SHARE PURCHASE AGREEMENT
dated as of December 13, 1996
Between
AMERICAN INDUSTRIAL PROPERTIES REIT
and
USAA REAL ESTATE COMPANY
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION -1-
1.1 Definitions -1-
1.2 Rules of Construction -8-
SECTION 2. PURCHASE AND SALE -8-
2.1 Purchase and Sale of the Shares. -8-
2.2 Purchase Price; Payment -8-
2.3 The Closing -8-
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER -9-
3.1 Organization and Related Matters -9-
3.2 Capital Stock; Title to Shares. -9-
3.3 Financial Statements -10-
3.4 SEC Reports -11-
3.5 Authorization; No Conflicts -12-
3.6 Legal Proceedings -12-
3.7 Compliance with Law and Permits -13-
3.8 Dividends and Other Distributions -13-
3.9 Certain Interests -13-
3.10 No Brokers or Finders -14-
3.11 Employee Benefit Plans -14-
3.12 Labor Matters -15-
3.13 Properties -15-
3.14 Tax Matters -17-
3.15 Material Contracts -19-
3.16 Insurance -20-
3.17 Environmental Matters -20-
3.18 Trust Records; Accounting Records -21-
3.19 New York Stock Exchange Listing -21-
3.20 Disclosure of Facts -21-
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER -21-
4.1 Organization and Related Matters -21-
4.2 Authorization -21-
4.3 No Conflicts -22-
4.4 No Brokers or Finders -22-
4.5 Legal Proceedings -22-
4.6 Investment Representation -22-
4.7 Legends; Stop-Transfer Orders -22-
4.8 Status for REIT Ownership and Income Tests -23-
SECTION 5. COVENANTS WITH RESPECT TO CONDUCT OF SELLER PRIOR TO
CLOSING -23-
5.1 Access -23-
5.2 Material Adverse Changes; SEC Filings; Reports;
Financial Statements -23-
5.3 Conduct of Business -24-
5.4 Prohibition of Solicitation -26-
5.5 Notification of Certain Matters -27-
5.6 Permits and Approvals -27-
SECTION 6. ADDITIONAL CONTINUING COVENANTS AND AGREEMENTS -28-
6.1 Use of Proceeds -28-
6.2 Appointment of Trust Managers -28-
6.3 Environmental Matters -29-
6.4 Status for REIT Ownership and Income Tests -29-
6.5 Prohibited Transactions. -29-
6.6 Seller/Buyer Registration Rights Agreement -29-
6.7 REIT Qualification -29-
6.8 Services by Buyer -29-
SECTION 7. GENERAL CONDITIONS OF PURCHASE -30-
7.1 No Orders -30-
7.2 Approvals -30-
7.3 Absence of Litigation -30-
7.4 New York Stock Exchange -30-
SECTION 8. CONDITIONS TO OBLIGATIONS OF BUYER -30-
8.1 Settlement Agreement -30-
8.2 Accuracy of Seller's Representations and Warranties-30-
8.3 Performance by Seller -30-
8.4 No Material Adverse Change -31-
8.5 Certification by Seller -31-
8.6 Opinion of Seller's Counsel -31-
8.7 No Other Business Combination Transaction -31-
SECTION 9. CONDITIONS TO OBLIGATIONS OF SELLER -31-
9.1 Settlement Agreement -31-
9.2 Accuracy of Buyer's Representations and Warranties -32-
9.3 Buyer's Performance -32-
9.4 Certification by Buyer -32-
9.5 Opinion of Buyer's Counsel -32-
SECTION 10. TERMINATION OF OBLIGATIONS; SURVIVAL -32-
10.1 Termination of Agreement -32-
10.2 Effect of Termination -33-
10.3 Survival of Representations and Warranties -33-
SECTION 11. INDEMNIFICATION -33-
11.1 Obligations of Seller -33-
11.2 Obligations of Buyer -34-
11.3 Procedure -34-
11.4 Survival -35-
11.5 Notice by Seller -35-
SECTION 12. GENERAL -35-
12.1 Amendments; Waivers -35-
12.2 Schedules; Exhibits; Integration -35-
12.3 Best Efforts; Further Assurances -36-
12.4 Governing Law -36-
12.5 No Assignment -36-
12.6 Headings -36-
12.7 Counterparts -36-
12.8 Publicity and Reports -36-
12.9 Confidentiality -36-
12.10Parties in Interest -37-
12.11Notices -37-
12.12Expenses -38-
12.13Remedies; Waiver -38-
12.14Representation By Counsel; Interpretation -38-
12.15Severability -38-
EXHIBITS
EXHIBIT A Settlement Agreement
EXHIBIT B Registration Rights Agreement
SCHEDULES
SCHEDULE 3.1 Jurisdictions; Officers and Trust Managers
SCHEDULE 3.2 Capital Stock; Title to Shares
SCHEDULE 3.3 Additional Liabilities or Contingencies
SCHEDULE 3.5 Permits and Approvals
SCHEDULE 3.6 Litigation
SCHEDULE 3.7 Compliance with Law and Permits
SCHEDULE 3.8 Dividends and Other Distributions
SCHEDULE 3.9 Certain Interests
SCHEDULE 3.11 Seller Benefit Plans
SCHEDULE 3.13 Properties and Encumbrances
SCHEDULE 3.14 Taxes
SCHEDULE 3.15 Material Contracts
SCHEDULE 3.16 Insurance
SCHEDULE 3.17 Environmental Compliance
SCHEDULE 3.18 Trust Records
SCHEDULE 5.3 Conduct of Business
SCHEDULE 8.6 List of Opinions of Seller's Counsel
SCHEDULE 9.5 List of Opinions of Buyer's Counsel
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of December 13, 1996, by and between AMERICAN
INDUSTRIAL PROPERTIES REIT, a Texas real estate investment trust
("Seller"), and USAA REAL ESTATE COMPANY, a Delaware corporation
("Buyer").
R E C I T A L S
A. Seller qualifies and operates as a real estate
investment trust for federal income tax purposes.
B. Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller, a certain number of Seller's Common Shares
(as defined herein) upon the terms and subject to the conditions
set forth in this Agreement.
C. The proceeds from the sale of Seller's Common Shares
are to be used for the purposes set forth in this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements set forth in this Agreement,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree
as follows:
SECTION 18. DEFINITIONS AND RULES OF CONSTRUCTION
18.1 Definitions. The capitalized terms used in this
Agreement, the Exhibits and the Schedules attached hereto shall
have the meanings set forth below:
"Action" means any action, complaint, investigation,
Suit or other proceeding, whether civil or criminal, in law or in
equity, or before any mediator, arbitrator or Governmental
Entity.
"Affiliate" means a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, a specified Person.
"Agreement" means this Share Purchase Agreement, by and
between Seller and Buyer, as amended from time to time pursuant
to the terms of this Agreement, together with all Exhibits and
all Schedules attached hereto.
"Alternative Proposal" has the meaning set forth in
Section 5.4(a) of this Agreement.
"Approval" means any approval, authorization, consent,
qualification or registration, or any waiver of the foregoing, or
any notice, statement or other communication required to be filed
with or delivered to any Governmental Entity or any other Person.
"Associate" of a Person means
(i) a corporation or organization (other than Seller or
a party to this Agreement) of which such Person is an officer or
partner or is, directly or indirectly, the beneficial owner of
10% or more of any class of equity securities;
(ii) any trust or other estate in which such Person has
a substantial beneficial interest or as to which such Person
serves as trustee or in a similar capacity; and
(iii) any relative or spouse of such Person who has the
same residence as such Person.
"Audited Financial Statements" has the meaning set
forth in Section 3.3(a) of this Agreement.
"Auditors" means Ernst & Young, LLP, independent public
accountants to Seller.
"Buyer" means USAA Real Estate Company, a Delaware
corporation, or permitted assigns.
"Buyer Indemnified Parties" has the meaning set forth
in Section 11.1 of this Agreement.
"Capital Stock" means any capital stock, beneficial
interest or other equity interest, or any securities convertible
into or exchangeable or exercisable for capital stock, beneficial
interests or other equity interests, or any other rights,
warrants or options to acquire any of the foregoing securities.
"Charter Documents" means Seller's Second Amended and
Restated Declaration of Trust and Fourth Amended and Restated
Bylaws as in effect as of the date of this Agreement.
"Closing" has the meaning set forth in Section 2.3(a)
of this Agreement.
"Closing Agreement" shall mean a written and legally
binding agreement with a taxing authority relating to Taxes.
"Closing Date" means the date specified in Section
2.3(a) of this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended, and, as applicable, the regulations promulgated
thereunder.
"Common Shares" means common shares of beneficial
interest, par value $.10 per share, of Seller.
"Confidentiality Agreement" has the meaning set forth
in Section 5.4(b) of this Agreement.
"Contract" means any agreement, arrangement, bond,
commitment, franchise, indemnity, indenture, instrument, lease,
license or understanding, whether or not in writing.
"Encumbrance" means any claim, charge, easement,
encumbrance, lease, covenant, security interest, lien, option,
pledge, rights of others, preferential right, right of first
refusal or restriction (whether on voting, sale, transfer,
disposition or otherwise), whether imposed by agreement,
understanding, law, equity or otherwise, except that
"Encumbrance" does not include any such item that (i) is
reflected in the Audited Financial Statements or (ii) constitutes
a statutory lien arising in the ordinary course of business.
"Environmental Claims" means any of the following to
the extent they relate to, or arise out of, directly or
indirectly, Environmental Noncompliance with respect to the
Properties or actual or alleged Environmental Conditions or any
Notification which may lead to: (i) claims, demands, suits,
causes of action for personal injury, death or property damage;
(ii) claims for actual or threatened damages to natural
resources; (iii) claims for the recovery of response costs, or
administrative or judicial orders directing the performance of
investigations, response or remedial actions under any
Environmental Law; (iv) a requirement to implement "corrective
action" pursuant to any restitution, contribution or equitable
indemnity to third parties or any Governmental Entity; (v) fines,
penalties, liens against the Properties; (vi) claims for
injunctive relief or other orders or notices of violation from
any Governmental Entity; or (vii) with regard to any present or
former employees, tenants or guests, exposure to or injury from
Environmental Conditions.
"Environmental Conditions" means conditions of the
environment, including the ocean, natural resources (including
flora and fauna), soil, surface water, ground water, any actual
or potential drinking or water supply, subsurface strata, or air,
including ambient air, relating to or arising out of the use,
handling, storage, treatment, recycling, generation,
transportation, release, spilling, leaking, pumping, pouring,
emptying, discharging, injecting, escaping, leaching, disposal,
dumping or threatened release of Hazardous Materials from, in,
on, or onto the Properties.
"Environmental Noncompliance" means any of the
following to the extent they are applicable to the Properties or
alleged to be applicable to the Properties or to Seller,
Subsidiaries or a Seller Partnership: (i) the Release of any
Hazardous Material into the environment, any storm drain, sewer,
septic system or publicly-owned treatment works, in violation of
any effluent or emission limitations, standards or other criteria
or guidelines established by any Environmental Law; (ii) any
noncompliance of physical structure, equipment, process or
premises with the requirements of building or fire codes, zoning
or land use regulations or ordinances or conditional use permits;
(iii) any noncompliance with federal, state or local requirements
governing occupational safety and health; (iv) any operations,
procedures and designs at or on the Properties which do not
conform to the statutory or regulatory requirements of any Law
(including land use regulations and ordinances) intended to
protect public health, welfare and the environment; (v) the
failure to have obtained permits, licenses, variances or other
governmental authorizations necessary for the legal use and/or
operation of any equipment, process or any activity at the
Properties; or (vi) the operation and/or use of any process or
equipment in violation of any permit condition, schedule of
compliance, administrative or court order.
"Environmental Permits" has the meaning set forth in
Section 3.17(a) of this Agreement.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"EVEREN" means EVEREN Securities, Inc.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"GAAP" means generally accepted accounting principles
as in effect from time to time.
"Governmental Entity" means any agency, bureau,
commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether
federal, state or local, domestic or foreign.
