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AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
SELLER: STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE FOR AMERITECH PENSION TRUST
BUYER: MERIDIAN INDUSTRIAL TRUST, INC.
May 29, 1997
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TABLE OF CONTENTS
Page
1. Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Condition of Title . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Contingency Period . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Tenant and Lender Estoppel Certificates. . . . . . . . . . . . . . . 6
7. Buyer's Representations and Warranties . . . . . . . . . . . . . . . 7
8. Representations and Warranties of Seller . . . . . . . . . . . . . .15
9. Covenants and Interim Responsibilities of Seller . . . . . . . . . .20
10.A Shareholders' Meeting; Preparation of Proxy Statement. . . . . . . .20
10.B Covenants of Buyer . . . . . . . . . . . . . . . . . . . . . . . . .21
11. Conditions of Closing. . . . . . . . . . . . . . . . . . . . . . . .22
12. Deposits By Seller . . . . . . . . . . . . . . . . . . . . . . . . .23
13. Deposits By Buyer. . . . . . . . . . . . . . . . . . . . . . . . . .24
14. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . .25
15. Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
16. Disbursements and Other Actions by Escrow Holder . . . . . . . . . .26
17. Damage or Condemnation Prior to Closing. . . . . . . . . . . . . . .27
18. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . .28
19. Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . .28
20. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
i
21. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
22. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
23. Required Actions of Buyer and Seller . . . . . . . . . . . . . . . .29
24. Time of Essence. . . . . . . . . . . . . . . . . . . . . . . . . . .29
25. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
26. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
27. No Obligations to Third Parties. . . . . . . . . . . . . . . . . . .30
28. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
29. Amendment to this Agreement. . . . . . . . . . . . . . . . . . . . .30
30. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
31. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . .30
32. Fees and Other Expenses. . . . . . . . . . . . . . . . . . . . . . .30
33. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .30
34. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . .30
35. Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
36. Computation of Periods . . . . . . . . . . . . . . . . . . . . . . .31
37. Indemnification of Escrow Holder.. . . . . . . . . . . . . . . . . .31
38. Buyer's Audit Rights . . . . . . . . . . . . . . . . . . . . . . . .31
39. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . .31
40. Marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
41. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
42. Restriction on Transfer of Acquisition Common Stock. . . . . . . . .33
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LIST OF DEFINED TERMS
Page No.
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1996 Form 10-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1997 Form 10-Q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1997 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Acquisition Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Amended and Restated Excepted Holder Agreement . . . . . . . . . . . . . . . . 9
Ardenwood Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Assignment of Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Assignment of Note and Liens . . . . . . . . . . . . . . . . . . . . . . . . .24
Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Xxxx of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Certification Regarding Withholding. . . . . . . . . . . . . . . . . . . . . .24
Close of Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condition of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Contingency Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conveying Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Current SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Deeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Delinquent Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Environmental Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Escrow Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
General Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Governmental Entity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Group A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Group B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Group B Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Group C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Group C Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Harvest Business Park Loan . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Intangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 1
Investor Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
knowledge of Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Lender Estoppel Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Major Environmental Matter . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Opening of Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Pension-Held REIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Personal Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Rancho Downey Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Rancho Downey Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . 1
Rancho Downey Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Rancho Downey Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Registration Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 8
REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
REOC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
SEC Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
SEC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Seller's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Series B Preferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Series B Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Shareholders' Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Tenant Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 6
iv
Title Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Title Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
to the best of Seller's knowledge. . . . . . . . . . . . . . . . . . . . . . .19
Transaction Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
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AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
("AGREEMENT") is made and entered into May 29, 1997, and constitutes an
agreement by which MERIDIAN INDUSTRIAL TRUST, INC., a Maryland corporation
("BUYER"), agrees to buy, and STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE
FOR AMERITECH PENSION TRUST ("SELLER"), agrees to sell or cause the sale of the
following:
A. Certain of the properties listed on EXHIBIT A, as provided below (each
of which is referred to herein as a "PROJECT" and collectively as the
"PROJECTS"), each of which is located on the tract of land which is described by
street address on EXHIBIT A (collectively, the "LAND").
B. Any and all structures, buildings, facilities, or other improvements
situated on the Land (collectively, the "IMPROVEMENTS").
C. All rights, privileges, easements, and appurtenances to the Land or
the Improvements. The term "REAL PROPERTY" herein shall refer collectively to
the Land, the Improvements and all such attendant rights, privileges, easements
and appurtenances.
D. All tangible personal property (excluding cash items) owned by the
applicable Conveying Entity relating to the Real Property and used at the Real
Property and in the operation of the Real Property (collectively, the "PERSONAL
PROPERTY").
E. The landlord's interest in all leases affecting the Real Property
(collectively, the "LEASES").
F. All intangible property owned by the applicable Conveying Entity used
in connection with the Real Property or the Personal Property (collectively, the
"INTANGIBLE PERSONAL PROPERTY").
G. The secured promissory note (the "RANCHO DOWNEY NOTE") dated March 27,
1990, in the original principal sum of $21,500,000, as amended to be $23,300,000
by amendment dated December 21, 1991, executed by Fremont Rancho, Ltd., payable
to the order of Xxxxxx Trust & Savings Bank, as Trustee for the Ameritech
Pension Trust, together with all liens securing payment thereof; the mortgagee's
title policy insuring such liens; all documents executed as further evidence of,
to secure, or otherwise in connection with the indebtedness evidenced by the
Rancho Xxxxxx Note (the "RANCHO DOWNEY LOAN DOCUMENTS"); all escrow, security
and other deposits made in connection therewith; and all other rights of Seller
with respect thereto (collectively, the "RANCHO DOWNEY LOAN"). The land,
improvements, and other property securing the Rancho Downey Loan are herein
called the "RANCHO XXXXXX PROPERTY".
1
H. The Real Property, the Personal Property, the Leases and the
Intangible Personal Property relating to a particular Project are collectively
referred to herein as a "PROPERTY," and when relating to all Projects are
collectively referred to herein as the "PROPERTIES."
The terms and conditions of this Agreement and the instructions to Chicago
Title Insurance Company (the "ESCROW HOLDER" and "TITLE COMPANY") with regard to
the escrow (the "ESCROW") created pursuant hereto are as follows:
1. PURCHASE AND SALE.
(a) For valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Seller agrees to sell or cause the sale of the Rancho
Downey Loan and the Properties to Buyer, and Buyer agrees to purchase the Rancho
Downey Loan and the Properties from Seller (or the applicable Conveying Entity),
upon the terms and conditions set forth herein.
(b) Seller and Buyer acknowledge that title to certain of the
Properties and to the Rancho Downey Loan are held by separate corporations
affiliated with Seller (the "CONVEYING ENTITIES"). Each of the Conveying
Entities is listed on SCHEDULE 1(b). Subject to Section 1.(d) below, Seller
agrees to take all action reasonably necessary and appropriate to cause each
Conveying Entity to take such action as may be necessary to consummate the
transactions herein contemplated.
(c) As more particularly reflected on EXHIBIT A, the Properties have
been divided into three groupings, "GROUP A", "GROUP B" and "GROUP C". The
parties' current intent is that Buyer will acquire Group A and Group B, subject
to satisfaction of certain conditions as set forth below. If such conditions
cannot be satisfied in a timely fashion as herein provided, then the parties
intend that Buyer shall acquire Group C instead of Group B as herein provided.
(d) The Properties in Group B are subject to certain liens securing
existing mortgages, and as a condition of the conveyance of Group B to Buyer,
the Seller must obtain a release of such liens (the "GROUP B RELEASE"). Seller
shall attempt to obtain the Group B Release but shall not be required to take
any action that, in Seller's judgment, would be unduly burdensome in terms of
cost, time, or otherwise, to obtain the Group B Release. Seller shall keep
Buyer informed of the status of its negotiations with the requisite parties to
obtain the Group B Release. If the Group B Release has not been obtained by the
Closing Date, then Seller may elect to extend the Closing Date for Group B for
an additional period not to exceed 60 days. In such event, the Closing shall
occur as otherwise herein provided with regard to Group A, and this Agreement
shall remain in effect as to Group B and Group C. If, at the end of such
extended period, Seller has not obtained the Group B Release, or if Seller shall
determine prior to the Closing Date or prior to the end of such extended period
that the Group B Release is not going to be obtained, then Seller shall give
written notice thereof to Buyer (the "GROUP C NOTICE") and shall sell to Buyer
and Buyer shall acquire Group C as otherwise herein provided, and the Closing
Date therefor shall be fifty-five (55) days after the date on which the Group C
Notice is given to Buyer. Seller shall notify Buyer of any extension in the
Closing Date for Group B by written notice specifying the date to which the
Closing Date for Group B will be extended not later than three (3) days prior to
the original Closing Date.
2
(e) If Seller does not obtain the Group B Release and is therefore
unable to convey Group B to Buyer, then concurrently with the Closing of the
acquisition of Group C, Seller shall reimburse Buyer for all of its out-of-
pocket due diligence costs expended in conducting due diligence investigations
of Group B, including accounting, fiscal inspection, environmental, legal
expenses and other expenses, up to a maximum reimbursement of $8,700 per
Project.
2. PURCHASE PRICE. The purchase price (the "PURCHASE PRICE") for the
Properties and the Rancho Downey Loan shall be payable as follows: At Closing,
Buyer shall deposit or cause to be deposited with Escrow Holder validly issued
certificated shares representing the Acquisition Common Stock. The "ACQUISITION
COMMON STOCK" shall be the number of shares of Common Stock reflected opposite
each Property (and the Rancho Downey Loan) on EXHIBIT A. "COMMON STOCK" means
Buyer's common stock, par value $.001 per share.
3. ESCROW.
(a) OPENING OF ESCROW. For the purposes of this Agreement, the
Escrow shall be deemed opened (the "OPENING OF ESCROW") on the date Escrow
Holder distributes to Buyer and Seller an executed counterpart of this
Agreement.
(b) CLOSE OF ESCROW. For purposes of this Agreement, the "CLOSE OF
ESCROW" or "CLOSING" shall be defined as the date or dates that each of the
special warranty deeds, or their equivalents (collectively, the "DEEDS")
conveying the respective Land and Improvements for each Project (subject to the
terms hereof) to Buyer are recorded or, as applicable, the date the Rancho
Downey Loan is assigned to Buyer, and the Acquisition Stock therefor is
delivered to Seller as herein provided. The Escrow shall close on or before the
earlier of (1) July 11, 1997, or (2) fifteen (15) days after the end of the
Contingency Period, unless extended by mutual agreement of Buyer and Seller or,
as to Group B or Group C, unless extended as provided in Section 1.(d) ("CLOSING
DATE"), provided that the deposits required of the parties herein have been made
by Seller and Buyer. On or before three (3) business days before the scheduled
Closing Date, Escrow Holder shall prepare a proforma closing statement, setting
forth the estimated adjustments and prorations as of the scheduled Closing Date,
for the Properties being acquired at such Closing (and, if applicable, the
Rancho Downey Loan).
4. CONDITION OF TITLE. It shall be a condition to Buyer's obligations
hereunder that Title Company shall be committed to issue a Texas Owner's Policy
of Title Insurance (with respect to Properties located in Texas) and an ALTA
Owner's Extended Coverage Title Insurance together with such endorsements
thereto as Buyer may reasonably require and which are approved by the Title
Company prior to expiration of the Contingency Period (collectively, the "TITLE
POLICIES"), each in the amount of the Purchase Price allocated to such Property
(as reflected on EXHIBIT A), showing fee title to the respective Land and
Improvements vested in Buyer, subject only to the following (as it relates to
each Property, the "CONDITION OF TITLE"):
(a) A lien to secure payment of real estate taxes, not delinquent;
3
(b) Matters affecting the Condition of Title created by or with the
written consent of Buyer; and
(c) If applicable, the Harvest Business Park Loan and the Ardenwood
Loan; and
(d) Exceptions disclosed by a current Texas Form Title Commitment
(with respect to Properties located in Texas) or a current extended coverage
ALTA Title Commitment (with respect to all other Properties) (respectively, a
"COMMITMENT") with respect to the Land and Improvements relating to each
Property issued by the Title Company and which are approved or deemed approved
by Buyer in accordance with this section. Seller shall provide Buyer with each
Commitment for the Properties in Group A and Group B, together with legible
copies of the instruments underlying any exceptions referred to in each such
Commitment (respectively, the "EXCEPTIONS") within fourteen (14) days following
Opening of Escrow, and a survey relating to each Property in Group A and Group B
of the Land and Improvements complying with the standards for a Texas Society of
Professional Surveyors Category 1A, Condition II survey (with respect to
Properties located in Texas) or the standards for an ALTA survey (with respect
to all other Properties) (respectively, a "SURVEY"), within twenty-one (21) days
following the Opening of Escrow; the Surveys may be updates of prior surveys
provided they locate all the Improvements and contain a current certificate
satisfactory to Buyer. The Commitments and Exceptions, and the Surveys for
Properties in Group C shall be delivered within fourteen (14) and twenty-one
(21) days, respectively, following the giving of the Group C Notice. Each
Survey shall be: (1) prepared by a licensed land surveyor in the respective
state where the Property is located, and (2) certified to Title Company, Buyer
and any other entity reasonably required by Buyer, in form reasonably acceptable
to Buyer. If, on or before fifteen (15) days following receipt of each
Commitment, Exceptions and Survey, Buyer disapproves any items described
therein, (Buyer agreeing that it will exercise a commercial reasonableness
standard in disapproving of any such item), Seller shall thereafter have the
right to attempt to eliminate or ameliorate to Buyer's satisfaction such matters
as Buyer shall have so disapproved on or before fifteen (15) days following
receipt of Buyer's disapproval notice, but in no event later than the expiration
of the Contingency Period (as hereafter defined). Seller shall give written
notice to Buyer within such fifteen (15) day period whether Seller is unable or
unwilling to eliminate such disapproved matters. If Seller so notifies Buyer
that it is unable or unwilling to eliminate any such disapproved matters, Buyer
shall have the right, exercisable by written notice delivered to Seller and
Escrow Holder on or before the expiration of the Contingency Period, with
respect to any Property for which such disapproved matters have not been cured
to Buyer's satisfaction, to: (A) waive its prior disapprovals of those matters
which Seller is unable or unwilling to eliminate as to some or all of the
Properties, in which event such disapproved matters with respect to such
Properties shall be deemed approved; or (B) terminate the Escrow with respect to
those Properties for which such disapproved matters have not been cured to
Buyer's satisfaction, in which event this Agreement shall continue to be in
effect with respect only to those Properties for which Buyer has not terminated
the Escrow (subject to Section 41).
4
5. CONTINGENCY PERIOD.
(a) INSPECTION OF PROPERTIES. For a period of (1) as to Group A and
Group B, forty-five (45) days from the Opening of Escrow, and (2) as to Group C,
forty-five (45) days after Seller delivers the Group C Notice (the "CONTINGENCY
PERIOD"), Buyer shall have the right to satisfy itself that the physical and
legal aspects of each Property and the Rancho Xxxxxx Property are acceptable to
Buyer and that the net operating income budgeted by Seller for the Properties
and the Rancho Xxxxxx Property reflects a commercially reasonable calculation of
the projected net operating income (based on industry standards) that may be
expected to be reasonably obtained from operating the Properties and holding the
Rancho Downey Loan. Buyer will not begin its inspections as to Group C until
Seller has given the Group C Notice. Buyer's obligations hereunder shall be
conditioned upon Buyer's satisfaction with or waiver of such matters concerning
the physical and legal aspects and the net operating income of the Properties
and the Rancho Xxxxxx Property, which satisfaction or waiver shall be in Buyer's
sole and absolute discretion. If Buyer, at any time on or before the expiration
of the Contingency Period, fails to approve or waive, in a writing delivered to
Seller and Escrow Holder, the matters set forth in this section with respect to
a Property or the Rancho Xxxxxx Property (other than with respect to a Major
Environmental Matter), then all of such matters shall be deemed disapproved with
respect to such Property or the Rancho Xxxxxx Property, in which case Buyer may,
prior to the expiration of the Contingency Period, terminate the Escrow with
respect to all Properties as to which Closing has not then occurred, in which
event the Escrow, this Agreement and the rights and obligations of the parties
hereunder shall terminate with respect to all Properties as to which Closing has
not then occurred. Notwithstanding the foregoing, if a Property or the Rancho
Xxxxxx Property is subject to a Major Environmental Matter, then Buyer may,
prior to the expiration of the Contingency Period, terminate the Escrow with
respect to such Property or the Rancho Downey Loan, in which event this
Agreement shall continue to be in effect with respect only to those Properties
and the Rancho Xxxxxx Property for which Buyer has not terminated the Escrow
(subject to Section 41). As used herein, a "MAJOR ENVIRONMENTAL MATTER" shall
mean an environmental condition as to a Property or the Rancho Xxxxxx Property
that is set forth in a written report prepared by an independent third party and
which would cause the value of the subject Property or the Rancho Xxxxxx
Property to be reduced by 10% or more.
