SHARE PURCHASE AGREEMENT
dated as of December 20, 1996
Among
AMERICAN INDUSTRIAL PROPERTIES REIT, INC.,
AMERICAN INDUSTRIAL PROPERTIES REIT
and
USAA REAL ESTATE COMPANY
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION -1-
1.1 Definitions -1-
1.2 Rules of Construction -8-
SECTION 2. PURCHASE AND SALE -8-
2.1 Purchase and Sale of the Shares. -8-
2.2 Purchase Price; Payment -9-
2.3 The Closing -9-
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER AND TRUST-9-
3.1 Organization and Related Matters -9-
3.2 Capital Stock; Title to Shares. -10-
3.3 Financial Statements -11-
3.4 SEC Reports -12-
3.5 Authorization; No Conflicts -12-
3.6 Legal Proceedings -13-
3.7 Compliance with Law and Permits -14-
3.8 Dividends and Other Distributions -14-
3.9 Certain Interests -14-
3.10 No Brokers or Finders -15-
3.11 Employee Benefit Plans -15-
3.12 Labor Matters -16-
3.13 Properties -16-
3.14 Tax Matters -18-
3.15 Material Contracts -20-
3.16 Insurance -20-
3.17 Environmental Matters -21-
3.18 Trust Records; Accounting Records -21-
3.19 New York Stock Exchange Listing -22-
3.20 Disclosure of Facts -22-
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER -22-
4.1 Organization and Related Matters -22-
4.2 Authorization -22-
4.3 No Conflicts -22-
4.4 No Brokers or Finders -23-
4.5 Legal Proceedings -23-
4.6 Investment Representation -23-
4.7 Legends; Stop-Transfer Orders -23-
4.8 Status for REIT Ownership and Income Tests -23-
SECTION 5. COVENANTS WITH RESPECT TO CONDUCT OF SELLER
PRIOR TO CLOSING -23-
5.1 Access -23-
5.2 Material Adverse Changes; SEC Filings; Reports;
Financial Statements -24-
5.3 Conduct of Business -24-
5.4 Prohibition of Solicitation -26-
5.5 Notification of Certain Matters -28-
5.6 Permits and Approvals -28-
SECTION 6. ADDITIONAL CONTINUING COVENANTS AND AGREEMENTS -28-
6.1 Use of Proceeds -28-
6.2 Environmental Matters -28-
6.3 Status for REIT Ownership and Income Tests -28-
6.4 Prohibited Transactions. -28-
6.5 Registration Rights Agreement -29-
6.6 REIT Qualification -29-
6.7 Services by Buyer -29-
SECTION 7. GENERAL CONDITIONS OF PURCHASE -29-
7.1 No Orders -29-
7.2 Approvals -29-
7.3 Absence of Litigation -29-
7.4 New York Stock Exchange -29-
SECTION 8. CONDITIONS TO OBLIGATIONS OF BUYER -30-
8.1 Settlement Agreement -30-
8.2 Accuracy of Representations and Warranties -30-
8.3 Performance by Seller and the Trust -30-
8.4 No Material Adverse Change -30-
8.5 Certification by Seller and the Trust -30-
8.6 Opinion of Seller and the Trust's Counsel -31-
8.7 No Other Business Combination Transaction -31-
SECTION 9. CONDITIONS TO OBLIGATIONS OF SELLER AND THE TRUST-31-
9.1 Settlement Agreement -31-
9.2 Accuracy of Buyer's Representations and Warranties -31-
9.3 Buyer's Performance -31-
9.4 Certification by Buyer -31-
9.5 Opinion of Buyer's Counsel -31-
SECTION 10. TERMINATION OF OBLIGATIONS; SURVIVAL -31-
10.1 Termination of Agreement -31-
10.2 Effect of Termination -32-
10.3 Survival of Representations and Warranties -32-
SECTION 11. INDEMNIFICATION -33-
11.1 Obligations of Seller and the Trust -33-
11.2 Obligations of Buyer -33-
11.3 Procedure -34-
11.4 Survival -34-
11.5 Notice by Seller and the Trust -35-
SECTION 12. GENERAL -35-
12.1 Amendments; Waivers -35-
12.2 Schedules; Exhibits; Integration -35-
12.3 Best Efforts; Further Assurances -35-
12.4 Governing Law -35-
12.5 No Assignment -35-
12.6 Headings -36-
12.7 Counterparts -36-
12.8 Publicity and Reports -36-
12.9 Confidentiality -36-
12.10Parties in Interest -36-
12.11Notices -37-
12.12Expenses -37-
12.13Remedies; Waiver -37-
12.14Representation By Counsel; Interpretation -38-
12.15Severability -38-
EXHIBITS
EXHIBIT A Settlement Agreement
EXHIBIT B Registration Rights Agreement
SCHEDULES
SCHEDULE 3.1 Jurisdictions; Officers and Trust Managers
SCHEDULE 3.2 Capital Stock; Title to Shares
SCHEDULE 3.3 Additional Liabilities or Contingencies
SCHEDULE 3.5 Permits and Approvals
SCHEDULE 3.6 Litigation
SCHEDULE 3.7 Compliance with Law and Permits
SCHEDULE 3.8 Dividends and Other Distributions
SCHEDULE 3.9 Certain Interests
SCHEDULE 3.11 Trust Benefit Plans
SCHEDULE 3.13 Properties and Encumbrances
SCHEDULE 3.14 Taxes
SCHEDULE 3.15 Material Contracts
SCHEDULE 3.16 Insurance
SCHEDULE 3.17 Environmental Compliance
SCHEDULE 3.18 Trust Records
SCHEDULE 5.3 Conduct of Business
SCHEDULE 8.6 List of Opinions of Seller and the Trust's Counsel
SCHEDULE 9.5 List of Opinions of Buyer's Counsel
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is made and
entered into as of December 20, 1996, by and among AMERICAN
INDUSTRIAL PROPERTIES REIT, INC., a Maryland corporation
("Seller"), AMERICAN INDUSTRIAL PROPERTIES REIT, a Texas real
estate investment trust ("Trust"), and USAA REAL ESTATE COMPANY,
a Delaware corporation ("Buyer").