"Hazardous Materials" means any substance, matter,
material, waste, solid, liquid, gas, or pollutant, the
generation, storage, disposal, handling, recycling, Release (or
threatened Release) or treatment of which is regulated,
prohibited, or limited under: (1) the Resource Conservation and
Recovery Act, as amended by the Hazardous and Solid Waste
Amendments of 1984, as now or hereafter amended ("RCRA") (42
U.S.C. Sections 6901 et seq.); (ii) the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act of
1986, as now or hereafter amended ("CERCLA") (42 U.S.C. Sections
9601 et seq.); (iii) the Clean Water Act, as now or hereafter
amended ("CWA") (33 U.S.C. Sections 1251 et seq.); (iv) the Toxic
Substances Control Act, as now or hereafter amended ("TSCA") (15
U.S.C. Sections 2601 et seq.); (v) the Clean Air Act, as now or
hereafter amended ("CAA") (42 U.S.C. Sections 7401 et seq.)
(RCRA, CERCLA, CWA, TSCA and CAA are collectively referred to
herein as the "Federal Environmental Laws"); (vi) any local,
state or foreign law, statute, regulation, or ordinance analogous
to any of the Federal Environmental Laws; or (vii) any other
federal, state, local, or foreign law (including any common law),
statute, regulation, or ordinance regulating, prohibiting, or
otherwise restricting the placement, Release, threatened Release,
generation, treatment, or disposal upon or into any environmental
media of any substance, pollutant, or waste which is now or
hereafter classified or considered to be hazardous or toxic to
human health or the environment. All of the laws, statutes,
regulations and ordinances referred to in subsections (vi) and
(vii) above, together with the Federal Environmental Laws, are
collectively referred to herein as "Environmental Laws." The term
"Hazardous Materials" shall also include: (a) gasoline, diesel
fuel, fuel oil, motor oil, waste oil, and any other petroleum
hydrocarbons, including any additives or other by-products
associated therewith; (b) "friable" asbestos (as the term
"friable" is defined under 40 C.F.R. Section 61.141) and friable
asbestos-containing materials in any form; (c) polychlorinated
biphenyls; or (d) any substance the presence of which on the
Properties, (x) requires reporting or remediation under any
Environmental Law, (y) causes or threatens to cause a nuisance on
the Properties or poses or threatens to pose a hazard to the
health or safety of persons on the Properties, or (z) which, if
it emanated or migrated from the Properties, could constitute a
trespass, nuisance or health or safety hazard to persons on
adjacent property.
"Indemnifiable Claim" means any Loss for or against
which any Person is entitled to indemnification under this
Agreement; "Indemnified Party" means the party entitled to
indemnity hereunder and their successors, assigns, and heirs; and
"Indemnifying Party" means the Person obligated to provide
indemnification hereunder and its successors and assigns.
"Initial REIT Year" has the meaning set forth in
Section 3.14(c) of this Agreement.
"Law" means any constitutional provision, statute or
other law, rule, regulation or interpretation of any thereof and
any Order of any Governmental Entity (including Environmental
Laws, including, without limitation, the Americans with
Disabilities Act).
"Loss" means any claim, amount paid in settlement,
cost, damage (including, without limitation, consequential
damage), disbursement, expense (including legal fees and
expenses), liability, loss, deficiency, diminution in value or
obligation.
"Material Contract" means any Contract to which Seller,
any Subsidiary or any Seller Partnership is a party or by which
any such Person or any of their respective Properties are bound
that currently is in effect and (a) after December 31, 1995
obligates Seller, any Subsidiary or any Seller Partnership to pay
an amount equal to $100,000 or more, (b) is one of the group of
Tenant Leases that is anticipated by Seller to produce 66 2/3% of
Seller's gross income during the fiscal year ending December 31,
1997, such group of Tenant Leases calculated beginning with the
Tenant Lease that is anticipated to produce the most gross income
during such period and thereafter in descending order of
magnitude of gross income anticipated to be earned during such
period under each other Tenant Lease until such percentage of
gross income is reached, (c) is a Tenant Lease involving the
lease of space in excess of 10,000 square feet for any Property,
(d) other than any Tenant Lease, has an unexpired term as of
December 31, 1995 in excess of five (5) years, (e) other than any
Tenant Lease, contains a covenant not to compete or otherwise
significantly restricts business activities of Seller, any
Subsidiary or any Seller Partnership, (f) provides for the
extension of credit by Seller, any Subsidiary or any Seller
Partnership or a line of credit to Seller, any Subsidiary or any
Seller Partnership in excess of $50,000, (g) provides for a
guaranty or indemnity by Seller, any Subsidiary or any Seller
Partnership, (h) grants a power of attorney, agency or similar
authority to another Person, (i) contains an option to purchase
or a right of first refusal relating to any of the Properties,
(j) relates to the sale or issuance of any equity securities of
Seller or securities exercisable for or convertible into any
equity securities of Seller, or (k) any other Contract that is
not within the general descriptions of clauses (a) through (j)
(i.e., is not a Tenant Lease or within any of the other general
categories listed above) but is material to the business,
financial condition, assets, results of operations or prospects
of Seller, Subsidiaries or Seller Partnerships.
"Notification" means any summons, citation, directive,
order, claim, litigation, pleading, investigation, proceeding,
judgment, letter or any other written or oral communication from
any Governmental Entity, any entity or any individual, concerning
any intentional or unintentional act or omission which has
resulted in or which may result in any Environmental
Noncompliance or Environmental Claim.
"Order" means any decree, injunction, judgment, order,
ruling, assessment or writ.
"Permit" means any license, permit, franchise,
certificate of authority or order, or any waiver of the
foregoing, required to be issued by any Governmental Entity.
"Person" means an association, a corporation, an
individual, a partnership, a joint venture, a limited liability
company, a trust or any other entity or organization, including a
Governmental Entity.
"Properties" means the real property owned or leased by
Seller, Subsidiaries and Seller Partnerships listed on Schedule
3.13 hereto.
"Purchase Price" has the meaning set forth in Section
2.2 of this Agreement.
"Pure World Litigation" means that case pending in the
United States District Court for the Northern District of Texas
Dallas Division, Civil No. 3:96-CV-0068-H, involving Seller, Pure
World, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et. al.
"Registration Rights Agreement" means the registration
rights agreement between Buyer and Seller to be executed
contemporaneously with the Closing.
"REIT" has the meaning set forth in Section 3.14(b) of
this Agreement.
"Release" means releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, ejecting, escaping,
leaching, disposing, seeping, infiltrating, draining or dumping
of any Hazardous Material. This term shall be interpreted to
include both the present and past tense, as appropriate.
"Schedule" means any schedule attached to this
Agreement.
"SEC" means the Securities and Exchange Commission or
any successor entity.
"SEC Filings" has the meaning set forth in Section 3.4
of this Agreement.
"Securities Act" means the Securities Act of 1933, as
amended.
"Seller" means American Industrial Properties REIT, a
Texas real estate investment trust.
"Seller Benefit Plans" has the meaning set forth in
Section 3.11 of this Agreement.
"Seller Indemnified Parties" has the meaning set forth
in Section 11.2 of this
Agreement.
"Seller Partnerships" has the meaning set forth in
Section 3.1 of this
Agreement.
"Seller Permits" has the meaning set forth in Section
3.7(b) of this Agreement.
"Settlement Agreement" shall mean the settlement
agreement by and among Seller, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ on the one hand and Pure World, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on the other hand attached hereto as Exhibit A.
"Shares" has the meaning set forth in Section 2.1 of
this Agreement.
"Subsidiaries" has the meaning set forth in Section 3.1
of this Agreement.
"Taxes" has the meaning set forth in Section 3.14(a) of
this Agreement.
"Tax Return" has the meaning set forth in Section
3.14(b) of this Agreement.
"Tenant Leases" has the meaning set forth in Section
3.13(b) of this Agreement.
"Trust Managers" means the Trust Managers of Seller.
"Unaudited Financial Statements" has the meaning set
forth in Section 3.3(b) of this Agreement.
"USAA Group" means United Services Automobile
Association, a reciprocal interinsurance exchange under the Texas
Insurance Code ("USAA"), and, as designated by USAA from time to
time, any entity in which USAA directly or indirectly owns 100%
of the issued and outstanding equity securities.
18.2 Rules of Construction. This Agreement shall be
construed in accordance with the following rules of construction:
(a) the terms defined in this Agreement include the plural
as well as the singular;
(b) all accounting terms not otherwise defined herein have
the meanings given such terms under GAAP;
(c) all references in the Agreement to designated
"Sections" and other subdivisions are to the designated Sections
and other subdivisions of the body of this Agreement;
(d) pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms;
(e) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and
not to any particular Section or other subdivision;
(f) the words "includes" and "including" are not limiting;
and
(g) knowledge of any Subsidiary or any Seller Partnership
shall be deemed to be knowledge of Seller.
SECTION 19. PURCHASE AND SALE
19.1 Purchase and Sale of the Shares. Subject to the terms
and conditions set forth herein, on the Closing Date, Seller
shall issue to Buyer, and Buyer shall purchase from Seller, an
aggregate of 924,600 Common Shares (the "Shares").
19.2 Purchase Price; Payment. The cash purchase price for
each Common Share shall be $2.75 per Common Share, and the
aggregate cash purchase price for the Shares (the "Purchase
Price") shall be Two Million Five Hundred Forty-Two Thousand Six
Hundred Fifty Dollars ($2,542,650), payable on the Closing Date
by wire transfer of immediately available funds to an account
designated by Seller.
19.3 The Closing.
(a) The closing of the purchase and sale of the Shares
(the "Closing") will take place at 10:00 a.m. at the offices of
Liddell, Sapp, Zivley, Hill & ▇▇▇▇▇▇, L.L.P., counsel to Seller,
on the same day or within one (1) business day of final approval
of the settlement of the Pure World Litigation by the court
overseeing such settlement (the "Closing Date").
(b) At the Closing, Seller shall deliver to Buyer the
certificate or certificates evidencing the Shares. In addition,
all other actions shall be taken and all other documents shall be
delivered which are necessary to consummate the purchase and sale
of the Shares, other than such actions and documents as are to be
taken or delivered at another date, as specifically provided in
this Agreement.
(c) At the Closing, Buyer shall pay and deliver to Seller
the Purchase Price in the manner set forth in Section 2.2 above.
SECTION 20. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to, and agrees with, Buyer as
follows:
20.1 Organization and Related Matters. Seller is duly
organized, validly existing and in good standing under the laws
of the State of Texas. Seller has all necessary power and
authority to execute, deliver and perform this Agreement.
Schedule 3.1 lists all Subsidiaries (the "Subsidiaries") and all
Seller Partnerships (the "Seller Partnerships") of Seller and
correctly sets forth Seller's ownership interest therein, the
jurisdiction in which each Subsidiary and each Seller Partnership
is organized and each jurisdiction in which Seller, each
Subsidiary and each Seller Partnership is and is required to be
qualified or licensed to do business as a foreign Person. Each
Subsidiary and each Seller Partnership is duly organized, validly
existing and, with respect to each Subsidiary, in good standing
under the laws of the jurisdiction of its incorporation or
organization. Seller, Subsidiaries and Seller Partnerships have
all necessary power (whether corporate, partnership or other
power, as applicable) and authority to own their respective
properties and assets and to carry on their respective businesses
as now conducted. Seller, Subsidiaries and Seller Partnerships
are duly qualified or licensed to do business as foreign Persons
in good standing in all jurisdictions in which the character or
the location of the assets owned or leased by any of them or the
nature of the business conducted by any of them requires
licensing or qualification, except where the failure to be so
qualified or licensed is not and will not be material to their
respective businesses, financial condition, assets, results of
operations or prospects. Schedule 3.1 correctly lists the current
Trust Managers, directors, general partners and executive
officers of Seller, Subsidiaries and Seller Partnerships. True,
correct and complete copies of the Charter Documents and the
charter or organizational documents of Subsidiaries and Seller
Partnerships (including the declaration of trust, articles or
certificate of incorporation, bylaws and partnership agreements,
as applicable) as in effect on the date hereof have been
delivered to Buyer. Seller is registered and is a reporting
company under the Exchange Act. Neither any Subsidiary nor any
Seller Partnership is registered or is a reporting company under
the Exchange Act. Except as listed on Schedule 3.1, Seller does
not directly or indirectly own or control any equity interest in
any Person.
