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 7, 1997
LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP
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(Exact name of registrant as specified in their governing documents)
MARYLAND 1-13130 23-7768996
PENNSYLVANIA 1-13132 23-2766549
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State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
65 VALLEY STREAM PARKWAY, SUITE 100
MALVERN, PENNSYLVANIA 19355
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 648-1700
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
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A. PORTFOLIO ACQUISITION
Liberty Property Limited Partnership, is a Pennsylvania limited
partnership (the "Operating Partnership"). Liberty Property Trust, a
Maryland real estate investment trust (the "Trust") owns an approximate
91.54% interest in the Operating Partnership (as of March 31, 1997) (the
Trust and the Operating Partnership are collectively referred to as the
"Company").
On June 23, 1997, the Company acquired title to 7 office properties,
comprising approximately 915,000 leaseable square feet, located in
suburban Detroit, Michigan. Specifically, these 7 properties consist of
a 634,359 square foot office building in the City of Southfield,
Michigan (the "Southfield Property") and 6 office buildings aggregating
280,746 square feet located in the City of Troy, Michigan (the "Troy
Properties"). The Southfield Property and the Troy Properties were
acquired from third parties unrelated to the Company pursuant to a
Purchase Agreement dated May 23, 1997 (the "Purchase Agreement"). A
portion of the Troy Properties were acquired in a tax-free exchange
utilizing the proceeds of the sale of certain properties owned by the
Operating Partnership.
On July 7, 1997, pursuant to the terms of the Purchase Agreement, the
Company also acquired six flex properties in the City of Farmington
Hills, Michigan (the "Farmington Hills Properties"). The Farmington
Hills Properties represent an aggregate of 224,110 leaseable square
feet. Collectively, the Southfield Property, the Troy Properties and
the Farmington Hills Properties are referred to as the "Detroit
Properties". Other than the transactions described herein, there is no
material relationship between Star Venture Limited Partnership, Maple
Venture Research Park Limited Partnership, and Technology Park,
collectively the seller of the Detroit Properties, and the Company or
any of its affiliates, any trustee or officer of the Company or any
associate of any such trustee or officer.
The Detroit Properties aggregate approximately 1.1 million leaseable
square feet. In accordance with the Purchase Agreement, total
consideration for the Detroit Properties is $127.5 million. The total
consideration for the Detroit Properties was paid in cash provided
through the Company's financing sources, including the unsecured
revolving credit facility arranged by BankBoston, N.A., and the proceeds
of the sale of certain properties owned by the Operating Partnership.
It is estimated that the Company's total investment in the Detroit
Properties will be approximately $130.6 million. The total investment
for a property is defined as the property's purchase price plus closing
costs and management's estimate, as determined at the time of
acquisition, of the cost of necessary building improvements ("Total
Investment").
Factors considered by the Company in determining the price to be paid
for the Detroit Properties included their historical and expected cash
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flow, the nature of tenants and terms of leases in place, occupancy
rates, opportunities for alternative and new tenancies, current
operating costs and real estate taxes on the properties and anticipated
changes therein under Company ownership, physical condition and
locations of the properties, the anticipated effect to the Company's
financial results (particularly funds from operations), the ability to
sustain and potentially increase its distributions to Company
shareholders, and other factors. The Company took into consideration
the capitalization rates at which it believed other comparable buildings
were recently sold, but determined the price it was willing to pay
primarily on factors discussed above relating to the properties
themselves and their fit into the Company's operations. The Company,
after investigation of the properties, is not aware of any material fact
other than those enumerated above, that would cause the financial
information reported not to be necessarily indicative of future
operating results.
The following properties were acquired pursuant to the Purchase
Agreement:
PROPERTY NAME LOCATION DESCRIPTION
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26911-26957 Northwestern Southfield, MI One, multi-level
office building
634,359 square feet
27260 Haggerty Farmington Hills, MI Single story flex
building
50,391 square feet
27200 Haggerty Farmington Hills, MI Single story flex
building
42,156 square feet
27280 Haggerty Farmington Hills, MI Single story flex
building
49,944 square feet
27220 Haggerty Farmington Hills, MI Single story flex
building
22,175 square feet
27240 Haggerty Farmington Hills, MI Single story flex
building
18,665 square feet
27300 Haggerty Farmington Hills, MI Single story flex
building
40,779 square feet
1650 Research Drive Troy, MI Three story office
building
70,562 square feet
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PROPERTY NAME LOCATION DESCRIPTION
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1775 Research Drive Troy, MI Single story office
building
30,450 square feet
1875 Research Drive Troy, MI Single story office
building
30,305 square feet
1850 Research Drive Troy, MI Three story office
building
72,229 square feet
1965 Research Drive Troy, MI Single story office
building
38,600 square feet
1960 Research Drive Troy, MI Single story office
building
38,600 square feet
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Statements contained in this report contain forward-looking statements
with respect to estimates of total investment. As such, these
statements involve risks and uncertainties that could affect future
results, and accordingly, such results may differ from those expressed
herein. These risks and uncertainties include, but are not limited to,
uncertainties affecting real estate businesses generally, risks relating
to acquisition activities and risks relating to leasing and releasing
activities and rates.
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ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
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(a) Statement of Operating Revenues and Certain Operating
Expenses for the Detroit Properties.
The response to Item 7(a) of the Registrants' Current Report on
Form 8-K, filed June 25, 1997, is incorporated by reference in response
to this item. The incorporated information is filed as Exhibit 99.1 to
this Report.
(b) Pro Forma Financial Information.
The response to Item 7(b) of the Registrants' Current Report on
Form 8-K, filed June 25, 1997, is incorporated by reference in response
to this item. The incorporated information is filed as Exhibit 99.l to
this Report.
(c) Exhibits:
10.1 Purchase Agreement by and among the Operating Partnership,
Star Venture Limited Partnership, Maple Venture Research Park Limited
Partnership and Technology Park dated May 23, 1997 (without exhibits).
99.1 Certain financial statements and pro forma financial
information incorporated by reference in response to Items 7(a) and 7
(b) of this Report. Incorporated by reference from the responses to
Items 7(a) and 7(b) of the Registrants' Current Report on Form 8-K,
filed June 25, 1997.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
LIBERTY PROPERTY TRUST
Dated: July 7, 1997 BY: /s/ JOSEPH P. DENNY
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NAME: Joseph P. Denny
TITLE: President
LIBERTY PROPERTY LIMITED PARTNERSHIP
BY: LIBERTY PROPERTY TRUST,
SOLE GENERAL PARTNER
Dated: July 7, 1997 BY: /s/ JOSEPH P. DENNY
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NAME: Joseph P. Denny
TITLE: President
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is made and entered into this
23rd day of May, 1997 (the "Effective Date"), by and among STAR VENTURE
LIMITED PARTNERSHIP, a Michigan limited partnership ("Star Venture"), as
to the Star Venture Property (hereinafter defined), MAPLE VENTURE
RESEARCH PARK LIMITED PARTNERSHIP, a Michigan limited partnership
("Maple Venture"), as to the Maple Venture Property (hereinafter
defined), and TECHNOLOGY PARK, a Michigan co-partnership ("Technology
Park"), as to the Technology Park Property (hereinafter defined), and
LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited partnership
("Purchaser"). Star Venture, Maple Venture and Technology Park are
sometimes hereinafter collectively referred to as the "Sellers" and,
individually, as a "Seller").
W I T N E S S E T H:
Article 1
Purchase and Sale
-----------------
1.1 Agreement of Purchase and Sale. Subject to the terms and
conditions hereinafter set forth, each Seller agrees to sell and convey,
and Purchaser agrees to purchase from each Seller, the following
property owned by each Seller:
(a) As to Star Venture:
(i) that certain tract or parcel of land situated in the
City of Southfield, Oakland County, Michigan, more particularly
described on Exhibit A-1 attached hereto and made a part hereof,
together with all and singular the rights and appurtenances pertaining
to such property, including any right, title and interest of Star
Venture in and to adjacent streets, alleys or rights-of-way (the
property described in this Section 1.1(a)(i) being herein referred to
collectively as the "Star Venture Land");
(ii) the buildings and other improvements on the Star
Venture Land, including specifically, without limitation, those certain
office buildings with a common atrium and having street addresses of
26911, 26913, 26933, 26935, 26955 and 26957 Northwestern Highway,
Southfield, Michigan (the property described in this Section 1.1(a)(ii)
being herein referred to collectively as the "Star Venture
Improvements");
(iii) the personal property and fixtures owned by Star
Venture upon the Star Venture Land or within the Star Venture
Improvements, including specifically, without limitation, heating,
ventilation and air conditioning systems and equipment, appliances,
furniture, carpeting, draperies and curtains, tools and supplies and
other items of personal property (excluding cash) used in connection
with the operation of the Star Venture Land and the Star Venture
Improvements (the property described in this Section 1.1(a)(iii) being
herein referred to collectively as the "Star Venture Personal Property",
regardless of whether such property constitutes personalty or fixtures
pursuant to Michigan law);
(iv) all of Star Venture's right, title and interest in
all written agreements pursuant to which any portion of the Star Venture
Land or Star Venture Improvements is occupied by anyone other than Star
Venture (the property described in this Section 1.1(a)(iv) being herein
referred to collectively as the "Star Venture Leases", and all
guaranties thereof and security deposits thereunder); and
(v) all of Star Venture's right, title and interest in and
to (-t-) all assignable contracts and agreements relating to the upkeep,
repair, maintenance or operation of the Star Venture Land, the Star
Venture Improvements or the Star Venture Personal Property which will
extend beyond the date of the First Closing (as such term is defined in
Section 4.1 hereof), including specifically, without limitation, all
assignable equipment leases (collectively, the "Star Venture Operating
Agreements"), (-u-) all assignable warranties and guaranties (express or
implied) issued to Star Venture in connection with the Star Venture
Improvements or the Star Venture Personal Property, (-v-) all of Star
Venture's right to connect with and to utilize any private or public
utility facilities now or hereafter serving the Star Venture Land, to
the extent transferable, (-w-) all licenses, permits, certificates of
occupancy and governmental approvals with respect to the Star Venture
Land or the Star Venture Improvements, and all development and similar
agreements relating to governmental permits or utility services relating
thereto, to the extent transferable, (-x-) the building names associated
with the Star Venture Improvements, (-y-) all plans and specifications
for the Star Venture Improvements, to the extent transferable, and (-z-)
all of Star Venture's right, title and interest, if any, as declarant,
under any covenants, conditions, easements and restrictions, if any,
governing the office park in which the Star Venture Land is located (the
property described in this Section 1.1(a)(v) being herein referred to
collectively as the "Star Venture Intangibles").