R E C I T A L S
A. Seller is a wholly-owned subsidiary of the Trust.
B. The Trust qualifies and operates as a real estate
investment trust for federal income tax purposes.
C. Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller, a certain number of Common Shares (as
defined herein) owned by Seller upon the terms and subject to the
conditions set forth in this Agreement.
D. The proceeds from the sale of the Common Shares owned
by Seller are to be used for the purposes set forth in this
Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and
the mutual covenants and agreements set forth in this Agreement,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree
as follows:
0. DEFINITIONS AND RULES OF CONSTRUCTION
1.
0 Definitions. The capitalized terms used in this
Agreement, the Exhibits and the Schedules attached hereto shall
have the meanings set forth below:
"Action" means any action, complaint,
investigation, Suit or other proceeding, whether civil or
criminal, in law or in equity, or before any mediator, arbitrator
or Governmental Entity.
"Affiliate" means a Person that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, a specified
Person.
"Agreement" means this Share Purchase Agreement,
by and among Seller, the Trust and Buyer, as amended from time to
time pursuant to the terms of this Agreement, together with all
Exhibits and all Schedules attached hereto.
"Alternative Proposal" has the meaning set forth
in Section 5.4(a) of this Agreement.
"Approval" means any approval, authorization,
consent, qualification or registration, or any waiver of the
foregoing, or any notice, statement or other communication
required to be filed with or delivered to any Governmental Entity
or any other Person.
"Associate" of a Person means
(i) a corporation or organization (other than
Seller or a party to this Agreement) of which such Person is an
officer or partner or is, directly or indirectly, the beneficial
owner of 10% or more of any class of equity securities;
(ii) any trust or other estate in which such
Person has a substantial beneficial interest or as to which such
Person serves as trustee or in a similar capacity; and
(iii) any relative or spouse of such Person who
has the same residence as such Person.
"Audited Financial Statements" has the meaning set
forth in Section 3.3(a) of this Agreement.
"Auditors" means Ernst & Young, LLP, independent
public accountants to the Trust.
"Buyer" means USAA Real Estate Company, a Delaware
corporation, or permitted assigns.
"Buyer Indemnified Parties" has the meaning set
forth in Section 11.1 of this Agreement.
"Capital Stock" means any capital stock,
beneficial interest or other equity interest, or any securities
convertible into or exchangeable or exercisable for capital
stock, beneficial interests or other equity interests, or any
other rights, warrants or options to acquire any of the foregoing
securities.
"Charter Documents" means the Trust's Second
Amended and Restated Declaration of Trust and Fourth Amended and
Restated Bylaws as in effect as of the date of this Agreement.
"Closing" has the meaning set forth in Section
2.3(a) of this Agreement.
"Closing Agreement" shall mean a written and
legally binding agreement with a taxing authority relating to
Taxes.
"Closing Date" means the date specified in Section
2.3(a) of this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended, and, as applicable, the regulations promulgated
thereunder.
"Common Shares" means common shares of beneficial
interest, par value $.10 per share, of the Trust.
"Confidentiality Agreement" has the meaning set
forth in Section 5.4(b) of this Agreement.
"Contract" means any agreement, arrangement, bond,
commitment, franchise, indemnity, indenture, instrument, lease,
license or understanding, whether or not in writing.
"December 13 Agreement" has the meaning set forth
in Section 3.5 of this Agreement.
"Demand Note" has the meaning set forth in Section
2.2 of this Agreement.
"Encumbrance" means any claim, charge, easement,
encumbrance, lease, covenant, security interest, lien, option,
pledge, rights of others, preferential right, right of first
refusal or restriction (whether on voting, sale, transfer,
disposition or otherwise), whether imposed by agreement,
understanding, law, equity or otherwise, except that
"Encumbrance" does not include any such item that (i) is
reflected in the Audited Financial Statements or (ii) constitutes
a statutory lien arising in the ordinary course of business.
