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EXHIBIT 10.42
CONTRIBUTION AGREEMENT
THIS AGREEMENT is dated as of August 23, 1996, by and among
TRUST REALTY PARTNERS, a California general partnership ("TRP"), TRUST REALTY
ADVISORS, a California corporation ("TRA"), and GLENBOROUGH PROPERTIES, L.P., a
California limited partnership ("Transferee").
RECITALS
A. Transferee is a California limited partnership whose
general partner is GLENBOROUGH REALTY TRUST INCORPORATED, a Maryland corporation
("GRTI"), whose stock is publicly traded on the New York Stock Exchange.
B. TRP desires to contribute the Property (as defined in
Subparagraph 1(a) below) to Transferee and Transferee desires to accept the
Property from TRP, upon the terms and subject to the conditions set forth in
this Agreement.
C. TRA is the property manager of the Property pursuant to a
Property and Asset Management and Administrative Services Agreement dated as of
July 26, 1993 between TRA, as manager, and TRP, as owner (the "Management
Agreement") and a Brokerage Agreement dated as of ________, 1993, between TRA,
as broker, and TRP, as partnership (the "Leasing Agreement").
D. TRA desires to contribute to Transferee all of TRA's right,
title and interest under the Management Agreement and the Leasing Agreement,
including, without limitation, TRA's rights to the "Sales Commission" (as
defined in the Leasing Agreement) and the "incentive management fee" (as defined
in the Management Agreement), to the extent applicable to the Property (as
herein defined) (collectively, the "Assigned Agreements") and Transferee desires
to accept all of TRA's right, title and interest under the Assigned Agreements
to the extent applicable to the Property, upon the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, the mutual
representations, warranties, covenants and agreements hereinafter contained, and
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties hereto
hereby agree as follows:
1. Contribution of Property and Assigned Agreements. Subject
to and upon the terms and conditions hereinafter set forth and the
representations and warranties contained herein,
(a) TRP agrees to contribute to Transferee, and
Transferee agrees to accept from TRP, subject to the terms, covenants and
conditions set forth herein, (a) the real property described in Schedule 1(a)
attached hereto, together with any and all buildings and other improvements
thereon and, to the extent owned by TRP, or held directly or indirectly for the
benefit of TRP, any interest therein, and any and all rights, privileges and
easements appurtenant
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thereto (individually, an "Individual Real Property," and collectively, the
"Real Property"), (b) all of TRP's right, title and interest in and to the
Leases listed in Exhibit J attached hereto (the "Leases"), and any and all
guarantees of the Leases, (individually, an "Individual Lease Right" and
collectively, the "Lease Rights") and (c) all of TRP's right, title and interest
in and to the personal property and any interest therein owned by TRP or held
directly or indirectly for the benefit of TRP, if any, located on the Real
Property and used in the operation or maintenance of the Real Property, together
with all of TRP's right, title and interest, if any, in and to the following to
the extent assignable: all service contracts, construction contracts for work in
progress, any warranties thereunder, management contracts (including, without
limitation, the Assigned Agreements), reciprocal easement agreements, operating
agreements, maintenance agreements, franchise agreements and other similar
agreements (the "Contracts"), the PMI insurance policy for the Individual
Property known as Mission East (the "PMI Policy"), Transferee's prorated share
(as determined pursuant to Subparagraph 5(f) below) of those certain reserves
which are held by Xxxxxxx, Xxxxx Associates Limited in connection with the Loan
secured by the Individual Property known as Mission East (the "Mission East
Reserves"), all general intangibles relating to design, development, operation,
management and use of the Real Property, all certificates of occupancy, zoning
variances, building, use or other permits, approvals, authorizations, licenses
and consents obtained from any governmental authority in connection with the
development, use, operation or management of the Real Property, all soil tests,
engineering reports, appraisals, architectural drawings, plans and
specifications relating to all or any portion of the Real Property, and all
payment and performance bonds or warranties or guarantees relating to the Real
Property; and all of TRP's right, title and interest in and to any and all of
the following to the extent assignable: trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos, other source and business identifiers, trademark
registration and applications for registration used at or relating to the Real
Property and any written agreement granting to TRP any right to use any
trademark or trademark registration at or in connection with the Real Property
(individually, an "Individual Personal Property," and collectively, the
"Personal Property"). The term "Individual Property" means an Individual Real
Property, together with the Individual Lease Rights and Individual Personal
Property related thereto. The term "Property" means all of the Real Property,
the Lease Rights and the Personal Property.
(b) TRA agrees to contribute to Transferee, free and
clear of any and all liens, encumbrances, liabilities, claims, charges, and
restrictions of any kind or nature whatsoever, all of TRA's right, title and
interest in and to the Assigned Agreements and Transferee agrees to accept from
TRA all of TRA's right, title and interest in and to the Assigned Agreements.
2. Contribution Consideration.
(a) The Transferee and TRP agree that the total
consideration to be given by the Transferee in return for the Property is Forty
Million Sixty-One Thousand Dollars ($40,061,000) ("Property Consideration"),
adjusted as provided in Subparagraph 5(g), which shall comprise the following
components:
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(i) The amount that would be required in
order to retire all mortgage debt as described on Schedule 2(a)(i) attached
hereto (excluding prepayment penalties) as of the Closing (as defined in
Subparagraph 5(b) below) (the "Loans"), which is presently estimated to be
$35,401,921;
(ii) Cash to be paid to TRP, in an amount to
be specified by TRA at or prior to the Closing ("Cash"); and
(iii) Class B limited partner units
("Units") of Transferee issued to TRP, which shall be in an amount equal to the
Property Consideration less the total of the Loans and the Cash. By way of
example only, based on the present estimated amount of the Loans as set forth
above, and assuming that TRA specified $3,900,000 of Cash to be paid pursuant to
subparagraph (ii), above, the total Property Consideration would comprise the
following:
Property Consideration $40,061,000
LESS:
Loans (subparagraph 2(a)(i)) 35,401,921
Cash (subparagraph. 2(a)(ii)) 3,900,000
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Total $39,301,921
EQUALS:
TRP Units (Subparagraph 2(a)(iii)) $ 759,079
(b) The Transferee and TRA agree that the total
consideration to be given by the Transferee in return for the Assigned
Agreements is One Million Four Hundred Thousand Dollars ($1,400,000) (the
"Management Consideration;" which, together with the Property Consideration, is
collectively referred to as the "Contribution Consideration"). At the Closing,
in consideration of TRA's contribution of the Assigned Agreements to Transferee,
Transferee shall issue to TRA $1,400,000 worth of GRTI's common stock ("Stock").
(c) For purposes of determining the number of Units
and Stock to be issued pursuant to Subparagraph 2(a)(iii) and 2(b) above, each
Unit or share of Stock, as applicable, shall be deemed to be worth $14.50.
