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EXHIBIT I
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CONTRIBUTION AGREEMENT
(SPF-I Separate Account)
by and between
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation, on behalf of the
Strategic Performance Fund I Separate Account
and
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
Date: September 24, 1997
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TABLE OF CONTENTS
Page
ARTICLE 1 - SALE OF PROPERTY.............................................................1
1.1 Real Property................................................................1
1.2 Personal Property............................................................1
1.3 Other Property Rights........................................................2
ARTICLE 2 - PURCHASE PRICE...............................................................2
2.1 Payment at Closing...........................................................2
2.2 Allocation of Purchase Price.................................................3
ARTICLE 3 - TITLE MATTERS................................................................3
3.1 Title to Real Property.......................................................3
3.2 Title Defects................................................................3
3.2.1 Certain Exceptions to Title............................................3
3.2.2 Discharge of Title Objections..........................................4
3.3 Title Insurance..............................................................4
ARTICLE 4 - MERIDIAN'S DUE DILIGENCE/CONDITION OF THE FACILITIES.........................5
4.1 Meridian's Inspection of the Facilities......................................5
4.2 Meridian's Inspection of Documents...........................................5
ARTICLE 5 - ADJUSTMENTS AND PRORATIONS...................................................7
5.1 Lease Rentals and Expenses...................................................7
5.1.1 Rents..................................................................7
5.1.2 Lease Expenses.........................................................7
5.2 Real Estate and Personal Property Taxes......................................7
5.3 Other Property Operating Expenses............................................8
5.4 Closing Costs................................................................9
5.5 Cash Security Deposits.......................................................9
5.6 Dividend Adjustment..........................................................9
5.7 Interest Adjustment..........................................................9
5.8 Apportionment Credit.........................................................9
5.9 Delayed Adjustment..........................................................10
ARTICLE 6 - CLOSING.....................................................................10
6.1 Closing.....................................................................10
6.2 Closing Date................................................................11
6.3 Title Transfer and Payment of Purchase Price................................12
6.4 Prudential's Closing Deliveries.............................................12
6.5 Meridian Closing Deliveries.................................................14
6.6 Delivery of Deeds...........................................................16
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ARTICLE 7 - CONDITIONS TO CLOSING.......................................................16
7.1 Conditions Precedent to Obligations of Prudential...........................16
7.2 Conditions Precedent to Obligations of Meridian.............................18
7.3 Waiver of Failure of Conditions Precedent...................................19
ARTICLE 8 - REPRESENTATIONS AND WARRANTIES..............................................19
Meridian's Representations..................................................19
8.1.1 Organization, Good Standing and Authority............................19
8.1.2 Meridian's Authorization..............................................20
8.1.3 [Intentionally Omitted]...............................................20
8.1.4 Capitalization........................................................20
8.1.5 Conflicting Agreements and Other Matters..............................21
8.1.6 Due Execution, etc....................................................21
8.1.7 Litigation, Proceeding, etc...........................................22
8.1.8 No Default or Violation...............................................22
8.1.9 Status of Acquisition Common Stock....................................22
8.1.10 Governmental Consents, etc......................................22
8.1.11 Private Offering................................................23
8.1.12 ERISA...........................................................23
8.1.13 Insurance.......................................................24
8.1.14 Information Provided............................................24
8.1.15 No Other Liabilities............................................24
8.1.16 Taxes; REIT Status..............................................25
8.1.17 Compliance with Laws............................................25
8.1.18 Meridian Affiliates.............................................25
8.1.19 Material Contracts..............................................25
8.1.20 No Restrictions on Acquisition Common Stock.....................26
8.1.21 SEC Documents...................................................26
8.1.22 No Merger Agreements............................................26
8.1.23 Certain Actions by Meridian.....................................26
8.1.24 Facilities Sold "AS-IS".........................................27
8.2 Prudential's Representations................................................32
8.2.1 Prudential's Authorization............................................32
8.2.2 Investment Intent.....................................................32
8.2.3 Transfer Restrictions.................................................32
8.2.4 Stop Transfer Instruction.............................................34
8.2.5 Prudential Status.....................................................34
8.2.6 Authority.............................................................34
8.2.7 Access to Information.................................................34
8.2.8 Reliance..............................................................35
8.2.9 Separate Account Investors............................................35
8.2.10 Other Prudential's Representations..............................35
8.2.11 No Other Agreements.............................................36
8.3 General Provisions..........................................................36
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8.3.1 No Representation As to Leases........................................36
8.3.2 Definition of "Prudential's Knowledge"................................36
8.3.3 Prudential's Representations Deemed Modified..........................36
8.3.4 Notice of Breach; Prudential's Right to Cure..........................37
8.3.5 Survival..............................................................37
8.3.6 Limitation on Prudential's Liability..................................37
ARTICLE 9 - COVENANTS...................................................................38
9.1.1 Confidentiality.......................................................38
9.1.2 Approvals not a Condition to Meridian's Performance...................38
9.1.3 Meridian's Indemnity; Delivery of Reports.............................39
9.1.4 Limit on Government Contacts..........................................39
9.1.5 Real Estate Investment Trust..........................................39
9.1.6 Conduct of Business...................................................39
9.1.7 Negative Covenants of Meridian........................................39
9.1.8 Maintenance of Books and Records......................................40
9.1.9 Party in Interest.....................................................40
9.1.10 Real Estate Operating Company.......................................40
9.1.11 Amendment to Investor Rights Agreement...............................40
9.1.12 Book Entry Shares....................................................40
9.1.13 Survival........................................................40
9.2 Prudential's Covenants......................................................41
9.2.1 Service Contracts.....................................................41
9.2.2 Maintenance of Facilities.............................................41
9.2.3 Access to Facilities..................................................41
9.2.4 Sale of Acquisition Common Stock by Prudential........................41
9.2.5 Meridian Audit Rights.................................................42
9.2.6 Survival..............................................................42
9.3 Mutual Covenants............................................................42
9.3.1 Publicity.............................................................42
9.3.2 Broker................................................................42
9.3.3 Tax Refunds and Credits...............................................42
9.3.4 Survival..............................................................43
9.3.5 Approvals.............................................................43
9.3.6 Notification of Certain Matters.......................................43
9.3.7 Further Assurances....................................................43
ARTICLE 10 - FAILURE OF CONDITIONS......................................................44
To Prudential's Obligations.................................................44
10.2 To Meridian's Obligations...................................................44
ARTICLE 11 - CONDEMNATION/CASUALTY......................................................44
11.1 Condemnation................................................................44
11.1.1 Right to Adjust.................................................44
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11.1.2 Assignment of Proceeds..........................................45
11.2 Destruction or Damage.......................................................45
11.3 Insurance...................................................................46
11.4 Effect of Termination.......................................................46
11.5 Waiver......................................................................46
ARTICLE 12 - [INTENTIONALLY OMITTED]....................................................46
ARTICLE 13 - LEASING MATTERS............................................................46
13.1 New Leases..................................................................46
13.2 Lease Expenses..............................................................47
13.3 Other Lease Activity........................................................48
13.4 Lease Enforcement...........................................................48
13.5 Lease Termination Prior to Closing..........................................48
ARTICLE 14 - MISCELLANEOUS..............................................................49
14.1 Assignment..................................................................49
14.2 Designation Agreement.......................................................49
14.3 Survival/Merger.............................................................50
14.4 Integration; Waiver.........................................................50
14.5 Governing Law...............................................................50
14.6 Captions Not Binding; Schedules and Exhibits................................50
14.7 Binding Effect..............................................................50
14.8 Severability................................................................50
14.9 Notices.....................................................................51
14.10 Counterparts................................................................52
14.11 No Recordation..............................................................52
14.12 Additional Agreements; Further Assurances...................................52
14.13 Construction................................................................52
14.14 Intentionally Omitted.......................................................53
14.15 Business Day................................................................53
14.16 Prudential's Maximum Aggregate Liability....................................53
14.17 WAIVER OF TRIAL BY JURY.....................................................53
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EXHIBITS
Exhibit A List of Facilities and Legal Descriptions
Exhibit B List of Contracts
Exhibit C Certain Certificates of Occupancy, Licenses, Permits and
Personal Property
Exhibit D Allocated Purchase Prices
Exhibit E Form of Meridian's As-Is Certificate And Agreement
Exhibit F Form of Deed
Exhibit G Form of Xxxx of Sale
Exhibit H Form of Assignment of Leases
Exhibit I List of Tenants
Exhibit J Form of Assignment of Contracts
Exhibit K-1 Form of Tenant Estoppel Letter
Exhibit K-2 Form of Prudential's Estoppel Certificate
Exhibit L Form of Notice to Tenants
Exhibit M Form of Prudential's FIRPTA Affidavit
Exhibit N Title Reports
Exhibit O Litigation Notices, Condemnation Notices and
Governmental Violations
Exhibit P Designated Employees
Exhibit Q Form of Amended and Restated Registration Rights
Agreement
Exhibit R Form of Excepted Holder Agreement
Exhibit S Form of Opinion of Meridian's Counsel
Exhibit T Meridian's Audit Rights
SCHEDULES
Schedule 1 Certain Defined Terms
Schedule 8.1.4 Convertible Securities and Indebtedness; Stock
Voting, Transfer and Redemption Agreements
Schedule 8.1.5 Conflicting Agreements
Schedule 8.1.10 Required Government Consents
Schedule 8.1.15 Other Liabilities
Schedule 8.1.18 Assessable Shares
Schedule 8.1.22 Merger Agreements
Schedule 8.2.9 Separate Account Investors
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CONTRIBUTION AGREEMENT
(SPF-I Separate Account)
THIS CONTRIBUTION AGREEMENT (this "Agreement") is made this 24th day of
September, 1997, by and between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a
New Jersey corporation, on behalf of the Strategic Performance Fund I Separate
Account (in such capacity "Prudential"), and MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation ("Meridian"). Capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in SCHEDULE 1
annexed hereto and by this reference incorporated herein.
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set forth herein the
parties hereto do hereby agree as follows:
ARTICLE
1 - SALE OF PROPERTY
Prudential agrees to sell, transfer and assign and Meridian agrees to purchase,
accept and assume, subject to the terms and conditions stated herein, all of
Prudential's right, title and interest in and to each of the Facilities, as
defined below. As used in this Agreement, the term "FACILITY" means any one of
the five (5) industrial/warehouse facilities located on the parcels of Real
Property described in EXHIBIT A-1 through EXHIBIT A-5, attached hereto and
incorporated herein by this reference, together with such Real Property's
accompanying Personal Property and Other Property Rights, as described below,
and "FACILITIES" means every such Facility, collectively. The Facilities are
more particularly described as follows:
1.1 Real Property. Those certain parcels of real estate legally described
in EXHIBIT A-1 through EXHIBIT A-5 attached hereto and incorporated herein by
this reference, together with all buildings, improvements and fixtures located
thereon and all rights, privileges and appurtenances pertaining thereto
including all of Prudential's right, title and interest in and to all
rights-of-way, open or proposed streets, alleys, easements, strips or gores of
land adjacent to each such parcel (herein collectively called the "REAL
PROPERTY"); and
1.2 Personal Property. All tangible personal property owned by Prudential
(excluding any computer or computer equipment and software owned by Prudential
or Prudential's property manager), located on the Real Property, and used in the
ownership, operation and maintenance of the Real Property and all
nonconfidential books, records and files (excluding appraisals, budgets,
Prudential's strategic plans for the Facilities, internal analyses, marketing
information, submissions relating to Prudential's obtaining of corporate
authorization, attorney and accountant work product, or other information in the
possession or control of Prudential or Prudential's property manager(s) which
Prudential deems proprietary) relating to the Real Property (herein collectively
called the "PERSONAL PROPERTY"); and
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1.3 Other Property Rights. (a) Prudential's interest as landlord in all
leases encumbering the Real Property on the Closing Date (as defined in Section
6.2); (b) if and to the extent assignable by Prudential, (i) all service,
supply, maintenance, utility and commission agreements, all equipment leases,
and all contracts, subcontracts and agreements, if any, relating to the
construction of any unfinished tenant improvements and described in EXHIBIT B
attached hereto and incorporated herein by this reference, and (ii) all
licenses, permits and other written authorizations necessary for the use,
operation or ownership of the Real Property or Personal Property and in
Prudential's possession or control (the rights and interests of Prudential
described in clauses (a) through (b) hereinabove being herein collectively
called the "OTHER PROPERTY RIGHTS").
ARTICLE 2 - PURCHASE PRICE
The total purchase price to be paid by Meridian for the purchase of the
Facilities is the sum of THIRTY ONE MILLION, EIGHT HUNDRED FORTH-EIGHT THOUSAND
DOLLARS ($31,848,000.00) (the "PURCHASE PRICE"). Payment of the Purchase Price
shall be rendered in the form of: (a) cash in the sum of NINE MILLION, FIVE
HUNDRED FIFTY-FOUR THOUSAND FOUR HUNDRED DOLLARS ($9,554,400.00) in immediately
available funds (the "ACQUISITION CASH"); and (b) validly issued shares of
Meridian's Common Stock, par value $0.001 per share (the "ACQUISITION COMMON
STOCK") with an aggregate value of TWENTY-TWO MILLION, TWO HUNDRED NINETY-THREE
THOUSAND SIX HUNDRED DOLLARS ($22,293,600.00), which Acquisition Common Stock
shall be comprised of 1,106,931.5 shares of Meridian's Common Stock priced at
$20.14 per share. The Purchase Price shall be paid in the following manner:
2.1 Payment at Closing. On the Closing Date, Meridian shall (a) deposit,
or cause to be deposited with First American Title Insurance Company whose
mailing address is 00 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxx X. ("Xxxx") Xxxxxx, Vice President & Special Counsel (the "TITLE
COMPANY") acting in its additional capacity as escrow agent ("ESCROW AGENT"),
the Acquisition Common Stock pursuant to Section 6.1(v), and (b) pay to
Prudential through Escrow Agent the Acquisition Cash, in immediately available
funds by wire transfer as more particularly set forth in Section 6.3. The
Acquisition Cash shall also be subject to the prorations and adjustments set
forth in Article 5 or as otherwise provided under this Agreement, plus any other
amounts required to be paid by Meridian at Closing.
2.2 Allocation of Purchase Price. The Purchase Price has been allocated to
each Facility by Prudential and Meridian as set forth in EXHIBIT D attached
hereto and by this reference incorporated herein (such portion being such
Facility's "ALLOCATED PURCHASE PRICE", subject in each instance to Closing
adjustments provided hereunder.
ARTICLE 3 - TITLE MATTERS
3.1 Title to Real Property. Meridian acknowledges that, prior to the
execution of this Agreement, Meridian has conducted an examination of the status
of title to the Facilities. Meridian has
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previously obtained (a) a commitment to issue an Owner's Policy of Title
Insurance with respect to each Facility, copies of which are attached hereto in
Exhibit N and incorporated herein by this reference, (each a "TITLE REPORT" and
collectively, the "TITLE REPORTS") from the Title Company, (b) copies of all
recorded documents referred to on Schedule B of each Title Report as exceptions
to coverage (the "TITLE DOCUMENTS"), and (c) a certified boundary survey of each
Facility (each a "SURVEY" and collectively, the "SURVEYS"). Meridian hereby
confirms its approval of the Title Reports and Surveys. Except as provided in
Section 3.2, Prudential shall convey and Meridian shall accept title to the
Facilities, subject to (i) exceptions to title appearing on Schedule B of the
Title Reports, including the Title Company's standard printed exceptions, (ii)
any and all applicable zoning and building ordinances and land use regulations,
(iii) such state of facts as are disclosed in the Survey with respect to each
Facility, (iv) such state of facts as would be disclosed by a physical
inspection of each Facility, (v) the liens of taxes not yet due and payable,
(vi) any exceptions caused by Meridian, its agents, representatives or
employees, (vii) such other exceptions with respect to each Facility as Title
Company shall commit to insure over, without any additional cost to Meridian,
whether such insurance is made available in consideration of payment, bonding,
indemnity of Prudential or otherwise, and (viii) the Leases (as defined in
Subsection 6.4(c)) (the foregoing exceptions described in clauses (i) through
(viii) being herein collectively called the "PERMITTED EXCEPTIONS").
Notwithstanding the foregoing, Prudential shall, at Prudential's expense, cause
to be removed from the Title Reports all mortgages, deeds of trust, mechanic's
liens, and other monetary liens and judgments described thereon. Meridian shall
pay any additional premiums required for the deletion of the "survey exception"
on Meridian's fee policy of title insurance and for the issuance of any desired
or applicable endorsements requested by Meridian which are available in the
state where each Facility is located. Meridian is aware that ALTA policies and
ALTA endorsements may not be available in all states in which the Facilities are
located.
3.2 Title Defects.
3.2.1 Certain Exceptions to Title. Meridian shall have the right to
object in writing to any title matters that are not Permitted Exceptions and
that, in Meridian's reasonable discretion, materially adversely affect title to,
or the value of, the Real Property with respect to any Facility which may appear
on supplemental title reports or updates to the Title Reports issued at the
request of Meridian after the end of the Due Diligence Period (herein
collectively called the "OTHER LIENS") within five (5) days after the receipt
thereof by Meridian. Unless Meridian shall timely object to such Other Liens,
all such Other Liens and any matters which do not, in Meridian's reasonable
discretion, materially adversely affect title to, or the value of, the Real
Property with respect to any Facility which are set forth in any such
supplemental reports or updates shall be deemed to constitute additional
Permitted Exceptions. Any exceptions which are timely objected to by Meridian
shall be herein collectively called the "TITLE OBJECTIONS." Prudential may elect
(but shall not be obligated) to remove, or cause to be removed at its expense,
any Title Objections, and shall be entitled to a reasonable adjournment of the
Closing (not to exceed thirty (30) days) for the purpose of such removal, which
removal will be deemed effected by the issuance of title insurance eliminating
or insuring against the effect of the Title Objections. Prudential shall notify
Meridian in writing within five (5) days after receipt of Meridian's notice of
Title Objections whether Prudential elects to remove the same. If Prudential is
unable to remove or endorse over any Title Objections prior to the Closing, or
if Prudential elects not to remove one or more Title Objections, Meridian may
elect to either (a) terminate this Agreement, in which event the parties shall
have no further
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rights or obligations hereunder except for obligations which expressly survive
the termination of this Agreement, or (b) waive such Title Objections, in which
event such Title Objections shall be deemed "Permitted Exceptions" and the
Closing shall occur as herein provided without any reduction of or credit
against the Purchase Price.