"Environmental Claims" means any of the following
to the extent they relate to, or arise out of, directly or
indirectly, Environmental Noncompliance with respect to the
Properties or actual or alleged Environmental Conditions or any
Notification which may lead to: (i) claims, demands, suits,
causes of action for personal injury, death or property damage;
(ii) claims for actual or threatened damages to natural
resources; (iii) claims for the recovery of response costs, or
administrative or judicial orders directing the performance of
investigations, response or remedial actions under any
Environmental Law; (iv) a requirement to implement "corrective
action" pursuant to any restitution, contribution or equitable
indemnity to third parties or any Governmental Entity; (v) fines,
penalties, liens against the Properties; (vi) claims for
injunctive relief or other orders or notices of violation from
any Governmental Entity; or (vii) with regard to any present or
former employees, tenants or guests, exposure to or injury from
Environmental Conditions.
"Environmental Conditions" means conditions of the
environment, including the ocean, natural resources (including
flora and fauna), soil, surface water, ground water, any actual
or potential drinking or water supply, subsurface strata, or air,
including ambient air, relating to or arising out of the use,
handling, storage, treatment, recycling, generation,
transportation, release, spilling, leaking, pumping, pouring,
emptying, discharging, injecting, escaping, leaching, disposal,
dumping or threatened release of Hazardous Materials from, in,
on, or onto the Properties.
"Environmental Noncompliance" means any of the
following to the extent they are applicable to the Properties or
alleged to be applicable to the Properties or to the Trust,
Subsidiaries or a Trust Partnership: (i) the Release of any
Hazardous Material into the environment, any storm drain, sewer,
septic system or publicly-owned treatment works, in violation of
any effluent or emission limitations, standards or other criteria
or guidelines established by any Environmental Law; (ii) any
noncompliance of physical structure, equipment, process or
premises with the requirements of building or fire codes, zoning
or land use regulations or ordinances or conditional use permits;
(iii) any noncompliance with federal, state or local requirements
governing occupational safety and health; (iv) any operations,
procedures and designs at or on the Properties which do not
conform to the statutory or regulatory requirements of any Law
(including land use regulations and ordinances) intended to
protect public health, welfare and the environment; (v) the
failure to have obtained permits, licenses, variances or other
governmental authorizations necessary for the legal use and/or
operation of any equipment, process or any activity at the
Properties; or (vi) the operation and/or use of any process or
equipment in violation of any permit condition, schedule of
compliance, administrative or court order.
"Environmental Permits" has the meaning set forth
in Section 3.17(a) of this Agreement.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"EVEREN" means EVEREN Securities, Inc.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"GAAP" means generally accepted accounting
principles as in effect from time to time.
"Governmental Entity" means any agency, bureau,
commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether
federal, state or local, domestic or foreign.
"Hazardous Materials" means any substance, matter,
material, waste, solid, liquid, gas, or pollutant, the
generation, storage, disposal, handling, recycling, Release (or
threatened Release) or treatment of which is regulated,
prohibited, or limited under: (1) the Resource Conservation and
Recovery Act, as amended by the Hazardous and Solid Waste
Amendments of 1984, as now or hereafter amended ("RCRA") (42
U.S.C. Sections 6901 et seq.); (ii) the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act of
1986, as now or hereafter amended ("CERCLA") (42 U.S.C. Sections
9601 et seq.); (iii) the Clean Water Act, as now or hereafter
amended ("CWA") (33 U.S.C. Sections 1251 et seq.); (iv) the Toxic
Substances Control Act, as now or hereafter amended ("TSCA") (15
U.S.C. Sections 2601 et seq.); (v) the Clean Air Act, as now or
hereafter amended ("CAA") (42 U.S.C. Sections 7401 et seq.)
(RCRA, CERCLA, CWA, TSCA and CAA are collectively referred to
herein as the "Federal Environmental Laws"); (vi) any local,
state or foreign law, statute, regulation, or ordinance analogous
to any of the Federal Environmental Laws; or (vii) any other
federal, state, local, or foreign law (including any common law),
statute, regulation, or ordinance regulating, prohibiting, or
otherwise restricting the placement, Release, threatened Release,
generation, treatment, or disposal upon or into any environmental
media of any substance, pollutant, or waste which is now or
hereafter classified or considered to be hazardous or toxic to
human health or the environment. All of the laws, statutes,
regulations and ordinances referred to in subsections (vi) and
(vii) above, together with the Federal Environmental Laws, are
collectively referred to herein as "Environmental Laws." The term
"Hazardous Materials" shall also include: (a) gasoline, diesel
fuel, fuel oil, motor oil, waste oil, and any other petroleum
hydrocarbons, including any additives or other by-products
associated therewith; (b) "friable" asbestos (as the term
"friable" is defined under 40 C.F.R. Section 61.141) and friable
asbestos-containing materials in any form; (c) polychlorinated
biphenyls; or (d) any substance the presence of which on the
Properties, (x) requires reporting or remediation under any
Environmental Law, (y) causes or threatens to cause a nuisance on
the Properties or poses or threatens to pose a hazard to the
health or safety of persons on the Properties, or (z) which, if
it emanated or migrated from the Properties, could constitute a
trespass, nuisance or health or safety hazard to persons on
adjacent property.