(b) REVIEW OF DOCUMENTS. Seller shall provide access to Buyer, on or
before the date that is five (5) days following the Opening of Escrow, (or, as
to Group C, following the giving of the Group C Notice), the schedules and
copies of the documents described on EXHIBIT B as to the relevant Properties.
Seller shall provide full legal descriptions of each Tract of the Land to Buyer
within five (5) days following the Opening of Escrow; after approval by Buyer,
such descriptions shall be deemed incorporated into this Agreement. As to those
documents relevant to the ownership, operation and maintenance of particular
Property, or the Rancho Xxxxxx Property, Buyer will have access to the records
at the offices of Seller's management agents (I.E, at the offices of Cabot or
RREEF as to Group A, Cabot as to Group B, and AMB as to Group C). Seller shall
direct its management agents to fully cooperate with Seller in the conduct of
Seller's inspections, and assist in obtaining such cooperation. Seller shall
furnish to Buyer and Buyer shall acknowledge an inventory of the records
reviewed by it in connection with its inspection. Seller shall deliver to Buyer
for its review copies of the Rancho Downey Note and all other Rancho Downey Loan
Documents and (if the Group C Notice is given) the promissory notes, mortgages
or deed of trust and
5
all other documents evidencing, securing or otherwise executed in connection
with mortgage loans secured by the Harvest Business Park Project (the
"HARVEST BUSINESS PARK LOAN") and the Ardenwood Project (the "ARDENWOOD
LOAN"). Except as provided in Section 1.(e), Buyer shall be solely
responsible for any costs incurred in connection with Buyer's: (1) review of
such documents and schedules, and (2) other investigations of the Properties.
Buyer shall maintain copies of all records it receives from Seller with
respect to the Properties so long as Seller is subject to a claim arising
under this Agreement pertaining to such records.
(c) BUYER'S INSPECTION RIGHTS DURING ESCROW. During the term of the
Escrow, Buyer, its agents, contractors and subcontractors shall have the right
to enter upon the Properties and, to the extent permitted by the Rancho Xxxxxx
Loan Documents, the Rancho Downey Property at reasonable times during ordinary
business hours, upon reasonable prior notice to Seller and subject to the rights
of tenants under the Leases, to make any and all inspections and tests as may be
necessary or desirable in Buyer's judgment; PROVIDED, that Buyer shall not make
any environmental inspections that are more intrusive than a Phase 1 examination
without Seller's prior approval thereof. Buyer shall indemnify and hold Seller
harmless from any damages to any Property or the Rancho Xxxxxx Property to the
extent such damages result from Buyer's entry and/or activities upon the
respective Real Property by Buyer, its agents, contractors and/or
subcontractors.
6. TENANT AND LENDER ESTOPPEL CERTIFICATES.
(a) Seller shall use good faith efforts to obtain from each tenant of
each Property and deliver to Buyer on or before the date that is five (5) days
prior to the Closing Date a duly executed tenant estoppel certificate in the
form of EXHIBIT C (the "TENANT ESTOPPEL CERTIFICATES"). The Tenant Estoppel
Certificates shall be initially prepared by Seller, shall be approved by Buyer,
and shall be dated no earlier than thirty (30) days prior to the originally
scheduled Closing Date.
(b) If Seller (1) fails to timely obtain Tenant Estoppel Certificates
for at least 75% of the total rentable square feet of a Property, (2) fails to
deliver a Tenant Estoppel Certificate for any tenant whose leased premises is
100,000 square feet of area or more, or (3) delivers executed Tenant Estoppel
Certificates containing information concerning Leases that are materially
different from the information contained in the Tenant Estoppel Certificate
prepared by Seller for more than 10% of the total rentable square feet of a
Property or as to any tenant whose leased premises contain 100,000 square feet
of area or more, Buyer shall have the right to (A) waive such defect with
respect to a Property, in which event at the Close of Escrow Seller shall
deliver to Buyer Seller's certification ("SELLER'S CERTIFICATE") as to those
matters for which the Tenant Estoppel Certificates were defective or missing; or
(B) terminate this Agreement with respect to such Property and the Escrow
created hereby, in which event this Agreement shall continue to be in effect
with respect only to those Properties for which Buyer has not terminated this
Agreement and the Escrow (subject to Section 41).
(c) If Buyer is to acquire Group C, as provided in Section 1.(d),
then Seller shall use good faith efforts to obtain from the lenders holding the
Harvest Business Park Loan and Ardenwood Loan, and deliver to Buyer not later
than five (5) days prior to the Closing Date for those Projects, an executed
certificate ("LENDER ESTOPPEL CERTIFICATE") executed and acknowledged by
6
a duly authorized officer of such lender: stating that its promissory note
and the liens securing it are in good standing and no uncured breaches or
defaults exist thereunder; setting forth the unpaid principal balance of such
note and the amount of all escrow deposits held in respect thereof; setting
forth the date through which interest on such note has been paid; consenting
to the sale and purchase herein contemplated, to the extent required by the
relevant loan documentation; agreeing to notify Buyer of any default under
any manner relative to its loan; and acknowledging that all of Seller's
rights and all escrow deposits held in respect of its loans have been
assigned to Buyer. If Seller is unable to deliver such Lender Estoppel
Certificates at least five (5) days prior to Closing, then unless Seller (at
its option) elects to pay the Harvest Business Park Loan and/or the Ardenwood
Loan, as applicable, and cause the release of the liens securing such loans,
Buyer shall have the right (1) if consent from a lender is not required or
has been obtained, to waive such matter, in which case Seller shall execute a
certificate certifying as to the matters which would have been contained in
the Lender's Estoppel Certificate; or (2) to terminate this Agreement with
respect to such Property and the Escrow created hereby, in which event this
Agreement shall continue to be in effect with respect only to those
Properties for which Buyer has not terminated this Agreement and the Escrow
(subject to Section 41). Seller shall notify Buyer if it will so pay the
Harvest Business Park Loan or Ardenwood Loan at least five (5) days prior to
Closing. If Seller does so pay either such loan (or both), then the Purchase
Price for the Project in question shall be as set forth in the column
indicated on Exhibit A.
7. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer makes the following
representations and warranties to Seller:
(a) ORGANIZATION AND GOOD STANDING. (1) Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland. Each Subsidiary (as defined below) of Buyer is a corporation or other
entity duly organized, validly existing and, with respect to each Subsidiary
that is a corporation, in good standing under the laws of its state of
incorporation or formation, as the case may be. Buyer and each Subsidiary of
Buyer is duly qualified or licensed and, with respect to each Subsidiary that is
a corporation, in good standing as a foreign corporation and authorized to do
business, in each jurisdiction in which the ownership or leasing of its
properties or the character of its operations makes such qualification,
licensing or authorization necessary, except where the failure to obtain such
qualification, license, authorization or good standing would not individually or
in the aggregate reasonably be expected to have a material adverse effect upon
the assets, liabilities, financial condition, earnings or operations of Buyer
and its Subsidiaries taken as a whole or any transaction contemplated by this
Agreement or any other agreement to be entered into by Buyer and Seller or any
Conveying Entity in accordance herewith (the "TRANSACTION DOCUMENTS") (any such
material adverse effect, whether individually or in the aggregate, a "MATERIAL
ADVERSE EFFECT"). "SUBSIDIARY" means, with respect to any entity, (i) a
corporation, a majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such entity, by a Subsidiary of such entity or by such entity and a
Subsidiary thereof or (ii) any other entity (other than a corporation) in which
such entity, a Subsidiary thereof or such entity and a Subsidiary thereof,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest. Buyer and each Subsidiary of Buyer has all
requisite corporate power and authority to own its assets
7
and to carry on its business as presently proposed to be conducted except
where a lack of such corporate power or authority would not reasonably be
expected to have a Material Adverse Effect.
(2) Buyer has delivered to Seller true, correct and complete
copies of the Charter and the Bylaws of Buyer.
(b) AUTHORIZATIONS. Buyer has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Transaction
Documents. The execution and delivery by Buyer of the Transaction Documents
and the consummation of the transactions contemplated thereby have been duly and
validly authorized by Buyer.
(c) CAPITALIZATION. As of the date hereof, and except for issuances
of Common Stock pursuant to Buyer's Amended and Restated Employee and Director
Stock Plan, the equity capitalization of Buyer is as set forth in the balance
sheet of Buyer included in Buyer's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997 (the "1997 FORM 10-Q"). At the Closing Date, all
of the outstanding shares of stock of Buyer will be duly and validly issued,
fully paid and non-assessable and not subject to any preemptive rights of other
shareholders. As of the date hereof, except as set forth in Buyer's Annual
Report on Form 10-K for the year ended December 31, 1996 (the "1996 FORM 10-K"),
the 1997 Form 10-Q and Buyer's Proxy Statement dated April 14, 1997 in respect
of Buyer's annual meeting of shareholders held on May 16, 1997 (the "1997 PROXY
STATEMENT" and collectively, the "CURRENT SEC REPORTS") and pursuant to Buyer's
Amended and Restated Employee and Director Stock Plan, (A) except as set forth
in SCHEDULE 7.(c), there are no outstanding securities or indebtedness
convertible into, exchangeable for, or carrying the right to acquire, Common
Stock or other equity securities of Buyer, or subscriptions, warrants, options,
rights, or other arrangements or commitments obligating Buyer to issue or
dispose of any Common Stock or other equity securities or any ownership therein,
(B) there is no agreement or arrangement restricting the voting or transfer of
any equity securities of Buyer, and (C) there are no outstanding contractual
obligations, commitments, understandings or arrangements of Buyer or any of its
Subsidiaries to repurchase, redeem or otherwise acquire, require or make any
payment in respect of any shares of equity securities of Buyer or such
Subsidiary. As of the date hereof, except as contemplated by the Registration
Rights Agreement to be entered into by Buyer and Seller in the form of Exhibit K
(the "REGISTRATION RIGHTS AGREEMENT") and the Amended and Restated Investor
Rights Agreement dated as of February 23, 1996 among Buyer, Seller and the other
parties thereto (the "INVESTOR RIGHTS AGREEMENT"), there are no agreements or
arrangements to which any of Buyer or its Subsidiaries is a party pursuant to
which Buyer is or could be required to register shares of Common Stock or other
securities under the Securities Act of 1933 (the "SECURITIES ACT").
(d) CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither Buyer nor any
of its Subsidiaries is a party to any contract or agreement or subject to any
charter or other corporate restriction compliance with which would have a
Material Adverse Effect. Assuming the filing of a Form D with the Securities
and Exchange Commission (the "COMMISSION"), the listing of the Acquisition
Common Stock on the New York Stock Exchange (the "NYSE") and the accuracy of the
representations and warranties of, and the performance of the agreements of,
Seller set forth in Section 8 and elsewhere herein, neither the execution and
delivery of the Transaction Documents nor fulfillment of nor compliance with the
terms and provisions thereof, nor the issuance of the
8
Acquisition Common Stock will (1) violate any provision of any law presently
in effect or in effect at the Closing Date having applicability to Buyer or
any Subsidiary or any of their properties, except such violations as would
not have a Material Adverse Effect, (2) conflict with or result in a breach
of or constitute a default under the Charter or Bylaws of Buyer or any
organizational document of its Subsidiaries, (3) except as set forth on
SCHEDULE 7(d), require any consent, approval or notice under, or conflict
with or result in a breach of, constitute a default or accelerate any right
under, any note, bond, mortgage, license, indenture or loan or credit
agreement, or any other agreement or instrument, to which Buyer or any of its
Subsidiaries is a party or by which any of their respective properties is
bound, except such consents, approvals, notices, conflicts, breaches or
defaults as would not have a Material Adverse Effect or (4) result in, or
require the creation or imposition of, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind ("LIENS") upon or with
respect to any of the properties now owned or hereafter acquired by Buyer or
any of its Subsidiaries. Neither Buyer nor any of its Subsidiaries is bound
by any agreement which would impose upon Seller any personal obligation or
personal liability which is greater than the personal obligations and
personal liabilities imposed upon Seller under this Agreement, the
Registration Rights Agreement and the Amended and Restated Excepted Holder
Agreement to be entered into by Buyer and Seller in the form of EXHIBIT L
(the "AMENDED AND RESTATED EXCEPTED HOLDER AGREEMENT"). In addition, Buyer is
not aware of any facts or circumstances that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) DUE EXECUTION, ETC. This Agreement constitutes, and when
executed and delivered by Buyer at the Closing each of the Registration Rights
Agreement and the Amended and Restated Excepted Holder Agreement will
constitute, a legal, valid and binding obligation of Buyer, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general principles
of equity.
(f) LITIGATION, PROCEEDING, ETC. There is no action, suit, notice of
violation, proceeding or investigation pending or, to the best knowledge of
Buyer, threatened against or affecting Buyer or any of its Subsidiaries or any
of their respective properties before or by any Governmental Entity which
(1) challenges the legality, validity or enforceability of any of the
Transaction Documents or the Acquisition Common Stock or (2) (individually or in
the aggregate) have a Material Adverse Effect or (3) would (individually or in
the aggregate) impair the ability of Buyer to perform fully on a timely basis
any obligations which it has under any of the Transaction Documents.
(g) NO DEFAULT OR VIOLATION. Neither Buyer nor any of its
Subsidiaries is (1) in default under or in violation of any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound, except such defaults or
violations as would not have a Material Adverse Effect, (2) in violation of any
decree, injunction, judgment, order, ruling, assessment or writ ("ORDER") of any
agency, bureau, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign (a "GOVERNMENTAL ENTITY"), except for such violations
as would not have a Material Adverse Effect, or (3) in violation of any law
which would (A) adversely affect the legality, validity or enforceability of the
Transaction Documents, (B) have
9
a Material Adverse Effect or (C) adversely impair Buyer's ability or
obligation to perform fully on a timely basis any obligation which it has
under the Transaction Documents.
(h) STATUS OF ACQUISITION COMMON STOCK. Subject to approval of the
shareholders of Buyer, which approval shall be solicited pursuant to
Section 10.A prior to the Closing, the issuance and sale of the Acquisition
Common Stock have been duly authorized by all necessary corporate action on the
part of Buyer and such Acquisition Common Stock, when delivered to Seller at the
Closing against payment therefor as provided herein, will be validly issued,
fully paid and non-assessable and the issuance and sale of the Acquisition
Common Stock is not and will not be subject to preemptive rights of any other
shareholder of Buyer.
