EXHIBIT 10.29
[LINKLATERS LETTERHEAD]
Dated 15 September 1999
PROLOGIS MANAGEMENT S.A.R.L.
FOR AND ON BEHALF OF PROLOGIS EUROPEAN PROPERTIES FUND
and
PROLOGIS DEVELOPMENTS S.A.R.L.
and
PROLOGIS FRANCE DEVELOPMENTS INC
and
KINGSPARK HOLDINGS S.A.
and
PROLOGIS TRUST
STABILISED PROPERTY CONTRIBUTION AGREEMENT
THIS AGREEMENT is made the 15th day of September 1999
BETWEEN: -
(1) PROLOGIS MANAGEMENT S.A.R.L. whose registered office is at 00X
Xxxxxxxxx Xxxxx X-0000 Xxxxxxxxxx ("XXX MANAGEMENT COMPANY") for and on
behalf of PROLOGIS EUROPEAN PROPERTIES FUND (the "FUND" which
expression shall include any direct or indirect wholly owned
subsidiaries of ProLogis European Properties Fund) and
(2) PROLOGIS DEVELOPMENTS S.A.R.L. whose registered office is at 00 Xxxxx
X'Xxxx X-0000 Xxxxxxxxxx ("XXXX")
(3) PROLOGIS FRANCE DEVELOPMENTS INC ("PLDF") whose registered office is at
0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx, 00000, County of New Castle and
(4) KINGSPARK HOLDINGS S.A. ("KINGSPARK") whose registered office is at 00
Xxxxx X'Xxxx X-0000 Xxxxxxxxxx
(5) PROLOGIS TRUST ("PROLOGIS") whose principal place of business is at
00000 Xxxx 00xx Xxxxx, Xxxxxx, XX00000
It is HEREBY AGREED as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS:
Unless the context otherwise requires the words and phrases set out in
this clause shall have the following meanings: -
APPRAISAL means an appraisal and valuation of a Property by the
Independent Appraiser including an assessment of the OMV of the
relevant Property.
CLASS B2 UNITS means Class B2 Units issued by the Fund as described in
Article 9 of the Management Regulations.
CLOSING means the first date determined by the Management Company on or
prior to which subscription forms in relation to the first issuance of
Class A(1) Units and/or Class C(1) Units have been received and
accepted by the Management Company for and on behalf of the Fund which
date is 15 September 1999.
CONDITION means in relation to any Property that the Management Company
on behalf of the Fund has confirmed on the basis, inter alia, of the
Appraisal, that the Property satisfies the Investment and Operating
Criteria at the Relevant Transfer Date.
CONTRIBUTION AMOUNT means:
(a) If a Property is acquired directly from a PLD Party:
the sum equivalent to 95% of the OMV of the relevant
Property (which the parties acknowledge is the agreed
market value taking account of the terms of this
Agreement) PROVIDED THAT if such Property is to be
transferred subject to any financial charges or other
indebtedness then (a) the amount of all liabilities
secured by such charge or other indebtedness as at
the Relevant Transfer Date shall be deducted from the
Contribution Amount and (b) all such liabilities
shall be assigned novated or otherwise transferred to
the Management Company on behalf of the Fund; OR
(b) if the Management Company on behalf of the Fund
acquires shares in a Property Owner rather than a
Property: the NAV of the shares in such Property
Owner computed in accordance with the policies
referred to in clause 5.6 and subject to
recalculation pursuant to clause 5.9;
and in each case such Contribution Amount shall be approved by the
Management Company on behalf of the Fund in accordance with clause 5
and taking account of the Appraisal.
DUE DILIGENCE means the PLD Party's investigation of the title and
other matters relating to any Property as summarised in the document at
Appendix 1 to this Agreement.
ENCUMBRANCE means any claim, charge, mortgage, security, lien, option,
equity, power of sale or hypothecation.
FUND'S PORTFOLIO means the properties from time to time owned by the
Management Company on behalf of the Fund or its wholly owned direct or
indirect subsidiaries.
GAAP means generally accepted accounting principles in the United
States.
INDEPENDENT APPRAISER means Xxxxx Xxxx LaSalle or such other
independent real estate appraisal and valuation professionals who are
members of the appropriate professional body and/or appropriately
licensed by the appropriate authority to operate in the jurisdiction
where the relevant Property is located, such persons to be proposed by
the Management Company and approved by the UAC.
INVESTMENT AND OPERATING CRITERIA means (in relation to any Property)
at the Relevant Transfer Date the Investment and Operating Criteria
defined in the Private Placement Memorandum.
MANAGEMENT REGULATIONS means the Management Regulations dated 10
September 1999 in relation to ProLogis European Properties Fund.
NAV means the value of all assets owned by the relevant Property Owner
after deducting all liabilities but ignoring any deferred tax
liabilities and in determining such value the value of the relevant
Property shall be included at 95% (and not 100%) of its OMV.
OMV has the meaning ascribed to that term in the Private Placement
Memorandum.
PLD PARTY means any of PLDD, PLDF and Kingspark and obligations which
are expressed to be undertaken by "THE PLD PARTY" shall be obligations
of the relevant one of PLDD or PLDF or Kingspark which owns an interest
in the relevant Property or Property Owner.
PRIVATE PLACEMENT MEMORANDUM means the Private Placement Memorandum
dated 10 September 1999 in respect of ProLogis European Properties
Fund.
PROLOGIS RELATED PARTY means (a) ProLogis (b) an entity that directly
or indirectly is controlled by ProLogis or (c) an entity at least 35
per cent of whose economic interest is owned directly or indirectly by
ProLogis; and the term "control" means the power to direct the
management of such entity through voting rights, ownership or
contractual obligations.
PROPERTY means one or more of the warehouse and distribution properties
which are owned (freehold or leasehold) from time to time by any PLD
Party or its wholly owned direct or indirect subsidiaries
PROPERTY OWNER means a special purpose company which directly or
indirectly owns one or more Stabilised Properties
RELEVANT TRANSFER DATE means a date specified by the PLD Party which is
(a) not earlier than twenty-five Working Days after the
date of service of the notice by the PLD Party under
Clause 5.1 in relation to any Property or Property
Owner; and
(c) not later than six months and twenty-four Working
Days after the date of such notice
STABILISATION DATE means the date on which the Management Company on
behalf of the Fund informs the PLD Party of its agreement that the
Condition has been satisfied in relation to any Property.
STABILISED PROPERTY means a Property in respect of which the Management
Company on behalf of the Fund has agreed that the Condition is
satisfied.
TARGET MARKETS means the markets identified as such in the Private
Placement Memorandum.
UAC means the Unitholders Advisory Committee set up in accordance with
the Management Regulations.
VAT means Value Added Tax pursuant to the 6th Council Directive
77/388/EEC and any similar tax on turnover in any other jurisdiction.
WARRANTIES means the warranties and representations set out in Schedule
1 of this Agreement
WORKING DAY means a day on which banks are open for business in
Luxembourg (excluding Saturdays, Sundays and public holidays).
1.2 In this Agreement the headings shall not affect its interpretation.
2 AGREEMENT TO CONTRIBUTE
2.1 Subject to clause 2.2 on each Relevant Transfer Date with respect to
any Property the Management Company on behalf of the Fund shall acquire
and the PLD Party shall contribute (or procure the contribution of)
such Stabilised Property to the Management Company on behalf of the
Fund PROVIDED THAT such a contribution may be effected at the option of
the PLD Party either:
2.1.1 by a transfer of the relevant Stabilised Property; or
2.1.2 by a transfer of the shares in the Property Owner of such
Stabilised Property provided that such entity owns no
properties other than one or more Stabilised Properties
in each case in exchange for the Contribution Amount applicable to the
relevant Properties, such Contribution Amount being satisfied as set
out in Clause 5.13.
