beacon Properties Perimeter Pending Corporation Center Acquisitions Pro Forma Pro Forma Historical (A) (B) Adjustments Consolidated ---------- ------- ----------- ---------- ------------- (dollars in thousands except per share amounts and shares outstanding) Revenue: Rental income $60,051 $6,420 $14,864 $ 81,335 Management fees 1,517 1,517 Recoveries from tenants 6,782 304 3,002 10,088 Mortgage interest income 2,165 $611(G) 2,776 Other income 4,591 208 673 5,472 ------- ------ ------- ------- -------- Total revenue 75,106 6,932 18,539 611 101,188 ------- ------ ------- ------- -------- Expenses: Property expenses 14,770 1,562 3,806 20,138 Real estate taxes 7,831 591 1,346 9,768 General and administrative 7,362 378 646 188(H) 8,574 Mortgage interest expense 13,661 1,461(C) 2,146(F) (462)(I) 16,805 Interest--amortization of financing costs 1,184 15(D) 1,199 Depreciation and amortization 13,346 1,196(E) 3,405(E) 17,947 ------- ------ ------- ------- -------- Total expenses 58,154 5,203 11,349 (274) 74,431 ------- ------ ------- ------- -------- Income from operations 16,952 1,729 7,190 886 26,757 Equity in net income of joint ventures and corporations 1,582 1,582 (1) ------- ------ ------- ------- -------- Income before minority interest 18,534 1,729 7,190 886 28,339 Minority interest in Operating Partnership (2,681) (1,181)(J) (3,862) ------- ------ ------- ------- -------- Net income before extraordinary items $15,853 $1,729 $ 7,190 ($ 296) $ 24,476 (2) ======= ====== ======= ======== ======== Common shares outstanding 32,368,263 Net income per common share $0.76 (1) Includes: Depreciation and amortization $1,994 Amortization of financing costs $448 (2) Company share of Operating Partnership is 86.37%
See accompanying notes to pro forma condensed consolidated statement of operations. F-22 BEACON PROPERTIES CORPORATION NOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS For the Six Months Ended June 30, 1996 (Unaudited) (A) Results of operations of Perimeter Center for the period ended February 14, 1996. (B) Results of operations of the Fairfax County Portfolio and the New York Life Portfolio. (C) Net interest expense associated with the MetLife Mortgage Loan in the amount of $218 million based on a 7.08% interest rate for the period ended prior to March 15, 1996. (D) Amortization of the costs of obtaining the permanent financing at $1.2 million over 10 years. (E) Detail of depreciation expense by property is presented as follows: Basis Life Depreciation ----- ---- ------------ Perimeter Center $287,130 30 yrs $1,196 ====== Pending Acquisitions: Fairfax County Portfolio $ 69,300 30 yrs $1,155 The New York Life Portfolio 135,000 30 yrs 2,250 ------ $3,405 ====== (F) Fairfax County Portfolio interest expense on debt assumed: Principal Rate Expense -------- ---- ------- JOHN MARSHALL 21,068 8.38% 882 EJ RANDOLPH (1) 18,016 7.44% 670 NORTHRIDGE 16,306 7.28% 594 ------ ----- 55,390 2,146 ====== ====== (1) Paid off by Credit Facility proceeds at closing. (G) Interest income related to the acquisition of the Rowes Wharf mortgage. (H) Additional general and administrative expense attributable to acquisitions. (I) Decrease in Credit Facility interest expense as the result of $21,300 repayment from proceeds of March 1996 offering. (J) Reflects decrease for minority interest (13.63%) in Operating Partnership. F-23 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BEACON PROPERTIES CORPORATION /s/ Robert J. Perriello ----------------------------- Robert J. Perriello, Senior Vice President, and Chief Financial Officer Date: July 23, 1996 EX-1 2 UNDERWRITING AGREEMENT BEACON PROPERTIES CORPORATION (a Maryland Corporation) Common Stock UNDERWRITING AGREEMENT July __, 1996 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated World Financial Center North Tower New York, New York 10281-1305 Dear Sirs: Beacon Properties Corporation, a Maryland corporation (the "Company"), proposes to issue and sell shares of Common Stock, $.01 par value (the "Common Stock" or the "Securities"), from time to time, in one or more offerings on terms to be determined at the time of sale. As used herein, "you" and "your", unless the context otherwise requires, shall mean the parties to whom this underwriting agreement (this "Agreement") is addressed together with the other parties, if any, identified in the applicable Terms Agreement (as defined herein) as additional co- managers with respect to Underwritten Securities (as hereinafter defined) purchased pursuant thereto. It is understood that the net proceeds of an offering of securities to which this Agreement relates will be contributed to Beacon Properties, L.P., a Delaware limited partnership (the "Operating Partnership") in exchange for interests in the Operating Partnership. Whenever the Company determines to make an offering of Securities through you or through an underwriting syndicate managed by you, the Company will enter into an agreement (the "Terms Agreement") providing for the sale of such Securities (the "Underwritten Securities") to, and the purchase and offering thereof by, you and such other underwriters, if any, selected by you as have authorized you to enter into such Terms Agreement on their behalf (the "Underwriters", which term shall include you whether acting alone in the sale of the Underwritten Securities or as a member of an underwriting syndicate and any Underwriter substituted pursuant to Section 10 hereof). The Terms Agreement relating to the offering of Underwritten Securities shall specify the number of Underwritten Securities to be initially issued (the "Initial Underwritten Securities"), the names of the Underwriters participating in such offering (subject to substitution as provided in Section 10 hereof), the number of Initial Underwritten Securities which each such Underwriter severally agrees to purchase, the names of such of you or such other Underwriters acting as co-managers, if any, in connection with such offering, the price at which the Initial Underwritten Securities are to be purchased by the Underwriters from the Company, the initial public offering price, if any, the time, date and place of delivery and payment and any delayed delivery arrangements of the Initial Underwritten Securities. In addition, each Terms Agreement shall specify whether the Company has agreed to grant to the Underwriters an option to purchase additional Underwritten Securities to cover over-allotments, if any, and the number of Underwritten Securities subject to such option (the "Option Securities"). As used herein, the term "Underwritten Securities" shall include the Initial Underwritten Securities and all or any portion of the Option Securities agreed to be purchased by the Underwriters as provided herein, if any. The Terms Agreement, which shall be substantially in the form of Exhibit A hereto, may take the form of an exchange of any standard form of written telecommunication between you and the Company. Each offering of Underwritten Securities through you or through an underwriting syndicate managed by you will be governed by this Agreement, as supplemented by the applicable Terms Agreement. The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333- ) for the registration of the Securities, under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"), and the Company has filed such amendments thereto as may have been required prior to the execution of the applicable Terms Agreement. Such registration statement (as amended, if applicable) has been declared effective by the Commission. Such registration statement and the prospectus constituting a part thereof, in each case as supplemented by a prospectus supplement relating to the offering of Underwritten Securities (the "Prospectus Supplement"), including in each case all documents incorporated therein by reference and the information, if any, deemed to be a part thereof pursuant to Rule 430A(b) or Rule 434 of the 1933 Act Regulations as from time to time amended or supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), or otherwise, are collectively referred to herein as the "Registration Statement" and the "Prospectus", respectively; provided, however, that a Prospectus Supplement shall be deemed to have supplemented the Prospectus only with respect to the offering of Underwritten Securities to which it 2 relates. All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is or is deemed to be incorporated by reference in the Registration Statement or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement or the Prospectus shall be deemed to mean and include the filing of any document under the 1934 Act which is or is deemed to be incorporated by reference in the Registration Statement or the Prospectus, as the case may be. If the Company elects to rely on Rule 434 under the 1933 Act Regulations, all references to the Prospectus shall be deemed to include, without limitation, the form of prospectus and the abbreviated term sheet, taken together, provided to the Underwriters by the Company in reliance on Rule 434 under the 1933 Act (the "Rule 434 Prospectus"). If the Company files a registration statement to register a portion of the Securities and relies on Rule 462(b) for such registration statement to become effective upon filing with the Commission (the "Rule 462 Registration Statement"), then any reference to "Registration Statement" herein shall be deemed to be to both the registration statement referred to above (No. 333- ) and the Rule 462 Registration Statement, as each such registration statement may be amended pursuant to the 1933 Act. Section 1. Representations and Warranties. (a) The Company and the Operating Partnership each severally represents and warrants to you, as of the date hereof, and to you and each other Underwriter named in the applicable Terms Agreement, as of the date thereof (in each case, a "Representation Date"), as follows: (i) The Registration Statement and the Prospectus, at the time the Registration Statement became effective and at each time thereafter on which the Company filed an Annual Report on Form 10-K with the Commission, complied, and as of each Representation Date will comply, in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations; the Registration Statement, at the time the Registration Statement became effective and at each time thereafter on which the Company filed an Annual Report on From 10-K with the Commission, did not, and at each time thereafter on which any amendment to the Registration Statement becomes effective or the Company files an Annual Report on Form 10-K with the Commission and as of each Representation Date, and at the Closing Time (as hereinafter defined), will not, contain an untrue statement of a material fact or omit to state a material fact required to 3 be stated therein or necessary to make the statements therein not misleading; and the Prospectus, as of the date hereof, does not, and as of each Representation Date will not, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through you expressly for use in the Registration Statement or Prospectus. (ii) The accountants who certified the financial statements and supporting schedules included or incorporated by reference in the Registration Statement and the Prospectus are independent public accountants as required by the 1933 Act and the 1933 Act Regulations. (iii) The historical financial statements of the Company and the historical combined financial statements of the Predecessor (as defined in Note 1 to the Financial Statements of the Company and the Predecessor) including the notes thereto, included or incorporated by reference in the Registration Statement and the Prospectus present fairly the financial position of the Company and the Predecessor, as at the dates indicated and the results of operations for the periods specified. If applicable, the historical financial information including the notes thereto for properties or other assets included in or incorporated by reference into the Registration Statement and Prospectus present fairly the stated financial information for such specific property or asset. Except as otherwise stated in the Registration Statement, said historical financial statements of the Company, the Predecessor, and, if applicable, the specific properties or other assets, have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved, and all adjustments necessary for a fair presentation of results for such periods have been made. The supporting schedules included or incorporated by reference in the Registration Statement and the Prospectus present fairly the information required to be stated therein; and the selected financial data (both historical and pro forma) included or incorporated by reference in the Registration Statement and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with the related financial statements presented therein. (iv) The unaudited pro forma condensed consolidated financial statements included or incorporated by reference 4 in the Registration Statement and the Prospectus present fairly the pro forma financial position of the Company as of the dates indicated and the results of its operations for the periods specified; and such unaudited pro forma financial statements have been prepared in accordance with generally accepted accounting principles applied on a basis substantially consistent with the audited financial statements of the Company and the Predecessor included or incorporated by reference in the Registration Statement and the Prospectus, the assumptions on which such pro forma financial statements have been prepared are reasonable and are set forth in the notes thereto, and such pro forma financial statements have been prepared, and the pro forma adjustments set forth therein have been applied, in accordance with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations, and such pro forma adjustments have been properly applied to the historical amounts in the compilation of such statements. (v) Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, (a) there has been no material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise, or any of the real property or improvements thereon owned by either the Company, the Operating Partnership or any of its subsidiaries (each individually a "Property" and collectively the "Properties"), whether or not arising in the ordinary course of business, (b) no material casualty loss or material condemnation or other material adverse event with respect to any of the Properties has occurred, (c) there have been no transactions entered into or acquisitions by the Company, or the Operating Partnership or any of its subsidiaries, other than those in the ordinary course of business or disclosed in the Prospectus, which are material with respect to the Company, the Operating Partnership and its subsidiaries considered as one enterprise, and (d) except for regular quarterly dividends on the Company's Common Stock or dividends or distributions declared paid or made in accordance with the terms of any series of the Company's Preferred Stock, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock or by the Operating Partnership or any of its subsidiaries with respect to its partnership interests or any class of its capital stock. As used in this Agreement, the term subsidiary as it relates to the Operating Partnership includes the Subsidiary Corporations (as such term is defined in the Prospectus), Beacon Property Management, L.P. (the "Management Partnership") and Beacon 367917.1 5 Design, L.P. (the "Design Partnership") as well as any corporation, limited or general partnership, joint venture or other entity through which the Operating Partnership owns an interest, either directly or indirectly, in a Property. (vi) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Maryland, with corporate power and authority to own, lease and operate its Properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under this Agreement and the Terms Agreement and the Company is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise or the Properties, collectively; and, except with respect to the Operating Partnership, and with respect to BCN Management, Inc., BCN Crystal, Inc., BCN Center Plaza, Inc., Beacon Properties Acquisition Corporation, BCN RWA, Inc. and BCN Wellesley, Inc., each qualified REIT subsidiaries of the Company, and with respect to Wellesley Holding, L.P., Wellesley Holding II, L.P., Crystal Holdings, L.P., Rowes Wharf Holdings, L.P., Center Plaza Associates, L.P., the Subsidiary Corporations, the Management Partnership and the Design Partnership (collectively, the "Subsidiary Entities"), the Company owns no material amounts of stock or other beneficial interest in any corporation, partnership, joint ventures or other business entity. (vii) The Agreement of Limited Partnership of the Operating Partnership (the "Partnership Agreement") has been duly and validly authorized, executed and delivered by the Company and is a valid and binding agreement, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights generally and by general principles of equity. The Partnership Agreement has been duly executed and delivered by the other parties thereto and, to the Company's knowledge, is a valid and binding agreement, enforceable against such parties in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights generally and by general principles of equity. The Operating Partnership and each of its subsidiaries has been duly formed and is validly 6 existing as a limited partnership or corporation, as the case may be, in good standing under the laws of its state of organization with partnership or corporate power and authority, as the case may be, to own, lease and operate its properties, to conduct the business in which it is engaged or proposes to engage as described in the Prospectus and to enter into and perform its obligations under this Agreement. The Operating Partnership and each of its subsidiaries is duly qualified or registered as a foreign partnership or corporation, as the case may be, and is in good standing in each jurisdiction in which such qualification or registration is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or register would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise or the Properties, collectively. The Company is the sole general partner of the Operating Partnership. The Operating Partnership has no subsidiaries other than the entities through which it owns interests in the Properties, the Subsidiary Corporations, the Management Partnership and the Design Partnership. Except as otherwise stated in the Prospectus, all of the issued and outstanding capital stock or other ownership interests in each Subsidiary Entity have been duly authorized and validly issued, are fully paid and non-assessable and, except for a 90% limited partner interest in Crystal Holdings, L.P., a 24% limited partner interest in Center Plaza Associates, L.P., and 99% of the voting stock of each of the Subsidiary Corporations, are owned by the Company or the Operating Partnership, directly or indirectly, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity, except for security interests granted in respect of indebtedness of the Company or the Operating Partnership or any of its subsidiaries as described in the Prospectus and except for security interests which would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership, or any of its subsidiaries considered as one enterprise or the Properties, collectively. (viii) The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus under "Capitalization" (except for subsequent issuances, if any, pursuant to reservations, agreements, employee benefit plans, dividend reinvestment plans, employee and director stock option plans or upon the exercise of options or convertible securities referred to in the Prospectus); and such shares of capital stock have been duly authorized and 7 validly issued and are fully paid and non-assessable and are not subject to preemptive or other similar rights. The Company has duly reserved a sufficient number of shares of Common Stock for issuance upon exchange of outstanding units of limited partner interest in the Operating Partnership (the "Units"). (ix) The issued and outstanding Units have been duly authorized and validly issued by the Operating Partnership and are fully paid and non-assessable. The Units have been sold in compliance with all applicable laws (including, without limitation, federal and state securities laws). (x) The Underwritten Securities being sold pursuant to this Agreement and the applicable Terms Agreement have, as of each Representation Date, been duly authorized for issuance and sale pursuant to this Agreement and such Terms Agreement and such Underwritten Securities, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth in such Terms Agreement or any Delayed Delivery Contract (as hereinafter defined), will be validly issued, fully paid and non-assessable, and the issuance of such Underwritten Securities will not be subject to preemptive or other similar rights; and the Underwritten Securities being sold pursuant to the applicable Terms Agreement conform in all material respects to all statements relating thereto contained in the Prospectus. The form of stock certificate used to evidence the Underwritten Securities is in due and proper form and complies with all applicable legal requirements. (xi) None of the Company, the Operating Partnership or any of its subsidiaries is in violation of its charter, by-laws, agreement of limited partnership or other organizational documents or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company, the Operating Partnership or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company, the Operating Partnership or any of its subsidiaries is subject, except for any such violation or default that would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership or its subsidiaries considered as one enterprise and the execution, delivery and performance of this Agreement, the applicable Terms Agreement, if any, and the consummation of the transactions contemplated herein and therein and compliance by the Company and the Operating Partnership (with respect to this Agreement), each 8 severally, with obligations hereunder and thereunder have been duly authorized by all necessary action, and will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, the Operating Partnership or any of its subsidiaries pursuant to, any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Company, the Operating Partnership or any of its subsidiaries is a party or by which any of them may be bound, or to which any of the property or assets of the Company, the Operating Partnership or any of its subsidiaries is subject, except for any such violation or default that would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership or its subsidiaries considered as one enterprise, nor will such action result in any violation of the charter, by-laws, the agreement of limited partnership or other organizational documents of the Company, the Operating Partnership or any of its subsidiaries or any applicable law, administrative regulation or administrative or court decree, except for any such violation or default that would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership or its subsidiaries considered as one enterprise. (xii) The Company has been organized in conformity with the requirements for qualification as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), and the Company's method of operation will enable it to meet the requirements for taxation as a REIT under the Code and it will make a timely election to be taxed as a REIT with respect to the years ended December 31, 1994 and thereafter. (xiii) Neither the Company, the Operating Partnership nor any of its subsidiaries is required to be registered under the Investment Company Act of 1940, as amended (the "1940 Act"). (xiv) Other than as disclosed or incorporated by reference into the Prospectus, there is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company or the Operating Partnership threatened against or affecting the Company, the Operating Partnership or any of its subsidiaries which is required to be disclosed in the Prospectus (other than as disclosed therein), or which might result in any material adverse change in the 9 condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise, or which might materially and adversely affect the property or assets thereof and the Properties, collectively, or which might materially and adversely affect the consummation of this Agreement or the applicable Terms Agreement, or the transactions contemplated herein or therein; all pending legal or governmental proceedings to which the Company, the Operating Partnership or any of its subsidiaries is a party or of which any property or assets of the Company, the Operating Partnership or any of its subsidiaries or the Properties is subject which are not described in or incorporated by reference into the Prospectus, including ordinary routine litigation incidental to the business, are, considered in the aggregate, not material; and there are no contracts or documents of the Company, the Operating Partnership or any of its subsidiaries which are required to be filed as exhibits to the Registration Statement by the 1933 Act or by the 1933 Act Regulations which have not been so filed. (xv) Each of the Company, the Operating Partnership and its subsidiaries are not required to own or possess any trademarks, service marks, trade names or copyrights in order to conduct the business to be operated by them. (xvi) No authorization, approval or consent of any court or governmental authority or agency is required that has not been obtained in connection with the consummation by the Company or the Operating Partnership of the transactions contemplated by this Agreement or the applicable Terms Agreement, except such as may be required under the 1933 Act or the 1933 Act Regulations, state securities laws, real estate syndication laws or under the rules and regulations of the National Association of Securities Dealers, Inc. (xvii) Each of the Company, the Operating Partnership and its subsidiaries possess such certificates, authorities or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct the businesses to be conducted by it, and neither the Company, nor the Operating Partnership or any of its subsidiaries has received any written notice of proceedings relating to the revocation or modification of any such certificate, authority or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would materially and adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise. 10 (xviii) The Company has full right, power and authority to enter into this Agreement, the applicable Terms Agreement and the Delayed Delivery Contracts (as defined below), if any, and this Agreement has been, and as of each Representation Date, the applicable Terms Agreement and the Delayed Delivery Contracts, if any, will have been, duly authorized, executed and delivered by the Company. (xix) The Operating Partnership has full right, power and authority to enter into this Agreement and this Agreement has been duly authorized, executed and delivered by the Operating Partnership. (xx) The documents incorporated or deemed to be incorporated by reference in the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the 1934 Act and the rules and regulations of the Commission under the 1934 Act (the "1934 Act Regulations"), and, when read together with the other information in the Prospectus, at the time the Registration Statement became effective and as of the applicable Representation Date or Closing Time (as defined herein) or during the period specified in Section 3(f), did not and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. [(xxi) (A) The following is a complete list of registration rights agreements entered into by the Company: (1) agreement dated May 26, 1994 with Crystal Holdings Corporation; (2) agreement dated May 26, 1994 with SKW Real Estate Limited Partnership; (3) agreement dated May 26, 1994 with Richard L. Friedman and John L. Hall II; (4) agreement dated May 26, 1994 with certain holders of Units; and (5) agreement dated October 27, 1994 with Wellesley Office Realty Corp. and Federal 175 Realty Corp. (B) No person has exercised registration or other similar rights to have any securities registered pursuant to the Registration Statement.] (xxii) (a) The Operating Partnership or its subsidiary, as the case may be, has good and marketable title to all items of real property owned by them, in each case free and clear of all liens, encumbrances, claims, security interests and defects, other than those referred to in the Prospectus or which are not material in amount; (b) all liens, charges, encumbrances, claims, or restrictions on or affecting the properties and assets owned by the Operating Partnership or any of its subsidiaries which are 11 required to be disclosed in the Prospectus are disclosed therein; (c) except as disclosed in the Prospectus, none of the Company, the Operating Partnership or any of its subsidiaries, or, to the best of the knowledge of the Company and the Operating Partnership, any lessee under a lease relating to any of the Properties, is in default under any of the leases relating to the Properties and neither the Company nor the Operating Partnership knows of any event which, but for the passage of time or the giving of notice, or both, would constitute a default under any of such leases, except such defaults that would not have a material adverse effect on the condition, financial or otherwise, or on the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise; (d) no tenant under any of the leases pursuant to which the Company, the Operating Partnership or any of its subsidiaries leases any of its real property or improvements has an option to purchase the premises demised under such lease; (e) each of the Properties is in compliance with all applicable codes and zoning laws and regulations, except for such failures to comply which would not individually or in the aggregate have a material adverse effect on the condition, financial or otherwise, or on the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise; and (f) neither the Company nor the Operating Partnership has knowledge of any pending or threatened condemnation, zoning change, or other proceeding or action that will in any manner affect the size of, use of, improvements on, construction on, or access to the Properties, except such proceedings or actions that would not have a material adverse effect on the condition, financial or otherwise, or on the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise. (xxiii) The Operating Partnership or its subsidiaries have obtained title insurance on all the Properties described in the Prospectus as owned by the Operating Partnership or its subsidiaries in an amount at least equal to the greater of (a) the cost of acquisition of such Property and (b) the cost of construction of the improvements located on such Properties. (xxiv) Except as disclosed in the Prospectus, each of the Company and the Operating Partnership has no knowledge of (a) the unlawful presence of any substance, material or waste which is regulated by any federal, state or local governmental or quasi-governmental authority, including, without limitation, (i) any substance, material or waste defined, used or listed as a "hazardous waste", "extremely 12 hazardous waste", "restricted hazardous waste", "hazardous substance", "hazardous material", "toxic substance" or other similar terms as defined or used in any Environmental Law (as defined below), (ii) any petroleum products, asbestos, polychlorinated biphenyls, lead-based paint, flammable explosives or radioactive materials and (iii) any additional substances or materials which are hazardous or toxic substances under any Environmental Law relating to the Properties (collectively, "Hazardous Materials") on any of the Properties or of (b) any spill, release, discharge or disposal of Hazardous Materials that have occurred or are presently occurring at, from or onto any of the Properties or any properties near or adjacent to the Properties, which presence or occurrence would materially adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise. Except as disclosed in the Prospectus, in connection with the construction on or operation and use of the Properties, the Company and the Operating Partnership represent that, as of the date of this Agreement, each of the Company and the Operating Partnership has no knowledge of any material failure to comply with all applicable local, state and federal environmental laws, regulations, ordinances and administrative and judicial orders relating to the use, generation, recycling, reuse, sale, storage, handling, transport and disposal of any Hazardous Materials (collectively, "Environmental Laws") that would have a material adverse effect on the condition, financial or otherwise, or on the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise. (xxv) Each of the Company and the Operating Partnership does no business with any person or affiliate located in Cuba within the meaning of Florida Rule 3E- 900.001. (b) Any certificate signed by any officer of the Company in such capacity or as general partner of the Operating Partnership and delivered to you or to counsel for the Underwriters in connection with the offering of the Underwritten Securities shall be deemed a representation and warranty by the Company or the Operating Partnership, as the case may be, to each Underwriter participating in such offering as to the matters covered thereby on the date of such certificate and, unless subsequently amended or supplemented, at each Representation Date subsequent thereto. 13 Section 2. Purchase and Sale. (a) The several commitments of the Underwriters to purchase the Underwritten Securities pursuant to the applicable Terms Agreement shall be deemed to have been made on the basis of the representations and warranties herein contained and shall be subject to the terms and conditions herein set forth. (b) In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company may grant, if so provided in the applicable Terms Agreement relating to the Initial Underwritten Securities, an option to the Underwriters named in such Terms Agreement, severally and not jointly, to purchase up to the number of Option Securities set forth therein at the same price per Option Security as is applicable to the Initial Underwritten Securities. Such option, if granted, will expire 30 days or such lesser number of days as may be specified in the applicable Terms Agreement after the Representation Date relating to the Initial Underwritten Securities, and may be exercised in whole or in part from time to time only for the purpose of covering over-allotments which may be made in connection with the offering and distribution of the Initial Underwritten Securities upon notice by you to the Company setting forth the number of Option Securities as to which the several Underwriters are then exercising the option and the time, date and place of payment and delivery for such Option Securities. Any such time and date of delivery (a "Date of Delivery") shall be determined by you, but shall not be later than three full business days and not be earlier than two full business days after the exercise of said option, unless otherwise agreed upon by you and the Company. If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Securities then being purchased which the number of Initial Underwritten Securities each such Underwriter has severally agreed to purchase as set forth in the applicable Terms Agreement bears to the total number of Initial Underwritten Securities (except as otherwise provided in the applicable Terms Agreement), subject to such adjustments as you in your discretion shall make to eliminate any sales or purchases of fractional Initial Underwritten Securities. (c) Payment of the purchase price for, and delivery of, the Underwritten Securities to be purchased by the Underwriters shall be made at the offices of Brown & Wood LLP, One World Trade Center, New York, New York 10048-0557, or at such other place as shall be agreed upon by you and the Company, at 10:00 A.M., New York City time, on the third business day (unless postponed in accordance with the provisions of Section 10) following the date of the applicable Terms Agreement or, if pricing takes place after 4:30 p.m. New York City time on the date of the applicable 14 Terms Agreement, on the fourth business day (unless postponed in accordance with the provisions of Section 10) following the date of the applicable Terms Agreement or at such other time as shall be agreed upon by you and the Company (each such time and date being referred to as a "Closing Time"). In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, payment of the purchase price for, and delivery of certificates representing, such Option Securities, shall be made at the above-mentioned offices of Brown & Wood LLP, or at such other place as shall be agreed upon by you and the Company on each Date of Delivery as specified in the notice from you to the Company. Unless otherwise specified in the applicable Terms Agreement, payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to you for the respective accounts of the Underwriters for the Underwritten Securities to be purchased by them. The Underwritten Securities shall be in such authorized denominations and registered in such names as you may request in writing at least one business day prior to the applicable Closing Time or Date of Delivery, as the case may be. The Underwritten Securities, which may be in temporary form, will be made available for examination and packaging by you on or before the first business day prior to the Closing Time or Date of Delivery, as the case may be. If authorized by the applicable Terms Agreement, the Underwriters named therein may solicit offers to purchase Underwritten Securities from the Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts") substantially in the form of Exhibit B hereto with such changes therein as the Company may approve. As compensation for arranging Delayed Delivery Contracts, the Company will pay to you at Closing Time, for the respective accounts of the Underwriters, a fee specified in the applicable Terms Agreement for each of the Underwritten Securities for which Delayed Delivery Contracts are made at the Closing Time as is specified in the applicable Terms Agreement. Any Delayed Delivery Contracts are to be with institutional investors of the types described in the Prospectus. At the Closing Time, the Company will enter into Delayed Delivery Contracts (for not less than the minimum number of Underwritten Securities per Delayed Delivery Contract specified in the applicable Terms Agreement) with all purchasers proposed by the Underwriters and previously approved by the Company as provided below, but not for an aggregate number of Underwritten Securities in excess of that specified in the applicable Terms Agreement. The Underwriters will not have any responsibility for the validity or performance of Delayed Delivery Contracts. You shall submit to the Company, at least two business days prior to the Closing Time, the names of any institutional investors with which it is proposed that the Company will enter into Delayed Delivery Contracts and the number of Underwritten 15 Securities to be purchased by each of them, and the Company will advise you, at least two business days prior to the Closing Time, of the names of the institutions with which the making of Delayed Delivery Contracts is approved by the Company and the number of Underwritten Securities to be covered by each such Delayed Delivery Contract. The number of Underwritten Securities agreed to be purchased by the several Underwriters pursuant to the applicable Terms Agreement shall be reduced by the number of Underwritten Securities covered by Delayed Delivery Contracts, as to each Underwriter as set forth in a written notice delivered by you to the Company; provided, however, that the total number of Underwritten Securities to be purchased by all Underwriters shall be the total number of Underwritten Securities covered by the applicable Terms Agreement, less the number of Underwritten Securities covered by Delayed Delivery Contracts. SECTION 3. Covenants of the Company and the Operating Partnership. Each of the Company and the Operating Partnership covenants with you, and with each Underwriter participating in the offering of Underwritten Securities, as follows: (a) Immediately following the execution of the applicable Terms Agreement, the Company will prepare a Prospectus Supplement setting forth the number of Underwritten Securities covered thereby and their terms not otherwise specified in the Prospectus pursuant to which the Underwritten Securities are being issued, the names of the Underwriters participating in the offering and the number of Underwritten Securities which each severally has agreed to purchase, the names of the Underwriters acting as co- managers in connection with the offering, the price at which the Underwritten Securities are to be purchased by the Underwriters from the Company, the initial public offering price, if any, the selling concession and reallowance, if any, any delayed delivery arrangements, and such other information as you and the Company deem appropriate in connection with the offering of the Underwritten Securities; and the Company will, by the close of business in New York on the business day immediately succeeding the date of the applicable Terms Agreement, transmit copies of the Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations and will furnish to the Underwriters named therein as many copies of the Prospectus (including such Prospectus Supplement) as you shall reasonably request. If the Company elects to rely on Rule 434 under the 1933 Act Regulations, the Company will prepare an abbreviated term sheet that complies with the requirements of Rule 434 under the 1933 Act Regulations and will provide the Underwriters with copies of the form of Rule 434 Prospectus, in such number as the Underwriters may reasonably request, and file or transmit for filing with the Commission the form of Prospectus complying with Rule 434(c)(2) of the 1933 Act Regulations in accordance with 16 Rule 424(b) of the 1933 Act Regulations by the close of business in New York on the business day immediately succeeding the date of the applicable Terms Agreement. (b) The Company will notify you immediately, and confirm such notice in writing, of (i) the effectiveness of any amendment to the Registration Statement, (ii) the transmittal to the Commission for filing of any Prospectus Supplement or other supplement or amendment to the Prospectus or any document to be filed pursuant to the 1934 Act, (iii) the receipt of any comments from the Commission, (iv) any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, and (v) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company will make every reasonable effort to prevent the issuance of any such stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment. (c) At any time when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act in connection with sales of the Underwritten Securities, the Company will give you notice of its intention to file or prepare any amendment to the Registration Statement or any amendment or supplement to the Prospectus, whether pursuant to the 1933 Act, 1934 Act or otherwise, (including any revised Prospectus which the Company proposes for use by the Underwriters in connection with an offering of Underwritten Securities which differs from the Prospectus on file at the Commission at the time the Registration Statement first becomes effective, whether or not such revised Prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of the 1933 Act Regulations) and will furnish you with copies of any such amendment or supplement a reasonable amount of time prior to such proposed filing or preparation, as the case may be, and will not file or prepare any such amendment or supplement or other documents in a form to which you or counsel for the Underwriters shall reasonably object. (d) The Company will deliver to each Underwriter as many signed and conformed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) as such Underwriter reasonably requests. (e) The Company will furnish to each Underwriter, from time to time during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act in connection with sales of the Underwritten Securities, such number of copies of 17 the Prospectus (as amended or supplemented) as such Underwriter may reasonably request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations. (f) If at any time when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act in connection with sales of the Underwritten Securities any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or counsel for the Company, to amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of either such counsel, at any such time to amend or supplement the Registration Statement or the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, then the Company will promptly prepare and file with the Commission such amendment or supplement, whether by filing documents pursuant to the 1933 Act, the 1934 Act or otherwise, as may be necessary to correct such untrue statement or omission or to make the Registration Statement and Prospectus comply, in the opinion of Counsel to the Underwriters, with such requirements, and the Company will furnish to the Underwriters a reasonable number of copies of such amendment or supplement. (g) The Company will endeavor, in cooperation with the Underwriters, to qualify the Underwritten Securities for offering and sale under the applicable securities laws and real estate syndication laws of such states and other jurisdictions of the United States as you may designate; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction where it is not so qualified. In each jurisdiction in which the Underwritten Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for so long as may be required for the distribution of the Underwritten Securities; provided, however, that the Company shall not be obligated to qualify as a foreign corporation in any jurisdiction where it is not so qualified. (h) With respect to each sale of Underwritten Securities, the Company will make generally available to its security holders as soon as practicable, but not later than 60 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 of the 1933 Act Regulations) covering a twelve month period beginning not later than the first day of the Company's fiscal quarter next following 18 the "effective date" (as defined in such Rule 158) of the Regis- tration Statement. (i) The Company will use its best efforts to meet the requirements to qualify as a "real estate investment trust" under the Code for the taxable year in which sales of the Underwritten Securities are to occur. (j) The Company will use the net proceeds received by it from the sale of the Underwritten Securities in the manner specified in the Prospectus under the caption "Use of Proceeds." (k) The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act in connection with sales of the Underwritten Securities, will file all documents required to be filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time periods prescribed by the 1934 Act and the 1934 Act Regulations. (l) Neither the Company nor the Operating Partnership will, during a period of 90 days from the date of the applicable Terms Agreement, with respect to the Underwritten Securities covered thereby, without your prior written consent, directly or indirectly, sell, offer to sell, grant any option for the sale of, or otherwise dispose of, any of the Company's or the Operating Partnership's equity securities (other than the Underwritten Securities which are to be sold pursuant to such Terms Agreement) or any securities convertible into or exchangeable into or exercisable for equity securities of either the Company or the Operating Partnership, except in accordance with this Agreement, pursuant to a dividend reinvestment plan, pursuant to employee or director stock option plans, or as partial or full payment for properties to be acquired by the Operating Partnership. (m) If applicable, the Company will use its best efforts to list the shares of Common Stock on the New York Stock Exchange or such other national exchange on which the Company's shares of Common Stock are then listed. Section 4. Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement or the applicable Terms Agreement, including (i) the printing and filing of the Registration Statement as originally filed and of each amendment thereto, (ii) the cost of reproducing and distributing to you copies of this Agreement and the applicable Terms Agreement, (iii) the preparation, issuance and delivery of the Underwritten Securities to the Underwriters, (iv) the fees and disbursements of the Company's counsel and accountants, (v) the qualification of the Underwritten Securities under securities laws and real estate syndication laws in accordance with the provisions of Section 3(g), including filing 19 fees and the fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey, (vi) the printing, reproduction and delivery to the Underwriters copies of the Blue Sky Survey, (vii) the printing and delivery to the Underwriters of copies of the Registration Statement as originally filed and of each amendment thereto, each preliminary prospectus and of the Prospectus and any amendments or supplements thereto, (viii) any fees charged by nationally recognized statistical rating organizations for the rating of the Securities, (ix) the fees and expenses, if any, incurred with respect to the listing of the Underwritten Securities on any national securities exchange, and (x) the fees and expenses, if any, incurred with respect to any filing with the National Association of Securities Dealers, Inc. If the applicable Terms Agreement is terminated by you in accordance with the provisions of Section 5, Section 9(b)(i) or 9(b)(ii), the Company shall reimburse the Underwriters named in such Terms Agreement for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters. Section 5. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase Underwritten Securities pursuant to the applicable Terms Agreement are subject to the accuracy of the representations and warranties of the Company and the Operating Partnership herein contained, the performance by each of the Company and the Operating Partnership of all of its covenants and other obligations hereunder, and to the following further conditions: (a) At Closing Time, (i) no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission, and (ii) there shall not have come to your attention any facts that would cause you to believe that the Prospectus, together with the applicable Prospectus Supplement, at the time it was required to be delivered to purchasers of the Underwritten Securities, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at such time, not misleading. (b) At Closing Time, you shall have received: (1) The favorable opinion, dated as of Closing Time, of Goodwin, Procter & Hoar, LLP, counsel for the Company and the Operating Partnership, in form and substance satisfactory to counsel for the Underwriters, to the effect that: 20 (i) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Maryland. (ii) The Operating Partnership has been duly formed and is validly existing as a limited partnership in good standing under the laws of the State of Delaware. All of the issued and outstanding partnership interests of the Operating Partnership have been duly authorized and validly issued to the Company and the entities or persons described in the Prospectus and are fully paid. The Company is the sole general partner of the Operating Partnership. (iii) Each subsidiary of the Operating Partnership has been duly organized and is validly existing as a partnership or corporation, as the case may be, in good standing under the laws of its state of organization. (iv) Each of the Company, the Operating Partnership and its subsidiaries has full corporate or partnership power and authority, as the case may be, to own, lease and operate its properties and to conduct its respective business as described in the Prospectus. (v) Each of the Company, the Operating Partnership and its subsidiaries, respectively, is duly qualified or registered as a foreign corporation or partnership, as the case may be, to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise. (vi) The authorized issued and outstanding capital stock of the Company is as set forth in the Prospectus under "Capitalization" (as of the date set forth therein) and such stock has been duly authorized, validly issued, fully paid and non-assessable. (vii) Each of this Agreement and the applicable Terms Agreement has been duly authorized, executed and delivered by the Company. (viii) This Agreement has been duly authorized, executed and delivered by the Operating Partnership. 