(i) GOVERNMENTAL CONSENTS, ETC. Except as may be required under any
applicable securities law in connection with the performance by Buyer of its
obligations under the Registration Rights Agreement, and except for the filing
of a Form D with the Commission and the listing of the Acquisition Common Stock
on the NYSE, and assuming the accuracy of the representations and warranties in
Sections 8.(k), 8.(l), 8.(n) and 8.(p), no authorization, consent, approval,
waiver, license, qualification or formal exemption from nor any filing,
declaration, qualification or registration with, any Governmental Entity or any
securities exchange is required in connection with the execution, delivery or
performance by Buyer of this Agreement and the issuance, sale or delivery of the
Acquisition Common Stock except for those that have been made or obtained by
Buyer as of the date hereof. At the Closing Date, Buyer will have made all
filings and given all notices to Governmental Entities and obtained all
necessary ordinances, registrations, declarations, approvals, orders, consents,
qualifications, franchises, certificates, permits and authorizations from any
Governmental Entity, to own or lease its properties and to conduct its
facilities and businesses as currently conducted, except where failure to do so
would not have a Material Adverse Effect. At the Closing Date, all such
registrations, declarations, approvals, orders, consents, qualifications,
franchises, certificates, permits and authorizations, the failure of which to
file, give notice of or obtain would have a Material Adverse Effect, will be in
full force and effect. The assets of Buyer qualify as exempt assets for
purposes of the Xxxx-Xxxxx-Xxxxxx Act and no filing under the Xxxx-Xxxxx-Xxxxxx
Act is required in connection with the sale and issuance of the Acquisition
Common Stock hereunder.
(j) PRIVATE OFFERING. Neither Buyer nor any person acting on its
behalf has taken or will take any action (including, without limitation, any
offering of any securities of Buyer under circumstances which would require the
integration of such offering with the offering of the Acquisition Common Stock
under the Securities Act) which might subject the offering, issuance or sale of
the Acquisition Common Stock to the registration requirements of Section 5 of
the Securities Act.
(k) ERISA.
(1) COMPANY STATUS. Buyer currently qualifies as a "real estate
operating company" ("REOC") within the meaning of C.F.R.
Section 2510.3-101(e), and has qualified as a REOC during all valuation
periods within the meaning of 29 C.F.R. Section 2510.3-101(d)(5).
10
(2) BENEFIT PLANS. To the extent applicable, the Benefit Plans
comply, in all material respects, with the requirements of the Employee
Retirement Income Security Act of 1974, as amended (or, with respect to any
provision thereof referred to herein, any corresponding provision of any
succeeding law, "ERISA") and the Code (including reporting requirements).
Neither any Benefit Plan nor Buyer or any Subsidiary of Buyer has incurred
any liability or penalty under Section 4975 of the Code or Section 502(i)
of ERISA. Each Benefit Plan has been maintained and administered in all
material respects in compliance with its terms and with ERISA and the Code
to the extent applicable thereto. There are no pending, or to the
knowledge of Buyer threatened, material claims (other than claims for
benefits pursuant to the terms of any such plan) against or otherwise
involving any of the Benefit Plans and no action has been brought against
or with respect to any Benefit Plan, and neither Buyer nor any Subsidiary
of Buyer incurred any material liability to any party with respect to any
Benefit Plan. All contributions required to be made to the Benefit Plans
have been made or provided for as of the date hereof. No Benefit Plan is
subject to Title IV of ERISA and neither Buyer nor any Subsidiary of Buyer
has, within six years prior to the date of this Agreement, contributed to
or had any obligation to contribute to any employee benefit plan subject to
Title IV of ERISA. "BENEFIT PLANS" means all employee benefit plans and
collective bargaining, labor and employment agreements or other similar
benefit arrangements to which Buyer or any Subsidiary of Buyer will be a
party at the Closing or by which Buyer or any Subsidiary of Buyer will be
bound at the Closing, including (A) any profit-sharing, deferred
compensation, bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, severance, welfare or incentive plan, agreement or
arrangement, (B) any plan, agreement or arrangement providing for "fringe
benefits" or perquisites to employees, officers, directors or agents,
including benefits relating to automobiles, clubs, vacation, child care,
parenting, sabbatical, sick leave, medical, dental, hospitalization, life
insurance and other types of insurance any employment agreement not
terminable on 30 days (or less) written notice or (C) any other "employee
benefit plan" within the meaning of Section 3(3) of ERISA. For purposes of
this Section 8, (i) the term "BUYER" includes any entity required to be
aggregated with Buyer pursuant to Code Section 414(b), (c), (m) or (o) and
(ii) provisions of ERISA or the Code include regulations prescribed under
such provisions.
(3) PROHIBITED TRANSACTIONS. The sale of the Properties and the
Rancho Xxxxxx Loan and the issuance of the Acquisition Common Stock as
herein contemplated does not constitute a prohibited transaction for
purposes of Section 4975(c)(1)(A) of the Code or Section 406(a)(1)(A) of
ERISA.
(l) FINANCIAL STATEMENTS. The consolidated balance sheets and
statements of operations of Buyer and its consolidated Subsidiaries as of the
last day of its latest complete fiscal year and the related consolidated
statements of operations, shareholders' equity and cash flows for the fiscal
year then ended, reported on by the independent public accountants (and, with
respect to Buyer, included in the 1996 Form 10-K) for the years ended
December 31, 1995 and December 31, 1996 and the consolidated balance sheets
and statements of operations of Buyer and its consolidated Subsidiaries as of
the fiscal quarter ended March 31, 1997 and the related consolidated
statements of operations, shareholders' equity and cash flows for the fiscal
quarter then ended (and, with respect
11
to Buyer, included in the 1997 Form 10-Q), present fairly in all material
respects the financial position of Buyer and its consolidated Subsidiaries as
of the dates indicated and the results of operations of Buyer and its
consolidated Subsidiaries, for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis and all adjustments
necessary for a fair presentation of results for such periods have been made
(subject, in the case of unaudited financial statements, to normal year-end
audit adjustments).
(m) INSURANCE. At Closing, Buyer and its Subsidiaries will have
(1) "all risk" property insurance, including fire, flood, earthquake, extended
coverage and rental loss insurance and (2) general commercial liability
insurance, under terms and in such amounts and covering such risks that are
customary for properties similar to those of Buyer and its Subsidiaries. There
are currently no outstanding material losses for which Buyer or any of its
Subsidiaries has failed to give or present notice or claim under any policy.
Policies for all the insurance are in full force and effect and none of Buyer or
its Subsidiaries is in default in any material respect under any of the
policies.
(n) INFORMATION PROVIDED. Neither this Agreement, the schedules and
exhibits hereto, the Current SEC Reports nor any other written document
delivered to Seller in connection with the transactions contemplated hereby
contain any untrue statement of a material fact or omit any material fact
necessary to make the statements herein or therein, as the case may be, in light
of the circumstances under which it was made, not misleading, and all material
information regarding Buyer and its Subsidiaries is provided therein.
(o) NO OTHER LIABILITIES. Neither Buyer nor any Subsidiary of Buyer
will have any material liability, whether absolute, accrued, contingent or
otherwise, except liabilities (1) reflected on the consolidated balance sheet of
Buyer and its Subsidiaries as at March 31, 1997, or (2) liabilities that (A) are
incurred by Buyer and its Subsidiaries after March 31, 1997 in the ordinary
course of business and (B) would not have a Material Adverse Effect.
(p) NO BROKERS OR FINDERS. No agent, broker, finder or investment or
commercial banker, or other Person or firm engaged by or acting on behalf of
Buyer in connection with the negotiation, execution or performance of this
Agreement is or will be entitled to any brokerage or finder's or similar fee or
other commission as a result of this Agreement other than any such fees or
commissions that have been disclosed to Seller and as to which Buyer shall have
full and sole responsibility.
(q) TAXES; REIT STATUS. Each of Buyer and its Subsidiaries has filed
all tax returns that are required to be filed with any Governmental Entity and
has paid all Taxes due pursuant to the tax returns or any assessment received by
it or otherwise required to be paid, except taxes being contested in good faith
by appropriate proceedings and for which adequate reserves or other provisions
are maintained, and except for the filing of tax returns as to which the failure
to file would not, individually or in the aggregate, have a Material Adverse
Effect. Buyer (1) elected to be taxed as a "real estate investment trust" as
defined in Section 856 of the Internal Revenue Code of 1986, as amended (the
"CODE") ("REIT") effective for each of the taxable years since Buyer has been
incorporated, (2) has not revoked such election, and (A) qualifies for taxation
as a REIT for
12
each such taxable year and for its current taxable year. Buyer is not a
foreign person within the meaning of Section 1445 of the Code.
(r) COMPLIANCE WITH LAWS. Neither Buyer nor any of its Subsidiaries
has been in or is in, and none of them has received notice of, violation of or
default with respect to, any law or any decision, ruling, order or award of any
arbitrator applicable to it or its business, properties or operations, except
for violations or defaults that, individually or in the aggregate, would not
have a Material Adverse Effect.
(s) SUBSIDIARIES.
(1) The 1996 Form 10-K sets forth a correct and complete list of
all of Buyer's Subsidiaries as of the date hereof.
(2) As of the date of this Agreement, except as set forth on
SCHEDULE 7(s), all outstanding shares of capital stock or other evidences
of equity ownership of each Subsidiary of Buyer are duly authorized,
validly issued, fully paid and nonassessable and are owned, directly or
indirectly, beneficially and of record by Buyer, free and clear of all
Liens.
(t) MATERIAL CONTRACTS. The 1996 Form 10-K and the 1997 Form 10-Q,
collectively, include a correct and complete list of the following as of the
date of this Agreement with respect to Buyer and any of its Subsidiaries:
(1) agreements with any shareholder having beneficial ownership
of 5% or more of the shares of Common Stock of Buyer or such Subsidiary
then issued and outstanding, director or officer of Buyer or such
Subsidiary and all shareholders' agreements and voting trusts; and
(2) agreements not made in the ordinary course of business and
which could reasonably be expected to result in a Material Adverse Effect.
(u) RECOMMENDATIONS. The Board of Directors of Buyer, at a meeting
duly called and held, has duly (1) determined that the Transaction Documents and
the transactions contemplated thereby, taken as a whole, are in the best
interests of Buyer and its shareholders, (2) resolved, subject to its fiduciary
duties, to recommend that holders of shares of Common Stock and Series B
Preferred Stock approve the issuance of the Acquisition Common Stock as
contemplated hereby and (3) approved the Transaction Documents and the
transactions contemplated thereby.
(v) SHAREHOLDER APPROVAL. The affirmative vote of a majority of the
shares of the Common Stock and Buyer's Series B Preferred Stock par value $.001
per share ("SERIES B PREFERRED STOCK"), voting together as a single class, voted
at the duly convened shareholders meeting of Buyer (or any other duly convened
meeting of the holders of the Common Stock and Series B Preferred Stock) is the
only vote of the holders of any class or series of the equity securities
13
of Buyer necessary to approve the Transaction Documents and the transactions
contemplated thereby.
(w) NO RESTRICTIONS ON ACQUISITION COMMON STOCK. No provision of the
Charter or Bylaws of Buyer, any other agreement, indenture or other instrument
to which Buyer or its properties are subject, or any law applicable to Buyer
(1) except as provided in the Amended and Restated Excepted Holder Agreement,
directly or indirectly restricts or impairs the right or ability of Seller to
vote, or otherwise to exercise the rights and receive the benefits of a
shareholder with respect to the Acquisition Common Stock, including, without
limitation, restrictions based upon the size of the security holdings of Seller,
the business in which it is engaged or other considerations applicable to it and
not to security holders generally, or (2) provides any other securityholder of
Buyer with any preemptive rights.
(x) SEC DOCUMENTS. Buyer has filed with the Commission all reports,
schedules, forms, statements and other documents required by the Securities
Exchange Act of 1934 (the "EXCHANGE ACT") to be filed by Buyer (collectively,
and in each case including all exhibits and schedules thereto and documents
incorporated by reference therein, the "SEC DOCUMENTS"). Buyer has delivered or
made available to Seller all SEC Documents. As of their respective dates,
except to the extent revised or superseded by a subsequent filing with the
Commission, the SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
none of the SEC Documents (including any and all financial statements included
therein) as of such dates contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The consolidated financial statements of Buyer
and its Subsidiaries included in all SEC Documents, including any amendments
thereto (the "SEC FINANCIAL STATEMENTS"), comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto.
(y) NO MERGER AGREEMENTS. As of the date hereof, neither Buyer nor
any of its Subsidiaries has entered into any agreement with any person which has
not been terminated as of the date of this Agreement and under which there
remains any liability or obligation thereof with respect to a merger or
consolidation with any of Buyer or its Subsidiaries, or any other acquisition of
a substantial amount of the assets of Buyer or its Subsidiaries.
(z) CERTAIN ACTIONS BY BUYER. Buyer has not: (1) made a general
assignment for the benefit of creditors, (2) filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by Buyer's
creditors, (3) suffered the appointment of a receiver to take possession of all
or substantially all of Buyer's assets, (4) suffered the attachment or other
judicial seizure of all, or substantially all, of Buyer's assets, (5) admitted
in writing Buyer's inability to pay its debts as they come due, or (6) made an
offer of settlement, extension, or composition to its creditors generally.
(aa) PENSION-HELD REIT STATUS. The Buyer is not, and the issuance of
all of the Acquisition Common Stock to Seller will not cause Buyer to be treated
as, a "PENSION-HELD REIT"
14
within the meaning of Section 856(h) of the Code, or, if Buyer is a
Pension-Held REIT, for purposes of applying Section 856(h)(3)(C) of the Code
to Seller, which assumes Buyer is treated as a "qualified trust" described in
Section 401(a) of the Code, (1) Buyer's indebtedness qualifies as
indebtedness described in Section 514(c)(9)(A) of the Code, (2) the ratio of
Buyer's gross income from unrelated trades or businesses (within the meaning
of Section 856(h)(3)(C) of the Code) to Buyer's total gross income for each
taxable year (within the meaning of Section 856(h)(3)(C) of the Code) will be
less than 5% and (3) the allocations to Buyer from all partnerships in which
Buyer is a partner for federal income tax purposes (other than MDN/JSC
Limited Partnership) will qualify under Section 514(c)(9)(B)(vi)(III), and
(c)(9)(E) of the Code.
The representations and warranties of Buyer in this Agreement shall survive
the Close of Escrow and be true and correct in all material respects on and as
of the Close of Escrow as if such representations and warranties were made on
and as such date (subject to revisions to reflect changed circumstances or
knowledge obtained between execution of the Agreement and the Close of Escrow).
8. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller makes the following
representations and warranties:
(a) This Agreement has been duly and validly authorized, executed and
delivered by Seller and no other approval on the part of Seller is requisite to
the valid and binding execution, delivery and performance of this Agreement by
Seller, and no consents of any third party are necessary to permit the
consummation by Seller of the transactions contemplated pursuant to this
Agreement, other than appropriate corporate resolutions of the Conveying
Entities, which Seller agrees to cause to be adopted prior to the applicable
Closing.
(b) There are no actions, suits or proceedings pending or, to the
best of Seller's knowledge, threatened which if adversely determined would
materially and adversely affect the Leases or the Properties, in the aggregate,
or any pending or, to the best of Seller's knowledge, threatened proceedings in
eminent domain, which would affect any Property. For the foregoing purposes,
any threatened or pending proceeding which is adequately covered by insurance,
in Buyer's reasonable judgment, shall be deemed not to have a material adverse
effect on the Property in question.
(c) To the best of Seller's knowledge, the Properties are not in
violation of any law or governmental regulation applicable to the Properties in
any manner that would have a material adverse effect on the Properties.
(d) There are no agreements granting any party rights to possession
of the Properties which will affect the Properties subsequent to the Closing,
except the Leases or as set forth in each Commitment. There are no maintenance,
service or other agreements affecting or relating to the Properties except as
made available to Buyer in accordance with EXHIBIT B hereto. Seller is not in
violation of or in default under any of the documents, recorded or unrecorded,
referred to in the Commitments.