2.2 Kingspark may elect as to whether it wishes to transfer a Stabilised
Property direct to the Management Company on behalf of the Fund in
accordance with this Agreement or whether it wishes to transfer such
Stabilised Property to PLDD in which case:-
2.2.1 Kingspark will continue to perform the obligations of the PLD
Party in relation to such Property until the date of transfer
to PLDD where upon PLDD shall become responsible for them and
the obligations on the part of PLDD in relation to such
Stabilised Property shall be as set out in this Agreement in
relation to Stabilised Properties generally; and
2.2.2 Kingspark shall transfer to PLDD such Stabilised Property no
later than the Relevant Transfer Date. Such transfer may be
effected by a transfer of the Property itself or a transfer of
the shares in the Property Owner and Kingspark shall notify
the Management Company of the date of such transfer.
3 REPORTING OBLIGATIONS
The PLD Party shall each provide the Management Company on behalf of
the Fund with a report no less frequently than once every three months
such report to include full details of:
3.1 The Properties then owned by the PLD Party;
3.2 The proposed development programme for such Properties;
3.3 The Properties then in the course of development with details of the
anticipated date of practical completion of the base building
construction;
3.4 The current position with regard to the letting of the Properties and
the proposed future letting programme;
3.5 Analysis of the letting market for such Properties and anticipated
rental levels;
3.6 The Properties ("THE POTENTIAL PROPERTIES") in respect of which the
Condition is (in the reasonable opinion of the PLD Party) expected to
be satisfied during the next twelve months.
3.7 Such other information as the Management Company on behalf of the Fund
reasonably requires for the purpose of determining the adequacy of the
financial resources of the Fund in relation to the likely availability
of Stabilised Properties.
4 COPY LEASE DOCUMENTATION
4.1 In relation to each Potential Property the PLD Party shall promptly
provide to the Management Company on behalf of the Fund a copy of all
executed agreements for lease and leases.
5 PROCEDURE FOR CONTRIBUTION/TIMING
5.1 The PLD Party shall notify the Management Company on behalf of the Fund
as soon as it believes that any Property (including any which are to be
transferred from Kingspark to PLDD pursuant to clause 2.2) has
satisfied the Investment and Operating Criteria. The PLD Party shall at
the same time notify the Management Company;
5.1.1 whether it wishes to contribute such Property or whether it
wishes to contribute the shares in the relevant Property Owner
(which option shall be available to the PLD Party only in
cases when the Property Owner owns no properties other than
Stabilised Properties nor any other material assets); and
5.1.2 when it wishes the Relevant Transfer Date to be for such
Property; and
5.1.3 any disclosures subject to which the warranties set out in
Schedule 1 are to be given in relation to such Property;
5.1.4 (if the Property itself is to be transferred to the Management
Company on behalf of the Fund) particulars of the contracts,
warranties, and guarantees relating to the design,
development and construction of the Property to be transferred
pursuant to clause 5.16.1; and
5.1.5 (if the PLD Party is Kingspark) whether it intends to transfer
the Property or Property Owner to PLDD.
5.2 The Management Company on behalf of the Fund shall at its own expense
promptly upon receiving the notification referred to in clause 5.1
instruct the Independent Appraiser to carry out an Appraisal of the OMV
of such Property (having regard to any material disclosures under
clause 5.1.3) as at the Relevant Transfer Date proposed pursuant to
clause 5.1 or as near thereto as practicable and the Management Company
shall promptly provide the PLD Party with a copy of such Appraisal.
5.3 The Management Company on behalf of the Fund shall respond within
fifteen Working Days of notification as referred to in clause 5.1
stating;
5.3.1 whether it agrees that such Condition is satisfied. Until it
indicates that the Condition has been satisfied the relevant
Property shall not become a Stabilised Property; and
5.3.2 whether the Management Company on behalf of the Fund with the
approval of the UAC determines that it will not accept such
Property on account of the material disclosures referred to in
clause 5.1.3. If the Management Company on behalf of the Fund
with the approval of the UAC does so determine then the
relevant Property or Property Owner shall not be contributed
to the Management Company on behalf of the Fund and the
Management Company on behalf of the Fund shall have no
obligation to make any payment or issue any Class B2 Units in
relation to such Property and the PLD Party shall be free to
sell such Property in the open market without any obligation
ever to offer such Property to the Fund again.
5.4 If the PLD Party notifies the Management Company on behalf of the Fund
that it intends to contribute the relevant Property Owner (and not the
Stabilised Property direct) then the PLD Party may effect such
contribution by transferring or procuring the transfer of the shares in
(a) the Property Owner or
(b) in any other company which directly or indirectly wholly owns the
shares in the Property Owner provided that such other company has no
other material assets or liabilities and references in this Agreement
to the transfer of a Property Owner shall be deemed to include
references to the transfer of such a company as referred to in this
paragraph (b) in which case the balance sheets referred to in clause
5.6 and clause 5.9 and paragraph 2 of Part III of Schedule 1 shall be
considered.
5.5 Within five Working Days after the Stabilisation Date the PLD Party
shall notify the Management Company on behalf of the Fund of the actual
Relevant Transfer Date which shall be not less than ten Working Days
after such notification.
5.6 Not less than ten Working Days prior to the Relevant Transfer Date for
the transfer of shares in any Property Owner the PLD Party shall
provide the Management Company on behalf of the Fund with a proforma
balance sheet in respect of the Property Owner drawn up under GAAP
reflecting the PLD Party's best estimate of the financial condition of
the Property Owner as at the Relevant Transfer Date on the basis that
(i) only 95% of the OMV of the Property shall be taken into account,
such OMV having been established in the Appraisal; and (ii) any
deferred
tax liabilities shall not be taken into account. The Contribution
Amount shall be estimated by the PLD Party acting reasonably and
properly on the basis of such balance sheet.
5.7 In the case of any transfer of a Stabilised Property the Contribution
Amount shall be calculated by the PLD Party in accordance with clause
1.1 and notified to the Management Company on behalf of the Fund in
sufficient time to enable the Management Company on behalf of the Fund
to approve it not less than ten Working Days prior to the Relevant
Transfer Date.
5.8 The decision of the Management Company on behalf of the Fund in
relation to the matters referred to in Clause 5.7 shall in the absence
of manifest error be final and binding on the parties for all purposes.
5.9 In the case of a transfer of a Property Owner, within forty Working
Days after the Relevant Transfer Date the PLD Party shall submit to the
Management Company on behalf of the Fund a definitive balance sheet
("THE BALANCE SHEET") on the basis of which the Contribution Amount as
referred to in Clause 5.6 shall be re-calculated.
5.9.1 If such recalculation results in a higher Contribution Amount
than had been calculated at the Relevant Transfer Date then
the Fund shall either
(a) subject to Clause 5.18, issue to the PLD
Party Class B2 Units effective as at the
Relevant Transfer Date in addition to those
Class B2 Units requested under clause 5.10;
and/or (at the option of the PLD Party such
option to be notified at the same time as
the submission of the Balance Sheet)
(b) pay to the PLD Party cash
in an aggregate amount equivalent to the amount of such
difference in the Contribution Amount.
5.9.2 If such recalculation results in a lower Contribution Amount
than had been calculated at the Relevant Transfer Date then
the PLD Party shall either
(a) pay cash to the Management Company on behalf
of the Fund; and/or (at the option of the
PLD Party such option to be notified at the
same time as the submission of the Balance
Sheet)
(b) take fewer Class B2 Units
in an aggregate amount equivalent to the amount of such
difference in the Contribution Amount.