20.2 Capital Stock; Title to Shares. The authorized
Capital Stock of Seller consists of 10,000,000 Common Shares of
which 9,075,400 Common Shares are issued and outstanding. Seller
owns all of the outstanding Capital Stock of Subsidiaries free
and clear of any Encumbrances, equities and claims except as
specified in Schedule 3.2. Seller owns the equity interest in
each Seller Partnership free and clear of any Encumbrances,
equities and claims except as specified in Schedule 3.2. No
Common Shares or Capital Stock of any Subsidiary are held in
treasury. Except as set forth in Schedule 3.2 or as contemplated
in this Agreement, there are no outstanding Contracts or other
rights to subscribe for or purchase, or Contracts or other
obligations to issue or grant any rights to acquire, any Common
Shares, any Capital Stock of any Subsidiary or any Seller
Partnership or to restructure or recapitalize Seller, any
Subsidiary or any Seller Partnership. Except as set forth in
Schedule 3.2, there are no outstanding Contracts of Seller, any
Subsidiary or any Seller Partnership to repurchase, redeem or
otherwise acquire any of their respective Common Shares or
Capital Stock, as applicable. No bonds, debentures, notes or
other indebtedness having general voting rights (or convertible
into securities having general voting rights) of Seller, any
Subsidiary or any Seller Partnership are issued or outstanding.
There are no voting trusts or other agreements or understandings
to which Seller, any Subsidiary or any Seller Partnership is a
party or is bound, or to the knowledge of Seller, to which any
other Person is a party or is bound, with respect to the voting
of the Common Shares or the Capital Stock of any Subsidiary or
any Seller Partnership. All issued and outstanding Common Shares
and Capital Stock of all Subsidiaries and Seller Partnerships
were duly authorized and validly issued at the time of issuance
and are fully paid and nonassessable. There are no preemptive
rights in respect of any Common Shares or Capital Stock of any
Subsidiary or any Seller Partnership. Upon the issuance of the
Shares to Buyer at the Closing, the Shares will have been validly
issued and be validly outstanding, fully paid and nonassessable,
and the issuance of such Shares is not and will not be subject to
preemptive rights of any other shareholder of Seller. Buyer
shall receive good and marketable title to the Shares, free and
clear of all Encumbrances, except for restrictions on the
transferability of the Shares set forth in the Charter Documents
or generally imposed on securities under federal and state
securities laws. Such Shares will rank equally with all other
Common Shares of Seller with respect to priority in payment of
dividends and the distribution of assets upon any liquidation of
Seller, and there are no shares of any class of Capital Stock of
Seller having any priority in respect thereof.
20.3 Financial Statements.
(a) Audited Financial Statements. Seller has delivered to
Buyer the consolidated balance sheets of Seller (which reflect
the financial position of all Subsidiaries and Seller
Partnerships), as of December 31, 1993, 1994 and 1995, and the
respective related consolidated statements of operations, cash
flows and stockholders' equity for the periods then ended
(collectively, the "Audited Financial Statements"). The Audited
Financial Statements have been examined by the Auditors whose
report thereon is attached to such financial statements. All
Audited Financial Statements have been prepared in conformity
with GAAP applied on a consistent basis (except for changes, if
any, disclosed therein). The Audited Financial Statements present
fairly, in all material respects, the consolidated financial
condition and results of operations of Seller, Subsidiaries and
Seller Partnerships as of their respective dates and periods.
Since December 31, 1995, there has been no change in the
significant accounting policies or procedures of Seller, any
Subsidiary or any Seller Partnership. Seller has not received any
annual management letters from the Auditors since March 29, 1996.
(b) Unaudited Financial Statements. Seller has delivered
to Buyer the consolidated balance sheets of Seller (which reflect
the financial position of all Subsidiaries and Seller
Partnerships), as of March 31, June 30 and September 30, 1996,
and the respective related consolidated statements of operations,
cash flows and stockholders' equity for the periods then ended
(collectively, the "Unaudited Financial Statements"). All
Unaudited Financial Statements have been prepared in conformity
with GAAP applied on a consistent basis (except for changes, if
any, disclosed therein). The Unaudited Financial Statements
present fairly, in all material respects, the consolidated
financial condition and results of operations of Seller,
Subsidiaries and Seller Partnerships as of their respective dates
and periods.
(c) No Material Adverse Changes. Since September 30, 1996,
except as set forth in Schedule 3.3, specifically contemplated by
this Agreement, specifically disclosed in any SEC Filings filed
since September 30, 1996 and prior to the date of this Agreement
(copies of which have been provided to Buyer), and except the
settlement of the Pure World Litigation, Seller, Subsidiaries and
Seller Partnerships have conducted their respective businesses
only in the ordinary course and in a manner consistent with past
practice and, whether or not in the ordinary course of business,
there has not been, occurred or arisen:
(i) any change in or event affecting the business of
Seller, Subsidiaries and Seller Partnerships that has had a
material adverse effect on such business or any materially
adverse change or trend in the business, financial condition,
assets, results of operations or prospects of Seller,
Subsidiaries or Seller Partnerships, or
(ii) any condition or action which would be
proscribed by (or require consent under) Section 5.3 had it
existed, occurred or arisen after the date of this Agreement, or
(iii) any casualty, loss, damage or
destruction of any real property of Seller, any Subsidiary or any
Seller Partnership that has involved or may involve a Loss
(whether or not covered by insurance) to Seller, any Subsidiary
or any Seller Partnership of more than $100,000 individually, or
$300,000 in the aggregate.
(d) No Other Liabilities or Contingencies. Neither
Seller nor any Subsidiary nor any Seller Partnership has any
material liability of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due,
probable of assertion or not, except liabilities that (i) were
incurred after September 30, 1996 in the ordinary course of
business in a manner consistent with past practice and are not
material in amount or which involve the Pure World Litigation, or
(ii) are set forth in Schedule 3.3 hereto.
20.4 SEC Reports. Seller has filed with the SEC all forms,
reports, statements, including registration statements, and other
material documents, together with any amendments required to be
made with respect thereto, that were required to be filed with
the SEC since December 31, 1993. Such forms, reports, statements,
including registration statements, and other material documents
required to be filed with the SEC by Seller since December 31,
1993 are collectively referred to in this Agreement as the "SEC
Filings." Seller has made available to Buyer all SEC Filings. As
of their respective dates, (x) each of the SEC Filings, including
the financial statements contained therein, was true and complete
in all material respects, (y) each of the SEC Filings, including
the financial statements contained therein, complied in all
material respects with the Securities Act and Exchange Act, as
applicable, and the rules and regulations promulgated thereunder,
and (z) none contained any untrue statement of a material fact or
omitted 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.
20.5 Authorization; No Conflicts. Seller has the requisite
power and authority to enter into this Agreement and the
Registration Rights Agreement and to carry out its obligations
hereunder and thereunder. The execution, delivery and
performance of this Agreement by Seller has been duly and validly
authorized by the Trust Managers and by all other necessary
action on the part of Seller, and no other proceedings on the
part of Seller (including Trust Manager and shareholder approval)
are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by Seller and constitutes the legally
valid and binding obligation of Seller, enforceable against
Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
Except as set forth in Schedule 3.5, the execution, delivery and
performance of this Agreement by Seller and the consummation by
Seller of the transactions contemplated hereby will not (i)
conflict with or result in the breach of any provisions of, or
trigger any preferential rights under, the Charter Documents or
the charter or organizational documents of Subsidiaries or Seller
Partnerships, (ii) result in a breach or violation of, a default
under, or the triggering of any payment or other material
obligations pursuant to, or accelerate vesting under, any Seller
Benefit Plans or any grant or award thereunder or any employment
or consulting agreement or arrangement of Seller, any Subsidiary
or any Seller Partnership, (iii) violate, conflict with, result
in a breach of any provision of, constitute a default (or an
event which, with notice or lapse of time or both, would
constitute a default) under, result in the termination or in a
right of termination or cancellation of, accelerate the
performance required by, result in the creation of any
Encumbrance upon any Properties under, result in the triggering
of any rights under, or result in being declared void, voidable
or without further binding effect, any of the terms or provisions
of any Material Contract of Seller, any Subsidiary or any Seller
Partnership or (iv) violate any Law. Schedule 3.5 lists all
Permits and Approvals required to be obtained by Seller,
Subsidiaries and Seller Partnerships to consummate the
transactions contemplated hereby. Except for matters identified
in Schedule 3.5 as requiring that certain actions be taken by or
with respect to a third party or Governmental Entity, the
execution and delivery of this Agreement by Seller and the
consummation of the transactions contemplated hereby will not
require the consent, authorization or approval of filing or
registration with, or the issuance of any Permit by, any other
third party or Governmental Entity under the terms of any
applicable Laws or Material Contracts of Seller, Subsidiaries or
Seller Partnerships.
20.6 Legal Proceedings. Except as set forth in Schedule
3.6 and except with respect to the Pure World Litigation, there
is no Order or Action pending, or to the knowledge of Seller
threatened, against or affecting Seller, any Subsidiary, any
Seller Partnership, any Trust Manager in his capacity as a trust
manager of Seller or any of the Properties which (i) questions
the validity of this Agreement, the Registration Rights
Agreement, the Settlement Agreement or any action taken or to be
taken pursuant hereto or thereto, or (ii) individually or when
aggregated with one or more other Orders or Actions has, or if
determined adversely will have, a material adverse effect on the
business, financial condition, assets, results of operations or
prospects of Seller, any Subsidiary or any Seller Partnership or
on Seller's ability to perform this Agreement. To Seller's
knowledge, Schedule 3.6 lists each Order and each Action that (i)
involves a claim or potential claim of aggregate liability in
excess of $50,000 against Seller, any Subsidiary or any Seller
Partnership that is not covered by insurance, (ii) involves a
claim or potential claim of aggregate liability brought by
Seller, any Subsidiary or any Seller Partnership against a tenant
under any Tenant Lease which Tenant Lease obligates such tenant
to pay rent to Seller, any Subsidiary or any Seller Partnership
during the year ending December 31, 1996 in an amount equal to or
in excess of $150,000, or (iii) that enjoins or seeks to enjoin
any activity by Seller, any Subsidiary or any Seller Partnership.
There is no matter as to which Seller, any Subsidiary or any
Seller Partnership has received any notice, claim or assertion in
connection with which any such Person has or may reasonably be
expected to have any right to be indemnified by Seller, any
Subsidiary or any Seller Partnership.
20.7 Compliance with Law and Permits.
(a) Seller, Subsidiaries and Seller Partnerships are
organized and have conducted their respective businesses in
accordance with applicable Laws, neither Seller nor any
Subsidiaries or Seller Partnerships has received any notice of
violation of any Laws which remains uncorrected, and the
respective forms, procedures and practices of Seller,
Subsidiaries and Seller Partnerships are in compliance with all
such Laws, to the extent applicable, the violation of which would
have a material adverse effect on the respective businesses,
financial condition, assets, results of operations or prospects
of Seller, Subsidiaries and Seller Partnerships.
(b) Except as set forth in Schedule 3.7, Seller,
Subsidiaries and Seller Partnerships hold all permits, licenses,
variances, exemptions, authorizations, orders and approvals of
all Governmental Entities necessary for the lawful conduct of
their respective businesses (the "Seller Permits") and Seller,
Subsidiaries and Seller Partnerships are in compliance with the
terms of the Seller Permits relating to each such Person, except
where the failure to hold such Seller Permits or be in compliance
therewith would not, individually or in the aggregate, have a
material adverse effect on the business, financial condition,
assets, results of operations or prospects of Seller,
Subsidiaries or Seller Partnerships. Seller has made available to
Buyer correct and complete copies of all Seller Permits. Except
as set forth in Schedule 3.7, to the knowledge of the Seller, no
investigation or review by any Governmental Entity with respect
to the Seller Permits is pending or threatened.
20.8 Dividends and Other Distributions. Except as set
forth in Schedule 3.8, there has been no dividend or other
distribution of assets or securities by Seller or Seller
Partnerships (other than Seller Partnerships in which Seller owns
100% beneficial interest) whether consisting of money, property
or any other thing of value, declared, issued or paid to or for
the benefit of Seller subsequent to the date of the Audited
Financial Statements.