3.2.2 Discharge of Title Objections. If on the Closing Date there
are any Title Objections which Prudential has elected to pay and discharge,
Prudential may use any portion of the Acquisition Cash to satisfy the same,
provided Prudential shall deliver to Meridian at the Closing instruments in
recordable form and sufficient to satisfy such Title Objections of record,
together with the cost of recording or filing such instruments, or provided that
Prudential shall cause Title Company to insure over the same, without any
additional cost to Meridian, whether such insurance is made available in
consideration of payment, bonding, indemnity of Prudential or otherwise.
3.3 Title Insurance. At Closing, Title Company shall issue to Meridian, at
Meridian's sole cost and expense, an ALTA Owner's Form (or such other form of
Owner's Policy as may be promulgated in the state in which a particular Facility
is located) of title insurance policy in the form of the applicable Title Report
(each an "OWNER'S TITLE POLICY" and collectively, the "OWNER'S TITLE POLICIES"),
in the amount of the Allocated Purchase Price with respect to such Facility
insuring that fee simple title to such Facility or Facilities is vested in
Meridian subject only to the Permitted Exceptions with respect to such Facility;
provided, however, that at Meridian's option, Meridian may instruct the Title
Company to issue one or more Owner's Title Policies insuring the state of title
to multiple Facilities. Meridian shall be entitled to request that the Title
Company provide, at Meridian's sole cost and expense, such endorsements (or
amendments) to the Owner's Title Policies as Meridian may reasonably require,
provided that (a) such endorsements (or amendments) shall be at no cost or
additional liability to Prudential, (b) Meridian's obligations under this
Agreement shall not be conditioned upon Meridian's ability to obtain such
endorsements and, if Meridian is unable to obtain such endorsements, Meridian
shall nevertheless be obligated to proceed to close the transaction contemplated
by this Agreement (the "TRANSACTION") without reduction of or set off against
the Purchase Price, and (c) the Closing shall not be delayed as a result of
Meridian's request. Notwithstanding anything herein to the contrary, Meridian
covenants and agrees that upon Meridian's acquisition of the Facilities,
Meridian shall purchase the Owner's Title Policies from the Title Company.
ARTICLE 4 - MERIDIAN'S DUE DILIGENCE/CONDITION OF THE FACILITIES
4.1 Meridian's Inspection of the Facilities. Meridian acknowledges that
during the time period concluding prior to the execution of this Agreement (the
"DUE DILIGENCE PERIOD"), that Meridian has conducted its examinations,
inspections, testing, studies and/or investigations (herein collectively called
the "DUE DILIGENCE") of the Facilities (including for Hazardous Materials) and
information regarding the Facilities. Meridian and Prudential each acknowledge
and agree that Meridian shall have no additional period after the date hereof to
conduct further physical Due Diligence of the Facilities. At Closing and as a
material inducement for Prudential to consummate the Transaction, Meridian will
deliver, with respect to each Facility, a certification in the form of EXHIBIT E
attached hereto and incorporated herein
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by this reference, certifying that no representations or warranties concerning
the Facilities have been made except as expressly set forth herein.
4.2 Meridian's Inspection of Documents. Meridian acknowledges that prior
to Meridian's execution of this Agreement, Prudential made available to Meridian
and otherwise allowed Meridian access to copies of certain documents in
Prudential's possession applicable to the Facilities, including, but not limited
to, the Title Reports, the Title Documents, the Surveys, the Leases, other
reports and any available documents and other pertinent books and records which
pertain to the Facilities (collectively, the "DOCUMENTS") as Meridian has deemed
necessary or appropriate. Meridian has determined to its satisfaction the
assignability of any Documents to be assigned hereunder. Prudential shall
cooperate with Meridian (but shall not be obligated) to obtain any consents
required in connection with the assignment to Meridian of any of the Documents.
All of the Documents are confidential and, prior to such time, if any, that
Meridian takes title to the Facilities, shall not be distributed or disclosed by
Meridian to any person or entity not associated with Meridian (which obligation
of Meridian shall survive any termination of this Agreement). If the Transaction
fails to close for any reason whatsoever, Meridian shall return to Prudential
all of the Documents (together with all copies thereof made by or on behalf of
Meridian) which Prudential, its sales agents or brokers may have previously
delivered or made available or may hereafter deliver or make available to
Meridian in accordance with this Section 4.2 (which obligation of Meridian shall
survive any termination of this Agreement). BY FURNISHING TO MERIDIAN THE
DOCUMENTS, EXCEPT AS EXPRESSLY SET FORTH HEREIN, WHETHER HERETOFORE OR
HEREAFTER, NONE OF PRUDENTIAL, ITS SALES AGENTS OR BROKERS, NOR ANY PARTNER,
OFFICER, DIRECTOR, EMPLOYEE, AGENT OR ATTORNEY OF PRUDENTIAL, NOR ANY OTHER
PARTY RELATED IN ANYWAY TO ANY OF THE FOREGOING (ALL OF WHICH PARTIES ARE
COLLECTIVELY REFERRED TO AS THE "PRUDENTIAL PARTIES") SHALL BE DEEMED TO HAVE
MADE ANY REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE WHATSOEVER WITH
RESPECT TO ANY MATTER SET FORTH, CONTAINED OR ADDRESSED IN THE DOCUMENTS,
INCLUDING, BUT NOT LIMITED TO, THE ACCURACY AND COMPLETENESS THEREOF, AND
MERIDIAN SHALL CONFIRM INDEPENDENTLY ALL INFORMATION THAT IT CONSIDERS MATERIAL
TO ITS PURCHASE OF THE FACILITIES.
Meridian acknowledges that prior to Meridian's execution of this Agreement
Prudential has made available to Meridian, and Prudential hereby agrees to
continue to make available to Meridian and otherwise allow Meridian access to,
other non-confidential information regarding the Facilities, including, but not
limited to, information which may have related to their construction, history,
current economic and leasing status, physical condition and prospects for future
use or development, as Meridian has deemed appropriate. Meridian acknowledges
that Meridian has reviewed the Documents and the other information regarding the
Facilities with the assistance of such experts as Meridian deemed appropriate.
While Prudential has provided, and will continue to provide, the Documents and
such other information to Meridian and to cooperate with Meridian, PRUDENTIAL
HAS MADE IT CLEAR THAT IT IS UNWILLING TO SELL THE FACILITIES TO MERIDIAN UNLESS
PRUDENTIAL AND THE OTHER PRUDENTIAL PARTIES ARE EXPRESSLY RELEASED FROM
LIABILITY BY MERIDIAN FOR ANY AND ALL REPRESENTATIONS MADE IN ANY STATEMENTS
HERETOFORE OR HEREAFTER MADE, OR INFORMATION HERETOFORE OR HEREAFTER
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FURNISHED TO MERIDIAN OR ITS AGENTS OR REPRESENTATIVES BY THE PRUDENTIAL PARTIES
UNLESS SUCH REPRESENTATIONS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY
EXHIBIT HERETO. Consequently, Meridian, for Meridian and Meridian's successors
in interest, hereby releases the Prudential Parties from, and waives all claims
and liability against the Prudential Parties for, any and all representations
now or hereafter made, or information now or hereafter furnished, by the
Prudential Parties to Meridian or its agents or representatives (including, but
not limited to, representations regarding the ownership, operation, economic and
leasing status and physical and soil condition of the Facilities), unless the
representations are expressly set forth in this Agreement or any exhibit hereto.
The release of Prudential Parties set forth in this Section 4.2 shall be deemed
to be reaffirmed as of the Closing and shall survive the Closing and shall not
be merged therein. Meridian acknowledges and agrees that it (i) is familiar with
the physical condition of the Facilities, (ii) has completed its due diligence
with respect to the Facilities and the Documents to its satisfaction, (iii) is
acquiring the Facilities based exclusively upon its own investigations and
inspections of the Facilities and the Documents, and (iv) shall have not
additional period after the date hereof to conduct further physical due
diligence regarding the Facilities.
ARTICLE 5 - ADJUSTMENTS AND PRORATIONS
The following adjustments and prorations shall be made at Closing:
5.1 Lease Rentals and Expenses.
5.1.1 Rents. All collected rents and other payments from tenants
under the leases of the Facilities shall be prorated between Prudential and
Meridian as of the day prior to the Adjustment Date. Prudential shall be
entitled to all rents (including any percentage rent, additional rent and any
accrued tax and operating expense reimbursements and escalations), charges, and
other revenue of any kind attributable to any period under the Leases to but not
including the Adjustment Date. Meridian shall be entitled to all rents
(including any percentage rent, additional rent and any accrued tax and
operating expense reimbursements and escalations), charges and other revenue of
any kind attributable to any period under the Leases on and after the Adjustment
Date. Rents and expense escalations or other reimbursements due landlord under
the Leases not collected as of the Closing Date shall not be prorated at the
time of Closing, but Meridian shall make a good faith effort to collect the same
on Prudential's behalf and to tender the same to Prudential upon receipt (which
obligation of Meridian shall survive the Closing and not be merged therein);
provided, however, that all rents, escalations and other reimbursements due
landlord under the Leases collected by Meridian on or after the Closing Date
shall first be applied to all amounts due under the Leases at the time of
collection (i.e., current rents and sums due Meridian as the current owner and
landlord) with the balance (if any) payable to Prudential, but only to the
extent of amounts delinquent and actually due Prudential. Meridian shall not
have an exclusive right to collect the sums due Prudential under the Leases and
Prudential hereby retains its rights to pursue any tenant under the Leases for
sums due Prudential for periods attributable to Prudential's ownership of the
Facilities; provided, however, that Prudential shall not be permitted to
commence or pursue any legal proceedings against any tenant seeking eviction of
such tenant or the termination of the underlying lease. Prudential's rights
under the immediately preceding sentence shall survive the Closing and not be
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merged therein. Meridian shall receive a credit against the Acquisition Cash
portion of the Purchase Price for pre-paid rentals held by Prudential covering
the period post-Closing.
5.1.2 Lease Expenses. At Closing, Meridian shall reimburse
Prudential for the Lease Expenses (as defined in Section 13.2) to the extent
required by the terms of Section 13.2.
5.2 Real Estate and Personal Property Taxes. Real estate taxes, as opposed
to personal property taxes, shall be prorated only on the basis of real estate
taxes which become due and payable in the calendar year during which Closing
occurs, based upon the latest available tax xxxx and the number of days elapsed
in the calendar year of Closing, as of midnight of the day immediately preceding
the Adjustment Date. Personal property taxes shall be prorated as of the
Adjustment Date based upon the date they become due. Prudential shall be
entitled to all tax refunds and credits attributable to the Facilities prior to
the Adjustment Date. Meridian shall pay all real estate and personal property
taxes and shall be entitled to all tax refunds and credits attributable to the
Facilities after the Adjustment Date. If the real estate and/or personal
property tax rate and assessments have not been set for the calendar year in
which the Closing occurs, then the proration of such taxes shall be based upon
the rate and assessments for the preceding calendar year, and such proration
shall be adjusted between Prudential and Meridian upon presentation of written
evidence that the actual taxes paid for the calendar year in which the Closing
occurs differ from the amounts used at Closing and in accordance with the
provisions of Section 5.7. Prudential shall pay all installments of special
assessments due and payable prior to the Adjustment Date and Meridian shall pay
all installments of special assessments due and payable on and after the
Adjustment Date; provided, however, that Prudential shall not be responsible for
any installments of special assessments which have not been confirmed or which
relate to projects that have not been completed on the date hereof.
Notwithstanding the foregoing terms of this Section, Prudential shall have no
obligation to pay (and Meridian shall not receive a credit at Closing for) any
real estate or personal property taxes or special assessments to the extent that
Meridian is entitled after Closing to reimbursement of taxes and assessments, or
the recovery of any increase in taxes and assessments, from the tenants under
the Leases, regardless of whether Meridian actually collects such reimbursement
or increased taxes and assessments from such tenants, it being understood and
agreed by Meridian and Prudential that the burden of collecting such
reimbursements shall be solely on Meridian. In the event any Facility has been
assessed for property tax purposes at such rates as would result in reassessment
(i.e., "escape assessment" or "roll-back taxes") based upon the change in land
usage or ownership of such Facility, Meridian hereby agrees to pay all such
taxes and to indemnify and save Prudential harmless from and against all claims
and liability for such taxes. Such indemnity shall survive the Closing and not
be merged therein.
5.3 Other Property Operating Expenses. Operating expenses for the
Facilities shall be prorated as of midnight of the day prior to the Adjustment
Date. Prudential shall pay all utility charges and other operating expenses
attributable to the Facilities to, but not including the Adjustment Date (except
for those utility charges and operating expenses payable by tenants in
accordance with the Leases) and Meridian shall pay all utility charges and other
operating expenses attributable to the Facilities on or after the Adjustment
Date. To the extent that the amount of actual consumption of any utility
services is not determined prior to the Closing Date, a proration shall be made
at Closing based on the last available reading and post-closing adjustments
between Meridian and Prudential shall be made within twenty (20) days of the
date that actual consumption for such pre-closing period is determined, which
obligation shall
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survive the Closing and not be merged therein. Prudential shall not assign to
Meridian any deposits which Prudential has with any of the utility services or
companies servicing the Facilities. Meridian shall arrange with such services
and companies to have accounts opened in Meridian's name beginning at 12:01 a.m.
on the Closing Date. Notwithstanding the foregoing terms of this Section,
Prudential shall have no obligation to pay (and Meridian shall not receive a
credit at Closing for) any operating expenses to the extent that Meridian is
entitled after Closing to reimbursement of operating expenses, or the recovery
of any increase in operating expenses, from the tenants under the Leases,
regardless of whether Meridian actually collects such reimbursement or increased
operating expenses from such tenants, it being understood and agreed by Meridian
and Prudential that the burden of collecting such reimbursements shall be solely
on Meridian.
5.4 Closing Costs. Except as expressly provided herein, Meridian shall pay
all costs associated with Closing other than Prudential's attorney's fees and
costs. Without limiting the foregoing, Meridian shall pay all premiums and
charges of the Title Company for the Owner's Title Policies (including
endorsements requested by Meridian) to be issued pursuant to the Title Reports,
the cost of the Surveys, the cost of any Phase I environmental reports ordered
by Meridian, all recording and filing charges in connection with the instruments
by which Prudential conveys the Facilities and all escrow charges, all transfer
taxes, all costs of Meridian's Due Diligence and any other costs customarily
paid by the purchaser of real property pursuant to the customs of the state in
which each Facility is located. Each party shall pay its own attorneys. The
obligations of Meridian to pay applicable escrow charges shall survive the
termination of this Agreement.
5.5 Cash Security Deposits. At Closing, Prudential shall give Meridian a
credit against the Acquisition Cash in the aggregate amount of the unapplied
cash security deposits then held by Prudential under the Leases and any interest
thereon less, any administrative or similar charges to which Prudential may be
entitled under applicable law.
5.6 Dividend Adjustment. Prudential shall pay to Meridian, promptly after
receipt of dividends for the quarter ended September 30, 1997, an amount equal
to the product of (x) Accrued Dividends Per Share multiplied by (y) 1,106,931.5
shares (the "Dividend Adjustment"). Payment of such Dividend Adjustment shall be
made in the manner as set forth in Section 5.8 or as otherwise agreed to by
Prudential and Meridian.
5.7 Interest Adjustment. At Closing Meridian shall pay to Prudential
interest at the rate of 5.5% per annum on the Acquisition Cash portion of the
Purchase Price for the number of days from and including the Adjustment Date to
and excluding the Closing Date. Such interest shall be calculated as simple
interest at a per diem rate equal to 5.5% divided by 365 days.
5.8 Apportionment Credit. In the event the apportionments to be made at
the Closing result in a credit balance (i) to Meridian, such sum shall be paid
(at Prudential's option) at the Closing by giving Meridian a credit against the
Acquisition Cash in the amount of such credit balance or without reduction of
the Acquisition Cash by giving Meridian a certified or bank check payable to the
order of Meridian, or (ii) to Prudential, Meridian shall pay the amount thereof
to Prudential at the Closing by wire transfer of immediately available funds to
the account or accounts to be designated by Prudential for the payment
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of the Acquisition Cash. Notwithstanding anything herein to the contrary, if the
aggregate adjustments and prorations payable by Prudential to Meridian at
Closing equal or exceed $100,000.00, then Prudential may, in its sole
discretion, elect to give Meridian a credit (a) solely against the Acquisition
Cash or (b) on a pro rata basis against each of the Acquisition Cash and the
number of share of Acquisition Common Stock to be delivered at Closing.
5.9 Delayed Adjustment. If at any time following the Closing Date, the
amount of an item listed in any section of this Article 5 shall prove to be
incorrect (whether as a result in an error in calculation or a lack of complete
and accurate information as of the Closing), the party in whose favor the error
was made shall promptly pay to the other party the sum necessary to correct such
error upon receipt of proof of such error, provided that such proof is delivered
to the party from whom payment is requested on or before one (1) year after
Closing. The provisions of this Section 5.8 shall survive the Closing and not be
merged therein.