(b) As to Maple Venture:
(i)that certain tract or parcel of land situated in the City of Troy,
Oakland County, Michigan, more particularly described on Exhibit A-2
attached hereto and made a part hereof, together with all and singular
the rights and appurtenances pertaining to such property, including any
right, title and interest of Maple Venture in and to adjacent streets,
alleys or rights-of-way (the property described in this
Section 1.1(b)(i) being herein referred to collectively as the "Maple
Venture Land");
(ii) the buildings and other improvements on the Maple
Venture Land, including specifically, without limitation, those certain
buildings having street addresses of 1650-1965 Research Drive, Troy,
Michigan (the property described in this Section 1.1(b)(ii) being herein
referred to collectively as the "Maple Venture Improvements");
(iii) the personal property and fixtures owned by Maple
Venture upon the Maple Venture Land or within the Maple Venture
Improvements, including specifically, without limitation, heating,
ventilation and air conditioning systems and equipment, appliances,
furniture, carpeting, draperies and curtains, tools and supplies and
other items of personal property (excluding cash) used in connection
with the operation of the Maple Venture Land and the Maple Venture
Improvements (the property described in this Section 1.1(b)(iii) being
herein referred to collectively as the "Maple Venture Personal
Property", regardless of whether such property constitutes personalty or
fixtures pursuant to Michigan law);
(iv) all of Maple Venture's right, title and interest in
all written agreements pursuant to which any portion of the Maple
Venture Land or Maple Venture Improvements is occupied by anyone other
than Maple Venture (the property described in this Section 1.1(b)(iv)
being herein referred to collectively as the "Maple Venture Leases", and
all guaranties thereof and security deposits thereunder); and
(v) all of Maple Venture's right, title and interest in
and to (-t-) all assignable contracts and agreements relating to the
upkeep, repair, maintenance or operation of the Maple Venture Land, the
Maple Venture Improvements or the Maple Venture Personal Property which
will extend beyond the date of the First Closing (as such term is
defined in Section 4.1 hereof), including specifically, without
limitation, all assignable equipment leases (collectively, the "Maple
Venture Operating Agreements"), (-u-) all assignable warranties and
guaranties (express or implied) issued to Maple Venture in connection
with the Maple Venture Improvements or the Maple Venture Personal
Property, (-v-) all of Maple Venture's right to connect with and to
utilize any private or public utility facilities now or hereafter
serving the Maple Venture Land, to the extent transferable, (-w-) all
licenses, permits, certificates of occupancy and governmental approvals
with respect to the Maple Venture Land or the Maple Venture
Improvements, and all development and similar agreements relating to
governmental permits or utility services relating thereto, to the extent
transferable, (-x-) the building names associated with the Maple Venture
Improvements, (-y-) all plans and specifications for the Maple Venture
Improvements, to the extent transferable, and (-z-) all of Maple
Venture's right, title and interest, if any, as declarant, under any
covenants, conditions, easements and restrictions, if any, governing the
office park in which the Maple Venture Land is located (the property
described in this Section 1.1(b)(v) being herein referred to
collectively as the "Maple Venture Intangibles").
(c) As to Technology Park:
(i) that certain tract or parcel of land situated in the
City of Farmington Hills, Oakland County, Michigan, more particularly
described on Exhibit A-3 attached hereto and made a part hereof,
together with all and singular the rights and appurtenances pertaining
to such property, including any right, title and interest of Technology
Park in and to adjacent streets, alleys or rights-of-way (the property
described in this Section 1.1(c)(i) being herein referred to
collectively as the "Technology Park Land");
(ii) the buildings and other improvements on the
Technology Park Land, including specifically, without limitation, those
certain buildings having street addresses of 27200-300 Haggerty Road,
Farmington Hills, Michigan (the property described in this
Section 1.1(c)(ii) being herein referred to collectively as the
"Technology Park Improvements");
(iii) the personal property and fixtures owned by
Technology Park upon the Technology Park Land or within the Technology
Park Improvements, including specifically, without limitation, heating,
ventilation and air conditioning systems and equipment, appliances,
furniture, carpeting, draperies and curtains, tools and supplies and
other items of personal property (excluding cash) used in connection
with the operation of the Technology Park Land and the Technology Park
Improvements (the property described in this Section 1.1(c)(iii) being
herein referred to collectively as the "Technology Park Personal
Property", regardless of whether such property constitutes personalty or
fixtures pursuant to Michigan law);
(iv) all of Technology Park's right, title and interest in
all written agreements pursuant to which any portion of the Technology
Park Land or Technology Park Improvements is occupied by anyone other
than Technology Park (the property described in this Section 1.1(c)(iv)
being herein referred to collectively as the "Technology Park Leases",
and all guaranties thereof and security deposits thereunder); and
(v) all of Technology Park's right, title and interest in
and to (-t-) all assignable contracts and agreements relating to the
upkeep, repair, maintenance or operation of the Technology Park Land,
the Technology Park Improvements or the Technology Park Personal
Property which will extend beyond the date of the Second Closing (as
such term is defined in Section 4.1 hereof), including specifically,
without limitation, all assignable equipment leases (collectively, the
"Technology Park Operating Agreements"), (-u-) all assignable warranties
and guaranties (express or implied) issued to Technology Park in
connection with the Technology Park Improvements or the Technology Park
Personal Property, (-v-) all of Technology Park's right to connect with
and to utilize any private or public utility facilities now or hereafter
serving the Technology Park Land, to the extent transferable, (-w-) all
licenses, permits, certificates of occupancy and governmental approvals
with respect to the Technology Park Land or the Technology Park
Improvements, and all development and similar agreements relating to
governmental permits or utility services relating thereto, to the extent
transferable, (-x-) the building names associated with the Technology
Park Improvements, (-y-) all plans and specifications for the Technology
Park Improvements, to the extent transferable, and (-z-) all of
Technology Park's right, title and interest, if any, as declarant, under
any covenants, conditions, easements and restrictions, if any, governing
the office park in which the Technology Park Land is located (the
property described in this Section 1.1(c)(v) being herein referred to
collectively as the "Technology Park Intangibles").
1.2 Property Defined. The Star Venture Land, the Star Venture
Improvements, the Star Venture Personal Property, the Star Venture
Leases and the Star Venture Intangibles are hereinafter sometimes
referred to collectively as the "Star Venture Property." The Maple
Venture Land, the Maple Venture Improvements, the Maple Venture Personal
Property, the Maple Venture Leases and the Maple Venture Intangibles are
hereinafter sometimes referred to collectively as the "Maple Venture
Property." The Technology Park Land, the Technology Park Improvements,
the Technology Park Personal Property, the Technology Park Leases and
the Technology Park Intangibles are hereinafter sometimes referred to
collectively as the "Technology Park Property."
Whenever the term "subject premises" is used in this Agreement in
relation to (i) Star Venture, it shall refer to the Star Venture
Property, (ii) Maple Venture, it shall refer to the Maple Venture
Property, and (iii) Technology Park, it shall refer to the Technology
Park Property.
1.3 Permitted Exceptions. The Star Venture Property shall be conveyed
subject to the matters which are deemed to be permitted exceptions
pursuant to Section 2.3 hereof (the "Star Venture Permitted
Exceptions"). The Maple Venture Property shall be conveyed subject to
the matters which are deemed to be permitted exceptions pursuant to
Section 2.3 hereof (the "Maple Venture Permitted Exceptions"). The
Technology Park Property shall be conveyed subject to the matters which
are deemed to be permitted exceptions pursuant to Section 2.3 hereof
(the "Technology Park Permitted Exceptions").
1.4 Purchase Price. On or before June 9, 1997, Sellers shall elect
one of the two options as to the purchase price (the "Purchase Price")
set forth below, which election shall be made by written notice to
Purchaser made in accordance with the provisions of Section 9.6 hereof
(the "Purchase Price Notice"):
(a) Purchase Price Option A: One Hundred Twenty-Seven Million
Five Hundred Thousand ($127,500,000.00) Dollars in cash; or
(b) Purchase Price Option B: One Hundred Twenty-Nine Million
($129,000,000.00) Dollars, of which One Hundred Million
($100,000,000.00) Dollars shall be cash and Twenty-Nine Million
($29,000,000.00) Dollars shall, at the election of Sellers, be either
(i) units of limited partnership interest in Purchaser, or (ii) shares
of beneficial interest, $0.001 par value ("Common Shares"), of Liberty
Property Trust, a Maryland real estate investment trust ("Parent"), with
each such unit of limited partnership interest or Common Share, as
applicable, valued at an amount equal to the arithmetic average of the
daily closing price per share of the Common Shares for the ten (10)
business days ending on and including the second (2nd) business day
prior to the First Closing or the Second Closing, as applicable, and
with the number of units of limited partnership interest or of Common
Shares, as applicable, rounded to the nearest whole number.
The Purchase Price, as selected by Sellers, shall be allocated as
follows: (i) 60.7843% to the Star Venture Property, (ii) 23.5294% to
the Maple Venture Property, and (iii) 15.6863% to the Technology Park
Property; provided, however, that if Sellers elect Purchase Price Option
B, Sellers shall have the right to designate what portion of the
Purchase Price allocable to the property owned by each Seller shall be
cash and what portion thereof shall be either units of limited
partnership interest in Purchaser or Common Shares of Parent. Such
allocation shall be included in the Purchase Price Notice.
1.5 Payment of Purchase Price. That portion of the Purchase Price
which is designated to be paid in cash shall be payable in full at the
First Closing and the Second Closing, as applicable, in immediately
available wire transferred funds, and that portion of the Purchase
Price, if any, which is designated to be paid in units of limited
partnership interest in Purchaser or Common Shares of Parent shall be
paid at the First Closing and the Second Closing, as applicable, by
issuance of units of limited partnership interest in Purchaser in
exchange for the contribution of all or such portion of the subject
premises of each Seller as such Seller shall designate pursuant to
Section 1.4 hereof or common stock of Parent pursuant to documentation
as set forth in Section 4.2 below.
1.6 Earnest Money. On the Effective Date, Purchaser shall deposit
with First American Title Insurance Company (the "Title Company"), at
1650 West Big Beaver Road, Troy, Michigan 48084, Attention: Michael R.
Cole, Esq., Vice President-Legal, in immediately available federal
funds, the sum of Four Million ($4,000,000.00) Dollars, which shall be
allocated Three Million ($3,000,000.00) Dollars to the Star Venture
Property and the Maple Venture Property, collectively (the "Star and
Maple Earnest Money"), and One Million ($1,000,000.00) Dollars to the
Technology Park Property (the "Technology Park Earnest Money"). The
Star and Maple Earnest Money and the Technology Park Earnest Money are
sometimes hereinafter referred to collectively as the "Earnest Money."
The Earnest Money shall be held by Title Company in an interest-bearing
account, provided that Purchaser shall provide Title Company with its
taxpayer identification number. All interest accruing on such sum shall
become a part of the Earnest Money and shall be distributed as Earnest
Money in accordance with the terms of this Agreement.