20.9 Certain Interests. Except as set forth in Schedule
3.1 and Schedule 3.9, no Affiliate of Seller, any Subsidiary or
any Seller Partnership, nor any of their respective officers,
Trust Managers, directors or partners, nor any Associate of any
such individual, has any material interest in any property used
in or pertaining to the respective businesses of Seller, any
Subsidiary or any Seller Partnership. Except as set forth in
Schedule 3.1 and Schedule 3.9, no such Person is indebted or
otherwise obligated to Seller, any Subsidiary or any Seller
Partnership. Except as set forth in Schedule 3.9, Seller,
Subsidiaries and Seller Partnerships are not indebted or
otherwise obligated to any such Person, except for amounts due
under normal arrangements applicable to all employees generally
as to salary or reimbursement of ordinary business expenses not
unusual in amount or significance. Except as set forth in
Schedule 3.1 and Schedule 3.9, there are no material transactions
between Seller, any Subsidiary or any Seller Partnership and any
Affiliate of Seller, any Subsidiary or any Seller Partnership or
any Associate of any such Affiliate that have continuing
obligations of any party thereunder. Except as set forth in
Schedule 3.9, the consummation of the transactions contemplated
by this Agreement will not (either alone, or upon the occurrence
of any act or event, or with the lapse of time, or both) result
in any compensation or severance or other payment or benefit
arising or becoming due from Seller, any Subsidiary or any Seller
Partnership or any of its assigns to any Person.
20.10 No Brokers or Finders. No agent, broker, finder, or
investment or commercial banker, or other Person or firm engaged
by or acting on behalf of Seller or any of its Affiliates in
connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is
or will be entitled to any brokerage or finder's or similar fee
or other commission as a result of this Agreement or such
transactions except for a fee payable to EVEREN.
20.11 Employee Benefit Plans. Schedule 3.11 lists
all employee benefit plans and collective bargaining, labor and
employment agreements or other similar benefit arrangements to
which either Seller, any Subsidiary, or any Seller Partnership is
a party or by which either Seller, any Subsidiary, or any Seller
Partnership is bound (collectively, the "Seller Benefit Plans"),
including (i) any profit-sharing, deferred compensation, bonus,
stock option, stock purchase, pension, retainer, consulting,
retirement, severance, welfare or incentive plan, agreement or
arrangement, (ii) any plan, agreement or arrangement providing
for "fringe benefits" or perquisites to employees, officers,
directors, trust managers or agents, including benefits relating
to automobiles, clubs, vacation, child care, parenting,
sabbatical, sick leave, medical, dental, hospitalization, life
insurance and other types of insurance, (iii) any employment
agreement not terminable on 30 days (or less) written notice or
(iv) any other "employee benefit plan" within the meaning of
Section 3(3) of ERISA. True and complete copies of the Seller
Benefit Plans, current descriptive booklets and summary plan
descriptions of the Seller Benefit Plans, any relevant trust
agreements or insurance policies or contracts and, if applicable,
the most recent annual return on Form 5500 (or equivalent form)
have been made available to Buyer. To the extent applicable, the
Seller Benefit Plans comply, in all material respects, with the
requirements of ERISA and the Code. Except as set forth in
Schedule 3.11, no Seller Benefit Plan is or is intended to be a
stock bonus, pension or profit-sharing plan within the meaning of
Section 401(a) of the Code. Neither any Seller Benefit Plan nor
Seller, any Subsidiary, or any Seller Partnership has incurred
any liability or penalty under Section 4975 of the Code or
Section 502(i) of ERISA. Each Seller 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. Except as set forth in Schedule 3.11,
there are no pending, or to the knowledge of Seller threatened,
claims (other than pursuant to the terms of any such plan)
against or otherwise involving any of the Seller Benefit Plans
and no Action has been brought against or with respect to any
Seller Benefit Plan, and neither Seller nor any Subsidiary nor
any Seller Partnership has incurred any liability to any party
with respect to any Seller Benefit Plan. All contributions
required to be made to the Seller Benefit Plans have been made or
provided for. Except as set forth in Schedule 3.11, neither
Seller nor any Subsidiary nor any Seller Partnership maintains or
contributes to any plan or arrangement which provides or has any
liability to provide life insurance or medical or other employee
welfare benefits to any employee or former employee upon his
retirement or termination of employment and neither Seller nor
any Subsidiary nor any Seller Partnership has represented,
promised or contracted (whether in oral or written form) to any
employee or former employee that such benefits would be provided.
Except as set forth in Schedule 3.11, the execution of, and
performance of the transactions contemplated by, this Agreement
will not (either alone or upon the occurrence of any additional
or subsequent event) constitute an event under any Seller Benefit
Plan or other policy, arrangement or any trust or loan that will
or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits
with respect to any employee. No Seller Benefit Plan is subject
to Title IV of ERISA and neither Seller nor any Subsidiary nor
any Seller Partnership 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 3.11, (i) the term "Seller"
includes any entity required to be aggregated with the Seller
pursuant to Code Section 414(b), (c), (m) or (o) and (ii)
provisions of ERISA or the Code include regulations prescribed
under such provisions.
20.12 Labor Matters. Neither Seller nor any
Subsidiary nor any Seller Partnership is a party to or bound by
any collective bargaining or other labor union contracts. There
is no pending or, to the knowledge of Seller, threatened labor
dispute, strike or work stoppage against Seller, any Subsidiary,
or any Seller Partnership. Neither Seller nor any Subsidiary nor
any Seller Partnership, nor their respective representatives or
employees, has committed any unfair labor practices in connection
with the operation of the respective businesses of Seller, each
Subsidiary, and each Seller Partnership, and there is no pending
or, to the knowledge of Seller, threatened charge or complaint
against Seller, any Subsidiary, or any Seller Partnership by the
National Labor Relations Board or any comparable state agency.
Seller, Subsidiaries, and Seller Partnerships are in compliance
with all applicable Laws respecting employment, consulting,
employment practices, wages, hours, and terms and conditions of
employment.
20.13 Properties.
(a) Schedule 3.13 contains a complete and correct list of
all real property owned or leased by Seller, each Subsidiary and
each Seller Partnership (collectively, the "Properties"). Except
as set forth in Schedule 3.13, Seller, Subsidiary or Seller
Partnership, as applicable, owns good and indefeasible title to
each Property, including the land and all improvements, all
personalty and the Tenant Leases (as hereinafter defined). Except
as set forth in Schedule 3.13, the Properties are free and clear
of all Encumbrances of any nature, except for (i) liens for real
property taxes or similar assessments not yet due and payable,
(ii) easements for utilities servicing the Properties and (iii)
such Encumbrances as do not materially detract from or interfere
with the present use of the Properties subject thereto or
affected thereby, or otherwise materially impair the use or value
of such Properties.
(b) Seller has delivered to Buyer a true, correct and
complete copy of a rent roll with respect to each Property
setting forth, among other matters, the term (commencement or
renewal date and expiration date) of each lease with respect to
the Properties (collectively, the "Tenant Leases"), the square
feet for each of the Tenant Leases, the monthly base rental rates
for each of the Tenant Leases and the security deposits for each
of the Tenant Leases. Other than the Tenant Leases, no party has
been granted any license, lease or other material right relating
to the use or possession of the Properties which is material to
the use or value of the Properties. Except as set forth in
Schedule 3.13, all of the Tenant Leases are valid and subsisting
and in full force and effect with respect to Seller, Subsidiaries
and Seller Partnerships and, to Seller's knowledge, with respect
to any other party thereto, and no tenant of the Properties is
more than 30 days delinquent on its rental as of October 31, 1996
except as set forth in Schedule 3.13. To Seller's knowledge, no
tenant of the Properties has initiated or threatened bankruptcy
since January 1, 1996. No tenant of the Properties is an
Affiliate or Associate of Seller, any Subsidiary or any Seller
Partnership. Except as set forth in Schedule 3.13, there are no
contracts or other material obligations outstanding for the sale,
exchange or transfer of the Properties or any portion thereof.
There are no attachments, executions, assignments for the benefit
of creditors, receiverships, conservatorship or voluntary or
involuntary proceedings in bankruptcy or pursuant to any other
debtor relief laws filed by, or pending against, Seller,
Subsidiaries, Seller Partnerships or the Properties. Except as
set forth in Schedule 3.13, since January 1, 1996, no tenants
have terminated their leases prior to expiration and, to Seller's
knowledge, have no intent to do so.
(c) Except as set forth in Schedule 3.13 there is no
pending condemnation or similar proceeding affecting the land,
the improvements or the personalty situated at the Properties or
any portion thereof, and neither Seller nor any Subsidiary nor
any Seller Partnership has received any written notice and has no
knowledge that any such proceeding is contemplated.
(d) The continued ownership, operation, use and occupancy
of the land or the improvements thereon do not violate any
zoning, building, administrative or other law, ordinance, order
or regulation or any restrictive covenant applicable to the
Properties, the violation of which would have a material adverse
effect on the business, financial condition, assets, results of
operations or prospects of Seller, Subsidiaries or Seller
Partnerships, as applicable, and no written notice of any such
violation has been received by Seller, any Subsidiary or any
Seller Partnership from any Governmental Entity.
(e) Seller, Subsidiaries or Seller Partnerships, as
applicable, currently has in place title, liability, casualty and
other insurance coverage with respect to the Properties in such
amounts as are reasonable and customary for properties similar to
the Properties. Each of such policies is in full force and
effect, and all premiums due and payable thereunder have been,
and on the Closing Date will be, fully paid when due. No notice
of cancellation has been received, or to the knowledge of Seller
threatened, with respect thereto.
(f) Except as set forth in Schedule 3.13, there is no
Action pending, or to the knowledge of Seller contemplated, by
any Governmental Entity or third party to levy any special
assessments against the Properties that, if successful, would
have a material adverse effect on the business, financial
condition, assets, results of operations or prospects of Seller.
(g) To Seller's knowledge, each unsatisfied brokerage
obligation that is in excess of $25,000 with respect to the
Properties is set forth on Schedule 3.13.
(h) To Seller's knowledge and except as set forth on
Schedule 3.13, no capital expenditures are contemplated by Seller
to be incurred by Seller, any Subsidiary or any Seller
Partnership within twelve months after the date of this Agreement
in excess of $50,000 per Property with respect to any Property.
(i) Except as set forth in Schedule 3.13, all management
contracts with respect to the Properties are terminable by Seller
on 30 days notice.
(j) To Seller's knowledge, except for customary easements
for access to building systems or utilities and except as set
forth in Schedule 3.13, each Property is an independent unit
which does not now rely on any facilities (other than facilities
of municipalities or public utilities) located on any property
that is not part of the Property for the furnishing to the
Property of any essential building systems or utilities
(including drainage facilities, catch basins and retention ponds)
that if the owner of the Property could not avail the use of
which, would materially detract from the value of the Property or
materially interfere with the use of the Property.
3.14 Tax Matters.
(a) For purposes of this Agreement, "Taxes" means any
federal (including, without limitation, tax on its undistributed
taxable income, alternative minimum tax, tax on certain sale
proceeds or other nonqualifying income from foreclosure property
or on income from prohibited transactions, and any taxes imposed
upon Seller, Subsidiaries or Seller Partnerships under Section
857 or Section 4981 of the Code), state, county, local or foreign
taxes, charges, fees, levies, or other assessments, including,
without limitation, all net income, gross income, sales and use,
ad valorem, transfer, gains, profits, excise, franchise, real and
personal property, gross receipt, capital stock, business and
occupation, disability, employment, payroll, license, estimated,
or withholding taxes or charges imposed by any Governmental
Entity, and includes any interest and penalties (civil or
criminal) on or additions to any such taxes.
(b) For purposes of this Agreement, "Tax Return" means a
report, return or other information required to be filed with or
supplied to a Governmental Entity with respect to Taxes
including, without limitation, any notices or information reports
or returns required to be filed by Seller, Subsidiaries or Seller
Partnerships with respect to their respective operations, income,
assets and shareholders or partners in order to maintain Seller's
status as a real estate investment trust ("REIT") under the Code.
(c) Seller elected to be taxed as a REIT under Sections
856 through 860 of the Code effective for its taxable year ended
December 31, 1985 (the "Initial REIT Year"). Seller, since the
Initial REIT Year through the end of the immediately preceding
taxable year, has always qualified as a REIT under the Code. At
all times from and after the Initial REIT Year to the date
hereof, Seller has complied with, and through the Closing Date
will comply with, all applicable Code and regulatory requirements
necessary to maintain its qualification as a REIT under the Code
and has otherwise operated, and through the Closing Date will
have otherwise operated, in the manner necessary to maintain its
qualification as a REIT under the Code. No dividend will be
required to be distributed before December 31, 1996 in order for
Seller to maintain its qualification as a REIT under the Code.