5.10 Not less than ten Working Days prior to the Relevant Transfer Date the
PLD Party shall inform the Management Company on behalf of the Fund of
(a) the amount (in Euros) (being part of the estimated
Contribution Amount as, in the case of the transfer of a
Property Owner, determined from the balance sheet referred to
in Clause 5.6) which it wishes to receive in respect of the
relevant Stabilised Property; and
(b) the amount (being the balance of such estimated Contribution
Amount) which it wishes to receive as Class B2 Units
subject always to the provisions of Clauses 5.12, 5.13 and 5.18.
At the same time the PLD Party shall inform the Management Company on
behalf of the Fund of the amount of the liabilities which shall be
required to be repaid by the Management Company on behalf of the Fund
pursuant to Clause 5.13.3.
5.11 If the Management Company on behalf of the Fund determines that it will
be unable to (a) pay the cash portion of any estimated Contribution
Amount calculated under clause 5.6 or (b) comply with its obligation
under Clause 5.13.3 in relation to any Stabilised Property then the
Management Company on behalf of the Fund shall so notify the PLD Party
not more than five Working Days after the notice given by the PLD Party
in Clause 5.10. Upon such notification being given to the PLD Party the
relevant Stabilised Property or Property Owner shall not be contributed
to the Management Company on behalf of the Fund and the Management
Company on behalf of the Fund shall have no obligation to pay any
Contribution Amount relevant to such Property or Property Owner. The
PLD Party shall thereupon be entitled to dispose of such Property or
Property Owner to any third party or the PLD Party may elect to keep
such Property for its own purposes and if so the PLD Party shall be
under no obligation ever to offer such Property to the Fund again.
5.12 The PLD Party may require the issue to it of Class B2 Units
representing such proportion of the Contribution Amount as the PLD
Party shall in its absolute discretion (but subject to the provisions
of clause 5.14 below) determine PROVIDED THAT in respect of every
Property which is contributed (directly or through a contribution of
the shares in the Property Owner) the PLD Party shall request and
ensure that there is sufficient equity in the Property Owner or the
Property to allow the PLD Party to receive Class B2 Units to a value at
least equivalent to:
10% x (95% of the OMV of the relevant Property)
5.13 The Management Company on behalf of the Fund shall on the Relevant
Transfer Date:
5.13.1 Issue Class B2 Units to the PLD Party in respect of the amount
notified pursuant to clause 5.10 except that, in relation to
the transfer of a Property Owner, no Units shall be issued
until the Contribution in Kind report referred to in clause
5.18 has been prepared, but when issued the Units shall be
issued as at the Relevant Transfer Date; and
5.13.2 Pay to the PLD Party cash equivalent to the balance of the (as
estimated under clause 5.6 of the case of a transfer of a
Property Owner) Contribution Amount (if any) which shall be
paid on the Relevant Transfer Date by the Fund to the PLD
Party in cleared funds in Euros on the Relevant Transfer Date
to an account designated by the PLD Party and notified to the
Management Company on behalf of the Fund not less than three
Working Days before the Relevant Transfer Date; and
5.13.3 Unless otherwise agreed by the parties repay all financial
indebtedness secured on or otherwise related to any Stabilised
Property transferred to the Management Company on behalf of
the Fund (directly or through the transfer of a Property
Owner) on such Relevant Transfer Date and the PLD Party shall
provide the Management Company on behalf of the Fund with full
account and other details for the relevant repayments to be
made.
5.14 Notwithstanding the provisions of Clause 5.10 any issue of Class B2
Units to the PLD Party in excess of the figure produced by the
calculation set out in Clause 5.12 shall be subject to the approval of
the UAC if immediately after the issue of such Class B2 Units the
aggregate amount paid to all the PLD Parties in the form of Class B2
Units under this Agreement in the
twelve month period immediately preceding the date of such issue would
exceed 50% of the product of the following calculation:
95% x OMV of all Properties contributed (directly or
via direct or indirect transfers of shares in
Property Owners) to the Management Company on behalf
of the Fund during such twelve month period
Provided that if
(a) such consent of the UAC is not granted; and
(b) the PLD Party requires (as determined in its
absolute discretion) to receive Class B2
Units in excess of such 50% maximum for
purposes relating to the recognition of
gains to ProLogis Trust under certain
provisions of US tax law and regulations and
not relating to any interest of the PLD
Party in owning a greater number of B2 Units
in the Fund;
then the PLD Party shall be at liberty to sell the relevant Property or
Property Owner to any other party including ProLogis Affiliates at any
price or to retain it without any obligation to offer it again to the
Fund;
And Provided Further that if the PLD Party opts to receive additional
Class B2 Units pursuant to clause 5.9.1(a) then such additional Class
B2 Units shall be issued notwithstanding that their issue might breach
such 50% maximum but such additional Class B2 Units shall be taken into
account for the purposes of the calculation set out in this clause 5.14
on all subsequent contributions of Properties and/or Property Owners
5.15 On the Relevant Transfer Date the parties shall enter into a transfer
of the relevant Property or a transfer of the shares in the Property
Owner (as the case may be) which shall achieve the transfer of the
entire freehold or leasehold (as the case may be) ownership of such
Property or the full legal and beneficial ownership of shares in the
relevant jurisdiction. Notwithstanding the foregoing the Management
Company on behalf of the Fund agrees to co-operate with the PLD Parties
in achieving a tax efficient method of structuring the transfer of
Properties and/or Property Owners to the Management Company on behalf
of the Fund including and if appropriate the separate transfers of the
legal and beneficial ownership of a Property subject to:
5.15.1 the PLD Party bearing all additional legal costs incurred by
the Management Company on behalf of the Fund in relation to
any particular tax-efficient structure (other than any costs
incurred by the Management Company and/or the Fund in respect
of actions taken by either or both of them without the consent
of the PLD Parties); and
5.15.2 the PLD Party indemnifying the Management Company on behalf of
the Fund for all liability which it might incur as a result of
it owning directly or indirectly the legal title to any
property at a time when the beneficial title to such property
is still vested directly or indirectly in the PLD Party; and
5.15.3 the structuring not being prejudicial to the Fund other than
in immaterial respects.
and in such case the warranty in paragraph 2.1 of Part I of Schedule 1
shall be varied so as to (a) allow for the legal and beneficial
ownership to be vested in two separate companies and (b) allow for the
possibility that the Management Company on behalf of the Fund might
itself already own the legal title as envisaged in clause 5.15.2 above.
5.16 If the Property itself is to be transferred to the Management Company
on behalf of the Fund the following additional provisions shall apply:-
5.16.1 the parties shall use their best efforts (but without
incurring any financial obligation) to ensure that there are
on the Relevant Transfer Date transferred to the Management
Company on behalf of the Fund (or held on trust for the
Management Company on behalf of the Fund) the benefit of all
contracts, warranties, claims, guarantees and other such
matters relating to the Property (including without limitation
its design, development, construction and title); and
5.16.2 unless otherwise agreed by the parties, the Property shall be
transferred subject to financial charges, mortgages and liens
provided that the liability to which the same relate is fully
taken into account when calculating the Contribution Amount
for such Property and such liabilities are assigned, novated
or otherwise transferred to the Management Company on behalf
of the Fund; and
5.16.3 if any adjoining property is retained by the relevant PLD
Party the transfer shall include such provision as to (i) the
grant and reservation of easements or rights for access and
the running of services over the Property and the retained
property and (ii) the maintenance and cost of any common areas
and common facilities as shall be appropriate and agreed
between the relevant PLD Party and the Management Company on
behalf of the Fund each acting reasonably.