ARTICLE 6 - CLOSING
Meridian and Prudential hereby agree that the Transaction shall be consummated
as follows:
6.1 Closing. Meridian and Prudential hereby agree that the Transaction
shall be consummated via a Closing in escrow with the Escrow Agent. The Escrow
Agent shall be paid a closing escrow fee in the total sum of Seven Hundred Fifty
Dollars ($750.00) for services as Escrow Agent. Meridian and Prudential shall
each pay one-half of such closing escrow fee. On the Closing Date, Escrow Agent
shall close escrow by:
(i) Recording all documents as may be necessary to clear title to each
Facility in accordance with the requirements of this Agreement;
(ii) Recording the Deeds (as hereinafter defined);
(iii) Paying all closing costs and making all prorations in accordance
with the terms of this Agreement and a statement of adjustments and
prorations prepared by Escrow Agent and approved by Meridian and
Prudential, copies of which statement shall be signed in multiple
originals by Meridian and Prudential and delivered to Escrow Agent
prior to the Closing Date;
(iv) Delivering to Meridian the Owner's Title Policies, closing
statement(s) duly executed by Meridian, Prudential and Escrow Agent,
and an original of each of the documents described in Sections
6.4(b) through (p) (the Deeds referred to in Section 6.4(a) to be
delivered by Escrow Agent to Meridian after return from the
recorder's office); and
(v) Delivering to Prudential the following: (a) by wire transfer to be
received by Prudential's bank not later than 12:00 p.m. Eastern
Time, on the Closing Date, or as otherwise may be directed by
written instructions from Prudential the Acquisition Cash plus or
minus closing
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adjustments and prorations; (b) by delivering to Prudential a share
certificate representing the total number of shares of Acquisition
Common Stock; and (c) delivering to Prudential, on or promptly after
the Closing Date, a closing statement fully executed by Prudential,
Meridian and Escrow Agent, a copy of the Title Policies, conformed
copies of the recorded Deeds, and an original of each of the
documents described in Sections 6.5(b) through (i), and copies of
the documents described in Section 6.5(j).
In the event that Meridian or Prudential execute separate escrow
instructions, such separate escrow instructions shall constitute separate
agreements between Escrow Agent on the one hand, and Meridian or Prudential, as
the case may be, on the other hand, and shall not constitute agreements between
Meridian and Prudential. Such separate escrow instructions shall be enforceable
only to the extent not inconsistent with this Agreement.
6.2 Closing Date. Subject to Prudential's right to extend the Closing as
provided in this Agreement, the Transaction shall close ("CLOSING") on the date
that Meridian's shareholders vote to approve the issuance of approximately
7,096,513 shares of Meridian's Common Stock to The Prudential Insurance Company
of America and to three accounts managed by The Prudential Insurance Company of
America as described in that certain Notice of Special Meeting, Proxy Statement
and Proxy Card for Special Meeting of Stockholders of Meridian distributed to
the shareholders of Meridian on September 5, 1997, which vote is scheduled to
occur on September 24, 1997 (the "CLOSING DATE") time being of the essence with
respect to such Closing Date. Closing may, at Prudential's election, be either
by a so-called "New York style" closing or through escrow. The Closing shall
take place at 12:00 p.m. Eastern Time in the offices of Prudential's attorneys.
Meridian and Prudential shall conduct a "pre-closing" no later than two (2)
business days prior to the Closing Date. Meridian and Prudential, separately or
collectively, as appropriate for each item, shall escrow with the Title Company
no later than one (1) business day prior to the Closing Date fully executed,
notarized and recordable Deeds (as hereinafter defined) for the Real Property,
bills of sale for the Personal Property, and each of the additional items listed
in Sections 6.4 and 6.5, such documents to be held by the Title Company pursuant
to an escrow letter to be provided by Prudential on or before the Closing Date.
Title transfer and payment of the Purchase Price is to be completed on the
Closing Date as set forth in Section 6.3. Time is of the essence with respect to
the Closing Date.
6.3 Title Transfer and Payment of Purchase Price. Provided all conditions
precedent to Prudential's obligations hereunder have been satisfied, Prudential
agrees to convey title to each Facility to Meridian by the Deeds upon
confirmation of receipt of the Purchase Price as set forth below. Provided all
conditions precedent to Meridian's obligations hereunder have been satisfied,
Meridian agrees to deliver the Purchase Price, as specified in Article 2, by
timely delivering the same to the Escrow Agent no later than 12:00 p.m. Eastern
Time on the Closing Date.
6.4 Prudential's Closing Deliveries. At the Closing, Prudential shall
deliver or cause to be delivered to Meridian the following:
(a) Deeds. A Deed with respect to each Facility in the form of
EXHIBIT F attached hereto and incorporated herein by this reference, conveying
to Meridian the Real Property with respect to each
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such Facility, subject only to the Permitted Exceptions (each individually a
"DEED" and collectively, the "DEEDS").
(b) Xxxx of Sale. A xxxx of sale with respect to each Facility in
the form of EXHIBIT G attached hereto and incorporated herein by this reference
conveying all of Prudential's right, title and interest in and to the Personal
Property with respect to each such Facility.
(c) Assignment of Tenant Leases. An assignment and assumption of
tenant leases with respect to each Facility, in the form of EXHIBIT H attached
hereto and incorporated herein by this reference (each individually an
"ASSIGNMENT OF LEASES" and collectively, the "ASSIGNMENTS OF LEASES")
transferring all of the landlord's interest in the tenant space leases for the
tenants for each such Facility as identified on EXHIBIT I (the "TENANTS")
attached hereto and incorporated herein by this reference (as updated at
Closing) and any amendments, guarantees and other documents relating thereto
(herein collectively called the "LEASES"), together with all assignable non-cash
security deposits deposited by the Tenants thereunder and not applied by
Prudential in accordance with the terms of the Leases.
(d) Assignment of Equipment Leases, Commission Agreements and
Service Contracts. An assignment and assumption of equipment leases, commission
agreements, service contracts, warranties and guaranties and the Other Property
Rights with respect to each Facility (to the extent the same are not transferred
by the applicable Deed, Xxxx of Sale or Assignment of Leases with respect to
such Facility) in the form of EXHIBIT J attached hereto and incorporated herein
by this reference (each individually an "ASSIGNMENT OF CONTRACTS" and
collectively, the "ASSIGNMENTS OF CONTRACTS"), transferring, to the extent
assignable, without liability or expense to Prudential, all of Prudential's
interest in the equipment leases and any lease commission agreements in effect
at each such Facility on the Closing Date, all uncanceled service contracts
encumbering such Facility on the Closing Date, all warranties and guaranties
which remain in effect with respect to such Facility on the Closing Date and any
Other Property Rights with respect to such Facility not otherwise transferred to
Meridian (all of the foregoing being herein collectively called the
"CONTRACTS"). Prudential shall not assign any existing management agreement or
any contracts or policies of insurance for the Facilities.
(e) Estoppel Letters. Executed estoppel letters, with respect to
each of the Facilities, from each of the Tenants. All of such estoppel letters
shall be dated no earlier than forty-five (45) days prior to the Adjustment Date
and shall be substantially in the form which such Tenant is required to provide
pursuant to the terms of such Tenant's Lease or, if no form is specified in any
of the Leases, in the form of EXHIBIT K-1 attached hereto and incorporated
herein by this reference. In the event Prudential cannot for any reason obtain a
tenant estoppel letter from a Tenant from whom an estoppel letter is required,
Prudential, at its option, may deliver to Meridian a seller's (landlord)
estoppel letter in the form of EXHIBIT K-2 attached hereto and incorporated
herein by this reference. Prudential's liability under Prudential's estoppel
letters shall expire and be of no further force or effect on the one-hundred and
eightieth (180th) day following the Closing Date; provided, however, that if
Prudential shall obtain an estoppel certificate from any such Tenant after
delivery of such Prudential's estoppel letter with respect to such Tenant,
Prudential's (landlord) estoppel letter shall, as of the date of such Tenant's
estoppel letter, be without further force or effect.
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(f) Notice to Tenants. A single form letter in the form of EXHIBIT L
attached hereto and incorporated herein by this reference to each Tenant under
the Leases, duplicate copies of which would be sent notifying it of the sale of
its respective Facility to Meridian and advising it that all future payments of
rent and other payments due under its respective Lease are to be made to
Meridian at an address designated by Meridian.
(g) Non-Foreign Status Affidavit. A non-foreign status affidavit in
the form of EXHIBIT M attached hereto and incorporated herein by this reference,
as required by Section 1445 of the Internal Revenue Code.
(h) Evidence of Authority. Documentation sufficient to establish the
due authorization of Prudential's sale of the Facilities and Prudential's
delivery of the documents required to be delivered by Prudential pursuant to
this Agreement which documentation shall consist of the certificate described in
Section 7.2(f) and a certificate of an Assistant Secretary of Prudential with
respect to the authority to act on behalf of Prudential of the individual
executing on behalf of Prudential all documents contemplated by this Agreement.
Prudential shall deliver to Title Company such documents as may be reasonably
required by Title Company to evidence the capacity of Prudential and the
authority of the person executing any documents on behalf of Prudential.
(i) Prudential's Certificate. The certificate of Prudential
certifying to the matters set forth in Section 8.2.
(j) Facility Documents. (i) To the extent in the possession of
Prudential or any of the current managers of the Facilities, (A) the original
(or, if unavailable, a copy) of the existing certificate of occupancy for each
Facility, and (B) all original (or, if unavailable, copies of) certificates,
licenses, permits, authorizations and approvals issued for or with respect to
each Facility by governmental and quasi-governmental authorities having
jurisdiction; and (ii) all non-proprietary books and records located at each
Facility and/or at the office of Prudential's building manager relating to such
Facility and the ownership and operation thereof (the items described in clauses
(i) and (ii) being herein collectively called the "PROPERTY DOCUMENTS").
(k) Letters of Credit as Tenant Security Deposits. With respect to
any security deposits which are letters of credit, Prudential shall, if the same
are assignable, (i) deliver to Meridian at the Closing such letters of credit,
(ii) execute and deliver such other instruments as the issuers of such letters
of credit shall reasonably require, and (iii) cooperate with Meridian to change
the named beneficiary under such letters of credit to Meridian so long as
Prudential does not incur any additional liability or expense in connection
therewith.
(l) Keys and Original Documents. Keys to all locks at each Facility
(in Prudential's and/or Prudential's building managers' possession) and
originals or, if originals are not available, copies, of the Leases and
Contracts (unless canceled as set forth herein) encumbering any of the
Facilities on the Closing Date.
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(m) Transfer Taxes. If applicable, duly completed and signed real
estate transfer tax returns.
(n) Registration Rights Agreement. An amended and restated
registration rights agreement in the form of EXHIBIT Q attached hereto and
incorporated herein by this reference (the "REGISTRATION RIGHTS AGREEMENT") duly
executed by Prudential.
(o) Excepted Holder Agreement. An excepted holder agreement in the
form of EXHIBIT R attached hereto and incorporated herein by this reference (the
"EXCEPTED HOLDER AGREEMENT") duly executed by Prudential.
(p) Other Documents. Such other documents as may be reasonably
required by Title Company or as may be agreed upon by Prudential and Meridian to
consummate the Transaction.
6.5 Meridian Closing Deliveries. At the Closing, Meridian shall deliver or
cause to be delivered to Prudential the following:
(a) Acquisition Cash. The Acquisition Cash, as adjusted for
apportionments and other adjustments required under this Agreement, plus any
other amounts required to be paid by Meridian at Closing.
(b) Assignment of Leases. An Assignment of Leases for each Facility
executed and acknowledged by Meridian.
(c) Assignment of Equipment Leases, Commission Agreements and
Service Contracts. An Assignment of Contracts for each Facility executed and
acknowledged by Meridian.
(d) Meridian's Certificates. The certificate of Meridian with
respect to each Facility, as required under Article 4 hereof and a certificate
of Meridian certifying as to the matters set forth in Section 8.1.
(e) Evidence of Authority. Documentation to establish to
Prudential's reasonable satisfaction the due authorization of Meridian's
acquisition of the Facilities and Meridian's delivery of the documents required
to be delivered by Meridian pursuant to this Agreement (including, but not
limited to, the organizational documents of Meridian, as they may have been
amended from time to time, resolutions of Meridian and incumbency certificates
of Meridian.
(f) Transfer Taxes. If applicable, duly completed and signed real
estate transfer tax returns.
(g) Registration Rights Agreement. The Registration Rights Agreement
for the benefit of Prudential and duly executed by Meridian.
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(h) Excepted Holder Agreement. The Excepted Holder Agreement duly
executed by Meridian.
(i) Evidence of Acquisition Common Stock Delivery. In accordance
with Section 6.1(v), Meridian shall present evidence that the Escrow Agent has
received a share certificate representing the Acquisition Common Stock.
(j) Other Documents. Such other documents as may be reasonably
required by Title Company or may be agreed upon by Prudential and Meridian to
consummate the Transaction.
6.6 Delivery of Deeds. Effective upon delivery of the Deeds, actual and
exclusive possession of each Facility (subject only to the Permitted Exceptions)
and risk of loss to the Facilities shall pass from Prudential to Meridian.
ARTICLE 7 - CONDITIONS TO CLOSING
7.1 Conditions Precedent to Obligations of Prudential. Prudential's
obligation to close the Transaction is conditioned on all of the following, any
or all of which may be waived by Prudential by an express written waiver, at its
sole option:
(a) Representations True; Performance of Covenants. All
representations and warranties made by Meridian in this Agreement shall be true
and correct in all material respects on and as of the Closing Date, as if made
on and as of such date except to the extent they expressly relate to an earlier
date and Meridian shall have complied in all material respects with all
agreements required to be performed by it hereunder at or prior to the Closing
Date.
(b) Meridian's Deliveries Complete. Meridian shall have delivered
the Acquisition Cash and the Acquisition Common Stock required hereunder and all
of the documents to be executed by Meridian set forth in Section 6.5 and shall
have performed all other covenants, undertakings and obligations, and complied
with all conditions required by this Agreement, to be performed or complied with
by Meridian at or prior to the Closing.
(c) Opinion of Meridian's Counsel. On the Closing Date, Prudential
shall have received an opinion of Xxxxxx & Xxxxxx L.L.P., counsel for Meridian,
substantially in the form of EXHIBIT S attached hereto and incorporated herein
by this reference, and dated as of the Closing Date. In rendering the foregoing
opinion, such counsel may rely as to factual matters upon certificates or other
documents furnished by directors and officers of Meridian and by government
officials, and upon such other documents as such counsel deem appropriate as a
basis for such opinion. Such counsel may specify the jurisdictions in which they
are admitted to practice and that they are not admitted to practice in any other
jurisdiction and are not experts in the law of any other jurisdiction. To the
extent such opinion concerns the laws of any other such jurisdiction, such
counsel may either provide an opinion of counsel admitted to practice in such
jurisdiction (which counsel shall be reasonably acceptable to Prudential) in
lieu of its own opinion or rely upon the opinion of such counsel. Prudential
hereby agrees that the firm of Xxxxxxx
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Xxxxx Xxxxxxx & Xxxxxxxxx is acceptable to Prudential for purposes of providing
such opinions involving the laws of the State of Maryland. To the extent that
any opinion rendered by counsel admitted to practice in another jurisdiction or
relied upon by Xxxxxx & Xxxxxx L.L.P., including any exception or limitation
thereto, is materially different from the opinion to be delivered at Closing by
Xxxxxx & Xxxxxx L.L.P. such opinion shall be reasonably satisfactory to
Prudential and a copy of such opinion shall be delivered to Prudential at the
Closing.
(d) No Material Adverse Effect. There shall not have occurred any
event which has had, or could reasonably be expected to have, a Material Adverse
Effect subsequent to March 31, 1997.
(e) Meridian Closing Certificate. At the Closing Date, Prudential
shall have received a certificate, dated the Closing Date, signed by an
authorized officer of Meridian in such capacity and not individually to the
effect set forth in Subsections 7.1(a) and (d), and stating that the conditions
specified in this Section 7.1 have been satisfied at the Closing Date.
(f) Meridian Officers' Certificate/Incumbency. At the Closing Date,
Prudential shall have received a certificate, dated the Closing Date, signed by
the Secretary or an Assistant Secretary of Meridian in such capacity and not
individually and certifying (i) that attached thereto is a true, correct and
complete copy of (A) the Charter, (B) Bylaws and (C) resolutions duly adopted by
the Board of Directors of Meridian authorizing the execution and delivery of the
documents relating to the Transaction and the issuance and sale of the
Acquisition Common Stock, (ii) the incumbency of officers executing this
Agreement and the other documents relating to the Transaction, and (iii) that
attached thereto is a specimen of the share certificate for the Acquisition
Common Stock.
(g) Transaction Not Prohibited. No Law or Order shall have been
enacted, entered, issued, promulgated or enforced by any Governmental Entity
which prohibits or restricts the transactions contemplated by this Agreement. No
Governmental Entity shall have notified any party to this Agreement that
consummation of the transactions contemplated by this Agreement would constitute
a violation of any Law of any jurisdiction or that it intends to commence
proceedings to restrain or prohibit such transactions or force divestiture or
rescission, unless such Governmental Entity shall have withdrawn such notice and
abandoned any such proceedings prior to the time which otherwise would have been
the Closing Date.
(h) Meridian Shareholder Approval. The shareholders of Meridian
shall have granted any requisite approvals necessary in connection with the
issuance of the Acquisition Common Stock to Prudential.
(i) Other Approvals. All Approvals set forth in Schedule 8.1.5 and
Schedule 8.1.10 shall have been received or the applicable waiting periods shall
have expired.