Article 2
Title and Survey
2.1 Commitments for Title Insurance. Prior to the execution hereof,
Sellers have each delivered to Purchaser the following preliminary title
commitments:
(a) As to the Star Venture Property: First American Title
Insurance Company Commitment No. 63-381277 dated April 14, 1997 at 8:00
a.m.;
(b) As to the Maple Venture Property: First American Title
Insurance Company Commitment No. 63-381270 dated April 14, 1997 at 8:00
a.m.; and
(c) As to the Technology Park Property: First American Title
Insurance Company Commitment No. 63-381299 dated April 14, 1997 at 8:00
a.m.
Each of these preliminary title commitments is in the amount of
One Thousand ($1,000.00) Dollars and indicates that the proposed insured
is to be named.
Within five (5) days after the Effective Date, Sellers shall
deliver, or cause to be delivered, to Purchaser and the surveyors
referenced in Section 2.2 hereof updated versions of each of the
preliminary title commitments, without standard exceptions
(collectively, the "Title Commitments"), in the amount of the Purchase
Price allocable to the property covered thereby, naming Purchaser as the
party to be insured and showing all matters affecting title to the
property described therein and binding Title Company to issue at the
First Closing or the Second Closing, as applicable, ALTA Form B owners'
title insurance policies, including zoning endorsements (Form 3.1) and
contiguity endorsements, where applicable (collectively, the "Title
Policies"). Sellers shall further instruct Title Company to deliver to
such parties copies of all instruments referenced in Schedule B-2 of the
Title Commitments, except any mortgages, security agreements, liens or
other encumbrances to be discharged at the First Closing or the Second
Closing.
2.2 Surveys. Prior to the execution hereof, Sellers have each
delivered to Purchaser the following preliminary surveys:
(a) As to the Star Venture Property: Urban Land Consultants
Mortgage Survey, Job No. 930635-3876, dated December 15, 1983, last
revised March 27, 1996;
(b) As to the Maple Venture Property: Professional Engineering
Associates Mortgage Survey, Job No. 96026SAL, dated March 8, 1996, last
revised April 18, 1996; and
(c) As to the Technology Park Property: Giffels-Webster
Engineers, Inc. Mortgage Survey, Job No. 9340.08, dated November 26,
1990, last revised March 6, 1996.
Within five (5) days after the Effective Date, Sellers shall cause
the respective surveyors who prepared such surveys to update such
surveys and re-certify them (collectively, the "Updated Surveys") to the
Seller which owns the property covered thereby, Purchaser and Title
Company.
2.3 Review Period. Purchaser shall have ten (10) days (the "Review
Period") after the receipt of the Title Commitments, copies of all
instruments referred to in Schedule B-2 thereof required to be delivered
to Purchaser and the Updated Surveys to notify each Seller as to the
subject premises, in writing, of such objections as Purchaser may have
to anything contained in the applicable Title Commitment or the Updated
Survey and/or any endorsements desired by Purchaser that are available
from Title Company. Any item contained in the Title Commitments or the
Updated Surveys to which Purchaser does not object during the Review
Period shall be deemed a Star Venture Permitted Exception, a Maple
Venture Permitted Exception or a Technology Park Permitted Exception, as
applicable. In the event Purchaser shall notify any Seller of
objections to title or the Updated Survey pertaining to the subject
premises prior to the expiration of the Review Period, such Seller shall
have five (5) days after receipt of notification of such objections, or
such greater period of time as may be mutually acceptable to Purchaser
and Sellers (the "Cure Period"), within which such Seller may (but shall
not be required to) cure or remove such objection. If such Seller fails
either to cure or remove such objection to the reasonable satisfaction
of Title Company and Purchaser prior to the expiration of the Cure
Period, Purchaser may either terminate this Agreement as to all (but not
less than all) Sellers by written notice to Sellers or waive such
objection and accept such title as such Sellers are able to convey
without any reduction in the Purchase Price. Failure of Purchaser to
send written notice of the election available to it pursuant to the
preceding sentence prior to the expiration of the Cure Period shall be
deemed an election by Purchaser to waive any objection and accept such
title as Sellers are able to convey without any reduction in the
Purchase Price.
2.4 Owners Policies of Title Insurance. At the First Closing or the
Second Closing, as applicable, Title Company shall issue to Purchaser
the Title Policies, which shall insure title to the Star Venture
Property, the Maple Venture Property and the Technology Park Property in
the full amount of the Purchase Price allocable thereto, subject only to
the Star Venture Permitted Exceptions, Maple Venture Permitted
Exceptions and the Technology Park Permitted Exceptions, as applicable.
Each Seller shall deliver an owner's affidavit in the form of
Exhibit B attached hereto to Title Company to facilitate the removal of
the standard printed exceptions in the Title Policies pertaining to the
subject premises, except that (i) the matters contained in such owner's
affidavit or similar documents shall be limited to such Seller's
knowledge, and (ii) such Seller shall not be required to indemnify Title
Company pursuant to such owner's affidavit.
Article 3
Inspection Period
3.1 Right of Inspection. During the period beginning on the Effective
Date and ending at 5:00 p.m., Southfield, Michigan time, on (i) June 16,
1997 as to the Star Venture Property and the Maple Venture Property (the
"Star and Maple Inspection Period"), and (ii) June 30, 1997 as to the
Technology Park Property (the "Technology Park Inspection Period"),
Purchaser shall have the right to make a physical inspection of the Star
Venture Property, the Maple Venture Property and the Technology Park
Property and to examine all relevant books and records maintained by the
relevant Seller relating to the Star Venture Property, the Maple Venture
Property and the Technology Park Property (including, without
limitation, environmental assessments and engineering reports) at such
place or places as such books and records may be located. Purchaser
agrees to indemnify and hold each Seller harmless of and from any claim
for damages or injuries arising from Purchaser's inspection of the Star
Venture Property, the Maple Venture Property and the Technology Park
Property and, notwithstanding anything to the contrary in this
Agreement, such obligation to indemnify shall survive the First Closing
and the Second Closing or any termination of this Agreement. All
inspections shall occur at reasonable times agreed upon by each Seller
and with notice of the actual time of such inspection as to its subject
premises and Purchaser, and shall be conducted so as not to unreasonably
interfere with the use of the Star Venture Property, the Maple Venture
Property and the Technology Park Property by each Seller or their
respective tenants. Purchaser shall be entitled to make such
applications, inquiries and searches of utility companies, governmental
records and governmental agencies as it shall deem appropriate in
connection with its investigation of the Star Venture Property, the
Maple Venture Property and the Technology Park Property, and Seller
shall provide reasonable cooperation to Purchaser in connection with
these efforts, at the sole cost and expense of Purchaser.
3.2 Right of Termination. In the event that Purchaser, in its sole
and uncontrolled discretion, determines that either the Star Venture
Property or the Maple Venture Property is not suitable for its purposes,
Purchaser shall have the right to terminate this Agreement in its
entirety as to all (but not less than all) of the Star Venture Property,
the Maple Venture Property and the Technology Park Property by sending
written notice thereof (hereinafter referred to as the "Preliminary
Notice of Termination") to all Sellers prior to the expiration of the
Star and Maple Inspection Period. Upon delivery by Purchaser of such
Preliminary Notice of Termination prior to the expiration of the Star
and Maple Inspection Period, this Agreement shall terminate as to all
Sellers and the Earnest Money shall be returned to Purchaser. If
Purchaser fails to send all Sellers a Preliminary Notice of Termination
prior to the expiration of the Star and Maple Inspection Period,
Purchaser shall no longer have any right to terminate this Agreement as
to the Star Venture Property and the Maple Venture Property (except as
set forth in Section 4.6, Section 6.2 and Section 7.2 hereof), the Star
and Maple Earnest Money shall be deemed fully earned by Star Venture and
Maple Venture, respectively, and non-refundable to Purchaser for any
reason (except as set forth in Section 4.6, Section 6.2 and Section 7.2
hereof) and Purchaser shall be bound to proceed to the First Closing and
consummate the transactions contemplated hereby with regard to the Star
Venture Property and the Maple Venture Property pursuant to the terms of
this Agreement.
In the event that Purchaser, in its sole and uncontrolled
discretion, determines that the Technology Park Property is not suitable
for its purposes, Purchaser shall have the right to terminate this
Agreement by sending written notice thereof (hereinafter referred to as
the "Secondary Notice of Termination") to Technology Park prior to the
expiration of the Technology Park Inspection Period. Upon delivery by
Purchaser of such Secondary Notice of Termination within the Technology
Park Inspection Period, this Agreement shall terminate as to Technology
Park and the Technology Park Earnest Money shall be returned to
Purchaser. If Purchaser fails to send Technology Park a Secondary
Notice of Termination prior to the expiration of the Technology Park
Inspection Period, Purchaser shall no longer have any right to terminate
this Agreement as to the Technology Park Property (except as set forth
in Section 4.6, Section 6.2 and Section 7.2 hereof), the Technology Park
Earnest Money shall be deemed fully earned by Technology Park and non-
refundable to Purchaser for any reason (except as set forth in
Section 4.6, Section 6.2 and Section 7.2 hereof) and Purchaser shall be
bound to proceed to the Second Closing and consummate the transaction
contemplated hereby with regard to the Technology Park Property pursuant
to the terms of this Agreement. Anything in this Agreement to the
contrary notwithstanding, Purchaser shall have no right to proceed to
the Second Closing and purchase the Technology Park Property unless the
First Closing shall have theretofore occurred and Purchaser shall have
purchased the Star Venture Property and the Maple Venture Property.
Article 4
Closing
4.1 Time and Place. The closing of the sale of the Star Venture
Property and the Maple Venture Property (the "First Closing") shall be
held at the office of such Sellers at 10:00 a.m. on June 23, 1997 (the
"First Closing Date"). The closing of the sale of the Technology Park
Property (the "Second Closing") shall be held at the office of such
Seller at 10:00 a.m. on July 7, 1997 (the "Second Closing Date"). At
the First Closing Date and the Second Closing Date, the relevant
Seller(s) and Purchaser shall perform the obligations set forth in,
respectively, Section 4.2 and Section 4.3, the performance of which
obligations shall be concurrent conditions.