5.17 The Fund and the Management Company shall act reasonably and promptly
in giving or withholding confirmation that a Property has become
Stabilised.
5.18 The obligation on the Management Company to issue Class B2 Units under
this Clause 5 in respect of a Property Owner shall be subject to the
requirement under Luxembourg law and regulatory practice for a
contribution in kind report to be prepared in relation to such issue.
The Management Company and the relevant PLD Party shall procure that
such a report is prepared at the same time as each Balance Sheet under
Clause 5.9 provided always to the extent that as a result the relevant
PLD Party cannot be issued a certain number of B2 Units, the PLD Party
shall be entitled to receive cash in lieu.
5.19 All costs associated with the Fund's financing of its acquisition of a
Property or Property Owner shall be borne by the Fund.
5.20 On the Relevant Transfer Date the PLD Party shall deliver or make
available to the Management Company the following:
5.20.1 Title documents (or copies thereof if the same are held by a
third party chargee) in respect of the relevant Property; and
5.20.2 (In the case of a transfer of a Property Owner) the
Certificate of Incorporation, corporate seal (if any), cheque
book (if any) and co-ordinated articles of incorporation of
the relevant Property Owner.
6 TRANSFER OF PROPERTIES WHEN THE CONDITION IS NOT SATISFIED
PLDD and PLDF and Kingspark each hereby grant to the Management Company
on behalf of the Fund the right of first refusal contained in Schedule
2 hereto (without prejudice to clause 7).
7 DEVELOPMENT
PLDD and PLDF and Kingspark shall each exercise commercially reasonable
efforts to ensure that any Property which any PLD Party develops
acquires or improves shall satisfy the Condition.
8 PLD PARTIES' BUSINESS
8.1 Each PLD Party may notwithstanding any other provision of this
Agreement and without any obligation to offer the relevant property to
the Management Company on behalf of the Fund engage in the business of
development and/or ownership and/or operation of warehouse and/or
distribution facilities or properties:-
8.1.1 in circumstances where the PLD Party has no legal, equitable
or beneficial interest in or ownership of such properties to
the intent that the PLD Party may carry out build-to-suit
developments and project management developments where the PLD
Party receives a fee for its services; and/or
8.1.2 in circumstances where Properties or Property Owners have been
offered to the Fund but the Management Company on behalf of
the Fund has been unable to pay for them or has declined to
acquire them; and/or
8.1.3 in circumstances where the PLD Party has acquired a Property
or a Property Owner from the Management Company on behalf of
the Fund following a decision by the Management Company on
behalf of the Fund to dispose of such Property or Property
Owner; and/or
8.1.4 in respect of any warehouse and/or distribution facilities or
properties which the Management Company on behalf of the Fund
is not permitted to acquire under the terms of Articles 6, 7
or 8 of the Management Regulations.
8.2 The PLD Parties each agree that they shall not, except with the consent
of the UAC (which shall not be unreasonably withheld), enter into any
arrangements such as development joint ventures which would in the
opinion of the PLD Parties be beneficial or neutral to the Fund but
could result in the Management Company on behalf of the Fund owning
less than 100% of either a Property or a Property Owner at the time
when the relevant Property (or a partial interest therein) would be
available for contribution to the Management Company on behalf of the
Fund. If at any time the PLD Party wishes to dispose of any Property
(with or without the interest of any joint venture partner), which is
the subject of any such joint venture then it shall first offer the
Property or its interest in it to the Management Company on behalf of
the Fund in accordance with Schedule 2.
9 BALANCE SHEET AUDIT
The Management Company on behalf of the Fund shall have the right to
approve (such approval not to be unreasonably withheld) the Balance
Sheet referred to in clause 5.9 and as part of such approval it may at
the expense of the Fund carry out an audit of such Balance Sheet and
the PLD Party shall co-operate in the provision of documentation and
information reasonably required to facilitate the carrying out of such
audit.
10 WARRANTIES
10.1 The PLD Party warrants (subject to clause 10.4) that the Warranties set
out in Schedule 1 will be fulfilled and will be true and accurate in
all respects and not misleading in any respect at the
Transfer Date for any Stabilised Property or relevant Property Owner
which is then to be transferred to the Management Company on behalf of
the Fund. The warranties set out in Part III of Schedule 1 apply only
if the transfer is to be a transfer of the Property Owner.
10.2 The PLD Party acknowledges that the Management Company on behalf of the
Fund will acquire the Stabilised Properties or relevant Property Owner
in reliance upon, amongst other things, the Warranties.
10.3 The Warranties are given by the relevant PLD Party only in relation to
Properties or Property Owners which are to be contributed by that PLD
Party.
10.4 The PLD Party's warranty in clause 10.1 above is subject to:
10.4.1 any matter which is fairly and fully disclosed to the
Management Company on behalf of the Fund prior to the Relevant
Transfer Date and to which the Management Company has not
objected pursuant to clause 5.3.2; and
10.4.2 any matter or thing hereafter done or omitted to be done
pursuant to this Agreement or otherwise at the request of or
with the approval of the Management Company on behalf of the
Fund.
10.5 The Warranties and all other provisions of this Agreement in so far as
the same shall not have been performed by the transfer of each relevant
Property or Property Owner shall not be extinguished or affected by
such transfer or by any other event or matter whatsoever, except by a
specific written waiver or release by the Management Company on behalf
of the Fund.
10.6 LIMITATION OF LIABILITY:
Notwithstanding the provisions of Clause 10.1, the PLD Party shall not
be liable under this Agreement:
10.6.1 TIME LIMITS: In respect of any warranty claim unless notice of
such claim is given in writing by the Management Company on
behalf of the Fund to the PLD Party setting out reasonable
details of the specific matter in respect of which the claim
is made including if practicable an estimate of the amount of
such claim, within one year after the Relevant Transfer Date
when such warranty (upon which the claim is based) was given;
10.6.2 MINIMUM CLAIMS: In respect of any claim arising from any
single circumstance if the amount of the claim does not exceed
one per cent of the OMV of the relevant Property (save that
claims relating to a series of connected matters shall be
aggregated for this purpose) but if the PLD Party shall be
liable for a claim in excess of that amount in respect of the
relevant Property then the entire claim shall accrue against
and be recoverable from the PLD Party;
10.6.3 MAXIMUM CLAIMS: In respect of any claim to the extent that the
liability of the PLD Party for all claims in aggregate made
under this Agreement in relation to any Property would exceed
95% of the OMV of the relevant Property;
10.6.4 CONTINGENT LIABILITIES: in respect of any liability which is
contingent unless and until such contingent liability becomes
an actual liability and is due and payable;
10.6.5 PROVISIONS: In respect of any claim if and to the extent that
proper provision or reserve is made for, or is taken account
of, the matter giving rise to the claim in the
accounts on the basis of which the NAV for the relevant
Property Owner was calculated (and not subsequently released)
or in the relevant Appraisal Provided That if it transpires
that any provision or reserve was excessive an appropriate
balancing payment will be made by the Management Company on
behalf of the Fund to the PLD Party;
10.6.6 DEFERRED TAX: For any claim in relation to deferred tax
liability;
10.6.7 VOLUNTARY ACTS ETC: In respect of any matter, act, omission or
circumstance (or any combination thereof) (including, for the
avoidance of doubt, the aggravation of a matter or
circumstance) to the extent that the same would not have
occurred but for:
(i) any voluntary act, omission or transaction of the
Fund or the Management Company, or its directors,
employees or agents, after the Relevant Transfer Date
in the ordinary course of its business;
(ii) the passing of, or any change in, after the date of
this Agreement, any law, rule, regulation or
administrative practice of any government,
governmental department, agency or regulatory body
including (without prejudice to the generality of the
foregoing) any increase in the rates of taxation or
any imposition of taxation or any withdrawal of
relief from taxation not actually (or prospectively)
in effect at the date of this Agreement;
(iii) any change in accounting or taxation policy, bases or
practice of the Management Company on behalf of the
Fund introduced or having effect after the Relevant
Transfer Date;
10.6.8 SAVINGS BY THE FUND in any respect of any claim for any losses
suffered by the Management Company on behalf of the Fund to
the extent of any corresponding savings by or net benefit to
the Fund arising therefrom;
10.6.9 INSURANCE: In respect of any claim to the extent that any
losses arising from such claim are covered by a policy of
insurance in force on the Relevant Transfer Date.
