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EXHIBIT 10.1
MASTER CONTRIBUTION AGREEMENT AMENDMENT
THIS MASTER CONTRIBUTION AGREEMENT AMENDMENT (this "Amendment")
is made and entered into as of September 15, 1997, by and between Pacific Gulf
Properties Inc., a Maryland corporation ("PGP"), and Eden Plaza Associates, LLC,
a California limited liability company ("Eden").
RECITALS
A. PGP and Eden have entered into that certain Master
Contribution Agreement (the "Agreement"). The terms used in this Amendment and
not otherwise defined shall have the meanings given thereto in the Agreement.
B. PGP and Eden desire to supplement and amend the Agreement as
hereinafter provided.
AGREEMENT
NOW, THEREFORE in consideration of the foregoing and the mutual
promises and covenants set forth herein, the parties hereto hereby agree as
follows:
1. Debt Restructure. Anything contained in the Agreement to the
contrary notwithstanding, the "Debt Restructure" (as defined in the Agreement)
may, at PGP's election which may be made in PGP's sole and absolute discretion,
consist of the following:
(a) the reduction of the Closing Cigna Debt by an amount to
be agreed upon by PGP and Cigna, not to exceed the amount set forth in Section
1.39(i) of the Agreement;
(b) the extension of the maturity date of the Cigna Debt to
a date after the Closing Date mutually agreed upon by PGP and Cigna;
(c) to the extent required by PGP, the agreement by Cigna
that all existing defaults under the Cigna Debt have been cured or waived;
(d) to the extent required by Cigna, the assumption of the
modified Cigna Debt by the Operating Partnership and, at Cigna's election,
either (i) the retention of Eden's liability for the modified Cigna Debt, or
(ii) the release of Eden's liability for the Cigna Debt combined with Eden's
guaranty of at least $12,000,000 of the modified Cigna Debt, which guaranty is
nonrecourse to the partners and members of Eden; and
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(e) such other terms and conditions as PGP may reasonably
approve.
Eden and PGP have determined that restructuring the Cigna Debt on
substantially the terms set forth above will be acceptable if PGP elects to do
so. However, nothing contained herein shall obligate PGP to cause the Cigna Debt
to be so restructured and PGP retains the right to pursue any and all other
possible Debt Restructures, subject to the other provisions of the Agreement.
Anything contained herein to the contrary notwithstanding, neither party shall
be obligated to accept the Debt Restructure outlined above if such Debt
Restructure (i) does not provide that the debt shall be secured by the
Properties; or (ii) would result in less than $12,000,000 (including any
holdback described in the Agreement) of debt encumbering the Property at the
Closing.
2. Eden Landing Certificate. Section 7.12(b) is deleted from the
Agreement.
3. Closing. PGP and Eden each agree to work diligently and in
good faith to cause the Closing to occur as soon as reasonably possible, but in
any event on or before the Outside Closing Date.
4. Closing Costs. In the event the Debt Restructure outlined in
Section 1 above is implemented at the Closing, Eden's obligations to pay the
amounts described in Sections 9.5(a)(iv)(A) and 9.5(b) of the Agreement shall
survive the Closing and, to the extent applicable, apply to the first
refinancing of the modified Cigna Debt that occurs after the Closing; provided,
however, that in no event shall Eden be required to pay any amounts described in
such Sections of the Agreement that exceed the amounts Eden would have been
required to pay pursuant to those Sections if the Debt Restructure outlined in
Section 1 above had not been implemented.
5. Exhibit B. In the event the Debt Restructure outlined in
Section 1 above is implemented at the Closing, Item 14 of Schedule B of the
Approved Title Form which is attached as Exhibit B to the Agreement shall be
deemed to refer to the recorded loan documents currently securing the Cigna
Debt, as modified.
6. Exhibit P. The following revisions are made to the form of
the OP Agreement which is attached as Exhibit P to the Agreement:
(a) The words ", as amended," are added after the words
"Master Contribution Agreement" in Section 1.42 of the OP Agreement.
(b) In Section 4.2 of the OP Agreement, the existing clause
(b) is relettered to be clause (c) and the following new clause (b) is added ";
(b) financing, refinancing
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and paying off or down Partnership debt (subject to the limitations in Section
7.2 hereof;".
7. Counterparts; Facsimile. This Amendment may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement with the same effect as if all parties had
signed the same signature page. This Amendment shall be deemed executed and
delivered upon each party's delivery of executed signature pages, which
signature pages may be delivered by facsimile with the same effect as delivery
of the originals.
8. Agreement. Except as expressly set forth herein, the
Agreement remains unmodified and in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be duly executed and delivered on its behalf as of the date first
above written.
"PGP"
PACIFIC GULF PROPERTIES INC., a Maryland
corporation
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxx, Executive Vice
President, Chief Financial Officer
and Secretary
"EDEN"
EDEN PLAZA ASSOCIATES, LLC, a California
limited liability company
By: /s/Xxxxxx X. Xxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxx, Managing
Member
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MASTER CONTRIBUTION AGREEMENT
BETWEEN
PACIFIC GULF PROPERTIES INC.
AND
EDEN PLAZA ASSOCIATES, LLC
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.......................................................... 1
ARTICLE II CONTRIBUTIONS........................................................ 10
2.1 Eden's Contribution......................................................... 10
2.2 Consideration For Eden Contribution......................................... 10
2.3 PGP Capital Contribution.................................................... 11
2.4 Consideration for PGP Contribution.......................................... 11
2.5 Closing Time and Place...................................................... 11
2.6 Title....................................................................... 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PGP................................ 12
3.1 Organization, Power and Authority, and Qualifi-
cation...................................................................... 12
3.2 Authority Relative to this Agreement........................................ 12
3.3 Binding Obligation.......................................................... 12
3.4 No Violation................................................................ 12
3.5 Bankruptcy.................................................................. 12
3.6 Disclosure.................................................................. 13
3.7 Reports..................................................................... 13
3.8 Brokers..................................................................... 13
ARTICLE IV INTENTIONALLY OMITTED................................................ 13
ARTICLE V REPRESENTATIONS AND WARRANTIES OF EDEN............................... 13
5.1 Organization, Power and Authority, and Qualifi-
cation...................................................................... 13
5.2 Authority Relative to this Agreement........................................ 13
5.3 Binding Obligation.......................................................... 13
5.4 No Violation................................................................ 14
5.5 Adequate Disclosure......................................................... 14
5.6 Absence of Undisclosed Liabilities.......................................... 14
5.7 Compliance with Laws/Certificates of Substandard
Structure................................................................... 14
5.8 Environmental Matters....................................................... 15
5.9 Physical Condition.......................................................... 15
5.10 Leases...................................................................... 15
5.11 No Litigation or Adverse Events............................................. 16
5.12 Contracts and Agreements.................................................... 16
5.13 No Other Agreements......................................................... 17
5.14 Non-Foreign Person.......................................................... 17
5.15 Employees................................................................... 17
5.16 Brokers..................................................................... 17
5.17 Operating Statements........................................................ 17
5.18 Security Deposits........................................................... 18
5.19 Deposits and Reimbursements................................................. 18
5.20 Bankruptcy.................................................................. 18
5.21 Disclosure.................................................................. 18
5.22 Prospectus.................................................................. 18
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5.23 No Public Offering.......................................................... 19
5.24 Knowledge and Experience.................................................... 19
5.25 No Distribution............................................................. 20
ARTICLE VI COVENANTS AND AGREEMENTS OF EDEN..................................... 20
6.1 Actions Affecting Properties................................................ 20
6.2 Access to Properties and Records; Contact with
Officials................................................................... 21
6.3 License and Entitlements.................................................... 21
6.4 No Extraordinary Transactions............................................... 21
6.5 Debt Restructure............................................................ 22
6.6 Insurance................................................................... 23
6.7 Taxes and Assessments....................................................... 23
6.8 Operation of Properties..................................................... 23
6.9 Compliance With Hayward Resolution.......................................... 23
6.10 Closing Information.......................................................... 24
6.11 Tax and Securities Issues................................................... 24
ARTICLE VII PGP's CONDITIONS PRECEDENT........................................... 24
7.1 Representations and Warranties.............................................. 24
7.2 No Material Adverse Change.................................................. 24
7.3 Delivery of Closing Requirements............................................ 25
7.4 No Order or Injunction...................................................... 25
7.5 Debt Restructure............................................................ 25
7.6 Maximum PGP Capital Contribution............................................ 25
7.7 Full Participation.......................................................... 25
7.8 Title Insurance............................................................. 25
7.9 Eden Compliance............................................................. 25
7.12 Certificates of Substandard Structure....................................... 26
ARTICLE VIII EDEN'S CONDITIONS PRECEDENT.......................................... 26
8.1 Representations, Warranties and Covenants................................... 26
8.2 Delivery of Closing Requirements............................................ 26
8.3 No Order or Injunction...................................................... 26
8.4 PGP Capital Contribution.................................................... 27
8.5 Debt Restructure............................................................ 27
8.6 PGP Compliance.............................................................. 27
ARTICLE IX THE CLOSING.......................................................... 27
9.1 Deliveries by Eden. ....................................................... 27
9.2 Deliveries by OP. ......................................................... 28
9.3 Closing Prorations.......................................................... 29
9.4 Deposits and Reimbursements................................................. 31
9.5 Closing Costs............................................................... 31
9.6 Eden Brokerage Commission................................................... 32
9.7 Shared Expenses............................................................. 33
9.8 Possession.................................................................. 34
9.9 Notices to Tenants.......................................................... 34
9.10 Reporting Requirements...................................................... 34
ARTICLE X INDEMNITY............................................................ 35
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ARTICLE XI GENERAL PROVISIONS.................................................... 36
11.1 Survival of Representations and Warranties.................................. 36
11.2 Confidentiality............................................................. 36
11.3 Notices..................................................................... 36
11.4 Successors and Assigns...................................................... 37
11.5 Amendments.................................................................. 37
11.6 Governing Law............................................................... 37
11.7 Enforcement................................................................. 38
11.8 Time of the Essence......................................................... 38
11.9 Severability................................................................ 38
11.10 Exhibits.................................................................... 38
11.11 Further Assurances.......................................................... 38
11.12 Risk of Loss................................................................ 38
11.13 Counterparts................................................................ 39
11.14 No Waiver................................................................... 39
11.15 Legal Representation........................................................ 39
11.16 REIT........................................................................ 39
11.17 Entire Agreement............................................................ 40
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MASTER CONTRIBUTION AGREEMENT
THIS MASTER CONTRIBUTION AGREEMENT (this "Agreement") is made and entered
into as of _________, 1997, by and between Pacific Gulf Properties Inc., a
Maryland corporation ("PGP"), and Eden Plaza Associates, LLC, a California
limited liability company ("Eden").
RECITALS
A. PGP and Eden desire to enter into the transactions herein described
for, among other things, the formation of the "Operating Partnership" and the
contribution to the Operating Partnership at the "Closing" of the four parcels
of land identified on Exhibit A (collectively, the "Land"). Each parcel of Land
is improved with an industrial building or buildings and related improvements.
The parcels of Land and all "Appurtenances", "Improvements", "Tangible Personal
Property" and "Intangible Personal Property" (as those terms are hereafter
defined) located thereon or associated therewith are individually referred to as
a "Property" and collectively referred to as the "Properties".
B. Pursuant hereto, the parties wish to provide for, among other
things, the contribution of cash by PGP to the Operating Partnership and the
contribution of the Properties by Eden to the Operating Partnership.
AGREEMENT
NOW, THEREFORE in consideration of the foregoing and the mutual promises
and covenants set forth herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Certain of the terms used in this Agreement that are not otherwise defined
herein shall have the meanings set forth below.
1.1 "Act" shall mean the Securities Act of 1933, as amended.
1.2 "Approved Title Form" shall mean a title insurance policy issued in
the form of, and containing only the Permitted Exceptions described on, Exhibit
B, including any handwritten notations thereon.
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1.3 "Appurtenances" shall mean all rights, privileges, interests,
licenses, claims, easements, benefits, covenants, conditions and servitudes of
any type or nature which are appurtenant to or otherwise benefit a parcel of
Land and/or the Improvements located thereon, including without limitation, all
minerals, oil, gas and other hydrocarbon substances on or under the Land, as
well as all development rights, air rights, water, water rights and water stock
relating to a parcel of Land and any other easements, rights of way or
appurtenances and used in connection with the beneficial operation, use and
enjoyment of such Land and/or Improvements or any other appurtenance, together
with all of Eden's rights in and to streets, sidewalks, alleys, gores, strips,
driveways, parking areas and areas adjacent thereto or used in connection
therewith, and all of Eden's rights in any land lying in the bed of any existing
or proposed street adjacent to any Land.
1.4 "Assignment of Intangible Property" shall have the meaning set forth
in Section 9.1(d).
1.5 "Assignment of Leases" shall have the meaning set forth in Section
9.1(e).
1.6 "Assumed Contracts" shall mean those Contracts identified on
Schedule 1 to Exhibit C that Eden will assign to, and that the Operating
Partnership will assume, as of the Closing Date.
1.7 "Base Value" shall mean $19,000,000.
1.8 "BT Commercial" shall mean, individually and collectively, BT
Commercial Real Estate, Inc., and Xxxxxx Xxxxxx, Xxxxx Xxxx and Xxxx Xxxx of BT
Commercial Real Estate, Inc.
1.9 "Capital Improvements" shall mean those items of deferred
maintenance and capital improvements to the Properties described on Exhibit D.
1.10 "Certificates of Substandard Structure" shall mean, collectively,
the Certificate of Substandard Structure recorded (i) March 3, 1994 as Series
No. 94-083727 with respect to 00000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx (the
"Corporate Avenue Certificate"), (ii) March 3, 1994 as Series No. 94-083733 with
respect to 0000-0000 Xxxxxxxxxx Xxxx., Xxxxxxx, Xxxxxxxxxx (the "Investment
Blvd. Certificate"), and (iii) March 3, 1994 as Series No. 94-083734 with
respect to 00000-000 Xxxx Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxx (the "Eden Landing
Certificate").
1.11 "Cigna Debt" shall mean the total amount of all principal, interest
and other amounts outstanding under that certain loan held by Connecticut
General Life Insurance Company ("Cigna"), as successor to Connecticut General
Life Insurance Company, a Connecticut corporation, in the original principal
amount of $16,700,000, and secured, in part, by that certain Deed
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of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated
January 16, 1990, and recorded January 17, 1990 as Series No. 90-013417 in the
Official Records of Alameda County, California.
1.12 "Cigna Restructure Proposal" shall have the meaning set forth in
Section 6.5.
1.13 "Conditions Precedent" shall mean collectively, the PGP Conditions
Precedent and Eden Conditions Precedent, each set forth in Article VII and
Article VIII, respectively, of this Agreement.
1.14 "Closing" shall mean the date and time at which title to all Real
Property has vested in the Operating Partnership, provided that all Properties
shall be conveyed to the Operating Partnership in a single Closing.
1.15 "Closing Cigna Debt" shall mean the outstanding amount of all
principal, interest and other amounts outstanding under the Cigna Debt on the
Closing Date prior to any pay down or refinancing of the Cigna Debt at the
Closing.
1.16 "Closing Date" shall mean the date on which the Closing of all
Properties occurs.
1.17 "Commissions" shall mean an amount equal to $390,000 in the
aggregate, of which (i) $195,000 shall be payable to BT Commercial, Xxxxxx
Xxxxxx, Xxxxxxx Xxxx and Xxxxx Xxxx (collectively), and (ii) $195,000 shall be
payable to Xxxxxxx & Co. upon Closing.
1.18 "Contracts" shall mean all written or oral management,
architectural, engineering, leasing, insurance, bonding, construction,
financing, guarantee, indemnity, service, maintenance, operating, repair,
collective bargaining, employment, employee benefit, equipment leasing, supply,
warranty, purchase, consulting, professional service, advertising, promotion,
public relations and other contracts and commitments (excluding the Leases) in
any way relating to the Properties or any part thereof.
1.19 "Debt Restructure" shall have the meaning set forth in Section 6.5.
1.20 "Debt Restructure Documents" shall have the meaning set forth in
Section 6.5.
1.21 "Deposits and Reimbursements" shall mean the following with respect
to the Properties: (i) deposits made with or tendered to utility companies to
secure service or to permit Eden or its predecessors in interest to tie in to
existing service grids or to cause a utility company to install connections or
extensions necessary to provide service,
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(ii) deposits made by Eden or its predecessors in interest with any bonding or
surety company or deposits, bonds or other financial security devices posted
with or for the benefit of any governmental or quasi-governmental agency in
connection with subdivision or public improvement bonds obtained by Eden or its
predecessors in interest or in connection with any development agreement,
subdivision agreement, parcel map or tract map, and (iii) any refundable fees,
payments or reimbursements which Eden or its predecessors in interest or the
then-current owner or occupant of the Properties is entitled to receive from any
governmental or quasi-governmental or private body in respect of the ownership
and development of the Land or Improvements or any public improvements made in
connection with the Land or Improvements.
1.22 "Determination Date" shall mean July 25, 1997 provided that on or
before August 1, 1997 this Agreement has been executed and delivered by Eden.
Otherwise the "Determination Date" shall be the Closing Date.
1.23 "Xxxxxxx Money" shall mean the sum of Two Hundred Fifty Thousand
Dollars ($250,000), to be deposited with the Escrow Holder by PGP and to be
disbursed as provided in this Agreement.
1.24 "Eden Capital Contribution" shall be equal to the Base Value, less
each of the following: (i) the actual amount at Closing of all debts and
liabilities assumed by the Operating Partnership or encumbering any of the
Properties as of the Closing Date determined prior to any reduction in the
Closing Cigna Debt by refinancing or application of the portion of the PGP
Capital Contribution used to pay down the Cigna Debt, (ii) the Commissions, and
(iii) the Qualifying Eden Closing Costs.
1.25 "Eden Conditions Precedent" shall have the meaning contained in
Article VIII.
1.26 "Eden Entity" shall mean any person or entity who or which directly
or indirectly through one or more intermediate entities owns, controls or
benefits from any interest in or to Eden.
1.27 "Environmental Reports" shall mean those certain Phase I
Environmental Site Assessments dated June 6, 1997, prepared by Dames & Xxxxx
under D&M Job No. 00000-000-000, titled 0000-0000 Xxxxxxxxxx Xxxx. & 26102-26142
Eden Landing Road, 3157- 3167 Corporate Place, 3129-3146 Corporate Place and
0000 Xxxxxxxxx Xxxxx & 00000 Xxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxx, and that
certain environmental report prepared by Hazardous Materials Mitigation
Professionals Incorporated, addressed to CLS Realty Advisors, Inc. under cover
letter dated April 9, 1987 and identified as Project No. H221-01A.
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1.28 "Environmental Requirements" shall mean all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders, approvals,
plans, authorizations, concessions, franchises and similar items, of all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory decrees,
judgments and orders relating to the protection of human health or the
environment, including, without limitation: (i) all requirements, including but
not limited to those pertaining to reporting, licensing, permitting,
investigation and remediation of emissions, discharges, releases or threatened
releases of Hazardous Materials (as such term is defined below), chemical
substances, pollutants, contaminants or hazardous or toxic substances, materials
or wastes whether solid, liquid or gaseous in nature, into the air, surface
water, groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal transport or handling of
chemical substances, pollutants, contaminants or hazardous or toxic substances,
materials, or wastes, whether solid, liquid or gaseous in nature; and (ii) all
requirements pertaining to the protection of the health and safety of employees
or the public.
1.29 "Escrow Holder" shall mean Chicago Title Company of Alameda County.
1.30 "Estoppel Certificates" shall mean estoppel certificates in the form
attached hereto as Exhibit Q, from all Tenants of the Improvements.
1.31 "Exchange Rights Agreement" shall mean that certain Exchange Rights
Agreement attached hereto as Exhibit E.
1.32 "Hazardous Materials" shall mean (i) any flammables, explosive or
radioactive materials, contaminants or hazardous or toxic wastes, materials or
substances or related materials whether solid, liquid or gaseous in nature,
including, without limitation, substances defined as "hazardous substances,"
"hazardous materials," "toxic substances" or "solid waste" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sec. 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq.; the Toxic Substances Control Act, 15 U.S.C., Section 2601
et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
6901 et seq.; and in the regulations adopted and publications promulgated
pursuant to said laws; (ii) those substances listed in the United States
Department of Transportation Table (49 C.F.R. 172.101 and amendments thereto) or
by the Environmental Protection Agency (or any successor agency) as hazardous
substances (40 C.F.R. Part 302 and amendments thereto); (iii) those substances
defined as "hazardous wastes," "hazardous substances" or "toxic substances" in
any similar federal, state or local laws or in the regulations adopted and
publications
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promulgated pursuant to any of the foregoing laws or which otherwise are
regulated by any governmental authority, agency, department, commission, board
or instrumentality of the United States of America, the State of California or
any political subdivision thereof; (iv) any pollutant or contaminant or
hazardous, dangerous or toxic chemicals, materials, or substances within the
meaning of any other applicable federal, state, or local law, regulation,
ordinance, or requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning any
hazardous, toxic, or dangerous waste, substance or material all as amended; (v)
petroleum or any by-products thereof; (vi) any radioactive material, including
any source, special nuclear or by-product material as defined at 42 U.S.C.
Sections 2011 et seq., as amended, and in the regulations adopted and
publications promulgated pursuant to said law; (vii) asbestos in any form or
condition; and (viii) polychlorinated biphenyls.
1.33 "Improvements" shall mean all improvements, structures or fixtures
constructed upon the Land and/or Appurtenances, including without limitation,
all buildings and structures presently located on the Land and/or Appurtenances,
all apparatus, equipment and appliances presently located on the Land and/or
Appurtenances and used in connection with the operation or occupancy thereof,
such as heating and air conditioning systems and facilities used to provide any
utility services, parking services, refrigeration, ventilation, garbage
disposal, recreation or other services thereto, and all landscaping and
leasehold improvements of Tenants which become the property of the lessor upon
termination of a Lease.
1.34 "Intangible Personal Property" shall mean all right, title, claim,
interest and estate in, to and under any and all (i) intangible personal
property owned by Eden which relates in any manner to or arises from or in
connection with the Real Property and/or Tangible Personal Property and any and
all other property, rights in or to property, general intangibles and
contractual rights which Eden may have which are necessary or useful in
connection with, or otherwise affect or relate to, the acquisition, development,
improvement, holding, use, operation, maintenance, leasing or sale of the Real
Property and/or Tangible Personal Property, including, but not limited to, any
and all plans, specifications, subdivision maps and filings with respect
thereto, applications, Licenses and Entitlements, subdivision or other bonds,
Deposits and Reimbursements, engineering or soil reports, environmental and
hazardous and toxic waste reports and studies, surveys, maps, correspondence,
inspection reports, management reports, marketing reports, marketing displays
and brochures, all contract rights, warranties from contractors, architects,
engineers and material and labor suppliers whether written or implied, copies of
all books and records (provided all original Leases and Lease files are included
in this definition), all claims, choses in action, judgments, remedies, damages
and causes of action, all easements, licenses and rights-of-way,
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occupancy or use agreements and all other documents affecting or relating to the
Real Property and/or Tangible Personal Property; (ii) insurance proceeds
received after Closing on account of a pre-Closing event; provided that the
Seller shall be entitled to retain insurance proceeds in an amount equal to
funds spent by Seller pre-Closing to repair or restore damage to the Property or
Improvements covered by such insurance proceeds; (iii) any trademark, service
xxxx, trade name or name customarily used or associated with the Real Property
and/or Tangible Personal Property, and (iv) any and all other warranties,
guarantees, permits, entitlements and other intangible rights of any type or
nature.
1.35 "Land" shall mean the parcels of real property described on Exhibit
A attached hereto.
1.36 "Law(s)" shall mean all applicable building codes, environmental,
life safety, laws, rules and regulations including without limitation, those
related to handicapped or disabled (including without limitation ADA) and land
use and zoning laws and regulations, and other applicable local, state and
federal laws and regulations.
1.37 "Leases" shall mean all leases, occupancy agreements and other
similar agreements, together with all modifications, extensions and renewals
thereof, and any guarantees of any of the foregoing with respect to or demising
any part of the Properties, all of which are described on a Rent Roll.
1.38 "Licenses and Entitlements" shall mean all licenses, franchises,
certifications, authorizations, approvals, rights, privileges, entitlements and
permits issued or approved by any governmental or quasi-governmental authority
or other person or entity having authority over the Properties, and all
applications, filings and submittals therefor, in each case relating to the
operation, ownership, subdivision, development, use or maintenance of the
Properties or any part thereof, including, without limitation, construction
permits, elevator permits, machinery permits, business licenses, ingress and
egress permits, development agreements, subdivision, parcel and tract maps and
approvals thereof, plans and/or permits required under the applicable zoning
regulations, variances, utility agreements and commitments, improvement
agreements, certificates of occupancy and the like, but excluding therefrom for
all purposes of this Agreement any licenses issued to or solely on behalf of any
Tenant.
1.39 "Maximum PGP Capital Contribution" shall mean the total of (i) cash
in an amount not to exceed $4,000,000 to be applied to reduce the Closing Cigna
Debt to $12,000,000, and (ii) cash in an amount not to exceed $570,000 to be
applied to pay the Commissions and the Qualifying Eden Closing Costs.
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1.40 "OP Agreement" shall mean the Agreement of Limited Partnership of
PGP Northern Industrial, L.P., between PGP as the sole general partner and Eden
as the initial limited partner, a copy of which is attached hereto as Exhibit P.
1.41 "OP Units" shall mean limited partnership units in the Operating
Partnership.
1.42 "Opening of Escrow" shall mean the date this Agreement is fully
executed and deposited with the Escrow Holder (as evidenced by the Escrow
Holders' written confirmation thereof).
1.43 "Operating Partnership" shall mean PGP Northern Industrial, L.P., a
Delaware limited partnership.
1.44 "Outside Closing Date" shall mean the date which is ninety (90) days
after the Opening of Escrow, or such other date as is mutually agreed upon by
PGP and Eden in writing.
1.45 "Permitted Exceptions" shall mean those exceptions to title
reflected in the Approved Title Form.
1.46 "Personal Property" shall mean the Tangible Personal Property and
the Intangible Personal Property.
1.47 "PGP Capital Contribution" shall mean cash to be contributed at
Closing by PGP to the Operating Partnership in an amount of not more than the
Maximum PGP Capital Contribution. The PGP Capital Contribution is subject to
reduction in the event of reduction of the Maximum PGP Capital Contribution.
1.48 "PGP Conditions Precedent" shall mean the conditions precedent
described in Article VII.
1.49 "PGP Share Price" shall mean, with respect to the common stock of
PGP, $18.50 per share, provided that the average closing price on the New York
Stock Exchange for the five (5) consecutive trading days immediately preceding
the Determination Date is not less than $17.50 per share and not greater than
$19.50 per share. In the event the average closing price for the common stock of
PGP on the New York Stock Exchange for the five (5) consecutive trading days
immediately preceding the Determination Date is less than $17.50 per share, then
the PGP Share Price shall be calculated by (i) determining the difference
between the average closing price for the common stock of PGP on the New York
Stock Exchange for the five (5) consecutive trading days immediately preceding
the Determination Date and $17.50 per share (the "Lower Differential"), and (ii)
deducting fifty percent (50%) of the Lower Differential from $18.50 per share.
For example, if the average closing price for the common stock of PGP on the New
York Stock Exchange for the five (5) consecutive trading days immediately
preceding the Determination Date is $17.00 per share, then the Lower
Differential shall equal $17.50
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- $17.00 = $.50, and the PGP Share Price shall equal $18.50 - $.25 = $18.25 per
share. In the event the average closing price for the common stock of PGP on the
New York Stock Exchange for the five (5) consecutive trading days immediately
preceding the Determination Date is greater than $19.50 per share, then the PGP
Share Price shall be calculated by (iii) determining the difference between the
average closing price for the common stock of PGP on the New York Stock Exchange
for the five (5) consecutive trading days immediately preceding the
Determination Date and $19.50 per share (the "Upper Differential"), and (iv)
adding fifty percent (50%) of the Upper Differential to $18.50 per share. For
example, if the average closing price for the common stock of PGP on the New
York Stock Exchange for the five (5) consecutive trading days immediately
preceding the Determination Date is $21.00, then the Upper Differential is
$21.00 - $19.50 = $1.50, and the PGP Share Price shall equal $18.50 + $.75 =
$19.25 per share.
1.50 "Property" and "Properties" shall have the meanings contained in
Recital A.
1.51 "Qualifying Eden Closing Costs" shall mean closing costs payable by
Eden pursuant to Section 9.5(a) and 9.5(b) of this Agreement and prorations
debited to Eden pursuant to Sections 9.3(c), (d) and (f) of this Agreement to
the extent that all such closing costs and proration debits do not exceed
$190,000. All other costs or expenses of Eden and proration debits to Eden shall
be paid in cash by Eden at the Closing.
1.52 "Real Property" shall mean collectively the Land, Improvements and
Appurtenances.
1.53 "Rent Roll" shall mean, for each Property, a current gross rent roll
of the Property, listing for each Tenant the name, location of leased premises,
rent, obligation for reimbursement of expenses, amount of security deposit, rent
paid more than thirty (30) days in advance, lease commencement date, lease
termination date, any free rent, or other unexpired concessions, if any, and a
description of any uncured defaults, certified by Eden as true, complete and
correct, and delivered to PGP by Eden concurrently with the execution and
delivery hereof. All references to a "Rent Roll" for a Property shall include
the update Rent Roll delivered pursuant to Section 6.10, which shall supersede
any prior Rent Roll for that Property.
1.54 "Securities Issues" shall have the meaning set forth in Section
6.11.
1.55 "Tangible Personal Property" shall mean and include any and all
tangible personal property owned by Eden located at, upon or about, or affixed
or attached to, or installed in the Real Property, or used or to be used in
connection with or incorporated into or otherwise relating to the Real Property
or its ownership, use, development, construction,
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maintenance, management, operation, marketing, leasing, occupancy, sale or
financing, including, but not limited to, fixtures, furniture, furnishings,
tools, machinery, appliances and other apparatus and equipment, including,
without limitation, plumbing equipment, HVAC, electric wiring and fixtures, gas
distribution system, and water and sewage systems, supplies and other
inventories, office equipment, communications equipment, vehicles, storage
tanks, spare and replacement parts, fuel plans, specifications, operational
handbooks, machinery and/or equipment operational instructions and/or
specifications, surveys, drawings, and records, files and papers, whether in
hard copy or computer format, including, without limitation, structural and
engineering information, sales and promotional literature, manuals and data,
sales and purchase correspondence, lists of present and former suppliers, lists
of present and former lessees and clients, personnel and employment records, and
any information relating to taxes imposed on the Real Property, including
without limitation, the Personal Property.
1.56 "Tax Issues" shall have the meaning set forth in Section 6.11.
1.57 "Tenant" shall mean each lessee or tenant occupying any portion of
the Properties.
1.58 "Title Company" shall mean Chicago Title Company of Alameda County.
1.59 "Title Policy" shall mean an ALTA Owner's Extended Coverage Policy
of Title Insurance for the Properties, in the form of the Approved Title Form,
issued to the Operating Partnership by the Title Company promptly after Closing.
1.60 "Transactions" shall mean all the transactions contemplated under
this Agreement and the other agreements referred to herein.
ARTICLE II
CONTRIBUTIONS/CLOSING
2.1 Eden's Contribution. Subject to the terms and conditions set forth
herein, Eden shall contribute to the Operating Partnership at Closing all of
Eden's right, title and interest in and to the Properties.
2.2 Consideration For Eden Contribution. In consideration of the
contribution of the Properties to the Operating Partnership, at Closing Eden
shall receive limited partner OP Units equal in number to the Eden Capital
Contribution divided by the PGP Share Price.
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2.3 PGP Capital Contribution. Subject to the terms and conditions set
forth herein, PGP shall contribute cash to the Operating Partnership at Closing
in the amount of the PGP Capital Contribution.
2.4 Consideration for PGP Contribution. In consideration of the PGP
Capital Contribution made by PGP to the Operating Partnership, at Closing PGP
shall receive its interest as General Partner in the Operating Partnership.
2.5 Closing Time and Place. The Closing shall occur on the Closing Date.
If the Closing has not occurred on or before the Outside Closing Date, then any
party to this Agreement who is not then in default or breach under any term or
provision of this Agreement, by written notice to the other party and the Escrow
Holder, may terminate this Agreement. In the event of any such termination, the
Xxxxxxx Money shall be returned to PGP.
2.6 Title. On the Closing Date, Eden will convey to the Operating
Partnership marketable, fee simple title to the Properties. Title to all
contributed Real Property will be insured by issuance at Closing by the Title
Company to the Operating Partnership of the Title Policy in the form of the
Approved Title Form.
2.7 Xxxxxxx Money. Three business days after a fully executed copy of
this Agreement has been deposited with the Escrow Holder (as evidenced by the
Escrow Holder's written confirmation thereof), PGP shall deposit the Xxxxxxx
Money into escrow with the Escrow Holder. The Xxxxxxx Money shall be held by the
Escrow Holder in an interest-bearing account, interest to remain with the
Xxxxxxx Money.
2.8 LIQUIDATED DAMAGES. IN THE EVENT THE TRANSACTIONS ARE NOT
CONSUMMATED BECAUSE OF THE FAILURE OF ANY CONDITION OR ANY OTHER REASON EXCEPT A
DEFAULT UNDER THIS AGREEMENT SOLELY ON THE PART OF PGP, THE XXXXXXX MONEY SHALL
IMMEDIATELY BE RETURNED TO PGP. IF THE TRANSACTIONS ARE NOT CONSUMMATED SOLELY
BECAUSE OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF PGP, THE XXXXXXX MONEY
SHALL BE PAID TO AND RETAINED BY EDEN AS LIQUIDATED DAMAGES. THE PARTIES HAVE
AGREED THAT EDEN'S ACTUAL DAMAGES, IN THE EVENT OF A DEFAULT BY PGP, WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING THEIR
INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE XXXXXXX MONEY HAS BEEN AGREED
UPON, AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF EDEN'S DAMAGES
AND AS EDEN'S SOLE AND EXCLUSIVE REMEDY AGAINST PGP, AT LAW OR IN EQUITY, IN THE
EVENT OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF PGP. EDEN HEREBY WAIVES
ANY AND ALL BENEFITS IT MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3389.
INITIALS: EDEN [SIG] PGP [SIG]
------ ------
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PGP
PGP makes the following representations and warranties as of the date
hereof and again on the Closing Date.
3.1 Organization, Power and Authority, and Qualification. PGP is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, and has the requisite power and authority to own all
of its assets and to carry on its business as it is now being conducted.
3.2 Authority Relative to this Agreement. PGP has taken all actions
necessary to authorize the execution, delivery and performance of this Agreement
by PGP, and no other actions on the part of PGP are necessary in this regard,
except the approval of the Board of Directors of PGP.
3.3 Binding Obligation. This Agreement has been duly and validly
executed and delivered by PGP and constitutes a valid and binding agreement of
PGP enforceable against PGP in accordance with its terms.
3.4 No Violation. The execution and delivery of this Agreement by PGP
and the consummation of the Transactions will not result in or constitute any of
the following: (i) a default, breach, or violation, or an event that, with
notice or lapse of time or both, would be a default, breach, or violation, of
the corporate organizational documents of PGP or any promissory note,
conditional sales contract, commitment, indenture, mortgage, deed of trust, or
other agreement, instrument or arrangement to which PGP is a party; (ii) an
event that would permit any party to accelerate the maturity of any indebtedness
or other obligation of PGP; or (iii) a violation or conflict with any term or
provision of any judgment, decree, order, statute, injunction, rule or
regulation of a governmental unit applicable to PGP.
3.5 Bankruptcy. There are no attachments, executions or assignments for
the benefit of creditors, or voluntary or involuntary proceedings in bankruptcy,
or under any other debtor relief laws, contemplated by or pending or threatened
against PGP. Without limiting the generality of the foregoing, none of the
following have been done by, against or with respect to PGP: (i) the
commencement of a case under Title 11 of the U.S. Code, as now constituted or
hereafter amended, or under any other applicable federal or state bankruptcy law
of other similar law; (ii) the appointment of a trustee or receiver of any
property interest; (iii) an assignment for the benefit of creditors; (iv) an
attachment, execution or other judicial seizure of a substantial property
interest; (v) the taking of, failure to take, or submission to, any action
indicating an inability to meet its financial obligations as they accrue; or
(vi) a dissolution or liquidation.
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3.6 Disclosure. No representation or warranty of PGP in this Agreement,
or any information, statement or certificate furnished or to be furnished by or
on behalf of PGP pursuant to this Agreement or in connection with the
Transactions contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained therein not
misleading. All documents delivered by PGP to Eden, or made available to Eden
for review in connection with the Transactions, were at the time delivered or
made available, and will be at the time of Closing, true, correct and complete
copies of all such documents in PGP's possession or control.
3.7 Reports. PGP has filed all reports required by the Securities
Exchange Act of 1934 and the information contained therein is materially true
and correct as of the date of each such filing. There have been no material
adverse developments in the business and operations of PGP since the last of
such reports so filed.
3.8 Brokers. PGP has not employed any broker or finder, or incurred any
liability therefor, in connection with the Transactions.
ARTICLE IV
INTENTIONALLY OMITTED
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF EDEN
Eden makes the following representations and warranties as of the date
hereof and again on the Closing Date, and each is applicable to all Properties.
5.1 Organization, Power and Authority, and Qualification. Eden is a
limited liability company duly organized, validly existing, and in good standing
under the laws of the State of California, and has the requisite power and
authority to own all the Properties and all of its assets and to carry on its
business as presently conducted.
5.2 Authority Relative to this Agreement. Eden has obtained the approval
of the Transactions by all Eden Entities. Eden has taken all action necessary to
authorize the execution, delivery and performance of the Transactions and this
Agreement, and no other proceedings, consents or approvals are needed to
authorize the execution and delivery of this Agreement and the consummation by
Eden of the Transactions contemplated hereunder.
5.3 Binding Obligation. This Agreement has been duly and validly
executed and delivered by Eden and constitutes a
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valid and binding agreement of Eden enforceable against Eden in accordance with
its terms.
5.4 No Violation. The execution and delivery of this Agreement by Eden
and the consummation of the Transactions will not result in or constitute any of
the following: (i) a default, breach, or violation, or an event that, with
notice or lapse of time or both, would be a default, breach, or violation, of
Eden's partnership agreement or any Contract or any Lease, License or
Entitlement, promissory note, conditional sales contract, commitment, indenture,
mortgage, deed of trust, or other agreement, instrument or arrangement to which
Eden is a party or by which it or the Properties are bound; (ii) an event that
would permit any party to terminate any Assumed Contract or to accelerate the
maturity of any indebtedness or other obligation of Eden; (iii) a violation or
conflict with any term or provision of any judgment, decree, order, statute,
injunction, rule or regulation of a governmental unit applicable to Eden or the
Properties; or (iv) the creation or imposition of any lien, charge or
encumbrance on the Properties.
5.5 Adequate Disclosure. All Eden Entities have been provided with, and
have given their consents and approvals on the basis of, disclosure materials
prepared by Eden, setting forth all relevant, material facts concerning Eden and
Properties, the Operating Partnership, and the Transactions, and (excluding any
statements of material fact made in such disclosure materials in reliance on
written information provided by PGP for inclusion in such disclosure materials)
none of such disclosures misstated any material facts or omitted to state any
material facts necessary to make the statements made, in the light of the
circumstances under which they were made, not misleading.
5.6 Absence of Undisclosed Liabilities. Except for the Cigna Debt,
obligations under the Contracts and Leases, and liabilities arising in the
ordinary course, Eden has no material liabilities of any nature, whether matured
or unmatured, fixed or contingent, regardless of whether the disclosure thereof
would otherwise be required by generally accepted accounting principles, which
liabilities could or would remain with the Properties or be binding on PGP or
the Operating Partnership or which would have an adverse effect upon PGP, the
Operating Partnership or the Properties.
5.7 Compliance with Laws/Certificates of Substandard Structure. Other
than as disclosed by the Corporate Avenue Certificate and Investment Blvd.
Certificate (i) the use and operation of the Properties now are, and at the time
of Closing will be, in compliance with all Laws which are material to the
ownership and operation of the Properties; and (ii) all Licenses and
Entitlements required in connection with the construction, use, or occupancy of
the Properties have been obtained and are in full force and effect and in good
standing. The violations
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referred to in the Eden Landing Certificate have been fully remedied.
5.8 Environmental Matters. Except as expressly provided in the
Environmental Reports, (i) neither Eden nor, to the knowledge of Eden, any
previous owner or tenant or any other person, has engaged in or permitted any
operations or activities in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of any Hazardous Materials on, under, in or about the Properties, or
transported any Hazardous Materials to, from or across the Properties, except in
all cases in compliance with Environmental Requirements; and (ii) to Eden's
knowledge, no Hazardous Materials are presently constructed, deposited, stored,
or otherwise located on, under, in or about the Properties, except in all cases
in compliance with Environmental Requirements.
5.9 Physical Condition. To Eden's knowledge, other than the Capital
Improvements, and other than as disclosed by the Corporate Avenue Certificate
and the Investment Blvd. Certificate, there are no structural defects or
deficiencies in the Improvements which individually or in the aggregate on a
Property by Property basis would have a material adverse effect on Eden or on
the value of any of the Properties. To Eden's knowledge, the Improvements and
Tangible Personal Property are in good working order and condition and are
sufficient to serve the needs of such Property. To Eden's knowledge all water,
sewer, gas, electric, telephone, and drainage facilities and all other utilities
required by law or by the normal use and operation of each of the Properties,
including, without limitation, waste water treatment facilities permanently
dedicated to and reserved for the Properties, are and at the time of Closing
will be installed to the property lines of the Land, are and at the time of
Closing will be connected pursuant to valid unconditional permits, and are and
at the time of Closing will be adequate to service each of the Properties and to
permit compliance with all Laws.
5.10 Leases. The Rent Roll for each Property is true, complete and
accurate. Except for the Leases, there are no other leases, licenses or other
agreements affecting the occupancy of any of the Properties which would become
an obligation of PGP or the Operating Partnership after the Closing. With
respect to each Lease: (i) it has been duly and validly executed and delivered
by Eden and, to Eden's knowledge, by the other parties thereto; (ii) to Eden's
knowledge, it is in full force and effect; (iii) the copy thereof delivered by
Eden to PGP is true and accurate and is unmodified; (iv) Eden is not in default
thereunder and no event exists which, with the passage of time or the giving of
notice or both, would become a default thereunder on the part of Eden, (v) to
Eden's knowledge, no other party thereto is in default thereunder, nor has any
event occurred which, with the passage of time or the giving of notice or both,
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would become a default thereunder, and (vi) each Lease may validly be assigned
to and assumed by the Operating Partnership, and any and all consents to such
assignment and assumption have been obtained by Eden.
5.11 No Litigation or Adverse Events. There are no investigations,
actions, suits, proceedings or claims pending or, to the knowledge of Eden,
threatened against or affecting Eden or any of the Properties, at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, agency, or instrumentality, domestic or foreign.
Other than the Certificates of Substandard Construction, Eden has not received
notice of any, and to Eden's knowledge, is not subject to any, order, writ,
injunction or decree of any court or federal, state, municipal or other
governmental agency or department, commission, board, agency or instrumentality.
5.12 Contracts and Agreements. Eden shall terminate at or prior to
Closing all Contracts (other than Leases) affecting the Properties that are not
Assumed Contracts. Eden acknowledges that the Operating Partnership and PGP are
entering into a management agreement in connection with the Property
concurrently with Closing, and that no property management agreement or
agreements existing prior to Closing shall constitute Assumed Contracts. In the
event of the Closing of the purchase of the Property, Buyer shall not retain the
existing employees and management agents of Seller for the Property, and,
accordingly, on the Closing, Seller shall (i) cause all employment and
management agreements respecting the Property to be terminated, and deliver
evidence of such termination to Buyer, and (ii) remove all employees and
management personnel from the Property. On the Closing Date, there will be no
outstanding written or oral Contracts made by Eden in connection with the
Properties which in any way binds or affects PGP, the Property or the Operating
Partnership other than the Assumed Contracts and Leases. There are no Contracts
for any improvements to any of the Properties which have not been fully paid
for, and Eden shall cause to be discharged all mechanics' and materialmen's
liens, if any, arising from any labor or materials furnished to any of the
Properties prior to the Closing Date. As of Closing, Eden will terminate any
Contract that is not designated by PGP as an Assumed Contract, and pay all
unpaid fees, costs or expenses in connection with such Contracts, including such
fees, costs or expenses resulting from such termination. Without limiting the
generality of the foregoing, Eden specifically acknowledges that Eden shall be
solely responsible for all unpaid fees, costs and expenses, and all termination
fees, costs and expenses, incurred in connection with any property management
agreement existing prior to Closing. With respect to each Assumed Contract: (i)
it has been duly and validly executed and delivered by the parties thereto; (ii)
it is in full force and effect; (iii) the copy thereof delivered by Eden to PGP
is true and accurate and is unmodified; (iv) Eden is not in default thereunder
and no event
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exists which, with the passage of time or the giving of notice or both, would
become a default thereunder on the part of Eden, (v) to Eden's knowledge, no
other party thereto is in default thereunder, nor has any event occurred which,
with the passage of time or the giving of notice or both, would become a default
thereunder, and (vi) each Assumed Contract may validly be assigned to and
assumed by the Operating Partnership, and any and all consents to such
assignment and assumption have been obtained by Eden.
5.13 No Other Agreements. To Eden's knowledge, there are no obligations
in connection with any of the Properties which will be binding upon PGP or the
Operating Partnership or affect the Properties after Closing and there are no
assessments or bonds assessed or proposed to be assessed, against any of the
Properties, except: (i) matters which are set forth in the Approved Title Form;
(ii) Assumed Contracts; and (iii) the Leases. To Eden's knowledge there are no
existing or proposed easements, covenants, restrictions, agreements or other
documents which affect title to any of the Properties and which are not
disclosed by the Approved Title Form.
5.14 Non-Foreign Person. Eden is not a "foreign person" as such term is
defined in Section 1445(f) of the Internal Revenue Code of 1986, as amended, and
Eden is not subject to withholding under Section 26131 of the California Revenue
and Taxation Code.
5.15 Employees. No employee of Eden in connection with any of the
Properties is covered by a collective bargaining agreement and there are no
retroactive increases or other accrued and unpaid sums owed to any such
employee. There is no labor trouble, dispute, grievance, controversy or strike
pending or, to Eden's knowledge, threatened against Eden and Eden does not know
of any basis for any such trouble, dispute, grievance, controversy or strike.
5.16 Brokers. Eden has not employed any broker or finder, or incurred any
liability therefor, in connection with the Transactions other than BT Commercial
and Xxxxxxx & Co.
5.17 Operating Statements. All operating statements and other financial
statements provided by Eden to PGP fully reflect the matters stated therein,
including operation of each of the Properties for the periods covered and, in
all material respects, accurately reflect all rents and other gross receipts,
and all amounts paid by Eden for electricity, water, sewer, other utility
services, insurance, fuel, maintenance and repairs (whether capitalized or
expended), real estate taxes, payroll and payroll taxes and all other operating
and other expenses associated with the Properties. Since the end of the latest
period covered by such financial statements, there have been no transactions or
occurrences materially affecting the operating expenses (or items thereof)
associated with the Properties. The
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foregoing does not constitute a representation and warranty as to future income
or expenses of the Properties.
5.18 Security Deposits. All Tenant security deposits are reflected on the
Rent Roll. There are no other deposits held by Eden in connection with any of
the Properties.
5.19 Deposits and Reimbursements. All Deposits and Reimbursements are
reflected on Exhibit F.
5.20 Bankruptcy. There are no attachments, executions or assignments for
the benefit of creditors, or voluntary or involuntary proceedings in bankruptcy,
or under any other debtor relief laws, contemplated by or pending or threatened
against Eden or any Eden Entity. Without limiting the generality of the
foregoing, none of the following have been done by, against or with respect to
Eden or any Eden Entity: (i) the commencement of a case under Title 11 of the
U.S. Code, as now constituted or hereafter amended, or under any other
applicable federal or state bankruptcy law of other similar law; (ii) the
appointment of a trustee or receiver of any property interest; (iii) an
assignment for the benefit of creditors; (iv) an attachment, execution or other
judicial seizure of a substantial property interest; (v) the taking of, failure
to take, or submission to, any action indicating an inability to meet its
financial obligations as they accrue; or (vi) a dissolution or liquidation.
5.21 Disclosure. No representation or warranty of Eden in this Agreement,
or any information, statement or certificate furnished or to be furnished by or
on behalf of Eden pursuant to this Agreement or in connection with the
Transactions contains any untrue statement of a material fact or omits to state
a material fact necessary to make the statements contained therein not
misleading. All documents delivered by Eden to PGP or made available to PGP for
review in connection with the Transactions were at the time delivered or made
available, and will be at the time of Closing, true, correct and complete copies
of all such documents in Eden's possession or control. To Eden's knowledge, all
of Eden's files in connection with the Properties in its possession or control
were delivered to or made available to PGP for its review and there are no
documents required for a complete understanding of or which are otherwise of
significance in evaluating the Properties which are not contained in Eden's
files or which have not been delivered or made available to PGP.
5.22 Prospectus. Eden, and each Eden Entity, has received and reviewed
that certain Prospectus of PGP dated May 29, 1997, that certain Prospectus
Supplement dated June 5, 1997, and that certain Registration Statement, filed
March 19, 1997, as amended and filed April 10, 1997, of which the Prospectus and
Prospectus Supplement are a part, filed with the Securities and Exchange
Commission under the Act and has had access to such additional financial and
other information, including without limitation PGP's most current Form 10-Q and
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Form 10-K, PGP's 1996 Annual Report to Shareholders' and PGP's Notice of 1997
Annual Meeting of Shareholders and accompanying Proxy Statement, and has been
afforded the opportunity to ask questions of representatives of PGP, and to
receive answers to those questions, as they have deemed necessary in connection
with the Transactions.
5.23 No Public Offering. Eden, and each Eden Entity, acknowledges that
the OP Units being acquired pursuant hereto are being acquired in a transaction
not involving any public offering within the meaning of the Act and that the OP
Units have not been registered under the Act and agrees not to offer, sell,
transfer or otherwise dispose of the OP Units (except for such transfers as
described in Section 5.25, below) in the absence of registration under the Act
unless Eden delivers to the Operating Partnership and PGP an opinion of a lawyer
reasonably satisfactory to the Operating Partnership and PGP, in form and
substance satisfactory to the Operating Partnership and PGP, 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. Eden acknowledges that the OP Units, to the extent in the form of physical
certificates, will bear a legend to the following effect:
"NEITHER THE LIMITED PARTNERSHIP UNITS IN THE PARTNERSHIP REPRESENTED BY
THIS CERTIFICATE OR INSTRUMENT NOR ANY PART THEREOF OR INTEREST THEREIN
HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (the
'ACT'), AND NEITHER MAY BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN PART, UNLESS SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION
COMPLIES WITH THE PROVISIONS OF THE AGREEMENT OF LIMITED PARTNERSHIP OF
PGP NORTHERN INDUSTRIAL, L.P., AS AMENDED FROM TIME TO TIME (A COPY OF
WHICH IS ON FILE WITH THE PARTNERSHIP); AND, IN ALL EVENTS, NO TRANSFER,
SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
LIMITED PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE (OR ANY SECURITY
ISSUED ON ACCOUNT HEREOF OR WITH RESPECT HERETO) MAY BE MADE UNLESS THE
PARTNERSHIP HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL (WHICH COUNSEL
AND OPINION BOTH MUST BE ACCEPTABLE TO THE PARTNERSHIP IN ITS SOLE
DISCRETION) FOR THE HOLDER THAT, BECAUSE OF THE AVAILABILITY OF AN
EXEMPTION, NO SUCH REGISTRATION, QUALIFICATION OR OTHER COMPLIANCE IS
REQUIRED UNDER THE ACT, APPLICABLE BLUE SKY OR STATE SECURITIES LAWS, OR
OTHERWISE."
5.24 Knowledge and Experience. Eden and each Eden Entity is either (a) an
"accredited investor" within the meaning of Rule 501(a) of Regulation D
under the Act, or (b) a person who either alone or with his, her or its
purchaser representative (as defined in Rule 501(h) of Regulation D under
the Act) has such
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knowledge and experience in financial and business matters that he, she or it is
capable of evaluating the merits and risks of an investment in the OP Units or
any other security acquired hereunder. Eden and each Eden Entity has such
knowledge and experience in financial and business matters as to be capable of
evaluating alone, or together with his, her or its purchaser representative or
personal advisor the merits and risks of an investment in the OP Units or any
other security delivered hereunder and protecting his, her or its own interests
in connection with the investment and has obtained, in his, her or its judgment,
alone, or together with his, her or its purchaser representative or personal
advisor sufficient information from PGP to evaluate the merits and risks of an
investment in the OP Units or any other security delivered hereunder. Eden and
each Eden Entity acknowledges that he, she, or it has the financial ability to
bear the economic risk of his, her or its investment in the OP Units, has
adequate means for providing for his, her or its current needs and personal
contingencies and has no need for liquidity with respect to the investment in
the OP Units. If other than an individual, Eden and each Eden Entity has not
been organized solely for the purpose of acquiring the OP Units or other
security acquired under this Agreement.
5.25 No Distribution. Although Eden may elect to transfer the OP Units to
its constituent Eden Entities, and those constituent Eden Entities may, in turn,
elect to transfer the OP Units to their respective constituent Eden Entities,
they are not acquiring any OP Units with a view to the distribution of the OP
Units or any present intention of offering or selling any of the OP Units in a
transaction that would violate the Act or the securities laws of any State or
any other applicable jurisdiction.
ARTICLE VI
COVENANTS AND AGREEMENTS OF EDEN
Eden hereby covenants and agrees as follows.
6.1 Actions Affecting Properties. Eden shall not initiate or solicit any
inquiries or offers with respect to, and shall not agree to, sell, assign,
lease, pledge, transfer or encumber any of the Properties, or enter into any
other consent, commitment, understanding or other agreement, or incur any
obligation or liability (contingent or absolute) with respect to any of the
Properties, or merge or consolidate with or into any other entity or enter into
any agreements relating thereto. Eden shall not make any material commitments or
representations to any applicable government authorities, any adjoining or
surrounding property owners, any civic association, any utility or any other
similar person or entity that would in any manner be binding upon PGP, the
Operating Partnership or the Properties without PGP's prior written consent in
each case. Eden shall use diligent
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efforts to avoid knowingly committing or permitting to occur, any action which
will result in a violation of any Law between the date hereof and the Closing.
6.2 Access to Properties and Records; Contact with Officials. Upon
reasonable notice and during regular business hours, Eden shall give PGP, and
authorized representatives of PGP, full access to Eden's personnel, properties,
documents, contracts, facilities, books, equipment and records and to the
Properties. In addition, Eden authorizes PGP to make all inquiries with and
applications to any third party, including any governmental authority, as PGP
deems necessary or appropriate in connection with the completion of the
Transactions and satisfaction of the PGP Conditions Precedent, including,
without limitation, the negotiation of an extension of time to comply with the
Certificates of Substandard Structure; provided, however, that PGP shall have no
power or authority to bind Eden or any of the Properties prior to the Closing
without Eden's prior written consent, which shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding Eden's agreement that PGP may make such
inquiries and applications, Eden agrees to fully and promptly cooperate in such
inquiries and applications to the extent requested by PGP and to promptly
provide all information, and upon five (5) business days notice to execute and
deliver such documents, as reasonably requested by PGP.
6.3 License and Entitlements. Through the Closing, Eden shall maintain
all Licenses and Entitlements in full force and effect, shall file timely all
reports, statements, renewal applications and other filings, and shall pay
timely all fees and charges in connection therewith that are required to keep
the Licenses and Entitlements in full force and effect.
6.4 No Extraordinary Transactions. Until the Closing Eden will conduct
its business in the ordinary and usual course as such business was conducted
prior to the date hereof, including, without limitation, using diligent efforts
to lease any vacant space in the Improvements to creditworthy tenants at market
rates and terms; provided, however, that Eden shall not engage in any
extraordinary transactions without PGP's prior written consent. Extraordinary
transactions shall include, without limitation, the sale of any real property or
any material asset, increase in compensation of any employees, implementation,
modification or termination of any plan for the benefit of employees, issuance
of any options, warrants or securities, borrowing of any funds under existing
credit arrangements or otherwise, entering into any new contract or agreement
(or extending, terminating or modifying any existing contract or agreement)
unless such is cancelable by Eden (and after the Closing, by the Operating
Partnership) in their discretion on a maximum of thirty (30) days' notice.