4.2 Sellers' Obligations at Closing. At the First Closing and the
Second Closing, each Seller involved in such closing shall:
(a) deliver to Purchaser a Covenant Deed (the "Deed"), in the
form of Exhibit C attached hereto and made a part hereof, executed and
acknowledged by such Seller and in recordable form, conveying the land
and improvements owned by each Seller to Purchaser, subject only to the
Permitted Exceptions applicable thereto;
(b) join with Purchaser in the execution and acknowledgment of a
Bill of Sale and Assignment (the "Bill of Sale"), in the form of Exhibit
D attached hereto and made a part hereof, with respect to the Star
Venture Personal Property, the Maple Venture Personal Property and the
Technology Park Personal Property, as applicable;
(c) join with Purchaser in the execution and acknowledgment of
an Assignment and Assumption of Contracts (the "Assignment of
Contracts"), in the form of Exhibit E attached hereto and made a part
hereof, with respect to the Star Venture Leases and Operating
Agreements, the Maple Venture Leases and Operating Agreements and the
Technology Park Leases and Operating Agreements, as applicable;
(d) join with Purchaser in the execution of a Closing Memorandum
and Indemnification Agreement (the "Closing Memorandum"), in the form of
Exhibit F attached hereto and made a part hereof, with respect to the
Star Venture Property, the Maple Venture Property and the Technology
Park Property, as applicable;
(e) deliver to Purchaser a FIRPTA Affidavit (the "FIRPTA
Affidavit"), in the form of Exhibit G attached hereto and made a part
hereof, duly executed by each such Seller, stating that such Seller is
not a "foreign person" as defined in the federal Foreign Investment in
Real Property Tax Act of 1980 and 1984 Tax Reform Act, and in the event
such Seller is unable or unwilling to deliver the FIRPTA Affidavit, in
lieu thereof, the funds payable to such Seller shall be adjusted in such
a manner as to comply with the withholding provisions of such statutes;
(f) join with Purchaser in the execution of a letter to each
tenant of the Star Venture Property, the Maple Venture Property and the
Technology Park Property, as applicable (the "Tenant Notification
Letter"), in the form of Exhibit H attached hereto and made a part
hereof;
(g) deliver to Purchaser possession and occupancy of the Star
Venture Property, the Maple Venture Property and the Technology Park
Property, as applicable, subject to the Star Venture Permitted
Exceptions, the Maple Venture Permitted Exceptions and the Technology
Park Permitted Exceptions;
(h) deliver to Purchaser all available keys to the Star Venture
Property, the Maple Venture Property and the Technology Park Property,
as applicable, in such Seller's possession;
(i) deliver to Purchaser all available building plans and
specifications, originals (or true copies if originals are not available
to Sellers) of all certificates of occupancy and other licenses,
permits, authorizations and approvals issued by governmental
authorities; the originals (or true copies if originals are not
available to Sellers) of all of the Leases (and guaranties thereto) and
all of the Operating Agreements; and all manuals, warranties, technical
data and other documentation in each Seller's possession relating to the
building systems, equipment and other fixtures and the Personal Property
with respect to each of the subject premises;
(j) If Sellers elect, pursuant to Section 1.4(b) above, to
receive a portion of the Purchase Price in the form of units of limited
partnership interest in Purchaser:
(i) Sellers shall join with Purchaser and Parent in the
execution of a Registration Rights Agreement (the "Unitholder
Registration Rights Agreement") and a Sixth Amendment to Partnership
Agreement (the "Partnership Amendment"), in the forms of Exhibits I-1
and I-2 attached hereto and made a part hereof, with respect to such
units of limited partnership interest; and
(ii) Sellers shall execute and deliver to Purchaser (-x-)
the Irrevocable Proxy in the form attached to the Partnership Amendment,
and (-y-) an investment letter in the form attached hereto as Exhibit I-
3 (the "Investment Letter"); and
(k) If Sellers elect, pursuant to Section 1.4(b) above, to
receive a portion of the Purchase Price in the form of Common Shares of
Parent:
(i) Sellers shall join with Purchaser and Parent in the
execution of a Registration Rights Agreement (the "Shareholder
Registration Rights Agreement"), in the form of Exhibit I-4 attached
hereto and made a part hereof, with respect to such Common Shares; and
(ii) Sellers shall execute and deliver the Investment
Letter.
To the extent that one or more of the subject premises is
contributed to Purchaser in exchange for units of limited partnership
interest in Purchaser, (-1-) each Seller shall supply all such
information as may be required by Purchaser with respect to the subject
premises so contributed to Purchaser as Purchaser shall determine to be
required for the preparation by Purchaser of its federal, state or local
income tax or other tax returns, including, but not limited to,
information relating to the income tax basis of any such property
transferred for units, the depreciation or other accounting methods
adopted with respect to such property and the amount of any gain
recognized by any Seller in connection with the transfer of the subject
premises to Purchaser, and (-2-) each Seller shall promptly, at the
request of Purchaser and at the expense of Purchaser, make available to
Purchaser the historical financial information in its possession
regarding the operation of the subject premises to the extent Purchaser
needs such information to prepare stand-alone financial statements for
such operations in accordance with generally accepted accounting
principles, as of the end of and for fiscal year 1996 and any required
subsequent date or period, and to cooperate with Purchaser and any
auditor engaged by Purchaser to audit such financial statements. The
obligations in clauses (-1-) and (-2-) above shall survive the First
Closing or the Second Closing, as applicable.
4.3 Purchaser's Obligations at Closing. At the First Closing and at
the Second Closing, Purchaser shall:
(a) pay to Star Venture, Maple Venture and Technology Park, as
applicable, the full amount of the Purchase Price payable to such
Seller; it being agreed that (i) at the First Closing, the Star and
Maple Earnest Money, and at the Second Closing, the Technology Park
Earnest Money, shall be delivered to each such Seller, as applicable,
and applied towards payment of the Purchase Price due to such Seller,
and (ii) the Star and Maple Earnest Money shall be allocated between
Star Venture and Maple Venture in the same proportions as the total
portions of the Purchase Price allocable to Star Venture and Maple
Venture are allocated between such entities; and
(b) join Seller in the execution of the instruments described in
Sections 4.2(b), (c), (d), (f) and (i) above, and (if applicable)
Sections 4.2(j) and (k) above.
4.4 Credits and Prorations.
(a) The following shall be apportioned with respect to each of
the Star Venture Property, the Maple Venture Property and the Technology
Park Property, as applicable, as of 12:01 a.m., Southfield, Michigan
time, on the First Closing Date and the Second Closing Date, as if
Purchaser were vested with title to the Star Venture Property, the Maple
Venture Property and the Technology Park Property, as applicable, during
the entire day upon which the First Closing or the Second Closing
occurs:
(i) rents, if any, as and when collected (as used in this
Agreement, the term "rents" includes payments due and payable by tenants
under the Star Venture Leases, the Maple Venture Leases and the
Technology Park Leases, as applicable, and by licensees and
concessionaires, if any);
(ii) taxes (including personal property taxes on the Star
Venture Personal Property, the Maple Venture Personal Property and the
Technology Park Personal Property), calculated on the due date basis;
(iii) any assessments that relate to the Star Venture
Property, the Maple Venture Property and the Technology Park Property,
as applicable;
(iv) payments under the Star Venture Operating Agreements,
the Maple Venture Operating Agreements and the Technology Park Operating
Agreements or other agreements affecting the Star Venture Property, the
Maple Venture Property and the Technology Park Property, as applicable;
(v) gas, electricity and other utility charges for which
Star Venture, Maple Venture and Technology Park, as applicable, are
liable, if any; such charges to be apportioned at (i) the First Closing,
on the basis of the most recent meter readings occurring prior to the
First Closing, and (ii) the Second Closing, on the basis of the most
recent meter readings occurring prior to the Second Closing; and
(vi) any other ordinary and reasonable operating expenses
of the Star Venture Property, the Maple Venture Property and the
Technology Park Property, as applicable, during the month in which the
First Closing or the Second Closing occurs, as applicable.
(b) Notwithstanding anything contained in the foregoing
provisions:
(i) at the First Closing and at the Second Closing, as
applicable, (-x-) Star Venture, Maple Venture and Technology Park shall,
at their respective options, either deliver to Purchaser any security
deposits actually held or required to be held by Star Venture, Maple
Venture and Technology Park, as applicable, pursuant to the Star Venture
Leases, the Maple Venture Leases and the Technology Park Leases, as
applicable, or credit to the account of Purchaser the amount of such
security deposits, and (-y-) Star Venture, Maple Venture and Technology
Park shall be entitled to receive and retain all refundable cash or
other deposits posted with utility companies serving the Star Venture
Property, the Maple Venture Property and the Technology Park Property,
as applicable;
(ii) except as provided in Section 4.4(b)(iii) below,
charges referred to in Section 4.4(a) above (other than those referred
to in Section 4.4(a)(i)) which are payable by any tenant to a third
party shall not be apportioned hereunder, and Purchaser shall accept
title subject to any of such charges which are unpaid and shall look
solely to the tenant responsible therefor for the payment of the same;
(iii) Sellers, on the one hand, and Purchaser, on the
other hand, shall separately reconcile with tenants the amounts paid or
payable on account of operating expenses incurred by each such party
during its period of ownership;
(iv) as to gas, electricity and other utility charges
referred to in Section 4.4(a)(v) above, Star Venture, Maple Venture and
Technology Park, as applicable, may, on notice to Purchaser, elect to
pay one or more of all of said items accrued to the date hereinabove
fixed for apportionment directly to the person or entity entitled
thereto, and to the extent any such Seller so elects, such item shall
not be apportioned hereunder, and such Seller's obligation to pay such
item directly in such case shall survive the First Closing or the Second
Closing, as applicable;
(v) at the First Closing and at the Second Closing, as
applicable, Purchaser shall assume responsibility for the payment of the
following leasing commissions becoming due and payable with respect to
the Star Venture Property, the Maple Venture Property and the Technology
Park Property, as applicable, from and after the Effective Date: (-x-)
leasing commissions which become due and payable from and after the
Effective Date under the Star Venture Leases, the Maple Venture Leases
and the Technology Park Leases, as applicable, executed after the
Effective Date, (-y-) leasing commissions which become due and payable
from and after the Effective Date by reason of the expansion of the
premises demised by any of the Star Venture Leases, the Maple Venture
Leases or the Technology Park Leases, regardless of when executed, or
the renewal of such leases, and (-z-) deferred leasing commissions due
after the Effective Date in the event a tenant under any of the Star
Venture Leases, the Maple Venture Leases or the Technology Park Leases,
regardless of when executed, has a right of termination thereunder which
such tenant fails to exercise. If Star Venture, Maple Venture and
Technology Park, as applicable, shall have paid any such leasing
commissions as of the date of the First Closing or the Second Closing,
as applicable, Purchaser shall reimburse such Seller therefor at the
First Closing or the Second Closing, as applicable;
(vi) at the First Closing and at the Second Closing, as
applicable, Purchaser shall assume responsibility for the payment of the
following Tenant Inducement Costs (as hereinafter defined) becoming due
and payable from and after the Effective Date: (-x-) Tenant Inducement
Costs which become due and payable from and after the Effective Date
under the Star Venture Leases, the Maple Venture Leases and the
Technology Park Leases, as applicable, executed after the Effective
Date, and (-y-) Tenant Inducement Costs which become due and payable
from and after the Effective Date by reason of the expansion of the
premises demised by any of the Star Venture Leases, the Maple Venture
Leases or the Technology Park Leases, regardless of when executed, or
the renewal of such leases. If Star Venture, Maple Venture and
Technology Park, as applicable, shall have paid any such Tenant
Inducement Costs as of the date of the First Closing or the Second
Closing, as applicable, Purchaser shall reimburse such Seller therefor
at the First Closing or the Second Closing, as applicable. For purposes
of the foregoing provisions, the term "Tenant Inducement Costs" shall
mean any payment required under any of the Star Venture Leases, Maple
Venture Leases or Technology Park Leases to be paid by the landlord
thereunder to or for the benefit of the tenant thereunder which is in
the nature of a tenant inducement, including specifically, without
limitation, tenant improvement costs, lease buy-outs and moving
allowances; and
(vii) the respective Sellers shall remain responsible for
the payment of any leasing commissions and Tenant Inducement Costs with
respect to the Star Venture Leases, the Maple Venture Leases and the
Technology Park Leases, except as assumed by Purchaser pursuant to
Sections 4.4(b)(v) and (vi) above.