10.7 MITIGATION OF LOSS: The Management Company on behalf of the Fund shall
procure that all reasonable steps are taken and all reasonable
assistance is given to avoid or mitigate any losses which in the
absence of mitigation might give rise to a liability in respect of any
claim under this Agreement.
10.8 CONDUCT OF CLAIMS:
10.8.1 If the Management Company on behalf of the Fund becomes aware
of any matter that may give rise to a claim against the PLD
Party under this Agreement notice of that fact shall be given
as soon as possible to the relevant PLD Party.
10.8.2 Without prejudice to the validity of the claim or alleged
claim in question, the Management Company on behalf of the
Fund shall allow, the PLD Party and its accountants and
professional advisers to investigate the matter or
circumstance alleged to give rise to such claim and whether
and to what extent any amount is payable in respect of such
claim and for such purpose the Management Company on behalf of
the Fund shall give, subject to it being paid all reasonable
costs and expenses, all such information and assistance,
including access to premises and personnel, and the right to
examine and copy or photograph any Property, assets,
accounts, documents and records, as the PLD Party or its
accountants or professional advisers may reasonably request.
10.8.3 If the claim in question is a result of or in connection with
a claim by or liability to a third party then:
(i) no admission of liability shall be made by or on
behalf of the Fund and the claim shall not be
compromised, disposed of or settled without the
consent of the PLD Party (which shall not be
unreasonably withheld or delayed);
(ii) the PLD Party shall in consultation with the
Management Company be entitled at its own expense in
its reasonable discretion to take such action as it
shall deem necessary to avoid, dispute, deny, defend,
resist, appeal, compromise or contest such claim or
liability (including, without limitation, making
counterclaims or other claims against third parties)
in the name of and on behalf of the Fund and to have
the conduct of any related proceedings, negotiations
or appeals;
(iii) the Management Company on behalf of the Fund will
give and procure that the relevant Property Owner
gives, subject to their being paid all reasonable
costs and expenses, all such information and
assistance, including access to Properties and
personnel, and the right to examine and copy or
photograph any assets, accounts, documents and
records, for the purpose of avoiding, disputing,
denying, defending, resisting, appealing,
compromising or contesting any such claim or
liability as the PLD Party or its professional
advisers reasonably request. The PLD Party agrees to
keep all such information confidential and only to
use it for such purpose.
10.9 PRIOR RECEIPT: If the PLD Party pays an amount in discharge of any
claim under this Agreement and the Management Company on behalf of the
Fund or any Property Owner subsequently recovers (whether by payment,
discount, credit, relief or otherwise) from a third party a sum which
is referable to the subject matter of the claim and which would not
otherwise have been received by the Management Company on behalf of the
Fund, the Management Company on behalf of the Fund shall pay, or shall
procure that the relevant Property Owner pays, to the PLD Party an
amount equal to (i) the sum recovered from the third party less any
reasonable costs and expenses incurred in obtaining such recovery or
(ii) if less, the amount previously paid by the PLD Party to the
Management Company on behalf of the Fund.
10.10 DOUBLE CLAIMS: The Management Company on behalf of the Fund shall not
be entitled to recover from the PLD Party under this Agreement more
than once in respect of the same damage suffered.
10.11 The PLD Parties agree that any claim which could otherwise be made by
the Management Company on behalf of the Fund under any Warranty shall
not be precluded or debarred on the grounds that the Management Company
has actual or constructive knowledge or deemed knowledge of the matter
to which such claim relates or on the grounds that reliance was not
placed by the Management Company on such Warranty, and there shall be
no reduction in the compensation payable as a result of the breach of
such Warranty by reason of the grounds set out above.
11 GENERAL PROVISIONS
11.1 This Agreement contains the whole agreement between the parties
relating to the subject matter of this Agreement at the date hereof to
the exclusion of any terms implied by law which may be excluded by
contract. The Management Company on behalf of the Fund acknowledges
that it has not been induced to enter into this Agreement by, and so
far as is permitted by law and except in the case of fraud, hereby
waives any remedy in respect of, any warranties, representations and
undertakings not incorporated into this Agreement.
11.2 So far as is permitted by law and except in the case of fraud, the
parties agree and acknowledge that the only right and remedy which
shall be available to the Management Company on behalf of the Fund in
connection with or arising out of or related to any of the statements
contained in the Warranties shall be damages in contract for breach of
this Agreement and not rescission of this Agreement.
11.3 Each PLD Party and the Management Company on behalf of the Fund
confirms it has received independent legal advice relating to all the
matters provided for in this Agreement, including the provisions of
this Clause, and agrees having considered the terms of this Clause and
the Agreement as a whole, that the provisions of this Clause are fair
and reasonable.
11.4 This Agreement is personal to the parties to it. Accordingly neither
the Management Company on behalf of the Fund nor any PLD Party may
without the prior written consent of the other assign the benefit or
all or any of the other's obligations under this Agreement nor any
benefit arising under or out of this Agreement. PROVIDED THAT
notwithstanding the foregoing any PLD Party or the PLD Parties jointly
may assign the benefit of this Agreement to a ProLogis Affiliate.
11.5 No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the parties to this Agreement.
11.6 Any time, date or period referred to in any provision of this Agreement
may be extended by mutual agreement between the parties but as regards
any time, date or period originally fixed or any time, date or period
so extended time shall be of the essence.
11.7 At any time after the date of this Agreement each PLD Party shall and
shall use its reasonable endeavours to procure that any necessary third
party shall at the cost of the Fund execute such documents and do such
acts and things as the Management Company on behalf of the Fund may
reasonably require for the purpose of giving to the Fund the full
benefit of all the provisions of this Agreement.
11.8 The PLD Party shall bear all legal, accountancy and other costs and
expenses (excluding fees payable in relation to the Appraisal) incurred
by it and by each PLD Party in connection with this Agreement, and the
contribution of the Properties and/or Property Owners including all
transfer taxes unless:
(a) there is in any country in which a Stabilised
Property is situated an adverse change in legislation
regarding the level of transfer taxes and/or the
circumstances in which they are payable
and
(b) the PLD Party gives notice to the Management Company
on behalf of the Fund referring to this clause
in which case:
(i) the Management Company on behalf of the Fund shall
with effect from the date of such notice pay all such
transfer taxes payable in the relevant country in
respect of transfers pursuant to this Agreement; and
(ii) the definition of OMV shall (in relation to
Stabilised Properties situated in the relevant
country) be amended so that an appropriate allowance
shall be made in relation to transfer taxes.
11.9 If the PLD Party or the Management Company on behalf of the Fund
default in the payment when due of any sum payable under this Agreement
(whether determined by agreement or pursuant to an order of a court or
otherwise) the liability of PLD Party or the Management Company on
behalf of the Fund (as the case may be) shall be increased to include
interest on such sum from the date when such payment is due until the
date of actual payment (as well after as before judgement) at a rate
per annum of 3 per cent above three month EURIBOR. Such interest shall
accrue from day to day.