15
(e) Except as would not have a material adverse effect on the
financial condition or operation of the Properties, or as otherwise disclosed
in writing to Buyer prior to expiration of the Contingency Period (by making
available copies of leases or files or otherwise), the Leases are in full
force and effect and have not been modified or amended; Seller is not in
default with respect to Leases; there have been no claims asserted by tenant
for offsets against rent or any other monetary or other claims made against
Seller, as landlord, which shall apply after the Close of Escrow; no Tenant
has been given any concession or consideration for the rental of any space
which shall apply after the Close of Escrow; no tenant is entitled hereafter
to any concession, rebate, construction of further improvements, moving or
other allowance or free or reduced rent for any period after the Close of
Escrow; Seller is not aware of any default by any tenant under its Lease;
all leasing commissions with respect to the Leases (including any renewal or
expansion option) have been paid by Seller and there are no outstanding
commission obligations or listing agreements that will affect Buyer or the
Properties after the Close of Escrow.
(f) All information and documents supplied or made available to Buyer
by Seller in accordance with EXHIBIT B hereto are true, complete and correct
copies of all of the documents in Seller's possession or control described on
EXHIBIT B and related to the leasing, use, ownership, development, maintenance,
management and repair of the Properties.
(g) To the best of Seller's knowledge, the improvements are in
compliance in all material respects with all applicable governmental laws,
ordinances, rules and regulations, and Seller is not aware of any material
defect in the condition of the Properties which has not been corrected.
(h) To the best of Seller's knowledge, Seller has made available to
Buyer true and correct copies of all site assessment reports within its
possession or control with respect to the presence or absence of "HAZARDOUS
MATERIALS" (as hereinafter defined) on the Properties (the "ENVIRONMENTAL
REPORTS"). To the best of Seller's knowledge, except as disclosed in the
Environmental Reports, there are no Hazardous Materials which require removal,
remediation or encasement of materials or reporting to any governmental
authority or which violate any federal, state or local environmental statute,
regulation or ordinance. To the best of Seller's knowledge, except as disclosed
in the Environmental Reports, there are no underground or other storage tanks
situated on the Properties and no such tanks have been removed from the
Properties. To the best of Seller's knowledge, neither Seller nor any occupant
of any Property has generated, stored, handled or disposed of any Hazardous
Materials at such Property, and there has been no release or discharge,
spillage, of any Hazardous Materials at the Properties. "HAZARDOUS MATERIALS"
herein means any material hazardous to human health which is listed in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Resource Conservation and Recovery Act, the Clean Water Act, the
Clean Air Act, the Toxic Substances Control Act, the Safe Drinking Water Act, or
in the regulations adopted and publications promulgated pursuant thereto.
(i) Seller is not a "foreign person" within the meaning of
Section 1445 of the Code.
(j) Seller has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the filing
of any involuntary petition by
16
Seller's creditors, (3) suffered the appointment of a receiver to take
possession of all or substantially all of Seller's assets, (4) suffered the
attachment or other judicial seizure of all, or substantially all, of
Seller's assets, (5) admitted in writing Seller's inability to pay its debts
as they come due, or (6) made an offer of settlement, extension, or
composition to its creditors generally.
(k) The Acquisition Common Stock to be acquired by it hereunder is
being acquired for its own account for investment and with no intention of
distributing or reselling the Acquisition Common Stock or any part thereof or
interest therein in any transaction which would be in violation of the
securities laws of the United States of America or any state or any foreign
country or jurisdiction.
(l) If Seller should decide to dispose of any of the Acquisition
Common Stock to be purchased by it, Seller understands and agrees that it may do
so only pursuant to an effective registration statement under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission promulgated
thereunder (the "SECURITIES ACT") or pursuant to an exemption from registration
under the Securities Act. In connection with any offer, resale, pledge or other
transfer (individually and collectively, a "TRANSFER") of any Acquisition Common
Stock other than pursuant to an effective registration statement, Buyer may
require that the transferor of the Acquisition Common Stock provide to Buyer an
opinion of counsel which opinion shall be reasonably satisfactory in form and
substance to Buyer, to the effect that such Transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and any state or foreign securities laws.
Seller agrees to the imprinting, so long as appropriate, of substantially the
following legends on certificates representing the Acquisition Common Stock:
THE SHARES OF COMMON STOCK (THE "SHARES") EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT IT WILL NOT OFFER,
RESELL, PLEDGE OR OTHERWISE TRANSFER (INDIVIDUALLY AND COLLECTIVELY, A
"TRANSFER") THE SHARES EVIDENCED HEREBY, EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT SUCH AS THE EXEMPTION SET FORTH IN
RULE 144 UNDER THE SECURITIES ACT (IF APPLICABLE). IF THE PROPOSED TRANSFER IS
TO BE MADE OTHER THAN PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE CORPORATION AND THE TRANSFER AGENT SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR ANY STATE OR FOREIGN SECURITIES LAW.
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER FOR THE PURPOSE OF THE CORPORATION'S
17
MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE CODE.
NO PERSON MAY (1) BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF EQUITY
STOCK IN EXCESS OF 8.5% (OR SUCH OTHER PERCENTAGE AS MAY BE DETERMINED BY THE
BOARD OF DIRECTORS OF THE CORPORATION) OF THE LESSER OF THE NUMBER OR VALUE
OF ANY CLASS OR SERIES OF THE OUTSTANDING EQUITY STOCK OF THE CORPORATION
UNLESS SUCH PERSON IS AN EXCEPTED HOLDER (IN WHICH CASE THE EXCEPTED HOLDER
LIMIT SHALL BE APPLICABLE)P OR (2) BENEFICIALLY OWN OR CONSTRUCTIVELY OWN
EQUITY STOCK WHICH WOULD RESULT IN THE CORPORATION BEING "CLOSELY HELD" UNDER
SECTION 856(H) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO
QUALIFY AS A REIT. ANY PERSON WHO ATTEMPTS TO BENEFICIALLY OWN OR
CONSTRUCTIVELY OWN SHARES OF EQUITY STOCK IN EXCESS OF THE ABOVE LIMITATIONS
MUST NOTIFY THE CORPORATION IN WRITING AT LEAST 15 DAYS PRIOR TO SUCH
ATTEMPTED TRANSFER. IF THE RESTRICTIONS ABOVE ARE VIOLATED, THE SHARES OF
EQUITY STOCK REPRESENTED HEREBY WILL BE TRANSFERRED AUTOMATICALLY AND BY
OPERATION OF LAW TO A TRUST AND SHALL BE DESIGNATED SHARES-IN-TRUST.
SHARES-IN-TRUST SHALL BE DEEMED TO HAVE BEEN OFFERED FOR SALE TO THE
CORPORATION, OR ITS DESIGNEE AT A PRICE AS SPECIFIED IN THE CORPORATION'S
CHARTER. ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED IN
THE CORPORATION'S CHARTER, AS THE SAME MAY BE FURTHER AMENDED FROM TIME TO
TIME. THE FOREGOING SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS SUBJECT TO
AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CORPORATION'S CHARTER, A
COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER, WILL BE SENT WITHOUT
CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS. SUCH REQUEST MUST BE MADE TO THE
SECRETARY OF THE CORPORATION.
The first legend set forth above may be removed if and when the Acquisition
Common Stock represented by such certificate is disposed of pursuant to an
effective registration statement under the Securities Act or the opinion of
counsel referred to above has been provided to Buyer.
(m) Seller agrees that Buyer shall be entitled to make a notation on
its records and give instructions to any transfer agent for the Acquisition
Common Stock in order to implement the restrictions on transfer set forth in
this Agreement.
(n) At the xxxx Xxxxxx was offered the Acquisition Common Stock,
Seller was, at the date hereof, Seller is, and at the Closing Date, Seller will
be, a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act, and has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating Buyer and an
investment in the Acquisition Common Stock, and is able to bear the economic
risk of such investment.
(o) Assuming the accuracy of the representations of Buyer in
Section 7 hereof, the acquisition of the Acquisition Common Stock to be
purchased by Seller has been duly and properly authorized and this Agreement has
been duly executed and delivered by it or on its behalf
18
and constitutes the valid and legally binding obligation of Seller,
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights generally
and to general principles of equity; the acquisition of the Acquisition
Common Stock does not conflict with or violate (1) its organizational
documents, charter or by-laws or (2) any law applicable to it in a manner
that could materially hinder or impair the completion of the transactions
contemplated hereby.
(p) Seller acknowledges that it has received a copy of Buyer's Annual
Report on Form 10-K for the year ended December 31, 1996 and Form 10-Q for the
calendar quarter ended March 31, 1997, and that it has been afforded the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of Buyer concerning the terms and conditions of
the offering of the Acquisition Common Stock and the merits and risks of
investing in the Acquisition Common Stock; access to information about Buyer,
Buyer's financial condition, pro forma results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment in the Acquisition Common Stock; and the opportunity to obtain such
additional information which Buyer possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy and completeness of
such information.
(q) Seller also understands and acknowledges that the Acquisition
Common Stock is being offered and sold without registration under the Securities
Act in a transaction that is exempt from the registration provisions of the
Securities Act and the availability of such exemption depends in part on, and
that Buyer (and, for purposes of the opinion to be delivered to Seller pursuant
to Section 13 hereof, Xxxxxx & Xxxxxx L.L.P., as to those in Sections 8.(k),
8.(l), 8.(m) and 8.(p)) will rely upon, the accuracy and truthfulness of the
foregoing representations and Seller hereby consents to such reliance.
(r) At the Closing, Seller will be a "qualified trust" as described
in Code Section 401(a) that is exempt from federal income tax under Code
Section 501(a).
(s) With respect to the Rancho Downey Loan: Seller has or will
deliver to Buyer true and complete copies of the Rancho Downey Note and the
other Rancho Xxxxxx Loan Documents; the Rancho Downey Loan is current in
payment; and no default or event which, with the passage of time or giving of
notice, or both, would constitute a default with respect to the Rancho Downey
Loan, exists.
As used here the term "TO THE BEST OF SELLER'S KNOWLEDGE" or
"KNOWLEDGE OF SELLER", means the actual knowledge of the following parties:
Xxxxxxx X. Xxxxxxxx (as to Seller); Xxxxxxx Xxxxxxx (as to Properties managed by
AMB); Xxxxxx Xxxxxxx (as to Properties managed by RREEF); and Xxxxx Xxxxx (as to
Properties managed by Cabot). If at any time prior to Close of Escrow Seller
shall discover any of the representations and warranties herein set forth are
not true and correct in all material respects, it shall immediately notify Buyer
thereof. The representations and warranties of Seller in this Agreement shall
survive the Close of Escrow and be true and correct in all material respects on
and as of the Close of Escrow as if such representations and warranties were
made on and as of such date (subject to revision to reflect changed
circumstances or knowledge
19
obtained between the date of execution of this Agreement and the Close of
Escrow). Those parties named above that are employees of Seller's asset
managers will not be informed of the provisions of this Section 8 until after
this Agreement is executed; Seller shall furnish a copy of such provisions to
such parties promptly following execution hereof, and provide a written
report of all changes required to be made to the foregoing representation and
warranties resulting from such parties' review of this Section 8 within
twenty-one (21) days after the opening of Escrow and upon delivery of such
report, the affected representations and warranties shall be deemed to be
modified as described in such report. With regard to Seller's representation
and warranties: Buyer may not rely on any such representation and warranty
that Buyer actually knows is false or inaccurate; and Seller shall not be
liable in damages to Buyer for the first or initial loss of up to $500,000
arising out of the falsity or inaccuracy or breach of such representations or
warranties; Seller shall, however, be liable for any and all such losses in
excess of $500,000. Seller may pay any such damages arising out of the
falsity or inaccuracy or breach of its representations and warranties by
delivering Common Stock (valued at its then market value) to Buyer.
9. COVENANTS AND INTERIM RESPONSIBILITIES OF SELLER. Seller agrees that
during the period between the Opening of Escrow and the Closing Date:
(a) SELLER'S AFFIRMATIVE COVENANTS. Seller shall: (1) maintain
Seller's existing insurance policies for the Properties continuously in force,
(2) operate and manage the Properties in the same manner as it has heretofore
done so,(3) perform, in all material respects, when due all of Seller's
obligations under the Leases and any and all contracts and agreements affecting
the Properties,(4) comply, in all material respects, with all applicable laws,
ordinances, rules, regulations and requirements affecting the Properties,(5) pay
all bills and invoices for labor, material and services of any kind contracted
for by Seller or the Conveying Entities or their agents and relating to the
Properties, and (6) as soon as Seller has knowledge thereof, promptly notify
Buyer of any change in any condition with respect to the Properties or any event
or circumstance which would render any representation, covenant or warranty of
Seller under this Agreement untrue, misleading or incapable of being performed.
(b) SELLER'S NEGATIVE COVENANTS. Seller shall not, without Buyer's
prior written consent: (1) execute any new lease nor modify any Lease (for
which consents shall not be unreasonably withheld or delayed), (2) accept from
any tenant rent or other charges more than one (1) month in advance, (3) enter
into any contract nor modify any existing contract with respect to the
Properties which will survive Closing, (4) remove any Personal Property from the
Properties unless replaced by Personal Property of equal or greater utility and
value, or (5) alienate, lien, encumber or otherwise transfer the Properties or
any interest therein.
10.A SHAREHOLDERS' MEETING; PREPARATION OF PROXY STATEMENT. Buyer shall,
promptly after the execution and delivery of this Agreement, take all actions
necessary in accordance with the Exchange Act, Maryland law, Buyer's Charter and
Bylaws and the rules of the NYSE to present the issuance of the Acquisition
Common Stock to Buyer's shareholders for their consideration and approval either
pursuant to the consent of the holders of the requisite percentage of Buyer's
outstanding Common Stock and Series B Preferred Stock ("SERIES B PREFERRED"),
voting as a single
20
class, or by the vote thereof at a meeting of Buyer's shareholders duly
called and convened to act thereon (the "SHAREHOLDERS' MEETING").
Buyer shall, in accordance with applicable law, as soon as practicable
following the execution and delivery of this Agreement, prepare and file with
the Commission a proxy statement to be used in connection with the solicitation
of the vote or consent of its shareholders required by Maryland law, its Charter
and Bylaws and by the rules of the NYSE to approve the issuance of the
Acquisition Common Stock (such proxy statement, including the form of proxy and
all such other materials distributed in connection therewith, as amended or
supplemented from time to time (the "PROXY STATEMENT").
Buyer shall use commercially reasonable efforts to obtain and furnish the
information required to be included by it in the Proxy Statement and respond
promptly to any comments made by the Commission with respect to the Proxy
Statement and any preliminary version thereof and shall cause the Proxy
Statement to be mailed to its shareholders at the earliest practicable time
following the approval of the Proxy Statement by the Commission. Seller will
use commercially reasonable efforts to provide Buyer with material and
information regarding the Seller which is reasonably requested by Buyer and is
required to be included therein. Buyer shall cause the Proxy Statement and the
distribution thereof to comply in all material respects with the Exchange Act
and ensure that the Proxy Statement will not, at the date the Proxy Statement is
first mailed to shareholders and at the time of the Shareholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Shareholders'
Meeting which has become false or misleading. The information regarding the
Seller which is supplied by Seller in writing for inclusion or incorporation by
reference in the Proxy Statement will not, at the time the Proxy Statement is
filed with the Commission and at the time of the Shareholders' Meeting, contain
any untrue statement of a material fact regarding the Seller or omit to state
any material fact regarding the Seller which is required to be stated therein or
necessary to make the statements made therein not misleading, in the light of
the circumstances under which they are made. Buyer shall include in the Proxy
Statement the recommendation of its Board of Directors that holders of the
Common Stock and the Series B Preferred vote in favor of the issuance of the
Acquisition Common Stock. Buyer shall use its commercially reasonable efforts
to solicit from its shareholders proxies in favor of the approval of the
issuance of the Acquisition Common Stock and to secure the vote or consent of
its shareholders required by Maryland law, its Charter and Bylaws and by the
rules of the NYSE to approve the issuance of the Acquisition Common Stock.