"Indemnifiable Claim" means any Loss for or
against which any Person is entitled to indemnification under
this Agreement; "Indemnified Party" means the party entitled to
indemnity hereunder and their successors, assigns, and heirs; and
"Indemnifying Party" means the Person obligated to provide
indemnification hereunder and its successors and assigns.
"Initial REIT Year" has the meaning set forth in
Section 3.14(c) of this Agreement.
"Law" means any constitutional provision, statute
or other law, rule, regulation or interpretation of any thereof
and any Order of any Governmental Entity (including Environmental
Laws, including, without limitation, the Americans with
Disabilities Act).
"Loss" means any claim, amount paid in settlement,
cost, damage (including, without limitation, consequential
damage), disbursement, expense (including legal fees and
expenses), liability, loss, deficiency, diminution in value or
obligation.
"Material Contract" means any Contract to which
the Trust, any Subsidiary or any Trust Partnership is a party or
by which any such Person or any of their respective Properties
are bound that currently is in effect and (a) after December 31,
1995 obligates the Trust, any Subsidiary or any Trust Partnership
to pay an amount equal to $100,000 or more, (b) is one of the
group of Tenant Leases that is anticipated by the Trust to
produce 66 2/3% of the Trust's gross income during the fiscal
year ending December 31, 1997, such group of Tenant Leases
calculated beginning with the Tenant Lease that is anticipated to
produce the most gross income during such period and thereafter
in descending order of magnitude of gross income anticipated to
be earned during such period under each other Tenant Lease until
such percentage of gross income is reached, (c) is a Tenant Lease
involving the lease of space in excess of 10,000 square feet for
any Property, (d) other than any Tenant Lease, has an unexpired
term as of December 31, 1995 in excess of five (5) years, (e)
other than any Tenant Lease, contains a covenant not to compete
or otherwise significantly restricts business activities of the
Trust, any Subsidiary or any Trust Partnership, (f) provides for
the extension of credit by the Trust, any Subsidiary or any Trust
Partnership or a line of credit to the Trust, any Subsidiary or
any Trust Partnership in excess of $50,000, (g) provides for a
guaranty or indemnity by the Trust, any Subsidiary or any Trust
Partnership, (h) grants a power of attorney, agency or similar
authority to another Person, (i) contains an option to purchase
or a right of first refusal relating to any of the Properties,
(j) relates to the sale or issuance of any equity securities of
the Trust or securities exercisable for or convertible into any
equity securities of the Trust, or (k) any other Contract that is
not within the general descriptions of clauses (a) through (j)
(i.e., is not a Tenant Lease or within any of the other general
categories listed above) but is material to the business,
financial condition, assets, results of operations or prospects
of the Trust, Subsidiaries or Trust Partnerships.
"Notification" means any summons, citation,
directive, order, claim, litigation, pleading, investigation,
proceeding, judgment, letter or any other written or oral
communication from any Governmental Entity, any entity or any
individual, concerning any intentional or unintentional act or
omission which has resulted in or which may result in any
Environmental Noncompliance or Environmental Claim.
"Order" means any decree, injunction, judgment,
order, ruling, assessment or writ.
"Permit" means any license, permit, franchise,
certificate of authority or order, or any waiver of the
foregoing, required to be issued by any Governmental Entity.
"Person" means an association, a corporation, an
individual, a partnership, a joint venture, a limited liability
company, a trust or any other entity or organization, including a
Governmental Entity.
"Properties" means the real property owned or
leased the Trust, Subsidiaries and Trust Partnerships listed on
Schedule 3.13 hereto.
"Purchase Price" has the meaning set forth in
Section 2.2 of this Agreement.
"Pure World Litigation" means that case pending in
the United States District Court for the Northern District of
Texas Dallas Division, Civil No. 3:96-CV-0068-H, involving the
Trust, Pure World, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et. al.
"Registration Rights Agreement" means the
registration rights agreement between Buyer and the Trust to be
executed contemporaneously with the Closing.
"REIT" has the meaning set forth in Section
3.14(b) of this Agreement.
"Release" means releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, ejecting,
escaping, leaching, disposing, seeping, infiltrating, draining or
dumping of any Hazardous Material. This term shall be interpreted
to include both the present and past tense, as appropriate.
"Schedule" means any schedule attached to this
Agreement.
"SEC" means the Securities and Exchange Commission
or any successor entity.
"SEC Filings" has the meaning set forth in Section
3.4 of this Agreement.
"Securities Act" means the Securities Act of 1933,
as amended.