21 (ix) The Underwritten Securities being sold pursuant to this Agreement and the applicable Terms Agreement have been duly authorized for issuance and sale pursuant to this Agreement and such Terms Agreement; and such Underwritten Securities, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth in such Terms Agreement or any Delayed Delivery Contract, will be validly issued, fully paid and non-assessable, and the issuance of such Underwritten Securities will not be subject to preemptive or other similar rights arising out of the operation of law or, to their knowledge, otherwise. (x) The Registration Statement has been declared effective under the 1933 Act and, to the best of their knowledge and information, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act or proceedings therefor initiated or threatened by the Commission. (xi) The Registration Statement and the Prospectus, excluding the documents incorporated by reference therein, as of their respective effective or issue dates, comply as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations; it being understood, however, that no opinion need be rendered with respect to the financial statements, schedules and other financial and statistical data included or incorporated by reference in the Registration Statement or the Prospectus. If applicable, the Rule 434 Prospectus conforms to the requirements of Rule 434 under the 1933 Act Regulations. (xii) Each document filed pursuant to the 1934 Act (other than the financial statements, schedules and other financial and statistical data included therein, as to which no opinion need be rendered) and incorporated or deemed to be incorporated by reference in the Prospectus complied when so filed as to form in all material respects with the 1934 Act and the 1934 Act Regulations. (xiii) To their knowledge, no authorization, approval or consent of any court or governmental authority or agency is required that has not been obtained in connection with the consummation by the Company, the Operating Partnership or any of its subsidiaries of the transactions contemplated by this Agreement and the applicable Terms Agreement except such as may be required under the 1933 Act, the 1934 22 Act and state securities laws or real estate syndication laws. (xiv) None of the Company, the Operating Partnership or any of its subsidiaries is required to be registered under the Investment Company Act of 1940. [(xv) To the best of such counsel's knowledge (A) the following is a complete list of registration rights agreements entered into by the Company: (1) agreement dated May 26, 1994 with Crystal Holdings Corporation; (2) agreement dated May 26, 1994 with SKW Real Estate Limited Partnership; (3) agreement dated May 26, 1994 with Richard L. Friedman and John L. Hall II; (4) agreement dated May 26, 1994 with certain holders of Units; and (5) agreement dated October 27, 1994 with Wellesley Office Realty Corp. and Federal 175 Realty Corp. (B) no persons have exercised registration or other similar rights to have any securities registered pursuant to the Registration Statement.] (xvi) The Company has been organized in conformity with the requirements for qualifications as a REIT under the Code and the Company's method of operation will enable it to meet the requirements for taxation as a REIT under the Code assuming it makes a timely election to be taxed as a REIT with respect to years ended December 31, 1994 and thereafter. (xvii) The Underwritten Securities conform in all material respects to the statements relating thereto contained in the Prospectus and the form of certificate used to evidence the Underwritten Securities is in due and proper form and complies in all material respects with all applicable statutory requirements. (xviii) The statements set forth in the Prospectus under the captions "Description of Preferred Stock," "Description of Common Stock," "Restrictions on Transfers of Capital Stock" and "Federal Income Tax Considerations", to the extent such statements constitute matters of law, or legal conclusions, have been reviewed by them and are correct in all material respects. (2) The favorable opinion, dated as of Closing Time, of Goulston & Storrs, special counsel for the Company and the Operating Partnership, in form and substance satisfactory to counsel for the Underwriters, to the effect that: 23 (i) To the best of their knowledge, there are no legal or governmental proceedings pending or threatened against the Company, the Operating Partnership or any of its subsidiaries which are required to be disclosed in the Prospectus, other than those disclosed therein, and all pending legal or governmental proceedings to which the Company, the Operating Partnership or any of its subsidiaries is a party or of which any of the Properties or assets of the Company, the Operating Partnership or any of its subsidiaries is the subject which are not described in the Prospectus, including ordinary routine litigation incidental to the business, are, considered in the aggregate, not material. (ii) To the best of their knowledge, there are no contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Registration Statement or the Prospectus or to be filed as exhibits thereto other than those described or referred to therein or filed as exhibits thereto other than those described or referred to therein or filed as exhibits thereto and the descriptions thereof or references thereto are correct in all material respects, and, to the best of their knowledge and information, no default exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument so described, referred to or filed. (iii) The execution and delivery of this Agreement and the applicable Terms Agreement and the consummation of the transactions contemplated herein and therein and compliance by each of the Company, the Operating Partnership or any of its subsidiaries with its obligations hereunder and thereunder will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any Property or assets of the Company, the Operating Partnership or any of its subsidiaries pursuant to any contract, indenture, mortgage, loan agreement, to which the Company, the Operating Partnership or any of its subsidiaries is a party or by which it or any of them may be bound or to which any of the Properties or assets of the Company, the Operating Partnership or any of its subsidiaries is subject, nor will such action result in violation of the provisions of the charter, by-laws, agreement of limited partnership or other organizational documents of the Company, the Operating Partnership or any of its 24 subsidiaries or any applicable law, administrative regulation or administrative or court order or decree. (3) The favorable opinion, dated as of Closing Time, of Brown & Wood LLP, counsel for the Underwriters, with respect to the matters set forth in (i), (vii) to (xiii), inclusive and (xix), of subsection (b)(1). (4) In giving their opinions required by subsections (b)(1), (b)(2) and (b)(3), respectively, of this Section, Goodwin, Procter & Hoar, LLP, Goulston & Storrs and Brown & Wood LLP shall each additionally state that nothing has come to their attention that would lead them to believe that the Registration Statement or any amendment thereto, (except for financial statements and schedules and other financial and statistical data, as to which counsel need make no statement) at the time it became effective (or, if an amendment to the Registration Statement or an Annual Report on Form 10-K has been filed by the Company with the Commission, subsequent to the effectiveness of the Registration Statement, then at the time such amendment becomes effective or at the time of the most recent filing of such Annual Report, as the case may be) or at the Representation Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading or that the Prospectus or any amendment or supplement thereto, (except for financial statements and schedules and other financial and statistical data, as to which such counsel need make no statement) at the Representation Date or at Closing Time, included or includes an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. In giving their opinions required by subsections (b)(1), (b)(2) and (b)(3), respectively, of this Section, Goodwin, Procter & Hoar, LLP, Goulston & Storrs and Brown & Wood LLP may rely, (1) as to all matters of fact, upon certificates and written statements of officers and employees of and accountants for the Company and Operating Partnership, (2) with respect to certain other matters, upon certificates of appropriate government officials in such jurisdiction, and (3) Brown & Wood LLP may additionally rely, as to matters involving the laws of the State of Maryland, upon the opinion of Goodwin, Procter & Hoar, LLP (or other counsel reasonably satisfactory to counsel for the Underwriters) in form and substance satisfactory to counsel for the Underwriters. (c) At Closing Time, there shall not have been, since the date of the applicable Terms Agreement or since the respective dates 25 as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise, or the Properties, collectively, whether or not arising in the ordinary course of business, from that set forth in the Prospectus; no proceedings shall be pending or, to the knowledge of the Company or Operating Partnership, threatened against the Company, the Operating Partnership or any of its subsidiaries or any of the Properties before or by any Federal, state or other commission, board or administrative agency wherein an unfavorable decision, ruling or finding would materially and adversely affect the business, property, financial condition or income of the Company, the Operating Partnership and its subsidiaries considered as one enterprise or the Properties, collectively, other than as set forth in the Prospectus or incorporated therein by reference; and you shall have received a certificate of the President and Chief Executive Officer and of the Chief Financial Officer of the Company in such capacity, and of the general partner of the Operating Partnership, dated as of such Closing Time, to the effect that (i) there has been no such material adverse change and (ii) the representations and warranties in Section 1 are true and correct with the same force and effect as though such Closing Time were a Representation Date. As used in this Section 5(c), the term "Prospectus" means the Prospectus in the form first used to confirm sales of the Underwritten Securities. (d) At the time of execution of the applicable Terms Agreement, you shall have received a letter dated such date from Coopers & Lybrand L.L.P., in form and substance satisfactory to you, to the effect that (i) they are independent public accountants with respect to the Company and the Predecessor within the meaning of the 1933 Act and the 1933 Act Regulations thereunder; (ii) it is their opinion that the financial statements and financial statement schedules included or incorporated by reference in the Registration Statement and the Prospectus and covered by their opinions therein comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations; (iii) they have performed limited procedures, not constituting an audit, including a reading of the latest available interim financial statements of the Company, a reading of the minute books of the Company, inquiries of officials of the Company who have responsibility for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, and on the basis of such limited review and procedures (which shall include, without limitation, the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in SAS No. 71, Interim Financial Information, with respect to the unaudited condensed consolidated financial 26 statement of the Company and its subsidiaries included or incorporated by reference in the Registration Statement), nothing has come to their attention which causes them to believe (A) that any material modifications should be made to the unaudited condensed financial statements of the Company included in the Registration Statement for them to be in conformity with generally accepted accounting principles or that such unaudited financial statements do not comply as to form in all material respects with the applicable accounting requirements of the 1934 Act and the 1934 Act Regulations, (B) the unaudited financial data of the Company included or incorporated by reference in the Registration Statement and the Prospectus under the caption "Selected Financial Information" was not determined on a basis substantially consistent with that used in determining the corresponding amounts in the audited financial statements included or incorporated by reference in the Registration Statement and the Prospectus, (C) the pro forma financial information included or incorporated by reference in the Registration Statement was not prepared in accordance with the requirements of the 1933 Act and the 1933 Act Regulations or that the pro forma financial information included in or incorporated by reference in the Registration Statement and the Prospectus has not been properly applied to the historical amounts in the compilation of those statements, and (D) at a specified date not more than three days prior to the date of the applicable Terms Agreement, there has been any change in the capital stock of the Company or any increase in the debt of the Company or any decrease in the net assets of the Company, as compared with the amounts shown in the most recent consolidated balance sheet included or incorporated by reference in the Registration Statement and the Prospectus or, during the period from the date of the most recent consolidated statement of operations included or incorporated by reference in the Registration Statement and the Prospectus to a specified date not more than three days prior to the date of the applicable Terms Agreement, there were any decreases, as compared with the corresponding period in the preceding year, in consolidated revenues, operating income, funds from operations, net income or net income per share of the Company, except in all instances for changes, increases or decreases which the Registration Statement and the Prospectus disclose have occurred or may occur; and (iv) in addition to the examination referred to in their opinion and the limited procedures referred to in clause (iii) above, they have carried out certain specified procedures, not constituting an audit, with respect to certain amounts, percentages and financial information which are included or incorporated by reference in the Registration Statement and Prospectus and which are specified by you, and have found such amounts, percentages and financial information to be in agreement with the relevant accounting, financial and other records of the Company identified in such letter. 27 (e) At Closing Time, you shall have received a letter, dated as of Closing Time, from Coopers & Lybrand L.L.P. to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (d) of this Section, except that the "specified date" referred to shall be a date not more than three days prior to such Closing Time. (f) At the time of the execution of the applicable Terms Agreement, you shall have received a letter dated such date from such independent accountants that have prepared historical financial statements included in or incorporated by reference into the Registration Statement and Prospectus which financial statements relate to properties or assets acquired or to be acquired by the Company, in form and substance satisfactory to the Underwriters, to the effect that (i) they are independent accountants with respect to the Company and such properties or assets within the meaning of the 1933 Act and the 1933 Act Regulations; and (ii) it is their opinion that the historical financial statements for such properties or assets that have been audited by them and covered by their opinions included or incorporated by reference into the Registration Statement and the Prospectus comply in form in all material respects with the applicable accounting requirements of the 1933 Act and the 1933 Act Regulations. (g) At Closing Time, counsel for the Underwriters shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the issuance and sale of the Underwritten Securities as herein contemplated and related proceedings, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Underwritten Securities, as herein contemplated shall be reasonably satisfactory in form and substance to you and counsel for the Underwriters. (h) In the event that the Underwriters exercise their option provided in a Terms Agreement as set forth in Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company and the Operating Partnership contained herein and the statements in any certificates furnished by the Company and the Operating Partnership hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, you shall have received: (1) A certificate, dated such Date of Delivery, of the President and Chief Executive Officer or a Vice President of the Company and of the chief financial or chief accounting officer of the Company on behalf of the Company and on behalf of the Company in its capacity as general partner of 28 the Operating Partnership confirming that the certificate delivered at the Closing Time pursuant to Section 5(c) hereof remains true and correct as of such Date of Delivery. (2) The favorable opinion of Goodwin, Procter & Hoar, LLP, counsel for the Company and the Operating Partnership, in form and substance reasonably satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Sections 5(b)(1) and 5(b)(4) hereof. (3) The favorable opinion of Goulston & Storrs special counsel for the Company and the Operating Partnership in form and substance reasonably satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Shares and otherwise to the same extent as the opinion required by Sections 5(b)(2) and 5(b)(4) hereof. (4) The favorable opinion of Brown & Wood LLP, counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Sections 5(b)(3) and 5(b)(4) hereof. (5) A letter from Coopers & Lybrand L.L.P., in form and substance satisfactory to you and dated such Date of Delivery, substantially the same in scope and substance as the letter furnished to you pursuant to Section 5(d) hereof, except that the "specified date" in the letter furnished pursuant to this Section 5(h)(5) shall be a date not more than three days prior to such Date of Delivery. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, the applicable Terms Agreement may be terminated by you by notice to the Company at any time at or prior to the Closing Time or Date of Delivery, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 hereof. Section 6. Indemnification. (a) The Company and the Operating Partnership, jointly and severally, hereby agree to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act as follows: (1) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be 29 part of the Registration Statement pursuant to Rule 430A(b) or Rule 434 of the 1933 Act Regulations, if applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto) or the omission, or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (2) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the indemnifying party; and (3) against any and all expense whatsoever (including, the reasonable fees and disbursements of counsel chosen by you) reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceedings by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (1) or (2) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through you expressly for use in the Registration Statement (or any amendment thereto) and the Prospectus (or any amendment or supplement thereto); and provided, further, that neither the Company nor the Operating Partnership will be liable to any Underwriter or any person controlling such Underwriter with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus which is corrected in the Prospectus (or any amendment or supplement thereto) if the Company or the Operating Partnership sustains the burden of proving that such Underwriter sold Underwritten Securities to the person asserting any such loss, claim, damage or liability without sending or giving, at or prior to the written confirmation of the sale of such Underwritten Securities to such person, a copy of the Prospectus (or any 30 amendment or supplement thereto), if the Company had previously furnished copies thereof to such Underwriter. (b) Each Underwriter severally agrees to indemnify and hold harmless the Company and the Operating Partnership, the directors, each of the officers who signed the Registration Statement and each person, if any, who controls the Company or the Operating Partnership within the meaning of Section 15 of the 1933 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through you expressly for use in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto). (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability which it may have otherwise than on account of this indemnity agreement. An indemnifying party may participate at its own expense in the defense of such action. If it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume the defense of such action with counsel chosen by it and approved by the indemnified parties defendant in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them which are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. (d) For purposes of this Section 6, all references to the Registration Statement, any preliminary prospectus or the Prospectus, or any amendment or supplement to any of the foregoing, shall be deemed to include, without limitation, any electronically transmitted copies thereof, including, without 31 limitation, any copies filed with the Commission pursuant to EDGAR. Section 7. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 6 is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms, the Company, the Operating Partnership and the Underwriters with respect to the offering of the Underwritten Securities shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company, the Operating Partnership and one or more of the Underwriters in respect of such offering, as incurred, in such proportions that the Underwriters are responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus in respect of such offering bears to the initial public offering price appearing thereon and the Company and the Operating Partnership are responsible for the balance; provided, however, that no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Underwritten Securities purchased by it pursuant to the applicable Terms Agreement and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay in respect of such losses, liabilities, claims, damages and expenses. For purposes of this Section, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company or the Operating Partnership within the meaning of Section 15 of the 1933 Act shall have the same rights to contribution as the Company and the Operating Partnership, respectively. The Underwriter's obligations to contribute pursuant to this Section 7 are several in proportion to their respective underwriting commitments and not joint. For purposes of this Section 7, the Company, the Operating Partnership and its subsidiaries shall be deemed one party jointly and severally liable for any obligations hereunder. 32 Section 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or the applicable Terms Agreement, or contained in certificates of officers of the Company and the Operating Partnership submitted pursuant hereto, shall remain operative and in full force and effect, regardless of any termination of this Agreement or the applicable Terms Agreement, or investigation made by or on behalf of any Underwriter or any controlling person, or by or on behalf of the Company or the Operating Partnership, and shall survive delivery of and payment for the Underwritten Securities. Section 9. Termination of Agreement. (a) This Agreement (excluding the applicable Terms Agreement) may be terminated for any reason at any time by the Company, the Operating Partnership or by you upon the giving of 30 days' written notice of such termination to the other parties hereto. (b) You may also terminate the applicable Terms Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been, since the date of such Terms Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company, the Operating Partnership and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or any outbreak of hostilities or escalation thereof or other calamity or crisis the effect of which on the financial markets of the United States is such as to make it, in your judgment, impracticable to market the Underwritten Securities or enforce contracts for the sale of the Underwritten Securities, or (iii) if trading in any of the securities of the Company has been suspended or limited by the Commission, or the New York Stock Exchange, or if trading generally on either the New York Stock Exchange or the American Stock Exchange has been suspended, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required, by either of said exchanges or by order of the Commission or any other governmental authority, or if a banking moratorium has been declared by Federal or New York authorities. As used in this Section 9(b), the term "Prospectus" means the Prospectus in the form first used to confirm sales of the Underwritten Securities. (c) In the event of any such termination, (x) the covenants set forth in Section 3 with respect to any offering of Underwritten Securities shall remain in effect so long as any Underwriter owns any such Underwritten Securities purchased from the Company pursuant to the applicable Terms Agreement and (y) the covenant set forth in Section 3(h) hereof, the provisions of 33 Section 4 hereof, the indemnity and contribution agreements set forth in Sections 6 and 7 hereof, and the provisions of Sections 8 and 13 hereof shall remain in effect. Section 10. Default by One or More of the Underwriters. If one or more of the Underwriters shall fail at the Closing Time to purchase the Underwritten Securities which it or they are obligated to purchase under the applicable Terms Agreement (the "Defaulted Securities"), then you shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, you shall not have completed such arrangements within such 24-hour period, then: (a) if the total number of Defaulted Securities does not exceed 10% of the total number of Underwritten Securities to be purchased pursuant to such Terms Agreement, the non-defaulting Underwriters named in such Terms Agreement shall be obligated, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or (b) if the total number of Defaulted Securities exceeds 10% of the total number of Underwritten Securities to be purchased pursuant to such Terms Agreement, the applicable Terms Agreement shall terminate without liability on the part of any non-defaulting Underwriter. No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default under this Agreement and the applicable Terms Agreement. In the event of any such default which does not result in a termination of the applicable Terms Agreement, either you or the Company shall have the right to postpone the Closing Time for a period not exceeding seven days in order to effect any required changes in the Registration Statement or the Prospectus or in any other documents or arrangements. Section 11. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed c/o Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Merrill Lynch World Headquarters, North Tower, World Financial Center, New York, New York 10281-1305, attention of John Brady, Managing Director; and notices to the Company and the Operating Partnership shall be directed to them at Beacon Properties Corporation, 50 Rowes Wharf, Boston, Massachusetts 02110, attention of Alan M. Leventhal, President. 34 Section 12. Parties. This Agreement and the applicable Terms Agreement shall each inure to the benefit of and be binding upon you and the Company, the Operating Partnership and any Underwriter who becomes a party to such Terms Agreement, and their respective successors. Nothing expressed or mentioned in this Agreement or the applicable Terms Agreement is intended or shall be construed to give any person, firm or corporation, other than those referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or such Terms Agreement or any provision herein or therein contained. This Agreement and the applicable Terms Agreement and all conditions and provisions hereof and thereof are intended to be for the sole and exclusive benefit of the parties hereto and thereto and their respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Underwritten Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. Section 13. Governing Law and Time. This Agreement and the applicable Terms Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in said State. Specified times of day refer to New York City time. Section 14. Counterparts. This Agreement and the applicable Terms Agreement may be executed in one or more counterparts, and if executed in more than one counterpart the executed counterparts shall constitute a single instrument. 35 If the foregoing is in accordance with your understanding of our agreement, please sign and return to us a counterpart hereof, whereupon this instrument, along with all counterparts will become a binding agreement between you, the Company and the Operating Partnership in accordance with its terms. Very truly yours, BEACON PROPERTIES L.P. By: ------------------------------------ Name: Alan M. Leventhal Title: President BEACON PROPERTIES CORPORATION By: Beacon Properties Corporation (its general partner) By: ----------------------------------- Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: -------------------------- Authorized Signatory 36 Exhibit A BEACON PROPERTIES CORPORATION (a Maryland Corporation) [Title of Securities] TERMS AGREEMENT Dated: , 199_ To: BEACON PROPERTIES CORPORATION 50 Rowes Wharf Boston, Massachusetts 02110 Attention: Chairman of the Board of Directors Dear Sirs: We (the "Representative") understand that Beacon Properties Corporation, a Maryland corporation (the "Company"), proposes to issue and sell the number of shares of its Common Stock, $.01 par value (such Common Stock being hereinafter referred to as the "Underwritten Securities"). Subject to the terms and conditions set forth or incorporated by reference herein, the underwriters named below (the "Underwriters") offer to purchase, severally and not jointly, the respective numbers of Initial Underwritten Securities (as defined in the Underwriting Agreement referenced to below) set forth below opposite their respective names, and a proportionate share of Option Securities (as defined in the Underwriting Agreement referred to below) to the extent any are purchased) at the purchase price set forth below. A-1 Number of Shares of Initial Underwritten Securities Underwriter Merrill Lynch, Pierce, Fenner & Smith Incorporated ---------- ---------- Total $ ========== A-2 The Underwritten Securities shall have the following terms: Title of Securities: Number of Shares: Public offering price per share: $ Purchase price per share: $ Number of Option Securities, if any, that may be purchased by the Underwriters: Delayed Delivery Contracts: [authorized] [not authorized] [Date of Delivery: Minimum Contract: Maximum number of Shares: Fee: ] Additional co-managers, if any: Other terms: Closing date and location: All the provisions contained in the document attached as Annex A hereto entitled "Beacon Properties Corporation - Common Stock - Underwriting Agreement" are hereby incorporated by reference in their entirety herein and shall be deemed to be a part of this Terms Agreement to the same extent as if such provisions had been set forth in full herein. Terms defined in such document are used herein as therein defined. A-3 Please accept this offer no later than o'clock P.M. (New York City time) on by signing a copy of this Terms Agreement in the space set forth below and returning the signed copy to us. Very truly yours, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By ----------------------------------------- Acting on behalf of itself and the other named Underwriters. Accepted: BEACON PROPERTIES CORPORATION By --------------------------------- Name: Title: A-4 Exhibit B BEACON PROPERTIES CORPORATION (a Maryland corporation) [Title of Securities] DELAYED DELIVERY CONTRACT , 199_ Beacon Properties Corporation 50 Rowes Wharf Boston, Massachusetts 02110 Attention: Chairman of the Board of Directors Dear Sirs: The undersigned hereby agrees to purchase from Beacon Properties Corporation (the "Company"), and the Company agrees to sell to the undersigned on __________, 19__ (the "Delivery Date"), of the Company's [insert title of security] (the "Securities"), offered by the Company's Prospectus dated __________, 19__, as supplemented by its Prospectus Supplement dated ___________, 19__, receipt of which is hereby acknowledged at a purchase price of [$__________] to the Delivery Date, and on the further terms and conditions set forth in this contract. Payment for the Securities which the undersigned has agreed to purchase on the Delivery Date shall be made to the Company or its order by certified or official bank check in New York Clearing House funds at the office of , on the Delivery Date, upon delivery to the undersigned of the Securities to be purchased by the undersigned in definitive form and in such denominations and registered in such names as the undersigned may designate by written or telegraphic communication addressed to the Company not less than five full business days prior to the Delivery Date. The obligation of the undersigned to take delivery of and make payment for Securities on the Delivery Date shall be subject only to the conditions that (1) the purchase of Securities to be B-1 made by the undersigned shall not on the Delivery Date be prohibited under the laws of the jurisdiction to which the undersigned is subject and (2) the Company, on or before __________, 19__, shall have sold to the Underwriters of the Securities (the "Underwriters") such principal amount of the Securities as is to be sold to them pursuant to the Terms Agreement dated __________, 19__ between the Company and the Underwriters. The obligation of the undersigned to take delivery of and make payment for Securities shall not be affected by the failure of any purchaser to take delivery of and make payments for Securities pursuant to other contracts similar to this contract. The undersigned represents and warrants to you that its investment in the Securities is not, as of the date hereof, prohibited under the laws of any jurisdiction to which the undersigned is subject and which govern such investment. Promptly after completion of the sale to the Underwriters, the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the opinion of counsel for the Company delivered to the Underwriters in connection therewith. By the execution hereof, the undersigned represents and warrants to the Company that all necessary corporate action for the due execution and delivery of this contract and the payment for and purchase of the Securities has been taken by it and no further authorization or approval of any governmental or other regulatory authority is required for such execution, delivery, payment or purchase, and that, upon acceptance hereof by the Company and mailing or delivery of a copy as provided below, this contract will constitute a valid and binding agreement of the undersigned in accordance with its terms. This contract will inure to the benefit of and binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. It is understood that the Company will not accept Delayed Delivery Contracts for a number of Securities in excess of ________ and that the acceptance of any Delayed Delivery Contract is in the Company's sole discretion and, without limiting the foregoing, need not be on a first-come, first-served basis. If this contract is acceptable to the Company, it is requested that the Company sign the form of acceptance on a copy hereof and mail or deliver a signed copy hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned when such copy is so mailed or delivered. B-2 This Agreement shall be governed by the laws of the State of New York. Yours very truly, ----------------------------- (Name of Purchaser) By --------------------------- (Title) ----------------------------- ----------------------------- (Address) Accepted as of the date first above written. BEACON PROPERTIES CORPORATION By ----------------------------- (Title) PURCHASER-PLEASE COMPLETE AT TIME OF SIGNING The name and telephone number of the representative of the Purchaser with whom details of delivery on the Delivery Date may be discussed are as follows: (Please print.) Telephone No. (including Name Area Code) B-3 EX-2.1 3 PLAN OF ACQUISITION, REORGANIZATION, ETC. OPTION AGREEMENT This OPTION AGREEMENT (this "Agreement") is made as of the 18th day of March, 1996 between John Marshall Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Greensboro Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Woodland-Northridge I Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Pimpernell Estates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801 and Goodridge Drive Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, (the foregoing five (5) partnerships, individually or collectively, "Seller"), and Beacon Properties, L.P., a Delaware limited partnership, with an address of 50 Rowes Wharf, Boston, Massachusetts 02110 (together with its successors and assigns, "Buyer"). WITNESSETH: WHEREAS, Seller is the owner of the real property with the buildings and improvements located thereon in Fairfax County, Virginia, and commonly known as described in Exhibit A attached hereto and incorporated herein, together with any and all property, rights and easements related thereto, including, without limitation, all appurtenant rights in any offsite improvements or amenities servicing such real property, buildings and improvements (collectively, the "Premises"); WHEREAS, Seller desires to grant to Buyer, and Buyer desires to obtain, an irrevocable option to acquire the Premises; WHEREAS, Seller is the owner of the real property with the buildings and improvements located thereon in Fairfax County, Virginia, and more particularly described in Exhibit B attached hereto and incorporated herein, together with any and all property, rights and easements related thereto (collectively, the "Additional Option Premises"); WHEREAS, if Buyer acquires the Premises, Seller desires to grant to Buyer, and Buyer desires to obtain, an irrevocable option to acquire the Additional Option Premises; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, Seller and Buyer hereby agree as follows: 1. Grant and Exercise of Option. Seller hereby gives and grants to Buyer an irrevocable option to acquire the Premises (the "Option"), upon the terms, covenants, conditions and provisions set forth in this Agreement. The Option may be exercised by Buyer's giving written notice of Buyer's exercise to Seller within the period commencing on the thirtieth (30th) day from the date of this Agreement and ending on the sixtieth (60th) day from the date of this Agreement (the date on which the Option is exercised, the "Option Exercise Date"). The notice of exercise of the Option by Buyer shall be accompanied by, and the effective exercise of the Option shall be conditioned upon, delivery to Commonwealth Land Title Insurance Company (the "Title Company") of One and One Half Million Dollars ($1,500,000) (together with all interest earned thereon, the "Additional Deposit") to be held in escrow in accordance with terms of this Agreement and the Escrow Agreement dated the date hereof among the Title Company, Seller and Buyer (the "Escrow Agreement"). The notice of exercise of Option shall also set a day and hour (the "Closing Date"), not less than thirty (30) days nor more than sixty (60) days after the date such notice is given, for consummation of the conveyance of the Premises as contemplated by this Agreement (the "Closing"). The Closing shall occur at the offices of Shearman and Sterling, 801 Pennsylvania Avenue, N.W., Washington, D.C. 20004-2604, unless the parties shall agree in writing upon another place. Failure of Buyer to timely exercise the Option or to so deposit the Additional Deposit shall render the Option null and void and of no further force or effect. Time shall be of the essence of this Agreement. 2. Conveyance. At Closing, the Premises shall be conveyed to Buyer, as a contribution to the capital of Buyer, by good and sufficient special warranty deeds (collectively, the "Deeds") conveying good and clear record and marketable title to the Premises, free and clear of all restrictions, liens, encumbrances, rights, title and interest in others, whether or not of record, except for (i) real estate taxes for the then current fiscal year not due and payable on the date of delivery of the Deeds, (ii) any liens for municipal betterments assessed after the date hereof, (iii) rights of tenants under the Leases (as defined below), as tenants only in the case of all Leases other than the Leases to SAIC of the Premises known as SAIC I and the Additional Option Premises known as SAIC II, (iv) the Assumed Indebtedness, (v) such other exceptions as are of record as of the Option Exercise Date and which do not secure or evidence indebtedness or other amounts owing or claimed to be owing by Seller other than the Assumed Indebtedness, including, without limitation, those exceptions set forth on Exhibit M attached hereto and incorporated herein, and (vi) matters which are the direct responsibility of tenants under Leases (collectively, the "Permitted Encumbrances"). Seller agrees that, from and after the Option Exercise Date through and including the Closing Date (the "Interim Period"), there shall not be created, and Seller shall not permit or suffer to exist, any new restrictions, liens, encumbrances, rights, title or interests in others on all or any portion of the Premises, except for matters which are the direct responsibility of tenants under Leases. Any clauses included in this Agreement relating to the content of the Deeds, if omitted from the Deeds, shall be deemed to survive the Closing, and Seller will give appropriate confirmatory instruments to Buyer at any time or from time to time thereafter. The immediately preceding sentence shall survive the Closing. 2 3. Consideration. The total consideration (the "Consideration") to be delivered to Seller for the Deeds and conveyance shall consist of limited partner interests in Buyer ("OP Units") having a value, calculated as provided below, equal to (i) the sum of all "Values" set forth with respect to the Premises on Exhibit C attached hereto and incorporated herein, minus (ii) the sum of all "Assumed Indebtedness" set forth with respect to the Premises on Exhibit C (as reduced by regularly scheduled principal payments from the date of this Agreement through the Closing Date). For purposes of determining the number of OP Units to be delivered in satisfaction of payment of the Consideration, the Consideration shall be calculated on the basis of an "Average Price" equal to the average closing price on the NYSE of the common stock, $.01 par value, of Beacon Properties Corporation, the general partner of Buyer, for each trading day occurring during the thirty (30) consecutive calendar days commencing on the first (1st) business day immediately following the date of this Agreement. The number of OP Units to be issued in the name of each partnership comprising Seller shall be as set forth in a schedule to be prepared by Seller and provided to Buyer no later than fifteen (15) days prior to the Closing Date. Upon Closing, the Deposit shall be returned to Buyer, and Buyer shall assume, or on or after Closing repay, the outstanding balance of principal and interest on the Assumed Indebtedness, as Buyer so elects. Buyer agrees to pay to the holder of the Assumed Indebtedness on the John Marshall I Premises an amount not to exceed $215,171 on account of an assumption or prepayment fee relating to such Assumed Indebtedness, and if such prepayment or assumption fee is less than such amount, Buyer agrees to pay the legal fees, title fees and other closing costs required by the holder of such Assumed Indebtedness in connection with such prepayment or assumption to the extent such legal, title and other fees, when taken together with such prepayment fee, do not exceed in the aggregate $215,171. Buyer agrees to pay to the holder of the Assumed Indebtedness on the SAIC I Premises a prepayment or assumption fee not to exceed $1,400,000 on account of the prepayment or assumption of such Assumed Indebtedness, and if such prepayment or assumption fee is less than such amount, Buyer agrees to pay the legal fees, title fees and other closing costs required by the holder of such Assumed Indebtedness in connection with such prepayment or assumption to the extent such legal, title and other fees, when taken together with such prepayment fee, do not exceed in the aggregate $1,400,000. Seller agrees to pay all other prepayments, due on sale or assumption fees and similar amounts, if any, payable to holders of the Assumed Indebtedness in connection with the transfer of the Premises to Buyer subject to the Assumed Indebtedness and the assumption of the Assumed Indebtedness or the repayment of the Assumed Indebtedness in connection therewith and, except as provided above with respect to John Marshall I and SAIC I, Seller and Buyer each agree to pay fifty percent (50%) of all legal fees, title fees and other closing costs required by the holders of Assumed Indebtedness in connection with the assumption or prepayment thereof. Seller agrees to cooperate with Buyer in accomplishing the assumption or payoff of the Assumed Indebtedness, as elected by Buyer, including, without limitation, by using diligent efforts to obtain payoff letters, confirmations and other agreements reasonably requested by Buyer from the holders of the Assumed Indebtedness, in each case in form and substance reasonably satisfactory to Buyer. 3 4. Deposit. Simultaneously with the execution and delivery of this Agreement, Buyer shall deliver to the Title Company the amount of Five Hundred Thousand Dollars ($500,000.00) (together with all interest earned thereon, the "Initial Deposit"), to be held in escrow in accordance with the terms of this Agreement and the Escrow Agreement. The Initial Deposit and the Additional Deposit (collectively, the "Deposit") shall be held by the Title Company, as escrow agent, in a segregated, interest-bearing account at The First National Bank of Boston or other bank acceptable to Buyer and Seller and subject to and otherwise in accordance with the terms of this Agreement and the Escrow Agreement. The Deposit shall be delivered as provided in this Agreement and the Escrow Agreement. 5. Termination. Buyer shall have the right, in its sole discretion, to terminate this Agreement at any time on or before the Option Exercise Date. Additionally, Buyer shall have the right, in its sole discretion, at any time following any Event of Default (as hereinafter defined) under this Agreement, or upon the failure of any condition precedent to Buyer's obligations under this Agreement, to terminate this Agreement. Upon any such termination, the Deposit shall immediately be refunded to Buyer, and, except as provided below in this Section, the rights and obligations of each of the parties to this Agreement shall cease and terminate and none of such parties shall have further liability under this Agreement, except as otherwise expressly provided in this Agreement. Upon any termination of this Agreement by Buyer following (i) an Event of Default or (ii) failure of a condition precedent to Buyer's obligations under this Agreement due to any intentional act or omission (where Seller has an obligation or duty to act) of Seller, in addition to its right to receive the Deposit, Buyer shall retain all of its rights at law and in equity. "Event of Default" means any failure by Seller to perform any of its obligations under this Agreement, which failure has not been cured, subject to the terms of this Section below, on or before six (6) business days following delivery of written notice thereof by Buyer (the "Cure Date"). If the Cure Date would occur after the scheduled Closing Date, the Closing Date shall be extended, but only once, to the first (1st) business day following the Cure Date, and Buyer shall retain all of its rights under this Section with respect to the applicable Event of Default. This provision shall survive Closing or termination of this Agreement. 6. Buyer's Review. Buyer, its authorized representatives, its agents and its employees shall have the right to conduct any and all due diligence relative to the Premises as may be deemed necessary or appropriate by Buyer in its sole discretion. Without limiting the foregoing, Buyer shall have the right to request copies of any and all materials and documents relating to all or any portion of the Premises, including, without limitation, Leases, management agreements, service and other contracts, financial reports, Rent Rolls (as defined below), Permits (as defined below) and other similar or dissimilar materials. Seller shall promptly, and in any event within five (5) days of Buyer's request therefor, deliver or make available at the offices of The Evans Company in McLean, Virginia to Buyer true, correct and complete copies of any requested material in the possession of Seller or under Seller's control and all of Seller's other materials, files, books, records and information relating to the Premises, in each case to the extent such materials, files, books, records, and information are 4 not subject to confidentiality agreements prohibiting their disclosure to Buyer. Buyer shall have the right to photocopy any or all of such materials, files, books, records and information at Buyer's expense. Entry onto the Premises shall be subject to the terms of Section 7. Buyer shall have the right to interview tenants under Leases in the performance of its due diligence on the Premises. 7. Tests and Inspections. Seller hereby authorizes Buyer, its authorized representatives, its agents and its employees, subject to the rights of tenants under Leases, to enter upon the Premises from time to time and to perform such tests and inspections as Buyer deems necessary or appropriate in its sole discretion, including, without limitation, such soil boring and compacting tests, test well and water table, soil porosity and liquid absorption tests, other environmental inspections and tests, and engineering tests. Seller agrees to cooperate with Buyer and use reasonable efforts to obtain access for Buyer to all or any portion of the Premises requested by Buyer. Following such tests, Buyer shall restore the Premises to the condition they were in immediately prior to such tests. All expenses for such tests, inspections and restoration shall be the responsibility of Buyer. Any entry by Buyer onto the Premises in connection with its due diligence shall not unreasonably interfere with the rights of tenants under Leases. Buyer agrees to indemnify and hold Seller harmless from and against any and all loss or liability incurred by Seller on account of any bodily injury or property damage caused by Buyer in connection with such tests or inspections or restoration. This obligation to restore and indemnify shall survive the Closing or termination of this Agreement. 8. Estoppel Certificates and Subordination, Nondisturbance and Attornment Agreements. Upon Buyer's request at any time after the Option Exercise Date, Seller shall use diligent and good faith efforts to obtain from those tenants or other occupants of the Premises requested by Buyer estoppel certificates and subordination, nondisturbance and attornment agreements, in form and substance reasonably satisfactory to Buyer. It shall be a condition precedent to Buyer's obligations under this Agreement that Buyer shall have received, no later than ten (10) days prior to Closing, such estoppel certificates and subordination, nondisturbance and attornment agreements from all Major Tenants (as defined below) and tenants (which may include such Major Tenants) under Leases providing in the aggregate at least eighty-five percent (85%) of the gross rental income of the Premises (such Major Tenants and tenants, collectively, the "Required Tenants"), in each case which estoppel certificates shall be dated no more than thirty (30) days prior to Closing and which subordination, nondisturbance and attornment agreements shall be dated no more than forty five (45) days prior to Closing. "Major Tenants" means, collectively, Booz Allen Hamilton, Reed Smith, The Evans Company, Legg Mason, SAIC and U.S. Sprint. An estoppel certificate covering the items required under each Lease shall be deemed to be in form reasonably satisfactory to Buyer, subject, however, to the reasonable additional requirements of any lender to Buyer. Notwithstanding the foregoing, if Seller cannot obtain from SAIC or Legg Mason a tenant estoppel certificate which, in addition to the other foregoing requirements, meets the additional reasonable requirements of any lender to Buyer, 5 Seller shall have the right to provide an estoppel certificate executed by it in satisfaction of such additional reasonable requirements. 