10.B COVENANTS OF BUYER.
(a) During any taxable year in which Buyer is treated as a
"Pension-Held REIT" within the meaning of Section 856(h) of the Code, Buyer
will take all necessary actions or refrain from taking such actions as
necessary to ensure that (1) the ratio of Buyer's gross income from unrelated
trades or businesses (within the meaning of Section 856(h)(3)(C) of the Code)
to Buyer's total gross income for each taxable year (within the meaning of
Section 856(h)(3)(C) of the Code)
21
is and will remain less than 5% and (2) all of Buyer's indebtedness meets the
requirements of Section 514(c)(9)(A) of the Code as if Buyer was a qualified
pension plan.
(b) Buyer will take all necessary actions or refrain from taking such
actions as necessary to ensure that Buyer qualifies as a REIT under the Code.
(c) Buyer will at Closing assume those service contracts and similar
agreements in effect at Closing with respect to the Properties; PROVIDED that
true and complete copies thereof have been made available to Buyer for its
review during the Continency Period.
11. CONDITIONS OF CLOSING.
(a) Buyer's obligation to close this transaction shall be subject to
the occurrence and/or satisfaction of the following conditions, as applicable to
the Closing in question:
(1) Buyer has received (or has waived as provided herein) the
Tenant Estoppel Certificates or Seller's Certificates, and the Lender
Estoppel Certificates, in each case complying with the requirements of this
Agreement.
(2) The Title Company is committed to issue the Title Policies
insuring title to each Property vested in Buyer or its nominee in the
amount specified in Section 4 in the approved Condition of Title with
respect to each Property.
(3) As of the Close of Escrow, Seller shall have performed all
of the obligations required to be performed by Seller under this Agreement.
(4) All representations and warranties made by Seller to Buyer
in this Agreement shall be materially true and correct as of the Close of
Escrow.
(5) No law or order shall have been enacted, entered, issued,
promulgated or enforced by any governmental entity which prohibits or
restricts the transactions contemplated by this Agreement. No governmental
entity shall have notified any party to this Agreement that consummation of
the transactions contemplated by this Agreement would constitute a
violation of any law of any jurisdiction or that it intends to commence
proceedings to restrain or prohibit such transactions or force divesture or
rescission, unless such governmental entity shall have withdrawn such
notice and abandoned any such proceedings prior to the time which otherwise
would have been the Closing Date.
(6) The issuance of the Acquisition Common Stock shall have been
approved by the requisite vote of the stockholders of Buyer.
(7) The Acquisition Common Stock shall have been approved for
listing on the NYSE.
22
(b) Seller's obligation shall be subject to the occurrence and/or
satisfaction of the following conditions, as applicable to the Closing in
question:
(1) As of the Close of Escrow, Buyer shall have performed all of
the obligations required to be performed by Buyer under this Agreement.
(2) All representations and warranties made by Buyer to Seller
in this Agreement shall be materially true and correct as of the Close of
Escrow.
(3) Seller shall have received an opinion of Xxxxxx & Xxxxxx
L.L.P., counsel for Buyer, substantially in the form of EXHIBIT I. In
rendering the foregoing opinion, such counsel may rely as to factual
matters upon certificates or other documents furnished by directors and
officers of Buyer and by governmental officials, and upon such other
documents as such counsel deem appropriate as a basis for such opinion.
Such counsel may specify the jurisdictions as such counsel deem appropriate
as a basis for such opinion. Such counsel may specify the jurisdictions in
which they are admitted to practice in any other jurisdiction and are not
experts in the law of any other jurisdiction. To the extent such opinion
concerns the laws of any other such jurisdiction, such counsel may either
provide an opinion of counsel admitted to practice in such jurisdiction
(which counsel shall be reasonably acceptable to Seller) in lieu of its own
opinion or rely upon the opinion of such counsel. Seller hereby agrees
that the firm of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx is acceptable to Seller
for purposes of providing such opinions involving the laws of the State of
Maryland. To the extent that any opinion rendered by counsel admitted to
practice in another jurisdiction or relied upon by Xxxxxx & Xxxxxx L.L.P.,
including any exception or limitation thereto, is materially different from
the opinion to be delivered to Seller at the Closing by Xxxxxx & Xxxxxx
L.L.P., such opinion shall be reasonably satisfactory to Seller and a copy
of such opinion shall be delivered to Seller at Closing.
(4) No law or order shall have been enacted, entered, issued,
promulgated or enforced by any governmental entity which prohibits or
restricts the transactions contemplated by this Agreement. No governmental
entity shall have notified any party to this Agreement that consummation of
the transactions contemplated by this Agreement would constitute a
violation of any law of any jurisdiction or that it intends to commence
proceedings to restrain or prohibit such transactions or force divesture or
rescission, unless such governmental entity shall have withdrawn such
notice and abandoned any such proceedings prior to the time which otherwise
would have been the Closing Date.
(5) The issuance of the Acquisition Common Stock shall have been
approved by the requisite vote of the stockholders of Buyer.
(6) The Acquisition Common Stock shall have been approved for
listing on the NYSE.
(7) No event shall have occurred and no set of circumstances
shall exist which could reasonably be expected to have a Material Adverse
Effect.
23
(c) If Closing has not occurred: (1) as to Group A, within 120
days from the Opening of Escrow; (2) as to Group B, within 120 days from the
Opening of Escrow plus the number of days to which the Closing Date for Group
B is extended pursuant to Section 1.(d); and (3) as to Group C, within 120
days from the date the Group C Notice is given, then either Seller or Buyer
may terminate this Agreement and the Escrow by notifying the other; PROVIDED
that a party may not so terminate this Agreement if Closing has not occurred
because of such party's default hereunder.
12. DEPOSITS BY SELLER. On or prior to the scheduled Closing Date, Seller
shall deliver to Escrow Holder for recordation or delivery to Buyer upon the
Close of Escrow, the following documents and instruments, fully executed by
Seller, or the Conveying Entities (as appropriate) and acknowledged where
appropriate, with respect to the Rancho Downey Loan and with respect to each
Property which Buyer is acquiring on such Closing Date pursuant to the terms
hereof:
(a) The Deeds in a form approved by Buyer, Seller, and Title Company.
(b) The original Leases.
(c) An assignment of leases (the "ASSIGNMENT OF LEASES") in the form
attached hereto as EXHIBIT D.
(d) A xxxx of sale (the "XXXX OF SALE") in the form attached hereto
as EXHIBIT E.
(e) A general assignment and assumption (the "GENERAL ASSIGNMENT") in
the form attached hereto as EXHIBIT F.
(f) A certification regarding withholding (the "CERTIFICATION
REGARDING WITHHOLDING") in the form attached hereto as EXHIBIT G-1.
(g) A letter, in a form approved by Buyer and Seller, advising
tenants of the sale to Buyer and directing that future rent payments and other
charges be forwarded to Buyer.
(h) Proof satisfactory to the Title Company and Buyer that the
persons executing such documents have the power and authority to bind Seller.
(i) Keys to all locks located on the respective Property, to the
extent in Seller's possession.
(j) With respect to Closing of the acquisition of the Rancho Xxxxxx
Loan: (1) the original Rancho Xxxxxx Note, duly endorsed to Buyer without
recourse, (2) the originals of all other Rancho Downey Loan Documents; (3) an
assignment of note and liens (the "ASSIGNMENT OF NOTE AND LIENS") in the form
attached hereto as EXHIBIT J; and (4) an endorsement to the mortgagee title
policy therefor reflecting Buyer as the insured owner of the Rancho Downey Loan.
(k) An executed counterpart of the Registration Rights Agreement.
24
(l) An executed counterpart of the Amended and Restated Excepted
Holder Agreement.
13. DEPOSITS BY BUYER. Buyer shall deposit with Escrow Holder (a) the
Acquisition Common Stock for the Rancho Downey Loan (if applicable) and for the
Properties being acquired at the Closing in question, taking into account a
deduction for the aggregate of the security deposit and/or prepaid rent by
tenants, and such other adjustments resulting from the prorations conducted
pursuant hereto (except to the extent that Seller has elected to pay any net
prorations in cash, which Seller may elect to do), (b) the Opinion, (c) an
executed counterpart of the Registration Rights Agreement,(d) on executed
counterpart of the Amended and Restated Excepted Holder Agreement, and (e) a
Certification Regarding Withholding in the form attached hereto as EXHIBIT G-2.
In addition, at least two (2) business days prior to the scheduled Closing Date,
Buyer shall execute and acknowledge (where appropriate) and deposit with Escrow
Holder for delivery to Seller upon the Close of Escrow a counterpart of the
Assignment of Leases and the General Assignment as to the Properties being
acquired at such Closing.
14. COSTS AND EXPENSES. The cost and expense of the Title Policy
attributable to standard coverage shall be paid by Seller, and Buyer shall pay
for the cost and expense of the Title Policies attributable to ALTA extended
coverage and for any endorsements requested by Buyer. The escrow fee of Escrow
Holder, if any, shall be shared equally by Seller and Buyer; provided, however,
that if the Close of Escrow has not occurred by the Closing Date by reason of a
default hereunder, the defaulting party shall bear all Escrow cancellation
charges. Seller and Buyer shall each pay one-half of all documentary transfer
and other taxes and recording fees payable in connection with the recordation of
the Deeds. All other costs and expenses for each respective Property shall be
allocated between Buyer and Seller in accordance with customary practice in the
county in which such Property is located.
15. PRORATIONS. The following items shall be prorated by Escrow Holder as
of the Close of Escrow with respect to each Property acquired by Buyer
hereunder:
(a) Real property taxes with respect to the Land and Improvements and
personal property taxes based upon the latest available tax information shall be
prorated to the Close of Escrow, taking into account the obligation, if any, of
tenants holding under the Leases to pay such taxes.
(b) Rents and other receivables under the Leases (collectively,
"RENTS") shall be accounted for as follows:
(1) Rents due and payable in the month of the Close of Escrow
shall be prorated between Buyer and Seller on the basis of the actual Rents
collected by Seller for such month.
(2) Rents and other charges which at Closing are past due (the
"DELINQUENT RENTS") shall be collected and applied as follows: For a
period of thirty (30) days after the Closing, Buyer shall use reasonable
efforts to collect Delinquent Rents. Rents
25
and other amounts received by Buyer from a tenant owing Delinquent Rent
shall be applied: (A) first, to rents attributable to any period after
the Closing which are past due on the date of receipt, and (B) then, to
Delinquent Rents, which Buyer shall promptly remit to Seller. If within
thirty (30) days after the Close of Escrow Buyer has not collected all
Delinquent Rents, Seller shall have the right to attempt to collect such
Delinquent Rents using all remedies available to Seller at law or in
equity; provided, however, that Seller shall not cause any Lease to be
terminated in Seller's efforts to collect Delinquent Rents.
(3) Buyer shall be credited and Seller shall be charged with any
security deposit or advance rentals in the nature of security deposits made
by tenants under the Leases, except to the extent previously applied by
Seller in accordance with the applicable Lease.
(c) Utilities, services and operating expenses with respect to the
Land and the Improvements shall be prorated to the Close of Escrow based upon
the latest available information taking into account the obligation of tenants
under the Leases to pay such utility, services and operating expenses.
(d) Premiums for casualty and liability insurance shall not be
prorated as Buyer will be obtaining its own such insurance upon the Close of
Escrow.
(e) Interest (at the current pay rate, and not the accrual rate) on
the Rancho Downey Loan shall be prorated at the Closing thereof.
(f) If a Closing occurs other than at the beginning of a calendar
quarter, Seller shall agree to pay to Buyer at the end of such calendar quarter
an amount, such that when Seller receives the dividend on the Acquisition Common
Stock received at such Closing for such calendar quarter (which dividend shall
be paid to Seller regardless of the date during the calendar quarter on which
the Acquisition Common Stock is issued to Seller), the difference between the
amount of the dividend and the amount so paid is equal to the pro-rated amount
the Seller would have received if such dividend were payable only for the actual
time during such calendar quarter that Seller owned such Acquisition Common
Stock.
If any errors or omissions are made regarding adjustments and
prorations as set forth above, the parties shall make the appropriate
corrections promptly upon the discovery thereof.
16. DISBURSEMENTS AND OTHER ACTIONS BY ESCROW HOLDER.
(a) Upon the Close of Escrow, Escrow Holder shall promptly undertake
all of the following in the manner indicated:
(1) Deliver the Title Policies to Buyer.
(2) Disburse the Acquisition Common Stock to Seller.
26
(3) Cause the Deeds to be recorded in the Official Records of
the county in which the respective Land is situated, and at the Closing of
the acquisition of the Rancho Xxxxxx Loan, cause to be recorded the
Assignment of Note and Liens in the county where the Rancho Xxxxxx Property
is located.
(b) Upon confirmation of recordation of the Deeds, Escrow Holder
shall:
(1) Deliver the Leases, Xxxx of Sale, General Assignment,
Certification Regarding Withholding, and a counterpart of the Assignment of
Leases executed by Seller for each Property being transferred at the
Closing in question to Buyer, and, at the Closing therefor, deliver to
Buyer the endorsed original Rancho Downey Note, the other Rancho Downey
Loan Documents, and the Assignment of Note and Liens.
(2) Deliver a counterpart of the Assignment of Leases,
Registration Rights Agreement, the Amended and Restated Excepted Holder
Agreement, and General Assignment executed by Buyer to Seller, together
with an original copy of the Opinion and the Certificate of Withholding
executed by Buyer.
(3) Mail the approved form of letter to the tenants advising
them of this transaction.
(4) Deliver to both Buyer and Seller copies of all documents
delivered to either party hereto or recorded pursuant to this Agreement.
17. DAMAGE OR CONDEMNATION PRIOR TO CLOSING. Seller shall promptly notify
Buyer of any casualty damage to any Property or the Rancho Xxxxxx Property or
any condemnation proceeding proposed or commenced prior to the Close of Escrow
with respect to any Property or the Rancho Xxxxxx Property.
(a) If such casualty or proceeding results or may result in a
material reduction in the value of a Property, which for purposes of this
Agreement shall mean a reduction of more than five percent (5%) of the allocated
Purchase Price for such Property (as provided on EXHIBIT A), then Buyer may, at
its option: (1) terminate this Agreement with respect to such Property, in
which event this Agreement shall continue to be in effect with respect only to
those Properties for which Buyer has not terminated this Agreement (subject to
Section 41), or (2) continue this Agreement in effect, in which event upon the
Close of Escrow there shall be credited to the Purchase Price the amount of any
deductible and any uninsured portion of the loss in question (for a casualty)
and Buyer shall be fully entitled to all insurance proceeds available under
Seller's insurance policies, or (for a condemnation) Seller shall assign to
Buyer any compensation, award or other payment or relief Seller has received or
is entitled to receive resulting from such condemnation.
(b) If such casualty or proceeding does not constitute or threaten a
material reduction in the value of a Property, then Buyer shall accept such
Property in its then condition and proceed with Closing, in which case Buyer
shall be entitled to a reduction of the Purchase Price in the amount of any
deductible and any uninsured portion of the loss in question, and Buyer shall be
27
entitled to receive any insurance proceeds, compensation, award or other
payment or relief Seller has received or is entitled to receive
resulting from such casualty or condemnation.
(c) Notwithstanding Section 17.(a) or 17.(b) above, if any casualty
or condemnation would give any tenant of any Property that occupies 25% or more
of such Property the right to terminate or materially modify its Lease, or to
xxxxx any payment of rent or other charges due under its Lease that is not fully
covered by valid insurance that will be available to Buyer, then Buyer shall
have the right to terminate this Agreement with respect to such Property, in
which event this Agreement shall continue to be in effect with respect only to
those Properties for which Buyer has not terminated this Agreement (subject to
Section 41).