(c) All other matters with respect to apportionment shall be
governed by the Closing Memorandum. All prorations and adjustments
described in this Section 4.4 and in the Closing Memorandum shall be
effected by increasing or decreasing, as appropriate, the amount of cash
to be paid by Purchaser to the respective Sellers at the First Closing
or the Second Closing, as applicable. The provisions of this
Section 4.4 shall survive the Closing.
4.5 Closing Costs. As to each of the Star Venture Property, the Maple
Venture Property and the Technology Park Property, as applicable, all
closing costs with respect thereto shall be split fifty (50%) percent
each between the relevant Seller and Purchaser. For purposes hereof,
"closing costs" shall mean (a) the cost of the Title Policies and any
endorsements thereto, (b) any recording fees, (c) any transfer tax,
documentary stamp tax or similar tax which becomes payable by reason of
the transfer of the Star Venture Property, the Maple Venture Property
and the Technology Park Property, as applicable, (d) any escrow fees
charged by Title Company, and (e) the fees and expenses for the Updated
Surveys. Each Seller and Purchaser shall pay the fees of any counsel
representing such party in connection with the transactions contemplated
by this Agreement. All other costs and expenses incident to these
transactions and the closing thereof shall be paid by the party
incurring same.
4.6 Conditions to Closing. The obligations of Purchaser to consummate
the First Closing and the Second Closing shall be conditioned upon the
satisfaction of the following conditions precedent, as applicable to
each such Closing, any one or more of which conditions may be waived in
writing by Purchaser, in its sole discretion:
(a) All representations and warranties of each Seller shall be
true in all material respects as of the date of this Agreement and as of
such Closing Date;
(b) Each Seller shall have performed in all material respects
all of its covenants and obligations to be performed at or before such
Closing;
(c) Title Company shall be unconditionally committed to issue
its Title Policies in the form required by the terms of this Agreement.
If Title Company is not unconditionally committed to issue its Title
Policies as aforesaid, Purchaser shall have the right to elect, as its
sole remedy for such circumstances, either to terminate this Agreement
or to complete the closing of the purchase of the subject premises with
such title as such Seller is able to convey, in which latter event there
shall be no reduction in the Purchase Price, except for the amount of
any judgments, encumbrances or liens in a fixed or ascertainable dollar
amount;
(d) No preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency shall be in effect at
such Closing which would prevent the consummation of the transactions
contemplated by this Agreement, and no notice shall be outstanding and
uncured asserting any material violation of any legal requirements with
respect to any of the Star Venture Property, the Maple Venture Property
and the Technology Park Property; and
(e) Such Seller shall have delivered (and agrees to use its best
efforts to deliver) to Purchaser, on or before the expiration of the
Star and Maple Inspection Period or the Technology Park Inspection
Period, as applicable, an executed tenant estoppel certificate
(collectively, the "Estoppel Certificates"), in the form of Exhibits J-
1, J-2 and J-3, as applicable, attached hereto, with all blanks
completed, from tenants occupying not less than seventy (70%) percent of
the subject premises (which shall as to each Seller, include the tenants
itemized on Exhibit K attached hereto); provided, however, that such
Seller's failure to deliver one or more of the Estoppel Certificates
shall not constitute a default by such Seller hereunder.
Article 5
Representations, Warranties and Covenants
5.1 Representations and Warranties of Sellers. Star Venture (as to
the Star Venture Property), Maple Venture (as to the Maple Venture
Property) and Technology Park (as to the Technology Park Property), each
hereby represents and warrants to Purchaser, as follows:
(a) Such Seller is the owner of title to the subject premises in
the condition required for performance hereunder, subject, only, to
certain mortgages, liens, security interests and encumbrances which
shall all be discharged or terminated simultaneously with the First
Closing or the Second Closing, as applicable;
(b) Such Seller has received no notice of, and has no actual
knowledge of, any proposed assessments or any public improvements
affecting the subject premises which have been ordered to be made and/or
which have not heretofore been completed, assessed and paid for;
(c) Such Seller has received no notice of, and has no actual
knowledge of, any existing or threatened condemnation, eminent domain
proceeding or any action of a similar kind or any change, redefinition
or other modification of the zoning classification regarding the subject
premises;
(d) Such Seller has received no written notice of, and has no
actual knowledge of, proposed plans to widen, modify or realign any
street or highway or to dedicate private lands to the public which would
affect the subject premises;
(e) There is no lease, occupancy agreement or any right
whatsoever in any party to occupy the subject premises, other than
pursuant to those leases delivered by such Seller to Purchaser and more
particularly itemized on Exhibit L attached hereto and made a part
hereof. To the actual knowledge of each Seller with respect to the
Leases relating to the subject premises (i) the copies of the Leases
provided by each Seller to Purchaser are true, correct and complete and
include all supplements and side letters relating thereto and such
Seller has not, nor does it have any actual knowledge that any other
person has, entered into any supplements or side letters with regard to
such Leases which have not been provided to Purchaser, (ii) the Leases
are in full force and effect, in accordance with their terms, (iii)
there are no agreements or commitments to pay any leasing brokerage
commissions with respect to such Leases, except as set forth therein,
and such Seller has not, nor does it have any actual knowledge that any
other person has, entered into any agreements to pay brokerage
commissions with regard to such Leases which have not been provided to
Purchaser, (iv) there has been no material default under the Leases and
no tenant has asserted any such default, or any defense to or offset or
claim against its rent or other obligations under the Leases, (v) no
tenant under the Leases has prepaid any rent for more than one (1) month
in advance, (vi) all material duties of the landlord under the Leases
accruing on or before the date hereof have been performed, and (vii) all
tenants thereunder are in occupancy, except (-x-) as to the Star Venture
Property, Maryland Casualty, Midcom Communications and R.L. Polk & Co.
as to Space C, (-y-) as to the Maple Venture Property, Gencorp, Inc. has
vacated its space, but continues to pay rent, and (-x-) as to the
Technology Park Property, Ericsson, Inc.;
(f) Except for those contracts itemized on Exhibit M attached
hereto (the "Mandatory Service Contracts"), such Seller has not
contracted for, and has no actual knowledge that any other person has
contracted for, any services and has made no commitments or obligations
therefor which will bind Purchaser with respect to the subject premises,
and any such contracts to which such Seller is a party are terminable
upon not more than thirty (30) days notice, without fee or penalty.
Except with regard to the Mandatory Service Contracts as to which
Purchaser must take an assignment and assume all obligations of such
Seller thereunder, such Seller shall pay all amounts due under any such
contracts and cause such contracts to be discharged or terminated prior
to the First Closing or the Second Closing, as applicable, unless
Purchaser notifies such Seller in writing that it elects to assume such
Seller's rights and obligations under any of such contracts. With
respect to any such contracts which Purchaser elects to assume, or the
Mandatory Service Contracts which Purchaser must assume, any amounts
paid or payable shall be prorated between the parties at the First
Closing or the Second Closing, as applicable, and appropriate credits
shall be given;
(g) Such Seller is the owner of the landlord's rights under the
Leases and of all of the Personal Property referred to in Section 1.1
hereof located on the subject premises, subject, only, to certain liens,
security interests and encumbrances which shall all be discharged or
terminated simultaneously with the First Closing or the Second Closing,
as applicable;
(h) In the event any claim is made by any party for the payment
of any amount due for the furnishing of labor and/or materials to the
subject premises prior to the First Closing or the Second Closing, as
applicable, or in the event any lien is filed against the subject
premises subsequent thereto as a result of the furnishing of such
materials and/or labor, such Seller shall immediately bond over such
claim or pay said claim and discharge said lien;
(i) Such Seller is not now insolvent or the subject of any
bankruptcy or reorganization proceeding, and will not be insolvent (as
defined in the Michigan Uniform Fraudulent Conveyance Act, MCLA 566.11,
et seq.), at the time of making the conveyances by such Seller required
hereunder, and this Agreement and the transactions contemplated
hereunder do not and will not violate, or cause the violation of, any
applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or similar laws;
(j) The execution and delivery of this Agreement by such Seller
and such Seller's performance of and compliance with its terms will not
(i) to the actual knowledge of such Seller, violate any existing
federal, state or local law, ordinance, rule, regulation or order, or
(ii) breach any agreement or other obligation to which such Seller is a
party or by which it is bound;
(k) Such Seller is a limited partnership or general partnership
(in the case of Technology Park) in good standing in the State of
Michigan and has the full right, power and authority to sell the subject
premises as provided in this Agreement and to carry out such Seller's
obligations hereunder, and all requisite action necessary to authorize
such Seller to enter into this Agreement and to carry out its
obligations hereunder have been taken;
(l) No consent, waiver, approval or authorization of, or filing,
registration or qualification with, or notice to, any governmental unit
or any other person is required to be made, obtained or given by such
Seller prior to or as a condition to the execution, delivery and
performance of this Agreement, except as have been made, obtained or
given;
(m) Except (i) the matters set forth on Exhibit N attached
hereto and made a part hereof, and (ii) claims covered by insurance,
there are no judicial, arbitration or governmental claims, actions,
suits, proceedings or investigations (including tax re-assessments or
assessment appeals) pending, or which, to the actual knowledge of such
Seller, are threatened against any of the subject premises, against any
such Seller relating to the subject premises or relating to the
transactions contemplated by this Agreement, or which would materially
and adversely affect such Seller's ability to perform its obligations
and complete the closing contemplated by this Agreement;
(n) Such Seller has not received any written notice from any
public authority asserting any uncorrected violations of any federal,
state, county or municipal laws, ordinances, codes or regulations with
respect to the subject premises;
(o) Such Seller has delivered to Purchaser true and complete
copies of all engineering or physical condition reports in such Seller's
possession with respect to the subject premises; except as disclosed in
those reports, such Seller has no actual knowledge of any material
defect in the structure, roof, foundation or any of the mechnaical,
electrical, plumbing, HVAC, elevator or other systems of the subject
premises, and
(p) Such Seller has delivered to Purchaser true and complete
copies of all environmental reports that are in such Seller's possession
with respect to the subject premises. Except as contained in such
reports, to the actual knowledge of such Seller, (i) no Environmental
Claim (as defined below) has been asserted against or with respect to
the subject premises, (ii) no underground storage tanks are now, or have
been in the past, located in or under the subject premises, and (iii) no
Hazardous Materials (as defined below) have been discharged, stored,
treated or disposed of in, on or under the subject premises in any
quantities, concentrations or manner of use that violate any applicable
Environmental Laws (as defined below) or would require remediation
thereunder.