9. Partnership Agreement; Admission. Buyer represents and warrants to Seller that attached hereto as Exhibit D and incorporated herein is a true and complete copy of the limited partnership agreement of Buyer in effect as of the date of this Agreement (the "Partnership Agreement"). Upon Closing, the general partner of Buyer (i) shall consent to the admission of each partnership comprising Seller as a limited partner in Buyer and (ii) shall, upon execution and delivery by each such partnership of an amendment to the Partnership Agreement providing for the acceptance of the OP Units to be delivered to it pursuant to the terms of this Agreement and containing an agreement to be bound by all terms and conditions of the Partnership Agreement, the Schedule of "Nonrecourse Built-in Gain" referred to in Section 11 and a Schedule showing the "Value" of each Premises set forth in Exhibit C as the "704(c) Value" of such Premises for purposes of the Partnership Agreement, in form and substance reasonably satisfactory to Buyer (the "Amendment"), add the name of each such partnership as a limited partner to the books and records of Buyer. Buyer agrees that no other documentation shall be required to effect such admission pursuant to the Partnership Agreement, unless required by any Law (as hereinafter defined) or interpretation thereof becoming effective after the date hereof, and Buyer agrees to take the actions required of it pursuant to Section 4.4 of the Partnership Agreement in respect of the contribution to be made by Seller. The Amendment shall also provide that Buyer shall use any convention permitted by law and selected by the general partner of Buyer to make the allocations contemplated in Section 12.2(C) of the Partnership Agreement in respect of the conveyance to be made pursuant to this Agreement, except that capital gains and losses shall be allocated to the partners in accordance with their interests on the date of the transaction giving rise to the capital gain or loss, and shall use the traditional method (specified in Regulation ss.1.704-3(b)) to allocate book-tax differences with respect to the contribution of the Premises to Buyer. Buyer agrees not to amend the Partnership Agreement from the date of this Agreement through the Closing Date without the consent of Seller to the extent any such amendment would otherwise require Seller's consent if Seller were a limited partner in Buyer. The general partner of Buyer agrees not to amend its articles of incorporation in a manner which would materially, adversely affect the rights of Seller as limited partner in Buyer but not other holders of limited partnership interests in Buyer. The general partner of Buyer shall use good faith efforts to remain a REIT until the fifth (5th) anniversary of the Closing Date. This provision shall survive Closing. 10. Seller's Representations, Warranties and Certain Covenants. Each Seller represents and warrants to Buyer, but only with respect to its portion of the Premises, that the following matters are true on the date of this Agreement and, to the extent set forth below, shall be true on the Option Exercise Date and, unless otherwise expressly 6 indicated, shall, as a condition precedent to Buyer's obligations under this Agreement, be true as of the Closing Date and, unless actually known to be untrue by Buyer on the Option Exercise Date, deemed remade as of such dates, and each Seller covenants as follows: (a) Title. To the best of Seller's knowledge, Seller is the legal fee simple titleholder of the portion of the Premises set forth opposite its name in Exhibit A and has, and will on the Option Exercise Date have, good, marketable and insurable title to such portion of the Premises. The representation and warranty set forth in the immediately preceding sentence shall not survive the Closing. (b) Defaults. To the best of Seller's knowledge, except as set forth in Exhibit E, Seller is not in monetary or material nonmonetary default under any document, including, without limitation, any document executed in connection with any Assumed Indebtedness, recorded or unrecorded, encumbering or affecting its portion of the Premises, nor has Seller received any written notice alleging the existence of any such default. To the best of Seller's knowledge, except as set forth in Exhibit E, Seller is not in material default under any Permit, Law or other requirement applicable to or encumbering its portion of the Premises, nor has Seller received any written notice alleging the existence of any such default. To the extent Seller obtains a duly authorized and executed estoppel certificate meeting the requirements of Section 8 from a tenant under a Lease certifying that Seller is not in monetary or material nonmonetary default under its Lease, Seller shall not be deemed to remake as of the Closing Date, nor shall the same survive Closing, such portion of the representations and warranties contained in this item (b) as are so certified by such tenant. (c) Contracts; Continuing Obligations. Seller agrees to terminate prior to Closing, at its own expense, all management agreements, and service, maintenance and repair contracts affecting its portion of the Premises. There shall be no such agreements or other contractual obligations with respect to all or any portion of Seller's portion of the Premises that are binding on Buyer or Seller's portion of the Premises following Closing, other than the Leases, the Permitted Encumbrances, the Permits and other documents executed in connection with the foregoing, copies of all of which have been delivered, or made available in the offices of The Evans Company in McLean, Virginia, to Buyer in accordance with the terms of Section 6. (d) Physical Condition. Seller has no knowledge of any existing defect in any structural component or system of Seller's portion of the Premises (i) that would not be readily discoverable upon customary physical inspection and (ii) that would require the expenditure of more than $250,000 to permit the continued use, occupancy or operation of Seller's portion of the Premises consistent in all material respects with prior usage, occupancy or operations and in accordance in all material respects with all applicable Laws. (e) Compliance with Laws and Codes. Except as set forth in Exhibit E, Seller has not received any written notice containing allegations that (i) all or any portion of 7 Seller's portion of the Premises, or the use or operation of all or any portion of Seller's portion of the Premises, is not in compliance with any municipal and other governmental laws, ordinances, rules, regulations, codes, licenses, permits and authorizations (collectively, "Laws"), which noncompliance remains uncured, or that (ii) there are not presently and validly in effect all licenses, permits, approvals and other authorizations (collectively, "Permits") to be obtained by Seller that are necessary for the use, occupancy or operation of all or any portion of Seller's portion of the Premises as it is presently being used, occupied or operated or in accordance with all Laws. (f) Litigation. Except as set forth in Exhibit E, as of the date of this Agreement, there are no pending or, to the best of Seller's knowledge, threatened, judicial, municipal or administrative proceedings affecting Seller's portion of the Premises or in which Seller is or will be a party by reason of Seller's ownership or operation of Seller's portion of the Premises, including, without limitation, proceedings for or involving collections, tax relief, condemnation, eminent domain, alleged building code or environmental or zoning violations, or personal injuries or property damage alleged to have occurred on or at Seller's portion of the Premises or by reason of the condition, use of, or operations on Seller's portion of the Premises (any of the foregoing, "Litigation"), in each case the liability under which will not be fully covered by insurance proceeds which are available to Seller and that would, if determined adversely to Seller, materially adversely affect (i) the value of all or any portion of Seller's portion of the Premises, (ii) the ability of Buyer to use Seller's portion of Premises for the purposes for which it is being used on the date hereof or (iii) the ability of Seller to perform its obligations under this Agreement. No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings are pending, or to Seller's knowledge, threatened, against Seller, nor are any of such proceedings contemplated by Seller. (g) Financial Information. To the best of Seller's knowledge, all partnership tax returns delivered to Buyer by Seller are complete, accurate, true and correct in all material respects and in all material respects accurately set forth the results of the operation of Seller's property for the periods covered by such returns. (i) Re-Zoning. To the best of Seller's knowledge, as of the date of this Agreement, there is not pending or threatened any proceeding for the re-zoning of all or any portion of Seller's portion of the Premises. (j) Real Estate Taxes. The most recent real estate tax bills received by Seller for (and, to the best of Seller's knowledge, the only real estate tax bills applicable to) its portion of the Premises have been delivered to Buyer. 8 (k) Leases. (i) Seller's Rent Roll in Exhibit F (each, a "Rent Roll") lists all leases and other agreements for the use or occupancy of all or any portion of Seller's portion of the Premises, other than subleases, sub-subleases and assignments (all such leases and other agreements of all Sellers, collectively, the "Leases"). Seller's Rent Roll (as updated through the Option Exercise Date and Closing to reflect actions taken in according with Sections 12(a) and 12(b)) is true, complete and correct in all material respects. Seller has delivered, or made available, to Buyer in the offices of The Evans Company in McLean, Virginia, true, complete and correct copies of all Leases affecting its portion of the Premises. The subleases, sub-subleases and assignments set forth in Exhibit I attached hereto and incorporated herein are the only subleases, sub-subleases and assignments under or of Leases of which Seller has knowledge, and Seller has delivered to Buyer true and complete copies of such subleases, sub-subleases and assignments in Seller's possession. (ii) As of the date of this Agreement, each of the Leases affecting Seller's portion of the Premises is in full force and effect according to the terms set forth therein and, except as set forth in Seller's Rent Roll, has not been modified, amended or altered. As of the date of this Agreement, to the best of Seller's knowledge, each tenant under a Lease affecting Seller's portion of the Premises is legally required to pay all sums and perform all material obligations set forth in its respective Lease, without concessions, abatements, offsets or other basis for relief or adjustment. (iii) Except as set forth in Exhibit E, all material obligations of Seller under the Leases affecting Seller's portion of the Premises have been performed, and, to the best of Seller's knowledge, each tenant under each such Lease has unconditionally accepted Seller's performance of such obligations. As of the date of this Agreement, no tenant under a Lease affecting Seller's portion of the Premises has asserted any offset, defense or claim against rent payable by it or other performance of material obligations due from it under its Lease. (iv) As of the date of this Agreement, no tenant under a Lease affecting Seller's portion of the Premises is in default under any material provision of its Lease, and no such tenant is in arrears in the performance of any monetary obligation required of it under its Lease; (v) As of the date of this Agreement, Seller has received no written notice that any tenant under a Lease affecting Seller's portion of the Premises is insolvent or that any such tenant is unable to perform any or all of its material obligations under its Lease. 9 (vi) No amount payable by any tenant under any Lease affecting Seller's portion of the Premises has been prepaid for more than one (1) month in advance of the due date thereof under the Lease, except for any security deposits; (vii) Except as set forth on Exhibit G attached hereto and incorporated herein and except as disclosed to Buyer pursuant to Section 12(a), there are no written agreements with any real estate broker, leasing agent or other party, including, without limitation, The Evans Company or the current manager of Seller's portion of the Premises, that entitle or will entitle such real estate broker, agent or other party to any leasing or other brokerage commission or payment as a result of any Lease existing as of the date hereof or the exercise by any tenant under a Lease existing as of the date hereof affecting Seller's portion of the Premises of an option to extend or renew its Lease or expand its leased premises as such options exist as of the date of this Agreement in its Lease, other than deferred commissions due to The Evans Company in connection with Leases existing as of the date of this Agreement which will be paid by Seller on or before Closing; (viii) Each security deposit under a Lease affecting Seller's portion of the Premises, other than the security deposits listed in Exhibit H attached hereto and incorporated herein shall be assigned or credited to Buyer, as Buyer elects, at the Closing. The security deposits listed on Exhibit H have been applied or refunded by Seller in accordance with the terms of the Lease in connection with which they were made; (ix) Except for SAIC pursuant to its Lease affecting the portion of the Premises known as SAIC I (the "SAIC I Option") and for SAIC pursuant to its Lease affecting the portion of the Premises known as SAIC II (the "SAIC II Option"), no tenant under a Lease affecting Seller's portion of the Premises has any purchase option or right of first refusal to acquire all or any portion of Seller's portion of the Premises. To the best of Seller's knowledge, there are no outstanding requests from any tenant under a Lease requesting consent to any sublease, sub-sublease or assignment; and (x) As of the date of this Agreement, no material proceeding, suit or litigation relating to any or all of the Leases affecting Seller's portion of the Premises, is pending or, to the best of Seller's knowledge, threatened. (h) United States Person. Seller is a nonforeign person within the meaning of Section 1445(f)(3) of the Internal Revenue Code, as amended, and shall execute and deliver a nonforeign affidavit at Closing. (i) Bulk Sales. The sale of the Premises to Buyer hereunder is not subject to, and does not subject Buyer to, any liability for bulk sales obligation under applicable law. (j) Assumed Indebtedness. Seller is not in monetary or material nonmonetary default under, and, to Seller's knowledge, there has not occurred any event 10 which, with the giving of notice and/or the passage of time, or both would constitute a monetary or material nonmonetary default by Seller under, any document or instrument executed in connection with all or any portion of the Assumed Indebtedness. Seller will deliver, or make available at the offices of The Evans Company in McLean, Virginia, to Buyer true, complete and accurate copies of all of the documents evidencing, securing and otherwise executed in connection with all or any portion of the Assumed Indebtedness in accordance with the terms of Section 6. (k) Disclosure. No representation or warranty made by Seller in this Agreement and no Exhibit attached hereto with respect to Seller's portion of the Premises contains any untrue statement of a material fact. Seller has made available to Buyer in accordance with the terms of Section 6 at the offices of The Evans Company in McLean, Virginia all of its files, books and records relating to all or any portion of the Premises. (l) Sale. Seller hereby represents that it is presently in possession of its portion of the Premises, as owner, and that there are no contractual obligations, other than the SAIC I Option, the SAIC II Option and the matters set forth in Exhibit E, which would prevent Seller from selling its portion of the Premises subject only to the Permitted Encumbrances and Leases or from otherwise complying with the terms of this Agreement. (m) OP Units. Seller acknowledges that any OP Units offered hereby are being offered without registration under the Securities Act of 1933, as amended (the "Securities Act"), and the securities laws of certain states. The OP Units are being offered in reliance on an exemption from registration under Regulation D of the Securities Act ("Regulation D") and similar state law exemptions. Seller further acknowledges that, to satisfy the requirements of these exemptions, Buyer must determine whether a prospective holder of OP Units meets the Regulation D and state law definitions of "accredited investor" before selling (or, in some states, offering) securities to such prospective holder. Seller hereby represents that it is familiar with the federal and state law definitions of an accredited investor and that Seller are accredited investors under the federal and applicable state law definitions. Seller shall deliver to Buyer on or before the Option Exercise Date subscriber questionnaires in the form set forth in Exhibit J attached hereto and incorporated herein. Additionally, in the event of any change in any securities or related Law or interpretation thereof after the date of this Agreement, Seller shall deliver to Buyer, upon Buyer's request, such other information, certificates and materials as Buyer shall reasonably request. It shall be a condition precedent to Buyer's and Seller's obligations under this Agreement that there shall have been no change in any securities or related Law or interpretation thereof that would render consummation of conveyance of the Premises as contemplated by this Agreement a violation of Law or interpretation thereof. 11. Deferral of Seller's Gain. Buyer agrees to maintain nonrecourse indebtedness on its properties such that the amount of such indebtedness includable by each of John Marshall Associates Limited Partnership, Greensboro Associates Limited Partnership and Woodland- 11 Northridge I Limited Partnership (each a "Transferring Partnership") in each such Transferring Partnership's respective Federal income tax basis for its interest in Buyer (the "Nonrecourse Debt") is at least $13,000,000, $13,000,000 and $5,000,000, respectively, for a period of five (5) years from the Closing Date. Subject to the terms of this Section below, Buyer's obligation to maintain such indebtedness includable in each such Transferring Partnership's Federal income tax basis for its interest in Buyer shall cease with respect to a particular Transferring Partnership upon the sale or other transfer by Buyer in a taxable transaction of the Premises transferred to Buyer by such Transferring Partnership. Buyer agrees that if Buyer sells or otherwise transfers the SAIC I or Northridge I Premises listed on Exhibit A prior to the third (3rd) anniversary of the Closing Date or the John Marshall I or E.J. Randolph Premises listed on Exhibit A prior to the seventh (7th) anniversary of the Closing Date, in each case in a taxable transaction or a non-taxable transaction with "boot," or if the Nonrecourse Debt is reduced below the amounts set forth above within the five (5) year period provided above, Buyer shall pay to Seller at the time of each such sale or other transfer or reduction in Nonrecourse Debt such amount as shall equal the sum of (i) the present value (using a ten (10%) discount rate) of the hypothetical interest at ten percent (10%) per annum, compounded monthly, on the Built in Tax Amount (as hereinafter defined) with respect to the Premises sold or otherwise transferred or with respect to which the Nonrecourse Debt was reduced, from the Tax Payment Date (as hereinafter defined) with respect to such sale, other transfer or reduction to the Tax Payment Date which would have applied if the sale, other transfer or reduction had occurred on the third (3rd) or seventh (7th) anniversary, as applicable, of the Closing Date or the Nonrecourse Debt reduction had occurred on the fifth (5th) anniversary of the Closing Date, and (ii) the present value (using a ten percent (10%) discount rate) of the federal and state income tax payable by such partners on such hypothetical interest amounts (calculated at a federal and state tax rate of 36% and 6%, respectively). Buyer agrees that to the extent of any conflict between the terms of Section 11 of this Agreement and Section 7.1D of the Partnership Agreement, Section 11 of this Agreement shall control. This provision shall survive the Closing. "Built in Tax Amount" with respect to a Premises means the amount of state and federal taxes which would be payable by partners of Seller on the Nonrecourse Built-in Gain with respect to such Premises as set forth in a schedule to the Amendment at a rate of 36% and 6%, respectively, and taking into account the deduction for federal income tax purposes of the amount of state tax. Notwithstanding the foregoing, with respect to a non-taxable transaction with "boot" or in the case of a reduction in Nonrecourse Debt below the amount set forth above, "Built in Tax Amount" means the amount of state and federal taxes which would be payable by partners of Seller on account of such transaction at a rate of 36% and 6%, respectively, and taking into account the deduction for federal income tax purposes of the amount of state tax. "Tax Payment Date" with respect to a Premises shall mean the due date for making an estimated tax payment with respect to taxable gain realized in connection with a sale or other transfer of, or reduction in Non-Recourse Debt with respect to, a Premises. 12 12. Seller's Covenants; Certain of Buyer's Conditions Precedent. (a) New Leases, Contracts and Other Agreements. Prior to the Option Exercise Date, Seller shall neither amend nor enter into any new lease, license, or other agreement for the use or occupancy of all or any portion of Seller's portion of the Premises, unless the economic terms of such amendment, lease, license or other agreement meet the guidelines set forth in Exhibit N attached hereto and incorporated herein and Seller obtains Buyer's prior written approval, which shall not be unreasonably withheld, with respect to all other terms. During the Interim Period, Seller shall neither amend any Lease now or hereafter existing in any economic or other material respect, nor execute any new lease, license, or other agreement for the use or occupancy of all or any portion of Seller's portion of the Premises, in each case without Buyer's prior written approval which will not be unreasonably withheld. Prior to the Closing Date, Seller shall not amend any term of the Assumed Indebtedness or any document executed in connection therewith. Without limiting the terms of the immediately preceding sentence, during the Interim Period, Seller shall neither amend nor enter into any other agreement or contractual obligation, including, without limitation, any Permit, Permitted Encumbrance or document executed in connection with any of the foregoing, which will be binding on Buyer or on all or any portion of Seller's portion of the Premises following Closing, in each case without Buyer's prior written approval which will not be unreasonably withheld. During the Interim Period, Seller shall not consent to any sublease or assignment without Buyer's prior written approval unless Seller is obligated to act reasonably under the applicable Lease, in which case Seller may so consent if acting reasonably. Buyer agrees to respond to requests for approval under this Section within ten (10) days of receipt of written request therefor, accompanied by such information as Buyer shall reasonably request in connection with such request. Any lease entered into by Seller affecting the Premises after the date of this Agreement and in accordance with the terms of this Agreement, including, without limitation the terms of this Section, shall constitute a "Lease" under this Agreement. (b) Enforcement of Leases. During the Interim Period, Seller shall take such action with respect to the enforcement of Leases as is reasonably requested by Buyer. Buyer hereby agrees to indemnify and hold Seller harmless from and against any and all Losses (as hereinafter defined) incurred by Seller as a result of taking any such action pursuant to the immediately preceding sentence. This provision shall survive Closing or termination of this Agreement. (c) Status of Leases and Tenants. It shall be a condition precedent to Buyer's obligations under this Agreement that, as of the Closing Date: (i) all Leases of the Required Tenants shall be in full force and effect according to the terms set forth therein and, except as set forth in a Rent Roll, shall not have been modified, amended or altered, (ii) each Required Tenant shall be legally required to pay all sums and perform all material obligations set forth in its Lease, without concession, abatement, offset or other basis for relief or adjustment, (iii) except as set forth in Exhibit E, all material obligations of Seller under the 13 Leases with Required Tenants shall have been performed, (iv) no Required Tenant under a Lease affecting Seller's portion of the Premises shall have asserted any offset, defense or claim against rent payable by it or other performance of material obligations due from it under its Lease, (v) no Required Tenant shall be in default under any material provision of its Lease and no Required Tenant shall be in arrears in the performance of any monetary obligation required of it under its Lease, (vi) Seller shall have received no written notice that any Required Tenant is insolvent or that any Required Tenant is unable to perform any or all of its material obligations under its Lease, and (vii) Seller shall certify that it has received no written notice described in item (vi). (d) Insurance. Seller shall maintain reasonable amounts of insurance on its portion of the Premises continuously in full force and effect through and including the Closing Date. (e) Operation of Premises. During the Interim Period, except to the extent the direct obligations of a tenant under a Lease, Seller shall operate and manage its portion of the Premises in a manner consistent with the manner in which such portion is being operated as of the Option Exercise Date, subject to ordinary wear and tear and fire and other casualty, and in accordance with all applicable Law, shall maintain its portion of the Premises in the repair and working order it is in as of the Option Exercise Date, and shall perform, when due, all of Seller's material obligations under the Leases, the Permitted Encumbrances and documents executed in connection with the Permitted Encumbrances, in each case affecting its portion of the Premises, and all Permits. Except for removal by tenants in accordance with the terms of their Leases, none of the personal property or fixtures of Seller shall be removed from its portion of the Premises, unless replaced by personal property or fixtures of equal or greater utility and value. During the Interim Period, Seller shall not change the use of all or any portion of the Premises. (f) Preclosing Expenses and Construction. Except as provided below in this item, all bills and invoices due for labor, goods, materials and services of any kind, utility charges and all other expenses relating to Seller's portion of the Premises for any period prior to Closing (to the extent not the responsibility of a tenant under a Lease affecting Seller's portion of the Premises to pay directly pursuant to the terms of its Lease) shall be paid by Seller. Seller agrees to pay at or prior to Closing all leasing commissions, broker's fees and finder's fees and costs of tenant improvement work due in connection with Leases existing as of the date of this Agreement. Seller further agrees to pay when due, and Buyer agrees to reimburse Seller upon Closing for, all tenant improvement work performed and leasing commissions due, respectively, pursuant to and in connection with each Lease entered into from and after the date of this Agreement so long as (i) such Lease is entered into in accordance with Section 12(a), (ii) such Lease covers space in the Premises which is vacant as of the date of this Agreement and results in no economic benefit to Seller other than that attributable to the fixed rent and recoupment of operating expenses and taxes to be payable under the Lease over the term attributable to the period from the date the Lease is entered into 14 through the Closing Date and other reimbursement payments customary for leases of a similar nature in the locale in which the Premises are located and (iii) the party or parties to receive such commission(s) and the amount of such commission(s) are specifically disclosed to Buyer in Seller's request for approval of the applicable proposed lease under Section 12(a) and are approved by Buyer, such approval not to be unreasonably withheld. Seller agrees to pay when due and without reimbursement all leasing commissions, broker's fees and finder's fees due and costs of tenant improvement work in connection with Leases entered into from and after the date of this Agreement that are not the responsibility of Buyer under the preceding sentence. Except as provided in this item, any alterations, improvements and other work required to be performed by the landlord under the Leases or the Seller prior to the Closing under any and all agreements affecting Seller's portion of the Premises (collectively, "Improvements") shall be completed and paid for in full by Seller as and when due. Buyer shall have the right in its sole discretion to contract for the performance of or otherwise cause to be performed by a party other than Buyer any Improvements to be performed in connection with any Leases entered into after the Option Exercise Date. If Buyer elects so to contract for or cause the performance of any such Improvements, then, during the Interim Period, Buyer shall cause such Improvements to be performed in accordance with the terms of the Lease to which they relate. Whether or not Buyer elects to exercise its rights to contract for or cause the performance of the Improvements, Buyer shall be responsible for the costs of Improvements required under Leases entered into after the date of this Agreement in accordance with the terms of Section 12(a), so long as the amount of such costs are specifically disclosed to Buyer in Seller's request for approval of the proposed lease to which they relate and Buyer approves such costs and the party or parties to perform the Improvements. Notwithstanding the foregoing, if the Closing does not occur, Buyer shall not be liable for the cost of any tenant improvement work performed by either Buyer or Seller and Seller shall reimburse Buyer upon demand for any such costs incurred by Buyer pursuant to this Section. This provision shall survive the Closing. Notwithstanding anything to the contrary contained in this Agreement, with respect to any Lease entered into after the date hereof in accordance with the terms of this Agreement that provides for a term (excluding renewals) of less than twelve (12) months, each of Buyer and Seller shall pay a pro-rata portion of all leasing commissions, broker's fees and finder's fees and all costs of tenant improvement work due in connection with and pursuant to, respectively, such Lease calculated on the basis of the number of days in such term for which each of Buyer and Seller was in title to the Premises. (g) Availability of Records. Upon Buyer's written request for a period of one (1) year after the Closing, Seller shall (i) make its books and records available to Buyer for inspection, copying and audit by Buyer's designated accountants at Buyer's sole cost and expense, and cooperate with Buyer in connection with any audit of such books and records necessary to comply with any requirements of the Securities and Exchange Commission or law and (ii) cooperate with Buyer to the extent reasonably necessary to obtain any Permits not in existence on the Closing Date and necessary for the operation of all or any portion of the Premises. This provision shall survive the Closing. 15 (h) Change in Conditions. Seller shall promptly notify Buyer of the occurrence of any event or circumstance known to Seller that will make any representation or warranty of Seller to Buyer under this Agreement materially untrue or materially misleading as of the Closing Date or any covenant of Seller under this Agreement, the nonperformance of which would have a material adverse effect on the value of all or any portion of the Premises, incapable of being performed, it being understood that Seller's obligation to provide notice to Buyer under this item shall in no way relieve Seller of any liability for breach by Seller of any of its representations, warranties or covenants under this Agreement subject to the other terms of this Agreement. (i) Litigation. It shall be a condition precedent to Buyer's obligations under this Agreement that there shall be, as of the Closing Date, no pending Litigation (including, without limitation, relating to any Lease of a Required Tenant), that would, if determined adversely to Seller, in Buyer's reasonable judgement, materially adversely affect (i) the value of the Premises, (ii) the ability of Buyer to use Seller's Premises for the purposes for which they are being used on the date hereof or (iii) the ability of Seller to perform its obligations under this Agreement. (j) Title Insurance; Survey. Seller shall cooperate with Buyer in its efforts to obtain satisfactory title insurance insuring its interest in the Premises, including, without limitation, by executing and delivering such authority documents, indemnities regarding mechanics' and materialmen's liens and parties in possession and other materials (excluding indemnities other than as described above in this sentence) as are reasonably required by the Title Company (or other title insurer selected by Buyer). It shall be a condition precedent to Buyer's obligations hereunder that the Title Company (or other title insurer selected by Buyer) shall be prepared to issue, and if Buyer pays the premium therefor, that Buyer shall receive from the Title Company (or other title insurer selected by Buyer), at Buyer's expense, an ALTA title insurance policy (1992 Form) insuring its interest in the Premises subject only to the Permitted Encumbrances in an amount of not less than One Hundred Fifteen Million Dollars ($115,000,000), having all standard and general printed exceptions deleted so as to afford full extended form coverages, including, such affirmative coverages and endorsements as Buyer shall reasonably require and being otherwise consistent with the terms of this Agreement. It shall further be a condition precedent to Buyer's obligations under this Agreement that, subject to Section 16 hereof, Seller shall have made no change to the Premises from and after the Option Exercise Date that would be shown on an accurate survey made as of the Closing Date. (k) Exercise of SAIC I Option; Conveyance of all Premises. It shall be a condition precedent to Buyer's obligations under this Agreement that the SAIC I Option shall not have been exercised. It shall be a condition precedent to Buyer's obligations under this Agreement that the Closing shall occur with respect to all but not less than all of the Premises, subject, however, to Section 16 hereof. 16 (l) Assumed Indebtedness. It shall be a condition precedent to Buyer's obligations under this Agreement that Buyer shall have received from the holder of any Assumed Indebtedness Buyer elects and is permitted by the holder thereof to assume such confirmations and other agreements as Buyer reasonably requests in form and substance reasonably satisfactory to Buyer. It shall be a further condition precedent to Buyer's obligations hereunder that Buyer shall receive payoff letters from the holders of all Assumed Indebtedness Buyer elects to repay. If Buyer is able to achieve a waiver by the holder of any Assumed Indebtedness of any amount Buyer has agreed to pay under Section 3, such savings shall redound solely to the benefit of Buyer and shall have no impact on any of Seller's rights or obligations under this Agreement. (m) Lock-Up. Seller shall enter into a lock-up agreement in the form of Exhibit K at Closing (the "Lock-Up Agreement"). (n) Transfer of OP Units and Registration Rights Following Lock-Up. Seller acknowledges that Seller and all OP Units shall be subject to all terms and conditions of the Lock-Up Agreement and the Partnership Agreement, including without limitation, regarding transfer and redemption. Seller and the general partner in Buyer agree to enter into a Registration Rights Agreement in the form of the Exhibit L attached hereto and incorporated herein at Closing. (o) Amendment to Partnership Agreement. Seller acknowledges that it shall be bound by and subject to all terms of the Partnership Agreement and shall enter into an amendment to the Partnership Agreement at Closing evidencing Seller's admission to the Partnership as a limited partner and agreement to be bound by all terms thereof and otherwise complying with the terms of this Agreement. 13. Buyer's Covenants; Seller's Conditions Precedent (a) Upon Seller's written request for a period of one (1) year after the Closing, Buyer shall make its records pertaining to the Premises available to Seller for inspection, copying and audit by Seller's designated accountants at Seller's sole cost and expense, except as provided below in this item. In no event shall Buyer be required to disclose any material, inside or nonpublic information or make any other disclosure that would violate any securities Law or interpretation thereof. This provision shall survive the Closing. (b) Buyer shall promptly notify Seller of the occurrence of any event or circumstance known to Buyer that will make any representation or warranty of Buyer to Seller under this Agreement materially untrue or materially misleading as of the Closing Date or any material covenant of Buyer under this Agreement incapable of being performed, it being understood that Buyer's obligation to provide notice to Seller under this item shall in no way relieve Buyer of any liability for breach by Buyer of any of its representation, warranties or covenants under this Agreement subject to the other terms of this Agreement. 17 14. Seller's Closing Deliveries. At the Closing, Seller shall deliver or cause to be delivered to Buyer, as a condition precedent to Buyer's obligations under this Agreement, the following in form and substance reasonably acceptable to Buyer and its counsel: (a) Deed. Sufficient special warranty deeds executed by Seller, in recordable form conveying the premises to Buyer free and clear of all liens, claims and encumbrances except for the Permitted Encumbrances; (b) Bill of Sale. A special warranty assignment and bill of sale, executed by Seller, assigning, conveying and warranting to Buyer title to the personal property of Seller, free and clear of all encumbrances other than the Permitted Encumbrances; (c) General Assignment. An assignment executed by Seller to Buyer of all right, title and interest of Seller in and to any intangible personal property of Seller relating to its portion of the Premises, including, without limitation, warranties, trade names and any Permits, to the extent assignable; (d) Assignment of Leases, Estoppel Certificates and Subordination Agreements. An assignment of Seller's right, title and interest in and to the Leases (including all security deposits and/or other deposits thereunder except those applied and described in Exhibit H) affecting its portion of the Premises, with (i) the agreement of Seller to indemnify, protect, defend and hold Buyer harmless from and against any and all Losses (as defined below) arising in connection with such Leases and relating to the period of time prior to the Closing Date and (ii) an assumption of Leases by Buyer and the corresponding agreement of Buyer to indemnify, protect, defend, and hold Seller harmless from and against any and all Losses arising in connection with such Leases relating to the period of time from and after the Closing Date, together with the estoppel certificates and agreements, required under Section 8 above; (e) Letters to Tenants. Letters executed by Seller addressed to all tenants under Leases affecting Seller's portion of the Premises and reasonably approved by Buyer notifying all such tenants of the transfer of ownership and directing payment of all rents accruing after the Closing Date to be made to Buyer or at its direction; (f) Original Documents. To the extent not previously delivered to Buyer and in Seller's possession or control, originals of the Leases, Permitted Encumbrances, Permits and copies of all other documents, files, materials and information in Seller's possession or control reasonably requested by Buyer related to the foregoing or otherwise affecting or applicable to Seller's portion of the Premises; (g) Plans and Specifications. All plans and specifications for Seller's portion of the Premises in Seller's possession or control; 18 (h) Section 1445 Affidavit. An affidavit from each Seller confirming that such Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code of 1986, as amended; (i) Rent Roll. A Rent Roll from each Seller updated through the Closing Date, certified by such Seller to be true, complete and correct in all material respects as of the Closing Date; (j) Registration Rights Agreement, Lock-Up Agreement and Amendment to Partnership Agreement. A Registration Rights Agreement, a Lock-Up Agreement and the Amendment, as provided in items (n), (o) and (p) of Section 12; (k) Management Agreement. A management agreement for the Additional Option Properties, as described in Section 24, and evidence of termination of any other management agreement(s) in effect prior to the Closing Date. (l) Assumed Indebtedness. Any and all documents reasonably required by the holder of any Assumed Indebtedness Buyer is permitted and elects to assume and any payoff letters and release and other documents reasonably requested by Buyer in connection with any Assumed Indebtedness Buyer elects to prepay. (m) Title Documents. Such information, documents and affidavits (excluding indemnities) as are required by the Title Company (or other title insurer selected by Buyer) and such indemnities as are required under Section 12(h). (n) Closing Statement. A closing statement conforming to the proration and other relevant provisions of this Agreement. (o) Evidence of Authority. Evidence of Seller's authority to consummate the transactions which are the subject of this Agreement, including, without limitation, consents of all partners in Seller. (p) Other. Such other documents and instruments as may reasonably be required by Buyer in connection with the consummation of the transactions that are the subject of this Agreement and otherwise to effect the agreements of the parties hereto, including, without limitations, all certifications required under Section 12(c). 15. Buyer's Closing Deliveries. At the Closing, Buyer shall deliver or cause to be delivered to Seller, as a condition precedent to Seller's obligations under this Agreement, the following in form and substance reasonably acceptable to Seller and its counsel: (a) The assignment of Leases contemplated in Section 13(d), the title documents contemplated in Section 13(m), and the closing statement contemplated in Section 13(n). 19 (b) Evidence of Buyer's authority to consummate the transactions which are the subject of this Agreement. (c) Such other documents and instruments as may reasonably be required by Seller in connection with the consummation of the transactions that are the subject of this Agreement and otherwise to effect the agreements of the parties hereto. (d) Buyer shall cause the general partner of Buyer to enter into the agreements contemplated in Sections 12 (n), (o) and (p) of this Agreement at the Closing. (e) Buyer shall cause Beacon Property Management Corporation (the "Manager") to enter into the management agreement contemplated in Section 24. 16. Eminent Domain and Casualty. In the event all or any portion of the Premises is damaged or destroyed by fire or other casualty or is taken or made subject to condemnation, eminent domain or other governmental acquisition proceedings, such that the cost to repair or restore would exceed Five Hundred Thousand Dollars ($500,000), then Buyer may, at its option, (i) elect to terminate this Agreement by written notice to Seller, in which event the Deposit shall be forthwith returned to Buyer and, thereupon, the rights and obligations of each of the parties to this Agreement and each other shall cease and terminate, except as otherwise expressly provided in this Agreement, or (ii) accept delivery of the Deeds. In such latter event Buyer shall deliver the full Consideration for the Premises and have assigned to it the amount of any insurance proceeds or award(s), as the case may be, allocable to the portion(s) of the Premises so damaged, destroyed or taken and not reasonably applied by Seller to repair or restoration of the Premises. 17. Environmental, Health and Safety Matters. (a) Representations and Warranties. Each Seller hereby represents and warrants as follows, but only with respect to its portion of the Premises: (i) To the best of Seller's knowledge, except as set forth in Exhibit E, there have been no past, and there are no pending or, to the best of Seller's knowledge, threatened (A) written claims, complaints, notices, or requests for information received by Seller with respect to any alleged violation of any federal, state, county, municipal or local statutes, laws, ordinances, rules, regulations, directives, orders or the like in effect now or in the future relating to environmental, health or safety matters (collectively, "Environmental Laws") with respect to Seller's portion of the Premises, or (B) written claims, complaints, notices, or requests for information to Seller regarding potential or alleged liability under any Environmental Law with respect to Seller's portion of the Premises; (ii) To the best of Seller's knowledge, except as set forth in Exhibit E, there have been no releases, including, without limitation, migrations, of hazardous 20 materials or any other substances or materials regulated under any Environmental Law (collectively, "Hazardous Materials") at, on, under, onto, about or emanating from Seller's portion of the Premises during its period of ownership, and to the best of Seller's knowledge, there has been no such release at any other time; (iii) Seller has been issued, and Seller is in material compliance with, all orders, directives, requirements, certificates and Permits from applicable governmental authorities relating to Environmental Laws applicable to Seller's portion of the Premises; (iv) Neither Seller's portion of the Premises nor any portion thereof is listed or, to the best of Seller's knowledge, proposed for listing on the National Priorities List pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. ss.ss.9601 et seq), as amended ("CERCLA") or on any state list of sites requiring remedial action; (v) To the best of Seller's knowledge, Seller has not transported or arranged for the transportation of any Hazardous Material from Seller's portion of the Premises to any location that is listed or proposed for listing on the National Priorities List pursuant to CERCLA or on any similar state list, or that is the subject of federal, state, or local enforcement actions or other investigations that may lead to claims against Seller for any remedial action, damage to natural resources, or personal injury, including, but not limited to, claims under CERCLA; (vi) Except as set forth in Exhibit E, Seller has not removed (or required or requested the removal of) any polychlorinated biphenyls or asbestos from Seller's portion of the Premises; and (vii) Except as set forth in Exhibit E, to the best of Seller's knowledge, there are no active or inactive underground storage tanks ("USTs") at Seller's portion of the Premises. Seller has not removed or abandoned any USTs at Seller's portion of the Premises, and Seller has no knowledge of the existence, abandonment or removal of USTs at Seller's portion of the Premises by any other person or entity; (b) Survival of Representations and Warranties. The representations and warranties of Seller contained in this Section 17 shall be deemed made as of the date of this Agreement and shall terminate on Closing. 18. Assignment. Except as provided below in this Section, this Agreement shall not be assignable by Buyer or Seller. Buyer shall have the right to assign its rights and obligations with respect to the Additional Option Premises under this Agreement to a controlled affiliate of Buyer. This provision shall survive the Closing. 21 19. Contiguous Parcels. Seller represents that if any of the properties comprising the Premises is composed of two (2) or more parcels, such parcels are contiguous on their common boundary lines, but if it should be determined that title to one (1) of such parcels is defective, then for the purposes of this Agreement, title to both parcels shall be deemed to be defective. 20. Accelerated Closing. Buyer, at Buyer's option exercised by not less than five (5) days' written notice to Seller, may accelerate the date set for Closing, in which event the Closing shall be held on such earlier date. Upon receipt of Buyer's written notice of acceleration, Seller shall deliver proper notice of termination of all contracts to be terminated in accordance with the terms of this Agreement, and Buyer shall pay all amounts due in connection with such terminations. Delivery of such notice by Seller shall satisfy Seller's obligations under this Agreement regarding the termination of such contracts. 21. Buyer's and Seller's Breach. If Buyer, after exercising the Option, shall fail to perform, fulfill or observe any of its representations, warranties or agreements set forth herein, other than those in Sections 7, 9, 11, 12(b), 12(f), 12(g), 13(a), 22, 26, 28, 29, 32, 33, 34, 35 and 36, the sole right of Seller shall be to retain the Deposit as liquidated damages for loss of its bargain, and Seller shall not have any rights nor be entitled to bring any action at law or in equity, including, without limitation, for specific performance or for any other damages whatsoever. With respect to defaults by Buyer or failure to observe its agreements, in each case under the aforementioned Sections, in addition to its rights to retain the Deposit, Seller shall retain all of its rights at law and in equity. Notwithstanding anything to the contrary contained herein, Buyer shall retain all of its rights at law and in equity in connection with any failure by Seller to perform, fulfill or observe any of its representations, warranties, agreements or acknowledgements under Section 12 hereof or this Agreement to be performed after Closing or which survive termination of this Agreement or Closing. 22. Closing. The words, "closing of title," "closing", "delivery of the Deeds" and words of similar import, as used in this Agreement, are intended to mean the event of consummation of the conveyance to Buyer of the Premises in accordance with the terms of this Agreement. The Closing shall occur pursuant to arrangements consistent with local custom and reasonably satisfactory to Buyer and Seller. Seller and Buyer agree that each of them shall bear fifty percent (50%) of all transfer and similar taxes due in connection with the transactions that are the subject of this Agreement. Seller and Buyer each agree to deliver to the other following Closing any and all such other documents and instruments as are reasonably requested by the other to achieve the purposes of this Agreement. This provision shall survive Closing. 