(d) With respect to any Stock to be issued to TRA or
to TRP (in the case of a redemption of Units as more fully described in
Subparagraph 2(e) below):
(i) All certificates for the Stock shall
bear a legend in substantially the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY
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STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OFFERED
FOR SALE EXCEPT IN COMPLIANCE WITH SUCH ACT AND LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
NOT TRANSFERABLE, EXCEPT IN ACCORDANCE WITH THE
PROCEDURES AND RESTRICTIONS SET FORTH IN THE
REGISTRATION RIGHTS AGREEMENT DATED AS OF __________,
1996, AMONG GRTI, TRA AND TRP (THE "REGISTRATION
RIGHTS AGREEMENT"), COPIES OF WHICH ARE FILED AT THE
PRINCIPAL OFFICE OF GRTI AND ARE AVAILABLE TO ANY
HOLDER WITHOUT CHARGE UPON WRITTEN REQUEST THEREFOR.
ANY PURPORTED TRANSFER IN VIOLATION OF SUCH
RESTRICTIONS SHALL BE VOID AND OF NO EFFECT. AS USED
HEREIN, 'TRANSFER' SHALL MEAN SALE, EXCHANGE,
ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF ANY INTEREST IN A SHARE EXCEPT BY
OPERATION OF LAW IN CONNECTION WITH A MERGER OR
CONSOLIDATION OF THE CORPORATION.
(ii) The certificates for shares of the
Stock shall also bear any other legend required by any applicable state
securities law.
(iii) In addition, GRTI shall make a
notation regarding the restrictions on transfer of the Stock in its stock
records, and such Stock shall be transferred on the records of GRTI only if
transferred or sold in compliance with the provisions of the Registration Rights
Agreement (as herein defined).
(iv) The holder of the Stock issued to TRA
at the Closing shall have "piggyback" registration rights for a period of one
year as well as certain other rights, all as more particularly described in the
Registration Rights Agreement.
(e) The Units shall include a redemption option, the
specific terms and provisions of which are or will be set forth in an amendment
to Transferee's partnership agreement, by which, at any time, any person holding
the Units ("Holder") may demand that Transferee redeem the Units. Transferee
shall comply with such demand by redeeming the Units for either (at the election
of GRTI, in its capacity as Transferee's managing general partner, as more
specifically set forth in Transferee's partnership agreement; provided, however,
that notwithstanding the foregoing, such election may be made by such Holder if
such Holder
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determines that such election may have an adverse income tax effect on such
Holder): (i) cash in an amount equal to the number of Units being redeemed
multiplied by the then fair market value per Unit, or (ii) Stock based on a
ratio of 1 Unit for 1 share of Stock. If the Units are redeemed for Stock, the
Holder shall have "piggyback" registration rights for a period of one year as
well as certain other rights, all as more particularly described in the
Registration Rights Agreement attached hereto as Exhibit A (the "Registration
Rights Agreement").
(f) On the Closing Date, TRP and TRA shall execute
and deliver, and Transferee shall cause GRTI, so to execute and deliver, the
Registration Rights Agreement.
3. Transferee's Objections to Title Matters. Transferee shall
have the right to disapprove any title exceptions disclosed to Transferee by the
Title Company (as defined in subparagraph 4(d) below) or otherwise disclosed to
Transferee from and after the Effective Date and not described on Schedule 3
attached hereto and made a part hereof (the exceptions described on Schedule 3
being herein referred to as the "Permitted Exceptions") (the "Disapproved
Encumbrances"), and Transferee shall notify TRP in writing of any Disapproved
Encumbrances for each Individual Property within seven (7) business days after
the later of (i) the Effective Date or (ii) the date Transferee receives notice
of any such Disapproved Encumbrance (provided that Transferee's failure to so
notify TRP within such 7-business day period shall be deemed Transferee's
approval of such exception). Notwithstanding the foregoing, Transferee shall be
deemed to have disapproved any delinquent tax, attachment, judgment lien or
mechanic's or supplier's lien, or any other monetary lien other than the Loans
("Monetary Liens"), each of which shall be automatically deemed a Disapproved
Encumbrance. All other title exceptions disclosed to Transferee within the
period described above and not disapproved by Transferee shall constitute
"Permitted Exceptions." Within seven (7) days after the later of (i) the
Effective Date or (ii) the date Transferee notifies TRP of the Disapproved
Encumbrances, TRP shall notify Transferee in writing of any such Disapproved
Encumbrances which TRP is willing and able to cure as of or prior to the
Closing, if any (the "Title Cure Notice"); provided that TRP shall be required
to cure Monetary Liens. Except as so identified in the Title Cure Notice and as
provided in the preceding sentence, TRP shall be deemed to have elected not to
cure such Disapproved Encumbrances. Transferee may, by giving written notice to
TRP on or before the tenth (10th) day after (x) receipt of the Title Cure Notice
or (y) the expiration of the seven (7)-day period described above without reply
from TRP, terminate this Agreement, in which case neither party shall have any
further liability to the other. If Transferee does not so elect within such ten
(10) day period to terminate this Agreement, then Transferee shall be deemed to
have waived its disapproval of the Disapproved Encumbrances pertaining to such
Individual Property and such title exceptions shall then be deemed to be
"Permitted Exceptions."
4. Conditions to Closing. The following conditions are
precedent to Transferee's obligation to accept the Property and the Assigned
Agreements (the "Conditions Precedent"):
(a) The representations and warranties of TRP and TRA
contained herein shall be true and correct as of the Closing Date as though made
at and as of the Closing Date, and TRP's and TRA's covenants under this
Agreement shall be satisfied as of the Closing
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Date (to the extent such covenants are to be satisfied as of the Closing Date),
and Transferee shall have received at the Closing a certificate dated as of the
Closing Date in the form of Exhibit B attached hereto and executed (i) on behalf
of TRP by executive officers of the respective general partners of TRP and (ii)
on behalf of TRA, by an executive officer of TRA, certifying as to the
fulfillment of the conditions set forth in this Subparagraph 4(a).
(b) At the Closing, TRP shall convey to Transferee
(i) good and marketable fee title to each Individual Property identified in
Schedule 1(a) by deed in the form of Exhibit C-1 through Exhibit C-6 attached
hereto, (ii) title to the Lease Rights pursuant to an assignment and assumption
of tenant leases in the form of Exhibit D attached hereto (the "Assignment of
Leases"), (iii) title to the Personal Property pursuant to a xxxx of sale in the
form of Exhibit E attached hereto and an assignment and assumption of service
contracts, guaranties and warranties and other intangible property in the form
of Exhibit F attached hereto (the "Assignment of Service Contracts").