Extraordinary transactions shall also include entering into any new lease,
occupancy agreement or other similar agreement of all or any portion of the
Properties or extending, terminating, amending or supplementing
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any existing Lease. Should Eden wish to engage in any extraordinary transaction,
Eden shall provide written notice thereof to PGP in detail sufficient to allow
PGP to evaluate the merits of the proposed transaction. PGP shall be deemed to
have approved the proposed transaction unless within ten (10) days of PGP's
receipt of such written notice PGP has provided Eden with a written response
setting forth in reasonable detail PGP's reasons for disapproving the proposed
transaction. In addition, Eden authorizes PGP to independently conduct such
discussions and negotiations with existing and prospective Tenants and others as
PGP deems necessary or appropriate to implement any extraordinary transaction;
provided, however, that PGP shall have no power or authority to bind Eden or any
of the Properties prior to the Closing without Eden's prior written consent,
which shall not be unreasonably withheld, conditioned or delayed. Any request
for consent pursuant to the preceding sentence shall be responded to by Eden in
writing within ten (10) days after Eden's receipt thereof, and any failure by
Eden to so respond shall be deemed to constitute Eden's consent to the request.
Extraordinary transactions shall not include the Debt Restructure.
6.5 Debt Restructure. PGP has received a proposal from Xxxxxxxxxx,
Xxxxxxxxxxx & Company, Inc. in a letter to Xxxxxx Xxxxx dated May 27, 1997
regarding restructuring the Cigna Debt, a copy of which is attached hereto as
Exhibit O (the "Cigna Restructure Proposal"). Eden and PGP have determined that
restructuring the Cigna Debt (either through modifying the terms of the existing
Cigna Debt or refinancing the existing Cigna Debt with a new loan from Cigna) on
substantially the terms reflected in the Cigna Restructure Proposal is
acceptable. However, PGP may also determine that another lending institution
other than Cigna may be willing to provide financing for the Properties (thereby
replacing the Cigna Debt with a new loan from a new lender) on terms which, in
the aggregate, are more favorable to the Operating Partnership than those
available from Cigna. Eden authorizes PGP to conduct such discussions and
negotiations with Cigna and other potential lenders as PGP deems necessary or
appropriate to finalize the Cigna Restructure Proposal or obtain such
alternative financing, and to review and negotiate loan documents prepared by
Cigna or another lender to implement the Cigna Restructure Proposal or such
other financing (collectively, the "Debt Restructure Documents"), such that the
Cigna Debt will be restructured or refinanced by either Cigna or another lender
concurrently with Closing on terms acceptable to PGP in its sole and absolute
discretion (the "Debt Restructure"); provided, however, that PGP shall have no
power or authority to bind Eden or any of the Properties prior to Closing
without Eden's prior written consent, which shall not be unreasonably withheld,
conditioned or delayed. Anything contained herein to the contrary
notwithstanding, neither party shall be obligated to accept the Debt Restructure
if the Debt Restructure (a) does not provide that the debt shall be guaranteed
in an amount equal to $12,000,000 by Eden, but without recourse to the partners
or members of Eden; (b) does not provide that the debt shall be
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secured by the Properties; or (c) would result in less than $12,000,000
(including any holdback hereinafter described) of debt encumbering the Property
at the Closing; provided, however that the Debt Restructure may result in funds
being held back by the lender to pay for capital improvements, deferred
maintenance and/or seismic retrofit or compliance as the lender may require.
Notwithstanding Eden's agreement that PGP may conduct such discussions and
negotiations to reach final agreement with Cigna or another lender regarding the
Debt Restructure, Eden agrees to fully and promptly cooperate in such
discussions and negotiations with Cigna and other potential lenders to the
extent requested by PGP and to promptly provide all information, and to execute
such Debt Restructure Documents as requested by PGP, Cigna or such other lender.
In connection with the Debt Restructure, the Operating Partnership will also
execute such documentation as is necessary to implement the Debt Restructure. In
the event notwithstanding the good faith efforts of Eden and PGP, the Debt
Restructure cannot be accomplished in accordance with the foregoing and the Debt
Restructure Documents cannot be executed, delivered and recorded, as applicable,
concurrently with the Closing, then Eden and/or PGP may, in its sole and
absolute discretion terminate this Agreement and the Transactions contemplated
hereby, without any liability or further obligation whatsoever to the other.
6.6 Insurance. Through the Closing, Eden shall maintain in full force
and effect substantially the same public liability and casualty insurance
coverage now in effect with respect to each of the Properties, at its own
expense.
6.7 Taxes and Assessments. Eden shall pay or discharge before delinquent
all tax liabilities and obligations, including, without limitation, those for
federal, state or local income, property, unemployment, withholding, sales, use
and other taxes that are payable prior to the Closing Date.
6.8 Operation of Properties. Eden shall continue to operate and maintain
the Properties in the ordinary course of its business, consistent with past
practice, and will maintain the Properties in substantially their present order
and condition, and deliver the Properties on the Closing in substantially the
same condition it was on the date this Agreement was executed by PGP, reasonable
wear and tear excepted. Without limiting the generality of the foregoing, no
fixtures, equipment or other Personal Property shall be removed from the
Properties unless prior to the Closing Date the same are replaced with similar
items of at least equal quality and value.
6.9 Compliance With Hayward Resolution. On or prior to Closing, Eden
shall cause the recordation of a quitclaim deed (the "Quitclaim Deed") by the
City Manager of the City of Hayward, a municipal corporation, pursuant to
Resolution No. 94-222 of the Hayward City Council, adopted October 11, 1994, a
certified copy of which was recorded December 19, 1994, as Series
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No. 94-386958 in the Official Records of Alameda County, California.
6.10 Closing Information. Five (5) business days prior to Closing, Eden
shall deliver to PGP a current Rent Roll for each Property.
6.11 Tax and Securities Issues. Eden acknowledges that: (i) all state and
federal income tax considerations, issues, analyses, and consequences relevant
to Eden and/or the Eden Entities ("Tax Issues"), and (ii) all state and federal
securities law considerations, issues, analyses, and consequences relevant to
Eden and/or the Eden Entities ("Securities Issues"), are solely the
responsibility of Eden and/or the Eden Entities. It is further acknowledged that
neither PGP nor the Operating Partnership or the agents or representatives
(including legal counsel and accountants) of PGP or the Operating Partnership
has provided advice, representations, or guidance to Eden and/or any Eden Entity
regarding the Tax Issues or the Securities Issues, and neither Eden, nor any
Eden Entity has relied or will rely on PGP or the Operating Partnership or the
agents or representatives of such parties with regard thereto, but instead will
rely on their own securities, tax, business and legal advisors therefor and with
respect thereto. Nothing contained in this Section 6.11 shall preclude reliance
by Eden or any Eden Entity on public documents, reports and registration
statements filed by PGP under the Act or the Securities Exchange Act of 1934 to
the same extent as the general public. PGP has not provided Eden, or any Eden
Entity, and neither Eden nor any Eden Entity may rely on, any non-public
information. Nothing contained in this Section 6.11 shall apply to limit the
obligations of PGP or the Operating Partnership to Eden or the Eden Entities
with respect to the operation of the Operating Partnership subsequent to the
Closing.
ARTICLE VII
PGP's CONDITIONS PRECEDENT
The obligation of PGP to consummate the Transactions shall be subject to
fulfillment (or waiver) at or prior to the Closing of the following conditions
precedent (the "PGP Conditions Precedent"):
7.1 Representations and Warranties. The representations and warranties
made in this Agreement or in any document delivered pursuant to this Agreement
by any person or entity other than PGP shall be true and correct in all material
respects when made and on and as of the Closing Date as though such
representations and warranties were made on and as of the Closing Date.
7.2 No Material Adverse Change. None of the following shall have
occurred: (i) any actual, pending, or threatened taking of any portion of any of
the Properties by condemnation or
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eminent domain; (ii) destruction of any portion of any of the Properties,
regardless of cause; (iii) the discovery of any Hazardous Materials on any of
the Properties other than as disclosed in the Environmental Reports; (iv) any
data, information, facts or material provided to or obtained by PGP regarding
Eden, any Property, or the Cigna Debt, proves to be false or misleading in any
material respect, or if any new material adverse fact concerning the same comes
to the attention of PGP; (v) significant adverse or worsening local, regional,
national or international business conditions, including without limitation
rising interest rates; or (vi) Eden fails to comply with the provisions of this
Agreement.
7.3 Delivery of Closing Requirements. Prior to or concurrently with
Closing, Eden shall have executed and delivered, or caused to be executed and
delivered, to Escrow Holder each of the documents and items identified in
Article IX, below to be executed and delivered by it.
7.4 No Order or Injunction. The consummation of the Transactions shall
not have been restrained, enjoined or prohibited by any order or injunction of
any court or governmental authority of competent jurisdiction.
7.5 Debt Restructure. The Debt Restructure shall be in a position to be
closed and the Debt Restructure Documents shall have been executed and delivered
by all parties thereto, and, where appropriate, recorded on the Closing Date.
7.6 Maximum PGP Capital Contribution. The total of all cash contributed
by PGP to the Operating Partnership shall not exceed the Maximum PGP Capital
Contribution.
7.7 Full Participation. All Properties are transferred to the Operating
Partnership at Closing.
7.8 Title Insurance. The grant deeds conveying title to the Real
Property to the Operating Partnership shall have been recorded and the Title
Company shall be irrevocably committed to issue the Title Policy.
7.9 Eden Compliance. Eden shall have fully complied with all of Eden's
duties and obligations contained in this Agreement.
7.10 Estoppel Certificates. Estoppel Certificates executed by each Tenant
of the Improvements shall have been delivered to PGP. The Estoppel Certificates
shall be dated not more that three (3) weeks prior to the Closing. The Estoppel
Certificates shall not have been materially modified from the form of Estoppel
Certificate attached hereto as Exhibit Q, and shall reflect information
acceptable to PGP.
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7.11 E&Y Audit. PGP shall have received an audit of the Property prepared
by Ernst & Young, sufficient to comply with PGP's reporting requirements to the
Securities and Exchange Commission.
7.12 Certificates of Substandard Structure.
(a) The appropriate governmental agency or agencies shall have
granted an extension of time (which extension shall be for a duration and shall
be documented in a manner reasonably acceptable to PGP) such that any currently
uncured violations noted in the Certificates of Substandard Construction may be
remedied in an orderly fashion following the Closing without any negative impact
on the Properties or their operations.
(b) On or prior to the Closing there shall have been recorded such
documents as shall be necessary to clear the Eden Landing Certificate from title
to the Properties and cause the Title Company to issue Title Policy without
exception therefor.
In the event the failure of any condition set forth on this Article VII
also constitutes a breach or default by Eden, the identification of any of the
foregoing as a condition precedent shall not limit or diminish in any way PGP's
rights or remedies on account of such breach or default.
ARTICLE VIII
EDEN'S CONDITIONS PRECEDENT
The obligation of Eden to consummate the Transactions shall be subject to
fulfillment (or waiver) at or prior to the Closing Date of the following
conditions precedent (the "Eden's Conditions Precedent"):
8.1 Representations, Warranties and Covenants. The representations and
warranties made by PGP in this Agreement or in any document delivered pursuant
to this Agreement shall be true and correct in all material respects when made
and on and as of the Closing Date as though such representations and warranties
were made on and as of the Closing Date.
8.2 Delivery of Closing Requirements. Prior to or concurrently with
Closing, PGP shall have executed and delivered, or caused to be executed and
delivered, to Escrow Holder each of the documents and items identified in
Article IX, below to be executed and delivered by it.
8.3 No Order or Injunction. The consummation of the Transactions shall
not have been restrained, enjoined or prohi-
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bited by any order or injunction of any court or governmental authority of
competent jurisdiction.
8.4 PGP Capital Contribution. Concurrently with Closing, PGP shall
contribute cash to the Operating Partnership in the amount of the PGP Capital
Contribution.
8.5 Debt Restructure. The Debt Restructure shall be in a position to be
closed and the Debt Restructure Documents shall have been executed and delivered
by all parties thereto, and, where appropriate, recorded on the Closing Date.
8.6 PGP Compliance. PGP shall have fully complied with all of PGP's
duties and obligations contained in this Agreement.
In the event the failure of any condition set forth on this Article VIII
also constitutes a breach or default by PGP, the enumeration of such as a
condition shall not diminish in any way Eden's rights or remedies on account of
such breach or default.
ARTICLE IX
THE CLOSING
9.1 Deliveries by Eden. At Closing, Eden shall deliver or cause to be
delivered to Escrow Holder (except where specified to remain at the management
office of the applicable Property) the following:
(a) The duly executed OP Agreement;
(b) A duly executed grant deed conveying to the Operating
Partnership good and marketable fee simple title to the Real Property (subject
only to Permitted Exceptions), in the form attached hereto as Exhibit G;
(c) A duly executed warranty xxxx of sale in the form attached
hereto as Exhibit H, conveying to the Operating Partnership title to its
Tangible Personal Property, such title to be free of any liens, encumbrances or
interests;
(d) A duly executed assignment to the Operating Partnership of the
Assumed Contracts, warranties, guaranties, permits and the Intangible Personal
Property in the form attached hereto as Exhibit C (the "Assignment of Intangible
Property");
(e) A duly executed assignment and assumption of Leases affecting
the Property to the Operating Partnership in the form of Exhibit I (the
"Assignment of Leases"), such title to be free of any liens, encumbrances or
interests;
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(f) A duly executed affidavit that Eden is not a "foreign person"
within the meaning of Section 1445(e)(3) of the Internal Revenue Code of 1986
(the "Internal Revenue Code") in the form of Exhibit J;
(g) A duly executed California Real Estate Withholding Exemption
Certificates (Form 590-RE) in the form of Exhibit K;
(h) A full release and reconveyance of all monetary encumbrances
affecting the Properties (other than the restructured Cigna Debt if the Debt
Restructure is to be accomplished by a modification of the existing Cigna loan
documents), including, without limitation, any mechanics' liens and such bond,
indemnity or other arrangements, and any other documents or agreements as shall
be necessary to cause the Title Company to insure title to the Properties as
vested in the Operating Partnership without any exception for such matters, and
in the form of the Approved Title Form;
(i) A duly executed legal opinion from counsel to Eden expressing
the opinions described in Exhibit L attached hereto;
(j) All keys to the Properties that are not in possession of
Tenants and originals of all Assumed Contracts and all Leases (each of which may
be left at the applicable Property management office);
(k) Cash in the amount of any net credits owed by Eden as a result
of the prorations described below, if any in excess of the Qualifying Eden
Closing Costs to be paid by PGP;
(l) Evidence of termination of any Contracts affecting the
Property and that are not Assumed Contracts;
(m) A duly executed Exchange Rights Agreement;
(n) Duly executed Debt Restructure Documents to the extent
execution thereof is required of Eden or any Eden Entity;
(o) Duly executed releases from BT Commercial and Xxxxxxx & Co.
acknowledging full payment of all brokerage commissions or other fees in
connection with the Property and the transactions contemplated hereby; and
(p) Such other documents and instruments as are necessary or
appropriate to consummate the Transactions in accordance with this Agreement.
9.2 Deliveries by OP. At Closing, PGP, as the newly constituted general
partner of the Operating Partnership, shall
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deliver to Escrow Holder the following on behalf of the Operating Partnership:
(a) The duly executed OP Agreement;
(b) A duly executed Assignment of Leases;
(c) A duly executed Assignment of Intangible Property;
(d) Cash in the amount of the PGP Capital Contribution and any net
amounts owed by the Operating Partnership as a result of the prorations
described below, if any, limited, however, by the Maximum PGP Capital
Contribution;
(e) A duly executed legal opinion from counsel to PGP expressing
the opinions described in Exhibit M attached hereto;
(f) A duly executed (by both the Operating Partnership and PGP)
Exchange Rights Agreement;
(g) Duly executed Debt Restructure Documents;
(h) Such other documents and instruments as are necessary or
appropriate to consummate the Transactions in accordance with this Agreement.
9.3 Closing Prorations. The items below are to be apportioned as of
12:01 AM on the Closing Date. No prorations, credits or transfer of deposits
shall be considered a capital contribution or advance by Eden or PGP to the
Operating Partnership, and the Operating Partnership shall not be obligated to
pay or reimburse Eden or PGP for such amounts; provided, however, that to the
extent PGP pays or otherwise gives Eden credit for Commissions and/or Qualifying
Eden Closing Costs, such payments or credits by PGP shall reduce the Eden
Capital Contribution and increase the PGP Capital Contribution. All prorations
shall be settled at Closing in cash, subject to subsequent adjustment as
provided in Section 9.3(j) below.
(a) Cigna Debt. Eden shall pay as of Closing all amounts under the
Cigna Debt that have accrued on or prior to the Closing Date. The Operating
Partnership shall pay all amounts under the restructured Cigna Debt or any
refinancing debt accruing after the Closing Date.
(b) Rent. Rent and all other charges payable by Tenants pursuant
to the Leases (collectively referred to herein as "rent") under the Leases
listed on the Rent Rolls shall be apportioned as of the Closing Date, regardless
of whether or not such rent has been received by Eden. Neither PGP nor the
Operating Partnership shall be obligated to take any steps to recover any rent
arrearages. Eden shall be permitted to pursue
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its remedies for collection of any rent arrearages applicable to the period
prior to the Closing Date, provided that neither PGP nor the Operating
Partnership shall incur any cost, expense or liability in connection therewith,
but Eden shall not be permitted to enforce any other legal or equitable remedies
specifically including commencing eviction procedures.
(c) Leasing Costs. Eden shall either pay as of the Closing Date or
be charged with all leasing commissions and tenant improvement costs and
allowances, if any, in connection with any Lease either executed on or before
the Opening of Escrow, or executed after the Opening of Escrow unless approved
by PGP pursuant to Section 6.4, whether due or to become due before or after the
Closing Date. With respect to any such commission, cost or allowance due in
connection with a Lease entered into after the Opening of Escrow but prior to
Closing and which has been approved by PGP pursuant to Section 6.4, such
commission, cost or allowance shall be prorated between Eden and the Operating
Partnership based on the number of months of the lease term prior to the Closing
Date and number of months of the lease term after the Closing Date and prior to
the end of the "No Sale Period" (as defined in the OP Agreement), exclusive of
any un-exercised options to renew or extend the term.
(d) Security Deposits. Eden shall deliver to the Operating
Partnership in cash at Closing the sum of all security deposits or other
deposits paid by Tenants under any Leases, and any interest earned thereon which
by law or the terms of such Leases are or could become refundable to tenants
(collectively, "Security Deposits").
(e) Utility Charges. Eden shall cause all the utility meters at
each of the Properties to be read on the Closing Date, and will be responsible
for the cost of all utilities used prior to the Closing Date not specifically
payable by tenants.
(f) Real Estate Taxes and Special Assessments. All unpaid real
estate taxes, special assessments, bonds and personal property taxes payable for
all calendar years prior to the year in which Closing occurs (together with
interest thereon) shall be paid by Eden at or prior to the Closing. Unpaid
general real estate taxes, special assessments, bonds and personal property
taxes payable on account of the calendar year in which Closing occurs (but no
prior calendar year) shall be prorated between Eden and the Operating
Partnership as of the Closing Date.
(g) Shared Expenses. Eden shall pay to PGP through escrow at the
Closing the net amount due from Eden to PGP on account of the Shared Expenses
pursuant to Section 9.7 below.
(h) Other Apportionments. Amounts payable under the Assumed
Contracts, annual or periodic permit and/or
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inspection fees (calculated on the basis of the period covered), and liability
for other Property operation and maintenance expenses and other recurring costs
shall be apportioned as of the day following the Closing Date. Effective upon
the Closing, Eden shall cancel all insurance it maintains on the Properties, and
premiums on any policy of insurance maintained by Eden in connection with the
Properties shall not be prorated.
(i) Preliminary Closing Adjustment. Eden and PGP shall jointly
prepare and approve a preliminary Closing adjustment on the basis of the Leases,
Assumed Contracts and other sources of income and expenses, and shall deliver
such computation to Escrow Holder prior to Closing.
(j) Post-Closing Reconciliation. If any of the aforesaid
prorations cannot be definitely calculated on the Closing Date, then they shall
be estimated at the Closing and definitely calculated as soon after the Closing
Date as feasible, but in any event within forty five (45) days after the Closing
Date. As soon as the necessary information is available, the Operating
Partnership and Eden shall conduct a post-Closing review to determine the
accuracy of all prorations made pursuant to this Agreement (the "Post-Closing
Review"). Either party owing the other party a sum of money based on such
subsequent proration(s) or the Post-Closing Review shall promptly pay said sum
to the other party, together with interest thereon at the rate of two percent
(2%) over the "prime rate" (as announced from time to time in the Wall Street
Journal) per annum from the Closing Date to the date of payment if payment is
not made within ten (10) days after delivery of a xxxx therefor.
(k) Payment of Qualifying Eden Closing Costs. The foregoing to the
contrary notwithstanding, PGP agrees to pay or give Eden credit for Qualifying
Eden Closing Costs which would otherwise be payable by or charged to Eden, and
the Eden Capital Contribution shall be reduced, and the PGP Capital Contribution
shall be increased, on account thereof.
9.4 Deposits and Reimbursements. Eden shall receive credit for, but
shall not be entitled to the return of, any Deposits and Reimbursements, all of
which shall remain in place for the benefit of the Operating Partnership with
such utility companies, bonding or surety companies or other governmental or
private body.
9.5 Closing Costs.
(a) Eden shall pay for (i) an as-built survey of each Property in
a form sufficient to enable the Title Company to issue an ALTA Owner's Policy of
Title Insurance in accordance with the Approved Title Form, provided, however,
the maximum amount Eden shall pay, in the aggregate, for such surveys shall be
Seven Thousand Five Hundred Dollars ($7,500), (ii) the premium for the Title
Policy (but only to the extent of the cost of a
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standard California Land Title Association Owner's Policy of Title Insurance)
and the cost of such CLTA endorsements as may be reasonably requested by PGP,
(iii) any county documentary transfer taxes applicable to the contribution of
the Properties, and (iv) recording fees in connection with the release of (A)
any monetary encumbrance affecting the Properties, (B) any Certificate of
Substandard Structure, and (C) the Quitclaim Deed in connection with Resolution
No. 94-222 of the Hayward City Council. PGP shall pay any additional costs to
obtain the Title Policy in ALTA extended coverage form, any costs of the surveys
in excess of Seven Thousand Five Hundred Dollars ($7,500), and any escrow fees
and costs and recording fees (other than recording fees in connection with the
release of any monetary encumbrance affecting the Properties, which shall be
paid by Eden). Sales tax (if any), and any city or state documentary transfer
taxes applicable to the contribution of the Properties, shall be paid fifty
percent (50%) by PGP and fifty percent (50%) by Eden. All other costs and
charges of the escrow not otherwise provided for in this Agreement shall be
allocated in accordance with the closing customs for Alameda County. The
foregoing to the contrary notwithstanding, in the event Closing occurs, PGP
agrees, to the extent requested by Eden, to pay or give Eden credit for any of
the foregoing costs or expenses which are Qualifying Eden Closing Costs which
would otherwise be payable by or charged to Eden. The Eden Capital Contribution
shall be reduced, and the PGP Capital Contribution shall be increased, to the
extent of any such payment by PGP and/or credit given to Eden.
(b) Except as provided in section 9.5(c), below, Eden shall be
responsible for all costs incurred in connection with the prepayment or
satisfaction of any loan or bond secured by any of the Properties, provided that
any such cost is commercially reasonable and normally incurred in the prepayment
or satisfaction of similar loans or bonds, or otherwise provided in the
applicable loan or bond documents.
(c) The Operating Partnership shall be responsible for all costs
incurred in connection with the Debt Restructure, including, without limitation,
any title insurance costs, legal fees of Cigna's or other lender's counsel and
other fees, costs or expenses in connection with the Debt Restructure.
9.6 Eden Brokerage Commission. If, and only if, Closing occurs, PGP will
pay through escrow the Commissions otherwise payable by Eden in connection with
the Transactions in the amount of $195,000 payable to BT Commercial and $195,000
payable to Xxxxxxx & Co and the Eden Capital Contribution shall be reduced, and
the PGP Capital Contribution shall be increased, on account thereof. In the
event the commission or fees payable to BT Commercial or Xxxxxxx & Co. in
connection with the Transactions exceed such amounts, then Eden shall pay such
excess. Eden shall not be credited with a capital contribution or other advance
to the Operating Partnership in connection with
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payment of such excess, and neither PGP nor the Operating Partnership will be
obligated to pay or reimburse Eden for the amount of such excess. In the event
that any broker or finder other than BT Commercial or Xxxxxxx & Co. claims a
commission or finder's fee based upon any contact, dealings or communication,
the party through whom the broker or finder makes its claim shall be responsible
for said commission or fee and all costs and expenses (including, without
limitation, reasonable attorneys' fees) incurred by the other party in defending
against the same. The party through whom any other broker or finder makes a
claim shall hold harmless, indemnify and defend the other party hereto, its
successors and assigns, agents, employees, officers and directors, and the
Property from and against any and all obligations, liabilities, claims, demands,
liens, encumbrances and losses (including, without limitation, attorneys' fees),
whether direct, contingent or consequential, arising out of, based on, or
incurred as a result of such claim. The provisions of this Section shall survive
the Closing or termination of this Agreement.
9.7 Shared Expenses.
(a) PGP, on the one hand, and Eden, on the other hand, agree to
share equally all fees, costs and expenses (including legal and accounting)
incurred in connection with the negotiation, drafting and completion of the Term
Sheet dated November 13, 1996 in connection with the Transactions. The foregoing
fees, costs and expenses are referred to collectively as the "Shared Expenses".
Shared Expenses does not include (and such excluded expenses shall be the
separate liability and obligation of the respective incurring parties), among
other things, the following: (i) PGP's and/or Eden's costs, fees, and expenses
associated with its due diligence review of the Properties, (ii) PGP's and/or
Eden's costs, fees, and expenses associated with the analysis of the tax,
economic, securities law compliance or other impact of the Transactions upon any
of the Eden Entities, and (iii) PGP's and/or Eden's costs, fees, and expenses
associated with soliciting and obtaining any consents or approvals for the
Transactions, including the costs, fees, and expenses associated with the
preparation and dissemination of any disclosure documents or materials to any of
the Eden Entities, each of which shall be paid by the party incurring the same.
Shared Expenses also does not include the cost of the audit of the financial and
operating statements for the Properties referred to in Section 7.11 above, the
cost of which shall be paid by PGP through a capital contribution to the
Operating Partnership.
(b) Eden and PGP have agreed that all fees, costs and expenses
(including both Eden's and PGP's legal and accounting) incurred in connection
with the negotiation, drafting and completion of the OP Agreement, this Master
Contribution Agreement and the conveyancing documents prepared in connection
therewith, and the Exchange Rights Agreement shall be expenses of
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the Operating Partnership. Any expense that is excluded from the definition of
Shared Expenses in Section (a), above, shall not be an expense of the Operating
Partnership.
(c) In the event the Closing does not occur due to the breach or
default by Eden, or any act or omission within the control of Eden, then
notwithstanding the provisions of Sections (a) and (b), above, Eden agrees to
pay all costs and expenses incurred by PGP (including legal and accounting) in
connection with the negotiation, due diligence, documentation and the like
relating to the Transactions. In the event the Closing does not occur due to the
breach or default of PGP, or any act or omission within the control of PGP,
then, notwithstanding the provisions of Sections (a) and (b), above, PGP agrees
to pay all costs and expenses incurred by Eden in connection with the
Transactions. In the event this Agreement is terminated due to the failure of a
Condition Precedent which does not result from an act or omission within the
control of any party hereto, and absent any breach or default by any of the
parties hereto, then the provisions of (a) above shall apply, and the fees,
costs and expenses described in Section (b), above, shall be deemed to be Shared
Expenses and shall be shared equally by PGP and Eden in accordance with Section
(a) above as though fully set forth therein.
9.8 Possession. At Closing, Eden shall deliver possession of the
Properties to the Operating Partnership (subject to the rights of Tenants under
the Leases), which Properties shall be in the same condition as of the date of
execution of this Agreement, reasonable wear and tear excepted.
9.9 Notices to Tenants. Eden shall mail (or cause to be mailed) via
first-class mail (postage prepaid) or personally deliver to each Tenant, within
20 days after the Closing, a letter in substantially the form attached hereto as
Exhibit N advising each Tenant of the applicable change of ownership and the
holding of security deposits, all in conformity with the requirements of
California Civil Code Section 1950.5(g)(1). If the notice to the Tenant is made
by personal delivery, the Tenant shall acknowledge receipt of the notice and
sign his or her name on Eden's copy of the notice.
9.10 Reporting Requirements. The Escrow Holder shall comply with all
applicable federal, state and local reporting and withholding requirements
relating to the close of the transactions contemplated herein. Without limiting
the generality of the foregoing, to the extent the transactions contemplated by
this Agreement involve a real estate transaction within the purview of Section
6045 of the Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"), Escrow Holder shall have sole responsibility to comply with the
requirements of Section 6045 of the Internal Revenue Code (and any similar
requirements imposed by state or local law). For purposes hereof, Seller's tax
identification number is 00-0000000. Escrow
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42
Holder shall hold Buyer, Seller and their counsel free and harmless from and
against any and all liability, claims, demands, damages and costs, including
reasonable attorney's fees and other litigation expenses, arising or resulting
from the failure or refusal of Escrow Holder to comply with such reporting
requirements.
ARTICLE X
INDEMNITY
10.1 Eden shall save, hold harmless, indemnify and defend PGP and the
Operating Partnership, their respective successors and assigns and their
respective officers, directors, employees, partners, agents and representatives,
from and against any and all obligations, liabilities, claims, liens or
encumbrances, demands, losses, damages, causes of action, judgments, costs and
expenses (including attorneys' fees), whether direct, contingent or
consequential, and no matter how arising, incurred or suffered by any of them
("Losses and Liabilities"): (i) resulting from the ownership or operation of the
Properties or the business affairs and transactions of Eden prior to the
Closing, excluding, however, any act or omission by Eden with respect to any new
or existing lease but only to the extent such act or omission was specifically
approved by PGP pursuant to Section 6.4; (ii) resulting from any
misrepresentation or inaccuracy in or breach of any representation, warranty or
covenant by Eden in this Agreement; (iii) resulting from any claim, cause of
action, or the like, by Eden or by any Eden Entity or by any representative,
successor or assign of Eden or any Eden Entity (whether made individually, as a
class, or derivatively, or any other way) as a result of this Agreement or the
Transactions, other than a claim for breach of a representation, warranty or
covenant by PGP or the Operating Partnership in this Agreement, (iv) resulting
from any Tax Issues or Securities Issues and including without limitation, (a)
the issuance of the OP Units to Eden, (b) the dissolution of Eden and/or any
Eden Entity, (c) the distribution or issuance of OP Units to any Eden Entity,
(d) the conversion of OP Units to REIT shares or the redemption of OP Units for
cash, but excluding violations of securities laws arising solely from the
initial formation of the Operating Partnership and the initial issuance of OP
Units to Eden to the extent, and only to the extent, of that initial transaction
as if that initial transaction were the only transaction taking place pursuant
hereto with no other Eden Entity ever receiving OP Units, (v) resulting from or
arising out of any Contract that is not an Assumed Contract, including, without
limitation, any claim of unpaid fees or costs, including, without limitation,
termination fees and costs, (vi) resulting from or arising out of any dispute
regarding the amount of the Commission payable to BT Commercial or Xxxxxxx & Co.
10.2 Except for Losses and Liabilities covered by Section 10.1, PGP shall
cause the Operating Partnership to save, hold harmless, indemnify and defend
Eden, its successors and
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assigns and its officers, directors, employees, partners, agents and
representatives from and against any and all Losses and Liabilities in any way:
(i) resulting from the ownership or operation of the Properties or the business
affairs and transactions of the Operating Partnership after the Closing; or (ii)
resulting from any misrepresentation or inaccuracy in or breach of any
representation, warranty or covenant of the Operating Partnership in this
Agreement. Additionally, PGP shall indemnify and defend Eden, its respective
successors and assigns and its respective officers, directors, employees,
partners, agents and representatives from and against any and all Losses and
Liabilities in any way resulting from any misrepresentation or inaccuracy in or
breach of any representation, warranty or covenant of PGP in this Agreement.
10.3 No payments made pursuant to any of the provisions of Article X
shall entitle the paying parties to any repayment or reimbursement from, or any
capital account credit in, the Operating Partnership. The provisions of this
Article X shall survive the Closing.
ARTICLE XI
GENERAL PROVISIONS
11.1 Survival of Representations and Warranties. All representations and
warranties in this Agreement shall survive the Closing.
11.2 Confidentiality. Eden agrees to maintain as confidential and, except
as required by law, to not disclose to any third parties, other than Eden
Entities, attorneys, and accounting and business advisors, all information in
their possession concerning the Transactions. Eden shall not make any public
announcement by way of press release or otherwise of the Transactions, but they
shall be entitled to describe the Transactions contemplated hereunder to the
Eden Entities. PGP and the Operating Partnership shall have the right to
disclose any and all information in its possession (confidential or otherwise)
concerning Eden and/or the Transactions for purposes of making any press release
concerning the Transactions as PGP or the Operating Partnership deems necessary
or appropriate in its sole and absolute discretion.
11.3 Notices. Any notice, consent or approval required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
given upon (i) hand delivery, (ii) one (1) business day after being deposited
with Federal Express or another reliable overnight courier service or next day
delivery or transmitted by facsimile telecopy, or (iii) two (2) business days
after being deposited in the United States mail, registered or certified mail,
postage prepaid, return receipt required, and addressed as follows:
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44
If to Eden: Eden Plaza Associates
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxx
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to: Leland, Parachini, Steinberg,
Flinn, Matzger & Xxxxxxx, LLP
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to the Operating
Partnership : Pacific Gulf Properties Inc.
0000 Xxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxx
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to: Xxx, Castle & Xxxxxxxxx, LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
or such other address as either party may from time to time specify in writing
to the other.
11.4 Successors and Assigns. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors,
heirs, administrators and permitted assigns. Any assignee of OP Units shall also
be an assignee hereunder and shall have the benefits of and be bound by the
terms and provisions of this Agreement (including those relating to indemnities
as hereinabove provided). Neither Eden nor PGP shall assign its right, title or
interest in or to this Agreement.
11.5 Amendments. Except as otherwise provided herein, this Agreement may
be amended or modified only by a written instrument executed by Eden and PGP.
11.6 Governing Law. This Agreement, and all documents and instruments
executed and delivered in connection herewith (except the OP Agreement, which
shall be governed by Delaware law), shall be governed by and construed in
accordance with the laws of the State of California.
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45
11.7 Enforcement. If any party hereto institutes any action or proceeding
to interpret or enforce any provision of this Agreement or for an alleged breach
of any provision of this Agreement, the prevailing party shall be entitled to
recover its actual attorneys' fees and all fees, costs and expenses incurred in
connection with such action or proceeding. Such attorneys' fees, fees, costs and
expenses shall include post judgment attor- neys' fees, fees, costs and expenses
incurred on appeal or in collection of any judgment. This provision is separate
and several and shall survive the merger of this provision into any judgment on
this Agreement. No person or entity other than the parties hereto is or shall be
entitled to bring any action to enforce any provision of this Agreement against
any of the parties hereto, and the covenants and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto or their respective successors and assigns as permitted
hereunder.
11.8 Time of the Essence. Time is of the essence of this Agreement.
11.9 Severability. If any provision of this Agreement, or the application
thereof to any person, place, or circumstance, shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Agreement and such provisions as applied to other persons, places and
circumstances shall remain in full force and effect.
11.10 Exhibits. All exhibits attached hereto are incorporated herein as
though fully set forth herein.
11.11 Further Assurances. Each party agrees to cooperate fully with the
other parties and to prepare, execute, and deliver such further instruments of
conveyance, contribution, assignment, or transfer and shall take or cause to be
taken such other or further action as either party shall reasonably request at
any time or from time to time in order to consummate the terms and provisions
and to carry into effect the intents and purposes of this Agreement.
11.12 Risk of Loss. In the event of any of loss or damage to all or any
part of any individual Property by fire or other casualty prior to the Closing
that PGP reasonably believes could be in excess of $50,000 on that Property, or
which materially impedes access to such Property, then notwithstanding the
existence of any casualty insurance, PGP shall have the option in its sole
discretion to: (i) terminate this Agreement in its entirety; or (ii) continue
this Agreement, whereupon Eden shall assign to the Operating Partnership all
available insurance and will pay to the Operating Partnership any deductible
amount thereunder (or such deductible amount shall reduce the Base Value of the
Properties in determining the Eden Capital Contribution and any cost thereof
paid by PGP shall increase the PGP Capital Contribution). The provisions of
subsection (ii), above, shall
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apply (and survive Closing) in the event of any loss or damage in an amount less
than $50,000.
11.13 Counterparts. To facilitate execution, this Agreement may be
executed in as many counterparts as may be required. It shall not be necessary
that the signatures of, or on behalf of, each party, or that the signatures of
all persons required to bind any party, appear on each counterpart, but it shall
be sufficient that the signature of, or on behalf of, each party, appear on one
or more of the counterparts. All counterparts shall collectively constitute a
single agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereof.
11.14 No Waiver. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any other
instrument or document given in connection with or pursuant to this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege. No waiver shall be valid against any party hereto
unless made in writing and signed by the party against whom enforcement of such
waiver is sought and then only to the extent expressly specified herein.
11.15 Legal Representation. Each party has been represented by legal
counsel in connection with the negotiation of the Transactions and the drafting
and negotiation of this Agreement and the other agreements referred to herein.
Xxx, Castle & Xxxxxxxxx, LLP ("CCN") has represented solely PGP, and Xxxxxx,
Parachini, Steinberg, Matzger & Xxxxxxx, LLP has represented solely Eden, in
connection with the Transactions, any other agreements previously existing among
the parties relating to the Transactions, this Agreement, all exhibits hereto
and all agreements referred to herein. CCN has not provided legal services to or
been legal counsel for the Operating Partnership, Eden, any Eden Entity and none
of the foregoing has relied on CCN in that regard. The normal rule of
construction that ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement.
11.16 REIT. PGP is qualified as a real estate investment trust under the
provisions of the Internal Revenue Code of 1986, as amended, and, by reason
thereof, the maintaining of such status and the avoiding of any activity which
might cause a penalty tax to be applied is of material concern to PGP. Eden also
acknowledges that PGP's status as a real estate investment trust also inures to
the benefit of Eden, and not just PGP. Accordingly, Eden agrees to make any
modifications or amendments to this Agreement requested by PGP prior to Closing
that may be
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47
necessary for PGP to maintain its status as a real estate investment trust or in
order for it to avoid a penalty tax; provided, however, that Eden shall have no
obligation to enter into any such modification or amendment that would
materially alter or affect, in Eden's sole judgment, Eden's rights, duties, or
obligations under this Agreement. If Eden declines to modify or amend this
Agreement for any reason in a manner which PGP determines, in the good faith
exercise of its reasonable business judgment, is necessary to maintain its
status as a real estate investment trust or avoid a penalty tax, PGP shall have
the right to terminate this Agreement by written notice delivered to Eden prior
to Closing and thereafter shall have no liability or further obligation
whatsoever to Eden.
11.17 Entire Agreement. This Agreement, including its exhibits and the
other documents and agreements referred to herein, are intended by the parties
as a final expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. There are no
covenants, agreements, promises, warranties or understandings other than those
set forth or referred to herein, with respect to such subject matter. This
Agreement, together with its exhibits and the other documents and agreements
referred to herein, supersede all prior agreements and
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understandings between the parties with respect to the subject matter hereof and
thereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be duly executed and delivered on its behalf as of the date first above
written.
"PGP"
PACIFIC GULF PROPERTIES INC., a Maryland
corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxxxx, President and
Chief Executive Officer
By: /s/ XXXXXX X. XXXXX
----------------------------------------
Xxxxxx X. Xxxxx, Vice President
"EDEN"
EDEN PLAZA ASSOCIATES, LLC, a California
limited liability company
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------
Xxxxxx X. Xxxxxxx, Managing
Member
Chicago Title Company of Alameda County agrees to act as Escrow Holder in
accordance with the terms of this Agreement. Escrow Holder shall provide written
notice to PGP and Eden of the date on which this Agreement is fully executed and
deposited with Escrow Holder.
CHICAGO TITLE COMPANY OF ALAMEDA COUNTY
By: /s/ XXXXXX XXXXXXX 8-11-97
----------------------------------------
XXXXXX XXXXXXX, VICE PRESIDENT
----------------------------------------
(Print Name and Title)
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EXHIBIT LIST
Section(s)
----------
Exhibit A - Legal Descriptions Recital A
Exhibit B - Approved Title Form 1.2
Exhibit C - Assignment of Intangible Property 1.6, 9.1(d)
Exhibit D - Capital Improvements 1.9
Exhibit E - Exchange Rights Agreement 1.31
Exhibit F - Deposits and Reimbursements 5.19
Exhibit G - Grant Deed 9.1(b)
Exhibit H - Xxxx of Sale 9.1(c)
Exhibit I - Assignment of Leases 9.1(e)
Exhibit J - Nonforeign Status Certificate 9.1(f)
Exhibit K - Form 590 9.1(g)
Exhibit L - Eden's Legal Opinion 9.1(i)
Exhibit M - PGP Legal Opinion 9.2(e)
Exhibit N - Notice of Lease Assignment 9.9
Exhibit O - Cigna Restructure Proposal 6.5
Exhibit P - OP Agreement 1.40
Exhibit Q - Form Estoppel Certificate 1.30, 7.10
50
EXHIBIT A
LEGAL DESCRIPTIONS OF ALL PROPERTY
THE LAND REFERRED TO IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ALAMEDA,
CITY OF HAYWARD, DESCRIBED AS FOLLOWS:
PARCEL 1:
XXXXXX 0, XXXXXX MAP 1288, FILED SEPTEMBER 25, 1973, BOOK 80 OF PARCEL MAPS,
PAGE 27, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 000-0000-000
PARCEL 2:
PARCEL 1, PARCEL MAP 939, FILED JULY 13, 1972, BOOK 76 OF PARCEL MAPS, PAGE 10,
ALAMEDA COUNTY RECORDS.
EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEED TO EDEN ROCK CO. NO. 3, A
JOINT VENTURE, RECORDED JULY 31, 1978, REEL 5508, IMAGE 378, SERIES NO.
78-145175, OFFICIAL RECORDS.
ASSESSOR'S PARCEL NO. 461-0015-020-2
PARCEL 3:
XXXXXX 0, XXXXXX MAP NO. 939, FILED JULY 13, 1972, IN BOOK 76 OF PARCEL MAPS,
PAGE 10, ALAMEDA COUNTY RECORDS.
TOGETHER WITH:
ALL THAT CERTAIN REAL PROPERTY BEING A PORTION OF PARCEL 1 AS SHOWN ON "PARCEL
MAP NO. 939" WHICH MAP IS FILED IN BOOK 76 OF PARCEL MAPS AT PAGE 10, ALAMEDA
COUNTY RECORDS, SAID REAL PROPERTY BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE CORNER COMMON TO PARCELS 1 AND 2 ON THE NORTHWESTERLY LINE OF
CORPORATE PLACE, AS SHOWN ON THE ABOVE MENTIONED PARCEL MAP, THENCE FROM SAID
POINT OF BEGINNING ALONG SAID NORTHERLY LINE SOUTH 76 DEGREES 38'05" WEST 8.22
FEET; THENCE LEAVING THE LAST SAID LINE AND RUNNING ALONG A LINE PARALLEL TO AND
7.806 FEET SOUTHWESTERLY AT RIGHT ANGLES, FROM THE DIVIDING LINE BETWEEN SAID
PARCELS 1 AND 2 NORTH 31 DEGREES 37'51" WEST 205.78 FEET; THENCE LEAVING SAID
PARALLEL LINE NORTH 58 DEGREES 22'09" EAST 7.806 FEET TO SAID DIVIDING LINE;
THENCE ALONG THE LAST SAID LINE SOUTH 31 DEGREES 37'51" EAST 208.356 FEET TO THE
POINT OF BEGINNING.
SAID REAL PROPERTY IS THE SAME AS "LOT LINE ADJUSTMENT NO. 77-4" APPROVED BY THE
CITY OF HAYWARD PLANNING COMMISSION ON SEPTEMBER 22, 1977.
ASSESSOR'S PARCEL NO. 461-0015-021-01
1
51
PARCEL 4:
PARCEL ONE OF AMENDED PARCEL MAP 1035 FILED SEPTEMBER 5, 1975 IN BOOK 80 OF
PARCEL MAPS ON PAGE 15, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 461-0085-018-03 (PORTION).
PARCEL 5:
PORTION OF INVESTMENT BOULEVARD, AS SAID BOULEVARD WAS ESTABLISHED BY THE GRANT
OF EASEMENT FROM EDEN LANDING CORPORATION, A CALIFORNIA CORPORATION, TO THE CITY
OF HAYWARD, A MUNICIPAL CORPORATION, DATED JUNE 20, 1967, AND RECORDED JULY 24,
1967 IN REEL 2005 OF OFFICIAL RECORDS OF ALAMEDA COUNTY AT IMAGE 500 (AZ-71982),
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTHERLY RIGHT OF WAY LINE OF INVESTMENT
BOULEVARD WITH THE EASTERLY RIGHT OF WAY LINE OF EDEN LANDING ROAD AS SHOWN ON
PARCEL MAP NO. 1035 FILED IN BOOK 79 OF PARCEL MAPS, PAGE 28, IN THE OFFICE OF
THE ALAMEDA COUNTY RECORDER; THENCE ALONG SAID NORTHERLY RIGHT OF WAY LINE OF
INVESTMENT BOULEVARD THE FOLLOWING THREE COURSES: 1) SOUTH 81 DEGREES 53'26"
EAST 40.130 FEET; 2) SOUTH 48 DEGREES 12'02" EAST 61.294 FEET; 3) SOUTH 08
DEGREES 06'34" WEST 40.000 FEET; THENCE LEAVING SAID NORTHERLY RIGHT OF WAY LINE
NORTH 81 DEGREES 53'26" WEST 67.124 FEET TO A TANGENT CURVE TO THE RIGHT; THENCE
ALONG SAID TANGENT CURVE TO THE RIGHT HAVING A RADIUS OF 24.000 FEET THROUGH A
CENTRAL ANGLE OF 89 DEGREES 59'35" AN ARC DISTANCE OF 37.696 FEET; THENCE NORTH
08 DEGREES 06'09" EAST 50.003 FEET TO THE POINT OF BEGINNING.
ASSESSOR'S PARCEL NO. 416-0085-018-03
2
52
EXHIBIT B
APPROVED TITLE FORM
1
53
AMERICAN LAND TITLE ASSOCIATION
OWNER'S POLICY FORM B-1970
(Amended 10-17-70)
CHICAGO TITLE INSURANCE COMPANY
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS CONTAINED IN SCHEDULE B
AND THE PROVISIONS OF THE CONDITIONS AND STIPULATIONS HEREOF, CHICAGO TITLE
INSURANCE COMPANY, a Missouri corporation, herein called the Company, insures,
as of Date of Policy shown in Schedule A, against loss or damage, not exceeding
the amount of insurance stated in Schedule A, and costs, attorneys' fees and
expenses which the Company may become obligated to pay hereunder, sustained or
incurred by the insured by reason of:
1. Title to the estate or interest described in Schedule A being
vested otherwise than as stated therein;
2. Any defect in or lien or encumbrance on such title;
3. Lack of a right of access to and from the land; or
4. Unmarketability of such title.
In Witness Whereof, CHICAGO TITLE INSURANCE COMPANY has caused this policy to be
signed and sealed as of the date of policy shown in Schedule A, the policy to
become valid when countersigned by an authorized signatory.
Issued by: CHICAGO TITLE INSURANCE COMPANY
CHICAGO TITLE COMPANY By: [SIG}
000 XXXXXXX XXXXXX XXXX, XXXXX 000 Xxxxxxxxx
XXXXXX XXXXX, XXXXXXXXXX 00000
(000) 000-0000
[SEAL]
By: [SIG]
President
IMPORTANT
This policy necessarily relates solely to the title as of the date of the
policy. In order that a purchaser of the real estate described herein may be
insured against defects, liens or encumbrances, this policy should be reissued
in the name of such purchaser.
54
CONDITIONS AND STIPULATIONS
1. DEFINITION OF TERMS
The following terms when used in this policy mean:
(a) "insured": the insured named in Schedule A, and, subject to any
rights or defenses the Company may have had against the named insured, those who
succeed to the interest of such insured by operation of law as distinguished
from purchase including, but not limited to, heirs, distributees, devisees,
survivors, personal representatives, next of kin, or corporate or fiduciary
successors.
(b) "insured claimant": an insured claiming loss or damage hereunder.
(c) "knowledge": actual knowledge, not constructive knowledge or notice
which may be imputed to an insured by reason of any public records.
(d) "land": the land described, specifically or by reference in
Schedule A, and improvements affixed thereto which by law constitute real
property; provided, however, the term "land" does not include any property
beyond the lines of the area specifically described or referred to in Schedule
A, nor any right, title, interest, estate or easement in abutting streets,
roads, avenues, alleys, lanes, ways or waterways, but nothing herein shall
modify or limit the extent to which a right of access to and from the land is
insured by this policy.
(e) "mortgage": mortgage, deed of trust, trust deed, or other security
instrument.
(f) "public records": those records which by law impart constructive
notice of matters relating to said land.
2. CONTINUATION OF INSURANCE AFTER CONVEYANCE OF TITLE
The coverage of this policy shall continue in force as of Date of
Policy in favor of an insured so long as such insured retains an estate or
interest in the land, or holds an indebtedness secured by a purchase money
mortgage given by a purchaser from such insured, or so long as such insured
shall have liability by reason of covenants of warranty made by such insured in
any transfer or conveyance of such estate or interest; provided, however, this
policy shall not continue in force in favor of any purchaser from such insured
of either said estate or interest or the indebtedness secured by a purchase
money mortgage given to such insured.
3. DEFENSE AND PROSECUTION OF ACTIONS---NOTICE OF CLAIM TO BE GIVEN BY AN
INSURED CLAIMANT
(a) The Company, at its own cost and without undue delay, shall provide
for the defense of an insured in all litigation consisting of actions or
proceedings commenced against such insured, or a defense interposed against an
insured in an action to enforce a contract for a sale of the estate or interest
in said land, to the extent that such litigation is founded upon an alleged
defect, lien, encumbrance, or other matter insured against by this policy.
(b) The insured shall notify the Company promptly in writing (i) in
case any action or proceeding is begun or defense is interposed as set forth in
(a) above, (ii) in case knowledge shall come to an insured hereunder of any
claim of title or interest which is adverse to the title to the estate or
interest, as insured, and which might cause loss or damage for which the Company
may be liable by virtue of this policy, or (iii) if title to the estate or
interest, as insured, is rejected as unmarketable. If such prompt notice shall
not be given to the Company, then as to such insured all liability of the
Company shall cease and terminate in regard to the matter or matters for which
such prompt notice is required; provided, however, that failure to notify shall
in no case prejudice the rights of any such insured under this policy unless the
Company shall be prejudiced by such failure and then only to the extent of such
prejudice.
(c) The Company shall have the right at its own cost to institute and
without undue delay prosecute any action or proceeding or to do any other act
which in its opinion may be necessary or desirable to establish the title to the
estate or interest as insured, and the Company may take any appropriate action
under the terms of this policy, whether or not it shall be liable thereunder,
and shall not thereby concede liability or waive any provision of this policy.
(d) Whenever the Company shall have brought any action or interposed a
defense as required or permitted by the provisions of this policy, the Company
may pursue any such litigation to final determination by a court of competent
jurisdiction and expressly reserves the right, in its sole discretion, to appeal
from any adverse judgment or order.
(e) In all cases where this policy permits or requires the Company to
prosecute or provide for the defense of any action or proceeding, the insured
hereunder shall secure to the Company the right to so prosecute or provide
defense in such action or proceeding, and all appeals therein, and permit the
Company to use, at its option, the name of such insured for such purpose.
Whenever requested by the Company, such insured shall give the Company all
reasonable aid in any such action or proceeding, in effecting settlement,
securing evidence, obtaining witnesses, or prosecuting or defending such action
or proceeding, and the Company shall reimburse such insured for any expense so
incurred.
4. NOTICE OF LOSS---LIMITATION OF ACTION
In addition to the notices required under paragraph 3(b) of these
Conditions and Stipulations, a statement in writing of any loss or damage for
which it is claimed the Company is liable under this policy shall be furnished
to the Company within 90 days after such loss or damage shall have been
determined and no right of action shall accrue to an insured claimant until 30
days after such statement shall have been furnished. Failure to furnish such
statement of loss or damage shall terminate any liability of the Company under
this policy as to such loss or damage.
5. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS
The Company shall have the option to pay or otherwise settle for or in
the name of an insured claimant any claim insured against or to terminate all
liability and obligations of the Company hereunder by paying or tendering
payment of the amount of insurance under this policy together with any costs,
attorneys' fees and expenses incurred up to the time of such payment or tender
of payment, by the insured claimant and authorized by the Company.
6. DETERMINATION AND PAYMENT OF LOSS
(a) The liability of the Company under this policy shall in no case
exceed the least of:
(i) the actual loss of the insured claimant; or
(ii) the amount of insurance stated in Schedule A.
(b) The Company will pay, in addition to any loss insured against by
this policy, all costs imposed upon an insured in litigation carried on by the
Company for such insured, and all costs, attorneys' fees and expenses in
litigation carried on by such insured with the written authorization of the
Company.
(c) When liability has been definitely fixed in accordance with the
conditions of this policy, the loss or damage shall be payable within 30 days
thereafter.
7. LIMITATION OF LIABILITY
No claim shall arise or be maintainable under this policy (a) if the
Company, after having received notice of an alleged defect, lien or encumbrance
insured against hereunder, by litigation or otherwise, removes such defect, lien
or encumbrance or establishes the title, as insured, within a reasonable time
after receipt of such notice; (b) in the event of litigation until there has
been a final determination by a court of competent jurisdiction, and disposition
of all appeals therefrom, adverse to the title, as insured, as provided in
paragraph 3 hereof; or (c) for liability voluntarily assumed by an insured in
settling any claim or suit without prior written consent of the Company.
8. REDUCTION OF LIABILITY
All payments under this policy, except payments made for costs,
attorneys' fees and expenses, shall reduce the amount of the insurance pro
tanto. No payment shall be made without producing this policy for endorsement of
such payment unless the policy be lost or destroyed, in which case proof of such
loss or destruction shall be furnished to the satisfaction of the Company.
9. LIABILITY NONCUMULATIVE
It is expressly understood that the amount of insurance under this
policy shall be reduced by any amount the Company may pay under any policy
insuring either (a) a mortgage shown or referred to in Schedule B hereof which
is a lien on the estate or interest covered by this policy, or (b) a mortgage
hereafter executed by an insured which is a charge or lien on the estate or
interest described or referred to in Schedule A, and the amount so paid shall be
deemed a payment under this policy. The Company shall have the option to apply
to the payment of any such mortgages any amount that otherwise would be payable
hereunder to the insured owner of the estate or interest covered by this policy
and the amount so paid shall be deemed a payment under this policy to said
insured owner.
CONDITIONS AND STIPULATIONS (CONTINUED ON REVERSE SIDE)
55
SCHEDULE A
Your Ref:
Policy No. 05 0057-60-9690019 ORDER NO. 9690019
Premium: $___________
Amount of Insurance: $19,000,000.00
Date of Policy: at 8:00 A.M.
1. Name of Insured:
PGP NORTHERN INDUSTRIAL L.P., A DELAWARE LIMITED PARTNERSHIP
2. The estate or interest in the land which is covered by this policy is:
A FEE
3. Title to the estate or interest in the land is vested in:
PGP NORTHERN INDUSTRIAL L.P., A DELAWARE LIMITED PARTNERSHIP
4. The land referred to in this policy is situated in the State of
California, County of Alameda and is described as follows:
SEE ATTACHED DESCRIPTION
This Policy valid only if Schedule B is attached
56
DESCRIPTION
Page 1
POLICY NO.: 05 0057-60-9690019
CITY OF HAYWARD
PARCEL 1:
PARCEL 1, PARCEL MAP 1288, FILED SEPTEMBER 25, 1973, BOOK 80 OF PARCEL
MAPS, PAGE 27, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO.: 000-0000-000
PARCEL 2:
PARCEL 1, PARCEL MAP 939, FILED JULY 13, 1972, BOOK 76 OF PARCEL MAPS,
PAGE 10, ALAMEDA COUNTY RECORDS.
EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEED TO EDEN ROCK
COMPANY. NO. 3, A JOINT VENTURE RECORDED JULY 31, 1978, REEL 5508,
IMAGE 378, SERIES NO. 78-145175, OFFICIAL RECORDS.
ASSESSOR'S PARCEL NO.: 461-0015-020-02
PARCEL 3:
XXXXXX 0, XXXXXX MAP NO 939, FILED JULY 13, 1972, IN BOOK 76 OF PARCEL
MAPS, PAGE 10, ALAMEDA COUNTY RECORDS.
TOGETHER WITH:
ALL THAT CERTAIN REAL PROPERTY BEING A PORTION OF PARCEL 1 AS SHOWN IN
"PARCEL MAP NO 939" WHICH MAP IS FILED IN BOOK 76 OF PARCEL MAPS AT
PAGE 10, ALAMEDA COUNTY RECORDS, SAID REAL PROPERTY BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE CORNER COMMON TO PARCELS 1 AND 2 ON THE NORTHWESTERLY
LINE OF CORPORATE PLACE, AS SHOWN ON THE ABOVE MENTIONED PARCEL MAP,
THENCE FROM SAID POINT OF BEGINNING ALONG SAID NORTHERLY LINE SOUTH 76
degrees 38'05" WEST 8.22 FEET; THENCE LEAVING THE LAST SAID LINE AND
RUNNING ALONG A LINE PARALLEL TO AND 7.806 FEET SOUTHWESTERLY AT RIGHT
ANGLES, FROM THE DIVIDING LINE BETWEEN SAID PARCELS 1 AND 2 NORTH 31
degrees 37'51" WEST 205.78 FEET; THENCE LEAVING SAID PARALLEL LINE
NORTH 58 degrees 22'09" EAST 7.806 FEET TO SAID DIVIDING LINE; THENCE
ALONG THE LAST SAID LINE SOUTH 31 degrees 37'51" EAST 208.356 FEET TO
THE POINT OF BEGINNING.
SAID REAL PROPERTY IS THE SAME AS LOT LINE ADJUSTMENT NO. 77-4 APPROVED
BY THE CITY OF HAYWARD PLANNING COMMISSION ON SEPTEMBER 22, 1977.
ASSESSOR'S PARCEL NO: 461-0015-021-01
PARCEL 4:
PARCEL ONE OF AMENDED PARCEL MAP 1035 FILED SEPTEMBER 5, 1975, IN BOOK
80 OF PARCEL MAPS PAGE 15, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO.: 461-0085-018-03 (PORTION)
57
DESCRIPTION
Page 2
POLICY NO: 05 0057-60-9690019
PARCEL 5:
PORTION OF INVESTMENT BOULEVARD, AS SAID BOULEVARD WAS ESTABLISHED BY
THE GRANT OF EASEMENT FROM EDEN LANDING CORPORATION, A CALIFORNIA
CORPORATION, TO THE CITY OF HAYWARD, A MUNICIPAL CORPORATION, DATED
JUNE 20, 1967, AND RECORDED July 24, 1967, IN REEL 2005 OF OFFICIAL
RECORDS OF ALAMEDA COUNTY AT IMAGE 500 (AS-71982), DESCRIBED AS
FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTHERLY RIGHT OF WAY LINE OF
INVESTMENT BOULEVARD WITH THE EASTERLY RIGHT OF WAY LINE OF EDEN
LANDING ROAD AS SHOWN ON PARCEL MAP NO. 1035 FILED IN BOOK 79 OF PARCEL
MAPS, PAGE 28, IN THE OFFICE OF THE ALAMEDA COUNTY RECORDER; THENCE
ALONG SAID NORTHERLY RIGHT OF WAY LINE OF INVESTMENT BOULEVARD THE
FOLLOWING THREE COURSES: 1) SOUTH 81 degrees 53'26" EAST 40.130 FEET;
2) SOUTH 48 degrees 12'02" EAST 61.294 FEET; 3) SOUTH 08 degrees 06'34"
WEST 40.000 FEET; THENCE LEAVING SAID NORTHERLY RIGHT OF WAY LINE NORTH
81 degrees 53'26" WEST 67.124 FEET TO A TANGENT CURVE TO THE RIGHT;
THENCE ALONG SAID TANGENT CURVE TO THE RIGHT HAVING A RADIUS OF 24.000
FEET THROUGH A CENTRAL ANGEL OF 89 degrees 59'35" AN ARC DISTANCE OF
37.696 FEET; THENCE NORTH 08 degrees 06'09" EAST 50.003 FEET TO THE
POINT OF BEGINNING.
ASSESSOR'S PARCEL NO.: 461-0085-018-03
58
SCHEDULE B
Your Ref.
POLICY NO.: 05 0057-60-9690019
EXCEPTIONS FROM COVERAGE
This policy does not insure against loss or damage (and the Company
will not pay costs, attorneys' fees or expenses) which arise by reason of:
AF 1. County and city taxes for the Fiscal Year 1997-1998, a lien not yet
due or payable.
A 2. The Lien of Supplemental Taxes, if any, assessed pursuant to the
provisions of Chapter 3.5, Revenue and Taxation Code, Sections 75 et
seq.
F 3. Easement, upon the terms covenants and conditions thereof, for the
purposes stated herein and incidental purposes created in that certain
instrument
Recorded : MARCH 5, 1958, BOOK 8611, PAGE 321, SERIES NO.
AP/22367, OFFICIAL RECORDS
Granted to : PACIFIC GAS AND ELECTRIC COMPANY, A CALIFORNIA
CORPORATION
Purpose : TOWER LINES
Affects : NORTHEASTERLY PORTION OF PARCEL 4
a 4. Easement, upon the terms, covenants and conditions thereof, for the
purposes stated herein and incidental purposes created in that certain
instrument
Recorded : MARCH 5, 1958, BOOK 8611, PAGE 323, SERIES NO. AP/22368,
OFFICIAL RECORDS
Granted to : PACIFIC GAS AND ELECTRIC COMPANY, A CALIFORNIA
CORPORATION
Purpose : TOWER LINES
Affects : NORTHEASTERLY PORTION OF PARCEL 4
M 5. Easement as follows as shown of the filed map of Trace 2898, filed
June 30, 1967, Book 55 of Maps, Page 25, Alameda County Records
For : PUBLIC SERVICE
Affects : WESTERLY 10 FEET OF PARCEL 1, ADJACENT TO CORPORATE PLACE;
SOUTHWESTERLY 10 FEET OF PARCEL 2, ADJACENT TO CORPORATE
AVENUE AND THE SOUTHEASTERLY 10 FEET OF PARCEL 2 AND 3,
ADJACENT TO CORPORATE PLACE
I 6. Covenants, conditions and restrictions, but omitting any covenant or
restriction, if any, based on race, color, religion, sex, handicap,
familial status or national origin unless and only to the extent that
said covenant (a) is exempt under Chapter 42, Section 3607 of the
United States Code or (b) relates to handicap but does not discriminate
against handicapped persons, contained in the Declaration
By : EDEN LANDING CORPORATION, A CALIFORNIA CORPORATION
59
SCHEDULE B
(Continued)
Page 1 POLICY NO.: 009690019
Recorded : JUNE 30, 1967, REEL 1991, IMAGE 793, SERIES NO. AZ/62977,
OFFICIAL RECORDS
J Modification and/or amendment thereof, recorded MARCH 30, 1973, REEL
3378, IMAGE 850, SERIES NO., 73-42409, OFFICIAL RECORDS, but omitting
any covenant or restriction, if any, based on race, color, religion,
sex, handicap, familial status or national origin unless and only to
the extent that said covenant (a) is exempt under Chapter 42, Section
3607 of the United States Code or (b) relates to handicap but does not
discriminate against handicapped persons.
R Modification an/or amendment thereof, recorded MAY 8, 1973, REEL 3420,
IMAGE 499, SERIES NO. 73-68230, OFFICIAL RECORDS, but omitting any
covenant or restriction, if any, based on race, color, religion, sex,
handicap, familial status or national origin unless and only to the
extent that said covenant (a) is exempt under Chapter 42, Section 3607
of the United States Code or (b) relates to handicap but does not
discriminate against handicapped persons.
L Contains no reversionary clause.
O Contains no mortgagee protection clause.
AF 7. Easement, upon the terms, covenants and conditions thereof, for the
purposes stated herein and incidental purposes created in that certain
instrument
Recorded : JUNE 28, 1972, REEL 3168, IMAGE 294, SERIES NO. 72-86979,
OFFICIAL RECORDS
Granted to: PACIFIC GAS AND ELECTRIC COMPANY, A CALIFORNIA
CORPORATION
Purpose : UNDERGROUND FACILITIES, CONSISTING OF UNDERGROUND CONDUITS,
PIPES, MANHOLES, SERVICE BOXES, WIRES, CABLES AND OTHER
ELECTRICAL CONDUCTORS; ABOVE GROUND MARKER POSTS, RISERS
AND SERVICE PEDESTALS; UNDERGROUND AND ABOVE GROUND
SWITCHES, FUSES, TERMINALS AND TRANSFORMERS WITH ASSOCIATED
CONCRETE PADS Affects: NORTHERLY PORTION OF PARCEL 4
N 8. Easement, upon the terms, covenants and conditions thereof, for the
purposes stated herein and incidental purposes created in that certain
instrument
Recorded : AUGUST 1, 1972, REEL 3195, IMAGE 721, SERIES NO. 72-104271,
OFFICIAL RECORDS
Granted to: PACIFIC GAS AND ELECTRIC COMPANY, A CALIFORNIA
CORPORATION
Purpose : UNDERGROUND CONDUITS, PIPES, AND SERVICE BOXES; ABOVE
GROUND MARKER POSTS, RISERS AND SERVICE PEDESTALS;
UNDERGROUND AND ABOVE GROUND SWITCHES, FUSES, TERMINALS AND
TRANSFORMERS WITH ASSOCIATED CONCRETE PADS
60
SCHEDULE B
(Continued)
Page 2 POLICY NO.: 009690019 969
Affects : WESTERLY 10 FEET OF PARCEL 1, ADJACENT TO CORPORATE PLACE;
SOUTHWESTERLY 10 FEET OF PARCEL 2, ADJACENT TO CORPORATE
AVENUE AND THE SOUTHEASTERLY 10 FEET OF PARCELS 2 AND 3,
ADJACENT TO CORPORATE PLACE.
P 9. Easement, upon the terms, covenants and conditions thereof, for the
purposes stated herein and incidental purposes created in that certain
instrument
Recorded : DECEMBER 26, 1974, REEL 3840, IMAGE 504, SERIES
NO. 74-161557, OFFICIAL RECORDS
Granted to : PACIFIC GAS AND ELECTRIC COMPANY, A CALIFORNIA
CORPORATION
Purpose : UNDERGROUND CONDUITS, PIPES AND SERVICE BOXES,
ABOVE GROUND MARKER POSTS, RISERS AND SERVICE
PEDESTALS; UNDERGROUND AND ABOVE GROUND SWITCHES,
FUSES, TERMINALS AND TRANSFORMERS WITH ASSOCIATED
CONCRETE PADS
Affects : PORTIONS OF PARCEL 4
g 10. Easement, upon the terms, covenants and conditions thereof, for the
purposes stated herein and incidental purposes created in that certain
instrument
Recorded : APRIL 10, 1975, REEL 3930, IMAGE 177, SERIES NO.
75-45978, OFFICIAL RECORDS
Granted to : THE PACIFIC TELEPHONE AND TELEGRAPH COMPANY,
A CORPORATION
Purpose : COMMUNICATION FACILITIES
Affects : PORTIONS OF PARCEL 4
T 11. Easement, upon the terms, covenants and conditions thereof, for the
purposes stated herein and incidental purposes created in that certain
instrument
Recorded : JULY 11, 1991, SERIES NO. 91-179447, OFFICIAL
RECORDS
Granted to : PACIFIC XXXX
Purpose : UNDERGROUND COMMUNICATION FACILITIES
Affects : PORTION OF PARCEL 4
AH 12. Unrecorded lease upon the terms and conditions contained therein
Lessor : EDEN PLAZA ASSOCIATES, A CALIFORNIA LIMITED
PARTNERSHIP
Lessee : INSIGHT HEALTH SERVICES
Disclosed by : NOTICE OF NON-RESPONSIBILITY
Recorded : FEBRUARY 20, 1997, SERIES NO. 97048274,
OFFICIAL RECORDS
AJ 13. Unrecorded lease upon the terms and conditions contained therein
Lessor : EDEN PLAZA ASSOCIATES, A CALIFORNIA GENERAL
PARTNERSHIP
61
SCHEDULE B
(CONTINUED)
Page 3
POLICY NO.: 009690019 969
Lessee : ADICOM WIRELESS, INC.
Disclosed by: FINANCING STATEMENT
Recorded : FEBRUARY 26, 1997, SERIES NO. 97053291, OFFICIAL RECORDS
AS 14. Deed of Trust to secure an Indebtedness in the original amount
shown below
Amount : $12,000,000.00
Dated : TO BE DETERMINED
Trustor : PGP NORTHERN INDUSTRIAL, L.P., A DELAWARE LIMITED
PARTNERSHIP
Trustee : PROFORMA
Beneficiary : CIGNA INVESTMENT, INC., A CONNECTICUT CORPORATION
Address : PROFORMA
Loan No. : PROFORMA
Recorded : PROFORMA
AK 15. The following matters disclosed by Alta Survey, Pacific Gulf
Properties, dated FEBRUARY 13, 1997, prepared by Xxxxx and Associates,
Inc., Job No. SJ0403:
A) EASEMENT OR LESSER SERVITUDE, IF ANY, AS MAY EXIST FOR
RAILROAD PURPOSES OVER A NORTHEASTERLY PORTION OF PARCEL 1.
B) EASEMENT OR LESSER SERVITUDE, IF ANY, AS MAY EXIST FOR GUY
WIRE PURPOSES OVER A NORTHERLY PORTION OF PARCEL 4.
AO 16. Rights of parties in possession, as Tenants only, as disclosed by
(NAME OF TENANTS TO BE LISTED AS SHOWN ON RENT ROLL).
AF "NOTE: This is a Pro Forma Policy furnished to or on behalf of the
party to be insured. It does not reflect the present status of title
and is not a commitment to insure the estate or interest as shown
herein, nor does it evidence the willingness of the company to provide
any affirmative coverage shown herein Any such commitment must be an
express written undertaking on appropriate forms of the company."
AO NOTE:
TAXES FOR THE FISCAL YEAR 1996-1997 PAID IN FULL.
ASSESSOR'S PARCEL NOS.: 461-0015-020-02 (AFFECTS PARCEL 2)
461-0015-021-01 (AFFECTS PARCEL 3)
000-0000-000 (AFFECTS PARCEL 1)
461-0085-018-03 (AFFECTS PARCELS 4 AND 5)
AR CAC
62
ENDORSEMENT
ATTACHED TO AND FORMING A PART OF
POLICY NO. 9690019SDC
ISSUED BY
CHICAGO TITLE INSURANCE COMPANY
Dated as of the date of the policy to which this endorsement is attached.
The Company hereby insures against loss which the Insured shall sustain by
reason of any incorrectness in the following assurances:
(1) That there are no covenants, conditions or restrictions containing
express provisions which will cause a forfeiture or reversion of title,
unless same also provide that a violation thereof shall not defeat the
lien of a mortgage or deed of trust made in good faith and for value;
(2) That there are no present violations on said land of any enforceable
covenants, conditions or restrictions;
(3) That, except as shown in Schedule B, there are no encroachments on to
said land of buildings, structures or improvements located on adjoining
land; and
(4) That there is no right to use the surface of the land for the
extraction or development of the minerals excepted from the description
of said land or shown as a reservation in Schedule B.
Wherever in this endorsement any or all of the words, "covenants, conditions or
restrictions" appear, they shall not be deemed to refer to or include the terms,
covenants and conditions contained in any lease referred to in Schedule A.
No coverage is provided under this endorsement as to any covenant, condition,
restriction, or other provision relating to environmental protection.
This endorsement is made a part of the policy and is subject to all of the terms
and provisions thereof and of any prior endorsements thereto. Except to the
extent expressly stated it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.
CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Authorized Signatory
CLTA Form 100 (Modified)
63
ENDORSEMENT
ATTACHED TO POLICY NO. 009690019
ISSUED BY
CHICAGO TITLE INSURANCE COMPANY
The Company hereby assures the insured that the land abuts upon a physically
open street known as Corporate Avenue, Corporate Place and Investment Boulevard.
The Company hereby insures the insured against loss which the insured shall
sustain in the event the assurance herein shall prove to be incorrect.
This endorsement is made a part of the policy and is subject to all of the terms
and provisions thereof and of any prior endorsements thereto. Except to the
extent expressly stated it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.
Dated: TO BE DETERMINED CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Authorized Signatory
CLTA Form 103.7 (Rev. 9-10-93)
64
ENDORSEMENT
ATTACHED TO AND FORMING A PART OF
POLICY NO. 9690019SDC
ISSUED BY
CHICAGO TITLE INSURANCE COMPANY
The Company assures the insured that at Date of Policy there is located
on the land Commercial Structures
known as 0000 Xxxxxxxxx Xxxxx, 26500 Corporate Ave., 352 Investment, Hayward,
California.
and that the map attached to this policy shows the correct location and
dimensions of the land according to the public records.
The Company hereby insures the insured against loss which the insured
shall sustain in the event that the assurance herein shall prove to be
incorrect.
This endorsement is made a part of the policy and is subject to all of
the terms and provisions thereof and of any prior endorsements thereto. Except
to the extent expressly stated it neither modifies any of the terms and
provisions of the policy and any prior endorsements, nor does it extend the
effective date of the policy and any prior endorsements, nor does it increase
the face amount thereof.
Dated: TO BE DETERMINDED CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Authorized Signatory
CLTA Form 116 (Rev. 9-10-93)
ALTA-Lender
65
ENDORSEMENT
ATTACHED TO AND FORMING A PART OF POLICY NO.009690019
ISSUED BY
CHICAGO TITLE INSURANCE COMPANY
The Company assures the insured that the land described in Schedule A is
contiguous as follows:
PARCEL 1 IS CONTIGUOUS TO PARCEL 3; PARCEL 2 IS CONTIGUOUS TO PARCEL 3 AND
PARCEL 4 IS CONTIGUOUS TO PARCEL 5.
The Company hereby insures the insured against loss which the insured shall
sustain in the event that the assurance herein shall prove to be incorrect.
This endorsement is made a part of the policy and is subject to all of the terms
and provisions thereof and of any prior endorsements thereto. Except to the
extent expressly stated it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.
Dated: TO BE DETERMINED CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Authorized Signatory
CLTA Form 116.4 (9-10-93)
66
ENDORSEMENT
ATTACHED TO AND FORMING A PART OF
POLICY NO. 9690019SDC
ISSUED BY
CHICAGO TITLE INSURANCE COMPANY
The Company assures the insured that the land is the same as that
delineated on the plat of a survey made by XXXXX AND ASSOCIATES, INC. on
FEBRUARY 13, 1997, designated Job No. SJ0403.
The Company hereby insures the insured against loss which the insured
shall sustain in the event that the assurance herein shall prove to be
incorrect.
This endorsement is made a part of the policy and is subject to all of
the terms and provisions thereof and of any prior endorsements thereto. Except
to the extent expressly stated it neither modifies any of the terms and
provisions of the policy and any prior endorsements, nor does it extend the
effective date of the policy and any prior endorsements, nor does it increase
the face amount thereof.
Dated:
CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Authorized Signatory
CLTA Form 116.1 (Rev. 9-10-93)
67
ENDORSEMENT
ATTACHED TO POLICY NO. 009690019
ISSUED BY
CHICAGO TITLE INSURANCE COMPANY
The Company assures the insured that the land described as Parcel(s) 1, 2, 3, 4
and 5 in Schedule A are lawfully created parcels according to the Subdivision
Map Act (Section 66410, et seq., of the California Government Code) and local
ordinances adopted pursuant thereto.
The Company hereby insures the insured against loss which the insured shall
sustain in the event that the assurance herein shall prove to be incorrect.
This endorsement is made a part of the policy and is subject to all of the terms
and provisions thereof and of any prior endorsements thereto. Except to the
extent expressly stated it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.
Dated: TO BE DETERMINED CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Authorized Signatory
CLTA Form 116.7 (Rev. 9-10-93)
68
ENDORSEMENT
ATTACHED TO POLICY NO. 009690019
ISSUED BY
CHICAGO TITLE INSURANCE COMPANY
Dated as of the date of the policy to which this endorsement is attached.
The Company hereby assures the insured that neither the withdrawal of a partner
or partners nor the admission of a partner or partners in the named insured
partnership will cause a termination of coverage under this policy. Provided,
however, that this assurance shall not be construed so as to continue policy
coverage after either of the following:
(A) if the named insured is a general partnership, a change in form to a
limited partnership; or
(B) if the named insured is a limited partnership, a change in form to a
general partnership.
This endorsement is made a part of the policy and is subject to all of the terms
and provisions thereof and of any prior endorsements thereto. Except to the
extent expressly stated it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.
CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Authorized Signatory
CIT Form 3032
(Fairway Endorsement)
69
ENDORSEMENT
ATTACHED TO POLICY NO. 009690019
ISSUED BY
CHICAGO TITLE INSURANCE COMPANY
The Company hereby assures PGP Northern Industrial, L.P., a Delaware Limited
Partnership and Pacific Gulf Properties, Inc., a Maryland Corporation,
notwithstanding the terms of the Conditions and Stipulations or schedule of
Exclusions from coverage to the contrary, that in the event of loss or damage
insured against under the terms of the policy, the Company will not deny its
liability thereunder to said assured on the grounds that said assured had
knowledge of any matter solely by reason of notice thereof imputed to it through
Eden Plaza Associates, a California General Partnership, or Eden Plaza
Associates, LLC, by operation of law.
The total liability of the Company under said policy and any endorsements
therein shall not exceed, in the aggregate, the face amount of said policy and
costs which the Company is obligated under the conditions and stipulations
thereof to pay.
This endorsement is made a part of said policy and is subject to the exclusions
from coverage, schedules, conditions and stipulations therein, except as
modified by the provisions hereof.
IN WITNESS WHEREOF, the Company has caused this endorsement to be signed and
sealed as of the ______ day of ______________, 1997, to be valid when
countersigned by an authorized officer or agent of the Company, all in
accordance with its by-laws.
Dated: TO BE DETERMINED CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Authorized Signatory
NON-IMPUTATION XXXXXXXXXXX
00
XXXXXXXXXXX
XXXXXXXX TO POLICY NO. 009690019
ISSUED BY
CHICAGO TITLE INSURANCE COMPANY
1. The Company insures the Insured against loss or damage sustained by
reason of any incorrectness in the assurance that, at Date of Policy:
(a) According to applicable zoning ordinances and amendments
thereto, the land is classified Zone I (INDUSTRIAL).
(b) The following use or uses are allowed under that
classification subject to compliances with any conditions,
restrictions, or requirements contained in the zoning
ordinances and amendments thereto, including but not limited
to the securing of necessary consents or authorizations as a
prerequisite to the use or uses.
2. The Company further insures against loss or damage arising from a final
decree of a court of competent jurisdiction:
(a) prohibiting the use of the land, with any structure presently
located thereon, as specified in paragraph 1(b); or
(b) requiring the removal or alteration of the structure on the
basis that, at Date of Policy, the ordinances and amendments
thereto have been violated with respect to any of the
following matters:
(i) Area, width or depth of the land as a building site
for the structure;
(ii) Floor space area of the structure;
(iii) Setback of the structure from the property lines of
the land; or
(iv) Height of the structure.
(v) Parking.
There shall be no liability under this endorsement based on the invalidity of
the ordinances and amendments thereto until after a final decree of a court of
competent jurisdiction adjudicating the invalidity, the effect of which is to
prohibit the use or uses. Loss or damage as to the matters insured against by
this endorsement shall not include loss or damage sustained or incurred by
reason of the refusal of any person to purchase, lease or lend money on the
estate or interest covered by this policy.
This endorsement is made a part of the policy and is subject to all of the terms
and provisions thereof and of any prior endorsements thereto. Except to the
extent expressly stated it neither modifies any of the terms and provisions of
the policy and any prior endorsements, nor does it extend the effective date of
the policy and any prior endorsements, nor does it increase the face amount
thereof.
Dated: TO BE DETERMINED CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Authorized Signatory
CLTA Form 123.2 (Rev. 3-13-87)
71
ASSESSOR'S MAP 461 15
[MAP]
72
ASSESSOR'S MAP 461 85
[MAP]
73
[CITY OF HAYWARD PARCEL MAP]
74
[CITY OF HAYWARD PARCEL MAP NO. 1288]
75
[CITY OF HAYWARD PARCEL MAP NO. 103**]]
76
[CITY OF HAYWARD PARCEL MAP NO. 3526]
77
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this policy:
1. Any law, ordinance or governmental regulation (including but not
limited to building and zoning ordinances) restricting or regulating or
prohibiting the occupancy, use or enjoyment of the land, or regulating
the character, dimensions or location of any improvement now or
hereafter erected on the land, or prohibiting a separation in ownership
or a reduction in the dimensions or area of the land, or the effect of
any violation of any such law, ordinance or governmental regulation.
2. Rights of eminent domain or governmental rights of police power unless
notice of the exercise of such rights appears in the public records at
Date of Policy.
3. Defects, liens, encumbrances, adverse claims, or other matters (a)
created, suffered, assumed or agreed to by the insured claimant; (b)
not known to the Company and not shown by the public records but known
to the insured claimant either at Date of Policy or at the date such
claimant acquired an estate or interest insured by this policy and not
disclosed in writing by the insured claimant to the Company prior to
the date such insured claimant became an insured hereunder; (c)
resulting in no loss or damage to the insured claimant; (d) attaching
or created subsequent to Date of Policy; or (e) resulting in loss or
damage which would not have been sustained if the insured claimant had
paid value for the estate or interest insured by this policy.
78
American Land Title Association
Owner's Policy Form B--1970
(Amended 10-17-70)
POLICY
OF
TITLE
INSURANCE
[CHICAGO TITLE INSURANCE COMPANY LOGO]
CHICAGO
TITLE INSURANCE
COMPANY
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX 00000
CONDITIONS AND STIPULATIONS (CONTINUED)
10. APPORTIONMENT
If the land described in Schedule A consists of two or more parcels which are
not used as a single site, and a loss is established affecting one or more of
said parcels but not all, the loss shall be computed and settled on a pro rata
basis as if the amount of insurance under this policy was divided pro rata as to
the value on Date of Policy of each separate parcel to the whole, exclusive of
any improvements made subsequent to Date of Policy, unless a liability or value
has otherwise been agreed upon as to each such parcel by the Company and the
insured at the time of the issuance of this policy and shown by an express
statement herein or by an endorsement attached hereto.
11. SUBROGATION UPON PAYMENT OR SETTLEMENT
Whenever the Company shall have settled a claim under this policy, all right
of subrogation shall vest in the Company unaffected by any act of the insured
claimant. The Company shall be subrogated to and be entitled to all rights and
remedies which such insured claimant would have had against any person or
property in respect to such claim had this policy not been issued, and if
requested by the Company, such insured claimant shall transfer to the Company
all rights and remedies against any person or property necessary in order to
perfect such right of subrogation and shall permit the Company to use the name
of such insured claimant in any transaction or litigation involving such rights
or remedies. If the payment does not cover the loss of such insured claimant,
the Company shall be subrogated to such rights and remedies in the proportion
which said payment bears to the amount of said loss. If loss should result from
any act of such insured claimant, such act shall not void this policy, but the
Company, in that event, shall be required to pay only that part of any losses
insured against hereunder which shall exceed the amount, if any, lost to the
Company by reason of the impairment of the right of subrogation.
12. LIABILITY LIMITED TO THIS POLICY
This instrument together with all endorsements and other instruments, if any,
attached hereto by the Company is the entire policy and contract between the
insured and the Company.
Any claim of loss or damage, whether or not based on negligence, and which
arises out of the status of the title to the estate or interest covered hereby
or any action asserting such claim, shall be restricted to the provisions and
conditions and stipulations of this policy.
No amendment of or endorsement to this policy can be made except by writing
endorsed hereon or attached hereto signed by either the President, a Vice
President, the Secretary, an Assistant Secretary, or validating officer or
authorized signatory of the Company.
13. NOTICES, WHERE SENT
All notices required to be given the Company and any statement in writing
required to be furnished the Company shall include the number of this policy and
shall be addressed to the Company at the issuing office or to:
CHICAGO TITLE INSURANCE COMPANY
CLAIMS DEPARTMENT
000 XXXXX XXXXX XXXXXX
XXXXXXX, XXXXXXXX 00000-0000
Form No. 3607
79
EXHIBIT C
ASSIGNMENT AND ASSUMPTION OF
SERVICE CONTRACTS, WARRANTIES,
GUARANTIES, PERMITS AND OTHER INTANGIBLE PROPERTY
THIS ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS, WARRANTIES,
GUARANTIES AND OTHER INTANGIBLE PROPERTY (this "Assignment") is made and entered
into as of the ____ day of ___________, 1997, by Eden Plaza Associates, LLC, a
California limited liability company ("Assignor"), to PGP Northern Industrial,
L.P., a Delaware limited partnership ("Assignee").
WITNESSETH:
WHEREAS, Assignor is contemporaneously herewith conveying, pursuant to
that certain Master Contribution Agreement dated ______________, 1997 (the
"Master Agreement") by and among Assignor and Pacific Gulf Properties Inc., a
Maryland corporation and the general partner of Assignee, certain real property
and improvements more particularly described therein, located in the County of
Alameda, State of California, the real property of which is more particularly
described on Exhibit A attached hereto and incorporated herein by this reference
(collectively, the "Real Property", which Real Property together with all
personal property related to the Real Property is collectively the "Property").
Terms used in this Agreement and not otherwise defined shall be given the
meanings defined in the Master Agreement.
WHEREAS, Assignor desires to assign its interest in and to the following
to Assignee as of the date on which title to the Real Property is vested in
Assignee (the "Transfer Date"), and Assignee desires to accept the assignment
thereof and assume Assignor's obligations thereunder from and after the Transfer
Date:
(a) All service contracts described in Schedule 1 attached hereto
and incorporated herein by this reference (the "Contracts");
(b) All Warranties and Guaranties (the "Warranties and
Guaranties", hereafter defined);
(c) All Names and Marks (the "Names and Marks", hereafter
defined);
(d) All Intangible Property (the "Intangible Property", hereafter
defined);
(e) All Licenses and Entitlements (the "Licenses and Entitlements"
as hereafter defined); and
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80
(f) All Deposits and Reimbursements.
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. As of the Transfer Date, Assignor hereby assigns and transfers unto
Assignee all of its right, title, claim and interest in, to and under the (a)
Contracts; (b) Warranties and Guarantees; (c) Names and Marks; (d) Intangible
Property; (e) Licenses and Entitlements; and (f) Deposits and Reimbursements
(collectively the "Assigned Interests"). Assignor hereby agrees to indemnify,
defend and hold harmless Assignee from and against any and all cost, liability,
loss, damage or expense, including, without limitation, reasonable attorneys'
fees and expenses (collectively, "Losses and Liabilities"), arising out of or in
any way related to the Assigned Interests prior to or on the Transfer Date or
which arise out of or are in any way related to the Assigned Interests after the
Transfer Date on account of any fact or circumstance occurring or existing on or
prior to the Transfer Date.
2. Assignee, as of the Transfer Date, hereby accepts the foregoing
assignment and assumes all of the Assignor's obligations under the Assigned
Interests which arise or relate to the period after the Transfer Date. Assignee
hereby agrees to indemnify, defend and hold harmless Assignor from and against
any and all Losses and Liabilities arising out of or in any way related to the
Assigned Interests after the Transfer Date, except for Losses and Liabilities
which arise out of or are in any way related to the Assigned Interests after the
Transfer Date on account of any fact or circumstance occurring or existing on or
prior to the Transfer Date.
3. The following terms shall have the following meanings:
(a) The term "Warranties and Guaranties" as used herein shall mean
and include all warranties and guarantees to the extent assignable, whether or
not written, for all or any portion of the Properties, including, without
limitation, the Improvements and the Tangible Personal Property. The term
"Warranties and Guaranties" shall expressly include, without limitation,
construction warranties from contractors and subcontractors, including without
limitation all warranties and guaranties covering the roofs of the Improvements
or any portion thereof.
(b) The term "Names and Marks" as used herein shall mean and
include all patents, licenses, trademarks, logos, service marks and names used
in connection with the operation of the Properties, and all symbols, emblems
with the operation of the Properties, and all symbols, emblems and logos used in
connection with the ownership or operation of the Properties, whether in black
and white or in color, and irrespective of size,
2
81
and all of Assignor's right, title and interest in and to all goodwill
associated therewith.
(c) The term "Intangible Property" as used herein shall mean and
include all intangible property relating to or used in connection with the
Properties, as defined in the Master Agreement.
(d) The term "Licenses and Entitlements" as used herein shall mean
and include all governmental permits and approvals relating to the construction,
operation, use or occupancy of the Properties, including without limitation, all
licenses, franchises, certifications, authorizations, approvals, rights,
privileges, entitlements and permits issued or approved by any governmental or
quasi-governmental authority or other person or entity having authority over the
Properties, and all applications, filings and submittals therefor, in each case
relating to the operation, ownership, subdivision, development, use or
maintenance of the Properties or any part thereof, including, without
limitation, construction permits, grading permits, elevator permits, machinery
permits, business licenses, ingress and egress permits, development agreements,
subdivision, parcel and tract maps and approvals thereof, plans and/or permits
required under the applicable zoning regulations, variances, utility agreements
and commitments, improvement agreements, certificates of occupancy and the like,
but excluding therefrom for all purposes of this Agreement any licenses issued
to or solely on behalf of any Tenant of Improvements at any of the Properties.
(e) The term "Deposits and Reimbursements" as used herein shall
have the meaning set forth in the Master Agreement.
4. In the event of any litigation between Assignor and Assignee arising
out of the obligations of the parties under this Assignment or concerning the
meaning or interpretation of any provision contained herein, the losing party
shall pay the prevailing party's costs and expenses of such litigation,
including, without limitation, reasonable attorneys' fees and expenses. In
addition to the foregoing award of attorneys' fees to the prevailing party, the
prevailing party in any lawsuit on this Agreement shall be entitled to its
reasonable attorneys' fees incurred in any post judgment proceedings to collect
or enforce the judgment. This provision is separate and several and shall
survive the merger of this Assignment into any judgment on this Assignment.
5. This Assignment shall be binding on and inure to the benefit of the
parties herein, their heirs, executors, administrators, successors-in-interest
and assigns.
6. This Assignment may be executed in any number of counterparts, each
of which shall be deemed an original and all
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82
of which taken together shall constitute one and the same agreement.
7. Nothing contained herein shall be deemed or construed as relieving
the Assignor or Assignee of their respective duties and obligations under the
Master Agreement.
8. All entities constituting Assignor hereunder shall be jointly and
severally liable for the faithful performance of the terms and conditions hereof
to be performed by Assignor.
ASSIGNOR: "EDEN"
EDEN PLAZA ASSOCIATES, LLC, a California
limited liability company
By:_____________________________________
Xxxxxx X. Xxxxxxx, Managing
Member
ASSIGNEE: PGP NORTHERN INDUSTRIAL, L.P., a
Delaware limited partnership
By: PACIFIC GULF PROPERTIES INC., a
Maryland corporation
By: ____________________________________
____________________________________
(Print Name and Title)
By: ____________________________________
____________________________________
(Print Name and Title)
4
83
Exhibit A to Assignment
LEGAL DESCRIPTION OF REAL PROPERTY
THE LAND REFERRED TO IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ALAMEDA,
CITY OF HAYWARD, DESCRIBED AS FOLLOWS:
PARCEL 1:
XXXXXX 0, XXXXXX MAP 1288, FILED SEPTEMBER 25, 1973, BOOK 80 OF PARCEL MAPS,
PAGE 27, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 000-0000-000
PARCEL 2:
PARCEL 1, PARCEL MAP 939, FILED JULY 13, 1972, BOOK 76 OF PARCEL MAPS, PAGE 10,
ALAMEDA COUNTY RECORDS.
EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEED TO EDEN ROCK CO. NO. 3, A
JOINT VENTURE, RECORDED JULY 31, 1978, REEL 5508, IMAGE 378, SERIES NO.
78-145175, OFFICIAL RECORDS.
ASSESSOR'S PARCEL NO. 461-0015-020-2
PARCEL 3:
XXXXXX 0, XXXXXX MAP NO. 939, FILED JULY 13, 1972, IN BOOK 76 OF PARCEL MAPS,
PAGE 10, ALAMEDA COUNTY RECORDS.
TOGETHER WITH:
ALL THAT CERTAIN REAL PROPERTY BEING A PORTION OF PARCEL 1 AS SHOWN ON "PARCEL
MAP NO. 939" WHICH MAP IS FILED IN BOOK 76 OF PARCEL MAPS AT PAGE 10, ALAMEDA
COUNTY RECORDS, SAID REAL PROPERTY BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE CORNER COMMON TO PARCELS 1 AND 2 ON THE NORTHWESTERLY LINE OF
CORPORATE PLACE, AS SHOWN ON THE ABOVE MENTIONED PARCEL MAP, THENCE FROM SAID
POINT OF BEGINNING ALONG SAID NORTHERLY LINE SOUTH 76 DEGREES 38'05" WEST 8.22
FEET; THENCE LEAVING THE LAST SAID LINE AND RUNNING ALONG A LINE PARALLEL TO AND
7.806 FEET SOUTHWESTERLY AT RIGHT ANGLES, FROM THE DIVIDING LINE BETWEEN SAID
PARCELS 1 AND 2 NORTH 31 DEGREES 37'51" WEST 205.78 FEET; THENCE LEAVING SAID
PARALLEL LINE NORTH 58 DEGREES 22'09" EAST 7.806 FEET TO SAID DIVIDING LINE;
THENCE ALONG THE LAST SAID LINE SOUTH 31 DEGREES 37'51" EAST 208.356 FEET TO THE
POINT OF BEGINNING.
SAID REAL PROPERTY IS THE SAME AS "LOT LINE ADJUSTMENT NO. 77-4" APPROVED BY THE
CITY OF HAYWARD PLANNING COMMISSION ON SEPTEMBER 22, 1977.
ASSESSOR'S PARCEL NO. 461-0015-021-01
84
PARCEL 4:
PARCEL ONE OF AMENDED PARCEL MAP 1035 FILED SEPTEMBER 5, 1975 IN BOOK 80 OF
PARCEL MAPS ON PAGE 15, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 461-0085-018-03 (PORTION).
PARCEL 5:
PORTION OF INVESTMENT BOULEVARD, AS SAID BOULEVARD WAS ESTABLISHED BY THE GRANT
OF EASEMENT FROM EDEN LANDING CORPORATION, A CALIFORNIA CORPORATION, TO THE CITY
OF HAYWARD, A MUNICIPAL CORPORATION, DATED JUNE 20, 1967, AND RECORDED JULY 24,
1967 IN REEL 2005 OF OFFICIAL RECORDS OF ALAMEDA COUNTY AT IMAGE 500 (AZ-71982),
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTHERLY RIGHT OF WAY LINE OF INVESTMENT
BOULEVARD WITH THE EASTERLY RIGHT OF WAY LINE OF EDEN LANDING ROAD AS SHOWN ON
PARCEL MAP NO. 1035 FILED IN BOOK 79 OF PARCEL MAPS, PAGE 28, IN THE OFFICE OF
THE ALAMEDA COUNTY RECORDER; THENCE ALONG SAID NORTHERLY RIGHT OF WAY LINE OF
INVESTMENT BOULEVARD THE FOLLOWING THREE COURSES: 1) SOUTH 81 DEGREES 53'26"
EAST 40.130 FEET; 2) SOUTH 48 DEGREES 12'02" EAST 61.294 FEET; 3) SOUTH 08
DEGREES 06'34" WEST 40.000 FEET; THENCE LEAVING SAID NORTHERLY RIGHT OF WAY LINE
NORTH 81 DEGREES 53'26" WEST 67.124 FEET TO A TANGENT CURVE TO THE RIGHT; THENCE
ALONG SAID TANGENT CURVE TO THE RIGHT HAVING A RADIUS OF 24.000 FEET THROUGH A
CENTRAL ANGLE OF 89 DEGREES 59'35" AN ARC DISTANCE OF 37.696 FEET; THENCE NORTH
08 DEGREES 06'09" EAST 50.003 FEET TO THE POINT OF BEGINNING.
ASSESSOR'S PARCEL NO. 416-0085-018-03
85
Schedule 1 to Assignment
DESCRIPTION OF THE CONTRACTS
NONE
86
EXHIBIT D
CAPITAL IMPROVEMENTS
Those improvements required by the Certificates of Substandard Structure.
1
87
EXHIBIT E
EXCHANGE RIGHTS AGREEMENT
This Exchange Rights Agreement (this "Agreement") is made as of
_____________, 1997 among Pacific Gulf Properties Inc., a Maryland corporation
(the "Company"), PGP Northern Industrial, L.P., a Delaware limited partnership
(the "Operating Partnership"), and Eden Plaza Associates, LLC, a California
limited liability company ("Eden").
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Definitions.
The following terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended, and the rules
and regulations of the Securities and Exchange Commission thereunder, all as the
same shall be in effect at the relevant time.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in Los Angeles, California are authorized or required
by law to close.
"Common Stock" means the common stock of the Company, par value $.01
per share.
"Company" means Pacific Gulf Properties Inc., a Maryland
corporation.
"Board of Directors" means the board of directors of the Company and
any committee thereof duly granted specific authority with respect to this
Agreement.
"Eden" means Eden Plaza Associates, LLC, a California limited
liability company.
"Effective Date" shall mean the date of "Closing" as defined in the
Master Contribution Agreement.
"Election Notice" shall have the meaning set forth in Section 4.
"Entitled Unitholder" shall mean each of the following named
individuals, but only the following named individuals, and, as to each
individual, only as long as he personally remains a Unitholder. "Entitled
Unitholder" shall not include any heir, executor, successor or assign of any of
the
88
following named individuals. The "Entitled Unitholders" are Xxxxxx X. Xxxxxxx
and The San Francisco Opera Association.
"Excess Partnership Units" shall have the meaning set forth in
Section 5.
"Excess Shares" has the meaning assigned to such term in the
Articles of Incorporation of the Company, as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange Commission
thereunder, all as the same shall be in effect at the relevant time.
"Exchange Factor" means the number used to calculate the amount of
cash and/or Common Stock to be delivered by the Company (i) pursuant to Section
2 or Section 3 upon the valid delivery to the Company by a Unitholder of an
Exercise Notice, or (ii) pursuant to Section 5 upon the occurrence of a
Mandatory Exchange Event, and in either case an election by the Company to pay
in cash and/or Common Stock as herein provided, and shall initially be equal to
one (1); provided, however, that the Exchange Factor shall be subject to
adjustment, from time to time, as follows:
(a) In the event the Company (i) shall issue rights or warrants to
all holders of Common Stock entitling them to subscribe for or purchase Common
Stock at a price per share less than the Value per share on the date fixed for
the determination of shareholders entitled to receive such rights or warrants,
and (ii) shall not issue similar rights or warrants to all Unitholders entitling
them to subscribe for or purchase Common Stock or Partnership Units at a
comparable price and in comparable amounts per share (determined, in the case of
Partnership Units, by reference to the Exchange Factor) in the event Unitholders
receive Common Stock under this Agreement, then the Exchange Factor in effect
immediately after the time fixed for the determination of shareholders entitled
to receive such rights or warrants shall be increased by multiplying such
Exchange Factor then in effect by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding at the time fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, and the denominator of which shall be the number of
shares of Common Stock outstanding at the time fixed for such determination plus
the number of shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock so offered for subscription would
purchase at the Value on such day.
(b) In the event the Company shall, by dividend or otherwise (in
either case not involving the Company's receipt of consideration therefor),
distribute to all holders of Common Stock (i) shares of capital stock of any
class other than Common
-2-
89
Stock or other than shares of capital stock convertible into Common Stock, (ii)
evidences of its indebtedness or (iii) assets (excluding any regular cash
dividend or distribution lawfully paid under the laws of the state of
incorporation of the Company, any regular dividend or distribution on
outstanding Common Stock, in Common Stock (or any capital stock of the Company
convertible into Common Stock), and any rights or warrants referred to in
paragraph (a) of this definition) and shall not cause a corresponding
distribution to be made to all Unitholders, then the Exchange Factor in effect
immediately after the time fixed for the determination of shareholders entitled
to receive such distribution shall be increased by multiplying such Exchange
Factor then in effect by a fraction, the numerator of which shall be the Value
on the day fixed for such determination, and the denominator of which shall be
such Value less the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive, and as described in a resolution of the
Board of Directors, a copy of which shall be certified by the Secretary of the
Company and promptly delivered to the holders of the Partnership Units) of the
portion of the aggregate shares of capital stock, evidences of indebtedness or
assets so distributed attributable to one share of Common Stock.
(c) In the event that the Company (i) declares or pays a dividend
on its outstanding Common Stock with Common Stock or makes a distribution to all
holders of its outstanding Common Stock in Common Stock, (ii) subdivides its
outstanding Common Stock, or (iii) combines its outstanding Common Stock into a
smaller number of Common Stock, the Exchange Factor shall be adjusted by
multiplying the Exchange Factor by a fraction, the numerator of which shall be
the number of shares of Common Stock issued and outstanding on the record date
for such dividend, distribution, subdivision or combination (assuming for such
purpose that such dividend, distribution, subdivision or combination has
occurred as of such time), and the denominator of which shall be the actual
number of shares of Common Stock (determined without the above assumption)
issued and outstanding on the record date for such dividend, distribution,
subdivision or combination. Any adjustment to the Exchange Factor so made shall
become effective immediately after the effective date of such event, retroactive
to the record date, if any, for such event.
(d) In the event of any reclassification of the Common Stock into
securities other than Common Stock (other than a distribution, subdivision or
combination provided for elsewhere in this definition of "Exchange Factor") then
(i) the "Value" shall thereafter be the exchange price, quoted price, or value
as determined by the Board of Directors, as applicable, of a share or other unit
of the kind of such securities receivable upon such reclassification by a holder
of Common Stock, and (ii) the Exchange Factor in effect immediately after the
effective time of such reclassification shall be adjusted by multiplying such
Exchange Factor then in effect by a number equal to the number of
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90
shares or other units of such securities receivable upon such reclassification
by a holder of one share of Common Stock. In the event of any such
reclassification, appropriate adjustment shall be made in the application of
this definition of "Exchange Factor" after the reclassification to the end that
the provisions of this definition shall be applicable after the reclassification
as nearly equivalent as may be practicable.
(e) If the number of outstanding shares of Common Stock of the
Company are exchanged for a different number or kind of shares or securities of
the Company through reorganization, merger, recapitalization, combination of
shares, or other similar transaction, the Exchange Factor shall be appropriately
and proportionately adjusted to give effect thereto upon consummation of such
event.
(f) For purposes of this definition, the term "Common Stock" shall
include all Common Stock outstanding plus all Excess Shares outstanding.
All determinations of the Exchange Factor will be made by the Board
of Directors, in its sole and absolute discretion but in accordance with the
provisions hereof, and any such determination shall, in the absence of manifest
error, be binding upon each tendering Unitholder.
"Exercise Notice" means an exercise notice in substantially the form
attached hereto as Exhibit C.
"Fractional Interest" shall have the meaning set forth in Section 4.
"Gross Sale Price" shall have the meaning set forth in Section 4.
"HSR" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as the same shall be in effect at the relevant time.
"Liquidating Event" shall have the meaning ascribed to such term in
the Partnership Agreement.
"Mandatory Exchange Event" means either: (i) the close of escrow for
a sale, transfer or other disposition by the Operating Partnership of an
Original Property; or (ii) a Liquidating Event.
"Mandatory Units" shall have the meaning set forth in Section 5.
"Maryland GCL" means the Maryland General Corporation Law, as
amended, as the same shall be in effect at the relevant time.
-4-
91
"Master Contribution Agreement" means that certain Master
Contribution Agreement of even date herewith by and between the Company and
Eden.
"No Exchange Period" means a period expiring two (2) years after the
Effective Date, except where a Unitholder dies (or, in the case of Units owned
as community property by the holder and the holder's spouse, then where either
the holder or the holder's spouse dies) prior to the relevant two (2) year
period, the "No Exchange Period", shall, as to such Unitholder only, expire on
the later of either (i) one (1) year after the Effective Date, or (ii) the death
of such holder.
"Non-Excess Partnership Units" shall have the meaning set forth in
Section 5.
"Operating Partnership" means PGP Northern Industrial, L.P., a
Delaware limited partnership.
"Original Property" shall have the meaning ascribed to such term in
the Partnership Agreement.
"Original Property Ratio" means, for each Original Property, the
ratio of (a) the "Agreed Value" (as defined in the Partnership Agreement) for
that Original Property as set forth on Exhibit D to the Partnership Agreement,
to (b) the aggregate of the Agreed Values for all Original Properties as set
forth on Exhibit D to the Partnership Agreement.
"Partnership Agreement" means the Agreement of Limited Partnership
of the Operating Partnership, as the same may be amended from time to time.
"Partnership Unit" shall have the meaning ascribed to such term in
the Partnership Agreement.
"Person" means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Proposed Sale" shall have the meaning set forth in Section 4.
"Remaining Original Property Ratio" means the sum of the Original
Property Ratios for all Original Properties which at any time remain owned by
the Operating Partnership; provided however, that, in connection with a
Liquidating Event, the "Remaining Original Property Ratio" shall be zero.
"Response Notice" means a response notice in substantially the form
attached hereto as Exhibit B.
"Sale Notice" shall have the meaning set forth in Section 4.
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92
"Settlement Date" means:
(a) with respect to any tender governed by Section 2 or Section 3,
that date which is the later of either of the following:
(i) seven (7) calendar days after the Tender Date; provided,
however, that if the Company does not elect to deliver only shares of Common
Stock to the tendering Unitholder (or such other Person designated in the
Exercise Notice relating to the tender) in satisfaction of all of the Company's
obligations under Sections 2 and 3, this subparagraph (i) shall read "fifteen
(15) calendar days after the Tender Date"; or
(ii) the expiration or termination of the waiting period
applicable to such tender, if any, under HSR.
(b) with respect to any mandatory exchange or redemption governed
by Section 5, the date of the applicable Mandatory Exchange Event; provided,
however, that any such mandatory exchange or redemption shall be deemed to occur
immediately prior to such Mandatory Exchange Event and receipt by the Operating
Partnership of any consideration in connection with such Mandatory Exchange
Event.
"Tender Date" means (a) with respect to any tender governed by
Section 2 or Section 3, the date an Exercise Notice in proper form is received
by the Company; or (b) with respect to any mandatory exchange or redemption
governed by Section 5, the date which is three (3) Business Days prior to the
applicable Mandatory Exchange Event.
"Unit Cash Amount" means, with respect to any tender governed by
Section 2 or Section 3 or any mandatory exchange or redemption governed by
Section 5, the Value, as of the applicable Tender Date, multiplied by the
Exchange Factor, as of the applicable Tender Date; provided, however, that if a
Tender Date shall occur after the record date and prior to the effective date of
any event giving rise to an adjustment to the Exchange Factor pursuant to the
definition thereof, an appropriate adjustment in the Unit Cash Amount shall be
made.
"Unitholder" means an "Original Limited Partner" (as defined in the
Partnership Agreement) who has executed and delivered to the Company a written
agreement to be bound by this Agreement. The initial Unitholder(s) are listed on
Exhibit A attached hereto. Upon any additional Original Limited Partners
becoming Unitholders under this Agreement, the Company shall amend Exhibit A to
reflect the name and address of such additional Unitholders.
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"Value" means, subject to paragraph (c) of the definition of
"Exchange Factor," the average of the daily market price for a single share of
Common Stock for the ten (10) consecutive trading days immediately preceding the
applicable valuation date. The market price for each such trading day shall be:
(i) if the Common Stock is listed or admitted to trading on any national
securities exchange or the NASDAQ-National Market System, the closing price,
regular way, on such day, or if no such sale takes place on such day, the
average of the closing bid and asked prices on such day, (ii) if the Common
Stock is not listed or admitted to trading on any national securities exchange
or the NASDAQ-National Market System, the last reported sale price on such day
or, if no sale takes place on such day, the average of the closing bid and asked
prices on such day, as reported by a reliable quotation source designated by the
Company, or (iii) if the Common Stock is not listed or admitted to trading on
any national securities exchange or the NASDAQ-National Market System and no
such last reported sale price or closing bid and asked prices are available, the
average of the reported high bid and low asked prices on such day, as reported
by a reliable quotation source designated by the Company, or if there shall be
no bid and asked prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than 10 days prior to
the date in question) for which prices have been so reported; provided that if
there are no bid and asked prices reported during the 10 days prior to the date
in question, the Value of the Common Stock shall be determined by the Company
acting in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.
2. Company's Option to Acquire Partnership Units for Cash. After the No
Exchange Period, subject to the provisions of this Agreement, upon the valid
delivery to the Company by a Unitholder of an Exercise Notice and tendering of
the Partnership Units covered thereby, the Company shall have the right and
option, in its sole and absolute discretion, but not the obligation, to acquire
from the Unitholder all, or any portion, of the Unitholder's validly tendered
Partnership Units in exchange for payment, on the Settlement Date, in
immediately available United States funds, of an amount equal to the Unit Cash
Amount as of the Tender Date, multiplied by the number of Partnership Units to
be acquired for cash.
3. Company's Option to Deliver Common Stock
(a) After the No Exchange Period, subject to the provisions of
this Agreement, if, after the valid delivery to the Company by a Unitholder of
an Exercise Notice and tender of the Partnership Units covered thereby, the
Company does not elect pursuant to Section 2 above to purchase for cash all of
the Partnership Units specified in such Exercise Notice and tendered to the
Company, then the Company shall deliver shares of Common Stock to the tendering
Unitholder (or such other Person
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designated in the Exercise Notice relating to the tender). In that event, the
number of shares of Common Stock which shall be so delivered by the Company
shall be equal to the number of Partnership Units tendered in accordance with
the Exercise Notice for which the Company has not elected to pay cash pursuant
to Section 2, multiplied by the Exchange Factor as of the applicable Tender
Date. The Common Stock so delivered shall be duly authorized, validly issued,
fully paid and nonassessable, registered under the Act, and free of any pledge,
lien, encumbrance or restriction created or imposed by the Company or the
Operating Partnership, other than as provided in the Company's Articles of
Incorporation or Bylaws, the Securities Act, the Maryland GCL and relevant Blue
Sky or other state securities or real estate syndication laws and this
Agreement.
(b) In the event of any reclassification of Common Stock into
securities other than Common Stock, the Company's option to deliver Common Stock
pursuant to paragraph (a) of this Section 3 shall be an option to deliver shares
or other units of such securities receivable upon such reclassification by a
holder of Common Stock.
(c) The Unitholders acknowledge that the exchange of Partnership
Units into cash and/or Common Stock is subject to certain substantial
restrictions contained in the Partnership Agreement.
(d) The Unitholders also acknowledge that each certificate or
instrument representing Partnership Units shall bear the following legend and
any other legend required under any applicable state securities law:
"NEITHER THE PARTNERSHIP UNITS IN THE PARTNERSHIP REPRESENTED BY THIS
CERTIFICATE OR INSTRUMENT NOR ANY PART THEREOF OR INTEREST THEREIN MAY BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED
OF, IN WHOLE OR IN PART, UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE
AGREEMENT OF LIMITED PARTNERSHIP OF PGP NORTHERN INDUSTRIAL, L.P., AS
AMENDED FROM TIME TO TIME (A COPY OF WHICH IS ON FILE WITH THE OPERATING
PARTNERSHIP); AND, IN ALL EVENTS, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE PARTNERSHIP UNITS REPRESENTED BY
THIS CERTIFICATE (OR ANY SECURITY ISSUED ON ACCOUNT HEREOF OR WITH RESPECT
HERETO) MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND IN
COMPLIANCE WITH ANY APPLICABLE STATE
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SECURITIES LAWS, OR (B) IF THE PARTNERSHIP HAS BEEN FURNISHED WITH AN
OPINION OF COUNSEL (WHICH COUNSEL AND OPINION BOTH MUST BE ACCEPTABLE TO
THE PARTNERSHIP IN ITS SOLE DISCRETION) FOR THE HOLDER THAT NO SUCH
REGISTRATION IS REQUIRED BECAUSE OF THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION UNDER THE ACT OR OTHERWISE, AND QUALIFICATION OR OTHER
COMPLIANCE UNDER APPLICABLE BLUE SKY OR STATE SECURITIES LAWS."