23. Additional Option. Upon Closing, Seller shall be deemed to have given and granted to Buyer an irrevocable option to acquire the Additional Option Premises, upon the terms, covenants, conditions and provisions set forth in this Section (the "Additional Option"). The Additional Option may be exercised by Buyer's giving written notice of Buyer's exercise, 22 to Seller at any time prior to March 1, 1999 (the "Additional Option Exercise Date"). The notice of exercise of the Additional Option shall set forth a day and hour (the "Additional Option Closing Date"), not less than thirty (30) nor more than sixty (60) days after the date such notice is given, for consummation of the conveyance of the Additional Option Premises as contemplated by this Agreement (the "Additional Closing"). Without limiting any other term of this Agreement, Buyer and its permitted assignee shall have the right to perform all such diligence on the Additional Option Premises as Buyer is permitted to perform under this Agreement with respect to the Premises, and Seller shall have such obligations with respect thereto as are set forth in this Agreement. Buyer shall have the right to perform such diligence within any two (2) sixty (60)-day periods selected by Buyer. If Buyer shall not have exercised the Additional Option in accordance with the terms of this Agreement at the end of such second (2nd) sixty (60)-day period, the Additional Option shall be null and void and of no further force and effect. Except as expressly set forth to the contrary in this Section, all terms and conditions of this Agreement pertaining to Seller, Buyer or the Premises shall be applicable to the Additional Option Premises Sellers, Buyer and the Additional Option Premises, respectively, as if so expressly provided in each place, including, without limitation, those regarding obligations and rights with respect to the Premises, arrangements regarding conveyance of the Premises and matters pertaining to Closing or survival following Closing, the parties hereto acknowledging that it is their intent that Buyer or its permitted assignee and Additional Option Premises Sellers have the same rights and obligations with respect to each other and the Additional Option Premises as Buyer and Seller have with respect to each other and the Premises under this Agreement. Additionally, except as expressly provided below in this Section, all representations and warranties made by Seller in this Agreement as of the date of this Agreement and/or the Option Exercise Date shall be deemed made by the Additional Option Premises Sellers with respect to themselves and their respective portions of the Additional Option Premises as of the Additional Option Exercise Date, and all representations and warranties made by Seller in this Agreement as of the Closing Date shall be deemed made by the Additional Option Premises Sellers with respect to themselves and their respective portions of the Additional Option Premises as of the Additional Option Closing Date. Additional Option Premises Sellers shall notify Buyer (or its permitted assignee, if applicable) within twenty (20) days after written request therefor by Buyer if any representation or warranty to be deemed made by it as of the Additional Option Exercise Date shall be untrue in any material respect as of such date. It shall be a condition precedent to Buyer's obligations under this Agreement that no such representation or warranty shall be untrue in any material respect as of the Additional Option Closing Date, but Additional Option Premises Sellers shall not be deemed to make any such representation or warranty that would be untrue in any material respect with respect to which notice was so delivered by Additional Option Premises Sellers. All representations and warranties of the Additional Option Premises Sellers, other than those made pursuant to this Section and Sections 10(a), 17, 28 and 32 (which may have a longer or shorter survival period) or as otherwise provided in Section 10(b), if applicable, shall survive the Additional Option Closing Date for a period of twelve (12) months. Additional Option Premises Sellers shall have no liability for any misrepresentation with respect to which a claim is made by Buyer or its assignee after such twelve (12) month-period, 23 except to the extent Buyer or such assignee commences litigation on or before the expiration of such twelve (12) month-period on account of any alleged misrepresentation. Additional Option Premises Sellers hereby agree to indemnify and hold Buyer and its permitted assignee, if any, harmless from and against any and all Losses suffered and occurred by Buyer or such assignee on account of any misrepresentation for which Additional Option Premises Seller is liable under this Section. The purchase price (the "Price") to be paid by Buyer or its permitted assignee for the Additional Option Premises shall equal the sum, discounted to net present value using a ten percent (10%) discount rate, of (i) all "Fixed Annual Rental" due under the Lease of SAIC II by SAIC, in accordance with the terms of such Lease in effect as of the date of this Agreement, from the date on which the Additional Option is exercised through the end of the "Initial Term", as such term is defined pursuant to the terms of such Lease in effect as of the date of this Agreement, minus (ii) all regularly scheduled payments of principal and interest for the period from the date on which the Additional Option is exercised through the end of the "Initial Term" due or to become due on account of indebtedness secured by the Additional Option Premises pursuant to the terms of such indebtedness in effect as of the date of this Agreement. Additional Option Premises Seller represents and warrants that the Initial Term under the Lease of SAIC II to SAIC ends on March 31, 1999. Upon exercise of the Additional Option, and as a condition to the valid exercise thereof, Buyer or its permitted assignee shall deliver to Escrow Agent a deposit in the amount of $100,000, which, together with all interest earned thereon, shall be held and delivered in the manner as provided in this Agreement with respect to the Deposit. The Price shall be paid in immediately available funds to Additional Option Premises Seller at the Closing with respect to the Additional Option Premises and shall be decreased by any prorations and adjustment in Buyer's favor and increased by any prorations and adjustments in Seller's favor, in each case as such prorations and adjustments are calculated in accordance with the terms of this Agreement. From and after the Closing, Additional Option Premises Seller shall permit Buyer to participate in any discussions and negotiations regarding the Leases to SAIC for SAIC II and SAIC III or any proposed new leases for such all or any portion of such Additional Option Premises. From and after the Closing, Additional Option Premises Sellers shall permit Buyer to participate in any discussions and negotiations regarding the financing, refinancing or restructuring of financing on SAIC II and/or SAIC III. Buyer shall take the Additional Option Premises subject to the indebtedness existing thereon as of the date of this Agreement and shall be responsible for any assumption, prepayment or other fees and expenses of the type described in Section 3. This provision shall survive the Closing. 24. Management of the Additional Option Premises. Upon Closing, the Manager shall become the property manager for the Additional Option Properties. Seller agrees to terminate any existing management agreement(s) for the Additional Option Properties, at its own expense, as of the Closing Date. Prior to the Option Exercise Date, Buyer and Seller shall work together in good faith to reach agreement on a mutually acceptable management agreement, which will be executed and delivered by Seller and the Manager at Closing. It shall be a condition precedent to Buyer's obligations under this Agreement that a management agreement mutually and reasonably acceptable to Buyer and Seller shall be agreed upon and 24 entered into at Closing. Such management agreement shall survive Closing with respect to the Premises. 25. Failure to Conform. Without limiting any of Buyer's rights under Section 5, in the event that Seller is unable to give title or make conveyance or deliver possession of the Premises as herein provided or, if at the time of Closing, the Premises do not conform with the provisions hereof, then and in any such event Buyer may, at its option, either (i) terminate this Agreement, in which event the Deposit shall be returned to Buyer and thereupon the rights and obligations of each of the parties to this Agreement shall cease and terminate, except as otherwise expressly provided or (ii) accept such title as Seller can then deliver to the Premises in their then condition and to pay therefor the full Consideration, in which event Seller shall convey such title and so deliver the Premises. 26. Prorations. Real estate taxes, other assessments, utilities, fuel, water and/or sewer charges, if any, rents (including, without limitation, base rent, additional rent, other amounts to be paid to the landlord under the Leases and security deposits) and other income, telephone charges, interest on the Assumed Indebtedness and other customary expenses shall be prorated at Closing. Such prorations shall be made on the basis of final meter readings and final invoices, but, to the extent final readings and invoices are not available at Closing, such prorations shall be made on the basis of the most current, available bills and reprorated upon issuance of final bills. No delinquent rents shall be prorated at Closing in favor of Seller. Payments received by Buyer from any tenant following Closing on account of rent shall be first applied to rents then due and owing from such tenant for the month in which the Closing occurs, then due rents for any period following Closing and the remainder, if any, thereafter promptly delivered to Seller to the extent of delinquent rent owing from such tenant as of Closing. Buyer shall use reasonable efforts to collect rents delinquent as of Closing for Seller but shall in no event be obligated to bring any action against any tenant or spend any money in the exertion of such efforts. Any amounts received by Seller on account of rent or other income following Closing shall be promptly delivered to Buyer for application and delivery, if applicable, in accordance with the terms of this Section. For purposes of making prorations, Buyer shall be deemed to be in title to the Premises, and entitled to the income therefrom and responsible for the expenses thereof, for the Closing Date, and Seller shall be entitled to the income from and responsible for the expenses of the Premises for all periods prior to the Closing Date. Any prorations not specifically addressed in this Section but customarily made in transactions of the type that is the subject of this Agreement shall be made in accordance with local custom. All prorations shall be made on the basis of the actual number of days of the year and month that shall have elapsed as of the Closing Date. Buyer shall be entitled to a proration in its favor in the amount of $284,327. Seller represents to Buyer that such amount is the amount to be paid by Booz Allen Hamilton in connection with the termination of its Lease in the E.J. Randolph Premises. All prorations shall be netted and paid by Seller to Buyer, or Buyer to Seller, as applicable, by wire transfer to an account designated by the applicable party in immediately available funds at the time of Closing. This provision shall survive Closing. 25 27. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given and delivered three days after posting when mailed, by registered or certified mail, postage and registration or certification charges prepaid, or on the day of delivery when sent by hand or recognized overnight courier service, addressed, in the case of Seller, to Seller at c/o Rhode Island Corporation, 22 East 67th Street, New York, New York 10021, with a copy to Chris M. Smith, Esq., Shearman & Sterling, Citicorp Center, 153 East 53 Street, New York, NY 10022-4676 and, in the case of Buyer, to Buyer at 50 Rowes Wharf, Boston, MA 02110, Attention: Lionel P. Fortin, with a copy to Goodwin, Procter & Hoar, Exchange Place, Boston, MA 02109, Attention: Gilbert G. Menna, P.C., except that either party may by written notice to the other designate another address which shall thereupon become the effective address of such party for the purposes of this Section. This provision shall survive the Closing. 28. Brokers. Seller represents and warrants to Buyer that it has dealt with no brokers, finders or other parties who would be due a similar fee in connection with the transactions that are the subject of this Agreement other than Yarmouth Property Services Limited, Inc. Buyer represents and warrants to Seller that it has dealt with no brokers or finders in connection with the transactions that are the subject of this Agreement. The parties agree that Seller shall be solely responsible for any broker's or finder's fee, commission or other compensation payable to Yarmouth Property Services Limited, Inc. in connection with this Agreement or the conveyance of the Premises. Seller agrees to indemnify and hold Buyer harmless from and against all claims, suits, obligations, liabilities and damages, including, without limitation, attorneys' fees and disbursements (collectively, "Losses"), arising out of any such broker's or finder's fee, commission or other compensation or any claim therefor or from any misrepresentation by Seller under this Section. Buyer agrees to indemnify and hold Seller harmless from and against any and all Losses arising from any misrepresentation by Buyer under this Section. This provision shall survive Closing. 29. Miscellaneous. In the event any period described in this Agreement expires or any obligation under this Agreement is to be performed on day which is not a business day, such period shall be extended to or such obligation shall be performed on the business day next succeeding such day. Section headings shall have no meaning in construing this Agreement. All representations, warranties and agreements of Seller in this Agreement shall be deemed both personal and covenants running with all land to which they apply and shall be applicable to and binding upon Seller and such land both during and after the period Seller's right, title and interest in such land shall continue. All representations and warranties of Seller shall survive the Closing Date for a period of twelve (12) months, other than those contained in Sections 10(a), 10(b), if applicable, 17 and 28 (which may have a longer or short survival period). Seller shall have no liability for any misrepresentation with respect to which a claim is made by Buyer after such twelve (12) month period, except to the extent Buyer commences litigation on or before the expiration of such twelve (12)-month period on account of any alleged misrepresentation. Seller and Buyer each hereby agree to indemnify and hold the other harmless from and against any and all Losses suffered or incurred by the other on account of a 26 misrepresentation of Seller, or Buyer, as the case may be, for which Seller, or Buyer, as the case may be, is liable under this Section. Notwithstanding anything to the contrary that may be contained in this Agreement, those obligations expressly provided to survive Closing or termination of this Agreement and those which by their terms are to be performed after Closing or termination of this Agreement shall survive Closing or termination of this Agreement, as the case may be, and not merge into any other document or any conveyance and each of Buyer and Seller shall retain all of their rights at law and in equity for breaches by the other of its obligations under this Agreement occurring prior to or following Closing. All rights and remedies of the parties shall be cumulative and not alternative, in addition to and not exclusive of any other right or remedy to which the parties may be lawfully entitled in case of any breach of threatened breach of any term or provision hereof; the rights and remedies of the parties shall be continuing and not exhausted by any one or more uses thereof, and may be exercised at any time or from time to time and as often as may be expedient; and any option or election to enforce any such right or remedy may be exercised or changed at any time or from time to time. This Agreement sets forth the entire agreement by the parties, and no custom, act, forbearance, or words or silence at any time, gratuitous or otherwise, shall impose any additional obligation or liability upon Buyer or Seller or waive or release either party or act as a supplement, alteration, amendment or change of any term hereof, including this clause, unless set forth in a written instrument duly executed by such party expressly stating that it is intended to impose such an additional obligation or liability or to constitute such a waiver or release, or that it is intended to operate as such a supplement, alteration, amendment or change. This Agreement shall be no more strictly construed against Buyer than Seller or vice versa, both having contributed in a material fashion to the negotiation and preparation hereof. Conditions precedent to a party's obligations hereunder are for the benefit of such party only and may be waived only by such party in its sole discretion. This Section shall survive Closing or termination of this Agreement. 30. Governing Law and Binding Effect. This Agreement shall be governed by the laws of the State of Virginia. This Agreement shall be binding on and inure to the benefit of the successors and permitted assigns of Seller and the successors and permitted assigns of Buyer. This provision shall survive the Closing. 31. Severability. If any term or provision of this Agreement or the application thereof to any person, property or circumstance which is not of essence to this Agreement shall to any extent be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons, properties and circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. This provision shall survive the Closing. 32. Authority. Each party signing this Agreement on behalf of Seller and Buyer, respectively, represents and warrants that such person has full authority to do so, that such person (on behalf of itself and the party for whom it is signing) has obtained all necessary 27 consents, approvals and authorizations from any person, entity or governmental authority required to enter into this Agreement and perform its obligations hereunder, including, without limitation, to convey the Premises to Buyer subject to the terms and conditions hereof, and that this Agreement is binding upon the entity or entities on behalf of which such person signed or such person, if an individual. Except as set forth in Exhibit E, Seller represents and warrants to Buyer that neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will (A) result in a breach of, default under, or acceleration of, any agreement to which Seller is a party or by which Seller or all or any portion of the Premises are bound; or (B) violate any restriction, court order, agreement or other legal obligation to which Seller and/or all or any portion of the Premises is subject. Buyer represents and warrants to Seller that neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will (Y) result in a breach of, default under, or acceleration of, any agreement to which Buyer is a party or to which Buyer is bound; or (Z) violate any restriction, court order, agreement or other legal obligation to which Buyer is subject. Seller represents and warrants to Buyer that Seller has delivered to Buyer true, complete and correct copies of each partnership agreement pursuant to which Seller was formed, which partnership agreements are in effect as of the date of this Agreement and are unmodified except as set forth in copies delivered to Buyer. Buyer has delivered to Seller on or before the date of this Agreement a copy of Buyer's general partner's articles of incorporation certified by the Secretary of State of the State of Maryland. 33. Good Faith. Seller and Buyer shall work together in good faith to accomplish the consummation of the transactions contemplated by this Agreement, and Buyer and Seller shall each furnish the other with such documents or further assurances as the other may reasonably require in connection with such transactions. This provision shall survive Closing. 34. Confidentiality. Each party hereto agrees to maintain in confidence, and not to discuss with or disclose to any person or entity who is not a party to this Agreement, the existence of this Agreement, any term of this Agreement or any aspect of the transactions contemplated hereby, except as provided below in this Section. Each party hereto may discuss with and disclose to its accountants, attorneys, existing or prospective lenders, investment bankers, underwriters, ratings agencies, partners, consultants and other advisors and, to the extent required to comply with the SAIC I and SAIC II Right of First Refusal, to SAIC the matters described above to the extent such parties reasonably need to know in connection with the transactions contemplated by this Agreement and are bound by a confidentiality obligation identical in all material respects to the one created in this Section. Additionally, each party may discuss and disclose such matters to the extent necessary to comply with any requirements of the Securities and Exchange Commission or in order to comply with any securities Law or interpretation thereof. Each of Buyer and Seller represents and warrants to the other that, to the best of their knowledge, no fact or circumstance exists which would require such discussion or disclosure as of the date of this Agreement. This provision shall survive termination of this Agreement, but shall terminate upon Closing, except as provided below. Any press release at any time to be made by any OP Unit Holder or Buyer, respectively, 28 regarding any matter which is the subject of the confidentiality obligation created in this Section shall be subject to the reasonable approval of Buyer or Rhode Island Corporation, respectively, both as to timing and content. Notwithstanding anything to the contrary contained herein, no disclosures shall be made with respect to the existence or any terms of this Agreement until the Option Exercise Date, except as Buyer is required to make pursuant to securities Law or interpretations thereof. 35. No Other Representations or Warranties by Seller. Buyer represents, warrants and agrees that (i) Buyer has examined or will examine the Premises and is or will be familiar with the physical condition thereof and has conducted or will conduct such investigation of the affairs of the Premises as Buyer may consider appropriate, (ii) neither Seller nor any of the employees, agents or attorneys of Seller have made any verbal or written representations, warranties, promises or guaranties whatsoever to Buyer, whether express or implied, and, in particular, that no such representations, warranties, promises or guaranties have been made with respect to the physical condition or operation of Premises, the actual or projected revenue and expenses of the Premises, the zoning and other laws, regulations and rules applicable to the Premises or the compliance of the Premises therewith, the quantity, quality or condition of the articles or personal property and fixtures included in the transactions contemplated hereby, the use or occupancy of the Premises or any part thereof or any other matter or thing affecting or related to the Premises or the transactions contemplated hereby, except as, and solely to the extent, herein specifically set forth, and (iii) Buyer has not relied upon any such representations, warranties, promises or guaranties other than those representations, warranties, promises or guaranties herein specifically set forth herein, and, then, only to the extent thereof, or upon any statements made in an informational brochure with respect to the Premises and, except as set forth hereinabove, has entered into this Agreement after having made and relied solely on its own independent investigation, inspection, analysis, appraisal, examination and evaluation of the facts and circumstances. 36. As-Is Acquisition. Buyer agrees to accept the Premises "AS IS", "WHERE IS" and "WITH ALL FAULTS" in its condition as of the Option Exercise Date, subject to ordinary wear and tear during the Interim Period, the representations and warranties made in this Agreement and Section 16 hereof. Seller agrees to deliver the Premises to Buyer at Closing in the condition in which they are in as of the Option Exercise Date, subject to ordinary wear and tear during the Interim Period, and free of tenants and occupants other than tenants under Leases and sublessees, sub-sublessees and assignees set forth in Exhibits F and I or otherwise occupying space in the Premises. 37. Multiple Counterparts. This Agreement may be executed in multiple counterparts, all of which when taken together will constitute one agreement. 29 IN WITNESS WHEREOF, the parties here to have executed this Agreement as of the date set forth above. Limited Joinder The general partner of Buyer hereby joins in and executes and delivers this Agreement for the sole purpose of making the acknowledgments and agreements contained in Section 9 and Section 12(0). All parties to this Agreement acknowledge that the general partner of Buyer shall have no obligation or liability in connection with this Agreement other than as set forth in and under Section 9 and Section 12(0). GENERAL PARTNER OF BUYER: Beacon Properties Corporation By: /s/ Lionel P. Fortin Name: Lionel P. Fortin Title: Chief Operating Officer WITNESS: SELLER: GREENSBORO ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ______________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner ______________________________ By: The Sotweed Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President 30 ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer JOHN MARSHALL ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ______________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner ______________________________ By: The Sotweed Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer PIMPERNELL ESTATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: Pimpernell Corporation, a Delaware corporation, as general partner 31 ______________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer WOODLAND-NORTHRIDGE I LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ______________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner By: White Swan Oil Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Vice President By: Green Highlander Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Vice President 32 By: Windward Oil and Gas Corporation, a Texas corporation, as general partner ______________________________ By: /s/ Gilbert Kerlin Name: Gilbert Kerlin Title: President By: Smoking Tree Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer GOODRIDGE DRIVE ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership _______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner _______________________________ By: /s/ A.J. Clark Name: A. J. Clark Title: General Partner By: RPC Associates, a Virginia general partnership, General Partner 33 By: Rattlesnake Point Corporation, a Delaware corporation, its general partner By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer 34 BUYER: BEACON PROPERTIES, L.P., a Delaware limited partnership By: Beacon Properties Corporation, a Maryland corporation, its general partner ____________________________ By: /s/ Lionel P. Fortin Name: Lionel P. Fortin Title: Chief Operating Officer 35 EXHIBIT A DESCRIPTION OF THE PREMISES
- ----------------------------------------------------------------------------------------------- Approximate Seller Property Name Address TRA/Lot Size - ----------------------------------------------------------------------------------------------- John Marshall Associates John Marshall I and 8283 Greensboro Drive 261,364 sf TRA Limited Partnership John Marshall III Land McLean, Virginia 22102 111,176 sf Lot Size - ----------------------------------------------------------------------------------------------- Greensboro Associates E. J. Randolph 8251 Greensboro Drive 164,695 sf TRA Limited Partnership McLean, Virginia 22102 - ----------------------------------------------------------------------------------------------- Pimpernell Estates SAIC I 1710 Goodridge Drive 128,655 sf TRA Limited Partnership McLean, Virginia 22102 - ----------------------------------------------------------------------------------------------- Woodland-Northridge I Northridge I 13221 Woodland Park Rd. 124,319 sf TRA Limited Partnership Herndon, Virginia 22071 - -----------------------------------------------------------------------------------------------
A-1 EXHIBIT B ADDITIONAL OPTION PREMISES
- ----------------------------------------------------------------------------------------------- Approximate Seller Property Name Address TRA/Lot Size - ----------------------------------------------------------------------------------------------- Pimpernell Estates SAIC II 128,655 sf TRA Limited Partnership - ----------------------------------------------------------------------------------------------- Goodridge Drive SAIC III 124,319 sf TRA Associates Limited Partnership - -----------------------------------------------------------------------------------------------
B-1 EXHIBIT C ALLOCATIONS OF VALUE AND DEBT Property Values Assumed Indebtedness - ------------------------------------------------------------------------------- John Marshall I and $32,293,000 $21,517,000 John Marshall III - ------------------------------------------------------------------------------- E.J. Randolph 23,467,000 18,056,000 - ------------------------------------------------------------------------------- SAIC I 37,378,000 27,879,000 - ------------------------------------------------------------------------------- Northridge I 21,862,000 16,642,000 ---------- ---------- - ------------------------------------------------------------------------------- TOTAL $115,000,000 $84,094,000 - ------------------------------------------------------------------------------- C-1 EXHIBIT D PARTNERSHIP AGREEMENT D-1 EXHIBIT E SELLER'S EXCEPTIONS E-1 EXHIBIT F RENT ROLL OF JOHN MARSHALL ASSOCIATES LIMITED PARTNERSHIP F-1 EXHIBIT F (continued) RENT ROLL OF GREENSBORO ASSOCIATES LIMITED PARTNERSHIP F-2 EXHIBIT F (continued) RENT ROLL OF PIMPERNELL ESTATES LIMITED PARTNERSHIP F-3 EXHIBIT F (continued) RENT ROLL OF WOODLAND-NORTHRIDGE I LIMITED PARTNERSHIP F-4 EXHIBIT G LEASING AND RELATED AGREEMENTS The Evans Company is owed a commission in the amount of $800,541.30 for five year lease extension of Booz Allen and Hamilton in John Marshall I. G-1 EXHIBIT H APPLIED SECURITY DEPOSITS Sam's Deli $ 2,703.75 Park's Fabricare $ 1,212.00 DSC Communications $11,933.00 H-1 EXHIBIT I KNOWN SUBLEASES, SUB-SUBLEASES AND ASSIGNMENTS None I-1 EXHIBIT J SUBSCRIBER QUESTIONNAIRE Name:______________________________________ PROSPECTIVE SUBSCRIBER QUESTIONNAIRE ------------ Beacon Properties, L.P. 50 Rowes Wharf Boston, MA 02110 Tel: (617) 330-1400 ------------ The units of limited partnership interest (the "Units") of Beacon Properties, L.P. (the "Operating Partnership") are being offered without registration under the Securities Act of 1933, as amended (the "Securities Act"), and the securities laws of certain states. The Units are being offered in reliance on an exemption from registration under Regulation D of the Securities Act ("Regulation D") and similar state law exemptions. To satisfy the requirements of Regulation D and applicable state law exemptions, the Operating Partnership must determine whether a prospective unitholder meets that Regulation D and state law definitions of "accredited investor" before selling (or, in some states, offering) securities to such person. This Questionnaire is intended to assist the Operating Partnership in making this determination. Please complete, execute and date this Prospective Subscriber Questionnaire and deliver it to the address set forth above. Your answers will, at all times, be kept confidential except as necessary to establish that the offering and sale of the Units will not result in a violation of the registration provisions of the Securities Act or a violation of the securities laws of any state. 1) To establish the basis of the Subscriber's status as an accredited investor, please answer the questions set forth below. J-1 a) Is the Subscriber an individual with a net worth (or net worth with his or her spouse) in excess of $1 million: Yes__________ No__________ b) Is the Subscriber an individual with net income (without including any net income of the Subscriber's spouse) in excess of $200,000, or joint income with the Subscriber's spouse, in excess of $300,000, in each of the two most recent years, and does the Subscriber reasonably expect to reach the same income level in the current year? Yes__________ No__________ c) Is the Subscriber an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (hereinafter "ERISA") whose decision to invest in the Operating Partnership is being made by a plan fiduciary which is either a bank, savings and loan association, insurance company or registered investment adviser or, alternatively, does the employee benefit plan have total assets in excess of $5,000,000 or is the employee benefit plan "self-directed" with investment decisions made solely by person(s) who answered "Yes" to item 1(a) or 1(b) above? Yes__________ No__________ d) Is the Subscriber a retirement plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees with total assets in excess of $5,000,000? Yes__________ No__________ e) Is the Subscriber a trust (including an individual retirement arrangement formed as a trust or a tax-qualified pension and profit sharing plan (e.g., a Keogh Plan) formed as a trust but not subject to ERISA) with total assets in excess of $5,000,000 that was not formed for the specific J-2 purpose of acquiring the Units and whose purchase is directed by a person with such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of the prospective investment? Yes__________ No__________ f) Is the Subscriber a corporation, partnership, Massachusetts or similar business trust or an organization described in Section 501(c)(3) of the Internal Revenue Code that was not formed for the specific purpose of acquiring the Units and whose total assets exceed $5,000,000? Yes__________ No__________ g) Is the Subscriber one of the following entities: (i) A "bank" as defined in Section 3(a)(2) of the Securities Act or any "savings and loan association" or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in an individual or fiduciary capacity; (ii) A "broker/dealer" registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; (iii) An "insurance company," as defined in Section 2(13) of the Securities Act; (iv) An "investment company" registered under the Investment Company Act of 1940 or a "business development company" as defined in Section 2(a)(48) of the Investment Company Act of 1940; (v) A "Small Business Investment Company" licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; or (vi) A "Private Business Development Company"as defined in Section 202(a)(22) of the Investment Advisers Act of 1940? J-3 Yes__________ No__________ If yes, then which entity (i.e., (g)(i) through (vi) above)? h) Is the Subscriber an entity (other than a trust, but including a grantor trust) in which all of the equity owners can answer "Yes" to any one question set forth in Sections 1(a) through 1(g) immediately above? Yes__________ No__________ 2) Is the Subscriber acquiring the Units of the Operating Partnership as a principal for the purposes of investment and not with a view to resale or distribution? Yes__________ No__________ 3) By signing this Questionnaire, the Subscriber hereby confirms the following statements: a) The Subscriber is aware that the offering of the Units will involve securities for which no market exists, thereby possibly requiring an investment to be held for an indefinite period of time. b) The Subscriber shall immediately provide the Operating Partnership with corrected information in the event any information given herein was untrue. c) The Subscriber acknowledges that any delivery of the Registration Statement on Form S-11 and other information relating to the Operating Partnership prior to the determination by the Operating Partnership of the suitability of the Subscriber as a Unitholder shall not constitute an offer of Units until such determination of suitability shall be made. d) The Subscriber acknowledges that the Operating Partnership will rely on the Subscriber's representations contained herein as a basis for exemption from registration. e) The Subscriber, either alone or with his or her purchase representative, has such knowledge and experience in financial and business matters as J-4 to be capable of evaluating the risks and merits of the prospective investment in the Units. f) The answers of the Subscriber to the foregoing questions are true and complete to the best of the information and belief of the undersigned, and the Operating Partnership shall be notified promptly (and, in particular, upon the acquisition of additional Units by the Subscriber) of any changes in the foregoing answers. Notwithstanding the foregoing, the undersigned shall have no obligation to furnish additional information after the acquisition of the Units except as may be required to demonstrate the availability of an exemption from registration under Regulation D with respect to the acquisition of Units or of the shares of Common Stock which may be obtained upon their redemption or exchange. - ------------------------------------ ------------------------------------ Signature of Subscriber Signature of Subscriber (or duly authorized agent) (or duly authorized agent) - ------------------------------------ ------------------------------------ Title: Title: - ------------------------------------ ------------------------------------ Print Name Signed Above Print Name Signed Above - ------------------------------------ ------------------------------------ Date Date J-5 EXHIBIT K LOCK-UP AGREEMENT [date] Beacon Properties Corporation 50 Rowes Wharf Boston, MA 02110 Beacon Properties, L.P. 50 Rowes Wharf Boston, MA 02110 Ladies and Gentlemen: In consideration of the Option Agreement between Beacon Properties, L.P. ("Purchaser"), and Greensboro Associates Limited Partnership, John Marshall Associates Limited Partnership, Pimpernell Estates Limited Partnership, Woodland-Northridge I Limited Partnership, and Goodridge Drive Associates Limited Partnership ("Seller"), dated as of March ____ 1996, pursuant to which Purchaser agreed to acquire certain assets of Seller for consideration including units of limited partnership interest (the "Units") in Beacon Properties, L.P., a Maryland partnership (the "Operating Partnership"), the undersigned hereby agrees that the undersigned will not sell, offer or contract to sell, grant any option to purchase, pledge, redeem, convert or otherwise dispose of or transfer any Units until the date that is one (1) year from the date of the issuance of the Units, and that any such transaction prior to such date shall be null and void and shall not be binding on or recognized by the Purchaser or Beacon Properties Corporation. Very truly yours, WITNESS: GREENSBORO ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: ____________________________________ Name: David W. Evans Title: General Partner ______________________________ By: ____________________________________ K-1 Name: A.J. Clark Title: General Partner ______________________________ By: The Sotweed Corporation, a Delaware corporation, as general partner ______________________________ By: _______________________________ Name: Robert G. Goelet Title: President ______________________________ By: _______________________________ Name: Jonathan M. Rather Title: Treasurer JOHN MARSHALL ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: ____________________________________ Name: David W. Evans Title: General Partner ______________________________ By: ____________________________________ Name: A.J. Clark Title: General Partner ______________________________ By: The Sotweed Corporation, a Delaware corporation, as general partner ______________________________ By: _______________________________ Name: Robert G. Goelet Title: President ______________________________ By: _______________________________ Name: Jonathan M. Rather Title: Treasurer K-2 PIMPERNELL ESTATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: Pimpernell Corporation, a Delaware corporation, as general partner ______________________________ By: _______________________________ Name: Robert G. Goelet Title: President ______________________________ By: _______________________________ Name: Jonathan M. Rather Title: Treasurer WOODLAND-NORTHRIDGE I LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: ____________________________________ Name: David W. Evans Title: General Partner ______________________________ By: ____________________________________ Name: A.J. Clark Title: General Partner By: White Swan Oil Corporation, a Delaware corporation, as general partner ______________________________ By: _______________________________ Name: Jonathan M. Rather Title: Vice President K-3 By: Green Highlander Corporation, a Delaware corporation, as general partner ______________________________ By: _______________________________ Name: Jonathan M. Rather Title: Vice President By: Windward Oil and Gas Corporation, a Texas corporation, as general partner ______________________________ By: _______________________________ Name: Gilbert Kerlin Title: President By: Smoking Tree Corporation, a Delaware corporation, as general partner ______________________________ By: _______________________________ Name: Robert G. Goelet Title: President ______________________________ By: _______________________________ Name: Jonathan M. Rather Title: Treasurer GOODRIDGE DRIVE ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership _______________________________ By: ____________________________________ Name: Title: K-4 EXHIBIT L REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is entered into as of _____________, 1996 by and between Beacon Properties Corporation, a Maryland corporation (the "Company") and John Marshall Associates Limited Partnership, a Virginia limited partnership, Greensboro Associates Limited Partnership, a Virginia limited partnership, Woodland-Northridge I Limited Partnership, a Virginia limited partnership, Pimpernell Estates Limited Partnership, a Virginia limited partnership, and Goodridge Drive Associates Limited Partnership, a Virginia limited partnership (each a "Holder" and collectively the "Holders"). WHEREAS, the Holders are to receive units of limited partnership interest ("Units") in Beacon Properties, L.P. (the "Operating Partnership") which may be redeemed for shares of the Company's common stock, no par value ("Common Stock") issued without registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to an Option Agreement dated March 18, 1996 by and between the Holders and the Operating Partnership. NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Registration. (a) Demand Registration. At any time after March 18, 1997 until the earlier of (i) March 18, 2007 or (ii) the date on which all of the Registrable Shares (as hereinafter defined) have become eligible for sale pursuant to Rule 144 promulgated under the Securities Act, subject to the conditions set forth in this Agreement, Holders may request that the Company cause to be filed, a registration statement (a "Demand Registration Statement") under Rule 415 under the Securities Act relating to the sale by such Holders of their previously or concurrently issued Registrable Shares in accordance with the terms hereof. As used in this Agreement, the term "Registrable Shares" means shares of Common Stock issued or to be issued to the Holders upon redemption or in exchange for their Units, excluding (A) Common Stock for which a Registration Statement relating to the sale thereof shall have become effective under the Securities Act and which have been disposed of under such Registration Statement, (B) Common Stock sold pursuant to Rule 144 under the Securities Act or (C) Common Stock eligible for sale pursuant to Rule 144 under the Securities Act. Upon receipt of any such request, the Company shall promptly give written notice of such proposed registration to all Holders of Units and Registrable Shares. Such Holders shall have the right, by giving written notice to the Company within fifteen (15) days after such notice referred to L-1 in the preceding sentence has been given by the Company to elect to have included in the Demand Registration Statement such of their Registrable Shares as each Holder may request in such notice of election. Thereupon, the Company shall use its best efforts to cause such Demand Registration Statement to be declared effective by the Securities and Exchange Commission (the "SEC") for all Registrable Shares which the Company has been requested to register as soon as practicable thereafter. The Company agrees to use its best efforts to keep the Demand Registration Statement continuously effective until the earliest of (a) the date on which the Holders no longer hold any Registrable Shares registered under the Demand Registration Statement, (b) the date on which the Registrable Shares may be sold by the Holders pursuant to Rule 144 promulgated under the Securities Act or (c) the date which is six (6) months from the effective date of such Demand Registration Statement. The Company shall not be required to file and effect a new Demand Registration Statement pursuant to this Section 1(a) until a period of twelve (12) months has elapsed from the termination of the registration statement with respect to Registrable Shares covered by a prior registration request. (b) Piggyback Registration. If at any time while any Registrable Shares are outstanding the Company proposes to file a registration statement under the Securities Act with respect to an offering of Common Stock solely for cash (other than a registration statement (i) on Form S-8 or any successor form or in connection with any employee or director welfare, benefit or compensation plan, (ii) on Form S-4 or any successor form or in connection with an exchange offer, (iii) in connection with a rights offering exclusively to existing holders of Common Stock, (iv) in connection with an offering solely to employees of the Company or its affiliates, or (v) relating to a transaction pursuant to Rule 145 of the Securities Act), whether or not for its own account (a "Piggyback Registration Statement"), the Company shall give written notice of such proposed filing at least 10 business days before filing to the Holders. The notice referred to in the preceding sentence shall offer Holders the opportunity to register such amount of Registrable Shares as each Holder may request (a "Piggyback Registration"). Subject to the provisions of Section 2 below, the Company shall include in such Piggyback Registration all Registrable Shares requested to be included in the registration for which the Company has received written requests for inclusion therein within fifteen (15) calendar days after the notice referred to above has been given by the Company to the Holders. Holders of Registrable Shares shall be permitted to withdraw all or part of the Registrable Shares from a Piggyback Registration at any time prior to the effective date of such Piggyback Registration. If a Piggyback Registration is an underwritten registration on behalf of the Company and the managing underwriter advises the Company that the total number of shares of Common Stock requested to be included in such registration exceeds the number of shares of Common Stock which can be sold in such offering, the Company will include in such registration in the following priority: (i) first, all shares of Common Stock the Company proposes to sell and (ii) second, up to the full number of applicable Registrable Shares requested to be included in such registration and, which in the opinion of such managing underwriter, can be sold without adversely affecting the price range or probability of success of such offering, which shall be allocated among the Holders and all other stockholders requesting registration on a pro rata basis. No Registrable Securities or other shares of Common Stock requested to be included in L-2 a registration pursuant to demand registration rights shall be excluded from the underwriting unless all securities other than such securities are first excluded. (c) Registration Statement Covering Issuance of Common Stock. In lieu of the registration rights set forth in Section 1(a) and 1(b) above, the Company may, in its sole discretion, prior to the first date upon which the Units held by the Holders may be redeemed (or such other date as may be required under applicable provisions of the Securities Act) file a registration statement (the "Shelf Registration Statement") under Rule 415 under the Securities Act relating to the issuance to Holders of shares of Common Stock upon the redemption or in exchange for their Units. Thereupon, the Company shall use its best efforts to cause such Registration Statement to be declared effective by the SEC for all shares of Common Stock covered thereby. The Company agrees to use its best efforts to keep the Shelf Registration Statement continuously effective until the date on which each Holder has redeemed or exchanged such Holder's Units for Common Stock. In the event that the Company is unable to cause such Registration Statement to be declared effective by the SEC or is unable to keep such Registration Statement effective until the date on which each Holder has redeemed or exchanged such Holder's Units for Common Stock, then the rights of each Holder set forth in Section 1(a) and 1(b) above shall be restored. Any Demand Registration Statement, Piggyback Registration Statement or Shelf Registration Statement are sometimes referred to as a "Registration Statement." 2. Registration Procedures. (a) The Company shall notify each Holder of the effectiveness of the Registration Statement and shall furnish to each Holder such number of copies of the Registration Statement (including any amendments, supplements and exhibits), the prospectus contained therein (including each preliminary prospectus), any documents incorporated by reference in the Registration Statement and such other documents as the Holder may reasonably request in order to facilitate its sale of the Registrable Shares in the manner described in the Registration Statement. (b) The Company shall prepare and file with the SEC from time to time such amendments and supplements to the Registration Statement and prospectus used in connection therewith as may be necessary to keep the Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all the Registrable Shares until the earlier of (i) such time as all of the Registrable Shares have been disposed of in accordance with the intended methods of disposition by the Holders as set forth in the Registration Statement or (ii) the date on which the Registration Statement ceases to be effective in accordance with the terms of Section 1. Upon ten (10) business days' notice, the Company shall file any supplement or post-effective amendment to the Registration Statement with respect to such Holder's interests in or plan of distribution of Registrable Shares that is reasonably necessary to permit the sale of the Holder's Registrable Shares pursuant to the Registration Statement and the Company shall file any necessary listing applications or L-3 amendments to the existing applications to cause the shares to be then listed or quoted on the primary exchange or quotation system on which the Common Stock is then listed or quoted. (c) The Company shall promptly notify each Holder of, and confirm in writing, any request by the SEC for amendments or supplements to the Registration Statement or the prospectus related thereto or for additional information. In addition, the Company shall promptly notify each Holder of, and confirm in writing, the filing of the Registration Statement, any prospectus supplement related thereto or any post-effective amendment to the Registration Statement and the effectiveness of any post-effective amendment. (d) The Company shall immediately notify each Holder, at any time when a prospectus relating to the Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. In such event and subject to paragraph 7 of this Agreement, the Company shall promptly prepare and furnish to each Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of Registrable Shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. 3. State Securities Laws. Subject to the conditions set forth in this Agreement, the Company shall, promptly upon the filing of a Registration Statement including Registrable Shares, file such documents as may be necessary to register or qualify the Registrable Shares under the securities or "Blue Sky" laws of such states as any Holder may reasonably request, and the Company shall use its best efforts to cause such filings to become qualified; provided, however, that the Company shall not be obligated to qualify as a foreign corporation to do business under the laws of any such state in which it is not then qualified or to file any general consent to service of process in any such state. Once qualified, the Company shall use its best efforts to keep such filings qualified until the earlier of (a) such time as all of the Registrable Shares have been disposed of in accordance with the intended methods of disposition by the Holder as set forth in the Registration Statement, (b) in the case of a particular state, a Holder has notified the Company that it no longer requires qualified filing in such state in accordance with its original request for filing or (c) the date on which the Registration Statement ceases to be effective. The Company shall promptly notify each Holder of, and confirm in writing, the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Shares for sale under the securities or "Blue Sky" laws of any jurisdiction or the initiation or threat of any proceeding for such purpose. 