(c) At the Closing, TRA shall convey to Transferee
all of its right, title and interest in the Assigned Agreements free and clear
of any defects, liens, encumbrances or claims of any kind by a duly executed
assignment in the form attached as Exhibit G (the "Assignment of Management and
Leasing Agreement").
(d) Chicago Title Insurance Company ("Title Company")
shall be committed to issue at Closing for each Individual Real Property its
extended coverage American Land Title Association Policy of Owner's Title
Insurance (Form B, rev. 10/17/70) in the amount of the Property Consideration
attributable to such Individual Real Property (as determined by Transferee),
showing title to such Individual Real Property vested in Transferee, subject
only to the Permitted Exceptions. The foregoing title policies, together, in
each case, with endorsements, to the extent available in the states where each
Individual Property is located, covering zoning, subdivision map act, survey,
access, contiguity, no violations of covenants, conditions or restrictions and
such other endorsements as Transferee shall reasonably request, are referred to
herein collectively as the "Title Policies." On or before the Closing, TRP shall
cause the Title Company to deliver to Transferee a certification that, in
issuing the Title Policies, the Title Company has not relied on any
representations or indemnities of TRP or any of its affiliates (except as
disclosed in such certification). In addition, as a condition to Transferee's
obligation to close, Transferee shall be satisfied that, as of the Closing,
there is no outstanding financing statement filed in accordance with the Uniform
Commercial Code of any applicable jurisdiction with respect to the Individual
Property or TRP except for any financing statements approved by Transferee prior
to the Effective Date or relating to any of the Loans.
(e) TRP obtaining and delivering to Transferee the
tenant estoppel certificates required under Paragraph 7 below.
(f) TRP obtaining and delivering to Transferee the
Payoff Letters (as defined in Subparagraph 6(a) below) required under
Subparagraph 6(a) below.
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(g) The physical condition of the Real Property shall
be substantially the same on the day of Closing as on the Effective Date,
reasonable wear and tear and loss by casualty excepted (subject to the
provisions of Paragraph 11 below).
(h) At the Closing, the Conditions Precedent (as
defined and set forth in that certain Agreement dated as of even date herewith
between Transferee and Xxxx Xxxxxxx ("Xxxxxxx"), who owns a controlling interest
in TRA, (the "Xxxxxxx Agreement")) shall have each been satisfied or waived in
writing by Transferee.
(i) All of the property management and leasing
agreements affecting the Property (whether between TRP, TRA or any other party
and such property managers and leasing agents) shall be terminated as of the
Closing Date at no cost or expense to Transferee.
The Conditions Precedent contained in Subparagraphs 4(a)
through (i) are intended solely for the benefit of Transferee. If any of the
Conditions Precedent is not satisfied, Transferee shall have the right in its
sole discretion either to waive in writing the Condition Precedent and proceed
with the purchase or terminate this Agreement. In addition, the provisions of
Subparagraphs 4(b), 4(c), 4(h) and 4(i) are also covenants of TRP, TRA and
Xxxxxxx, as applicable.
5. Closing and Escrow.
(a) Upon mutual execution of this Agreement, the
parties hereto shall deposit an executed counterpart of this Agreement with
Title Company and this Agreement shall serve as instructions to Title Company as
the escrow holder for consummation of the purchase and sale contemplated hereby.
TRP and Transferee agree to execute such additional escrow instructions as may
be appropriate to enable the escrow holder to comply with the terms of this
Agreement; provided, however, that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall control unless a contrary intent is expressly
indicated in such supplementary instructions.
(b) The parties shall endeavor to conduct an escrow
closing pursuant to Subparagraph 5(a) above. If, however, an escrow closing is
not practical, the closing of the transactions contemplated herein (the
"Closing") shall be held and delivery of all items to be made at the Closing
shall be made at the offices of Xxxxxxxx & Xxxxxxxx LLP, 000 Xxxx Xxxx Xxxx,
Xxxx Xxxx, XX 00000 on or before December 1, 1996 (the "Closing Date"). In the
event the Closing does not occur on or before the Closing Date, the escrow
holder shall, unless it is notified by both parties to the contrary within five
(5) days after the Closing Date, return to the depositor thereof items which
were deposited hereunder. Any such return shall not, however, relieve either
party of any liability it may have for its wrongful failure to close.
(c) At or before the Closing, TRP shall deliver or
cause to be delivered to Transferee the following:
(i) a duly executed Registration Rights
Agreement;
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(ii) the duly executed and acknowledged
Deeds;
(iii) a duly executed Assignment of Leases;
(iv) a duly executed Xxxx of Sale;
(v) a duly executed Assignment of Service
Contracts;
(vi) a duly executed Assignment of
Management and Leasing Agreement;
(vii) originals (or copies to the extent TRP
does not possess originals) of the Leases;
(viii) duly executed tenant estoppel
certificates as required pursuant to Subparagraph 4(e) above;
(ix) originals (or copies to the extent TRP
does not possess originals) of the Contracts not previously delivered to
Transferee;
(x) originals of the building permits and
certificates of occupancy for the Improvements and all tenant-occupied space
included within the Improvements not previously delivered to Transferee;
(xi) a FIRPTA affidavit (in the form
attached as Exhibit H) pursuant to Section 1445(b)(2) of the Internal Revenue
Code of 1986 (the "Code"), and on which Transferee is entitled to rely, that
neither TRP is a "foreign person" within the meaning of Section 1445(f)(3) of
the Code;
(xii) a California Form 590 from TRP (in the
form attached as Exhibit I) certifying that TRP has a permanent place of
business in California or is qualified to do business in California; (xiii) such
resolutions, authorizations, bylaws or other corporate and/or partnership
documents or agreements relating to TRP and TRA as shall be reasonably required
by Title Company; (xiv) the certificate certifying as to TRP's and TRA's
representations and warranties as required by Subparagraph 4(a) above;
(xv) the Payoff Letters as required by
Subparagraph 4(f) above; and
(xvi) any other instruments, records or
correspondence called for hereunder which have not previously been delivered.
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Transferee may waive compliance on TRP's part under any of the foregoing items
by an instrument in writing.
(d) At or before the Closing, Transferee shall
deliver or cause to be delivered to TRP or TRA, as the case may be, the
following:
(i) a duly executed Registration Rights
Agreement;
(ii) a duly executed Assignment of Leases;
and
(iii) a duly executed Assignment of Service
Contracts.
(e) TRP and Transferee shall each deposit such other
instruments as are reasonably required by the escrow holder or otherwise
required to close the escrow and consummate the transactions described herein in
accordance with the terms hereof. TRP and Transferee hereby designate Title
Company as the "Reporting Person" for the transaction pursuant to Section
6045(e) of the Code and the regulations promulgated thereunder. Title Company
shall prepare for the mutual review and approval of the parties, a closing
statement to be executed and delivered by each party hereto at the Closing.