(d) Except as disclosed in Schedule 3.14, Seller,
Subsidiaries and Seller Partnerships have (i) filed all Tax
Returns required to be filed by applicable Law since December 31,
1990, and all such Tax Returns were in all material respects
(and, as to Tax Returns not filed as of the date hereof but filed
on or before the Closing Date, will be in all material respects)
true, complete and correct and filed on a timely basis and (ii)
within the time and in the manner prescribed by law, paid (and
until the Closing Date will pay within the time and in the manner
prescribed by law) all material Taxes that were or are due and
payable.
(e) Except as set forth in Schedule 3.14, Seller,
Subsidiaries and Seller Partnerships have established (and until
the Closing Date will maintain) on their respective books and
records reserves adequate to pay all Taxes of Seller,
Subsidiaries and Seller Partnerships not yet due and payable in
accordance with GAAP which are reflected in the Audited Financial
Statements and Unaudited Financial Statements to the extent
required by GAAP.
(f) Except as disclosed in Schedule 3.14, as of the date
hereof, there are no, and, as of the Closing Date, there will be
no, material Tax liens upon the assets of Seller, Subsidiaries
and Seller Partnerships, except liens for Taxes not yet due.
(g) Except as disclosed in Schedule 3.14, Seller,
Subsidiaries, and Seller Partnerships have complied (and until
the Closing Date will comply) in all material respects with the
provisions of the Code relating to the payment and withholding of
Taxes, including the withholding and reporting requirements under
Code Sections 1441 through 1464, 3401 through 3406, and 6041
through 6049, as well as similar provisions under any other laws,
and have, within the time and in the manner prescribed by law,
withheld from employee wages and paid over to the proper
governmental authorities all material amounts required by
applicable Law.
(h) Except as disclosed in Schedule 3.14, Seller,
Subsidiaries and Seller Partnerships have not executed any
outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any
Taxes or Tax Returns.
(i) No notice of any material deficiency for any Taxes has
been received by Seller, any Subsidiary or any Seller Partnership
that has not been resolved and paid in full or otherwise settled,
no audits or other administrative proceedings or court
proceedings are presently pending or, to Seller's knowledge,
threatened with regard to any Taxes or Tax Returns of Seller,
Subsidiaries or Seller Partnerships, and no notice of any
material claim has been received by Seller, any Subsidiary or any
Seller Partnership from any authority in a jurisdiction where
Seller, Subsidiaries or Seller Partnerships do not file Tax
Returns that Seller, any Subsidiary or any Seller Partnership is
or may be subject to Tax in that jurisdiction.
(j) Seller, Subsidiaries and Seller Partnerships have not
received a Tax Ruling or entered into a Closing Agreement with
the Internal Revenue Service that would have any continuing
effect after the Closing Date.
(k) Seller has made available (or, with respect to all Tax
Returns filed after the date hereof, will make available) to
Buyer complete and accurate copies of all Tax Returns, and
amendments thereto, filed by Seller, any Subsidiary or any Seller
Partnership for all taxable periods or years ending on or prior
to the Closing Date.
(l) Neither Seller nor any Subsidiary nor any Seller
Partnership is required to include in income any adjustment
pursuant to Code Section 481(a) by reason of a voluntary change
in federal income tax accounting method (other than a change of
federal income tax accounting method required as a result of a
change in law) initiated by Seller, and the Internal Revenue
Service has not proposed any such adjustment or change in
accounting method.
(m) Seller has made available to Buyer all relevant
information with respect to the federal income tax net operating
loss carryovers of Seller as of December 31, 1995, based on the
federal income Tax Returns filed by Seller as of such date.
(n) For all taxable years from and including its Initial
REIT Year through the Closing Date, (i) Seller has maintained
permanent records containing the information required to be
maintained by Code Section 857(a)(2) and Treasury Regulation
Sections 1.857-(8)(a), 1.857-8(c) and 1.857-8(e) and (ii) Seller
has demanded the written statements from its shareholders
required by Treasury Regulation Section 1.857-8(d) in accordance
with Treasury Regulation Section 1.857-8(e).
3.15 Material Contracts. Schedule 3.15 sets forth an
accurate list of all Material Contracts of Seller, Subsidiaries
and Seller Partnerships. Seller has made available to Buyer
complete and correct copies of all Material Contracts. All
Material Contracts are in full force and effect. Except as set
forth in Schedule 3.15, Seller, Subsidiaries and Seller
Partnerships are not in violation of or default in any material
respect (nor is there any waiver in effect of any event that
would constitute a default but for such waiver) under, and no
event has occurred that (with notice or the lapse of time or
both) would constitute a violation of or default under, any
Material Contract. Except as set forth in Schedule 3.15, to the
knowledge of Seller, no other party to any Material Contract is
in breach of the terms, provisions and conditions of such
Material Contract and no other party to any Material Contract has
notified Seller, any Subsidiary or any Seller Partnership that it
intends to terminate or modify a Material Contract.
3.16 Insurance. Schedule 3.16 sets forth a complete and
correct list of all insurance policies, except for title
insurance policies, currently in force insuring against risks of
Seller, Subsidiaries and Seller Partnerships. Seller,
Subsidiaries and Seller Partnerships are in compliance with the
terms of such policies applicable to them and there are no claims
by Seller, any Subsidiary or any Seller Partnership under any
such policy as to which any insurance company is denying
liability or defending under a reservation of rights clause.
3.17 Environmental Matters.
(a) Except as set forth in the documentation provided to
Seller pursuant to Section 3.17(b) and in Schedule 3.17, there is
no material Environmental Noncompliance with respect to any
Property and there are no material Environmental Claims with
respect to any Property or the Seller, any Subsidiary or any
Seller Partnership or, to the knowledge of Seller, any tenants
under any of the Tenant Leases. All material permits, consents,
licenses, certificates, approvals, registrations, and
authorizations in connection with environmental matters
(collectively, "Environmental Permits") which are required by any
Law have been obtained and are valid. The Properties (and all
uses thereof and operations conducted thereon) comply in all
material respects with all Environmental Permits. All operations
on or at the Properties conducted by Seller are and have been
conducted in all material respects in compliance with applicable
Environmental Laws. Except as set forth in the documentation
provided to Seller pursuant to Section 3.17(b) and in Schedule
3.17, Seller has not received any Notification from any
Governmental Entity seeking any information or alleging any
violation of any Law regarding Environmental Conditions. Except
as set forth in the documentation provided to Seller pursuant to
Section 3.17(b) and in Schedule 3.17, Seller has not caused or
given its verbal or written authorization to cause, and has no
knowledge of, any Release of any Hazardous Materials on-site or
off-site of the Properties in violation of any Environmental Law.
(b) Seller has made available to Buyer true, correct, and
complete copies of all written reports of any environmental
assessment, compliance or regulatory audit, inspection, or
investigation of the Properties in its possession, and Seller has
not received any other written report containing any evidence of
Environmental Noncompliance.
(c) Except as set forth in the documentation provided to
Seller pursuant to Section 3.17(b) and in Schedule 3.17, there is
not now, nor has there been in the past, any "friable" asbestos
(as the term "friable" is defined under 40 C.F.R. Section 61.141)
or friable asbestos containing materials located on, incorporated
in, or otherwise contained in the Properties or any portion
thereof, and there are not now, and have not in the past been,
any underground storage tanks located on the Properties or any
portion thereof.
(d) Except as set forth in the documentation provided to
Seller pursuant to Section 3.17(b), and in Schedule 3.17, none of
the tenants under any Tenant Lease handle or store any Hazardous
Material as a principal or primary business.
3.18 Trust Records; Accounting Records. The minute books of
Seller accurately reflect in all material respects all actions
taken to the date of this Agreement by the holders of Common
Shares, the Trust Managers and committees of the Trust Managers,
except for those matters set forth in Schedule 3.18 for which
minutes of such actions have not yet been prepared or approved.
The share certificate books and records of Seller accurately
reflect the ownership of the Common Shares. Seller maintains
accounting records which fairly reflect, in all material
respects, Seller's transactions.
3.19 New York Stock Exchange Listing. The outstanding
Common Shares are listed on the New York Stock Exchange. The
sale and delivery of the Shares to Buyer pursuant to this
Agreement along with the subsequent sale and delivery of any
other Common Shares to Buyer will not violate any listing
requirements of the New York Stock Exchange for the listing of
Common Shares, including the Shares.
3.20 Disclosure of Facts. There are no facts peculiar to
Seller, Subsidiaries or the Seller Partnerships that Seller has
not disclosed to Buyer that materially adversely affect, or
insofar as Seller can reasonably foresee, will materially
adversely affect, the business, financial condition, assets,
results of operations or prospects of Seller, Subsidiaries or
Seller Partnerships.
SECTION 21. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to, and agrees with, Seller as
follows:
21.1 Organization and Related Matters. Buyer is a
corporation duly organized and validly existing under the laws of
the State of Delaware. Buyer has all necessary corporate power
and corporate authority to carry on its business as now being
conducted. Buyer has all necessary corporate power and corporate
authority to execute, deliver and perform this Agreement and the
transactions contemplated hereby. USAA beneficially owns, and at
Closing will beneficially own, directly or indirectly, all of the
capital stock of Buyer.
21.2 Authorization. The execution, delivery and
performance of this Agreement by Buyer has been duly and validly
authorized by Buyer and by all other necessary corporate action
on the part of Buyer and no other corporate proceedings on the
part of Buyer are necessary to authorize this Agreement or
consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Buyer and constitutes the
legally valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
The execution and delivery of this Agreement by Buyer and the
consummation of the transactions contemplated hereby will not
require filing or registration with, or the issuance of any
Permit by, any other third party or Governmental Entity under the
terms of any applicable Law or material Contracts of Buyer, other
than any filing required under the Exchange Act.
21.3 No Conflicts. The execution, delivery and
performance of this Agreement by Buyer will not violate the
provisions of, or constitute a breach or default (whether upon
lapse of time and/or the occurrence of any act or event or
otherwise) under, (a) Buyer's certificate of incorporation and
bylaws, pursuant to which Buyer was organized and by which Buyer
is governed, (b) any Law to which Buyer is subject or (c) any
Contract to which Buyer is a party that is material to the
financial condition, results of operations or conduct of the
business of Buyer.
21.4 No Brokers or Finders. No agent, broker, finder or
investment or commercial banker, or other Person or firms engaged
by or acting on behalf of Buyer or their respective Affiliates in
connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is
or will be entitled to any broker's or finder's or similar fees
or other commissions as a result of this Agreement or such
transactions.
21.5 Legal Proceedings. There is no Order or Action
pending against or, to the knowledge of Buyer, affecting Buyer
that individually or when aggregated with one or more other
Actions has, or if determined adversely would have, a material
adverse effect on the business, properties, or financial
condition of Buyer or on Buyer's ability to perform this
Agreement.
21.6 Investment Representation. Buyer is acquiring the
Shares from Seller for Buyer's own account, for investment
purposes only and not with a view to or for sale in connection
with the distribution thereof. Buyer agrees to execute any
further certificate or other document representing Buyer's
investment intent or as to any other matter reasonably requested
by Seller to assure compliance with applicable securities laws.
21.7 Legends; Stop-Transfer Orders.
(a) All certificates for the Shares may bear legends in
substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY
STATE AND, ACCORDINGLY, MAY BE OFFERED, SOLD, TRANSFERRED OR
PLEDGED ONLY IN A TRANSACTION WHICH IS REGISTERED UNDER SUCH ACT
AND SUCH LAWS OR IS EXEMPT FROM SUCH REGISTRATION REQUIREMENT."
(b) The certificates for Shares may also bear any legend
required by any applicable state blue sky law.
(c) The certificates for the Shares will also bear a
legend relating to restrictions on transfer imposed pursuant to
the percentage ownership limitation contained in the Charter
Documents.
(d) Seller may impose appropriate stop-transfer
instructions relating to the restrictions set forth herein.
21.8 Status for REIT Ownership and Income Tests. At the
Closing, applying the stock ownership rules of Code Section
856(h), Buyer will be treated as a corporation, and the Shares
that it owns will be treated as owned proportionately by Buyer's
policyholders (its "shareholders" for this purpose).
SECTION 22. COVENANTS WITH RESPECT TO CONDUCT OF SELLER PRIOR TO
CLOSING
From the date of this Agreement up to and including the
Closing Date, Seller covenants and agrees to take such actions,
or refrain from taking such actions, as are set forth in this
Section 5.
