CONTRIBUTION AGREEMENT by and among REXFORD INDUSTRIAL REALTY, L.P., REXFORD INDUSTRIAL REALTY, INC., and REXFORD INDUSTRIAL FUND IV, LLC Dated as of July 24, 2013
Exhibit 2.4
EXECUTION VERSION
by and among
XXXXXXX INDUSTRIAL REALTY, L.P.,
XXXXXXX INDUSTRIAL REALTY, INC.,
and
XXXXXXX INDUSTRIAL FUND IV, LLC
Dated as of July 24, 2013
TABLE OF CONTENTS
Page | ||||||
ARTICLE I CONTRIBUTION |
3 | |||||
Section 1.01 |
CONTRIBUTION TRANSACTION; ASSIGNMENT AND ASSUMPTION OF ASSUMED LIABILITIES | 3 | ||||
Section 1.02 |
CONSIDERATION | 3 | ||||
Section 1.03 |
FRACTIONAL INTEREST | 4 | ||||
Section 1.04 |
FURTHER ACTION | 5 | ||||
Section 1.05 |
CALCULATION OF CONTRIBUTION CONSIDERATION | 5 | ||||
ARTICLE II CLOSING |
5 | |||||
Section 2.01 |
CONDITIONS PRECEDENT | 5 | ||||
Section 2.02 |
TIME AND PLACE | 7 | ||||
Section 2.03 |
DELIVERY OF CONTRIBUTION CONSIDERATION | 7 | ||||
Section 2.04 |
CLOSING DELIVERIES | 9 | ||||
Section 2.05 |
CLOSING COSTS | 10 | ||||
Section 2.06 |
TERM OF THE AGREEMENT | 10 | ||||
Section 2.07 |
EFFECT OF TERMINATION | 10 | ||||
Section 2.08 |
TAX WITHHOLDING | 10 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE OPERATING PARTNERSHIP |
10 | |||||
Section 3.01 |
ORGANIZATION; AUTHORITY | 10 | ||||
Section 3.02 |
DUE AUTHORIZATION | 11 | ||||
Section 3.03 |
CONSENTS AND APPROVALS | 11 | ||||
Section 3.04 |
NO VIOLATION | 11 | ||||
Section 3.05 |
VALIDITY OF OP UNITS AND REIT SHARES | 12 | ||||
Section 3.06 |
LITIGATION | 12 | ||||
Section 3.07 |
OPERATING PARTNERSHIP AGREEMENT | 12 | ||||
Section 3.08 |
LIMITED ACTIVITIES | 12 | ||||
Section 3.09 |
NO BROKER | 12 | ||||
Section 3.10 |
NO OTHER REPRESENTATIONS OR WARRANTIES | 13 | ||||
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS |
13 | |||||
Section 4.01 |
ORGANIZATION; AUTHORITY | 13 | ||||
Section 4.02 |
DUE AUTHORIZATION | 14 | ||||
Section 4.03 |
OWNERSHIP OF CONTRIBUTED ASSETS | 14 | ||||
Section 4.04 |
CONSENTS AND APPROVALS | 14 | ||||
Section 4.05 |
NO VIOLATION | 15 | ||||
Section 4.06 |
LICENSES AND PERMITS | 15 | ||||
Section 4.07 |
COMPLIANCE WITH LAWS | 15 | ||||
Section 4.08 |
CONTRIBUTED PROPERTIES | 16 |
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Section 4.09 |
INSURANCE | 17 | ||||
Section 4.10 |
ENVIRONMENTAL MATTERS | 17 | ||||
Section 4.11 |
EMINENT DOMAIN | 17 | ||||
Section 4.12 |
EXISTING LOANS | 17 | ||||
Section 4.13 |
FINANCIAL STATEMENTS | 17 | ||||
Section 4.14 |
TAXES | 18 | ||||
Section 4.15 |
LITIGATION | 18 | ||||
Section 4.16 |
INSOLVENCY | 18 | ||||
Section 4.17 |
SECURITIES LAW MATTERS | 19 | ||||
Section 4.18 |
NO BROKER | 19 | ||||
Section 4.19 |
OWNERSHIP OF CERTAIN ASSETS | 19 | ||||
Section 4.20 |
EMPLOYEES | 19 | ||||
Section 4.21 |
NO OTHER REPRESENTATIONS OR WARRANTIES | 19 | ||||
Section 4.22 |
SURVIVAL OF REPRESENTATIONS AND WARRANTIES | 19 | ||||
ARTICLE V COVENANTS AND OTHER AGREEMENTS |
20 | |||||
Section 5.01 |
PRE-CLOSING COVENANTS | 20 | ||||
Section 5.02 |
COMMERCIALLY REASONABLE EFFORTS BY THE OPERATING PARTNERSHIP AND THE CONTRIBUTOR | 21 | ||||
Section 5.03 |
TAX MATTERS | 21 | ||||
Section 5.04 |
CONSENT AND WAIVER OF RIGHTS UNDER ORGANIZATIONAL DOCUMENTS | 23 | ||||
Section 5.05 |
EXCLUDED ASSETS | 23 | ||||
Section 5.06 |
ALTERNATE TRANSACTION | 24 | ||||
Section 5.07 |
ELIMINATED ASSETS | 24 | ||||
ARTICLE VI GENERAL PROVISIONS |
24 | |||||
Section 6.01 |
NOTICES | 24 | ||||
Section 6.02 |
DEFINITIONS | 25 | ||||
Section 6.03 |
COUNTERPARTS | 31 | ||||
Section 6.04 |
ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES | 31 | ||||
Section 6.05 |
GOVERNING LAW | 31 | ||||
Section 6.06 |
ASSIGNMENT | 31 | ||||
Section 6.07 |
JURISDICTION | 32 | ||||
Section 6.08 |
DISPUTE RESOLUTION | 32 | ||||
Section 6.09 |
SEVERABILITY | 33 | ||||
Section 6.10 |
RULES OF CONSTRUCTION | 33 | ||||
Section 6.11 |
EQUITABLE REMEDIES | 34 | ||||
Section 6.12 |
TIME OF THE ESSENCE | 34 | ||||
Section 6.13 |
DESCRIPTIVE HEADINGS | 34 | ||||
Section 6.14 |
NO PERSONAL LIABILITY CONFERRED | 34 | ||||
Section 6.15 |
CONSENT OF PARTNER, MANAGER or MEMBER | 34 | ||||
Section 6.16 |
WAIVER OF SECTION 1542 PROTECTIONS | 34 | ||||
Section 6.17 |
AMENDMENTS | 35 |
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Schedule 2.05 | Reimbursement Agreements | |
Schedule 3.01(b) | List of Operating Partnership Subsidiaries | |
Schedule 4.01(b) | List of Contributed Entities / List of Contributed Properties | |
Schedule 4.08(a) | Contributed Properties Not Covered by Title Insurance | |
Schedule 4.08(c) | Lease Defaults | |
Schedule 4.12 | Existing Loans | |
Schedule 4.19 | Ownership of Certain Assets | |
Schedule 5.05 | Excluded Assets | |
Schedule 6.02(c) | Calculation of Equity Value |
Exhibit A | List of Xxxxxxx Entities | |
Exhibit B | Operating Partnership Agreement | |
Exhibit C | Form of Lock-Up Agreement | |
Exhibit D | Form of Tax Matters Agreement | |
Exhibit E | Form of Registration Rights Agreement | |
Exhibit F | Order of Mergers and Contribution Transactions | |
Exhibit G | Form of Assignment and Assumption of Assumed Contracts | |
Exhibit H | Form of Assignment and Assumption of Membership Interests | |
Exhibit I | Form of Assumption of Assumed Liabilities | |
Exhibit J | Form of Xxxx of Sale | |
Exhibit K | Formation Transaction Documentation |
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DEFINED TERMS
TERM |
SECTION | |
Accredited Investor |
Section 6.02(a) | |
Affiliate |
Section 6.02(b) | |
Agreement |
Introduction | |
Allocated Share |
Section 6.02(c) | |
Alternate Transaction |