(f) With respect to each Individual Property the
following adjustments shall be made, and the following procedures shall be
followed:
(i) Items Not to be Prorated. There shall be
no prorations or adjustments of any kind with respect to (a) delinquent rents
collected by Transferee after the Closing; (b) refunds or shortfalls arising
after the Closing with respect to Overage Rents (as defined below) collected by
TRP from tenants prior to the Closing; (c) insurance premiums (except with
respect to the PMI Policy, which is discussed below).
(ii) Basis of Prorations. All prorations
shall be calculated as of 12:01 a.m. on the Closing Date, on the basis of a
365-day year.
(iii) At Closing. As nearly as practicable
prior to the Closing, Transferee and TRP shall prepare a statement for each
Individual Property ("Proration Statement") showing prorations and adjustments,
and each party shall be so credited or charged at the Closing, in accordance
with the following:
a. Rents. With respect to fixed
rents ("Fixed Rents") and additional rents, including, without limitation,
percentage rents, escalation charges for real estate taxes, parking charges,
marketing fund charges, operating expenses, maintenance escalation rents or
charges, common area expenses, cost-of-living increases or other charges of a
similar nature, if any, and any additional charges and expenses payable under
tenant leases (collectively, "Overage Rents"), TRP shall account to Transferee
for any Fixed Rents or Overage Rents actually collected, and Transferee shall be
credited for its share. For example, if the Closing Date is October 16,
Transferee will be credited for 50% of all October rents collected by TRP prior
to the Closing Date.
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b. Expenses. With respect to
expenses (including, without limitation, real property taxes and assessments;
current installments (only) of any improvement bonds or assessments which are a
lien on an Individual Property or which are pending and may become a lien on any
Individual Property; water, sewer and utility charges; amounts payable under any
Contract that will be continued after the Closing; permits, licenses and/or
inspection fees; the PMI Policy; interest on any Loan; and any other expenses
normal to the operation and maintenance of the Property) ("Expenses"):
(1) to the extent Expenses
have been paid prior to the Closing Date, TRP shall account to Transferee for
such prepaid Expenses, and TRP shall be credited for its pro rata share for the
period after the Closing Date;
(2) to the extent of
Expenses not yet paid by TRP and to be paid in arrears but which are
ascertainable (e.g., interest on the Loans), Transferee shall be credited for
TRP's pro rata share of such expenses.
c. Security Deposits. TRP shall
deliver to Transferee all security deposits, letters of credit and other
collateral given to TRP or any of its affiliates or predecessors-in-interest
pursuant to any of the Leases, less any portions thereof applied in accordance
with the respective Lease (together with a statement regarding such
applications).
(iv) After Closing. After the Closing Date,
Transferee and TRP shall meet from time to time to discuss adjustments in
accordance with the following:
a. Rents. If Transferee collects any
non-delinquent Fixed Rents or Overage Rents applicable to the month in which the
Closing occurs, TRP's pro rata share of such rents shall be credited to TRP.
b. Expenses. With respect to any
invoice received by Transferee after the Closing Date for Expenses that relates
to the month in which the Closing occurs, Transferee will either, at
Transferee's option, (i) pay the entire amount of the invoice and either xxxx
TRP for TRP's share or offset TRP's share against any prorated rents due to TRP
under subparagraph a, above, or (ii) compute Transferee's pro rata share, write
a check for that amount in favor of the vendor, and then send the invoice and
its check to TRP, in which case TRP agrees that it will pay for its share and
forward the invoice and the two payments to the vendor.
(g) All costs associated with the transaction, up
to but not exceeding $500,000, shall be charged against TRP only if the Closing
occurs, and in such case will be deducted from the Property Consideration.
These costs are set forth in a budget which was prepared by Transferee and
previously delivered to TRP, and includes, without limitation, all legal and
accounting costs of Transferee and GRTI (including three years' audited
operating statements for the Property to be completed prior to the Closing as
required under federal securities laws), all title insurance premiums, all
escrow charges, any transfer taxes, all costs of Transferee's and GRTI's
engineering and environmental analyses, and all survey costs. To the extent
any of the foregoing costs are not determined at Closing, Transferee shall
deliver to TRP a
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statement setting forth such costs within thirty (30) days after the Closing
Date and such costs shall be paid by TRP to Transferee within five (5) days
after receipt by TRP of such Statement.
(h) Notwithstanding anything to the contrary set
forth in this Agreement, including, without limit, this Paragraph 5, the Mission
East Reserves shall be prorated between Transferee and TRP in the same manner in
which rents are prorated under this Paragraph 5.
(i) Except as otherwise set forth in this Paragraph
5, the obligations of TRP and Transferee under this Paragraph 5 shall survive
the Closing.
6. Loans. Transferee and TRP (but at no material cost or
liability to TRP) shall use all reasonable efforts to obtain the consent of the
lender of each Loan to the transfer of the Property to Transferee as well as a
payoff letter confirming the outstanding principal amount of such Loan as of the
Closing Date (collectively, the "Payoff Letters"). In addition, TRP hereby
grants Transferee the right to renegotiate the Loans and to negotiate new loans
or loans to replace the existing Loans; provided that (i) TRP incurs no cost or
liability in connection therewith, and (ii) such new loans and modifications to
any Loans are not effective until the Closing. In no event shall TRP be
responsible for the payment of any prepayment fees or yield maintenance fees
payable in connection with the Loans. The parties shall execute all documents
necessary or desirable to evidence or effectuate the modification of Loans as
provided in this Paragraph 6.
7. Estoppel Certificates. TRP shall use all reasonable efforts
to obtain an estoppel certificate from each tenant of the Property (each, a
"Tenant") (other than Tenant's under apartment leases at the Properties listed
on Schedule 7 attached hereto), dated no earlier than forty-five (45) days prior
to the Closing Date, substantially in the form of Exhibit J attached hereto,
conforming to the most recent rent roll approved by Transferee and alleging no
defaults, offsets, or claims against the lessor (the "Estoppel Certificate"). It
shall be a condition to Transferee's obligation to close the transactions
contemplated in this Agreement that on or before the Closing:
(a) TRP delivers to Transferee an Estoppel
Certificate from Tenants occupying seventy-five percent (75%) of the rentable
area of each Individual Property, including all tenants occupying more than ten
percent (10%) of the rentable area of each such Individual Property
(collectively, the "Required Tenants"), and, with respect to all other tenants
(collectively, the "Non-Required Tenants"), there shall exist no dispute with
TRP, which dispute is material to the use, value or economics of such Individual
Property, as determined on an individual basis by Transferee in good faith in
Transferee's sole discretion (a "Material Non-Required Tenant Dispute") (and
Transferee shall be afforded the opportunity to inquire of any Non-Required
Tenant which does not provide an Estoppel Certificate as to whether any such
dispute exists); or
(b) To the extent that TRP is unable to obtain
Estoppel Certificates, or any items required to be therein, from the Required
Tenants, or to the extent that there is any Material Non-Required Tenant
Dispute, TRP shall deliver to Transferee and Transferee may, but shall not be
obligated to, accept, on the Closing Date a certification in which TRP warrants
and
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represents to Transferee, with respect to such missing Estoppel Certificates, or
any missing items required to be included therein, each item set forth in the
Estoppel Certificate attached as Exhibit J for the missing Estoppel
Certificates.