(j) REOC Requirement. Prudential shall be reasonably satisfied that
Meridian is qualified as a REOC.
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(k) ERISA Compliance. Prudential shall be reasonably satisfied that
the Transaction complies in all respects with ERISA and would not be a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code.
(l) Voting Rights. Meridian shall have taken all actions necessary
to ensure that Prudential shall have full voting rights with respect to the
Acquisition Common Stock (including, without limitation, obtaining approvals of
the Board of Directors of Meridian and amending the Charter or Bylaws of
Meridian, as applicable).
(m) Listing Approval. The Acquisition Common Stock shall have been
approved for listing on the NYSE.
7.2 Conditions Precedent to Obligations of Meridian. Meridian's obligation
to close the Transaction is conditioned on all of the following, any or all of
which may be waived by Meridian by an express written waiver, at its sole
option:
(a) Representations True; Performance of Covenants. Subject to the
provisions of Section 8.3, all representations and warranties made by Prudential
in this Agreement, as the same may be amended as provided in Section 8.3, shall
be true and correct in all material respects on and as of the Closing Date, as
if made on and as of such date except to the extent that they expressly relate
to an earlier date and Prudential shall have complied in all material respects
with all agreements required to be performed by it hereunder at or prior to the
Closing Date and Prudential shall have provided such evidence thereof as
Meridian may reasonably request.
(b) Title Conditions Satisfied. At the time of the Closing, title to
each Facility shall be as provided in Article 3 of this Agreement.
(c) Prudential's Deliveries Complete. Prudential shall have
delivered all of the documents and other items required pursuant to Section 6.4
and shall have performed all other covenants, undertakings and obligations, and
complied with all conditions required by this Agreement, to be performed or
complied with by Prudential at or prior to the Closing.
(d) Transaction Not Prohibited. No Law or Order shall have been
enacted, entered, issued, promulgated or enforced by any Governmental Entity
which prohibits or restricts the transactions contemplated by this Agreement. No
Governmental Entity shall have notified any party to this Agreement that
consummation of the transactions contemplated by this Agreement would constitute
a violation of any Law of any jurisdiction or that it intends to commence
proceedings to restrain or prohibit such transactions or force divestiture or
rescission, unless such Governmental Entity shall have withdrawn such notice and
abandoned any such proceedings prior to the time which otherwise would have been
the Closing Date.
(e) Stock Ownership Limitations. The Acquisition Common Stock owned
by Prudential will not cause Meridian to be treated as the owner of a 9.8% or
more interest in any tenant of Meridian listed on Annex 1 to the Excepted Holder
Agreement.
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(f) Prudential Authorization. At the Closing, Meridian shall have
received a certificate, dated the Closing Date, signed an officer of Prudential
in such capacity and not individually to the effect set forth in Subsection
8.2.1 and certifying that Prudential has received all necessary internal
approvals and authorizations necessary in connection with its purchase of the
Acquisition Common Stock.
7.3 Waiver of Failure of Conditions Precedent. At any time or times on or
before the date specified for the satisfaction of any condition, Meridian or
Prudential may elect in writing to waive the benefit of any such condition set
forth in Section 7.1 or Section 7.2, respectively. By closing the Transaction,
(i) Prudential shall be conclusively deemed to have waived the benefit of any
remaining unfulfilled conditions set forth in Section 7.1, and (ii) Meridian
shall be conclusively deemed to have waived the benefit of any remaining
unfulfilled conditions set forth in Section 7.2. Subject to Prudential's right
to extend the Closing as provided under this Agreement, in the event any of the
conditions set forth in Sections 7.1 or 7.2 are neither waived nor fulfilled by
September 30, 1997 or if such date is not a business day, the next business day
thereafter, Meridian or Prudential (as appropriate) may terminate their
obligations to perform at the Closing and otherwise under this Agreement in
accordance with the provisions of Article 10.
ARTICLE 8 - REPRESENTATIONS AND WARRANTIES
.1 Meridian's Representations. Meridian represents and warrants to, and
covenants with, Prudential as of the date hereof as follows:
.1.1 Organization, Good Standing and Authority. (a) Meridian is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland and on or before the Closing Date shall be duly
qualified and in good standing in the States in which the Facilities are
located, except to the extent that Meridian's failure to obtain such
qualification or good standing would not individually or in the aggregate have a
Material Adverse Effect. Each Person that directly, or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control with
Meridian (each a "MERIDIAN AFFILIATE" and collectively, the "MERIDIAN
AFFILIATES") is a corporation or other entity duly organized, validly existing
and, with respect to each Meridian Affiliate that is a corporation, in good
standing under the laws of its state of incorporation or formation, as the case
may be. Meridian and each Meridian Affiliate is duly qualified or licensed and,
with respect to each Meridian Affiliate that is a corporation, in good standing
as a foreign corporation and authorized to do business, in each jurisdiction in
which the ownership or leasing of its properties or the character of its
operations makes such qualification, licensing or authorization necessary,
except where the failure to obtain such qualification, license, authorization or
good standing would not individually or in the aggregate have a Material Adverse
Effect. Meridian has all requisite corporate power and authority to execute and
deliver this Agreement and all documents contemplated hereunder to be executed
by Meridian, to perform its obligations hereunder and thereunder. Meridian and
each Meridian Affiliate has all requisite authority to own its assets and to
carry on its business as presently proposed to be conducted except where a lack
of such corporate power or authority could not reasonably be expected to have a
Material Adverse Effect.
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(a) Meridian has delivered to Prudential true, correct and complete
copies of its certificate of incorporation and Bylaws.
.1.2 Meridian's Authorization. This Agreement and all documents
contemplated hereunder to be executed by Meridian, have been duly authorized by
all requisite corporate action on the part of Meridian and are the valid and
legally binding obligation of Meridian, enforceable in accordance with their
respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights generally and to general principles of equity.
Neither the execution and delivery of this Agreement and all documents
contemplated hereunder to be executed by Meridian, nor the performance of the
obligations of Meridian hereunder or thereunder will result in the violation of
any provision of the Charter and Bylaws of Meridian or will conflict with any
order or decree of any court or governmental instrumentality of any nature by
which Meridian is bound.
.1.3 [Intentionally Omitted].
.1.4 Capitalization. As of the date hereof, the equity
capitalization of Meridian is as set forth in the balance sheet of Meridian
included in the 1997 Form 10-Q, except for any shares of Common Stock issued
under the Employee and Director Stock Plan since March 31, 1997. At the Closing
Date, all of the outstanding shares of stock of Meridian will be duly and
validly issued, fully paid and non-assessable and not subject to any preemptive
rights of other shareholders. Except as set forth in the Current SEC Reports and
in Schedule 8.1.4 or contemplated by the Employee and Director Stock Plan (i)
there are no outstanding securities or indebtedness convertible into,
exchangeable for, or carrying the right to acquire, Common Stock or other equity
securities of Meridian, or subscriptions, warrants, options, rights, or other
arrangements or commitments obligating Meridian to issue or dispose of any
Common Stock or other equity securities or any ownership therein, (ii) there is
no agreement or arrangement restricting the voting or transfer of any equity
securities of Meridian, and (iii) there are no outstanding contractual
obligations, commitments, understandings or arrangements of Meridian or any
Meridian Affiliates to repurchase, redeem or otherwise acquire, require or make
any payment in respect of any shares of equity securities of Meridian or such
Meridian Affiliate. Except with respect to statutory restrictions of general
application, as provided in Meridian's Third Amended and Restated Articles of
Incorporation (the "CHARTER") with respect to the Series B Preferred Stock and
the terms of Meridian's Second Amended and Restated Revolving Credit Agreement
with The First National Bank of Boston and certain other Banks named therein,
there are no legal, contractual or other restrictions on the payment of
dividends or other distributions or amounts on or in respect of Meridian's
Common Stock. As of the date hereof, except as contemplated by the Registration
Rights Agreement and the Investor Rights Agreement and except as set forth in
Schedule 8.1.4, there, there are no agreements or arrangements to which any of
Meridian or the Meridian Affiliates is a party pursuant to which Meridian is or
could be required to register shares of Common Stock or other securities under
the Securities Act.
.1.5 Conflicting Agreements and Other Matters. Neither Meridian nor
any Meridian Affiliate is a party to any contract or agreement or subject to any
articles of incorporation or other corporate restriction compliance with which
could reasonably be expected to have a Material Adverse Effect. Assuming the
filing of a Form D with the Commission, the listing of the Acquisition Common
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Stock on the NYSE and the accuracy of the representations and warranties of, and
the performance of the agreements of, Prudential set forth in Section 8.2 and
elsewhere herein, neither the execution and delivery of the documents relating
to the Transaction nor fulfillment of nor compliance with the terms and
provisions thereof, nor the issuance of the Acquisition Common Stock will (i)
violate any provision of any law presently in effect or in effect at the Closing
Date having applicability to Meridian or any Meridian Affiliate or any of their
properties including, without limitation, to, the Facilities, except such
violations as could not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or result in a breach of or constitute a default
under the Charter or Bylaws or any other organizational document of either
Meridian or any Meridian Affiliate, (iii) except as set forth in Schedule 8.1.5,
require any consent, approval or notice under, or conflict with or result in a
breach of, constitute a default or accelerate any right under, any note, bond,
mortgage, license, indenture or loan or credit agreement, or any other agreement
or instrument, to which Meridian or any Meridian Affiliate is a party or by
which any of their respective properties is bound, except such consents,
approvals, notices, conflicts, breaches or defaults as could not reasonably be
expected to have a Material Adverse Effect or (iv) result in, or require the
creation or imposition of, any mortgage, lien, pledge, encumbrance, charge or
security interest of any kind (each individually a "LIEN" and collectively
referred to as "LIENS") upon or with respect to any of the properties now owned
or hereafter acquired by Meridian or any Meridian Affiliate. Neither Meridian
nor any Meridian Affiliate is bound by any agreement which would impose upon
Prudential any personal obligation or personal liability which is greater than
the personal obligations and personal liabilities imposed upon Prudential under
this Agreement, the Registration Rights Agreement and the Excepted Holder
Agreement to be entered into by Meridian and Prudential. In addition, Meridian
is not aware of any facts or circumstances that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
.1.6 Due Execution, etc. This Agreement, constitutes, and when
executed and delivered by Meridian at the Closing each of the Registration
Rights Agreement and the Excepted Holder Agreement will constitute, a legal,
valid and binding obligation of Meridian, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity.
.1.7 Litigation, Proceeding, etc. There is no action, suit, notice
of violation, proceeding or investigation pending or, to the best knowledge of
Meridian, threatened against or affecting Meridian or any Meridian Affiliate or
any of their respective properties before or by any Governmental Entity which
(i) challenges the legality, validity or enforceability of any of the documents
relating to the Transaction or the Acquisition Common Stock or (ii) could
(individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect or (iii) would (individually or in the aggregate) impair the
ability of Meridian to perform fully on a timely basis any obligations which it
has under any of the documents relating to the Transaction.
.1.8 No Default or Violation. Neither Meridian nor any Meridian
Affiliate is (i) in default under or in violation of any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound, except such defaults or
violations as could not reasonably be expected to have a Material Adverse
Effect, (ii) in violation of any Order of any
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Governmental Entity, except for such violations as could not reasonably be
expected to have a Material Adverse Effect, or (iii) in violation of any law
which could reasonably be expected to (A) adversely affect the legality,
validity or enforceability of the documents relating to the Transaction, (B)
have a Material Adverse Effect or (C) adversely impair Meridian's ability or
obligation to perform fully on a timely basis any obligation which it has under
the documents relating to the Transaction.
.1.9 Status of Acquisition Common Stock. The issuance of the
Acquisition Common Stock has been duly authorized by all necessary corporate
action on the part of Meridian and such shares, when delivered to Prudential at
the Closing as part of the Purchase Price as provided herein, will be validly
issued, fully paid and non-assessable and the issuance and sale of the
Acquisition Common Stock is not and will not be subject to preemptive rights of
any other shareholder of Meridian.
.1.10 Governmental Consents, etc. Except as may be required under
any applicable securities law in connection with the performance by Meridian of
its obligations under the Registration Rights Agreement, and except for the
filing of a Form D with the Commission and the listing of the Acquisition Common
Stock on the NYSE and assuming the accuracy of the representations and
warranties of, and the performance of the agreements of, Prudential set forth
herein, no authorization, consent, approval, waiver, license, qualification or
formal exemption from, nor any filing, declaration, qualification or
registration with, any Governmental Entity or any securities exchange is
required in connection with the execution, delivery or performance by Meridian
of this Agreement and the issuance, sale or delivery of the Acquisition Common
Stock except for those that (i) have been made or obtained by Meridian as of the
date hereof or (ii) are set forth in Schedule 8.1.10 and by the Closing shall be
made or received by Meridian. At the Closing Date, Meridian will have made all
filings and given all notices to Governmental Entities and obtained all
necessary ordinances, registrations, declarations, approvals, orders, consents,
qualifications, franchises, certificates, permits and authorizations from any
Governmental Entity, to own or lease its properties and to conduct its
facilities and businesses as currently conducted, except where failure to do so
could not reasonably be expected to have a Material Adverse Effect. At the
Closing Date, all such registrations, declarations, approvals, orders, consents,
qualifications, franchises, certificates, permits and authorizations, the
failure of which to file, give notice of or obtain could reasonably be expected
to have a Material Adverse Effect, will be in full force and effect. The assets
of Meridian qualify as exempt assets for purposes of the Xxxx-Xxxxx-Xxxxxx Act
and no filing under the Xxxx-Xxxxx-Xxxxxx Act is required in connection with the
sale and issuance of the Acquisition Common Stock hereunder.
.1.11 Private Offering. Neither Meridian nor any person acting on
its behalf has taken or will take any action (including, without limitation, any
offering of any securities of Meridian under circumstances which would require
the integration of such offering with the offering of the Acquisition Common
Stock under the Securities Act) which might subject the offering, issuance or
sale of the Acquisition Common Stock to the registration requirements of Section
5 of the Securities Act.
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.1.12 ERISA.
(a) Meridian Status. Meridian currently qualifies as a "real
estate operating company" ("REOC") within the meaning of 29 C.F.R. Section
2510.3-101(e), and has qualified as a REOC during all valuation periods
within the meaning of 29 C.F.R. Section 2510.3-101(d)(5).
(b) Benefit Plans. To the extent applicable, the Benefit Plans
comply, in all material respects, with the requirements of ERISA and the
Code (including reporting requirements). Neither any Benefit Plan nor
Meridian nor any Subsidiary has incurred any liability or penalty under
Section 4975 of the Code or Section 502(i) of ERISA. Each Benefit Plan has
been maintained and administered in all material respects in compliance
with its terms and with ERISA and the Code to the extent applicable
thereto. There are no pending, or to knowledge of Meridian threatened,
material claims (other than claims for benefits pursuant to the terms of
any such plan) against or otherwise involving any of the Benefit Plans and
no action has been brought against or with respect to any Benefit Plan,
and neither Meridian nor any Subsidiary of Meridian has incurred any
material liability to any party with respect to any Benefit Plan. All
contributions required to be made to the Benefit Plans have been made or
provided for as of the date hereof. No Benefit Plan is subject to Title IV
of ERISA and neither Meridian nor any Subsidiary has, within six years
prior to the date of this Agreement, contributed to or had any obligation
to contribute to any employee benefit plan subject to Title IV of ERISA.
For purposes of this Section 8.1.12, (i) the term Meridian includes any
entity required to be treated as a single employer with Meridian pursuant
to Code Section 414(b), (c), (m) or (o) and (ii) provisions of ERISA or
the Code include regulations prescribed under such provisions.
(c) Arms' Length Transaction. The terms of this Transaction
have been negotiated and determined at arms'-length, and are not less
favorable to Prudential than the terms that would be available generally
in an arms'-length transaction between unrelated parties.
(d) Meridian is not a party in interest, as defined in Section
3(14) of ERISA, with respect to any employee benefit plan set forth in
Schedule 8.2.9.
Meridian hereby agrees to execute such documents or provide such information as
Prudential may require in connection with the forgoing representations in this
Section 8.1.12. Prudential shall not be obligated to consummate the Transaction
unless and until Prudential is satisfied that the Transaction complies in all
respects with ERISA. The obligations of Meridian under this section shall
survive the Closing and shall not be merged therein.
.1.13 Insurance. At Closing, Meridian and the Meridian Affiliates
will have (i) with respect to each property owned by Meridian (including,
without limitation, the Facilities), "all risk" property insurance, including
fire, flood, earthquake, extended coverage and rental loss insurance and (ii)
with respect to Meridian, the Meridian Affiliates and each property owned by
Meridian (including, without limitation, the Facilities), general commercial
liability insurance, in each case under such terms and in such amounts and
covering such risks that are customary for properties and businesses similar to
those of Meridian and the Meridian Affiliates. There are currently no
outstanding material losses for which
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Meridian or any of the Meridian Affiliates has failed to give or present notice
or claim under any policy. Policies for all the insurance are in full force and
effect and none of Meridian or Meridian Affiliates is in default in any material
respect under any of the policies.
.1.14 Information Provided. Neither this Agreement, the schedules
and exhibits hereto, the Current SEC Reports nor any other written document
delivered to Prudential in connection with the transactions contemplated hereby
contain any untrue statement of a material fact or omit any material fact
necessary to make the statements herein or therein, as the case may be, in light
of the circumstances under which it was made, not misleading, and all material
information regarding Meridian and the Meridian Affiliates is provided therein.
.1.15 No Other Liabilities. Except as set forth in Schedule 8.1.15,
neither Meridian nor any Meridian Affiliate will have any material liability,
whether absolute, accrued, contingent or otherwise, except liabilities (i)
reflected on the consolidated balance sheet of Meridian and the Meridian
Affiliates as at March 31, 1997, or (ii) liabilities that (1) are incurred by
Meridian and the Meridian Affiliates after March 31, 1997 in the ordinary course
of business and (2) could not reasonably be expected to have a Material Adverse
Effect.