Section 6.02(d) | |
Assignment and Assumption of Assumed Contracts |
Section 6.02(e) | |
Assignment and Assumption of Membership Interests |
Section 6.02(f) | |
Assumed Contracts |
Section 6.02(g) | |
Assumed Liabilities |
Section 6.02(h) | |
Assumption of Assumed Liabilities |
Section 6.02(i) | |
Xxxx of Sale |
Section 6.02(j) | |
Business Day |
Section 6.02(k) | |
Closing |
Section 2.02 | |
Closing Date |
Section 2.02 | |
Code |
Section 6.02(l) | |
Consent Form |
Section 6.02(m) | |
Contributed Assets |
Section 6.02(n) | |
Contributed Entities |
Recitals | |
Contributed Interest |
Recitals | |
Contributed Properties |
Section 6.02(o) | |
Contribution Consideration |
Section 1.02(a) | |
Contributor |
Introduction | |
Decrease |
Section 6.02(c) | |
Dispute |
Section 6.08(a) | |
Elected OP Unit Percentage |
Section 6.02(p) | |
Elected REIT Shares Percentage |
Section 6.02(q) | |
Eliminated Assets |
Section 5.07 | |
Entity Specific Debt |
Section 6.02(r) | |
Environmental Laws |
Section 6.02(s) | |
Equity Value |
Section 6.02(t) | |
Excluded Assets |
Section 6.02(u) | |
Existing Loan Documents |
Section 4.12 | |
Existing Loans |
Section 4.12 | |
Formation Transaction Documentation |
Section 6.02(v) | |
Formation Transactions |
Section 6.02(w) | |
Fund Material Adverse Effect |
Section 6.02(x) | |
Fund V Subsequent Investment Amount |
Section 6.02(y) | |
Governmental Authority |
Section 6.02(z) | |
Intellectual Property |
Section 6.02(aa) | |
Intellectual Property Assets |
Section 6.02(bb) | |
Interim Period |
Section 6.02(cc) | |
JAMS |
Section 6.08(b) | |
Laws |
Section 6.02(dd) |
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Leases |
Section 4.08(b) | |
Liens |
Section 6.02(ee) | |
Lock-Up Agreement |
Section 6.02(ff) | |
Management Companies |
Section 6.02(gg) | |
Nominees |
Section 1.02(a) | |
Offering |
Recitals | |
Offering Closing Date |
Section 6.02(hh) | |
Offering Document |
Section 6.02(ii) | |
Offering Price |
Section 6.02(jj) | |
OP Material Adverse Effect |
Section 6.02(kk) | |
OP Units |
Recitals | |
Operating Partnership |
Introduction | |
Operating Partnership Agreement |
Section 3.05 | |
Operating Partnership Subsidiary |
Section 3.01(b) | |
Organizational Documents |
Section 6.02(ll) | |
Other RIF Fund Contribution Agreements |
Recitals | |
Outside Date |
Section 2.06 | |
Permitted Liens |
Section 6.02(mm) | |
Person |
Section 6.02(nn) | |
Pre-Formation Interests |
Section 6.02(oo) | |
Pre-Formation Participants |
Section 6.02(pp) | |
Properties |
Section 6.02(qq) | |
Register |
Section 1.02(a) | |
Registration Rights Agreement |
Section 6.02(rr) | |
REIT |
Introduction | |
REIT Shares |
Recitals | |
Xxxxxxx Entity |
Section 6.02(ss) | |
RI LLC |
Recitals | |
RIF V Fund |
Recitals | |
RIF V Manager |
Recitals | |
RIF V REIT |
Recitals | |
RIF Fund Entity |
Recitals | |
Sale Consent |
Section 5.03(a) | |
SEC |
Section 2.01(a)(i) | |
Securities Act |
Section 6.02(tt) | |
Sponsor |
Recitals | |
Subsidiary |
Section 6.02(uu) | |
Target Asset |
Section 6.02(vv) | |
Tax |
Section 6.02(ww) | |
Tax Matters Agreement |
Section 6.02(xx) | |
Tax Return |
Section 6.02(yy) | |
Transfer Taxes |
Section 5.03(b) | |
Valid Election |
Section 6.02(zz) |
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THIS CONTRIBUTION AGREEMENT is made and entered into as of July 24, 2013 (this “Agreement”), by and among Xxxxxxx Industrial Realty, Inc., a Maryland corporation (the “REIT”), Xxxxxxx Industrial Realty, L.P., a Maryland limited partnership (the “Operating Partnership”) and a subsidiary of the REIT, and Xxxxxxx Industrial Fund IV, LLC, a California limited liability company (the “Contributor”). Certain capitalized terms are defined in Section 6.02 of this Agreement.
WHEREAS, concurrently with the execution of this Agreement, Xxxxxxx Industrial, LLC, a California limited liability company (“RI LLC”), will enter into an agreement and plan of merger pursuant to which RI LLC will merge with and into a direct wholly-owned subsidiary of the Operating Partnership, with RI LLC as the surviving entity, and the equity interests in RI LLC will be converted automatically into the right to receive cash, without interest, OP Units and/or REIT Shares;
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WHEREAS, concurrently with the execution of this Agreement, each of Xxxxxxx Industrial Fund I, LLC, Xxxxxxx Industrial Fund II, LLC and Xxxxxxx Industrial Fund III, LLC (each such entity, the Contributor, RIF V REIT and RIF V Fund may be referred to herein as a “RIF Fund Entity”) will enter into a contribution agreement with the REIT and the Operating Partnership on substantially the same terms as this Contribution Agreement (the “Other RIF Fund Contribution Agreements”);
WHEREAS, in the event that all members of the Contributor or another RIF Fund Entity return duly executed and completed Consent Forms approving the Formation Transactions, then, in lieu of this Agreement or the applicable Other RIF Fund Contribution Agreement, the REIT may elect to cause the applicable RIF Fund Entity to enter into an agreement and plan of merger with the Operating Partnership pursuant to which such RIF Fund Entity will merge with and into the Operating Partnership and the membership interests in such RIF Fund Entity will be converted automatically into the right to receive cash, REIT Shares and/or OP Units;
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ARTICLE I
Section 1.01 CONTRIBUTION TRANSACTION; ASSIGNMENT AND ASSUMPTION OF ASSUMED LIABILITIES.