(c) If the conditions contained in Subparagraphs 7(a)
and (b) above are not satisfied, then Transferee may, by written notice given to
TRP before the Closing, elect to either waive such conditions or terminate this
Agreement.
8. TRP's and TRA's Representations and Warranties. TRP and TRA
each hereby represents and warrants to Transferee as follows:
(a) TRA is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. TRP is
a general partnership duly organized, validly existing and in good standing
under the laws of the State of California.
(b) TRP and TRA each have full power and authority to
execute and deliver this Agreement and to perform all of the terms and
conditions hereof to be performed by TRP and TRA, respectively, and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by each of TRP and TRA and is the legal, valid and
binding obligation of each of TRP and TRA and is enforceable against each of TRP
and TRA in accordance with its terms, except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and by general
equitable principles (whether or not such enforceability is considered in a
proceeding at law or in equity). Neither TRP nor TRA is presently subject to any
bankruptcy, insolvency, reorganization, moratorium, or similar proceeding.
(c) Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated by this Agreement,
nor the compliance with the terms and conditions hereof will (i) violate or
conflict, in any material respect, with any provision of TRP's partnership
agreement or TRA's articles of incorporation or bylaws or any statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge or other
restrictions of any government, governmental agency or court to which either TRP
or TRA is subject, or (ii) result in any material breach or the termination of
any lease, agreement or other instrument or obligation to which either TRP or
TRA is a party or by which any of the Property may be subject, or cause a lien
or other encumbrance to attach to any of the Property or the Assigned
Agreements. Neither TRP nor TRA is a party to any contract or subject to any
other legal restriction that would prevent or restrict complete fulfillment by
TRP or TRA of all of the terms and conditions of this Agreement or compliance
with any of the obligations under it.
(d) All material consents required from any
governmental authority or third party in connection with the execution and
delivery of this Agreement by TRP and TRA or the consummation by TRP or TRA of
the transactions contemplated hereby, if any, have been made or obtained or
shall have been made or obtained by the Closing Date. Complete and correct
copies of all such consents, if any, shall be delivered to Transferee.
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(e) There are no adverse or other parties in
possession of the Property, or any part thereof, except TRP and tenants under
the Leases. No party has been granted any license, lease, or other right
relating to the use or possession of the Property or any part thereof, except
tenants under the Leases.
(f) To the best of TRA's and TRP's actual knowledge,
except as set forth on Schedule 8(f), there is no litigation pending or
threatened, against either TRP or TRA or any basis therefor that arises out of
the ownership of the Property or that might detrimentally affect the value or
the use or operation of any of the Property for its intended purpose or the
ability of TRP or TRA to perform its obligations under this Agreement. TRP and
TRA shall notify Transferee promptly of any such litigation of which either TRP
or TRA becomes aware.
(g) Except as set forth on Schedule 8(g), at the time
of Closing there will be no outstanding written or oral contracts made by TRP
for any improvements to the Property which have not been fully paid for and TRP
shall cause to be discharged all mechanics' and materialmen's liens arising from
any labor or materials furnished to the Property prior to the time of Closing.
(h) Schedule 8(h) lists all of the tangible Personal
Property.
(i) Attached hereto as Exhibit K is a rent roll (the
"Rent Roll") for each Property showing all of the Leases for each such Property
as of the date of this Agreement. Said Rent Roll is complete in all material
respects and all information therein is accurate as of its date, and as of the
Effective Date there are no Leases or tenancies with respect to the Property or
any part thereof except as therein set forth. Except as disclosed on the Rent
Roll, no rental under any Lease has been collected in advance of the current
month. The Rent Roll shall be updated at the Closing to reflect any changes
which occur after the Effective Date. TRP is the owner of the entire lessor's
interest in and to each of the Leases and none of the Leases or the rentals or
other sums payable thereunder has been assigned or otherwise encumbered, except
in connection with the Loans.
(j) Schedule 8(j) attached hereto sets forth a list
of all notes or other evidence of indebtedness, loan agreements, mortgages,
guaranty agreements, and any and all other documents entered into by TRP and all
amendments, modifications and supplements thereto (collectively the "Loan
Documents") in connection with the Loans and all matters in connection with the
Loans.
(k) To the best of TRP's actual knowledge, (i) the
Exhibits and Schedules attached hereto, as provided by or on behalf of TRP,
completely and correctly present in all material respects the information
required by this Agreement to be set forth therein, and (ii) TRP has delivered
to Transferee true and correct copies of all of the due diligence materials
pertaining to the Property which are in the possession or control of TRP or TRA.
No representation or warranty by TRP herein and, to the best of TRP's actual
knowledge, no information disclosed in the Exhibits and Schedules hereto
supplied by or on behalf of TRP contains any untrue statement of a material fact
or omits to state a fact necessary to make the statements contained herein or
therein not materially misleading. TRP has no actual knowledge
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of any events, transactions or other facts which, either individually or in the
aggregate might reasonably give rise to circumstances or conditions which might
have a material adverse affect on the Property.
(1) TRP is not a "foreign person" within the meaning
of Section 1445(f)(3) of the Code.
(m) (i) (A) TRP and TRA are acquiring the Units and the
Stock (the Units and the Stock being hereinafter sometimes referred to as the
"Securities"), respectively, for investment for its own account, not as a
nominee or agent, and not with a view to the sale in connection with a public
distribution of any part thereof; and (B) TRP and TRA each have no present
intention of selling, granting a participation in or otherwise distributing, and
do not have any contract, undertaking, agreement or arrangement with any natural
person, corporation, partnership, association or other entity ("Person") to
sell, transfer or grant a participation to such person, or to any third person,
with respect to any of the Securities.
(ii) TRP and TRA each understand that the Securities
are not registered under the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (the "Securities Act") on the ground that
the sale and the issuance of the Securities hereunder is exempt from
registration under the Securities Act pursuant to Section 4(2) thereof and
regulations issued thereunder, and that the Transferee's reliance on such
exemption is predicated on TRP's and TRA's representations set forth herein.