The term "Environmental Claim" shall mean any written
administrative, regulatory or judicial action, suit, demand, demand
letter, claim, lien, notice of non-compliance or violation,
investigation or proceeding relating in any way to any applicable
Environmental Law or any permit issued under any such applicable
Environmental Law, including, without limitation, (a) by governmental or
regulatory authorities for the enforcement, clean-up, removal, response,
remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief resulting from Hazardous Materials or arising from alleged injury
or threat of injury to the health, safety or environment as a result of
the presence of Hazardous Materials.
The term "Hazardous Materials" shall mean any substance, material,
waste, gas or particulate matter which is regulated by any local
governmental authority, the State of Michigan or the United States of
America, including, but not limited to, any material or substance which
is (i) defined as a "hazardous waste", "hazardous material", "hazardous
substance", "extremely hazardous waste" or "restricted hazardous waste"
or words of similar import under any provision of any applicable
Environmental Law, (ii) petroleum or petroleum products, (iii) asbestos,
(iv) polychlorinated biphenyl, (v) radioactive material, (vi) radon gas,
(vii) defined as a "hazardous substance" pursuant to Section 311 of the
Clean Water Act, 33 U.S.C. 1251, et seq. (33 U.S.C. 1317), (viii)
defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 U.S.C. 6901, et seq. (42 U.S.C.
6903), or (ix) defined as a "hazardous substance" pursuant to Section
101 of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. 9601, et seq. (42 U.S.C. 9601).
The term "Environmental Laws" shall mean all statutes specifically
described in the foregoing paragraph and all federal, state and local
environmental health and safety statutes, ordinances, codes, rules,
regulations, orders and decrees regulating, relating to or imposing
liability or standards concerning or in connection with Hazardous
Materials.
5.2 Covenants of Sellers. Star Venture (as to the Star Venture
Property), Maple Venture (as to the Maple Venture Property) and
Technology Park (as to the Technology Park Property), each hereby
covenants with Purchaser, as follows:
(a) Within five (5) days after the Effective Date, such Seller
shall use reasonable efforts to make available to Purchaser at its
office or the office of the manager of the subject premises all relevant
books and records relating to the operation of the subject premises
maintained by such manager;
(b) From and after the Effective Date and through and including
the First Closing Date or the Second Closing Date, as applicable, such
Seller agrees to operate and maintain the subject premises consistent
with such Seller's prior operation and maintenance of the subject
premises, and during such period such Seller agrees as follows:
(i) to refrain from transferring any of the subject
premises or creating on the subject premises any easements, liens,
mortgages, encumbrances or other interests which would affect the
subject premises or such Seller's ability to comply with the terms of
this Agreement;
(ii) to refrain from entering into any contracts or other
commitments regarding the subject premises without the prior written
consent of Purchaser, which consent shall not be unreasonably withheld
or delayed; provided, however, that such Seller may, without Purchaser's
consent, enter into any contract in the ordinary and usual course of
business or which can be terminated on no more than thirty (30) days'
written notice;
(iii) to refrain, without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld or delayed,
from entering into any leases of the subject premises (Purchaser
acknowledging that its consent shall be deemed given unless a specific
denial is provided to the respective Seller within two (2) business days
after request for such consent);
(iv) to keep in effect public liability and hazard and
extended coverage insurance for the subject premises, which insurance
may be in the form of a blanket policy or policies;
(v) to deliver to Purchaser, promptly after receipt
thereof, copies of all notices of violations of laws, ordinances,
regulations, orders, codes or requirements of any governmental authority
with jurisdiction over the subject premises or the use or operation
thereof; copies of any tax bill, notice of assessment or notice of
change in a tax rate or assessment affecting the subject premises;
copies of any written notice of a taking or condemnation affecting or
relating to the subject premises; copies of any notice instituting or
asserting any material claim, action, investigation or proceeding
affecting the subject premises; and copies of any written notice from
any tenant under any of the Leases asserting a default by the landlord
thereunder or seeking to terminate any such Lease relating to the
subject premises; and
(vi) to comply with all material obligations under the
Leases and the Operating Agreements relating to the subject premises.
5.3 Actual Knowledge Defined. References in Section 5.1 above to the
"actual knowledge" of any Seller shall refer only to the actual
knowledge of C. Michael Kojaian or David M. Haboian, and shall not be
construed to refer to the knowledge of any other partner, agent or
employee of such Seller, any officer, agent or employee of any corporate
partner of such Seller or any affiliate thereof, or to impose upon C.
Michael Kojaian or David M. Haboian any duty to investigate the matter
to which such actual knowledge, or the absence thereof, pertains.
5.4 Representation and Warranty of Purchaser. Purchaser hereby
represents and warrants to each Seller, as follows:
(a) Purchaser has the full right, power and authority to
purchase the Star Venture Property, the Maple Venture Property and the
Technology Park Property as provided in this Agreement and to carry out
Purchaser's obligations hereunder, and all requisite actions necessary
to authorize Purchaser to enter into this Agreement and to carry out its
obligations hereunder have been taken; and
(b) Each of Purchaser and Parent has filed all required
documents with the SEC since January 1, 1997, including, without
limitation, the Annual Report on Form 10-K for the year ended December
31, 1996 of Purchaser and Parent (collectively, the "LPT SEC
Documents"). As of their respective dates, the LPT SEC Documents
complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and, at the
respective times they were filed, none of the LPT SEC Documents
contained any untrue statement of a material fact or omitted 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 were
made, not misleading. The representations and warranties of this
paragraph shall be of no effect if Sellers elect all-cash consideration
as permitted in Section 1.4(a) above.
5.5 Covenants of Purchaser. Purchaser hereby covenants with each
Seller that Purchaser shall, in connection with its investigation of the
Star Venture Property, the Maple Venture Property and the Technology
Park Property during the Star and Maple Inspection Period and the
Technology Park Inspection Period, as applicable, inspect the Star
Venture Property, the Maple Venture Property and the Technology Park
Property for the Hazardous Materials, and shall furnish to each Seller
at the First Closing or the Second Closing, as applicable, copies of any
reports received by Purchaser in connection with any such inspections.
Except for any breach of the representation and warranty set forth in
Section 5.1(p) hereof, Purchaser hereby assumes full responsibility for
such inspections and irrevocably waives any claim against (i) Star
Venture arising from the presence of such Hazardous Materials on the
Star Venture Property, (ii) Maple Venture arising from the presence of
such Hazardous Materials on the Maple Venture Property, and (iii)
Technology Park arising from the presence of such Hazardous Materials on
the Technology Park Property. Purchaser shall also furnish to each
Seller at the First Closing or the Second Closing, as applicable, or
upon termination of this Agreement, copies of any other reports received
by Purchaser relating to any other inspections of the Star Venture
Property, the Maple Venture Property and the Technology Park Property,
as applicable, conducted on Purchaser's behalf, if any (including
specifically, without limitation, any engineering reports and any
reports analyzing compliance of the Star Venture Property, the Maple
Venture Property and the Technology Park Property with the provisions of
the Americans with Disabilities Act ("ADA"), 42 U.S.C. 12101, et seq.,
if applicable).
Article 6
Default
6.1 Default by Purchaser. In the event that the Earnest Money is
delivered to Title Company as herein provided and Purchaser fails to
consummate this Agreement for any reason, except (a) a default by any
Seller hereunder, (b) a failure of a condition to closing as set forth
in Section 4.6 above, or (c) the permitted termination of this Agreement
by any Seller or Purchaser as herein expressly provided, Sellers shall
be entitled, as their sole remedy, to terminate this Agreement and
receive the Earnest Money (or such portion thereof as shall not have
theretofore been applied to the Purchase Price at the First Closing, if
the First Closing has then occurred), which return shall operate to
terminate this Agreement as to the Star Venture Property, the Maple
Venture Property and the Technology Park Property, as applicable, which
shall not have theretofore been transferred to Purchaser pursuant to
this Agreement, and release Purchaser, Star Venture, Maple Venture or
Technology Park, as applicable, from any and all liability hereunder; it
being agreed between the parties hereto that the actual damages to such
Sellers in the event of such breach are impractical to ascertain and the
amount of the Earnest Money (as allocated to each Seller as set forth
hereinabove) is a reasonable estimate thereof. In the event that the
Earnest Money is not delivered to Title Company as herein provided, this
Agreement shall be null and void ab initio and none of the parties
hereto shall have any further rights hereunder. Notwithstanding
anything to the contrary contained in this Section 6.1, if Purchaser or
any affiliate of Purchaser asserts a claim to the Star Venture Property,
the Maple Venture Property or the Technology Park Property which clouds
the title of Star Venture, Maple Venture or Technology Park, as
applicable thereto, and if such claim is found by a court of competent
jurisdiction to be without merit, then each such Seller whose title has
been so clouded shall have all remedies available at law or in equity
against Purchaser.
6.2 Default by Sellers. In the event that any Seller shall fail to
consummate this Agreement for any reason, except Purchaser's default or
the permitted termination of this Agreement by any Seller or Purchaser
as herein expressly provided, Purchaser shall be entitled, as its sole
remedy, either (a) to receive the return of the Earnest Money (or such
portion thereof as shall not have theretofore been applied to the
Purchase Price at the First Closing, if the First Closing has then
occurred), which return shall operate to terminate this Agreement as to
the Star Venture Property, the Maple Venture Property and the Technology
Park Property, as applicable, which shall not have theretofore been
transferred to Purchaser pursuant to this Agreement, and release
Purchaser, Star Venture, Maple Venture or Technology Park, as
applicable, from any and all liability hereunder, or (b) to enforce
specific performance of the obligations of any Seller which have not
theretofore been satisfied to execute the documents required to convey
the Star Venture Property, the Maple Venture Property or the Technology
Park Property, as applicable, to Purchaser; it being understood and
agreed that the remedy of specific performance shall not be available to
enforce any other obligation of any Seller hereunder. Purchaser
expressly waives its rights to seek damages in the event of default by
any Seller hereunder. Purchaser shall be deemed to have elected to
terminate this Agreement and receive back the Earnest Money if Purchaser
fails to file suit for specific performance against any Seller whose
obligations remain unsatisfied in a court having jurisdiction in Oakland
County, Michigan, on or before sixty (60) days following the date upon
which the First Closing was to have occurred.