(a) At the Closing and subject to the terms and conditions contained in this Agreement and in accordance with applicable Laws, the Contributor hereby contributes, assigns, sets over, transfers, conveys and delivers to the Operating Partnership, absolutely and unconditionally and free and clear of all Liens (other than those arising under Organizational Documents of the applicable Xxxxxxx Entities and Permitted Liens with respect to the Contributed Properties), all of its right, title and interest in and to the Contributed Assets, including all rights to indemnification in favor of the Contributor under the Organizational Documents; provided, that the Operating Partnership accepts the assignment by the Contributor and agrees to be bound by the terms of the Organizational Documents governing the Contributor’s Contributed Interests and undertakes, assumes and agrees punctually and faithfully to perform, pay or discharge when due and otherwise in accordance with its terms, all agreements, covenants, conditions, obligations and liabilities of the Contributor in the applicable Xxxxxxx Entities with respect to the Contributor’s Contributed Interests on or after the Closing Date.
(b) At the Closing and subject to the terms and conditions contained in this Agreement, the Operating Partnership assumes and agrees to pay, perform and discharge all of the Assumed Liabilities.
(c) Without limiting the foregoing, the Contributor, on behalf of itself and its Affiliates, consents to, and agrees and acknowledges that all requirements and conditions for the transactions contemplated by this Agreement, including the transfer of the Contributed Assets and the admission of the Operating Partnership as a partner or member of each of the Contributed Entities have been satisfied or otherwise waived.
(d) All of the parties hereto agree that, as a result of the assignment and assumptions hereunder, for purposes of the Organizational Documents governing the Contributed Entities, the Operating Partnership shall be a substituted general partner, limited partner, manager or member, as the case may be, of the applicable Contributed Entity.
(a) At Closing, subject to the terms and conditions contained in this Agreement, the Contributor shall receive cash, OP Units and/or REIT Shares with an aggregate value equal to the Equity Value represented by the Contributed Assets (collectively referred to as the “Contribution Consideration”). The parties acknowledge that, concurrently with the Closing,
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the Contributor expects to distribute the Contribution Consideration to its members in accordance with irrevocable elections made by the members of the Contributor in a Consent Form submitted by such members to the Contributor, or, if any such member has failed to submit a Consent Form, in accordance with determinations made by the Contributor. As a means of expediting such distribution, the Operating Partnership agrees to deliver such cash, OP Units and/or REIT Shares directly to such members as the nominees of the Contributor (the “Nominees”). The transfer of OP Units to any Nominee shall be evidenced by an entry to the Register (as defined in the Operating Partnership Agreement), and the transfer of REIT Shares to any Nominee shall be evidenced by the establishment of a credit to a book-entry account at the REIT’s transfer agent. Subject to Section 1.03, the amount of cash, number of OP Units and/or REIT Shares comprising the Contribution Consideration attributable to each Nominee shall be as follows:
(i) Cash. One hundred percent (100%) of the Allocated Share attributable to a Nominee who is not an Accredited Investor shall be paid in cash.
(ii) OP Units. The Elected OP Unit Percentage of the Allocated Share attributable to a Nominee who is an Accredited Investor shall be distributed in whole OP Units in the form of a number of OP Units equal to the applicable portion of such Allocated Share divided by the Offering Price; and
(iii) REIT Shares. The Elected REIT Shares Percentage of the Allocated Share attributable to a Nominee who is an Accredited Investor shall be distributed in whole REIT Shares in the form of a number of REIT Shares equal to the applicable portion of such Allocated Share divided by the Offering Price; provided, that to the extent such distribution of REIT Shares to such Nominee would result in a violation of the restrictions on ownership and transfer set forth in Section 6.2.1 of the REIT’s charter (the “Ownership Limits”), such Nominee shall receive (x) the maximum number of whole REIT Shares that would not result in such violation of the Ownership Limits, and (y) that number of whole OP Units equal to the remaining number of REIT Shares not distributed as a result of the application of the foregoing clause (x).
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Shares resulting from such aggregation and, in lieu of any fractional REIT Share resulting from such aggregation, an amount in cash determined by multiplying that fraction of a REIT Share to which the Nominee would otherwise have been entitled, by the Offering Price. No interest will be paid or will accrue on any cash paid or payable in lieu of any fractional OP Unit or REIT Share.
ARTICLE II
Section 2.01 CONDITIONS PRECEDENT.
(a) Condition to Each Party’s Obligations. The respective obligation of each party to effect the contributions contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Closing Date is subject to the satisfaction or waiver on or prior to the Closing of the following conditions:
(i) Registration Statement. If the REIT undertakes a public Offering, the public Offering registration statement must have been declared effective under the Securities Act and will not be the subject of any stop order or proceedings by the Securities and Exchange Commission (“SEC”) seeking a stop order. This condition may not be waived by any party.
(ii) No Injunction. No Governmental Authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction, stay or other order (whether temporary, preliminary or permanent), in any case which is in effect and which prevents or prohibits consummation of any of the transactions contemplated in this Agreement nor shall any of the same brought by a Governmental Authority of competent jurisdiction be pending or threatened that seeks the foregoing.
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(iii) Operating Partnership Agreement. The Operating Partnership Agreement, in substantially the form attached hereto as Exhibit B, shall have been executed and delivered by the partners of the Operating Partnership and shall be in full force and effect and, except as contemplated by Section 2.03 or the other Formation Transaction Documents, shall not have been amended or modified.
(b) Conditions to the Obligations of the Operating Partnership. The obligations of the Operating Partnership to effect the contribution contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Operating Partnership in whole or in part):
(i) Representations and Warranties. The representations and warranties of the Contributor contained in this Agreement shall be true and correct in all material respects at the Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date).
(ii) Performance by the Contributor. The Contributor shall have performed each of the agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date and the Contributor shall not have breached any of its covenants contained herein in any material respect.
(iii) Offering Closing. The closing of the Offering shall occur substantially concurrently with the Closing.
(iv) Consents, Etc. All necessary consents and approvals of Governmental Authorities or third parties (including lenders) for the Contributor to consummate the transactions contemplated hereby shall have been obtained.
(v) No Fund Material Adverse Effect. There shall have not occurred between the date hereof and the Closing Date a Fund Material Adverse Effect.
(vi) Formation Transactions. The Formation Transactions shall have been or shall be consummated substantially concurrently in accordance with the timing set forth in the respective Formation Transaction Documentation.
(vii) Lock-Up Agreement. Each Nominee receiving REIT Shares or OP Units shall have entered into the Lock-Up Agreement substantially in the form attached as Exhibit C.
(viii) Tax Matters Agreement. Any Nominee that will receive OP Units in the contribution contemplated by this Agreement and that (1) owns, directly or indirectly, an interest in any Contributed Property specified in the Tax Matters Agreement or (2) has been provided an opportunity to guarantee debt as set forth in the Tax Matters Agreement shall have entered into the Tax Matters Agreement substantially in the form attached as Exhibit D, if applicable.
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(c) Conditions to the Obligations of the Contributor. The obligation of the Contributor to effect the contribution contemplated by this Agreement and to consummate the other transactions contemplated hereby to occur on the Closing Date are further subject to satisfaction of the following conditions (any of which may be waived by the Contributor in whole or in part):
(i) Representations and Warranties. Except as would not have an OP Material Adverse Effect, the representations and warranties of the Operating Partnership contained in this Agreement shall be true and correct at the Closing as if made again at that time (except to the extent that any representation or warranty speaks as of an earlier date, in which case it must be true and correct only as of that earlier date).
(ii) Performance by the Operating Partnership. Except as would not have an OP Material Adverse Effect, the Operating Partnership shall have performed all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing Date.
(iii) Registration Rights Agreement. The REIT shall have entered into the Registration Rights Agreement, substantially in the form attached as Exhibit E hereto. This condition may not be waived by any party hereto.