.1.16 Taxes; REIT Status. Each of Meridian and the Meridian
Affiliates has filed all tax returns that are required to be filed with any
Governmental Entity and has paid all taxes due pursuant to the tax returns or
any assessment received by it or otherwise required to be paid, except taxes
being contested in good faith by appropriate proceedings and for which adequate
reserves or other provisions are maintained, and except for the filing of Tax
Returns as to which the failure to file could not, individually or in the
aggregate, have a Material Adverse Effect. Meridian (i) elected to be taxed as a
"real estate investment trust" as defined in Section 856 of the Code ("REIT")
effective for each of the taxable years since Meridian has been incorporated,
other than the 1996 taxable year (as to which Meridian covenants that it will
timely make such election) (ii) has not revoked such election, (iii) qualifies
for taxation as a REIT for each such taxable year and for its current taxable
year and (iv) has not sold or otherwise disposed of any assets which could give
rise to a material amount of tax pursuant to any election made by Meridian under
Notice 88-19, 1988-1 CB486 and does not expect to effect any such sale or other
disposition.
.1.17 Compliance with Laws. Neither Meridian nor any Meridian
Affiliate has been in or is in, and none of them has received notice of,
violation of or default with respect to, any law or any decision, ruling, order
or award of any arbitrator applicable to it or its business, properties or
operations, except for violations or defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
.1.18 Meridian Affiliates.
(i) The 1996 Form 10-K sets forth a correct and complete list
of all Meridian Affiliates as of the date hereof.
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(ii) As of the date hereof, except as set forth on Schedule
8.1.18, all outstanding shares of capital stock or other evidences of equity
ownership of each Meridian Affiliate are duly authorized, validly issued, fully
paid and nonassessable and are owned directly or indirectly, beneficially and of
record by Meridian, free and clear of all Liens.
.1.19 Material Contracts. (a) The 1997 Form 10-Q, the 1996 Form 10-K
and Schedule 8.1.4 includes a correct and complete list of the following with
respect to Meridian and any Meridian Affiliate: (1) agreements with any
shareholder having beneficial ownership of 5% or more of the shares of Common
Stock of Meridian or such Meridian Affiliate then issued and outstanding,
director or officer of Meridian or such Meridian Affiliate and all shareholders'
agreements and voting trusts; and (2) agreements not made in the ordinary course
of business and which could reasonably be expected to result in a Material
Adverse Effect.
(b) All property management agreements to which Meridian is a party
provide for a right (without payment of any penalty or termination fee) of
Meridian to terminate such agreement upon a 30-day prior written notice and
Meridian shall deliver each such agreement reasonably requested by Prudential
within ten (10) days after the date of such request.
.1.20 No Restrictions on Acquisition Common Stock. As of the Closing
Date, subject to satisfaction of Section 7.1(k), no provision of the Charter or
Bylaws of Meridian, any other agreement, indenture or other instrument to which
Meridian or its properties are subject, or any law applicable to Meridian, (i),
except as provided in the Excepted Holder Agreement, directly or indirectly
restricts or impairs the right or ability of Prudential to vote, or otherwise to
exercise the rights and receive the benefits of a shareholder with respect to
the Acquisition Common Stock, including without limitation, restrictions based
upon the size of the security holdings of Prudential, the business in which it
is engaged or other considerations applicable to it and not to security holders
generally, or (ii) provides any other security holder of Meridian with any
preemptive rights.
.1.21 SEC Documents. Meridian has filed with the Securities and
Exchange Commission (the "COMMISSION") all reports, schedules, forms, statements
and other documents required by the Exchange Act to be filed by Meridian
(collectively, and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the "SEC DOCUMENTS"). Meridian has
delivered or made available to Prudential all SEC Documents. As of their
respective dates, except to the extent revised or superseded by a subsequent
filing with the Commission, the SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and none of the SEC Documents (including any and all financial statements
included therein) as of such dates contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The consolidated financial statements
of Meridian and Meridian Affiliates included in all SEC Documents, including any
amendments thereto (the "SEC FINANCIAL STATEMENTS"), comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto.
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.1.22 No Merger Agreements. As of the date hereof, except as set
forth in Schedule 8.1.22, none of Meridian or Meridian Affiliates has entered
into any agreement with any person or entity which has not been terminated as of
the date of this Agreement and under which there remains any liability or
obligation thereof with respect to a merger or consolidation with any of
Meridian or Meridian Affiliates, or any other acquisition of substantial amount
of the assets of Meridian or Meridian Affiliates.
.1.23 Certain Actions by Meridian. Meridian has not: (i) made a
general assignment for the benefit of creditors; (ii) filed any voluntary
petition in bankruptcy or suffered the filing of any involuntary petition by
Meridian's creditors; (iii) suffered the appointment of a receiver to take
possession of all or substantially all of Meridian's assets, (iv) suffered the
attachment or other judicial seizure of all, or substantially all, of Meridian's
assets, (v) admitted in writing Meridian's inability to pay its debts as they
come due; or (vi) made an offer of settlement, extension, or composition to its
creditors generally.
.1.24 Facilities Sold "AS-IS". Except as expressly set forth herein,
Meridian acknowledges and agrees that each Facility is to be sold on an "As-Is,
Where-Is" basis, and Meridian will rely entirely upon its own inspections and
analysis of the Facilities. Without in any way limiting the foregoing, Meridian
hereby specifically acknowledges and agrees that:
(A) THE FACILITIES SHALL BE SOLD, AND MERIDIAN SHALL ACCEPT POSSESSION
OF EACH FACILITY ON THE CLOSING DATE, "AS IS, WHERE IS, WITH ALL
FAULTS", WITH NO RIGHT OF SETOFF OR REDUCTION IN THE PURCHASE PRICE;
(B) EXCEPT FOR PRUDENTIAL'S REPRESENTATIONS AND WARRANTIES SET FORTH IN
SECTION 8.2 HEREOF, THE REPRESENTATIONS AND WARRANTIES SET FORTH IN
ANY ESTOPPEL LETTER DELIVERED BY SELLER IN ACCORDANCE WITH THE TERMS
OF SECTION 6.4 HEREOF, AND THE LIMITED WARRANTIES OF TITLE TO BE
GIVEN IN THE DEEDS (HEREIN COLLECTIVELY CALLED THE "PRUDENTIAL'S
WARRANTIES"), NONE OF PRUDENTIAL, ITS COUNSEL, ITS SALES AGENTS, NOR
ANY PARTNER, OFFICER, DIRECTOR, EMPLOYEE, AGENT OR ATTORNEY OF
PRUDENTIAL, ITS COUNSEL, BROKER, OR ITS SALES AGENTS, NOR ANY OTHER
PARTY RELATED IN ANY WAY TO ANY OF THE FOREGOING (ALL OF WHICH
PARTIES ARE HEREIN COLLECTIVELY CALLED THE "PRUDENTIAL PARTIES")
HAVE OR SHALL BE DEEMED TO HAVE MADE ANY VERBAL OR WRITTEN
REPRESENTATIONS, WARRANTIES, PROMISES OR GUARANTEES (WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) TO MERIDIAN WITH RESPECT
TO ANY FACILITY, ANY MATTER SET FORTH, CONTAINED OR ADDRESSED IN THE
DOCUMENTS (INCLUDING, BUT NOT LIMITED TO, THE ACCURACY AND
COMPLETENESS THEREOF) OR THE RESULTS OF THE INVESTIGATIONS; AND
MERIDIAN HAS CONFIRMED INDEPENDENTLY ALL INFORMATION THAT IT
CONSIDERS MATERIAL TO ITS PURCHASE OF THE FACILITIES OR THE
TRANSACTION.
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(C) MERIDIAN SPECIFICALLY ACKNOWLEDGES THAT, EXCEPT FOR PRUDENTIAL'S
WARRANTIES (AS SUCH TERM IS HEREIN DEFINED), MERIDIAN IS NOT RELYING
ON (AND PRUDENTIAL AND EACH OF THE OTHER PRUDENTIAL PARTIES DOES
HEREBY DISCLAIM AND RENOUNCE) ANY REPRESENTATIONS OR WARRANTIES OF
ANY KIND OR NATURE WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, FROM PRUDENTIAL OR ANY OTHER
PRUDENTIAL PARTIES, AS TO: (I) THE OPERATION OF ANY FACILITY OR THE
INCOME POTENTIAL, USES, OR MERCHANTABILITY OR FITNESS OF ANY PORTION
OF ANY SUCH FACILITY FOR A PARTICULAR PURPOSE; (II) THE PHYSICAL
CONDITION OF ANY FACILITY OR THE CONDITION OR SAFETY OF ANY FACILITY
OR ANY IMPROVEMENTS THEREON, INCLUDING, BUT NOT LIMITED TO,
PLUMBING, SEWER, HEATING AND ELECTRICAL SYSTEMS, ROOFING, AIR
CONDITIONING, FOUNDATIONS, SOILS AND GEOLOGY, INCLUDING HAZARDOUS
MATERIALS, LOT SIZE, OR SUITABILITY OF SUCH FACILITY OR ANY
IMPROVEMENTS THEREON FOR A PARTICULAR PURPOSE; (III) THE PRESENCE OR
ABSENCE, LOCATION OR SCOPE OF ANY HAZARDOUS MATERIALS IN, AT, OR
UNDER ANY FACILITY; (IV) WHETHER THE APPLIANCES, IF ANY, PLUMBING OR
UTILITIES ARE IN WORKING ORDER; (V) THE HABITABILITY OR SUITABILITY
FOR OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF ITS CONSTRUCTION;
(VI) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY SOUND, IN GOOD
CONDITION, OR IN COMPLIANCE WITH APPLICABLE MUNICIPAL, COUNTY, STATE
OR FEDERAL STATUTES, CODES OR ORDINANCES; (VII) THE ACCURACY OF ANY
STATEMENTS, CALCULATIONS OR CONDITIONS STATED OR SET FORTH IN
PRUDENTIAL'S BOOKS AND RECORDS CONCERNING ANY FACILITY OR SET FORTH
IN ANY OF PRUDENTIAL'S OFFERING MATERIALS WITH RESPECT TO THE
FACILITIES; (VIII) THE DIMENSIONS OF ANY FACILITY OR THE ACCURACY OF
ANY FLOOR PLANS, SQUARE FOOTAGE, LEASE ABSTRACTS, SKETCHES, REVENUE
OR EXPENSE PROJECTIONS RELATED TO ANY FACILITY; (IX) THE OPERATING
PERFORMANCE, THE INCOME AND EXPENSES OF ANY FACILITY OR THE ECONOMIC
STATUS OF ANY FACILITY; (X) THE ABILITY OF MERIDIAN TO OBTAIN ANY
AND ALL NECESSARY GOVERNMENTAL APPROVALS OR PERMITS FOR MERIDIAN'S
INTENDED USE AND DEVELOPMENT OF ANY FACILITY OR ANY OF THE
DOCUMENTS; (XI) THE LEASING STATUS OF ANY FACILITY OR THE INTENTIONS
OF ANY PARTIES WITH RESPECT TO THE NEGOTIATION AND/OR EXECUTION OF
ANY LEASE FOR ANY PORTION OF ANY FACILITY; AND (XII) PRUDENTIAL'S
OWNERSHIP OF ANY PORTION OF ANY FACILITY. MERIDIAN FURTHER
ACKNOWLEDGES AND AGREES THAT PRUDENTIAL IS UNDER NO DUTY TO MAKE ANY
AFFIRMATIVE DISCLOSURES OR INQUIRY REGARDING ANY MATTER WHICH MAY OR
MAY NOT BE KNOWN TO PRUDENTIAL, ITS OFFICERS, DIRECTORS,
CONTRACTORS, AGENTS OR EMPLOYEES.
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(D) ANY REPORTS, REPAIRS OR WORK REQUIRED BY MERIDIAN ARE THE SOLE
RESPONSIBILITY OF MERIDIAN, AND MERIDIAN AGREES THAT THERE IS NO
OBLIGATION ON THE PART OF PRUDENTIAL TO MAKE ANY CHANGES,
ALTERATIONS OR REPAIRS TO ANY FACILITY OR TO CURE ANY VIOLATIONS
OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
MERIDIAN IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF
OCCUPANCY OR ANY OTHER APPROVAL OR PERMIT NECESSARY FOR
TRANSFER OR OCCUPANCY OF THE FACILITIES AND FOR ANY REPAIRS OR
ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT MERIDIAN'S SOLE
COST AND EXPENSE.
(E) MERIDIAN, FOR MERIDIAN AND MERIDIAN'S SUCCESSORS AND ASSIGNS,
HEREBY RELEASES PRUDENTIAL FROM, AND WAIVES ALL CLAIMS AND
LIABILITY AGAINST PRUDENTIAL FOR OR ATTRIBUTABLE TO THE
FOLLOWING:
(i) ANY AND ALL STATEMENTS OR OPINIONS HERETOFORE OR HEREAFTER
MADE, OR INFORMATION FURNISHED, BY PRUDENTIAL PARTIES TO
MERIDIAN OR ITS AGENTS OR REPRESENTATIVES, EXCEPT FOR
PRUDENTIAL'S WARRANTIES (AS SUCH TERM IS HEREIN DEFINED); AND
(ii) ANY STRUCTURAL, PHYSICAL OR ENVIRONMENTAL CONDITION AT ANY
FACILITY, INCLUDING WITHOUT LIMITATION, CLAIMS OR LIABILITIES
RELATING TO THE PRESENCE, DISCOVERY OR REMOVAL OF ANY
HAZARDOUS MATERIALS IN, AT, ABOUT OR UNDER ANY FACILITY, OR
FOR, CONNECTED WITH OR ARISING OUT OF ANY AND ALL CLAIMS OR
CAUSES OF ACTION BASED UPON CERCLA (COMPREHENSIVE
ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT OF
1980, 42 U.S.C. "9601 ET SEQ., AS AMENDED BY SUPERFUND
AMENDMENT AND REAUTHORIZATION ACT OF 1986 AND AS MAY BE
FURTHER AMENDED FROM TIME TO TIME), THE RESOURCE CONSERVATION
AND RECOVERY ACT OF 1976, 42 U.S.C. "6901 ET SEQ., OR ANY
RELATED CLAIMS OR CAUSES OF ACTION OR ANY OTHER FEDERAL OR
STATE BASED STATUTORY OR REGULATORY CAUSES OF ACTION FOR
ENVIRONMENTAL CONTAMINATION AT, IN OR UNDER ANY FACILITY.
(F) EXCEPT AS EXPRESSLY PROVIDED TO THE CONTRARY IN THIS SUBSECTION
8.1.24(F), MERIDIAN HEREBY ASSUMES AND TAKES RESPONSIBILITY AND
LIABILITY FOR ALL LOSSES, COSTS, CLAIMS, LIABILITIES, EXPENSES,
DEMANDS AND OBLIGATIONS OF ANY KIND OR NATURE WHATSOEVER
ATTRIBUTABLE TO THE FACILITIES, WHETHER ARISING OR ACCRUING BEFORE
OR AFTER THE DATE HEREOF AND WHETHER ATTRIBUTABLE TO EVENTS OR
CIRCUMSTANCES WHICH HAVE HERETOFORE OR MAY HEREAFTER OCCUR,
INCLUDING, WITHOUT
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LIMITATION, ALL LOSSES, COSTS, CLAIMS, LIABILITIES, EXPENSES AND
DEMANDS WITH RESPECT TO THE STRUCTURAL, PHYSICAL OR, EXCEPT AS
PROVIDED IN CLAUSES (iii) AND (iv) BELOW, ENVIRONMENTAL CONDITION OF
ANY FACILITY (INCLUDING, WITHOUT LIMITATION, ANY HAZARDOUS
MATERIALS, IN AT, UNDER OR ABOUT ANY FACILITY) AND MERIDIAN AGREES
TO INDEMNIFY, DEFEND AND HOLD HARMLESS PRUDENTIAL FROM ANY LOSS,
COST, CLAIM, LIABILITY, EXPENSE OR DEMAND WITH RESPECT THERETO. BY
ITS EXECUTION OF THIS AGREEMENT, MERIDIAN HEREBY AGREES THAT IT
SHALL AT ALL TIMES COMPLY WITH ALL APPLICABLE FEDERAL, STATE AND
LOCAL LAWS, RULES AND REGULATIONS INVOLVING HAZARDOUS MATERIALS IN,
AT, UNDER OR ABOUT THE FACILITY OR THEIR REMOVAL FROM ANY FACILITY.