4. Expenses. The Company shall bear all expenses incurred in connection with the registration of the Registrable Shares pursuant to Section 1(b) and Section 1(c) of this L-4 Agreement. Additionally, the Company shall bear all expenses incurred in connection with the registration of the Registrable Shares pursuant to Section 1(a) of this Agreement for each Registration Statement registering $1 million or more of Registrable Shares, and the Holders shall bear their ratable shares of all expenses incurred by the Company in connection with a registration in which the Holders are included pursuant to Section 1(a) of this Agreement based on the number of Registrable Shares included to the total number of shares of Common Stock so registered for each Registration Statement registering less than $1 million of Registrable Shares. Such expenses shall include, without limitation, all printing, legal and accounting expenses incurred by the Company and all registration and filing fees imposed by the SEC, any state securities commission or the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, the principal national securities exchange or national market system on which the Common Stock is then traded or quoted. In addition, Holders shall be responsible for any brokerage or underwriting commissions and taxes of any kind (including, without limitation, transfer taxes) with respect to any disposition, sale or transfer of Registrable Shares and for any legal, accounting and other expenses incurred by them. 5. Indemnification by the Company. The Company agrees to indemnify each of the Holders and their respective officers, directors, employees, agents, representatives and affiliates, and each person or entity, if any, that controls a Holder within the meaning of the Securities Act, and each other person or entity, if any, subject to liability because of his, her or its connection with a Holder, and any underwriter and any person who controls the underwriter within the meaning of the Securities Act (an "Indemnitee") against any and all losses, claims, damages, actions, liabilities, costs and expenses (including without limitation reasonable attorneys' fees, expenses and disbursements documented in writing), joint or several, arising out of or based upon any untrue or alleged untrue statement of material fact contained in the Registration Statement or any prospectus contained therein, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as and to the extent that such statement or omission arose out of or was based upon information regarding the Indemnitee or its plan of distribution which was furnished to the Company by the Indemnitee for use therein, provided, further that the Company shall not be liable to any person who participates as an underwriter in the offering or sale of Registrable Shares or any other person, if any, who controls such underwriter within the meaning of the Securities Act, in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in such Registration Statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with information furnished to the Company for use in connection with the Registration Statement or the prospectus contained therein by such Indemnitee or (ii) such Indemnitee's failure to send or give a copy of the final prospectus furnished to it by the Company at or prior to the time such action is required by the Securities Act to the person claiming an untrue statement or alleged untrue statement or omission or alleged omission if such statement or omission was corrected L-5 in such final prospectus. The obligations of the Company under this Section 5 shall survive the completion of any offering of Registrable Shares pursuant to a Registration Statement under this Agreement or otherwise and shall survive the termination of this Agreement. 6. Covenants of Holders. Each of the Holders hereby agrees (a) to cooperate with the Company and to furnish to the Company all such information in connection with the preparation of the Registration Statement and any filings with any state securities commissions as the Company may reasonably request, (b) to deliver or cause delivery of the prospectus contained in the Registration Statement to any purchaser of the shares covered by the Registration Statement from the Holder, (c) to indemnify the Company, its officers, directors, employees, agents, representatives and affiliates, and each person, if any, who controls the Company within the meaning of the Securities Act, and each other person, if any, subject to liability because of his connection with the Company, against any and all losses, claims, damages, actions, liabilities, costs and expenses arising out of or based upon (i) any untrue statement or alleged untrue statement of material fact contained in either Registration Statement or the prospectus contained therein, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, if and to the extent that such statement or omission arose out of or was based upon information regarding the Holder or its plan of distribution which was furnished to the Company by the Holder expressly for use therein, or (ii) the failure by the Holder to deliver or cause to be delivered the prospectus contained in the Registration Statement (as amended or supplemented, if applicable) furnished by the Company to the Holder to any purchaser of the shares covered by the Registration Statement from the Holder. Notwithstanding the foregoing, (i) in no event will a Holder have any obligation under this Section 6 for amounts the Company pays in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld) and (ii) the total amount for which a Holder shall be liable under this Section 6 shall not in any event exceed the aggregate proceeds received by him or it from the sale of the Holder's Registrable Shares in such registration. The obligations of the Holders under this Section 6 shall survive the completion of any offering of Registrable Shares pursuant to a Registration Statement under this Agreement or otherwise and shall survive the termination of this Agreement. 7. Suspension of Registration Requirement. (a) The Company shall promptly notify each Holder of, and confirm in writing, the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose. The Company shall use its best efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest possible moment. (b) Notwithstanding anything to the contrary set forth in this Agreement, the Company's obligation under this Agreement to use its best efforts to cause the Registration Statement and any filings with any state securities commission to be made or to become L-6 effective or to amend or supplement the Registration Statement shall be suspended in the event and during such period pending negotiations relating to, or consummation of, a transaction or the occurrence of an event that would require additional disclosure of material information by the Company in the Registration Statement or such filing, as to which the Company has a bona fide business purpose for preserving confidentiality or which renders the Company unable to comply with SEC requirements (such circumstances being hereinafter referred to as a "Suspension Event") that would make it impractical or unadvisable to cause the Registration Statement or such filings to be made or to become effective or to amend or supplement the Registration Statement, but such suspension shall continue only for so long as such event or its effect is continuing but in no event will that suspension exceed 60 days. The Company agrees not to exercise the rights set forth in this Section 7(b) more than twice in any twelve month period and further agrees that the 60-day periods shall be non-consecutive. The Company shall notify the Holder of the existence of any Suspension Event. (c) Each holder of Registrable Shares whose Registrable Shares are covered by a Registration Statement filed pursuant to Section 1 hereof agrees, if requested by the Company in the case of a nonunderwritten offering (a "Nonunderwritten Offering") or if requested by the managing underwriter or underwriters in an underwritten offering (an "Underwritten Offering," collectively with Nonunderwritten Offering, the "Offering"), not to effect any public sale or distribution of any of the securities of the Company of any class included in such Offering, including a sale pursuant to Rule 144 or Rule 144A under the Securities Act (except as part of such Underwritten Offering), during the 15-day period prior to, and during the 60-day period (or such longer period as may be required by the managing underwriter or underwriters) beginning on, the date of pricing of each Offering, to the extent timely notified in writing by the Company or the managing underwriters. 8. Black-Out Period. Following the effectiveness of the Registration Statement and the filings with any state securities commissions, the Holders agree that they will not effect any sales of the Registrable Shares pursuant to the Registration Statement or any such filings at any time after they have received notice from the Company to suspend sales as a result of the occurrence or existence of any Suspension Event, during any Offering or so that the Company may correct or update the Registration Statement or such filing pursuant to Section 2(c) or 2(d). The Holder may recommence effecting sales of the Registrable Shares pursuant to the Registration Statement or such filings following further notice to such effect from the Company, which notice shall be given by the Company not later than five (5) days after the conclusion of any such Suspension Event or Offering. 9. Additional Shares. The Company, at its option, may register, under any registration statement and any filings with any state securities commissions filed pursuant to this Agreement, any number of unissued shares of Common Stock or any shares of Common Stock owned by any other shareholder or shareholders of the Company. 10. Contribution. If the indemnification provided for in Sections 5 and 6 is unavailable to an indemnified party with respect to any losses, claims, damages, actions, L-7 liabilities, costs or expenses referred to therein or is insufficient to hold the indemnified party harmless as contemplated therein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, actions, liabilities, costs or expenses in such proportion as is appropriate to reflect the relative fault of the Company, on the one hand, and the Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, actions, liabilities, costs or expenses as well as any other relevant equitable considerations. The relative fault of the Company, on the one hand, and of the Holder, on the other hand, shall be determined by reference to, among other factors, whether the untrue or alleged untrue statement of a material fact or omission to state a material fact relates to information supplied by the Company or by the Holder and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that in no event shall the obligation of any indemnifying party to contribute under this Section 10 exceed the amount that such indemnifying party would have been obligated to pay by way of indemnification if the indemnification provided for under Sections 5 or 6 hereof had been available under the circumstances. The Company and the Holders agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. No indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation. 11. No Other Obligation to Register. Except as otherwise expressly provided in this Agreement, the Company shall have no obligation to the Holders to register the Registrable Shares under the Securities Act. 12. Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented without the prior written consent of the Company and Holders holding in excess of 50% of the Registrable Shares. 13. Notices. Except as set forth below, all notices and other communications provided for or permitted hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or sent by telex or telecopier, registered or certified mail (return receipt requested), postage prepaid or courier or overnight delivery service to the Company at the following address and to the Holder at the address set forth on his signature page to this Agreement (or at such other address for any party as shall be specified by like notice, provided that notices of a change of address shall be effective only upon receipt thereof), and further provided that in case of directions to amend the Registration Statement pursuant to Section 2(b) or Section 6, a Holder must confirm such notice in writing by overnight express delivery with confirmation of receipt: L-8 If to the Company: Beacon Properties Corporation 50 Rowes Wharf Boston, MA 02110 Attn: Alan M. Leventhal, Chief Executive Officer With a copy to: Goodwin, Procter & Hoar Exchange Place Boston, MA 02109 Attn: Gilbert G. Menna, P.C. In addition to the manner of notice permitted above, notices given pursuant to Sections 1, 7 and 8 hereof may be effected telephonically and confirmed in writing thereafter in the manner described above. 14. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. This Agreement may not be assigned by any Holder and any attempted assignment hereof by any Holder will be void and of no effect and shall terminate all obligations of the Company hereunder with respect to such Holder. 15. Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 16. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland applicable to contracts made and to be performed wholly within said State. 17. Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law. 18. Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be the complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to such subject matter. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. L-9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. BEACON PROPERTIES CORPORATION ________________________________ Name: Title: L-10 GREENSBORO ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership By: ______________________________ Name: David W. Evans Title: General Partner By: ______________________________ Name: A.J. Clark Title: General Partner By: The Sotweed Corporation, a Delaware corporation, as general partner By: _____________________________ Name: Robert G. Goelet Title: President By: _____________________________ Name: Jonathan M. Rather Title: Treasurer JOHN MARSHALL ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership By: ______________________________ Name: David W. Evans Title: General Partner By: ______________________________ Name: A.J. Clark Title: General Partner L-11 By: The Sotweed Corporation, a Delaware corporation, as general partner By: ____________________________ Name: Robert G. Goelet Title: President By: ____________________________ Name: Jonathan M. Rather Title: Treasurer PIMPERNELL ESTATES LIMITED PARTNERSHIP, a Virginia limited partnership By: Pimpernell Corporation, a Delaware corporation, as general partner By: _____________________________ Name: Robert G. Goelet Title: President By: _____________________________ Name: Jonathan M. Rather Title: Treasurer WOODLAND-NORTHRIDGE I LIMITED PARTNERSHIP, a Virginia limited partnership By: _________________________________ Name: David W. Evans Title: General Partner L-12 By: ______________________________ Name: A.J. Clark Title: General Partner By: White Swan Oil Corporation, a Delaware corporation, as general partner By: _____________________________ Name: Jonathan M. Rather Title: Vice President By: Green Highlander Corporation, a Delaware corporation, as general partner By: _____________________________ Name: Jonathan M. Rather Title: Vice President By: Windward Oil and Gas Corporation, a Texas corporation, as general partner By: _____________________________ Name: Gilbert Kerlin Title: President By: Smoking Tree Corporation, a Delaware corporation, as general partner By: _____________________________ Name: Robert G. Goelet Title: President L-13 By: ______________________________ Name: Jonathan M. Rather Title: Treasurer GOODRIDGE DRIVE ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership By: _______________________________ Name: David W. Evans Title: General Partner By: _______________________________ Name: A. J. Clark Title: General Partner By: RPC Associates, a Virginia general partnership, General Partner By: Rattlesnake Point Corporation, a Delaware corporation, its general partner By: _________________________ Name: Robert G. Goelet Title: President By: __________________________ Name: Jonathan M. Rather Title: Treasurer Each Holder's address: c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801 L-14 EXHIBIT M TITLE EXCEPTIONS M-1 EXHIBIT N PRE-OPTION EXERCISE DATE ECONOMIC LEASE TERM GUIDELINES 299699.c1 N-1 EX-2.2 4 PLAN OF ACQUISITION, REORGANIZATION, ETC. FIRST AMENDMENT TO OPTION AGREEMENT THIS FIRST AMENDMENT TO OPTION AGREEMENT is made as of the 17th day of May, 1996 by and among John Marshall Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Greensboro Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Woodland-Northridge I Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Pimpernell Estates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801 and Goodridge Drive Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, (the foregoing five (5) partnerships, individually or collectively, "Seller"), and Beacon Properties, L.P., a Delaware limited partnership, with an address of 50 Rowes Wharf, Boston, Massachusetts 02110 (together with its successors and assigns, "Buyer"). Capitalized terms used herein without definition shall have the same meaning ascribed to such terms in the Option Agreement. W I T N E S S E T H : WHEREAS, Seller and Buyer entered into that certain Option Agreement dated as of March 18, 1996 (the "Option Agreement") pursuant to which Seller granted Buyer an option to purchase the Premises, and provided Buyer purchases the Premises, Seller also granted Buyer an option to purchase the Additional Option Premises, all as more fully described in the Option Agreement; and WHEREAS, Seller and Buyer desire to change the date by which Buyer must exercise the Option and amend the Option Agreement to exclude the Premises known as SAIC I and the Additional Option Premises (as such terms are defined in the Option Agreement), subject to the terms of this Amendment below. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, Seller and Buyer hereby agree as follows: 1. The second sentence of Section 1 of the Option Agreement is hereby deleted and the following substituted therefor: "The Option may be exercised by Buyer's giving written notice of Buyer's exercise to Seller on or before May 31, 1996 (the date on which the Option is exercised, the 'Option Exercise Date')." 2. Except as provided in paragraph 3 below, SAIC I and the Additional Option Premises shall be excluded from the Option Agreement, the Option Agreement shall have no force or effect with respect thereto and all references thereto in the Option Agreement including, without limitation, on Exhibits A and B of the Option Agreement shall be deemed deleted. 3. In the event that, on or before May 31, 1996, both (i) Seller has not entered into a contract with SAIC for the sale of, or grant of an option to purchase, SAIC I and the Additional Option Premises and (ii) SAIC has irrevocably waived in writing its rights of first refusal under the SAIC I Option and the SAIC II Option with respect to the Option Agreement, then SAIC I and the Additional Option Premises shall be reinstated into the Option Agreement and paragraph 2 hereof shall be of no further force or effect. 4. Except as modified hereby, the Option Agreement shall remain in full force and effect. EXECUTED under seal as of the date first above written. WITNESS: SELLER: GREENSBORO ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ______________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner 2 ______________________________ By: The Sotweed Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer JOHN MARSHALL ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ______________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner By: The Sotweed Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer 3 PIMPERNELL ESTATES LIMITED PARTNERSHIP, a Virginia limited partnership By: Pimpernell Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer WOODLAND-NORTHRIDGE I LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ______________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner By: White Swan Oil Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Vice President 4 By: Green Highlander Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Vice President By: Windward Oil and Gas Corporation, a Texas corporation, as general partner ______________________________ By: /s/ Gilbert Kerlin Name: Gilbert Kerlin Title: President By: Smoking Tree Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer GOODRIDGE DRIVE ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership _______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner 5 _______________________________ By: /s/ A.J. Clark Name: A. J. Clark Title: General Partner By: RPC Associates, a Virginia general partnership, General Partner By: Rattlesnake Point Corporation, a Delaware corporation, its general partner ______________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer BUYER: BEACON PROPERTIES, L.P., a Delaware limited partnership By: Beacon Properties Corporation, a Maryland corporation, its general partner ____________________________ By: /s/ Lionel P. Fortin Name: Lionel P. Fortin Title: Chief Operating Officer 299748.c1 6 EX-2.3 5 PLAN OF ACQUISITION, REORGANIZATION, ETC. SECOND AMENDMENT TO OPTION AGREEMENT This SECOND AMENDMENT TO OPTION AGREEMENT is made as of the 31st day of May, 1996 by and among John Marshall Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Greensboro Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Woodland-Northridge I Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Pimpernell Estates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801 and Goodridge Drive Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801 (the foregoing five (5) partnerships, individually or collectively, "Seller"), and Beacon Properties, L.P., a Delaware limited partnership, with an address of 50 Rowes Wharf, Boston, Massachusetts 02110 (together with its successors and assigns, "Buyer"). Capitalized terms used herein without definition shall have the same meaning ascribed to such terms in the Option Agreement. WITNESSETH: WHEREAS, Seller and Buyer entered into that certain Option Agreement dated as of March 18, 1996, as amended by a First Amendment to Option Agreement by and between Seller and Buyer dated as of May 17, 1996 (as amended, the "Option Agreement") pursuant to which Seller granted buyer an option to purchaser the Premises, and provided Buyer purchases the Premises, Seller also granted Buyer an option to purchase the Additional Option Premises, all as more fully described in the Option Agreement; and WHEREAS, Seller and Buyer desire to change the date by which Buyer must exercise the Option (as such term is defined in the Option Agreement), subject to the terms of this Amendment below. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledge, Seller and Buyer hereby agree as follows: 1. All references in the First Amendment to "May 31, 1996" are hereby deleted and "June 14, 1996" is hereby substituted therefor. 2. Except as modified hereby, the Option Agreement shall remain in full force and effect. EXECUTED under sale as of the date first above written. WITNESS: SELLER: GREENSBORO ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ________________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ________________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner By: The Sotweed Corporation, a Delaware corporation, as general partner ________________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ________________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer JOHN MARSHALL ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ________________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ________________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner 2 By: The Sotweed Corporation, a Delaware corporation, as general partner ________________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ________________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer PIMPERNELL ESTATES LIMITED PARTNERSHIP, a Virginia limited partnership By: Pimpernel Corporation, a Delaware corporation, as general partner ________________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ________________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer WOODLAND-NORTHRIDGE I LIMITED PARTNERSHIP, a Virginia limited partnership ________________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ________________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner 3 By: White Swan Oil Corporation, a Delaware corporation, as general partner ________________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Vice President By: Green Highlander Corporation, a Delaware corporation, as general partner ________________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Vice President By: Windward Oil and Gas Corporation, a Texas corporation, as general partner ________________________________ By: /s/ Gilbert Kerlin Name: Gilbert Kerlin Title: President By: Smoking Tree Corporation, a Delaware corporation, as general partner ________________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ________________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer GOODRIDGE DRIVE ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ________________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner 4 ________________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner By: RPC Associates, a Virginia general partnership, General Partner By: Rattlesnake Point Corporation, a Delaware corporation, its general partner ________________________________ By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ________________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer BUYER: BEACON PROPERTIES, L.P., a Delaware limited partnership By: Beacon Properties Corporation, a Maryland corporation, its general partner ________________________________ By: /s/ Charles H. Cremens Name: Charles H. Cremens Title: Senior Vice President 299814.c1 5 EX-2.4 6 PLAN OF ACQUISITION, REORGANIZATION, ETC. THIRD AMENDMENT TO OPTION AGREEMENT This THIRD AMENDMENT TO OPTION AGREEMENT (this "Amendment") is made as of the 21st day of June, 1996 by and among John Marshall Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Greensboro Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Woodland-Northridge I Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, Pimpernell Estates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801 and Goodridge Drive Associates Limited Partnership, a Virginia limited partnership, with an address of c/o Goelet Realty Company, Three Christine Centre, 201 North Walnut Street, Suite 1002, Wilmington, Delaware 19801, (the foregoing five (5) partnerships, individually or collectively, "Seller"), and Beacon Properties, L.P., a Delaware limited partnership, with an address of 50 Rowes Wharf, Boston, Massachusetts 02110 (together with its successors and assigns, "Buyer"). Capitalized terms used herein without definition shall have the same meaning ascribed to such terms in the Agreement (as hereinafter defined). WITNESSETH: WHEREAS, Seller and Buyer entered into that certain Option Agreement dated as of March 18, 1996 (the "Initial Agreement"), as amended by First Amendment to Option Agreement dated as of May 17, 1996 (the "First Amendment"), and by Second Amendment to Option Agreement dated as of May 31, 1996 (the "Second Amendment") (the Initial Agreement, as amended by the First Amendment and the Second Amendment is referred to herein as "the Agreement" or "this Agreement) pursuant to which Seller granted Buyer an option to purchase the Premises, more fully described in the Agreement; WHEREAS, Seller and Buyer desire to modify and add certain provisions of the Agreement, as more particularly described herein; and WHEREAS, Buyer desires to exercise the Option and set a Closing Date. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, Seller and Buyer hereby agree as follows: 1. "Agreement" as used in the Initial Agreement means the Agreement (as defined above). 2. Buyer hereby exercises the Option and on this date is delivering the Additional Deposit to the Title Company to be held in escrow in accordance with the terms of the Option Agreement and the Escrow Agreement. Subject to the terms of the Agreement, the Closing Date shall be 10:00 a.m. on the date which is thirty (30) days following the Remediation Plan Approval Date (as defined below). 3. The first two (2) sentences of Section 3 of the Agreement are hereby deleted in their entirety and the following is substituted therefor: "3. Consideration. The total consideration (the "Consideration") to be delivered to Seller for the Deeds and conveyance of the Premises other than SAIC I shall consist of limited partner interests in Buyer (collectively, the "OP Units") equal in number to (i) Seventy-Seven Million Dollars ($77,000,000), minus the sum of all Assumed Indebtedness set forth with respect to the Premises other than SAIC I in Exhibit C (as reduced by regularly scheduled principal payments from the date of the Agreement through the Closing Date), divided by (ii) $25.75, which constitutes the average of the closing prices on the NYSE of the common stock, $.01 par value, of Beacon Properties Corporation for each trading day that occurred during the thirty (30) consecutive calendar days commencing on March 19, 1996." 4. Section 5 of the Option is hereby amended by inserting the following after the first sentence thereof: "Buyer shall have the right, in its sole discretion, to terminate this Agreement by written notice to Seller at any time on or before the date which is thirty (30) days following the date of the Third Amendment (the "Remediation Plan Approval Date") if Buyer is not satisfied, in its sole discretion, with the environmental condition of the Premises, the Remediation Plan (as defined in Section 12(p)), any proposed arrangement for the escrow and disbursement of funds or other security therefor, as requested by Buyer in its sole discretion, the implementation of any such proposed remediation plan or any matters relating to any of the foregoing." 5. Section 12 of the Agreement is hereby amended by inserting the following paragraph after paragraph (o): "(p) Remediation Plan. On or before the Remediation Plan Approval Date, Seller shall deliver to Buyer a plan for the remediation of environmental contamination found at the Premises ("Remediation"), (such plan, the "Remediation Plan"). Without limiting the foregoing, Seller shall include in the Remediation Plan the establishment of an escrow for the costs of remediation with security, deposit and disbursement arrangements. Seller shall perform the Remediation in accordance with the Remediation Plan. 6. Section 8 of the Agreement is hereby amended by inserting the following new paragraph: 2 "Without limiting any other term of this Agreement, it shall be a condition to Closing that Buyer shall have received, no later than ten (10) days prior to Closing, estoppel certificates with respect to the John Marshall Associates Limited Partnership Declaration of Easements, Covenants and Conditions dated September 26, 1994, the Goodridge Drive Associates Limited Partnership Declaration of Easements, Covenants and Conditions dated July 10, 1987 and the Declaration of Protective Covenants for Woodland Park dated February 25, 1986, each as it may have been amended, in the form required thereunder." 7. Section 10 of the Agreement is hereby amended by: (a) The second (2nd) sentence of paragraph (c) is deleted and the following inserted in lieu thereof: "There shall be no such agreements or other contractual obligations with respect to all or any portion of Seller's portion of the Premises that are binding on Buyer or Seller's portion of the Premises following Closing, other than the Leases, the Permitted Encumbrances and other documents executed in connection with the Permitted Encumbrances, the Permits, and the Real Estate Conveyance Agreement dated as of September 27, 1994 between John Marshall Associates Limited Partnership and CC - JM II Associates, copies of all of which have been delivered, or made available in the offices of The Evans Company in McLean, Virginia, to Buyer in accordance with the terms of Section 6." (b) Relettering each of the paragraphs after "(g) Financial Information" alphabetically. (c) Inserting the following at the end of paragraph (n): "Set forth on Exhibit Q are all environmental assessments, reports and investigations relating to the Premises in the files of Seller and, to the best of Seller's knowledge, otherwise obtained by or on behalf of Seller within the calendar year prior to the date of the Third Amendment, true, complete and correct copies of all of which have been delivered to Buyer." 8. The second to last sentence of Section 12(j) of the Agreement is hereby amended by deleting "One Hundred Fifteen Million Dollars ($115,000,000)" therefrom and substituting "Seventy-Seven Million Dollars ($77,000,000), subject to the terms of Section 39 of this Agreement by which the parties intend such number to revert to One Hundred Fifteen Million Dollars ($115,000,000) when Buyer becomes entitled to exercise its rights with respect to SAIC I" therefor. 3 9. Section 14(l) is hereby amended (i) by inserting the following immediately before the first word "Any": "Notwithstanding anything to the contrary contained in this Section, it shall be solely a condition precedent to Buyer's obligations under this Agreement that the following be delivered to Buyer:" and (ii) by inserting the following in the second line thereof after "assume":", including, without limitation, the certifications set forth in Exhibit P with respect to such Assumed Indebtedness." 10. The first sentence of Section 26 of the Agreement is hereby amended by inserting the following in the fourth line thereof after "Assumed Indebtedness": ", any other adjustments provided for herein". 11. Section 36 of the Agreement is hereby amended by (a) inserting the following at the end of the second line thereof after "subject to": "Seller's obligations under the Remediation Plan,". 12. The following new sections are added to the Agreement: "38. VEPCO Easement at E.J. Randolph Premises. Seller and Buyer hereby acknowledge that a certain easement (the "VEPCO Easement") to Virginia Electric and Power Company ("VEPCO") granted April 8, 1983, recorded in Book 5783, Page 1722 among the Land Records of Fairfax County, Virginia, runs underneath the parking structure at the E.J. Randolph Premises. Seller and Buyer further acknowledge that, pursuant to the terms of the VEPCO Easement, structures may not be constructed over such easement. Seller agrees that Buyer shall have the right to seek from VEPCO such confirmations as are requested by Buyer's title insurer in order to issue to Buyer title insurance insuring against any Losses, including, without limitation, forced removal or forfeiture of title, as a result of the exercise of any rights under the VEPCO Easement. 39. SAIC I and II. (a) Section 3 of the First Amendment is hereby deleted and the following inserted in lieu thereof: "In the event (the "SAIC Reinstatement Event") that, on or before January 1, 1997, (i) Seller has not entered into a contract with SAIC for the sale of, or grant of an option to purchase, SAIC I and the Additional Option Premises, which contract remains in full force and effect, (ii) SAIC has irrevocably waived in writing its rights of first refusal under the SAIC I Option and the SAIC II Option which exist on account of this Agreement and (iii) Seller has no legal obligation under the SAIC I Option or the SAIC II Option to reoffer SAIC I or the Additional Option Premises to SAIC, then Buyer's and Seller's rights and obligations with respect to SAIC I and the Additional Option 4 Premises shall be reinstated into this Agreement, subject to the terms of this Section below, and paragraph 2 hereof shall be of no further force or effect. Seller shall promptly deliver written notice of the occurrence of the SAIC Reinstatement Event to Buyer. The Consideration for acquisition of SAIC I and/or the Additional Option shall be OP Units in the amount of (i) $38,000,000 minus the sum of all Assumed Indebtedness set forth with respect to SAIC I on Exhibit C (as reduced by regularly scheduled principal payments from the date of the Agreement through the Closing Date), divided by (ii) $25.75. The Option Exercise Date shall become the date that is sixty (60) days following receipt by Buyer of written notice of the SAIC Reinstatement Event, and the Closing Date shall become the date specified in accordance with this Agreement in Buyer's notice of exercise with respect to SAIC I and the Additional Option Premises. No Deposit shall be required. Seller and Buyer shall cooperate with each other and use good faith efforts to resolve objections of Buyer to rights of SAIC and objections of Buyer and Seller to liabilities and obligations of Seller to SAIC, (provided, however, that Seller shall not be required to pay any consideration to SAIC therefor) and it shall be a condition to Buyer's and Seller's obligation to close on SAIC I and the Additional Option that such objections shall be resolved in a manner satisfactory to Buyer and Seller. With respect to its obligation to make representations and warranties regarding SAIC I and the Additional Option Premises pursuant to this Section and the other provisions of this Agreement, Seller shall remake such representations and warranties as of the date which is five (5) business days prior to the Option Exercise Date with such modifications as are necessary to cause the same to be true, including, without limitation, to reflect changes required by the passage of time or the current state of facts, and, if Buyer exercises its option to acquire SAIC I and the Additional Option, as of the Closing Date without further modification. If, on or before January 1, 1997, the SAIC Reinstatement Event has not occurred, the terms of this Section shall terminate and be of no further force and effect. Subject to the terms of the immediately preceding sentence, the terms of this Section shall survive Closing. 13. Exhibit C to the Agreement is hereby deleted and Exhibit C hereto substituted therefor. 5 14. Exhibit E to the Agreement is hereby amended as follows: (a) The following sentence shall be added at the end of 1: "It shall be a condition to Buyer's obligation to close under this Agreement that Seller shall have completed and paid for reconstruction of the fountain area and provided and paid for required substitute parking. (b) There shall be added the following: "9. Two UST's exist at SAIC I, and two UST's exist at Northridge." 15. Exhibit F-1 attached hereto containing Seller's Rent Roll updated through the date hereof shall be added to Exhibit F of the Agreement. 16. Section 10(k)(vii) and Exhibit G to the Agreement are hereby amended by inserting the following at the end of each: "Seller shall be liable for the payment of the commissions described on Exhibit G." 17. Section 20 is amended by inserting in the sixth (6th) line following the word "terminations" the following: ", to the extent in excess of amounts that would have been payable by Seller had the date for Closing not been accelerated by Buyer and other than in connection with the termination of any management agreement." 18. All references to "Option Agreement" in the Escrow Agreement dated as of March 18, 1996 between Seller, Buyer and Commonwealth Land Title Insurance Company shall refer to the Agreement, as previously and hereafter amended. Except as modified hereby, the Agreement remains in full force and effect. 6 IN WITNESS WHEREOF, the parties here to have executed this Agreement as of the date set forth above. WITNESS: SELLER: GREENSBORO ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ______________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner ______________________________ By: The Sotweed Corporation, a Delaware corporation, as general partner /s/ Theresa A. Kiernan By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer JOHN MARSHALL ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner 7 ______________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner ______________________________ By: The Sotweed Corporation, a Delaware corporation, as general partner /s/ Theresa A. Kiernan By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer PIMPERNELL ESTATES LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: Pimpernell Corporation, a Delaware corporation, as general partner /s/ Theresa A. Kiernan By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer 8 WOODLAND-NORTHRIDGE I LIMITED PARTNERSHIP, a Virginia limited partnership ______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner ______________________________ By: /s/ A.J. Clark Name: A.J. Clark Title: General Partner By: White Swan Oil Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Vice President By: Green Highlander Corporation, a Delaware corporation, as general partner ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Vice President By: Windward Oil and Gas Corporation, a Texas corporation, as general partner ______________________________ By: /s/ Gilbert Kerlin Name: Gilbert Kerlin Title: President 9 By: Smoking Tree Corporation, a Delaware corporation, as general partner /s/ Theresa A. Kiernan By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President ______________________________ By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer GOODRIDGE DRIVE ASSOCIATES LIMITED PARTNERSHIP, a Virginia limited partnership _______________________________ By: /s/ David W. Evans Name: David W. Evans Title: General Partner _______________________________ By: /s/ A.J. Clark Name: A. J. Clark Title: General Partner By: RPC Associates, a Virginia general partnership, General Partner By: Rattlesnake Point Corporation, a Delaware corporation, its general partner /s/ Theresa A. Kiernan By: /s/ Robert G. Goelet Name: Robert G. Goelet Title: President 10 By: /s/ Jonathan M. Rather Name: Jonathan M. Rather Title: Treasurer BUYER: BEACON PROPERTIES, L.P., a Delaware limited partnership By: Beacon Properties Corporation, a Maryland corporation, its general partner ____________________________ By: /s/ Lionel P. Fortin Name: Lionel P. Fortin Title: Chief Operating Officer 11 EXHIBIT C ALLOCATIONS OF VALUE AND DEBT Property Value Assumed Indebtedness - ------------------------------------------------------------------------------- John Marshall I, $33,072,774 $21,517,000 for John John Marshall III and Marshall I and John SAIC I Option Marshall III - ------------------------------------------------------------------------------- E.J. Randolph $22,904,982 18,056,000 - ------------------------------------------------------------------------------- Northridge I $21,022,244 16,642,000 ----------- ---------- - ------------------------------------------------------------------------------- TOTAL $77,000,000 $56,215,000 - ------------------------------------------------------------------------------- SAIC I $38,000,000 $27,879,000 - -------------------------------------------------------------------------------- C-1 EXHIBIT F-1 RENT ROLLS EXHIBIT P CERTIFICATION A. The following is a complete list of all documents executed or delivered in connection with such the debt held by American National Insurance Company and secured by the John Marshall I and John Marshall III Buildings, located at 8283 Greensboro Drive, McLean, Virginia 22102: 1. Promissory Note, dated September 30, 1993, from John Marshall Associates Limited Partnership to American National Insurance Company in the original principal amount of $24,000,000. 2. Deed of Trust, Security Agreement and Financing Statement, dated September 30, 1993, among John Marshall Associates Limited Partnership as maker and Lois J. Vermillion and Frank W. Stearns, as Trustees for the benefit of American National Insurance Company. 3. Absolute Assignment of Leases and Rents dated September 30, 1993. 4. UCC-1 Financing Statements filed with the Virginia State Corporation Commission and with the chattel records of Fairfax County, Virginia. 5. Letter dated January 14, 1994 from American National Insurance Company to John Marshall Associates LP [sic] relating to waiver of insurance escrow. 6. Modification to Promissory Note, Deed of Trust and Assignment of Rents, dated September 26, 1994. 7. Letter, dated October 27, 1994, from American National Insurance Company to John Marshall Associates Limited Partnership, correcting principal balance of Loan referred to in Section 2(c) of Modification. 8. Mortgage Loan Application, Loan Commitment No. 93-128 dated August 2, 1993, together with Proposed Changes Conditioning Acceptance for 8283 Greensboro Drive (John Marshall Building). 9. Certificate and Indemnity Regarding Hazardous Substances, dated September 30, 1993. P-1 B. The following is a complete list of all documents executed or delivered in connection with the debt held by Teachers Insurance and Annuity Association of America and secured by the Edmund Jennings Randolph Building, located at 8251 Greensboro Drive, McLean, Virginia 22102: (a) Certificate of Transfer of Note, dated July 11, 1984 from Dominion Bankshares Mortgage Corporation to Teachers Insurance and Annuity Association of America. (b) Deed of Trust Note (Demand), dated July 10, 1984, made by Greensboro Associates and payable to the order of Teachers Insurance and Annuity Association of America, in the principal sum of $2,725,000.00. (c) Agreement of Consolidation, Modification and Restatement of Deed of Trust Notes, dated as of July 10, 1984, by and between Greensboro Associates and Teachers Insurance and Annuity Association of America. (d) Deed of Trust ($2,725,000), dated July 10, 1984, from Greensboro Associates to Robert A. Armstrong and Richard W. Klein, Jr., as trustees for the use and benefit of Teachers Insurance and Annuity Association of America, securing the aforesaid $2,750,000.00 Note. (e) Agreement of Consolidation, Modification and Restatement of Deeds of Trust, dated as of July 10, 1984, by and among Greensboro Associates, Teachers Insurance and Annuity Association of America, Robert A. Armstrong and Richard W. Klein, Jr., securing a principal sum of $18,525,000.00. (f) Assignment of Leases and Rents, dated as of July 10, 1984, from Greensboro Associates to Teachers Insurance and Annuity Association of America. (g) Deed of Appointment and Removal, dated as of July 10, 1984, from Teachers Insurance and Annuity Association of America appointing Robert A. Armstrong and Richard W. Klein, Jr. trustees under various loan documents. (h) Uniform Commercial Code Financing Statement (UCC-1), undated, listing Greensboro Associates as Debtor and Teachers Insurance and Annuity Association of America as the Secured Party (Including Exhibit A). (i) Borrower's Settlement Statement in connection with the loan closing, dated July 11, 1984. (j) Letter, dated July 11, 1984, from Teachers Insurance and Annuity Association of America to Greensboro Associates, clarifying the definition of "default" in the loan documents. P-2 (k) Letter, dated October 26, 1983, from Teachers Insurance and Annuity Association of America to Greensboro Associates, agreeing to defer escrows. (l) Letter, dated October 26, 1983, from Teachers Insurance and Annuity Association of America to Greensboro Associates, setting forth conditions under which secondary financing would be considered. (m) Letter, dated October 26, 1983 from Teachers Insurance and Annuity Association of America to Greensboro Associates, setting forth conditions under which junior liens would be permitted. (n) Escrow Agreement dated as of September 26, 1994 by and among Greensboro Associates Limited Partnership, Teachers Insurance and Annuity Association of America, and Real Title Company, Inc., as Escrow Agent, executed in connection with Booz Allen's surrender of certain space in the E. J. Randolph Building. (o) Side letter dated October 18, 1994 between The Evans Company and Goelet Corporation relating to the accrual of management fees in excess of 3% (the "Management Fee Letter"). C. The only existing debt on the property of the SAIC I Building, located at 1710 Goodridge Drive, McLean, Virginia 22102, is held by the Northwestern Mutual Life Insurance Company, and the following is a complete list of all documents executed or delivered in connection with such debt: 1. Second Amendment and Restatement of Promissory Note, dated July 10, 1987, from Goodridge Drive Associates Limited Partnership to The Northwestern Mutual Life Insurance Company in the principal amount of $28,750,000. 2. Second Amendment and Restatement of Deed of Trust dated July 10, 1987, by and between Goodridge Drive Associates Limited Partnership, The Northwestern Mutual Life Insurance Company and William Norton, as Trustee. D. The following is a complete list of all documents executed or delivered in connection with the debt held by The Northwestern Mutual Life Insurance Company and secured by the Woodland-Northridge Building, located at 13221 Woodland Park Road, Herndon, Virginia 22071: 1. Loan Commitment dated June 21, 1988 by and between Woodland-Northridge I Limited Partnership and The Northwestern Mutual Life Insurance Company. P-3 2. Letter dated June 21, 1988 from Woodland-Northridge I Limited Partnership to The Northwestern Mutual Life Insurance Company regarding changes to the Loan Commitment. 3. Letter dated November 1, 1988 from Woodland-Northridge I Limited Partnership to The Northwestern Mutual Life Insurance Company requesting a 30 day extension of the Loan Commitment Expiration Date from November 15 to December 15. 4. Letter dated December 14, 1988 from The Northwestern Mutual Life Insurance Company to Woodland-Northridge I Limited Partnership granting 30 day extension of the Loan Commitment Expiration Date. 5. Promissory Note dated December 16, 1988 from Woodland-Northridge I Limited Partnership to The Northwestern Mutual Life Insurance Company in the amount of $17,000,000. 6. Deed of Trust and Security Agreement dated December 16, 1988 between Woodland-Northridge I Limited Partnership, William H. Norton and Craig E. Cuzmanko, as Trustee, and The Northwestern Mutual Life Insurance Company. 7. Absolute Assignment of Rents and Leases dated ___ between Woodland-Northridge I Limited Partnership and The Northwestern Mutual Life Insurance Company. 8. UCC Financing Statements. (i) Master Lease Agreement dated December 16, 1988, by and between Woodland-Northridge I Limited Partnership, as landlord, and David W. Evans and A.J. Clark, as tenant. (j) Letter dated September 12, 1995 from The Evans Company to Northwestern Mutual Life Insurance Company extending the loan term for one year ending December 14, 1996. (k) Letter dated September 21, 1995 from Northwestern Mutual Life Insurance Company to Woodland-Northridge I Limited Partnership setting a New Annual Interest Rate. P-4 EXHIBIT Q ENVIRONMENTAL ASSESSMENTS, REPORTS & INVESTIGATIONS: January 1, 1995 to Present GREENSBORO ASSOCIATES L.P. (Randolph Building) None JOHN MARSHALL ASSOCIATES L.P. (John Marshall I Building and John Marshall III Land): 1. September 27, 1995 Contaminated Soil Consultants, Inc. Waste Disposal Questionnaire 2. September 8, 1995 Evans' letter to VA Dept. Of Environmental Quality 3. October 9, 1995 ECS, Ltd.'s Initial Abatement Report 4. May 15, 1996 ECS, Ltd.'s fax with the following attached documents: Letters from VA Dept. Of Environmental Quality to Tysons Auto dated 9/26/95 and 4/1/96. 5. June 11, 1996 Preliminary Environmental Sampling Report, John Marshall III site prepared by ECS, Ltd. PIMPERNELL ESTATES L.P. & GOODRIDGE DRIVE ASSOCIATES L.P. (SAIC I & II) June 11, 1996 Preliminary Environmental Sampling Report, SAIC site prepared by ECS, Ltd. WOODLAND-NORTHRIDGE I L.P. (Northridge) None 299824.c1 Q-1 EX-2.5 7 PLAN OF ACQUISITION, REORGANIZATION, ETC. - -------------------------------------------------------------------------------- SALE AND PURCHASE AGREEMENT between NEW YORK LIFE INSURANCE COMPANY as "Seller" and BEACON PROPERTIES, L.P. as "Purchaser" Date: As of July 19, 1996 - -------------------------------------------------------------------------------- TABLE OF CONTENTS ----------------- ARTICLE I DEFINITIONS ----------- Section 1.1. "Affiliate".............................................. 1 Section 1.2. "Antitrust Division"..................................... 1 Section 1.3. "Assets"................................................. 1 Section 1.4. "Asset File"............................................. 1 Section 1.5. "Bid Date"............................................... 1 Section 1.6. "Business Day"........................................... 1 Section 1.7. "Cash Balance"........................................... 1 Section 1.8. "CERCLA"................................................. 2 Section 1.9. "Closing" and "Closing Date"............................. 2 Section 1.10. "Contingent Commission Event"........................... 2 Section 1.11. "Deposit"............................................... 2 Section 1.12. "Dollars" or "$"........................................ 2 Section 1.13. "Due Diligence Expiration Date"......................... 2 Section 1.14. "Escrow Agent".......................................... 2 Section 1.15. "Existing Leases"....................................... 2 Section 1.16. "Existing Service Contracts"............................ 2 Section 1.17. "Fixed Rents"........................................... 2 Section 1.18. "FTC"................................................... 2 Section 1.19. "Governmental Authority"................................ 2 Section 1.20. "Hazardous Substances".................................. 2 Section 1.21. "HSR Act"............................................... 3 Section 1.22. "HSR Adjournment Fee"................................... 3 Section 1.23. "Improvements".......................................... 3 Section 1.24. "Land".................................................. 3 Section 1.25. "Leases"................................................ 3 Section 1.26. "Liquidated Sum Amount"................................. 3 Section 1.27. "Liquidated Sum Title Exception"........................ 3 Section 1.28. "Major Casualty"........................................ 4 Section 1.29. "New Leases"............................................ 4 Section 1.30. "New Service Contracts"................................. 4 Section 1.31. "Nonpermitted Exceptions"............................... 4 Section 1.32. "Overage Rent".......................................... 4 Section 1.33. "Permits"............................................... 4 Section 1.34. "Permitted Exceptions".................................. 