(iii) TRP and TRA each represent that it and each of
its equity owners, (A) is both an "accredited investor" as that term is defined
in Regulation D promulgated under the Securities Act and a purchaser excluded
from the count of investors under Section 25102(f) of the California
Corporations Code; and (B) alone or together with its professional advisor, has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of investment in the Transferee and has the
capacity to protect its own interest in connection with the transactions
contemplated hereby. TRP and TRA each further represent that, during the course
of the transaction and prior to its purchase of shares of the Securities, it had
access to, the opportunity to ask questions of, and receive answers from,
representatives of the Transferee concerning the terms and conditions of the
offering and to obtain additional information (to the extent the Transferee
possessed such information or could acquire it without unreasonable effort or
expense) necessary to verify the accuracy of any information furnished to it or
to which it had access.
(iv) TRP and TRA have relied solely on its own
investigations in making a decision to purchase the Securities, and has received
no representation or warranty from Transferee, or any of its affiliates,
employees or agents, other than those set forth in this Agreement.
(v) TRP and TRA understand that the Securities may
not be sold, transferred or otherwise disposed of without registration under the
Securities Act or pursuant to an exemption therefrom, and that in the absence of
an effective registration statement covering the Securities or an available
exemption from registration under the Securities Act, the
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Securities must be held indefinitely. In particular, TRP and TRA are aware that
the Securities may not be sold pursuant to Rule 144 promulgated under the
Securities Act unless all of the conditions of that Rule are met. Among the
current conditions for use of Rule 144 by certain holders is the availability to
the public of current information about Transferee. Such information is not now
available, and the Transferee has no present plans to make such information
available. TRP and TRA represent that, in the absence of an effective
registration statement covering the Securities, it will sell, transfer or
otherwise dispose of the Securities only in a manner consistent with its
representations set forth herein and then only in accordance with the provisions
of this Agreement and applicable laws and regulations.
(vi) TRP and TRA each agree that, except as
specifically contemplated hereunder, in no event will it transfer or dispose of
any of the Securities other than pursuant to an effective registration statement
under the Securities Act, unless and until (A) there is compliance with all
requirements contained in other sections of this Agreement and the Transferee's
partnership agreement; (B) TRP and/or TRA, as the case may be, shall have
notified Transferee of the proposed disposition and shall have furnished
Transferee with a statement of the circumstances surrounding the disposition;
(C) if requested by Transferee, at the expense of TRP and/or TRA, as the case
may be, or its transferee, it shall have furnished to Transferee an opinion of
counsel, reasonably satisfactory to Transferee, to the effect that such transfer
may be consummated without registration under the Securities Act; and (D) the
transferee executes and delivers an assumption of the terms and conditions of
this Agreement and, in the case of the Units, the Transferee's partnership
agreement satisfactory to the Transferee.
Transferee expressly understands and agrees that the phrase "to the best of
TRP's or TRA's actual knowledge" or words of similar import as used in Paragraph
8 means the actual knowledge of Xxxx Xxxxxxx, without any independent
investigation having been made.
9. Representations and Warranties of Transferee. Transferee
hereby represents and warrants to TRP and TRA as follows:
(a) Transferee is a duly organized and validly
existing limited partnership under the laws of the State of California.
(b) Transferee has full power and authority to
execute and deliver this Agreement and to perform all of the terms and
conditions hereof to be performed by Transferee, and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Transferee and is the legal, valid and binding obligation of
Transferee and is enforceable against Transferee in accordance with its terms,
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and by general equitable principles (whether or not such
enforceability is considered in a proceeding at law or in equity). Transferee is
not presently subject to any bankruptcy, insolvency, reorganization, moratorium,
or similar proceeding.
(c) Neither the execution and delivery of this
Agreement, the consummation of the transactions contemplated by this Agreement,
nor the compliance with the
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terms and conditions hereof will (i) violate or conflict, in any material
respect, with any provision of Transferee's partnership agreement or any
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge
or other restrictions of any government, governmental agency or court to which
Transferee is subject, or (ii) result in any material breach or the termination
of any lease, agreement or other instrument or obligation to which Transferee is
a party. Transferee is not a party to any contract or subject to any other legal
restriction that would prevent or restrict complete fulfillment by Transferee of
all of the terms and conditions of this Agreement or compliance with any of the
obligations under it.
(d) All material consents required from any
governmental authority or third party in connection with the execution and
delivery of this Agreement by Transferee or the consummation by Transferee of
the transactions contemplated hereby have been made or obtained or shall have
been made or obtained by the Closing Date. Complete and correct copies of all
such consents shall be delivered to TRP and TRA.
10. Indemnification.
(a) Each party hereby agrees to indemnify the other
party and defend and hold it harmless from and against any and all claims,
demands, liabilities, costs, expenses, penalties, damages and losses, including,
without limitation, attorneys' fees, resulting from any misrepresentation or
breach of warranty or breach of covenant made by such party in this Agreement or
in any document, certificate, or Exhibit given or delivered to the other
pursuant to or in connection with this Agreement. The indemnity contained in
this Subparagraph 10(a) shall not be interpreted to expand in any way the
indemnities provided in Subparagraphs 10(b) and 10(c).
(b) Except as otherwise expressly set forth in this
Agreement, TRP and TRA each agree to indemnify Transferee and GRTI and defend
and hold Transferee and GRTI harmless from and against any and all claims,
demands, liabilities, costs, expenses, penalties, damages and losses, including,
without limitation, attorneys' fees, asserted against, incurred or suffered by
Transferee and/or GRTI resulting from or arising out of any transaction entered
into (including, without limit, any of the Loans), any state of facts existing,
or any personal injury or property damage occurring in, on or about the Property
or relating thereto, before the Closing Date, from any cause whatsoever other
than as a consequence of the acts or omissions of Transferee, its agents,
employees or contractors.
(c) Except as otherwise expressly set forth in this
Agreement, Transferee agrees to indemnify TRP and TRA and defend and hold TRP
and TRA harmless from any claims, losses, demands, liabilities, costs, expenses,
penalties, damages and losses, including, without limitation, attorneys' fees,
asserted against, incurred or suffered by TRP or TRA resulting from or arising
out of any transaction entered into (including, without limit, the any of the
Loans), any state of facts existing, or any personal injury or property damage
occurring in, on or about the Property or relating thereto, after the Closing
Date, from any cause whatsoever other than as a consequence of the acts or
omissions of TRP, TRA, or their respective agents, employees or contractors.
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(d) The indemnification provisions of this Paragraph
10 shall survive beyond the Closing, or, if the Closing does not occur pursuant
to this Agreement, beyond any termination of this Agreement.