NOTWITHSTANDING THE FOREGOING, HOWEVER, MERIDIAN DOES NOT ASSUME
(AND SHALL NOT BE REQUIRED TO INDEMNIFY PRUDENTIAL FOR) ANY
RESPONSIBILITY OR LIABILITY ARISING OUT OF OR IN CONNECTION WITH:
(i) ANY CLAIMS MADE OR CAUSES OF ACTION BROUGHT BY ANY THIRD PARTY
UNRELATED TO MERIDIAN ALLEGING A DEFAULT OR BREACH BY
PRUDENTIAL WHICH IS ALLEGED TO HAVE OCCURRED PRIOR TO THE
CLOSING DATE UNDER ANY CONTRACT OR AGREEMENT (OTHER THAN ANY
LEASE) ENTERED INTO BETWEEN PRUDENTIAL AND ANY SUCH CLAIMANT;
PROVIDED, HOWEVER, THAT MERIDIAN SHALL BE DEEMED TO ASSUME AND
SHALL INDEMNIFY PRUDENTIAL IN ACCORDANCE WITH THE TERMS OF
THIS SUBSECTION 8.1.24(F) WITH RESPECT TO ANY SUCH CLAIMS OR
CAUSES OF ACTION TO THE EXTENT THAT THE SAME RELATE TO ANY
ALLEGED DEFAULTS OR THE BREACH OF ANY OF THE LEASES, IT BEING
UNDERSTOOD AND AGREED BY MERIDIAN AND PRUDENTIAL THAT MERIDIAN
SHALL RELY SOLELY UPON ITS DUE DILIGENCE WITH RESPECT TO THE
FACILITIES, PRUDENTIAL'S WARRANTIES AND SUCH TENANT ESTOPPEL
CERTIFICATES AS MERIDIAN MAY RECEIVE ON OR BEFORE THE CLOSING
DATE WITH RESPECT TO PROTECTION AGAINST ANY ALLEGED BREACH OR
DEFAULT BY PRUDENTIAL UNDER ANY OF THE LEASES THAT MAY HAVE
OCCURRED PRIOR TO THE CLOSING DATE; OR
(ii) ANY TORT CLAIMS MADE OR BROUGHT BY A THIRD PARTY UNRELATED TO
MERIDIAN WHICH ARISE FROM ANY ACTS OR OMISSIONS OF PRUDENTIAL
WHICH OCCURRED DURING THE TIME THAT PRUDENTIAL OWNED FEE TITLE
TO THE FACILITY;
(iii) ANY CLAIMS MADE OR CAUSES OF ACTION BROUGHT BY ANY
GOVERNMENTAL ENTITY WITH RESPECT TO HAZARDOUS MATERIALS
DEPOSITED OR PLACED IN, AT ABOUT OR UNDER THE FACILITIES
DURING THE TIME THAT PRUDENTIAL OWNED FEE TITLE TO THE
FACILITIES UNLESS:
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(a) MERIDIAN KNOWS OR IS DEEMED TO KNOW (AS DEFINED IN
SUBSECTION 8.3.3 HEREOF) OF SUCH CLAIM OR CAUSE OF
ACTION ON OR BEFORE THE CLOSING DATE; OR
(b) THE GOVERNMENTAL ENTITY THAT BRINGS ANY SUCH CLAIMS OR
CAUSES OF ACTION IS AN OWNER OR TENANT OF THE FACILITY
THAT SUCH CLAIM OR CAUSE OF ACTION RELATES TO AT THE
TIME SUCH CLAIM OR CAUSE OF ACTION IS BROUGHT OR MADE.
(iv) ANY CLAIMS MADE OR CAUSES OF ACTION BROUGHT BY ANY THIRD PARTY
UNRELATED TO MERIDIAN (EXCLUDING GOVERNMENTAL ENTITIES) WITH
RESPECT TO HAZARDOUS MATERIALS DEPOSITED OR PLACED IN, AT,
ABOUT OR UNDER THE FACILITY PRIOR TO THE CLOSING DATE.
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Meridian is familiar with California Civil Code Section 1542 the text of
which is set forth as follows:
Section 1542 of the California Civil Code provides as follows: "A
general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor."
For a valuable consideration, Meridian hereby waives its rights, if any, under
Section 1541.
MERIDIAN'S INITIALS ________________
The representations and warranties of Meridian in this Agreement shall survive
the Closing and be true and correct in all material respects on and as of the
Closing as if such representations and warranties were made on and as such date
(subject to revisions to reflect changed circumstances or knowledge obtained
between execution of the Agreement and the Closing.
.2 Prudential's Representations. Prudential represents and warrants to
Meridian as of the date hereof as follows:
.2.1 Prudential's Authorization. Prudential is (a) duly organized
(or formed), validly existing and in good standing under the laws of its State
of organization and the States in which the Facilities are located, (b) is
authorized to consummate the Transaction and fulfill all of its obligations
hereunder and under all documents contemplated hereunder to be executed by
Prudential, and (c) has all necessary power to execute and deliver this
Agreement and all documents contemplated hereunder to be executed by Prudential
and to perform its obligations hereunder and thereunder. This Agreement and all
documents contemplated hereunder to be executed by Prudential have been duly
authorized by all requisite corporate action on the part of Prudential and are
the valid and legally binding obligation of Prudential enforceable in accordance
with their respective terms. Neither the execution and delivery of this
Agreement and all documents contemplated hereunder to be executed by Prudential
nor the performance of the obligations of Prudential hereunder or thereunder
will result in the violation of any provision of the articles of incorporation
and by-laws of Prudential or will conflict with any order or decree of any court
or governmental instrumentality of any nature by which Prudential is bound.
.2.2 Investment Intent. Prudential represents and warrants to
Meridian that the Acquisition Common Stock to be acquired by it hereunder is
being acquired for its own account for investment and with no intention of
distributing or reselling such Acquisition Common Stock or any part thereof or
interest therein in any transaction which would be in violation of the
securities laws of the United States of America or any State or any foreign
country or jurisdiction.
.2.3 Transfer Restrictions. If Prudential should decide to dispose
of any of the Acquisition Common Stock, Prudential understands and agrees that
it may do so only pursuant to an effective registration statement under the
Securities Act or pursuant to an exemption from registration under the
Securities Act. In
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connection with any offer, resale, pledge or other transfer (individually and
collectively, a "TRANSFER") of any Acquisition Common Stock other than pursuant
to an effective registration statement, Meridian may require that the transferor
of such Acquisition Common Stock provide to Meridian an opinion of counsel which
opinion shall be reasonably satisfactory in form and substance to Meridian, to
the effect that such Transfer is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act and any State or foreign securities laws. Prudential agrees to the
imprinting, so long as appropriate, of substantially the following legend on
certificates representing the Acquisition Common Stock:
THE SHARES OF COMMON STOCK (THE "SHARES") EVIDENCED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
AGREES THAT IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
(INDIVIDUALLY AND COLLECTIVELY, A "TRANSFER") THE SHARES EVIDENCED HEREBY,
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT SUCH AS THE EXEMPTION SET FORTH IN RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE). IF THE PROPOSED TRANSFER IS TO BE MADE
OTHER THAN PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO MERIDIAN AND THE TRANSFER AGENT SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR ANY STATE OR FOREIGN SECURITIES LAW.
The legend set forth above may be removed if and when the Acquisition
Common Stock represented by such certificate are disposed of pursuant to an
effective registration statement under the Securities Act or the opinion of
counsel referred to above has been provided to Meridian. The share certificates
shall also bear legends regarding permitted ownership levels of Acquisition
Common Stock and any additional legends required by applicable Federal, State or
foreign securities Laws or necessary under applicable tax Laws, which legends
may be removed when, in the opinion of counsel to Meridian, the same are no
longer required under the Charter or the applicable requirements of such
securities or tax Laws. Prudential agrees that, in connection with any Transfer
of Acquisition Common Stock by it pursuant to an effective registration
statement under the Securities Act, Prudential will comply with all prospectus
delivery requirements of the Securities Act. Meridian makes no representation,
warranty or agreement as to the availability of any exemption from registration
under the Securities Act with respect to any resale of Acquisition Common Stock.
.2.4 Stop Transfer Instruction. Prudential agrees that Meridian
shall be entitled to make a notation on its records and give instructions to any
transfer agent for the Acquisition Common Stock in order to implement the
restrictions on transfer set forth in this Agreement.
.2.5 Prudential Status. Prudential represents and warrants to, and
covenants and agrees with, Meridian that (i) at the time Prudential was offered
the Acquisition Common Stock, Prudential was, (ii) at the date hereof,
Prudential is, and (iii) at the Closing Date, Prudential will be, a "qualified
institutional buyer" as
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defined in Rule 144A under the Securities Act or an "accredited investor" as
defined in Rule 501 under the Securities Act, and has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating Meridian and an investment in the Acquisition Common
Stock, and is able to bear the economic risk of such investment.
.2.6 Authority. Prudential represents and warrants to Meridian that,
assuming the accuracy of the representation of Meridian in Section 8.1.10
hereof, (i) as of the Closing Date, the purchase of the Acquisition Common Stock
to be purchased by it has been duly and properly authorized and this Agreement
has been duly executed and delivered by it or on its behalf and constitutes the
valid and legally binding obligation of Prudential, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general principles
of equity; (ii) the purchase of the Acquisition Common Stock to be purchased by
it does not conflict with or violate (A) its articles of incorporation or bylaws
or (B) any Law applicable to it in a manner that could materially hinder or
impair the completion of the transactions contemplated hereby; and (iii) the
purchase of Acquisition Common Stock to be purchased by it does not impose any
penalty or other onerous condition on Prudential that could materially hinder or
impact the completion of the transactions contemplated hereby.
.2.7 Access to Information. Prudential acknowledges as of the date
hereof that it has been afforded: (i) the opportunity to ask such questions as
it has deemed necessary of, and to receive answers from, representatives of
Meridian concerning the terms and conditions of the offering of the Acquisition
Common Stock and the merits and risks of investing in the Acquisition Common
Stock; (ii) access to information about Meridian, Meridian's financial
condition, pro forma results of operations, business properties, management and
prospects sufficient to enable it to evaluate its investment in the Acquisition
Common Stock; and (iii) the opportunity to obtain such additional information
which Meridian possesses or can acquire without unreasonable effort or expense
that is necessary to verify the accuracy and completeness of the information
contained in the SEC Documents.
.2.8 Reliance. Prudential also understands and acknowledges that (i)
the Acquisition Common Stock is being offered and sold without registration
under the Securities Act in a transaction that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption
depends in part on, and that Meridian and, for purposes of the opinion to be
delivered to Prudential pursuant to Section 7.1(c) hereof, Xxxxxx & Xxxxxx
L.L.P. will rely upon, the accuracy and truthfulness of the foregoing
representations and Prudential hereby consents to such reliance.
.2.9 Separate Account Investors. Prudential represents that each
employee benefit plan, as defined in Section 3(3) of ERISA, that has an interest
in a separate account on behalf of which Prudential is acting in this
Transaction is set forth in Schedule 8.2.9.
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.2.10 Other Prudential's Representations. To Prudential's knowledge
(as such term is hereinafter defined):
(a) Except as listed in EXHIBIT O attached hereto and
incorporated herein by this reference, Prudential has not received (i) any
written notice of pending litigation against Prudential which would, if
determined adversely to Prudential, adversely affect the Facilities, or (ii) any
written notice of pending or threatened condemnation with respect to any of the
Facilities.
(b) Prudential has not entered into any service, supply,
maintenance or utility contracts affecting any Facility which will be binding
upon Meridian after the Closing other than the Contracts listed in EXHIBIT B
attached hereto.
(c) Set forth in EXHIBIT C attached hereto is a list of (i)
all certificates of occupancy, licenses and permits in Prudential's possession
that are necessary and material to the operation of the Facilities and (ii) all
personal property owned by Prudential that is necessary and material to the
operation of the Facilities.
(d) As of the date of this Agreement, the only tenants of each
Facility are the tenants listed with respect to each such Facility in EXHIBIT I
attached hereto and incorporated herein by this reference.
(e) Except as listed in EXHIBIT O attached hereto, Prudential
has not received any written notice from any governmental authority of any
violation of any zoning, building, fire, or health code, statute, ordinance,
rule or regulation applicable to any of the Facilities. Notwithstanding the
foregoing, however, Prudential shall not be required to disclose to Meridian
(and shall not be deemed to make any representation or warranty with respect to)
any notices relating to the environmental condition of any of the Facilities or
Hazardous Materials in, at, under or about any of the Facilities, it being
acknowledged and agreed to by both Meridian and Prudential that Meridian will
investigate and satisfy itself with regard to the environmental condition of
each Facility and the presence or absence of Hazardous Materials during the Due
Diligence Period, provided, however, that pursuant to and in accordance with the
terms and limitations of Article 4 of this Agreement, in order to assist
Meridian in its investigation of the environmental condition of the Facilities,
Prudential has agreed (during the Due Diligence Period) to make available to
Meridian and otherwise allow Meridian access to, certain non-confidential
information regarding the Facilities, including, but not limited to,
environmental reports of the Facilities.
.2.11 No Other Agreements. Prudential has not entered into any
currently effective agreement to sell or dispose of all of its interest in and
to any of the Facilities (except for this Agreement and any options to purchase
any Facility or a portion thereof that may be contained in any of the Leases).
.3 General Provisions.
.3.1 No Representation As to Leases. Prudential does not represent
or warrant that any particular Lease or Leases will be in force or effect on the
Closing Date or that the tenants will have performed their obligations
thereunder.
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.3.2 Definition of "Prudential's Knowledge". All references in this
Agreement to "PRUDENTIAL'S KNOWLEDGE" or words of similar import shall refer
only to the actual knowledge of the Designated Employee with respect to each
Facility and shall not be construed to refer to the knowledge of the Designated
Employee of any other Facility, or any other officer, agent or employee of
Prudential or any affiliate thereof, or to impose or have imposed upon the
Designated Employee any duty to investigate the matters to which such knowledge,
or the absence thereof, pertains, including, but not limited to, the contents of
the files, documents and materials made available to or disclosed to Meridian or
the contents of files maintained by the Designated Employee. The "DESIGNATED
EMPLOYEE" with respect to each Facility is the person designated as such next to
the name of such Facility on EXHIBIT P attached hereto and incorporated herein
by this reference. There shall be no personal liability on the part of any
Designated Employee arising out of any representations or warranties made
herein.
.3.3 Prudential's Representations Deemed Modified. To the extent
that Meridian knows or is deemed to know prior to the expiration of the Due
Diligence Period that Prudential's representations and warranties are
inaccurate, untrue or incorrect in any way, such representations and warranties
shall be deemed modified to reflect Meridian's knowledge or deemed knowledge, as
the case may be. For purposes of this Agreement, Meridian shall be "deemed to
know" that a representation or warranty was untrue, inaccurate or incorrect to
the extent that this Agreement, the Documents, any estoppel certificate executed
by any tenant of any Facility and delivered to Meridian, or any studies, tests,
reports, or analyses prepared by or for Meridian or any of its employees,
agents, representatives or attorneys (all of the foregoing being herein
collectively called the "MERIDIAN'S REPRESENTATIVES") or otherwise obtained by
Meridian or Meridian's Representatives contains information which is
inconsistent with such representation or warranty.
.3.4 Notice of Breach; Prudential's Right to Cure. If after the date
hereof but prior to the Closing, Meridian or any Meridian's Representative
obtains actual knowledge that any of the representations or warranties made
herein by Prudential are untrue, inaccurate or incorrect in any material
respect, Meridian shall give Prudential written notice thereof within five (5)
business days of obtaining such knowledge (but, in any event, prior to the
Closing). If at or prior to the Closing, Prudential obtains knowledge that any
of the representations or warranties made herein by Prudential are untrue,
inaccurate or incorrect in any material respect, Prudential shall give Meridian
written notice thereof within five (5) business days of obtaining such knowledge
(but, in any event, prior to the Closing). In either such event, Prudential
shall have the right to cure such misrepresentation or breach and shall be
entitled to a reasonable adjournment of the Closing (not to exceed ninety (90)
days) for the purpose of such cure. If Prudential is unable to so cure any
misrepresentation or breach, then Meridian, as its sole remedy for any and all
such materially untrue, inaccurate or incorrect material representations or
warranties, shall elect either (a) to waive such misrepresentations or breaches
of warranties and consummate the Transaction without any reduction of or credit
against the Purchase Price, or (b) to terminate this Agreement by written notice
given to Prudential on the Closing Date, in which event this Agreement shall be
terminated, and, thereafter, neither party shall have any further rights or
obligations hereunder except as provided in any section hereof that by its terms
expressly provides that it survives any termination of this Agreement. If any
such representation or warranty is untrue, inaccurate or incorrect but is not
untrue, inaccurate or incorrect in any material respect, Meridian shall be
deemed to waive such misrepresentation or breach of warranty, and Meridian shall
be required to consummate the Transaction without any reduction of or credit
against the Purchase Price. The untruth, inaccuracy or incorrectness of a
representation or warranty shall be deemed material only if Meridian's aggregate
damages resulting from the
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untruth, inaccuracy or incorrectness of any of the representations or warranties
are reasonably estimated by Meridian to exceed One Hundred Thousand Dollars
($100,000.00).
.3.5 Survival. The representations and warranties made by Prudential
in this Agreement shall survive the Closing and not be merged therein for a
period of ninety (90) days and Prudential shall only be liable to Meridian
hereunder for a breach of a representation and warranty made herein or in any of
the documents executed by Prudential at the Closing with respect to which a
claim is made by Meridian against Prudential on or before the ninetieth (90th)
day after the date of the Closing.
.3.6 Limitation on Prudential's Liability. Anything in this
Agreement to the contrary notwithstanding, the maximum aggregate liability of
Prudential for Prudential's breaches of representations and warranties herein or
in any documents executed by Prudential at Closing (including, but not limited
to, any Prudential estoppel letters delivered pursuant to Section 6.4(e)) shall
be limited as set forth in Section 14.16 hereof. Notwithstanding the foregoing,
however, if the Closing occurs, Meridian hereby expressly waives, relinquishes
and releases any right or remedy available to it at law, in equity or under this
Agreement to make a claim against Prudential for damages that Meridian may
incur, or to rescind this Agreement and the Transaction, as the result of any of
Prudential's representations or warranties being untrue, inaccurate or incorrect
if (a) Meridian knew or is deemed to know that such representation or warranty
was untrue, inaccurate or incorrect at the time of the Closing, or (b)
Meridian's damages as a result of such representations or warranties being
untrue, inaccurate or incorrect are reasonably estimated to aggregate less than
$500,000.00.