Article 7
Risk of Loss
7.1 Minor Damage. In the event of loss or damage by casualty or
condemnation to the Star Venture Property, the Maple Venture Property or
the Technology Park Property, or any portion hereof, which is not
"major" (as hereinafter defined), this Agreement shall remain in full
force and effect, provided that the Seller owning the Star Venture
Property, the Maple Venture Property or the Technology Park Property, as
applicable, performs any necessary repairs or, at such Seller's option,
reduces the portion of the Purchase Price allocable thereto in an amount
equal to the cost of such repairs; such Seller thereby retaining all of
such Seller's right, title and interest to any claims and proceeds such
Seller may have with respect to any casualty insurance policies or
condemnation awards relating to the subject premises. In the event that
such Seller elects to perform repairs upon the subject premises, such
Seller shall use reasonable efforts to complete such repairs promptly,
and the date of the First Closing or the Second Closing, as applicable,
shall be extended a reasonable time in order to allow for the completion
of such repairs.
7.2 Major Damage. In the event of a "major" loss or damage by
casualty or condemnation to the Star Venture Property, the Maple Venture
Property or the Technology Park Property, or any portion thereof, any
Seller or Purchaser may terminate this Agreement by written notice to
the other parties, in which event the Earnest Money (or such portion
thereof as shall not have theretofore been applied to the Purchase Price
at the First Closing, if the First Closing has then occurred) shall be
returned to Purchaser. If none of Sellers or Purchaser elects to
terminate this Agreement within ten (10) days after any Seller sends
Purchaser written notice of the occurrence of a major loss or damage,
then Sellers and Purchaser shall be deemed to have elected to proceed
with the First Closing or the Second Closing, as applicable, in which
event the Seller whose subject premises shall have suffered the major
loss or damage shall assign to Purchaser all of such Seller's right,
title and interest to any claims and proceeds such Seller may have with
respect to any casualty insurance policies or condemnation awards
relating to the subject premises and shall pay or credit to Purchaser,
at the applicable Closing, the amount of any deductible or co-insurance
amount with respect thereto. If any Seller terminates this Agreement as
permitted above, such Seller shall pay to Purchaser, as a condition to
the effectiveness of such termination, a sum equal to all out-of-pocket,
reasonable costs and expenses incurred by Purchaser in connection with
its investigation of the several subject premises and its negotiation of
this Agreement, not to exceed One Hundred Fifty Thousand ($150,000.00)
Dollars, in the aggregate.
Upon the First Closing or the Second Closing, as applicable, full
risk of loss with respect to the subject premises shall pass to
Purchaser. For purposes of Sections 7.1 and 7.2 hereof, "major" loss or
damage refers to the following: (i) loss or damage to the subject
premises, or any portion thereof, such that the cost of repairing or
restoring the subject premises to a condition substantially identical to
that of the subject premises prior to the event of damage would be, in
the certified opinion of a mutually acceptable architect, equal to or
greater than Two Hundred Fifty Thousand ($250,000.00) Dollars, (ii) any
loss due to a condemnation which permanently and materially impairs the
current use of the subject premises, or (iii) any loss or damage that
would entitle any tenant or tenants whose base rents represent in the
aggregate, more than twenty (20%) percent of the base rent for the
subject premises to terminate their Leases.
Article 8
Advisory Fees
8.1 Advisory Fees. Star Venture (as to the Star Venture Property) and
Maple Venture (as to the Maple Venture Property) each agree to pay to BT
Securities Corporation, as financial sale advisor, a fee in accordance
with the terms of that certain Letter Agreement dated February 20, 1997
in the event that the sale of the Star Venture Property and the Maple
Venture Property contemplated by this Agreement is consummated, but not
otherwise. Technology Park (as to the Technology Park Property) agrees
to pay to CB Commercial Real Estate Group, Inc., as financial sale
advisor, a fee in accordance with the terms of that certain Letter
Agreement dated March 3, 1997 in the event that the sale of the
Technology Park Property contemplated by this Agreement is consummated,
but not otherwise. Each party agrees that should any claim be made for
any advisory or finder's fees or commissions by any financial advisor,
finder or broker other than the financial advisors named above by,
through or on account of any acts of said party or its representatives,
said party will hold the other parties free and harmless from and
against any and all loss, liability, cost, damage and expense in
connection therewith. In the event that the sale of the Star Venture
Property and the Maple Venture Property is not consummated for any
reason, including, without limitation, default by Star Venture or Maple
Venture, neither Star Venture nor Maple Venture shall have any
obligation for the payment of any advisory or similar type fee with
respect to the subject premises. In the event that the sale of the
Technology Park Property is not consummated for any reason, including,
without limitation, default by Technology Park, Technology Park shall
not have any obligation for the payment of any advisory or similar type
fee with respect to the subject premises. The provisions of this
Section 8.1 shall survive the First Closing or the Second Closing, as
applicable.
Article 9
Miscellaneous
9.1 Disclaimers. PURCHASER AGREES THAT IT WILL PERFORM EXAMINATIONS
AND INVESTIGATIONS OF THE STAR VENTURE PROPERTY, THE MAPLE VENTURE
PROPERTY AND THE TECHNOLOGY PARK PROPERTY PRIOR TO THE EXPIRATION OF THE
STAR AND MAPLE INSPECTION PERIOD OR THE TECHNOLOGY PARK INSPECTION
PERIOD, AS APPLICABLE, INCLUDING SPECIFICALLY, WITHOUT LIMITATION,
EXAMINATIONS AND INVESTIGATIONS FOR THE PRESENCE OF HAZARDOUS MATERIALS,
AND THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN, PURCHASER WILL RELY
SOLELY UPON SUCH EXAMINATIONS AND INVESTIGATIONS IN CONSUMMATING ANY
PURCHASE PROVIDED FOR IN THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE
CONTRARY HEREIN, IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT, EXCEPT AS
EXPRESSLY SET FORTH HEREIN, PURCHASER IS PURCHASING THE STAR VENTURE
PROPERTY, THE MAPLE VENTURE PROPERTY AND THE TECHNOLOGY PARK PROPERTY "AS
IS" AND "WHERE IS", AND WITH ALL FAULTS AND THAT STAR VENTURE, MAPLE
VENTURE AND TECHNOLOGY PARK ARE MAKING NO REPRESENTATIONS OR WARRANTIES,
WHETHER EXPRESS OR IMPLIED BY OPERATION OF LAW OR OTHERWISE, WITH RESPECT
TO THE QUALITY, PHYSICAL CONDITION OR VALUE OF THE SUBJECT PREMISES, THE
INCOME OR EXPENSES FROM OR OF THE SUBJECT PREMISES OR THE COMPLIANCE OF
THE SUBJECT PREMISES WITH APPLICABLE BUILDING OR FIRE CODES OR OTHER LAWS
OR REGULATIONS. WITHOUT LIMITING THE FOREGOING, IT IS UNDERSTOOD AND
AGREED THAT EACH SUCH SELLER MAKES NO WARRANTY OF HABITABILITY,
SUITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
PURCHASER AGREES THAT EACH SUCH SELLER IS NOT LIABLE OR BOUND BY ANY
GUARANTEES, PROMISES, STATEMENTS, REPRESENTATIONS OR INFORMATION
PERTAINING TO THE SUBJECT PREMISES MADE OR FURNISHED BY ANY FINANCIAL
ADVISOR, REAL ESTATE AGENT, BROKER, EMPLOYEE, SERVANT OR OTHER PERSON
REPRESENTING OR PURPORTING TO REPRESENT SUCH SELLER, EXCEPT AS AND TO THE
EXTENT EXPRESSLY SET FORTH HEREIN. PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT THE COMPENSATION TO BE PAID TO EACH SELLER FOR ITS SUBJECT
PREMISES HAS BEEN DECREASED TO TAKE INTO ACCOUNT THAT THE SUBJECT
PREMISES ARE BEING SOLD SUBJECT TO THE FOREGOING DISCLAIMERS, AND
PURCHASER SHALL ASSUME RESPONSIBILITY FOR ALL COSTS AND EXPENSES REQUIRED
TO CAUSE THE SUBJECT PREMISES TO COMPLY WITH ALL APPLICABLE BUILDING AND
FIRE CODES, MUNICIPAL ORDINANCES AND OTHER LAWS, RULES AND REGULATIONS
(INCLUDING, WITHOUT LIMITATION, THE ADA AND ANY CODES, MUNICIPAL
ORDINANCES, LAWS, RULES OR REGULATIONS REGARDING RETROFITTING OF PLUMBING
FIXTURES). PURCHASER AND EACH SELLER AGREE THAT THE PROVISIONS OF THIS
SECTION 9.1 SHALL SURVIVE THE FIRST CLOSING OR THE SECOND CLOSING.
9.2 Confidentiality. Prior to the First Closing (with respect to the
Star Venture Property and the Maple Venture Property) and prior to the
Second Closing (with respect to the Technology Park Property):
(a) Purchaser and its representatives (including, without
limitation, its partners, members, officers, employees or agents) shall,
except as required by law or by the SEC or the New York Stock Exchange,
hold in strictest confidence all data and information obtained with
respect to any Seller or its business, whether obtained before or after
the execution and delivery of this Agreement, and shall not use such
data or information or disclose the same to others, except to the
limited extent that such disclosure is required in connection with the
transactions contemplated by this Agreement, including, without
limitation, disclosure to prospective equity or debt financing sources,
engineers and property inspectors, and except to the extent such
information otherwise becomes publicly available. In the event this
Agreement is terminated or Purchaser fails to perform hereunder,
Purchaser shall promptly return to each Seller, as applicable, any
statements, documents, schedules, exhibits or other written information
obtained from such Seller in connection with this Agreement or the
transactions contemplated herein. In the event of a breach or
threatened breach by Purchaser or its agents or representatives of this
Section 9.2, each Seller shall be entitled to an injunction restraining
Purchaser or its agents or representatives from disclosing, in whole or
in part, such confidential information. Nothing herein shall be
construed as prohibiting any Seller from pursuing any other available
remedy at law or in equity for such breach or threatened breach; and
(b) Neither Purchaser nor Sellers shall disclose the existence
of the agreements contained herein or the terms hereof, except in
accordance with Section 9.3 below.
9.3 Public Disclosure. Prior to the First Closing (with respect to
the Star Venture Property and the Maple Venture Property) and prior to
the Second Closing (with respect to the Technology Park Property), any
release to the public of information with respect to the matters set
forth in this Agreement will be made only in the form reasonably
approved by Purchaser and each Seller and their respective counsel,
except as required by law or by the SEC or the New York Stock Exchange,
or in connection with any other filing or registration made by Parent as
the issuer of publicly-traded securities.
9.4 Survival of Obligations. All of the representations, warranties
and covenants of the parties hereunder shall survive the First Closing
and the Second Closing, as applicable; provided, however, that no claim
for any breach of a representation or warranty hereunder shall be
effective unless made in writing on or before the first anniversary of
the First Closing or the Second Closing, as applicable, to the subject
premises with respect to which such breach relates.
9.5 Assignment. Purchaser may not assign its rights, duties and
obligations under this Agreement, except with the prior written consent
of all Sellers, which consent may be given or withheld in the sole
discretion of Sellers.