4 Section 1.35. "Person"................................................ 4 Section 1.36. "Personal Property"..................................... 4 Section 1.37. "Premises".............................................. 4 Section 1.38. "Property".............................................. 4 Section 1.39. "Property Judgment"..................................... 5 Section 1.40. "Purchase Price"........................................ 5 Section 1.41. "Purchaser's Adverse Changes............................ 5 i Section 1.42. "Purchaser's Representation Certificate"................ 5 Section 1.43. "RCRA".................................................. 5 Section 1.45. "Restoration Costs"..................................... 6 Section 1.46. "Schedule Price"........................................ 6 Section 1.47. "Scheduled Closing Date"................................ 6 Section 1.48. "Seller Liquidated Sum Title Exception Notice".......... 6 Section 1.49. "Seller's Adverse Changes............................... 6 Section 1.50. "Seller's Representation Certificate"................... 6 Section 1.51. "Service Contracts"..................................... 6 Section 1.52. "Specified Estoppel Leases"............................. 6 Section 1.53. "Structural Defect"..................................... 6 Section 1.54. "Survival Period"....................................... 6 Section 1.55. "Tenant Estoppel Certificate"........................... 7 Section 1.56. "Title Exception(s)".................................... 7 Section 1.57. "Title Insurer"......................................... 7 Section 1.58. "Voluntary Title Exceptions"............................ 7 Section 1.59. "Warranties"............................................ 7 ARTICLE II ASSETS ------ Section 2.1. Sale and Purchase of Assets.............................. 7 ARTICLE III PURCHASE PRICE -------------- Section 3.1. Payment of Purchase Price................................ 8 Section 3.2. Allocation of Purchase Price............................. 9 Section 3.3. Escrow of Deposit........................................ 9 ARTICLE IV ADJUSTMENTS ----------- Section 4.1. Fixed Rents.............................................. 11 Section 4.2. Overage Rents............................................ 12 Section 4.3. Taxes and Assessments.................................... 14 Section 4.4. Water and Sewer Charges.................................. 14 Section 4.5. Utility Charges.......................................... 14 Section 4.6. Service Contracts........................................ 15 Section 4.7. Permits.................................................. 15 Section 4.8. Miscellaneous Revenues................................... 15 Section 4.9. Supplies................................................. 15 Section 4.10. Other................................................... 15 ARTICLE V ii TITLE AND PERMITTED EXCEPTIONS ------------------------------ Section 5.1. Permitted Exceptions..................................... 15 Section 5.2. Title Report............................................. 15 Section 5.4. Inability to Convey...................................... 16 Section 5.5. Rights in Respect of Inability to Convey................. 16 Section 5.6. Voluntary Title Exceptions............................... 17 Section 5.7. Liquidated Sum Title Exceptions.......................... 17 Section 5.8. Purchaser's Right to Accept Title........................ 18 Section 5.9. Cooperation.............................................. 18 ARTICLE VI CONDITION OF PROPERTY --------------------- Section 6.1. Condition of Property.................................... 19 ARTICLE VII CLOSING ------- Section 7.1. Closing Date............................................. 19 ARTICLE VIII CLOSING DELIVERIES ------------------ Section 8.1. Documents and Payments to be Delivered at the Closing.... 20 Section 9.1. Conditions to Purchaser's Obligation to Close............ 22 Section 9.2. Conditions to Seller's Obligation to Close............... 23 Section 9.3. Multiple Properties...................................... 24 Section 9.4. Failure to Satisfy Conditions to Close................... 24 ARTICLE X REPRESENTATIONS AND WARRANTIES ------------------------------ Section 10.1. Representations and Warranties by Seller as to Seller... 24 (a) Authority; Binding on Seller; Enforceability............. 24 (b) Conflict with Existing Laws or Contracts................. 24 (c) Legal Action Against Seller.............................. 25 (d) Bankruptcy of Seller..................................... 25 Section 10.2. Representations and Warranties by Seller as to the Property............................................... 25 (a) Owner.................................................... 25 (b) Leases................................................... 25 (c) Brokerage................................................ 26 (d) Service Contracts........................................ 26 (e) Litigation............................................... 27 (f) Condemnation............................................. 27 iii (g) Compliance with Laws; Permits............................ 27 (h) Insurance................................................ 27 (i) Environmental Matters.................................... 28 (j) Condition of the Improvements............................ 28 (k) Personal Property........................................ 28 Section 10.3. Representations and Warranties of Purchaser............. 28 (a) Authority; Binding on Purchaser; Enforceability.......... 28 (b) Conflict with Existing Laws or Contracts................. 28 (c) Legal Action Against Purchaser........................... 28 (d) Bankruptcy or Debt of Purchaser; Financial Condition..... 29 Section 10.4. Closing Certificates of Seller and Purchaser............ 29 (a) Purchaser's Closing Certificate.......................... 29 (b) Seller's Closing Certificate............................. 29 Section 10.5. Survival of Representations and Warranties.............. 30 ARTICLE XI COVENANTS --------- Section 11.1. Operation of Premises................................... 30 Section 11.2. Insurance............................................... 31 Section 11.3. Modification of Leases.................................. 31 Section 11.4. Termination of Leases................................... 31 Section 11.5. New Leases.............................................. 32 Section 11.6. Payment of Leasing Costs................................ 32 Section 11.7. Estoppel Certificates................................... 34 Section 11.8. Non-Disturbance Agreements.............................. 34 ARTICLE XII INSPECTION ---------- Section 12.1. Right of Inspection..................................... 34 Section 12.2. Due Diligence Period.................................... 34 ARTICLE XIII TRANSACTION COSTS ----------------- Section 13.1. Seller's Transaction Costs.............................. 35 Section 13.2. Purchaser's Transaction Costs........................... 35 Section 13.3. Hart-Scott-Rodino Filing Fees........................... 36 ARTICLE XIV BROKERAGE --------- iv Section 14.1. Payment of Broker; Representations...................... 36 ARTICLE XV CASUALTY AND CONDEMNATION ------------------------- Section 15.1. Casualty................................................ 36 Section 15.2. Condemnation............................................ 37 ARTICLE XVI ASSIGNMENT ---------- Section 16.1. No Assignment by Purchaser.............................. 38 Section 16.2. Permitted Assignment to Affiliate....................... 38 ARTICLE XVII TAX CERTIORARI PROCEEDINGS -------------------------- Section 17.1. Prosecution and Settlement of Proceedings............... 39 Section 17.2. Application of Refunds or Savings....................... 39 Section 17.3. Survival................................................ 39 ARTICLE XVIII DEFAULT; REMEDIES; SURVIVAL --------------------------- Section 18.1. Purchaser's Default On or Before Closing................ 40 Section 18.2. Seller's Default On or Before Closing................... 40 Section 18.3. Survival................................................ 41 Section 18.4. Determination of Material Inaccuracy.................... 42 ARTICLE XIX NOTICES ------- Section 19.1. Notices................................................. 42 ARTICLE XX MISCELLANEOUS ------------- Section 20.1. Governing Law; Jurisdiction and Venue................... 43 Section 20.2. Further Assurances...................................... 44 Section 20.3. Successors.............................................. 44 Section 20.4. No Third Party Beneficiary.............................. 44 Section 20.5. Entire Agreement........................................ 44 Section 20.6. Severability............................................ 44 v Section 20.7. Modification............................................ 45 Section 20.8. Waiver of Trial by Jury................................. 45 Section 20.9. No Recording............................................ 45 Section 20.10. Captions; Interpretation............................... 45 Section 20.11. Counterparts........................................... 45 Section 20.12. No Waiver.............................................. 46 Section 20.13. Time of Essence........................................ 46 Section 20.14. Attorney's Fees........................................ 46 Section 20.15. Addendum A............................................. 46 ARTICLE XXI HART-SCOTT-RODINO ----------------- Section 21.1. Filing Requirements..................................... 46 Section 21.2. Condition Precedent..................................... 46 Section 21.3. Purchaser's Delay....................................... 47 ARTICLE XXII AUDIT ----- Section 22.1. Compliance with SEC Regulations......................... 47 ARTICLE XXIII CONFIDENTIALITY AND PRESS RELEASE --------------------------------- Section 23.1. SEC Disclosure.......................................... 48 Section 23.2. Press Release........................................... 49 vi SALE AND PURCHASE AGREEMENT THIS AGREEMENT, made as of the 19th day of July, 1996, between NEW YORK LIFE INSURANCE COMPANY, a New York mutual insurance company with an office at 51 Madison Avenue, New York, New York 10010 ("Seller"), and BEACON PROPERTIES, L.P., a Delaware limited partnership with an office at 50 Rowes Wharf, Boston, Massachusetts 02110 ("Purchaser"). ARTICLE I DEFINITIONS For purposes of this Agreement, the following terms shall have the meanings indicated: Section 1.1. "Affiliate" means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. For purposes of this definition, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting stock, by contract or otherwise. Section 1.2. "Antitrust Division" has the meaning given in Section 21.1 of this Agreement. Section 1.3. "Assets" means the property or properties that Purchaser is purchasing from Seller and Seller is selling to Purchaser, a list of which is set forth on Schedule 1 annexed hereto and made a part hereof. "Asset" means any one of the Assets. Section 1.4. "Asset File" means that certain file for the Assets containing copies of financial information, leases, service contracts, reports, title information and other due diligence information and documentation delivered to Purchaser under cover of a letter, dated May 7, 1996, from Mr. Jeffrey Silver of Merrill Lynch & Co., and the updates of such file delivered under cover of letters, dated May 7, 1996, May 23, 1996 and June 5, 1996, in each case from Mr. Silver. Section 1.5. "Bid Date" means June 11, 1996. Section 1.6. "Business Day" means any day other than a Saturday, Sunday or day on which the banks in New York, New York are authorized or obligated by law to be closed. Section 1.7. "Cash Balance" has the meaning given in Section 3.1. Section 1.8. "CERCLA" means the Comprehensive Environmental, Response, Compensation and Liability Act, 42 U.S.C. ss.ss. 9601 and 9657 et seq., as amended. Section 1.9. "Closing" and "Closing Date" have the respective meanings given in Section 7.1. Section 1.10. "Contingent Commission Event" has the meaning given in Section 10.2(c). Section 1.11. "Deposit" has the meaning given in Section 3.1. Section 1.12. "Dollars" or "$" means lawful currency of the United States of America, and all sums payable by either party to the other pursuant to this Agreement shall be paid in Dollars. Section 1.13. "Due Diligence Expiration Date" has the meaning given in Section 12.2. Section 1.14. "Escrow Agent" means Robinson Silverman Pearce Aronsohn & Berman LLP. Section 1.15. "Existing Leases" means, with respect to each Premises, the leases, licenses and occupancy agreements (including all material modifications and amendments thereto) for space in such Premises which are in effect on the Bid Date and listed on Exhibit B annexed hereto and made a part hereof. Section 1.16. "Existing Service Contracts" means, with respect to each Premises, the service contracts, maintenance contracts, union contracts, concession agreements, agency agreements and other written contracts or agreements affecting such Premises or the operation thereof which are in effect on the Bid Date and listed on Exhibit D annexed hereto and made a part hereof. Section 1.17. "Fixed Rents" has the meaning given in Section 4.1. Section 1.18. "FTC" has the meaning given in Section 21.1 of this Agreement. Section 1.19. "Governmental Authority" means, with respect to each Premises, the United States, the State, county and city in which such Premises is located, and any political subdivision, agency, authority, department, court, commission, board, bureau or instrumentality of any of the foregoing asserting jurisdiction over any of the parties hereto or over such Premises. Section 1.20. "Hazardous Substances" means (a) those substances included within the definitions of any one or more of the terms "hazardous substances," "hazardous materials," "toxic substances," and "hazardous waste" in CERCLA, RCRA and the Hazardous Materials Transportation Act, as amended, 49 U.S.C. Sections 1801 et seq., and in the 2 regulations promulgated pursuant to such laws; and (b) such other substances, materials and wastes as are regulated under applicable local, state or federal environmental laws or regulations, or which are classified as hazardous or toxic under federal, state or local environmental laws or regulations; and (c) any materials, wastes or substances that are (i) petroleum; (ii) friable asbestos; (iii) polychlorinated biphenyls; (iv) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, as amended, 13 U.S.C. ss. 1321 et seq. (33 U.S.C. ss. 1321) or designated as "toxic pollutants" pursuant to ss. 307 of the Clean Water Act (33 U.S.C. ss. 1317); (v) flammable explosives; or (vi) radioactive materials. Hazardous Substances shall not include materials or substances (A) lawfully sold by tenants of any Property in the ordinary course of business or (B) customarily used in the day-to-day operation and maintenance of any Property, such as cleaning fluids and similar substances and materials. Section 1.21. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Section 1.22. "HSR Adjournment Fee" has the meaning given in Section 21.3 of this Agreement. Section 1.23. "Improvements" means, with respect to the Land comprising each Asset, all buildings and improvements located on such Land which are owned by Seller, including, without limitation, all sidewalks, roads, heating, air conditioning and ventilating systems, sewer systems, waste water treatment systems, electrical substations, lines, feeders, switches and transformers, emergency generators, lighting systems, furnaces, boilers, engines, pipes, pumps, tanks, motors, conduits, switch boards, and all plumbing, lifting, fire prevention, fire extinguishing, fire alarm, sprinkler, security (including video camera surveillance equipment), refrigerating, ventilating, cooking, and communications and telecommunications equipment, apparatus and systems. Section 1.24. "Land" means, with respect to each Asset, the parcel or parcels of land which comprise such Asset as described on Exhibit A annexed hereto and made a part hereof. Section 1.25. "Leases" means, with respect to each Premises, collectively, (a) the Existing Leases affecting such Premises which are in effect on the Closing Date and (b) all New Leases affecting such Premises which are in effect on the Closing Date. Section 1.26. "Liquidated Sum Amount" means an amount equal to one-half of one (.5%) percent of the Purchase Price, but in no event more than Two Hundred Fifty Thousand ($250,000) Dollars. Section 1.27. "Liquidated Sum Title Exception" means, with respect to any Property, a Title Exception affecting such Property that arises after the date of this Agreement, but on or prior to the Closing Date, which can be discharged solely by the payment of a liquidated sum of money; provided, however, that the term "Liquidated Sum Title Exception" as used in this Agreement shall not include the following: (a) any Voluntary Title Exceptions applicable to such Property; (b) any Title Exceptions that are approved, waived or deemed to 3 have been approved or waived by Purchaser or that are created in accordance with the provisions of this Agreement; (c) any Permitted Exceptions for such Property or (d) any judgments against Seller which are docketed against the applicable Premises but which are not Property Judgments (it being agreed that, for the purposes of this Agreement, a Property Judgment shall constitute a Liquidated Sum Title Exception). Section 1.28. "Major Casualty" has the meaning given in Section 15.1. Section 1.29. "New Leases" means, with respect to each Premises, all new leases, licenses and occupancy agreements affecting such Premises which are entered into by Seller after the Bid Date in accordance with the provisions of this Agreement. Section 1.30. "New Service Contracts" means, with respect to each Premises, such maintenance contracts, union contracts, concession agreements, agency agreements and other written contracts or agreements affecting such Premises or the operation thereof which are entered into by Seller after the Bid Date in accordance with the terms of this Agreement. Section 1.31. "Nonpermitted Exceptions" has the meaning given in Section 5.4. Section 1.32. "Overage Rent" has the meaning given in Section 4.2. Section 1.33. "Permits" means all transferable governmental licenses, permits, approvals and certificates which are in effect on the Closing Date and are required or used in connection with the ownership or operation of each Premises. Section 1.34. "Permitted Exceptions" has the meaning given in Section 5.1. Section 1.35. "Person" means an individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, or government or any agency or subdivision thereof. Section 1.36. "Personal Property" means, with respect to each Premises, all equipment, furniture, fittings, fixtures and articles of personal property affixed or attached to, installed or placed in or upon and used for or useable in any present or future enjoyment, occupancy or operation of such Premises which is owned by Seller, including, without limitation, those items set forth in Schedule B to Exhibit G attached hereto. Section 1.37. "Premises" means, with respect to each Asset, the Land comprising such Asset and the Improvements located thereon. Section 1.38. "Property" means, with respect to each Asset, the following (in each case, to the extent applicable to such Asset): (a) The Land; 4 (b) The Improvements; (c) The Personal Property; (d) The Service Contracts and Leases; (e) The Permits; (f) any strips and gores adjacent to such Land and any land lying in the bed of any street, road or avenue opened or proposed, in front of or adjoining such Land, to the center line thereof; (g) all of the easements, rights, privileges and appurtenances belonging or in anyway appertaining to such Land and Improvements; (h) to the extent assignable, all Warranties, if any; (i) to the extent assignable, all trade names and general intangibles used in connection with the ownership and operation of such Land and Improvements, if any; (j) any award made after the date of this Agreement for any taking by condemnation of such Land and Improvements or any damage to such Land and Improvements by reason of a change of grade of any street or highway; and (k) subject to the provisions of Article 15 below, any insurance proceeds that are payable after the date of this Agreement on account of any damage to such Improvements that results from a fire or other casualty that occurs after the date of this Agreement. "Properties" means more than one Property. Section 1.39. "Property Judgment" means, with respect to each Premises, a judgment which (a) is entered against Seller, (b) is docketed against such Premises and (c) arises from a law suit that relates to and directly involves Seller's ownership and/or operation of the applicable Premises. Section 1.40. "Purchase Price" has the meaning given in Section 3.1. Section 1.41. "Purchaser's Adverse Changes" has the meaning given in Section 10.4(a). Section 1.42. "Purchaser's Representation Certificate" has the meaning given in Section 10.4(a). Section 1.43. "RCRA" means the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. ss. 6901 et seq. 5 Section 1.44. "Rent Differential Escrow Agreement" means that certain Rent Differential Escrow Agreement dated February 1, 1996 among American Association for the Advancement of Science, Seller and NationsBank, National Association. Section 1.45. "Restoration Costs" has the meaning given in Section 15.1. Section 1.46. "Schedule Price" means, with respect to a Property (a) if this Agreement is for the sale of one Property, the Purchase Price and (b) if this Agreement is for the sale of more than one Property, the allocated portion of the Purchase Price for such Property as set forth on Schedule 1 annexed hereto. Section 1.47. "Scheduled Closing Date" has the meaning given in Section 7.1. Section 1.48. "Seller Liquidated Sum Title Exception Notice" has the meaning given in Section 5.7. Section 1.49. "Seller's Adverse Changes" has the meaning given in Section 10.4(b). Section 1.50. "Seller's Representation Certificate" has the meaning given in Section 10.4(b). Section 1.51. "Service Contracts" means, with respect to each Premises, collectively, (a) the Existing Service Contracts affecting such Premises which are in effect on the Closing Date and (b) the New Service Contracts affecting such Premises which are in effect on the Closing Date. Section 1.52. "Specified Estoppel Leases" has the meaning given in Section 9.1(c). Section 1.53. "Structural Defect" means, with respect to any Property, a structural defect in the footings, foundation, roofplate or weight bearing walls of the Improvements comprising such Property which existed prior to the Closing Date and was not actually known or disclosed to Purchaser prior to the Bid Date. No Improvement shall be deemed to have a Structural Defect solely by reason of (a) the failure of such Improvement to have a design or function satisfactory for a new or unintended use or purpose developed subsequent to the date of construction of such Improvement, (b) the absence of any building or improvement not necessary for the structural integrity of such Improvements, (c) wear and tear associated with the normal operation of such Improvements, (d) a condition or defect which is to be repaired as part of a standard program of deferred maintenance, (e) failure of such Improvement to comply with any law, rule, regulation or code applicable to such Improvement which was promulgated, amended, supplemented or otherwise effectuated or modified after the construction of such Improvement or (f) such Improvement having outlived its useful life or functional utility. Section 1.54. "Survival Period" means (a) with respect to the representations and warranties set forth in Sections 10.1, 10.2(d), 10.2(e), 10.2(g), 10.2(i) 10.2(j) and 10.2(k), 6 the period from the Closing Date to the date which is one hundred eighty (180) days after the Closing Date and (b) with respect to the representations and warranties contained in Sections 10.2(b) and 10.2(c), the period from the Closing Date to the date which is the one (1) year anniversary of the Closing Date. Section 1.55. "Tenant Estoppel Certificate" has the meaning given in Section 11.7. Section 1.56. "Title Exception(s)" means, with respect to any Property, any lien, encumbrance, security interest, charge, reservation, lease, tenancy, easement, right-of-way, encroachment, restrictive covenant, condition or limitation affecting such Property. Section 1.57. "Title Insurer" means First American Title Insurance Company. Section 1.58. "Voluntary Title Exceptions" means, with respect to any Property, Title Exceptions affecting such Property that are knowingly and intentionally created by Seller after the Bid Date through the execution by Seller of one or more instruments creating or granting such Title Exceptions; provided, however, that the term "Voluntary Title Exceptions" as used in this Agreement shall not include the following: (a) any Permitted Exceptions for such Property; (b) Leases for such Property or any Title Exception created pursuant to a Lease for such Property by the tenant thereunder; (c) any Title Exceptions that are approved, waived or deemed to have been approved or waived by Purchaser or that are created in accordance with the provisions of this Agreement; (d) any Title Exceptions which, pursuant to a Lease for such Property or otherwise, are to be discharged by a tenant or occupant of the applicable Property; (e) mechanic's or materialmen's liens or (f) any federal tax liens. Section 1.59. "Warranties" means, with respect to any Improvements, any warranties and guaranties given by any contractor or manufacturer in favor of Seller in connection with the construction, repair or renovation of such Improvements. ARTICLE II ASSETS Section 2.1. Sale and Purchase of Assets. With respect to each Asset, Seller agrees to sell and convey, and Purchaser agrees to purchase, all of Seller's right, title and interest in and to the Property applicable to such Asset. 7 ARTICLE III PURCHASE PRICE Section 3.1. Payment of Purchase Price. (a) The purchase price (the "Purchase Price") for the Assets is One Hundred Forty-Nine Million Six Hundred Seventy-Five Thousand and 00/100 ($149,675,000.00) Dollars, payable by Purchaser as follows: (i) Five Million and 00/100 ($5,000,000) Dollars on the signing of this Agreement (the "Deposit"), by wire transfer of immediately available federal funds to an account of Escrow Agent designated by Seller, which Deposit shall be held and disbursed in accordance with the provisions set forth in Section 3.3 below; and (ii) One Hundred Forty-Four Million Six Hundred Seventy-Five Thousand and 00/100 ($144,675,000.00) Dollars (the "Cash Balance") at the Closing, to be paid by Purchaser to Seller pursuant to the provisions of Section 3.1(b) below. (b) The Cash Balance shall be paid at Closing by wire transfer of immediately available federal funds transferred to one or more bank accounts designated by Seller, provided that Seller shall have the right, to be exercised by notice given to Purchaser at least two (2) Business Days prior to the Closing, to require Purchaser to pay a portion of the Cash Balance by one or more separate official bank checks, each to be drawn on the New York office of a member bank of the New York Clearinghouse Association, and each to be payable to the unendorsed order of Seller or Seller's designee. If Seller elects to cause Purchaser to pay a portion of the Cash Balance by official bank check(s) as aforesaid, then Seller's exercise notice shall set forth (i) the portion of the Cash Balance to be so paid, (ii) the number of official bank checks to be drawn and (iii) the payee(s) thereof. With respect to the portion of the Cash Balance to be paid by wire transfer, Seller, at least two (2) Business Days prior to the Closing, shall notify Purchaser of the designated bank account(s) and the wiring instructions therefor. (c) Pursuant to Section 10.1 of a lease, dated July 31, 1995, between Greystone Realty Corporation, as agent for Seller, as landlord, and the Postal Rate Commission, as tenant, as modified by First Amendment dated November 16, 1995 (the "Postal Commission Lease"), the tenant is entitled to an allowance (the "Allowance") from the landlord to renovate and/or refurbish its demised premises, which Allowance may be paid by payment of the cost of renovation and/or refurbishment by landlord or application by tenant against the rental payments due under the lease. The amount of the Allowance remaining as of the date hereof is approximately $139,062.14. At Closing, Purchaser shall be entitled to a credit against the Cash Balance in an amount equal to the remaining balance of the Allowance as of the Closing Date (i.e., $139,062.14, as reduced by expenses paid by Seller and/or credits against rental payments taken by tenant on account of the Allowance between the date hereof and the Closing Date, evidence of which additional expenses and/or rent credits shall be furnished to Purchaser at Closing). 8 (d) Seller and Purchaser acknowledge that Seller has commenced negotiations with the Public Service Commission of the District of Columbia ("PSC") regarding a lease of certain premises (the "7th Floor Premises") located on the seventh floor of the Washington, D.C. Asset formerly occupied by the American Association for the Advancement of Science ("AAAS"). In connection therewith, if (i) on or before the Closing Date, Seller and PSC enter into either a binding letter of intent or lease with respect to a lease of all of the 7th Floor Premises, the Cash Balance shall be increased by the Adjustment Amount or (ii) after the Closing Date, Purchaser and PSC enter into a binding letter of intent or lease with respect to a lease of all of the 7th Floor Premises, Purchaser, within five (5) Business Days after the rent commencement date under such letter of intent or lease, shall pay to Seller an amount equal to the Adjustment Amount. For purposes of this Section 3.1(d), the term "Adjustment Amount" means an amount equal to the Rent Recoupment Amount less Seventy-Five Thousand ($75,000) Dollars; provided, however, in no event shall the Adjustment Amount be less than zero or greater than $625,000. For purposes hereof, the term "Rent Recoupment Amount" means (A) $39,790 multiplied by (B) the number of months between (x) the later of the Closing Date and the rent commencement date of such lease and (y) the date which is nine (9) months after the Closing Date (pro-rated in the case of any partial month). Purchaser agrees to consent to any lease with PSC which is on substantially the same terms as the proposed letter of intent, dated May 2, 1996, from Randall H. Hagner & Company, as agent for Greystone Realty Corporation, to Mark E. Teitelbaum and the lease abstract/analysis thereof, dated July 3, 1996 prepared by Greystone Realty Corporation (the "Letter of Intent"). Notwithstanding the foregoing provisions of this Section 3.1(d), if the rental and workletter terms of the actual binding letter of intent or lease with PSC are materially different from the terms set forth in the Letter of Intent, then Seller and Purchaser agree to negotiate in good faith to modify the Adjustment Amount in light of such material differences; provided, however, in no event shall any such modification result in the Adjustment Amount being greater than $625,000 or less than zero. Section 3.2. Allocation of Purchase Price. If there is more than one Property being sold and purchased pursuant to this Agreement, a portion of the Purchase Price shall be deemed allocated to each Property in the amount set forth on Schedule 1 annexed hereto. Section 3.3. Escrow of Deposit. (a) The Deposit shall be delivered to Escrow Agent in accordance with the provisions of Section 3.1 hereof, and shall be held by Escrow Agent until the Closing or sooner termination of this Agreement. Escrow Agent shall pay over or apply the Deposit in accordance with the terms of this Section 3.3. Any interest earned on the Deposit shall be paid to the same party entitled to the Deposit hereunder (as and when such party is entitled to the Deposit), and the party receiving such interest shall pay any income taxes thereon, except that at the Closing, the interest earned on the Deposit shall be paid to Purchaser. For purposes thereof, the tax identification numbers of the parties hereto is as follows: 13-5582869 (Seller); and 04-3224259 (Purchaser). (b) At the Closing, the Deposit shall be paid by Escrow Agent to Seller. 9 (c) If for any reason the Closing does not occur, then Escrow Agent shall continue to hold the Deposit and the interest thereon, if any, until otherwise directed by joint written instructions from Seller and Purchaser or a final judgment of a court having jurisdiction. Escrow Agent, however, shall have the right at any time to deposit the Deposit and the interest thereon with the clerk of any federal or state court sitting in the State of New York or a court having jurisdiction in the county in which any Premises is located. Escrow Agent shall give written notice of such deposit to Seller and Purchaser. Upon such deposit, Escrow Agent shall be relieved and discharged of all further obligations and responsibilities hereunder. (d) The parties acknowledge that Escrow Agent (i) is acting solely as a stakeholder at their request and for their convenience, (ii) shall not be deemed to be the agent of either of the parties and (iii) shall not be liable to either of the parties for any act or omission on its part unless taken or suffered in bad faith, willful disregard of this Agreement or involving gross negligence. Seller and Purchaser shall jointly and severally indemnify and hold Escrow Agent harmless from and against all costs, claims and expenses, including reasonable attorneys' fees, incurred in connection with the performance of Escrow Agent's duties hereunder, except with respect to actions or omissions taken or suffered by Escrow Agent in bad faith, willful disregard of this Agreement or involving gross negligence on the part of Escrow Agent. (e) Escrow Agent shall invest the Deposit in savings accounts, treasury bills, certificates of deposit and/or other money market instruments as requested by Purchaser, subject to the reasonable approval of Seller. Escrow Agent shall not be liable for any losses suffered in connection with any such investment and shall have no obligation to obtain the best, or otherwise seek to maximize, the rate of interest earned on any such investment. Any fees or charges in connection with such investment shall be paid out of the amounts held in escrow before any other payments shall be required to be made from such amounts. (f) Upon any delivery of the amount remaining in escrow as provided in Section 3.3(b) or 3.3(c) above, Escrow Agent shall be relieved of all liability, responsibility or obligation with respect to or arising out of the escrow or under this Agreement. Escrow Agent shall not be bound by any modification to this Section 3.3 unless Escrow Agent shall have agreed to such modification in writing. (g) Escrow Agent shall be entitled to rely or act upon any notice, instrument or document believed by Escrow Agent to be genuine and to be executed and delivered by the proper person, and shall have no obligation to verify any statements contained in any notice, instrument or document or the accuracy or due authorization of the execution of any notice, instrument or document. (h) Escrow Agent shall be entitled to retain attorneys of its choice, including itself, in connection with this escrow and Escrow Agent may continue to represent Seller in connection with this Agreement, or any dispute which may arise hereunder or otherwise. (i) Escrow Agent has acknowledged agreement to the foregoing provisions of this Section 3.3 by signing in the place indicated on the signature page of this Agreement. 10 ARTICLE IV ADJUSTMENTS The following are to be adjusted and prorated between Seller and Purchaser as of 11:59 P.M. on the day preceding the Closing Date, based upon a 365 day year, and the net amount thereof shall be added to (if such net amount is in Seller's favor) or deducted from (if such net amount is in Purchaser's favor) the Cash Balance of the Purchase Price: Section 4.1. Fixed Rents. (a) Fixed rents (collectively, "Fixed Rents") paid or payable by tenants under the Leases in connection with their occupancy of the applicable Premises shall be adjusted and prorated on an if, as and when collected basis. Any Fixed Rents collected by Purchaser or Seller after the Closing from any tenant who owes Fixed Rents for periods prior to the Closing, shall be applied (i) first, in payment of Fixed Rents owed by such tenant for the month in which the Closing Date occurs, (ii) second, in payment of Fixed Rents owed by such tenant for the period (if any) after the month in which the Closing Date occurs through the end of the month in which such amount is collected and (iii) third, after Fixed Rents for all current periods have been paid in full, in payment of Fixed Rents owed by such tenant for the period prior to the month in which the Closing Date occurs. Each such amount, less any costs of collection (including reasonable counsel fees) reasonably allocable thereto, shall be adjusted and prorated as provided above, and the party who receives such amount shall promptly pay over to the other party the portion thereof to which it is so entitled. In furtherance and not in limitation of the preceding sentence, with respect to any tenant which has paid all Fixed Rents for periods through the Closing, if, prior to the Closing, Seller shall receive any prepaid Fixed Rents from such tenant attributable to a period following the Closing, at the Closing, Seller shall pay over to Purchaser the amount of such prepaid Fixed Rents. (b) Purchaser shall bill tenants who owe Fixed Rents for periods prior to the Closing on a monthly basis for a period of six consecutive months following the Closing Date and shall use commercially reasonable efforts to collect such past due Fixed Rents; provided, however, that Purchaser shall have no obligation to commence any actions or proceedings to collect any such past due Fixed Rents. Notwithstanding the foregoing, if Purchaser shall be unable to collect such past due Fixed Rents, Seller shall have the right, upon prior written notice to Purchaser, to pursue tenants to collect such delinquencies (including, without limitation, the prosecution of one or more lawsuits), but Seller shall not be entitled to evict (by summary proceedings or otherwise) any such tenants. Any payment by a tenant in an amount less than the full amount of Fixed Rents and Overage Rent then due and payable by such tenant shall be applied first to Fixed Rents (in the order of priority as to time periods as is set forth in Section 4.1(a) above) to the extent of all such Fixed Rents then due and payable by such tenant, and thereafter to Overage Rents (in the order of priority as to time periods as is set forth in Section 4.2 below). 11 Section 4.2. Overage Rents. (a) With respect to any Lease that provides for (i) the payment of additional rent based upon a percentage of the tenant's business during a specified annual or other period (sometimes referred to as "percentage rent"), (ii) so called common area maintenance or "cam" charges or (iii) so-called "escalation rent" or additional rent based upon increases in real estate taxes or operating expenses or labor costs or cost of living or porter's wages or otherwise (such percentage rent, cam charges, escalation rent and additional rent being collectively called "Overage Rent"), such Overage Rent shall be adjusted and prorated on an if, as and when collected basis. (b) As to any Overage Rent in respect of an accounting period that shall have expired prior to the Closing but which shall be paid after the Closing, Purchaser agrees that it will pay the entire amount over to Seller upon receipt thereof, less any costs of collection (including reasonable counsel fees) reasonably allocable thereto. Purchaser agrees that it shall (i) promptly render bills for any Overage Rent in respect of an accounting period that shall have expired prior to the Closing but which shall be paid after the Closing, (ii) bill tenants such Overage Rent attributable to an accounting period that shall have expired prior to the Closing on a monthly basis for a period of six consecutive months thereafter and (iii) use commercially reasonable efforts to collect Overage Rent; provided, however, that Purchaser shall have no obligation to commence any actions or proceedings to collect any such Overage Rents. Notwithstanding the foregoing, if Purchaser shall be unable to collect such Overage Rent, Seller shall have the right, upon prior written notice to Purchaser, to pursue tenants to collect such delinquencies (including, without limitation, the prosecution of one or more lawsuits), but Seller shall not be entitled to evict (by summary proceedings or otherwise) any such tenants. Seller shall furnish to Purchaser all information relating to the period prior to the Closing that is reasonably necessary for the billing of such Overage Rent; and Purchaser will deliver to Seller, concurrently with the delivery to tenants, copies of all statements relating to Overage Rent for a period prior to the Closing. Purchaser shall bill tenants for Overage Rents for accounting periods prior to the Closing in accordance with and on the basis of such information furnished by Seller. (c) Overage Rent in respect of the accounting period in which the Closing occurs shall be apportioned between Seller and Purchaser as of 11:59 P.M. of the day preceding the Closing Date, with Seller receiving the proportion of such Overage Rent (less a like portion of any costs and expenses (including reasonable counsel fees) incurred in the collection of such Overage Rent) that the portion of such accounting period prior to the Closing Date bears to the entire such accounting period, and Purchaser receiving the proportion of such Overage Rent (less a like portion of any costs and expenses (including reasonable counsel fees) incurred in the collection of such Overage Rent) that the portion of such accounting period from and after the Closing Date bears to the entire such accounting period. If, prior to the Closing, Seller shall receive any installments of Overage Rent attributable to Overage Rent for periods from and after the Closing Date, such sum shall be apportioned at the Closing. If, after the Closing, Purchaser shall receive any installments of Overage Rent attributable to Overage Rent for periods prior to the Closing, such sum (less any costs and expenses (including reasonable counsel fees) incurred by Purchaser in the collection of such Overage Rent) shall be paid by Purchaser to Seller promptly after Purchaser receives payment thereof. 12 (d) Any payment by a tenant on account of Overage Rent (to the extent not applied against Fixed Rents due and payable by such tenant in accordance with Section 4.1(b) above) shall be applied to Overage Rents then due and payable in the following order of priority, (i) first, in payment of Overage Rent for the accounting period in which the Closing Date occurs and (ii) second, in payment of Overage Rent for the accounting period preceding the accounting period in which the Closing Date occurs, in the chronological order in which such payments are due for such accounting period pursuant to the applicable lease. (e) To the extent that any portion of Overage Rent is required to be paid monthly by tenants on account of estimated amounts for any calendar year (or, if applicable, any lease year or tax year or any other applicable accounting period), and at the end of such calendar year (or lease year, tax year or other applicable accounting period, as the case may be), such estimated amounts are to be recalculated based upon the actual expenses, taxes and other relevant factors for that calendar (lease or tax) year or other applicable accounting period, with the appropriate adjustments being made with such tenants, then such portion of the Overage Rent shall be prorated between Seller and Purchaser at the Closing based on such estimated payments actually paid by tenants (i.e., with Seller entitled to retain all monthly or other periodic installments of such amounts paid by tenants with respect to periods prior to the calendar month or other applicable installment period in which the Closing occurs, Seller to pay to Purchaser at the Closing all monthly or other periodic installments of such amounts theretofore received by Seller with respect to periods following the calendar month or other applicable installment period in which the Closing occurs and Seller and Purchaser to apportion as of the Closing Date all monthly or other periodic installments of such amounts paid by tenants with respect to the calendar month or other applicable installment period in which the Closing occurs). At the time(s) of final calculation and collection from (or refund to) each tenant of the amounts in reconciliation of actual Overage Rent for a period for which estimated amounts paid by such tenant have been prorated, there shall be a re-proration between Seller and Purchaser. If, with respect to any tenant, the recalculated Overage Rent exceeds the estimated amount paid by such tenant, upon collection from the tenant, (i) the entire excess shall be paid by Purchaser to Seller, if the accounting period for which such recalculation was made expired prior to the Closing and (ii) such excess shall be apportioned between Seller and Purchaser as of the Closing Date (on the basis described in the first sentence of Section 4.2(c) above), if the Closing occurred during the accounting period for which such recalculation was made, with Purchaser paying to Seller the portion of such excess which Seller is so entitled to receive. If, with respect to any tenant, the recalculated Overage Rent is less than the estimated amount paid by such tenant, (1) the entire shortfall shall be paid by Seller to Purchaser (or, at Seller's option, directly to the tenant in question), if the accounting period for which such recalculation was made expired prior to the Closing and (2) such shortfall shall be apportioned between Seller and Purchaser as of the Closing Date (on the basis described in the first sentence of Section 4.2(c) above), if the Closing occurred during the accounting period for which such recalculation was made, with Seller paying to Purchaser (or, at Seller's option, directly to the tenant in question) the portion of such shortfall so allocable to Seller. (f) Until such time as all amounts required to be paid to Seller by Purchaser pursuant to Section 4.1 and this Section 4.2 shall have been paid in full, Purchaser shall furnish to Seller not less frequently than monthly a reasonably detailed accounting of such 13 amounts payable by Purchaser, which accounting shall be delivered to Seller on or prior to the 15th day following the last day of each calendar month from and after the calendar month in which the Closing occurs. Seller shall have the right from time to time following the Closing, on prior notice to Purchaser, during ordinary business hours on Business Days, to review Purchaser's rental records with respect to each Property to ascertain the accuracy of such accountings. Section 4.3. Taxes and Assessments. Real estate taxes shall be adjusted and prorated on the basis of the fiscal year for which assessed. If, with respect to any Premises, the Closing shall occur before the tax rate or assessed valuation is fixed for such Premises, the apportionment of real estate taxes for such Premises shall be upon the basis of the tax rate for the preceding year applied to the most recently applicable assessed valuation of such Premises, subject to further and final adjustment when the tax rate and/or assessed valuation for such Premises is fixed for the year in which the Closing occurs. In the event that any Premises or any part thereof shall be or shall have been affected by an assessment or assessments, whether or not the same become payable in annual installments, Seller shall, at the Closing, be responsible for any installments due prior to the Closing and Purchaser shall be responsible for any installments due on or after the Closing. Section 4.4. Water and Sewer Charges. Water rates, water meter charges, sewer rents and vault charges, if any (other than any such charges, rates or rents which are payable by tenants of each Premises pursuant to such tenants' leases), shall be adjusted and prorated on the basis of the fiscal period for which assessed. If there be a water meter, or meters, on any Premises, Seller agrees that it shall at the Closing furnish a reading of same to a date not more than 30 days prior to the Closing and the unfixed meter charges and the unfixed sewer rent thereon for the time intervening from the date of the last reading shall be apportioned on the basis of such last reading, and shall be appropriately readjusted after the Closing on the basis of the next subsequent bills. Unmetered water charges shall be apportioned on the basis of the charges therefor for the same period of the preceding calendar year, but applying the current rate thereto. As to any unpaid water charges or sewer rents payable directly by tenants, Purchaser shall close title and accept the delivery of the deed for the applicable Premises subject to such unpaid charges and rents and any lien resulting therefrom, without credit against the Purchase Price or any claim or right of action against Seller. Section 4.5. Utility Charges. Gas, steam, electricity and other public utility charges (other than any such charges which are payable by tenants of each Premises pursuant to such tenants' leases) will be paid by Seller to the utility company to the Closing Date. Seller shall arrange for a final reading of all utility meters (covering gas, water, steam and electricity) as of the Closing, except meters the charges of which are payable by tenants of each Premises pursuant to such tenants' leases. Seller and Purchaser shall jointly execute a letter to each of such utility companies advising such utility companies of the termination of Seller's responsibility for such charges for utilities furnished to the applicable Premises as of the date of the Closing and commencement of Purchaser's responsibilities therefor from and after such date. If a bill is obtained from any such utility company as of the Closing, Seller shall pay such bill on or before the Closing. If such bill shall not have been obtained on or before the Closing, Seller shall, upon receipt of such bill, pay all such utility charges as evidenced by such bill or bills pertaining to the 14 period prior to the Closing, and Purchaser shall pay all such utility charges pertaining to the period thereafter. Any bill which shall be rendered which shall cover a period both before and after the date of Closing shall be apportioned between Purchaser and Seller as of the Closing. Section 4.6. Service Contracts. Charges and payments under all Service Contracts. Section 4.7. Permits. License and permit fees on Permits. Section 4.8. Miscellaneous Revenues. Revenues, if any, arising out of telephone booths, vending machines, or other income-producing agreements. Section 4.9. Supplies. Maintenance supplies in unopened containers based on Seller's actual cost therefor, including sales and/or use tax. Section 4.10. Other. Any other item which, under the terms of this Agreement, is to be apportioned at Closing. If any such items are not determinable at the Closing, the adjustment shall be made subsequent to the Closing when the charge is determined. Any errors or omissions in computing adjustments at the Closing shall be promptly corrected, provided that the party seeking to correct such error or omission shall have notified the other party of such error or omission on or prior to the date that is one (1) year following the Closing Date. The provisions of this Article 4 shall survive the Closing. ARTICLE V TITLE AND PERMITTED EXCEPTIONS ------------------------------ Section 5.1. Permitted Exceptions. Each Property shall be sold and is to be conveyed, and Purchaser agrees to purchase such Property, subject to (a) those matters set forth on Exhibit E annexed hereto with respect to such Property, (b) such Title Exceptions affecting such Property as any reputable title insurance company authorized to do business in the State in which the applicable Property is located shall be willing to (i) omit as exceptions to coverage or (ii) except with insurance against collection out of or enforcement against such Property with respect to Purchaser's insurance policy, and omit as exceptions to coverage with respect to any lender's mortgage insurance policy, (c) the standard exceptions and provisions contained in the form of insuring agreement employed by the Title Insurer and (d) the exceptions and matters specifically set forth in this Agreement (the liens, claims, encumbrances, exceptions and matters set forth in subclauses (a) through (d) above with respect to any Property being collectively referred to as the "Permitted Exceptions"). Section 5.2. Title Report. Purchaser has received and/or reviewed a copy of a recent title report with respect to each Property. Purchaser shall (a) instruct the Title Insurer, in writing, to furnish copies of all title continuations to Seller's counsel at the address set forth in 15 Article 19 hereof and (b) within two (2) Business Days after issuance of any such continuation, give notice to Seller specifying all Title Exceptions set forth in such continuation which Purchaser claims are not Permitted Exceptions. Section 5.3. Use of Purchase Price to Discharge Title Exceptions. With respect to any Property, if, at the Closing, there are any Title Exceptions applicable to such Property which are not Permitted Exceptions for such Property and which Seller is obligated by this Agreement or elects to pay and discharge, Seller may use any portion of the Cash Balance of the Purchase Price to satisfy the same, provided that Seller shall have delivered to Purchaser at the Closing instruments in recordable form sufficient to satisfy such Title Exceptions of record, together with the cost of any applicable recording or filing fees. Purchaser, if request is made within a reasonable time prior to the Closing, agrees to provide at the Closing separate certified or cashier's checks as requested, aggregating up to the amount of the Cash Balance of the Purchase Price, to facilitate the satisfaction of any such Title Exceptions. The existence of any such liens or encumbrances shall not be deemed objections to title if Seller shall comply with the foregoing requirements. Any unpaid liens for taxes, water charges and assessments applicable to the period prior to the Closing Date shall not be objections to title, but the amount thereof plus any interest and penalties thereon shall be deducted from the Cash Balance of the Purchase Price, subject to the provisions for apportionment of taxes, water charges and assessments contained in Article 4 of this Agreement. Section 5.4. Inability to Convey. Except as expressly set forth in Sections 5.6 and 5.7, nothing contained in this Agreement shall be deemed to require Seller to take or bring any action or proceeding or any other steps to remove any Title Exception or to expend any moneys therefor, nor shall Purchaser have any right of action against Seller, at law or in equity, for Seller's inability to convey title subject only to the Permitted Exceptions, except that, at the Closing, Seller shall cause those Title Exceptions set forth in Exhibit E-1 attached hereto (collectively, the "Nonpermitted Exceptions") to be omitted from Purchaser's title insurance policy. Section 5.5. Rights in Respect of Inability to Convey. In the event that Seller shall be unable to convey title to each Property, subject only to the Permitted Exceptions applicable to such Property, and Purchaser shall not, prior to the Scheduled Closing Date (as it may have been adjourned in accordance with this Agreement), give notice to Seller that Purchaser is willing to waive objection to each Title Exception which is not a Permitted Exception for the applicable Property and close this transaction without abatement of the Purchase Price, credit or allowance of any kind or any claim or right of action against Seller for damages or otherwise, Seller shall have the right, at Seller's sole election, to either (1) take such action as Seller shall deem advisable to discharge each such Title Exception which is not a Permitted Exception or (2) terminate this Agreement. In the event Seller shall elect to take action to discharge each such Title Exception which is not a Permitted Exception, Seller shall be entitled to one or more adjournments of the Scheduled Closing Date for a period not to exceed ninety (90) days in the aggregate (inclusive of any adjournments made by Seller pursuant to Sections 5.6 and 5.7 hereof), and the Closing shall be adjourned to a date specified by Seller not beyond such ninety (90) day period. If, for any reason whatsoever, Seller shall not have succeeded in discharging each such Title Exception at the expiration of such adjournment(s) and if Purchaser 16 shall not, prior to the expiration of the last of such adjournments, give notice to Seller that Purchaser is willing to waive objection to each such Title Exception and to close this transaction without abatement of the Purchase Price, credit or allowance of any kind or any claim or right of action against Seller for damages or otherwise, this Agreement shall be deemed to be terminated as of the last date to which the Scheduled Closing Date was adjourned by Seller pursuant to this Article 5. Upon any termination of this Agreement pursuant to this Section 5.5, then (I) the Deposit shall be refunded to Purchaser and (II) neither party shall have any further rights or obligations hereunder other than those which expressly survive the termination of this Agreement. No action taken by Seller to discharge, or attempt to discharge, any purported Title Exception shall be an admission that any such purported Title Exception is not a Permitted Exception. The provisions of this Section 5.5 shall be subject to Seller's and Purchaser's rights and obligations with respect to Nonpermitted Exceptions, Voluntary Title Exceptions and Liquidated Sum Title Exceptions set forth in Sections 5.4, 5.6 and 5.7, respectively. Section 5.6. Voluntary Title Exceptions. If, from time to time prior to the Closing, Purchaser shall become aware of any Voluntary Title Exceptions, then Purchaser shall promptly notify Seller thereof, which notice shall describe in reasonable detail the Voluntary Title Exceptions(s) and the Property at issue. Seller shall discharge all Voluntary Title Exceptions on or prior to Closing. Seller shall be entitled to one or more adjournments of the Scheduled Closing Date not to exceed ninety (90) days in the aggregate (inclusive of any adjournments made by Seller pursuant to Sections 5.5 and 5.7 hereof) to discharge Voluntary Title Exceptions. If Seller shall not discharge all Voluntary Title Exceptions on or prior to Closing, then Purchaser, as and for its sole and exclusive remedy, shall have the rights set forth in Section 18.2(a) hereof. Section 5.7. Liquidated Sum Title Exceptions. On or prior to Closing, Seller shall discharge all Liquidated Sum Title Exceptions with respect to each Property; provided, however, that Seller's obligations under this Section 5.7 shall be subject to and limited by the following provisions: (a) Notwithstanding the foregoing provisions of this Section 5.7, Seller shall have no obligation to expend more than the Liquidated Sum Amount in the aggregate in order to cause all Liquidated Sum Title Exceptions with respect to all Properties to be discharged. Seller shall be entitled to one or more adjournments of the Scheduled Closing Date not to exceed ninety (90) days in the aggregate (inclusive of any adjournments made by Seller pursuant to Sections 5.5 and 5.6 above) to discharge Liquidated Sum Title Exceptions. (b) If, from time to time and at any time at or prior to the Closing, Seller shall determine that the sum of (i) the cost to discharge all then undischarged Liquidated Sum Title Exceptions, plus (ii) all amounts expended by Seller on or prior to such date (but after the date of this Agreement) to discharge any Liquidated Sum Title Exceptions shall exceed the Liquidated Sum Amount, then Seller may (but shall not be obligated to) notify Purchaser thereof (the "Seller Liquidated Sum Title Exception Notice"), which notice shall describe in reasonable detail (x) the Liquidated Sum Title Exceptions that are then in existence and have not been discharged and (y) the amounts expended by Seller on or prior to such date (but after the date of this Agreement) to discharge any Liquidated Sum Title Exceptions, together with documentation reasonably evidencing the same. If Seller shall give a Seller Liquidated Sum Title Exception 17 Notice to Purchaser, then Purchaser shall have the right, as and for its sole and exclusive remedy, to elect one of the following two alternatives: (i) Purchaser may elect to close otherwise in accordance with this Agreement, notwithstanding the existence of such Liquidated Sum Title Exceptions. If Purchaser so elects, then, subject to Purchaser's rights with respect to any Voluntary Title Exceptions as set forth in Section 5.6 above, (1) Purchaser shall be deemed to have waived all of the Title Exceptions (including, without limitation, the Liquidated Sum Title Exceptions) applicable to each Property that were not discharged on or prior to the Closing and the same shall not be grounds for an objection to title, (2) Purchaser shall not have any right of action against Seller for or in connection with such undischarged Title Exceptions, at law or in equity and (3) Purchaser shall receive a credit against the Purchase Price in an amount equal to the lesser of (x) the aggregate amount needed to discharge such undischarged Liquidated Sum Title Exceptions and (y) the excess of the Liquidated Sum Amount over the amounts expended by Seller on or prior to the Closing Date (but after the date of this Agreement) to discharge any Liquidated Sum Title Exceptions; or (ii) Purchaser, by written notice given to Seller on or prior to the Scheduled Closing Date (as so adjourned), may elect to terminate this Agreement. If Purchaser shall fail to notify Seller of such election on or prior to the Scheduled Closing Date (as so adjourned), then Purchaser shall irrevocably be deemed to have elected to proceed to Closing as provided in clause (i) of this Section 5.7(b). If this Agreement is terminated pursuant to this clause (ii), then (I) the Deposit shall be refunded to Purchaser and (II) neither party shall have any further rights or obligations hereunder other than those which expressly survive the termination of this Agreement. Section 5.8. Purchaser's Right to Accept Title. Notwithstanding the foregoing provisions of this Article 5, Purchaser may, by notice given to Seller at any time prior to the Scheduled Closing Date (as it may have been adjourned by Seller pursuant to this Article 5), elect to accept such title as Seller can convey, notwithstanding the existence of any Title Exceptions which are not Permitted Exceptions. In such event, this Agreement shall remain in effect and the parties shall proceed to Closing but, except to the extent set forth in Sections 5.6 and 5.7, Purchaser shall not be entitled to any abatement of the Purchase Price, any credit or allowance of any kind or any claim or right of action against Seller for damages or otherwise by reason of the existence of any Title Exceptions which are not Permitted Exceptions. Section 5.9. Cooperation. Purchaser and Seller shall cooperate with the Title Insurer in connection with obtaining title insurance insuring title to each Property subject only to the Permitted Exceptions for such Property. In furtherance and not in limitation of the foregoing, at or prior to the Closing, Purchaser and Seller shall deliver to the Title Insurer such affidavits, certificates and other instruments as are reasonably requested by the Title Insurer and customarily furnished in connection with the issuance of owner's policies of title insurance, including, without limitation, (i) evidence sufficient to establish (x) the legal existence of Purchaser and Seller and (y) the authority of the respective signatories of Seller and Purchaser to bind Seller and Purchaser, as the case may be, and (ii) a certificate of good standing of Seller. 18 ARTICLE VI CONDITION OF PROPERTY --------------------- Section 6.1. Condition of Property. Purchaser is a sophisticated investor and its valuation of, bid and decision to purchase each Property is based upon its own independent expert evaluations of such facts and materials deemed relevant by Purchaser and its agents. Purchaser acknowledges receipt of the Asset File. Other than the representations and warranties of Seller and specifically set forth herein, Purchaser has not relied in entering into this Agreement upon any oral or written information from Seller, in any capacity, or any of its employees, affiliates, agents, consultants, advisors or representatives, including, without limitation, any appraisals, projections or evaluations of credit quality prepared by Seller or any of its employees, affiliates, agents, consultants, advisors or representatives, whether or not contained in the Asset File. Purchaser further acknowledges that no employee, agent, consultant, advisor or representative of Seller has been authorized to make, and that Purchaser has not relied upon, any statements or representations other than those specifically contained in this Agreement. Without limiting the generality of the foregoing, Purchaser acknowledges and agrees that, except as expressly set forth in Section 10.2 hereof, Purchaser is purchasing each Property "as is" and "where is" on the Closing Date, and, except as expressly set forth in Section 10.2 hereof, Seller is making no representation or warranty, express or implied, and Purchaser has not relied on any representation or warranty, express or implied, regarding any Property, including, without limitation, any representation or warranty with respect to (a) the business or financial condition of any tenant of any Property, (b) the physical condition of any Improvement or Personal Property comprising all or a part of any Property, or its fitness, merchantability or suitability for any use or purpose, (c) the leases, rents, income or expenses of any Property, (d) the compliance or non-compliance with any laws, codes, ordinances, rules or regulations of any Governmental Authority and any violations thereof or (e) the current or future use of any Property, including, but not limited to, any Property's use for commercial, retail, industrial or other purposes. Seller is not liable or bound in any manner by any verbal or written statements, representations, real estate brokers' "set-ups", offering memorandum or information pertaining to any Property furnished by any real estate broker, advisor, consultant, agent, employee, representative or other Person. ARTICLE VII CLOSING ------- Section 7.1. Closing Date. The closing of the transactions contemplated by this Agreement (the "Closing") shall be held at the offices of Robinson Silverman Pearce Aronsohn & Berman LLP, 1290 Avenue of the Americas, New York, New York 10104, at 10:00 a.m., on August 15, 1996 (such date, as it may be adjourned pursuant to one or more of the provisions of this Agreement, being herein called the "Scheduled Closing Date"). Seller, in addition to any other right of Seller to adjourn the Scheduled Closing Date set forth in this Agreement, shall have the right from time to time, by written notice given to Purchaser on or before any Scheduled Closing Date, to adjourn the Closing to a Business Day occurring on or before (i) the ninetieth (90th) day after the date of this Agreement, if, in Seller's sole and 19 absolute discretion, Seller will be unable to (a) comply with any covenant of Seller in this Agreement or (b) satisfy every condition precedent to Purchaser's obligation to close set forth in this Agreement, as of such Scheduled Closing Date (i.e., the Scheduled Closing Date existing prior to such adjournment) or (ii) September 6, 1996, for any reason. Purchaser shall have the right, by written notice given to Seller on or before any Scheduled Closing Date, to adjourn the Closing to a Business Day occurring on or before August 30, 1996. Subject to Seller's right to adjourn the Closing as set forth in the second preceding sentence, TIME SHALL BE OF THE ESSENCE with respect to Purchaser's and Seller's obligation to close by any Scheduled Closing Date which is on or after September 6, 1996. (The actual date on which the Closing occurs is referred to herein as the "Closing Date"). In no event may Seller or Purchaser accelerate the Closing to a date on or before August 15, 1996. ARTICLE VIII CLOSING DELIVERIES ------------------ Section 8.1. Documents and Payments to be Delivered at the Closing. At the Closing: (a) Purchaser shall deliver to Seller the Cash Balance of the Purchase Price and any other amounts payable by Purchaser to Seller, at the Closing, pursuant to this Agreement; (b) Seller shall execute, acknowledge and deliver to Purchaser a deed for each Property in the form of Exhibit F attached hereto, in proper form for recording; (c) Seller shall execute, acknowledge and deliver to Purchaser a general bill of sale for each Property, in the form of Exhibit G attached hereto, conveying to Purchaser all of Seller's right, title and interest in and to the Personal Property applicable to such Property; (d) Seller and Purchaser shall each execute, acknowledge and deliver an assignment and assumption for each Property, in the form of Exhibit H attached hereto, which provides for the assignment by Seller to Purchaser, in accordance with this Agreement, of all of Seller's right, title and interest as landlord in and to the Leases for such Property and the assumption by Purchaser of all of Seller's obligations as landlord under such Leases arising from and after the Closing Date; (e) Seller and Purchaser shall each execute, acknowledge and deliver an assignment and assumption for each Property, in the form of Exhibit I attached hereto, which provides for the assignment by Seller to Purchaser, in accordance with this Agreement, of all of Seller's right, title and interest in and to the Service Contracts, Rent Differential Escrow Agreement, Permits, Warranties, trade names and general intangibles for such Property and the assumption by Purchaser of all of Seller's obligations under such Service Contracts, Rent Differential Escrow Agreement, and Permits arising from and after the Closing Date; 20 (f) Seller shall deliver to Purchaser the security deposits held by Seller under the Leases (together with accrued interest thereon, if any, less Seller's proportionate share of administrative fees, if any, to the extent such administrative fees are allowed by the applicable lease or by law) by, at Seller's option, (i) payment of the amount thereof to Purchaser, (ii) a credit to Purchaser against the Cash Balance of the Purchase Price and/or (iii) assignment to Purchaser of the bank accounts (or other security) in which same are held, which assignment shall be in form reasonably acceptable to the depositary bank. Any such tenants' securities in form other than cash shall be transferred to Purchaser by way of appropriate instruments of transfer or assignment; (g) Seller shall deliver to Purchaser executed original counterparts or copies of all Leases and Service Contracts in Seller's possession; (h) Seller shall execute and deliver to Purchaser a certification of non-foreign status, in form required by the Internal Revenue Code Section 1445 and the regulations issued thereunder. Seller understands that such certification will be retained by Purchaser and will be made available to the Internal Revenue Service on request; (i) Purchaser and Seller shall jointly execute notice letters, in the form of Exhibit J attached hereto, to the tenants under the Leases, which notice letters shall (A) advise such tenants and other entities of the sale, (B) to the extent applicable, advise such tenants and other entities that their security deposit (or other form of security), if any, and any interest thereon, has been turned over to Purchaser and (C) set forth Purchaser's name and address and the manner in which future payments of rental are to be made. Such notice letters shall be retained by Seller and delivered by Seller to each tenant and other such entity promptly following Closing; (j) If a return is required to be filed for the transaction herein described under Section 6045(e) of the Internal Revenue Code of 1986, Seller's attorney shall be the "Reporting Person" or have the Title Insurer designated as the "Reporting Person"; (k) Seller shall execute and/or deliver such other instruments or documents which by the terms of this Agreement are to be delivered by Seller at Closing, and Purchaser shall execute and/or deliver such other instruments or documents which by the terms of this Agreement are to be delivered by Purchaser at Closing; (l) Purchaser shall deliver to Seller (i) a copy of the partnership agreement of Purchaser, certified as true and correct by an officer of the general partner of Purchaser, (ii) an instrument, executed by each of the general partners of Purchaser, in which each such general partner consents to the transactions contemplated hereby, (iii) a copy of the certificate of incorporation of the corporate general partner of Purchaser and (iv) a certified copy of such corporate documents of the corporate general partner of Purchaser as are reasonably necessary to demonstrate that the transactions contemplated hereby have been authorized by all necessary corporate action of the corporate general partner of Purchaser; 21 (m) To the extent that any of the Personal Property includes motor vehicles which are registered, Seller shall execute and deliver to Purchaser the certificates of title for such vehicles, together with an assignment, without recourse, representation or warranty, express or implied (except as set forth in Section 10.2(k) of this Agreement), of such certificates of title; (n) Seller and Purchaser shall each execute and deliver a closing statement setting forth the adjustments made in accordance with Article IV of this Agreement, which statement shall set forth in reasonable detail the basis for such adjustments; (o) With respect to each Property, Purchaser and Seller shall jointly execute and deliver such real estate transfer tax returns or declarations as may be required by any governmental authority having jurisdiction in connection with the sale of such Property pursuant to this Agreement; and (p) Seller shall deliver to Purchaser a letter, duly executed by Seller, terminating the property management agreement with Seller's property manager at each Property effective as of the Closing Date. ARTICLE IX CONDITIONS TO CLOSING --------------------- Section 9.1. Conditions to Purchaser's Obligation to Close. Purchaser's obligation to purchase each Property is subject to the satisfaction of the following conditions precedent, any or all of which may be waived by Purchaser: (a) This Agreement shall be in full force and effect and there shall not then exist any event which would allow Purchaser to terminate this Agreement pursuant to the express terms hereof; (b) Seller shall have complied, in all material respects, with its obligations under this Agreement; (c) With respect to each Property, Seller shall have delivered to Purchaser, Tenant Estoppel Certificates, dated as of a date not more than sixty (60) days prior to the Scheduled Closing Date (as the Scheduled Closing Date may be adjourned by Seller (but not by Purchaser) from time to time in accordance with this Agreement), from (i) the specific tenants of such Property under the leases set forth on Exhibit N annexed hereto (the "Specified Estoppel Leases") and (ii) the holders of the tenant's interest under Leases for such Property which demise an aggregate number of rentable square feet equal to at least eighty (80%) percent of the aggregate number of rentable square feet of that portion of the Improvements applicable to such Property which is demised as of the date of this Agreement (it being understood that a Tenant Estoppel Certificate from the tenant under any Specified Estoppel Lease shall count toward such percentage requirement); provided, however, if, with respect to any Property, Seller obtains Tenant Estoppel Certificates from the holders of the tenant's interest under Leases for such 22 Property which demise an aggregate number of rentable square feet equal to at least sixty-five (65%) percent, but less than eighty (80%) percent, of the aggregate number of rentable square feet of that portion of the Improvements applicable to such Property which is demised as of the date of this Agreement, Seller shall execute and deliver to Purchaser at Closing a certificate from Seller as to the matters which would be set forth in the Tenant Estoppel Certificate for the tenant(s) under any Lease(s) selected by Seller which did not execute and deliver a Tenant Estoppel Certificate to the extent, and only to the extent, necessary to increase to eighty (80%) the rentable square footage of the Leases with respect to which a Tenant Estoppel Certificate is obtained from the tenant and a certificate as described in this sentence is delivered by Seller, it being understood that the rentable square footage demised pursuant to the lease for any tenant with respect to which such a certificate is delivered by Seller shall be counted toward satisfaction of the percentage requirement set forth in this subclause (c), but in no event may Seller deliver any such certificate executed by Seller in lieu of a Tenant Estoppel Certificate by a tenant under a Specified Estoppel Lease. Any such certificate given by Seller shall state that the certifications made by Seller therein shall survive the Closing for a period of twelve (12) months or until such earlier date on which the applicable tenant shall deliver a Tenant Estoppel Certificate to Purchaser; (d) With respect to the Lincolnshire Asset, Seller shall have delivered to Purchaser (i) an estoppel certificate from the Tri-State International Office Center Association, in the form required by Section 12.7 of the Declaration of Covenants, Conditions, Restrictions and Certain Reciprocal Rights and Easements dated March 30, 1987 relating to Phase I of the Tri-State International Office Center, and (ii) an estoppel certificate from the Tri- State International Phase II Association, in the form required by Section 12.6 of the Declaration of Covenants, Conditions, Restrictions and Easements dated August 11, 1987 relating to Phase II of the Tri-State International Office Center; (e) The replacement of a portion of the sidewalk adjacent to the 14th Street elevation of the Improvements applicable to the Washington, D.C. Asset shall be substantially completed; and (f) The above-ground storage tank located in the basement of the Improvements applicable to the Washington, D.C. Asset shall be removed in accordance with all applicable laws, and any Hazardous Substances present and caused by the existence of such storage tank which are discovered upon its removal shall be removed, encapsulated or abated to the extent required by applicable laws. Purchaser shall be afforded reasonable advance notice of the removal of such storage tank, and the opportunity to observe such removal. Section 9.2. Conditions to Seller's Obligation to Close. Seller's obligation to sell each Property is subject to the satisfaction of the following conditions precedent, any or all of which may be waived by Seller: (a) This Agreement shall be in full force and effect and there shall not then exist any event which would allow Seller to terminate this Agreement pursuant to the express terms hereof; and 23 (b) Purchaser shall have complied, in all material respects, with its obligations under this Agreement. Section 9.3. Multiple Properties. If this Agreement shall provide for the purchase and sale of more than one Property, then the conditions applicable to Seller's and Purchaser's obligations hereunder shall be construed such that Seller only shall have the right and obligation to sell, and Purchaser shall only have the right and obligation to purchase, all of the Properties (i.e., if there is a failure of a condition with respect to one Property, Seller shall not have the obligation to sell, and Purchaser shall not have the obligation to purchase, the other Properties). Section 9.4. Failure to Satisfy Conditions to Close. Notwithstanding any provision of this Agreement to the contrary, in no event shall there be any express or implied covenant, agreement or obligation of (a) Seller to cause any condition precedent set forth in Section 9.1 above to be satisfied or (b) Purchaser to cause any condition precedent set forth in Section 9.2 above to be satisfied, unless the failure to satisfy such condition precedent results from such party's failure to comply with a covenant, agreement or obligation of such party set forth in another Article of this Agreement. ARTICLE X REPRESENTATIONS AND WARRANTIES ------------------------------ Section 10.1. Representations and Warranties by Seller as to Seller. Seller represents and warrants to Purchaser that, as of the date hereof: (a) Authority; Binding on Seller; Enforceability. Seller is duly organized, validly existing and in good standing in its jurisdiction of incorporation. Seller has corporate powers adequate for the making and performing of this Agreement, has taken all corporate action required to execute, deliver and perform this Agreement and to make all of the provisions of this Agreement the valid and enforceable obligations they purport to be and has caused this Agreement to be executed by a duly authorized officer or officers of Seller. (b) Conflict with Existing Laws or Contracts. The execution and delivery of this Agreement and all related documents and the performance of its obligations hereunder and thereunder by Seller does not conflict with any provision of any law or regulation to which Seller is subject, conflict with or result in a breach of or constitute a default under any of the terms, conditions or provisions of any agreement or instrument to which Seller is a party or by which Seller is bound or any order or decree applicable to Seller or result in the creation or imposition of any lien on any of its assets or property, which would materially and adversely affect the ability of Seller to perform its obligations under this Agreement; and Seller has obtained all consents, approvals, authorizations or orders of any court or governmental agency or body, if any, required for the execution, delivery and performance by Seller of this Agreement. 24 (c) Legal Action Against Seller. There is no action, suit or proceeding pending against Seller in any court or by or before any other governmental agency or instrumentality which would materially and adversely affect the ability of Seller to perform its obligations under this Agreement. (d) Bankruptcy of Seller. Seller has not filed any petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency, nor has any such petition been filed against Seller. Seller is not insolvent and the consummation of the transactions contemplated by this Agreement shall not render Seller insolvent. Section 10.2. Representations and Warranties by Seller as to the Property. Except as disclosed or set forth in the Asset File (whether or not also disclosed or set forth in an exhibit to this Agreement), Seller represents and warrants to Purchaser that, as of the date hereof: (a) Owner. Seller is the owner of record title to each Premises, and has the right to sell such Premises pursuant to the terms of this Agreement, subject to the terms and provisions of Addendum A annexed hereto, if any. (b) Leases. (i) With respect to each Premises, there are no leases, licenses, subleases or other occupancy agreements which are in effect as of the Bid Date with respect to such Premises and under which Seller is the holder of the landlord's interest, other than the Existing Leases applicable to such Premises. Except as set forth in Exhibit B, copies of the Existing Leases contained in the Asset File are true, correct and complete in all material respects. The information provided in the rent roll attached hereto as Exhibit B, including the fixed rents payable under the Existing Leases, lease expiration dates and security deposits, is true, correct and complete in all material respects; provided, however, since Purchaser has reviewed each of the Existing Leases, in the event that there is any discrepancy between the information contained in Exhibit B and the terms and provisions of any of the Existing Leases, the terms and provisions of the Existing Leases shall be effective as against Seller and Purchaser, and Seller shall not be deemed to have breached the representation contained in this subclause (b)(i) by reason of such discrepancy. (ii) Except as otherwise noted on Exhibit B, (1) each of the Existing Leases is in full force and effect, (2) no written notice of a material default on the part of the tenant under any of the Existing Leases has been sent by Seller, other than a default notice setting forth a material default which, as of the date hereof, has been cured, (3) no written notice of a material default on the part of the landlord under any of the Existing Leases has been received by Seller, other than a default notice setting forth a material default which, as of the date hereof, has been cured, (4) no Fixed Rent or recurring monthly Overage Rent payable under any Existing Lease is more than thirty (30) days in arrears of the date that the same is required to be paid under the terms of such Existing Lease and (5) subject to the provisions of Section 11.6, all decorating, alterations and other work required to be performed by Seller pursuant to each 25 Existing Lease prior to the Closing Date in order to prepare the premises demised thereunder for initial occupancy, or any cost thereof to be reimbursed to any such tenants as an incident of such initial occupancy, has been performed or reimbursed, or will be performed or reimbursed, prior to the Closing Date, except that, with respect to the Postal Commission Lease, in consideration of the credit to the Cash Balance being given to Purchaser pursuant to Section 3.1(c), Seller shall not be required to perform or pay for the alterations and other work to which the Allowance is to be applied. (c) Brokerage. Subject to the provisions of Section 11.6 and except as otherwise noted on Exhibit C, all brokerage commissions payable in connection with the Existing Leases have been or will be paid in full prior to the Closing, other than any brokerage commissions which may be payable as a result of or in connection with (i) any renewal terms which shall not yet have commenced on the Bid Date and extension options or expansion options the term for which have not yet commenced on the Bid Date, (ii) any space which is leased pursuant to rights of first refusal or first offer or similar rights contained in Existing Leases and the term for which has not yet commenced on the Bid Date, and (iii) the failure to timely exercise or the expiration of any right to terminate or cancel any Existing Lease (any such event as described in the preceding subclauses (i), (ii) and (iii) being a "Contingent Commission Event"). A true and complete schedule of the brokerage agreements entered into by Seller and requiring the payment of any brokerage commissions upon a Contingent Commission Event is contained in Exhibit C; provided, however, subject to the provisions of Section 18.4, Seller shall not be deemed to have breached the representation and warranty contained in this sentence unless a brokerage agreement entered into by Seller and not listed on Exhibit C is binding upon Purchaser and requires the payment by Purchaser of a brokerage commission upon a Contingent Commission Event which is in excess of the standard commission payable upon the occurrence of such Contingent Commission Event for properties similar to and located in the same area as the Property in question. (d) Service Contracts. (i) With respect to each Premises, Seller (after inquiry of Seller's property manager of such Premises), has no actual knowledge of any service contracts, management agreements, maintenance contracts, brokerage agreements, union contracts, management contracts, concession agreements, agency agreements or any other written contracts or agreements by which Seller is bound and which affect such Premises on the Bid Date, except for (1) the Existing Service Contracts applicable to such Premises, (2) the Existing Leases applicable to such Premises and (3) written contracts or agreements which are cancelable upon not more than 60 days notice. Except as set forth in Exhibit D, copies of the Existing Service Contracts contained in the Asset File are true, correct and complete in all material respects. The information with respect to the Existing Service Contracts set forth on Exhibit D is true, complete and correct in all material respects; provided, however, since Purchaser has reviewed and is familiar with each of the Existing Service Contracts, in the event that there is any discrepancy between the information contained in Exhibit D and the terms and provisions of any of the Existing Service Contracts, the terms and provisions of the Existing Service Contracts shall be effective as against Seller and Purchaser, and Seller shall not be deemed to have breached the representation contained in this subclause (d)(i) by reason of such discrepancy. Nothing 26 contained in this Agreement shall be deemed to be a representation, warranty or assurance that the Existing Service Contracts, or any of them, will be in effect at the Closing, the termination of any Existing Service Contract prior to the Closing shall not affect Purchaser's obligations hereunder, which shall remain in full force and effect notwithstanding such termination and Seller expressly reserves the right to terminate any of the Existing Service Contracts (or any additional such agreements entered into between the date of this Agreement and the Closing Date) at any time on or prior to the Closing Date. (ii) To Seller's actual knowledge, except as otherwise noted on Exhibit D, (1) each of the Existing Service Contracts is in full force and effect, (2) no written notice of material default on the part of the other party to any of the Existing Service Contracts has been sent by Seller, other than a default notice setting forth a material default which, as of the date hereof, has been cured and (3) no written notice of material default or breach on the part of Seller under any of the Existing Service Contracts has been received by Seller, other than a default notice setting forth a material default which, as of the date hereof, has been cured. (e) Litigation. Except as set forth on Exhibit L, to the actual knowledge of Seller (after inquiry of Seller's property manager of each Property), there are no actions, suits or proceedings pending, or any order, injunction or decree outstanding, existing or relating to any Property, which (i) has not been disclosed in writing by Seller to Purchaser on or before the Bid Date and (ii) could have a material adverse effect upon such Property or title thereto. (f) Condemnation. As of the date hereof, there are no pending or, to Seller's actual knowledge, threatened condemnation or eminent domain proceedings that would affect any part of any Premises which could have a material adverse effect upon the current use of such Premises for its intended purposes. (g) Compliance with Laws; Permits. No written notice has been received by Seller from any Governmental Authority to the effect that (i) any zoning law, ordinance or regulation has been violated by the current operation, occupancy or use of any Property which violation has not been cured and would materially and adversely affect the current operation, occupancy or use of such Property, (ii) any federal, state or municipal law, ordinance or regulation has been violated by the current operation, occupancy or use of any Property which violation has not been cured and would materially and adversely affect the current operation, occupancy or use of such Property or (iii) any Permits have not been issued and paid for and are not in full force and effect, in each case, without which the operation of the applicable Property would be materially and adversely affected. Notwithstanding the foregoing provisions of this Section 10.2(g), no representation is made by Seller with respect to compliance with or any violation of the Americans With Disabilities Act of 1991, 42 U.S.C. Section 12101 et seq. or the Energy Policy Act of 1992, 42 U.S.C. Section 13201 et seq. (h) Insurance. The insurance coverages with respect to each Premises set forth on Exhibit M attached hereto are in full force and effect. 27 (i) Environmental Matters. To the actual knowledge of Seller, no Hazardous Substances has been disposed of, or identified on, under or at, any Property in violation of any applicable federal, state or municipal law, ordinance or regulation, except to the extent that remediation (by removal, elimination or encapsulation) has occurred or will occur prior to the Closing Date. Seller has not received written notice from any Governmental Authority that any Property is in violation of any applicable federal, state or municipal law, ordinance or regulation regarding Hazardous Substances. (j) Condition of the Improvements. To the actual knowledge of Seller, the Improvements of each Property are free from Structural Defects. (k) Personal Property. The Personal Property with respect to each Property is owned by Seller free and clear of any lien or encumbrance other than the Permitted Exceptions applicable to such Property and any lien or encumbrance that shall be discharged at or prior to Closing. Section 10.3. Representations and Warranties of Purchaser. Purchaser represents to Seller that, as of the date hereof: (a) Authority; Binding on Purchaser; Enforceability. Purchaser is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware, with corporate and/or partnership powers adequate for the making and performing of this Agreement and for carrying on the business now conducted or proposed to be conducted by it. Purchaser has taken all corporate and/or partnership action required to execute, deliver and perform this Agreement and to make all of the provisions of this Agreement the valid and enforceable obligations they purport to be and has caused this Agreement to be executed by a duly authorized officer. Purchaser is duly qualified and in good standing as a foreign corporation and/or partnership in all jurisdictions where it is required so to be qualified, except for failures to be so qualified that do not in the aggregate have any material adverse effect on Purchaser and which will not affect the validity of this Agreement. (b) Conflict with Existing Laws or Contracts. The execution and delivery of this Agreement and all related documents and the performance of its obligations hereunder and thereunder by Purchaser do not conflict with any provision of any law or regulation to which Purchaser is subject, conflict with or result in a breach of or constitute a default under any of the terms, conditions or provisions of any agreement or instrument to which Purchaser is a party or by which Purchaser is bound or any order or decree applicable to Purchaser, or result in the creation or imposition of any lien on any of Purchaser's assets or property, which would materially and adversely affect the ability of Purchaser to perform its obligations under this Agreement; and Purchaser has obtained all consents, approvals, authorizations or orders of any court or governmental agency or body, if any, required for the execution, delivery and performance by Purchaser of this Agreement. (c) Legal Action Against Purchaser. There are no judgments, orders or decrees of any kind against Purchaser unpaid or unsatisfied of record or any legal action, suit or other legal or administrative proceeding pending, threatened or reasonably 28 anticipated which could be filed before any court or administrative agency which has, or is likely to have, any material adverse effect on (i) the business or assets or the condition, financial or otherwise, of Purchaser or (ii) the ability of Purchaser to perform its obligations under this Agreement. (d) Bankruptcy or Debt of Purchaser; Financial Condition. Purchaser has not filed any petition seeking or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law relating to bankruptcy or insolvency, nor has any such petition been filed against Purchaser. No general assignment of Purchaser's property has been made for the benefit of creditors, and no receiver, master, liquidator or trustee has been appointed for Purchaser or any of its property. Purchaser is not insolvent and the consummation of the transactions contemplated by this Agreement shall not render Purchaser insolvent. Purchaser has now and will have as of the Closing Date sufficient capital or net worth to meet its current obligations. Purchaser certifies that any financial statements and any financial statements of Purchaser and/or any Affiliate of Purchaser submitted to Seller have been prepared in accordance with generally accepted accounting principles recognized by the American Institute of Certified Public Accountants or the Financial Accounting Standards Board, or any successors thereto, and are true and correct and that no circumstances have occurred or come to its attention since the date of such financial statements which would have a material adverse impact on the financial condition of Purchaser or such Affiliate as indicated on any such financial statements delivered to Seller. Section 10.4. Closing Certificates of Seller and Purchaser. (a) Purchaser's Closing Certificate. At the Closing, Purchaser shall execute and deliver to Seller an instrument in which Purchaser shall remake the representations and warranties made by Purchaser pursuant to Section 10.3 above as of the Closing Date; provided, however, that Purchaser, in such instrument, may also (i) advise Seller of any events occurring between the date hereof and the Closing Date which affect the accuracy of such representations and warranties (as made as of the Closing Date) and (ii) correct such representations and warranties (as made as of the date hereof) to reflect any discovered inaccuracy therein; such instrument being herein called "Purchaser's Representation Certificate"; any updated information set forth in the Purchaser's Representation Certificate pursuant to the preceding subclause (i) which has a material adverse effect on Seller, together with any correction of any representation and warranty as set forth in the Purchaser's Representation Certificate pursuant to the preceding subclause (ii) which has a material adverse effect on Seller, are herein collectively called "Purchaser's Adverse Changes". (b) Seller's Closing Certificate. At the Closing, Seller shall execute and deliver to Purchaser an instrument ("Seller's Representation Certificate") in which Seller shall remake the representations and warranties made by Seller pursuant to Section 10.1 and, subject to the following provisions of this Section 10.4(b), Section 10.2 above as of the Closing Date; provided, however, that 29 (i) the representations and warranties contained in Section 10.2(b) of this Agreement shall be remade in the Seller's Representation Certificate as to the New Leases only (i.e., not as to the Existing Leases); (ii) Seller shall not be obligated or deemed to remake the representations and warranties contained in Section 10.2(c) as of the Closing Date (the respective rights and obligations of Seller and Purchaser with respect to brokerage commissions payable under any New Leases being set forth in Section 11.6 hereof); (iii) the representations and warranties contained in Section 10.2(d) of this Agreement shall be remade in the Seller's Representation Certificate as to the New Service Contracts only (i.e., not as to the Existing Service Contracts); (iv) Seller shall not be obligated or deemed to remake the representations and warranties contained in Section 10.2(h) as of the Closing Date; and (v) Seller, in Seller's Representation Certificate, may also (A) advise Purchaser of any events occurring between the date hereof and the Closing Date which affect the accuracy of such representations and warranties (as made as of the Closing Date), including, without limitation, those made pursuant to subclauses (i) and (iii) of this sentence, and (B) correct such representations and warranties (as made as of the date hereof) to reflect any discovered inaccuracy therein. Any updated information set forth in the Seller's Representation Certificate pursuant to subclause (v)(A) of the preceding sentence which has a material adverse effect on Purchaser, together with any correction of any representation and warranty as set forth in the Seller's Representation Certificate pursuant to subclause (v)(B) of the preceding sentence which has a material adverse effect on Purchaser, are herein collectively called "Seller's Adverse Changes". Section 10.5. Survival of Representations and Warranties. The representations and warranties of Seller set forth in Sections 10.1, 10.2(b), 10.2(c), 10.2(d), 10.2(e), 10.2(g), 10.2(i) 10.2(j) and 10.2(k), and the representations and warranties of Purchaser set forth in Section 10.3, including, without limitation, any remake of such representations and warranties in the Seller's Representation Certificate and Purchaser's Representation Certificate, as the case may be, shall survive the Closing for the applicable Survival Period. ARTICLE XI COVENANTS --------- Section 11.1. Operation of Premises. Between the date hereof and the Closing Date, Seller shall continue to maintain each Premises in the ordinary course and substantially in accordance with the practices and procedures customarily followed by Seller in the maintenance of such Premises prior to the date hereof; provided, however, that Seller shall 30 have no obligation to make any repairs or expenditures that are capital in nature. Purchaser shall receive a credit against the Cash Balance at the Closing equal to Twenty-Two Thousand Five Hundred and 00/100 ($22,500) Dollars in full and complete satisfaction of any obligation of Seller to perform or complete any capital improvements, replacements or repairs with respect to any of the Properties after the date hereof, including, without limitation, all capital improvement work scheduled for 1996 pursuant to any budget or otherwise at any Property, completion of any gazebo or auditorium work at the Lincolnshire Asset and completion of the elevator cab refurbishment, sprinkler work and energy management system work at the Washington, D.C. Asset. Section 11.2. Insurance. Between the date hereof and the Closing Date, Seller shall either (a) maintain in full force and effect all insurance policies owned by Seller and relating to fire or other casualty in effect on the date hereof with respect to the Improvements at each Property or (b) replace such insurance policies with other policies providing coverage equivalent thereto. Section 11.3. Modification of Leases. Between the day following the Due Diligence Expiration Date and the Closing Date, Seller shall not modify or amend any of the Existing Leases or New Leases in any material respect without Purchaser's prior written consent in each instance, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, Seller shall have the right, without Purchaser's consent, to enter into any modification or amendment of any Existing Lease or New Lease (a) that is required pursuant to the terms of any Existing Lease or New Lease or that is entered into to effectuate or memorialize the exercise of any right or option contained in any Existing Lease or New Lease and (b) if Purchaser shall default in any material respect under any representation, warranty, covenant, agreement or other obligation of Purchaser set forth in this Agreement. If required, Purchaser's consent shall be deemed granted if not denied by notice (stating the grounds for denial with reasonable specificity) given to Seller within five (5) Business Days after request for such consent by Seller. Section 11.4. Termination of Leases. Between the day following the Due Diligence Expiration Date and the Closing Date, Seller shall not cancel, accept the surrender of, or terminate any of the Existing Leases or New Leases without Purchaser's prior written consent in each instance, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, Seller shall have the right, without Purchaser's consent, to cancel, accept the surrender of, or terminate an Existing Lease or New Lease (a) if, with respect to any Lease other than the Specified Estoppel Leases, such cancellation, surrender or termination is predicated upon a default of the tenant thereunder, (b) if such cancellation, surrender or termination is made by the tenant pursuant to the terms of such Existing Lease or New Lease or (c) if Purchaser shall default in any material respect under any representation, warranty, covenant, agreement or other obligation of Purchaser set forth in this Agreement. If required, Purchaser's consent shall be deemed granted if not denied by notice (stating the grounds for denial with reasonable specificity) given to Seller within five (5) Business Days after request for such consent by Seller. Purchaser agrees that (i) no representation or warranty has been made, and no responsibility is assumed, by Seller with respect to the continued occupancy of any portion of any Premises by any tenant, and Seller does not guarantee or undertake to insure that any tenant will be in occupancy at the 31 Closing, (ii) prior to the Closing, Seller shall have the right, but not the obligation, to enforce its rights against any tenant(s), by summary proceedings or otherwise and (iii) the dispossession or removal of any tenant(s) prior to the Closing predicated upon a default by such tenant under its lease shall not be the basis for any claim by Purchaser against Seller or affect any of Purchaser's covenants and obligations under this Agreement. Section 11.5. New Leases. (a) With respect to each Property, between the day following the Due Diligence Expiration Date and the Closing Date, Seller shall not enter into any new lease or renew or extend any Existing Lease without Purchaser's prior written consent in each instance, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, Seller shall have the right, without Purchaser's consent, (i) to renew or extend any Existing Lease or New Lease pursuant to the exercise of any right of renewal or extension by the tenant under the terms of any Existing Lease or New Lease and (ii) to enter into any new lease or renew or extend any Existing Lease if Purchaser shall default in any material respect under any representation, warranty, covenant, agreement or other obligation of Purchaser set forth in this Agreement. If required, Purchaser's consent shall be deemed granted if not denied by notice (stating the grounds for denial with reasonable specificity) given to Seller within five (5) Business Days after request for such consent by Seller. (b) The provisions of this Section 11.5(b) shall apply only to the Lincolnshire Asset but shall be in addition to the provisions of Section 11.5(a) above: in order to provide an efficient process for the review and approval of any proposed new lease at the Lincolnshire Asset, Seller shall instruct its leasing agent to meet with Purchaser from time to time to afford Purchaser a reasonable opportunity to provide suggested general guidelines for new leases of a particular space at the Lincolnshire Asset. As any proposal for a new lease is received by Seller's leasing agent, it shall notify Purchaser and afford Purchaser an opportunity to comment upon the proposal to Seller prior to such leasing agent's responding to such proposal. Seller, however, shall not be bound by the proposed leasing guidelines of Purchaser or the comments or suggestions of Purchaser. In addition, Purchaser shall be entitled to attend all meetings and site visits between Seller or the leasing agent and the prospective tenant, it being understood that Seller and/or its leasing agent shall control and conduct all negotiations during any such meeting or visit. Seller shall provide or cause its leasing agent to provide Purchaser with reasonable prior notice (which may be oral) of any such meeting or visit. At such time as Seller decides to enter into a New Lease with a new or existing tenant, Seller shall provide Purchaser with written notice thereof, which notice shall include the terms of the proposed New Lease, including without limitation Seller's construction manager's estimate of the tenant improvement costs, and all tenant concessions and the terms of any brokerage commission payable in connection therewith. Section 11.6. Payment of Leasing Costs. (a) Purchaser, in the manner set forth in this Section 11.6, shall pay and be solely responsible for the payment of (or, to extent paid by Seller, shall reimburse Seller at the Closing for), all or a portion of any Leasing Costs paid or payable by the landlord in 32 connection with (i) any New Lease or any modification or amendment of any New Lease, (ii) any modification or amendment of any Existing Lease executed after the Bid Date, (iii) any renewal options, extension options or expansion options which are exercised or become effective between the Bid Date and the Closing Date pursuant to the terms of each respective Existing Lease and New Lease and (iv) any space leased pursuant to rights of first refusal or first offer or similar rights which are exercised between the Bid Date and the Closing Date (each of the foregoing leases and events with respect to leases is referred to as a "Lease Cost Transaction"). For purposes of this Agreement, "Leasing Costs" shall mean leasing and brokerage commissions, any direct payments, work allowances and workletters paid or granted to or for the benefit of the tenant under a lease and any free rent, rent allowances or rent credits paid or granted to such tenant (and, in the case of any such inducement not paid in cash, the dollar value thereof), advertising expenses and legal fees and disbursements. (b) If the commencement date or effective date of any Lease Cost Transaction is after the Closing Date, then Purchaser shall be responsible for all of the Leasing Costs arising out of such Lease Cost Transaction. If the commencement date or effective date of any Lease Cost Transaction is before the Closing Date, then (i) Seller shall be responsible for a portion of the Leasing Costs arising out of such Lease Cost Transaction equal to the product obtained by multiplying such Leasing Costs by a fraction, the numerator of which is the number of days from the commencement date or effective date of such Lease Cost Transaction to (but not including) the Closing Date and the denominator of which is the number of days from the commencement date or effective date of such Lease Cost Transaction to the stated expiration date of such lease and (ii) Purchaser shall be responsible for the balance of such Leasing Costs. (c) If, in any instance described in Section 11.6(b) above, Seller, as of the Closing Date, shall not have theretofore paid or incurred the portion of such Leasing Costs for which Seller is responsible, then Purchaser shall be entitled to a credit against the Cash Balance of the Purchase Price in an amount equal to such unpaid and un-incurred portion for which Seller is responsible and, to the extent that the same has been so credited, Purchaser shall make payment of such portion of such Leasing Costs. If, in any instance described in Section 11.6(b) above, Seller, as of the Closing Date, shall have paid or incurred any portion of such Leasing Costs for which Purchaser is responsible, then the Cash Balance of the Purchase Price shall be increased by an amount equal to such paid or incurred portion. (d) In the case of any proposed new lease or renewal of any Existing Lease to which Purchaser's consent is required pursuant to the provisions of Section 11.5(a) above, Purchaser shall have the right, within five (5) Business Days after the expiration of the five Business Day period described in Section 11.5 with respect to such new lease or renewal, to submit to Seller the name of a contractor and a proposal by such contractor for the performance of any tenant improvement work required to be performed by the landlord pursuant to such new lease or renewal. Seller agrees to review such proposal in good faith, but Seller shall retain the sole and exclusive right to engage any contractor selected by Seller for the performance of such work. (e) The provisions of this Section 11.6 shall survive the Closing. 