ARTICLE 8 - COVENANTS
.1 Meridian's Covenants. Meridian hereby covenants as follows:
.1.1 Confidentiality. Meridian acknowledges that any information
furnished to Meridian with respect to the Facilities is and has been so
furnished on the condition that Meridian maintain the confidentiality thereof.
Accordingly, Meridian shall hold, and shall cause its directors, officers and
other personnel and representatives to hold, in strict confidence, and not
disclose to any other person without the prior written consent of Prudential
until the Closing shall have been consummated, any of the information in respect
of each Facility delivered to or for the benefit of Meridian whether by agents,
consultants, employees or representatives of Meridian or by Prudential or any of
its agents, representatives or employees, including, but not limited to, any
information obtained by Meridian or any of Meridian's Representatives in
connection with any studies, inspections, testings or analyses conducted by
Meridian as part of its Due Diligence. In the event the Closing does not occur
and this Agreement is terminated, Meridian shall promptly return to Prudential
all copies of documents containing any of such information without retaining any
copy thereof or extract therefrom. Notwithstanding anything to the contrary
hereinabove set forth, Meridian may disclose such information (i) on a
need-to-know basis to its employees or members of professional firms serving it,
and (ii) as any governmental agency may require in order to comply with
applicable laws or regulations. The provisions of this Subsection 9.1.1 shall
survive the Closing (and not be merged therein) or earlier termination of this
Agreement.
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.1.2 Approvals not a Condition to Meridian's Performance. Meridian
acknowledges and agrees that its obligation to perform under this Agreement is
not contingent upon Meridian's ability to obtain any (a) governmental or
quasi-governmental approval of changes or modifications in use or zoning, or (b)
modification of any existing land use restriction, or (c) consents to
assignments of any service contracts, management agreements or other agreements
which Meridian requests, or (d) endorsements to any of the Title Policies.
.1.3 Meridian's Indemnity; Delivery of Reports. Meridian hereby
agrees to indemnify, defend, and hold Prudential and the other Prudential
Parties free and harmless from and against any and all costs, loss, damages and
expenses, of any kind or nature whatsoever (including attorneys fees and costs),
arising out of or resulting from the entry and/or the conduct of activities upon
any of the Facilities by Meridian, its agents, contractors and/or subcontractors
in connection with the inspections, examinations, testings and investigations of
any of the Facilities conducted at any time prior to the Closing, which
indemnity shall survive the Closing (and not be merged therein) or any earlier
termination of this Agreement. Meridian shall use all reasonable efforts to
deliver promptly to Prudential copies of all third party reports commissioned by
Meridian evidencing the results of tests, studies or inspections of the
Facilities.
.1.4 Limit on Government Contacts. Notwithstanding any provision in
this Agreement to the contrary, except in connection with the preparation of
so-called "Phase I" environmental reports with respect to the Facilities,
Meridian shall not contact any governmental official or representative regarding
Hazardous Materials on or the environmental condition of any of the Facilities
without Prudential's prior written consent thereto, which consent shall not be
unreasonably withheld. In addition, if Prudential's consent is obtained by
Meridian, Prudential shall be entitled to receive at least five (5) days prior
written notice of the intended contact and to have a representative present when
Meridian has any such contact with any governmental official or representative.
.1.5 Real Estate Investment Trust. Meridian shall use its best
efforts to continue to qualify as a REIT and for so long as Prudential holds the
Acquisition Common Stock representing, in the aggregate, at least the Minimum
Ownership Level, Meridian shall not, without Prudential's written consent, take
any action that could reasonably be expected to disqualify Meridian as a REIT.
.1.6 Conduct of Business. Meridian covenants and agrees that until
the earlier of the Closing Date or the termination of this Agreement, Meridian
shall, and shall cause the Meridian Affiliates to, continue to engage in an
efficient and economical manner solely in a business of the same general type as
conducted by it on the date of this Agreement in the ordinary course, consistent
with past practices; and use its reasonable best efforts to preserve the
business of Meridian and the Meridian Affiliates and to preserve the goodwill of
customers and others having business relations with Meridian and the Meridian
Affiliates.
.1.7 Negative Covenants of Meridian. Meridian covenants and agrees
as follows, and shall not enter into any agreement or take any other action
inconsistent with the following, in each case until the earlier of the Closing
Date or the termination of this Agreement, except as specifically contemplated
by this Agreement or to the extent such action shall not reasonably be expect to
result in a Material Adverse Effect.
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(a) Organizational Documents. Meridian shall not amend its
Charter or Bylaws and shall not permit any of the Meridian Affiliates to amend
its organizational documents.
(b) Mergers, Etc. Except as shall have been previously agreed
in writing by the parties, Meridian shall not, and shall not permit any of the
Meridian Affiliates to, merge or consolidate with any entity, sell, lease,
license or otherwise dispose of all or substantially all of its assets (whether
now owned or hereafter acquired) to any entity or acquire all or substantially
all of the assets or business of any entity in each case whether in one
transaction or in a series of transactions pursuant to which Meridian or such
Meridian Affiliate shall not be the surviving entity.
.1.8 Maintenance of Books and Records. Meridian shall keep proper
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of Meridian in accordance
with generally accepted accounting principles, and Meridian shall cause the
Meridian Affiliates to do the same.
.1.9 Party in Interest. Meridian shall not enter into any agreement
or take any action that would cause Meridian to be a party in interest, as
defined in Section 3(14) of ERISA, with respect to any employee benefit plan set
forth in Schedule 8.2.9 for so long as Prudential holds any Shares.
.1.10 Real Estate Operating Company. Meridian shall continue to
operate as a REOC for so long as Prudential holds the Acquisition Common Stock
in an amount representing in the aggregate at least the Minimum Ownership Level.
.1.11 Amendment to Investor Rights Agreement. Meridian shall use its
best efforts in order to obtain all necessary consents in order (i) to provide
Prudential rights that are pari passu with those of each of Meridian's
shareholders party to the Investor Rights Agreement under the penultimate
paragraph of Section 2(b) and Section 2(c)(i) and (ii) of the Investor Rights
Agreement and (ii) to provide that such shareholders shall not have any right to
be included in the shelf registration to be filed by Meridian for the benefit of
Prudential.
.1.12 Book Entry Shares. Meridian hereby covenants that if the
Acquisition Common Stock is issued in certificate form at Closing then Meridian
will, if requested in writing by Prudential, accept delivery of the certificate
or certificates representing the Acquisition Common Stock and cause the
appropriate book entry to be made indicating Prudential's ownership of such
Acquisition Common Stock.
.1.13 Survival. The covenants of Meridian in this Section 9.1 shall
survive the Closing and shall not be merged therein.
.2 Prudential's Covenants. Prudential hereby covenants as follows:
.2.1 Service Contracts. Without Meridian's prior consent, which
consent shall not be unreasonably withheld, between the date hereof and the
Closing Date, Prudential shall not extend, renew, replace or modify any Contract
unless such contract (as so extended, renewed, replaced or modified) can be
terminated by the owner of the applicable Facility without penalty on not more
than thirty (30) days' notice.
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.2.2 Maintenance of Facilities. Except to the extent Prudential is
relieved of such obligations by Article 11 hereof, between the date hereof and
the Closing Date, Prudential shall maintain and keep each of the Facilities in a
manner consistent with Prudential's past practices with respect to such
Facility. Between the date hereof and the Closing Date, Prudential will advise
Meridian in writing of any written notice Prudential receives after the date
hereof from any governmental authority relating to the violation of any law or
ordinance regulating the condition or use of the Facilities (such notice to
Meridian, a "VIOLATION NOTICE"). Within five (5) days of receipt of a Violation
Notice from Prudential, Meridian may deliver to Prudential a written notice of
Meridian's objection to the existence of the violation specified in the
Violation Notice (such notice to Prudential, a "VIOLATION OBJECTION"). Upon
Prudential's receipt of a Violation Objection Prudential shall notify Meridian
in writing whether Prudential elects to cure the same. If Prudential is unable
to cure any such violation prior to the Closing, or if Prudential elects not to
cure one or more such violations, Meridian may elect to either (a) terminate
this Agreement, in which event the parties shall have no further rights or
obligations hereunder except for obligations which expressly survive the
termination of this Agreement, or (b) waive such violation, in which event the
Closing shall occur as herein provided without any reduction of or credit
against the Purchase Price. Notwithstanding anything herein to the contrary,
Meridian hereby agrees that it shall accept each of the Facilities subject to,
and Prudential shall have no obligation to cure, (i) all violations of law or
municipal ordinances, orders or requirements and (ii) all physical conditions
which would give rise to violations existing, which, with respect to both
clauses (i) and (ii), exist on the date hereof.
.2.3 Access to Facilities. From and after the date hereof, Meridian
shall not be permitted to perform any further testing or other physical
evaluation of the Facilities prior to Closing.
.2.4 Sale of Acquisition Common Stock by Prudential. Prudential
hereby agrees that during the ninety (90) day period commencing on the Closing
Date it will not sell, assign, transfer or otherwise in any manner dispose of
any of the Acquisition Common Stock, other than sales, assignments, transfers or
dispositions: (i) in connection with any merger or consolidation of Meridian;
(ii) pursuant to a tender or exchange offer for shares of Common Stock; (iii) to
an affiliate of Prudential provided that such person or entity agrees to be
bound by the terms and conditions of this Agreement and the Registration Rights
Agreement, including, without limitation, Section 6 of the Registration Rights
Agreement; (iv) as a result of any pledge by Prudential of the Acquisition
Common Stock as security for any indebtedness or guaranty of Prudential,
provided that such pledgee agrees to be bound by the terms and conditions of
this Agreement and the Registration Rights Agreement including, without
limitation, Section 6 of the Registration Rights Agreement upon the exercise of
its rights under such pledge; or (v) in private transactions pursuant to one or
more exemptions from registration under the Securities Act.
.2.5 Meridian Audit Rights. Prudential acknowledges that Meridian is
required to have audits performed of the records of the real properties acquired
by Meridian. Accordingly, for the period from the Closing Date through December
31, 1998, upon fifteen (15) days advance written notice from Meridian,
Prudential agrees to make available to Meridian's independent accountants those
items respecting the Facilities described in Exhibit T attached hereto.
.2.6 Survival. The covenant of Prudential set forth in Sections
9.2.4 and 9.2.5 of this Agreement shall survive the Closing and shall not be
merged therein.
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.3 Mutual Covenants.
.3.1 Publicity. Prudential and Meridian each hereby covenant that
(a) prior to the Closing neither Prudential nor Meridian shall issue any press
release or public statement (a "RELEASE") with respect to the Transaction
without the prior consent of the other, except to the extent required by law,
and (b) after the Closing, any Release issued by either Prudential or Meridian
shall be subject to the review and approval of both parties (which approval
shall not be unreasonably withheld). If either Prudential or Meridian is
required by law to issue a Release, such party shall, at least two (2) business
days prior to the issuance of the same, deliver a copy of the proposed Release
to the other party for its review.
.3.2 Broker. Prudential and Meridian each represents and warrants to
the other that it has not dealt with any broker in the Transaction and each
agrees to hold harmless the other and indemnify the other from and against any
and all damages, costs or expenses (including, but not limited to, reasonable
attorneys' fees and disbursements) suffered by the indemnified party as a result
of acts of the indemnifying party that would constitute a breach of its
representation and warranty in this section (which obligation of Meridian shall
survive the Closing and not be merged therein).
.3.3 Tax Refunds and Credits. All real estate and personal property
tax refunds and credits with respect to any Facility shall be apportioned
between Meridian and Prudential as follows:
(a) with respect to any refunds or credits attributable to
real estate and personal property taxes due and payable in the calendar year in
which the Closing occurs (regardless of the year for which such taxes are
assessed), such refunds and credits shall be apportioned between Meridian and
Prudential in proportion to the number of days in such calendar year that each
party owned such Facility (with title to such Facility being deemed to have
passed as of 12:01 a.m. on the Closing Date);
(b) with respect to any refunds or credits attributable to
real estate and personal property taxes due and payable during any period prior
to the calendar year in which the Closing occurs (regardless of the year for
which such taxes are assessed), Prudential shall be entitled to the entire
refunds and credits; and
(c) with respect to any refunds or credits attributable to
real estate and personal property taxes due and payable during any period after
the calendar year in which the Closing occurs (regardless of the year for which
such taxes are assessed), Meridian shall be entitled to the entire refunds and
credits.
.3.4 Survival. The provisions of this Section 9.3 shall survive the
Closing (and not be merged therein) or earlier termination of this Agreement.
.3.5 Approvals. Meridian and Prudential each agree to cooperate and
use their reasonable best efforts to obtain (and will immediately prepare all
registrations, filings, applications, requests and notices preliminary to) all
approvals that may be necessary or which may be reasonably requested by Meridian
or Prudential to consummate the transactions contemplated by this Agreement.
Meridian shall, prior to the Closing Date, take all actions necessary to ensure
that Prudential shall have full voting rights with respect to
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each Share of the Acquisition Common Stock (including, without limitation,
obtaining approvals of the Board of Directors of Meridian and amending the
Charter or Bylaws of Meridian, as applicable).
.3.6 Notification of Certain Matters. Meridian shall give prompt
notice to Prudential, and Prudential shall give prompt notice to Meridian, of
(a) the occurrence, or failure to occur, of any event that causes any
representation or warranty contained in any document relating to the Transaction
to be untrue or inaccurate in any material respect at any time from the date of
this Agreement to the Closing Date and b) any failure of Meridian, on the one
hand, or Prudential, on the other hand, to comply with or satisfy, in any
material respect, any covenant, condition or agreement to be complied with or
satisfied by it under any document relating to the Transaction.
.3.7 Further Assurances. Promptly upon request by the other party,
each party shall, and shall cause its affiliates to, take, execute, acknowledge,
deliver, file, re-file, register and re-register, any and all such further acts,
certificates, assurances and other instruments as the requesting party may
require from time to time in order to carry out more effectively the purposes of
the Transaction and to better transfer, preserve, protect and confirm to the
requesting party the rights granted or now or hereafter intended to be granted
to the requesting party under the Transaction.
ARTICLE 8 - FAILURE OF CONDITIONS
.1 To Prudential's Obligations. If, on or before the Closing Date, (i)
Meridian is in default of any of its obligations hereunder, or (ii) any of
Meridian's material representations or warranties are untrue in any material
respect, or (iii) the Closing otherwise fails to occur by reason of Meridian's
failure or refusal to perform its obligations hereunder in a prompt and timely
manner, then Prudential may elect to (a) terminate this Agreement by written
notice to Meridian; or (b) proceed to close the Transaction. If this Agreement
is so terminated, then Prudential shall be entitled to seek and recover
compensatory and consequential damages to the full extent available at law and
in equity, and thereafter neither party to this Agreement shall have any further
rights or obligations hereunder other than any arising under any section herein
which expressly provides that it survives the termination of this Agreement.
.2 To Meridian's Obligations. If, at the Closing, (i) Prudential is in
default of any of its obligations hereunder, or (ii) any of Prudential's
material representations or warranties are untrue in any material respect, or
(iii) the Closing otherwise fails to occur by reason of Prudential's failure or
refusal to perform its obligations hereunder in a prompt and timely manner,
Meridian shall have the right, to elect, as its sole and exclusive remedy, to
(a) terminate this Agreement by written notice to Prudential, or (b) waive the
condition and proceed to close the Transaction, or (c) seek specific performance
of this Agreement by Prudential. If this Agreement is terminated pursuant to
provision (a) of the preceding sentence, neither party to this Agreement shall
have any further rights or obligations hereunder other than any arising under
any Section herein which expressly provides that it survives the termination of
this Agreement.
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ARTICLE 8 - CONDEMNATION/CASUALTY
.1 Condemnation.
.1.1 Right to Adjust. If, prior to the Closing Date, all or any
significant portion (as hereinafter defined) of any Facility is taken by eminent
domain (or is the subject of a pending taking which has not yet been
consummated), Prudential shall notify Meridian in writing of such fact promptly
after obtaining knowledge thereof, and Meridian shall have the right to
terminate this Agreement by giving written notice to Prudential no later than
ten (10) days after the giving of Prudential's notice, and the Closing Date
shall be extended, if necessary, to provide sufficient time for Meridian to make
such election. The failure by Meridian to so elect in writing to terminate this
Agreement within such ten (10) day period shall be deemed an election not to
terminate this Agreement. For purposes hereof, a "SIGNIFICANT PORTION" of a
Facility shall mean (i) such portion as shall have a value, as reasonably
determined by Prudential, in excess of One Hundred Thousand Dollars
($100,000.00) with respect to such Facility or (ii) such portion, the taking of
which shall have a Material Adverse Effect on the operation of such Facility. If
Meridian elects to terminate this Agreement as aforesaid, the provisions of
Section 11.4 shall apply.
.1.2 Assignment of Proceeds. If (a) Meridian does not elect to
adjust this Agreement as aforesaid if all or any significant portion of a
Facility is taken, or if (b) a portion of a Facility not constituting a
significant portion of such Facility is taken or becomes subject to a pending
taking, by eminent domain, there shall be no abatement of the Purchase Price;
provided, however, that, at the Closing, Prudential shall pay to Meridian the
amount of any award for or other proceeds on account of such taking which have
been actually paid to Prudential prior to the Closing Date as a result of such
taking (less all costs and expenses, including attorneys' fees and costs,
incurred by Prudential as of the Closing Date in obtaining payment of such award
or proceeds) and, to the extent such award or proceeds have not been paid,
Prudential shall assign to Meridian at the Closing (without recourse to
Prudential) the rights of Prudential to, and Meridian shall be entitled to
receive and retain, all awards for the taking of such Facility or such portion
thereof.