(d) If any casualty or condemnation occurs with respect to the Rancho
Xxxxxx Property and the reduction in value meets the threshold set forth in
Section 17.(a) or in 17.(c), then Buyer shall have the rights set forth in such
Sections with respect to the Rancho Xxxxxx Loan.
18. PARTIAL INVALIDITY. If any portion of this Agreement shall be
declared by any court of competent jurisdiction to be invalid, illegal or
unenforceable, such portion shall be deemed severed from this Agreement and the
remaining parts hereof shall remain in full force and effect as fully as though
such invalid, illegal or unenforceable portion had never been part of this
Agreement.
19. ATTORNEYS' FEES. In the event of the bringing of any action or suit
by a party hereto against another party hereto by reason of any breach of any of
the covenants or agreements or any inaccuracies in any of the representations
and warranties on the part of the other party arising out of this Agreement,
then, in that event, the prevailing party in such action or dispute, whether by
final judgment or out-of-court settlement, shall be entitled to have and recover
of and from the other party all costs and expenses of suit, including actual
attorneys' fees.
20. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, return receipt requested,
delivered or sent by telecopy or via a reliable overnight courier service, and
shall be deemed received upon the earlier of: (1) if delivered personally or
via overnight courier, the date of delivery to the address of the person to
receive such notice, (2) if mailed, upon the date of receipt as disclosed on the
return receipt, (3) if telecopied, the date of receipt as disclosed by the
transmission record .
To Buyer: Meridian Industrial Trust, Inc.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Telecopy: 000-000-0000
28
With a copy to: Xxxxxx & Xxxxxx L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Telecopy: 000-000-0000
To Seller: Ameritech Pension Trust
c/o Ameritech Corporation
000 Xxxx Xxxxxxxx, XX00X
Xxxxxxx, Xxxxxxxx 00000
Attn: Director of Real Estate Investments
Telecopy: 000-000-0000
With a copy to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. XxXxxxxxx
Telecopy: 000-000-0000
To Escrow Holder: Chicago Title Insurance Company
000 Xxxxx Xx. Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxx
Telecopy: 000-000-0000
Escrow No.:
and Chicago Title Insurance Company
000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxx
Telecopy: 000-000-0000
Escrow No.:
Notice of change of address shall be given by written notice in the manner
detailed in this section. Rejection or other refusal to accept or the inability
to deliver because of changed address of which no notice was given shall be
deemed to constitute receipt of the notice, demand, request or communication
sent.
21. BROKERS. Buyer and Seller each represent and warrant to the other
that no broker or finder has been engaged by it in connection with the
transaction contemplated by this Agreement. In the event of any such additional
claims for brokers' or finders' fees for the consummation of this Agreement,
then Buyer shall indemnify, save harmless and defend Seller from and against
such claims if they shall be based upon any statement or representation or
agreement by Buyer, and Seller shall indemnify, save harmless and defend Buyer
if such claims shall be based upon any statement,
29
representation or agreement made by Seller. The foregoing indemnities
shall survive the Close of Escrow or any termination of this Agreement.
22. SURVIVAL. Except as expressly set forth herein, the covenants,
agreements, representations and warranties of both Buyer and Seller set forth in
this Agreement shall survive any investigation of the parties, the recordation
of the Deed and the Close of Escrow, except that the representations and
warranties made by Buyer in Section 7 and Seller in Section 8, respectively,
shall survive the Close of Escrow for a period of one year after the last
Closing Date hereunder.
23. REQUIRED ACTIONS OF BUYER AND SELLER. Buyer and Seller agree to
execute such instruments and documents and to diligently undertake such actions
as may be required in order to consummate the purchase and sale herein
contemplated and shall use their good faith to accomplish the Close of Escrow in
accordance with the provisions hereof.
24. TIME OF ESSENCE. Time is of the essence of each and every term,
condition, obligation and provision hereof.
25. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute one and the same instrument.
26. CAPTIONS. Any captions to, or headings of, the sections, paragraphs
or subparagraphs of this Agreement are solely for the convenience of the parties
hereto, are not a part of this Agreement, and shall not be used for the
interpretation or determination of the validity of this Agreement or any
provision hereof.
27. NO OBLIGATIONS TO THIRD PARTIES. The execution and delivery of this
Agreement shall not be deemed to confer any rights upon, nor obligate any of the
parties thereto, to any person or entity other than the parties hereto.
28. EXHIBITS. The exhibits attached hereto are hereby incorporated herein
by this reference.
29. AMENDMENT TO THIS AGREEMENT. The terms of this Agreement may not be
modified or amended except by an instrument in writing executed by each of the
parties hereto.
30. WAIVER. The waiver or failure to enforce any provision of this
Agreement shall not operate as a waiver of any future breach of any such
provision or any other provision hereof.
31. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
32. FEES AND OTHER EXPENSES. Except as otherwise provided herein, each of
the parties shall pay its own fees and expenses in connection with this
Agreement.
30
33. ENTIRE AGREEMENT. This Agreement supersedes any prior agreements,
negotiations and communications, oral or written, and contains the entire
agreement between Buyer and Seller as to the subject matter hereof. No
subsequent agreement, representation or promise made by either party hereto, or
by or to an employee, officer, agent or representative of either party, shall be
of any effect unless it is in writing and executed by the party to be bound
thereby.
34. SUCCESSORS AND ASSIGNS. This Agreement and all of the terms,
conditions and provisions hereof shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties hereto. Neither party
hereto shall assign its rights or obligations hereunder without the prior
written consent of the other which may be granted or withheld in such party's
absolute discretion. Seller agrees that Buyer may direct that title to certain
of the Properties be taken directly from Seller by certain affiliates of Buyer.
35. DEFAULT. If any of Seller's or Buyer's representations and warranties
contained herein shall not be materially true and correct, or if Seller or Buyer
shall have materially failed to perform any of the covenants and agreements
contained herein to be performed by it within the time for performance as
specified herein, the other party may either: (1) terminate its obligations
under this Agreement with respect to those Properties as to which Closing has
not occurred by written notice to the other party with a copy to Escrow Holder,
and recover its actual damages incurred as a result of such default, or
(2) obtain specific performance of this Agreement and all reasonable costs
incurred in so doing.
36. COMPUTATION OF PERIODS. All periods of time referred to in this
Agreement shall include all Saturdays, Sundays and national holidays, unless the
period of time specifies business days; provided, however, that if the date to
perform any act or give a notice with respect to this Agreement shall fall on a
Saturday, Sunday or national holiday, such act or notice may be timely performed
on the next succeeding day which is not a Saturday, Sunday or a national
holiday.
37. INDEMNIFICATION OF ESCROW HOLDER.
(a) If this Agreement or any matter relating hereto shall become the
subject of any litigation or controversy, Buyer and Seller agree, jointly and
severally, to hold Escrow Holder free and harmless from any loss or expense,
including attorneys' fees, that may be suffered by it by reason thereof, except
for losses or expenses which may arise from Escrow Holder's negligent or willful
misconduct. If conflicting demands are made or notices served upon Escrow
Holder with respect to this Agreement, the parties expressly agree that Escrow
Holder shall be entitled to file a suit in interpleader and obtain an order from
the court requiring the parties to interplead and litigate their several claims
and rights among themselves. Upon the filing of the action in interpleader,
Escrow Holder shall be fully released and discharged from any obligations
imposed upon it by this Agreement.
(b) Escrow Holder shall not be liable for the sufficiency or
correctness as to form, manner, execution or validity of any instrument
deposited with it, nor as to the identity, authority or rights of any person
executing such instrument, nor for failure to comply with any of the provisions
of any agreement, contract or other instrument filed with Escrow Holder or
referred to herein.
31
Escrow Holder's duties hereunder shall be limited to the safekeeping of
such money, instruments or other documents received by it as Escrow
Holder, and for their disposition in accordance with the terms of this
Agreement.
38. BUYER'S AUDIT RIGHTS. Seller acknowledges that Buyer is required to
have audits performed of the records of the Properties acquired by Buyer.
Accordingly, for the period from the Opening of Escrow through December 31 of
the calendar year following the Closing Date, upon fifteen (15) days advance
written notice from Buyer, Seller agrees to use all commercially reasonable
efforts to make available to Buyer's independent accountants those items
respecting the Properties described in EXHIBIT H attached hereto. The
obligations of Seller under this section shall survive the Closing.
39. CONFIDENTIALITY. Buyer and Seller each agree that it will (a) use its
best efforts to keep confidential (except for such disclosure to attorneys,
bankers, underwriters, fiduciaries, managers, agents, independent contractors,
and employees as may be appropriate in the furtherance of this transaction or as
required by law) all information of a confidential nature obtained by it from
the other (including the terms of this Agreement and the identity of Buyer and
Seller) in connection with the transaction contemplated hereby and (b) return to
the other all documents and other materials obtained from the other in
connection herewith should this Agreement be terminated. No party hereto will
issue any press release or make any other public announcement relating to the
transaction contemplated hereby without the prior consent of the other party
hereto, except that any party may make any disclosure required to be made by it
under applicable law (including without limitation the federal securities laws)
or stock exchange rules and regulations if such party determines in good faith
that it is appropriate to do so and gives prior notice to the other party
hereto, and affords to the other party a reasonable opportunity to comment on
the proposed disclosure and will make a commercially reasonable effort to
incorporate any comments or requested revisions.
40. MARKETING. In order to induce Buyer to undertake the considerable
effort and to incur the major expenses associated with the transaction
contemplated hereby, during the term of this Agreement as to Group A; as to
Group B, until such time (if ever) as the Group C Notice is given; and as to
Group C, after the Group C Notice is given, Seller shall not and shall cause the
trustees, officers, directors, and employees of Seller not to, (a) solicit,
initiate, or encourage the submission of proposals or offers from any other
person or entity for, or enter into any agreement or arrangement relating to,
the purchase of the Properties or any portion thereof or (b) participate in any
negotiations regarding, or, except as required by legal process, furnish to any
other person or entity any information with respect to or in contemplation of,
the purchase of the Properties or any portion thereof. Notwithstanding the
foregoing provisions of this Section 40, Seller shall have the right to discuss
and negotiate the possible sale of the Group B Properties prior to the giving of
the Group C Notice if such discussions or negotiations are conducted with a
party which is then negotiating for the purchase of the Group C Properties and
the basis for such discussions or negotiations is the possible sale of the
Group B Properties to such party if the Group C Properties are to be sold to
Buyer pursuant to this Agreement.
41. TERMINATION. Notwithstanding anything to the contrary, if Buyer
terminates this Agreement as to certain Properties pursuant to its rights to do
so pursuant to Sections 4, 5 (but only
32
with respect to a Major Environmental Matter), 6 or 17 and such
Properties represent more than 20% of the total rentable square feet of
all the Properties in (1) Group A and Group B, aggregated (if the Group
C Notice has not been given) or, (2) Group A and Group C (if the Group C
Notice has been given and the Closing of the Group A sale has not
occurred), or (3) Group C (if the Group C Notice has been given and the
Closing of the Group A sale has occurred) and more than 20% of the
Budgeted NOI of such group or groups of Properties, then Seller or Buyer
may elect to terminate this Agreement (as to Properties as to which
Closing has not occurred) by delivering written notice to the other
within ten (10) days after Seller receives the notice from Buyer
terminating this Agreement as to a Property so as to cause the foregoing
threshold to be reached, in which event the parties hereto shall have no
further duties or liabilities hereunder; provided, however, that Buyer
shall have a period of ten (10) days after receipt of any such notice
from Seller in which to elect to withdraw one or more of its notices of
termination as to such Properties, such that Seller and Buyer would no
longer have the right to terminate this Agreement pursuant to this
Section 41, and if Buyer does so withdraw a sufficient number of its
termination notices, then Seller shall be deemed to have withdrawn its
notice of termination given pursuant to this Section 41. In addition to
Buyer's other rights hereunder, if at the applicable Closing Date there
is any default in respect of any payments due with respect to the Rancho
Xxxxxx Loan, Buyer may terminate this Agreement as to the Rancho Xxxxxx
Loan only, and this Agreement shall remain in effect as to the
Properties, and such termination shall not be considered in determining
if the threshold set forth in this Section 41 has been reached. For
purposes of the calculations provided in this Section 41, the Rancho
Xxxxxx Property shall be deemed to be a Property and one of the
Properties.
42. RESTRICTION ON TRANSFER OF ACQUISITION COMMON STOCK. In consideration
of the benefits to be received by Seller hereunder, Seller hereby agrees and
acknowledges Seller shall not transfer any shares of Acquisition Common Stock to
be received by Seller hereunder for a period of ninety (90) days after the
Closing Date.
33
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first set forth above.
BUYER: MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By:____________________________________
Name:__________________________________
Title:_________________________________
SELLER: AMERITECH PENSION TRUST,
By: State Street Bank and Trust Company,
as Trustee
By:___________________________________
Name:_________________________________
Title:________________________________
ESCROW HOLDER APPROVES THE ESCROW
PROVISIONS AND SPECIFIC INSTRUCTIONS
TO ESCROW HOLDER SET FORTH IN THE
FOREGOING AGREEMENT AND AGREES TO
ACT IN ACCORDANCE THEREWITH.
CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Xxxxx Xxxxxxxx, Authorized Agent
By:_______________________________________
Xxxxxx Xxxxx, Authorized Agent
Date: May ___, 1997
34
SCHEDULE 1(b)
GROUP A
CONVEYING ENTITY PROPERTY NAME ADDRESS
---------------- ------------- -------
Apt Cabot Illinois, Inc. XXX Xxxxxxxx 00 Xxxxxxxxxxxxxx Xxxx.
Xxxxxxxx Xxxxxxx, XX
Timber Court 0 Xxxxxx Xxxxx
Xxxxxxxxxxx, XX
APT Cabot California II, Inc. General Motors 0000 Xxxxxxxxxx Xxxxxx
Xxxx, XX
First Street 0000 X. Xxxxx Xxxxxx
Xxx Xxxx, XX
RK Distribution 0000 X. Xxxxxxxxxxx
Xxxxxxx, XX
Tab Xxxxxxxx 000000 Xxxxxxx Xxxxxx
Xxxxxxx, XX
TYC Industries 00000 Xxxxx Xxxxxxx
Xxxxxx
XxXxxxxx, XX
Vans Distribution 00000 X. Xxx Xxxx
Xxxxxx
Xxx Xxxxxxx, XX
APT Cabot Arizona II, Inc. Tech Plastic 000 Xxxx Xxxxxx
Xxxxx, XX
APT Barrington, Inc. Barrington Business 0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX
APT Realty Holding #5, Inc. Phantom Drive 0000 Xxxxxxx Xxxxx
Xx. Xxxxx, XX
Fremont Rancho, Ltd. Rancho Business 0000 Xxxxxxxx Xxxxxxx
Xxxxxx Xxxxxx, XX
00000 Xxxxx Avenue
Downey, CA
0000 Xxxxxx Xxxxxx
Xxxxxx, XX
0000 Xxxxxx Xxxxxx
Xxxxxx, XX
Schedule 1(b)-1
GROUP B
CONVEYING ENTITY PROPERTY NAME ADDRESS
---------------- ------------- -------
APT IND/APTS Realty, Inc. Abitibi Price 0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX
Airborne 0000 X. Xxxxx Xxxxxxx
Xxxxx, XX
Xxxxxxx Services 0000 Xxxxx Xxxxxx
Xxxxxx Xxxxxxxxx, XX
Climatic 0000 Xxxxxxx Xxxxxxx
Xxxxxxxxxx, XX
Xxxxxx Building 0000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX
Xxxxxx Price 000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX
Northern Auto 0000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX
Prime Paper 00000 Xxxxxxxxxx Xxxxxx
Xxxxxx Xxxxxxxxx, XX
Skyway Freight 0000 XxXxxxxx Xxxxx
Xxxxxxxxxx, XX
Southwire 00000 Xxxxx Xxxx
Xxxxxx, XX
Sports Supply 00000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxxx, XX
Schedule 1(b)-2
GROUP C
CONVEYING ENTITY PROPERTY NAME ADDRESS
---------------- ------------- -------
APT Harvest, Inc. Harvest Business 0000-0000 X. 000xx
Xxxx Xxxxxx
Xxxx, XX
0000-0000 S. 000xx
Xxxxxx
Xxxx, XX
0000-0000 S. 000xx
Xxxxxx
Xxxx, XX
APT Xxxx Xxxxx, Inc. Xxxx Xxxxx 0000 Xxxx Xxxxxx
Xxxxx
Xxxxxxxxxxx, XX
0000 Xxxxx Xxxxxx
Xxxxx
Xxxxxxxxxxx, XX
APT Corporate Corporate Square 000 Xxxxxx Xxxx
Xxxxxx, Xxx. Xxxx, XX
0000 Xxxxxx Xxxx
Xxxx, XX
3110 Xxxx Xxxxxxxxx
Blvd.