33 Section 11.7. Estoppel Certificates. Seller shall request that the tenant under each Existing Lease and New Lease execute and deliver to Seller an estoppel certificate in the form attached hereto as Exhibit K; provided, however, that if an Existing Lease or New Lease prescribes the form or contents of an estoppel certificate to be delivered by the tenant, then Seller may elect to request that the tenant thereunder execute and deliver an estoppel certificate in the form required pursuant to the applicable Existing Lease or New Lease, as the case may be. Each estoppel certificate so requested pursuant to this Section 11.7 is herein referred to as a "Tenant Estoppel Certificate". Section 11.8. Non-Disturbance Agreements. Between the date hereof and the Closing Date, Purchaser shall have the right to request that tenants under the Leases execute non-disturbance and attornment agreements with any lender which may be providing financing to Purchaser secured by a mortgage on the applicable Property; provided, however, no such non-disturbance and attornment agreement shall be effective unless and until the Closing shall occur. Nothing contained in this Section 11.8 is intended or shall be construed to condition any of Purchaser's obligations under this Agreement upon Purchaser obtaining (a) any such non-disturbance and attornment agreements from any tenant or tenants or (b) financing in connection with the purchase of any one or more of the Properties. ARTICLE XII INSPECTION ---------- Section 12.1. Right of Inspection. Purchaser and its agents shall have the right to inspect each Property during business hours on Business Days, including the right to interview the tenants under Existing Leases, provided that (a) Purchaser shall first give Seller reasonable advance notification of its intention to conduct any such inspection or interview, (b) Purchaser shall permit a representative of Seller to accompany Purchaser and/or its agents during any such inspection or interview if Seller shall make such a representative available and (c) such inspection or interview shall not unreasonably impede the normal day-to-day business operation of such Property. Purchaser's right of inspection of each Property shall be subject to the rights of tenants. Purchaser hereby indemnifies and agrees to defend and hold Seller harmless from all loss, cost (including, without limitation, reasonable attorneys' fees), claim or damage arising in connection with or from any such inspection by Purchaser or its agents. The provisions of this Article 12 shall survive the Closing. Section 12.2. Due Diligence Period. (a) Purchaser confirms to Seller that Purchaser has conducted a detailed inspection of the Asset File, has made multiple site visits and in certain instances consulted with third party professionals in satisfying itself that each Property is appropriate for Purchaser's acquisition. Notwithstanding the foregoing, in order to confirm preliminary information with third party professionals, review materials requested but not delivered, clarify certain discrepancies, conduct a more complete Phase I environmental analysis and complete its 34 investigation, Purchaser, for the period ending on July 22, 1996 (the "Due Diligence Expiration Date"), shall have the right to conduct or cause to be conducted, at Purchaser's sole cost, risk and expense, such inspections, tests, examinations and studies of each Property as Purchaser deems necessary or appropriate; to further examine all applicable records relating to the income, operation and maintenance of each Property; to interview tenants; to determine compliance of each Property with applicable laws and regulations, including, without limitation, zoning, building, land use and environmental protection laws; to conduct an asbestos study; and to further confirm certain title matters. The provisions of Section 12.1 above shall apply to any on-site investigations or inspections to be made by Purchaser. (b) If Purchaser, in its judgment reasonably exercised, determines that (i) there are capital items required for any Property (in addition to those identified in the capital budget included in the Asset File and those of which Purchaser had knowledge as of the execution and delivery of this Agreement) exceeding in the aggregate $250,000, (ii) there are violations of any of the aforesaid applicable laws, (iii) any new materials not previously furnished as a part of the Asset File or further investigation of materials previously furnished provide results unsatisfactory to Purchaser or (iv) there are environmental matters which Purchaser is unwilling to assume, Purchaser shall have the right to terminate this Agreement by written notice given to Seller prior to 5:00 p.m. (E.D.T) on the Due Diligence Expiration Date (TIME BEING OF THE ESSENCE). If Purchaser shall elect to terminate this Agreement in the time and manner set forth in this Section 12.2(b), then the Deposit shall be returned to Purchaser, this Agreement shall be deemed terminated and neither party shall have any further rights or obligations to the other, except for those expressly stated to survive the termination of this Agreement. If Purchaser shall fail to terminate this Agreement in the time and manner set forth in this Section 12.2(b), then Purchaser shall be deemed to have irrevocably waived its right to terminate this Agreement pursuant to this Section 12.2(b). ARTICLE XIII TRANSACTION COSTS ----------------- Section 13.1. Seller's Transaction Costs. At the Closing, Seller shall pay all transfer taxes and/or deed stamps payable as a result of the conveyance of title to each Property to Purchaser pursuant to this Agreement. Seller, in addition to its apportionments obligations hereunder, if any, also shall be responsible for the cost of its legal counsel, advisors and the other professionals employed by it in connection with the sale of the Properties. Section 13.2. Purchaser's Transaction Costs. Purchaser, in addition to its apportionments (if any) and its other payment obligations hereunder, shall be responsible for all costs and expenses associated with (a) Purchaser's due diligence, (b) Purchaser's legal counsel, advisors, engineers, consultants and the other professionals employed by it in connection with Purchaser's due diligence and the purchase of the Properties, (c) title reports or abstracts issued by the Title Insurer, as well as all survey and search costs and updates related thereto, (d) the policy premiums in respect of any fee title insurance obtained by Purchaser and any mortgage title insurance required by Purchaser's lender (if any), (e) payment, at the Closing, of the recording fees and recordation taxes for the deed(s) and (f) all costs and expenses of obtaining 35 any financing Purchaser may elect to obtain (including any fees, financing costs, transfer taxes, mortgage and recordation taxes and intangible taxes in connection therewith). Section 13.3. Hart-Scott-Rodino Filing Fees. Purchaser shall be responsible for paying all filing fees necessary in connection with all filings required under the HSR Act with respect to the sale of any Property to Purchaser, as more particularly provided for in Article 21 hereof. ARTICLE XIV BROKERAGE --------- Section 14.1. Payment of Broker; Representations. Purchaser and Seller each represents and warrants to the other that such party has not had any conversations or dealings with any broker, finder or other similar party in connection with the transactions contemplated hereby other than Merrill Lynch and Company and Koch Asset Management Company (collectively, the "Broker"). Purchaser and Seller (each, an "indemnifying party") shall indemnify, defend and hold the other harmless from and against any and all claims, liabilities, losses, damages, costs or expenses (including, without limitation, reasonable attorneys' fees and expenses), arising out of a claim of a breach of the representation made by such indemnifying party pursuant to the immediately preceding sentence. Seller shall pay any brokerage commission or similar compensation due to the Broker pursuant to a separate written agreement. The provisions of this Article 14 shall survive the Closing or termination of this Agreement. ARTICLE XV CASUALTY AND CONDEMNATION ------------------------- Section 15.1. Casualty. (a) For purposes of this Article 15, the following terms shall have the meanings indicated: "Major Casualty" means, with respect to the Improvements at any Property, a fire in or other casualty to such Improvements which causes damage or injury to such Improvements and results in Restoration Costs in excess of an amount equal to Ten Million ($10,000,000) Dollars. "Restoration Costs" means, as of any date with respect to any fire or other casualty affecting the Improvements at any Property, the cost to be incurred, from and after such date, to repair or restore (as reasonably determined by an architect or engineer selected by Seller) the damage to such Improvements at such Property caused by such fire or other casualty, exclusive of the cost of any such repair or restoration for which Seller, as the landlord under any Existing Lease or New Lease for such Property, is not responsible. 36 (b) If, between the date hereof and the Closing, there shall occur a fire or other casualty affecting the Improvements at any Property which is not a Major Casualty, then Purchaser shall have no right to terminate this Agreement and shall purchase such Property in its damaged condition (and all other Properties) without reduction of or offset against the Purchase Price or any other claim against Seller (other than a credit against the Cash Balance in an amount equal to the deductible, if any, under Seller's insurance policy applicable to such casualty). Seller shall assign to Purchaser the right to receive any insurance proceeds payable to Seller as a result of such fire or other casualty; provided, however, that Seller shall be entitled to retain (to the extent theretofore paid to Seller), and shall not be obligated to assign the right to receive (to the extent not theretofore paid to Seller), an amount of such insurance proceeds equal to Seller's expenses, if any, incurred in collecting such proceeds and repairing such fire or other casualty. Upon the assignment to Purchaser of any insurance proceeds payable with respect to such fire or other casualty, Seller shall reasonably cooperate with Purchaser with respect to Purchaser's efforts to collect such proceeds. (c) If, between the date hereof and the Closing, there shall occur a fire or other casualty affecting the Improvements at any Property which is a Major Casualty, then Purchaser shall have the option, to be exercised by notice given to Seller within fifteen (15) days after the date of such casualty, to terminate this Agreement. If Purchaser shall so elect to terminate this Agreement, then (i) Purchaser shall be entitled to the return of the Deposit and (ii) neither party hereto shall have any further obligations or liabilities to the other hereunder, except for those which expressly survive the termination of this Agreement. If Purchaser shall not elect to terminate this Agreement with respect to such Property as provided in this subclause (c), then this Agreement shall remain in full force and effect with respect to such Property (and all other Properties) and the provisions of Section 15.1(b) above shall apply to such damage and any insurance proceeds payable in connection therewith. (d) In no event shall Seller have any obligation to repair any damage or destruction to any Property, but Seller shall have the right to do so and utilize insurance proceeds for such purpose. Section 15.2. Condemnation. (a) If, between the date hereof and the Closing, any condemnation or eminent domain proceedings are initiated with respect to any Property which would result in (i) the elimination of more than 10% of the parking spaces at such Property or (ii) a taking of a portion of such Property requiring in excess of Ten Million ($10,000,000) Dollars to restore the Property to its physical and economic condition prior to such taking, then either Seller or Purchaser may elect to terminate this Agreement by giving written notice of its election to the other party within fifteen (15) days after receiving notice of such prospective taking. If Purchaser or Seller shall so elect to terminate this Agreement, then (x) Purchaser shall be entitled to the return of the Deposit and (y) neither party hereto shall have any further obligations or liabilities hereunder, except for those which expressly survive the termination of this Agreement. If neither party so elects to terminate this Agreement, then the parties hereto shall proceed to the Closing without reduction of or offset against the Purchase Price and Purchaser shall have no other claim against Seller. In such event, all of Seller's right, title and interest in and to any 37 condemnation proceeds paid or payable in connection therewith shall be assigned to Purchaser. In no event shall Seller have any obligation to repair or restore any Property or any portion thereof. (b) If, between the date hereof and the Closing, any condemnation or eminent domain proceedings are initiated which would result in the taking of less than a material portion of any Property, then neither Seller nor Purchaser may terminate this Agreement with respect to such Property (or any other Properties) and the parties shall proceed to the Closing without reduction of or offset against the Purchase Price and Purchaser shall have no other claim against Seller. In such event, all of Seller's right, title and interest in and to any condemnation proceeds paid or payable in connection therewith shall be assigned to Purchaser. In no event shall Seller have any obligation to repair or restore any Property or any portion thereof. ARTICLE XVI ASSIGNMENT ---------- Section 16.1. No Assignment by Purchaser. Neither this Agreement nor any of the rights of Purchaser hereunder (nor the benefits of such rights) may be assigned, transferred or encumbered without Seller's prior written consent and any purported assignment, transfer or encumbrance without Seller's prior written consent shall be void. Purchaser expressly covenants and agrees that (a) if Purchaser is a corporation, a sale or transfer of more than fifty percent (50%) (at any one time or, in the aggregate from time to time) of the shares of any class of the issued and outstanding stock of Purchaser, its successors or assigns, or the issuance of additional shares of any class of its stock to the extent of more than 50% (at any one time or, in the aggregate from time to time) of the number of shares of said class of stock issued and outstanding on the date hereof or (b) if Purchaser is a partnership, joint venture or limited liability company, a sale or transfer of more than fifty percent (50%) (at any one time or, in the aggregate from time to time) of the partnership, joint venture, membership or other unincorporated association interests of Purchaser, its successors or assigns, or the issuance of additional partnership, joint venture or member interests of any class to the extent of more than 50% (at any one time or, in the aggregate from time to time) of the amount of partnership, joint venture or member interests issued on the date hereof shall, in any such case, constitute an assignment of this Agreement. Unless, in each instance, the prior written consent of Seller has been obtained, any such assignment shall constitute a material default under this Agreement and shall entitle Seller to exercise all rights and remedies under this Agreement, at law or equity, in the case of such a default. Section 16.2. Permitted Assignment to Affiliate. Notwithstanding the provisions of Section 16.1 to the contrary, the named Purchaser in this Agreement shall have the one-time right to assign its rights and obligations under this Agreement to an Affiliate of such named Purchaser effective on or prior to the Closing, provided that (a) Seller shall consent to such assignment, such consent not to be unreasonably withheld or delayed, (b) at least ten (10) Business Days prior to the effective date of such assignment, Purchaser delivers to Seller 38 evidence of the ownership of Purchaser and the proposed assignee so as to permit Seller to verify that such proposed assignee is an Affiliate of Purchaser and (c) on or prior to the effective date of such assignment, the Purchaser shall deliver to Seller a written assumption, in form reasonably satisfactory to Seller and duly executed and acknowledged by the assignee, in which the assignee agrees to assume all of Purchaser's covenants, agreements and obligations under this Agreement. Purchaser shall remain fully liable for all of Purchaser's covenants, agreements and obligations under this Agreement notwithstanding any such permitted assignment pursuant to this Section 16.2. ARTICLE XVII TAX CERTIORARI PROCEEDINGS -------------------------- Section 17.1. Prosecution and Settlement of Proceedings. If any tax reduction proceedings in respect of any Premises, relating to any fiscal years ending prior to the fiscal year in which the Closing occurs, are pending at the time of the Closing, Seller reserves and shall have the right to continue to prosecute and/or settle the same. If any tax reduction proceedings in respect of any Premises, relating to the fiscal year in which the Closing occurs, are pending at the time of Closing, then Seller reserves and shall have the right to continue to prosecute and/or settle the same; provided, however, that Seller shall not settle any such proceeding without Purchaser's prior written consent, which consent shall not be unreasonably withheld or delayed. Purchaser shall reasonably cooperate with Seller in connection with the prosecution of any such tax reduction proceedings. Section 17.2. Application of Refunds or Savings. Any refunds or savings in the payment of taxes resulting from such tax reduction proceedings applicable to the period prior to the date of the Closing shall belong to and be the property of Seller, and any refunds or savings in the payment of taxes applicable to the period from and after the date of the Closing shall belong to and be the property of Purchaser; provided, however, that if any such refund creates an obligation to reimburse any tenants under Leases for any rents or additional rents paid or to be paid, that portion of such refund equal to the amount of such required reimbursement (after deduction of allocable expenses as may be provided in the Lease to such tenant) shall, at Seller's election, either (a) be paid to Purchaser and Purchaser shall disburse the same to such tenants or (b) be paid by Seller directly to the tenants entitled thereto. All attorneys' fees and other expenses incurred in obtaining such refunds or savings shall be apportioned between Seller and Purchaser in proportion to the gross amount of such refunds or savings payable to Seller and Purchaser, respectively (without regard to any amounts reimbursable to tenants). Section 17.3. Survival. The provisions of this Article 17 shall survive the Closing. ARTICLE XVIII DEFAULT; REMEDIES; SURVIVAL --------------------------- 39 Section 18.1. Purchaser's Default On or Before Closing. (a) If, on or prior to the Closing Date, (i) Purchaser defaults in any of the covenants, agreements or obligations to be performed by Purchaser under this Agreement on or as of the Closing Date (or at the Closing), (ii) Seller shall become aware of an inaccuracy in any representation or warranty made by Purchaser pursuant to Section 10.3 hereof (as made as of the date hereof) which has a material adverse effect on Seller, (iii) Seller shall become aware of an inaccuracy in any representation or warranty made by Purchaser pursuant to Purchaser's Representation Certificate (as made as of the Closing Date) which has a material adverse effect on Seller, (iv) Purchaser's Representation Certificate shall set forth any Purchaser's Adverse Changes or (v) Purchaser otherwise materially defaults hereunder and such other material default is not cured by the earlier of (A) the Scheduled Closing Date (as it may have been adjourned in accordance with this Agreement) or (B) the date which is ten (10) days after notice of such default from Seller to Purchaser, then, and in any of such events, Seller, as its sole remedy therefor, may terminate this Agreement by written notice to Purchaser, whereupon, as liquidated damages on account thereof, Purchaser shall be liable to Seller for an amount equal to the Deposit, and the Deposit shall be paid to Seller by Escrow Agent and credited against Purchaser's liability. Upon any such termination of this Agreement, neither party shall have any further rights or obligations hereunder other than those which expressly survive the termination of this Agreement. Seller and Purchaser agree that the damages that Seller will sustain as a result of such termination will be substantial but will be difficult to ascertain, and the aforesaid liquidated damages are a fair and reasonable amount to be retained by Seller as agreed and liquidated damages in light of Seller's removal of each Property from the market and the damages incurred by Seller and shall not constitute a penalty or a forfeiture. (b) If Seller, with knowledge of (i) a default in any of the covenants, agreements or obligations to be performed by Purchaser under this Agreement, (ii) a material inaccuracy in any representation or warranty of Purchaser made in this Agreement or pursuant to Purchaser's Representation Certificate and/or (iii) any Purchaser's Adverse Changes, elects to proceed to Closing, then, upon the consummation of the Closing, Seller shall be deemed to have waived any such default, material inaccuracy and/or Purchaser's Adverse Changes and shall have no claim against Purchaser on account thereof. Section 18.2. Seller's Default On or Before Closing. (a) If, on or prior to the Closing Date, (i) Seller defaults in any of the covenants, agreements or obligations to be performed by Seller under this Agreement on or as of the Closing Date (or at the Closing) or (ii) Seller otherwise materially defaults hereunder and such other material default is not cured by the earlier of (A) the Scheduled Closing Date (as it may have been adjourned in accordance with this Agreement) or (B) the date which is ten (10) days after notice of such default from Purchaser to Seller, then, and in any of such events, Purchaser, as its sole remedy therefor, may either (1) seek specific performance of Seller's obligations hereunder, without abatement, credit against or reduction of the Purchase Price or (2) terminate this Agreement by written notice to Seller, whereupon the Deposit shall be refunded to Purchaser, it being understood and agreed that in no event shall Purchaser be entitled to monetary damages. If Purchaser shall elect to terminate this Agreement then, upon such election, neither 40 party shall have any further rights or obligations hereunder other than those which expressly survive the termination of this Agreement. (b) If, on or prior to the Closing Date, (i) Purchaser shall become aware of an inaccuracy in any representation or warranty made by Seller pursuant to Section 10.1 or 10.2 hereof (as made as of the date hereof) which has a material adverse effect on Purchaser, (ii) Purchaser shall become aware of an inaccuracy in any representation or warranty made by Seller pursuant to Seller's Representation Certificate (as made as of the Closing Date) which has a material adverse effect on Purchaser or (iii) Seller's Representation Certificate shall set forth any Seller's Adverse Changes, then, and in any of such events, Purchaser, as its sole remedy therefor, may either (1) elect to proceed to the Closing, without abatement, credit against or reduction of the Purchase Price or (2) terminate this Agreement by written notice to Seller, whereupon the Deposit shall be refunded to Purchaser, it being understood and agreed that in no event shall Purchaser be entitled to monetary damages. If Purchaser shall elect to terminate this Agreement then, upon such election, neither party shall have any further rights or obligations hereunder other than those which expressly survive the termination of this Agreement. Without limiting the generality of this Section 18.2(b), in no event shall the occurrence of any of the events or circumstances described in the preceding subclauses (i), (ii) and (iii) of this Section 18.2(b) give rise to any obligation of Seller to cure an inaccuracy in any representation or warranty or otherwise make Seller liable for damages on account thereof. (c) If Purchaser, with knowledge of (i) a default in any of the covenants, agreements or obligations to be performed by Seller under this Agreement, (ii) a material inaccuracy in any representation or warranty of Seller made in this Agreement or pursuant to Seller's Representation Certificate and/or (iii) any Seller's Adverse Changes, elects to proceed to Closing, then, upon the consummation of the Closing, Purchaser shall be deemed to have waived any such default, material inaccuracy and/or Seller's Adverse Changes and shall have no claim against Seller on account thereof. Section 18.3. Survival. (a) Except as otherwise expressly provided in this Agreement, no provision of this Agreement (i.e., no representation, warranty, covenant, agreement or other obligation set forth in any provision of this Agreement, including, without limitation, any representation or warranty set forth in Seller's Closing Certificate and Purchaser's Closing Certificate) shall survive the Closing (and, accordingly, no claim arising out of the same may be commenced after the Closing), and the delivery and acceptance of the deed shall be deemed to be full performance and discharge of each such representation, warranty, covenant, agreement or other obligation. (b) If, after the Closing, Seller shall first learn of (i) an inaccuracy in any representation or warranty of Purchaser made pursuant to Section 10.3 hereof (as made as of the date hereof) or pursuant to Purchaser's Closing Certificate (as made as of the Closing Date) which, in any case, has a material adverse effect on Seller and expressly survives the Closing pursuant to this Agreement or (ii) a default in any of the covenants, agreements or obligations to be performed by Purchaser under this Agreement which expressly survives the 41 Closing, then Seller shall have a claim for damages on account thereof, provided that (1) any such claim not brought within the Survival Period shall be deemed waived and (2) Seller hereby waives the right to collect or seek to collect consequential or punitive damages. (c) If, after the Closing, Purchaser shall first learn of (i) an inaccuracy in any representation or warranty of Seller made pursuant to Section 10.1 or 10.2 hereof (as made as of the date hereof) or pursuant to Seller's Closing Certificate (as made as of the Closing Date) which, in any case, has a material adverse effect on Purchaser and expressly survives the Closing pursuant to this Agreement or (ii) a default in any of the covenants, agreements or obligations to be performed by Seller under this Agreement which expressly survives the Closing, then Purchaser shall have a claim for damages on account thereof, provided that (1) any such claim not brought within the applicable Survival Period shall be deemed waived and (2) Purchaser hereby waives the right to collect or seek to collect consequential or punitive damages. Section 18.4. Determination of Material Inaccuracy. Notwithstanding any provision of this Agreement to the contrary, no inaccuracy in any representation or warranty made by Seller pursuant to Section 10.2 hereof or pursuant to Seller's Closing Certificate (to the extent making or remaking any representation or warranty pursuant to Section 10.2), or any Seller's Adverse Change (to the extent affecting any representation or warranty made or remade pursuant to Section 10.2), with respect to any Property shall be deemed to have a material adverse effect on Purchaser unless Purchaser can reasonably demonstrate that the cost to cure the condition causing such inaccuracy or Seller's Adverse Change or the reduction in economic value of such Property resulting from such inaccuracy or Seller's Adverse Change, is more than the sum of (i) Five Hundred Thousand ($500,000) Dollars, plus (ii) all insurance proceeds, if any, payable to Purchaser by reason or arising out of the circumstances giving rise to such inaccuracy or Seller's Adverse Change. If any such inaccuracy in any representation or warranty under Section 10.2 or in Seller's Representation Certificate, or any Seller's Adverse Change, shall not have a material adverse effect on Purchaser, as determined in accordance with this Section 18.4, then Purchaser shall not be entitled to any right or remedy under this Agreement, at law or equity as a result of such inaccuracy or Seller's Adverse Change, including, without limitation, the right to terminate this Agreement if Purchaser shall become aware of such inaccuracy or Seller's Adverse Change on or before the Closing. ARTICLE XIX NOTICES ------- Section 19.1. Notices. All notices, demands, requests and other communications required hereunder shall be in writing and shall be deemed to have been given: (a) upon delivery, if personally delivered; (b) three (3) days after deposit in the United States Mail when delivered, postage prepaid, by certified or registered mail; or (c) one (1) Business Day after deposit with a nationally recognized overnight delivery service marked for delivery on the next Business Day, addressed to the party for whom it is intended at its address hereinafter set forth: To the Seller: 42 New York Life Insurance Company 51 Madison Avenue New York, New York 10010 Att: Marilyn Goldstein, Esq. with a copy to: Robinson Silverman Pearce Aronsohn & Berman LLP 1290 Avenue of the Americas New York, New York 10104 Att: Robert J. Sorin, Esq. To the Purchaser: Beacon Properties, L.P. 50 Rowes Wharf Boston, Massachusetts 02110 Att: Ms. Erin O'Boyle with a copy to: Goulston & Storrs P.C. 400 Atlantic Avenue Boston, Massachusetts 02110 Att: Jordan P. Krasnow, Esq. or at such other address in the United States of America as may be designated by either of the parties in a written notice given in accordance with the provisions of this Section. The attorney for any party may send notices on that party's behalf. ARTICLE XX MISCELLANEOUS ------------- Section 20.1. Governing Law; Jurisdiction and Venue. (a) This Agreement shall be governed by, and construed in accordance with, the substantive laws of the State of New York, without regard to conflict of law principles. (b) For the purposes of any suit, action or proceeding involving this Agreement, Purchaser hereby expressly submits to the jurisdiction of all federal and state courts sitting in the State of New York and consents that any order, process, notice of motion or other application to or by any such court or a judge thereof may be served within or without such court's jurisdiction by registered mail or by personal service, provided that a reasonable time for 43 appearance is allowed, and Purchaser agrees that such courts shall have the exclusive jurisdiction over any such suit, action or proceeding commenced by either or both of said parties. In furtherance of such agreement, Purchaser agrees upon the request of Seller to discontinue (or agree to the discontinuance of) any such suit, action or proceeding pending in any other jurisdiction. (c) Purchaser hereby irrevocably waives any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any federal or state court sitting in the State of New York and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Section 20.2. Further Assurances. In addition to the obligations required to be performed hereunder by Seller and Purchaser at or prior to the Closing, each party, from and after the Closing, shall execute, acknowledge and/or deliver such other instruments, as may reasonably be requested in order to effectuate the purposes of this Agreement; provided, however, that the foregoing provisions of this Section 20.2 shall not obligate either party to execute, acknowledge or deliver any instrument which would or might impose upon such party any additional liability or obligation (beyond that imposed upon on it under the documents delivered by such party at the Closing and the other provisions of this Agreement which survive the Closing). Section 20.3. Successors. All of the provisions of this Agreement and of any of the documents and instruments executed in connection herewith shall apply to and be binding upon, and inure to the benefit of Seller and Purchaser, their successors and permitted assigns. Section 20.4. No Third Party Beneficiary. This Agreement and each of the provisions hereof are solely for the benefit of Purchaser and Seller and their permitted assigns. No provisions of this Agreement, or of any of the documents and instruments executed in connection herewith, shall be construed as creating in any person or entity other than Purchaser and Seller and their permitted assigns any rights of any nature whatsoever. Section 20.5. Entire Agreement. This Agreement, together with the documents and instruments executed and delivered in connection herewith, sets forth the entire agreement between Purchaser and Seller relating to the transactions contemplated hereby and all other prior or contemporaneous agreements, understandings, representations or statements, oral or written, relating directly to each Property are superseded hereby. Section 20.6. Severability. If any provision in this Agreement is found by a court of competent jurisdiction to be in violation of any applicable law, and if such court should declare such provision of this Agreement to be unlawful, void, illegal or unenforceable in any respect, the remainder of this Agreement shall be construed as if such unlawful, void, illegal or unenforceable provision were not contained herein, and the rights, obligations and interests of the parties hereto under the remainder of this Agreement shall continue in full force and effect undisturbed and unmodified in any way. 44 Section 20.7. Modification. This Agreement and the terms hereof may not be changed, waived, modified, supplemented, canceled, discharged or terminated orally, but only by an instrument or instruments in writing executed and delivered by Purchaser and Seller. Section 20.8. Waiver of Trial by Jury. EACH PARTY HEREBY WAIVES, IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OF THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH, THE PROPERTIES, OR ANY CLAIMS, DEFENSES, RIGHTS OF SET-OFF OR OTHER ACTIONS PERTAINING HERETO OR TO ANY OF THE FOREGOING. Section 20.9. No Recording. Neither this Agreement nor any memorandum hereof shall be recorded. Each party hereby agrees to indemnify and hold harmless the others for all liabilities, losses, damages, liens, suits, claims, costs and expenses (including reasonable attorneys' fees) incurred by the other by reason of a breach of the foregoing covenant. Section 20.10. Captions; Interpretation. (a) The captions in this Agreement are inserted for convenience of reference only and in no way define, describe or limit the scope or intent of this Agreement or any of the provisions hereof. All references to "Articles" and "Sections" without reference to a document other than this Agreement, are intended to designate articles and sections of this Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article or Section, unless specifically designated otherwise. (b) As used in this Agreement, the masculine shall include the feminine and neuter, the singular shall include the plural and the plural shall include the singular, as the context may require. (c) The use of the term "including" shall mean in all cases "including but not limited to" unless specifically designated otherwise. (d) Use of the phrase "to the actual knowledge of Seller" and words of similar import means that Seller has actual, and not constructive, knowledge of the facts in question at the time in question, without any express or implied duty or obligation to conduct any inquiry or investigation. (e) No rules of construction against the drafter of this Agreement shall apply in any interpretation or enforcement of this Agreement, any documents or certificates executed pursuant hereto, or any provisions of any of the foregoing. Section 20.11. Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same original, 45 and the execution of separate counterparts by Purchaser and Seller shall bind Purchaser and Seller as if they had each executed the same counterpart. Section 20.12. No Waiver. Neither the failure of either party to exercise any power given such party hereunder or to insist upon strict compliance by the other party with its obligations hereunder, nor any custom or practice of the parties at variance with the terms hereof shall constitute a waiver of either party's right to demand exact compliance with the terms hereof. Section 20.13. Time of Essence. Time shall be of the essence with respect to this Agreement and the covenants and obligations of the parties hereunder. Section 20.14. Attorney's Fees. In the event that either party hereto shall commence litigation against the other in connection herewith, the losing party in such action shall reimburse the attorneys' fees and disbursements of the prevailing party in such action. Section 20.15. Addendum A. Please see the rider to this Agreement contained in Addendum A attached hereto and made a part hereof. ARTICLE XXI HART-SCOTT-RODINO ----------------- If a filing or filings are required under the HSR Act in connection with the transactions contemplated by this Agreement, then the following provisions shall apply: Section 21.1. Filing Requirements. Simultaneously with the execution of this Agreement, Purchaser shall duly complete, execute, acknowledge, and deliver to Seller the Notification and Report Forms required to be completed and executed by Purchaser under the HSR Act. Seller, promptly after the date hereof, shall (a) complete, execute and acknowledge the Notification and Report Forms required to be completed and executed by Seller under the HSR Act and (b) file with the Federal Trade Commission (the "FTC") and the Antitrust Division of the Department of Justice (the "Antitrust Division") the Notification and Report Forms required to be so filed under the HSR Act. Purchaser shall, promptly upon request of Seller, deliver a check to Seller in the amount necessary to cover all filing fees customarily paid by a purchaser of real property in connection with filing the Notification and Report Forms required to be filed under the HSR Act. Each of Seller and Purchaser, within 10 Business Days after its receipt thereof, shall respond to all inquiries received by it from the FTC and the Antitrust Division for additional documentation and information regarding the transactions contemplated by this Agreement. Section 21.2. Condition Precedent. It shall be a condition precedent to both parties' obligations to close that the waiting period applicable under the HSR Act shall have expired or shall have otherwise terminated without objection from either the FTC or the Antitrust Division. The Scheduled Closing Date shall be adjourned until such condition precedent is satisfied; provided, however, that in no event shall the Scheduled Closing Date be adjourned 46 pursuant to this Article beyond the date which is one hundred eighty (180) days after the original Scheduled Closing Date. Section 21.3. Purchaser's Delay. If (a) Purchaser does not respond timely to any inquiry received by it from the FTC, the Antitrust Division or any other antitrust enforcement agencies, or otherwise does not cooperate fully with Seller's efforts to satisfy promptly the condition precedent described in Section 21.2 above, and (b) as a result thereof the Scheduled Closing Date must be adjourned beyond the date which is ninety (90) days after the original Scheduled Closing Date, then, in addition to all other remedies available to Seller under this Agreement, at law or equity, Purchaser shall pay to Seller, by wire transfer of immediately available federal funds or by official bank check drawn on the New York office of a member bank of the New York Clearinghouse Association and payable to the unendorsed order of Seller, an amount (the "HSR Adjournment Fee") equal to the product obtained by multiplying (i) $10,000, by (ii) the number of days by which the Scheduled Closing Date is adjourned beyond the date which is ninety (90) days after the original Scheduled Closing Date as a result of Purchaser's failure to respond timely to any inquiry received by it from the FTC or the Antitrust Division or otherwise to cooperate fully with Seller's efforts to satisfy promptly the condition precedent described in Section 21.2 above. ARTICLE XXII AUDIT ----- Section 22.1. Compliance with SEC Regulations. To comply with the Securities and Exchange Commission ("SEC") regulations with respect to the verification of historical information, Purchaser shall have the right prior to or subsequent to Closing to conduct an audit, at Purchaser's sole cost and expense, of Seller's books and records for and with respect to the respective Properties for the shorter of (i) three years prior to Closing or (ii) the period of Seller's ownership thereof. Seller hereby agrees to permit Purchaser and Purchaser's accountants access to such books and records (including those maintained by Seller's managing agents) and, at Purchaser's sole cost and expense, to reasonably cooperate and to cause Seller's accountants to cooperate with Purchaser to enable such audit to be performed. Nothing contained in this Section 22.1 is intended or shall be construed to increase or modify any of the obligations, covenants, agreements, representations or warranties of Seller otherwise set forth in this Agreement, including, without limitation, the Survival Period which may be applicable thereto. The provisions of this Section 22.1 shall survive the Closing. ARTICLE XXIII CONFIDENTIALITY AND PRESS RELEASE --------------------------------- 47 Section 23.1. SEC Disclosure. Seller acknowledges that Beacon Properties Corporation, the general partner of Purchaser, is a publicly owned corporation subject to regulation by the SEC, and that the regulations of the SEC may require that Purchaser disclose the existence of this Agreement and the contents of some or all of the documents delivered by Seller in connection therewith. Accordingly, Seller expressly consents to the disclosure of the terms and conditions of this Agreement and the transactions contemplated hereby to the extent that Purchaser in the exercise of its reasonable judgment has determined that the SEC requires such disclosure. In addition to the disclosure contemplated by the preceding sentence, and without limitation thereof, either party may disclose this Agreement or the contents thereof or of any documents to be executed and/or delivered in connection herewith to any partners, advisers, underwriters, analysts, employees, affiliates, officers, directors, consultants, lenders, accountants or legal counsel of any of the foregoing, provided that they are advised as to the confidential nature of such information and are instructed to maintain such confidentiality. The foregoing shall constitute a modification of any prior confidentiality agreement that may have been entered into by the parties. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 48 Section 23.2. Press Release. Seller or Purchaser may issue a press release with respect to this Agreement and the transactions contemplated hereby, provided that the content of any such press release shall be subject to the prior written consent of the other party hereto, which consent shall not be unreasonably withheld or delayed. IN WITNESS WHEREOF, this Agreement has been entered into as of the day and year first above written. SELLER: NEW YORK LIFE INSURANCE COMPANY By:_________________________ Richard M. Kernan, Jr. Executive Vice President PURCHASER: BEACON PROPERTIES, L.P. By: Beacon Properties Corporation, its sole general partner By:[Signature of Charles H. Cremens] -------------------------------- Charles H. Cremens Senior Vice President 49 Section 23.2. Press Release. Seller or Purchaser may issue a press release with respect to this Agreement and the transactions contemplated hereby, provided that the content of any such press release shall be subject to the prior written consent of the other party hereto, which consent shall not be unreasonably withheld or delayed. IN WITNESS WHEREOF, this Agreement has been entered into as of the day and year first above written. SELLER: NEW YORK LIFE INSURANCE COMPANY By:[Signature of Richard M. Kernan, Jr.] ------------------------------------- Richard M. Kernan, Jr. Executive Vice President PURCHASER: BEACON PROPERTIES, L.P. By: Beacon Properties Corporation, its sole general partner By: -------------------------------- Charles H. Cremens Senior Vice President 49 AGREEMENT OF ESCROW AGENT: The undersigned Escrow Agent hereby acknowledges receipt of $5,000,000, and agrees to hold such sum in escrow pursuant to the provisions of Section 3.3 of this Agreement. ROBINSON SILVERMAN PEARCE ARONSOHN & BERMAN LLP By:[Signature of ] -------------------------- Name: Title: 50 List of Exhibits and Schedules Schedule 1 Asset Schedule Exhibit A Land Exhibit B Rent Roll for Existing Leases Exhibit C Brokerage Agreements Exhibit D Existing Service Contracts Exhibit E Permitted Exceptions Exhibit E-1 Nonpermitted Exceptions Exhibit F Deed Exhibit G Bill of Sale Exhibit H Assignment and Assumption of Leases Exhibit I Assignment and Assumption of Service Contracts, Warranties, Permits, Trade Names and General Intangibles Exhibit J Notice Letter to Tenants Exhibit K Tenant Estoppel Certificate Exhibit L Litigation Exhibit M Insurance Coverages Exhibit N Specified Estoppel Leases Addendum A The Company will furnish the Commission with copies of any exhibits or schedules hereto upon request. EX-23.1 8 CONSENTS OF EXPERTS AND COUNSEL [Coopers & Lybrand Letterhead] CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Registration Statement of Beacon Properties Corporation on Form S-3 (No. 333-02544) of our report dated April 19, 1996, on our audit of the statement of excess of revenues over specific operating expenses of Fairfax County Portfolio in Tysons Corner and Herndon, Virginia for the year ended December 31, 1995, which report is included in this Form 8-K, of our report dated July 3, 1996, on our audit of the statement of excess of revenues over specific operating expenses of 1333 H Street in Washington, DC for the year ended December 31, 1995, which report is included in this Form 8-K, of our report dated July 8, 1996, on our audit of the statement of excess of revenues over specific operating expenses of AT&T Plaza in Oak Brook, Illinois for the year ended December 31, 1995, which report is included in this Form 8-K, and of our report dated July 8, 1996, on our audit of the statement of excess of revenues over specific operating expenses of Tri-State International in Lincolnshire, Illinois for the year ended December 31, 1995, which report is included in this Form 8-K. We also consent to the reference to our Firm under the caption "Experts" in such Prospectus. [Signature of Coopers & Lybrand L.L.P.] COOPERS & LYBRAND L.L.P. Boston, Massachusetts July 23, 1996 -----END PRIVACY-ENHANCED MESSAGE-----