(iv) Tax Matters Agreement. If the Contributor (1) owns, directly or indirectly, an interest in any Contributed Property specified in the Tax Matters Agreement or (2) has any members that have been provided an opportunity to guarantee debt as set forth in the Tax Matters Agreement, the REIT and the Operating Partnership shall have entered into the Tax Matters Agreement substantially in the form attached as Exhibit D, if applicable.
Section 2.03 DELIVERY OF CONTRIBUTION CONSIDERATION.
(a) Subject to Section 5.03(a), as soon as reasonably practicable after the Closing, the Operating Partnership shall deliver to the Nominees the Contribution Consideration payable in the amounts and form provided in Section 1.02(a). The issuance of any OP Units and admission of the recipients thereof as limited partners of the Operating Partnership pursuant to Section 1.02(b) shall be evidenced by an entry to the Register. Any certificate representing REIT Shares issuable as Contribution Consideration shall bear the following legend:
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE CORPORATION AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE CORPORATION’S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE CORPORATION’S CHARTER, (I) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF THE CORPORATION’S COMMON STOCK IN EXCESS OF 9.8% (IN VALUE OR NUMBER OF SHARES) OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE CORPORATION UNLESS SUCH PERSON IS AN EXCEPTED HOLDER (IN WHICH CASE THE EXCEPTED HOLDER LIMIT SHALL BE APPLICABLE); (II) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK OF THE CORPORATION IN EXCESS OF 9.8% OF THE VALUE OF THE TOTAL OUTSTANDING SHARES OF CAPITAL STOCK OF THE CORPORATION, UNLESS SUCH PERSON IS AN EXCEPTED HOLDER (IN WHICH CASE THE EXCEPTED HOLDER LIMIT SHALL BE APPLICABLE); (III) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN CAPITAL STOCK THAT COULD 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; AND (IV) NO PERSON MAY TRANSFER SHARES OF CAPITAL STOCK IF SUCH TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE CORPORATION BEING OWNED BY FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO
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BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK WHICH CAUSES OR MAY CAUSE A PERSON TO BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK IN EXCESS OR IN VIOLATION OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE CORPORATION OR, IN THE CASE OF SUCH A PROPOSED OR ATTEMPTED TRANSACTION, GIVE AT LEAST 15 DAYS PRIOR WRITTEN NOTICE. IF ANY OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP SET FORTH IN (I) THROUGH (III) ABOVE ARE VIOLATED, THE SHARES OF CAPITAL STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO A TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN ADDITION, THE CORPORATION MAY TAKE OTHER ACTIONS, INCLUDING REDEEMING SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF DIRECTORS IN ITS SOLE AND ABSOLUTE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED ABOVE. FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL UNDERLINED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED IN THE CHARTER OF THE CORPORATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF CAPITAL STOCK OF THE CORPORATION ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.
(b) The Operating Partnership (or its successor in interest) shall not be liable to any Nominee for any portion of the Contribution Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OPERATING PARTNERSHIP
The Operating Partnership hereby represents and warrants to the Contributor as follows:
Section 3.01 ORGANIZATION; AUTHORITY.
(a) The Operating Partnership has been duly formed and is validly existing and in good standing under the Laws of its jurisdiction of formation, and, upon the effectiveness of the Operating Partnership Agreement, will have all requisite power and authority to enter into this Agreement and the other Formation Transaction Documentation and to carry out the transactions contemplated hereby and thereby, and to own, lease and/or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws,
10
is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than such failures to be so qualified as would not, individually or in the aggregate, reasonably be expected to have an OP Material Adverse Effect.
(b) Schedule 3.01(b) sets forth as of the date hereof, (i) each Subsidiary of the Operating Partnership (each an “Operating Partnership Subsidiary”), (ii) the ownership interest therein of the Operating Partnership, and (iii) if not wholly owned by the Operating Partnership, the identity and ownership interest of each of the other owners of such Operating Partnership Subsidiary. Each Operating Partnership Subsidiary has been duly organized or formed and is validly existing and is in good standing under the Laws of its jurisdiction of organization or formation, as applicable, has all requisite power and authority to own, lease and/or operate its property and to carry on its business as presently conducted and, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its property make such qualification necessary, other than such failures to be so qualified as would not, individually or in the aggregate, reasonably be expected to have an OP Material Adverse Effect.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTORS
Except as disclosed in the Offering Document or the schedules attached hereto, the Contributor hereby represents and warrants to the Operating Partnership that as of the Closing Date:
Section 4.01 ORGANIZATION; AUTHORITY.
(a) The Contributor has been duly formed, is validly existing and in good standing under the Laws of its jurisdiction of formation, and has all requisite power and authority to enter into this Agreement, each agreement contemplated hereby and the other Formation Transaction Documentation to which it is a party (including any agreement, document and instrument executed and delivered by or on behalf of the Contributor pursuant to this Agreement or the other Formation Transaction Documentation) and to carry out the transactions contemplated hereby and thereby, and to carry on its business as presently conducted. The Contributor, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business make such qualification necessary, other than such failures to be so qualified as would not, individually or in the aggregate, reasonably be expected to have a Fund Material Adverse Effect.
(b) Schedule 4.01(b) sets forth as of the date hereof with respect to the Contributor (i) each Contributed Entity, (ii) the direct or indirect ownership interest therein of the Contributor, (iii) if not wholly owned by the Contributor, the identity and ownership interest of each of the other owners of such Contributed Entity, (iv) each Contributed Property, (v) the ownership interest therein of the Contributor, (vi) if not wholly owned by the Contributor, the identity and ownership interest of each of the other owners of such Contributed Property. Such Contributed Entity has been duly organized and is validly existing and is in good standing under the Laws of its jurisdiction of organization, and has all requisite power and authority to own, lease and/or operate its Contributed Property and to carry on its business as presently conducted. Such Contributed Entity, to the extent required under applicable Laws, is qualified to do business and is in good standing in each jurisdiction in which the nature of its business or the character of its Contributed Property make such qualification necessary, other than such failures to be so qualified as would not, individually or in the aggregate, reasonably be expected to have a Fund Material Adverse Effect. Except as set forth on Schedule 4.01(b), each of the Contributor and the Contributed Entities does not own any equity or ownership interest in any other Person.
(c) The Operating Partnership has been provided complete and accurate copies of Organizational Documents, as amended through the date hereof, and such Organizational Documents are in full force and effect as of the date hereof and have not been further modified or amended.
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Section 4.08 CONTRIBUTED PROPERTIES.
(a) Except as set forth in Schedule 4.08(a), the Contributor or a Contributed Entity is the insured under a policy of title insurance as the owner of, and, to the knowledge of the Contributor, the Contributor or a Contributed Entity is the owner of, good marketable and insurable fee simple title (or, in the case of certain Contributed Properties, a tenancy-in-common estate) to the Contributed Property owned by the Contributor or the Contributed Entity, in each case free and clear of all Liens except for Permitted Liens. Prior to the Closing, neither the Contributor nor any of the Contributed Entities shall take or omit to take any action to cause any Lien to attach to any Contributed Property, except for Permitted Liens and Liens, if any, given to secure mortgage indebtedness encumbering such Contributed Property.