"Seller" means American Industrial Properties
REIT, Inc., a Maryland corporation and a wholly-owned subsidiary
of the Trust.
"Seller Indemnified Parties" has the meaning set
forth in Section 11.2 of this Agreement.
"Selling Shareholder Agreements" has the meaning
set forth in Section 3.5 of this Agreement.
"Settlement Agreement" shall mean the settlement
agreement by and among the Trust, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ on the one hand and Pure World, Inc., ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on the other hand attached hereto as Exhibit
A.
"Shares" has the meaning set forth in Section 2.1
of this Agreement.
"Subsidiaries" has the meaning set forth in
Section 3.1 of this Agreement. All references herein to
Subsidiaries shall include Seller.
"Taxes" has the meaning set forth in Section
3.14(a) of this Agreement.
"Tax Return" has the meaning set forth in Section
3.14(b) of this Agreement.
"Tenant Leases" has the meaning set forth in
Section 3.13(b) of this Agreement.
"Trust" means American Industrial Properties REIT,
a Texas real estate investment trust.
"Trust Benefit Plans" has the meaning set forth in
Section 3.11 of this Agreement.
"Trust Managers" means the Trust Managers of the
Trust.
"Trust Partnerships" has the meaning set forth in
Section 3.1 of this
Agreement.
"Trust Permits" has the meaning set forth in
Section 3.7(b) of this Agreement.
"Unaudited Financial Statements" has the meaning
set forth in Section 3.3(b) of this Agreement.
"USAA Group" means United Services Automobile
Association, a reciprocal interinsurance exchange under the Texas
Insurance Code ("USAA"), and, as designated by USAA from time to
time, any entity in which USAA directly or indirectly owns 100%
of the issued and outstanding equity securities.
1 Rules of Construction. This Agreement shall be
construed in accordance with the following rules of construction:
(a) the terms defined in this Agreement include the
plural as well as the singular;
(b) all accounting terms not otherwise defined herein
have the meanings given such terms under GAAP;
(c) all references in the Agreement to designated
"Sections" and other subdivisions are to the designated Sections
and other subdivisions of the body of this Agreement;
(d) pronouns of either gender or neuter shall
include, as appropriate, the other pronoun forms;
(e) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole
and not to any particular Section or other subdivision;
(f) the words "includes" and "including" are not
limiting; and
(g) knowledge of any Subsidiary or any Trust
Partnership shall be deemed to be knowledge of Seller and the
Trust.
1. PURCHASE AND SALE
0 Purchase and Sale of the Shares. Subject to the terms
and conditions set forth herein, on the Closing Date, Seller
shall sell to Buyer, and Buyer shall purchase from Seller, an
aggregate of 998,100 Common Shares (the "Shares").
1 Purchase Price; Payment. The aggregate purchase
price for the Shares (the "Purchase Price") is payable on the
Closing Date by the cancellation of all principal and interest
outstanding under the Promissory Note dated November 25, 1996 in
the principal amount of $2,769,775 between the Trust and Buyer
(the "Demand Note").
2 The Closing.
( ) The closing of the purchase and sale of the Shares
(the "Closing") will take place at 10:00 a.m. at the offices of
Liddell, Sapp, Zivley, Hill & ▇▇▇▇▇▇, L.L.P., counsel to Seller
and the Trust, within one (1) or two (2) business days of final
approval of the settlement of the Pure World Litigation by the
court overseeing such settlement (the "Closing Date").
(a) At the Closing, Seller shall deliver to Buyer the
certificate or certificates evidencing the Shares. In addition,
all other actions shall be taken and all other documents shall be
delivered which are necessary to consummate the purchase and sale
of the Shares, other than such actions and documents as are to be
taken or delivered at another date, as specifically provided in
this Agreement.
(b) At the Closing, Buyer shall pay and deliver to Seller
the Purchase Price in the manner set forth in Section 2.2 above.
0. REPRESENTATIONS AND WARRANTIES OF SELLER AND TRUST
Seller and the Trust, jointly and severally, represent
and warrant to, and agree with, Buyer as follows:
0 Organization and Related Matters. Seller is duly
organized, validly existing and in good standing under the laws
of the State of Maryland. Seller has all necessary corporate
power and corporate authority to execute, deliver and perform
this Agreement. The Trust is duly organized, validly existing
and in good standing under the laws of the State of Texas. The
Trust has all necessary power and authority to execute, deliver
and perform this Agreement. Schedule 3.1 lists all Subsidiaries
(the "Subsidiaries," which term includes Seller) and all Trust
Partnerships (the "Trust Partnerships") of the Trust and
correctly sets forth the Trust's ownership interest therein, the
jurisdiction in which each Subsidiary and each Trust Partnership
is organized and each jurisdiction in which the Trust, each
Subsidiary and each Trust Partnership is and is required to be
qualified or licensed to do business as a foreign Person. Each
Subsidiary and each Trust Partnership is duly organized, validly
existing and, with respect to each Subsidiary, in good standing
under the laws of the jurisdiction of its incorporation or
organization. The Trust, Subsidiaries and Trust Partnerships have
all necessary power (whether corporate, partnership or other
power, as applicable) and authority to own their respective
properties and assets and to carry on their respective businesses
as now conducted. The Trust, Subsidiaries and Trust Partnerships
are duly qualified or licensed to do business as foreign Persons
in good standing in all jurisdictions in which the character or
the location of the assets owned or leased by any of them or the
nature of the business conducted by any of them requires
licensing or qualification, except where the failure to be so
qualified or licensed is not and will not be material to their
respective businesses, financial condition, assets, results of
operations or prospects. Schedule 3.1 correctly lists the current
Trust Managers, directors, general partners and executive
officers of the Trust, Subsidiaries and Trust Partnerships.