22.1 Access. Seller shall, and shall cause the
Subsidiaries and Seller Partnerships to, authorize and permit
Buyer and its representatives (which term shall be deemed to
include its independent accountants and counsel) to have
reasonable access during normal business hours, upon reasonable
notice and in such manner as will not unreasonably interfere with
the conduct of business, to all of the Properties, books,
records, operating instructions and procedures, Tax Returns and
all other information with respect to the businesses of Seller,
Subsidiaries and Seller Partnerships as Buyer may from time to
time reasonably request, and to make copies of such books,
records and other documents and to discuss the business of
Seller, Subsidiaries and Seller Partnerships with Buyer and its
partners and their respective officers, employees, accountants
and counsel, as Buyer considers necessary or appropriate for the
purposes of familiarizing itself with the business of Seller,
obtaining any necessary Approvals of, or Permits for, the
transactions contemplated by this Agreement and conducting an
evaluation of the organization and business of Seller. From the
date of this Agreement up to and including the Closing Date,
Seller will permit, and cause Subsidiaries and Seller
Partnerships to permit, Buyer and its partners, and their
respective officers, directors, agents, attorneys, accountants,
and representatives, to audit such books and records, to meet
with tenants of the Properties, and to conduct such
investigations, tests, or inspections of the Properties as Seller
shall approve in Seller's sole discretion, including intrusive
sampling studies to ascertain whether or not there are any
Hazardous Materials on, in, or under the Properties.
22.2 Material Adverse Changes; SEC Filings; Reports;
Financial Statements.
(a) Seller shall promptly notify Buyer of any event of
which Seller obtains knowledge which has had or might reasonably
be expected to have a material adverse effect on Seller's
business or which if known as of the date hereof would have been
required to be disclosed to Buyer.
(b) Seller will, and will cause the Subsidiaries and
Seller Partnerships to, furnish to Buyer as soon as available
copies of all SEC Filings, reports, renewals, filings,
certificates, statements and other documents filed with any
Governmental Entity.
22.3 Conduct of Business. Except as set forth in Schedule
5.3 and as provided in Section 5.4, from the date of this
Agreement until December 24, 1996, Seller agrees with and for the
benefit of Buyer that Seller shall not, and Seller shall cause
Subsidiaries and Seller Partnerships not to, without the prior
written consent of Buyer, which consent may not unreasonably be
withheld:
(a) conduct the business of Seller, Subsidiaries and
Seller Partnerships in any manner except in the ordinary course
consistent with past practices; or
(b) purchase any real property; or
(c) declare, issue, make or pay any dividend or other
distribution of assets, whether consisting of money, other
tangible or intangible personal property, real property or other
thing of value, to its shareholders, or split, combine, dividend,
distribute or reclassify any Common Shares or any shares of its
Capital Stock, as applicable, except for dividends the record
date of which is after the Closing Date; or
(d) issue, sell, redeem or acquire for value, or agree to
do so, any debt obligations, Common Shares or Capital Stock; or
(e) incur or agree to incur any obligation or liability
(absolute or contingent) that individually calls for payment by
Seller, any Subsidiary or any Seller Partnership of more than
$50,000 individually or in the aggregate except for (i)
liabilities (other than indebtedness for borrowed money) incurred
in the ordinary course of business consistent with past practices
(including, but not limited to, tenant improvements and capital
improvements to Properties) and (ii) liabilities arising out of,
incurred in connection with, or related to the consummation of
the transactions contemplated by this Agreement; or
(f) merge, sell substantially all of its assets or enter
into any other contract involving any other form of business
combination or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution) or adopt any plan of liquidation or
dissolution; or
(g) change the number of Trust Managers or the Board of
Directors of any of the Subsidiaries, or admit any additional
partners to the Seller Partnerships; or
(h) amend the Charter Documents or the charter or
organizational documents of the Subsidiaries or Seller
Partnerships; or
(i) sell, lease, transfer or otherwise dispose of, or
mortgage, pledge or otherwise encumber, other than the lease of
any Property or space therein in the ordinary course of business
consistent with past practices, any of the Properties; or
(j) cancel, satisfy or prepay any debt, obligation,
liability or encumbrance, or waive any claim or right of value of
Seller, Subsidiaries or Seller Partnerships; or
(k) (i) increase in any manner the compensation or fringe
benefits (including, but not limited to, severance benefits)
payable or to become payable by Seller, Subsidiaries, or Seller
Partnerships to any officer, Trust Manager, director, partner,
consultant or independent contractor as salary or wages or under
any bonus, insurance, welfare, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including,
without limitation, the granting of any stock option or stock
appreciation right or performance or restricted stock award),
stock purchase or other employee benefit plan, (ii) increase in
any manner the compensation or fringe benefits (including, but
not limited to, severance benefits) payable or to become payable
by Seller, Subsidiaries or Seller Partnerships to any employee
who is not an officer, Trust Manager, director or partner of
Seller, Subsidiaries or Seller Partnerships as salary or wages or
under any bonus, insurance, welfare, severance, deferred
compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of any stock option
or stock appreciation right or performance or restricted stock
award) stock purchase or other employee benefit plan, except for
such increase in salary, bonuses or severance benefits to such
employees in the ordinary course of business consistent with past
practices and provided that all such increases in salary, bonuses
or severance benefits do not have a material adverse effect on
the business, assets, financial condition or prospects of Seller,
Subsidiaries or Seller Partnerships, or (iii) enter into, adopt,
amend in any material respect (except as required by law) or
terminate any Seller Benefit Plan or any agreement, arrangement,
plan or policy between Seller, Subsidiaries or Seller
Partnerships, as applicable, and one or more of its Trust
Managers, directors, partners, officers, employees or independent
contractors; or
(l) make any tax election other than in connection with
maintaining Seller's qualification as a REIT or take any action
that would cause Seller not to qualify as a REIT, or fail to take
any reasonable action to preserve Seller's qualification as a
REIT; or
(m) make any change in any significant accounting
principles or practices used by Seller, Subsidiaries or Seller
Partnerships, except as required by the SEC; or
(n) amend, modify or change the terms of any Material
Contract other than in the ordinary course of business consistent
with past practice and provided that such amendment, modification
or change does not have a material adverse effect on the
business, assets, financial condition or prospects of Seller,
Subsidiaries or Seller Partnerships; or
(o) acquire any Person (or interest therein) or any
material amount of assets, or make any loans, advances or capital
contributions to, or investments in, any Person; or
(p) incur any indebtedness for borrowed money or assume,
endorse (other than endorsements of negotiable instruments in the
ordinary course of business), guarantee or otherwise become
liable or responsible (whether directly, contingently or
otherwise) for the liabilities or obligations of any Person; or
(q) take any action that would, or fail to take any action
which failure would, result in any of Seller's representations
and warranties set forth in this Agreement not being true; or
(r) agree to or make any commitment to take any action
prohibited by this Section 5.3.
22.4 Prohibition of Solicitation.
(a) General Prohibition. Seller shall not, and it shall
direct and use its best efforts to cause its officers, Trust
Managers, employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant
retained by it) to not, directly or indirectly, initiate, solicit
or encourage (including by way of furnishing information or
assistance), or take any other action to facilitate, the making
or implementation of any proposal or offer (including, without
limitation, any proposal or offer to its shareholders) with
respect to a merger, acquisition, consolidation or similar
transaction involving, or any purchase of all or any significant
portion of the assets or Common Shares of Seller (any such
proposal or offer being hereinafter referred to as an
"Alternative Proposal") or engage in any negotiations concerning,
or provide any confidential information or data to, or have any
discussions with, any Person relating to an Alternative Proposal,
or otherwise facilitate any effort or attempt to make or
implement an Alternative Proposal. Except as disclosed to Buyer
in writing prior to the date of this Agreement, Seller represents
and warrants to Buyer that there are no existing activities,
discussions or negotiations with any Person with respect to an
Alternative Proposal. Seller hereby agrees to notify Buyer
immediately if any inquiries or proposals are received by, any
information is requested from, or any negotiations or discussions
are sought to be initiated or continued with Seller with respect
to an Alternative Proposal.
(b) Unsolicited Offers. Nothing contained in Section
5.4(a) shall prohibit the Trust Managers from: (i) furnishing
information to or entering into discussions or negotiations with
any Person that makes an unsolicited bona fide Alternative
Proposal if, and only to the extent that, (1) prior to furnishing
such information to, or entering into discussions or negotiations
with, such Person, Seller provides written notice to Buyer to the
effect that it is furnishing information to, or entering into
discussions or negotiations with, such Person, (2) prior to
furnishing such information to, or entering into discussions or
negotiations with, such Person, Seller receives from such Person
an executed confidentiality agreement in customary form on terms
not less favorable in any material respect to Seller than the
terms of the letter agreement, dated July 12, 1996 by and between
Buyer and Seller (the "Confidentiality Agreement"), (3) Seller
keeps Buyer informed of the status of any such discussions or
negotiations and (4) Seller shall not disclose the terms of this
Agreement and other information with respect to transactions
among Seller and Buyer except as permitted under Section 12.9
hereto; and (ii) to the extent applicable, complying with Rule
14e-2 promulgated under the Exchange Act with regard to an
Alternative Proposal. Nothing in this Section 5.4 shall permit
Seller to terminate this Agreement or affect any other obligation
of Seller under this Agreement.
(c) Buyer's Continuing Rights. Seller shall be permitted
to enter into a binding agreement relating to an Alternative
Proposal only if the Trust Managers determine, after considering
the advice of its legal counsel, that the failure to consummate
such a transaction might reasonably be expected to subject the
Trust Managers to liability for breach of their fiduciary duties
to Seller's shareholders. The terms of any Alternative Proposal
to which Seller is a party in which Seller is the surviving
entity shall provide that Buyer shall have the right, at its
election, to purchase the Shares upon payment of the Purchase
Price prior to consummation of any such transaction. In the event
that Seller shall not be the surviving entity of such
transaction, upon consummation of such transaction Seller shall
cause such third party to assume the obligations of Seller under
this Agreement and Buyer shall have the right, at its election,
to acquire, upon payment of the Purchase Price, such securities
or other property as it would have been entitled to receive upon
exchange of the Shares if Buyer had purchased the Shares
immediately prior to the consummation of such transaction.
(d) Reimbursement of Expenses. If for any reason,
regardless of fault, the Shares are not sold by Seller to Buyer,
Seller shall reimburse Buyer for all out-of-pocket expenses
incurred by Buyer in connection with the transactions
contemplated by this Agreement upon the submission by Buyer to
Seller of documentation evidencing the incurrence of such
expenses.
22.5 Notification of Certain Matters. Seller shall give
prompt notice to Buyer, and Buyer shall give prompt notice to
Seller, of (a) the occurrence, or failure to occur, of any event
that causes any representation or warranty contained in this
Agreement to be untrue or inaccurate at any time from the date of
this Agreement to the Closing Date and (b) any failure of Buyer
or Seller, as the case may be, to comply with or satisfy, in any
material respect, any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement.
22.6 Permits and Approvals.
(a) Seller and Buyer each agree to cooperate and use their
best efforts to obtain (and will immediately prepare all
registrations, filings and applications, requests and notices
preliminary to all) Approvals and Permits that may be necessary
or which may be reasonably requested by Seller or Buyer to
consummate the transactions contemplated by this Agreement.
(b) To the extent that the Approval of a third party with
respect to any Material Contract is required in connection with
the transactions contemplated by this Agreement, Seller shall use
its best efforts to obtain such Approval prior to the Closing
Date.
SECTION 23. ADDITIONAL CONTINUING COVENANTS AND AGREEMENTS
23.1 Use of Proceeds. The proceeds from the sale of the
Shares to Buyer, net of any costs (including any accounting,
legal and fairness opinion costs and expenses) associated with
the transactions contemplated by this Agreement, shall be applied
by Seller to expenses provided for in the Settlement Agreement
and general reserves.