11.10
11.10.1 Any notice or other communication requiring to be given or
served under or in connection with this Agreement shall be in
writing and shall be sufficiently given or served if delivered
or sent:
In the case of any PLD Party at:
00000 Xxxx 00xx Xxxxx
Xxxxxx
Xx 00000
Attention: Legal
In the case of the Management Company on behalf of the Fund
at:
00x Xxxxxxxxx Xxxxx X-0000
Xxxxxxxxxx
Fax: (000) 0000 0000
Attention: Xxxx Xxxxx Xxx Xxxxx
with a copy to
ProLogis BV
Xxxxxxxxxxx 00-00
0000 XX Xxxxxxxx - Rijk
Amsterdam
The Netherlands
Fax: (00) 00000 0000
Attention: Xxxxx Xxxx
11.10.2 Any such notice or other communication shall be delivered by
hand or sent by courier, fax or prepaid first class post. If
sent by courier or fax such notice or communication shall
conclusively be deemed to have been given or served at the
time of despatch, in
case of service in Luxembourg, or on the following Day in the
case of international service. If sent by post such notice or
communication shall conclusively be deemed to have been
received two Working Days from the time of posting, in the
case of inland mail in Luxembourg or three Working Days from
the time of posting in the case of international mail.
11.11 If any term or provision in this Agreement is be held to be illegal or
unenforceable, in whole or in part, under any enactment or rule of law,
such term or provision or part shall to that extent be deemed not to
form part of this Agreement but the enforceability of the remainder of
this Agreement shall not be affected.
11.12 This Agreement may be executed in as many counterparts as there are
parties to this Agreement.
11.13 The Management Company on behalf of the Fund and the PLD Parties agree
to co-operate with each other in good faith in order to give effect to
the purpose of this Agreement.
11.14 This Agreement and the documents to be entered into pursuant to it,
SAVE AS EXPRESSLY REFERRED TO THEREIN, shall be governed by and
construed in accordance with the law of Luxembourg and all the parties
irrevocably agree that the courts of Luxembourg are to have
jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement and such documents.
12 DURATION OF THIS AGREEMENT
12.1 This Agreement shall continue for a period of 20 years. Save as
provided in clause 12.2, the parties may not elect unilaterally to
terminate this Agreement prior to the end of such period.
Notwithstanding the foregoing, the Management Company may, after a
decision to liquidate the Fund has been adopted in compliance with the
Management Regulations and Private Placement Memorandum, terminate this
Agreement, by giving notice in writing with immediate effect to the
other parties.
12.2 The PLD Parties may in their sole discretion terminate this Agreement
on giving notice in writing with immediate effect to the Management
Company if (a) during any period of six months and twenty-five Working
Days the PLD Parties offer one or more Properties that meet the
Investment and Operating Criteria to the Management Company on behalf
of the Fund and, except as permitted under Clause 5.3, the Management
Company on behalf of the Fund fails to acquire at least one of such
Properties and (b) the Management Company on behalf of the Fund cannot
establish to the reasonable satisfaction of the PLD Parties at the end
of such period that it has sufficient funds available and committed to
purchase the next Stabilised Property which the PLD Parties will offer
to the Management Company on behalf of the Fund pursuant to this
Agreement.
13 VAT
All sums payable under this Agreement by any party to any other party
shall be deemed to be exclusive of any Value Added Tax (or its
equivalent in any jurisdiction outside the European Union) which is
chargeable on the supply made by such other party for which such sums
are the consideration for Value Added Tax purposes.
14 CONDITION
The provisions of Clauses 1-13 (inclusive) and 15-17 (inclusive) of
this Agreement are conditional upon Closing.
15 EXCLUDED PROPERTIES
It is agreed that this Agreement (including the provisions of Schedule
2 hereof) shall not apply in any way to the Properties referred to in
Schedule 3 and such Properties may be freely sold in the open market
without being offered to the Management Company on behalf of the Fund.
16 ESTATE COMMON PARTS
If appropriate, the PLD Party may, at the same time as a Property or
Property Owner is contributed to the Management Company on behalf of
the Fund, contribute (at nil cost) any related estate common areas
(such as estate roads) or the shares in any management company in which
such areas are vested.
17 PROLOGIS TRUST COVENANT
ProLogis Trust shall procure that any subsidiary which owns any
property which satisfies the Investment and Operating Criteria shall
offer such property (or the company which owns it), to the Management
Company on behalf of the Fund as if such subsidiary had been identified
in the Agreement as a PLD Party.
Signed by ProLogis Management S.a.r.l. for
and on behalf of ProLogis European Property Fund
in the presence of: ZUBAIR MIR /s/ XXXXXXX XXXXXXXX
Signed by ProLogis Development S.a.r.l.
in the presence of: ZUBAIR MIR /s/ XXXXXXX XXXXXXXX
Signed by ProLogis France Developments Inc
in the presence of: ZUBAIR MIR /s/ XXXXXXX XXXXXXXX
Signed by Kingspark Holdings S.A.
in the presence of: ZUBAIR MIR /s/ XXXXXXX XXXXXXXX
Signed by ProLogis Trust acting by /s/ XXXXXX X. XXXXXXX
SCHEDULE 1
PART I
(PROPERTY WARRANTIES)
18 The PLD Party completed Due Diligence in respect of the relevant
Property prior to the PLD Party's acquisition of the Property or the
shares in a company directly or indirectly owning the Property. The Due
Diligence was carried out on the basis that the PLD Party would be the
absolute owner of the Property or the shares in such company and the
results of such Due Diligence were in the opinion of the PLD Party
satisfactory or any issues arising were resolved as part of the
relevant acquisition in a manner satisfactory to the PLD Party.
2 TITLE
In relation to each Property:
18.1 The Property Owner ("the OWNER") of the Property is the legal owner of
and beneficially entitled to the whole of the Property.
18.2 To the extent necessary all registration formalities in relation to the
Owner's title to the Property have been completed.
18.3 The PLD Party has not received written notice that
18.3.1 The Property is subject to any adverse estate, right,
interest, covenant, restriction, option or right of
pre-emption in favour of any third party (whether in the
nature of a public or private right or obligation), nor is
there any agreement to give or create any of the foregoing,
other than of a minor nature;
18.3.2 Where the Property is subject to any of the arrangements
referred to in paragraph 2.3.1 PLD has not received written
notice that any breach has occurred of any of the terms
thereof other than of a minor nature.
18.4
18.4.1 The Property has access to and egress from public roads or the
Property has the benefit of all necessary rights over private
land on terms which do not entitle any person to terminate or
curtail the same.
18.4.2 The Property drains into a public sewer and is served by
water, electricity and gas utilities. Either the pipes,
sewers, wires, cables, conduits and telecommunications
conducting media serving the Property connect directly to a
public supply without passing through land in the occupation
or ownership of a third party or, if they do not, the rights
necessary for the present use of such services by the Property
are available on terms which do not entitle any person to
terminate or curtail the same.
18.5 There are no outstanding disputes between the Owner and any third party
affecting the Property, other than of a minor nature.
19 PLANNING/PERMITS/ZONING
So far as the PLD Party is aware in relation to each Property:
19.1 No development at the Property which has been carried out by the PLD
Party or ProLogis Affiliates or any use of the Property has been
undertaken in breach of the relevant regulations, laws, orders,
consents or permissions regulating the development.