(b) Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Fund Material Adverse Effect, (1) neither the Contributor nor any of the Contributed Entities nor, to the knowledge of the Contributor, any other party to any material agreement affecting any Property (other than a Lease (as such term is hereinafter defined) for space within such Property), is in breach or default of any such agreement, (2) to the knowledge of the Contributor, no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any such agreement, or would, individually or together with all such other events, reasonably be expected to cause the acceleration of any material obligation of any party thereto or the creation of a Lien upon any asset of the Contributor or the Contributed Entities, except for Permitted Liens, or otherwise reasonably be expected to have a Fund Material Adverse Effect and (3) all agreements affecting any Property required for the continued use, occupancy, management, leasing and operation of such Property (exclusive of space Leases) are valid and binding and in full force and effect, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity.
(c) Except for matters that would not, individually or in the aggregate, reasonably be expected to have a Fund Material Adverse Effect or that are otherwise disclosed on Schedule 4.08(c), (1) neither the Contributor, nor the Contributed Entities, nor, to the knowledge of the Contributor, any other party to any Lease, is in breach or default of any such Lease, (2) to the knowledge of the Contributor, no event has occurred or has been threatened in writing, which with or without the passage of time or the giving of notice, or both, would, individually or together with all such other events, constitute a default under any Lease or would permit termination, modification or acceleration under such Lease and (3) to the knowledge of the Contributor, each of the leases (and all amendments thereto or modifications thereof) to which the Contributor or the Contributed Entities is a party or by which the Contributor or the Contributed Entities or any Contributed Property is bound or subject (collectively, the “Leases”) is valid and binding and in full force and effect, subject to applicable bankruptcy, insolvency, moratorium or other similar Laws relating to creditors’ rights and general principles of equity.
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(a) Contributor has timely and properly filed (or caused to be timely and properly filed) all Tax Returns required to be filed by it and each Contributed Entity (after giving effect to any filing extension properly granted by a Governmental Authority having authority to do so) and all such Tax Returns are accurate and complete in all material respects;
(b) Contributor and each Contributed Entity have paid (or have had paid on their behalf) all Taxes as required to be paid by them;
(c) no income or material non-income Tax Returns filed by Contributor or any Contributed Entity are the subject of a pending or ongoing audit, and
(d) no deficiencies for any income or material non-income Taxes have been proposed, asserted or assessed against Contributor or any Contributed Entity, and no requests for waivers of the time to assess any such Taxes are pending. Since its formation, for U.S. federal income tax purposes, each of Contributor and each Contributed Entity has been treated as a partnership or as a disregarded entity, and not as a corporation or an association taxable as a corporation.
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ARTICLE V
COVENANTS AND OTHER AGREEMENTS
(a) (i) other than distributions to the members of the Contributor in connection with such members’ payment of any Taxes related to their ownership of the membership interest of the Contributor or as otherwise contemplated by this Agreement, declare, set aside or pay any dividends or distributions in respect of any Contributed Interests, except in the ordinary course of business consistent with past practice and in accordance with the applicable governing document of the Contributor, (ii) issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any Contributed Interests or make any other changes to the equity capital structure of the Contributor or the Contributed Entities, or (iii) purchase, redeem or otherwise acquire any Contributed Interests or interests of the Contributed Entities or any other securities thereof;
(b) other than in accordance with Section 4.08(a), issue, deliver, sell, transfer, dispose, mortgage, pledge, assign or otherwise encumber, or cause the issuance, delivery, sale, transfer, disposition, mortgage, pledge, assignment or otherwise encumbrance of, any limited liability company, partnership interests or other equity interests of the Contributor or of the Contributed Entities or any other assets of the Contributor or the Contributed Entities;
(c) amend, modify or terminate any lease, contract or other instruments relating to a Contributed Property, except in the ordinary course of business consistent with past practice;
(d) amend its certificate of formation and limited liability company agreement;
(e) adopt a plan of liquidation, dissolution, merger, consolidation, restructuring, recapitalization or reorganization;
(f) materially alter the manner of keeping the Contributor’s or the Contributed Entities’ books, accounts or records or the accounting practices therein reflected;
(g) file an entity classification election pursuant to Treasury Regulation Section 301.7701-3(c) on Internal Revenue Service Form 8832 (Entity Classification Election) to treat the Contributor or any Contributed Entity as an association taxable as a corporation for United States federal income tax purposes; make or change any other Tax elections; settle or compromise any claim, notice, audit report or assessment in respect of Taxes; change any annual
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Tax accounting period; adopt or change any method of Tax accounting; file any amended Tax Return; enter into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement relating to any Tax; surrender of any right to claim a Tax refund; or consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment;
(h) terminate or amend any existing insurance policies affecting any Contributed Property that results in a material reduction in insurance coverage for such Contributed Property;
(i) knowingly cause or permit the Contributor or any Contributed Entity to violate, or fail to use commercially reasonable efforts to cure any violation of, any applicable Laws;
(j) take any action or fail to take any action the result of which would have a Fund Material Adverse Effect; or
(k) authorize, commit or agree to take any of the foregoing actions.
(a) So long as some portion of the Contribution Consideration is in the form of OP Units, the parties hereto intend and agree that, for United States federal income tax purposes, the transactions contemplated by this Agreement shall constitute an “assets-over” partnership merger within the meaning of Treasury Regulations Section 1.708-1(c)(3)(i) pursuant to which the Contributor contributes all of its assets and liabilities to the Operating Partnership in exchange for OP Units in a transaction qualifying under Section 721(a) of the Code and immediately thereafter, the Contributor distributes such OP Units to the Nominees. As a result, (i) in accordance with Treasury Regulations Section 1.708-1(c)(4), any payment of cash or REIT Shares attributable to a Nominee shall be treated as a sale by such Nominee of its interests in the Contributor and a purchase of such interests by the Operating Partnership for the cash and/or REIT Shares so paid under the terms of this Agreement, and (ii) Contributor shall cause each such Nominee who receives cash and/or REIT Shares to explicitly agree and consent (the “Sale Consent”) to such treatment in their Consent Forms as a condition to electing such consideration. To the extent the Operating Partnership acquires any interests in the Contributor as described in clause (i) above, or otherwise previously acquired any such interests, for United States federal income tax purposes the receipt by the Operating Partnership of the portion of property
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attributable to such interests shall be treated as a distribution by the Contributor in redemption of such interests. Notwithstanding Section 1.02 and any Nominee’s election as to the form of its Contribution Consideration, if any Nominee (other than a non-Accredited Investor), fails to execute a Sale Consent prior to the Closing, such Nominee’s Contribution Consideration shall consist solely of OP Units. Notwithstanding Sections 1.03 and 2.03(a), any cash paid as the Contribution Consideration shall be paid only after the receipt of a Sale Consent from such Nominee.
(b) All transfer, stamp, documentary, sales, use, registration, value-added and other similar Taxes (including all applicable real estate transfer Taxes) incurred in connection with this Agreement and the transactions contemplated hereby (“Transfer Taxes”) will be borne by the Operating Partnership. The parties agree, upon request, to use commercially reasonable efforts to obtain any certificate or other document from any Governmental Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Transfer Taxes that could be imposed in connection with the transactions contemplated hereby.
(c) The Contributor shall timely file or cause to be timely filed when due all income Tax Returns required to be filed by the Contributor and shall pay or cause to be paid all income Taxes required to be paid.
(d) The Operating Partnership shall prepare or cause to be prepared and file or cause to be filed all other Tax Returns of the Contributor and all Tax Returns of each Contributed Entity which are due after the Closing Date. All such Tax Returns shall be prepared in a manner consistent with past practice, except as otherwise required by applicable law.