23.2 Appointment of Trust Managers.
(a) Effective as of the Closing Date, Seller shall
increase the number of its Trust Managers from three (3) to five
(5), and Seller shall appoint two (2) individuals designated by
Buyer to fill the vacancies caused by the increase in the number
of Trust Managers under this Section 6.2(a). In addition, at the
first annual meeting and all subsequent annual meetings of
shareholders after the number of Trust Managers has been
increased to five (5) under this Section 6.2(a), Seller shall
nominate, and use its best efforts to have such persons elected
(which efforts shall include, without limitation, including
Buyer's nominees in management's slate for nomination and
election and solicitation of proxies on their behalf), two (2)
designees of Buyer (which may be different persons than the
persons initially appointed as Trust Managers pursuant to the
first sentence of this Section 6.2(a) if such initial designees
shall have died, resigned, been removed or declined to be
nominated) as Trust Managers. During such time as Seller shall
have individuals designated by Buyer serving as Trust Managers
pursuant to this Section 6.2(a), and except as otherwise provided
in Section 6.2(b) hereof, the number of Trust Managers shall
consist of not more than five (5) persons, including the
designees of Buyer. Such designees of Buyer shall hold office
until resignation, removal, death or expiration of the term for
which he or she was appointed and any successive term for which
such representative is duly elected as a Trust Manager by the
shareholders of Seller. In the event of the death, resignation
or removal from office of a designee of Buyer serving as a Trust
Manager pursuant to the first sentence of this Section 6.2(a),
the Buyer shall be entitled to appoint a replacement designee as
Trust Manager prior to the date Trust Managers are to be elected
at the first annual meeting after the number of Trust Managers
has been increased to five (5) pursuant to this Section 6.2(a).
(b) Additional Appointments. In addition to Buyer's
rights under Section 6.2(a), at any time during the three (3)
year period commencing on the Closing Date, Buyer may, by notice
in writing to Seller, require Seller to increase the number of
Trust Managers from five (5) to seven (7) and to appoint two (2)
individuals designated by Buyer in such written notice to fill
such resulting vacancies. In addition, including Buyer's rights
under Section 6.2(a), at the first annual meeting and all
subsequent annual meetings of shareholders after notice by Buyer
pursuant to the first sentence of this Section 6.2(b), Seller
shall nominate four (4) designees of Buyer (which may be
different persons than those persons initially appointed as Trust
Managers pursuant to such first sentence if such initial
designees shall have died, resigned, been removed or declined to
be nominated) as Trust Managers. During such time as Seller
shall have designees of Buyer serving as Trust Managers pursuant
to this Section 6.2(b), the Trust Managers shall consist of not
more than seven (7) persons, including designees of Buyer. Such
designees of Buyer shall hold office until resignation, removal,
death or expiration of the term for which he or she was appointed
and any successive term for which such representative is duly
elected as a Trust Manager by the shareholders of Seller. In the
event of the death, resignation or removal from office of a
designee of Buyer serving as a Trust Manager pursuant to the
first sentence of this Section 6.2(b), the Buyer shall be
entitled to appoint a replacement designee as Trust Manager.
(c) Qualifications. Each of the representatives
designated by Buyer in accordance with this Section 6.2 shall be
a Person selected by Buyer in its sole discretion; provided,
however, that any such person may not have been involved in any
of the events described in Item 401(d)(1)-(4) of Regulation S-K
promulgated under the Exchange Act.
(d) Committees. At any time that Buyer shall have
exercised its rights under this Section 6.2 to appoint a designee
as Trust Manager, Seller shall appoint at least one of Buyer's
designees on each committee of the Trust Managers, and each such
committee shall contain no more than three (3) members until
expiration of the latest term of office of any designee of Buyer
pursuant to Section 6.2(a) or 6.2(b).
23.3 Environmental Matters. Seller will advise Buyer
promptly (a) upon obtaining knowledge that a Release has occurred
at or upon the Properties and/or (b) upon receipt of a
Notification pertaining to the Properties.
23.4 Status for REIT Ownership and Income Tests. Following
the Closing, and at all subsequent times during which Buyer owns
any of the Shares, applying the stock ownership rules of Code
Section 856(h), Buyer will be treated as a corporation, and the
Shares that it owns will be treated as owned proportionately by
Buyer's policyholders (its "shareholders" for this purpose).
23.5 Prohibited Transactions. Seller shall not effect any
business transactions, or agree to effect any business
transactions, with Affiliates, Trust Managers or employees of
Seller except in the ordinary course of business and unless the
consideration paid by Seller in any such business transaction is
fair value at market rates.
23.6 Seller/Buyer Registration Rights Agreement.
Contemporaneously with the Closing, Buyer and Seller shall enter
into a Registration Rights Agreement substantially in the form of
Exhibit B.
23.7 REIT Qualification. Seller shall take all actions
necessary to maintain Seller's qualification as a REIT and,
without the written consent of Buyer, shall take no action that
would cause Seller not to qualify as a REIT or fail to take any
action that would preserve Seller's qualification as a REIT.
23.8 Services by Buyer. To the extent permitted by law and
the Charter Documents, Buyer shall have the right to provide
management and leasing services to Seller at fair market rates.
SECTION 24. GENERAL CONDITIONS OF PURCHASE
The obligations of the parties to effect the Closing shall
be subject to the following conditions unless waived in writing
by all parties:
24.1 No Orders. 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.
24.2 Approvals. To the extent required by applicable Law,
all Permits and Approvals required to be obtained in connection
with the Closing from any Governmental Entity or any consent from
a third party material to Seller or its business shall have been
received or obtained on or prior to the Closing Date.
24.3 Absence of Litigation. No Action before any
Governmental Entity pertaining to the transactions contemplated
by this Agreement shall have been instituted on or before the
Closing Date whether or not Buyer or its Affiliates is a party.
24.4 New York Stock Exchange. The Shares shall have been
approved for listing, upon official notice of issuance, on the
New York Stock Exchange. Seller shall have received a letter or
other assurance from the New York Stock Exchange confirming that
approval by Seller's shareholders of the issuance of the Shares
is not required under the rules of the New York Stock Exchange.
Seller will use its best efforts to maintain the listing of its
Common Shares on the New York Stock Exchange.
SECTION 25. CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to effect the Closing shall be
subject to the following conditions except to the extent waived
in writing by Buyer:
25.1 Settlement Agreement. The final settlement of the
Pure World Litigation by the court overseeing such settlement
shall have occurred on or before the Closing Date.
25.2 Accuracy of Seller's Representations and
Warranties. All representations and warranties of Seller set
forth in this Agreement shall be true and correct at the Closing
Date as if made on and as of the Closing Date.
25.3 Performance by Seller. Seller shall have in all
material respects performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by Seller on or
before the Closing Date, including the covenants set forth in
Section 5.
25.4 No Material Adverse Change. During the period from
the date of the Audited Financial Statements to the Closing Date,
(i) there shall not have been any material adverse change in the
business, assets, prospects, financial condition or the results
of operations of Seller, and Seller shall not have sustained any
material Loss or damage to its assets (including those of
Subsidiaries and Seller Partnerships), except for Losses covered
by insurance, that adversely affects its ability to conduct a
material part of its business and (ii) there shall not have
occurred any material adverse change in the financial markets in
the United States, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development
involving a prospective change in national or international
political, financial or economic conditions, in each case the
effect of which is such as to, in the judgment of Buyer,
significantly impair the marketability or value of the Shares,
(iii) the trading in any securities of the Company shall not have
been suspended or limited by the Commission or the New York Stock
Exchange, trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market shall
not have been suspended or limited, minimum or maximum prices for
trading shall not have been fixed, and maximum ranges for prices
shall not have been required, by any of said exchanges or by such
system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other Governmental Entity, and
(iv) a banking moratorium shall not have been declared by
Federal, Texas or New York authorities.
25.5 Certification by Seller. Buyer shall have received a
certificate, dated as of the Closing Date, signed by the
President of Seller, certifying, in such detail as Buyer and its
counsel reasonably may request, that the conditions specified in
Section 8.1, Section 8.2, Section 8.3, and Section 8.4 have been
fulfilled.
25.6 Opinion of Seller's Counsel. Buyer shall have
received from counsel for Seller an opinion, dated as of the
Closing Date, in form and substance reasonably satisfactory to
Buyer as to the matters set forth in Schedule 8.6.
25.7 No Other Business Combination Transaction. Seller
shall not have entered into an agreement relating to an
Alternative Proposal and its Trust Managers shall not have
recommended an Alternative Proposal.
SECTION 26. CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller to effect the Closing shall be
subject to the following conditions, except to the extent waived
in writing by Seller:
26.1 Settlement Agreement. The final settlement of the
Pure World Litigation by the court overseeing such settlement
shall have occurred on or before the Closing Date.
26.2 Accuracy of Buyer's Representations and Warranties.
All representations and warranties of Buyer set forth in this
Agreement shall be true and correct at the Closing Date as if
made on and as of the Closing Date.
26.3 Buyer's Performance. Buyer shall have in all
material respects performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by Buyer on or before
the Closing Date.
26.4 Certification by Buyer. Seller shall have received a
certificate, dated as of the Closing Date, signed by the
President or a Vice President of Buyer, certifying, in such
detail as Seller and its counsel reasonably may request, that the
conditions specified in Section 9.2 and Section 9.3 have been
fulfilled.
26.5 Opinion of Buyer's Counsel. Seller shall have
received from counsel to Buyer an opinion, dated as of the
Closing Date, in form and substance reasonably satisfactory to
Seller as to the matters set forth in Schedule 9.5.
SECTION 27. TERMINATION OF OBLIGATIONS; SURVIVAL
27.1 Termination of Agreement. This Agreement and the
transactions contemplated by this Agreement may be terminated at
any time before the Closing Date, as follows and in no other
manner:
(a) Mutual Consent. By mutual consent in writing of
Buyer and Seller.
(b) Conditions to Buyer's Performance Not Met. By Buyer
with written notice to Seller if the Closing Date has not
occurred on or before December 31, 1996. Notwithstanding the
foregoing, Buyer may not exercise any right to terminate this
Agreement pursuant to this paragraph if Buyer has breached in any
material respect its covenants or agreements set forth in this
Agreement in any manner that shall have proximately contributed
to the failure of the Closing Date to occur on or before December
31, 1996.
(c) Conditions to Seller's Performance Not Met. By
Seller with written notice to Buyer if the Closing Date has not
occurred on or before December 31, 1996. Notwithstanding the
foregoing, Seller may not exercise any right to terminate this
Agreement pursuant to this paragraph if Seller has breached in
any material respect its covenants or agreements set forth in
this Agreement in any manner that shall have proximately
contributed to the failure of the Closing Date to occur on or
before December 31, 1996.
(d) Misrepresentation or Material Breach. By Buyer or
Seller with written notice to the other party if there has been a
misrepresentation or material breach on the part of Seller or
Buyer, respectively, in their respective representations,
warranties and covenants set forth herein, which, with respect to
a breach of a covenant, if curable, has not been cured within ten
business days after receipt of notice from Buyer or Seller of the
terminating party's intention to terminate.
(e) Environmental Noncompliance. By Buyer in the event
of the discovery of any Release or other matter prior to the
Closing Date which, if known to Seller as of the date of this
Agreement, would have constituted a breach of the representations
and warranties contained in Section 3.17.
27.2 Effect of Termination. In the event that this
Agreement shall be terminated pursuant to Section 10.1, all
further obligations of the parties under this Agreement shall
terminate; provided that the obligations of the parties contained
in this Section 10.2, Section 11, and Section 12, (other than
Sections 12.3 and 12.8) shall survive any such termination. A
termination under Section 10.1 shall not relieve any party of any
liability for a breach of, or for any misrepresentation under,
this Agreement, or be deemed to constitute a waiver of any
available remedy (including specific performance if available)
for any such breach or misrepresentation.
27.3 Survival of Representations and Warranties. The
representations and warranties contained in or made pursuant to
this Agreement shall expire on the third anniversary of the
Closing except that (a) the representations and warranties
contained in Section 3.2 shall continue forever (subject to all
defenses of Seller available under applicable Law, including the
expiration of the applicable statute of limitations period), (b)
the representations and warranties contained in Section 3.14
shall continue through the applicable statute of limitations, (c)
representations and warranties which are intentionally
misrepresented shall continue through the later of the first
anniversary of the Closing Date and one year following the date
of actual discovery of such intentional misrepresentation, and
(d) if a claim or notice is given under Section 11 with respect
to the breach of any representation or warranty prior to the
applicable expiration date, such representation or warranty shall
continue indefinitely until such claim is finally resolved. All
covenants and agreements of the parties hereto shall be
continuing and shall survive the Closing Date pursuant to the
terms thereof.