Xxxx, MN
3160 Xxxx Xxxxxxxxx
Blvd.
Xxxx, MN
Northwestern
Warehouse
Xxxx, MN
APT Ardenwood, Inc. Ardenwood 0000 Xxxxxx Xxxxx
Xxxxxxx, XX
0000 Xxxxxx Xxxxx
Xxxxxxx, XX
0000 Xxxxxx Xxxxx
Xxxxxxx, XX
00000 Xxxxxxxxx
Xxxx.
Xxxxxxx, XX
APT Fairway, Inc. Fairway Drive 0000 Xxxxxxx Xxxxx
(Xxxx. 0, 0, 0)
Xxx Xxxxxxx, XX
Schedule 1(b)-3
SCHEDULE 7(c)
CAPITALIZATION
The Buyer's obligations set forth in the letter agreement dated
December 29, 1995, between the Buyer and Ameritech Pension Trust.
The Buyer's obligations set forth in that certain letter agreement dated
May 5, 1997 between the Buyer and The Prudential Insurance Company of America.
Schedule 7(c)-1
SCHEDULE 7(d)
CONFLICTING AGREEMENTS AND OTHER MATTERS
Consent of holders of the Company's Series B Preferred Stock pursuant to
Section 5.4.(d) of the Stock Purchase Agreement dated December 29, 1995, among
the Buyer, Xxxxxx Trust & Savings Bank as Trustee for Ameritech Pension Trust,
and OTR, an Ohio general partnership acting on behalf of and as nominee for the
State Teachers Retirement Board of Ohio.
Consent of Lenders under Second Amended and Restated Revolving Credit
Agreement dated April 21, 1997 among Buyer, the First National Bank of Boston as
Agent and the other Banks party to such Agreement to the Buyer's investment in
the Rancho Downey Loan.
Schedule 7(d)-1
SCHEDULE 7(s)
SUBSIDIARIES
1. EBP 1, LTD.
- Form of entity: Texas limited partnership
- Ownership
(a) General Partner:
- MIT Unsecured, Inc., a wholly-owned corporate subsidiary of
MIT, is the sole general partner with a 1% interest.
(b) Limited Partners:
- MIT-ULP, Inc., a wholly-owned corporate subsidiary of MIT,
holds a 49% limited partnership interest.
- DFW Fund - Enterprise Business Park Associates, L.P. (which
is not affiliated with MIT) holds a 50% limited partnership
interest.
- Future cash requirements: MIT will be supplying funds to complete the
Partnership's development project by means of a construction loan to
the partnership from the general partner.
2. EBP 2, LTD.
- Form of entity: Texas limited partnership
- Ownership
(1) General Partner:
- MIT Unsecured, Inc., a wholly-owned corporate subsidiary of
MIT, is the sole general partner with a 1% interest.
(2) Limited Partners:
- MIT-ULP, Inc., a wholly-owned corporate subsidiary of MIT,
holds a 49% limited partnership interest.
- DFW Fund - Enterprise Business Park Associates, L.P. (which
is not affiliated with MIT) holds a 50% limited partnership
interest.
- Future cash requirements: MIT will be supplying funds to complete the
Partnership's development project by means of a construction loan to
the partnership from the general partner.
Schedule 7(s)-1
3. MDN-JSC LIMITED PARTNERSHIP
- Form of entity: California limited partnership
- Ownership
(1) General Partner:
- MJV IV Corp., a wholly-owned corporate subsidiary of MIT,
holds a 1% general partnership interest.
- Xxxxxxx-Xxxx/Florida, Inc. (which is not affiliated with
MIT) holds a 1% general partnership interest.
(2) Limited Partners:
- MIT holds an 85% limited partnership interest.
- Xxxxxxx-Xxxx/FOCP Limited Partnership (which is not
affiliated with MIT) holds a 13% limited partnership
interest.
4. MERIDIAN OHIO LIMITED PARTNERSHIP
- Form of entity: Delaware limited partnership
- Ownership
(1) General Partner:
- MJV III Corp., a wholly-owned corporate subsidiary of MIT,
holds a 1% general partnership interest.
- Ohio MDN, a Delaware corporation that is not affiliated with
MIT, holds a 1% general partnership interest.
(2) Limited Partners:
- MIT holds an 19% limited partnership interest.
- OTR, an Ohio general partnership acting on behalf of and as
nominee for The State Teachers' Retirement Board of Ohio
(which is not affiliated with MIT) holds a 79% limited
partnership interest.
Schedule 7(s)-2
EXHIBIT A
GROUP A
1997 # OF
PROJECT SQUARE BUDGETED COMMON ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
First Street 74,621 0000 X. Xxxxx Xxxxxx Xxx Xxxx, XX 582,000 $6,466,667 325,023 Cabot II
General Motors 132,000 0000 Xxxxxxxxxx Xx. Xxxx, XX 393,000 4,366,667 219,475 Cabot II
IDI Building 135,526 00 Xxxxxxxxxxxxxx Xxxx. Xxxxxxxx Xxxxxxx, XX 656,000 7,288,889 366,349 Cabot II
RK Distribution 133,775 0000 X. Xxxxxxxxxxx Xxxxxxx, XX 385,000 4,277,778 215,007 Cabot II
Tab Xxxxxxxx 136,260 000000 Xxxxxxx Xxxxxx Xxxxxxx, XX 495,000 5,500,000 276,437 Cabot II
Tech Plastic 60,633 000 Xxxx Xxxxxx Xxxxx, XX 216,000 2,400,000 120,627 Cabot II
Timber Court 320,722 0 Xxxxxx Xxxxx Xxxxxxxxxxx, XX 1,124,000 12,488,889 627,709 Cabot II
TYC Industries 70,756 00000 Xxxxx Xxxxxxx XxXxxxxx, XX 284,000 3,155,556 158,603 Cabot II
Street
Vans 126,720 00000 Xxxx Xxx Xxxx Xxx. City of Industry, 373,000 4,144,444 208,305 Cabot II
Distribution (Los Angeles), CA
Barrington 203,315 0000 Xxxxxxxxxx Xxxxx Xxxxxxx, XX 828,413 9,204,589 462,635 RREEF II
Business Park
Phantom Drive 127,000 0000 Xxxxxxx Xxxxx Xx. Xxxxx, XX 266,373 2,959,700 148,759 RREEF II
Bldg.
A-1
1997 # OF
PROJECT SQUARE BUDGETED COMMON ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
Rancho Xxxxxx- 623,571 0000 Xxxxxxxx Xxxxxxx Xxxxxx, XX N/A $21,500,000 1,080,619 RREEF II
Part Loan
00000 Xxxxx Xxxxxx Xxxxxx, XX
0000 Xxxxxx Xxxxxx Xxxxxx, XX
0000 Xxxxxx Xxxxxx Xxxxxx, XX
2,144,541
---------
---------
A-2
EXHIBIT A
GROUP B
1997 # OF
PROJECT SQUARE BUDGET COMMONS ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
Abitibi Price 227,120 0000 Xxxxxxxxxx Xx. Xxxxxxxxx, XX 331,000 $3,677,778 184,850 Cabot I
Airborne 144,000 0000 Xxxx Xxxxx Xxxx. Xxxxx, XX 443,000 4,922,222 247,398 Cabot I
Xxxxxxx Services 177,744 0000 Xxxxx Xxx. Xxxxxx Xxxxxxxxx, XX 516,000 5,733,333 288,165 Cabot I
Climatic 83,200 0000 Xxxxxxx Xxxx. Xxxxxxxxxx, XX 285,000 3,166,667 159,161 Cabot I
Dircks Building 158,000 0000 X. Xxxxxx Xxxxxx Xxxxxxx, XX 625,000 6,944,444 349,037 Cabot I
Xxxxxx Price 275,169 000 X. Xxxxxx Xx. Xxxxxxx, XX 903,000 10,033,333 504,289 Cabot I
Northern Auto 274,000 0000 X. Xxxxxx Xx. Xxxxxxx, XX 735,000 8,166,667 410,468 Cabot I
Prime Paper 125,952 00000 Xxxxxxxxxx Xx. Xxxxxx Xxxxxxxxx, XX 299,000 3,322,222 166,979 Cabot I
Skyway Freight 155,496 0000 XxXxxxxx Xx. Xxxxxxxxxx, XX 452,000 5,022,222 252,424 Cabot I
Southwire 156,600 00000 Xxxxx Xx. Xxxxxx, XX 439,000 4,877,778 245,164 Cabot I
Sports Supply 180,841 00000 Xxxxxxxxx Xx. Xxxxxxx Xxxxxx, XX 531,000 5,900,000 296,542 Cabot I
1,960,268
---------
A-3
EXHIBIT A
GROUP C
1997 # OF
PROJECT SQUARE BUDGET COMMONS ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
*Harvest Business
Park 192,000 6242-6250 S. 000xx Xxxxxx Xxxx, XX $375,000 $4,166,667 209,422 AMB II
0000-0000 X. 000xx Xxxxxx Xxxx, XX
0000-0000 S. 000xx Xxxxxx Xxxx, XX
Xxxx Xxxxx 215,606 0000 Xxxx Xxxxxx Xxxxx Xxxxxxxxxxx, XX 788,000 8,755,556 440,066 AMB II
0000 Xxxxx Xxxxxx Xxxxx Xxxxxxxxxxx, XX
Corporate Square 526,716 000 Xxxxxx Xxxx Xxxx, XX 1,453,000 16,144,444 811,442 AMB II
0000 Xxxxxx Xxxx Xxxx, XX
3110 Xxxx Xxxxxxxxx Blvd. Xxxx, MN
3160 Xxxx Xxxxxxxxx Blvd. Xxxx, MN
Northwestern Warehouse Xxxx, MN
A-4
1997 # OF
PROJECT SQUARE BUDGET COMMONS ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
**Ardenwood 295,657 0000 Xxxxxx Xxxxx Xxxxxxx, XX 1,442,000 16,022,222 805,299 AMB II
0000 Xxxxxx Xxxxx Xxxxxxx, XX
0000 Xxxxxx Xxxxx Xxxxxxx, XX
00000 Xxxxxxxxx Xxxx. Xxxxxxx, XX
Fairway Drive 175,324 0000 Xxxxxxx Xxxxx Xxx Xxxxxxx, XX 753,000 8,366,667 420,520 AMB II
(Bldg. 1, 2, 3)
1,405,303
---------
---------
*Alternate price if 756,000 8,400,000 422,195
Harvest Business Park
Loan paid off
**Alternate price if 2,226,000 24,733,333 1,243,131
Ardenwood Loan paid off
A-5
EXHIBIT B
DOCUMENT LIST
DUE DILIGENCE DOCUMENTS
1. Copies of all leases and amendments thereto affecting the Properties,
together with any side letters or other agreements pertaining to such lease.
2. Copies of all certificates of occupancy, licenses and permits
pertaining to the Properties in Seller's possession.
3. A current rent roll prepared by Seller indicating:
(a) The name of each tenant of each respective Property.
(b) The amount of each security deposit from each tenant; the amount
of rent and reimbursable expenses paid and to be paid by each tenant; and the
amount and date of the next scheduled rent increase.
(c) The portion of the improvements and the approximate total of
square footage occupied by each tenant.
(d) The commencement and termination dates of each lease.
(e) All renewal, expansion, and similar rights afforded thereby.
(f) The amount of any discounts, rebates, rental concessions,
brokerage commissions, and other items payable thereunder in connection
therewith.
(g) Expense stop or base year for passing through of operating
expenses.
(h) Any provision for amortization of tenant improvement cost
separately from rent.
(i) Any periods of free rent or any lease buy-out arrangements with
respect to other leases.
(j) Any cancellation, termination or other similar rights.
4. Copies of all tenant financial statements in Seller's possession.
B-1
5. Copies of all tax statements or bills for the Properties in Seller's
possession for all real estate and personal property taxes for the prior twelve
(12) months.
6. A schedule reflecting the income from and expenses of the operation of
the Properties for the preceding three (3) years through the end of the month
immediately preceding the date of the purchase agreement.
7. A schedule of all Seller's personal property used in the operation of
the Properties.
8. Copies of all soils, geotechnical, environmental, engineering and
building inspection reports and all architectural drawings (including "as
builts") pertaining to the Properties in Seller's possession or control.
9. A schedule of any and all actions, suits, and legal or administrative
proceedings affecting the Properties.
10. Copies of any and all current service contracts, agreements or other
documents affecting or relating to the Properties in Seller's possession or
control.
11. The Rancho Xxxxxx Note and all other Rancho Xxxxxx Loan Documents
(copies of which shall be delivered to Buyer for examination as opposed to being
made available).
12. Copies of the promissory notes, mortgages, and all other documents
executed as evidence of, as security for, or otherwise in connection with the
Harvest Business Park Loan and the Ardenwood Loan (copies of which shall be
delivered to Buyer for examination as opposed to being made available).
B-2
EXHIBIT C
TENANT ESTOPPEL CERTIFICATE
____________________________ ("TENANT") hereby certifies as follows:
1. The undersigned is the Tenant under that certain lease dated
____________, 199__, (the "LEASE") executed by _____________________
("LANDLORD") as Landlord, and the undersigned as Tenant respecting those certain
premises located at ___________________________ (the "PREMISES"). True and
correct copies of the Lease and all amendments, modifications and supplements
thereto are attached hereto as SCHEDULE 1.
2. Pursuant to the Lease, Tenant has paid to Landlord a deposit of
$________; the commencement date of the Lease is ______________; the expiration
date of the Lease is _______________; the fixed annual minimum rent is
$____________; the next rental payment in the amount of $____________ is due on
_______________; prepaid rent in the amount of $___________ has been paid for
the month of __________________________.
3. Pursuant to the Lease, Tenant is obligated to reimburse Landlord for
its percentage share of all real property taxes, operating expenses, common area
maintenance and insurance expenses affecting the project of which the Premises
are a part, which percentage share is equal to ____________ percent.
4. The Lease is in full force and effect, and there are no amendments,
modifications or supplements thereto, whether oral or written, except as
follows:
_________________________________________________________________
________________________________________________________________.
5. Tenant has accepted and taken possession of the Premises and is in
occupancy thereof; and Tenant is not aware of any defects in the Premises or in
the building of which the Premises are a part, except as follows:______________
_______________________________________________________________________________
_______________________________________________________________________________
6. All space and improvements leased by Tenant have been completed and
furnished in accordance with the provisions of the Lease; Tenant has accepted
and taken possession of the Premises and is in occupancy thereof; and Tenant is
not aware of any defects in the Premises or in the building of which the
Premises are a part.