(e) The REIT, the Operating Partnership and the Contributor shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns related to the transactions pursuant to this Agreement and any audit, litigation or administrative, judicial or other inquiry or proceeding with respect to Taxes related to the transactions pursuant to this Agreement. Such cooperation shall include the retention and (upon the other party’s request) the provision of records and information which are reasonably relevant to any such action or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The REIT, the Operating Partnership and the Contributor further agree, upon request, to use their reasonable efforts to obtain any certificate or other document from any governmental authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed with respect to the transactions contemplated hereby.
(f) Prior to Closing, the Contributor shall deliver to the Operating Partnership a properly executed certificate prepared in accordance with Treasury regulations section 1.1445-2(b) certifying the Contributor’s non-foreign status, and if requested by the Operating Partnership, and any similar withholding certificates or other forms under applicable state, local or foreign Tax laws.
(g) The REIT and the Operating Partnership make no representations or warranties to the Contributor, the Nominees or to the Xxxxxxx Entities regarding the Tax treatment of the contributions pursuant to this Agreement or of the other Formation Transactions,
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or with respect to any other Tax consequences to the Contributor or any Contributed Entity of this Agreement or the other Formation Transactions. The Contributor acknowledges that each Contributed Entity, the Contributor and the Nominees are relying solely on their own Tax advisors in connection with this Agreement and the other Formation Transactions.
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ARTICLE VI
(a) | if to the REIT or the Operating Partnership, to: |
Xxxxxxx Industrial Realty, Inc.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx and Xxxxxxx X. Xxxxxxx
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(b) | if to the Contributor: |
c/o Rexford Industrial, LLC
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx and Xxxxxxx X. Xxxxxxx
(a) “Accredited Investor” has the meaning set forth under Regulation D of the Securities Act.
(b) “Affiliate” means, with respect to any Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with the specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise.
(c) “Allocated Share” means an amount of Contribution Consideration that would be distributed to a Pre-Formation Participant as a Nominee of the Contributor in accordance with the provisions of the Contributor’s Organizational Documents relating to distributions of distributable net proceeds from sales of directly or indirectly owned properties or assets, and assuming the sale of the relevant Target Asset or Target Assets that are directly or indirectly owned by such entity for a value equal to such Target Asset’s or Target Assets’ respective Equity Value(s).
(d) “Alternate Transaction” means any transaction structure, other than that contemplated by this Agreement, pursuant to which the REIT, the Operating Partnership or any of their Subsidiaries acquire all or a portion of the interests in the Contributor or the Contributed Assets or the assets held directly or indirectly by the applicable Xxxxxxx Entities in a transaction pursuant to which the Contributor and/or the Nominees receive the amount of cash, the number of OP Units and/or the number of REIT Shares that were to be received by the Contributor and/or the Nominees pursuant to this Agreement (or a portion thereof equal in value to the value of the portion of such assets acquired by the REIT, the Operating Partnership or any of their Subsidiaries pursuant to such Alternate Transaction); provided, that such structure will not (i) result in a breach of the Contributor’s or any applicable Contributed Entity’s governing documents and (ii) would not give rise to dissenters’ or appraisal rights by the members of the Contributor, unless such rights have fully waived by all such members in the Consent Forms.
(e) “Assignment and Assumption of Assumed Contracts” means that certain Assignment and Assumption of Assumed Contracts, dated as of the Closing Date and executed by the parties thereto, substantially in the form attached hereto as Exhibit G.
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(f) “Assignment and Assumption of Membership Interests” means that certain Assignment and Assumption of Membership Interests, dated as of the Closing Date and executed by the parties thereto, substantially in the form attached hereto as Exhibit H.
(g) “Assumed Contracts” means all contracts, agreements, commitments, understandings and licenses of the Contributor.
(h) “Assumed Liabilities” means any direct or indirect liability, indebtedness, obligation, commitment, expense, claim, deficiency, guaranty or endorsement of or by the Contributor of any type, whether accrued, absolute, contingent, matured, unmatured, known or unknown or otherwise, including, without limitation, all such liabilities, whether past, currently existing or hereafter arising, relating to the ownership of Contributed Assets or the businesses conducted with such Contributed Assets.
(i) “Assumption of Assumed Liabilities” means that certain Assumption of Assumed Liabilities, dated as of the Closing Date and executed by the parties thereto, substantially in the form attached hereto as Exhibit I.
(j) “Xxxx of Sale” means that certain Xxxx of Sale, dated as of the Closing Date and executed by the parties thereto, substantially in the form attached hereto as Exhibit J.
(k) “Business Day” means any day that is not a Saturday, Sunday or legal holiday in the State of California.
(l) “Code” means the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated or issued thereunder.
(m) “Consent Form” means the form provided to each holder of Pre-Formation Interests to consent to the Formation Transactions and to make such holder’s irrevocable elections with respect to consideration to be received by such holder (as Nominee or otherwise) in the Formation Transactions.
(n) “Contributed Assets” means, other than the Excluded Assets, all of the Contributor’s right, title and interest in, under and to all of the assets, properties and rights of the Contributor of every kind, nature and description, whether such assets, properties and rights are real, personal or mixed, tangible or intangible, including without limitation:
(i) the Contributor’s Contributed Interests;
(ii) cash and cash equivalents;
(iii) all accounts or notes receivable held by the Contributor, and any security, claim, remedy or other right related to any of the foregoing;
(iv) all inventory, finished goods, raw materials, work in progress, packaging, supplies, parts and other inventories;
(v) the Assumed Contracts;
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(vi) all Intellectual Property Assets;
(vii) all furniture, fixtures, equipment, machinery, tools, vehicles, office equipment, supplies, computers, telephones and other tangible personal property;
(viii) all permits, including environmental permits, which are held by the Contributor and required for the conduct of the Contributor’s business as currently conducted or for the ownership and use of the Contributed Assets;
(ix) all rights to any actions, claims or suits of any nature available to or being pursued by the Contributor to the extent related to the Contributor’s business, the Contributed Assets or the Assumed Liabilities, whether arising by way of counterclaim or otherwise;
(x) all prepaid expenses, credits, advance payments, claims, security, refunds, rights of recovery, rights of set-off, rights of recoupment, deposits, charges, sums and fees (including any such item relating to the payment of taxes);
(xi) all of the Contributor’s rights under warranties, indemnities and all similar rights against third parties to the extent related to any Contributed Assets;
(xii) all insurance benefits, including rights and proceeds, arising from or relating to the Contributor’s business, the Contributed Assets or the Assumed Liabilities;
(xiii) originals, or where not available, copies, of all books and records, including, but not limited to, books of account, ledgers and general, financial and accounting records, machinery and equipment maintenance files, customer and tenant data, other records and data (including all correspondence with any Governmental Authority), strategic plans, internal financial statements, marketing and promotional surveys, and other similar documents and data; and
(xiv) all goodwill and the going concern value of the Contributor’s business.
(o) “Contributed Properties” means all Properties owned directly or indirectly, in whole or in part, by the Contributed Entities, as identified on Schedule 4.01(b).
(p) “Elected OP Unit Percentage” means, with respect to the Contribution Consideration to be received by any Nominee, the percentage of the Allocated Share that the Nominee has made a Valid Election to receive in the form of OP Units.