(e) The Unitholder further acknowledges that each certificate or
instrument obtained under the terms of this Agreement shall bear the following
legend and any other legend required under applicable law:
The Corporation is authorized to issue three classes of capital stock
which are designated as Common Stock, Preferred Stock and Excess Stock.
The Board of Directors is authorized to determine the preferences,
limitations and relative rights of the Preferred Stock before the issuance
of any Preferred Stock. The corporation will furnish, without charge, to
any stockholder making a written request therefor, a copy of the
Corporation's Charter and a written statement of the designations, and any
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption applicable to each class of stock. Requests for such written
statement may be directed to Pacific Gulf Properties Inc. at its principal
executive offices, Attention: Secretary.
The shares of Common Stock represented by this certificate are subject to
restrictions on 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. No Person may
Beneficially Own Capital Stock in excess of 9.8% (in value or in number of
shares, whichever is more restrictive) of the outstanding Capital Stock of
the Corporation, with certain further restrictions and exceptions set
forth in the Corporation's Charter. Capital Stock that may be acquired
upon conversion of convertible securities of the Corporation held,
directly or constructively, by an investor, but not Capital Stock issuable
with respect to
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convertible securities held by others, is deemed to be owned by the
investor and outstanding prior to conversion for purposes of determining
the percentage of Capital Stock held by that Investor. Any Person who
attempts to Beneficially Own Capital Stock in excess of the above
limitations must immediately notify the Corporation. All capitalized terms
in this legend have the meanings detained in the Corporation's Charter.
Transfer or other events in violation of the restrictions described above
shall be null and void ab initio, and the purported transferee or
purported owner shall acquire or retain no rights to, or economic
interests in, any Common Stock held in violation of these restrictions.
The Corporation may redeem such shares upon the terms and conditions
specified by the Board of Directors in its sole discretion if the Board of
Directors determines that a Transfer or other event would violate the
restrictions described above.
In addition, upon the occurrence of certain events, if the restrictions on
ownership are violated, the Common Stock represented hereby may be
automatically exchanged for Excess Stock which will be held in trust for
the exclusive benefit of the transferee or transferees to whom such Common
Stock may ultimately be transferred (without violating these ownership
restrictions). The Corporation has an option to acquire Excess Stock under
certain circumstances. The Board of Directors shall determine the terms,
limitations, and any rights of the Excess Stock as required or prudent to
obtain an IRS Ruling Satisfactory to the Corporation regarding such Excess
Stock, which determination shall be set forth in Articles Supplementary to
the Corporation's Charter. The Corporation will furnish to the holder
hereof upon request and without charge a complete written statement of the
terms and conditions of the Excess Stock. Requests for such statement may
be directed to Pacific Gulf Properties Inc. at its principal executive
offices, Attention: Secretary.
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4. Entitled Unitholder's Option to Receive Property Interest.
(a) In the event of a Mandatory Exchange Event that consists of a
proposed sale of an Original Property or Properties and that would result in
Mandatory Units owned by an Entitled Unitholder being deemed tendered to the
Company pursuant to Section 5 below (the "Proposed Sale"), the Company shall
give written notice (the "Sale Notice") of the Proposed Sale to each such
Entitled Unitholder not less than sixty (60) days prior to the projected closing
date of the Proposed Sale. The Sale Notice shall identify the Original Property
or Properties proposed to be sold, the proposed gross sale price (the "Gross
Sale Price") and the projected closing date of the Proposed Sale. Each such
Entitled Unitholder may elect to exercise its rights pursuant to this Section 4
by giving written notice of such election (the "Election Notice") to the Company
not more that thirty (30) days after the date of the Sale Notice. If the Company
has not received an Entitled Unitholder's written Election Notice within said
thirty (30) days, that Entitled Unitholder shall be conclusively and irrevocably
deemed to have elected to not exercise its rights pursuant to this Section 4
with respect to the Proposed Sale and the Company and the Operating Partnership
shall be free to consummate the Proposed Sale without the provisions of this
Section 4 being applied to that Entitled Unitholder, provided that the Proposed
Sale is consummated within one (1) year after the projected closing date
originally set forth in the Sale Notice. If the Proposed Sale is to be
consummated more than one (1) year after the originally projected closing date,
then any Sale Notice and any Election Notice previously given with respect to
that Proposed Sale shall be of no force or effect and the provisions of this
Section 4 shall apply anew with respect to that Proposed Sale as if no such
previous notices had been given.
(b) The Unitholders, including without limitation the Entitled
Unitholders, shall have no right to approve or object to (i) the proposed Gross
Sale Price or any adjustments thereto; (ii) the closing date of the Proposed
Sale; (iii) the proposed buyer under the Proposed Sale; or (iv) any other term
or provision of the Proposed Sale or any modification or amendment thereof. The
Company, as the general partner of the Operating Partnership, shall have
absolute and exclusive discretion to determine the terms and conditions of, and
the buyer under, any Proposed Sale and may agree to change such terms and
conditions or buyer in its sole and absolute discretion without notice. Except
as provided in the last sentence of Section 4(a), any Election Notice given by a
Unitholder shall be unconditional and irrevocable if the Proposed Sale is
consummated. However, nothing contained herein shall obligate the Company or
Operating Partnership to consummate a Proposed Sale. The Company, as the general
partner of the Operating Partnership, may, in its sole and absolute discretion
and without any liability, elect to terminate or abandon any Proposed Sale,
notwithstanding the
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giving of any Sale Notice or Election Notice with respect thereto or otherwise.
(c) If an Entitled Unitholder timely delivers an Election Notice
pursuant to Section 4(a) with respect to a Proposed Sale, then on the Settlement
Date with respect to such Proposed Sale (such Proposed Sale also being a
Mandatory Exchange Event) the provisions of this Section 4 shall apply to the
extent this Section 4 is inconsistent with Section 5 below. On the Settlement
Date with respect to such Proposed Sale, and immediately prior to the
consummation of such Proposed Sale, the Operating Partnership shall deed an
undivided "Fractional Interest" in the Original Property or Properties which are
the subject of such Proposed Sale to each Entitled Unitholder who has timely
delivered an Election Notice pursuant to Section 4(a) with respect to such
Proposed Sale and to any other Unitholder to whom the Company, in its sole and
absolute discretion, extends the benefits of this Section 4. The Fractional
Interest deeded to each such Unitholder shall be calculated by dividing (i) the
product of the Unit Cash Amount as of the Tender Date multiplied by the number
of Mandatory Units deemed tendered by such Unitholder to the Company with
respect to such Proposed Sale pursuant to Section 5, below; by (ii) the actual
final Gross Sale Price with respect to such Proposed Sale (regardless of the
proposed Gross Sale Price projected in the Sale Notice).
(d) In the event a Fractional Interest in the Original Property or
Properties which are the subject of a Proposed Sale is deeded to a Unitholder,
then that Unitholder shall (i) execute, deliver and acknowledge all deeds,
assignments, agreements and other documents required to be executed, delivered
or acknowledged by the seller under the Proposed Sale to the full extent
necessary to consummate the Proposed Sale as if that Unitholder were the seller
under the Proposed Sale; (ii) pay a share, equal to its Fractional Interest, of
all of the fees, commissions, costs and expenses that would have been incurred
in implementing the Proposed Sale without deeding Fractional Interests to
Unitholders pursuant to this Section 4; (iii) pay its share, equal to a fraction
the numerator of which is its Fractional Interest and the denominator of which
is the sum of all Fractional Interests of all Unitholders receiving Fractional
Interests in connection with the Proposed Sale, of all of the fees, commissions,
costs and expenses that would not have been incurred in implementing the
Proposed Sale but for the deeding of one or more Fractional Interests to
Unitholders pursuant to this Section 4; (iv) upon, and only upon, the
consummation of the Proposed Sale, receive its Fractional Interest of the net
proceeds generated by the Proposed Sale which such Unitholder may direct be held
in or by an exchange escrow or accommodator at such Unitholder's sole cost and
expense; and (v) otherwise diligently cooperate with the Company and Operating
Partnership to implement the Proposed Sale.
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(e) The right of any Entitled Unitholder to participate in a
Proposed Sale in the manner provided in this Section 4 is expressly conditioned
upon the Company's determination, in the Company's reasonable discretion, that
none of the conditions set forth in this Section 4(e) exist with respect to such
Entitled Unitholder. In addition, and without in any way imposing any duty on
the Company to do so, if the Company, in its sole and absolute discretion,
extends the benefits of this Section 4 to any other Unitholder, the Company may
nevertheless subsequently deny the benefits of this Section 4 to any such
Unitholder if the Company, in its reasonable discretion, determines that any of
the conditions set forth in this Section 4(e) exist with respect to such
Unitholder. The conditions of this Section 4(e) are that: (i) there is then
outstanding against such Unitholder any judgement or decree that could attach to
or become a lien upon any property acquired by such Unitholder; (ii) such
Unitholder is the subject of any bankruptcy, insolvency or other proceedings
related to the consolidation, adjustment, discharge, arrangement or
reorganization of its debts or obligations; (iii) the title company issuing
title insurance in connection with the Proposed Sale refuses to insure title, or
adds any exception to the title insurance it does issue, on account of the
deeding of the Fractional Interest to such Unitholder; (iv) any lis pendens,
injunction or other action is filed seeking to prevent the Proposed Sale on
account of the deeding of the Fractional Interest to such Unitholder; (v) the
Company reasonably determines that the implementation of this Section 4 will
materially delay, impede or jeopardize (and such delay, impediment or
jeopardization would be reasonable) the Proposed Sale or result in the Operating
Partnership receiving materially less favorable terms in the Proposed Sale than
would otherwise be the case; or (vi) there has been a change in any law, rule or
regulation such that, in the Company's reasonable determination, the
implementation of the provisions of this Section 4 would result in a materially
adverse consequence to the Company or Operating Partnership, including without
limitation, jeopardize the Company's status as a REIT or the imposition of a
penalty upon the Company or Operating Partnership. Any Unitholder seeking the
benefits of this Section 4 shall, on or before the consummation of the Proposed
Sale, reimburse the Company for all reasonable fees, costs and expenses incurred
by the Company in making the determinations described in this Section 4(e),
including without limitation costs of title insurance, reports and commitments,
litigation searches and credit checks.
(f) Each deed for a Fractional Interest shall be deposited by the
Company into the escrow established for the Proposed Sale with instructions to
the escrow to cause the Fractional Interest deed(s) to be recorded immediately
prior to the recordation of the deed conveying the Original Property or
Properties to the buyer. Such escrow instructions shall give the Company the
right, in its sole and absolute discretion, to unilaterally withdraw from such
escrow at any time prior to
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recordation any Fractional Interest deed to any Unitholder with respect to whom
the Company determines any of the conditions set forth in Section 4(e) exist.
Except as expressly provided in Section 4(g) below, no Unitholder shall have any
right to contest, object to or seek to prevent any such withdrawal of a
Fractional Interest deed from escrow. If the Company determines that any of the
conditions set forth in Section 4(e) exist with respect to a Unitholder, then
the Mandatory Units held by such Unitholder shall be automatically subject to
mandatory exchange or redemption pursuant to Section 5 below.
(g) The sole and exclusive remedy of any Unitholder who contends
that the Company or the Operating Partnership has failed to comply with the
provisions of this Section 4 shall be an action at law for monetary damages
against only the Company and/or the Operating Partnership. Each Unitholder
hereby expressly waives any right or privilege it may now or hereafter have to
(i) name or join any person or entity, including without limitation any
prospective buyer under a Proposed Sale, in any such action for damages; (ii)
seek specific performance of this Section 4; (iii) seek an injunction to enforce
the provisions of this Section 4 or to prevent, delay or impede any Proposed
Sale; (iv) file a lis pendens against any property that is the subject of a
Proposed Sale; or (v) in any other way prevent, delay or impede a Proposed Sale.
Each Unitholder acknowledges (vi) the absolute and paramount need of the Company
and Operating Partnership to be able to consummate any Proposed Sale the Company
deems appropriate without delay or hinderance of any kind on account of any
Unitholder's contention that the Company or the Operating Partnership may not
have complied with this Section 4; and (vii) that an action at law for monetary
damages against only the Company and/or the Operating Partnership is an adequate
remedy on account of the Company's and/or the Operating Partnership's failure to
comply with the provisions of this Section 4.
(h) The Company's sole duty pursuant to this Section 4 shall be to
comply with the provisions of this Section 4. Neither the Company nor the
Operating Partnership makes any representation or provides any assurance that
compliance with the provisions of this Section 4 will be respected or upheld by
any agency or authority or achieve the result desired by any Unitholder. The
monetary damages recoverable by a Unitholder if the Company or the Operating
Partnership fails to comply with the provisions of this Section 4 shall be
limited to the marginal additional income tax liability such Unitholder incurs
as a result of the Mandatory Units deemed tendered by such Unitholder to the
Company in connection with the Proposed Sale being exchanged or redeemed
pursuant to Section 5 rather than this Section 4. It is agreed that any such
failure to comply would not result in any other damages being incurred or
recoverable by a Unitholder, whether consequential, compensatory or otherwise.
Each Unitholder claiming monetary damages under this Section 4
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shall have the burden of proving such damages and shall have the duty to
mitigate those damages to the extent reasonably possible.
(i) Nothing contained herein shall preclude the Company from
extending the benefits of this Section 4 to Unitholders other than Entitled
Unitholders. However, any such extension shall be in the Company's sole and
absolute discretion and subject to any additional terms or conditions as the
Company, in its sole and absolute discretion, may impose. Neither the Company
nor the Operating Partnership shall have any duty or obligation, and neither the
Company nor the Operating Partnership shall incur any liability if the Company
fails, to extend the benefits of this Section 4 to any Unitholders other than
Entitled Unitholders.
(j) Anything contained herein or in any other document to the
contrary notwithstanding, the provisions of this Section 4 may be supplemented
and amended by the mutual agreement of the Company and the Entitled Unitholders
without the need for notice to or consent of any other Unitholder.
5. Mandatory Exchange.
(a) If, on the Settlement Date with respect to a Mandatory
Exchange Event, the aggregate number of Partnership Units which have not been
acquired or converted pursuant to Section 2, Section 3 or Section 4 above
exceeds the product (such product being herein called the "Non-Excess
Partnership Units") of the number of Partnership Units outstanding on the
Effective Date multiplied by the Remaining Original Property Ratio (calculated
without including the Original Property Ratio of any Original Property then
being sold, transferred or otherwise disposed of), then Partnership Units in the
number of such excess (the "Excess Partnership Units") shall automatically be
deemed tendered to the Company, whereupon the provisions of Section 2 and 3
above shall apply without the need of any Exercise Notice or actual tendering of
Partnership Units. In the event of an automatic tender pursuant to this Section
5, each Unitholder holding Partnership Units on the Settlement Date for such
Mandatory Exchange Event shall automatically be deemed to have tendered to the
Company a number of Partnership Units (the "Mandatory Units") equal to the total
number of Partnership Units then held by such Unitholder multiplied by a
fraction, the numerator of which is the number of Excess Partnership Units then
existing, and the denominator of which is the number of then existing
Partnership Units which have not been acquired or converted pursuant to Section
2, Section 3 or Section 4 above.
(b) If, on the Settlement Date with respect to a Mandatory
Exchange Event there has been a voluntary tender of Partnership Units for which
the Settlement Date has not yet occurred, then the Settlement Date for such
voluntary tender shall instead be the Settlement Date with respect to such
Mandatory Exchange Event, but the Tender Date and Xxxx Xxxx
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000
Xxxxxx with respect to such voluntary tender shall remain unchanged.
(c) The settlement of any mandatory exchange or redemption
pursuant to this Section 5 shall be deemed to have occurred prior to the
Mandatory Exchange Event giving rise to such mandatory exchange or redemption.
All Operating Partnership allocations and distributions made pursuant to the
Partnership Agreement on account of any such Mandatory Exchange Event shall be
calculated and made on the basis that the settlement of any mandatory exchange
or redemption pursuant to this Section 5 occurred prior to such Mandatory
Exchange Event.
(d) As of the Settlement Date with respect to a Mandatory Exchange
Event, all certificates representing Partnership Units which have not actually
been surrendered to the Company shall thereafter represent only the Partnership
Units or other securities to which the Unitholder remains entitled under this
Section 5. Upon being notified by the Company of a Mandatory Exchange Event each
Unitholder shall promptly deliver to the Company a completed and duly executed
Exercise Notice with respect to any Excess Partnership Units held by such
Unitholder.
(e) Except as modified by this Section 5, all other provisions of
this Agreement shall apply to an acquisition or conversion of the Partnership
Units pursuant to this Section 5, and any deemed tender of Partnership Units
pursuant to this Section 5 shall be treated as an actual tender for purposes of
the other provisions of this Agreement.
6. Procedure for Exercising Company's Right to Acquire Partnership
Units.
(a) Promptly upon receipt of an Exercise Notice from a tendering
Unitholder (and in no event later than three (3) Business Days after such
receipt), or on or before the Tender Date with respect to any Mandatory Exchange
Event, the Company shall exercise its right to acquire the validly or deemed
tendered Partnership Units by delivering to the tendering Unitholder a completed
and duly executed Response Notice. The Company shall simultaneously deliver to
the Operating Partnership a copy of any such duly executed Response Notice.
(b) Unless an exception applies under applicable law and
regulations, the Company, if it exercises its rights hereunder, will be required
to withhold, and will withhold, thirty one percent (31%) (or such other amount
as applicable law may require) of the gross proceeds (including dollar
equivalent of shares of Common Stock) paid to a tendering Unitholder pursuant to
this Agreement unless the Unitholder provides his, her or its tax identification
number (employer identification number or Social Security Number) and certifies
that such number is correct. Therefore, unless such an exception exists and is
provided in a manner satisfactory to the Company, each tendering
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Unitholder should complete and sign the main signature form on the Exercise
Notice and sign the Substitute Form W-9 included as part of the Exercise Notice,
so as to provide the information and certification necessary to avoid backup
withholding.
(c) All determinations as to the validity and form of any tender
pursuant to this Agreement will be made by the Board of Directors of the
Company, in its sole and absolute discretion but in accordance with the
provisions hereof, and any such determination shall, in the absence of manifest
error, be binding upon each tendering Unitholder and on the Company.
7. Payment.
(a) On the Settlement Date, the Company shall deliver to the
tendering Unitholder (or such other Person designated in the Exercise Notice),
pursuant to the instructions in the Exercise Notice, the cash and/or Common
Stock required to be delivered pursuant to this Agreement.
(b) In all cases, payment for the Partnership Units tendered
pursuant to this Agreement shall be made only after timely receipt by the
Company of the partnership interest certificate(s) relating to such Partnership
Units, a properly completed and duly executed Exercise Notice, appropriate
investment representations concerning the recipient's investment intent with
regard to any Common Stock received hereunder, and any other documents required
by the Exercise Notice.
(c) The Company agrees to use reasonable commercial efforts to
obtain an early termination of the waiting period applicable to each tender, if
any, under the HSR.
(d) Anything in this Agreement to the contrary notwithstanding,
the Company shall not be required to tender or deliver cash, or to issue, tender
or deliver any Common Stock if to do so would cause any violation of the
Securities Act, the Exchange Act, the Maryland GCL, or any applicable Blue Sky
or other state securities or real estate syndication laws. Upon the reasonable
request by the Company, a tendering Unitholder shall deliver to the Company such
other and further documents to ensure compliance with such laws. Both the
Company and the tendering Unitholder shall use commercially reasonable efforts
to permit such tender and delivery to be in compliance with all of the foregoing
laws.
8. Rights as a Partner.
(a) Until the Settlement Date, each tendering Unitholder shall
continue to own such Unitholder's tendered Partnership Units, and will continue
to be treated as the holder of such tendered Partnership Units for all purposes
of the Partnership Agreement, including, without limitation, for purposes of
voting, consent, allocations and distributions.
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(b) On the Settlement Date, all Partnership Units acquired by the
Company pursuant to this Agreement shall automatically, and without further
action required, be converted into and deemed to be an equal number of general
partner interests in the Operating Partnership owned by the Company, and all
rights, title, interest, claim, cause of action, and the like of the Unitholder
arising out of such Unitholder's Partnership Units so acquired and/or status and
interest as a partner as a result thereof shall become the property of the
Company in its entirety, and the Unitholder shall have no further claim of
interest therein or thereto.
9. Rights as a Shareholder. No tendering Unitholder (or other Person
designated in the Exercise Notice, if applicable) shall have any rights as a
shareholder of the Company with respect to shares of Common Stock, if any, to be
received pursuant to this Agreement until the Settlement Date, at which time
such tendering Unitholder (or other Person designated in the Exercise Notice, if
applicable) shall become the holder of record of such shares of Common Stock.
10. Consistent Treatment. Each of the Company, any tendering
Unitholder, and the Operating Partnership shall treat the transaction between
the tendering Unitholder and the Company for Federal income tax purposes as a
sale of the tendering Unitholder's Partnership Units to the Company.
11. Representations and Warranties of Unitholders. On the Effective Date
and on each date that a Unitholder receives Common Stock or other securities or
cash under this Agreement, each Unitholder represents and warrants to the
Company as follows (and each such representation and warranty also constitutes a
condition precedent to the Company's obligation to pay the cash and/or issue the
Common Stock as provided under this Agreement):
(a) Unitholder has the authority to exercise all rights and powers
under this Agreement, including the right and power to deliver the Exercise
Notice, tender Partnership Units and receive all consideration provided
hereunder, and has obtained all consents, approvals, permits and other
clearances required to complete the transactions contemplated hereunder.
(b) Unitholder is delivering good and marketable title to each and
every Partnership Unit tendered hereunder, free and clear of any liens, claims,
encumbrances, restrictions, interests or rights of any other Person, except for
the restrictions on transfer of Partnership Units described in this Agreement.
(c) Unitholder is either (a) an "accredited investor" within the
meaning of Rule 501(a) of Regulation D under the Act, or (b) a person who either
alone or with his, her or its purchaser representative (as defined in Rule
501(h) of Regulation D under the Act) has such knowledge and experience in
financial
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and business matters that he or she is capable of evaluating the merits and
risks of an investment in the Partnership Units, Common Stock or any other
security acquired hereunder. The Unitholder has such knowledge and experience in
financial and business matters as to be capable of evaluating alone, or together
with his, her or its purchaser representative or personal advisor the merits and
risks of an investment in the Partnership Units, Common Stock or any other
security delivered hereunder and protecting his, her or its own interests in
connection with the investment and has obtained, in his, her or its judgment,
alone, or together with his, her or its purchaser representative or personal
advisor sufficient information from the Company to evaluate the merits and risks
of an investment in the Partnership Units, Common Stock or any other security
delivered hereunder. The Unitholder acknowledges that he, she, or it has the
financial ability to bear the economic risk of his, her or its investment in the
Company, has adequate means for providing for his, her or its current needs and
personal contingencies and has no need for liquidity with respect to the
investment in the Company. If other than an individual, the Unitholder also
represents it has not been organized solely for the purpose of acquiring the
Partnership Units, Common Stock or other security acquired under this Agreement.
12. Indemnification. Each Unitholder agrees to indemnify the Company,
the Operating Partnership and their affiliates, officers, directors, partners,
employees, agents and representatives against all losses, claims, damages,
liabilities and expenses whatsoever and reasonable fees and expenses of counsel
incurred in investigating, preparing or defending against, and aggregate amounts
paid in settlement of, any litigation, action, investigation or proceeding by
any governmental agency or body, commenced or threatened, in each case whether
or not a party, or any claim whatsoever based upon, arising from or in
connection with any third party's or such Unitholder's claim against such
Unitholder's Partnership Units at any time prior to delivery to the Company
under this Agreement which arise prior to such delivery, or based upon, rising
from or in connection with the breach of any representation or warranty made by
Unitholder under this Agreement.
13. Miscellaneous.
13.1 Governing Law. This Agreement shall be governed, construed and
enforced in all respects by the laws of the State of California applicable to
contracts made and wholly performed within the State of California by Persons
domiciled in California, without regard to choice of law rules.
13.2 Entire Agreement. This Agreement and the provisions of the
forms of Exercise Notice and Response Notice attached hereto, together with the
Partnership Agreement, and other agreements and documents specifically referred
to herein, constitute the full and entire understanding and agreement with
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regard to the subjects hereof and thereof, and supersede any previous agreements
regarding the matters covered herein.
13.3 Notices. Each notice, demand, request, request for approval,
consent, approval, disapproval, designation or other communication (each of the
foregoing being referred to herein as a "notice") required or desired to be
given or made under this Agreement shall be in writing (except as otherwise
provided in this Agreement) and shall be effective and deemed to have been
received (i) when delivered in person, or (ii) when sent by facsimile
transmission with receipt acknowledged (a) if to a Unitholder, at such
Unitholder's address or telefax number set forth in Exhibit A hereto or, if not
set forth in Exhibit A, in the records of the Operating Partnership, or at such
other address or to the telefax number as such Unitholder shall have furnished
to the Company and the Operating Partnership in writing, (b) if to the Company,
at the address of the Company's principal executive offices and addressed to the
attention of the President and Chief Executive Officer, or at such other address
or to the telefax number as the Company shall have furnished to each Unitholder
and the Operating Partnership in writing or (c) if to the Operating Partnership,
at the address of the Company's principal executive offices and addressed to the
attention of the Corporate Secretary, or at such other address or to the telefax
number as the Operating Partnership shall have furnished to each Unitholder and
the Company in writing.
13.4 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided, however, that no such severability
shall be effective if it materially changes the economic benefit of this
Agreement to any Person.
13.5 Construction. The words such as "herein," "hereinafter,"
"hereof" and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
Whenever the context so indicates, the singular or plural number shall each be
deemed to include the other.
13.6 Use of Term "Assignee". Whenever in this Agreement the term
"assignee" is used, it shall include each assignee, transferee, distributee
(whether or not in liquidation of the distributing Person), assignee of an
assignee through one or more predecessor assignments and, by way of illustration
and not limitation, each Person who becomes an assignee as a result of a secured
creditor exercising its rights under a security agreement and/or applicable law,
in each case, whether the assignment creating the assignee was effected with or
without consideration, by gift or bequest, by operation of law or otherwise. The
terms "assign," "assigned" and "assignment" shall be similarly construed.
-20-
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13.7 Effectiveness and Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the Company, the Operating Partnership
and all Unitholders who sign and deliver counterparts of this Agreement. Subject
to the foregoing, this Agreement shall be binding upon and inure to the benefits
of all parties and their successors, assigns, heirs, executors, administrators
and legal representatives.
13.8 Additional Unitholders. If the Operating Partnership issues
Partnership Units to Persons who are not parties to this Agreement, the Company
may elect to cause such Persons to become parties to this Agreement, in which
case (a) this Agreement shall be amended without the consent of any other party
to make such Persons parties to this Agreement, and (b) such persons shall
execute a counterpart of this Agreement.
13.9 Section Titles. Section titles are for descriptive purposes
only and shall not control or alter the meaning of this Agreement as set forth
in the text.
13.10 Attorney Fees. In the event of any litigation among the
parties hereto to enforce or interpret any provision or right hereunder, the
unsuccessful party to such litigation covenants and agrees to pay the successful
party all costs and expenses reasonably incurred, including without limitation
reasonable attorneys' fees. For the purpose of this Agreement, the term
"attorneys' fees" shall mean the fees and expenses of counsel to the parties
hereto, which may include printing, photostating, duplicating and other
expenses, air freight charges and fees billed for law clerks, paralegals,
librarians and others not admitted to the bar but performing services under the
supervision of an attorney. Such term shall also include all such fees and
expenses incurred with respect to appeals, arbitrations, reference out and
bankruptcy proceedings, and whether or not any action or proceeding is brought
with
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respect to the matter for which said fees and expenses were incurred.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement.
PACIFIC GULF PROPERTIES INC., a Maryland
corporation
By:_________________________________________
Xxxxx X. Xxxxxxxxx, President and Chief
Executive officer
By:_________________________________________
Xxxxxx X. Xxxxxxx, Executive Vice
President, Chief Financial Officer and
Secretary
PGP NORTHERN INDUSTRIAL, L. P., a Delaware
limited partnership
By: PACIFIC GULF PROPERTIES INC., a Maryland
corporation, general partner
By:_____________________________________
Xxxxx X. Xxxxxxxxx, President and
Chief Executive Officer
By:_____________________________________
Xxxxxx X. Xxxxxxx, Executive Vice
President, Chief Financial Officer
and Secretary
EDEN PLAZA ASSOCIATES, LLC, a California
limited liability company
By:_________________________________________
Xxxxxx X. Xxxxxx, Managing Member
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EXHIBIT A
UNITHOLDERS
NAME ADDRESS AND TELEFAX
---- -------------------
EDEN PLAZA ASSOCIATES, LLC, a 000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx limited liability Xxx Xxxxxxxxx, XX 00000
company Telefax: (000) 000-0000
Telephone: (000) 000-0000
A-1
110
EXHIBIT B
RESPONSE NOTICE
[Date] _______________, ____, ____
TO: [Tendering Unitholder] and __________________________, L.P.
On and subject to the terms, provisions, and conditions of that certain
Exchange Rights Agreement ("Agreement") dated as of _____________, 1997 among
Pacific Gulf Properties Inc., a Maryland corporation (the "Company"), PGP
Northern Industrial, L.P., a Delaware limited partnership (the "Operating
Partnership"), and each of the limited partners of the Operating Partnership
listed on Exhibit A thereto, the Company hereby exercises its right to acquire
____________ Partnership Units from (the "Unitholder") pursuant to that certain
Notice of Exercise delivered to the Company by the Unitholder, by delivery of
$_____________ in cash and/or _____________ shares of Common Stock of the
Company.
PACIFIC GULF PROPERTIES INC., a
Maryland corporation
By: ______________________________________
Its: _____________________________________
X-0
000
XXXXXXX X
XXXXXXXX XXXXXX
[Date] _______________, ____, ____
TO: Pacific Gulf Properties Inc.
On and subject to the terms, provisions, and conditions of that certain
Exchange Rights Agreement ("Agreement"), dated as of _____________, 1997 among
Pacific Gulf Properties Inc., a Maryland corporation (the "Company"), PGP
Northern Industrial, L.P., a Delaware limited partnership (the "Operating
Partnership"), and each of the limited partners of the Operating Partnership
listed on Exhibit A thereto, the undersigned Unitholder hereby exercises such
Unitholder's right to tender _____________ Partnership Units owned by such
Unitholder pursuant to this Notice of Exercise. The undersigned Unitholder
hereby affirms each of the representations and warranties contained in the
Agreement, intending that the Company shall rely hereon as a material inducement
to pay the cash and/or issue the shares of Common Stock called for under the
Agreement. Such representations and warranties are true and correct as of the
date hereof, and shall be true and correct as of the "Settlement Date" (as such
term is defined in the Agreement).
________________________, 199_
To: PGP NORTHERN INDUSTRIAL, L. P.
Description of Partnership Units
--------------------------------------------------------------------------------
Name(s) and Partnership Interest Certificate(s)
Address(es) of Enclosed (Attach additional list if
Registered Owner(s) necessary)
Partnership Units of Units of
Interest Partnership Partnership
Certificate Interests Interests
Number(s) Represented by Being
Partnership Tendered
Interest
Certificate(s)
-----------------------------------------------------
Total
Unless otherwise indicated, it will be assumed that all Partnership Units
evidenced by any Partnership Interest Certificate(s) delivered to the Company
are being tendered. See instruction 4.
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NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Gentlemen:
The undersigned hereby provides notice to the Company of the undersigned's
tender of the above-described Partnership Units. All capitalized terms used
herein but not defined herein are used as defined in the Partnership Agreement
or Exchange Rights Agreement.
Subject to, and effective upon, payment (i.e., payment of cash and/or
issuance of shares of common stock of the Company ("Common Stock")) for the
Partnership Units tendered herewith, the undersigned hereby sells, assigns,
transfers, and conveys to the Company, in the event the Company exercises its
rights to purchase the above-described Units pursuant to the Exchange Rights
Agreement, all right, title and interest in and to all the Partnership Units
that are being tendered hereby, together with all rights, claims, interests,
privileges, entitlements, rights to distributions of any and all kinds, causes
of action, and the like in, to, and against the Operating Partnership and any of
its general or limited partners, and hereby irrevocably constitutes and appoints
the Company its attorney in fact, with full power of substitution and
resubstitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), (a) to present such Partnership Units for transfer on
the Operating Partnership's books, and (b) to receive all benefits and otherwise
exercise all rights of beneficial ownership of such Partnership Units all in
accordance with the terms and conditions of the Exchange Rights Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Partnership Units and that, upon payment, the Company will acquire good,
marketable and unencumbered title thereto, free and clear of all liens, claims,
restrictions, charges and encumbrances whatsoever, and the same will not be
subject to any adverse claim. The undersigned will, upon request, execute any
additional documents deemed by the Company to be necessary or desirable to
complete the sale, assignment and transfer of the tendered Partnership Units.
The undersigned further represents that he, she or it is either (a) an
"accredited investor" within the meaning of Rule 501(a) of Regulation D under
the Act, or (b) a person who either alone or with his, her or its purchaser
representative (as defined in Rule 501(h) of Regulation D under the Act) has
such knowledge and experience in financial and business matters that he, she or
it is capable of evaluating the merits and risks of an investment in the
Partnership Units, Common Stock or any other security acquired under the
Exchange Rights Agreement. The Unitholder has such knowledge and experience in
financial and
C-2
113
business matters as to be capable of evaluating alone, or together with his, her
or its purchaser representative or personal advisor the merits and risks of an
investment in the Partnership Units, Common Stock or any other security
delivered under the Exchange Rights Agreement and protecting his, her or its own
interests in connection with the investment and has obtained, in his, her or its
judgment, alone, or together with his, her or its purchaser representative or
personal advisor sufficient information from the Company to evaluate the merits
and risks of an investment in the Partnership Units, Common Stock or any other
security delivered under the Exchange Rights Agreement. The Unitholder
acknowledges that he, she, or it has the financial ability to bear the economic
risk of his, her or its investment in the Company, has adequate means for
providing for his, her or its current needs and personal contingencies and has
no need for liquidity with respect to the investment in the Company. If other
than an individual, the Unitholder also represents it has not been organized
solely for the purpose of acquiring the Partnership Units, Common Stock or other
security acquired under the Exchange Rights Agreement.
The effectiveness of this Notice of Exercise shall not be affected by, and
shall survive, the death or incapacity of the undersigned, and any obligation of
the undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators and legal representatives of the undersigned. Except
as provided in the Exchange Rights Agreement, this tender is irrevocable.
The undersigned understands that a tender of Partnership Units pursuant to
the Exchange Rights Agreement constitutes a binding agreement between the
undersigned and the Company, upon the terms and subject to the conditions of the
Exchange Rights Agreement.
Unless otherwise indicated under "Special Delivery Instructions", please
mail the cash and/or shares of Common Stock for the purchase price and, if
applicable, return the Partnership Interest Certificate(s) for Partnership Units
not tendered (and accompanying documents, as appropriate) to the address(es) of
the registered holder(s) appearing under "Description of Partnership Units
Tendered." In the event that the Special Delivery Instructions are completed,
please issue and deliver the cash and/or the shares of Common Stock for the
purchase price, and any Partnership Interest Certificate for Partnership
Interests not tendered, if applicable, in the name of the registered holder(s)
and transmit the same to the person(s) so indicated.
C-3
114
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5 and 6)
To be completed ONLY if Partnership Interest Certificate(s) for
Partnership Units not tendered and/or cash and/or shares of Common Stock for the
purchase price of Partnership Units purchased are to be sent to someone other
than the undersigned or to the undersigned at an address other than that above.
Mail:
[ ] certificate(s) for shares of Common Stock
[ ] Partnership Interest Certificate(s) for Partnership Units not tendered
to:
Name____________________________________________________________________________
(Please Print)
Address_________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
________________________________________________________________________________
(Tax Identification or Social Security Number)
SIGN HERE
Complete Substitute Form W-9 Included
________________________________________________________________________________
________________________________________________________________________________
(Signature(s) of holder of Partnership Units)
(Must be signed by registered holder(s) as name(s) appear(s) on Partnership
Interest Certificate(s). If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5.)
Dated___________________________________________________________________________
Name(s)_________________________________________________________________________
(Please Print)
Capacity________________________________________________________________________
(Full Title)
Address_________________________________________________________________________
________________________________________________________________________________
(Include Zip Code)
Area Code and Tel. No.__________________________________________________________
Tax Identification or
Social Security No._____________________________________________________________
(Complete Substitute Form W-9)
C-4
115
Guarantee of Signature(s)
(See Instruction 1)
Authorized
Signature_______________________________________________________________________
Name of Firm____________________________________________________________________
Dated___________________________________________________________________________
INSTRUCTIONS
Forming Part of the Terms and Conditions
of the Exchange Rights Agreement
1. Guarantee of Signature. No signature guarantee on this Notice of
Exercise is required unless the registered holder of the Partnership Units has
completed the box entitled "Special Delivery Instructions." In such case all
signatures on this Notice of Exercise must be guaranteed by a member firm of any
registered national securities exchange in the United States or of the National
Association of Securities Dealers, Inc. or by a commercial bank or trust company
(not a savings bank or a savings and loan association) having an office, branch
or agency in the United States.
2. Delivery of Notice of Exercise and Partnership Interest
Certificate(s) or Exchange Rights Agreement Evidencing Rights. This Notice of
Exercise is to be completed by the holder of Partnership Units. Partnership
Interest Certificate(s) for all Partnership Units as well as a properly
completed and duly executed Notice of Exercise, and any other documents required
by this Notice of Exercise, must be received by the Company. No alternative,
conditional or contingent tenders will be accepted.
3. Inadequate Space. If the space provided herein is inadequate, the
Partnership Interest Certificate number(s) and/or other information required
should be listed on a separate schedule attached hereto.
4. Partial Tenders. If fewer than all the Partnership Units evidenced
by any Partnership Interest Certificate(s) submitted are to be tendered, fill in
the number of Partnership Units which are to be tendered in the box entitled
"Partnership Units Being Tendered." In such case, a new Partnership Interest
Certificate for the remainder of the Partnership Interests that was evidenced by
old certificate(s) will be sent to the registered holder, unless otherwise
provided in the appropriate box on this Notice of Exercise, as soon as
practicable. All Partnership Units represented by Partnership Interest
Certificate(s) delivered to the Company will be deemed to have been tendered
unless otherwise indicated.
C-5
116
5. Signatures on Notice of Exercise. The signature(s) must correspond
with the name as written on the face of the Partnership Interest Certificate(s)
without any change whatsoever. If any of the Partnership Units tendered hereby
are owned of record by two or more joint owners, all such owners must sign the
Notice of Exercise. If this Notice of Exercise is signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, each person should so indicate
when signing, and proper evidence satisfactory to the Company of the authority
of each such person so to act must be submitted.
6. Special Delivery Instructions. If Partnership Interest
Certificate(s) for unpurchased Partnership Units are to be returned to a person
other than the signer of this Notice of Exercise or if a certificate for shares
of Common Stock is to be sent to someone other than the signer of this Notice of
Exercise or to an address other than that shown above, the appropriate boxes on
this Notice of Exercise should be completed.
7. Waiver of Conditions. The Company reserves the absolute right to
waive any of the specified conditions of the Offer in the case of the
Partnership Units tendered.
8. Backup Withholding. Under Federal income tax law, a person
surrendering Partnership Units must provide the Company with his, her or its
correct taxpayer identification number ("TIN") on Substitute Form W-9 below
unless an exemption applies. If the correct TIN is not provided, a $50 penalty
may be imposed by the Internal Revenue Service and payments made in exchange for
the surrendered Partnership Units may be subject to backup withholding of that
rate provided by Federal income tax law (such rate being on the date of the
Partnership Agreement and the Exchange Rights Agreement, thirty one percent
(31%)). The TIN that must be provided is that of the registered holder of the
Partnership Units. The TIN for an individual is his or her social security
number.
9. Requests for Assistance or Additional Copies. Questions and requests
for assistance or additional copies of the Partnership Agreement, the Exchange
Rights Agreement and the Notice of Exercise may be directed to the Company.
IMPORTANT TAX INFORMATION
Under Federal income tax laws, a holder whose tendered Partnership Units
are accepted for payment is required by law to provide the Company (as payer)
with his, her or its correct taxpayer identification number on Substitute Form
W-9 below. If such holder is an individual, the taxpayer identification number
is his or her social security number. If the Operating Partnership or the
Company, as applicable, is not provided with the correct taxpayer identification
number, the holder may be
C-6
117
subject to a $50 penalty imposed by the Internal Revenue Service. In addition,
payments that are made to such holder with respect to Partnership Units
purchased pursuant to the Offer may be subject to backup withholding.
If backup withholding applies, the Company is required to withhold that
rate provided by the Federal income tax law (such rate being on the date of the
Partnership Agreement, the Exchange Rights Agreement, thirty one percent (31%)
of any such payments made to the holder of Partnership Units. Backup withholding
is not an additional tax; rather, the tax liability of a person subject to
backup withholding will be reduced by the amount of tax withheld and, if
withholding results in an overpayment of taxes, a refund may be obtained.
Purpose of Substitute Form W-9
To prevent backup withholding on payments that are made to a holder of
Partnership Units purchased pursuant to the Offer, the holder is required to
notify the Company of his, her or its correct taxpayer identification number by
completing the form below certifying that the taxpayer identification number
provided on Substitute Form W-9 is correct.
What Number to Give the Company.
The holder is required to give the Company the social security number or
employer identification number of the record owner of the Partnership Units.
C-7
118
PAYER'S NAME: PGP NORTHERN INDUSTRIAL, L.P. AND
PACIFIC GULF PROPERTIES INC.
Substitute Form Part 1 - Please provide your TIN in Social Security
W-9 the box at right and certify by Number; Employer
signing and dating below Identification
Number
----------------
Department of Certification - Under penalties of
the Treasury Perjury, (i) I certify that the
Internal information provided on this form
Revenue Service is true, correct and complete and
(ii) I am not subject to backup
withholding because: (a) I am
exempt from backup withholding or
(b) I have not been notified by the
Internal Revenue Service (IRS) that
I am subject to backup withholding
as a result of a failure to report
all interest or dividends or (c)
the IRS has notified me that I am
no longer subject to backup
withholding.
Signature ________________________________ Date ____________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF THAT RATE PROVIDED BY THE FEDERAL INCOME TAX LAW
(SUCH RATE BEING ON THE DATE OF THE PARTNERSHIP AGREEMENT AND THE
EXCHANGE RIGHTS AGREEMENT, THIRTY ONE PERCENT (31%)) OF ANY PAYMENTS
MADE TO YOU PURSUANT TO THE EXCHANGE RIGHTS AGREEMENT.
C-8
119
EXHIBIT F
DEPOSITS AND REIMBURSEMENTS
NONE
1
120
EXHIBIT G
GRANT DEED
RECORDING REQUESTED BY
______________________
WHEN RECORDED MAIL TO:
___________________________
___________________________
___________________________
___________________________
___________________________
Attention: _______________
MAIL TAX STATEMENTS TO:
______________________________
______________________________
______________________________
______________________________
________________________________________________________________________________
(Space Above Line for Recorder's Use Only)
GRANT DEED
In accordance with Section 11932 of the California Revenue and Taxation Code,
Grantor has declared the amount of the transfer tax which is due by a separate
statement which is not being recorded with this Grant Deed.
FOR VALUE RECEIVED, EDEN PLAZA ASSOCIATES, LLC, a California limited
liability company, grants to PGP NORTHERN INDUSTRIAL, L.P., a Delaware limited
partnership ("Grantee"), all that certain real property situated in the County
of Alameda, State of California, described on Exhibit A attached hereto and by
this reference incorporated herein (the "Property"), subject to matters of
record or which would be revealed by a survey of the Property.
IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of
___________________,1997.
EDEN PLAZA ASSOCIATES, LLC, a California
limited liability company
By:_____________________________________
Xxxxxx X. Xxxxxxx, Managing Member
1
121
STATE OF _______________ )
) ss.
COUNTY OF ______________ )
On ________________, 199__, before me, the undersigned, a Notary Public in
and for said County and State, personally appeared
_____________________________________________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the within instrument.
WITNESS my hand and official seal.
____________________________________________
Notary Public
122
EXHIBIT H
XXXX OF SALE
FOR VALUE RECEIVED, the undersigned ("Transferor") hereby conveys and
assigns to PGP NORTHERN INDUSTRIAL, L.P., a Delaware limited partnership, all of
the undersigned's right, title and interest in and to all of Transferor's
personal property used in connection with that certain real property described
on Exhibit A attached hereto (the "Property"), including without limitation,
miscellaneous janitorial supplies, office furniture and rental brochures.
TO HAVE AND TO HOLD the foregoing personal property unto the grantee and
its successors and assigns forever.
The undersigned warrants that it owns good and marketable title to the
foregoing personal property and will defend title to said personal property
against all persons claiming a prior right thereto to the extent that such prior
right is alleged to exist on or before the date of this Xxxx of Sale.
All entities constituting Transferor shall be jointly and severally liable
for the faithful performance of the terms and conditions hereof to be performed
by Transferor.
IN WITNESS WHEREOF, the undersigned has executed this Xxxx of Sale on this
____ day of ____________, 1997.
EDEN PLAZA ASSOCIATES, LLC, a California
limited liability company
By: ________________________________________
Xxxxxx X. Xxxxxxx, Managing Member
3
123
Exhibit A to Xxxx of Sale
Legal Description
THE LAND REFERRED TO IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ALAMEDA,
CITY OF HAYWARD, DESCRIBED AS FOLLOWS:
PARCEL 1:
XXXXXX 0, XXXXXX MAP 1288, FILED SEPTEMBER 25, 1973, BOOK 80 OF PARCEL MAPS,
PAGE 27, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 000-0000-000
PARCEL 2:
PARCEL 1, PARCEL MAP 939, FILED JULY 13, 1972, BOOK 76 OF PARCEL MAPS, PAGE 10,
ALAMEDA COUNTY RECORDS.
EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEED TO EDEN ROCK CO. NO. 3, A
JOINT VENTURE, RECORDED JULY 31, 1978, REEL 5508, IMAGE 378, SERIES NO.
78-145175, OFFICIAL RECORDS.
ASSESSOR'S PARCEL NO. 461-0015-020-2
PARCEL 3:
XXXXXX 0, XXXXXX MAP NO. 939, FILED JULY 13, 1972, IN BOOK 76 OF PARCEL MAPS,
PAGE 10, ALAMEDA COUNTY RECORDS.
TOGETHER WITH:
ALL THAT CERTAIN REAL PROPERTY BEING A PORTION OF PARCEL 1 AS SHOWN ON "PARCEL
MAP NO. 939" WHICH MAP IS FILED IN BOOK 76 OF PARCEL MAPS AT PAGE 10, ALAMEDA
COUNTY RECORDS, SAID REAL PROPERTY BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE CORNER COMMON TO PARCELS 1 AND 2 ON THE NORTHWESTERLY LINE OF
CORPORATE PLACE, AS SHOWN ON THE ABOVE MENTIONED PARCEL MAP, THENCE FROM SAID
POINT OF BEGINNING ALONG SAID NORTHERLY LINE SOUTH 76 DEGREES 38'05" WEST 8.22
FEET; THENCE LEAVING THE LAST SAID LINE AND RUNNING ALONG A LINE PARALLEL TO AND
7.806 FEET SOUTHWESTERLY AT RIGHT ANGLES, FROM THE DIVIDING LINE BETWEEN SAID
PARCELS 1 AND 2 NORTH 31 DEGREES 37'51" WEST 205.78 FEET; THENCE LEAVING SAID
PARALLEL LINE NORTH 58 DEGREES 22'09" EAST 7.806 FEET TO SAID DIVIDING LINE;
THENCE ALONG THE LAST SAID LINE SOUTH 31 DEGREES 37'51" EAST 208.356 FEET TO THE
POINT OF BEGINNING.
SAID REAL PROPERTY IS THE SAME AS "LOT LINE ADJUSTMENT NO. 77-4" APPROVED BY THE
CITY OF HAYWARD PLANNING COMMISSION ON SEPTEMBER 22, 1977.
ASSESSOR'S PARCEL NO. 461-0015-021-01
124
PARCEL 4:
PARCEL ONE OF AMENDED PARCEL MAP 1035 FILED SEPTEMBER 5, 1975 IN BOOK 80 OF
PARCEL MAPS ON PAGE 15, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 461-0085-018-03 (PORTION).
PARCEL 5:
PORTION OF INVESTMENT BOULEVARD, AS SAID BOULEVARD WAS ESTABLISHED BY THE GRANT
OF EASEMENT FROM EDEN LANDING CORPORATION, A CALIFORNIA CORPORATION, TO THE CITY
OF HAYWARD, A MUNICIPAL CORPORATION, DATED JUNE 20, 1967, AND RECORDED JULY 24,
1967 IN REEL 2005 OF OFFICIAL RECORDS OF ALAMEDA COUNTY AT IMAGE 500 (AZ-71982),
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTHERLY RIGHT OF WAY LINE OF INVESTMENT
BOULEVARD WITH THE EASTERLY RIGHT OF WAY LINE OF EDEN LANDING ROAD AS SHOWN ON
PARCEL MAP NO. 1035 FILED IN BOOK 79 OF PARCEL MAPS, PAGE 28, IN THE OFFICE OF
THE ALAMEDA COUNTY RECORDER; THENCE ALONG SAID NORTHERLY RIGHT OF WAY LINE OF
INVESTMENT BOULEVARD THE FOLLOWING THREE COURSES: 1) SOUTH 81 DEGREES 53'26"
EAST 40.130 FEET; 2) SOUTH 48 DEGREES 12'02" EAST 61.294 FEET; 3) SOUTH 08
DEGREES 06'34" WEST 40.000 FEET; THENCE LEAVING SAID NORTHERLY RIGHT OF WAY LINE
NORTH 81 DEGREES 53'26" WEST 67.124 FEET TO A TANGENT CURVE TO THE RIGHT; THENCE
ALONG SAID TANGENT CURVE TO THE RIGHT HAVING A RADIUS OF 24.000 FEET THROUGH A
CENTRAL ANGLE OF 89 DEGREES 59'35" AN ARC DISTANCE OF 37.696 FEET; THENCE NORTH
08 DEGREES 06'09" EAST 50.003 FEET TO THE POINT OF BEGINNING.
ASSESSOR'S PARCEL NO. 416-0085-018-03
125
EXHIBIT I
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this "Assignment") dated as of
the ____ day of ______________, 1997, is made and entered into by and between
Eden Plaza Associates, LLC, a California limited liability company ("Assignor"),
and PGP Northern Industrial, L.P., a Delaware limited partnership ("Assignee").
WITNESSETH:
WHEREAS, Assignor is the lessor under certain leases executed with respect
to those certain real properties located in the County of Alameda, State of
California, incorporated herein by this reference (individually and
collectively, the "Properties") more particularly described on Exhibit A,
attached hereto and incorporated herein by this reference, which leases are
described in Exhibit B attached hereto and incorporated herein by this reference
(the "Leases").
WHEREAS, Assignor is contemporaneously herewith conveying the Properties
to Assignee pursuant to that certain Master Contribution Agreement dated
_____________ (the "Master Agreement") by and between Assignor and Pacific Gulf
Properties Inc., a Maryland corporation and the general partner of Assignee.
WHEREAS, Assignor desires to assign its interest in and to the Leases to
Assignee as of the date on which title to the Properties is vested in Assignee
(the "Transfer Date"), and Assignee desires to accept the assignment thereof and
assume Assignor's obligations thereunder from and after the Transfer Date.
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the parties hereby agree as follows:
1. As of the Transfer Date, Assignor hereby assigns to Assignee all of
its right, title and interest in and to the Leases.
2. Assignor warrants and represents that as of the Transfer Date, the
attached Exhibit B includes all of the Leases affecting the Properties and there
are no assignments of or agreements to assign the Leases to any other party.
3. Assignor hereby agrees to indemnify, defend and hold harmless
Assignee from and against any and all cost, liability, loss, damage or expense,
including, without limitation, reasonable attorneys' fees and expenses
(collectively, "Losses and Liabilities"), arising out of or in any way related
to the lessor's obligations under the Leases described in Exhibit B and related
to the period prior to or on the Transfer Date or
126
which arise out of or are in any way related to the lessor's obligations under
said Leases after the Transfer Date on account of any breach or default by
Assignor occurring or existing on or prior to the Transfer Date.
4. Assignee, as of the Transfer Date, hereby accepts the foregoing
assignment and assumes all of the lessor's obligations under the Leases
described in Exhibit B relating to the period from and after the Transfer Date.
Assignee hereby agrees to indemnify, defend and hold harmless Assignor from and
against any and all Losses and Liabilities arising out of Lessor's obligations
under the Leases described in Exhibit B and related to the period after the
Transfer Date, except for Losses and Liabilities on account of any fact or
circumstance occurring or existing on or prior to the Transfer Date.
5. In the event of any litigation between Assignor and Assignee arising
out of the obligations of the parties under this Assignment or concerning the
meaning or interpretation of any provision contained herein, the losing party
shall pay the prevailing party's costs and expenses in such litigation,
including, without limitation, reasonable attorneys' fees and expenses. In
addition to the foregoing award of attorneys' fees to the prevailing party, the
prevailing party in any lawsuit on this Agreement shall be entitled to its
reasonable attorneys' fees incurred in any post judgment proceedings to collect
or enforce the judgment. This provision is separate and several and shall
survive the merger of this Assignment into any judgment on this Assignment.
6. This Assignment shall be binding on and inure to the benefit of the
parties herein, their heirs, executors, administrators, successors-in-interest
and assigns.
7. This Assignment may be executed in any number of counterparts, each
of which shall be deemed an original and all of which taken together shall
constitute one and the same agreement.
8. Nothing contained herein shall be deemed or construed as relieving
the Assignor or Assignee of their respective duties and obligations under the
Master Agreement.
9. All entities constituting Assignor hereunder shall be jointly and
severally liable for the faithful performance of the terms and conditions hereof
to be performed by Assignor.
127
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
the date and year first above written.
ASSIGNOR: "EDEN"
EDEN PLAZA ASSOCIATES, LLC, a California
limited liability company
By:_________________________________________
Xxxxxx X. Xxxxxxx, Managing Member
ASSIGNEE: PGP NORTHERN INDUSTRIAL, L.P., a
Delaware limited partnership
By: Pacific Gulf Properties Inc., a
Maryland corporation, general
partner
By: ____________________________________
____________________________________
(Print Name and Title)
By: ____________________________________
____________________________________
(Print Name and Title)
128
Exhibit A
LEGAL DESCRIPTION OF REAL PROPERTY
THE LAND REFERRED TO IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ALAMEDA,
CITY OF HAYWARD, DESCRIBED AS FOLLOWS:
PARCEL 1:
XXXXXX 0, XXXXXX MAP 1288, FILED SEPTEMBER 25, 1973, BOOK 80 OF PARCEL MAPS,
PAGE 27, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 000-0000-000
PARCEL 2:
PARCEL 1, PARCEL MAP 939, FILED JULY 13, 1972, BOOK 76 OF PARCEL MAPS, PAGE 10,
ALAMEDA COUNTY RECORDS.
EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEED TO EDEN ROCK CO. NO. 3, A
JOINT VENTURE, RECORDED JULY 31, 1978, REEL 5508, IMAGE 378, SERIES NO.
78-145175, OFFICIAL RECORDS.
ASSESSOR'S PARCEL NO. 461-0015-020-2
PARCEL 3:
XXXXXX 0, XXXXXX MAP NO. 939, FILED JULY 13, 1972, IN BOOK 76 OF PARCEL MAPS,
PAGE 10, ALAMEDA COUNTY RECORDS.