True, correct and complete copies of the Charter Documents and
the charter or organizational documents of Subsidiaries and Trust
Partnerships (including the declaration of trust, articles or
certificate of incorporation, bylaws and partnership agreements,
as applicable) as in effect on the date hereof have been
delivered to Buyer. The Trust is registered and is a reporting
company under the Exchange Act. Neither any Subsidiary nor any
Trust Partnership is registered or is a reporting company under
the Exchange Act. Except as listed on Schedule 3.1, the Trust
does not directly or indirectly own or control any equity
interest in any Person.
1 Capital Stock; Title to Shares. The authorized
Capital Stock of the Trust consists of 10,000,000 Common Shares
of which 10,000,000 Common Shares are issued and outstanding.
The Trust owns all of the outstanding Capital Stock of
Subsidiaries free and clear of any Encumbrances, equities and
claims except as specified in Schedule 3.2. The Trust owns the
equity interest in each Trust Partnership free and clear of any
Encumbrances, equities and claims except as specified in Schedule
3.2. No Common Shares or Capital Stock of any Subsidiary are
held in treasury. Except as set forth in Schedule 3.2 or as
contemplated in this Agreement, there are no outstanding
Contracts or other rights to subscribe for or purchase, or
Contracts or other obligations to issue or grant any rights to
acquire, any Common Shares, any Capital Stock of any Subsidiary
or any Trust Partnership or to restructure or recapitalize the
Trust, any Subsidiary or any Trust Partnership. Except as set
forth in Schedule 3.2, there are no outstanding Contracts of the
Trust, any Subsidiary or any Trust Partnership to repurchase,
redeem or otherwise acquire any of their respective Common Shares
or Capital Stock, as applicable. No bonds, debentures, notes or
other indebtedness having general voting rights (or convertible
into securities having general voting rights) of the Trust, any
Subsidiary or any Trust Partnership are issued or outstanding.
There are no voting trusts or other agreements or understandings
to which the Trust, any Subsidiary or any Trust Partnership is a
party or is bound, or to the knowledge of the Trust and Seller,
to which any other Person is a party or is bound, with respect to
the voting of the Common Shares or the Capital Stock of any
Subsidiary or any Trust Partnership. All issued and outstanding
Common Shares and Capital Stock of all Subsidiaries and Trust
Partnerships were duly authorized and validly issued at the time
of issuance and are fully paid and nonassessable. There are no
preemptive rights in respect of any Common Shares or Capital
Stock of any Subsidiary or any Trust Partnership. Upon the sale
of the Shares to Buyer at the Closing, the Shares will have been
validly issued and be validly outstanding, fully paid and
nonassessable, and the sale of such Shares is not and will not be
subject to preemptive rights of any other shareholder of the
Trust. Buyer shall receive good and marketable title to the
Shares, free and clear of all Encumbrances, except for
restrictions on the transferability of the Shares set forth in
the Charter Documents or generally imposed on securities under
federal and state securities laws. Such Shares will rank equally
with all other Common Shares of the Trust with respect to
priority in payment of dividends and the distribution of assets
upon any liquidation of the Trust, and there are no shares of any
class of Capital Stock of the Trust having any priority in
respect thereof.
2 Financial Statements.
( ) Audited Financial Statements. The Trust has delivered
to Buyer the consolidated balance sheets of the Trust (which
reflect the financial position of all Subsidiaries and Trust
Partnerships), as of December 31, 1993, 1994 and 1995, and the
respective related consolidated statements of operations, cash
flows and stockholders' equity for the periods then ended
(collectively, the "Audited Financial Statements"). The Audited
Financial Statements have been examined by the Auditors whose
report thereon is attached to such financial statements. All
Audited Financial Statements have been prepared in conformity
with GAAP applied on a consistent basis (except for changes, if
any, disclosed therein). The Audited Financial Statements present
fairly, in all material respects, the consolidated financial
condition and results of operations of the Trust, Subsidiaries
and Trust Partnerships as of their respective dates and periods.
Since December 31, 1995, there has been no change in the
significant accounting policies or procedures of the Trust, any
Subsidiary or any Trust Partnership. The Trust has not received
any annual management letters from the Auditors since March 29,
1996.
(a) Unaudited Financial Statements. The Trust has
delivered to Buyer the consolidated balance sheets of the Trust
(which reflect the financial position of all Subsidiaries and
Trust Partnerships), as of March 31, June 30 and September 30,
1996, and the respective related consolidated statements of
operations, cash flows and stockholders' equity for the periods
then ended (collectively, the "Unaudited Financial Statements").
All Unaudited Financial Statements have been prepared in
conformity with GAAP applied on a consistent basis (except for
changes, if any, disclosed therein). The Unaudited Financial
Statements present fairly, in all material respects, the
consolidated financial condition and results of operations of the
Trust, Subsidiaries and Trust Partnerships as of their respective
dates and periods.
(b) No Material Adverse Changes. Since September 30, 1996,
except as set forth in Schedule 3.3, specifically contemplated by
this Agreement, specifically disclosed in any SEC Filings filed
since September 30, 1996 and prior to the date of this Agreement
(copies of which have been provided to Buyer), and except the
settlement of the Pure World Litigation, the Trust, Subsidiaries
and Trust Partnerships have conducted their respective businesses
only in the ordinary course and in a manner consistent with past
practice and, whether or not in the ordinary course of business,
there has not been, occurred or arisen:
( ) any change in or event affecting the business of the
Trust, Subsidiaries and Trust Partnerships that has had a
material adverse effect on such business or any materially
adverse change or trend in the business, financial condition,
assets, results of operations or prospects of the Trust,
Subsidiaries or Trust Partnerships, or
(i) any condition or action which would be proscribed by
(or require consent under) Section 5.3 had it existed, occurred
or arisen after the date of this Agreement, or
(ii) any casualty, loss, damage or destruction of any real
property of the Trust, any Subsidiary or any Trust Partnership
that has involved or may involve a Loss (whether or not covered
by insurance) to the Trust, any Subsidiary or any Trust
Partnership of more than $100,000 individually, or $300,000 in
the aggregate.
(c) No Other Liabilities or Contingencies. Neither the
Trust nor any Subsidiary nor any Trust Partnership has any
material liability of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due,
probable of assertion or not, except liabilities that (i) were
incurred after September 30, 1996 in the ordinary course of
business in a manner consistent with past practice and are not
material in amount or which involve the Pure World Litigation, or
(ii) are set forth in Schedule 3.3 hereto.
3 SEC Reports. The Trust has filed with the SEC all
forms, reports, statements, including registration statements,
and other material documents, together with any amendments
required to be made with respect thereto, that were required to
be filed with the SEC since December 31, 1993. Such forms,
reports, statements, including registration statements, and other
material documents required to be filed with the SEC by the Trust
since December 31, 1993 are collectively referred to in this
Agreement as the "SEC Filings." The Trust has made available to
Buyer all SEC Filings. As of their respective dates, (x) each of
the SEC Filings, including the financial statements contained
therein, was true and complete in all material respects, (y) each
of the SEC Filings, including the financial statements contained
therein, complied in all material respects with the Securities
Act and Exchange Act, as applicable, and the rules and
regulations promulgated thereunder, and (z) none contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
4 Authorization; No Conflicts. Seller has the requisite
corporate power and corporate authority to enter into this
Agreement and to carry out its obligations hereunder. The Trust
has the requisite power and authority to enter into this
Agreement and the Registration Rights Agreement and to carry out
its obligations hereunder and thereunder. The execution,
delivery and performance of this Agreement by Seller has been
duly and validly authorized by its Board of Directors and by all
other necessary action on the part of Seller, and no other
proceedings on the part of Seller (including shareholder
approval) are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Trust has been
duly and validly authorized by the Trust Managers and by all
other necessary action on the part of the Trust, and no other
proceedings on the part of the Trust (including shareholder
approval) are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Seller and constitutes
the legally valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
This Agreement has been duly executed and delivered by the Trust
and constitutes the legally valid and binding obligation of the
Trust, enforceable against the Trust in accordance with its
terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws and equitable principles relating to or limiting
creditors' rights generally. Except as set forth in Schedule
3.5, the execution, delivery and performance of this Agreement by
Seller and the Trust and the consummation by Seller and the Trust
of the transactions contemplated hereby, by the Share Purchase
Agreement between the Trust and Buyer, dated as of December 13,
1996 (the "December 13 Agreement") and by the share purchase
agreements dated as of November 25, 1996 between Buyer and
(i) Pure World, Inc. and (ii) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇. ▇. ▇▇▇▇▇ (the "Selling Shareholder
Agreements") will not (i) conflict with or result in the breach
of any provisions of, or trigger any preferential rights under,
the Charter Documents or the charter or organizational documents
of Subsidiaries or Trust Partnerships, (ii) result in a breach or
violation of, a default under, or the triggering of any payment
or other material obligations pursuant to, or accelerate vesting
under, any Trust Benefit Plans or any grant or award thereunder
or any employment or consulting agreement or arrangement of the
Trust, any Subsidiary or any Trust Partnership, (iii) violate,
conflict with, result in a breach of any provision of, constitute
a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, result in the
termination or in a right of termination or cancellation of,
accelerate the performance required by, result in the creation of
any Encumbrance upon any Properties under, result in the
triggering of any rights under, or result in being declared void,
voidable or without further binding effect, any of the terms or
provisions of any Material Contract of the Trust, any Subsidiary
or any Trust Partnership or (iv) violate any Law. Schedule 3.5
lists all Permits and Approvals required to be obtained by
Seller, the Trust, Subsidiaries and Trust Partnerships to
consummate the transactions contemplated hereby and by the
December 13 Agreement. Except for matters identified in Schedule
3.5 as requiring that certain actions be taken by or with respect
to a third party or Governmental Entity, the execution and
delivery of this Agreement by Seller and the Trust and the
consummation of the transactions contemplated hereby and by the
December 13 Agreement will not require the consent, authorization
or approval of filing or registration with, or the issuance of
any Permit by, any other third party or Governmental Entity under
the terms of any applicable Laws or Material Contracts of Seller,
the Trust, Subsidiaries or Trust Partnerships.