(q) “Elected REIT Share Percentage” means, with respect to the Contribution Consideration to be received by any Nominee, the percentage of the Allocated Share that the Nominee has made a Valid Election to receive in the form of REIT Shares.
(r) “Entity Specific Debt” has the meaning set forth in Schedule 6.02(c) hereto.
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(s) “Environmental Laws” means all federal, state and local Laws governing pollution or the protection of human health or the environment.
(t) “Equity Value” has the meaning set forth in Schedule 6.02(c) hereto.
(u) “Excluded Assets” means (i) the assets identified on Schedule 5.05 and (ii) any interest excluded from the contribution hereunder in accordance with Section 5.07.
(v) “Formation Transaction Documentation” means all of the agreements (including this Agreement) and related documents substantially in the forms accompanying the Request for Consent dated February 22, 2013 and identified in Exhibit K hereto, pursuant to which all of the Xxxxxxx Entities and/or the Pre-Formation Interests are to be acquired by the REIT or the Operating Partnership, directly or indirectly, as part of the Formation Transactions.
(w) “Formation Transactions” means the transactions contemplated by this Agreement and the other Formation Transaction Documentation.
(x) “Fund Material Adverse Effect” means any material adverse change in the assets, business, condition (financial or otherwise), results of operation or prospects of the Contributor, the Contributed Entities or Contributed Properties, taken as a whole.
(y) “Fund V Subsequent Investment Amount” has the meaning set forth in Schedule 6.02(c) hereto.
(z) “Governmental Authority” means any government or agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.
(aa) “Intellectual Property” means all of the following and similar intangible property and related proprietary rights, interests and protections, however arising, pursuant to the Laws of any jurisdiction throughout the world: (a) trademarks, service marks, trade names, brand names, logos, trade dress and other proprietary indicia of goods and services, whether registered or unregistered, and all registrations and applications for registration of such trademarks, including intent-to-use applications, all issuances, extensions and renewals of such registrations and applications and the goodwill connected with the use of and symbolized by any of the foregoing; (b) internet domain names, whether or not trademarks, registered in any top-level domain by any authorized private registrar or Governmental Authority; (c) original works of authorship in any medium of expression, whether or not published, all copyrights (whether registered or unregistered), all registrations and applications for registration of such copyrights, and all issuances, extensions and renewals of such registrations and applications; (d) confidential or proprietary information, formulas, designs, devices, technology, know-how, research and development, inventions, methods, processes, compositions and other trade secrets, whether or not patentable and whether or not the foregoing has been reduced to a writing or other tangible form, and all improvements, documents and things embodying, incorporating, or referring in any way to the foregoing; (e) patented and patentable designs and inventions, all design, plant and utility patents, letters patent, utility models, pending patent applications and provisional applications and all issuances, divisions, continuations, continuations-in-part, reissues,
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extensions, reexaminations and renewals of such patents and applications; (f) all other intellectual property and proprietary rights, of every kind and nature throughout the world and however designated in all media in existence now or hereafter developed (including without limitation, moral rights, character rights, publicity rights, privacy rights and “rental” rights), whether arising by operation of law, contract, license or otherwise; and (g) all rights to xxx and recover and retain damages, costs and attorneys’ fees for past, present and future infringement, misappropriation, or other unauthorized use, and any other rights relating to any of the foregoing.
(bb) “Intellectual Property Assets” means all Intellectual Property of the Contributor.
(cc) “Interim Period” has the meaning set forth in Schedule 6.02(c) hereto.
(dd) “Laws” means laws, statutes, rules, regulations, codes, orders, ordinances, judgments, injunctions, decrees and policies of any Governmental Authority, including, without limitation, zoning, land use or other similar rules or ordinances.
(ee) “Liens” means all pledges, claims, liens, charges, restrictions, controls, easements, rights of way, exceptions, reservations, leases, licenses, grants, covenants and conditions, encumbrances and security interests of any kind or nature whatsoever.
(ff) “Lock-Up Agreement” means that certain Lock-Up Agreement, by and between the underwriters and each investor of the REIT and/or the Operating Partnership.
(gg) “Management Companies” means, collectively RIF V Manager, Sponsor, and RI LLC.
(hh) “Offering Closing Date” means the closing date of the Offering.
(ii) “Offering Document” means either (i) in the event the REIT undertakes a public Offering, the REIT’s final prospectus as filed with the SEC; or (ii) in the event the REIT undertakes a private Offering, the REIT’s final offering memorandum (together with any supplements and amendments thereto) used in the Offering.
(jj) “Offering Price” means the initial offering price of a REIT Share in the Offering.
(kk) “OP Material Adverse Effect” means any material adverse change in any of the assets, business, condition (financial or otherwise), results of operation or prospects of the Operating Partnership and each Operating Partnership Subsidiary, taken as a whole.
(ll) “Organizational Documents” means the certificate of formation, certificate of incorporation and bylaws, certificate of limited partnership and limited partnership agreement, limited liability company agreement or operating agreement, of the Contributor or the applicable Contributed Entity.
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(mm) “Permitted Liens” means (i) Liens, or deposits made to secure the release of such Liens, securing Taxes, the payment of which is not delinquent or the payment of which (including, without limitation, the amount or validity thereof) is being contested in good faith by appropriate proceedings for which adequate reserves have been made in accordance with GAAP; (ii) zoning, entitlement, building and other land use Laws imposed by Governmental Authorities having jurisdiction over the Contributed Properties; (iii) covenants, conditions, restrictions, easements for public utilities, encroachments, rights of access or other non-monetary matters that do not materially impair the use of the Contributed Properties for the purposes for which they are currently being used or proposed to be used in connection with the relevant Person’s business; (iv) Liens securing financing or credit arrangements existing as of the Closing Date; (v) Liens arising under Leases in effect as of the Closing Date; (vi) any exceptions contained in any title policy (including any policy issued to a secured lender) relating to the Contributed Properties as of the Closing Date; and (vii) mechanics’, carriers’, workers’, repairers’ and similar Liens arising or incurred in the ordinary course of business that are not yet due and payable or the payment of which (including, without limitation, the amount or validity thereof) is being contested in good faith by appropriate proceedings for which adequate reserves have been made in accordance with GAAP, and which are not, in the aggregate, material to the business, operations and financial condition of the Contributed Properties so encumbered.
(nn) “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.
(oo) “Pre-Formation Interests” means the equity interests directly or indirectly held by the Pre-Formation Participants in the Xxxxxxx Entities and in the “Xxxxxxx Properties” as defined in that certain Confidential Request for Consent and Investment Election dated February 22, 2013.
(pp) “Pre-Formation Participants” means the holders of the equity interests in the relevant RIF Fund Entity and the Management Companies immediately prior to the Formation Transactions, and shall include any other Person contributing any interest or Property to the REIT, the Operating Partnership or any Subsidiary thereof in the Formation Transactions.
(qq) “Properties” means the real properties owned directly or indirectly, in whole or in part, by the Xxxxxxx Entities.
(rr) “Registration Rights Agreement” means that certain Registration Rights Agreement, by and among the REIT, the Operating Partnership and the parties identified as a signatory on Schedule A thereto.
(ss) “Xxxxxxx Entity” means a RIF Fund Entity, the Management Companies and each of their respective Subsidiaries, as applicable. As used herein, “Xxxxxxx Entities” refer to each Xxxxxxx Entity, collectively.
(tt) “Securities Act” means the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder.