TOGETHER WITH:
ALL THAT CERTAIN REAL PROPERTY BEING A PORTION OF PARCEL 1 AS SHOWN ON "PARCEL
MAP NO. 939" WHICH MAP IS FILED IN BOOK 76 OF PARCEL MAPS AT PAGE 10, ALAMEDA
COUNTY RECORDS, SAID REAL PROPERTY BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE CORNER COMMON TO PARCELS 1 AND 2 ON THE NORTHWESTERLY LINE OF
CORPORATE PLACE, AS SHOWN ON THE ABOVE MENTIONED PARCEL MAP, THENCE FROM SAID
POINT OF BEGINNING ALONG SAID NORTHERLY LINE SOUTH 76 DEGREES 38'05" WEST 8.22
FEET; THENCE LEAVING THE LAST SAID LINE AND RUNNING ALONG A LINE PARALLEL TO AND
7.806 FEET SOUTHWESTERLY AT RIGHT ANGLES, FROM THE DIVIDING LINE BETWEEN SAID
PARCELS 1 AND 2 NORTH 31 DEGREES 37'51" WEST 205.78 FEET; THENCE LEAVING SAID
PARALLEL LINE NORTH 58 DEGREES 22'09" EAST 7.806 FEET TO SAID DIVIDING LINE;
THENCE ALONG THE LAST SAID LINE SOUTH 31 DEGREES 37'51" EAST 208.356 FEET TO THE
POINT OF BEGINNING.
SAID REAL PROPERTY IS THE SAME AS "LOT LINE ADJUSTMENT NO. 77-4" APPROVED BY THE
CITY OF HAYWARD PLANNING COMMISSION ON SEPTEMBER 22, 1977.
ASSESSOR'S PARCEL NO. 461-0015-021-01
129
PARCEL 4:
PARCEL ONE OF AMENDED PARCEL MAP 1035 FILED SEPTEMBER 5, 1975 IN BOOK 80 OF
PARCEL MAPS ON PAGE 15, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 461-0085-018-03 (PORTION).
PARCEL 5:
PORTION OF INVESTMENT BOULEVARD, AS SAID BOULEVARD WAS ESTABLISHED BY THE GRANT
OF EASEMENT FROM EDEN LANDING CORPORATION, A CALIFORNIA CORPORATION, TO THE CITY
OF HAYWARD, A MUNICIPAL CORPORATION, DATED JUNE 20, 1967, AND RECORDED JULY 24,
1967 IN REEL 2005 OF OFFICIAL RECORDS OF ALAMEDA COUNTY AT IMAGE 500 (AZ-71982),
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTHERLY RIGHT OF WAY LINE OF INVESTMENT
BOULEVARD WITH THE EASTERLY RIGHT OF WAY LINE OF EDEN LANDING ROAD AS SHOWN ON
PARCEL MAP NO. 1035 FILED IN BOOK 79 OF PARCEL MAPS, PAGE 28, IN THE OFFICE OF
THE ALAMEDA COUNTY RECORDER; THENCE ALONG SAID NORTHERLY RIGHT OF WAY LINE OF
INVESTMENT BOULEVARD THE FOLLOWING THREE COURSES: 1) SOUTH 81 DEGREES 53'26"
EAST 40.130 FEET; 2) SOUTH 48 DEGREES 12'02" EAST 61.294 FEET; 3) SOUTH 08
DEGREES 06'34" WEST 40.000 FEET; THENCE LEAVING SAID NORTHERLY RIGHT OF WAY LINE
NORTH 81 DEGREES 53'26" WEST 67.124 FEET TO A TANGENT CURVE TO THE RIGHT; THENCE
ALONG SAID TANGENT CURVE TO THE RIGHT HAVING A RADIUS OF 24.000 FEET THROUGH A
CENTRAL ANGLE OF 89 DEGREES 59'35" AN ARC DISTANCE OF 37.696 FEET; THENCE NORTH
08 DEGREES 06'09" EAST 50.003 FEET TO THE POINT OF BEGINNING.
ASSESSOR'S PARCEL NO. 416-0085-018-03
130
Exhibit B
DESCRIPTION OF THE LEASES
131
EXHIBIT J
TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS
To inform PGP NORTHERN INDUSTRIAL, L.P., a Delaware limited partnership
("Transferee"), that withholding of tax under Section 1445 of the Internal
Revenue Code of 1954, as amended ("Code"), will not be required upon the
transfer of certain real property to the Transferee by Eden Plaza Associates,
LLC, a California limited liability company ("Transferor"), the undersigned
hereby certifies the following on behalf of the Transferor:
1. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, foreign estate or foreign person (as those terms are defined in
the Code and the Income Tax Regulations promulgated thereunder);
2. The Transferor's U.S. employer or tax (social security)
identification number is 00-0000000.
The Transferor understands that this Certification may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
The Transferor understands that the Transferee is relying on this
Certification in determining whether withholding is required upon said transfer.
The Transferor hereby agrees to indemnify, defend and hold the Transferee
harmless from and against any and all obligations, liabilities, claims, losses,
actions, causes of action, rights, demands, damages, costs and expenses of every
kind, nature or character whatsoever (including, without limitation, reasonable
attorneys' fees and court costs) incurred by the Transferee as a result of: (i)
the Transferor's failure to pay U.S. Federal income tax which the Transferor is
required to pay under applicable U.S. law; or (ii) any false or misleading
statement contained herein.
All entities constituting Transferor hereunder shall be jointly and
severally liable for the faithful performance of the terms and conditions hereof
to be performed by Transferor.
Under penalty of perjury I declare that I have examined this Certification
and to the best of my knowledge and belief it
1
132
is true and correct and complete, and I further declare that I have authority to
sign this document on behalf of the Transferor.
Date: _________________, 1997
EDEN PLAZA ASSOCIATES, LLC, a California
limited liability company
By: ________________________________________
Xxxxxx X. Xxxxxxx, Managing Member
2
133
EXHIBIT K
94-1 FORM 590 1-701
YEAR CALIFORNIA FORM
-------- WITHHOLDING EXEMPTION CERTIFICATE -------------------
590
19__ (For use by individuals, corporations, partnerships, estates, trusts, tax-exempt entities and nonprofit organizations)
===================================================================================================================================
File this form with your withholding agent.
-----------------------------------------------------------------------------------------------------------------------------------
Name
-----------------------------------------------------------------------------------------------------------------------------------
Address (number and street) Daytime telephone number
( )
-----------------------------------------------------------------------------------------------------------------------------------
City State ZIP Code
-----------------------------------------------------------------------------------------------------------------------------------
Complete the appropriate line: Individuals - Social security number __________________ [ ] Married [ ] Single
Corporations - California corporation number (issued by Secretary of State) or F.E.I.N. ___________
Partnerships, Estates, Irrevocable Trusts and Tax-Exempt Entities - F.E.I.N. ______________________
NOTE: Failure to provide your identification number will render this certificate void.
To ___________________________________________________________________________________
(Withholding Agent or Payer)
INDIVIDUALS:
CERTIFICATE OF RESIDENCY
Under penalties of perjury, I hereby certify I am a resident of California and I reside at the address shown above. Should I become
a nonresident at any time, I will promptly inform you. See Side 2 for the definition of a resident.
Signature _________________________________________________________________________________ Date _________________________________
CERTIFICATE OF RESIDENCY OF DECEASED PERSON
Under penalties of perjury, I hereby certify as executor of the above named person's estate, the decedent was a California resident
at the time of death.
Name of executor (type or print) _________________________________________________________________________________________________
Signature _________________________________________________________________________________ Date _________________________________
CORPORATIONS:
Under penalties of perjury, I hereby certify the above-named corporation has a permanent place of business in California at the
address shown above or is qualified to do business in California. Should this corporation cease to have a permanent place of
business in California or be qualified to do business in California, I will promptly inform you. See Side 2 for the definition of
permanent place of business.
Name and Title of corporate officer (type or print) ______________________________________________________________________________
Signature _________________________________________________________________________________ Date _________________________________
PARTNERSHIPS:
Under penalties of perjury, I hereby certify the above-named partnership has a permanent place of business in California at the
address shown above, and that it is subject to the laws of California. I further certify that the partnership will file California
returns and withhold on foreign and domestic nonresident partners when required. Should the partnership cease to do any of the
above, I will promptly inform you.
Name and Title (type or print) ___________________________________________________________________________________________________
Signature _________________________________________________________________________________ Date _________________________________
TAX-EXEMPT ENTITIES AND NONPROFIT ORGANIZATIONS:
Under penalties of perjury, I hereby certify that the above-named entity is exempt from tax under California or federal law. Should
this entity cease to be exempt from tax, I will promptly inform you.
Name and Title (type or print) ___________________________________________________________________________________________________
Signature _________________________________________________________________________________ Date _________________________________
IRREVOCABLE TRUSTS:
Under penalties of perjury, I hereby certify that at least one trustee of the above-named irrevocable trust is a California
resident. Should the trustee become a nonresident at any time, I will promptly inform you.
Name and Title (type or print) ___________________________________________________________________________________________________
Signature _________________________________________________________________________________ Date _________________________________
For Privacy Act Notice, see form FTB 1131 (individuals only).
----------------------------------------------------------------------------------------------------------------------------------
Form 590 (REV. 1993) Side 1
134
EXHIBIT L
EDEN LEGAL OPINION
At the Closing, Eden shall cause to be delivered to PGP and the Operating
Partnership an opinion of counsel, in form and substance reasonably acceptable
to PGP and the Operating Partnership, containing the legal opinion that: (i)
Eden has the power and authority to enter into and perform its obligations under
this agreement, the OP Agreement, and the Exchange Rights Agreement
(collectively, the "Agreements"); (ii) the Agreements have been duly authorized
by all necessary action on the part of Eden, and have been duly executed and
delivered by Eden; and (iii) the Agreements constitute the legally valid and
binding obligation of Eden, enforceable in accordance with their respective
terms, except as enforcement may be limited by bankruptcy laws or the laws
affecting the rights of creditors generally; (iv) Eden and each of its
constituent entities are duly organized and validly existing under the laws of
the state of their incorporation, and each are qualified to do business in the
State of California. Additionally, in rendering the enforceability opinion
described in clause (iii) above, counsel for Eden shall be entitled to rely on
the representation of Eden, without further investigation, that the solicitation
materials utilized by Eden to obtain the approval of the Eden Entities to this
agreement and the transactions herein contemplated did not misstate or omit to
state any material fact, and were otherwise accurate and complete in all
material respects.
1
135
EXHIBIT M
LEGAL OPINION OF PGP
At the Closing, PGP shall cause to be delivered to Eden an opinion of
counsel, in form and substance reasonably acceptable to Eden, containing the
legal opinion that: (i) PGP has the power and authority to enter into and
perform its obligations under this agreement, the OP Agreement, and the Exchange
Rights Agreement (collectively, the "Agreements"); (ii) the Agreements have been
duly authorized by all necessary action on the part of PGP, and have been duly
executed and delivered by PGP; (iii) the Agreements constitute the legally valid
and binding obligations of PGP, enforceable in accordance with their respective
terms, except as enforcement may be limited by bankruptcy laws or the laws
affecting the rights of creditors generally; (iv) PGP is duly organized and
validly existing under the laws of the state of its incorporation, and is
qualified to do business in the State of California. Additionally, in rendering
the enforceability opinion described in clause (iii) above, counsel for PGP
shall be entitled to rely on the representation of PGP, without further
investigation, that the solicitation materials utilized by Eden to obtain the
approval of the Eden Entities to this agreement and the transactions herein
contemplated did not misstate or omit to state any material fact, and were
otherwise accurate and complete in all material respects.
2
136
EXHIBIT N
NOTICE OF LEASE ASSIGNMENT
_________________, 1997
To: _______________________
_______________________
_______________________
_______________________
RE: Notice of Lease Assignment
This letter is to notify you that the property commonly known as the
__________________ ("Property") has this date been sold and ownership
transferred.
In connection with this sale, all of the interest of the lessor under your
lease of space in the Properties has been transferred. You are hereby notified
that, from and after the date hereof and until further notice, all future
payments under your lease should be made payable to "______________" (the
"Property Manager") and mailed to the Properties Manager, whose address is
___________ ____________________. In addition, all questions or other matters
regarding your lease should be directed to the Properties Manager at (____)
__________.
Also in connection with this sale, your security deposit in connection
with your lease in the amount of ______ has been transferred to the Properties
Manager. The return of any such security deposit will be conditioned upon and
subject to the terms and conditions of the lease and the legal requirements of
the State of California. All future inquiries regarding security deposits are to
be directed to the Properties Manager.
Thank you for your cooperation.
Very truly yours,
______________________________
______________________________
______________________________
1
137
EXHIBIT 0
CIGNA RESTRUCTURE PROPOSAL
MORTGAGE LOAN APPLICATION AND AGREEMENT
EDEN PLAZA
138
AGREEMENT
TABLE OF CONTENTS
SECTION I - PRINCIPAL LOAN TERMS
1.1 Borrower.................................................................1
1.2 Lender Definition........................................................1
1.3 Loan Amount..............................................................1
1.4 Term.....................................................................1
1.5 Interest Rate............................................................1
1.6 Monthly Installments.....................................................1
1.7 Prepayment and Prepayment Fee..........................................2-3
1.8 Late Payments/Charges/Defaults...........................................3
1.9 No Personal Liability..................................................3-4
SECTION 2 - CLOSING PROCEDURE
2.1 Good Faith Deposit.....................................................4-5
2.2 Lender Fee...............................................................5
2.3 Engineering Costs Deposit................................................5
2.4 Closing Date/Expiration..................................................5
2.5 Material Adverse Change..................................................5
SECTION 3 - SECURITY AND BORROWER'S COVENANTS
3.1 Security...............................................................5-6
3.2 Leasing..................................................................6
3.3 Restrictions on Transfer.................................................6
3.4 No Secondary Financing...................................................6
3.5 UCC Security Interest....................................................6
3.6 Taxes....................................................................6
3.7 Insurance................................................................6
3.8 Annual Reports...........................................................7
3.9 Disposition of Condemnation/Insurance Proceeds.........................7-8
3.10 Management Agreement.....................................................8
SECTION 4 - DUE DILIGENCE
4.1 Submissions..............................................................8
4.2 Title, Documents, Borrower's Counsel Opinion and Other Matters...........8
4.3 Survey.................................................................8-9
4.4 Property Condition And Use Requirements..................................9
4.4.1 Engineering Requirements...........................................9
4.4.2 Earthquake Requirements.........................................9-10
4.4.3 Environmental, Asbestos and Land Use Matters...................10-11
4.4.4 Americans with Disabilities Act ("ADA") Requirements..............11
4.5 Evidence of Approvals...................................................12
SECTION 5 - MISCELLANEOUS PROVISIONS
5.1 Interpretation..........................................................12
5.2 Costs...................................................................12
5.3 No Commitment...........................................................12
5.4 No Prior Agreement......................................................12
5.5 Entire Agreement........................................................12
5.6 Choice of Law...........................................................12
5.7 No Assignment...........................................................12
5.8 Status of Principals....................................................13
139
Signatures..........................................................................13
Exhibit A SPECIAL PROVISIONS (if Applicable)
Exhibit B DESCRIPTION OF PROPERTY
Exhibit C RENTS AND LEASES
Exhibit D FORM OF LETTER OF CREDIT
Exhibit E STANDARD FORMS
E-1 Survey Checklist
E-2 Lease Estoppel Certificate
E-3 Subordination, Non-Disturbance and Attornment Agreement
140
MORTGAGE LOAN APPLICATION AND AGREEMENT
This Mortgage Loan Application and Agreement and any exhibits attached hereto
(this "Agreement") is an irrevocable offer by Borrower (as hereinafter defined)
to borrow from Lender (as hereinafter defined) under the terms and conditions
contained herein (the "Loan"). Borrower's offer shall be irrevocable for the
period ending at 5:00 p.m. on July 30, 1997 ("Lender Acceptance Date"), and may
be accepted by Lender at any time during this period. If Lender approves the
Loan and executes this Agreement, then Lender agrees to lend and Borrower agrees
to borrow on the terms and conditions herein set forth. If Lender does not
accept this Agreement on or before the Lender Acceptance Date, then such offer
shall be automatically revoked as of such date and the Good Faith Deposit,
Engineering Cost Deposit and Lender Fee (as hereinafter defined) received by
CIGNA Investments, Inc. ("CII") shall be returned to Borrower and this Agreement
shall be null and void.
SECTION I - PRINCIPAL LOAN TERMS
1.1 Borrower. The Borrower is _____________________________________.
Holders of substantial interest in the Borrower or the Real Property are
identified in Exhibit A ("Special Provisions").
1.2 Lender Definition: The term "Lender" as used herein shall include CII,
its affiliate(s), separate account(s), nominee(s) or subsidiary(ies),
and any investor, participant or assignee to whom the Loan, in whole or
in part, may be sold prior to or subsequent to the Closing Date
(hereinafter defined). Any such sale will not modify Borrower's or
Lender's rights or obligations hereunder or under the loan documents.
1.3 Loan Amount: $12,000,000.
1.4 Term: The Loan shall be for a term (the "Term") of 5 years, commencing
on the date funds are first advanced to or for the benefit of Borrower
(the "Closing Date") and ending on a date (the "Maturity Date") which
shall be the first day of the first calendar month following the end of
the Term.
1.5 Interest Rate: ______% per annum (the "Interest Rate"). In no event will
Lender receive interest in excess of that allowed by applicable state
law.
1.6 Monthly Installments: Monthly installments in the amount of $______
(based on a 25 year amortization schedule), (interest only), shall be
due on the first day of each month (the "Monthly Payment Date")
commencing on the first calendar day of the second month following the
Closing Date. Such payments shall be applied first to interest with the
remainder, if any, to be applied to principal. Interest will be applied
on the basis of a 360-day year and 30-day month. Borrower shall pay at
closing interest from and including the Closing Date to the first day of
the first calendar month after the Closing Date occurs; interest paid at
closing shall be calculated on the basis of a 365-day year and the
actual number of days from the Closing Date to the first day of the
first calendar month following closing.
June 26, 1997
Page 1
141
1.7 Prepayment and Prepayment Fee: The Loan is closed to prepayment (the
"Closed Period") until the third anniversary of the first Monthly
Payment Date, each such annual period being hereinafter referred to as a
"Loan Year".
Borrower may prepay the Loan in full, but not in part, on any Monthly
Payment Date after the Closed Period provided Borrower gives Lender 60
days' prior written notice and pays a prepayment fee (the "Prepayment
Fee") calculated as follows:
The greater of (a) 1% of the then-existing balance of the Loan,
or (b) Yield Maintenance as defined below.
In the event of a prepayment during the Closed Period resulting from a
default, acceleration or any other reason, Borrower shall pay the Lender
a prepayment fee (the "Default Prepayment Fee") calculated as follows:
(a) 2% of the then existing balance of the Loan, plus
(b) Yield Maintenance as defined below.
Yield Maintenance: Yield Maintenance is defined as the sum of Present
Values on the date of prepayment of each Monthly Interest Shortfall for
the remaining Term of the Loan discounted at the monthly Treasury Yield.
The Monthly Interest Shortfall is calculated for each monthly payment
date and is the product of (i) the positive difference, if any, of the
Semi-Annual Equivalent Rate less the Treasury Yield, divided by 12,
times (ii) the outstanding principal balance of the Loan on the Monthly
Payment Date for which the calculation is made for each full and partial
month remaining in the Term.
The Present Value is then determined by discounting each Monthly
Interest Shortfall at the Treasury Yield divided by twelve.
FOR EXAMPLE: If a 9% loan were prepaid with 24 months remaining in the
Term, at a time when Federal Reserve Statistical Release H. 15 (519)
reported a two-year Treasury Yield of 7.0%; and the outstanding loan
balance was $10,000,000, then:
Semi-Annual Equivalent Rate .0917
less the Treasury Yield -.0700
------------
equals the positive rate difference .0217
divided by 12
equals the monthly rate difference .001808
times the principal balance x$10,000,000
------------
equals the Monthly Interest Shortfall $18,080.00
The sum of the Present Values of all the Monthly Interest Shortfalls
($18,080) discounted at the monthly Treasury Yield (7% divided by 12 or
.58333%) equals $403,818.60.
The "Semi-Annual Equivalent Rate" for this loan is ____%.
The "Treasury Yield" will be determined by reference to the Federal
Reserve Statistical Release H.15 (519) of Selected Interest Rates (or
any similar successor publication of
June 26, 1997
Page 2
142
the Federal Reserve) for the first week ending not less than two full
weeks prior to the prepayment date. If the remaining Term is less than
one year, the Treasury Yield will equal the yield for 1-Year Treasury
Constant Maturities. If the remaining Term is equal to one of the
maturities of the Treasury Constant Maturities (e.g., 1-year, 2-year,
etc.), then the Treasury Yield will equal the yield for the Treasury
Constant Maturity with a maturity equaling the remaining Term. If the
remaining Term is longer than one year but does not equal one of the
maturities of the Treasury Constant Maturities, then the Treasury Yield
will equal the yield for the Treasury Constant Maturity closest to but
not exceeding the remaining Term.
1.8 Late Payments/Charges/Defaults. All payments of principal, interest and
applicable escrow amounts not received within five (5) business days
following the due date of such payments shall constitute an event of
default. The failure by Borrower to perform any other duty of a monetary
or non-monetary nature under the loan documents, which failure to
perform is not cured within thirty (30) days after notice from Lender of
such failure to perform, shall also constitute an event of default
except if such failure is not susceptible of cure within such period, so
long as Borrower has commenced and thereafter diligently pursues such
cure and provided further that such cure occurs within a reasonable
period of time but in no event greater than 120 days. In such event,
Lender may exercise any and all remedies to which it may be entitled,
including without limitation, acceleration of the principal
indebtedness. Delinquent payments of principal, interest and applicable
escrow amounts not received by the due date of such payments shall bear
a one-time late charge equal to the lesser of four percent (4%) of the
delinquent payment or the maximum amount which shall be permitted by
applicable state law. Upon acceleration of the Loan, the entire amount
of principal, interest and other charges due as of the date of
acceleration shall bear interest at a rate equal to the lesser of (i)
the Interest Rate plus four percent (4%) per annum, or (ii) the maximum
amount permitted by law.
1.9 No Personal Liability: No judgment for the repayment of the indebtedness
evidenced by the note or in any action to foreclose the Mortgage (as
hereinafter defined) or to collect any amount payable under the loan
documents will be satisfied out of the personal assets of Borrower or of
any other holders of beneficial interest in the Borrower, except that
Lender's sole recourse for such judgment(s) shall be against the Real
Property (hereinafter defined) and other collateral as provided pursuant
to this Agreement. The foregoing limitation on liability shall not
apply, and Borrower [and Pacific Gulf Properties) shall be personally
liable, [jointly and severally], for the following acts or omissions, to
the extent described:
ACT OR OMISSION LIABILITY
--------------- ---------
(i) Borrower misapplies any To the extent of such misapplication;
condemnation or insurance
proceeds attributable to the Real
Property,
(ii) Borrower misapplies any security To the extent of such misapplication;
deposits attributable to the Real
Property,
June 26, 1997
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143
(iii) Borrower collects rents in advance To the extent of such rents collected in
in violation of any covenant under advance;
the loan documents,
(iv) Borrower commits any fraud, To the extent of any remedies available at
misrepresentation or waste, law or equity;
(v) Gross revenues from the Real To the extent of any funds diverted from such
Property are sufficient to pay any payments or expenses (during the period 12 months
portion of the indebtedness, prior to Lender's notice of
operating and maintenance acceleration through the date Lender takes
expenses, insurance premiums title to the Real Property);
deposits into a reserve account, or
other sums required by the loan
documents, and Borrower fails to
make such payments or deposits
when due,
(vi) Borrower enters into any guarantee As provided in such guarantee,
and/or indemnification agreement(s) indemnification or master lease;
and/or master lease(s), as may be
required under this Agreement,
(vii) Borrower fails to pay real estate To the extent of any unpaid taxes,
taxes and assessments which are a assessments and any additional interest,
lien against the Real Property during penalties or other charges assessed as a
the period of Borrower's ownership, result of such non-payment;
(viii) Borrower fails to maintain the level In the amount of the loss incurred as the
of insurance required under the loan result of such uninsured casualty or
documents, to the extent that a uninsured liability.
casualty or liability occurs or arises
and insurance proceeds would have
been available had such insurance
been maintained,
The provisions of this paragraph will not affect other remedies
available to Lender or Lender's rights in the Real Property.
SECTION 2 - CLOSING PROCEDURE
2.1 Good Faith Deposit: This Agreement must be accompanied by a good faith
deposit ("Deposit") in the form of cash or certified check of $240,000
made payable to Connecticut General Life Insurance Company to be
retained by Lender as consideration for the holding of funds for future
disbursement.
Instead of submitting the Deposit in cash or certified check, Borrower
may submit $120,000 in cash or certified check and an unconditional and
irrevocable sight draft letter of credit in the amount of $120,000,
drawn on a bank satisfactory to Lender, payable to Lender, expiring no
earlier than 30 days beyond the Expiration Date (as
June 26, 1997
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hereinafter defined) of this Agreement and substantially in the form
attached hereto as Exhibit D ("Form of Letter of Credit").
The Deposit shall be held free of trust as security for Borrower's
obligations under this Agreement, and any interest earned on the cash
portion of the Deposit will be retained by Lender. The Deposit will be
returned if and when the Loan closes, or if the Lender fails to accept
this Agreement as provided herein.
Should the Loan fail to close prior to the Expiration Date for any
reason (except for the Lender's sole default) or in the event Borrower
does not fulfill Borrower's obligations under this Agreement: (i) the
Deposit (including any payments obtained by cashing a letter of credit)
will be retained by Lender as partial compensation for holding funds for
future disbursement; (ii) Lender shall have the right to exercise any
rights and remedies Lender may have at law or in equity, which rights
and remedies shall include (without limitation) the right to seek
damages, expenses, loss of bargain, and/or the right of specific
performance; and (iii) unless Lender's obligation to fund the Loan has
already expired, Lender may, at Lender's sole option, terminate Lender's
obligation to fund the Loan.
2.2 Lender Fee: This agreement must be accompanied by a Fee (the "Lender
Fee") in cash or certified check of $15,000 made payable to CIGNA
Investments, Inc. If Lender executes the Agreement as provided herein,
the Lender Fee will be earned by Lender whether or not the Loan closes
except for failure of Lender to fulfill its obligations under this
Agreement. In the event Lender does not accept this Agreement, the
Lender Fee will be returned to Borrower.
2.3 Engineering Costs Deposit: This Agreement must also be accompanied by a
deposit (the "Engineering Costs Deposit") of $15,000 in cash or
certified check made payable to CIGNA Investments, Inc. to be applied to
the costs of the inspections and reports to be prepared by third parties
required under the provisions of Section 4.4, exclusive of the ADA
Survey (Sec. 4.4.4).
The Engineering Costs Deposit is only an estimate of the costs of said
inspections and reports. Borrower will receive a refund if the costs are
less, and shall pay any excess at or before Closing, if the costs are
more than the amount estimated.
2.4 Closing Date/Expiration: Under no circumstances will Lender be obligated
to close the loan and disburse loan funds before August 1, 1997, or
after August 31, 1997, (the "Expiration Date") unless these dates are
changed in writing by Lender at Lender's sole option.
In the event this loan has not closed by the Expiration Date, Lender
shall, at Borrower's request and upon Borrower's payment of a fee
("Extension Fee"), extend the Expiration Date for one additional thirty
(30) day period ("Extension Period"), provided that such request and
such Extension Fee is received by Lender on or before the Expiration
Date. The Extension Fee shall be $25,000.
2.5 Material Adverse Change: Lender shall not be obligated to close the Loan
if there is any material adverse change in Borrower's financial position
(or that of any guarantor or principal of Borrower), the Real Property
(as hereinafter defined), rental income, the rent roll attached hereto
as Exhibit C-1, or any other features of the transaction from
June 26, 1997
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145
that which existed on the date of this Agreement or from the
representations of Borrower contained herein. From the date of this
Agreement, neither the Borrower nor any guarantor or principal of
Borrower nor any lessee shall be involved in any bankruptcy,
reorganization or insolvency proceedings, or in any criminal proceedings
or in government receivership or in a FDIC or FSLIC proceeding.
SECTION 3 - SECURITY AND BORROWER'S COVENANTS
3.1 Security: REAL PROPERTY NAME: Eden Plaza/Eden Rack
REAL PROPERTY LOCATION: Hayward, California
The Loan shall be secured by (a) a first priority mortgage or deed of
trust (the "Mortgage") on Borrower's interest in the Land and
Improvements (together, the "Real Property") described in Exhibit B, (b)
a first priority security interest in the Personal Property described in
Exhibit B, and (c) a first priority Assignment of Rents and Leases
described in Exhibit C.
3.2 Leasing: Borrower will meet Lender's leasing requirements prior to
closing as described in the attached Exhibit C ("Rents and Leases").
3.3 Restrictions on Transfer Borrower shall not transfer, sell or assign the
Real Property, any interest in the Real Property or any interest in
Borrower.
3.4 No Secondary Financing: Borrower shall not encumber the Land or the
Improvements with any lien other than the lien of the Mortgage.
3.5 UCC Security Interest: Lender shall require a first priority security
interest on all personal property, fixtures and equipment now or
hereafter used in the operation of the Real Property, with security
agreements and Uniform Commercial Code ("UCC") Financing Statements to
be executed and filed with the appropriate county and/or state offices.
Not less than thirty (30) days prior to closing Borrower agrees to
furnish a detailed and certified schedule satisfactory in form and
substance to Lender of all personal property, fixtures and equipment
which will be used in the operation of the Real Property and owned by
Borrower.
3.6 Taxes: The Real Property must be a separate tax parcel, separate and
apart from any other property owned by Borrower or anyone else. The loan
documents will provide for monthly deposits equal to one-twelfth of the
annual estimated real estate taxes and assessments. At the loan closing
an initial deposit will be made in an amount which, when added to the
monthly deposits to be paid within the current tax and assessment
period, will be sufficient to satisfy the next succeeding periodic tax
and assessment payment. All deposits will be made directly into an
interest-bearing account (the "Escrow Account") at a bank selected by
Borrower and approved by Lender under an agreement satisfactory in form
and substance to Lender with interest being retained by Lender and free
of trust except to the extent, if any, that applicable law shall
otherwise require. The loan documents will also provide that escrow
agent will, within 30 days after the final date that taxes can be paid
without penalty, furnish Lender with such evidence as may be reasonably
required that all taxes have been paid in full.
June 26, 1997
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So long as Borrower holds title to and controls the Real Property, tax
payments are paid in full when due and there has been no default, or any
state of facts which, with the passage of time or giving of notice, or
both, would constitute a default under the loan documents, the interest
earned by such escrows, less reasonable escrow costs, will be paid to
Borrower following Lender's receipt of confirmation that taxes have been
paid.
3.7 insurance: Borrower will be required to maintain and deposit with Lender
policies of All Risk Replacement Cost Insurance with Agreed Amount
Endorsement, flood insurance (if the Real Property is in an area which
is considered a flood risk area by the U.S. Department of Housing and
Urban Development), rent insurance or business interruption insurance,
comprehensive general and excess or umbrella liability insurance,
earthquake insurance (if required), and other appropriate insurance as
Lender may require from time to time in amounts, form, and substance
satisfactory to Lender, with companies acceptable to Lender which have a
Best's rating of at least A:XII. Lender will require that Lender be
named an additional insured under all of the aforementioned policies,
and loss payee on all such policies except those pertaining to general
and excess liability coverage.
3.8 Annual Reports: Borrower will furnish Lender, within 90 days after the
end of each of Borrower's fiscal years, the following financial reports
and information: (a) balance sheet, (b) statement of sources and uses,
(c) rent roll certified and otherwise conforming to Exhibit C-1, (d)
statement of operating cash flow and accounts receivable, and (e) such
other financial information as Lender shall reasonably request. Such
reports and information shall be in reasonable detail and shall be
accompanied by the unqualified opinion of independent certified public
accountants who are satisfactory to Lender confirming that they have
been prepared in accordance with generally accepted accounting
principles together with any "Notes to Financial Statements".
In addition, Borrower agrees upon request to provide Lender with (a) a
current rent roll in detail similar to that shown in Exhibit C-1, (b) a
balance sheet and year-to-date operating statements for the Property
certified by the Chief Financial Officer of the Borrower, and (c) if
retail, all sales information of tenants and anchors that make up the
center (total sales and sales per square foot) that report sales to
Borrower.
3.9 Disposition of Condemnation/Insurance Proceeds: If, at any time during
the Term, all or any part of the Real Property is taken in a
condemnation proceeding or damaged by fire or other hazard, any
insurance or condemnation proceeds shall be paid directly to Lender for
application to reduction of the principal indebtedness at par or
restoration or repair of the Real Property at Lender's sole option.
Notwithstanding the foregoing, Lender agrees to make casualty insurance
proceeds available to Borrower for restoration or repair of the Real
Property, provided:
(i) Not more than 20% of the Real Property is damaged, and, in the
case of condemnation, that portion remaining after the taking is
still economically in the reasonable opinion of Lender;
(ii) There has been no event of default under the loan documents in
the prior twelve (12) months, and there does not then exist a
state of facts which, with
June 26, 1997
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the passage of time or the giving of notice, or both, would
constitute an event of default;
(iii) Borrower can demonstrate to Lender's satisfaction that Borrower
has the financial ability to make all scheduled payments when
due under the loan documents during reconstruction, whether from
the proceeds of rent insurance or otherwise;
(iv) Such damage or destruction occurs prior to the last two (2) Loan
Years;
(v) The funds are released under escrow/construction funding
arrangements satisfactory to Lender;
(vi) Annual income from leases in place and approved by Lender that
are not terminable as a result of the casualty or condemnation
provide coverage of at least 1.25 times the annual debt service;
and
(vii) The repairs and restoration will restore the Improvements to
substantially the size, design and utility as existed
immediately prior to the casualty.
Any principal reduction at par from an early involuntary prepayment as a
result of a condemnation proceeding or insurance settlement will cause a
re-calculation of debt service payments based upon the reduced loan
balance, the remaining amortization schedule and the Interest Rate.
3.10 Management Agreement: During the term of the Loan, the Real Property
will be managed under a management agreement (the "Management
Agreement"). Said agreement shall be subject to Lender's written
approval, and in form and substance satisfactory to Lender. The
Management Agreement may not be modified or amended and any successor
agreement may not be entered into or any management company appointed
without Lender's prior written approval. The Management Agreement and
any successor management agreement and any liens to which the manager
may be entitled, shall be expressly subordinate to the lien of the
Mortgage.
SECTION 4 - DUE DILIGENCE
4.1 Submissions: All items required under this Agreement to be submitted
to Lender for approval by Lender prior to closing shall be delivered by
Borrower to Lender not less than twenty days prior to closing (unless
another time limit is specified herein).
4.2 Title, Documents, Borrower's Counsel Opinion and Other Matters: All
closing documents will be in form and substance satisfactory to Lender
with such provisions as may be reasonably required to protect Lender's
interests. Title to the Real Property, the legal descriptions, and all
documents and other matters relating in any way to the Loan or to the
Real Property must be to Lender's satisfaction. Not less than 30 days
prior to closing, Borrower will furnish Lender with a commitment for an
ALTA title insurance policy to be issued at closing containing no
exceptions other than those
June 26, 1997
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148
approved by Lender, issued by a company acceptable to Lender and in
substance and form acceptable to Lender.
Borrower shall provide Lender with a favorable opinion of Borrower's
counsel to the following effects:
(i) Borrower is duly organized and in good standing under applicable
state law,
(ii) all loan documents are duly authorized and executed and shall
constitute valid, binding and enforceable agreements in
accordance with their respective terms, subject only to any
applicable bankruptcy, insolvency, reorganization, moratorium
law or other laws affecting creditors' rights generally;
(iii) all permits and approvals that are required for the
construction, use and occupancy of the Real Property under any
and all applicable laws, ordinances, rules, regulations,
covenants and restrictions have been duly and validly issued by
the governmental authorities or persons having jurisdiction or
rights with respect thereto, are in full force and effect, and
nothing has come to counsel's attention which would question the
validity of such permits and approvals;
(iv) the loan documents and all other matters relating to the Loan do
not violate any usury or other applicable laws; and
(v) such other matters as Lender may reasonably require.
4.3 Survey: Borrower will furnish Lender an up-to-date engineer's survey of
the Real Property by a registered surveyor acceptable to Lender and the
title insurance company and certified in a manner satisfactory to Lender
and the title insurance company, showing no state of facts objectionable
to Lender or the title insurance company. Specifically, the survey must
show that all buildings and proposed buildings (if any) are within lot
and building lines and must locate all above or below ground easements,
improvements, appurtenances, utilities and rights of way, and ingress
and egress, number and size of parking spaces and otherwise contain the
information outlined in the Survey Checklist in Exhibit E-1 (attached).
4.4 Property Condition And Use Requirements: As a condition to Lender's
obligation to close the Loan, Borrower shall comply with the
requirements in provisions 4.4.1, 4.4.2, 4.4.3 and 4.4.4.
4.4.1 Engineering Requirements:
(a) Within ten business days after the date this Agreement
is executed by Lender, Borrower shall make the final
plans and specifications for the Real Property available
to Lender (in such form as Lender shall prescribe),
together with copies of geotechnical or soil borings
reports, materials inspection and testing reports, and
other tests and inspections in Borrower's possession
relating to the condition of the Real Property, for
review and approval by Lender's in-house
Architect/Engineer ("A/E") or an independent A/E engaged
by Lender.
June 26, 1997
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149
(b) Lender will have the right to engage, at Borrower's
cost, an independent A/E to review the plans and
specifications for the Real Property, to perform a
physical inspection of the Real Property, and to prepare
a report documenting the A/E's findings.
(c) Borrower shall provide a certification, at least ten
days prior to closing, by the project's design Architect
or Engineer, that the Improvements have been completed
in accordance with plans and specifications provided to
Lender. The certification will also state whether the
Real Property meets current building codes and is served
by all necessary utilities.
4.4.2 Earthquake Requirements: (Applicable if the Real Property is
located within Seismic Zones 3 or 4 as defined by the latest
edition of the Uniform Building Code, Seismic Zone Map)
(a) Lender's A/E, at Borrower's cost, shall furnish a report
on the design and construction of the Real Property
relative to probable damage from probable earthquake
events affecting the location of the Real Property. The
report shall be based on the A/E's review of all
information deemed necessary by the A/E to assess the
proper design and construction of the Real Property to
minimize damage from earthquake risk at the site. The
report should assess the relative risk of the site as
compared to the local metropolitan area overall. The
report must assess the probable monetary loss, as a
percentage of replacement cost, and an absolute dollar
amount resulting from the maximum probable earthquake
event affecting the location of the Real Property.
(b) The report will identify any physically practical
repairs or improvements that would reduce the estimated
probable monetary loss significantly. The report will
assess the likelihood of foundation, structural, or
other damage, regardless of monetary level, that would
result in the required demolition of the Improvements or
prevent the occupancy of the Improvements for extended
periods.
(c) If the report identifies, in Lender's sole judgement,
unacceptable risks; or if Lender is not satisfied with
any remedies proposed by Borrower to address problems
disclosed in said report, then Lender may terminate
Lender's obligations hereunder.
(d) Lender shall at all times retain the right to require
earthquake insurance if and when it becomes available at
a reasonable price and is customarily required by
Lenders as a condition for closing new loans.
In the event this Agreement is terminated by Lender pursuant to
subparagraph (c) above then the Deposit shall be returned to
Borrower after deducting all costs incurred by Lender in
connection with the contemplated transaction including but not
limited to attorney's fees, A/E inspections fees and any other
out-of-pocket costs.
4.4.3 Environmental, Asbestos and Land Use Matters:
June 26, 1997
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150
(a) Lender will engage, at Borrower's cost, an environmental
consultant to perform a Phase I Environmental Site
Assessment ("ESA") of the Real Property and prepare a
report presenting related findings. The ESA shall be
conducted and the report shall be prepared in accordance
with ASTM E 1527-94, "Standard Practice for
Environmental Site Assessments: Phase I Environmental
Site Assessment Process." Borrower shall make available
to Lender and its environmental consultant all prior
environmental reports, including Phase I and Phase II
ESAs, documentation of environmental investigation and
remediation, Asbestos Surveys, records of any asbestos
abatement activities, or Operation and Maintenance
("O&M") programs for asbestos-containing building.
(b) If deemed necessary by Lender as a result of the
findings of the ESA, Lender may require its
environmental consultant to perform additional testing
and/or investigation as may be required to ascertain
whether the Real Property has been contaminated and to
what extent. In addition, based on the characteristics
and location of the Real Property, Lender may require
its consultant to conduct testing for recognized
environmental concerns, including, without limitation,
radon, lead paint, lead-in-water, and indoor air
quality. Costs of such additional investigation shall be
borne by Borrower, and may require an additional fee to
be paid to Lender.
(c) Lender may require its consultant to perform an asbestos
assessment ("Asbestos Assessment") as a part of the ESA,
based upon the age, use and condition of the Real
Property and the existence of a prior asbestos
assessment to confirm that there are no
asbestos-containing materials ("ACM") at the Real
Property, or that any ACM present is not friable.
(d) Borrower shall provide Lender a representation, warranty
and covenant that Borrower and any holders of a
substantial beneficial or ownership interest in Borrower
that are designated by Lender in its reasonable
discretion have not, and to the best of Borrower's
knowledge, no prior owner or current or prior tenant,
subtenant, or other occupant of all or any part of the
Real Property, has used Hazardous Materials on, from or
affecting the Real Property in any manner that violates
federal, state or local laws, ordinances, rules,
regulation or policies governing the use, storage,
treatment, transportation, manufacture, refinement,
handling, production, or disposal of Hazardous Materials
(collectively, the "Environmental Laws"), and that to
the best of Borrower's knowledge, no Hazardous Materials
have been disposed of on the Real Property.
(e) Lender shall also require a representation and warranty
that, to the best of Borrower's knowledge and belief,
except for any ACM identified in the Asbestos
Assessment, the Real Property does not contain, and has
not in the past contained, any ACM and there is no
current or potential airborne contamination of the Real
Property by asbestos fiber, including any potential
contamination that would be caused by maintenance or
tenant finish activities in the building(s).
June 26, 1997
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(f) An agreement (the "Environmental Indemnification
Agreement") that Borrower, and any holders of
substantial beneficial or ownership interests in
Borrower that are designated by Lender in its reasonable
discretion, will indemnify Lender and its agents
against, and hold Lender and its agents harmless from,
any and all loss, cost, expense, claim or liability that
Lender or its agents may incur as a result of violations
of Environmental Laws in connection with the Real
Property or the disposal of Hazardous Materials on the
Real Property or migration of Hazardous Materials onto
the Real Property and such indemnity shall survive the
transaction contemplated herein and shall survive the
event of foreclosure of the Mortgage or conveyance of
the Real Property in lieu thereof as to violations or
disposal or migration occurring prior to such
foreclosure or conveyance.
In the event that all provisions of this paragraph are not
provided to Lender's satisfaction, then Lender may terminate
Lender's obligations hereunder and the Deposit, the Engineering
Cost Deposit and the Lender Fee shall be retained by Lender as
consideration for evaluating this Agreement, agreeing to make
the loan and holding the funds for future disbursements.
However, in the event Lender is not satisfied with either the
report required in subparagraph 4.4.3 (a) and (c) herein or with
any remedies proposed by Borrower to address problems disclosed
by said report and Lender therefore terminates Lender's
obligations hereunder, then Borrower shall be entitled to a
return of the Deposit and the Engineering Cost Deposit after
deduction of all costs incurred by Lender in connection with the
contemplated transaction. Lender shall also retain the Lender
Fee.
4.4.4 Americans with Disabilities Act ("ADA") Requirements:
Prior to Lender's acceptance of this Agreement, if available,
and in no event less than forty-five (45) days prior to closing,
the Borrower shall submit a plan of action (the "ADA Compliance
Plan"), in form and substance acceptable to Lender based upon an
ADA Survey. Such ADA Compliance Plan shall include a prioritized
list of the items to be accomplished, including a timetable for
completion thereof, prepared and carried out so as to bring the
Real Property into compliance with ADA. The ADA Compliance Plan
shall be based upon an ADA Survey prepared by a consultant
acceptable to Lender. The ADA Survey shall detail the extent to
which the Real Property complies and does not comply with Title
III of the ADA and identify those non-compliance items that are
"readily achievable" as that term is defined under the ADA. The
loan documents shall contain a provision requiring Borrower to
implement the ADA Compliance Plan in accordance with its terms.
4.5 Evidence of Approvals: Borrower will be required to obtain and at all
times keep in full force and effect such governmental approvals as may
be necessary to comply with all governmental requirements, including all
environmental and land use matters relating to the Real Property and its
occupancy, as such requirements may exist from time to time. At closing,
Borrower will provide Lender with proof, including without limitation,
attorneys' opinions and architects' or engineers' certifications, that
such approvals have been obtained and that all applicable appeal periods
have expired and that the Real Property complies with all laws and
regulations including, without limitation,
June 26, 1997
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building and zoning laws and regulations; all such proof and any
conditions thereto must be acceptable to Lender.
SECTION 5 - MISCELLANEOUS PROVISIONS
5.1 Interpretation: All of Borrower's representations and agreements and all
other terms and conditions contained in this Agreement are material
conditions to the closing of the Loan, or any subsequent advance of Loan
proceeds after the Closing Date, and are established for the protection
of Lender. Lender may, at its sole discretion, waive any such
conditions.
5.2 Costs: Whether or not closing occurs, Borrower agrees to pay all costs
incidental to the transaction contemplated hereby, including without
limitation all costs of title insurance; appraisal and engineering fees;
revenue stamps; recording fees; attorneys' fees (whether charged by
Lender's staff counsel or local counsel) for preparation of documents,
legal research, legal opinions or any other legal services Lender seeks
in connection with this transaction; mortgage tax, if any; survey cost;
and any and all other incidental expenses incurred by Lender relating to
the Loan. Excluded from the foregoing are the expenses of Lender's loan
department and personnel.
5.3 No Commitment: Borrower agrees not to apply for, or accept, a commitment
for any other financing for the Real Property during the pendency of
this Agreement.
5.4 No Prior Agreement: Upon execution by Lender this Agreement will
supersede all other prior dealings between Borrower and Lender with
regard to the Loan, except to the extent Borrower has made prior
representations to Lender regarding any aspect of the transaction
contemplated hereby. Prior receipt of any document will not constitute
approval of that document unless expressly stated otherwise within this
Agreement.
5.5 Entire Agreement: The entire agreement between Borrower and Lender
consists of the Mortgage Loan Application and Agreement, Special
Provisions (Exhibit A), Description of Real Property (Exhibit B), Rents
and Leases (Exhibit C), Form of Letter of Credit (Exhibit D), Standard
Forms (Exhibit E), and the following exhibits attached hereto (if any):
n/a.
5.6 Choice of Law: This Agreement is governed by the laws of the State of
Connecticut. Unless Lender requires that the loan documents be governed
by the laws of another state having significant contacts with the loan
transaction, the loan documents will be governed by the laws of the
state in which the Real Property is located.
5.7 No Assignment: This Agreement may not be assigned by Borrower without
the prior written consent of Lender. Any change in the composition of
any beneficial ownership interest in Borrower shall be considered an
assignment.
5.8 Status of Principals: If any signatory of the loan documents is a
partnership, limited partnership, joint venture, corporation or other
business entity, Borrower shall furnish Lender with such documents as
Lender may require to determine that the entity is legally formed and
existing and able to enter into the Loan, and that the individuals
executing the loan documents are empowered to do so; said documents
shall include
June 26, 1997
Page 13
153
without limitation partnership agreements, charters, by-laws,
resolutions and evidence of good standing. If the entity which is to be
the Borrower under this Agreement is not already formed, it must be duly
and legally constituted in accordance with all applicable laws, rules
and regulations before closing, Borrower's obligations under this
Agreement must be performed by an entity satisfactory to Lender and this
Agreement must be executed by such entity on behalf of Borrower.
The undersigned has the authority to execute this Agreement and to bind the
Borrower with respect to the terms and conditions herein contained. The Borrower
agrees to be bound by and to perform the terms, conditions and covenants of this
Agreement.
BORROWER:
__________________________________________
By:_______________________________________ Date:__________________
Name:_____________________________________
Title:____________________________________
Address:__________________________________
The above offer is hereby accepted.
CIGNA Investments, Inc.
By:_______________________________________ Date:__________________
Name:_____________________________________
Title:____________________________________
June 26, 1997
Page 14
154
EXHIBIT A
1. BORROWER
Borrower/(Partnership): Borrower is _____________________________, a
California limited partnership, the general partner(s) and ownership
percentage(s) of which is (are):
Pacific Gulf Properties (___%), a California general partnership.
Borrower's address is: 0000 Xxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000.
Borrower's United States Taxpayer identification Number is
("TIN")________________
The addresses of Borrower's General partners are:
Name Address TIN
---- ------- ---
Pacific Gulf Properties, Inc. 0000 Xxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Borrower's limited partners are:
Name Address TIN
---- ------- ---
Eden Plaza Associates (_%), a California general partnership
000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000
2. DEFERRED MAINTENANCE
Borrower agrees that the items shown on the attached Exhibit ___ and
detailed in the Xxxx/Xxxxx Report of January 21, 1997, shall be
corrected within ___ days of the closing of the loan. Items ___ will be
completed within ___ days of closing. In the event the items are not
completed by the scheduled deadlines, Lender will require that borrower
deposit 100% of the monthly Project Cash Flow bearing escrow for the
benefit of Lender until said items are completed.
Project Cash Flow is defined as net cash flow available after payment of
operating expenses and debt service on the subject loan.
Mortgage Loan Application and Agreement
Exhibit A - Special Provisions June 26, 1997
155
3. TRANSFERS
Notwithstanding the provisions of Section 3.3 of this Agreement,
Borrower shall have the right with prior written notice to Lender to
transfer limited partnership interests in the Borrower to Pacific Gulf
Properties, Inc.
Mortgage Loan Application and Agreement
Exhibit A - Special Provisions June 26, 1997
156
EXHIBIT B
DESCRIPTION OF REAL PROPERTY
The Loan is to be secured by a first mortgage lien on the unencumbered fee
simple interest in the Land, all present and future Improvements thereon and the
Personal Property described below:
Land: EDEN XXXXX XXXX XXXX #0 & #0 XXXX XXXX #00
---- ---------- ----------------- -------------
7.89 Acres 4.96 Acres 26.4 Acres
Improvements: 101,230 sf NRA 71,840 sf NRA 327,715 sf NRA
------------ Sales & Service Office/Research Warehouse
Parking: 322 Cars 236 Cars 206 Cars
-------
There are at least 764 parking spaces on the Real Property. The Loan documents
will provide that there will be on the Real Property throughout the term of the
Loan the greater of: (a) the above figures, or (b) sufficient parking spaces to
comply with applicable government regulations.
Personal
Property:
All personal property now or hereafter owned by Borrower and used in the
operation or maintenance of the Land and Improvements.
The Loan will be further secured by a first mortgage lien on Borrower's interest
in any and all easements and appurtenances, including without limitation, (i)
any drainage ponds or other like drainage areas not located on the Real Property
which may be required for water run off, (ii) any easements necessary to obtain
access from the Real Property to such drainage areas or to any other location to
which Borrower has a right to drain water or sewage, (iii) any land required to
be maintained as undeveloped land by the zoning rules and regulations applicable
to the Real Property and (iv) any easements and agreements which are or may be
established to allow satisfactory ingress to, egress from and operation of the
Real Property.
Lender will require that all Personal Property be owned lien-free by Borrower
and paid in full, and not be subject to any equipment leases, conditional sales
contracts or any other types of financing. All exceptions to this must be
approved by Lender.
May 30, 1997
157
EXHIBIT C
RENTS AND LEASES
Approval of Leases Prior to Closing Date: Prior to the Closing Date, all leases
and sub-leases (and any amendments, modifications, extensions or renewals
thereof) affecting the Real Property must be submitted to Lender for written
approval. All leases identified on the Rent Roll described herein shall be
submitted to Lender at least thirty (30) days prior to the Closing Date. Prior
to closing Borrower shall deliver to Lender for Lender's review and approval
Borrower's standard form of tenant lease.
Rent Roll: On the Closing Date the tenants listed in Exhibit C-1 must be in
occupancy of the premises under Approved Leases providing for the terms set
forth in the Rent Roll attached as Exhibit C-1, in form as set forth herein. An
"Approved Lease" shall mean a lease which meets all of the following
requirements:
(a) The lease must be in form and substance satisfactory to Lender.
(b) The tenant thereunder must be satisfactory to Lender.
(c) The tenant and their guarantors are solvent and not subject to
any bankruptcy, insolvency or reorganization proceedings, or any
FDIC or FSLIC proceedings, investigations or reviews.
(d) The lease must be in full force and effect with the tenant in
occupancy of the premises and paying rent on a current basis
with no offsets or defenses; there must be no prepayment of rent
other than as provided in the Lease; the landlord and tenant
must not be in default in any of their obligations under such
lease.
Rental concessions such as free rent, above standard tenant improvements, moving
allowances, lease buyouts, or any other monetary tenant inducement must be noted
on the Rent Roll. On the Closing Date, Borrower shall deliver a Rent Roll
certified by Borrower to be true and complete.
Estoppels: Not less than five (5) days prior to closing Borrower will furnish
Lender with lease ratification agreements executed by both the tenant and the
landlord under all leases. Each ratification agreement is to be satisfactory to
Lender dated within forty-five (45) days of closing, and substantially in the
form attached hereto as Exhibit E-2 with such additions and modifications as
Lender shall require or approve.
Subordination, Non-Disturbance and Attornment: All leases must be subordinate to
the lien of the Mortgage unless Lender may otherwise specify; Lender may require
that specific leases be made superior to the lien of the Mortgage and that
certain provisions of such superior leases be made subject to the lien of the
Mortgage. Lender shall require the execution of subordination, attornment and
non-disturbance agreements substantially in the form attached hereto as Exhibit
E-3 from all tenants unless specifically waived by Lender. The loan documents
shall permit Lender to require subordination, non-disturbance and attornment
agreements for all leases executed during the Term.
May 30, 1997
158
Assignment of Leases: Lender will receive an assignment of lessor's interest in
leases which shall be in form and substance satisfactory to Lender and shall
provide Lender with a perfected first lien security interest in all rents,
royalties, issues, profits, license fees, concession fees, lease termination
fees, option payments, reimbursements, charges, deposits, and other revenues of
every kind and nature or due by virtue of the leases (collectively, the
"Rents"). Lender will be authorized to notify tenants of the existence of such
assignment, but Lender will not exercise its right to collect Rents unless a
default occurs in the Loan.
Lease Approval After Closing Date: After the Closing Date, all leases and
sub-leases (and any amendments, modifications, extensions or renewals thereof)
executed after the Closing Date must be submitted to Lender for prior written
approval, and Borrower shall promptly deliver to Lender a fully-executed copy of
all such approved leases.
Notwithstanding the foregoing, for so long as there is no event of default under
any of the loan documents, Lender shall waive its requirement to receive and
approve all leases and subleases (and any amendments, modifications, extensions
or renewals thereof) by separate agreement provided the following requirements
are met ("Approval Waiver Requirements"):
(a) The lease covers an area no greater than 10,000 square feet of
net rentable area;
(b) The lease is written on a standard form of lease which Lender
has previously approved in writing with no material changes;
(c) The length of the lease term is not less than one (1) year and
no greater than ten (10) years, including any renewal or
extension options;
(d) The effective rent provided for over the lease term is
consistent with the then current market effective rent of
comparable space in competitive properties. The schedule of rent
shall not decline over the lease term, including any extension.
At Lender's option, an effective rent schedule shall be provided
by borrower annually for written approval by Lender;
(e) The lease does not (a) grant the tenant any purchase option or
right of first refusal to purchase the property, (b) grant the
tenant any interest in the ownership of the Real Property or
provide any incentives equivalent to an ownership interest in
the Real Property, or (c) otherwise contain terms that would
cause a material impairment of Lender's security;
(f) The lease does not provide for the payment for tenant
improvement work or leasing commissions at any time other than
at commencement of the lease;
(g) The lease shall be an arms length transaction and not be to
Borrower, an affiliate of Borrower, or a creditor of Borrower
and the Borrower shall not assign any portion of the rental to
any third party.