9.6 Notices. Any notice pursuant to this Agreement shall be given in
writing by (a) personal delivery, (b) expedited delivery service with
proof of delivery, (c) United States registered or certified mail,
return receipt requested, postage prepaid, or (d) prepaid telegram,
telex or telecopy (provided that such telegram, telex or telecopy is
confirmed by expedited delivery service or by mail in the manner
previously described), sent to the intended addressee at the address set
forth below, or to such other address or to the attention of such other
person as the addressee shall have designated by written notice sent in
accordance herewith, and shall be deemed to have been given either at
the time of personal delivery, or, in the case of expedited delivery
service or mail, as of the date of the first attempted delivery at the
address and in the manner provided herein, or, in the case of telegram,
telex or telecopy, upon receipt. Unless changed in accordance with the
preceding sentence, the address for notices given pursuant to this
Agreement shall be as follows:
If to Star Venture:
Star Venture Limited Partnership
26600 Telegraph Road
Suite 450
Southfield, Michigan 48034-5300
Attn: Mr. C. Michael Kojaian
Telecopy No. 810/827-7550
If to Maple Venture:
Maple Venture Research Park Limited Partnership
26600 Telegraph Road
Suite 450
Southfield, Michigan 48034-5300
Attn: Mr. C. Michael Kojaian
Telecopy No. 810/827-7550
If to Technology Park:
Technology Park
26600 Telegraph Road
Suite 450
Southfield, Michigan 48034-5300
Attn: Mr. C. Michael Kojaian
Telecopy No. 810/827-7550
With a copy as to notices to any Seller to:
Barris, Sott, Denn & Driker, P.L.L.C.
211 West Fort Street
Fifteenth Floor
Detroit, Michigan 48226-3281
Attn: William G. Barris, Esq.
Telecopy No. 313/965-2493
If to Purchaser:
Liberty Property Limited Partnership
65 Valley Stream Parkway
Malvern, Pennsylvania 19355
Attn: Mr. Joseph P. Denny
Telecopy No. 610/644-4129
With copies to:
Liberty Property Limited Partnership
65 Valley Stream Parkway
Malvern, Pennsylvania 19355
Attn: James J. Bowes, Esq., General Counsel
Telecopy No. 610/644-2175
Wolf, Block, Schorr and Solis-Cohen
Twelfth Floor, Packard Building
111 South 15th Street
Philadelphia, Pennsylvania 19102-2678
Attn: Herman C. Fala, Esq.
Telecopy No. 215/977-2334
9.7 Modifications. This Agreement cannot be changed orally, and no
executory agreement shall be effective to waive, change, modify or
discharge it, in whole or in part, unless such executory agreement is in
writing and is signed by all parties against whom enforcement of any
waiver, change, modification or discharge is sought.
9.8 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described in this Agreement, the day of the
act or event after which the designated period of time begins to run is
not to be included and the last day of the period so computed is to be
included, unless such last day is a Saturday, Sunday or legal holiday,
in which event the period shall run until the end of the next day which
is neither a Saturday, Sunday nor legal holiday.
9.9 Time of Essence. Sellers and Purchaser agree that time is of the
essence of this Agreement.
9.10 Successors and Assigns. The terms and provisions of this
Agreement are to apply to and bind the permitted successors and assigns
of the parties hereto.
9.11 Entire Agreement. This Agreement, including the exhibits,
contains the entire agreement between the parties pertaining to the
subject matter hereof and fully supersedes all prior agreements and
understandings between the parties pertaining to such subject matter.
9.12 Further Assurances. Each party agrees that it will, without
further consideration, execute and deliver such other documents and take
such other actions, whether prior or subsequent to the First Closing
Date or the Second Closing Date, as applicable, as may be reasonably
requested by any other party to consummate more effectively the purposes
or subject matter of this Agreement. Without limiting the generality of
the foregoing, Purchaser shall, if requested by any Seller, execute
acknowledgments of receipt with respect to any materials delivered by
any Seller to Purchaser with respect to the subject premises.
9.13 Attorneys' Fees. In the event of any controversy, claim or
dispute between the parties affecting or relating to the subject matter
or performance of this Agreement, the prevailing party shall be entitled
to recover from the non-prevailing party all of its reasonable expenses,
including reasonable attorneys' and accountants' fees.
9.14 Counterparts. This Agreement may be executed in several
counterparts, and all such executed counterparts shall constitute the
same agreement. It shall be necessary to account for only one such
counterpart in proving this Agreement.
9.15 Severability. If any provision of this Agreement is determined
by a court of competent jurisdiction to be invalid or unenforceable, the
remainder of this Agreement shall nonetheless remain in full force and
effect.
9.16 Applicable Law. THIS AGREEMENT SHALL, IN ALL RESPECTS, BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE SUBSTANTIVE FEDERAL
LAWS OF THE UNITED STATES AND THE LAWS OF THE STATE OF MICHIGAN.
PURCHASER AND EACH SELLER HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION
OF ANY STATE COURT SITTING IN OAKLAND COUNTY, MICHIGAN OR U.S. DISTRICT
COURT SITTING IN DETROIT, MICHIGAN, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY IRREVOCABLY AGREE THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD AND
DETERMINED IN ANY SUCH STATE OR FEDERAL COURT. PURCHASER AND EACH SELLER
AGREE THAT THE PROVISIONS OF THIS SECTION 9.16 SHALL SURVIVE THE FIRST
CLOSING AND THE SECOND CLOSING.
9.17 No Third Party Beneficiary. The provisions of this Agreement and
of the documents to be executed and delivered at the First Closing and
the Second Closing are and will be for the benefit of each Seller and
Purchaser only and are not for the benefit of any third party.
Accordingly, no third party shall have the right to enforce the
provisions of this Agreement or of the documents to be executed and
delivered at the First Closing or the Second Closing.
9.18 Exhibits and Schedules. The following schedules or exhibits
attached hereto shall be deemed to be an integral part of this
Agreement:
(a) Exhibit A-1: Legal Description of Star Venture Land
(b) Exhibit A-2: Legal Description of Maple Venture Land
(c) Exhibit A-3: Legal Description of Technology Park Land
(d) Exhibit B: Form of Owner's Affidavit
(e) Exhibit C: Form of Covenant Deed
(f) Exhibit D: Form of Bill of Sale and Assignment
(g) Exhibit E: Form of Assignment and Assumption of
Contracts
(h) Exhibit F: Form of Closing Memorandum and
Indemnification Agreement
(i) Exhibit G: Form of FIRPTA Affidavit
(j) Exhibit H: Form of Tenant Notification Letter
(k) Exhibit I-1: Form of Unitholder Registration Rights
Agreement
(l) Exhibit I-2: Form of Partnership Amendment
(m) Exhibit I-3: Form of Investment Letter
(n) Exhibit I-4: Form of Shareholder Registration Rights
Agreement
(o) Exhibit J-1: Form of Star Venture Estoppel Letter
(p) Exhibit J-2: Form of Maple Venture Estoppel Letter
(q) Exhibit J-3: Form of Technology Park Estoppel Letter
(r) Exhibit K: Schedule of Certain Tenants
(s) Exhibit L: Schedule of Leases or Occupancy Agreements
delivered by Sellers to Purchaser
(t) Exhibit M: Schedule of Mandatory Service Contracts
(u) Exhibit N: Schedule of Claims
9.19 Captions. The section headings appearing in this Agreement are
for convenience of reference only and are not intended, to any extent or
for any purpose, to limit or define the text of any section or any
subsection hereof.
9.20 Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any exhibits or amendments hereto.
9.21 Termination of Agreement. It is understood and agreed that if
either Purchaser or any Seller terminates this Agreement pursuant to a
right of termination granted hereunder, such termination shall operate
to relieve each Seller and Purchaser from all obligations under this
Agreement, except for such obligations as are specifically stated herein
to survive the termination of this Agreement (such as, but not limited
to, the indemnification obligations of Purchaser set forth in Section
3.1).
9.22 Effective Date. If Purchaser fails to execute this Agreement and
deliver same to Sellers on or before 12:00 p.m., Southfield, Michigan
time, on May 23, 1997, all negotiations between each Seller and
Purchaser concerning the sale of the Star Venture Property, the Maple
Venture Property and the Technology Park Property shall be deemed
terminated. Upon execution of this Agreement by Purchaser and delivery
of same to Sellers, this Agreement shall constitute an offer by
Purchaser. The offer by Purchaser herein contained shall automatically
be withdrawn and become of no force or effect unless this Agreement is
executed by each Seller and delivered to Title Company on or before 5:00
p.m., Southfield, Michigan time, on May 23, 1997.
9.23 Limited Liability of Trustees of Parent. Notwithstanding
anything to the contrary contained herein, the liability of Parent shall
be limited to the assets of Parent, and under no circumstances will any
trustees, officers or employees thereof have any individual liability
therefor.
IN WITNESS WHEREOF, the parties hereto have executed this Purchase
Agreement to be effective as of the Effective Date.
Signed:
STAR VENTURE LIMITED PARTNERSHIP,
a Michigan limited partnership
By: STAR VENTURE-I, INC.,
a Michigan corporation,
Managing General Partner
By: /s/ C. MICHAEL KOJAIAN
------------------------------
C. Michael Kojaian, Vice President
"Star Venture"
MAPLE VENTURE RESEARCH PARK LIMITED
PARTNERSHIP, a Michigan limited partnership
By: MAPLE RESEARCH PARK, INC.,
a Michigan corporation,
Managing General Partner
By: /s/ C. MICHAEL KOJAIAN
-------------------------------
C. Michael Kojaian, Vice President
"Maple Venture"
TECHNOLOGY PARK, a Michigan co-partnership
By: TECHNOLOGY DEVELOPMENT ASSOCIATES LIMITED
PARTNERSHIP, a Michigan limited
partnership, Managing General Partner
By: TECHNOLOGY DEVELOPMENT INVESTMENT
CORPORATION, a Michigan corporation,
Managing General Partner
By: /s/ C. MICHAEL KOJAIAN
-------------------------------
C. Michael Kojaian
Vice President
"Technology Park"
LIBERTY PROPERTY LIMITED PARTNERSHIP,
a Pennsylvania limited partnership
By: LIBERTY PROPERTY TRUST, a Maryland real
estate investment trust, Sole General
By: /s/ JOSEPH P. DENNY
------------------------------
Joseph P. Denny
President
By: /s/ GEORGE J. ALBURGER, JR.
------------------------------
George J. Alburger, Jr.
Chief Financial Officer
"Purchaser"
Acknowledgment by Title Company
Title Company hereby agrees to perform its obligations under this
Agreement and acknowledges receipt of (i) a fully executed counterpart
of this Agreement, and (ii) the Earnest Money described in this
Agreement, on the 23rd day of May, 1997.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ MICHAEL R. COLE
------------------------------
Michael R. Cole, Vice President-Legal
40