C-1
7. Landlord has satisfied all commitments made to induce Tenant to enter
into the Lease, Landlord is not in any respect in default in the performance of
the terms and provisions of the Lease, and there are no existing defenses which
the undersigned has against the full enforcement of the Lease by Landlord,
except as follows:_____________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
8. Tenant is not in any respect in default under the Lease and has not
assigned, transferred or hypothecated the Lease or any interest therein or
subleased all or any portion of the Premises, except as follows:_______________
_______________________________________________________________________________
_______________________________________________________________________________
9. There are no offsets or credits against rentals payable under the
Lease, and no free periods of rent or other concessions have been granted to
Tenant, except as follows:_____________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
10. Tenant does not have any right or option to renew or extend the term
of the Lease, to lease other space within the building of which the Premises are
a part, nor any preferential right to purchase all or any part of the property
of which the Premises are a part, except as follows:
_______________________________________________________________________________
_______________________________________________________________________________
This certificate has been given to Buyer with the understanding that Buyer
will rely hereon in connection with the acquisition of the property of which the
Premises constitutes a part. The individual executing this instrument hereby
personally certifies that he or she is duly authorized to sign, acknowledge and
deliver this Estoppel Certificate to Buyer.
TENANT: ___________________________,
a ___________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
C-2
EXHIBIT D
ASSIGNMENT OF LEASES
THIS ASSIGNMENT OF LEASES ("ASSIGNMENT") is executed as of
___________________, 199__, by and between _________________, a
___________________ ("ASSIGNOR"), and MERIDIAN INDUSTRIAL TRUST, INC., a
_________________________ ("ASSIGNEE").
RECITALS:
A. Concurrently herewith, Assignor is conveying to Assignee its interest
in the real property more particularly described on SCHEDULE 1 attached hereto
and by this reference made a part hereof, together with the improvements and
personal property located thereon (herein referred to collectively as the
"PROPERTY" ) pursuant to that certain Agreement of Purchase and Sale and Joint
Escrow Instructions dated as of _________________, 1997, by and between State
Street Bank and Trust Company as Trustee for Ameritech Pension Trust, as
"SELLER" and Assignee, as "BUYER" (the "AGREEMENT") .
B. Assignor is the landlord under certain leases (collectively,
"LEASES"), which Leases Assignor has agreed to assign to Assignee, and Assignee
has agreed to assume upon its purchase of the Property. The Leases and the
security deposits ("SECURITY DEPOSITS") with respect to such Leases are more
particularly described on SCHEDULE 2 attached hereto and incorporated herein.
NOW, THEREFORE, in consideration of the foregoing recitals and for other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns, conveys,
transfers and sets over unto Assignee any and all right, title and interest of
Assignor in and to the Leases, and Assignee hereby accepts said assignment and
assumes all of Assignor's obligations, duties and responsibilities under the
Leases commencing on the Close of Escrow (as defined in the Agreement) and the
transfer of the Property to Assignee.
2. INDEMNIFICATION. Assignor agrees to protect, indemnify, defend and
hold Assignee harmless from and against all claims, obligations and liabilities
to the extent arising out of or relating to the Leases, prior to the Close of
Escrow. Assignee agrees to protect, indemnify, defend and hold Assignor
harmless from and against all claims, obligations and liabilities to the extent
arising out of or relating to the Leases, from and after the Close of Escrow.
3. SUCCESSORS AND ASSIGNS. This Assignment shall inure to the benefit
of, and be binding upon, the successors, executors, administrators, legal
representatives and assigns of the parties hereto.
D-1
4. GOVERNING LAW. This Assignment shall be construed under and enforced
in accordance with the laws of the State of Illinois.
5. FURTHER ASSURANCES. Assignor and Assignee each agree to execute and
deliver to the other party, upon demand, such further documents, instruments
and-conveyances, and shall take such further actions as are necessary or
desirable to effectuate this Assignment.
6. ATTORNEYS' FEES; COSTS. Upon the bringing of any action, suit or
arbitration by either party against the other arising out of this Assignment or
the subject matter hereof, the party in whose favor final judgment shall be
entered shall be entitled to recover from the other party all costs and expenses
of suit including, without limitation, reasonable attorneys' fees and costs.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the date first set forth above.
ASSIGNOR: ____________________________________
By:______________________________________
______________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
ASSIGNEE: MERIDIAN INDUSTRIAL TRUST, INC., a Maryland
corporation
By:______________________________________
Name:______________________________________
Title:______________________________________
D-2
EXHIBIT E
XXXX OF SALE
Pursuant to that certain Agreement of Purchase and Sale and Joint Escrow
Instructions dated as of _______________, 1997, by and between STATE STREET BANK
AND TRUST COMPANY AS TRUSTEE FOR AMERITECH PENSION TRUST, ___________________
("ASSIGNOR"), and MERIDIAN INDUSTRIAL TRUST, INC., a Maryland corporation
("ASSIGNEE"), and for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Assignor does hereby assign, convey, transfer,
set over and deliver to Assignee all of the personal property ("PERSONAL
PROPERTY") described in SCHEDULE 1 attached hereto.
This Xxxx of Sale shall be governed by and construed in accordance with the
laws of the State of Illinois. Upon the bringing of any action, suit or
arbitration by either Assignee or Assignor arising out of this Xxxx of Sale or
the subject matter hereof, the party in whose favor final judgment shall be
entered shall be entitled to recover from the other party all costs and expenses
of suit including, without limitation, reasonable attorneys' fees and costs.
IN WITNESS WHEREOF, Assignor has executed this Xxxx of
Sale this __________________, 199_.
ASSIGNOR: _________________________________
By:______________________________________
______________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
E-1
EXHIBIT F
GENERAL ASSIGNMENT AND ASSUMPTION
THIS GENERAL ASSIGNMENT ("ASSIGNMENT") is executed as of
___________________, 199__, by _________________________, a
__________________________ ("ASSIGNOR"), in favor of MERIDIAN INDUSTRIAL TRUST,
INC., a Maryland corporation ("ASSIGNEE").
RECITALS:
A. Concurrently herewith, Assignor is conveying to Assignee its interest
in the real property more particularly described on Schedule 1 attached hereto
and by this reference made a part hereof, together with the improvements and
personal property located thereon (herein referred to collectively as the
"PROPERTY"), pursuant to that certain Agreement of Purchase and Sale and Joint
Escrow Instructions dated as of _______________, 1997, by and between State
Street Bank and Trust Company as Trustee for Ameritech Pension Trust, as
"SELLER," and Assignee, as "BUYER" (the "AGREEMENT").
B. Assignor owns and/or holds certain warranties, guaranties, licenses,
permits, and other documents and instruments pertaining to the Property,
including the contracts and agreements listed on SCHEDULE 2 (the "SERVICE
CONTRACTS") which Assignor has agreed to assign to Assignee upon its purchase of
the Property.
C. This Assignment is executed to effectuate the transfer to Assignee of
all of Assignor's right, title and interest in and to any and all of the items
referred to above and other rights pursuant to the provisions of the Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and for other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor hereby agrees as follows:
1. WARRANTIES AND GUARANTIES. Assignor hereby assigns, conveys,
transfers and sets over unto Assignee, to the extent assignable, any and all of
Assignor's right, title and interest in and to all guaranties, warranties,
certificates and agreements from any contractors, subcontractors, vendors or
suppliers regarding their performance, quality of workmanship and quality of
materials supplied in connection with the construction, manufacture,
development, installation and operation of any and all personal property,
fixtures and improvements located on the Property.
2. GOVERNMENTAL APPROVALS AND CERTIFICATES. Assignor hereby assigns,
transfers, conveys and sets over unto Assignee, to the extent assignable, any
and all of Assignor's right, title and interest in and under any zoning, use,
occupancy and operating permits, and all other permits, licenses, approvals and
certificates to the extent same directly affect the Property.
F-1
3. PLANS, SPECIFICATIONS AND STUDIES. Assignor hereby assigns, conveys,
transfers and sets over unto Assignee any and all of Assignor's right, title and
interest in and to all maps, plans, specifications, studies, reports and related
documents prepared in connection with the development, construction and
operation of any and all improvements located on the Property.
4. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns to Assignee all of
Assignor's interest in and to the Service Contracts, and Assignee hereby accepts
such assignment and assumes all of Assignor's obligation under the Service
Contracts, commencing on the Close of Escrow (as defined in the Agreement).
5. INDEMNIFICATION. Assignor agrees to protect, indemnify, defend and
hold Assignee harmless from and against all claims, obligations and liabilities
to the extent arising out of or relating to the Service Contracts prior to the
Close of Escrow. Assignee agrees to protect, indemnify, defend and hold
Assignor harmless from and against all claims, obligation, and liabilities to
the extent arising out of or relating to the Service Contracts from and after
the Close of Escrow.
6. GOVERNING LAW. This Assignment shall be construed under and enforced
in accordance with the laws of the State of Illinois.
7. FURTHER ASSURANCES. Assignor agrees to execute and deliver to
Assignor, upon demand, such further reasonable documents, instruments and
conveyances, and shall take such further reasonable actions, as are necessary or
desirable to effectuate this Assignment.
8. ATTORNEYS' FEES; COSTS. Upon the bringing of any action, suit or
arbitration by either party under this Assignment or the subject matter hereof,
the party in whose favor final judgment shall be entered shall be entitled to
recover from the other party all costs and expenses of suit including, without
limitation, reasonable attorneys' fees and costs.
9. SUCCESSORS AND ASSIGNS. This Assignment shall inure to the benefit
of, and be binding upon, the successors, executors, administrators, legal
representatives and assigns of the parties hereto.
F-2
IN WITNESS WHEREOF, Assignor and Assignor have executed this Assignment as
of the date first set forth above.
ASSIGNOR: ___________________________________
By:______________________________________
______________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
ASSIGNEE: MERIDIAN INDUSTRIAL TRUST, INC., a Maryland
corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
F-3
EXHIBIT G-1
CERTIFICATION REGARDING WITHHOLDING
A. CERTIFICATION OF NON-FOREIGN STATUS. Section 1445 of the Internal
Revenue Code of 1986, as amended, provides that a transferee of a U.S. real
property interest must withhold tax if the transferor is a foreign person.
AMERITECH PENSION TRUST, a ________________________ ("TRANSFEROR"),
hereby certifies to MERIDIAN INDUSTRIAL TRUST, INC., a Maryland corporation,
("TRANSFEREE"), that withholding of tax is not required upon the transfer of a
U.S. real property interest by Transferor to Transferee.
1. Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
2. Transferor's U.S. Employer identification/social security number
is ___________________; and
3. Transferor's office/residence address is
______________________________________________________________.
B. GENERAL PROVISIONS. Transferor (a) understands that Transferee is
relying on this Certification in determining whether withholding is required
upon said transfer, (b) understands that this Certification may be disclosed to
the Internal Revenue Service by Transferee and that any false statement
contained herein could be punished by fine, imprisonment or both.
Under penalty of perjury the undersigned declares that he/she/it has
examined this Certification and, to the best of his/her/its knowledge and
belief, it is true, correct and complete, and the undersigned further declares
that he/she/it has authority to sign this document on behalf of Transferor.
TRANSFEROR: AMERITECH PENSION TRUST
By: State Street Bank and Trust Company,
as Trustee
By:________________________________________
Name:______________________________________
Title:_____________________________________
Date:______________________________________
G-1-1
EXHIBIT G-2
CERTIFICATION REGARDING WITHHOLDING
A. CERTIFICATION OF NON-FOREIGN STATUS. Section 1445 of the Internal
Revenue Code of 1986, as amended, provides that a transferee of a U.S. real
property interest (including stock in a domestic corporation that predominantly
owns real estate interests) must withhold tax if the transferor is a foreign
person.
MERIDIAN INDUSTRIAL TRUST, INC., a ________________________
("TRANSFEROR"), hereby certifies to AMERITECH PENSION TRUST ("TRANSFEREE"), that
withholding of tax is not required upon the transfer of a U.S. real property
interest by Transferor to Transferee.
1. Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
2. Transferor's U.S. Employer identification/social security number
is ___________________; and
3. Transferor's office/residence address is
______________________________________________________________.
B. GENERAL PROVISIONS. Transferor (a) understands that Transferee is
relying on this Certification in determining whether withholding is required
upon said transfer, (b) understands that this Certification may be disclosed to
the Internal Revenue Service by Transferee and that any false statement
contained herein could be punished by fine, imprisonment or both.
Under penalty of perjury the undersigned declares that he/she/it has
examined this Certification and, to the best of his/her/its knowledge and
belief, it is true, correct and complete, and the undersigned further declares
that he/she/it has authority to sign this document on behalf of Transferor.
TRANSFEROR: MERIDIAN INDUSTRIAL TRUST, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
Date:_______________________________
G-2-1
EXHIBIT H
AUDIT DOCUMENT LIST
1. Copies of property operating statements and access to year-to-date general
ledgers (or other books of original accounting record) for the year ended
December 31, 1996 and for the period from January 1, 1997 to the Closing
Date.
2. Copies of property rent rolls for March, June, September and December 1996,
January, February and March 1997 and the calendar month immediately
preceding the month in which the Closing occurs.
3. Access to leases for all tenants in occupancy of the Properties during 1996
and 1997.
4. Access to bank statements and cash receipts documents (check copies and
deposit slips) supporting recorded revenues for March, June, September and
December 1996, January, February and March 1997 and the calendar month
immediately preceding the month in which the Closing occurs.
5. Access to detail unpaid rent and other charges as of December 31, 1996 and
most recent date available prior to the closing date, along with
documentation supporting subsequent collection explanations and/or
uncollected balances.
6. Copies of 1996 operating expense pass-through reconciliation statements and
related adjustments.
7. Access to invoices supporting operating expenses paid by tenants in 1996
and 1997.
8. Copies of real property tax bills for the tax year ended December 31, 1996
and for the period from January 1, 1997 to the Closing Date.
9. Schedule of all tenants granted free rent including amounts granted during
1996 and 1997.
H-2
EXHIBIT I
FORM OF OPINION
I-1
EXHIBIT J
ASSIGNMENT OF NOTE AND LIENS
____________________ ("ASSIGNOR"), for $10 and other good and valuable
consideration, whose receipt and sufficiency are acknowledged, assigns to
_________________________________ ("ASSIGNEE"), without recourse or warranty
(except as provided below), the following:
1. The promissory note dated ______________, in the original principal
amount of $________________, executed by ____________________ ("MAKER"), payable
to the order of Assignor as specified therein (the "NOTE"); and
2. All rights, titles and interests of Assignor existing and to exist in
connection with or as security for the payment of the indebtedness evidenced by
the Note, including without limitation all rights, titles and interests arising
under or evidenced by (a) the Mortgage/Deed of Trust dated _______________,
executed by Maker, recorded in Volume _____, Page _____ of the Records of
_________ County, ________, and (b) the Assignment of Rents recorded in Volume
_____, Page _____ of the Records of _________ County, ______.
TO HAVE AND TO HOLD the Note, together and along with all rights, titles
and interests now or hereafter had by Assignor in connection therewith or as
security therefor unto Assignee, its successors and assigns forever. Assignor
hereby represents and warrants that Assignor (1) is the owner and holder of the
Note,(2) has not assigned, mortgaged or hypothecated the Note or any of the
liens or security interests securing payment thereof to any other party, and (3)
has the full right and authority to transfer the Note, all rights, titles, and
interests related thereto, and to execute this instrument.
EXECUTED as of _________, 19___.
______________________________________
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
J-1
THE STATE OF _________ Section
Section
COUNTY OF ___________ Section
This instrument was acknowledged before me on ________, 19__, by
__________________________, ____________________ of ______________________, a
_______________________, on behalf of said _____________.
________________________________________________
Notary Public, State of ________
My Commission Expires: _________________________
________________________________________________
Printed Name of Notary
J-2
EXHIBIT K
REGISTRATION RIGHTS AGREEMENT
[to be attached]
K-1
EXHIBIT L
AMENDED AND RESTATED EXCEPTED HOLDER AGREEMENT
L-1