Notwithstanding the Approval Waiver Requirements set forth above, Lender agrees
to conditionally modify subsection (a ) above by increasing the square footage
requirement to 25,000 square feet, provided that all other requirements of
subsections (b) through (i) are met. Borrower acknowledges that Lender will from
time to time review and evaluate the status of the Loan and that Lender shall
retain the right, in its sole discretion, to re-instate the lower square
May 30, 1997
159
footage requirement at any time and for any reason. Upon Borrower's receipt of
Lender's notice to reinstate the lower square footage requirement, the square
footage requirement shown in subsection (a) above shall be immediately
reinstated
May 30, 1997
160
EXHIBIT C-1
RENT ROLL
Annual Rent Termination Landlord Tenant
Initial Lease Commencement Expiration Minimum Escalation or Renewal Rental Security Improvement Lease
Tenant Term Date Date Rental Provisions Options Concessions* Deposit Costs Commissions
-----------------------------------------------------------------------------------------------------------------------------------
SEE ATTACHED
* Rental concessions include but are not limited to such concessions as free
rent, above standard improvements, moving allowances or any other monetary
tenant lease inducement.
May 30, 1997
161
EXHIBIT D
FORM OF LETTER OF CREDIT
(Issuing Bank's Letterhead)
Beneficiary - CIGNA Investments, Inc.
Irrevocable Credit No.: __________________________
Date: ___________________________
Gentlemen:
For the account of (Borrower), we hereby authorize you or your transferee to
draw on us at sight up to an aggregate amount of $_________________ *U.S.).
This credit is irrevocable, unconditional and transferable. This credit may be
transferred without charge one or more times upon receipt of your written
instructions submitted in accordance with the attached transfer form.
Drafts drawn under this Credit must specify the number of this Credit and be
presented at this office not later than (expiration date).
We agree that we will not be subrogated to your rights in any collateral held by
you unless and until the loan in connection with which this Letter of Credit is
issued has been paid in full.
This Credit sets forth in full the terms of our obligation to you, and such
undertaking shall not in any way be modified or amplified by any agreement in
which this Credit is referred to or to which this Credit relates, and any such
reference shall not be deemed to incorporate herein by reference any agreement.
Drafts drawn under this Letter of Credit will be duly honored.
(Authorized Signature)
[Add the following if applicable] Any letter of credit submitted in connection
with (choose all applicable: [tenant improvements] [rental achievement]
[leasing] [as additional security]) shall contain an "evergreen clause"
obligating the issuer to renew the letter of credit for one (1) year unless that
issuer has notified Lender at least thirty (30) days in advance that it intends
not to renew the letter of credit.
162
EXHIBIT E-1
STANDARD CHECKLISTS/FORMS
The following checklists and forms are incorporated as part of this
Agreement:
1. Survey Checklist
2. Lease Estoppel Certificate
3. Subordination, Non-Disturbance and Attornment Agreement.
163
EXHIBIT E-2
[OFFICE AND INDUSTRIAL PROPERTIES]
LEASE ESTOPPEL CERTIFICATE
Landlord:
Tenant:
Tenant Trade Name:
Lender: Connecticut General Life Insurance Company
Premises:
Area:__________________________Sq. Ft. Lease Date:_____________________
The undersigned Landlord and Tenant of the above-referenced lease (the "Lease")
hereby ratify the Lease and certifies to Lender as mortgagee of the Real
Property of which the premises demised under the Lease (the "Premises") is a
part, as follows:
1. That the term of the Lease commenced on___________________, 19__
and the Tenant is in full and complete possession of the
premises demised under the Lease and has commenced full
occupancy and use of the Premises, such possession having been
delivered by the original landlord and having been accepted by
the Tenant.
2. That the Lease calls for monthly rent installments of
$__________________ to date and that the Tenant is paying
monthly installments of rent of $________________ which
commenced to accrue on the___________ day of____________, 19___.
3. That no advance rental or other payment has been made in
connection with the Lease, except rental for the current month,
there is no "free rent" or other concession under the remaining
term of the lease and the rent has been paid to and including
________________,19___.
4. That a security deposit in the amount $_____________ is being
held by Landlord, which amount is not subject to any set-off or
reduction or to any increase for interest or other credit due to
Tenant.
5. That all obligations and conditions under said Lease to be
performed to date by Landlord or Tenant have been satisfied,
free of defenses and set-offs including all construction work in
the Premises.
6. That the Lease is a valid lease and in full force and effect and
represents the entire agreement between the parties; that there
is no existing default on the part of the Landlord or the Tenant
in any of the terms and conditions thereof and no event has
occurred which, with the passing of time or giving of notice or
both, would constitute an event of default; and that said Lease
has: (initial one)
[ ] not been amended, modified, supplemented, extended, renewed
or assigned.
May 30, 1997
164
[ ] been amended, modified, supplemented, extended, renewed or
assigned as follows by the following described agreements:
________________________________________________________________
________________________________________________________________
________________________________________________________________
____________________________
7. That the Lease provides for a primary term of ____________
months; the term of the Lease expires on the ____________ day of
___________, 19___; and that: _________ (initial all applicable
subparagraphs)
[ ] neither the Lease nor any of the documents listed above in
Paragraph 6, (if any), contain an option for any additional term
or terms or an option to terminate the Lease prior to the
expiration date set forth above.
[ ] the Lease and/or the documents listed above in Paragraph 6
contain an option for ___________ additional term(s) of
___________ year(s) and ___________ months(s) (each) at a rent
to be determined as follows:
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
[ ] the Lease and/or the documents listed above in Paragraph 6
contain an option to terminate the lease prior to the date set
forth above as follows:
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
8. That Landlord has not rebated, reduced or waived any amounts due
from Tenant under the lease, either orally or in writing, nor
has Landlord provided financing for, made loans or advances to,
or invested in the business of Tenant.
9. That, to the best of Tenant's knowledge, there is no apparent or
likely contamination of the Real Property of the Premises by
Hazardous Materials, and Tenant does not use, nor has Tenant
disposed of Hazardous Materials in violation of Environmental
Laws on the Real Property or the Premises.
10. That there are no actions, voluntary or involuntary, pending
against the Tenant under the bankruptcy laws of the United
States or any state thereof.
11. That this certification is made knowing that Lender is relying
upon the representations herein made.
May 30, 1997
165
Tenant: Landlord:
By: ________________________________ By: ________________________________
Typed Name: Typed Name:
Title: Title:
Attest _____________________________
Typed Name:
Title:
Date: ________________________, 1996
Borrower's Initial________
Lender's Initial__________
May 30, 1997
166
EXHIBIT E-3
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Tenant Name: _________________________________
Trade Name: __________________________________
Room/Unit No.: _______________________________
THIS AGREEMENT is dated the _____ day of ________________, 19___, and is
made by and among CONNECTICUT GENERAL LIFE INSURANCE COMPANY, having an address
c/o CIGNA Investments, Inc., 000 Xxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx
00000, Attn: Real Estate Investment Services S-319 ("Mortgagee"),
_________________________________________________________,
d/b/a_____________________________________________________, having an address of
_________________________________________________________ ("Tenant"), and
_______________________________________________________, having an address of
_________________________________________________________ ("Landlord).
RECITALS:
A. Tenant has entered into a lease ("Lease") dated
_____________________________, 19__ with _______________________ as lessor
("Landlord"), covering the premises known as ________________________ (the
"Premises") within the property known as ________________________, more
particularly described as shown on Exhibit A, attached hereto (the "Real
Property").
B. Mortgagee has agreed to make or has made a mortgage loan in the
amount of ________________________ to Landlord, secured by a mortgage of the
Real Property (the "Mortgage"), and the parties desire to set forth their
agreement herein.
NOW, THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. The Lease and all extensions, renewals, replacements or
modifications thereof are and shall be subject and subordinate to the Mortgage
and all terms and conditions thereof insofar as it affects the Real Property of
which the Premises form a part, and to all renewals, modifications,
consolidations, replacements and extensions thereof, to the full extent of
amounts secured thereby and interest thereon.
2. Tenant shall attorn to and recognize any purchaser at a
foreclosure sale under the Mortgage, any transferee who acquires the Premises by
deed in lieu of foreclosure, and the successors and assigns of such
purchaser(s), as its landlord for the unexpired balance (and any extensions, if
exercised) of the term of the Lease on the same terms and conditions set forth
in the Lease.
May 30, 1997
167
3. If it becomes necessary to foreclose the Mortgage, Mortgagee
shall neither terminate the Lease nor join Tenant in summary or foreclosure
proceedings so long as Tenant is not in default under any of the terms,
covenants, or conditions of the Lease.
4. If Mortgagee succeeds to the interest of Landlord under the
Lease, Mortgagee shall not be:
a. liable for any act or omission of any prior landlord
(including Landlord);
b. liable for the return of any security deposit unless
such deposit has been delivered to Mortgagee by Landlord or is in an escrow fund
available to Mortgagee;
c. subject to any offsets or defenses that Tenant might
have against any prior landlord (including Landlord);
d. bound by any rent or additional rent that Tenant might
have paid for more than the current month to any prior landlord (including
Landlord);
e. bound by any amendment, modification, or termination of
the Lease made without Mortgagee's consent;
f. personally liable under the Lease, Mortgagee's liability
thereunder being limited to its interest in the Real Property; or
g. bound by any notice of termination given by Landlord to
Tenant without Mortgagee's prior written consent thereto.
5. This Agreement shall be binding on and shall inure to the
benefit of the parties hereto and their successors and assigns.
6. Tenant shall give Mortgagee, by certified mail, return receipt
requested, or by commercial overnight delivery service, a copy of any notice of
default served on Landlord, at Mortgagee's address set forth above or at such
other address as to which Tenant has been notified in writing. If Landlord shall
have failed to cure such default within the time provided for in the Lease, then
Mortgagee shall have an additional ten (10) days within which to cure any
default capable of being cured by the payment of money and an additional thirty
(30) days within which to cure any other default or if such default cannot be
cured within that time, then such additional time as may be necessary to cure
such default shall be granted if within such thirty (30) days Mortgagee has
commenced and is diligently pursuing the remedies necessary to cure such default
(including, but not limited to, commencement of foreclosure proceedings, if
necessary to effect such cure), in which event the Lease shall not be terminated
while such remedies are being so diligently pursued.
7. Landlord has agreed under the Mortgage and other loan documents that
rentals payable under the Lease shall be paid directly by Tenant to Mortgagee
upon default by Landlord under the Mortgage. After receipt of notice from
Mortgagee to Tenant, at the address set forth above or at such other address as
to which Mortgagee has been notified in writing, that rentals under the Lease
should be paid to Mortgagee, Tenant shall pay to Mortgagee, or at the direction
of Mortgagee, all monies due or to become due to Landlord under the Lease.
Tenant shall have no responsibility to ascertain whether such demand by
May 30, 1997
168
Mortgagee is permitted under the Mortgage, or to inquire into the existence of a
default. Landlord hereby waives any right, claim, or demand it may now or
hereafter have against Tenant by reason of such payment to Mortgagee, and any
such payment shall discharge the obligations of Tenant to make such payment to
Landlord.
8. Tenant declares, agrees and acknowledges that Mortgagee, in
making disbursements pursuant to any agreement relating to the Loan, is under no
obligation or duty to, nor has Mortgagee represented that it will, see to the
application of such proceeds by the person or persons to whom Mortgagee
disburses such proceeds, and any application or use of such proceeds for
purposes other than those provided for in such agreement shall not defeat the
subordination herein made in whole or in part.
IN WITNESS WHEREOF, the parties hereto have executed these presents as
of the day and year first above written.
Mortgagee:__________________ ___________________
Date
By:_________________________
Its:________________________
Tenant:_____________________ ___________________
Date
By:_________________________
Its:________________________
Landlord:___________________ ___________________
Date
By:_________________________
Its:________________________
May 30, 1997
169
[CORPORATION]
[STATE OR COMMONWEALTH OF ___________]
:ss.
[COUNTY OF ____________]
On this, the ___ day of ______________, before me, notary public, the
undersigned officer, personally appears _____________, who acknowledged himself
to be the ___________________ of ________________ , a corporation, and the
foregoing instrument for the purposes therein contained, by signing the name of
the corporation by himself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal the day and
year aforesaid.
______________________________
Notary Public
My Commission Expires:
[PARTNERSHIP]
STATE OF )
)
COUNTY OF )
On this _____ day of ________________ in the year ______ before me,
________________, a Notary Public of said State, duly commissioned and sworn,
personally appeared _____________, known to me (or proved to me on the oath of
___________) to be a general partner of a limited partnership that executed the
within instrument, and acknowledged to me that such partnership executed the
same.
______________________________
Notary Public in and for said State
May 30, 1997
170
[CII ON BEHALF OF CGLIC]
STATE OF CONNECTICUT )
)SS.
COUNTY OF HARTFORD )
On this ________ day of __________, 19__, personally appeared
_______________ who acknowledged himself to be the _____________ of CIGNA
Investments, Inc., a corporation, duty authorized to sign on behalf of
____________, a corporation, and that he, being authorized so to do, executed
the foregoing instrument for the purposes therein contained by signing the name
of the corporation.
IN WITNESS WHEREOF, I hereunto set my hand.
______________________________
Notary Public
My Commission Expires:
May 30, 1997
171
EXHIBIT A
(SNDA-MTG)
Description of Premises
May 30, 1997
172
EXHIBIT P
OP AGREEMENT
AGREEMENT OF LIMITED PARTNERSHIP
OF
PGP NORTHERN INDUSTRIAL, L.P.
173
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINED TERMS .................................................... 1
ARTICLE 2 ORGANIZATIONAL MATTERS ........................................... 13
Section 2.1 Organization ............................................ 13
Section 2.2 Name .................................................... 13
Section 2.3 Registered Office and Agent; Principal Office ........... 13
Section 2.4 Power of Attorney ....................................... 14
Section 2.5 Term .................................................... 15
ARTICLE 3 PURPOSE .......................................................... 15
Section 3.1 Purpose and Business .................................... 15
Section 3.2 Powers .................................................. 16
Section 3.3 Technical Revisions ..................................... 16
ARTICLE 4 CAPITAL CONTRIBUTIONS ............................................ 16
Section 4.1 Initial Capital Contributions of the Partners ........... 16
Section 4.2 Additional Capital Contributions by the
General Partner ......................................... 18
Section 4.3 Issuances of Additional Partnership Interests ........... 18
Section 4.4 Preemptive Rights ....................................... 20
ARTICLE 5 DISTRIBUTIONS .................................................... 21
Section 5.1 Requirement and Characterization of Distributions ....... 21
Section 5.2 General Partner Election ................................ 22
Section 5.3 Amounts Withheld ........................................ 22
Section 5.4 Distributions Upon Liquidation .......................... 22
Section 5.5 Other Assets Present .................................... 22
Section 5.6 Seismic Costs ........................................... 23
ARTICLE 6 ALLOCATIONS ...................................................... 23
Section 6.1 Allocations of Net Income and Net Loss .................. 23
Section 6.2 Other Allocations ....................................... 25
ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS ............................ 25
Section 7.1 Management .............................................. 25
Section 7.2 Limitations on General Partner .......................... 29
Section 7.3 Certificate of Limited Partnership ...................... 30
Section 7.4 Management Fee and Reimbursement of the
General Partner ......................................... 31
Section 7.5 Outside Activities of the General Partner ............... 33
Section 7.6 Contracts with Affiliates ............................... 33
Section 7.7 Indemnification ......................................... 34
Section 7.8 Liability of the General Partner ........................ 36
Section 7.9 Other Matters Concerning the General Partner ............ 37
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174
Page
----
Partner ................................................. 37
Section 7.10 Title to Partnership Assets ............................. 38
Section 7.11 Reliance by Third Parties ............................... 38
ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS ....................... 39
Section 8.1 Limitation of Liability ................................. 39
Section 8.2 Management of Business .................................. 39
Section 8.3 Outside Activities of Limited Partners .................. 39
Section 8.4 Return of Capital ....................................... 40
Section 8.5 Rights of Limited Partners Relating to the Partnership .. 40
Section 8.6 No Redemption Right ..................................... 41
Section 8.7 Representations and Warranties .......................... 41
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS ........................... 43
Section 9.1 Records and Accounting .................................. 43
Section 9.2 Fiscal Year ............................................. 43
Section 9.3 Reports ................................................. 43
ARTICLE 10 TAX MATTERS ...................................................... 44
Section 10.1 Preparation of Tax Returns .............................. 44
Section 10.2 Tax Elections ........................................... 44
Section 10.3 Tax Matters Partner ..................................... 45
Section 10.4 Organizational Expenses ................................. 46
Section 10.5 Withholding ............................................. 46
ARTICLE 11 TRANSFERS AND WITHDRAWALS ........................................ 47
Section 11.1 Transfer ................................................ 47
Section 11.2 Transfer of the General Partner's Partner
Interest and Limited Partner Interest ................... 48
Section 11.3 Limited Partners' Rights to Transfer .................... 48
Section 11.4 Substituted Limited Partners ............................ 50
Section 11.5 Assignees ............................................... 51
Section 11.6 General Provisions ...................................... 51
Section 11.7 No Exchange ............................................. 52
ARTICLE 12 ADMISSION OF PARTNERS ............................................ 52
Section 12.1 Admission of Successor General Partner .................. 52
Section 12.2 Admission of Additional Limited Partners ................ 53
Section 12.3 Amendment of Agreement and Certificate
of Limited Partnership .................................. 53
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION ......................... 54
Section 13.1 Dissolution ............................................. 54
Section 13.2 Winding Up .............................................. 55
Section 13.3 Compliance with Timing Requirements of Regulations ...... 57
Section 13.4 Deemed Distribution and Re-contribution ................. 57
Section 13.5 Rights of Limited Partners .............................. 57
Section 13.6 Notice of Dissolution ................................... 58
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175
Page
----
Section 13.7 Termination of Partnership and Cancellation
of Certificate of Limited Partnership ................... 58
Section 13.8 Reasonable Time for Winding-Up .......................... 58
Section 13.9 Waiver of Partition ..................................... 58
ARTICLE 14 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS ..................... 58
Section 14.1 Amendments .............................................. 58
Section 14.2 Meetings of the Partners ................................ 60
ARTICLE 15 GENERAL PROVISIONS ............................................... 61
Section 15.1 No Assurances ........................................... 61
Section 15.2 Addresses and Notices ................................... 62
Section 15.3 Titles and Captions ..................................... 62
Section 15.4 Pronouns and Plurals .................................... 62
Section 15.5 Further Action .......................................... 62
Section 15.6 Binding Effect .......................................... 62
Section 15.7 Creditors ............................................... 62
Section 15.8 Waiver .................................................. 63
Section 15.9 Counterparts ............................................ 63
Section 15.10 Applicable Law .......................................... 63
Section 15.11 Invalidity of Provisions ................................ 63
Section 15.12 Entire Agreement ........................................ 63
Section 15.13 No Rights as Shareholders ............................... 63
Section 15.14 Venue ................................................... 64
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AGREEMENT OF LIMITED PARTNERSHIP
OF
PGP NORTHERN INDUSTRIAL, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP OF PGP NORTHERN INDUSTRIAL, L.P.
(this "Agreement"), dated as of 1997, is entered into by and between Pacific
Gulf Properties Inc., a Maryland corporation, as the sole general partner (the
"General Partner"), and Eden Plaza Associates, LLC, a California limited
liability company ("Eden"), as the initial "Original Limited Partner" (as
hereafter defined).
WHEREAS, the General Partner and Eden desire to form a Delaware limited
partnership (the "Partnership") pursuant to this Agreement of Limited
Partnership and the "Act" (as hereinafter defined);
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
Section 1.1 "Act" means the Delaware Revised Uniform Limited Partnership
Act, as it may be amended from time to time, and any successor to such statute.
Section 1.2 "Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 4.3 hereof and who is shown
as such on the books and records of the Partnership.
Section 1.3 "Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each Partnership taxable year: (i)
increased by any amounts which such Partner is obligated to restore pursuant to
any provision of this Agreement or is deemed to be obligated to restore pursuant
to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5); and (ii) decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
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Section 1.4 "Adjusted Capital Account Deficit" means, with respect to
any Partner, the deficit balance, if any, in such Partner's Adjusted Capital
Account as of the end of the relevant Partnership taxable year.
Section 1.5 "Adjusted Property" means any property, the Carrying Value
of which has been adjusted pursuant to Exhibit "B" hereof.
Section 1.6 "Affiliate" means, with respect to any Person: (i) any
Person directly or indirectly controlling, controlled by or under common control
with such Person; (ii) any Person owning or controlling ten percent (10%) or
more of the outstanding voting interests of such Person; (iii) any Person of
which such Person owns or controls ten percent (10%) or more of the voting
interests; or (iv) any officer, director, general partner or trustee of such
Person or of any Person referred to in clauses (i), (ii), and (iii) above.
Section 1.7 "Agreed Value" means: (i) in the case of any Contributed
Property set forth on Exhibit "D" and as of the time of its contribution to the
Partnership, the Agreed Value of such property as set forth in Exhibit "D";
(ii) in the case of any Contributed Property not set forth in Exhibit "D" and
as of the time of its contribution to the Partnership, the 704(c) Value of such
property, reduced by any liabilities either assumed by the Partnership upon such
contribution or to which such property is subject when contributed; and (iii) in
the case of any property distributed to a Partner by the Partnership, the
Partnership's Carrying Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution as determined under Section 752 of the Code and the Regulations
thereunder.
Section 1.8 "Agreement" means this Agreement of Limited Partnership, as
it may be amended, supplemented or restated from time to time.
Section 1.9 "Assignee" means a Person to whom one or more Limited
Partnership Units have been transferred in a manner permitted under this
Agreement, but who has not become a Substituted Limited Partner, and who has the
rights set forth in Section 11.5.
Section 1.10 "Available Cash" means, with respect to any period for
which such calculation is being made, (i) the sum of:
(a) the Partnership's gross revenues for such period from all sources
related to the operation of the Partnership assets (excluding the proceeds of
the sale or financing of Partnership assets); and
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(b) the amount of any reduction during such period in the reserves of
the Partnership referred to in clause (ii)(d) below (including, without
limitation, reductions resulting from the General Partner's determination that
such amounts are no longer necessary);
(ii) less the sum of:
(a) all payments made by the Partnership during such period on
Partnership debts;
(b) all costs and expenses of operating the Partnership and owning,
operating, maintaining, repairing, improving, acquiring and selling Partnership
assets paid during such period;
(c) to the extent not already including in clause (ii)(b) above, any
management fee paid during such period pursuant to Section 7.4; and
(d) the amount of any reserves and other cash or similar balances
(including, but not limited to, reserves for working capital, reserves, debt
service, property taxes, insurance and capital improvements reserves) set aside
during such period which the General Partner determines to be necessary or
appropriate in its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any cash
received or reductions in reserves, or take into account any disbursements made
or reserves established, after commencement of the dissolution and liquidation
of the Partnership.
Additionally, if and after the Partnership acquires NonOriginal Limited
Partner Related Assets, or becomes obligated, indebted or liable for or on
account of Non-Original Limited Partner Related Assets or the ownership or
operation thereof, and so long as the General Partner has not consummated the
transactions and made the election described in Sections 4.3B and 5.2,
respectively, of this Agreement, then for purposes of determining distributions
of Available Cash to the Original Limited Partners and their heirs, successors
and assigns under the terms of this Agreement, Available Cash shall be
calculated separately with respect to Original Limited Partner Related Assets
and the ownership and operation thereof, together with the operation and
existence of the Partnership insofar as such concerns the Original Limited
Partner Related Assets, and shall not include any revenues, expenses, assets, or
liabilities of the Partnership relating to the Non-Original Limited Partner
Related Assets, the ownership or operation thereof, or the operation or
existence of the Partnership with respect thereto. (Without limiting the
foregoing, Available Cash shall not take into account any items referred to in
Paragraph 1.10(ii) which were
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not incurred or otherwise attributable to the Original Limited Partner Related
Assets.)
Section 1.11 "Book-Tax Disparities" means, with respect to any item of
Contributed Property or Adjusted Property, as of the date of any determination,
the difference between the Carrying Value of such Contributed Property or
Adjusted Property and the adjusted basis thereof for federal income tax purposes
as of such date. A Partner's share of the Partnership's Book-Tax Disparities in
all of its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Exhibit "B" and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
Section 1.12 "Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Los Angeles, California are authorized
or required by law to close.
Section 1.13 "Capital Account" means the Capital Account maintained for
a Partner pursuant to Exhibit "B" hereof.
Section 1.14 "Capital Contribution" means, with respect to any Partner,
any cash, cash equivalents or the Agreed Value of Contributed Property which
such Partner contributes or is deemed to contribute to the Partnership pursuant
to Article 4 hereof.
Section 1.15 "Carrying Value" means: (i) with respect to a Contributed
Property or Adjusted Property, the 704(c) Value of such property, reduced (but
not below zero) by all Depreciation with respect to such property charged to the
Partners' Capital Accounts following the contribution of or adjustment with
respect to such property; and (ii) with respect to any other Partnership
property, the adjusted basis of such property for federal income tax purposes,
all as of the time of determination. The Carrying Value of any property shall be
adjusted from time to time in accordance with Exhibit "B" hereof, and to reflect
changes, additions or other adjustments to the Carrying Value for dispositions
and acquisitions of Partnership properties, as deemed appropriate by the General
Partner.
Section 1.16 "Certificate" means a Certificate of Limited Partnership
relating to the Partnership filed in the office of the Delaware Secretary of
State, as amended from time to time in accordance with the terms hereof and the
Act.
Section 1.17 "Cigna Debt" shall have the meaning given thereto in the
Master Contribution Agreement.
Section 1.18 "Closing" shall have the meaning given thereto in the
Master Contribution Agreement.
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Section 1.19 "Code" means the Internal Revenue Code of 1986, as amended
and in effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provisions of future
law.
Section 1.20 "Consent" means the consent or approval of a proposed
action by a Partner given in accordance with Section 14.2 hereof.
Section 1.21 "Contributed Property" means each property or other asset,
in such form as may be permitted by the Act (but excluding cash), contributed or
deemed contributed to the Partnership (including deemed contributions to the
Partnership on termination pursuant to Section 708 of the Code) . Once the
Carrying Value of a Contributed Property is adjusted pursuant to Exhibit "B"
hereof, such property shall no longer constitute a Contributed Property for
purposes of Exhibit "B" hereof, but shall be deemed an Adjusted Property for
such purposes.
Section 1.22 "Current Year Deficit" means with respect to any calendar
year, the amount, if any, by which the aggregate cash dividend paid to the
common shareholders of the General Partner on account of one share of common
stock of the General Partner for such calendar year exceeds the aggregate cash
distributed to the Limited Partners pursuant to Sections 5.1A(1) and 5.1A(2) on
account of one Limited Partnership Unit for such calendar year. A Current Year
Deficit for any calendar year shall not carry forward or be used in calculating
the Current Year Deficit for any subsequent calendar year.
Section 1.23 "Depreciation" means, for each taxable year, an amount
equal to the federal income tax depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such year, except that
if the Carrying Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Carrying Value
as the federal income tax depreciation, amortization, or other cost recovery
deduction for such year bears to such beginning adjusted tax basis; provided
however, that if the federal income tax depreciation, amortization, or other
cost recovery deduction for such year is zero, Depreciation shall be determined
with reference to such beginning Carrying Value using any reasonable method
selected by the General Partner.
Section 1.24 "Eden" shall mean Eden Plaza Associates, LLC, a California
limited liability company.
Section 1.25 "Effective Date" shall mean the date of the Closing.
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Section 1.26 "Equity Affiliate" means any Subsidiary of the General
Partner, and any entity in which the General Partner has a direct or indirect
equity interest.
Section 1.27 "Excess Distributions" means distributions to a Limited
Partner for all periods in excess of allocations of Net Income to the Limited
Partner for all periods pursuant to Sections 6.1B(2), (3) and (4) .
Section 1.28 "Exchange Rights Agreement" means that certain Exchange
Rights Agreement entered into concurrently herewith by and between the
Partnership, the General Partner, and Eden concurrently herewith.
Section 1.29 "General Partner" shall mean Pacific Gulf Properties Inc.,
a Maryland corporation, or any successor general partner of the Partnership in
compliance with this Agreement.
Section 1.30 "General Partner Interest" means a Partnership Interest
held by the General Partner, in its capacity as general partner.
Section 1.31 "General Partner Security Rights" has the meaning set forth
in Section 4.3B.
Section 1.32 "Incapacity" or "Incapacitated" means: (i) as to any
individual Partner, death, total physical disability or entry by a court of
competent jurisdiction adjudicating him incompetent to manage his Person or his
estate; (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter; (iii) as to any partnership which is a Partner, the
dissolution and commencement of winding up the partnership; (iv) as to any
estate which is a Partner, the distribution by the fiduciary of the estate's
entire interest in the Partnership; (v) as to any trustee of a trust which is a
Partner, the termination of the trust (but not the substitution of a new
trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For
purposes of this definition, bankruptcy of a Partner shall be deemed to have
occurred when: (a) the Partner commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect; (b) the Partner is adjudged as
bankrupt or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner; (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors; (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above; (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any
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substantial part of the Partner's properties; (f) any proceeding seeking
liquidation, reorganization or other relief of or against such Partner under any
bankruptcy, insolvency or other similar law now or hereafter in effect which has
not been dismissed within one hundred twenty (120) days after the commencement
thereof; (g) the appointment without the Partner's consent or acquiescence of a
trustee, receiver or liquidator which has not been vacated or stayed within
ninety (90) days of such appointment; or (h) an appointment referred to in
clause (g) which has been stayed is not vacated within ninety (90) days after
the expiration of any such stay.
Section 1.33 "Indemnitee" means any Person made a party to a proceeding
by reason of (i) his status as the General Partner, an Affiliate of the General
Partner, or as a director, officer, employee, partner, agent or representative
of the General Partner or an Affiliate of the General Partner, or (ii) his or
its liabilities pursuant to a loan guarantee or otherwise for or as a result of
any indebtedness or obligation of the Partnership or any Subsidiary of the
Partnership (including, without limitation, any indebtedness or obligation which
the Partnership or any Subsidiary of the Partnership has assumed or taken assets
subject to).
Section 1.34 "IRS" means the Internal Revenue Service, which administers
the internal revenue laws of the United States.
Section 1.35 "Limited Partner" means any Person named as a Limited
Partner on Exhibit "A" attached hereto, as such Exhibit may be amended from
time to time, or any Substituted Limited Partner or Additional Limited Partner,
in such Person's capacity as a Limited Partner of the Partnership.
Section 1.36 "Limited Partner Interest" means a Partnership Interest of
a Limited Partner in the Partnership. A Limited Partner Interest may be
expressed as a number of Limited Partnership Units.
Section 1.37 "Limited Partner Percentage Interest" means, as to a
Limited Partner, its interest in the Partnership relative to all other Limited
Partners, as determined by dividing the Limited Partnership Units owned by such
Limited Partner by the total number of Limited Partnership Units then
outstanding and as specified in Exhibit "A" attached hereto, as such Exhibit
may be amended from time to time.
Section 1.38 "Limited Partnership Unit" means a fractional, undivided
share of the Limited Partnership Interests of all Limited Partners issued
pursuant to Article 4 hereof. The number of Limited Partnership Units
outstanding and the Limited Partner Percentage Interest represented by such
Limited Partnership Units are set forth in Exhibit "A" attached hereto, as such
Exhibit may be amended from time to time. The ownership of Limited Partnership
Units shall be evidenced by such form of
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certificate for units as the General Partner adopts from time to time unless the
General Partner determines that the Limited Partnership Units shall be
uncertificated securities. If the General Partner elects to evidence the Limited
Partnership Units with a certificate, such certificate may be imprinted with a
legend setting forth such restrictions placed on the units as specified in this
Agreement and such restrictions will be binding upon all holders of the
certificate along with the terms and conditions set forth in this Agreement.
Section 1.39 "Liquidation Event," has the meaning set forth in Section
13.1.
Section 1.40 "Liquidator" has the meaning set forth in Section 13.2.
Section 1.41 "Management Agreement" means a Property Management.
Agreement between the Partnership and the General Partner or an Affiliate of the
General Partner substantially in the form of Exhibit "E" attached hereto.
Section 1.42 "Master Contribution Agrreement" means that certain Master
Contribution Agreement by and between the General Partner and Eden providing for
the formation of this Partnership and the contributions of cash by the General
Partner and the Original Properties by Eden.
Section 1.43 "Net Income" means, for any taxable period, the excess, if
any, of the Partnership's items of income and gain for such taxable period over
the Partnership's items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
federal income tax accounting principles, subject to the specific adjustments
provided for in Exhibit "B".
Additionally, if and after the Partnership acquires Non-Original Limited
Partner Related Assets, or becomes obligated, indebted or liable for or on
account of Non-Original Limited Partner Related Assets or the ownership or
operation thereof, and so long as the General Partner has not consummated the
transactions and made the election described in Sections 4.3B and 5.2,
respectively, of this Agreement, then for purposes of determining allocations of
Net Income to the Original Limited Partners and their heirs, successors and
assigns under this Agreement, Net Income shall be calculated separately with
respect to Original Limited Partner Related Assets and the ownership and
operation thereof, together with the operation and existence of the Partnership
insofar as such concerns the Original Limited Partner Related Assets and the
ownership and operation thereof, and shall not include any revenues, expenses,
assets, or liabilities of the Partnership relating to the Non-Original Limited
Partner Related Assets, the ownership or operation thereof, or the operation or
existence of the Partnership with respect thereto.
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Section 1.44 "Net Loss" means, for any taxable period, the excess, if
any, of the Partnership's items of loss and deduction for such taxable period
over the Partnership's items of income and gain for such taxable period. The
items included in the calculation of Net Loss shall be determined in accordance
with federal income tax accounting principles, subject to the specific
adjustments provided for in Exhibit "B".
Additionally, if and after the Partnership acquires Non-Original Limited
Partner Related Assets, or becomes obligated, indebted or liable for or on
account of Non-Original Limited Partner Related Assets or the ownership or
operation thereof, and so long as the General Partner has not consummated the
transactions and made the election described in Sections 4.3B and 5.2,
respectively, of this Agreement, then for purposes of determining allocations of
Net Loss to the Original Limited Partners and their heirs, successors and
assigns under this Agreement, Net Loss shall be calculated separately with
respect to Original Limited Partner Related Assets and the ownership and
operation thereof, together with the operation and existence of the Partnership
insofar as such concerns the Original Limited Partner Related Assets and the
ownership and operation thereof, and shall not include any revenues, expenses,
assets, or liabilities of the Partnership relating to the Non-Original Limited
Partner Related Assets, the ownership or operation thereof, or the operation or
existence of the Partnership with respect thereto.
Section 1.45 "No Exchange Period" shall have the meaning given thereto
in the Exchange Rights Agreement.
Section 1.46 "Non-Original Limited Partner Related Assets" means all of
the real properties and all other assets and property of the Partnership other
than such as constitute "Original Limited Partner Related Assets" (as defined
below).
Section 1.47 "Nonrecourse Built-in-Gain" means, with respect to any
Contributed Properties or Adjusted Properties that are subject to a Nonrecourse
Liability, the amount of any taxable gain that would be allocated to the
Partners pursuant to Section 2.B of Exhibit "C" if such properties were
disposed of in a taxable transaction in full satisfaction of such liabilities
and for no other consideration.
Section.1.48 "Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
a Partnership taxable year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).
Section 1.49 "Nonrecourse Liability" has the meaning set forth in
Regulations Section 1.752-1(a)(2).
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Section 1.50 "No Sale Period" means the period from the date hereof to
the date which is four (4) years after the Effective Date.
Section 1.51 "Original Limited Partners" means the parties listed on
Exhibit "A" as attached hereto at the time of the initial execution and
delivery of this Agreement, without regard to any subsequent changes to said
Exhibit, and with respect to any such parties which are partnerships or limited
liability companies, the partners or members, directly or indirectly, of such
partnerships or limited liability companies (or the partners or members thereof)
if and when the Limited Partnership Units received by such partnerships or
limited liability companies under the Master Contribution Agreement are
distributed by such partnerships or limited liability companies to such partners
or members and the provisions of Section 11.3, below, have been satisfied.
Section 1.52 "Original Limited Partner Related Assets" means all of the
real properties and all other assets and property contributed, assigned,
transferred or conveyed to the Partnership in connection with the transactions
contemplated by the Master Contribution Agreement, together with all other
assets and properties acquired, owned, or used by the Partnership in any way
relating thereto, as well as all replacements thereof and substitutions
therefor.
Section 1.53 "Original Property" or "Original Properties" means the
"Property" or "Properties" (as defined in the Master Contribution Agreement),
together with all other assets and properties contributed to the Partnership by
Eden pursuant to the terms and provisions of the Master Contribution Agreement.
Section 1.54 "Partner" means a General Partner or a Limited Partner, and
"Partners" means the General Partner and all Limited Partners collectively.
Section 1.55 "Partner Minimum Gain" means an amount, with respect to
each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
Section 1.56 "Partner Nonrecourse Debt" has the meaning set forth in
Regulations Section 1.704-2(b)(4).
Section 1.57 "Partner Nonrecourse Deductions" has the meaning set forth
in Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership taxable
year shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2)
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Section 1.58 "Partnership" means the limited partnership formed under
this Agreement and any successor thereto.
Section 1.59 "Partnership Interest" means an ownership interest in the
Partnership representing a Capital Contribution by either a Limited Partner or
the General Partner, and includes any and all benefits to which the holder of
such a Partnership Interest may be entitled as provided in this Agreement,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement.
Section 1.60 "Partnership Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
as well as any net increase or decrease in a Partnership Minimum Gain, for a
Partnership taxable year shall be determined in accordance with the rules of
Regulations Section 1.704-2(d).
Section 1.61 "Partnership Record Date" means the record date established
by the General Partner for the distribution of Available Cash pursuant to
Article 5 hereof with respect to a calendar quarter, which record date shall be
the same as the record date established by the General Partner for the making of
dividend distributions to its shareholders on account of their common stock
holdings in the General Partner with respect to the same calendar quarter.
Section 1.62 "Partnership Year" means the fiscal year of the
Partnership, which shall be the calendar year.
Section 1.63 "Person" means an individual or a corporation, partnership,
trust, limited liability company, unincorporated organization, association or
other entity.
Section 1.64 "Plan" means any plan or arrangement, whether or not
approved by shareholders or partners, and whether formal or informal, utilized
by the General Partner to provide incentives, benefits or other compensation to
its employees, consultants or advisors, or the employees, consultants or
advisors of any Equity Affiliate.
Section 1.65 "Recapture Income" means any gain recognized by the
Partnership upon the disposition of any property or asset of the Partnership,
which gain is characterized as ordinary income because it represents the
recapture of deductions previously taken with respect to such property or asset.
Section 1.66 "Regulations" means the Income Tax Regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
Section 1.67 "REIT" means a real estate investment trust under Section
856 of the Code.
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Section 1.68 "REIT Share" shall mean a share of common stock of the
General Partner, par value $.01 per share.
Section 1.69 "Residual Gain" or "Residual Loss" means any item of gain
or loss, as the case may be, of the Partnership recognized for federal income
tax purposes resulting from a sale, exchange or other disposition of Contributed
Property or Adjusted Property, to the extent such item of gain or loss is not
allocated pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit "C" to eliminate
Book-Tax Disparities.
Section 1.70 "Securities Act" shall mean the Securities Act of 1933, as
amended.
Section 1.71 "704(c) Value" of any Contributed Property means the value
of such property as set forth in Exhibit "D", or if no value is set forth in
Exhibit "D", the fair market value of such property or other consideration at
the time of contribution, as determined by the General Partner using such
reasonable method of valuation as it may adopt. Subject to Exhibit "B" hereof,
the General Partner shall, in its sole and absolute discretion, use such method
as it deems reasonable and appropriate to allocate the aggregate of the 704(c)
Values of Contributed Properties in a single or integrated transaction among the
separate properties on a basis proportional to their respective fair market
values.
Section 1.72 "Seismic Costs" means all costs and expenses paid or
incurred by the Partnership or the General Partner on or after the Closing to
repair, retrofit or upgrading the Original Properties to cause the Original
Properties to be in compliance with all federal, state, county and city
statutes, laws, ordinances, orders, rules and regulations related to seismic
safety and compliance as such statutes, laws, ordinances, orders, rules and
regulations existed as of the Closing; provided, however, that the total amount
of all Seismic Costs shall not exceed $200,000.
Section 1.73 "Subscription Documents" means those certain "Subscription
Documents for OP Units in the Partnership" executed and delivered by the
Original Limited Partners concurrently herewith.
Section 1.74 "Subsidiary" means, with respect to any Person, any
corporation, partnership or other entity of which a majority of (i) the voting
power of the voting equity securities, or (ii) the outstanding equity interests,
is owned, directly or indirectly, by such Person.
Section 1.75 "Substituted Limited Partner" means a Person who is
admitted as a Limited Partner to the Partnership pursuant to Section 11.4.
Section 1.76 "Unrealized Gain" attributable to any item of Partnership
property means, as of any date of determination, the
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excess, if any, of (i) the fair market value of such property (as determined
under Exhibit "B" hereof) as of such date, over (ii) the Carrying Value of such
property (prior to any adjustment to be made pursuant to Exhibit "B" hereof) as
of such date.
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Organization
The Partnership is a limited partnership organized pursuant to the
provisions of the Act and upon the terms and conditions set forth in this
Agreement. Except as expressly provided herein to the contrary, the rights and
obligations of the Partners and the administration and termination of the
Partnership shall be governed by the Act. The Partnership Interest of each
Partner shall be personal property for all purposes.
Section 2.2 Name
The name of the Partnership shall be PGP Northern Industrial, L.P. The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner. The words "Limited Partnership," "L.P.,"
"Ltd." or similar words or letters shall be included in the Partnership's name
where necessary for the purpose of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole and absolute discretion may
change the name of the Partnership at any time and from time to time, and shall
notify the Limited Partners of such change in the next regular communication to
the Limited Partners.
Section 2.3 Registered Office and Agent; Principal Office
The address of the registered office of the Partnership in the State of
Delaware and the name and address of the registered agent for service of process
on the Partnership in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The
principal office of the Partnership shall be c/o Pacific Gulf Properties Inc.,
0000 Xxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000, or such
other place as the General Partner may from time to time designate by notice to
the Limited Partners. The Partnership may maintain offices at such other place
or places within or outside the State of Delaware as the General Partner deems
advisable.
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Section 2.4 Power of Attorney
A. Each Limited Partner and each Assignee hereby constitutes and
appoints the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead to:
(1) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices: (a) all certificates, documents and other
instruments (including, without limitation, this Agreement and the Certificate
and all amendments or restatement thereof) that the General Partner or the
Liquidator deems appropriate or necessary to form, qualify or continue the
existence or qualification of the Partnership as a limited partnership (or a
partnership in which the Limited Partners have limited liability) in the State
of Delaware and in all other jurisdictions in which the Partnership may or plans
to conduct business or own property; (b) all instruments that the General
Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its terms; (c)
all conveyances and other instruments or documents that the General Partner or
the Liquidator deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; (d) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to, or other events described in, Article 11, 12 or 13
hereof or the Capital Contribution of any Partner; (e) all certificates,
documents and other instruments relating to the determination of the rights,
preferences and privileges of Partnership Interest; and (f) any and all
financing statements, continuation statements and other documents necessary or
desirable to create, perfect, continue or validate the security interest granted
by a Limited Partner pursuant to Section 10.5 of this Agreement or to exercise
or enforce the Partnership's rights with respect to such security interest; and
(2) execute, swear to, seal, acknowledge and file all ballots,
consents, approvals, waivers, certificates and other instruments appropriate or
necessary, in the sole and absolute discretion of the General Partner or any
Liquidator, to make, evidence, give, confirm or ratify any vote, consent,
approval, agreement or other action which is made or given by the Partners
hereunder or is consistent with the terms of this agreement or appropriate or
necessary, in the sole discretion of the General Partner or any Liquidator, to
effectuate the terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except
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in accordance with Article 14 hereof or as may be otherwise expressly provided
for in this Agreement.
B. The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, in recognition of the fact that each of
the Partners will be relying upon the power of the General Partner and any
Liquidator to act as contemplated by this Agreement in any filing or other
action by it on behalf of the Partnership, and it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or Assignee and the
transfer of all or any portion of such Limited Partner's Assignee's Limited
Partnership Units and shall extend to such Limited Partner's or Assignee's
heirs, successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner or any Liquidator, acting in good faith pursuant to such power
of attorney, and each such Limited Partner or Assignee hereby waives any and all
defenses which may be available to contest, negate or disaffirm the action of
the General Partner or any Liquidator, taken in good faith under such power of
attorney in accordance with the provisions of this Agreement. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within fifteen (15) days after receipt of the General Partner's or
Liquidator's request therefor, such further designation, powers of attorney and
other instruments as the General Partner or the Liquidator, as the case may be,
deems necessary to effectuate this Agreement and the purposes of the
Partnership.
Section 2.5 Term
The term of the Partnership shall commence on the Effective Date and
shall continue until December 31, 2097, unless the Partnership is dissolved
sooner pursuant to the provisions of Article 13 or as otherwise provided by law.
ARTICLE 3
PURPOSE
Section 3.1 Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership is: (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to be classified as a REIT, unless the General
Partner ceases to qualify as a REIT for reasons other than the conduct of the
business of the Partnership; (ii) to enter into any partnership, joint venture
or other similar arrangement to engage in any of the foregoing or to own
interests in any entity engaged in any of the foregoing; and (iii) to do
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anything necessary or incidental to the foregoing. In connection with the
foregoing, and without limiting the General Partner's right, in its sole
discretion, to cease qualifying as a REIT, the Partners acknowledge the General
Partner's current status as a REIT inures to the benefit of all of the Partners
and not solely the General Partner.
Section 3.2 Powers
The Partnership is empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership; provided, however, that the
Partnership shall not take, or refrain from taking, any action which, in the
judgment of the General Partner, in its sole and absolute discretion: (i) could
adversely affect the ability of the General Partner to continue to qualify as a
REIT; (ii) could subject the General Partner to any additional taxes under
Section 857 or Section 4981 of the Code; or (iii) could violate any law or
regulation of any governmental body or agency having jurisdiction over the
General Partner or its securities, unless such action (or inaction) shall have
been specifically consented to by the General Partner in writing.
Section 3.3 Technical Revisions
The Limited Partners agree to, and the General Partner is hereby
authorized to make, any modifications or amendments to this Agreement that may
be necessary for the General Partner to maintain its status as a real estate
investment trust or in order for it to avoid a penalty or tax; provided,
however, that such modification or amendment does not materially alter or affect
adversely any Limited Partner's rights, duties, or obligations under this
Agreement.
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1 Initial Capital Contributions of the Partners
A.(1) Concurrently with the Closing, the General Partner shall
contribute to the Partnership cash up to, but not exceeding, a maximum of
$4,000,000, as described and in accordance with the terms, provisions, and
conditions of the Master Contribution Agreement as necessary for the purposes of
paying down and/or restructuring the Cigna Debt.
(2) Concurrently with the Closing, the General Partner shall pay or
credit Eden with the "Commissions" and "Qualifying Eden Closing Costs" (pursuant
to and as defined in the Master Contribution Agreement). The Commissions and
Qualifying Eden
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Closing Costs paid or credited to Eden by the General Partner shall constitute
Capital Contributions by the General Partner.
(3) Concurrently with the Closing, the General Partner shall contribute
to (or pay on behalf of) the Partnership or the General Partner the cash
necessary to pay the transaction costs, closing costs and prorations to be paid
by the Partnership or the General Partner or which are designated as Partnership
or General Partner expenses pursuant to the Master Contribution Agreement. The
amounts so contributed or paid by the General Partner shall constitute Capital
Contributions by the General Partner.
B. Concurrently with the Closing, Eden shall transfer, assign, convey,
and deliver all right, title, and interest in and to the real properties,
improvements, and other assets relating to the Original Properties as described
and in accordance with the terms, provisions, and conditions of the Master
Contribution Agreement. As stated therein, the Original Properties shall be
subject to debt in an amount no less than $12,000,000 (including holdbacks as
described therein) at the Closing, $12,000,000 of which shall be guaranteed by
Eden, but without recourse to the partners or members of Eden; provided,
however, that nothing contained herein shall preclude amortization of such debt
in accordance with the applicable loan documents. The Agreed Value of the
Original Properties is set forth on Exhibit "D". The Capital Contribution of
the Original Limited Partners to the Partnership shall be equal to the Agreed
Value of the Original Properties. The number of Limited Partnership Units issued
to the Original Limited Partners on account of such Capital Contribution shall
be equal to the Agreed Value of the Original Properties divided by the "PGP
Share Price" (as defined in the Master Contribution Agreement).
C. In consideration of their initial Capital Contributions, the Limited
Partners shall receive Limited Partnership Units in the amounts set forth on
Exhibit "A", and such amounts shall represent the initial Limited Partner
Percentage Interests shown on said Exhibit. The Limited Partner Percentage
Interests shall be adjusted in Exhibit "A" from time to time by the General
Partner to the extent necessary to reflect accurately redemptions, additional
Capital Contributions, the issuance of additional Limited Partnership Units
(pursuant to any merger or otherwise), or similar or other events having an
effect on any Limited Partner's Limited Partner Percentage Interest. Except as
provided hereinabove and as expressly provided in Sections 4.3 and 10.5, the
Partners shall have no obligation whatsoever to make any additional or further
Capital Contributions, loans, or advances of any kind to the Partnership, or to
in any way finance the operation of the Partnership or any of the debt or
obligations of the Partnership.
D. Except as provided in Section 13.3 of this Agreement and as otherwise
expressly provided herein, the Capital Contribution of each Partner will be
returned to that Partner
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only in the manner and to the extent provided in Article 5 and Article 13
hereof, and no Partner may withdraw from the Partnership or otherwise have any
right to demand or receive the return of its Capital Contribution to the
Partnership, except as specifically provided herein. Under circumstances
requiring a return of any Capital Contribution, no Partner shall have the right
to receive property other than cash, except as specifically provided herein. No
Partner shall be entitled to interest on any Capital Contribution or Capital
Account. The General Partner shall not be liable for the return of any portion
of the Capital Contribution of any Limited Partner, and the return of such
Capital Contributions shall remain solely from Partnership assets.
E. No Limited Partner shall have any further personal liability-to
contribute money to, or in respect of, the liabilities or the obligations of the
Partnership, nor shall any Limited Partner be personally liable for any
obligations of the Partnership, except as otherwise provided in this Agreement
or in the Act. No Limited Partner shall be required to make any contributions to
the capital of the Partnership other than as expressly, provided in this
Agreement.
Section 4.2 Additional Capital Contributions by the General Partner
From time to time at or following the Closing, the General Partner may,
but shall not be obligated to, contribute additional capital to the Partnership
to pay for any and all costs and expenses of (a) operating the Partnership and
(b) owning, operating, maintaining, repairing, improving, acquiring and selling
both Original and Non-Original Limited Partner Related Assets, including but not
limited to Seismic Costs and any other Capital Contributions made to correct or
repair any items of seismic compliance, deferred maintenance and capital
improvements to the Original Properties.
Section 4.3 Issuances of Additional Partnership Interests
A. The General Partner is hereby authorized to cause the Partnership
from time to time to issue to the Partners (including the General Partner) or
other Persons additional Limited Partnership Units or other Partnership
Interests in one or more classes, or one or more series of any of such classes,
with such designations, preferences and relative, participating, optional or
other special rights, powers and duties, including, rights, powers and duties
senior to the Limited Partners (including the Original Limited Partners and
their heirs, successors and assigns), except that, notwithstanding the
foregoing, with respect to the Original Limited Partners Related Assets, any
such additional Limited Partnership Units or Partnership Interests shall, if at
all, only carry or give to their holders rights to receive distributions (as to
amount, timing, and priority) junior to the rights of the Original Limited
Partners as set forth in
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this Agreement with respect to the Original Limited Partners Related Assets
unless and until (and not before) the General Partner has made the election
provided for in Section 5.2 of this Agreement. Following the making of such
election, the rights as to distributions pertaining to such additional Limited
Partnership Units or Partnership Interests may be equal or junior to those of
the Original Limited Partners and their heirs, successors and assigns. Subject
to the foregoing, the rights, privileges, benefits, burdens, and restrictions
relating to any such additional Limited Partnership Units or Partnership
Interests shall be determined by the General Partner in its sole and absolute
discretion (but without creating different priorities as between the Limited
Partner Interests and the General Partner Interests received by the General
Partner and the Original Limited Partners in connection with the contributions
provided for under the Master Contribution Agreement), subject to Delaware law,
including, without limitation: (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Interests; (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions; and (iii) the
rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership; provided that no such additional Limited
Partnership Units or other Partnership Interests shall be issued to the General
Partner, as the General Partner, or a Limited Partner, or to an Affiliate of
either the General Partner or a Limited Partner, unless the additional
Partnership Interests are issued for a fair economic consideration determined at
the time of or within ninety (90) days prior to the issuance, or unless the
issuance of such additional Partnership Interests is otherwise permitted under
the terms and provisions of this Agreement. A determination by an independent
investment banker or financial advisor that the consideration paid or proposed
to be paid by the General Partner in this regard is a fair economic
consideration, or is otherwise fair from a financial point of view, to the
Partnership shall be conclusive and binding upon all parties hereto for all
purposes, and shall constitute a conclusive, non-rebuttable presumption that the
consideration so paid represented fair, good faith, and proper action by the
General Partner with the Partnership as concerns the General Partner's dealings
and transactions with the Partnership in relation to such issuance.
B. If the General Partner makes the election provided for in Section 5.2
of this Agreement, then thereafter the General Partner shall be authorized at
any time, in its sole discretion, and without the need for any vote, consent or
approval from, or consultation with, any Limited Partner, and further without
the need for any appraisal, valuation, or any other analysis or evaluation of
any property, assets, rights, debts, liabilities, obligations, claims, title,
encumbrances, or any other matters of any sort from any person, to contribute,
assign, convey, and transfer all, but not less than all, of the General
Partner's rights, title, claims, interests, debts, duties, liabilities, and
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obligations, in, to, and relating to all, but not less than all, of the General
Partner's assets, properties, debts, liabilities, and obligations (excluding the
General Partner's rights, title, claims, interests, debts, duties, liabilities,
and obligations in, to, and relating to its interest in the Partnership, and
also excluding same as such relates to any other entity in which the General
Partner has an interest but which does not own a direct or indirect interest in
real property) to the Partnership. In exchange therefor, the Partnership shall
immediately issue to the General Partner (A) that number of Limited Partnership
Units equal to the number of the outstanding shares of common stock of the
General Partner at the time of such contribution by the General Partner to the
Partnership, and (B) options, warrants, and other rights to acquire additional
Limited Partnership Units in the Partnership and other securities of the
Partnership on a unit-for-unit basis equivalent to, and on the same terms and
conditions as, all options, warrants, and other rights and securities issued and
then outstanding ("General Partner Security Rights") with regard to any shares
of capital stock or other securities of any kind of the General Partner then or
thereafter issued. After consolidation of the General Partner's affairs into the
Partnership as described in this Section, upon the exercise by any holder of
any General Partner Security Rights and the General Partner's issuance of its
securities to the exercising party with respect thereto, or the issuance of any
other securities of the General Partner, the General Partner promptly shall
contribute to the Partnership any consideration received upon such exercise (net
of all costs, fees, expenses, and commissions relating thereto), and the
Partnership shall thereupon issue to the General Partner an equivalent number of
Limited Partnership Units (in the case of issuances by the General Partner of
shares of its common stock) or an equivalent number of other interests in the
Partnership which have parallel and comparable rights and privileges to the
rights and privileges of the securities issued by the General Partner (in the
case of issuances by the General Partners other than shares of its common
stock.)
Section 4.4 Preemptive Rights
Only the General Partner shall have the right to make the additional
Capital Contributions described in Section 4.2. Except as provided in Section
4.2 hereof, no Person shall have any preemptive, preferential or other similar
right with respect to: (i) the making of additional Capital Contributions or
loans to the Partnership; or (ii) the issuance or sale of any Limited
Partnership Units or other Partnership Interests.
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ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions
A. Subject to Section 5.6, on or before ninety (90) days after the end
of each calendar quarter the General Partner shall distribute to the Partners
who are partners on the Partnership Record Date for such calendar quarter an
amount equal to 100% of the Available Cash for such calendar quarter in the
following order of priority:
(1) First, to the Limited Partners pro rata in accordance with their
respective Limited Partner Percentage Interests, until such time as the
distribution made pursuant to this Section 5.1A(1) on account of each Limited
Partnership Unit held by a Limited Partner for the calendar quarter in which the
distributions are made equals the cash dividend paid to the common shareholders
of the General Partner on account of one share of common stock of the General
Partner for such calendar quarter;
(2) Second, if there then exists a Current Year Deficit, to the Limited
Partners pro rata in accordance with their respective Limited Partner Percentage
Interests until such time as the distribution made pursuant to this Section
5.1A(2) eliminates the Current Year Deficit; provided, however, that if
Available Cash is not sufficient to eliminate the Current Year Deficit for the
calendar year on account of which the distributions are made, any remaining
Current Year Deficit shall not be carried forward and shall be disregarded in
determining distributions to be made pursuant to this Section 5.1A in subsequent
quarters; and
(3) Thereafter, to the General Partner.
B. Distributions made pursuant to this Section 5.1 shall be made in the
foregoing order of priority, with all Available Cash being distributed at the
highest level of priority until that level of priority is completely satisfied
before any Available Cash is distributed at a lower level of priority, and
distributions at a lower level of priority not being made or being only
partially made if Available Cash is insufficient therefor.
C. Anything contained herein to the contrary notwithstanding, the
quarterly distribution of Available Cash made on account of each Limited
Partnership Unit for the calendar quarter which contains the Effective Date
shall not exceed the dividend paid to common shareholders of the General Partner
on account of a share of common stock of the General Partner for the calendar
quarter which contains the Effective Date, multiplied by
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a fraction (x) the numerator of which is the number of days from and including
the Effective Date to and including the last day of such calendar quarter, and
(y) the denominator of which is the total number of days in such calendar
quarter.
Section 5.2 General Partner Election
The General Partner may elect, at any time, in its sole and absolute
discretion, to have all future calculations of Available Cash based upon all
Partnership assets without distinction between Original and Non-Original Limited
Partner Related Assets, and to have all future distributions to Limited Partners
made pursuant to the following terms in lieu of the terms of Section 5.1 (an
election under this Section, once made, shall be irrevocable):
A. First, the General Partner shall make distributions or payments to
the Limited Partners regardless of the availability or amount of Available Cash,
in an amount, on account of each Limited Partnership Unit held by a Limited
Partner for the calendar quarter in which the distributions are made, equal to
the cash dividend paid to the common shareholders of the General Partner on
account of one share of common stock of the General Partner for such calendar
quarter; and
B. Thereafter, to the General Partner.
Section 5.3 Amounts Withheld
All amounts withheld pursuant to the Code or any provisions of any state
or local tax law and Section 10.5 hereof with respect to any allocation, payment
or distribution to the Partners or Assignees shall be treated as amounts
distributed to the Partners or Assignees pursuant to Sections 5.1 or 5.2 for all
purposes under this Agreement.
Section 5.4 Distributions Upon Liquidation
Proceeds from a Liquidating Event, if any, and any other cash received
or reductions in reserves made after commencement of the liquidation of the
Partnership shall be distributed to the Partners in accordance with Section
13.2.
Section 5.5 Other Assets Present
Notwithstanding the foregoing, if and after the Partnership acquires
Non-Original Limited Partner Related Assets, or becomes obligated, indebted or
liable for or on account of Non-Original Limited Partner Related Assets or the
ownership or operation thereof, and so long as the General Partner has not
consummated the transactions and made the election described in Sections 4.3B
and 5.2, respectively, of this Agreement, then distributions of Available Cash
to the General Partner and the Original Limited Partners (and the Original
Limited Partners' heirs, successors
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and assigns) under the terms of the foregoing shall be calculated and made only
with respect to Original Limited Partner Related Assets and the ownership and
operation thereof, together with the operation and existence of the Partnership
insofar as such concerns the Original Limited Partner Related Assets.
Distributions under the terms of the foregoing shall not include any revenues,
expenses, assets, or liabilities of the Partnership relating to the Non-Original
Limited Partner Related Assets, the ownership or operation thereof, or the
operation or existence of the Partnership with respect thereto, all of which
shall be as separately determined by the General Partner in its sole and
absolute discretion.
Section 5.6 Seismic Costs
Anything contained herein to the contrary notwithstanding, from the
amounts otherwise distributable to the Original Limited Partners pursuant to
Sections 5.1A(1), 5.1A(2) and 5-2A, the General Partner shall instead pay or
establish a reserve to pay (or to reimburse the General Partner to the extent
the General Partner has paid) the Seismic Costs. The amount so reserved or paid
(or reimbursed to the General Partner) in each calendar quarter shall equal the
greater of either (a) $25,000; or (b) the amount which, when added to all
amounts previously reserved or paid (or reimbursed to the General Partner)
equals the total amount of all Seismic Costs incurred by the Partnership and the
General Partner to the date of such quarterly distribution. The Seismic Costs
shall be incurred and paid (or reimbursed to the General Partner) in such order
as the General Partner may determine in its sole and absolute discretion. No
amounts shall be distributed to the Limited Partners pursuant to Sections
5.1A(1), 5.1A(2) or 5.2A unless and until the full amount set forth in the
second sentence of this Section 5.6 has been reserved or paid (or reimbursed to
the General Partner) in full. Nevertheless, all amounts on account of Seismic
Costs which would otherwise have been distributed to the Limited Partners but
for the provisions of this Section 5.6 shall be treated as having been
distributed to the Limited Partners pursuant to Sections 5.1A(1), 5.1A(2) or 5.2
for all purposes under this Agreement. When all Seismic Costs have been paid (or
reimbursed to the General Partner) in full, any funds remaining in such Seismic
Costs reserve shall be distributed to the Original Limited Partners pro rata in
accordance with their respective Limited Partner Percentage Interests.
ARTICLE 6
ALLOCATIONS
Section 6.1 Allocations of Net Income and Net Loss
For purposes of maintaining the Capital Accounts and in determining the
rights of the General and Limited Partners among
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themselves, the Partnership's items of income, gain, loss and deduction
(computed in accordance with Exhibit "B" hereof) shall be allocated among the
General and Limited Partners in each taxable year (or portion thereof) as
provided herein below.
A. Net Loss for a particular period shall be allocated as follows:
(1) First, to the General and Limited Partners in proportion to and to
the extent of their positive Capital Account balances, if any.
(2) Second, to the Limited Partners, in proportion to and to the extent
of, their respective aggregate Excess Distributions, until the amount allocated
under this Section 6.1A(2) for the current fiscal year and all prior fiscal
years equals the Excess Distributions of all Limited Partners.
(3) Third, to the General Partner.
B. Net Income for a particular period shall be allocated as follows:
(1) First, to the Partners that have previously been allocated Net Loss
pursuant to Section 6.1A in amounts and among such Partners in the reverse order
(and in the corresponding amounts) of all Net Loss previously allocated to them
until the amount of Net Income allocated pursuant to this Section 6.1B(1)
equals the aggregate amount of all Net Loss theretofore allocated pursuant to
Section 6.1A.
(2) Second, if applicable, to the Limited Partners in proportion to
their respective Limited Partner Percentage Interests until the aggregate Net
Income allocated pursuant to this Section 6.1B(2) for the current taxable period
and all previous taxable periods equals the aggregate amount of Available Cash
distributed to the Limited Partners pursuant to Section 5.1A(1).
(3) Third, if applicable, to the Limited Partners in proportion to
their respective Limited Partner Percentage Interests until the aggregate Net
Income allocated pursuant to this Section 6.1B(3) for the current taxable period
and all previous taxable periods equals the aggregate amount of Available Cash
distributed to the Limited Partners pursuant to Section 5.1A(2).
(4) Fourth, if applicable, to the Limited Partners in proportion to
their respective Limited Partner Percentage Interests until the aggregate Net
income allocated pursuant to this Section 6.1B(4) for the current taxable period
and all previous taxable periods equals the aggregate amount of Available Cash
distributed to the Partners pursuant to Section 5.2A; and
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(5) Fifth, to the General Partner.
Section 6.2 Other Allocations
A. For purposes of Regulations Section 1.752, the Partners agree that
$12,000,000 of the Partnership debt secured by the Original Properties at the
Closing shall be allocated to Eden as a result of Eden's guaranty of $12,000,000
of such debt, which guaranty is nonrecourse to the partners and members of Eden;
provided, however, that nothing contained herein shall preclude amortization of
such debt in accordance with the applicable loan documents.
B. Any gain allocated to the General Partner and the Original Limited
Partners upon the sale or other taxable disposition of any Partnership asset
shall, to the extent possible, after taking into account other required
allocations of gain pursuant to Exhibit "C", be characterized as Recapture
Income in the same proportions and to the same extent as such Partners have
been allocated any deductions directly or indirectly giving rise to the
treatment of such gains as Recapture Income.
C. If and after the Partnership acquires Non-Original Limited Partner
Related Assets, or becomes obligated, indebted or liable for or on account of
Non-Original Limited Partner Related Assets or the ownership or operation
thereof, and so long as the General Partner has not consummated the transactions
and made the election described in Sections 4.3B and 5.2, respectively, of this
Agreement, then allocations of Net Income, Net Loss, and any other items to the
Original Limited Partners and their heirs, successors and assigns under this
Agreement shall be calculated separately with respect to Original Limited
Partner Related Assets and the ownership and operation thereof, together with
the operation and existence of the Partnership insofar as such concerns the
Original Limited Partner Related Assets and the ownership and operation thereof.
Such allocations and calculations shall not include any revenues, expenses,
assets, or liabilities of the Partnership relating to the Non-Original Limited
Partner Related Assets, the ownership or operation thereof, or the operation or
existence of the Partnership with respect thereto, all of which shall be as
separately determined by the General Partner in its sole and absolute
discretion.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management
A. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are and shall
be exclusively vested in the
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General Partner, and no Limited Partner shall have any right to participate in
or exercise control or management power over the business and affairs of the
Partnership. The General Partner may not be removed by the Limited Partners with
or without cause. In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or which are granted to
the General Partner under any other provision of this Agreement, the General
Partner, shall have full power and authority to do all things deemed necessary
or desirable by it to conduct the business of the Partnership, to exercise all
powers set forth in Section 3.2 hereof and to effectuate the purposes set forth
in Section 3.1 hereof, including, without limitation:
(1) the making of any expenditures, the lending or borrowing of money
(including, without limitation, making prepayments on loans and borrowing money
to permit the Partnership to make distributions to its Partners in such amounts
as will permit the General Partner (so long as the General Partner qualifies as
a REIT) to avoid the payment of any federal income tax (including, for this
purpose, any excise tax pursuant to Section 4981 of the Code) and to make
distributions to its shareholders in amounts sufficient to permit the General
Partner to maintain REIT status), the assumption or guarantee of, or other
contracting for, indebtedness and other liabilities, the issuance of evidence of
indebtedness (including the securing of the same by deed, mortgage, deed of
trust or other lien or encumbrance on the Partnership's assets) and the
incurring of any obligations it deems necessary for the conduct of the
activities of the Partnership;
(2) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having jurisdiction
over the business or assets of the Partnership;
(3) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any assets of the Partnership (including the
exercise or grant of any conversion, option, privilege, or subscription right or
other right available in connection with any assets at any time held by the
Partnership) or the merger or other combination of the Partnership with or into
another entity;
(4) the use of the assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with the terms of this
Agreement and on any terms it sees fit, including, without limitation, the
financing of the conduct of the operations of the General Partner, the
Partnership or any of the Partnership's Subsidiaries, the lending of funds to
other Persons (including, without limitation, the Subsidiaries of the
Partnership and/or the General Partner) and the repayment of obligations of the
Partnership and its Subsidiaries and any other Person in which it has an equity
investment, and the making of capital contributions to its Subsidiaries, the
holding of any
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real, personal and mixed property of the Partnership in the name of the
Partnership or in the name of a nominee or trustee and the creation, by grant or
otherwise, of easements or servitudes;
(5) the management, operation, leasing, collection of rents, marketing,
landscaping, repair, alteration, renovation, rehabilitation, demolition or
improvement of the original Properties or any other real property or
improvements owned by the Partnership or any Subsidiary of the Partnership and
the performance of any and other acts necessary or appropriate to the operation
of such properties, including, without limitation, applications for rezoning or
objections to rezoning of such properties;
(6) the negotiation, execution, and performance of any contracts,
conveyances or other instruments that the General Partner considers useful or
necessary to the conduct of the Partnership's operations or the implementation
of the General Partner's powers under this Agreement, including, without
limitation, the execution and delivery of leases on behalf of or in the name of
the Partnership, contracting with contractors, developers, consultants,
accountants, legal counsel, other professional advisors and other agents and the
payment of their expenses and compensation out of the Partnership's assets;
(7) the opening and closing of bank accounts, the investment Of
Partnership funds in securities, certificates of deposit and other instruments,
and the distribution of Partnership cash or other Partnership assets in
accordance with this Agreement;
(8) the holding, managing, investing and reinvesting cash and other
assets of the Partnership;
(9) the collection and receipt of revenues and income of the
Partnership;
(10) the establishment of one or more divisions of the Partnership, the
selection and dismissal of employees of the Partnership (including, without
limitation, employees having titles such as "president," "vice president,"
"secretary" and "treasurer" of the Partnership), and agents, outside attorneys,
accountants, consultants and contractors of the Partnership, and the
determination of their compensation and other terms of employment or hiring
(whether or not any of the foregoing are also employed by, consultants to,
independent contractors for, or otherwise do business with the General Partner
or its Affiliates in related or unrelated matters);
(11) the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate (whether or
not such is done as part of a group, combined or other policy or policies under
which the Partnership and the General Partner (or its Affiliates) are also
insured, so
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long as the General Partner fairly allocates the expense thereof among the
covered parties);
(12) the formation of, or acquisition of an interest in, and the
contribution of some or all of property (or any part thereof or interest
therein) to, any further limited or general partnerships, joint ventures or
other relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property to, its
Subsidiaries and any other Person in which it has an equity investment from
time to time);
(13) the control of any and all matters affecting the rights and
obligations of the Partnership, including the settlement, compromise, submission
to arbitration or any other form of dispute resolution, or abandonment of, any
claim, cause of action, liability, debt or damages, due or owing to or from the
Partnership, the commencement or defense of suits, legal proceedings,
administrative proceedings, arbitration or other forms of dispute resolution,
and the representation of the Partnership in all suits or legal proceedings,
administrative proceedings, arbitrations or other forms of dispute resolution,
the incurring of legal expense, and the indemnification of any Person against
liabilities and contingencies to the extent permitted by law and consistent with
the terms of this Agreement, including in each and all of the foregoing
instances any such matter or thing in which the General Partner or its
Affiliates have a direct interest;
(14) the undertaking of any action in connection with the Partnership's
direct or indirect investment in its Subsidiaries or any other Person (including
without limitation, the contribution or loan of funds by the Partnership to such
Persons);
(15) the determination of the fair market value of any Partnership
property distributed in kind using such reasonable method of valuation as the
General Partner may adopt;
(16) the exercise, directly or indirectly, through any attorney-in-fact
acting under a general or limited power of attorney, of any right, including the
right to vote, appurtenant to any asset or investment held by the Partnership;
(17) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of or in connection with any Subsidiary
of the Partnership or any other Person in which the Partnership has a direct or
indirect interest, or an interest jointly with any such Subsidiary or other
Person;
(18) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of any Person in
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which the Partnership does not have an interest pursuant to contractual or
other arrangements with such Person;
(19) the making, execution and delivery of any and all deeds, leases,
notes, mortgages, deeds of trust, security agreements, conveyances, contracts,
guarantees, warranties, indemnities, waivers, releases or legal instruments or
agreements in writing necessary or appropriate, in the judgment of the General
Partner, for the accomplishment of any of the powers of the General Partner
enumerated in this Agreement; and
(20) the issuance of additional Limited Partnership Units or
Partnership Interests, as appropriate, in connection with Capital Contributions
by Additional Limited Partners and additional Capital Contributions by Partners
pursuant to Article 4 hereof.
B. Each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the Partners, notwithstanding any other provision of this Agreement, the
Act or any applicable law, rule or regulation, to the fullest extent permitted
under the Act or other applicable law, rule or regulation. The execution,
delivery or performance by the General Partner or the Partnership of any
agreement authorized or permitted under this Agreement shall not constitute a
breach by the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other Persons under this Agreement or
of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General Partner may
cause the Partnership to establish and maintain at any and all times working
capital accounts and other cash or similar balances in such amounts as the
General Partner, in its sole and absolute discretion, deems appropriate and
reasonable from time to time.
D. In exercising its authority under this Agreement, the General Partner
may, but shall be under no obligation to, take into account the tax consequences
to any Partner of any action taken by it. The General Partner and the
Partnership shall not have liability to a Limited Partner under any
circumstances as a result of an income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner taken
pursuant to its authority under this Agreement and in accordance with the terms
hereof.
Section 7.2 Limitations on General Partner
Anything contained herein to the contrary notwithstanding, without the
prior Consent of all Original Limited Partners, the General Partner shall not
cause the Partnership to do any of the
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following during the No Sale Period unless and until (on a property-by-property
basis if applicable) such is accomplished in a manner which is fully tax
deferred to, and does not produce any income tax liability for, an Original
Limited Partner as a result thereof:
A. sell, transfer or otherwise dispose of any of the Original
Properties;
B. pay down the Cigna Debt or, if the Cigna Debt is refinanced, any
refinanced debt, or change any of the terms of the Cigna Debt or refinanced debt
such as the debt is less than $12,000,000, not secured by the Original
Properties, or not guaranteed by Eden (other than as contemplated by the Master
Contribution Agreement or as required by the loan documents or any other
agreement ancillary thereto), nor take any other action which would result in a
reduction of the allocation of debt to the Original Limited Partners for
purposes of computing such parties' basis for income tax purposes; provided,
however, that nothing contained herein shall preclude amortization of such debt
in accordance with the applicable loan documents;
C. fail to use reasonable, good faith and diligent efforts to avoid a
foreclosure of the Cigna Debt or, if the Cigna Debt is refinanced, any
refinanced debt, or a bankruptcy filing by or against the Partnership;
D. elect to dissolve the Partnership.
Section 7.3 Certificate of Limited Partnership
The General Partner has filed the Certificate with the Secretary of
State of Delaware as required by the Act. The General Partner shall use all
reasonable efforts to cause to be filed such other certificates or documents as
may be reasonable and necessary or appropriate for the continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability) in the State of Delaware and any
other state, or the District of Columbia, in which the Partnership may elect to
do business or own property. To the extent that such action is determined by the
General Partner to be reasonable and necessary or appropriate, the General
Partner shall file amendments to and restatements of the Certificate and do all
of the things to maintain the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability) under the laws
of the State of Delaware and each other state, or the District of Columbia, in
which the Partnership may elect to do business or own property. Subject to the
terms of Section 8.5.A(4) hereof, the General Partner shall not be required,
before or after filing, to deliver or mail a copy of the Certificate or any
amendment thereto to any Limited Partner.
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Section 7.4 Management Fee and Reimbursement of the General Partner
A. The General Partner and/or its Affiliates shall have the right, but
not the obligation, in the sole discretion of the General Partner, to perform
all or any of the property management services on account of the property owned
or managed by the Partnership. If the General Partner elects to so perform, or
to have an Affiliate so perform, the property management services, then the
General Partner or its Affiliate shall be reimbursed by the Partnership for the
expenses it incurs in providing such services in amounts determined by the
General Partner, in its good faith discretion, to be comparable to amounts which
would be reimbursable on account of expenses to reputable unrelated third party
property management companies which have substantial experience in performing
property management services for properties of the type owned or managed by the
Partnership for institutional owners with portfolios under management which are
substantially similar in size, nature, and condition of property owned or
managed by the Partnership. In addition, if the General Partner elects to so
perform, or to have an Affiliate so perform, the property management services
described herein, it is agreed that a management fee of four percent (4%) of
gross income shall be paid by the Partnership to the General Partner or its
Affiliates for the property management services as contemplated hereunder. The
reimbursements and fees payable to the General Partner or its Affiliates under
this Section shall be paid no less frequently than monthly. Except as provided
in this Section 7.4A and elsewhere in this Agreement (including the provisions
of Articles 5 and 6 regarding distributions, payments, and allocations to which
it may be entitled), the General Partner shall not be compensated for its
services as general partner of the Partnership. In furtherance of this Section,
the General Partner may cause the Partnership to enter into one or more property
management agreements with the General Partner or an Affiliate of the General
Partner, substantially in the form of the Management Agreement.
B. The General Partner shall be reimbursed on a monthly basis, or such
other basis as it may determine in its sole and absolute discretion, for all
costs and expenses that it incurs relating to the ownership and operation of, or
for the benefit of, the Original Properties, the Partnership or any of its other
assets or related to the administration of the Partnership and the Limited
Partnership Units. After consummation of the transactions and election described
in, respectively, Sections 4.3B and 5.2 of this Agreement as a result of which
the assets of the General Partner are conveyed to the Partnership, such
reimbursement shall include reimbursement to the General Partner for all general
and administrative costs, fees, and expenses incurred by the General Partner due
to its status as a public company, a qualified real estate investment trust, or
otherwise, and any and all other expenses incurred by the General Partner for
any matter, reason or thing whatsoever. Any reimbursement
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under this Section shall be in addition to any reimbursement made as a result of
indemnification pursuant to Section 7.7 hereof.
C. It is also acknowledged and agreed that, after consummation of the
transactions and election described in, respectively, Sections 4.3B and 5.2 of
this Agreement as a result of which the assets of the General Partner are
conveyed to the Partnership, the General Partner will directly or indirectly
incur costs and expenses, and may issue stock or other securities, or both, to
persons employed or not employed, or retained or not retained, directly by the
Partnership. Such costs, expenses, and issuances may include, but not be limited
to, payment of general and administrative expenses by the General Partner,
including compensation and bonuses to its officers and directors, and the award
of stock grants and options to purchase securities of the General Partner. In
light of the foregoing, it is agreed that, after consummation of the
transactions and election described in, respectively, Section 4.3B and 5.2 of
this Agreement, appropriate actions shall be taken by the Partnership, as
determined by the General Partner, in its sole discretion, to either (i)
reimburse the General Partner an appropriate portion of any such cost, expense,
or issuance, or (ii) adjust the General Partner's Interest in the Partnership so
as to prevent dilution of the General Partner's Interest.
D. Without limiting the generality of Section 7.4C above, it is agreed
that if, at any time or from time to time after consummation of the transactions
and election described in, respectively, Sections 4.3B and 5.2 of this
Agreement, options to purchase REIT Shares or any other securities granted to
employees, consultants or advisors of the General Partner or any Equity
Affiliate under any Plan or otherwise as compensation or incentive are
exercised, or REIT Shares or any other securities are granted or awarded to
employees, consultants or advisors of the General Partner or any Equity
Affiliate under any Plan or otherwise as compensation or incentive, then the
Partnership promptly shall issue to the General Partner Limited Partnership
Units or other interests in the Partnership with comparable rights, benefits,
and privileges in an amount equal to the REIT Shares or other securities granted
and/or issued, as the case may be. If Limited Partnership Units or other
interests in the Partnership are issued to the General Partner as a result of
the exercise of options to purchase REIT Shares or other securities, then
concurrently with the issuance of the Limited Partnership Units or other
interests to the General Partner, the General Partner shall pay to the
Partnership the cash consideration received by the General Partner on account of
such exercise.
E. After consummation of the transactions and elections described in
Sections 4.3B and 5.2 of this Agreement, in the event that the General Partner
shall elect to purchase from its shareholders REIT Shares for the purpose of
delivering such REIT Shares to satisfy an obligation under any dividend
reinvestment program adopted by the General Partner, any employee stock
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purchase plan adopted by the Company, or any similar obligation or arrangement
undertaken by the General Partner in the future, the purchase price paid by the
General Partner for such REIT Shares and any other expenses incurred by the
General Partner in connection with such purchase shall be considered expenses of
the Partnership and shall be reimbursed to the General Partner, subject to the
conditions that: (i) if such REIT Shares subsequently are to be sold by the
General Partner, the General Partner shall pay to the Partnership any proceeds
received by the General Partner for such REIT Shares (provided that a transfer
of REIT Shares for Limited Partnership Units pursuant to the Exchange Rights
Agreement would not be considered a sale for such purposes); and (ii) if such
REIT Shares are not re-transferred by the General Partner within 30 days after
the purchase thereof, the General Partner shall cause the Partnership to cancel
a number of Limited Partnership Units held by the General Partner equal to the
number of such REIT Shares (adjusted for stock dividends, stock splits,
reorganizations, reclassifications, mergers, and the like with regard to the
REIT Shares prior to such cancellation of Limited Partnership Units).
Section 7.5 Outside Activities of the General Partner
The General Partner and its Affiliates shall be permitted to purchase,
own, operate, manage and otherwise deal with and profit from any property, real,
personal or mixed, not owned by the Partnership for their own account and
benefit, whether or not competitive with the business and affairs of the
Partnership, and neither the Partnership, any Limited Partner, or any other
Person shall have any right, claim, interest or cause of action therein or as a
result thereof. Without limiting the generality of the above, nothing in this
Agreement shall obligate the General Partner or its Affiliates to first offer
the Partnership an opportunity to invest in any investment which has been
offered to or found by the General Partner or its Affiliates, whether or not
such investment is of a nature that may be invested in by the Partnership or
would compete directly or indirectly with the business of the Partnership. The
Limited Partners hereby acknowledge that the General Partner currently owns a
variety of real estate investments and may in the future acquire additional real
estate investments that may be competitive with the business of the Partnership.
Section 7.6 Contracts with Affiliates
A. The Partnership may lend or contribute funds or other assets to its
Subsidiaries or other Persons in which it has an equity investment and such
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.
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B. Subject to the restrictions contained in Section 7.2 hereof, the
Partnership may transfer assets to joint ventures, other partnerships,
corporations or other business entities in which it is or thereby becomes a
participant upon such terms and subject to such conditions consistent with this
Agreement and applicable law as the General Partner, in its sole and absolute
discretion, believes are advisable.
C. Except as expressly permitted by this Agreement, neither the General
Partner nor any of its Affiliates shall sell, transfer or convey any property
to, or purchase or otherwise acquire any property from, the Partnership,
directly or indirectly, except pursuant to transactions that are determined by
the General Partner in good faith to be fair and reasonable.
D. The General Partner, in its sole and absolute discretion and without
the approval of the Limited Partners, may propose and adopt, on behalf of the
Partnership, employee benefit plans, stock option plans, and similar plans
funded by the Partnership for the benefit of employees of the Partnership,
Subsidiaries of the Partnership or any Affiliate of any of them in respect of
services performed, directly or indirectly, for the benefit of the Partnership
or any Subsidiaries of the Partnership. Any or all of the foregoing may be
jointly established with the General Partner or its Affiliates, provided that in
such case the allocation of expense shall be shared among the parties on whose
behalf such plans exist as determined by the General Partner in good faith to be
fair and reasonable.
Section 7.7 Indemnification
A. To the fullest extent permitted by Delaware law, the Partnership
shall indemnify each Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including, without limitation,
attorneys' fees and other legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership or the General Partner in its
capacity as general partner of the Partnership as set forth in this Agreement,
in which such Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, whether or not suit or other legal proceedings are
commenced, unless it is established by a court of competent jurisdiction, and
all appeals relating thereto have been fully completed or the applicable appeal
periods have expired, that: (i) the act or omission of the Indemnitee was
material to the matter giving rise to the proceedings and either was committed
in intentional bad faith or was the result of active and deliberate dishonesty;
(ii) the Indemnitee actually received an improper and unpermitted personal
benefit in money, property or services; or (iii) in the case of any criminal
proceeding, the Indemnitee knew, or was reckless in not knowing, that the act or
omission was unlawful. Without limitation, the
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foregoing indemnity shall extend to any liability of any Indemnitee pursuant to
a loan guaranty, recourse obligation, general partner liability, or otherwise
for any indebtedness of the Partnership or any Subsidiary of the Partnership
(including, without limitation, any indebtedness which the Partnership or any
Subsidiary of the Partnership has assumed or taken subject to), and the General
Partner is hereby authorized and empowered, on behalf of the Partnership, to
enter into one or more indemnity agreements consistent with the provisions of
this Section 7.7 in favor of any Indemnitee having or potentially having
liability for any such indebtedness. The termination of any proceeding by
judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct as set forth in this Section
7.7A. The termination of any proceeding by conviction of an Indemnitee, or an
entry of an order of probation against an Indemnitee prior to judgment, in each
case after all appeals relating thereto have been fully completed or the
applicable appeal periods have expired, creates a rebuttable presumption that
such Indemnitee acted in a manner contrary to that specified in this Section
7.7A with respect to the subject matter of such proceeding. Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets of the
Partnership, and neither the General Partner nor any Limited Partner shall have
any obligation to contribute to the capital of the Partnership, or otherwise
provide funds, to enable the Partnership to fund its obligations under this
Section 7.7.
B. Reasonable expenses incurred by an Indemnitee who is a party to a
proceeding shall be paid or reimbursed by the Partnership in advance of the
final disposition of the proceeding.
C. The indemnification provided by this Section 7.7 shall be in addition
to any other rights to which an Indemnitee or any other Person may be entitled
under any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity unless otherwise provided in a written agreement pursuant to which
such Indemnitees are indemnified.
D. The Partnership may, but shall not be obligated to, purchase and
maintain insurance, on behalf of the Indemnitees and such other Persons as the
General Partner shall determine, against any liability that may be asserted
against or expenses that may be incurred by such Person in connection with the
Partnership's activities, regardless of whether the Partnership would have the
power to indemnify such Person against such liability under the provisions of
this Agreement.
E. For purposes of this Section 7.7, the Partnership shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
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beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of this Section 7.7; and actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.
F. In no event may an Indemnitee subject any of the Partners to personal
liability by reason of the Indemnification provisions set forth in this
Agreement.
G. An Indemnitee shall not be denied indemnification in whole or in part
under this Section 7.7 because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators, and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the Partnerships
liability to any Indemnitee under this Section 7.7, as in effect immediately
prior to such amendment, modification, or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
Section 7.8 Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this Agreement,
the General Partner and its officers and directors shall not be liable for
monetary damages to the Partnership, any Partners or any Assignees for losses
sustained or liabilities incurred as a result of errors in judgment or any act
or omission of the General partner undertaken in good faith.
B. The Limited Partners expressly acknowledge that the General Partner
is acting on behalf of the Partnership and the shareholders of the General
Partner collectively, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners (except as otherwise
provided herein) in deciding whether to cause the Partnership to take (or
decline to take) any actions, and that the General Partner shall not be liable
for monetary damages for losses sustained, liabilities incurred, or benefits not
derived by Limited Partners in connection with such decisions, provided that the
General Partner has acted in good faith.
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C. Subject to its obligations and duties as General Partner set forth in
Section 7.1.A hereof, the General Partner may exercise any of the powers granted
to it by this Agreement and perform any of the duties imposed upon it hereunder
either directly or by or through its agents. The General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith.
D. Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's and its officers and directors' liability
to the Partnership and the Limited Partners under this Section 7.8 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
Section 7.9 Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in acting, or
refraining from acting, upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, or other
paper or document believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties.
B. The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers, architects, engineers,
environmental consultants and other consultants and advisers selected by it, and
any act taken or omitted to be taken in reliance upon the opinion of such
Persons as to matters which such General Partner reasonably believes to be
within such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with such
opinion.
C. The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and duly appointed attorneys-in-fact. Each such attorney shall, to the
extent provided by the General Partner in the power of attorney, have full power
and authority to do and perform all and every act and duty which is permitted or
required to be done by the General Partner hereunder.
D. Notwithstanding any other provisions of this Agreement or the Act,
any action of the General Partner on behalf of the Partnership or any decision
of the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order: (i) to protect the ability of the General Partner to
continue to qualify as a REIT; or (ii) to avoid the
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General Partner incurring any taxes under Section 857 or Section 4981 of the
Code, is expressly authorized under this Agreement and is deemed approved by all
of the Limited Partners.
Section 7.10 Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner, individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title to any or all
of the Partnership assets may be held in the name of the Partnership, the
General Partner or one or more nominees, as the General Partner may determine,
including Affiliates of the General Partner. The General Partner hereby declares
and warrants that any Partnership assets for which legal title is being held in
the name of the General Partner or any nominee or Affiliate of the General
Partner shall be held by the General Partner for the use and benefit of the
Partnership in accordance with the provisions of this Agreement. All Partnership
assets shall be recorded as the property of the Partnership in its books and
records, irrespective of the name in which legal title to such Partnership
assets is held.
Section 7.11 Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without consent or approval of any other
Partner or Person, to encumber, sell or otherwise use in any manner any and all
assets of the Partnership and to enter into any contracts on behalf of the
Partnership, and take any and all actions on behalf of the Partnership and such
Person shall be entitled to deal with the General Partner as if the General
Partner were the Partnership's sole party in interest, both legally and
beneficially. Each Limited Partner hereby waives any and all defenses or other
remedies which may be available against such Person to contest, engage or
disaffirm any action of the General Partner in connection with any such dealing.
In no event shall any Person dealing with the General Partner or its
representatives be obligated to ascertain that the terms of this Agreement have
been complied with or to inquire into the necessity or expedience of any act or
action of the General Partner or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that: (i)
at the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect; (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership; and
(iii) such certificate, document or instrument was duly executed
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and delivered in accordance with the terms and provisions of this Agreement, and
is binding upon the Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability
The Limited Partners shall have no liability under this Agreement,
except as expressly provided in this Agreement (including Section 10.5 hereof)
or under the Act.
Section 8.2 Management of Business
No Limited Partner or Assignee (other than the General Partner, any of
its Affiliates or any officer, director, employee, agent or trustee of the
General Partner, the Partnership or any of their Affiliates, in their capacity
as such) shall take part in the operation, management or control (within the
meaning of the Act) of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. The transaction of any such business by the General Partner, any of
its Affiliates or any officer, director, employee, partner, agent or trustee of
the General Partner, the Partnership or any of their Affiliates, in their
capacity as such, shall not affect, impair or eliminate the limitations on the
liability of the Limited Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners
A. Subject to the terms and provisions hereof, it is agreed that any
Partner (General and/or Limited) and any Affiliate of any Partner (including any
officer, director, employee, agent, or representative of any Partner) shall be
entitled to and may have business interests and engage in business activities in
addition to those relating to the Partnership, including business interests and
activities that are in direct competition with the Partnership or that are
enhanced by the activities of the Partnership. Neither the Partnership nor any
Partners shall have any rights, claims, or interests by virtue of this Agreement
or any relationships, duties or obligations hereunder (including, but not
limited to, any fiduciary or similar duties created by this Agreement, under the
Act, or otherwise existing at law or in equity) in any business ventures or
investments of any General Partner or Limited Partner, or any Affiliate of any
of the foregoing. None of the Limited Partners nor any other Person shall have
any rights by virtue of this Agreement or the Partnership relationship
established hereby in any business ventures of any other Person, and such Person
shall have no obligation pursuant to this Agreement to offer any interest in any
such business ventures to
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the Partnership, any Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person could be taken by such Person.
B. It is further agreed that none of the Partners, General or Limited,
or any of their Affiliates, have any duty, obligation, or liability to present
to the Partnership any business or investment opportunity which may arise in the
course of activity for or on behalf of the Partnership, or otherwise, for
investment by the Partnership or any of the Partners (even if within the line
and scope of the business and affairs of the Partnership), and instead any
Partner, General or Limited, and any Affiliate may pursue such opportunity for
such Partner's or Affiliate's own benefit and account, without any
participation, right, or claim therein by the Partnership or any other Partner,
and without notification or disclosure to the Partnership or any other Partner.
Section 8.4 Return of Capital
No Limited Partner shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent of distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein. Except
to the extent provided by Exhibit "C" hereof or as otherwise expressly provided
in this Agreement, no Limited Partner or Assignee shall have priority over any
other Limited Partner or Assignee, either as to the return of Capital
Contributions or as to profits, losses or distributions.
Section 8.5 Rights of Limited Partners Relating to the Partnership
A. In addition to the other rights provided by this Agreement or by the
Act, and except as limited by Section 8.5.B hereof, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at such Limited Partner's own
expense (including such copying and administrative charges as the General
Partner may establish from time to time):
(1) to obtain a copy of the most recent annual and quarterly balance
sheet, income statement, and related financial statements prepared by the
Partnership;
(2) to obtain a copy of the Partnership's federal, state and local
income tax returns for each Partnership Year;
(3) to obtain a current list of the name and last known business,
residence or mailing address of each Partner;
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(4) to obtain a copy of this Agreement and the Certificate and all
amendments thereto, together with executed copies of all powers of attorney
pursuant to which this Agreement, the Certificate and all amendments thereto
have been executed; and
(5) to obtain true and full information regarding the amount of cash
and a description and statement of any other property or services contributed by
each Partner and which each Partner has agreed to contribute in the future, and
the date on which each became a Partner to the extent the foregoing is
materially different from information contained in financial statements or other
reports provided to Limited Partners.
(6) to obtain quarterly and annual balance sheets and income statements
regularly prepared by the Partnership in order to verify the correctness of
distributions of cash, if any, to the Limited Partner in accordance with the
terms and provisions of this Agreement.
B. Notwithstanding any other provision of this Section 8.5, the General
Partner may keep confidential from the Limited Partners, for such period of time
as the General Partner determines in its sole and absolute discretion to be
reasonable, desirable or necessary any information that: )(i) the General
Partner reasonably believes to be in the nature of trade secrets or other
information, the disclosure of which the General Partner in good faith believes
is not in the best interests of the Partnership or could damage the Partnership
or its business; or (ii) the Partnership is required by law or by agreement with
an unaffiliated third party to keep confidential. If the General Partner desires
to disclose any information of the type described in the preceding paragraphs
(i) or (ii) to a Limited Partner, the General Partner may require, as a
condition to such disclosure, that the Limited Partner agree in writing that
such information will be held in strictest confidence and no distribution of
such information will be made.
Section 8.6 No Redemption Right
No Limited Partner (other than the General Partner) shall have the right
to require the Partnership to redeem all or a portion of the Limited Partnership
Units held by such Limited Partner.
Section 8.7 Representations and Warranties
Each Limited Partner represents and warrants to the General Partner and
the Partnership that:
A. He, she or it has received and reviewed that certain Prospectus Of
the General Partner dated May 27, 1997, that certain Prospectus Supplement dated
June 5, 1997, and that certain Registration Statement, filed March 19, 1997, as
amended
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and filed April 10, 1997, of which the Prospectus and Prospectus Supplement are
a part, filed with the Securities and Exchange Commission under the Act and has
had access to such additional financial and other information, including without
limitation the General Partner's most current Form 10-Q and Form 10-K, the
General Partners' 1996 Annual Report to Shareholders' and the General Partners'
Notice of 1997 Annual Meeting of Shareholders and accompanying Proxy Statement,
and has been afforded the opportunity to ask questions of representatives of the
General Partner, and to receive answers to those questions, as they have deemed
necessary.
B. He, she or it acknowledges that the Limited Partnership Units are
being acquired in a transaction not involving any public offering within the
meaning of the Securities Act and that the Limited Partnership Units have not
been registered under the Securities Act and agrees not to offer, sell, transfer
or otherwise dispose of the Limited Partnership Units (except for such transfer
as described in subsection D, below) in the absence of registration under the
Securities Act unless such Limited Partner delivers to the Partnership and the
General Partner an opinion of a lawyer reasonably satisfactory to the
Partnership and the General Partner, in form and substance satisfactory to the
Partnership and the General Partner, to the effect that the proposed sale,
transfer or other disposition may be effected without registration under the
Securities Act and under applicable state securities or blue sky laws.
C. He, she or it is either (a) an "accredited investor" within the
meaning of Rule 501(a) of Regulation D under the Securities Act, or (b) a person
who either alone or with his, her or its purchaser representative (as defined in
Rule 501(h) of Regulation D under the Securities Act) has such knowledge and
experience in financial and business matters that he, she or it is capable of
evaluating the merits and risks of an investment in the Limited Partnership
Units or any other security acquired hereunder. He, she or it has such knowledge
and experience in financial and business matters as to be capable of evaluating
alone, or together with his, her or its purchaser representative or personal
advisor the merits and risks of an investment in the Limited Partnership Units
or any other security delivered hereunder and protecting his, her or its own
interests in connection with the investment and has obtained, in his, her or its
judgment, alone, or together with his, her or its purchaser representative or
personal advisor sufficient information from the General Partner to evaluate the
merits and risks of an investment in the Limited Partnership Units or any other
security delivered hereunder. He, she or it acknowledges that he, she or it has
the financial ability to bear the economic risk of his, her or its investment in
the Limited Partnership Units, has adequate means for providing for his, her or
its current needs and personal contingencies and has no need for liquidity with
respect to the investment in the Limited Partnership Units. If other than an
individual, it has not been organized solely for
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the purpose of acquiring the Limited Partnership Units or other security
acquired under this Agreement.
D. Although Eden may elect to transfer the Limited Partnership Units to
its constituent entities, and those constituent entities may, in turn, elect
to transfer the Limited Partnership Units to their respective constituent
entities, they are not acquiring any Limited Partnership Units with a view to
the distribution of the Limited Partnership Units or any present intention of
offering or selling any of the Limited Partnership Units in a transaction that
would violate the Securities Act or the securities laws of any State or any
other applicable jurisdiction.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The General Partner shall keep or cause to be kept at the principal
office of the Partnership those records and documents required to be
maintained by the Act and other books and records deemed by the General
Partner to be appropriate with respect to the Partnership's business. Any
records maintained by or on behalf of the Partnership in the regular course of
its business may be kept on, or be in the form of, punch cards, magnetic tape,
photographs, micrographics or any other information storage device, provided
that the records so maintained are convertible into clearly legible written
form within a reasonable period of time. The books of the Partnership shall be
maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles, or such other basis
as the General Partner determines to be necessary or appropriate.
Section 9.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
Section 9.3 Reports
A. The Partnership shall mail to each Limited Partner no later than
ninety (90) days after the close of each Partnership Year an annual report
containing financial statements of the Partnership, or of the General Partner
if such statements are prepared solely on a consolidated basis with the
General Partner, for such Partnership year, presented in accordance with
generally accepted accounting principles, such statements to be audited by a
nationally recognized firm of independent public accountants selected by the
General Partner in its discretion (such selection may include any such
accountants who also perform accounting or auditing work for the General
Partner and its Affiliates).
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B. The Partnership shall mail to each Limited Partner no later than ninety
(90) days after the close of each calendar quarter (except the last calendar
quarter of each year), a report containing unaudited financial statements of the
Partnership, or of the General Partner if such statements are prepared solely on
a consolidated basis with the General Partner, and such other information as may
be required by applicable law or regulation, or as the General Partner
determines to be appropriate.
C. All accounting and other professional fees associated with the
preparation, compilation, review, audit, and any other matters relating to the
Partnership's records, financial statements and reports, tax returns, and any
other Partnership items described in the preceding paragraphs shall be at the
expense of the Partnership, not the General Partner.
ARTICLE 10
TAX MATTERS
Section 10.1 Preparation of Tax Returns
The General Partner shall arrange for the preparation and timely filing
of all returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for federal and state income tax purposes and shall
use all reasonable efforts to furnish, within ninety (90) days of the close of
each taxable year, the tax information reasonably required by the Limited
Partners for federal and state income tax reporting purposes.
Section 10.2 Tax Elections
Except as otherwise provided herein, the General Partner shall, in its
sole and absolute discretion, determine whether to make any available election
pursuant to the Code; provided, however, that if requested by a transferee of a
Partnership Interest, the General Partner shall file an election on behalf of
the Partnership pursuant to Section 754 of the Code to adjust the basis of the
Partnership property in the case of a transfer of a Partnership Interest made in
accordance with the provisions of this Agreement. The General Partner intends to
elect the so-called "traditional method" of making Section 704(c) allocations
pursuant to Regulations Section 1.704-3 with respect to property contributed as
of the date hereof. The General Partner shall have the right to seek to revoke
any tax election it makes (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination, in its sole
and absolute discretion, that such revocation is in the best interest of the
Partners.
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Section 10.3 Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of the
Partnership for federal income purposes. Pursuant to Section 6230(e) of the
Code, upon receipt of notice from the IRS of the beginning of an administrative
proceeding with respect to the Partnership, the tax matters partner shall
furnish the IRS with the name, address, taxpayer identification number, and
profit interest of each of the Limited Partners and the Assignees; provided,
however, that such information is provided to the Partnership by the Limited
Partners and the Assignees.
B. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of Partnership items
required to be taken into account by a Partner for income tax purposes (such
administrative proceedings being referred to as a "tax audit" and such judicial
proceedings being referred to as "judicial review"), and in the settlement
agreement the tax matters partner may expressly state that such agreement shall
bind all Partners, except that such settlement agreement shall not bind any
Partner: (i) who (within the time period prescribed pursuant to the Code and
Regulations) files a statement with the IRS providing that the tax matters
partner shall not have the authority to enter into a settlement agreement on
behalf of such Partner; or (ii) who is a "notice partner" (as defined in Section
6231(a)(8) of the Code) or a member of a "notice group" (as defined in Section
6223(b)(2) of the Code);
(2) in the event that a notice of a final administrative adjustment
at the Partnership level of any item required to be taken into account by a
Partner for tax purposes (a "final adjustment") is mailed to the tax matters
partner, to seek judicial review of such final adjustment, including the filing
of a petition for readjustment with the Tax Court or the District Court of the
United States for the district in which the Partnership's principal place of
business is located;
(3) to intervene in any action brought by any other Partner for
judicial review of a final adjustment;
(4) to file a request for an administrative adjustment with the IRS
and, if any part of such request is not allowed by the IRS, to file an
appropriate pleading (petition or complaint) for judicial review with respect to
such request;
(5) to enter into an agreement with the IRS to extend the period for
assessing any tax which is attributable to any item required to be taken account
of by a Partner for tax purposes, or an item affected by such item; and
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(6) to take any other action of behalf of the Partners or the
Partnership in connection with any tax audit or judicial review proceeding to
the extent permitted by applicable law or regulations.
C. The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 7.7 of this Agreement shall be fully applicable to
the tax matters partner in its capacity as such.
D. The tax matters partner shall receive no special compensation for its
services as such. All third party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees
and expenses) shall be borne or reimbursed by the Partnership. Nothing herein
shall be construed to restrict the Partnership from engaging an accounting firm
to assist the tax matters partner in discharging its duties hereunder, including
an accounting firm which also renders services to the General Partner and its
Affiliates.
Section 10.4 Organizational Expenses
The Partnership shall elect to deduct expenses, if any, incurred by it
in organizing the Partnership ratably over a sixty (60) month period as provided
in Section 709 of the Code.
Section 10.5 Withholding
Each Limited Partner hereby authorizes the Partnership to withhold from,
or pay on behalf of or with respect to, such Limited Partner any amount of
federal, state, local or foreign taxes that the General Partner determines that
the Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the Code and
similar state and local income tax laws, if any. Any amount paid on behalf of or
with respect to a Limited Partner shall constitute a loan by the Partnership to
such Limited Partner, which loan shall be repaid by such Limited Partner within
fifteen (15) days after notice from the General Partner that such payment must
be made, unless: (i) the Partnership withholds such payment from a distribution
which would otherwise be made to the Limited Partner; or (ii) the General
Partner determines, in its sole and absolute discretion, that such payment may
be satisfied out of the available funds of the Partnership which would, but for
such payment, be distributed to the Limited Partner. Any amounts withheld
pursuant to the foregoing clauses (i) or (ii) shall be treated as having been
distributed to such Limited Partner. Each Limited Partner hereby unconditionally
and irrevocably grants to the Partnership a
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security interest in such Limited Partner's Partnership Interest to secure such
Limited Partner's obligation to pay to the Partnership any amounts required to
be paid pursuant to this Section 10.5. In the event that a Limited Partner fails
to pay any amounts owed to the Partnership pursuant to this Section 10.5 when
due, the General Partner may, in its sole and absolute discretion, elect to make
the payment to the Partnership on behalf of such defaulting Limited Partner, and
shall succeed to all rights and remedies of the Partnership as against such
defaulting Limited Partner. Without limitation, in such event the General
Partner shall have the right to receive distributions that would otherwise be
distributable to such defaulting Limited Partner until such time as such loan,
together with all interest thereon, has been paid in full, and any such
distributions so received by the General Partner shall be treated as having been
distributed to the defaulting Limited Partner and immediately paid by the
defaulting Limited Partner to the General Partner in repayment of such loan. Any
amounts payable by a Limited Partner hereunder shall bear interest at the lesser
of (A) the base rate on corporate loans at large United States money center
commercial banks, as published from time to time in the Wall Street Journal,
plus four (4) percentage points, or (B) the maximum lawful rate of interest on
such obligation, such interest to accrue from the date such amount is due (i.e.,
fifteen (15) days after demand) until such amount is paid in full. Each Limited
Partner shall at its own expense take such actions as the Partnership or the
General Partner shall request in order to perfect or enforce the security
interest created hereunder.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer
A. The term "transfer" when used in this Article 11 with respect to a
Limited Partnership Unit shall be deemed to refer to a transaction by which the
General Partner purports to assign all or any part of its General Partner
Interest to another Person or by which a Limited Partner purports to assign all
or any part of its Limited Partner Interest to another Person, and includes a
sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange
or any other disposition by law or otherwise. The term "transfer" when used in
this Article 11 does not include any acquisition of Partnership Interests or
Limited Partnership Units by the General Partner from any Limited Partner, nor
does it include any grant of a security interest or any related action involving
levy, execution, or the like contemplated under Section 10.5 of this Agreement.
B. No Partnership Interest shall be transferred, in whole or in part
(including any interest therein), except in accordance with the terms and
conditions set forth in this Article 11. Any
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transfer or purported transfer of a Partnership Interest not made in accordance
with this Article 11 shall be null and void ab initio, and the Partnership shall
have no duty or obligation to recognize the transferee as a partner or holder of
any interest whatsoever in the Partnership, and the transferee shall have no
rights, interests or claims in or against the Partnership or any Partner.
Section 11.2 Transfer of the General Partner's Partner
Interest and Limited Partner Interest
The General Partner may transfer any of its General Partner Interest or
withdraw as General Partner, or transfer any of its Limited Partner Interest,
without consent or approval from any Limited Partners. Such transfer includes
transfer to an entity which is wholly-owned by the General Partner and is a
Qualified REIT Subsidiary under Section 856(d) of the Code.
Section 11.3 Limited Partners' Rights to Transfer
A. Subject to the provisions of Sections 11.3C, 11.3D, 11.3E, 11.3F and
11.4, a Limited Partner (other than the General Partner) may transfer, with or
without the consent of the General Partner, all or any portion of its
Partnership Interest, or any of such Limited Partner's economic rights as a
Limited Partner. In addition, those Original Limited Partners which are
themselves partnerships or limited liability companies shall have the right to
transfer, assign, and convey their Limited Partnership Units to their
constituent partners, provided that such constituent partners or members shall
first have executed and delivered the Subscription Documents and a written
agreement to be bound by the terms, provisions, and conditions of this
Agreement, the Exchange Rights Agreement, and the Master Contribution Agreement,
and that at the time of such transfer, assignment, and conveyance to such
constituent partners, the representations and warranties made by such
constituent partners or members in the aforementioned Subscription Documents and
the related agreement are true and correct in all material respects.
B. If a Limited Partner is subject to Incapacity, the partners,
executor, administrator, trustee, committee, guardian, conservator or receiver
of such Limited Partner's estate shall have all of the rights of a Limited
Partner, but not more rights than those enjoyed by other Limited Partners, for
the purpose of settling or managing the estate and such power as the
Incapacitated Limited Partner possessed to transfer all or any part of his or
its interest in the Partnership. The Incapacity of a Limited Partner, in and of
itself, shall not dissolve or terminate the Partnership.
C. The General Partner may prohibit any transfer by a Limited Partner
if, in the opinion of legal counsel to the Partnership or the General Partner,
such transfer would require filing of a registration statement under the
Securities Act of
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1933 or would otherwise violate any federal or state securities laws or
regulations applicable to the Partnership or the Limited Partnership Units.
D. No transfer by a Limited Partner of its Limited Partnership Units may
be made to any Person if: (i) in the opinion of legal counsel for the
Partnership or the General Partner, it would result in the Partnership being
treated as an association taxable as a corporation; (ii) such transfer is
effectuated through an "established securities market" or a "secondary market
(or the substantial equivalent thereof)" within the meaning of Section 7704 of
the Code; (iii) such transfer would cause the Partnership to become, with
respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(c) of the Code); (iv) such transfer would,
in the opinion of legal counsel for the Partnership or the General Partner,
cause any portion of the assets of the Partnership to constitute assets of any
employee benefit plan pursuant to Department of Labor Regulations Section
2510.2-101; (v) such transfer would subject the Partnership to be regulated
under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or
the Employee Retirement Income Security Act of 1974, each as amended; or (vi) in
the opinion of legal counsel for the Partnership or the General Partner, it
would adversely affect the ability of the General Partner to continue to qualify
as a REIT or subject the General Partner to any additional taxes under Section
857 or Section 4981 of the Code.
E. No transfer of any Limited Partnership Unit may be made to a lender
to the Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
constitutes a Nonrecourse Liability, without the consent of the General Partner,
in its sole and absolute discretion. Without limiting the restriction of the
foregoing sentence, if any such consent is given, a condition to such consent
shall be that the lender enter into an arrangement with the Partnership or the
General Partner to exchange or redeem at a price agreeable to the lender, the
General Partner, and the transferring Partner (each in their respective
discretion) all Limited Partnership Units in which a security interest is held
immediately prior to the time at which such lender would be deemed to be a
partner in the Partnership for purposes of allocating liabilities to such lender
under Section 752 of the Code.
F. The Limited Partners acknowledge that each certificate or instrument
representing Limited Partnership Units shall bear the following legend and any
other legend required under any applicable state securities law:
"NEITHER THE LIMITED PARTNERSHIP UNITS IN THE PARTNERSHIP REPRESENTED
BY THIS CERTIFICATE OR
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INSTRUMENT NOR ANY PART THEREOF OR INTEREST THEREIN HAS BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT') AND NEITHER MAY
BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, IN WHOLE OR IN PART, UNLESS SUCH TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE
PROVISIONS OF THE AGREEMENT OF LIMITED PARTNERSHIP OF PGP NORTHERN
INDUSTRIAL, L.P., AS AMENDED FROM TIME TO TIME (A COPY OF WHICH IS ON
FILE WITH THE PARTNERSHIP); AND, IN ALL EVENTS, NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE LIMITED
PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE (OR ANY SECURITY
ISSUED ON ACCOUNT HEREOF OR WITH RESPECT HERETO) MAY BE MADE UNLESS THE
PARTNERSHIP HAS BEEN FURNISHED WITH AN OPINION OF COUNSEL (WHICH COUNSEL
AND OPINION BOTH MUST BE ACCEPTABLE TO THE PARTNERSHIP IN ITS SOLE
DISCRETION) FOR THE HOLDER THAT, BECAUSE OF THE AVAILABILITY OF AN
EXEMPTION, NO SUCH REGISTRATION, QUALIFICATION OR OTHER COMPLIANCE IS
REQUIRED UNDER THE ACT, APPLICABLE BLUE SKY OR STATE SECURITIES LAWS, OR
OTHERWISE."
Section 11.4 Substituted Limited Partners
A. No Limited Partner shall have the right to substitute a transferee
as a Limited Partner in his place. The General Partner shall, however, have the
right to consent to the admission of a transferee of the interest of a Limited
Partner pursuant to this, Section 11.4 as a Substituted Limited Partner, which
Consent may be given or withheld by the General Partner in its sole and absolute
discretion. The General Partner's failure or refusal to permit a transferee of
any such interests to become a Substituted Limited Partner shall not give rise
to any cause of action against the Partnership or any Partner. Notwithstanding
the foregoing in the event of transfers of Limited Partnership Units by Original
Limited Partners in accordance with the second sentence of Section 11.3A, the
transferees shall be admitted as Substituted Limited Partners, and the General
Partner hereby consents to such.
B. A transferee who has been admitted as a Substituted Limited Partner
in accordance with this Article 11 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement.
C. Upon admission of a Substituted Limited Partner, the General Partner
shall amend Exhibit "A" to reflect the name, address, number of Limited
Partnership Units, and Limited Partner Percentage Interest of such Substituted
Limited Partner.