SECTION 28. INDEMNIFICATION
28.1 Obligations of Seller. Seller agrees to indemnify,
defend and hold harmless Buyer and its officers, employees,
agents, directors and Affiliates (collectively, the "Buyer
Indemnified Parties") from and against any and all Losses of the
Buyer Indemnified Parties (as incurred) as a result of, or based
upon, relating to or arising out of, directly or indirectly, the
transactions contemplated hereby or by the Registration Rights
Agreement, including, without limitation, as a consequence of (a)
any inaccuracy in, or breach or nonperformance of, any of the
representations, warranties, covenants or agreements made by
Seller in, or pursuant to, this Agreement, or (b) any pending or
threatened Action brought by Seller's shareholders or creditors
or any other Person other than the Buyer Indemnified Parties or
their creditors relating to, or arising out of or in connection
with, directly or indirectly, the transactions contemplated under
this Agreement; provided, however, that Seller shall not be
obligated to indemnify, defend or hold harmless any of the Buyer
Indemnified Parties for any claims based solely on actions taken
by any of the Buyer Indemnified Parties other than the
performance of the covenants and agreements to be undertaken by
Buyer pursuant to the terms and conditions of this Agreement and
any other action authorized in writing by Seller. As a condition
to the rights of any of the Buyer Indemnified Parties under this
Section 11, Seller may require that any such Person provide a
written undertaking that such Person will repay to Seller any
amount expended by Seller to indemnify, defend or hold harmless
such Person in the event and to the extent a court determines
that Seller's indemnification or defense of such Person is
prohibited by applicable Law.
28.3 Obligations of Buyer. Buyer agrees to indemnify,
defend and hold harmless Seller and its Trust Managers, officers,
employees, agents, directors and Affiliates (collectively, the
"Seller Indemnified Parties") from and against any Losses of the
Seller Indemnified Parties as a result of, or based upon or
arising out of, directly or indirectly, (a) any material
inaccuracy in, or material breach or material nonperformance of,
any of the representations, warranties, covenants or agreements
made by Buyer in, or pursuant to, this Agreement, or (b) any
pending or threatened Action brought by Buyer's policyholders or
creditors relating to, or arising out of or in connection with,
directly or indirectly, the transactions contemplated under this
Agreement; provided, however, that Buyer shall not be obligated
to indemnify, defend or hold harmless any of the Seller
Indemnified Parties for any claims based solely on actions taken
by any of the Seller Indemnified Parties other than the
performance of the covenants and agreements to be undertaken by
Seller pursuant to the terms and conditions of this Agreement and
any other action authorized in writing by Buyer. As a condition
to the rights of any of the Seller Indemnified Parties under this
Section 11, Buyer may require that any such Person provide a
written undertaking that such Person will repay to Buyer any
amount expended by Buyer to indemnify, defend or hold harmless
such Person in the event and to the extent a court determines
that Buyer's indemnification or defense of such Person is
prohibited by applicable Law.
28.3 Procedure.
(a) Notice. Any party seeking indemnification with
respect to any Loss shall give notice to the party required to
provide indemnity hereunder (the "Indemnifying Party") on or
before the date specified in Section 11.4.
(b) Defense of Claim. If any claim, demand or liability
is asserted by any third party against any Indemnified Party, the
Indemnifying Party shall have the right, unless otherwise
precluded by applicable law, to conduct and control the defense,
compromise or settlement of any Action or threatened Action
brought against the Indemnified Party in respect of matters
embraced by the indemnity set forth in this Section 11. The
Indemnified Party shall have the right to employ counsel separate
from counsel employed by the Indemnifying Party in connection
with any such Action or threatened Action and to participate in
the defense thereof, but the fees and expenses of such counsel
employed by the Indemnified Party shall be at the sole expense of
the Indemnified Party unless (i) the Indemnifying Party shall
have elected not, or, after reasonable written notice of any such
Action or threatened Action, shall have failed, to assume or
participate in the defense thereof, (ii) the employment thereof
has been specifically authorized by the Indemnifying Party in
writing, or (iii) the parties to any such Action or threatened
Action (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and the Indemnified
Party shall have been advised in writing by counsel for the
Indemnified Party that there may be one or more defenses
available to the Indemnified Party that are not available to the
Indemnifying Party or legal conflicts of interest pursuant to
applicable rules of professional conduct between the Indemnifying
Party and the Indemnified Party (in any which case, the
Indemnifying Party shall not have the right to assume the defense
of such Action on behalf of the Indemnified Party), in either of
which events referred to in clauses (i), (ii) and (iii) the fees
and expenses of such counsel employed by the Indemnified Party
shall be at the expense of the Indemnifying Party. The
Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise any such Action or
threatened Action or consent to the entry of any judgment which
does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party a release
from all liability in respect of such Action or threatened
Action. Unless the Indemnifying Party shall have elected not, or
shall have after reasonable written notice of any such Action or
threatened Action failed, to assume or participate in the defense
thereof, the Indemnified Party may not settle or compromise any
Action or threatened Action without the written consent of the
Indemnifying Party. If, after reasonable written notice of any
such Action or threatened Action, the Indemnifying Party neglects
to defend the Indemnified Party, a recovery against the latter
suffered by it in good faith, is conclusive in its favor against
the Indemnifying Party; provided, however, that no such
conclusive presumption shall be made if the Indemnifying Party
has not received reasonable written notice of the Action against
the Indemnified Party.
28.4 Survival. The indemnity set forth in this Section 11
shall survive the Closing or termination of this Agreement and
shall remain in effect for a period of (a) with respect to a
breach of a representation or warranty, for the period through
which such representation or warranty shall continue pursuant to
Section 10.3 (including such period of time through which such
representation or warranty shall be extended until resolution of
a claim with respect thereto) and (b) with respect to a breach of
a covenant or agreement or an Action referred to in clause (b) of
Sections 11.1 or 11.2, forever.
28.5 Notice by Seller. Seller and Buyer agree to notify
in writing the other party of any liabilities, claims or
misrepresentations, breaches or other matters covered by this
Section 11 upon discovery or receipt of notice thereof (other
than from such other party), whether before or after Closing.
SECTION 29. GENERAL
29.1 Amendments; Waivers. This Agreement and any Schedule
or Exhibit attached hereto or referenced herein may be amended
only by agreement in writing of all parties. No waiver of any
provision nor consent to any exception to the terms of this
Agreement shall be effective unless in writing and signed by the
party to be bound and then only to the specific purpose, extent
and instance so provided.
29.2 Schedules; Exhibits; Integration. Each Exhibit and
Schedule delivered pursuant to the terms of this Agreement shall
be in writing and shall constitute a part of the Agreement. This
Agreement, together with such Exhibits and Schedules, constitutes
the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and
understandings of the parties in connection therewith.
29.3 Best Efforts; Further Assurances. Each party will
use its best efforts to cause all conditions to its obligations
to be timely satisfied and to perform and fulfill all obligations
on its part to be performed and fulfilled under this Agreement.
The parties shall cooperate with each other in such actions and
in securing requisite Approvals. Each party shall execute and
deliver such further certificates, agreements and other documents
and take such other actions as the other party may reasonably
request to consummate or implement the transactions contemplated
hereby or to evidence such events or matters, including the
seeking of any necessary shareholder approvals.
29.4 Governing Law. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS
OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW
OR CONFLICT OF LAW PROVISION (WHETHER OF THE STATE OF TEXAS OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.
29.5 No Assignment. Except as otherwise specifically
provided herein, neither this Agreement nor any rights or
obligations under it are assignable by any party, except that
Buyer may assign its rights hereunder (including but not limited
to its rights under Section 11) to any member of the USAA Group.
Buyer shall remain liable to Seller for the payment of the
Purchase Price and other obligations of Buyer hereunder
notwithstanding a permitted assignment.
29.6 Headings. The descriptive headings of the Sections
and subsections of this Agreement are for convenience only and do
not constitute a part of this Agreement.
29.7 Counterparts. This Agreement and any other
agreement or document delivered pursuant hereto may be executed
in one or more counterparts and by different parties in separate
counterparts. All of such counterparts shall constitute one and
the same agreement or other document and shall become effective
when one or more counterparts of this Agreement have been signed
by each party and delivered to the other party.
29.8 Publicity and Reports. Seller and Buyer shall
coordinate all publicity relating to the transactions
contemplated by this Agreement and no party shall issue any press
release, publicity statement or other public notice relating to
this Agreement, or the transactions contemplated by this
Agreement, without obtaining the prior consent of the other
party, except to the extent that independent legal counsel to
Seller or Buyer, as the case may be, shall advise Seller or Buyer
in writing that a particular action is required by applicable Law
(in which event the party taking such action shall cooperate with
the other party in connection with any disclosure or publicity
resulting from such action).
29.9 Confidentiality. All information disclosed by any
party (or its representatives) to the other party whether before
or after the date hereof, in connection with the transactions
contemplated by, or the discussions and negotiations preceding,
this Agreement to any other party (or its representatives) shall
be kept confidential by such other party and its representatives
and shall not be used by any such Persons other than as
contemplated by this Agreement, except (a) to the extent that
such information (i) was known by the recipient when received,
(ii) is or hereafter becomes lawfully obtainable from other
public sources or (iii) is necessary or appropriate to be
disclosed to a Governmental Entity having jurisdiction over the
parties, (b) may otherwise be required by Law to be disclosed or
(c) to the extent such duty as to confidentiality is waived in
writing by the other party. If this Agreement is terminated in
accordance with its terms, each party shall use all reasonable
efforts to return upon written request from the other party all
documents (and reproductions thereof) received by it or its
representatives from such other party (and, in the case of
reproductions, all such reproductions made by the receiving
party) that include information not within the exceptions
contained in the first sentence of this Section 12.9, unless the
recipients provide assurances reasonably satisfactory to the
requesting party that such documents have been destroyed.
29.10 Parties in Interest. This Agreement shall be binding
upon and inure to the benefit of each party, and nothing in this
Agreement, express or implied, is intended to confer upon any
other Person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. Nothing in this Agreement
is intended to relieve or discharge the obligation of any third
Person to or to confer any right of subrogation or action over or
against any party to this Agreement.
22.11 Notices. Any notice or other communication hereunder
must be given in writing and (a) either delivered in person, (b)
transmitted by telex, telefax or telecopy mechanism, (c) mailed
by first class mail, return receipt requested, or (d) delivered
by overnight mail or courier service, as follows:
If to Buyer, addressed to:
USAA Real Estate Company
8000 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Freeway
▇▇-▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller, addressed to:
American Industrial Properties REIT
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or to such other person as any party
shall have last designated by such notice to the other parties.
Each such notice or other communication shall be effective (i) if
given by telecommunication, when transmitted to the applicable
number so specified in this Section 12.11 and an appropriate
answer back is received, (ii) if given by mail, three days after
such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when actually delivered at such address.
29.12 Expenses. Seller and Buyer shall pay their own
respective expenses incident to the negotiation, preparation and
performance of this Agreement and the transactions contemplated
hereby, including but not limited to the fees, expenses and
disbursements of their respective financial advisers, accountants
and counsel.
29.13 Remedies; Waiver. All rights and remedies existing
under this Agreement and any related agreements or documents are
cumulative to and not exclusive of any rights or remedies
otherwise available under applicable Law. No failure on the part
of any party to exercise or delay in exercising any right
hereunder shall be deemed a waiver thereof, nor shall any single
or partial exercise preclude any further or other exercise of
such or any other right. Buyer and Seller shall be entitled to
seek any equitable remedy to the extent such remedy is available
under applicable Law.
29.14 Representation By Counsel; Interpretation. Seller
and Buyer each acknowledge that each party to this Agreement has
been represented by counsel in connection with this Agreement
and the transactions contemplated by this Agreement. Accordingly,
any rule of Law or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement
against the party that drafted it has no application and is
expressly waived. The provisions of this Agreement shall be
interpreted in a reasonable manner to effect the intent of Buyer
and Seller, and no rule of strict construction shall be applied
against any party to this Agreement.
29.15 Severability. If any provision of this Agreement is
determined to be invalid, illegal or unenforceable by any
Governmental Entity, the remaining provisions of this Agreement
to the extent permitted by Law shall remain in full force and
effect to the extent permitted by Law, and the parties hereby to
the same extent waive any provision of Law that renders any
provision hereof prohibited or unenforceable in any respect.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed by its duly authorized officers as
of the day and year first above written.
"BUYER"
USAA REAL ESTATE COMPANY
By: /s/
T. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President - Operations
"SELLER"
AMERICAN INDUSTRIAL PROPERTIES REIT
By: /s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer