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EXHIBIT 2.1
AGREEMENT OF PURCHASE AND SALE
DATED JUNE 20, 2000
BETWEEN
PACIFIC GULF PROPERTIES INC.
AND
CALWEST INDUSTRIAL PROPERTIES, LLC
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TABLE OF CONTENTS
ARTICLE I PURCHASE AND SALE OF PROPERTY.........................................................................1
Section 1.1 Sale..................................................................................1
Section 1.2 Deposit; Purchase Price...............................................................2
Section 1.3 Adjustments to Purchase Price.........................................................3
Section 1.4 Material Adverse Matters..............................................................5
Section 1.5 Partnership Properties................................................................6
Section 1.6 Ground Leases.........................................................................7
Section 1.7 Right of First Refusal Properties.....................................................8
Section 1.8 Deferred Properties...................................................................8
ARTICLE II REPRESENTATIONS AND WARRANTIES; BUYER'S EXAMINATION.................................................10
Section 2.1 Representations and Warranties of the Seller.........................................10
Section 2.2 Representations and Warranties of the Buyer..........................................12
Section 2.3 Survival of Representations and Warranties; Limitations..............................13
Section 2.4 The Buyer's Independent Investigation................................................14
Section 2.5 Release..............................................................................16
Section 2.6 Release Related to General Physical Items and ADA....................................17
Section 2.7 Survival.............................................................................17
ARTICLE III TITLE..............................................................................................18
Section 3.1 Conditions of Title..................................................................18
Section 3.2 Evidence of Title....................................................................19
Section 3.3 Cost of Title and Other Closing Costs................................................19
ARTICLE IV RISK OF LOSS; INSURANCE PROCEEDS; SUBSEQUENT MATERIAL ADVERSE MATTERS..............................20
Section 4.1 Minor Loss...........................................................................20
Section 4.2 Major Loss...........................................................................20
Section 4.3 Minor Loss - Subsequent Material Adverse Matter......................................21
Section 4.4 Major Loss - Subsequent Material Adverse Matter......................................21
Section 4.5 Certain Procedures...................................................................21
ARTICLE V BROKERS AND EXPENSES.................................................................................22
Section 5.1 Brokers..............................................................................22
Section 5.2 Expenses.............................................................................22
ARTICLE VI COVENANTS...........................................................................................22
Section 6.1 Maintenance, Leasing and Sale of the Properties......................................22
Section 6.2 Assumption of Mortgages..............................................................24
Section 6.3 Service Contracts....................................................................24
Section 6.4 Tenant Notices; Estoppels............................................................25
Section 6.5 Solicitation; Negotiations...........................................................25
Section 6.6 Proxy Statement; Meeting of Stockholders.............................................26
Section 6.7 No Employees.........................................................................27
Section 6.8 Management Agreement.................................................................27
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ARTICLE VII CLOSING AND ESCROW.................................................................................27
Section 7.1 Escrow Instructions..................................................................27
Section 7.2 Closing..............................................................................27
Section 7.3 Deposit of Documents.................................................................27
Section 7.4 Further Efforts......................................................................30
Section 7.5 Prorations...........................................................................30
ARTICLE VIII CONDITIONS TO CLOSING.............................................................................31
Section 8.1 Conditions to Each Party's Obligations to Effect the Closing.........................31
Section 8.2 Conditions to the Obligations of the Seller..........................................31
Section 8.3 Conditions to the Obligations of the Buyer...........................................32
ARTICLE IX TERMINATION.........................................................................................33
Section 9.1 Termination..........................................................................33
Section 9.2 Effect of Termination................................................................35
Section 9.3 Fees and Expenses....................................................................35
Section 9.4 Termination after the Closing........................................................37
Section 9.5 Effect of Termination after the Closing..............................................38
ARTICLE X MISCELLANEOUS........................................................................................40
Section 10.1 Notices..............................................................................40
Section 10.2 Entire Agreement.....................................................................41
Section 10.3 Entry and Indemnity..................................................................41
Section 10.4 Time.................................................................................42
Section 10.5 Attorneys' Fees......................................................................42
Section 10.6 Assignment...........................................................................42
Section 10.7 Counterparts.........................................................................42
Section 10.8 Governing Law........................................................................42
Section 10.9 Confidentiality and Return of Documents..............................................42
Section 10.10 Interpretation of Agreement..........................................................43
Section 10.11 Limited Liability....................................................................43
Section 10.12 Amendments...........................................................................43
Section 10.13 No Recording.........................................................................43
Section 10.14 Drafts Not an Offer to Enter Into a Legally Binding Contract.........................43
Section 10.15 No Partnership.......................................................................44
Section 10.16 Survival.............................................................................44
Section 10.17 Oregon Statutory Disclaimer..........................................................44
Section 10.18 Survival of Article X................................................................44
Section 10.19 Delivery Items.......................................................................44
Section 10.20 Intent to Transfer Industrial Portfolio..............................................45
Section 10.21 Defined Terms........................................................................45
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AGREEMENT OF PURCHASE AND SALE
This Agreement of Purchase and Sale ("Agreement"), dated June 20, 2000,
is between Pacific Gulf Properties Inc. (the "Seller"), and CalWest Industrial
Properties, LLC ("the Buyer"). The definition of certain capitalized terms used
herein, as well as the location of the definition of other capitalized terms
used herein, are set forth in Section 10.19 hereof.
ARTICLE I
PURCHASE AND SALE OF PROPERTY
SECTION 1.1 SALE.
(a) The Seller agrees to sell to the Buyer, and the Buyer
agrees to purchase from Seller, subject to the terms, covenants and conditions
set forth herein:
(i) certain parcels of real property, together with any and all
rights, privileges and easements appurtenant thereto owned by
the Seller, which includes, without limitation, the ground
lessee's interest in certain ground leases therein, as
described on EXHIBIT B (each, a "Ground Lease," and
collectively the "Ground Leases") and all improvements,
buildings, systems, fixtures, water and water rights located
therein or thereon owned by the Seller, which real property is
more particularly described in EXHIBIT A attached hereto (the
legal descriptions included in EXHIBIT A being subject to the
Buyer's review and confirmation during the Diligence Period)
and made a part hereof (each, a "Real Property" and
collectively the "Real Properties"); provided, however, that
in the case of Real Properties subject to Ground Leases, the
term Real Property shall refer to the Seller's ground
leasehold interest in the real property covered thereby and
the Seller's fee simple interest in the improvements on such
real property);
(ii) The Seller's interest in all tenant leases and any other
occupancy agreements (including, without limitation, any
telecommunications licenses or agreements, signage agreements
or billboard agreements applicable to the Properties and any
subleases under the Ground Leases) (each, a "Lease" and
collectively the "Leases") affecting the right to occupy any
portion of the Real Properties;
(iii) The Seller's interest in any intangible personal property now
or hereafter used in connection with the operation,
maintenance, management, or occupancy of the Real Properties,
including, without limitation, (a) the Seller's interest in
all permits, approvals, development rights, air rights and
entitlements, if any, with respect to the foregoing, (b) the
Seller's interest in all permits and approvals, if any, with
respect to the Development Properties (as defined below), (c)
the Seller's interest in any and all warranties and guaranties
relating the Properties, (d) the Seller's interest in any
stock, warrants or rights to purchase stock or other ownership
interests arising out of telecommunication licenses or
agreements, and (e) the Seller's interest in any trade names
and trademarks associated with the Real Property, provided
that the Seller makes no absolutely representation that it
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has any rights whatsoever with respect to trade names or
trademarks and provided that in no event will the Buyer
acquire any rights in or to the Seller's name or logo
(collectively, the "Intangible Property"); and
(iv) The Seller's interest in any personal property owned by the
Seller, if any, located on the Real Property and used
exclusively in the operation or maintenance of the Real
Properties including, without limitation all water rights that
are personal property under Arizona law, including without
limitation all type 2 nonirrigation grandfathered rights (if
applicable), all irrigation rights, all ditch rights, right to
irrigation district stock, all contracts for effluent, all
contracts for Central Arizona Project water, and all other
contractual rights to water in or relating to or used in
connection with the Properties and all shares of stock
evidencing any such water right, but excluding any personal
property owned by the Seller and used in the leasing or
management offices of the Real Properties (including, without
limitation, any vehicles), located on the Real Properties, as
the same may be further described in any list which is in the
Seller's possession and is furnished to the Buyer within the
Diligence Period as defined in Section 1.4(a) below (the
"Personal Property").
Each Real Property, the related Leases and the related Intangible Property and
Personal Property to be transferred to the Buyer is referred to herein as a
"Property," and all are collectively referred to herein as the "Properties."
(b) The parties agrees that, within a commercially reasonable
time after the Closing (as defined below), the Buyer, at its cost, shall remove
from the Properties any name or logo of the Seller (other than in connection
with the Seller's role, if any, with respect to the management of the
Properties). If the Buyer does not timely remove such names or logos, the Seller
shall have the right to enter the Properties, remove such names and logos from
the Properties and the Buyer shall be obligated to reimburse the Seller for its
expenses related thereto.
SECTION 1.2 DEPOSIT; PURCHASE PRICE.
(a) Within two (2) business days after the execution and
delivery of this Agreement by the Buyer and the Seller, the Buyer shall deposit
into escrow with First American Title Insurance Company, ▇▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇,
fax number (▇▇▇) ▇▇▇-▇▇▇▇ (the "Title Company") an all-cash payment in
immediately available funds in the amount of Twenty-Five Million Dollars
($25,000,000) (the "Deposit"). The Deposit shall be invested in investments
reasonably approved by both parties and pursuant to escrow instructions
consistent with the terms hereof.
(b) The purchase price of the Properties is Eight Hundred
Eighty-Three Million Five Hundred Thousand Dollars ($883,500,000), subject to
adjustment as set forth in Section 1.3 hereof (after giving effect to such
adjustments, if any, the "Purchase Price"); the portion of the Purchase Price
attributable to each Property (the "Allocated Values") are set forth on EXHIBIT
A-1 attached hereto.
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(c) The Purchase Price shall be paid as follows:
(i) Upon the consummation of the purchase and sale of
the Properties (other than Deferred Properties) contemplated hereunder (the
"Closing"), the Buyer shall receive a credit towards the Purchase Price in the
amount of the sum of (1) an amount equal to the product of (A) a fraction, the
numerator of which is the aggregate Allocated Values for all Properties to be
purchased at such Closing and the denominator of which is the remainder that
results when the aggregate of the Allocated Values of all Deferred Properties
that are not purchased at the Closing is subtracted from the aggregate of the
Allocated Values of all Properties (giving effect to Section 1.8(c), which
provides that Deleted Properties cease to be Properties) and (B) the Deposit,
plus interest on such product from the date of placement of the Deposit into
escrow to the Closing Date, and (2) the aggregate unpaid principal balance as of
the date of Closing of all loans secured by a lien on any of the Properties (a
list of all such loans is set forth on EXHIBIT C hereto (the "Loans")) to the
extent such Loan is assumed by the Buyer pursuant to Section 6.2 hereof (the
parties agree that substantially similar credits will be applied to the purchase
price of any Deferred Property that is to be purchased after the Closing using
the principles of the foregoing formula).
(ii) The balance of the Purchase Price, except for
the Allocated Value of any Deferred Property that is not being purchased by the
Buyer at the Closing, shall be paid by the Buyer to the Seller by wire transfer
in immediately available funds to the Title Company at the Closing.
(iii) The Allocated Value of each Deferred Property
that is not purchased by the Buyer at the Closing shall be paid upon the closing
of the purchase of such Deferred Property using the closing procedures set forth
in Section 1.8 hereof, including application of the portion of the Deposit
applicable thereto.
SECTION 1.3 ADJUSTMENTS TO PURCHASE PRICE. In addition to the
prorations and credits contemplated by Section 7.5 below, the Purchase Price
shall be increased or decreased as follows:
(a) the Purchase Price shall be decreased by the aggregate
amount of the Allocated Values of any Deleted Properties;
(b) the Purchase Price shall be increased by the purchase
price, as set forth on EXHIBIT A-2 (each, a "Partnership Property Price"), of
each Partnership Property that becomes a Property under the terms of Section 1.5
hereof;
(c) the Purchase Price shall be increased, with respect to
each of the properties identified on EXHIBIT A hereto as "Development
Properties" that are not otherwise Deleted Properties or Deferred Properties, by
the sum of the following: (i) the purchase price paid by the Seller for each
such Development Property (such purchase prices, as agreed by the Buyer and the
Seller, are set forth on EXHIBIT D hereto), (ii) the Seller's out-of-pocket
third party costs (a summary of such costs to date is set forth on EXHIBIT D
hereto), whether expensed or capitalized for financial reporting purposes, for
the development of such Development Properties, plus (iii) an amount that would
accrue on the amounts set forth in preceding clauses
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(i) and (ii) at the rate of eleven percent (11%) interest per annum, not
compounded, from the date hereof or, if later, the date of expenditure of such
costs, through the Closing Date.
(d) with respect to the Properties identified on EXHIBIT A
hereto as "Fully-Leased Properties" (defined as properties identified on EXHIBIT
A hereto as "Fully-Leased Properties" that are not otherwise Deleted Properties
or Deferred Properties), if at Closing there exists any rentable square footage
that is not subject to a Fully-Paying Executed Lease, then the Purchase Price
shall be adjusted as follows (in each case other than any such amounts for which
the Buyer has been compensated under Section 4.1, 4.2, 4.3 or 4.4):
(i) first, with respect to any Non-Paying Lease in
effect at Closing at a Fully-Leased Property, the Purchase Price shall be
decreased by the amount of the Payment Reduction that will apply with respect to
periods after the Closing Date, but in no event more than six (6) months; and
(ii) second, with respect to any rentable square
footage at a Fully-Leased Property that is not subject to a Fully-Paying
Executed Lease or a Non-Paying Lease at Closing, the Purchase Price shall be
decreased by the sum of the following items from EXHIBIT E applicable to any of
such square footage: (A) pro forma tenant improvements per square foot, (B)
leasing commissions per square foot, and (C) six (6) months pro forma base rent
per square foot, operating expenses, taxes and assessments that would otherwise
be payable by a tenant of such space.
(e) with respect to the Property identified on EXHIBIT A
hereto as the "Spectrum" (the "Spectrum") (as long as such property is not
otherwise a Deleted Property or a Deferred Property), if at Closing the
aggregate square footage subject to a Fully-Paying Executed Lease is less than
95% of the total rentable square footage at the Spectrum (such shortfall, the
"Spectrum Leased Space Shortfall" (e.g., if the square footage subject to a
Fully-Paying Executed Lease is 91% of the total rentable square footage, the
Spectrum Leased Space Shortfall shall be 4% of the total rentable square
footage)), then the Purchase Price shall be adjusted as follows (in each case
other than any such amounts for which the Buyer has been compensated under
Section 4.1, 4.2, 4.3 or 4.4):
(i) first, with respect to any square footage, up to
the number of square feet in the Spectrum Leased Space Shortfall, that is
subject to a Non-Paying Lease in effect at Spectrum at Closing, the Purchase
Price shall be decreased by the amount of the Payment Reduction attributable to
such square footage that will apply with respect to periods after the Closing
Date, but in no event more than six (6) months; and
(ii) second, if the square footage subject to
Non-Paying Leases is less than the Spectrum Leased Space Shortfall (such
shortfall, the "Spectrum Vacant/Delinquent Space" (e.g., if, as noted above, the
Spectrum Leased Space Shortfall is 4% of total rentable square footage and the
square footage subject to Non-Paying Leases is 3% of the total rentable square
footage, the Spectrum Vacant/Delinquent Space shall be 1% of the total rentable
square footage)), then the Purchase Price shall be decreased by the sum of the
following items from EXHIBIT E applicable to the Spectrum Vacant/Delinquent
Space: (A) pro forma tenant improvements per square foot, (B) leasing
commissions per square foot, and (C) six (6) months pro forma base rent per
square foot,
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operating expenses, taxes and assessments that would otherwise be payable by a
tenant of such space.
(f) with respect to any of the Properties being purchased by
the Buyer at the Closing other than the Fully-Leased Properties and the Spectrum
(the "Partially-Leased Properties"), if at Closing the aggregate square footage
subject to a Fully-Paying Executed Lease is less than 92% of the total rentable
square footage at the Partially-Leased Properties (such shortfall, the
"Partially-Leased Space Shortfall"), then the Purchase Price shall be adjusted
as follows (in each case other than any such amounts for which the Buyer has
been compensated under Section 4.1, 4.2, 4.3 or 4.4):
(i) first, with respect to any square footage, up to
the number of square feet in the Partially-Leased Space Shortfall, that is
subject to a Non-Paying Lease in effect at a Partially-Leased Property at
Closing, the Purchase Price shall be decreased by the amount of the Payment
Reduction attributable to such square footage that will apply with respect to
periods after the Closing Date, but in no event more than six (6) months; and
(ii) second, if the square footage subject to
Non-Paying Leases is less than the Partially-Leased Space Shortfall (such
shortfall, the "Partially-Leased Vacant/Delinquent Space"), then the Purchase
Price shall be decreased by $5 for each square foot of Partially-Leased
Vacant/Delinquent Space.
(g) the Purchase Price shall be decreased by the aggregate
amount of the Allocated Values of any Sold Properties (as defined in Section
6.1).
(h) if and to the extent that the Seller has failed to timely
comply with its obligations under Section 2.6(c), the Purchase Price shall be
decreased by the reasonable cost of the aggregate amount of remediation that was
required, under Section 2.6(c), to be performed on the Properties by the Seller
but was not performed.
SECTION 1.4 MATERIAL ADVERSE MATTERS.
(a) On or prior to the date ninety (90) days from the date
hereof (such period, the "Diligence Period"), the Buyer may deliver to the
Seller a written notice, such notice to specifically state that such notice
constitutes a "Defect Letter" hereunder, specifying any Material Adverse Matters
(a "Defect Letter"). The Defect Letter may consist of a written report or
notice, provided that it is in accordance with the terms of the preceding
sentence, from one of the Buyer's members, officers, employees, advisors,
attorneys or consultants. The Buyer's failure to deliver to the Seller on or
prior to the close of the Diligence Period a Defect Letter shall be deemed
conclusively as the Buyer's confirmation of the absence of any Material Adverse
Matters, and the Buyer shall be deemed to be satisfied with, and to have waived
objection to, any Code Defect, Environmental Defect, Structural Defect, Title
Defect or Zoning Defect other than those specifically set forth in a Defect
Letter and other than as contemplated in Sections 4.3 and 4.4.
(b) If a Defect Letter is delivered identifying any Material
Adverse Matters, the Defect Letter shall set forth: (i) the identity of any
Properties as to which the Buyer has
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identified any Material Adverse Matters, (ii) the nature of the Material Adverse
Matters and (iii) a reasonably detailed description of the existence of such
Material Adverse Matters.
(c) For each Property having a Material Adverse Matter, the
Seller shall have the option, exercisable by written notice to the Buyer within
ten (10) business days of the Seller's receipt of the Defect Letter, either (i)
to treat such Property as a Deleted Property, in which case it shall cease to be
a Property, or (ii) to treat such Property as a Deferred Property, in which
event the procedures set forth in Section 1.8 shall apply.
(d) In the case of Deferred Properties having an Environmental
Defect, a Title Defect or a Zoning Defect, subject to Section 9.1(c)(v) and
(vii), the Seller shall bear all costs of remediation of such Material Adverse
Matter. In the case of Deferred Properties having a Structural Defect or a Code
Defect, subject to Section 9.1(c)(viii), the Buyer and the Seller shall each
contribute equal amounts to the remediation of such Material Adverse Matter up
to the Shared Remediation Maximum (except for any Structural Defect or Code
Defect identified under Sections 4.1 or 4.2, for which the Buyer shall have no
obligation to contribute), and the Seller shall bear all remediation costs in
excess thereof.
SECTION 1.5 PARTNERSHIP PROPERTIES.
(a) The Buyer and the Seller acknowledge that the parcels of
real estate identified on EXHIBIT A-2 hereto as "Partnership Properties") are
owned by partnerships of which the Seller is the general partner and that, as
set forth on EXHIBIT L hereto, the consent of the limited partners of such
partnerships is required to effect the sale of such Partnership Properties.
Subject to Section 1.5(b) through (d), between the date hereof and thirty (30)
days after the date hereof, the Seller shall use commercially reasonable efforts
to obtain all such required consents and to cause such partnerships to sell such
Partnership Properties to the Buyer on the terms provided herein. When any
Partnership Property becomes a Property under the terms hereof, the Seller shall
cause any such partnership to sell such Partnership Property to the Buyer on,
and subject to, the terms hereof.
(b) Within thirty (30) days after the date hereof, the Seller
may give written notice to the Buyer that the Seller has obtained the required
consents (such consents to be reasonably satisfactory to the Buyer) with respect
to a particular Partnership Property, that such Partnership Property is to
become a Property and that the Buyer may begin its diligence with respect to
such Partnership Property. If the Seller delivers such a notice with respect to
a particular Partnership Property, such Partnership Property shall become a
Property to be purchased by the Buyer hereunder at its Partnership Property
Price, subject to such Partnership Property being deemed a Deleted Property or a
Deferred Property and subject to the other terms and conditions hereof.
(c) If, within such thirty (30) days, the Seller does not
deliver such a notice with respect to a particular Partnership Property, such
Partnership Property shall not become a Property.
(d) If the Seller has delivered such a notice with respect to
a particular Partnership Property, but such required consents are terminated,
cancelled or otherwise negated
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such that the Seller cannot deliver such Partnership Property for sale to the
Buyer prior to the termination hereof, then (i) such Partnership Property shall
cease to be a Property, and (ii) the Seller shall reimburse the Buyer for its
actual out-of-pocket third party costs with respect to the diligence conducted
on such Partnership Property, plus the sum of Ten Thousand Dollars ($10,000) for
each such Partnership Property to cover legal and other costs.
(e) Notwithstanding the fact that a particular Partnership
Property will not constitute a Property unless and until such Partnership
Property becomes a Property under Section 1.5(b) hereof, the term "Property"
shall be deemed to include the Partnership Properties for purposes of the
Seller's representations, warranties, covenants and agreements herein; provided
that if at Closing such Partnership Property has not become a Property under
Section 1.5(b) hereof, the term "Property" shall not include such Partnership
Property and such Partnership Property shall not be deemed to be a Deleted
Property, a Category A Deleted Property or a Category B Deleted Property.
SECTION 1.6 GROUND LEASES.
(a) The Buyer and the Seller acknowledge that the Properties
identified on EXHIBIT A hereto as Ground Lease Properties consist of the
Seller's interest as a lessee in the Ground Leases and the improvements thereon
and that, as set forth on EXHIBIT L hereto, certain ground lessors under such
Ground Leases have the right to object to a transfer of the Ground Leases and/or
to acquire the Seller's interest in the Ground Lease and the improvements
thereon in the event of a proposed sale of such interests by the Seller. Between
the date hereof and thirty (30) days after the date hereof, the Seller shall use
commercially reasonable efforts to obtain consents and/or waivers of all such
rights of first refusal.
(b) If, within such thirty (30) days, the Seller obtains the
consents and/or waivers of rights of first refusal (such consents and/or waivers
to be reasonably satisfactory to the Buyer) with respect to a particular Ground
Lease, the Seller will give written notice to the Buyer that such Ground Lease
will continue to constitute Property and will be included in the Properties
transferred hereunder, subject to such Property being deemed a Deleted Property
or a Deferred Property and subject to the other terms and conditions hereof.
(c) If, within such thirty (30) days, the Seller does not
obtain the consents and/or waivers of rights of first refusal with respect to a
particular Ground Lease Property and does not so notify the Buyer, (i) such
Ground Lease Property shall be deemed to be a Category A Deleted Property, and
(ii) the Seller shall reimburse the Buyer for its actual out-of-pocket third
party costs with respect to the diligence conducted on such Ground Lease
Property, plus the sum of Ten Thousand Dollars ($10,000) for each such Ground
Lease Property to cover legal and other costs.
(d) The parties acknowledge and agree that if one of the two
Ground Lease Properties located in Tustin, California becomes a Deleted
Property, the other Ground Lease Property so located shall likewise be a Deleted
Property.
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SECTION 1.7 RIGHT OF FIRST REFUSAL PROPERTIES.
(a) The Buyer and the Seller acknowledge that the Properties
identified on EXHIBIT A hereto as Right of First Refusal Properties consist of
Properties as to which the Seller has granted a right of first refusal or option
to purchase to a tenant or otherwise and that, as set forth on EXHIBIT L hereto,
such tenants or other parties may have the right to object to a transfer of the
Right of First Refusal Properties and/or to acquire the Seller's interest in the
Right of First Refusal Properties in the event of a proposed sale of such
interests by the Seller. Subject to Section 1.7(b) through (d), between the date
hereof and thirty (30) days after the date hereof, the Seller shall use
commercially reasonable efforts to obtain consents and/or waivers in a form
reasonably approved by the Buyer and the Title Company of all such rights of
first refusal or options to purchase.
(b) Within thirty (30) days after the date hereof, the Seller
may give written notice to the Buyer that the Seller has obtained the required
consents and/or waivers (such consents and/or waivers to be reasonably
satisfactory to the Buyer) with respect to a particular Right of First Refusal
Property, that such Right of First Refusal Property is to remain a Property and
that the Buyer may begin its diligence with respect to such Right of First
Refusal Property. If the Seller delivers such a notice with respect to a
particular Right of First Refusal Property and such Right of First Refusal
Property shall be purchased by the Buyer hereunder at its Allocated Value,
subject to such Right of First Refusal Property being deemed a Deleted Property
or a Deferred Property and subject to the other terms and conditions hereof.
(c) If, within such thirty (30) days, the Seller does not
deliver such a notice with respect to a particular Right of First Refusal
Property, such Right of First Refusal Property shall be deemed to be a Category
A Deleted Property.
(d) If the Seller has delivered such a notice with respect to
a particular Right of First Refusal Property, but such required consents and/or
waivers are terminated, cancelled or otherwise negated such that the Seller
cannot deliver such Right of First Refusal Property for sale to the Buyer prior
to the termination hereof, then (i) such Right of First Refusal Property shall
be deemed to be a Category A Deleted Property, and (ii) the Seller shall
reimburse the Buyer for its actual out-of-pocket third party costs with respect
to the diligence conducted on such Right of First Refusal Property, plus the sum
of Ten Thousand Dollars ($10,000) for each such Right of First Refusal Property
to cover legal and other costs.
SECTION 1.8 DEFERRED PROPERTIES.
(a) In the event a Property is proposed by the Seller to be
designated as a Deferred Property, the Seller and the Buyer shall use their
respective good faith efforts to determine, taking into account, if reasonably
necessary, the effect of the Material Adverse Matter upon the future tenancy of
the Property subject to the Material Adverse Matter, a plan to cure such
Material Adverse Matter (a "Plan"). Each Plan proposed by the Buyer or the
Seller shall be reasonably detailed in scope given the nature and extent of the
Material Adverse Matter, and shall include any anticipated governmental
approvals or closures required and the estimated costs of implementation of such
Plan, including the costs of obtaining any required governmental approvals or
closures. If the parties do not agree upon such a Plan within ten (10) business
days
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of the receipt by the Buyer of the Seller's election to treat the Property as a
Deferred Property under the terms hereof, the Property subject to the Material
Adverse Matter shall be treated as a Deleted Property and shall be deemed to be
a Category B Deleted Property (with respect to Sections 9.1(c)(v), (vi), (vii)
and (viii), the remediation costs for any Material Adverse Matter as to which
the parties cannot agree upon a Plan shall be the costs set forth in the
Seller's proposed Plan). If the parties reasonably agree that the Material
Adverse Matter cannot be fully cured prior to the projected first anniversary of
the Closing, the Property subject to the Material Adverse Matter shall be deemed
to be a Deleted Property. If the parties do agree upon such a Plan, the Seller
shall use commercially reasonable efforts to attempt to cure, in accordance with
such Plan, the Material Adverse Matter affecting such Deferred Property during
the period ending on the first anniversary of the Closing. If the parties agree
that such cure is successfully consummated in accordance with such Plan, then,
within thirty (30) days of such cure, but no earlier than the Closing, the Buyer
shall be obligated to purchase the cured Deferred Property at its Allocated
Value in accordance with the procedures set forth herein (other than timing). If
the parties do not agree that any such cure has been successfully consummated in
accordance with such Plan, the parties shall refer the matter to arbitration for
resolution. The arbitration shall be conducted in Los Angeles, California by
three neutral arbitrators acting by majority vote (the "Panel") selected by
agreement of the parties or, failing such agreement, appointed pursuant to the
commercial arbitration rules of the American Arbitration Association, as amended
from time to time (the "AAA Rules"). If an arbitrator so selected becomes unable
to serve, his or her successors shall be similarly selected or appointed. The
arbitration shall be conducted pursuant to such procedures as the Buyer and the
Seller may agree, or, in the absence of or failing such agreement, pursuant to
the AAA Rules for large commercial arbitrations. The award shall be in writing
and shall specify the factual and legal basis for the award. The Panel shall
apportion all costs and expenses of arbitration, including the Panel's fees and
expenses and fees and expenses of experts, between the prevailing and
non-prevailing party as the Panel deems fair and reasonable. Any arbitration
award shall be binding and enforceable against the parties hereto and judgment
may be entered thereon in any court of competent jurisdiction.
(b) During the period after the Closing, all of the terms and
conditions herein shall apply to the extent related to the Deferred Property. In
furtherance and not in limitation of the foregoing:
(i) Subject to the Maximum Post-Closing Exposure, the
Seller's representations and warranties set forth in Section 2.1 (only insofar
as they relate to such Deferred Property) shall survive for a period of six (6)
months from the date of closing of the Buyer's purchase of such Deferred
Property;
(ii) with respect to the period between the
designation of a Property as a Deferred Property and the closing of the Buyer's
purchase of such Deferred Property, the covenants set forth herein, including
without limitation Article IV and VI, shall apply to the extent related to such
Deferred Property;
(iii) all of the conditions to closing set forth in
Section 8 shall apply to the extent related to such Deferred Property; and
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(iv) at any closing of the purchase of a Deferred
Property, the adjustments to the Purchase Price set forth in Section 1.3(d),
(e), (f) and (h) shall apply to the purchase of the Deferred Property as if such
Deferred Property were being acquired by the Buyer at the Closing together with
all other Properties that have been acquired by the Buyer; provided that the
occupancy rates and payment terms of such Deferred Property at the time of its
purchase by the Buyer shall be aggregated with the occupancy rates and rent
payment terms in effect at the closing(s) of all of other Properties purchased
by the Buyer prior thereto.
(c) If a Property becomes a Deleted Property, (i) it shall
cease to be a Property or a Real Property, (ii) the Buyer and the Seller shall
have no further obligation to purchase or sell, respectively, the Deleted
Property, and (iii) the Buyer and the Seller shall remain obligated to purchase
and sell, respectively, all other Properties in accordance with the terms
hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES; BUYER'S EXAMINATION
SECTION 2.1 REPRESENTATIONS AND WARRANTIES OF THE SELLER. Subject to
the provisions of Section 2.3 below, the Seller hereby makes the following
representations and warranties with respect to the Properties, provided that the
Seller makes no representations or warranties with respect to the matters (the
"Disclosure Items") which are set forth in SCHEDULE 1 attached hereto and made a
part hereof. Notwithstanding anything to the contrary contained herein or in any
document delivered in connection herewith, the Seller makes no representations
or warranties with respect to the Disclosure Items other than as set forth in
SCHEDULE 1 (any covenants, representations or warranties set forth in SCHEDULE 1
shall be deemed to be covenants, representations or warranties, as the case may
be, under this Section 2.1 and shall survive as set forth in Section 2.3).
Nothing herein shall prohibit the Buyer from raising an Environmental Defect, a
Title Defect, a Code Defect, a Zoning Defect or a Structural Defect with respect
to the Disclosure Items. The Seller shall indemnify, hold harmless and defend
the Buyer from and against any and all claims, losses, liabilities, damages,
costs and expenses (including, without limitation, reasonable attorneys' fees
and costs) with respect to any claims, liabilities, damages, losses and expenses
arising out of any litigation disclosed in SCHEDULE 1 which is an exception to
Section 2.1(j) and with respect to any additional litigation filed prior to
Closing against the Properties or the Seller as owner of the Properties or the
partnerships as owners of the Partnership Properties (unless any such litigation
relates to actions of the Buyer). The foregoing indemnity shall survive the
Closing. For purposes of this Agreement and any document delivered at Closing,
whenever the phrase "to the best of the Seller's knowledge" or the "knowledge"
of the Seller or words of similar import are used, they shall be deemed to refer
to the current actual knowledge of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, the Seller's Chairman of
the Board, President and Chief Executive Officer, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the
Seller's Executive Vice President, Chief Financial Officer and Secretary, J.R.
▇▇▇▇▇▇, the Seller's Executive Vice President of Operations and Chief Operating
Officer, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the Seller's Senior Vice President of Industrial
Operations and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, the Seller's Senior Vice President and
Treasurer, at the times indicated only and not any implied, imputed or
constructive knowledge, without any independent investigation having been made
or any implied duty to investigate.
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(a) The Seller has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by the Seller's creditors, (iii)
suffered the appointment of a receiver to take possession of all, or
substantially all, of the Seller's assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of the Seller's assets, (v)
admitted in writing its inability to pay its debts as they come due, or (vi)
made an offer of settlement, extension or composition to its creditors
generally.
(b) The Seller is not a "foreign person" as defined in Section
1445 of the Internal Revenue Code of 1986, as amended (the "Code") and any
related regulations.
(c) This Agreement and all documents executed by the Seller
which are to be delivered at the Closing (i) have been or will be duly
authorized, executed and delivered by the Seller, and (ii) except as set forth
on SCHEDULE 1, do not or will not violate any provision of any material
agreement or judicial order to which the Seller is a party or to which the
Seller or the Properties are subject. Assuming the due authorization, execution
and delivery of such documents by the Buyer, this Agreement constitutes (and all
other documents executed by the Seller which are to be delivered at the Closing
will constitute) the legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to creditors' rights generally or to general principles of equity.
(d) Subject to the requisite vote of the Seller's
stockholders, the Seller has the power and authority to enter into this
Agreement and to perform its obligations hereunder.
(e) Copies of the documents evidencing the Loans (the "Loan
Documents"), the Leases, Ground Leases and contracts delivered to the Buyer by
the Seller are true and accurate copies of such items.
(f) The only tenant Leases and amendments thereto in force for
the Properties as of June 15, 2000 are listed on EXHIBIT F attached hereto and
made a part hereof (such EXHIBIT F being materially consistent with
documentation previously delivered by the Seller to the Buyer or the Buyer's
representatives). The only tenant Leases executed by the Seller since June 15,
2000 have been in the ordinary course of business. The only Ground Leases and
amendments thereto in force for the Properties as of the date hereof are listed
on EXHIBIT B attached hereto and made a part hereof. The only Loan Documents and
amendments thereto in force for the Properties as of the date hereof are listed
on EXHIBIT C attached hereto and made a part hereof.
(g) To the best of the Seller's knowledge and except as set
forth on SCHEDULE 1, the Seller has received no written notice that the
Properties or their current use and operation are in material violation of any
applicable law.
(h) To the best of the Seller's knowledge, the documents which
have been or will be delivered by the Seller to the Buyer or have been made or
will be made available by the Seller to the Buyer for the Buyer's inspection and
copying are true and complete copies of all documents in the Seller's possession
related to the Properties except for the Seller's internal
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economic memoranda and reports, attorney-client privileged materials and the
Seller's appraisals of the Properties, if any.
(i) To the best of the Seller's knowledge and except as set
forth on SCHEDULE 1, the Seller has received no written notice of any (i)
condemnation, environmental, zoning or other land-use proceedings, instituted or
threatened, against the Properties or (ii) special assessment proceedings
affecting the Properties.
(j) To the best of the Seller's knowledge, the Seller has
received no written notice of any material litigation or arbitration, instituted
or intended to be instituted, against the Properties or against the Seller as
owner of the Properties except as set forth on SCHEDULE 1.
(k) To the best of the Seller's knowledge, the Seller has
received no written notice that any tenant of a Property has either filed or
been the subject of any filing of a petition under any federal or state
bankruptcy or insolvency laws except as set forth on SCHEDULE 1.
(l) The Seller has received no written notice of any defaults
by the Seller under any of the Loan Documents, the Leases or Ground Leases
except as set forth on SCHEDULE 1. Except as set forth on SCHEDULE 1 and except
for notices of defaults with respect to insurance certificate requirements, the
Seller has given no written notice to any tenant of the Properties of any
material defaults under its Lease which has not been cured, the Seller has given
no written notice to any ground lessor of the Ground Lease Properties of any
defaults under its Ground Lease which has not been cured and the Seller has
given no written notice to any lender under the Loan Documents of any defaults
thereunder which has not been cured.
(m) The Seller has received no written notice of any defaults
by the Seller which have not been cured under the service contracts, guaranties,
or warranties which will be binding on the Buyer, after the Closing.
(n) The Seller is duly formed, validly existing and in good
standing under the laws of the State of Maryland and is qualified to do business
as a foreign corporation in the jurisdictions where such qualification is
required, except for any such jurisdiction where the failure to be so qualified
would not have a material adverse effect on the Seller.
(o) EXHIBIT L sets forth a complete list of the consents
and/or waivers required with respect to the consummation of the transactions
contemplated hereby to the extent related to the Partnership Properties, the
Excluded Ground Leases and the Right of First Refusal Properties and describes
all rights of first refusal or options to purchase any Property, portion thereof
or interest therein.
(p) The only contracts or agreements affecting the Real
Properties that will be binding upon a Buyer after the Closing are the Ground
Leases, the Leases, the Loan Documents (to the extent assumed under Section 6.2
hereof) and other customary service contracts entered into by the Seller in the
ordinary course of business.
SECTION 2.2 REPRESENTATIONS AND WARRANTIES OF THE BUYER. Subject to the
provisions of Section 2.3 below, the Buyer represents and warrants to the Seller
as follows:
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(a) The Buyer represents and warrants to the Seller that this
Agreement and all documents executed by the Buyer which are to be delivered to
the Seller at Closing do not and at the time of Closing will not violate any
provision of any material agreement or judicial order to which the Buyer is a
party or to which the Buyer is subject.
(b) The Buyer represents and warrants to the Seller that the
Buyer has not (i) made a general assignment for the benefit of creditors, (ii)
filed any voluntary petition in bankruptcy or suffered the filing of any
involuntary petition by the Buyer's creditors, (iii) suffered the appointment of
a receiver to take possession of all, or substantially all, of the Buyer's
assets, (iv) suffered the attachment or other judicial seizure of all, or
substantially all, of the Buyer's assets, (v) admitted in writing its inability
to pay its debts as they come due, or (vi) made an offer of settlement,
extension or composition to its creditors generally.
(c) The Buyer is duly formed, validly existing and in good
standing under the laws of the State of California. The Buyer has duly
authorized, executed and delivered this Agreement. Assuming the due
authorization, execution and delivery of such documents by the Seller, this
Agreement constitutes (and all other documents executed by the Buyer which are
to be delivered at the Closing will constitute) the legal, valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with its
terms, subject to any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to creditors' rights generally or to general
principles of equity.
(d) The Buyer had a tangible net worth (the book value of all
tangible assets minus the book value of all liabilities), based on a balance
sheet prepared in accordance with generally accepted accounting principles
consistently applied with prior periods, of at least Two Hundred Fifty Million
Dollars ($250,000,000).
SECTION 2.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; LIMITATIONS.
(a) The representations and warranties of the Seller set forth
in Section 2.1, together with the Seller's liability for any breach before
Closing of any of the Seller's interim operating covenants under Section 6.1,
will survive the Closing for a period of six (6) months (as set forth in Section
1.8(b)(i), with respect to the purchase of a Deferred Property, such
representations, warranties and covenants (only insofar as they relate to such
Deferred Property) shall survive for six (6) months after such purchase). The
Buyer will not have any right to bring any action against the Seller as a result
of any untruth or inaccuracy of such representations and warranties, or any such
breach, unless and until the aggregate amount of all liability and losses
arising out of any such untruth or inaccuracy, or any such breach, exceeds (with
respect to the Closing and all subsequent purchases of Deferred Properties) One
Hundred Thousand Dollars ($100,000), and then the Buyer may bring an action for
all such amounts; provided that in no event will the Seller's liability for all
such breaches exceed, in the aggregate (i) with respect to the Closing, Twelve
Million Five Hundred Thousand Dollars ($12,500,000) (the "Maximum Post-Closing
Exposure") and (ii) with respect to purchases of Deferred Properties after the
Closing, the greater of Two Hundred and Fifty Thousand Dollars ($250,000) and 2%
of the Allocated Value of such Deferred Property (the "Individual Deferred
Property Maximum Exposure"). The Seller agrees to maintain reasonable access to
funds (which funds shall be kept available in cash and cash equivalents, the
availability of which shall be confirmed by ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co. to the Buyer on a monthly basis) in an amount
necessary to satisfy (i) with respect to the six (6) months after the Closing,
the Maximum Post-Closing Exposure, and (ii) with respect to the six (6) months
after the purchase of a Deferred Property, the Individual Deferred Property
Maximum Exposure. Furthermore, the Seller agrees to maintain, during the
pendency of any claim timely made by the Buyer hereunder, an amount sufficient
to satisfy such claim (subject to the Maximum Post-Closing Exposure and the
Individual Deferred Property Maximum Exposure). The Seller shall have no
liability with respect to any of the Seller's representations, warranties and
covenants herein if, prior to the Closing (or, with respect to the subsequent
purchase of a Deferred Property, prior to the purchase thereof), the Buyer has
actual knowledge of any breach of a representation, warranty or covenant of the
Seller herein, or the Buyer obtains actual knowledge (from whatever source,
including, without limitation, any tenant or ground lessor estoppel
certificates, as a result of the Buyer's due diligence or written disclosure by
the Seller or the Seller's agents and employees) that contradicts any of the
Seller's representations and warranties herein, and the Buyer nevertheless
consummates the transaction contemplated by this Agreement. Sections 5.1, 10.5
and 10.9 will survive Closing without limitation unless a specified period is
otherwise provided in this Agreement. All other representations, warranties,
covenants and agreements made or undertaken by the Seller under this Agreement,
unless otherwise specifically provided herein, will not survive the Closing
Date.
(b) The representations and warranties of the Buyer set forth
in Section 2.2 will survive the Closing for a period of six (6) months. The
Seller will not have any right to bring any action against the Buyer as a result
of any untruth or inaccuracy of such representations and warranties, or any such
breach, unless and until the aggregate amount of all liability and losses
arising out of any such untruth or inaccuracy, or any such breach, exceeds One
Hundred Thousand Dollars ($100,000), and then the Seller may bring an action for
all such amounts; provided that in no event will the Buyer's liability for all
such breaches exceed, in the aggregate, Twelve Million Five Hundred Thousand
Dollars ($12,500,000). The Buyer shall have no liability with respect to any of
the Buyer's representations, warranties and covenants herein if, prior to the
Closing, the Seller has actual knowledge of any breach of a representation,
warranty or covenant of the Buyer herein, or the Seller obtains actual knowledge
(from whatever source, including, without limitation, any tenant or ground
lessor estoppel certificates, as a result of the Seller's due diligence or
written disclosure by the Buyer or the Buyer's agents and employees) that
contradicts any of the Buyer's representations and warranties herein, and the
Seller nevertheless consummates the transaction contemplated by this Agreement.
Sections 5.1, 10.5 and 10.9 will survive Closing without limitation unless a
specified period is otherwise provided in this Agreement. All other
representations, warranties, covenants and agreements made or undertaken by the
Buyer under this Agreement, unless otherwise specifically provided herein, will
not survive the Closing Date.
SECTION 2.4 THE BUYER'S INDEPENDENT INVESTIGATION.
(a) The Buyer acknowledges and agrees that it has been given
or will be given before the end of the Diligence Period, a full opportunity to
inspect and investigate each and every aspect of the Properties, either
independently or through agents of the Buyer's choosing, including, without
limitation:
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(1) All matters relating to title, together with all
governmental and other legal requirements such as taxes, assessments, zoning,
use permit requirements and building codes.
(2) The physical condition and aspects of the
Properties, including, without limitation, the interior, the exterior, the
square footage within the improvements on the Real Properties and within each
tenant space therein, the structure, seismic aspects of the Properties, the
paving, the utilities, and all other physical and functional aspects of the
Properties. Such examination of the physical condition of the Properties shall
include an examination for the presence or absence of Hazardous Materials, as
defined below, which shall be performed or arranged by the Buyer at the Buyer's
sole expense. For purposes of this Agreement, "Hazardous Materials" shall mean
inflammable explosives, radioactive materials, asbestos, polychlorinated
biphenyls, lead, lead-based paint, under and/or above ground tanks, hazardous
materials, hazardous wastes, hazardous substances, oil, or related materials,
which are listed or regulated in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 6901, et
seq.), the Resources Conservation and Recovery Act of 1976 (42 U.S.C. Section
6901, et seq.), the Clean Water Act (33 U.S.C. Section 1251, et seq.), the Safe
Drinking Water Act (14 U.S.C. Section 1401, et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801, et seq.), the Toxic Substance
Control Act (15 U.S.C. Section 2601, et seq.), the California Hazardous Waste
Control Law (California Health and Safety Code Section 25100, et seq.), the
▇▇▇▇▇▇-Cologne Water Quality Control Act (California Water Code Section 13000,
et seq.), the Safe Drinking Water and Toxic Enforcement Act of 1986 (California
Health and Safety Code Section 25249.5, et seq.), the Arizona Environmental
Quality Act, A.R.S. Section 49-201, et seq.; the Arizona "State Superfund"
provisions, A.R.S. Section 49-281, et seq.; the Arizona Solid Waste Management
provisions, A.R.S. Section 49-701, et seq.; the Arizona Hazardous Waste
Management Act, A.R.S. Section 49-921, et seq.; and the Arizona Underground
Storage Tank provisions, A.R.S. Section 49-1001, and any other applicable
federal, state or local laws and regulations.
(3) Any easements and/or access rights affecting the
Properties.
(4) The leases and all matters in connection
therewith, including, without limitation, the ability of the tenants to pay the
rent and the economic viability of the tenants.
(5) The service contracts and any other documents or
agreements of significance affecting the Properties.
(6) All economic and financial matters relating to
the Properties.
(7) All other matters of material significance
affecting the Properties.
(b) THE BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT THE
SELLER IS SELLING AND BUYER IS PURCHASING THE PROPERTIES ON AN "AS IS WITH ALL
FAULTS" BASIS AND THAT THE BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS,
OR BROKERS AS TO ANY MATTERS
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CONCERNING THE PROPERTIES EXCEPT AS EXPRESSLY SET FORTH IN SECTION 2.1 ABOVE OR
IN THE CLOSING DOCUMENTS, INCLUDING WITHOUT LIMITATION: (i) the quality, nature,
adequacy and physical condition and aspects of the Properties, including, but
not limited to, the structural elements, seismic aspects of the Properties,
foundation, roof, appurtenances, access, landscaping, parking facilities and the
electrical, mechanical, HVAC, plumbing, sewage, and utility systems, facilities
and appliances, the square footage within the improvements on the Real
Properties and within each tenant space therein, (ii) the quality, nature,
adequacy, and physical condition of soils, geology and any groundwater, (iii)
the existence, quality, nature, adequacy and physical condition of utilities
serving the Properties, (iv) the development potential of the Properties, and
the Properties' use, habitability, merchantability, or fitness, suitability,
value or adequacy of the Properties for any particular purpose, (v) the zoning
or other legal status of the Properties or any other public or private
restrictions on use of the Properties, (vi) the compliance of the Properties or
its operation with any applicable codes, laws, regulations, statutes,
ordinances, covenants, conditions and restrictions of any governmental or
quasi-governmental entity or of any other person or entity, (vii) the presence
of Hazardous Materials on, under or about the Properties or the adjoining or
neighboring property, (viii) the quality of any labor and materials used in any
improvements on the Real Properties, (ix) the condition of title to the
Properties, (x) the leases, service contracts, or other agreements affecting the
Properties and (xi) the economics of the operation of the Properties.
SECTION 2.5 RELEASE.
(a) Without limiting the above, and subject to the
representations and warranties of the Seller contained in Section 2.1 hereof and
the terms and conditions hereof and the other covenants of the Seller contained
herein or in the Closing Documents, the Buyer on behalf of itself and its
successors and assigns waives its right to recover from, and forever releases
and discharges, the Seller, the Seller's affiliates, the Seller's investment
manager, the partners, trustees, beneficiaries, shareholders, members,
directors, officers, employees and agents of each of them, and their respective
heirs, successors, personal representatives and assigns (collectively, the
"Seller Related Parties"), from any and all demands, claims, legal or
administrative proceedings, losses, liabilities, damages, penalties, fines,
liens, judgments, costs or expenses whatsoever (including, without limitation,
attorneys' fees and costs), whether direct or indirect, known or unknown,
foreseen or unforeseen, that may arise on account of or in any way be connected
with (i) the physical condition of the Properties including, without limitation,
all structural and seismic elements, all mechanical, electrical, plumbing,
sewage, heating, ventilating, air conditioning and other systems, the
environmental condition of the Properties and Hazardous Materials on, under or
about the Properties, and (ii) any law or regulation applicable to the
Properties, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
6901, et seq.), the Resources Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901, et seq.), the Clean Water Act (33 U.S.C. Section 1251, et seq.),
the Safe Drinking Water Act (14 U.S.C. Section 1401, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Toxic
Substance Control Act (15 U.S.C. Section 2601, et seq.), the California
Hazardous Waste Control Law (California Health and Safety Code Section 25100, et
seq.), the ▇▇▇▇▇▇-Cologne Water Quality Control Act (California Water Code
Section 13000, et seq.), and the Safe Drinking Water and Toxic Enforcement Act
of 1986 (California Health and Safety Code
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Section 25249.5, et seq.), the Arizona Environmental Quality Act, A.R.S. Section
49-201, et seq.; the Arizona "State Superfund" provisions, A.R.S. Section 49-28
1, et seq.; the Arizona Solid Waste Management provisions, A.R.S. Section
49-701, et seq.; the Arizona Hazardous Waste Management Act, A.R.S. Section
49-921, et seq.; and the Arizona Underground Storage Tank provisions, A.R.S.
Section 49-1001, and any other applicable federal, state or local laws and
regulations.
(b) In connection with Section 2.5(a) above, the Buyer
expressly waives the benefits of Section 1542 of the California Civil Code,
which provides as follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
SECTION 2.6 RELEASE RELATED TO GENERAL PHYSICAL ITEMS AND ADA. The
Buyer acknowledges and agrees that, as of the date hereof, it has approved of
and consented to (i) any non-compliance (to the extent any such non-compliance
exists) of the Properties with the Americans With Disabilities Act of 1990,
other than any such non-compliance that has been specifically identified and
cited to the Seller by a governmental entity, and (ii) all General Physical
Items. The Buyer and the Seller further acknowledges that:
(a) notwithstanding Section 2.3 hereof, the Seller shall have
no liability, and the Buyer may not bring an action to recover against the
Seller, with respect to (i) any non-compliance of the Properties with the
Americans With Disabilities Act of 1990, other than any such non-compliance that
has been specifically identified and cited to the Seller by a governmental
entity, or (ii) any General Physical Items;
(b) for purposes of the conditions to the obligations of the
Buyer set forth in Section 8.3 hereof, (i) any non-compliance of the Properties
with the Americans With Disabilities Act of 1990, other than any such
non-compliance that has been specifically identified and cited to the Seller by
a governmental entity, and (ii) any General Physical Items shall not render the
representations and warranties of the Seller contained in Section 2.1(g) to be
untrue or incorrect; and
(c) prior to Closing, the Seller shall, at the Seller's cost
and to the reasonable satisfaction of the Buyer, cure any non-compliance of the
Properties with the Americans With Disabilities Act of 1990 to the extent that
the Seller has received, on or prior to the date hereof, written notice from a
governmental entity of such specific item of non-compliance, along with a demand
to remedy the same. Written notice from such governmental entity of its
satisfaction (unconditional except with respect to ongoing inspection) with such
cure or unconditional written clearance (unconditional except with respect to
ongoing inspection) from such governmental entity of such non-compliance shall
be deemed to satisfy the Buyer hereunder, provided that, such written notice or
clearance shall be in a form reasonably approved by the Buyer.
SECTION 2.7 SURVIVAL. The provisions of this Article II shall survive
the Closing subject to the limitations and qualifications contained in such
provisions.
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ARTICLE III
TITLE
SECTION 3.1 CONDITIONS OF TITLE.
(a) At the Closing, the Seller shall convey title to the
Properties to the Buyer by grant deed for those Real Properties in California,
in the form attached hereto as EXHIBIT G-1, by statutory bargain and sale deed
for those Real Properties in Washington, in the form attached hereto as EXHIBIT
G-2, by grant bargain and sale deed for those Real Properties located in Nevada,
in the form attached hereto as EXHIBIT G-3, by special warranty deeds, in the
form attached hereto as EXHIBIT G-4, for those Real Properties located in
Arizona, and by special warranty deeds, in the form attached hereto as EXHIBIT
G-5, for those Real Properties located in Oregon (collectively the "Deeds"),
subject to no exceptions other than:
(i) Interests of tenants in possession without any
rights of first refusal or options to purchase a Property, portion thereof or
interest thereon which have not been waived;
(ii) Non-delinquent liens for real estate taxes and
assessments; and
(iii) Any exceptions disclosed by (A) the preliminary
title reports or title commitments issued by the Title Company for the
Properties delivered to the Buyer during the Diligence Period, and (B) the
survey obtained by the Buyer for each of the Properties during the Diligence
Period.
(b) Excluding those matters objected to in any Defect Letter,
the foregoing exceptions shall be collectively referred to as the "Conditions of
Title." If, after the Diligence Period, any additional exceptions to title are
disclosed in a supplemental or updated title report or title commitment issued
by the Title Company with respect to the Properties (a "Supplemental Title
Report"), the Buyer shall have fifteen (15) business days after the delivery by
the Title Company or the Seller of such Supplemental Title Report to the Buyer
to deliver a Defect Letter to the Seller specifying any Material Adverse
Matters. The Buyer's failure to deliver to the Seller within said fifteen (15)
business day period a Defect Letter shall be deemed conclusively as the Buyer's
confirmation that none of such new exceptions to title constitutes a Material
Adverse Matter. In the event that the Buyer delivers a Defect Letter to the
Seller pursuant to this Section 3.1, the provisions set forth in Section 1.4 and
Section 1.8 shall apply thereto.
(c) Notwithstanding anything to the contrary contained herein,
the Seller shall pay off all liens and encumbrances on the Properties prior to
Closing, other than those liens with respect to any Loans the Buyer is assuming
at Closing and liens for non-delinquent real estate taxes and assessments, and
the Buyer shall have no obligation to give the Seller a Defect Letter with
respect to such liens and encumbrances.
(d) By acceptance of the Deed and the Closing of the purchase
and sale of the Properties, (i) the Buyer agrees it is assuming for the benefit
of the Seller all of the obligations of the Seller with respect to the
Conditions of Title but only to the extent such obligations arise from and after
the Closing, and (ii) the Buyer agrees that the Seller shall have conclusively
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satisfied its obligations with respect to title to the Properties. The
provisions of this Section 3.1 shall survive the Closing.
SECTION 3.2 EVIDENCE OF TITLE. Delivery of title in accordance with the
foregoing shall be evidenced by the willingness of the Title Company to issue,
at Closing, its ALTA extended coverage Owner's Policy of Title Insurance (Form
B, rev. 10/17/70) (provided that a leasehold policy shall be issued for Real
Properties subject to Ground Leases) in the amount of the Purchase Price showing
title to the Real Properties vested in the Buyer, subject to the Conditions of
Title and with the following CLTA endorsements (or equivalent thereof): 100.2
(modified for an owner); 101.4; 103.1, 103.4 or 103.6; 103.4 or 103.7 (as
applicable); 116; 116.1; 116.4 (if applicable); 116.7; 123.2 (modified to
include parking); creditors' rights endorsement; separate tax parcel
endorsement; tie-in endorsement (including said endorsements, the "Title
Policy"), or the equivalent, but only to the extent that the Buyer shall confirm
in writing with the Title Company prior to the end of the Diligence Period that
the Title Company will issue the aforesaid endorsements at Closing and the Buyer
shall, prior to the end of the Diligence Period, provide the Seller with a copy
of such confirmation. The Seller is under no obligation to provide any indemnity
or other agreement or undertaking to the Title Company in order for Title
Company to issue the foregoing endorsements. The Buyer shall have prepared, at
the Buyer's cost, the ALTA survey of the Properties necessary to support the
issuance of the Title Policy; provided that if the Buyer does not so obtain an
ALTA survey and if the Title Company is unable to issue the form of Title Policy
described above (including endorsements) without the survey, a CLTA policy of
title insurance shall satisfy the requirements of this Section 3.2. The Title
Policy shall contain reinsurance and co-insurance as reasonably required by the
Buyer. The Buyer shall be entitled to request that the Title Company provide
such additional endorsements (or amendments) (other than the endorsements whose
numbers are specifically set forth above) to the Title Policy as the Buyer may
reasonably require, provided that (a) such additional endorsements (or
amendments) shall be at no cost to, and shall impose no additional liability on,
the Seller, (b) the Buyer's obligations under this Agreement shall not be
conditioned upon the Buyer's ability to obtain such endorsements and, if the
Buyer is unable to obtain such endorsements, the Buyer shall nevertheless be
obligated to proceed to close the transaction contemplated by this Agreement
without reduction of or set off against the Purchase Price, and (c) the Closing
shall not be delayed as a result of the Buyer's request.
SECTION 3.3 COST OF TITLE AND OTHER CLOSING COSTS. The Seller shall pay
(a) one-half of the Escrow Agent's escrow fee, (b) the premium for the CLTA
portion of the Title Policy (including any sales tax thereon), (c) recording
fees in connection with any reconveyance requested hereby, (d) all state,
county, city, local and other transfer taxes, excise taxes, documentary stamp
taxes and sales taxes, if any, (e) all costs of re-insurance and co-insurance
(to the extent allocated to portion of the Title Policy paid for by the Seller)
and (f) any additional costs and charges customarily charged to the Sellers in
accordance with common escrow practices in the county in which the Property is
located, other than those costs and charges specifically required to be paid by
the Buyer hereunder. The Buyer shall pay (a) one-half of the Escrow Agent's
escrow fee, (b) the premium for the ALTA portion of the Title Policy (including
any sales tax thereon) and the costs of any endorsements the Buyer may require
in accordance with Section 3.2 and all costs of re-insurance and co-insurance
(to the extent allocated to portion of the Title Policy and endorsements paid
for by the Buyer) (c) the recording fees required in connection with the
transfer of the Property to the Buyer, and (d) any additional costs and
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charges customarily charged to the Buyers in accordance with common escrow
practices in the county in which the Property is located, other than those costs
and charges specifically required to be paid by the Seller hereunder. In
addition to the foregoing, the Buyer shall be responsible for any costs of
updating the Surveys of the Property or otherwise conforming the Surveys to the
requirements for issuance of such Title Policy or for any new survey that may be
required for issuance of such Title Policy.
ARTICLE IV
RISK OF LOSS; INSURANCE PROCEEDS; SUBSEQUENT
MATERIAL ADVERSE MATTERS
SECTION 4.1 MINOR LOSS. The Buyer shall be bound to purchase, and the
Seller shall be bound to sell, a Property for the full Allocated Value (or
Partnership Property Price, as applicable) thereof as required by the terms
hereof, without regard to the occurrence or effect of any damage to such
Property or destruction of any improvements thereon or condemnation of any
portion of such Property, provided that: (a) the aggregate cost to repair any
such damage or destruction plus the diminution in the value of such Property as
a result of condemnation does not exceed One Hundred Thousand Dollars ($100,000)
and (b) upon the Closing, the Seller shall, in respect of such Property as a
result of any such damage or destruction or condemnation, (i) assign to the
Buyer (A) any insurance proceeds to be collected and (B) any condemnation awards
to be collected and (ii) deliver or pay to the Buyer (A) any insurance proceeds
collected by the Seller to date, (B) any condemnation awards collected by the
Seller to date, (C) the amount of any deductible payable by the Seller under any
such insurance, (D) the amount of any uninsured losses incurred by the Seller
and (E) the amount of any rent abatements allowed to tenants, except in each
case to the extent needed to reimburse the Seller for sums expended to repair or
restore such Property reasonably approved by the Buyer.
SECTION 4.2 MAJOR LOSS.
(a) If, with respect to any Property, the aggregate cost to
repair any such damage or destruction plus the diminution in the value of such
Property as a result of condemnation equals or exceeds One Hundred Thousand
Dollars ($100,000), then, with respect to each such Property, the Buyer may, at
its option to be exercised within five (5) business days of the Buyer's receipt
of the Seller's notice of the occurrence of the damage or destruction or the
commencement of condemnation proceedings (which notice shall include a statement
by the Seller as to the effectiveness and coverage amounts of any insurance
policy with respect thereto), either (i) request that the Seller cure or restore
such Property (a "Major Loss Cure Election") or (ii) elect to consummate the
purchase of such Property at its Allocated Value (or Partnership Property Price,
as applicable).
(b) If the Buyer fails to notify the Seller within such 5
business day period of its Major Loss Cure Election for a particular Property,
the parties will be obligated to consummate the sale and purchase of such
Property at its Allocated Value (or Partnership Property Price, as applicable)
at the Closing, in which case the Seller shall, in respect of such Property as a
result of any such damage or destruction or condemnation, (i) assign to the
Buyer (A) any insurance proceeds to be collected and (B) any condemnation awards
to be collected and
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(ii) deliver or pay to the Buyer (A) any insurance proceeds collected by the
Seller to date, (B) any condemnation awards collected by the Seller to date, (C)
the amount of any deductible payable by the Seller under any such insurance and
(D) the amount of any rent abatements allowed to tenants, except in each case to
the extent needed to reimburse the Seller for sums expended to repair or restore
such Property reasonably approved by the Buyer.
(c) If the Buyer timely delivers a Major Loss Cure Election
for a particular Property, then, subject to Sections 9.1(c), the Seller may, at
its option to be exercised within five (5) business days of the Seller's receipt
of the Buyer's Major Loss Cure Election, either: (i) treat such Property as a
Deleted Property, or (ii) treat such Property as a Deferred Property, in which
case the procedures set forth in Section 1.4 and 1.8 shall apply (provided that
any cure of a Deferred Property shall include payment to the Buyer of any
applicable condemnation awards).
SECTION 4.3 MINOR LOSS - SUBSEQUENT MATERIAL ADVERSE MATTER. The Buyer
shall be bound to purchase, and the Seller shall be bound to sell, a Property
for the full Allocated Value (or Partnership Property Price, as applicable)
thereof as required by the terms hereof, without regard to a Subsequent Material
Adverse Matter with respect to such property, provided that: (a) the aggregate
cost to repair any such Subsequent Material Adverse Matter does not exceed One
Hundred Thousand Dollars ($100,000) and (b) upon the Closing, the Seller shall,
in respect of such Property as a result of any such Subsequent Material Adverse
Matter, (i) assign to the Buyer any insurance proceeds to be collected and (ii)
deliver or pay to the Buyer (A) any insurance proceeds collected by the Seller
to date, (B) the amount of any deductible payable by the Seller under any such
insurance, (C) the amount of any uninsured losses incurred by the Seller and (D)
the amount of any rent abatements allowed to tenants, except in each case to the
extent needed to reimburse the Seller for sums expended to repair or restore
such Property reasonably approved by the Buyer.
SECTION 4.4 MAJOR LOSS - SUBSEQUENT MATERIAL ADVERSE MATTER.
(a) If, with respect to any Property, the aggregate cost to
repair any such Subsequent Material Adverse Matter equals or exceeds One Hundred
Thousand Dollars ($100,000), then, with respect to each such Property, the
Seller may, at its option to be exercised by written notice to the Buyer,
either: (i) treat such Property as a Deleted Property, or (ii) treat such
Property as a Deferred Property, in which case the procedures set forth in
Section 1.4 and 1.8 shall apply.
SECTION 4.5 CERTAIN PROCEDURES. The Seller shall promptly notify the
Buyer after the Seller obtains knowledge of any material damage, destruction or
condemnation action with respect to the Properties or of any Subsequent Material
Adverse Matter with respect to the Properties. The aggregate cost to repair any
such Subsequent Material Adverse Matter, damage or destruction of all Deferred
Properties and Deleted Properties plus the diminution in the value of all
Deferred Properties and Deleted Properties as a result of condemnation is
referred to herein as the "Value Diminution."
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ARTICLE V
BROKERS AND EXPENSES
SECTION 5.1 BROKERS.
(a) The Seller represents and warrants to the Buyer that the
Seller engaged, retained or hired no broker or finder with respect to this
transaction except for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co. ("Seller's Broker"). At
Closing, the Seller shall pay the commission due, if any, to the Seller's
Broker, which shall be paid pursuant to separate agreements between the Seller
and the Seller's Broker. If any other person brings a claim for a commission or
finder's fee based upon any contact, dealings or communication with the Seller
or the Seller's Broker, then the Seller shall defend the Buyer from such claim,
and shall indemnify the Buyer and hold the Buyer harmless from any and all
costs, damages, claims, liabilities or expenses (including without limitation,
reasonable attorneys' fees and disbursements) incurred by the Buyer in defending
against the claim.
(b) The Buyer represents and warrants to the Seller that the
Buyer engaged, retained or hired no broker or finder with respect to this
transaction except for Secured Capital ("Buyer's Broker"). At Closing, the Buyer
shall pay the commission due, if any, to the Buyer's Broker, which shall be paid
pursuant to separate agreements between the Buyer and the Buyer's Broker. If any
other person brings a claim for a commission or finder's fee based upon any
contact, dealings or communication with the Buyer or the Buyer's Broker, then
the Buyer shall defend the Seller from such claim, and shall indemnify the
Seller and hold the Seller harmless from any and all costs, damages, claims,
liabilities or expenses (including without limitation, reasonable attorneys'
fees and disbursements) incurred by the Seller in defending against the claim.
(c) The provisions of this Section 5.1 shall survive the
Closing or, if the purchase and sale is not consummated, any termination of this
Agreement.
SECTION 5.2 EXPENSES. Except as otherwise provided in this Agreement,
each party hereto shall pay its own expenses incurred in connection with this
Agreement and the transactions contemplated hereby.
ARTICLE VI
COVENANTS
SECTION 6.1 MAINTENANCE, LEASING AND SALE OF THE PROPERTIES. Between
the date hereof and the Closing, the Seller shall maintain and operate the
Properties, including without limitation, enter into new leases and perform
tenant improvements, in the ordinary course of business consistent with past
practices, in each case at the Seller's sole cost and expense. In furtherance of
the foregoing, between the date hereof and the Closing (except as set forth in
clause (vi) below):
(i) The Seller shall not sell or refinance any Real Property,
or enter into any agreement to sell or refinance any Real Property without first
obtaining the Buyer's approval in
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Buyer's sole discretion (all such Real Property that is sold or to be sold in
accordance with the foregoing, the "Sold Properties"). If the Buyer fails to
give the Seller notice of its approval of any such proposed sale or refinance
within five (5) business days after the Seller notifies the Buyer of the
Seller's desire to take such action, then the Buyer shall be deemed to have
disapproved of such action.
(ii) Without the prior consent of the Buyer in Buyer's sole
discretion, the Seller will not incur out-of-pocket third party costs, whether
expensed or capitalized for financial reporting purposes, for the development of
the Development Properties.
(iii) The Seller will provide the Buyer with prior written
notice before entering into any new tenant leases for any of the Properties if
the terms of such new tenant leases are materially less favorable to the lessor,
on the whole, than the parameters of terms for new tenant lease terms set forth
on EXHIBIT E hereto; provided, however, if after the date hereof, the Buyer
delivers written notice to the Seller that leases with respect to at least
twenty-five percent (25%) of the square footage of Properties leased by the
Seller after the date hereof are not, on the whole, within or more favorable
than such parameters, and the Seller cannot within three (3) business days
disprove the facts asserted in such notice, then the Seller shall not enter into
any such new leases without the Buyer's prior written consent in the Buyer's
sole discretion. In addition, the Seller shall not, without the prior written
consent of the Buyer in its sole discretion, enter into any new lease with a
term longer than 5 years (except for the proposed lease with Shimoda in the
Miramar Facility).
(iv) The Seller shall promptly notify the Buyer of (A) any
condemnation, environmental, zoning or other land-use regulation proceedings of
which the Seller obtains knowledge, (B) any notices of violations of any
applicable federal, state or local law, regulation or ordinances relating to the
Properties of which the Seller obtains knowledge, (C) any litigation of which
the Seller obtains knowledge that arises out of the ownership of the Properties,
and (D) any matters of which the Seller obtains knowledge, which would make any
of the Seller's representations and warranties contained herein untrue.
(v) The Seller shall maintain or cause to be maintained, at
the Seller's sole cost and expense, all policies of insurance currently in
effect with respect to the Properties (or comparable replacements thereof).
(vi) The Seller shall deliver to the Buyer copies of all
operating statements prepared in the ordinary course of business within fifteen
(15) days after the Seller's preparation thereof relating to periods prior to
Closing, even if prepared after Closing. The Seller shall also deliver to the
Buyer copies of any bills for real estate taxes and personal property taxes and
copies of any notices pertaining to real estate taxes or assessments applicable
to the Properties that are received by the Seller after the date hereof, even if
received after Closing. The obligations set forth in this Paragraph 6.1(vi)
shall survive the Closing.
(vii) Without the prior consent of the Buyer, which consent
shall not be unreasonably withheld, the Seller shall not enter into any new
leasing, brokerage or service contract with respect to the Properties that will
be binding upon the Buyer for a period in excess of three (3) months after
Closing and the Seller shall not enter into any other contract or
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agreement (other than as set forth in clause (iii) above) that will be binding
upon the Buyer for any period of time after Closing without the Buyer's consent
in its sole discretion.
SECTION 6.2 ASSUMPTION OF MORTGAGES. The Buyer will assume the Loans;
provided that it shall be a condition precedent to the Buyer's obligation to
assume any Loan encumbering a Property that the following terms and conditions
are satisfied at the Closing:
(a) Subject to the terms of this Section 6.2 and Section 10.21
below, at the Closing, the Buyer and the Seller will execute and deliver an
Assumption Agreement reasonably approved by the Buyer with respect to each Loan
being assumed by the Buyer, along with such other reasonable documentation
reasonably approved by the Buyer as necessary or appropriate, or as reasonably
required by any Mortgage Lender, to cause the Buyer to assume such Loan. Each
such Assumption Agreement shall confirm the amounts outstanding under the
applicable Loan, shall confirm the Loan Documents, and shall contain a
representation that to the best of the Lender's knowledge, there are no defaults
by the borrower thereunder. Notwithstanding the foregoing, the Buyer shall not
be required to assume any of the Seller's obligations under the Loans and Loan
Documents arising prior to the Closing Date. Notwithstanding anything to the
contrary contained herein, under no circumstances shall the Loan Documents,
Assumption Agreement or such other reasonable documentation contain any
provision which provides recourse against California Public Employee Retirement
System or any entity other than the Buyer.
(b) In connection with the Buyer's assumption of Loans at
Closing, the Buyer and the Seller shall each pay fifty percent (50%) of all
commercially reasonable assumption fees and other commercially reasonable costs
and expenses to be paid to the Mortgage Lender under the applicable Loan
Documents for such assumption (including the Mortgage Lender's legal fees, if
required to be paid under the Loan Documents), and any title, recording, escrow,
transfer fees and closing costs related thereto.
(c) Notwithstanding anything to the contrary contained herein,
at the Closing, the Buyer shall not be required to assume any Loan which (i)
encumbers any property which is not described on EXHIBIT A, EXHIBIT A-2 or
EXHIBIT B attached hereto, (ii) encumbers any property which is not being
acquired by the Buyer at such Closing, or (iii) is cross-defaulted with any
other loan or agreements affecting any property not being acquired by the Buyer
at the Closing.
(d) In the event that any of the conditions or terms set forth
in Sections 6.2(a) through Section 6.2(c) are not satisfied prior the Closing,
the Seller shall repay the Loan or Loans for which such conditions or terms are
not satisfied at the Closing, including, without limitation, any prepayment
penalty or fee in connection therewith.
(e) If the terms of a Loan related to a particular Property
prohibit prepayment by the Seller and the lender(s) under such Loan do not
consent to the assumption of such Loan by the Buyer, then such Property shall be
deemed to be a Category A Deleted Property.
SECTION 6.3 SERVICE CONTRACTS. Not later than sixty (60) days after the
commencement of the Diligence Period, the Buyer may deliver a written notice to
the Seller
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instructing the Seller which property management, brokerage and leasing
contracts and servicing contracts the Buyer wishes to be terminated upon
Closing. If the Buyer delivers such a timely notice, then, unless otherwise
agreed by the Seller and the Buyer, (i) the Seller will terminate, prior to the
Closing, all such identified property management, brokerage and leasing
contracts (subject to customary obligations under such contracts to pay
commissions if the leasing agent secures a tenant from a designated list of
possible tenants within a specified period of time (not more than ninety (90)
days) after termination, which the Buyer will assume); and (ii) and the Seller
will notify third parties under all such service contracts of the Seller's
intent to terminate such service contracts at the earliest possible termination
date (but no earlier than Closing, unless the Seller elects to do so). The
Seller shall pay any termination fees incurred by the Seller with respect to any
such cancellation.
SECTION 6.4 TENANT NOTICES; ESTOPPELS.
(a) At the Closing, the Seller shall furnish the Buyer with a
signed notice to be given to each tenant of the Properties. The notice shall
disclose that the Property has been sold to the Buyer, that, after the Closing,
all rents should be paid to the Buyer at an address to be supplied by the Buyer
and that the Buyer shall be responsible for all the tenant's security deposit.
The form of the notice and the amount of each tenant's security deposit listed
therein shall be otherwise reasonably acceptable to the parties.
(b) Between the date hereof and the Closing, the Seller shall
use commercially reasonable efforts to obtain estoppel certificates,
substantially in the form of EXHIBIT H hereto, from tenants of the Properties.
(c) Between the date hereof and the Closing, the Seller shall
use commercially reasonable efforts to obtain ground lessor estoppel
certificates, in form reasonably satisfactory to the Buyer, or on such other
form as may be required by the applicable lessors, from lessors under the Ground
Leases.
SECTION 6.5 SOLICITATION; NEGOTIATIONS.
(a) Subject to Section 6.5(b), unless and until this Agreement
shall have been terminated in accordance with its terms, the Seller agrees and
covenants that (i) neither the Seller nor any of its respective subsidiaries or
affiliates, shall, and each of them shall direct and cause their respective
officers, directors and employees, and shall use commercially reasonable efforts
to cause their agents and representatives (including, without limitation, any
investment banker, attorney or accountant retained by it or any of its
subsidiaries), not to, directly or indirectly, initiate, solicit or encourage
any inquiries or the making or implementation of any proposal or offer with
respect to a merger, acquisition, or similar transaction involving the direct or
indirect purchase of all or any material portion of the Properties or of the
Seller (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal") or engage in any negotiations with, or provide any
confidential information or data to, or have any discussions with, any person
relating to, an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal.
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(b) Notwithstanding anything set forth in this Agreement to
the contrary, the Board of Directors of the Seller (the "Seller Board") may
furnish information to or enter into discussions or negotiations with any person
that makes an unsolicited bona fide proposal to purchase all or a portion of the
Properties having an aggregate Allocated Value of at least seventy-five percent
(75%) of the Purchase Price, whether, directly or indirectly, by merger,
purchase of stock, purchase of assets, consolidation or otherwise (a
"Proposal"), if the Seller Board determines in good faith that the Proposal, if
consummated as proposed, would result in a transaction more favorable to the
Seller's stockholders from a financial point of view than the transactions
contemplated by this Agreement (any such Proposal being referred to herein as a
"Superior Proposal"). If the Seller Board is prepared to accept the Superior
Proposal, then the Seller shall give the Buyer 48 hours notice that the Seller
Board is prepared to accept the Superior Proposal, provided that the Seller may
not definitively accept a Superior Proposal unless the Seller concurrently
therewith terminates this Agreement pursuant to Section 9.1(c)(iv) and, promptly
after such termination, makes any payments required by Section 9.3.
SECTION 6.6 PROXY STATEMENT; MEETING OF STOCKHOLDERS.
(a) Promptly after the execution hereof and no later than
thirty (30) days before the Final Date (but in no event earlier than may be
required, under the circumstances of the transactions contemplated hereby and
any other related transactions, for such proxy statement to comply with
applicable law), the Seller shall prepare and file with the Securities and
Exchange Commission (the "SEC") the proxy statement for the solicitation of a
vote of the Seller's stockholders to approve the transactions contemplated
hereby, which, subject to the fiduciary duty of the Seller Board, shall include
the recommendation of the Seller Board that stockholders of the Seller vote in
favor of the approval and adoption of this Agreement (the "Proxy Statement").
The Seller shall use all reasonable efforts to have the Proxy Statement cleared
by the SEC as promptly as practicable after such filing, and promptly thereafter
mail the Proxy Statement to the stockholders of the Seller. Whenever any event
occurs which is required to be set forth in an amendment or supplement to the
Proxy Statement, the Seller will promptly inform the Buyer of such occurrence
and cooperate in filing with the SEC or its staff or any other government
officials, and/or mailing to stockholders of the Seller, such amendment or
supplement.
(b) The Seller shall take all actions necessary in accordance
with Maryland law, its Certificate of Incorporation and bylaws to duly call,
give notice of, convene and hold a meeting of its stockholders as promptly as
practicable to consider and vote upon the adoption and approval of this
Agreement and the transactions contemplated hereby (the "Meeting"). The
stockholder vote required for the adoption and approval of the transactions
contemplated by this Agreement shall be the vote required by Maryland law, the
Seller's Certificate of Incorporation and bylaws. Notwithstanding anything to
the contrary contained in this Agreement, the Seller may adjourn or postpone (i)
the Meeting to the extent necessary to ensure that any necessary supplement or
amendment to the Proxy Statement is provided to the Seller's stockholders in
advance of a vote on the transactions contemplated by this Agreement or (ii) the
time for which the Meeting is originally scheduled (as set forth in the Proxy
Statement), if there are insufficient shares represented, either in person or by
proxy, to constitute a quorum necessary to conduct the business of the Meeting.
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(c) The Seller will promptly inform the Buyer of the results
of the Meeting and the satisfaction or non-satisfaction of the condition set
forth in Section 8.1(a).
SECTION 6.7 NO EMPLOYEES. In no event will the transactions
contemplated hereby be deemed to render employees of the Seller to be employees
of the Buyer, and the Buyer shall have no obligations with respect to such
employees.
SECTION 6.8 MANAGEMENT AGREEMENT. The Buyer and the Seller hereby
covenant to use commercially reasonable efforts to enter into a management
agreement with respect to the Buyer's retention of the Seller as the manager of
the Properties after the Closing. Notwithstanding the foregoing or any other
terms contained herein, neither the execution or non-execution of such
management agreement nor the satisfaction or nonsatisfaction of the obligations
of either party hereto under this Section 6.8 shall be a condition to the
respective obligations of the parties to effect the Closing and, if the parties
do not enter into any such management agreement, neither party will have any
further obligation to the other with respect to such management agreement.
ARTICLE VII
CLOSING AND ESCROW
SECTION 7.1 ESCROW INSTRUCTIONS. Upon execution of this Agreement, the
parties hereto shall deposit an executed counterpart of this Agreement with the
Title Company, and this instrument shall serve as the instructions to the Title
Company as the escrow holder for consummation of the purchase and sale
contemplated hereby. The Seller and the Buyer agree to execute such reasonable
additional and supplementary escrow instructions as may be appropriate to enable
the Title Company to comply with the terms of this Agreement; provided, however,
that in the event of any conflict between the provisions of this Agreement and
any supplementary escrow instructions, the terms of this Agreement shall
control.
SECTION 7.2 CLOSING. Subject to Article VIII hereof, the Closing
hereunder shall be held and delivery of all items to be made at the Closing
under the terms of this Agreement shall be made at the offices of the Title
Company on the date which is seven (7) business days after the satisfaction or
waiver of all conditions to Closing, and before 9:00 a.m. local time, or such
other earlier date and time as the Buyer and the Seller may mutually agree upon
in writing (the "Closing Date"). Except as expressly provided in this Agreement,
such date and time may not be extended without the prior written approval of
both the Seller and the Buyer. All funds of the Buyer to be deposited in escrow
for the Closing shall be deposited by the Buyer in escrow no later than the last
business day prior to the Closing Date.
SECTION 7.3 DEPOSIT OF DOCUMENTS.
(a) At or before the Closing, the Seller shall deposit into
escrow the following items:
(1) the duly executed and acknowledged Deeds
conveying the Real Properties to be purchased at the Closing (but not the Real
Properties subject to Ground Leases, provided, the Buyer may require a Deed to
it conveying the Seller's interest as owner of
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buildings and improvements on such Ground Leased Property) to the Buyer subject
to the Conditions of Title;
(2) four (4) duly executed counterparts of the ▇▇▇▇
of Sale in the form attached hereto as EXHIBIT I (the "▇▇▇▇ of Sale"), with
EXHIBIT C to said ▇▇▇▇ of Sale listing the Conditions of Title;
(3) four (4) duly executed counterparts of an
Assignment and Assumption of Leases, Service Contracts and Warranties in the
form attached hereto as EXHIBIT J pursuant to the terms of which the Buyer shall
assume all of the Seller's obligations under the Leases, equipment leases,
service contracts, leasing commission agreements and tenant improvement
agreements affecting the Properties to the extent set forth in said EXHIBIT J
(the "Assignment of Leases"), with Exhibit D to said document listing the
Conditions of Title;
(4) four (4) duly executed counterparts of an
Assignment and Assumption of Ground Leases in forms to be agreed by the parties
pursuant to the terms of which the Buyer shall assume all of the Seller's
obligations under the Ground Leases which accrue from and after the date of
Closing (the "Assignment of Ground Leases");
(5) four (4) duly executed counterparts of an
Assumption Agreement for each Loan being assumed pursuant to Section 6.2 hereof
pursuant to the terms of which the Buyer shall assume all of the Seller's
obligations under the Loans which accrue from and after the date of Closing,
which Assumption Agreements must be reasonably acceptable to the Buyer and
conform to the provisions of Section 6.2 above (each, an "Assumption
Agreement");
(6) an affidavit pursuant to Section 1445(b)(2) of
the Federal Code, and on which the Buyer is entitled to rely, that the Seller is
not a "foreign person" within the meaning of Section 1445(f)(3) of the Federal
Code and any other comparable state certificates;
(7) good standing letters reasonably satisfactory to
the Buyer from the Arizona Department of Revenue ("DOR") and all other
appropriate state, county and/or municipal taxing authorities in Arizona
(collectively the "Arizona Taxing Authorities") stating that Seller has paid all
applicable rental taxes, transaction privilege (sales) taxes, personal property
taxes, use taxes and similar excise taxes due in connection with the Properties
located in Arizona and the operation of the Seller's business at the Properties
located in Arizona;
(8) An Affidavit of Property Value for each of the
Real Properties located in Arizona allocating the value of said Real Properties
in accordance with EXHIBIT A-1;
(9) A Washington real estate excise tax affidavit in
the form required by the Title Company for each of the Real Properties located
in Washington allocating the value of said Real Properties in accordance with
EXHIBIT A-1;
(10) Four (4) duly executed counterparts of a closing
statement in form and content satisfactory to the Buyer and the Seller (the
"Closing Statement") duly executed by the Seller.
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(b) At or before Closing, the Buyer shall deposit into escrow
the following items:
(1) funds necessary to close this transaction;
(2) four (4) duly executed counterparts of the ▇▇▇▇
of Sale;
(3) four (4) duly executed counterparts of the
Assignment of Leases;
(4) An Affidavit of Property Value for each of the
Real Properties located in Arizona allocating the value of said Real Properties
in accordance with EXHIBIT A-1; and
(5) A Washington real estate excise tax affidavit in
the form required by the Title Company for each of the Real Properties located
in Washington allocating the value of said Real Properties in accordance with
EXHIBIT A-1;
(6) four (4) duly executed counterparts of the
Closing Statement.
(7) four (4) duly executed counterparts of the
Assignment of Ground Leases; and
(8) four (4) duly executed counterparts of an
Assumption Agreement for each Loan being assumed pursuant to Section 6.2 hereof.
(c) The Buyer and the Seller shall each deposit such other
instruments as are reasonably required by the Title Company or otherwise
required to close the escrow and consummate the purchase and sale of the
Properties in accordance with the terms hereof, including, without limitation,
an agreement (the "Designation Agreement") designating Title Company as the
"Reporting Person" for the transaction pursuant to Section 6045(e) of the
Federal Code and the regulations promulgated thereunder, and executed by the
Seller, the Buyer and Title Company. The Designation Agreement shall appear in
the Seller's and the Buyer's escrow instructions and shall be in a form
reasonably acceptable to the parties, and, in any event, shall comply with the
requirements of Section 6045(e) of the Federal Code and the regulations
promulgated thereunder.
(d) The Seller shall deliver to the Buyer originals of the
leases, copies of the tenant correspondence files (for the three (3) most recent
years of the Seller's ownership of the Properties only), and originals of any
other items which the Seller was requested to furnish the Buyer copies of or
make available at the Properties, except for the Seller's general ledger and
other internal books or records which shall be retained by the Seller, within
five (5) business days after the Closing Date. The Seller shall deliver to the
Buyer keys to the Properties on the Closing Date.
(e) The Seller shall deliver possession of the Properties to
the Buyer upon the Closing, subject to the Conditions of Title.
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SECTION 7.4 FURTHER EFFORTS. Subject to the terms and conditions herein
provided, including Section 6.5, each of the parties hereto agrees to use all
reasonable efforts to take or cause to be taken all action and to do or cause to
be done all things reasonably necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement, including using
all reasonable efforts to do the following, (i) obtain consents of all third
parties and governmental entities necessary, proper, advisable or reasonably
requested by the Buyer or the Seller, for the consummation of the transactions
contemplated by this Agreement; (ii) use all reasonable efforts to take or cause
to be taken all action and to do or cause to be done all things reasonably
necessary, proper or advisable in order for the conditions to closing set forth
in Article VIII hereof to be satisfied; and (iii) execute any additional
instruments necessary to consummate the transactions contemplated hereby.
SECTION 7.5 PRORATIONS.
(a) Except as set forth herein, the Seller shall pay for all
tenant improvement costs, leasing commissions and Tenant Inducements for leases
executed prior to the Closing. Rents, including, without limitation, percentage
rents, if any, and any additional charges and expenses payable under tenant
Leases or licenses, including without limitation telecommunications licenses,
all as and when actually collected (whether such collection occurs prior to, on
or after the Closing Date); rents payable by the Seller on the Ground Leases,
interest payable under the Loans, real property taxes and assessments; water,
sewer and utility charges; personal property taxes, if any; amounts payable
under any service contracts; annual permits and/or inspection fees (calculated
on the basis of the period covered); any other expenses of the operation and
maintenance of the Properties; and the above market portions of tenant
improvement costs and leasing commissions related to the Properties in the event
the parties, in their sole discretion, agree in writing, after written prior
notice thereof from the Seller to the Buyer, that any such tenant improvements
or leasing commissions are for amounts that are above market rates, shall all be
prorated as of 12:01 a.m. on the date the Deed is recorded, on the basis of a
365-day year. Any sums collected by the Buyer from tenants after the Closing
shall be promptly paid to the Seller to the extent of any rents and other sums
which were delinquent at Closing, after first applying all such amounts
collected to current obligations. The Buyer shall use reasonable efforts to
collect such delinquent rents but shall not be obligated to expend any sums,
commence any litigation, terminate any lease or threaten to terminate any lease
to do so. The Seller retains the rights to collect any such delinquent rents
from tenants after Closing provided that the Seller shall use personnel
independent of any personnel who may be performing management services for the
Buyer to do so and provided that the Seller shall not commence any legal or
equitable proceedings in the nature of an unlawful detainer, eviction or other
proceeding which would have the effect of interfering with any tenant's quiet
enjoyment of its leased premises or result in a lien or encumbrance on such
leased premises. The amount of any security deposits (but not letters of credit
in lieu thereof, which shall be transferred by the Seller in accordance with the
provisions of Section 7.5(b) below) under tenant Leases shall be credited
against the Purchase Price and the Buyer shall assume all liabilities
thereunder. The Seller shall receive credits at Closing for the amount of any
utility or other deposits with respect to the Properties, in which case all such
deposits for which the Seller receives credit shall remain in place for the
benefit of the Buyer and the Seller shall execute and deliver such documents as
shall be necessary to assign such deposits to the Buyer. The Buyer shall use
reasonable efforts to cause all utilities and letters of credit to be
transferred into the Buyer's name and account at the
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time of Closing. The Seller and the Buyer hereby agree that if any of the
aforesaid prorations and credits cannot be calculated accurately on the Closing
Date, then the same shall be calculated as soon as reasonably practicable after
the Closing Date and either party owing the other party a sum of money based on
such subsequent proration(s) or credits shall promptly pay said sum to the other
party. The Seller and the Buyer shall jointly prepare and approve a preliminary
Closing Statement on the basis of the Leases and other sources of income and
expenses, and shall deliver such computation to the Title Company prior to the
Closing.
(b) In connection with the transfer of the Property to the
Buyer, the Seller shall use commercially reasonable efforts to have each letter
of credit security deposit or other noncash security deposit (collectively, the
"Noncash Deposits") for those tenants of the Properties which have Noncash
Deposits reissued in favor of the Buyer upon the Closing. In the event that the
Seller is unable to have all of the Noncash Deposits reissued in favor of the
Buyer upon the Closing, then the Seller shall use commercially reasonable
efforts to have the Noncash Deposits promptly reissued in favor of the Buyer
after the Closing. Until all of the Noncash Deposits are reissued in favor of
the Buyer, in the event that the Buyer is entitled to draw down a Noncash
Deposit or otherwise realize upon a Noncash Deposit pursuant to a tenant's
lease, then the Seller shall reasonably cooperate with the Buyer as reasonably
requested by the Buyer to facilitate such draw down or realization.
(c) The provisions of Sections 7.4 and 7.5 shall survive the
Closing.
ARTICLE VIII
CONDITIONS TO CLOSING
SECTION 8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE
CLOSING. The respective obligations of each party hereto to effect the Closing
are subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(a) this Agreement shall have been approved and adopted by the
requisite vote of the stockholders of the Seller; and
(b) no statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or enforced
by any United States federal or state court or United States federal or state
governmental entity that prohibits or enjoins the consummation of the Closing.
SECTION 8.2 CONDITIONS TO THE OBLIGATIONS OF THE SELLER. The obligation
of the Seller to effect the Closing is subject to the satisfaction at or prior
to the Closing Date of the following conditions:
(a) there shall not have been a breach of any representations
and warranties on the part of the Buyer set forth in this Agreement that
materially adversely affects (or materially delays) the ability of the Buyer to
consummate the Closing, except for any such breach that the Buyer has cured
within five (5) business days after notice by the Seller thereof, and, at the
Closing, the Buyer shall have delivered to the Seller a certificate to that
effect, executed by an executive officer of the Buyer;
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(b) there shall not have occurred a breach by the Buyer of any
of its covenants and obligations hereunder that materially adversely affects (or
materially delays) the ability of the Buyer to consummate the Closing, except
for any such breach that the Buyer has cured within five (5) business days after
notice by the Seller thereof, and, at the Closing, the Buyer shall have
delivered to the Seller a certificate to that effect, executed by an executive
officer of the Buyer; and
(c) The Buyer shall have delivered the documents set forth in
Sections 7.3(b) and (c) and as otherwise required hereby.
(d) The Seller shall have received a copy of the resolutions
of the Buyer, certified by an appropriate officer of the Buyer, reflecting the
Buyer's authority to consummate the transactions contemplated hereby, including
the authority of the Buyer to consummate the purchase of Deferred Properties, if
any.
SECTION 8.3 CONDITIONS TO THE OBLIGATIONS OF THE BUYER. The obligations
of the Buyer to effect the Closing are subject to the satisfaction at or prior
to the Closing Date of the following conditions (provided that, with respect to
any event, circumstance or condition that is both a Material Adverse Matter and
a breach of a representation, warranty, covenant or agreement of the Seller,
such event, circumstance or condition shall be treated as a Material Adverse
Matter and not as a breach of a representation, warranty, covenant or agreement
of the Seller):
(a) (i) the representations and warranties of the Seller
contained in this Agreement (other than those set forth in Sections 2.1(e), (f),
(l) and (h) (to the extent (h) relates to Leases, Ground Leases or other
income-producing assets related to the Properties)) shall be true and correct at
and as of the Closing with the same effect as if made at and as of the Closing
and, at the Closing (except to the extent the aggregate of all such breaches,
together with breaches of the covenants and obligations of the Seller to be
performed at or before the Closing pursuant to the terms of this Agreement, do
not result in damages or losses incurred or to be incurred by the Buyer that
equal or exceed Five Hundred Thousand Dollars ($500,000) and with respect to
Section 2.1(f) except for Leases entered into in compliance with Section
6.1(iii)); and
(ii) the representations and warranties of the Seller
set forth in Sections 2.1(e), (f), (l) and (h) (to the extent (h) relates to
Leases, Ground Leases or other income-producing assets related to the
Properties) of this Agreement shall be true and correct at and as of the Closing
with the same effect as if made at and as of the Closing, except with respect to
Section 2.1(f) for Leases entered into in compliance with Section 6.1(iii),
and, with respect to each of clauses (i) and (ii), the Seller shall have
delivered to the Buyer a certificate to that effect, executed by an executive
officer of the Seller;
(b) each of the covenants and obligations of the Seller to be
performed at or before the Closing pursuant to the terms of this Agreement shall
have been duly performed at or before the Closing (except to the extent the
aggregate of all such breaches, together with breaches of the representations
and warranties of the Seller contained in this Agreement, do not result in
damages or losses incurred or to be incurred by the Buyer that equal or exceed
Five
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Hundred Thousand Dollars ($500,000)) and, at the Closing, the Seller shall have
delivered to the Buyer a certificate to that effect, executed by an executive
officer of the Company;
(c) The Seller shall have delivered the documents set forth in
Sections 7.3(a) and (c) and as otherwise required hereby;
(d) The Buyer shall have received a copy of the resolutions of
the Seller's Board of Directors, certified by an appropriate officer of the
Seller, reflecting the authorization of the transactions contemplated hereby;
and
(e) the Title Company shall have delivered the Title Policy to
the Buyer.
ARTICLE IX
TERMINATION
SECTION 9.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing, whether before or after approval and adoption of this
Agreement by the Seller's stockholders:
(a) by mutual written consent of the Buyer and the Seller;
(b) by the Buyer or the Seller if the Closing has not been
consummated by December 15, 2000 (the "Final Date"); provided, however, that no
party may terminate this Agreement pursuant to this Section 9.1(b) if such
party's failure to fulfill any of its obligations under this Agreement shall
have been a principal reason that the Closing shall not have occurred on or
before said date;
(c) by the Seller if:
(i) there shall have been a breach of any
representations or warranties on the part of the Buyer set forth in this
Agreement that materially adversely affects (or materially delays) the ability
of the Buyer to consummate the Closing, and the Buyer has not cured such breach
within five (5) business days after notice by the Seller thereof, provided that
the Seller has not breached any of its obligations hereunder in any material
respect;
(ii) there shall have been a breach by the Buyer of
any of its covenants or agreements hereunder that materially adversely affects
(or materially delays) the ability of the Buyer to consummate the Closing, and
the Buyer has not cured such breach within five (5) business days after notice
by the Seller thereof, provided that the Seller has not breached any of its
obligations hereunder in any material respect;
(iii) the Seller shall have convened the Meeting and
shall have failed to obtain the requisite vote of its stockholders at the
Meeting (including any adjournments thereof) to approve this Agreement and the
transactions contemplated hereby;
(iv) the Seller Board has received and is prepared to
accept a Superior Proposal and has complied with the provisions of Section 6.5;
provided that no such termination
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shall be effective until the Seller shall have made the termination payment set
forth in Section 9.3(a);
(v) the remediation costs (net of insurance proceeds
received by the Seller related to such remediation costs, exclusive of Breach
Costs and exclusive of a maximum of One Million Five Hundred Thousand Dollars in
remediation costs (if any), for Environmental Defects directly related to the
▇▇▇▇▇▇ leased space at the Mountain Avenue facility) for Environmental Defects,
Title Defects and Zoning Defects (whether related to Deferred Properties or
Deleted Properties) exceeds Twenty-Five Million Dollars ($25,000,000) in the
aggregate;
(vi) the aggregate Value Diminution (net of insurance
proceeds and condemnation awards received by the Seller related to such Value
Diminution and exclusive of Breach Costs) (whether related to Deferred
Properties or Deleted Properties) exceeds Twenty-Five Million Dollars
($25,000,000);
(vii) the sum of remediation costs (net of insurance
proceeds received by the Seller related to such remediation costs, exclusive of
Breach Costs and exclusive of a maximum of One Million Five Hundred Thousand
Dollars in remediation costs (if any), for Environmental Defects directly
related to the ▇▇▇▇▇▇ leased space at the Mountain Avenue facility) for
Environmental Defects, Title Defects and Zoning Defects plus the aggregate Value
Diminution (net of insurance proceeds and condemnation awards received by the
Seller related to such Value Diminution) (in each case whether related to
Deferred Properties or Deleted Properties) exceeds Forty Million Dollars
($40,000,000) in the aggregate;
(viii) the remediation costs (net of insurance
proceeds received by the Seller related to such remediation costs and exclusive
of Breach Costs) for Structural Defects and Code Defects (whether related to
Deferred Properties, Deleted Properties or Properties as to which the Seller
elects to cure any Material Adverse Matter) exceeds the Shared Remediation
Maximum; or
(ix) the aggregate Allocated Values for all Category
B Deleted Properties equals or exceeds Ninety Million Dollars ($90,000,000);
provided, however, with respect to clauses (v), (vi), (vii) and (viii), the
remediation costs for a particular matter shall not count both as remediation
costs and Value Diminution (with the intent that amounts are not double
counted).
(d) by the Buyer if:
(i) there shall have been a breach of any
representations or warranties on the part of the Seller set forth in this
Agreement such that the condition set forth in Section 8.3(a) would be incapable
of being satisfied by the Final Date, and the Seller has not cured such breach
within five (5) business days after notice by the Buyer thereof, provided that
the Buyer has not breached any of its obligations hereunder in any material
respect;
(ii) there shall have been a breach by the Seller of
any of its covenants or agreements hereunder such that the condition set forth
in Section 8.3(b) would be incapable of being satisfied by the Final Date, and
the Seller has not cured such breach within five (5)
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business days after notice by the Buyer thereof, provided that the Buyer has not
breached any of its obligations hereunder in any material respect;
(iii) the Seller shall have convened the Meeting and
shall have failed to obtain the requisite vote of its stockholders at the
Meeting (including any adjournments thereof) to approve this Agreement and the
transactions contemplated hereby;
(iv) the Seller Board has accepted a Superior
Proposal or has withdrawn or adversely modified its approval or recommendation
of this Agreement; or
(v) the aggregate square footage of the Deleted
Properties exceeds Five Million (5,000,000) square feet.
SECTION 9.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 9.1, this Agreement shall
forthwith become void and have no effect without any liability on the part of
any party hereto or its affiliates, directors, officers or stockholders;
provided that the provisions of this Section 9.2 and Sections 9.3, 9.4, 10.5,
10.8, 10.9 and 10.10 shall survive any such termination. Nothing contained in
this Section 9.2 shall relieve any party from liability for any breach of any
covenant in this Agreement prior to such termination.
SECTION 9.3 FEES AND EXPENSES.
(a) In the event that this Agreement shall be terminated
pursuant to Section 9.1(c)(iv) or 9.1(d)(iv), the Title Company shall promptly
(within two (2) business days) return the Deposit to the Buyer, with interest
from the date of placement of the Deposit into escrow, and the Seller shall
promptly (within two (2) business days) pay to the Buyer as a termination fee an
additional Twenty-Five Million Dollars ($25,000,000).
(b) IN THE EVENT THAT THIS AGREEMENT SHALL BE TERMINATED
PURSUANT TO SECTION 9.1(b) AS A RESULT OF A FAILURE TO SATISFY THE CONDITION SET
FORTH IN SECTION 8.1(b) DUE TO AN ORDER, DECREE, RULING OR INJUNCTION ISSUED OR
ENTERED AGAINST THE SELLER OR PURSUANT TO SECTION 9.1(c)(iii), 9.1(c)(ix),
9.1(d)(i), 9.1(d)(ii) OR 9.1(d)(iii), THEN, AS THE BUYER'S SOLE REMEDY, THE
TITLE COMPANY SHALL PROMPTLY (WITHIN TWO (2) BUSINESS DAYS) RETURN THE DEPOSIT
TO THE BUYER, WITH INTEREST FROM THE DATE OF PLACEMENT OF THE DEPOSIT INTO
ESCROW, AND THE SELLER SHALL PROMPTLY (WITHIN TWO (2) BUSINESS DAYS) PAY TO THE
BUYER THE AMOUNT OF SIX MILLION DOLLARS ($6,000,000) AS REIMBURSEMENT FOR THE
OUT-OF-POCKET COSTS, FEES AND EXPENSES INCURRED BY THE BUYER OR ON ITS BEHALF IN
CONNECTION WITH THIS AGREEMENT AND AS LIQUIDATED DAMAGES IMMEDIATELY UPON THE
OCCURRENCE OF THE EVENT DESCRIBED IN THIS SECTION 9.3(b) GIVING RISE TO SUCH
DAMAGES. IT IS SPECIFICALLY AGREED THAT THE AMOUNTS TO BE PAID PURSUANT TO THIS
SECTION 9.3(b) REPRESENT LIQUIDATED DAMAGES AND NOT A PENALTY. THE SELLER HEREBY
WAIVES ANY RIGHT TO SET-OFF OR COUNTERCLAIM AGAINST SUCH AMOUNT.
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AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE
CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNTS SET FORTH IN
THIS SECTION 9.3(b) ARE A REASONABLE ESTIMATE OF THE DAMAGES THAT THE BUYER
WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH PARTY
SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT
THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS
AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
INITIALS: THE SELLER ______ THE BUYER ______
(c) In the event that this Agreement shall be terminated
pursuant to Section 9.1(a), 9.1(c)(v), 9.1(c)(vi), 9.1(c)(vii), 9.1(c)(viii) or
9.1(d)(v) or pursuant to Section 9.1(b) as a result of a failure to satisfy the
condition set forth in Section 8.3(e), the Title Company shall promptly (within
two (2) business days) return the Deposit to the Buyer, with interest from the
date of placement of the Deposit into escrow.
(d) IN THE EVENT THIS AGREEMENT IS TERMINATED PURSUANT TO
SECTION 9.1(c)(i) OR 9.1(c)(ii) OR IN THE EVENT THIS AGREEMENT HAS BEEN
TERMINATED UNDER SECTION 9.1(b) AS A RESULT OF A FAILURE TO SATISFY THE
CONDITION SET FORTH IN SECTION 8.1(b) DUE TO AN ORDER, DECREE, RULING OR
INJUNCTION ISSUED OR ENTERED AGAINST THE BUYER, THEN, AS THE SELLER'S SOLE
REMEDY, THE TITLE COMPANY SHALL PROMPTLY (WITHIN TWO (2) BUSINESS DAYS) DELIVER
THE DEPOSIT, TOGETHER WITH ANY INTEREST THEREON FROM THE DATE OF PLACEMENT OF
THE DEPOSIT INTO ESCROW, TO THE SELLER AND THE SELLER SHALL BE ENTITLED TO
RETAIN SUCH FUNDS. IT IS SPECIFICALLY AGREED THAT THE AMOUNT TO BE PAID PURSUANT
TO THIS SECTION 9.3(d) REPRESENTS LIQUIDATED DAMAGES AND NOT A PENALTY. THE
BUYER HEREBY WAIVES ANY RIGHT TO SET-OFF OR COUNTERCLAIM AGAINST SUCH AMOUNT.
AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE
CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNTS SET FORTH IN
THIS SECTION 9.3(d) ARE A REASONABLE ESTIMATE OF THE DAMAGES THAT THE SELLER
WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH PARTY
SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT
THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS
AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION.
INITIALS: THE SELLER ______ THE BUYER ______
(e) In the event this Agreement has been terminated under
Section 9.1(d)(ii) as a result of the Seller's breach of its covenants and
agreements set forth in Section 6.6 and, within six (6) months of the
termination of this Agreement, the Seller shall enter into an agreement under
which a third party would acquire, directly or indirectly, by merger or
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acquisition of stock or assets, all or substantially all of the Properties, then
the Seller shall promptly (within two (2) business days) pay to the Buyer an
additional termination fee of Nineteen Million Dollars ($19,000,000) (unless the
termination fee of Twenty-Five Million Dollars ($25,000,000) set forth in
Section 9.3(a) has already been paid).
SECTION 9.4 TERMINATION AFTER THE CLOSING. The obligations to purchase
and sell a particular Deferred Property after the Closing may be terminated at
any time after the Closing:
(a) by mutual written consent of the Buyer and the Seller;
(b) by the Buyer or the Seller if the cure for such Deferred
Property, agreed upon under the terms hereof, has not been effected, under the
terms hereof, prior to the first anniversary of the Closing or if the purchase
and sale of such Deferred Property has not been consummated by the date that is
thirteen months after the Closing (such date, the "Deferred Property Final
Date"); provided, however, that no party may terminate its obligations with
respect to such Deferred Property pursuant to this Section 9.4(b) if such
party's failure to fulfill any of its obligations under this Agreement shall
have been a principal reason that the purchase and sale of such Deferred
Property shall not have occurred on or before said date;
(c) by the Seller if:
(i) there shall have been a breach of any
representations or warranties on the part of the Buyer set forth in this
Agreement that materially adversely affects (or materially delays) the ability
of the Buyer to consummate the purchase and sale of such Deferred Property, and
the Buyer has not cured such breach within five (5) business days after notice
by the Seller thereof, provided that the Seller has not breached any of its
obligations hereunder in any material respect; or
(ii) there shall have been a breach by the Buyer of
any of its covenants or agreements hereunder that materially adversely affects
(or materially delays) the ability of the Buyer to consummate the purchase and
sale of such Deferred Property, and the Buyer has not cured such breach within
five (5) business days after notice by the Seller thereof, provided that the
Seller has not breached any of its obligations hereunder in any material
respect.
(d) by the Buyer if:
(i) there shall have been a breach of any
representations or warranties on the part of the Seller set forth in this
Agreement such that the condition set forth in Section 8.3(a) would be incapable
of being satisfied by the Deferred Property Final Date, and the Seller has not
cured such breach within five (5) business days after notice by the Buyer
thereof, provided that the Buyer has not breached any of its obligations
hereunder in any material respect;
(ii) there shall have been a breach by the Seller of
any of its covenants or agreements hereunder such that the condition set forth
in Section 8.3(b) would be incapable of being satisfied by the Deferred Property
Final Date, and the Seller has not cured such breach within five (5) business
days after notice by the Buyer thereof, provided that the Buyer has not breached
any of its obligations hereunder in any material respect.
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SECTION 9.5 EFFECT OF TERMINATION AFTER THE CLOSING.
(a) In the event that the obligations with respect to a
particular Deferred Property are terminated pursuant to Section 9.4(a), the
Title Company shall promptly return to the Buyer the Deferred Property Deposit
with respect to such Deferred Property.
(b) IN THE EVENT THAT THE OBLIGATIONS WITH RESPECT TO A
PARTICULAR DEFERRED PROPERTY ARE TERMINATED UNDER SECTION 9.4(d) OR UNDER
SECTION 9.4(b) AS A RESULT OF A FAILURE TO SATISFY THE CONDITIONS SET FORTH IN
SECTION 8.1(b) DUE TO AN ORDER, DECREE, RULING OR INJUNCTION ISSUED OR ENTERED
AGAINST THE SELLER, THEN, AS THE BUYER'S SOLE REMEDY, THE BUYER MAY EITHER (i)
ELECT TO ENFORCE SPECIFIC PERFORMANCE OF THIS AGREEMENT WITH RESPECT TO SUCH
DEFERRED PROPERTY OR (ii) ELECT TO TERMINATE ITS OBLIGATIONS WITH RESPECT TO
SUCH DEFERRED PROPERTY IN WHICH CASE THE TITLE COMPANY SHALL PROMPTLY RETURN TO
THE BUYER AN AMOUNT EQUAL TO THE DEFERRED PROPERTY DEPOSIT WITH RESPECT TO SUCH
DEFERRED PROPERTY, AND THE SELLER SHALL PROMPTLY PAY TO THE BUYER AN AMOUNT
EQUAL TO THE PRODUCT OF (A) SIX MILLION DOLLARS ($6,000,000) AND (B) A FRACTION,
THE NUMERATOR OF WHICH IS THE ALLOCATED VALUE OF SUCH DEFERRED PROPERTY AND THE
DENOMINATOR OF WHICH IS THE AGGREGATE ALLOCATED VALUES OF ALL PROPERTIES. SUCH
AMOUNT SHALL BE REIMBURSEMENT FOR THE OUT-OF-POCKET COSTS, FEES AND EXPENSES
INCURRED BY THE BUYER OR ON ITS BEHALF IN CONNECTION WITH SUCH DEFERRED PROPERTY
AND AS LIQUIDATED DAMAGES IMMEDIATELY UPON THE OCCURRENCE OF THE EVENT DESCRIBED
IN THIS SECTION 9.5(b) GIVING RISE TO SUCH DAMAGES. IN THE EVENT THE BUYER
ELECTS TO TERMINATE ITS OBLIGATION WITH RESPECT TO SUCH DEFERRED PROPERTY
PURSUANT TO THE TERMS OF THIS SECTION 9.5(b), IT IS SPECIFICALLY AGREED THAT THE
AMOUNTS TO BE PAID PURSUANT TO THIS SECTION 9.5(b) REPRESENT LIQUIDATED DAMAGES
AND NOT A PENALTY. THE SELLER HEREBY WAIVES ANY RIGHT TO SET-OFF OR COUNTERCLAIM
AGAINST SUCH AMOUNT. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT,
CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE
AMOUNTS SET FORTH IN THIS SECTION 9.5(b) ARE A REASONABLE ESTIMATE OF THE
DAMAGES THAT THE BUYER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS
BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE
ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT
THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION.
INITIALS: SELLER ______ BUYER ______
(c) IN THE EVENT THAT THE OBLIGATIONS WITH RESPECT TO A
PARTICULAR DEFERRED PROPERTY ARE TERMINATED UNDER SECTION
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9.4(c) OR UNDER SECTION 9.4(b) AS A RESULT OF A FAILURE TO SATISFY THE
CONDITIONS SET FORTH IN SECTION 8.1(b) DUE TO AN ORDER, DECREE, RULING OR
INJUNCTION ISSUED OR ENTERED AGAINST THE BUYER, THEN, AS THE SELLER'S SOLE
REMEDY, THE TITLE COMPANY SHALL PROMPTLY DELIVER TO THE SELLER AN AMOUNT EQUAL
TO THE DEFERRED PROPERTY DEPOSIT WITH RESPECT TO SUCH DEFERRED PROPERTY, AND THE
SELLER SHALL BE ENTITLED TO RETAIN SUCH FUNDS. IT IS SPECIFICALLY AGREED THAT
THE AMOUNT TO BE PAID PURSUANT TO THIS SECTION 9.5(c) REPRESENTS LIQUIDATED
DAMAGES AND NOT A PENALTY. THE BUYER HEREBY WAIVES ANY RIGHT TO SET-OFF OR
COUNTERCLAIM AGAINST SUCH AMOUNT. AFTER NEGOTIATION, THE PARTIES HAVE AGREED
THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT,
THE AMOUNTS SET FORTH IN THIS SECTION 9.5(c) ARE A REASONABLE ESTIMATE OF THE
DAMAGES THAT THE SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS
BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE
ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT
THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES
PROVISION.
INITIALS: SELLER ______ BUYER ______
ARTICLE X
MISCELLANEOUS
SECTION 10.1 NOTICES. Any notices required or permitted to be given
hereunder shall be given in writing and shall be delivered (a) in person, (b) by
certified mail, postage prepaid, return receipt requested, (c) by facsimile with
confirmation of receipt, or (d) by a commercial overnight courier that
guarantees next day delivery and provides a receipt, and such notices shall be
addressed as follows:
To the Buyer: CalWest Industrial Properties, LLC
c/o The RREEF Funds
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Old Federal Reserve Bank Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
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To the Seller: Pacific Gulf Properties Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Dhiya El-Saden, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
To Title Company: First America Title Insurance Co. of
Walnut Creek, California
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone:
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon delivery.
SECTION 10.2 ENTIRE AGREEMENT. This Agreement, together with the
Exhibits hereto, contains all representations, warranties and covenants made by
the Buyer and the Seller and constitutes the entire understanding between the
parties hereto with respect to the subject matter hereof. Any prior
correspondence, memoranda or agreements are replaced in total by this Agreement
together with the Exhibits hereto.
SECTION 10.3 ENTRY AND INDEMNITY. In connection with any entry by the
Buyer, or its agents, employees or contractors onto the Properties, the Buyer
shall give the Seller reasonable advance notice of such entry and shall conduct
such entry and any inspections in connection therewith so as to minimize, to the
extent reasonably possible, interference with the Seller's business and the
business of the Seller's tenants and otherwise in a manner reasonably acceptable
to the Seller. Without limiting the foregoing, prior to any entry to perform any
on-site testing, the Buyer shall give the Seller oral or written notice thereof,
including the identity of the company or persons who will perform such testing
and the proposed scope of the testing. The Seller shall approve or disapprove
the drilling aspects of any proposed testing within two (2) business days after
receipt of such notice; provided that if the Seller disapproves of, and prevents
the Buyer from performing, any such proposed drilling, the Property subject to
such proposed drilling shall be deemed to be a Deleted Property and provided
further that any proposed testing other than drilling shall be at the Buyer's
discretion. If the Seller fails to respond within such two (2) business day
period, the Seller shall be deemed to have disapproved the proposed testing. If
the Buyer or its agents, employees or contractors take any sample from the
Properties in
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connection with any such approved testing, the Buyer, at the request of the
Seller, shall provide to the Seller a portion of such sample being tested to
allow the Seller, if it so chooses, to perform its own testing. The Seller or
its representative may be present to observe any testing or other inspection
performed on the Properties. After any such testing, the Buyer shall, at its
cost and to the reasonable satisfaction of the Seller after consideration of
industry standards, restore each Property to its condition prior to any such
testing. The Buyer shall provide the Seller with reasonable prior notice. If the
Buyer intends to contact any governmental authority with respect to any
environmental matter relating to the Properties and the Seller, at the Seller's
election, shall be entitled to have a representative on any phone or other
contact made by the Buyer to a governmental authority and present at any meeting
by the Buyer with a governmental authority. In the event the Buyer contacts any
governmental authority with respect to any matter other than environmental
matters relating to the Properties, the Buyer shall provide the Seller with
prior notice of such contact. The Buyer shall provide the Seller with reasonable
prior notice If the Buyer intends to contact any tenant of the Properties and
the Seller, at the Seller's election, shall be entitled to have a representative
on any phone or other contact made by the Buyer to a tenant and present at any
meeting by the Buyer with a tenant. The Buyer shall maintain, and shall assure
that each of its contractors maintain, public liability and property damage
insurance in amounts (minimum coverage of One Million Dollars ($1,000,000) per
occurrence and Five Million Dollars ($5,000,000) in the aggregate) and in form
and substance adequate (with the Seller named as an additional insured) to
insure against all liability of the Buyer and its agents, employees or
contractors, arising out of any entry or inspections of the Properties pursuant
to the provisions hereof, and the Buyer shall provide the Seller with evidence
of such insurance coverage upon request by the Seller. The Buyer shall indemnify
and hold the Seller harmless from and against any costs, damages, liabilities,
losses, expenses, liens or claims (including, without limitation, reasonable
attorney's fees) arising out of or relating to any entry on the Properties by
the Buyer, its agents, employees or contractors in the course of performing the
inspections, testings or inquiries provided for in this Agreement; provided that
the Buyer shall not be liable for pre-existing conditions that are discovered,
and not caused, by the Buyer's inspection or testing. The foregoing indemnity
shall survive beyond the Closing, or, if the sale is not consummated, beyond the
termination of this Agreement.
SECTION 10.4 TIME. Time is of the essence in the performance of each of
the parties' respective obligations contained herein.
SECTION 10.5 ATTORNEYS' FEES. If either party hereto fails to perform
any of its obligations under this Agreement or if any dispute arises between the
parties hereto concerning the meaning or interpretation of any provision of this
Agreement, then the defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and expenses incurred
by the other party on account of such default and/or in enforcing or
establishing its rights hereunder, including, without limitation, court costs
and reasonable attorneys' fees and disbursements. Any such attorneys' fees and
other expenses incurred by either party in enforcing a judgment in its favor
under this Agreement shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Agreement and to
survive and not be merged into any such judgment. As used in this Agreement, the
term "attorneys' fees" or "expenses" (or similar references to attorneys' fees
and costs or expenses) shall include, without limitation, all attorneys' and
paralegals' fees and expenses, whether in action or proceeding, upon appeal
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therefrom, or in connection with any petition for review or action to rescind
this Agreement, or in a case or proceeding under the Bankruptcy Code or
successor statute, or in connection with any other action to enforce any
provision of this Agreement.
SECTION 10.6 ASSIGNMENT. Prior to Closing, the Buyer's rights and
obligations hereunder shall not be assignable without the prior written consent
of the Seller. Notwithstanding the foregoing, the Seller's consent shall not be
required for any assignment by the Buyer to an entity of which the Buyer has
majority ownership and control. The Buyer shall in no event be released from any
of its obligations or liabilities hereunder in connection with any assignment.
Subject to the provisions of this Section, this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns.
SECTION 10.7 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
SECTION 10.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
SECTION 10.9 CONFIDENTIALITY AND RETURN OF DOCUMENTS. The Buyer and the
Seller shall each maintain as confidential any and all material obtained about
the other or, in the case of the Buyer, about the Properties, this Agreement or
the transactions contemplated hereby, and shall not disclose such information to
any third party other than (i) each party's respective consultants and
professionals in connection with their review, evaluation, negotiation and
closing of the subject transaction, (ii) the parties' actual and prospective
lenders and investors, or (iii) the parties' officers, directors, employees,
agents, contractors, affiliates and representatives (collectively, the
"Representatives"), provided that all such parties shall keep such information
confidential as provided herein. The parties agree to keep, and to use all
reasonable efforts to cause the Representatives to keep, any information and
documents received from the other party (or based upon the party's evaluation of
the Properties) confidential, except to the extent (a) such information was
known by the party prior to the date hereof on the basis of information provided
to the party by persons other than the other party or its agents, (b) such
information was of general public knowledge prior to the date hereof, or (c)
disclosure is required by law or court order or is used in connection with any
litigation between the parties hereto. This provision shall survive the Closing
or any termination of this Agreement.
SECTION 10.10 INTERPRETATION OF AGREEMENT. The article, section and
other headings of this Agreement are for convenience of reference only and shall
not be construed to affect the meaning of any provision contained herein. Where
the context so requires, the use of the singular shall include the plural and
vice versa and the use of the masculine shall include the feminine and the
neuter. The term "person" shall include any individual, partnership, joint
venture, corporation, trust, unincorporated association, any other entity and
any government or any department or agency thereof, whether acting in an
individual, fiduciary or other capacity.
SECTION 10.11 LIMITED LIABILITY. The obligations of the Seller are
intended to be binding only on the property of the Seller and shall not be
personally binding upon, nor shall any resort be had to, the private properties
of any of its trustees, officers, beneficiaries, directors,
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members, or shareholders, or of its investment manager, the general partners,
officers, directors, members, or shareholders thereof, or any employees or
agents of the Seller or its investment manager. The obligations of the Buyer are
intended to be binding only on the property of the Buyer and shall not be
personally binding upon, nor shall any resort be had to, the private properties
of any of its trustees, officers, beneficiaries, directors, members, or
shareholders, or of its investment manager, the general partners, officers,
directors, members, or shareholders thereof, or any employees or agents of the
Buyer.
SECTION 10.12 AMENDMENTS. This Agreement may be amended or modified
only by a written instrument signed by the Buyer and the Seller.
SECTION 10.13 NO RECORDING. Neither this Agreement or any memorandum or
short form thereof may be recorded by the Buyer.
SECTION 10.14 DRAFTS NOT AN OFFER TO ENTER INTO A LEGALLY BINDING
CONTRACT. The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Properties. The parties shall be legally bound with respect to the
purchase and sale of the Properties pursuant to the terms of this Agreement only
if and when the parties have been able to negotiate all of the terms and
provisions of this Agreement in a manner acceptable to each of the parties in
their respective sole discretion, including, without limitation, all of the
Exhibits and Schedules hereto, and both the Seller and the Buyer have fully
executed and delivered to each other a counterpart of this Agreement, including,
without limitation, all Exhibits and Schedules hereto.
SECTION 10.15 NO PARTNERSHIP. The relationship of the parties hereto is
solely that of the Seller and the Buyer with respect to the Properties and no
joint venture or other partnership exists between the parties hereto. Neither
party has any fiduciary relationship hereunder to the other.
SECTION 10.16 SURVIVAL. Except as expressly set forth to the contrary
herein, no representations, warranties, covenants or agreements of the Seller
contained herein shall survive the Closing.
SECTION 10.17 OREGON STATUTORY DISCLAIMER. THE PROPERTY DESCRIBED IN
THIS INSTRUMENT MAY NOT BE WITHIN A FIRE PROTECTION DISTRICT PROTECTING
STRUCTURES. THE PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS, WHICH, IN
FARM OR FOREST ZONES, MAY NOT AUTHORIZE CONSTRUCTION OR SITING A RESIDENCE AND
WHICH LIMIT LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS
30.930 IN ALL ZONES. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON
ACQUIRING FEE TITLE TO THIS PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR
COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND EXISTENCE OF FIRE
PROTECTION FOR STRUCTURES.
SECTION 10.18 SURVIVAL OF ARTICLE X. The provisions of this Article X
shall survive the Closing.
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SECTION 10.19 DELIVERY ITEMS.
(a) To the extent not previously delivered to Buyer and to the
extent reasonably within Seller's control and possession, the Seller shall
promptly (and in no event later than ten (10) business days of the date hereof)
make available or deliver to the Purchaser at the Seller's sole cost and
expense, the following: (i) copies of all existing and proposed easements,
covenants, restrictions, agreements or other documents which affect title to
each of the Properties that are actually known by the Seller and that would not
typically be disclosed by a preliminary title report; (ii) all surveys of each
of the Real Properties; (iii) copies of the most recent property tax bills for
each of the Properties; (iv) copies of all documents relating to actions, suits,
and legal or administrative proceedings affecting each of the Properties; (v)
regularly-prepared financial information concerning income and expenses relating
to the ownership and operation of each of the Properties for the prior three (3)
years; (vi) copies of the Leases and financial information pertaining to the
tenants under the Leases; and (vii) all environmental, structural, soils,
seismic and other reports, studies or memoranda relating to the Properties, and
all other contracts, agreements, or documents of material significance for the
Properties.
(b) In the event that there are any additional income
producing agreements, other than those delivered to the Buyer pursuant to
Section 10.20(a) above, solely relating to the operation of the Properties (i)
of which the Seller or the Buyer becomes aware prior to the Closing, the Seller
shall promptly deliver such agreements to the Buyer for the Buyer's review and
reasonable approval prior to Closing, or (ii) of which the Seller or the Buyer
becomes aware after the Closing, the Seller shall promptly delivery such
agreements to the Buyer for the Buyer's review and reasonable approval. In the
event that the Buyer approves of any such agreements pursuant to subsection (ii)
above, then the Seller agrees to transfer its interest in such agreements to the
Buyer pursuant to and assignment and assumption agreement approved by both
parties.
SECTION 10.20 INTENT TO TRANSFER INDUSTRIAL PORTFOLIO.
The Seller acknowledges that its intent hereunder is to transfer to the
Buyer all of the industrial properties it currently owns except for the 128,640
square foot building located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, the 89,760 square foot building located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, the Seller's corporate headquarters building in Newport
Beach, California, and the Seller's non-industrial assets.
SECTION 10.21 DEFINED TERMS.
(a) As used herein, the following terms have the following
meanings:
"Assumption Agreement" shall mean a reasonable form of
assumption agreement as may be required by any Mortgage Lender (including such
covenants, representations and warranties as are customarily required by
institutional lenders), which form shall be subject to the Buyer's reasonable
approval, pursuant to which, in the case of each Loan being assumed by the
Buyer, the Buyer shall assume all of the obligations of the Seller under the
subject Loan arising on or after the Closing Date, and the Mortgage Lender shall
consent to the sale of the subject Property to the Buyer and the assumption of
the Loan by the Buyer.
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"Breach Costs" shall mean the remediation costs arising solely
out of a breach of a representation or warranty of the Seller made herein.
"Category A Deleted Property" shall mean a Deleted Property
the Allocated Value of which shall not count towards the sums set forth in
Section 9.1(c)(v), (vi), (vii) and (viii).
"Category B Deleted Property" shall mean a Deleted Property
the Allocated Value of which shall count towards the sums set forth in Section
9.1(c)(ix) as set forth in Section 1.8(a).
"Code Defects" shall mean the failure of the improvements
located on a Property to be in compliance (after consideration of applicable
"grandfather" clauses) with applicable federal, state or local law, regulation
or ordinances relating to the construction of improvements or operation or use
thereof or to health, safety, or access (including, without limitation, building
codes, fire sprinklerization requirements and the Americans With Disability Act
of 1990) (Title 24 of the California Health and Safety Codes), but excluding any
Zoning Defects.
"Closing Documents" shall mean all of the documents to be
delivered by the parties pursuant to Section 7.3 above.
"Deferred Property" shall mean each Property with respect to
which the Seller has elected, pursuant to the terms hereof, to cure or restore a
Material Adverse Matter or an event or condition giving rise to a Value
Diminution, whether such cure or restoration is effected before or after the
Closing and whether the sale and purchase of such Deferred Property occurs at or
after the Closing.
"Deferred Property Deposit" shall mean, with respect to a
particular Deferred Property, the amount equal to the product of (i) of the
Deposit then retained by the Title Company and (ii) a fraction, the numerator of
which is the Allocated Value of such Deferred Property and the denominator of
which is the aggregate Allocated Value of all Deferred Properties that have then
not been purchased by the Buyer, together with interest on such product from the
date of placement of the Deposit into escrow.
"Environmental Defect" shall mean any of the following: (i) a
condition on, under or about the Property by reason of which such Property is
not in compliance with a federal, state or local law, ordinance or regulation
applicable to such Property and relating to the existence, storage, disposal,
release, emission or discharge of Hazardous Materials or to the protection of
human health or the environment (collectively "Environmental Laws"), (ii) the
presence of Hazardous Materials on the Property which are likely to cause Buyer
to incur future material costs, which would not otherwise be incurred absent
such condition, to ▇▇▇▇▇ or mitigate the presence of such Hazardous Materials
during the course of development or other construction or demolition, in any of
the following respects, in a manner that institutional buyers (including without
limitation publicly-traded REITs) of properties similar to the Property would
require such remediation: (A) remediation of contamination by Hazardous
Materials of soil or groundwater on, under or about the Properties at
concentrations which do not require immediate action under Environmental Laws,
(B) remediation of underground storage tank systems or other underground
installations (including, without limitation, sumps, vaults and piping)
containing or
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formerly containing Hazardous Materials and (C) remediation of asbestos-
containing building materials, whether in a friable condition or not; and (iii)
Properties occupied by one or more long-term (i.e. holding a lease with three or
more years remaining) tenants engaged in one or more of the following activities
or businesses: (A) dry cleaning establishments utilizing perchloroethylene (PCE)
or similar chlorinated solvents or other businesses utilizing the same
substances, (B) operations involving the bulk storage of Hazardous Materials,
(C) operations classified under Environmental Laws as Large Quantity Generators
of hazardous waste, and (D) operations that primarily relate to transportation,
or the logistics or repair of vehicles used in transportation, where refueling
or regular vehicle maintenance is routinely performed on the Property (e.g.,
where the refueling or maintenance typically takes place on the Property, and
not elsewhere), but excluding automotive and truck repair operations.
"Fully-Paying Executed Lease" means all tenant leases in
effect at Closing other than Non-Paying Leases and other than tenant leases as
to which the tenant is more than sixty (60) days delinquent in the payment of
rent or other amounts due under such lease.
"General Physical Items" shall mean, with respect to the
Properties, the roof (consisting of the membrane of the roof, but excluding
damage to the plywood if such damage is caused by a Structural Defect),
painting, landscaping, parking facilities, windows, doors, seals and the HVAC
system, electrical system, lighting system, plumbing system and the
non-structural defects elements of the loading facilities.
"Loan Documents" shall mean, collectively, with respect to
each Loan, the loan documents set forth on EXHIBIT C attached hereto.
"Material Adverse Matters" shall mean (i) Environmental
Defects, (ii) Code Defects; (iii) Structural Defects, (iv) Title Defects and
(iii) Zoning Defects; provided that in no event will Material Adverse Matters
include (A) any non-compliance of the Properties with the Americans With
Disabilities Act of 1990, other than any such non-compliance that has been
specifically identified and cited to the Seller by a governmental entity, or (B)
any General Physical Items.
"Mortgage Lenders" shall mean the lenders under the Loans
described on EXHIBIT C attached hereto.
"Non-Paying Lease" means a tenant lease having a Payment
Reduction in effect at Closing other than a tenant lease as to which such tenant
is more than sixty (60) days delinquent in the payment of rent or other amounts
due under such lease.
"Payment Reduction" means, with respect to a Non-Paying Lease,
the aggregate amount of reduction in regular rent, operating expenses, taxes and
assessments that would be payable by the tenant under such Non-Paying Lease and
that is attributable to any post-Closing period, of up to six (6) months, that
is afforded to a tenant (i) during an initial period under its lease due to a
free rent period, (ii) as a result of a rent abatement, (ii) during the pendency
of tenant improvements or (iv) due to the fact that under such lease the tenant
does not take possession until a date later than Closing.
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"Shared Remediation Maximum" shall mean an amount equal to the
product of (i) $20,000,000 multiplied by (ii) a fraction, the numerator if which
is the difference of Eight Hundred Eighty-Three Million Five Hundred Thousand
Dollars ($883,500,000) minus the aggregate Allocated Values of all Deleted
Properties, and the denominator of which is Eight Hundred Eighty-Three Million
Five Hundred Thousand Dollars ($883,500,000).
"Structural Defect" shall mean a defect in the structure of a
Property, including, without limitation, a condition of or defect in the
structure of the improvements on a Property or condition of or a defect in the
soil. "Structure" for the purpose of the foregoing definition means the
foundation, soil, exterior walls, interior bearing walls, roof structure,
hangers, purlins, beams, other structural members, including, without
limitation, braces and other similar items, and structural components and
supports for electrical, plumbing, water, and HVAC systems and operating
systems. By way of example, "Structural Defect" shall not include, without
limitation, (a) the failure of any component of the structure to be suitable for
a use for which it was intended when built or installed (provided it is suitable
for its current use); (b) any condition which exists by reason of normal wear
and tear; or (c) any condition that is a Code Defect, Environmental Defect,
Title Defect, General Physical Item or Zoning Defect.
"Subsequent Material Adverse Matter" shall mean any event,
condition or other matter occurring solely after the Diligence Period that would
properly have been the subject of a Defect Letter if such event, condition or
other matter had existed and been discovered by the Buyer during the Diligence
Period.
"Tenant Inducements" shall mean all costs paid or obligations
incurred in connection with inducing a tenant to enter into a lease at a
Property, including, without limitation, any moving costs, costs in connection
with the assumption of a tenants' lease obligations at a location other than the
Property and the obligations under such lease, and other payments to or on
behalf of a tenant.
"Title Defect" shall mean a condition of title to a Property
reflecting that the Seller does not hold a fee simple interest therein (other
than with respect to a Ground Lease Property) or that the Seller's title is
encumbered by liens or encumbrances or other title exceptions having an adverse
effect on the value, use, operation or ownership of such Property that would not
be acceptable to a reasonably prudent institutional buyer (including, without
limitation, publicly-traded REITs) in an arms-length sale at fair market value.
In accordance with the foregoing sentence, Title Defect may include, without
limitation, an objection based on the legal description, survey with respect to
the Property or any condition or exception which causes the Title Company to
conclude that it cannot issue any of the endorsements whose numbers are
specifically set forth in Section 3.2.
"Zoning Defect" shall mean the failure of a Property to be in
compliance with federal, state or local laws, rules, regulations or ordinances
relating to zoning or land-use matters, including, without limitation, the
ability of an owner or occupant of a Property to develop and make a particular
use of same; provided, however, that a Property shall not have a Zoning Defect
if the improvements (or proposed improvements) thereon and/or use thereof is the
subject of a conditional use permit or variance permitting same and the
conditions to any such conditional use permit or variance are currently
satisfied.
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(b) The following capitalized terms are defined in the corresponding
locations:
Acquisition Proposal.............Section 6.5(a) Major Loss Cure Election.........Section 4.2(a)
Agreement........................Preamble Maximum Post-Closing Exposure....Section 2.3(a)
Allocated Values.................Section 1.2(b) Meeting..........................Section 6.6(b)
Arizona Taxing Authorities.......Section 7.3(a)(7) Noncash Deposits.................Section 7.5(b)
Assignment of Ground Leases......Section 7.3(a)(4) Partially-Leased Properties......Section 1.3(f)
Assignment of Leases.............Section 7.3(a)(3) Partially-Leased Space Shortfall.Section 1.3(f)
Assumption Agreement.............Section 7.3(a)(5) Partially-Leased Vacant/
Delinquent Space.............Section 1.3(f)(ii)
▇▇▇▇ of Sale.....................Section 7.3(a)(2) Partnership Properties...........Section 1.5
Buyer............................Preamble Personal Property................Section 1.1
Buyer's Broker...................Section 5.1(b) Plan.............................Section 1.8(a)
Closing..........................Section 1.2(c) Properties.......................Section 1.1
Closing Date.....................Section 7.2 Property.........................Section 1.1
Closing Statement................Section 7.3(a)(10) Proposal.........................Section 6.5(b)
Code.............................Section 2.1(b) Proxy Statement..................Section 6.6(a)
Conditions of Title..............Section 3.1(b) Purchase Price...................Section 1.2(b)
Deeds............................Section 3.1(a) Real Properties..................Section 1.1
Defect Letter....................Section 1.4(a) Real Property....................Section 1.1
Deposit..........................Section 1.2(a) Representatives..................Section 10.9
Designation Agreement............Section 7.3(c) SEC..............................Section 6.6(a)
Development Properties...........Section 1.3(c) Seller Board.....................Section 6.5(b)
Diligence Period.................Section 1.4(a) Seller Related Parties...........Section 2.5(a)
Disclosure Items.................Section 2.1 Seller's Broker..................Section 5.1(a)
DOR..............................Section 7.3(a)(7) Sold Properties..................Section 6.1(i)
Final Date.......................Section 9.1(b) Spectrum.........................Section 1.3(e)
Fully-Leased Properties..........Section 1.3(d) Spectrum Leased Space
Hazardous Materials..............Section 2.4(a)(2) Shortfall.....................Section 1.3(e)
Individual Deferred Property Spectrum Vacant/Delinquent Space.Section 1.3(e)(ii)
Maximum Exposure..............Section 2.3(a) Superior Proposal................Section 6.5(b)
Intangible Property..............Section 1.1 Supplemental Title Report........Section 3.1(b)
Lease............................Section 1.1 Title Company....................Section 1.2(a)
Leases...........................Section 1.1 Title Policy.....................Section 3.2
Loan Documents...................Section 2.1(e) Value Diminution.................Section 4.5
Loans............................Section 1.2(c)(1)
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The parties hereto have executed this Agreement as of the respective dates
written below.
THE BUYER: CALWEST INDUSTRIAL PROPERTIES, LLC
a California limited liability company
By: RREEF America L.L.C.
a Delaware limited liability company
Its: Manager
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Date: , 2000
---------------
THE SELLER: PACIFIC GULF PROPERTIES INC.
By:
--------------------------------------
Its: Chief Executive Officer
Date: , 2000
----------------------
By:
--------------------------------------
Its: Chief Financial Officer
Date: , 2000
----------------------
By:
--------------------------------------
Its: Chief Operating Officer
Date: , 2000
----------------------
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COUNTERPART SIGNATURE PAGE TO
AGREEMENT OF PURCHASE AND SALE
DATED AS OF ____________ __, 2000
(TITLE COMPANY)
Title Company agrees to act as escrow holder and title company in
accordance with the terms of this Agreement and to act as the Reporting Person
in accordance with Section 6045(e) of the Internal Revenue Code and the
regulations promulgated thereunder.
FIRST AMERICAN TITLE INSURANCE COMPANY
OF WALNUT CREEK, CALIFORNIA
By:
----------------------------------
Its:
----------------------------------
Date: , 2000
------------------
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LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Real Property Description
Exhibit A-1 Allocated Values
Exhibit A-2 Partnership Property Prices
Exhibit B List of Ground Leases
Exhibit C Loans
Exhibit D Agreed Upon purchase price for Development Properties;
Summary of Development Costs
Exhibit E Pro Forma Rent, Term, Leasing Commission and Tenant
Improvement Summary
Exhibit F List of Tenant Leases
Exhibit G-1 California Grant Deed
Exhibit G-2 Washington Special Warranty Deed
Exhibit G-3 Nevada Special Warranty Deed
Exhibit G-4 Arizona Special Warranty Deed
Exhibit G-5 Oregon Special Warranty Deed
Exhibit H Tenant Estoppel Certificate
Exhibit I ▇▇▇▇ of Sale
Exhibit J Assignment of Leases, Service Contracts and Warranties
SCHEDULES
Schedule 1 Disclosure Items
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