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Section 11.5 Assignees
If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee as a Substituted Limited
Partner, as described in Section 11.4, such transferee shall be considered an
Assignee for purposes of this Agreement. An Assignee shall be deemed to have had
assigned to it, and shall be entitled to receive distributions from the
Partnership and the share of Net Income, Net Losses, Recapture Income, and any
other items, gain, loss deduction and credit of the Partnership attributable to
the Limited Partnership Units assigned to such transferee, but shall not be
deemed to be a holder of Limited Partnership Units for any other purpose under
this Agreement, and shall not be entitled to vote such Limited Partnership Units
for any other purpose under this Agreement, and shall not be entitled to vote
such Limited Partnership Units in any matter presented to the Limited Partners
for a vote (such Limited Partnership Units being deemed to have been voted on
such matters in the same proportion as all other Limited Partnership Units held
by Limited Partners are voted). In the event any such transferee desires to make
a further assignment of any such Limited Partnership Units, such transferee
shall be subject to all of the provisions of this Article 11 to the same extent
and in the same manner as any Limited Partner desiring to make an assignment of
Limited Partnership Units.
Section 11.6 General Provisions
A. No Limited Partner may withdraw from the Partnership other than as a
result of a permitted transfer of all such Limited Partner's Limited Partnership
Units in accordance with this Article 11 or pursuant to any agreement consented
to by the Partnership pursuant to which the Limited Partner's interests in the
Partnership are conveyed and the Limited Partner's withdrawal is provided for.
B. Any Limited Partner who shall transfer all of its Limited
Partnership Units in a transfer permitted pursuant to this Article 11 shall
cease to be a Limited Partner upon the admission of all Assignees of such
Limited Partnership Units as Substitute Limited Partners. Similarly, any Limited
Partner who shall transfer all of its Limited Partnership Units pursuant to any
agreement of the type referred to in the preceding paragraph shall cease to be a
Limited Partner.
C. Transfers pursuant to this Article 11 may only be made on the first
day of a fiscal quarter of the Partnership, unless the General Partner otherwise
agrees.
D. Without limiting the restriction of Section 11.6C, if any
Partnership Interest is transferred or assigned during any quarterly segment of
the Partnership's fiscal year in compliance with the provisions of this Article
11 on any day other than the first day of a Partnership Year, then Net Income,
Net Losses,
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each item thereof and all other items attributable to such interest for such
Partnership Year shall be divided and allocated between the transferor Partner
and the transferee Partner by taking into account their varying interests during
the Partnership Year in accordance with Section 706(d) of the Code, using the
interim closing of the books method. Solely for purposes of making such
allocations, each of such items for the calendar month in which the transfer or
assignment occurs shall be allocated to the transferee Partner, and none of such
items for the calendar month in which a redemption occurs shall be allocated to
a redeeming Partner. All distributions of Available Cash attributable to such
Limited Partnership Unit with respect to which the Partnership Record Date is
before the date of such transfer, assignment, or redemption shall be made to the
transferor Partner, all distributions of Available Cash thereafter attributable
to such Limited Partnership Unit shall be made to the transferee Partner.
Section 11.7 No Exchange
Notwithstanding anything in this Section 11 to the contrary, each of the
Limited Partners hereby agrees that, during the No Exchange Period, it shall be
prohibited from tendering its Limited Partnership Units for exchange or
redemption under the Exchange Rights Agreement.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner
A Successor to all of the General Partner Interest pursuant to Section
11.2 hereof who is proposed to be admitted as successor General Partner shall be
admitted to the Partnership as the General Partner, effective upon such
transfer. The admission of any such transferee shall not cause a dissolution of
the Partnership and such transferee shall carry on the business of the
Partnership in accordance with the forms and provisions of this Agreement. In
each case, the admission shall be subject to the Successor General Partner
executing and delivering to the Partnership an acceptance of all of the terms
and conditions of this Agreement and such other documents or instruments as may
be required to effect the admission. In the case of such admission on any day
other than the first day of a Partnership Year, all items attributable to the
General Partner Interest for such Partnership Year shall be allocated between
the transferring General Partner and such successor as provided in Section
11.6-D hereof.
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Section 12.2 Admission of Additional Limited Partners
A. Except as otherwise provided elsewhere in this Agreement, after the
admission of Eden to the Partnership as the initial original Limited Partner on
the date hereof, a Person who makes a Capital Contribution to the Partnership in
accordance with this Agreement shall be admitted to the Partnership as an
Additional Limited Partner only upon furnishing to the General Partner (i)
evidence of acceptance in form satisfactory to the General Partner of all of the
terms and conditions of this Agreement, including, without limitation, the power
of attorney granted in Section 2.4 hereof, and (ii) such other documents or
instruments as may be required in the discretion of the General Partner in order
to effect such Person's admission as an Additional Limited Partner.
B. Notwithstanding anything to the contrary in this Section 12.2, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.
C. If any Additional Limited Partner is admitted to the Partnership on
any day other than the first day of a Partnership Year, then Net Income, Net
Losses, each item thereof and all other items allocable among Partners and
Assignees for such Partnership Year shall be allocated among such Additional
Limited Partner and all other Partners and Assignees by taking into account
their varying interests during the Partnership Year in accordance with Section
706(d) of the Code, using the interim closing of the books method. Solely for
purposes of making such allocations, each of such items for the calendar month
in which an admission of any Additional Limited Partner occurs shall be
allocated among all of the Partners and Assignees, including such Additional
Limited Partner. All distributions of Available Cash with respect to which the
Partnership Record Date is before the date of such admission shall be made
solely to Partners and assignees, other than the Additional Limited Partner, and
all distributions of Available Cash thereafter shall be made to all of the
Partners and Assignees, including such Additional Limited Partner.
Section 12.3 Amendment of Agreement and Certificate of Limited
Partnership
For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment to this Agreement (including an amendment of Exhibit
"A") and, if
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required by law, shall prepare and file an amendment to the Certificate and may
for this purpose exercise the power of attorney granted pursuant to Section 2.4
hereof.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 Dissolution
The Partnership shall not be dissolved by the admission of substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership. The Partnership shall dissolve, and
its affairs be wound up, only upon the first to occur of any of the following
("Liquidating Events"):
A. the expiration of its term as provided in Section 2.5 hereof;
B. an event of withdrawal of the General Partner, as defined in the
Act (other than an event of bankruptcy), unless within ninety (90) days after
such event of withdrawal a majority in interest in capital and profits of the
remaining Partners agree in writing to continue the business of the Partnership
and to the appointment, effective as of the date of withdrawal of a successor
General Partner;
C. an election to dissolve the Partnership made by the General
Partner, in its sole and absolute discretion;
D. entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
E. the sale of all or substantially all of the assets and properties
of the Partnership; provided, however, that the sale of one or more, but less
than all, of the Original Properties shall not be a Liquidating Event so long
as the Partnership retains at least one of the Original Properties; or
F. a final and non-appealable judgment is entered by a court of
competent jurisdiction ruling that the General Partner is bankrupt or insolvent,
or a final and non-appealable order for relief is entered by a court with
appropriate jurisdiction against the General Partner, in each case under any
federal or state bankruptcy or insolvency laws as now or hereafter in effect,
unless prior to the entry of such order or judgment all of the remaining
Partners agree in writing to continue the business of the Partnership and to the
appointment, effective as of a date prior to the date of such order or judgment,
of a substitute General Partner.
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Section 13.2 Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Partners.
No Partner shall take any action that is inconsistent with, or not necessary to
or appropriate for, the winding up of the Partnership's business and affairs.
The General Partner, or in the event there is no remaining General Partner, any
Person elected by a majority in interest Of the Limited Partners (the General
Partner or such other Person being referred to herein as the "Liquidator"),
shall be responsible for overseeing the winding up and dissolution of the
Partnership and shall take full account of the Partnership's liabilities and
property and the Partnership property shall be liquidated as promptly as is
consistent with obtaining the fair value thereof, and the proceeds therefrom
(which may, to the extent determined by the General Partner, include shares of
common stock in the General Partner) shall be applied and distributed in the
following order:
(1) First, to the satisfaction of all of the Partnership's debts
and liabilities to creditors other than the Partners (whether by payment or the
reasonable provision for payment thereof);
(2) Second, to the satisfaction of all of the Partnership's debts
and liabilities to the General Partner and its Affiliates (whether by payment or
the reasonable provision for payment thereof);
(3) Third, to the satisfaction of all of the Partnership's debts
and liabilities to the other Partners (whether by payment or the reasonable
provision for payment thereof); and
(4) The balance, if any, to the General Partner and Limited
Partners in accordance with their Capital Accounts, after giving effect to all
contributions, distributions, and allocations for all periods.
The General Partner shall not receive any special compensation for
any services performed pursuant to this Article 13.
B. Notwithstanding the foregoing, if and after the Partnership
acquires Non-Original Limited Partner Related Assets, or becomes obligated,
indebted or liable for or on account of Non-original Limited Partner Related
Assets or the ownership or operation thereof, and so long as the General Partner
has not consummated the transactions and made the election described in Sections
4.3B and 5.2, respectively, of this Agreement, then distributions under the
terms of Section 13.2A shall be calculated and made only with respect to
Original Limited Partner
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Related Assets and the ownership and operation thereof, together with the
operation and existence of the Partnership insofar as such concerns the original
Limited Partner Related Assets. Distributions under the terms of Section 13.2A
shall not include any revenues, expenses, assets, or liabilities of the
Partnership relating to the Non-Original Limited Partner Related Assets, the
ownership or operation thereof, or the operation or existence of the Partnership
with respect thereto, all of which shall be as separately determined by the
General Partner in its sole and absolute discretion.
C. Anything contained herein to the contrary notwithstanding,
pursuant to the Exchange Rights Agreement all Limited Partnership Units then
held by any Limited Partner (other than Limited Partnership Units held by the
General Partner) will be mandatorily exchanged or redeemed prior to any
distribution, or the determination of any entitlement to any distribution,
pursuant to Section 13.2A. As a result of such mandatory exchange or redemption
of Limited Partnership Units, no Limited Partner (other than the General Partner
in its capacity as a Limited Partner) will receive, nor shall he, she or it be
entitled to receive, any distribution upon a Liquidating Event.
D. Notwithstanding the provisions of Section 13.2A hereof which
require liquidation of the assets of the Partnership, but subject to the order
of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners and their Affiliates
as creditors) and/or distribute to the Partners, in lieu of cash, as tenants in
common and in accordance with the provisions of Section 13.2A hereof, undivided
interests in such Partnership assets as the Liquidator deems not suitable for
liquidation. Any such distributions in kind shall be made only if, in the good
faith judgment of the Liquidator, such distributions in kind are in the best
interest of the Partners, and shall be subject to such conditions relating to
the disposition and management of such properties as the Liquidator deems
reasonable and equitable and to any agreements governing the operation of such
properties at such time. The Liquidator shall determine the fair market value of
any property distributed in kind using such reasonable method of valuation as it
may adopt.
E. In the discretion of the Liquidator, a pro rata portion of the
distributions that would otherwise be made pursuant to this Article 13 may be:
(1) distributed to one or more trust(s) established for the benefit
of the creditors and the General Partner and Limited Partners for the purposes
of liquidating Partnership
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assets, collecting amounts owed to the Partnership, and paying any contingent,
conditional or unmatured liabilities or obligations of the Partnership or the
General Partner arising out of or in connection with the Partnership. The assets
of any such trust(s) shall be distributed to the creditors and General Partner
and Limited Partners from time to time, in the reasonable direction of the
Liquidator, in the same manner and proportions as the amount distributed to such
trust(s) by the Partnership would otherwise have been distributed to the
creditors and General Partner and Limited Partners pursuant to this Agreement;
and
(2) withheld or escrowed to provide a reasonable reserve for
Partnership liabilities (contingent or otherwise) and to reflect the unrealized
portion of any installment obligations owed to the Partnership, provided that
such withheld or escrowed amounts shall be distributed to the creditors and
General Partner and Limited Partners in the manner and order of priority set
forth in Section 13.2A as soon as practicable.
Section 13.3 Compliance with Timing Requirements of Regulations
In the event the Partnership is "liquidated" within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant
to this Article 13 to the General Partner and Limited Partners who have positive
Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2)
(provided, however, in no event shall the Partnership be liquidated prior to the
date which would be the Settlement Date within the meaning of the Exchange
Rights Agreement for Partners who tender an Exchange Notice (within the meaning
of the Exchange Rights Agreement) on or before the fifth (5th) day after the
date of receipt of the notice of liquidation by the Partnership.
Section 13.4 Deemed Distribution and Re-contribution
Notwithstanding any other provision of this Article 13, in the event
the Partnership is considered "liquidated" within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g), but no Liquidating Event has occurred, the
Partnership's property shall not be liquidated, the Partnership's liabilities
shall not be paid or discharged, and the Partnership's affairs shall not be
wound up.
Section 13.5 Rights of Limited Partners
Except as otherwise provided in this Agreement, each Limited Partner
shall look solely to the assets of the Partnership for the return of its Capital
Contributions and shall have no right, power or claim to demand or receive
property other than cash from the Partnership. Except as otherwise provided in
this Agreement, no Limited Partner shall have priority over any other Partner as
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to the return of its Capital Contributions, distributions, or allocations.
Section 13.6 Notice of Dissolution
In the event a Liquidating Event occurs or an event occurs that would,
but for the provisions of an election or objection by one or more Partners
pursuant to Section 13.1, result in a dissolution of the Partnership, the
General Partner shall, within thirty (30) days thereafter, provide written
notice thereof to each of the Partners.
Section 13.7 Termination of Partnership and Cancellation of
Certificate of Limited Partnership
Upon the completion of the liquidation of the Partnership's assets, as
provided in Section 13.2 hereof, a certificate of cancellation shall be filed,
the Partnership shall be terminated, and all qualifications of the Partnership
as a foreign limited partnership in jurisdictions other than the State of
Delaware shall be canceled and such other actions as may be necessary to
terminate the Partnership shall be taken.
Section 13.8 Reasonable Time for Winding-Up
A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect between the Partners during the period of liquidation.
Section 13.9 Waiver of Partition
Each Partner hereby waives any right to partition of the Partnership
property.
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments
A. Amendments to this Agreement may be proposed by the General
Partner or by any Limited Partners (other than the General Partner) holding
twenty-five percent (25%) or more of the Limited Partner Percentage Interests.
Following such proposal, the General Partner shall submit any proposed amendment
to the Limited Partners. The General Partner shall seek the written vote of the
Partners on the proposed amendment or shall call a meeting to vote thereon and
to transact any other business that it may deem appropriate. For purposes of
obtaining a written vote, the General Partner may require a response within a
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reasonable specified time, but not less than fifteen (15) days, and failure
to respond in such time period shall constitute a vote which is consistent with
the General Partner's recommendation with respect to the proposal. Except as
provided in Section 13.1C, 14.1B, 14.1C, or 14.1D, a proposed amendment shall be
adopted and be effective as an amendment hereto if it is approved by the General
Partner and it receives the Consent of Partners holding a majority of the
Limited Partner Percentage Interests of all Limited Partners; provided, however,
that, except as otherwise provided in Sections 4.3A and 5.2 hereof, any
amendment which materially and adversely alters the right of a Limited Partner
(including an original Limited Partner) to receive distributions of Available
Cash or allocations of Net Income, Net Loss or any other items in the amounts,
in the priorities or at the times described in this Agreement shall require the
consent of such Limited Partner in order to become effective.
B. Notwithstanding Section 14.1.A, the General Partner shall have
the power, without the consent or approval of the Limited Partners, to amend
this Agreement as may be required to facilitate or implement any of the
following purposes:
(1) to add to the obligations of the General Partner or
surrender any right or power granted to the General Partner or any Affiliate of
the General Partner for the benefit of the Limited Partners;
(2) to reflect the admission, substitution, termination, or
withdrawal of Partners in accordance with this Agreement;
(3) to set forth the designations, rights, powers, duties, and
preferences of other holders of any additional Partnership Interests issued
pursuant to Section 4.3, or otherwise pursuant to the terms of this Agreement;
(4) to reflect a change that is of an inconsequential nature and
does not adversely affect the Limited Partners in any material respect, or to
cure any ambiguity, correct or supplement any provision in this Agreement not
inconsistent with law or with other provisions of this Agreement, or make any
other changes with respect to matters arising under this Agreement that will not
be inconsistent with law or with the provisions of this Agreement;
(5) to satisfy any requirements, conditions, or guidelines,
contained in any order, directive, opinion, ruling or regulation of a federal or
state agency or contained in federal or state law; and
(6) the purposes set forth in Section 3.3.
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The General Partner shall provide notice to the Limited Partners when
any action under this Section 14.1.B is taken.
C. Notwithstanding Section 14.1.A and 14.1.B hereof, this Agreement
shall not be amended without Consent of each Partner adversely affected if such
amendment would: (i) convert a Limited Partner's interest in the Partnership
into a General Partner Interest; (ii) modify the limited liability of a Limited
Partner in a manner adverse to such Limited Partner; (iii) alter rights of the
Partner to receive distributions pursuant to Article 5 or Article 13, or the
allocations specified in Article 6 (except as permitted pursuant to Section 4.3
and Section 14.1.B(3) hereof); (iv) cause the termination of the Partnership
prior to the time set forth in Sections 2.5. or 13.1; or (v) amend this Section
14.1.C.
D. Notwithstanding Section 14.1.A and 14.1.B hereof, the General
Partner shall not amend Sections 7.4, 7.5, 14.1A, 14.1C or 14.2 without Consent
of Limited Partners holding a majority of the Limited Partner Percentage
Interests of the Limited Partners, excluding Limited Partner Interests held by
the General Partner; and, to the extent that any such amendment would affect the
amount, priority, or timing of distributions to any of the Original Limited
Partners or their heirs, successors and assigns under this Agreement, the
General Partner shall not amend Sections 7.4, 7.5, 14.1A, 14.1C, or 14.2
without Consent of original Elmited Partners holding a majority of the Limited
Partner Percentage Interests of the Original Limited Partners (in each case
including their heirs, successors and assigns), unless the transactions and
election described in, respectively, Sections 4.3B and 5.2 of this Agreement
have occurred and been made, in which case the special Consent of the Original
Limited Partners as herein provided shall not be required.
Section 14.2 Meetings of the Partners
A. Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
Limited Partners (other than the General Partner) holding twenty-five percent
(25%) or more of the Limited Partner Percentage Interests. The request shall
state the nature of the business to be transacted. Notice of any such meeting
shall be given to all Partners not less than seven (7) days nor more than thirty
(30) days prior to the date of such meeting. Partners may vote in person or by
proxy at such meeting. Whenever the vote or consent of the Partners is permitted
or required under this Agreement, such vote or consent may be given at a meeting
of the Partners or may be given in accordance with the procedures prescribed in
Sections 14.1A or 14.2B hereof. Except as otherwise expressly provided in his
Agreement, whenever the Consent of the Limited Partners is required the Consent
of holders of a majority of the Limited Partner Percentage Interests held by
Limited Partners (including
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Limited Partnership Interests held by the General Partner) shall control.
B. Any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by Limited Partners holding a majority of the Limited
Partner Percentage Interests (or such other percentage as is expressly required
by this Agreement). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of Limited
Partners holding a majority of the Limited Partner Percentage Interests (or such
other percentage as is expressly required by this Agreement). Such consent shall
be filed with the General Partner. An action so taken shall be deemed to have
been taken at a meeting held on the effective date so certified.
C. Each Limited Partner may authorize any Person or Persons to act for
him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or his
attorney-in-fact. No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Limited Partner executing it, such
revocation to be effective upon the Partnership's receipt of written notice of
such revocation from the Limited Partner executing such proxy.
D. Each meeting of the Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to such
rules for the conduct of the meeting as the General Partner or such other Person
deems appropriate. Without limitation, meetings of Partners may be conducted in
the same manner as meetings of the shareholders of the General Partner and may
be held at the same time, and as part of, meetings of the shareholders of the
General Partner. Anything contained herein to the contrary notwithstanding, all
meetings of the Partners shall be held within the State of California at such
location as may be designated by the General Partner.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1 No Assurances. Eden acknowledges and agrees that it is
solely responsible for its tax planning and the structuring of this Agreement to
accommodate such tax planning, and that neither the Partnership nor the General
Partner makes any representation or provides any assurance to Eden that the
provisions of this Agreement affecting or impacting Eden's tax planning,
structuring or liability will be respected or upheld by any agency or authority
or achieve the result desired by the
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Limited Partners. Therefore, notwithstanding the provisions of this Agreement,
and without limiting the generality of the foregoing, Eden acknowledges and
agrees that neither the Partnership nor the General Partner makes any
representation or provides any assurance that the allocation provided in section
6.2 will be respected or upheld by any agency or authority or achieve the result
desired by the Limited Partners, or that the Cigna Debt or any refinanced debt
terms or allocation will be respected or upheld by any agency or authority or
achieve the result desired by the Limited Partners.
Section 15.2 Addresses and Notices
Any notice, demand, request or report required or permitted to be
given or made to a Partner or Assignee under this Agreement shall be in writing
and shall be deemed given or made when delivered in person or when sent by first
class United States mail or by other means of written communication to the
Partner or Assignee at the address set forth in Exhibit "A" or such other
address of which the Partner shall notify the General Partner in writing.
Section 15.3 Titles and Captions
All article or section titles or captions in this Agreement are for
convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.
Section 15.4 Pronouns and Plurals
Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.
Section 15.5 Further Action
The parties shall execute and deliver all documents, provide all
information and take or refrain form taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.6 Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
Section 15.7 Creditors
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Other than as expressly set forth herein with respect to the
Indemnitees, none of the provisions of this Agreement shall be for the benefit
of, or shall be enforceable by, any creditor of the Partnership.
Section 15.8 Waiver
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any covenant, duty, agreement or condition.
Section 15.9 Counterparts
This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all of the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.
Section 15.10 Applicable Law
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of law.
Section 15.11 Invalidity of Provisions
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of other
remaining provisions contained herein shall not be affected thereby.
Section 15.12 Entire Agreement
This Agreement contains the entire understanding and agreement: among
the Partners with respect to the subject matter hereof and supersedes any other
prior written or oral understandings or agreements among them with respect
thereto.
Section 15.13 No Rights as Shareholders
Nothing contained in this Agreement shall be construed as conferring
upon the holders of the Limited Partnership Units any rights whatsoever as
shareholders of the General Partner, including, without limitation, any right to
receive dividends or other distributions made to shareholders of the General
Partner or to vote or to consent or to receive notice as shareholders in respect
of any meeting of shareholders for the election of directors of the General
Partner or any other matter. Nothing contained in this Section shall be deemed a
waiver or
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relinquishment of any parties rights under the Exchange Rights Agreement.
Section 15.14 Venue
Any action initiated by any party under this Agreement shall be
brought and prosecuted in the State of California which the parties acknowledge
and agree is a convenient forum in which to
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litigate such action, and the parties waive any right to commence or transfer
such action in or to any other state.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
as of the day first above written.
GENERAL PARTNER:
PACIFIC GULF PROPERTIES INC., a Maryland
corporation
By:_____________________________________
Xxxxx X. Xxxxxxxxx, President and
Chief Executive Officer
By:_____________________________________
Xxxxxx X. Xxxxxxx, Executive Vice
President, Chief Financial Officer and
Secretary
EDEN:
EDEN PLAZA ASSOCIATES, LLC, a California
limited liability company
By:_____________________________________
Xxxxxx X. Xxxxxxx, Managing Member
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EXHIBIT A
Partners Contributions and Partnership Interests
Limited
Limited Partner
Name and Address Cash Agreed Value of Total Partnership Percentage
of Partner Contribution Contributed Property Contribution Units Interest
----------------- ------------ -------------------- ------------ ----------- ----------
General Partner
Pacific Gulf $ N/A $ N/A N/A
Properties Inc. -------- -------
------------------
------------------
------------------
Limited Partners
Xxxx Xxxxx X/X $ * $ 100%
Associates, LLC -------- -------- -----
-------------------
-------------------
-------------------
*SEE NOTE ON EXHIBIT D
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EXHIBIT B
Capital Account Maintenance
1. Capital Accounts of the Partners
A. The Partnership shall maintain for each Partner a separate Capital
Account in accordance with the rules of Regulations Section 1.704-1(b)(2)(iv).
Such Capital Account shall be increased by (i) the amount of all Capital
Contributions and any other deemed contributions made by such Partner to the
Partnership pursuant to this Agreement; and (ii) all items of Partnership income
and gain (including income and gain exempt from tax) computed in accordance with
Section 1.B hereof and allocated. to such Partner pursuant to Section 6.1B of
the Agreement and Exhibit "C" hereof and decreased by (x) the amount of cash
or Agreed Value of all actual and deemed distributions of cash or property made
to such Partner pursuant to this Agreement; and (y) all items of Partnership
deduction and loss computed in accordance with Section 1.B hereof and allocated
to such Partner pursuant to Section 6.1A of the Agreement and Exhibit "C"
hereof.
B. For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, unless
otherwise specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal tax purposes determined in accordance
with Section 703(a) of the Code (for this purpose all items of income, gain,
loss or deduction required to be stated separately pursuant to Section 703(a)(1)
of the Code shall be included in taxable income or loss), with the following
adjustments:
(1) Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and
deduction shall be made without regard to any election under Section 754 of the
Code which may be made by the Partnership, provided that the amounts of any
adjustments to the adjusted bases of the assets of the Partnership made pursuant
to Section 734 of the Code as a result of the distribution of property by the
Partnership to a Partner (to the extent that such adjustments have not
previously been reflected in the Partners' Capital Accounts) shall be reflected
in the Capital Accounts of the Partners in the manner and subject to the
limitations prescribed in Regulations Section 1.704-1(b)(2)(iv)(m)(4).
(2) The computation of all items of income, gain, and deduction
shall be made without regard to the fact that items described in Sections
705(a)(1)(B) or 705(a)(2)(B) of the Code are not includable in gross income or
are neither currently deductible nor capitalized for federal income tax
purposes.
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(3) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if the adjusted
basis of such property as of such date of disposition were equal in amount to
the Partnership's Carrying Value with respect to such property as of such date.
(4) In lieu of depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such fiscal year.
(5) In the event the Carrying Value of any Partnership Asset is
adjusted pursuant to Section 1.D hereof, the amount of any such adjustment
shall be taken into account as gain or loss from the disposition of such asset.
(6) Any items specifically allocated under Section 1 of Exhibit
"C" hereof shall not be taken into account.
C. Generally, a transferee (including an Assignee) of a Limited
Partnership Unit shall succeed to a pro rata portion of the Capital Account of
the transferor; provided, however, that if the transfer causes a termination of
the Partnership under Section 708(b)(1)(B) of the Code, the Partnership's
properties shall be deemed solely for federal income tax purposes, to have been
contributed to the successor Partnership. The Capital Accounts of such successor
Partnership shall be maintained in accordance with the principles of this
Exhibit "B".
D. (1) Consistent with the provisions of Regulations Section
1.704-1(b)(2)(iv)(f), and as provided in Section 1.D.(2), the Carrying Value of
all Partnership assets shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership property, as
of the times of the adjustments provided in Section 1.D.(2) hereof, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each
such property and allocated pursuant to Section 6.1 of the Agreement.
(2) Such adjustments shall be made as of the following times: (a)
immediately prior to the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a de
minimis Capital Contribution; (b) immediately prior to the distribution by the
Partnership to a Partner of more than a de minimis amount of property as
consideration for an interest in the Partnership; and (c) immediately prior to
the liquidation of the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), provided, however, that adjustments pursuant to clauses
(a) and (b) above shall be made only if the General Partner determines that such
adjustments are necessary or appropriate to reflect economic interests of the
Partners in the Partnership.
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(3) In accordance with Regulations Section 1.704-1(b)(2)(iv)(e), the
Carrying Value of Partnership assets distributed in kind shall be adjusted
upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property, as of the time any such asset is
distributed.
(4) In determining Unrealized Gain or Unrealized Loss for purposes of
this Exhibit "B", the aggregate cash amount and fair market value of all
Partnership assets (including cash or cash equivalents) shall be determined by
the General Partner using such reasonable method of valuation as it may adopt,
or in the case of a liquidating distribution pursuant to Article 13 of the
Agreement, shall be determined and allocated by the Liquidator using such
reasonable methods of valuation as it may adopt. The General Partner, or the
Liquidator, as the case may be, shall allocate such aggregate value among the
assets of the Partnership (in such manner as it determines in its sole and
absolute discretion to arrive at a fair market value for individual properties).
E. The provisions of this Agreement (including this Exhibit "B" and other
Exhibits to this Agreement) relating to the maintenance of Capital Accounts are
intended to comply with Regulations Section 1.704-1(b), and shall be interpreted
and applied in a manner consistent with such Regulations. In the event the
General Partner shall determine that it is prudent to modify (i) the manner in
which the Capital Accounts, or any debits or credits thereto (including, without
limitation, debits or credits relating to liabilities which are secured by
contributed or distributed property or which are assumed by the Partnership, the
General Partner, or the Limited Partners) are computed; or (ii) the manner in
which items are allocated among the Partners for federal income tax purposes in
order to comply with such Regulations or to comply with Section 704(c) of the
Code, the General Partner may make such modification without regard to Article
14 of the Agreement, provided that it is not likely to have a material effect on
the amounts distributable to any Person pursuant to Article 13 of the Agreement
upon the dissolution of the Partnership. The General Partner also shall (i)
where appropriate, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q),
make any adjustments that are necessary or appropriate to maintain equality
between Capital Accounts of the Partners and the amount of Partnership capital
reflected on the Partnership's balance sheet, as computed for book purposes; and
(ii) make any appropriate modifications in the event unanticipated events might
otherwise cause this Agreement not to Comply With Regulations Section
1.704-1(b). In addition, the General Partner may adopt and employ such methods
and procedures for (i) the maintenance of book and tax capital accounts; (ii)
the determination and allocation of adjustments under Sections 704(c), '734 and
743 of the Code; (iii) the determination of Net Income, Net Loss, taxable loss
and items thereof under this Agreement: and pursuant to the Code; (iv)
conventions for the
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determination of cost recovery, depreciation and amortization deductions, as it
determines in its sole discretion are necessary or appropriate to execute the
provisions of this Agreement, to comply with federal and state tax laws, and are
in the best interest of the Partners.
2. No Interest
No interest shall be paid by the Partnership on Capital .Contributions or
on balances in Partners' Capital Accounts.
3. No Withdrawal
No Partner shall be entitled to withdraw any part of his Capital
Contribution or his Capital Account or to receive any distribution from the
Partnership, except as provided in Articles 4, 5, 7 and 13 of the Agreement.
4. Non-Original Limited Partner Related Assets
Notwithstanding the foregoing, if and after the Partnership acquires
Non-Original Limited Partner Related Assets, or becomes obligated, indebted or
liable for or on account of Non-Original Limited Partner Related Assets or the
ownership or operation thereof, and so long as the General Partner has not
consummated the transactions and made the election described in Sections 4.3B
and 5.2, respectively, of this Agreement, then allocations provided for in this
Exhibit "B" shall be calculated separately with respect to Original Limited
Partner Related Assets and the ownership and operation thereof, together with
the operation and existence of the Partnership insofar as such concerns the
Original Limited Partner Related Assets and the ownership and operation thereof.
Such allocations and calculations shall not include any revenues, expenses,
assets, or liabilities of the Partnership relating to the Non-Original Limited
Partner Related Assets, the ownership or operation thereof, or the operation or
existence Of the Partnership with respect thereto, all of which shall be
separately determined by the General Partner in its sole and absolute
discretion.
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EXHIBIT C
Special Allocation Rules
1. Special Allocation Rules
Notwithstanding any other provision of the Agreement or this Exhibit "C",
the following special allocations shall be made in the following order:
A. Minimum Gain Chargeback. Notwithstanding the provisions of Section 6.1
of the Agreement or any other provisions of this Exhibit "C", if there is a net
decrease in Partnership Minimum Gain during any Partnership taxable year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain, as determined
under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.7042(f)(6). This Section
1.A is intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.
Solely for purposes of this Section 1.A, each Partner's Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant to Section
6.1 of Partner Minimum Gain during such Partnership taxable year.
B. Partner Minimum Gain Chargeback. Notwithstanding any other provision
of Section 6.1 of this Agreement or any other provisions of this Exhibit "C"
(except Section 1.A hereof), if there is a net decrease in Partner Minimum Gain
attributable to a Partner Nonrecourse Debt during any Partnership taxable year,
each Partner who has a share of the Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.702-2(i)(5), shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2(i)(4). This Section 1.B is intended to comply
with the minimum gain chargeback requirement in such Section of the Regulations
and shall be interpreted consistently therewith. Solely for purposes of this
Section 1.B, each Partner's Adjusted Capital Account Deficit shall be determined
prior to any other allocations pursuant to Section 6.1 of the Agreement or this
Exhibit with respect to such
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Partnership taxable year, other than allocations pursuant to Section 1.A hereof.
C. Qualified Income offset. In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2) (ii) (d)(5), or 1.704-1
(b) (2) (ii) (d) (6) , and after giving effect to the allocations required under
Sections 1.A and 1.B hereof such Partner has an Adjusted Capital Account
Deficit, items of Partnership income and gain (consisting of a pro rata portion
of each item of Partnership income, including gross income and gain for the
Partnership taxable year) shall be specifically allocated to such Partner in an
amount and manner sufficient to eliminate, to the extent required by the
Regulations, its Adjusted Capital Account Deficit created by such adjustments,
allocations or distributions as quickly as possible.
D. Nonrecourse Deductions. Nonrecourse Deductions for any Partnership
taxable year shall be allocated to the General Partner. If the General Partner
determines in its good faith discretion that the Partnership's Nonrecourse
Deductions must be allocated in a different ratio to satisfy the safe harbor
requirements of the Regulations promulgated under Section 704(b) of the Code,
the General Partner is authorized, upon notice to the Limited Partners, to
revise the prescribed ratio to the numerically closest ratio for such
Partnership taxable year which satisfy such requirements.
E. Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for
any Partnership taxable year shall be specially allocated to the Partner who
bears the economic risk of loss with respect to the Partner Nonrecourse Debt to
which such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i).
F. Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Regulations.
G. Curative Allocations. The allocations set forth in Section 1.A through
1.F of this Exhibit "C" (the "Regulatory Allocations") are intended to comply
with certain requirements of the Regulations under Section 704(b) of the Code.
The Regulatory Allocations may not be consistent with the manner in which the
Partners intend to divide Partnership distributions. Accord-
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ingly, the General Partner is hereby authorized to divide other allocations of
income, gain, deduction and loss among the Partners so as to prevent the
Regulatory Allocations from distorting the manner in which Partnership
distributions will be divided among the Partners. In general, the Partners
anticipate that this will be accomplished by specially allocating other items of
income, gain, loss and deduction among the Partners so that the net amount of
the Regulatory Allocations and such special allocations to each person is zero.
However, the General .Partner will have discretion to accomplish this result in
any reasonable manner; Provided, however, that no allocation pursuant to this
Section 1.G shall cause the Partnership to fail to comply with the requirements
of Regulations Sections 1.7041(b)(2)(ii)(d),-2(e)or-2(i)
2. Allocations for Tax Purposes
A. Except as otherwise provided in this Section 2, for federal income tax
purposes, each item of income, gain, loss and deduction shall be allocated among
the Partners in the same manner as its correlative item of "book" income, gain,
loss or deduction is allocated pursuant to Section 6.1 of the Agreement and
Section 1 of this Exhibit "C".
B. In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss, and
deduction shall be allocated for federal income tax purposes among the Partners
as follows:
(1) (a) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners,
consistent with the principles of Section 704(c) of the Code
and the Regulations thereunder, to take into account the
variation between the 704(c) Value of such property and its
adjusted basis at the time of contribution; and
(b) any item of Residual Gain or Residual Loss attributable to a
Contributed Property shall be allocated among the Partners
in the same manner as its correlative item of "book" gain or
loss is allocated pursuant to Section 6.1 of the Agreement
and Section 1 of this Exhibit "C".
(2) (a) In the, case of an Adjusted Property, such items shall
(1) first, be allocated among the Partners in a manner
consistent with the principals of Section 704(c) of the Code
and the Regulations thereunder to take into account the
Unrealized Gain or Unrealized Loss attribut-
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able to such property and the allocations thereof pursuant
to Exhibit "B"; and
(2) second, in the event such property was originally a
Contributed Property, be allocated among the Partners in a
manner consistent with Section 2.B(1) of this Exhibit "C";
and
(b) any item of Residual Gain or Residual Loss attributable to
an Adjusted Property shall be allocated among the Partners
in the same manner its correlative item of "book" gain or
loss is allocated pursuant to Section 6.1 of the Agreement
and Section 1 of this Exhibit "C".
(3) all other items of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as their
correlative item of "book" gain or loss is allocated
pursuant to Section 6.1 of the Agreement and Section 1 of
this Exhibit "C".
C. To the extent that the Treasury Regulations promulgated pursuant to
Section 704(c) of the Code permit the Partnership to utilize alternative methods
to eliminate the disparities between the Carrying Value of property and its
adjusted basis, the General Partner shall have the authority to elect the method
to be used by the Partnership and such election shall be binding on all
Partners.
3. No Withdrawal
No Partner shall be entitled to withdrawal any part of his Capital
Contribution or his Capital Account or to receive any distribution from the
Partnership, except as provided in Articles 4, 5, 8 and 13 of the Agreement.
4. Non-Original Limited Partner Related Assets
Notwithstanding the foregoing, if and after the Partnership acquires
Non-original Limited Partner Related Assets, or becomes obligated, indebted or
liable for or on account of Non-Original Limited Partner Related Assets or the
ownership or operation thereof, and so long as the General Partner has not
consummated the transactions and made the election described in Sections 4.3B
and 5.2, respectively, of this Agreement, then allocations provided for in this
Exhibit "C" shall be calculated separately with respect to Original Limited
Partner Related Assets and the ownership and operation thereof, together with
the operation and existence of the Partnership insofar as such concerns the
Original Limited Partner Related Assets and the ownership and operation thereof.
Such allocations and calculations shall not
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include any revenues, expenses, assets, or liabilities of the Partnership
relating to the Non-Original Limited Partner Related Assets, the ownership or
operation thereof, or the operation or existence of the Partnership with respect
thereto, all of which shall be separately determined by the General Partner in
its sole and absolute discretion.
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EXHIBIT D
Value of Contributed Property
Underlyinq Property 704(c) Value* Agreed Value**
------------------- ------------- --------------
[*704(C) VALUE IS THE AGREED VALUE PLUS THE AMOUNT OF THE CIGNA
DEBT AT CLOSING PRIOR TO ANY REDUCTION]
[**THE AGREED VALUE OF THE ORIGINAL PROPERTIES SHALL BE THE "EDEN CAPITAL
CONTRIBUTION" AS DEFINED IN THE MASTER CONTRIBUTION AGREEMENT]
252
EXHIBIT E
PROPERTY MANAGEMENT AGREEMENT
(EDEN PLAZA INDUSTRIAL PARKS)
THIS PROPERTY MANAGEMENT AGREEMENT (this "AGREEMENT") is
made and entered into as of ______________, by and between PGP NORTHERN
INDUSTRIAL, L.P., a Delaware limited partnership ("OWNER") and Pacific Gulf
Properties Inc., a Maryland corporation ("MANAGER") with reference to the
following.
RECITALS
A. The Owner is the owner of an industrial park located on the land
identified in Exhibit A attached hereto (the "PROJECT"). Manager is the sole
general partner of owner.
B. Manager is experienced in managing and operating properties similar to
the Project, and Manager possesses the personnel, skills and experience
necessary for the efficient management and operation of the Project.
C. Owner desires to engage Manager to manage and operate the Project, and
Manager desires to render such management services to Owner, upon and subject to
the terms and conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, Owner and Manager agree as follows:
1. ENGAGEMENT OF MANAGER.
1.1 Exclusive Manager. Owner engages Manager as, and Manager agrees
to serve as, the sole and exclusive manager of the Project, with the authority
to direct, supervise and manage the operation of the Project, for the period of
time and upon the terms and conditions hereinafter set forth.
1.2 Employment of Personnel. Manager shall investigate, hire,
train, pay, supervise and discharge the personnel reasonably necessary to be
employed in order to properly maintain and operate the Project. All salaries,
wages and other compensation of personnel employed by Manager hereunder,
including so-called fringe benefits, medical health insurance, pension plans,
social security taxes, Worker's Compensation insurance and the like
(collectively, the "PERSONNEL COMPENSATION"), shall be payable by Manager from,
and reimbursable to Manager out of, gross revenues generated from the operation
of the Project, including, without limitation, all rent and/or lease payments,
security, cleaning, and other deposits, common area maintenance charges, taxes,
insurance, casualty
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and/or condemnation loss proceeds and other income due to Owner from each
Project ("PROJECT REVENUES"). Personnel Compensation shall not reduce the
"MANAGEMENT FEE", (defined below).
2. DUTIES OF MANAGER.
2.1 Performance of Duties. During the term of this Agreement,
Manager agrees, for and in consideration of the compensation set forth herein,
to supervise and direct the management and operation of the Project on behalf of
Owner and for the account of owner in an efficient and satisfactory manner as an
industrial park. Manager shall at all times maintain an organization, systems
and personnel sufficient to enable it to carry out all its duties, obligations
and functions under this Agreement. Manager will perform its duties under this
Agreement in accordance with all laws, codes and regulations applicable to the
Project.
2.2 Service Contracts. Manager shall make or renew in Owner's name
as agent of Owner and at Owner's expense, contracts and/or leases for water,
electricity, gas, telephone, vermin extermination, landscape, trash removal and
other services deemed by Manager or Owner to be necessary or advisable for the
operation of the Project. In entering into any contracts or leases herein
contemplated, Manager shall include as a condition thereof the right to
terminate on thirty (30) calendar days, prior written notice with or without
cause, unless Manager obtains the prior written consent of Owner.
2.3 Leasing. Manager shall be responsible for coordinating the
leasing activities of the Project. Manager is hereby authorized to contract, in
Owner's name as agent of Owner and at Owner's expense, with such brokers and
leasing agents as Manager deems necessary or appropriate to facilitate the
leasing activities of the Project. Manager is hereby authorized to prepare,
execute, deliver and renew all leases, lease amendments and lease renewals and
extensions, and to terminate tenancies, evict tenants and recover possession of
rented space within the Project, prosecute legal actions in the name of Owner in
connection with the foregoing, settle, compromise and/or release such actions or
reinstate such tenancies, as Manager deems necessary or appropriate, all on
owner's behalf and as agent of Owner and at Owner's expense. References of all
prospective tenants shall be investigated carefully by Manager, and Manager
shall use reasonable efforts to ensure that space in the Projects is rented to
desirable and financially responsible tenants.
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2.4 Payment of Expenses. Manager shall establish and maintain on
behalf of Owner at a bank or banks as Manager may, from time to time, determine,
an account for the Project (an "Account"). Manager shall collect all Project
Revenue, and deposit all such income in the Account for the Project. From the
Account, Manager shall make such disbursements to pay Project operating
expenses, including, without limitation, Personnel Compensation, as are
necessary, in Manager's reasonable judgment, to manage, operate and maintain the
Project as provided in this Agreement. All items specified herein to be at
Owner's expense shall be considered operating expenses of the Project.
2.5 Funding Of Account. Owner agrees to deposit moneys into the
Account in the amount and to the extent that Project Revenues are insufficient
to pay any operating expenses, including Personnel Compensation, hereunder.
Manager shall notify owner in writing as to the amount of any such
insufficiency.
3. INSURANCE. The Manager shall obtain, upon Owner's request and
approval, at Owner's cost and expense, such insurance as may be required by
Owner in connection with the Project, including, without limitation,
comprehensive general public liability, contractual liability and such other
insurance as Owner deems necessary or desirable. Owner shall designate Manager
as an additional named insured on each such insurance policy.
4. MANAGER'S COMPENSATION.
4.1 Management Fee. In consideration of the management services to
be rendered by Manager pursuant to Article 2 of this Agreement, Manager shall
receive as compensation a monthly sum equal to four percent (4%) of all Project
Revenues from the Project collected during each month during the term of this
Agreement (the "MANAGEMENT FEE").
4.2 Payment of Management Fee. The Management Fee shall be paid on
the first day of each calendar month during the term of this Agreement, based
upon the Project Revenues from the Project collected for the preceding calendar
month. If the term of this Agreement begins on a date other than the first day
of a month or ends on a date other than the last day of a month, the Management
Fee shall be prorated based on the number of days in such month.
4.3 Other Compensation. Manager shall be separately compensated for
any services other than the usual and customary services performed in its
capacity as the manager of the Project; provided that Manager shall not perform
any extraordinary services without obtaining the prior written approval of
Owner.
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5. BOOKS, RECORDS AND STATEMENTS.
5.1 Maintenance and Access of Records. Manager agrees to maintain
adequate accounting records (which records shall be and remain the property of
Owner) in connection with all matters contemplated by this Agreement in
accordance with the provisions of this Agreement.
5.2 Operating Budget. Within thirty (30) calendar ,days after the
execution of this Agreement, Manager shall prepare and submit to owner for its
approval a proposed operating budget setting forth in reasonable detail the
estimated income and operating expenses of the Project, by month, for the
remainder of the then calendar year for which this Agreement is in effect. on or
before thirty (30) calendar days before each subsequent calendar year during the
term of this Agreement, Manager shall prepare and submit to Owner for its
approval a proposed operating budget setting forth in reasonable detail the
estimated income and operating expenses of the Project, by month, for the
succeeding calendar year.
Owner will consider the proposed budgets and then will consult with the
Manager in the ensuing period prior to the commencement of the forthcoming
calendar year in order to agree on an "APPROVED OPERATING BUDGET." The parties
will use reasonable efforts to agree upon an Approved Operating Budget for the
forthcoming calendar year on or before December 15th of the then current
calendar year. If the parties are unable to reach such agreement, the Approved
Operating Budget for the forthcoming calendar year will be established by Owner.
Manager agrees to employ reasonable efforts to ensure that the actual costs
of maintaining and operating the Project shall not exceed the Approved Operating
Budget, either in total or in any one accounting category. In the event it
appears to Manager that the actual costs of maintaining and operating the
Project shall exceed the Approved Operating Budget, Manager shall submit a
revised budget proposal for owner's approval as provided above. Upon approval,
such revised budget shall become the Approved Operating Budget. In all events,
Owner shall pay all actual costs of maintaining and operating the Project.
5.3 Capital Expenditure Budget. Within thirty (30) calendar days after
the execution of this Agreement, Manager shall prepare and submit to owner for
its approval a proposed capital expenditure budget setting forth in reasonable
detail the estimated capital expenditures of the Project, by month, for the
remainder of the then calendar year for which this Agreement is in effect. On or
before thirty (30) calendar days before each subsequent calendar year during the
term of this Agreement, Manager shall prepare and submit to Owner for its
approval a proposed capital expenditure budget setting forth in reasonable
detail the estimated capital expenditures of the Project, by month, for the
succeeding calendar year.
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Owner will consider the proposed budgets and then will consult with
Manager in the ensuing period prior to the commencement of the forthcoming
calendar year in order to agree on an "APPROVED CAPITAL BUDGET." The parties
will use reasonable efforts to agree upon an Approved Capital Budget for the
succeeding calendar year on or before December 15th of the then current calendar
year. If the parties are unable to reach such agreement, the Approved Capital
Budget for the forthcoming calendar year will be established by Owner.
6. TERM.
6.1 Initial Term. The term of this Agreement shall commence as of
the date first set forth above and shall continue for an initial term ending on
__________ . Unless written notice to terminate is given by either party to the
other at least thirty (230) days prior to the end of the initial term, this
Agreement: shall be automatically renewed for another ____ year term, upon and
subject to the terms and conditions set forth in this Agreement.
6.2 Termination. This Agreement may be terminated for "cause" at
any time by Owner upon thirty (30) days prior written notice to Manager setting
forth in detail the "cause" for such termination. The term "cause" shall mean
(i) any material breach of this Agreement by Manager, (ii) any willful
misconduct, intentional misrepresentation or gross negligence of Manager related
to, or in connection with, the management and operation of the Project, (iii)
the commencement of a case under Title 11 U.S.C., or under any similar
insolvency proceeding under applicable state or federal law, involving Manager
as debtor, (iv) Owner's transfer or sale of the Property to an independent third
party, (v) the occurrence of a total destruction of the Project, and (vi) the
taking of the Project by condemnation, eminent domain, or by agreement in lieu
thereof.
7. INDEMNIFICATION AND HOLD HARMLESS. Neither Manager nor any employee of
Manager shall be liable, responsible or accountable in damages or otherwise to
owner for any acts performed by it, him or her in good faith and within the
scope of this Agreement if any such act or failure to act is not attributable to
Manager's or such employee's gross negligence or willful misconduct. Owner shall
indemnify, defend and hold Manager (and each employee thereof) harmless for any
loss, damage, liability, cost or expense (including reasonable attorneys' fees)
arising out of any act or failure to act by Manager (or any employee thereof) if
such act or failure to act is in good faith, is within the scope of this
Agreement, and is not attributable to Manager's or such employee's gross
negligence or willful misconduct.
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8. MISCELLANEOUS.
8.1 Applicable Law. This Agreement shall be construed in accordance with
the laws of the State of California.
8.2 Severability. Each provision of this Agreement is intended to be
severable. If any term or provision of this Agreement shall be determined by a
court of competent jurisdiction to be illegal or invalid for any reason
whatsoever, that provision shall be severed from this Agreement and shall not
affect the validity of the remainder of this Agreement.
8.3 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall comprise but a single instrument.
IN WITNESS OF THE FOREGOING, Owner and Manager have caused their duly
authorized representatives to execute this Agreement as of the date first above
written.
OWNER:
PGP NORTHERN INDUSTRIAL, L.P.,
a Delaware limited partnership
By: Pacific Gulf Properties Inc., a Maryland
corporation,
its General Partner
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
MANAGER:
PACIFIC GULF PROPERTIES INC.,
a Maryland corporation
By:
----------------------------------------------
Name:
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Title:
-------------------------------------------
By:
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Name:
--------------------------------------------
Title:
-------------------------------------------
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EXHIBIT A
LEGAL DESCRIPTION
THE LAND REFERRED TO IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ALAMEDA,
CITY OF HAYWARD, DESCRIBED AS FOLLOWS:
PARCEL 1:
XXXXXX 0, XXXXXX MAP 1288, FILED SEPTEMBER 25, 1973, BOOK 80 OF PARCEL MAPS,
PAGE 27, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 000-0000-000
PARCEL 2:
PARCEL 1, PARCEL MAP 939, FILED JULY 13, 1972, BOOK 76 OF PARCEL MAPS, PAGE 10,
ALAMEDA COUNTY RECORDS.
EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEED TO EDEN ROCK CO. NO. 3,
A JOINT VENTURE, RECORDED JULY 31, 1978, REEL 5508, IMAGE 378, SERIES NO.
78-145175, OFFICIAL RECORDS.
ASSESSOR'S PARCEL NO. 461-0015-020-2
PARCEL 3:
XXXXXX 0, XXXXXX MAP NO. 939, FILED JULY 13, 1972, IN BOOK 76 OF PARCEL MAPS,
PAGE 10, ALAMEDA COUNTY RECORDS.
TOGETHER WITH:
ALL THAT CERTAIN REAL PROPERTY BEING A PORTION OF PARCEL 1 AS SHOWN ON "PARCEL
MAP NO. 939" WHICH MAP IS FILED IN BOOK 76 OF PARCEL MAPS AT PAGE 10, ALAMEDA
COUNTY RECORDS, SAID REAL PROPERTY BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE CORNER COMMON TO PARCELS 1 AND 2 ON THE NORTHWESTERLY LINE OF
CORPORATE PLACE, AS SHOWN ON THE ABOVE MENTIONED PARCEL MAP, THENCE FROM SAID
POINT OF BEGINNING ALONG SAID NORTHERLY LINE SOUTH 76 degrees 38' 05" WEST 8.22
FEET; THENCE LEAVING THE LAST SAID LINE AND RUNNING ALONG A LINE PARALLEL TO AND
7.806 FEET SOUTHWESTERLY AT RIGHT ANGLES, FROM THE DIVIDING LINE BETWEEN SAID
PARCELS 1 AND 2 NORTH 31 DEGREES 37' 51" WEST 205.78 FEET; THENCE LEAVING SAID
PARALLEL LINE NORTH 58 DEGREES 22' 09" EAST 7.806 FEET TO SAID DIVIDING LINE;
THENCE ALONG THE LAST SAID LINE SOUTH 31 degrees 37 feet 51 inches EAST 208.356
FEET TO THE POINT OF BEGINNING.
SAID REAL PROPERTY IS THE SAME AS "LOT LINE ADJUSTMENT NO. 77-4" APPROVED BY THE
CITY OF HAYWARD PLANNING COMMISSION ON SEPTEMBER 22, 1977.
ASSESSOR'S PARCEL NO. 461-0015-021-01
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259
PARCEL 4:
PARCEL ONE OF AMENDED PARCEL MAP 1035 FILED SEPTEMBER 5, 1975 IN BOOK 80 OF
PARCEL MAPS ON PAGE 15, ALAMEDA COUNTY RECORDS.
ASSESSOR'S PARCEL NO. 461-0085-018-03 (PORTION).
PARCEL 5:
PORTION OF INVESTMENT BOULEVARD, AS SAID BOULEVARD WAS ESTABLISHED BY THE GRANT
OF EASEMENT FROM EDEN LANDING CORPORATION, A CALIFORNIA CORPORATION, TO THE CITY
OF HAYWARD, A MUNICIPAL CORPORATION, DATED JUNE 20, 1967, AND RECORDED JULY 24,
1967 IN REEL 2005 OF OFFICIAL RECORDS OF ALAMEDA COUNTY AT IMAGE 500 (AZ-71982),
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE NORTHERLY RIGHT OF WAY LINE OF INVESTMENT
BOULEVARD WITH THE EASTERLY RIGHT OF WAY LINE OF EDEN LANDING ROAD AS SHOWN ON
PARCEL MAP NO. 1035 FILED IN BOOK 79 OF PARCEL MAPS, PAGE 28, IN THE OFFICE OF
THE ALAMEDA COUNTY RECORDER; THENCE ALONG SAID NORTHERLY RIGHT OF WAY LINE OF
INVESTMENT BOULEVARD THE FOLLOWING THREE COURSES: 1) SOUTH 81 DEGREES 53 FEET 26
INCHES EAST 40.130 FEET; 2) SOUTH 48 DEGREES 12 FEET 02 INCHES EAST 61.294 FEET;
3) SOUTH 08 DEGREES 6'34" WEST 40.000 FEET; THENCE LEAVING SAID NORTHERLY RIGHT
OF WAY LINE NORTH 81 DEGREES 53 FEET 26 INCHES WEST 67.124 FEET TO A TANGENT
CURVE TO THE RIGHT; THENCE ALONG SAID TANGENT CURVE TO THE RIGHT HAVING A RADIUS
OF 24.000 FEET THROUGH A CENTRAL ANGLE OF 89 DEGREES 59 FEET 35 INCHES AN ARC
DISTANCE OF 37.696 FEET; THENCE NORTH 08 DEGREES 6 FEET 09 INCHES EAST 50.003
FEET TO THE POINT OF BEGINNING.
ASSESSOR'S PARCEL NO. 416-0085-018-03
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260
EXHIBIT Q
FORM ESTOPPEL CERTIFICATE
LEASE ESTOPPEL CERTIFICATE
Landlord:
Tenant:
Tenant Trade Name:
Lender: Connecticut General Life Insurance Company
Premises:
Area:______________________________ Sq. Ft. Lease Date:_______________________
The undersigned Landlord and Tenant of the above-referenced lease (the "Lease")
hereby ratify the Lease and certifies to Lender as mortgagee of the Real
Property of which the premises demised under the Lease (the "Premises") is a
part, as follows:
1. That the term of the Lease commenced on ________________, 19__ and
the Tenant is in full and complete possession of the premises demised
under the Lease and has commenced full occupancy and use of the
Premises, such possession having been delivered by the original
landlord and having been accepted by the Tenant.
2. That the Lease calls for monthly rent installments of $_________ to
date and that the Tenant is paying monthly installments of rent of
$_________ which commenced to accrue an the ______________ day of
_____________ 19__.
3. That no advance rental or other payment has been made in connection
with the Lease, except rental for the current month, there is no "free
rent" or other concession under the remaining term of the lease and
the rent has been paid to and including
4. That a security deposit in the amount $________ is being held by
Landlord, which amount is not subject to any set-off or reduction or
to any increase for interest or other credit due to Tenant.
5. That all obligations and conditions under said Lease to be performed
to date by Landlord or Tenant have been satisfied, free of defenses
and set-offs including all construction work in the Premises.
6. That the Lease is a valid lease and in full force and effect and
represents the entire agreement between the parties; that there is no
existing default on the part of the Landlord or the Tenant in any of
the terms and conditions thereof and no event has
July 16, 1997
