WARRANT REPURCHASE AGREEMENT
This Warrant Repurchase Agreement (this "Agreement") is entered into as of
March 31, 1998, by and among Pacific Gateway Properties, Inc., a New York
corporation (the "Company"), and Citicorp Real Estate, Inc., a Delaware
corporation ("Citicorp").
RECITALS
WHEREAS, the Company and Citicorp entered into a Warrant Agreement, dated
as of December 28, 1993 (the "Warrant Agreement"), pursuant to which the Company
issued to Citicorp a warrant to acquire up to 2,000,000 shares of the Company's
Common Stock upon the terms and conditions set forth therein; and
WHEREAS, pursuant to the Warrant Agreement, Citicorp currently holds a
warrant (the "Warrant") which is immediately exercisable to purchase from the
Company up to 1,000,000 shares of the Company's Common Stock at a price per
share of $2.875; and
WHEREAS, Citicorp desires to sell to the Company, and the Company desires
to purchase from Citicorp, the Warrant on the terms and conditions set forth
below; and
WHEREAS, as of the close of business on March 30, 1998, the Company's
Common Stock traded on the American Stock Exchange at a price per share of
$7.625.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, and in further consideration of the
mutual covenants, conditions and agreements contained herein, the Company and
Citicorp hereby agree as follows:
1. REPURCHASE OF WARRANT. Subject to the terms and conditions set forth
in this Agreement, Citicorp agrees to sell, transfer and deliver to the Company,
and the Company agrees to purchase from Citicorp, the Warrant for an aggregate
purchase price of $1,000,000.00 (the "Purchase Price"). Citicorp and the
Company agree that the Warrant covers 1,000,000 shares of Common Stock at an
exercise price of $2.875 per share.
2. CLOSING. The closing of the purchase and sale contemplated hereby
(the "Closing") shall take place at the offices of the Company at 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, at 10:00 a.m. on March 31, 1998, or at
such other time, date and place as are mutually agreeable to the Company and
Citicorp. At the Closing, Citicorp shall deliver the Warrant to the Company,
and the Company shall pay the Purchase Price by wire transfer to an account
designated by Citicorp.
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3. REPRESENTATIONS OF THE COMPANY. The Company hereby represents and
warrants to Citicorp as follows:
3.1 EXISTENCE AND GOOD STANDING, AUTHORIZATION AND VALIDITY OF
AGREEMENT. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York. The Company has the
corporate power and authority to enter into this Agreement and perform its
obligations hereunder. This Agreement has been duly authorized and approved by
all required corporate action of the Company. This Agreement has been duly
executed and delivered by the Company and is a valid and binding obligation of
the Company in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and to general equitable principles.
3.2 NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company will not (a) to the Company's knowledge result in a
violation of any law, rule, ordinance, regulation, order, judgment or decree by
which the Company is bound or (b) conflict with or result in a material breach
of or default under any mortgage, lien, lease, license, permit, agreement,
contract or instrument to which the Company is a party or by which the Company
is bound, which conflict, breach or default would have a material adverse effect
on the ability of the Company to perform its obligations under this Agreement.
3.3 PERFORMANCE OF OBLIGATIONS. The Company has the financial and
other ability to perform its obligations under the terms of this Agreement.
3.4 DISCLOSURE.
(a) The Company has filed all reports required to be filed by it
under the Securities Exchange Act of 1934 (the "SEC Reports"). The SEC Reports
comply as to form in all material respects with the requirements of the
Securities Exchange Act of 1934 and do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) The Company has not reported operating results or closed its
books for the first quarter of 1998. Accordingly, the Company cannot make any
representations regarding first quarter results. However, the Company is not
aware of any material transactions that would cause first quarter results to be
materially different from results for the fourth quarter of 1997. Excluding
routine inquiries from potential purchasers of the Company's portfolio
properties, the Company currently is not engaged in substantive negotiations
with any person who has expressed an interest in acquiring the Company.
4. REPRESENTATIONS OF CITICORP. Citicorp hereby represents and warrants
to the Company as follows:
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4.1 OWNERSHIP OF WARRANT. Citicorp is the lawful owner of the
Warrant, free and clear of all liens, encumbrances, restrictions and claims of
every kind. Citicorp has full legal right, power and authority to enter into
this Agreement and to sell, assign, transfer and convey the Warrant pursuant to
this Agreement, and the delivery to the Company of the Warrant pursuant to the
provisions of this Agreement will transfer to the Company title thereto, free
and clear of all liens, encumbrances, restrictions and claims of every kind.
Following the consummation of the transactions contemplated by this Agreement,
Citicorp shall own no further right or interest in the Warrant. Citicorp has
not exercised the Warrant or any portion thereof, nor has Citicorp sold,
assigned, transferred or conveyed the Warrant or any interest therein.
4.2 EXISTENCE AND GOOD STANDING, AUTHORIZATION AND VALIDITY OF
AGREEMENT. Citicorp is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Citicorp has the
corporate power and authority to enter into this Agreement and perform its
obligations hereunder. This Agreement has been duly authorized and approved by
all required corporate action of Citicorp. This Agreement has been duly
executed and delivered by Citicorp and is a valid and binding obligation of
Citicorp in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and to general equitable principles.
4.3 NO CONFLICTS. The execution, delivery and performance of this
Agreement by Citicorp will not (a) to Citicorp's knowledge result in a violation
of any law, rule, ordinance, regulation, order, judgment or decree by which
Citicorp is bound or (b) conflict with or result in a material breach of or
default under any mortgage, lien, lease, license, permit, agreement, contract or
instrument to which Citicorp is a party or by which Citicorp is bound, which
conflict, breach or default would have a material adverse effect on the ability
of Citicorp to perform its obligations under this Agreement.
5. MISCELLANEOUS.
5.1 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of New York applicable to agreements
executed and to be performed solely within such State.
5.2 ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement among the parties hereto with respect to the matters
referred to herein. No other representations, covenants, undertakings or other
prior or contemporaneous agreements, oral or written, respecting such matters,
which are not specifically incorporated herein, shall be deemed in any way to
exist or bind either party. Both parties acknowledge that they have not entered
into this Agreement or executed this Agreement in reliance on any such promise,
representation or warranty.
5.3 MODIFICATION. This Agreement shall not be modified by either
party by oral representation made before or after the execution of this
Agreement. All modifications must be in writing and signed by the party against
whom enforcement shall be sought.
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5.4 NOT CONSTRUED AGAINST EITHER PARTY. This Agreement shall not be
construed against the party initially drafting it but shall be construed as if
both parties jointly prepared this Agreement, and any uncertainty or ambiguity
shall not be interpreted against any one party.
5.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which when taken
together shall constitute but one and the same agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by the Company
and Citicorp as of the date first written above.
PACIFIC GATEWAY PROPERTIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
CITICORP REAL ESTATE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
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