11. Risk of Loss.
(a) Minor Loss. Transferee shall be bound to accept
the Property for the full Property Consideration as required by the terms
hereof, without regard to the occurrence or effect of any damage to an
Individual Property or destruction of any improvements thereon or condemnation
of any portion of an Individual Property, provided that: (a) the cost to repair
any such damage or destruction does not exceed twenty percent (20%) of the
portion of the Property Consideration allocated to such Individual Property or,
in the case of a partial condemnation, the value of the portion of the
Individual Property taken does not exceed twenty percent (20%) of the portion of
the Property Consideration allocated to such Individual Property; (b) upon the
Closing, there shall be a credit against the Property Consideration due
hereunder equal to the amount of any insurance proceeds or condemnation awards
collected by TRP as a result of any such damage or destruction or condemnation,
plus the amount of any insurance deductible; (c) insurance or condemnation
proceeds available to TRP are sufficient to cover the cost of restoration; (d)
the insurance carrier has admitted liability for the payment of such costs; and
(e) the Loan, if any, on the Individual Property in question is not accelerated
or defaulted by reason of such casualty or condemnation. If the proceeds or
awards have not been collected as of the Closing, then TRP's right, title and
interest to such proceeds or awards shall be assigned to Transferee.
(b) Major Loss. If the cost to repair such damage or
destruction to an Individual Property exceeds twenty percent (20%) of the
portion of the Property Consideration allocated to such Individual Property or,
in the case of condemnation, if the value of the portion of the Individual
Property taken exceeds twenty percent (20%) of the portion of the Property
Consideration allocated to such Individual Property, then Transferee may, at its
option to be exercised by written notice to TRP within five (5) business days of
TRP'S notice to Transferee of the occurrence of the damage or destruction or the
commencement of condemnation proceedings, either (a) elect to terminate this
Agreement, or (b) consummate the purchase of all of the Property for the full
Property Consideration as required by the terms hereof, subject to the credits
against the Property Consideration provided below. If Transferee elects to
proceed with the purchase of all of the Property, then, upon the Closing,
Transferee shall be given a credit against the Property Consideration due
hereunder equal to the amount of any insurance proceeds or condemnation awards
collected by TRP as a result of any such damage or destruction or condemnation,
plus the amount of any insurance deductible. If the proceeds or awards have not
been collected as of the Closing, then TRP's right, title and interest to such
proceeds or awards shall be assigned to Transferee. If Transferee fails to give
TRP notice within such five (5) business day period, then Transferee will be
deemed to have elected to terminate this Agreement.
12. Inspections. Prior to the Closing Date, TRP shall
afford authorized representatives of Transferee reasonable access to the
Property for purposes of satisfying
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Transferee with respect to the representations, warranties and covenants of TRP
contained herein and with respect to satisfaction of any Conditions Precedent to
the Closing contained herein. Transferee hereby agrees to indemnify and hold TRP
harmless from any damage or injury to persons or property caused by Transferee
or its authorized representatives during their entry and investigations prior to
the Closing. In the event this Agreement is terminated, Transferee shall restore
the Property to substantially the condition in which it was found. This
indemnity shall survive the termination of this Agreement or the Closing, as
applicable.
13. Leases And Other Agreements; Capital Improvements
(a) Except as otherwise contemplated or permitted by
this Agreement or approved by Transferee in writing, from the Effective Date to
the Closing Date, TRP will cause TRP to operate, maintain, repair and lease the
Property in a prudent manner, in the ordinary course, on an arm's-length basis
and consistent with their past practices (and without limiting the foregoing,
TRP shall, in the ordinary course, negotiate with prospective tenants and enter
into leases of the Property, enforce leases in all material respects, pay all
costs and expenses of the Property, including, without limitation, debt service,
real estate taxes and assessments, maintain insurance and pay and perform
obligations under the Loan Documents) and will not dispose of or encumber any of
the Property, except for dispositions of personal property in the ordinary
course of business.
(b) Notwithstanding the above terms of this Xxxxxxxxx
00, XXX shall not without the prior written approval of Transferee, take any of
the following actions:
(ii) execute or terminate any new lease,
lease amendment or lease renewal covering in excess of 5,000 square feet in the
case of any lease of industrial space, 2,000 square feet in the case of any
lease of office space, or 2,000 square feet in the case of any lease of retail
space, or modify or waive any material term thereof.
(iii) Except as set forth in Subparagraph
4(i), enter into, execute or terminate any operating agreement, reciprocal
easement agreement, management agreement or any lease, contract, agreement or
other commitment of any sort (including any contract for capital items or
expenditures), with respect to any one or more of the Individual Properties
requiring payments to or by TRP in excess of $10,000 per annum, or the
performance of services by TRP the value of which is in excess of $10,000 per
annum; or
(iv) waive or modify any material term under
any Loan Document.
(c) In connection with any new leases or Lease
modifications affecting the Property entered into between the Effective Date and
the Closing in accordance with Subparagraph 13(b) above, the cost of tenant
improvement work and leasing commissions shall be prorated between Transferee
and TRP as of the Closing based on the portion of the lease term, if any,
occurring before the Closing Date and the portion of the lease term occurring on
and after such date. Notwithstanding the foregoing, TRP shall be responsible for
the cost of tenant improvement work and leasing commissions for all Leases (and
amendments thereto) entered
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into prior to the Effective Date (regardless of when the same are payable), and
TRP's obligations with respect thereto shall survive the Closing.
(d) Between the Effective Date and the Closing, TRP
shall continue to undertake capital improvements with respect to the Individual
Properties in the ordinary course. TRP acknowledges that it has performed
certain repair work to the decks at the Mission East Property and, that
notwithstanding anything to the contrary contained in this Agreement, TRP shall
be responsible for payment of all such work performed by or on behalf of TRP
prior to Closing.
14. Cooperation. TRP and Transferee shall cooperate and do all
acts as may be reasonably required or requested by the other with regard to the
fulfillment of any Condition Precedent or the consummation of the transactions
contemplated hereby including execution of any documents, applications or
permits. TRP hereby irrevocably authorize Transferee and its agents to make all
inquiries of any third party, including any governmental authority, as
Transferee may reasonably require to complete its due diligence.
15. Miscellaneous.
(a) 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) day after being
deposited with Federal Express or another reliable overnight courier service or
transmitted by facsimile telecopy, or (iii) two (2) days after being deposited
in the United States mail, registered or certified mail, postage prepaid, return
receipt required, and addressed as follows:
If to TRP: c/o Trust Realty Advisors
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Att'n: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
With a copy to: XxXxxxxxx, Will & Xxxxx
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Att'n: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Fax : (000) 000-0000
If to Transferee: Glenborough Properties, L.P.