19.2 There is no resolution, proposal, scheme or order, whether formally
adopted or not, by any governmental or other relevant authority for the
compulsory acquisition of the whole or any part of the Property.
20 LEASEHOLD PROPERTIES
Where the interest of the Owner in any Property is leasehold:
20.1 Any consent necessary for the grant of the lease under which the Owner
holds its interest in the Property (the "GROUND LEASE") was duly
obtained and a copy of the consent is with the documents of title.
20.2 So far as the PLD Party is aware there is no subsisting breach, nor any
non-observance of any covenant, condition or agreement contained in the
Ground Lease on the part of either the relevant landlord or the Owner,
other than of a minor nature.
20.3 There are no restrictions in the Ground Lease which prevent the
Property being used now or during the remaining term of the Ground
Lease for the present use.
20.4 The Ground Lease is not expressed to be subject to any rights of
re-entry, forfeiture or termination on the liquidation of the tenant
(whether compulsory or voluntary) or on any other ground except
non-payment of rent or breach of covenant by the tenant under the
Ground Lease.
20.5 There is no right for the landlord to terminate the Ground Lease before
the expiry of the contractual term other than by forfeiture.
20.6 The tenant under the Ground Lease can assign or underlet the whole of
the Property subject only to obtaining the landlord's consent (such
consent not to be unreasonably withheld).
20.7 The Ground Lease is for a term of years with not less than 40 years
unexpired as at the Relevant Transfer Date.
21 OCCUPATIONAL LEASES AND LICENCES
21.1 There is no material subsisting breach or material non-observance of
any covenant, condition or agreement contained in any occupational
lease.
21.2 No legal proceedings have been instituted by the Owner against the
tenant under the occupational lease.
21.3 All consents necessary for the grant of any occupational lease by the
landlord were obtained.
The warranties contained in paragraphs 2 to 5 are given (i) in respect of
matters arising prior to the acquisition by the PLD Party of the Property or the
shares in a company directly or indirectly owning the Property, to the best of
the knowledge, information and belief of the PLD Party on the basis of the Due
Diligence referred to in paragraph 3.1 above and any written notice received by
the PLD Party subsequently; and (ii) in respect of all matters arising on or
since the PLD Party acquired the Property or the shares in a company directly or
indirectly owning the Property.
References to any English legal term or concept in the warranties contained in
paragraphs 2 to 5 shall in respect of any Property located in a jurisdiction
other than England be construed as references to the term or concept which most
nearly corresponds to it in that jurisdiction.
PART II
(DEVELOPMENT WARRANTIES)
The PLD Party has procured the construction of the Property
1 in a good and workmanlike manner according to good building practice
generally accepted at the date of construction;
2 according to the standards of good design practice for properties
intended for use as distribution facilities;
2 using good quality materials goods and equipment;
3 in material compliance with:-
3.1 all relevant third party permits, consents and approvals;
3.2 all relevant legislation (which shall include any instrument or order
regulation code of practice or other subordinate legislation deriving
validity from any such legislation);
3.3 all mandatory rules and regulations as govern site and works safety and
are applicable to the buildings constructed on the Property;
3.4 all relevant codes of practice and regulations (taking account of any
changes which have already been announced or which will be implemented
prior to the Stabilisation Date);
4 on normal commercial terms and in accordance with normal practice for
the jurisdiction in which the Property is situated.
PART III
(CORPORATE WARRANTIES)
1 AUTHORITY AND CAPACITY
1.1 The PLD Party and the Property Owner are companies duly incorporated
and validly existing under their respective laws of incorporation.
1.2 Each PLD Party has the legal right and full power and authority to
enter into and perform this Agreement and any other documents to be
executed to any PLD Party pursuant to or in connection with this
Agreement which, when executed, will constitute valid and binding
obligations on each PLD Party in accordance with their respective
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganisation or similar laws in
effect which affect the enforcement of creditors' rights generally and
by equitable limitations on the availability of specific remedies.
1.3 The execution and delivery of and the performance by each PLD Party of
their obligations under, this Agreement and any other documents to be
executed by each PLD Party pursuant to or in connection with this
Agreement will not:
1.3.1 result in breach of any provision of the memorandum or
articles of association of each PLD Party; or
1.3.2 result in a breach of or give any third party a right to
terminate or modify, or result in the creation of any
Encumbrance under any agreement, licence or other instrument
or result in a breach of any order, judgement or decree of any
Court, governmental agency or regulatory body to which a PLD
Party is a party or by which any PLD Party or any of their
assets is bound.
1.4 Each PLD Party is entitled to contribute and transfer to the Fund the
full legal and beneficial ownership of the shares in the Property Owner
under the terms of this Agreement without the consent of any third
party. Such shares comprise the whole of the allotted and issued share
capital of the Property Owner, have been properly and validly allotted
and issued and are each fully paid.
1.5 No person other than the Fund has the right (whether exercisable now or
in the future and whether contingent or not) to call for the allotment,
conversion, issue, sale or transfer of any share or loan capital or any
other security giving rise to a right over the capital of any Property
Owner under any option or other agreement (including conversion rights
and rights of pre-emption) and there are no Encumbrances or the shares
in the Property Owner or any arrangements or obligations to create any
Encumbrances.
2 ACCOUNTS AND RECORDS
The Balance Sheet required pursuant to Clause 5.9 will be prepared in
accordance with applicable law and in accordance with GAAP and, subject
thereto, so as to give a true and fair view of the assets, liabilities
and state of affairs of the Property Owner as at the Relevant Transfer
Date
PROVIDED THAT;
(A) No provision shall be made for deferred tax liabilities;
(B) No warranty shall be given in relation to the value of any Property.
3 ACCOUNTING AND OTHER RECORDS
The statutory books, books of account and other records of whatsoever
kind of each Property Owner will by the Relevant Transfer Date be
up-to-date and maintained in accordance with all applicable legal
requirements on a proper and consistent basis and will contain complete
and accurate records of all xxxxxx required to be dealt within such
books and all such books and records and all other documents (including
documents of title and copies of all subsisting agreements to which the
Property Owner is a party) which are the property of each Property
Owner or ought to be in its possession will be in its possession (or
under its control). All accounts, documents and returns required by law
to be delivered or made to any company registrar in any relevant
jurisdiction or any other authority will be duly and correctly
delivered or made.
SCHEDULE 2
(PRE-EMPTION)
Without prejudice to the PLD Parties' obligation in clause 7 of this
Agreement the PLD Party agrees with the Fund that:
1 IF during the term of this Agreement the PLD Party shall desire to
dispose of (other than to any other PLD Party or its direct or indirect
wholly owned subsidiaries) any warehouse or distribution property or
the shares in the company which owns such property which is not then a
Stabilised Property (but excluding any land which is undeveloped) THEN
it shall first give written notice (the "OFFER NOTICE") to the Fund in
terms which if accepted by the Fund would constitute a legally
enforceable agreement for the contribution of such warehouse
distribution Property or shares (as the case may be) subject to any
liabilities specified in the Offer Notice for the sum stated in the
Offer Notice (which sum may be received by the PLD Party as cash or
Class B2 Units at the discretion of the PLD Party) and otherwise on the
terms of this Agreement (mutatis mutandis) for the transfer of
Stabilised Properties or Property Owners (as the case may be) but
subject to the provisions of paragraph 5 of this Schedule 2.
2 The Fund shall be entitled within fifteen Working Days of service on it
of an Offer Notice to serve on the PLD Party a written notice
("Acceptance") accepting the offer contained in the Offer Notice.
3 Subject to paragraph 4 where an Acceptance has been duly served the PLD
Party shall contribute and the Fund shall acquire the Property or the
relevant Property Owner on the terms referred to in paragraph 1 of this
Schedule.