(uu) “Subsidiary” of any Person means any corporation, partnership, limited liability company, joint venture, trust or other legal entity of which such Person owns (either directly or through or together with another Subsidiary of such Person) either (i) a general
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partner, managing member or other similar interest, or (ii)(A) ten percent (10%) or more of the voting power of the voting capital stock or other equity interests, or (B) ten percent (10%) or more of the outstanding voting capital stock or other voting equity interests of such corporation, partnership, limited liability company, joint venture or other legal entity.
(vv) “Target Asset” has the meaning set forth in Schedule 6.02(c) hereto.
(ww) “Tax” means all federal, state, local and foreign income, gross receipts, license, property, withholding, sales, franchise, employment, payroll, goods and services, stamp, environmental, customs duties, capital stock, social security, transfer, alternative minimum, excise and other taxes, tariffs or governmental charges of any nature whatsoever, including estimated taxes, together with penalties, interest or additions to Tax with respect thereto, whether or not disputed.
(xx) “Tax Matters Agreement” means that certain Tax Matters Agreement, by and among the REIT, the Operating Partnership and the other parties identified signatories therein.
(yy) “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
(zz) “Valid Election” means, with respect to any Nominee, an irrevocable election to receive all or a portion of its Allocated Share in the form of OP Units or REIT Shares as indicated on the properly completed and timely received Consent Form of the Nominee or a Consent Form as to which any deficiencies have been waived by the REIT.
Section 6.05 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of California, regardless of any Laws that might otherwise govern under applicable principles of conflicts of laws thereof.
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(a) Upon any dispute, controversy or claim arising out of or relating to this Agreement or the enforcement, breach, termination or validity thereof (“Dispute”), the party raising the Dispute will give written notice to the other parties to the Dispute describing the nature of the Dispute following which the parties to such Dispute shall attempt for a period of ten (10) Business Days from receipt by the parties of notice of such Dispute to resolve such Dispute by negotiation between representatives of the parties hereto who have authority to settle such Dispute. All such negotiations shall be confidential and any statements or offers made therein shall be treated as compromise and settlement negotiations for purposes of any applicable rules of evidence and shall not be admissible as evidence in any subsequent proceeding for any purpose. The statute of limitations applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defense based on the running of the statute of limitations will be available based upon the passage of time during any such negotiation. Regardless of the foregoing, a party shall have the right to seek immediate injunctive relief pursuant to Section 6.08(c) below without regard to any such ten (10) Business Day negotiation period.
(b) Any Dispute (including the determination of the scope or applicability of this agreement to arbitrate) that is not resolved pursuant to Section 6.08(a) above shall be submitted to final and binding arbitration in California before one neutral and impartial arbitrator, in accordance with the Laws of the State of California for agreements made in and to be performed in that State. The arbitration shall be administered by JAMS, Inc. (“JAMS”) pursuant to its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. Each of the REIT and the Operating Partnership, on the one hand, and the Contributor, on the other hand, shall appoint one arbitrator within fifteen (15) days of a demand for arbitration. If the REIT and the Operating Partnership and the Contributor cannot mutually agree upon an arbitrator within such 15-day period, the arbitrator shall be appointed by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, as in effect on the date hereof. The arbitrator shall designate the place and time of the hearing. The hearing shall be scheduled to begin as soon as practicable and no later than sixty (60) days after the appointment of the arbitrator (unless such period is extended by the arbitrator for good cause shown) and shall be conducted as expeditiously as possible. The award, which shall set forth the arbitrator’s findings
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of fact and conclusions of law, shall be filed with JAMS and mailed to the parties no later than thirty (30) days after the close of the arbitration hearing. The arbitration award shall be final and binding on the parties and not subject to collateral attack. Judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.
(c) Notwithstanding the parties’ agreement to submit all Disputes to final and binding arbitration before JAMS, the parties shall have the right to seek and obtain temporary or preliminary injunctive relief in any court having jurisdiction thereof. Such courts shall have authority to, among other things, grant temporary or provisional injunctive relief in order to protect any party’s rights under this Agreement. Without prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority to grant provisional remedies and to direct the parties to request that any court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any party to respect the arbitral tribunal’s orders to that effect.
(d) The prevailing party shall be entitled to recover its costs and reasonable attorneys’ fees, and the non-prevailing party shall pay all expenses and fees of JAMS, all costs of the stenographic record, all expenses of witnesses or proofs that may have been produced at the direction of the arbitrator, and the fees, costs, and expenses of the arbitrator. The arbitrator shall allocate such costs and designate the prevailing party or parties for these purposes.
Section 6.10 RULES OF CONSTRUCTION.
(a) The parties hereto agree that they have had the opportunity to be represented by counsel during the negotiation, preparation and execution of this Agreement and, therefore, waive the application of any Law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
(b) The words “hereof,” “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph, exhibit and schedule references are to the articles, sections, paragraphs, exhibits and schedules of this Agreement unless otherwise specified. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” All terms defined in this Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. Unless explicitly stated otherwise herein, any agreement, instrument or statute
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defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time, amended, qualified or supplemented, including (in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.
Section 6.11 EQUITABLE REMEDIES. The parties agree that irreparable damage would occur to the Operating Partnership in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Operating Partnership shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by a Contributor and to enforce specifically the terms and provisions hereof in any federal or state court located in California, this being in addition to any other remedy to which the Operating Partnership is entitled under this Agreement or otherwise at law or in equity.
Section 6.15 CONSENT OF PARTNER, MANAGER or MEMBER. In accordance with the terms of certain of the agreements governing the Contributed Interests, the undersigned, in its capacity as a partner, manager or member of one or more of the Contributed Entities, consents to the applicable transfers contemplated in Section 1.01 hereof and the admission of the Operating Partnership as a substituted partner or member in each applicable Contributed Entity and waives any right of first refusal which the undersigned has with respect of the transfer of any of the Contributed Interests to the Operating Partnership.
Section 6.16 WAIVER OF SECTION 1542 PROTECTIONS. As of the Closing Date, each of the parties hereto expressly acknowledges that it has had, or has had and waived, the opportunity to be advised by independent legal counsel and hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the California Civil Code and does so understanding and acknowledging the significance and consequence of such specific waiver of Section 1542 which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
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[SIGNATURE PAGES FOLLOW]
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XXXXXXX INDUSTRIAL REALTY, L.P., | ||||
a Maryland limited partnership | ||||
By: | XXXXXXX INDUSTRIAL REALTY, INC., | |||
a Maryland corporation | ||||
Its: | General Partner | |||
By: | /s/ Xxxxxx Xxxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxxx | |||
Title: | Co-Chief Executive Officer | |||
By: | /s/ Xxxxxxx Xxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxx | |||
Title: | Co-Chief Executive Officer | |||
XXXXXXX INDUSTRIAL REALTY, INC., a Maryland corporation | ||||
By: | /s/ Xxxxxx Xxxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxxx | |||
Title: | Co-Chief Executive Officer | |||
By: | /s/ Xxxxxxx Xxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxx | |||
Title: | Co-Chief Executive Officer | |||
XXXXXXX INDUSTRIAL FUND IV, LLC, a California limited liability company | ||||
By: | XXXXXXX INDUSTRIAL, LLC | |||
a California limited liability company | ||||
Its: | Manager | |||
By: | /s/ Xxxxxx Xxxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxxx | |||
Title: | Manager |
[Signature Page to Fund IV Contribution Agreement]