.2 Destruction or Damage. In the event any Facility is damaged or
destroyed prior to the Closing Date, Prudential shall notify Meridian in writing
of such fact promptly after obtaining knowledge thereof. If any such damage or
destruction (a) would cost less than or equal to One Hundred Thousand Dollars
($100,000.00) to repair or restore, and (b) would not give any tenant thereof
the right to terminate or materially alter its Lease, then this Agreement shall
remain in full force and effect and Meridian shall acquire the affected Facility
together with the remaining Facilities upon the terms and conditions set forth
herein. In such event, Meridian shall receive a credit against the Acquisition
Cash portion of the Purchase Price equal to the deductible amount applicable
under Prudential's casualty policy (less all costs and expenses, including
attorneys' fees and costs, incurred by Prudential as of the Closing Date in
connection with the negotiation and/or settlement of the casualty claim with the
insurer (the "REALIZATION COSTS")), and Prudential shall assign to Meridian all
of Prudential's right, title and interest in and to all proceeds of insurance on
account of such damage or destruction. In the event a Facility is damaged or
destroyed prior to the Closing Date and as a result either (a) the cost of
repair would cost more than One Hundred Thousand Dollars ($100,000.00) or (b)
any tenant with respect to such Facility would have the right to terminate or
materially alter its Lease, then, notwithstanding anything to the contrary set
forth above in this section, Meridian shall have the right, at its election, to
terminate this Agreement. Meridian shall have thirty (30) days after Prudential
notifies Meridian
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that a casualty has occurred to make such election by delivery to the other of a
written election notice (the "ELECTION NOTICE") and the Closing Date shall be
extended, if necessary, to provide sufficient time for Meridian to make such
election. The failure by Meridian to deliver the Election Notice within such
thirty (30) day period shall be deemed an election not to terminate this
Agreement. If Meridian does not elect to terminate this Agreement as set forth
above, this Agreement shall remain in full force and effect, Prudential shall
assign to Meridian all of Prudential's right, title and interest in and to any
and all proceeds of insurance on account of such damage or destruction, if any,
and, if the casualty was an insured casualty, Meridian shall receive a credit
against the Purchase Price equal to the deductible amount (less the Realization
Costs) under Prudential's casualty insurance policy.
.3 Insurance. Prudential shall maintain the property insurance coverage
currently in effect for each of the Facilities through the Closing Date.
.4 Effect of Termination. If this Agreement is terminated pursuant to
Section 11.1 or Section 11.2, neither party to this Agreement shall have any
further rights or obligations hereunder other than any arising under any section
herein which expressly provides that it shall survive the termination of this
Agreement.
.5 Waiver. The provisions of this Article 11 supersede the provisions of
any applicable statutory or decisional law with respect to the subject matter of
this Article 11.
ARTICLE 8 - [INTENTIONALLY OMITTED]
ARTICLE 8 - LEASING MATTERS
.1 New Leases. After the date of that certain letter from Meridian dated
June 16, 1997 and executed by Prudential as of June 16, 1997 (the "LETTER OF
INTEREST"), Prudential shall not, without Meridian's prior written consent in
each instance, which consent shall not be unreasonably withheld and shall be
given or denied, with the reasons for such denial specified in reasonable
detail, within three (3) business days after receipt by Meridian of the
information referred to in the next sentence, enter into a new lease for space
in any Facility or renew or extend any Lease (except pursuant to the exercise by
a tenant of a renewal, extension or expansion option contained in such tenant's
Lease). Prudential shall furnish Meridian with all information regarding any
proposed new leases, renewals and extensions reasonably necessary to enable
Meridian to make informed decisions with respect to the advisability of the
proposed action. If Meridian fails to object in writing to any such proposed new
lease, renewal or extension, as the case may be, within three (3) business days
after receipt of the aforementioned information, Meridian shall be deemed to
have approved the proposed new lease, renewal or extension, as the case may be.
If Meridian rejects the proposed action, Prudential nevertheless retains full
right, power and authority to execute such documents as are necessary to effect
such action, and Prudential shall promptly advise Meridian of the same. The
foregoing notwithstanding, in the event Meridian has rejected the proposed
action but Prudential nonetheless proceeds to effect it, Meridian shall have the
right, within three (3) business days after receipt of Prudential's notice that
Prudential has taken such action, to elect to terminate this Agreement by the
delivery to Prudential of a written notice of termination, in which case the
parties shall have no further rights or obligations hereunder other than any
arising under any section herein
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which expressly provides that it shall survive the termination of this
Agreement. If Meridian fails to notify Prudential within such time period,
Meridian shall be deemed to have fully waived any rights to terminate this
Agreement pursuant to this Section 13.1. Prudential shall deliver to Meridian a
true and complete copy of each such new lease, renewal and extension agreement,
if any, promptly after the execution and delivery thereof.
.2 Lease Expenses. At Closing, Meridian shall reimburse Prudential for any
and all fees paid by Prudential prior to Closing or costs and expenses incurred
by Prudential prior to Closing (such fees, costs and expenses being herein
collectively called the "LEASE EXPENSES"), arising out of or in connection with:
(a) any extensions, renewals or expansions under the Leases
exercisable and exercised by any tenant between the date of the full execution
of the Letter of Interest and the Closing Date; and
(b) any lease for space at any Facility entered into between the
date of the full execution of the Letter of Interest and the Closing Date, or
any extension, renewal or expansion of a Lease where such Lease does not provide
for its extension, renewal or expansion, entered into on or after the date of
the full execution of the Letter of Interest (a "NEW LEASE").
Lease Expenses shall include, without limitation, (i) brokerage commissions and
fees to effect any such leasing transaction, (ii) expenses incurred for repairs,
improvements, equipment, painting, decorating, partitioning and other items to
satisfy the tenant's requirements with regard to such leasing transaction, (iii)
legal fees for services in connection with the preparation of documents and
other services rendered in connection with the effectuation of the leasing
transaction, (iv) if there are any rent concessions covering any period that the
tenant has the right to be in possession of the demised space, the rents that
would have accrued during the period of such concession prior to the Closing
Date as if such concession were amortized over (A) with respect to any extension
or renewal, the term of such extension or renewal, (B) with respect to any
expansion, that portion of the term remaining under the subject Lease after the
date of any expansion, or (C) with respect to any New Lease, the entire initial
term of any New Lease, and (v) expenses incurred for the purpose of satisfying
or terminating the obligations of a tenant under a New Lease to the landlord
under another lease (whether or not such other lease covers space in a
Facility). At the Closing, Meridian shall assume Prudential's obligations to
pay, when due (whether on a stated due date or accelerated) any Lease Expenses
unpaid as of the Closing, and Meridian hereby agrees to indemnify and hold
Prudential harmless from and against any and all claims for such Lease Expenses
which remain unpaid for any reason at the time of Closing, which obligations of
Meridian shall survive the Closing and shall not be merged therein. Each party
shall make available to the other all records, bills, vouchers and other data in
such party's control verifying Lease Expenses and the payment thereof.
.3 Other Lease Activity. Except as provided in this Section 13.3, without
the prior consent of Meridian, which shall not be unreasonably withheld (a) no
Lease shall be modified or amended except as provided in Section 13.1 with
respect to extensions, renewals or expansions of Leases and the execution of New
Leases, (b) Prudential shall not consent to any assignment or sublease in
connection with any Lease or New Lease and (c) Prudential shall not remove any
tenant under any Lease or New Lease, whether by summary proceedings or
otherwise, except by reason of a default of the tenant under the Lease or New
Lease. In furtherance of the foregoing, Prudential shall deliver to Meridian a
written notice of each proposed action of the type described in clauses (a)
through (c) above which Prudential has been asked or proposes to take, stating,
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if applicable, whether Prudential is willing to consent to such action and
setting forth the relevant information therefor. Meridian shall notify
Prudential in writing whether or not it approves such action within three (3)
business days after delivery to Meridian of Prudential's notice containing the
aforementioned information. If Meridian notifies Prudential that it disapproves
such action, Meridian's notice shall state with specificity the reasons for such
disapproval. If Meridian shall not give written notice of its disapproval of
such action within such three (3) business day period, Meridian shall be deemed
to have approved such action. If any Lease requires that the landlord's consent
be given under the applicable circumstances (or not be unreasonably withheld),
then Meridian shall be deemed ipso facto to have approved such action. Subject
to its reimbursement rights pursuant to Section 13.2, Prudential shall perform
all of the obligations of the landlord under the Leases and New Leases which
under the terms of such Leases and New Leases are required to be performed by
the landlord prior to the Closing Date.
.4 Lease Enforcement. Subject to the provisions of Section 13.3 above,
prior to the Closing Date, Prudential shall have the right, but not the
obligation (except to the extent that Prudential's failure to act shall
constitute a waiver of such rights or remedies), to enforce the rights and
remedies of the landlord under any Lease or New Lease, by summary proceedings or
otherwise, and to apply all or any portion of any security deposits then held by
Prudential toward any loss or damage incurred by Prudential by reason of any
defaults by tenants.
.5 Lease Termination Prior to Closing. The termination of any Lease or New
Lease or the removal of any tenant by reason of a default by such tenant (by
summary proceedings or otherwise) prior to the Closing shall not affect the
obligations of Meridian under this Agreement in any manner or entitle Meridian
to a reduction in, or credit or allowance against, the Purchase Price or give
rise to any other claim on the part of Meridian.
ARTICLE 8 - MISCELLANEOUS
.1 Assignment.
(a) Meridian's Assignment. Meridian shall not assign this Agreement
or its rights hereunder to any individual or entity without the prior written
consent of Prudential, which consent Prudential may grant or withhold in its
sole discretion, and any such assignment shall be null and void. Notwithstanding
the foregoing, Meridian shall be permitted to assign this Agreement to an entity
in which Meridian owns or controls one hundred percent (100%) of the beneficial
interests provided (a) Meridian effectuates such assignment in writing prior to
the Closing, (b) the assignee assumes the obligations of Meridian under the
terms of this Agreement, and (c) Meridian remains liable to Prudential under the
terms of this Agreement. In the event Meridian assigns this Agreement or its
rights hereunder to a Meridian Affiliate, Meridian shall provide written notice
of such assignment to Prudential within five (5) business days of the execution
of such an assignment.
(b) Prudential's Assignment. Prudential may assign this Agreement
and/or its rights and obligations hereunder, without the prior consent of
Meridian, as Prudential deems necessary to complete the
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Transaction; provided, however, that in the event of such an assignment,
Prudential shall provide written notice thereof to Meridian within five (5)
business days of the execution of any such assignment.
.2 Designation Agreement. Section 6045(e) of the United States Internal
Revenue Code and the regulations promulgated thereunder (herein collectively
called the "REPORTING REQUIREMENTS") require an information return to be made to
the United States Internal Revenue Service, and a statement to be furnished to
Prudential, in connection with the Transaction. Escrow Agent is either (i) the
person responsible for closing the Transaction (as described in the Reporting
Requirements) or (ii) the disbursing title or escrow company that is most
significant in terms of gross proceeds disbursed in connection with the
Transaction (as described in the Reporting Requirements). Accordingly:
(a) Escrow Agent is hereby designated as the "REPORTING PERSON" (as
defined in the Reporting Requirements) for the Transaction. Escrow Agent shall
perform all duties that are required by the Reporting Requirements to be
performed by the Reporting Person for the Transaction.
(b) Prudential and Meridian shall furnish to Escrow Agent, in a
timely manner, any information requested by Escrow Agent and necessary for
Escrow Agent to perform its duties as Reporting Person for the Transaction.
(c) Escrow Agent hereby requests Prudential to furnish to Escrow
Agent Prudential's correct taxpayer identification number. Prudential
acknowledges that any failure by Prudential to provide Escrow Agent with
Prudential's correct taxpayer identification number may subject Prudential to
civil or criminal penalties imposed by law. Accordingly, Prudential hereby
certifies to Escrow Agent, under penalties of perjury, that Prudential's correct
taxpayer identification number is 00-0000000.
(d) Each of the parties hereto shall retain this Agreement for a
period of four (4) years following the calendar year during which Closing
occurs.
.3 Survival/Merger. Except for the provisions of this Agreement which are
explicitly stated to survive the Closing, (a) none of the terms of this
Agreement shall survive the Closing, and (b) the delivery of the Deeds and any
other documents and instruments by Prudential and the acceptance thereof by
Meridian shall effect a merger, and be deemed the full performance and discharge
of every obligation on the part of Meridian and Prudential to be performed
hereunder.
.4 Integration; Waiver. This Agreement, together with the Schedules and
Exhibits hereto, embodies and constitutes the entire understanding between the
parties with respect to the Transaction and all prior agreements,
understandings, representations and statements, oral or written, are merged into
this Agreement. Neither this Agreement nor any provision hereof may be waived,
modified, amended, discharged or terminated except by an instrument signed by
the party against whom the enforcement of such waiver, modification, amendment,
discharge or termination is sought, and then only to the extent set forth in
such instrument. No waiver by either party hereto of any failure or refusal by
the other party to comply with its obligations hereunder shall be deemed a
waiver of any other or subsequent failure or refusal to so comply.
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.5 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New Jersey except to the extent its
conflict of law principles would direct the application of the law of a
different state of forum.
.6 Captions Not Binding; Schedules and Exhibits. The captions in this
Agreement are inserted for reference only and in no way define, describe or
limit the scope or intent of this Agreement or of any of the provisions hereof.
All Schedules and Exhibits attached hereto shall be incorporated by reference as
if set out herein in full.
.7 Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
.8 Severability. If any term or provision of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
.9 Notices. Any notice, request, demand, consent, approval and other
communications under this Agreement shall be in writing, and shall be deemed
duly given or made at the time and on the date when personally delivered as
shown on a receipt therefor (which shall include delivery by a nationally
recognized overnight delivery service) or three (3) business days after being
mailed by prepaid registered or certified mail, return receipt requested, to the
address for each party set forth below, or by telecopy on the date shown on the
receiving party's confirmation thereof, unless such telecopy is received after
2:00 p.m., in which case the date of delivery shall be the next succeeding
business day. Any party, by written notice to the other in the manner herein
provided, may designate an address different from that set forth below.
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IF TO MERIDIAN:
MERIDIAN INDUSTRIAL TRUST, INC.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Executive Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
WITH COPIES TO:
MERIDIAN INDUSTRIAL TRUST, INC.
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
AND TO:
XXXXXX & XXXXXX L.L.P.
0000 Xxxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
IF TO PRUDENTIAL:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
Xxxxx Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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WITH A COPY TO:
XXXXXXX, PROCTER & XXXX LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.
.11 No Recordation. Prudential and Meridian each agrees that neither this
Agreement nor any memorandum or notice hereof shall be recorded and Meridian
agrees (a) not to file any notice of pendency or other instrument (other than a
judgment or lis pendens filed by Meridian in connection with Meridian's
enforcement of its rights hereunder) against any of the Facilities or any
portion thereof in connection herewith and (b) to indemnify Prudential against
all costs, expenses and damages, including, without limitation, reasonable
attorneys' fees and disbursements, incurred by Prudential by reason of the
filing by Meridian of such notice of pendency or other instrument.
.12 Additional Agreements; Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto shall execute and deliver
such documents as the other party shall reasonably request in order to
consummate and make effective the Transaction; provided, however, that the
execution and delivery of such documents by such party shall not result in any
additional liability or cost to such party.
.13 Construction. The parties acknowledge that each party and its counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendment, Schedule or Exhibit hereto.
.14 Intentionally Omitted.
.15 Business Day. As used herein, the term "BUSINESS DAY" shall mean any
day other than a Saturday, Sunday, or any Federal or State of New Jersey
holiday.
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.16 Prudential's Maximum Aggregate Liability. Notwithstanding any
provision to the contrary contained in this Agreement or any documents executed
by Prudential pursuant hereto or in connection herewith, the maximum aggregate
liability of Prudential, and the maximum aggregate amount which may be awarded
to and collected by Meridian, under this Agreement (including, without
limitation, the breach of any representations and warranties contained herein)
and any and all documents executed pursuant hereto or in connection herewith
(including, without limitation, any Prudential's estoppel letter provided in
accordance with the terms of Section 6.4(e) hereof), for which one or more
claims (in the aggregate) are timely made by Meridian shall not exceed Three
Million Dollars ($3,000,000.00). The provisions of this section shall survive
the Closing and shall not be merged therein.
.17 WAIVER OF TRIAL BY JURY. MERIDIAN AND PRUDENTIAL HEREBY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM FILED BY MERIDIAN OF PRUDENTIAL, WHETHER IN CONTRACT,
TORT OR OTHERWISE, WHICH RIGHT OR CLAIM RELATES DIRECTLY OR INDIRECTLY TO THIS
AGREEMENT, ANY DOCUMENTATION RELATED THERETO, OR ANY ACTS OR OMISSIONS IN
CONNECTION WITH THIS AGREEMENT. THIS WAIVER HAS BEEN AGREED TO AFTER
CONSULTATION WITH LEGAL COUNSEL SELECTED BY MERIDIAN AND PRUDENTIAL.
This Waiver is agreed to: Meridian's Initials ( )
Prudential's Initials ( )
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed on its behalf on the day and year first above written.
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation
By: /s/ Xxxx Xxxxxx
____________________________
Xxxx Xxxxxx
Vice President
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By: /s/ Xxxxxx X. Xxxxxx
____________________________
Name: Xxxxxx X. Xxxxxx
Its: Secretary
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The undersigned has executed this
Agreement solely to confirm its
agreement to (i) hold the Escrow
Deposits in escrow in accordance
with the provisions hereto, (ii) comply
with the provisions of Section 14.2 and (iii) to provide the
Release to Meridian and Prudential under the
conditions described in Article 3.
FIRST AMERICAN TITLE INSURANCE COMPANY
By: /s/ Xxxx Xxx Xxxxxxx
__________________________
Name: Xxxx Xxx Xxxxxxx
Its: Vice President
Date: September 24, 1997
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