000 Xxxxx Xx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Att'n: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
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With a copy to: Xxxxxxxx & Xxxxxxxx LLP
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Att'n: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax : (000) 000-0000
or such other address as either party may from time to time specify in writing
to the other.
(b) Brokers and Finders. Except for Xxxx Xxxxxxx who
shall be paid a finder's fee by Transferee pursuant to the terms of the Xxxxxxx
Agreement, neither party has had any contact or dealings regarding the Property,
or any communication in connection with the subject matter of this transaction,
through any real estate broker or other person who can claim a right to a
commission or finder's fee in connection with the sale contemplated herein. In
the event that any other broker or finder perfects a claim for a commission or
finder's fee based upon any such contact, dealings or communication, the party
through whom the other broker or finder makes its claim shall be responsible for
said commission or fee and shall indemnify and hold harmless the other party
from and against all liabilities, losses, costs and expenses (including
reasonable attorneys' fees) arising in connection with such claim for a
commission or finder's fee. The provisions of this Subparagraph shall survive
the Closing.
(c) 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 assigns. Transferee shall have
the right, with notice to TRP and TRA (and only with TRP'S and TRA's consent,
which consent may be withheld in their respective sole discretion), to assign
its right, title and interest in and to this Agreement to one or more assignees
at any time before the Closing Date. In the event of an approved assignment by
Transferee, Transferee shall not be relieved of any and all obligations under
this Agreement and any other instruments executed pursuant hereto, but such
assignee(s) shall be substituted in its place and will assume all obligations of
Transferee hereunder. Neither TRP nor TRA shall have the right to assign any of
their respective interest in this Agreement.
(d) Amendments. Except as otherwise provided herein,
this Agreement may be amended or modified only by a written instrument executed
by TRP, TRA and Transferee.
(e) Continuation and Survival of Representations and
Warranties, Etc. All representations and warranties by the respective parties
contained herein or made in writing pursuant to this Agreement are intended to
and shall remain true and correct as of the time of Closing, shall be deemed to
be material, and, together with all conditions, covenants and indemnities made
by the respective parties contained herein or made in writing pursuant to this
Agreement (except as otherwise expressly limited or expanded by the terms of
this Agreement), shall survive the execution and delivery of this Agreement and
the Closing, or, to the extent the context requires, beyond any termination of
this Agreement.
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(f) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of California. The
parties recognize that, with respect to some of the Individual Properties
located outside of the State of California, it may be necessary for the parties
to comply with certain aspects of the law of such states in order to consummate
the purchase and sale of Individual Properties pursuant hereto. The parties
agree to comply with such other laws to the extent necessary to consummate the
purchase and sale of such Individual Properties, provided that it is the
parties' intent that the provisions of this Agreement be applied to each
Individual Property in a manner which results in the greatest consistency
possible. For this reason, and because of the large number of Individual
Properties located in the State of California, the parties have agreed that
California law shall govern with respect to the purchase and sale of each
Individual Property pursuant hereto to the greatest extent possible.
(g) Merger of Prior Agreements. This Agreement and
the Exhibits hereto constitute the entire agreement between the parties and
supersede all prior agreements and understandings between the parties relating
to the subject matter hereof.
(h) Enforcement. If either party hereto fails to
perform any of its obligations under this Agreement or if a dispute arises
between the parties hereto concerning the meaning or interpretation of any
provision of this Agreement, then the defaulting party or the party not
prevailing in such dispute shall pay any and all costs and expenses incurred by
the other party on account of such default and/or in enforcing or establishing
its rights hereunder, including, without limitation, court costs and attorneys'
fees and disbursements. Any such attorneys' fees and other expenses incurred by
either party in enforcing a judgment in its favor under this Agreement shall be
recoverable separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable from
the other provisions of this Agreement and to survive and not be merged into any
such judgment.
(i) Time of the Essence. Time is of the essence of
this Agreement.
(j) 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.
(k) Marketing. TRP agrees not to market or show the
Property to any other prospective purchasers during the term of this Agreement.
(l) Effective Date. As used herein, the term
"Effective Date" shall mean the first date on which both TRP, TRA and Transferee
shall have executed this Agreement.
(m) Confidentiality. Transferee, TRP and TRA shall
each maintain as confidential any and all material or information about the
other or, in the case of Transferee and its agents, employees, consultants and
contractors, about the Property, and shall not disclose such information to any
third party, except, in the case of information about the Property and TRP, to
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Transferee's lender or prospective lenders, insurance and reinsurance firms,
attorneys, environmental assessment and remediation service firms and
consultants, as may be reasonably required for the consummation of the
transaction contemplated hereunder and/or as required by law.
(n) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
16. Special Provisions Regarding Texas Property. With
respect to any Individual Property located in the state of Texas, Transferee
hereby represents and warrants that (i) Transferee is not in a significantly
disparate bargaining position with TRP, (ii) Transferee is represented by legal
counsel in connection with the transactions contemplated by this Agreement, and
(iii) such Individual Property is not a family residence occupied or to be
occupied as Transferee's residence. Transferee hereby waives any claim it may
now have or which arises in the future against TRP, its heirs, personal
representatives, agents, employees, directors, officers, agents,
representatives, successors and assigns arising by virtue of the provisions of
the Texas Business and Commerce Code Section 17.41, et seq., other than Section
17.555, which relates, in whole or in part, to this Agreement, any such
Individual Property, or any transaction between the parties hereto relating to
or arising out of this Agreement.
17. Non-Recourse Allocation. Transferee and GRTI agree
that up to $11 million of non-recourse mortgage debt shall be allocated to TRP
or an entity designated by TRP for not less than twenty-five (25) years, so as
to provide continuing debt basis for income tax purposes.
18. Determination of Material Inaccuracy. Notwithstanding
any provision of this Agreement to the contrary, Transferee shall not be
entitled to any right or remedy under this Agreement with respect to the first
$10,000 in damages suffered by Transferee as a result of any inaccuracies in any
representations or warranties (on a cumulative basis and not per each such
inaccuracy) made by TRP and/or TRA pursuant to Paragraph 8 hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
Transferee: GLENBOROUGH PROPERTIES, L.P.
a California limited partnership
Dated: By Glenborough Realty Trust Incorporated,
------------- a Maryland corporation, its general partner
By:
-----------------------------------------
Its:
----------------------------------------
TRP: TRUST REALTY PARTNERS
a California general partnership
By Trust Realty Advisors, a California
corporation
By:
-----------------------------------------
Its:
----------------------------------------
By TRP-LLC, a
---------------------
By:
-----------------------------------------
Dated: Its:
------------- ----------------------------------------
TRA: TRUST REALTY ADVISORS
a California corporation
Dated: By:
------------- -----------------------------------------
Its:
----------------------------------------
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