4 When the PLD Party has served an Offer Notice on the Fund and EITHER
4.1 the Fund serves on the PLD Party a written notice that it does not
intend to serve an Acceptance; OR
4.2 No Acceptance is served within the period prescribed for its service;
THEN the PLD Party shall be at liberty to complete a transfer of the
relevant Property or Property Owner during the period of Twelve months
after the date of the Offer Notice at a price equal to or greater than,
and on terms no more favourable than those set out in the Offer Notice
but if the relevant Property is not located in a Target Market then: -
(A) the PLD Party may dispose of such Property at any
time and at any price; or
(B) the PLD Party may hold such Property as an investment
for its own account
(in either case) without any obligation to offer it to the Fund at any
future date.
4.3 The PLD Party shall, in relation to any Property in relation to which a
notice is served under paragraph 1 of this Schedule, provide the
Management Company with sufficient information about such Property
within a timescale which is in the reasonable opinion of the PLD Party
sufficient to enable the UAC to make an informed investment decision
about such Property.
4.4 The parties hereto agree that the Fund shall not acquire any Properties
which are not Stabilised Properties ("NON-STABILISED PROPERTIES") or
Properties which are outside the Target Markets from any PLD Party or
any third party if such acquisition would result in the Fund owning
non-Stabilised Properties and Properties outside the Target Markets of
a value (valued in accordance with the Management Regulations) which is
in excess of 15% of the total gross
asset value of the Portfolio as at the most recent Valuation Date (as
defined in the Management Regulations).
5 Any Offer Notice in relation to a Property which satisfies all the
Investment and Operating Criteria except that it is located outside the
Target Market but within Europe shall constitute an offer to sell such
Property for the Contribution Amount for such Property calculated in
accordance with this Agreement.
SCHEDULE 3
1 The whole of the properties at Segensworth Fareham, UK, Ashby Business
Park, Xxxxx-de-la-Zouch, Leicestershire, UK and Xxxx 0, Xxxxxxxx Xxxx,
Xxxxxxx Xxxx, Xxxxxxxxxxxxx, Xxxxxxxxxxxxxx XX and the Properties in
course of development for Post Office Property Holdings at Greenford,
Hounslow, Middlesex;
2 Any assets comprising the cold storage operating business of ProLogis
or its affiliates including, without limitation, any assets owned by
Frigoscandia;
3 Existing joint ventures of Kingspark Holdings SA and its subsidiaries;
4 Any properties developed and sold as part of a build-to-suit
transaction for an owner-user;
5 Undeveloped land.
APPENDIX 1
DUE DILIGENCE CHECK LIST - SITE ACQUISITION AND DEVELOPMENT
1 LEGAL MATTERS
1.1 Investigate title.
1.2 Check Conveyance plan against survey/OS mapping/physical boundaries
1.3 Raise enquiries and consider replies.
1.4 Undertake searches (eg local search, commons search, index map search,
coal authority search and any relevant specialist searches eg
Railtrack, BWB etc).
1.5 Undertake utility searches/enquiries.
1.6 Review restrictions on use.
1.7 Inspect the site.
1.8 Negotiate contract.
1.9 Agree form of Transfer.
1.10 Ensure availability of vacant possession.
1.11 Check or obtain title indemnity insurance if relevant.
2 PLANNING MATTERS
2.1 Consider/review/understand any local Acts.
2.2 Check whether the site being sold matches the site with any planning
permissions.
2.3 Check whether the site is included in the Local Plan for B1, B2, B8
development (and whether there is any restriction B8 use).
2.4 Check whether the site has outline planning permission.
2.5 Check whether the site has any detailed planning permission.
2.6 Consider any section 106 Agreement to which any planning permission is
subject.
2.7 Check planning applications and relevant permissions.
2.8 Review whether any conditions contained in a planning permission
restrict/prevent/make development more expensive.
2.9 Investigate the "flexibility" of any existing consents, conditions or
agreements with the planning authority to better suit ProLogis'
approach to the development.
2.10 Consider whether visibility splays are required? If so, consider
whether any third party land is required.
2.11 Check the proposed local plans and their current status.
2.12 Consider English Heritage/archaeology requirements.
2.13 Review any environmental assessment/impact statement/planning history.
2.14 Ascertain the make up of councillors and identity of the chairman of
the planning committee.
2.15 Obtain information regarding local politics.
2.16 Check whether the site abuts a conservation area or area of outstanding
natural beauty.
2.17 Consider development in relation to trees, plants, wild life and
hedgerows.
2.18 Consider development in relation to the site's proximity to the
railway; whether there is any risk of underground interference with
computers.
3 SERVICES
3.1 Check whether the site has (or if they are available on a adjoining
land):-
Gas
Electricity
Water
Mains drainage
Surface water drainage
Fibre optic cable
Telephone
3.2 Check whether all those services are adopted and whether they have
capacity to service the proposed development.
3.3 Consider whether section 104 Agreements are required.
3.4 Check whether any sub-station, gas governor or fire mains is required
on site.
3.5 Consider the likely requirements/implications of other nearby
developments.
4 HIGHWAYS AND TRANSPORTATION
4.1 Check whether the site abuts an adopted highway.
4.2 Consider whether highway improvements are required. If so check whether
the land required is owned by ProLogis, the highway authority or a
third party.
4.3 If the highway is not adopted check what access rights will be granted
and any relevant maintenance liabilities.
4.4 Check whether any section 278 or section 38 Agreements will be required
or already exist.
4.5 Review whether the local authority will require a Traffic Impact
Assessment and part of the detailed planning application.
4.6 Check whether the Highways Agency will be involved.
4.7 Consider whether public transport is an issue and if so, whether
contributions will be expected from ProLogis.
4.8 Review whether there are likely to be car parking restrictions.
4.9 Consider whether any rail access is involved.
4.10 Consider whether any Railway Works Agreements will be required.
4.11 Consider whether any Transport and Works Act orders will be required.
4.12 Consider whether any cycleways and footways will be required.
4.13 Check whether there are any bridges involved and, if so whether any
technical approvals will be required.
4.14 Check whether safety audits will be required.
4.15 Review future road plans.
5 SITE CONSTRAINTS
Check whether the site is subject to any of the following:-
5.1 Overhead power lines.
5.2 Underground/overground easements (including airports/flightpaths etc).
5.3 Tree preservation orders.
5.4 Flooding during the last 100 years.
5.5 Presence of minerals/geotechnical faults/any other problem disclosed by
the Desktop Study.
5.6 Water courses.
5.7 Environmental issues (eg newts, stream diversions, landscaping,
designation as a site of special scientific interest or an area of
outstanding natural beauty).
5.8 Public/private footpaths.
5.9 Third party occupancies.
6 GROUND ANALYSIS
6.1 Review the results of:-
6.1.1 Desktop study.
6.1.2 Site survey as to boundaries and levels.
6.1.3 Ground investigation report.
6.2 Obtain confirmation from engineer that the ground investigation is
satisfactory.
6.3 Obtain confirmation that the ground will accept normal foundation
techniques.
6.4 Consider any archaeological requirements.
6.5 Ensure that ProLogis has the benefit of any relevant reports
commissioned by others.
6.6 Consider the need for environmental insurance.
6.7 If contamination is present:-
6.7.1 Obtain a remediation specification (taking account of cost and
availability of warranties.
6.7.2 Establish the necessary level of remediation having regard to
the proposed use of the site.
6.7.3 Allocate responsibility for remediation and future liability.
7 OTHER
7.1 Any other appropriate due diligence for the relevant property.