5 Legal Proceedings. Except as set forth in Schedule
3.6 and except with respect to the Pure World Litigation, there
is no Order or Action pending, or to the knowledge of Seller or
the Trust threatened, against or affecting the Trust, any
Subsidiary, any Trust Partnership, any Trust Manager in his
capacity as a trust manager of the Trust or any of the Properties
which (i) questions the validity of this Agreement, the
Registration Rights Agreement, the Settlement Agreement or any
action taken or to be taken pursuant hereto or thereto, or (ii)
individually or when aggregated with one or more other Orders or
Actions has, or if determined adversely will have, a material
adverse effect on the business, financial condition, assets,
results of operations or prospects of the Trust, any Subsidiary
or any Trust Partnership or on the Trust's ability to perform
this Agreement. To Seller's and the Trust's knowledge, Schedule
3.6 lists each Order and each Action that (i) involves a claim or
potential claim of aggregate liability in excess of $50,000
against the Trust, any Subsidiary or any Trust Partnership that
is not covered by insurance, (ii) involves a claim or potential
claim of aggregate liability brought by the Trust, any Subsidiary
or any Trust Partnership against a tenant under any Tenant Lease
which Tenant Lease obligates such tenant to pay rent to the
Trust, any Subsidiary or any Trust Partnership during the year
ending December 31, 1996 in an amount equal to or in excess of
$150,000, or (iii) that enjoins or seeks to enjoin any activity
by the Trust, any Subsidiary or any Trust Partnership. There is
no matter as to which the Trust, any Subsidiary or any Trust
Partnership has received any notice, claim or assertion in
connection with which any such Person has or may reasonably be
expected to have any right to be indemnified by the Trust, any
Subsidiary or any Trust Partnership.
6
Compliance with Law and Permits.
( ) The Trust, Subsidiaries and Trust Partnerships
are organized and have conducted their respective businesses in
accordance with applicable Laws, neither the Trust nor any
Subsidiaries or Trust Partnerships has received any notice of
violation of any Laws which remains uncorrected, and the
respective forms, procedures and practices of the Trust,
Subsidiaries and Trust Partnerships are in compliance with all
such Laws, to the extent applicable, the violation of which would
have a material adverse effect on the respective businesses,
financial condition, assets, results of operations or prospects
of the Trust, Subsidiaries and Trust Partnerships.
(a) Except as set forth in Schedule 3.7, the Trust,
Subsidiaries and Trust Partnerships hold all permits, licenses,
variances, exemptions, authorizations, orders and approvals of
all Governmental Entities necessary for the lawful conduct of
their respective businesses (the "the Trust Permits") and the
Trust, Subsidiaries and Trust Partnerships are in compliance with
the terms of the Trust Permits relating to each such Person,
except where the failure to hold such Trust Permits or be in
compliance therewith would not, individually or in the aggregate,
have a material adverse effect on the business, financial
condition, assets, results of operations or prospects of the
Trust, Subsidiaries or Trust Partnerships. The Trust has made
available to Buyer correct and complete copies of all Trust
Permits. Except as set forth in Schedule 3.7, to the knowledge of
the Seller and the Trust, no investigation or review by any
Governmental Entity with respect to the Trust Permits is pending
or threatened.
7 Dividends and Other Distributions. Except as set
forth in Schedule 3.8, there has been no dividend or other
distribution of assets or securities by the Trust or Trust
Partnerships (other than Trust Partnerships in which the Trust
owns 100% beneficial interest) whether consisting of money,
property or any other thing of value, declared, issued or paid to
or for the benefit of the Trust subsequent to the date of the
Audited Financial Statements.
8 Certain Interests. Except as set forth in Schedule
3.1 and Schedule 3.9, no Affiliate of the Trust, any Subsidiary
or any Trust Partnership, nor any of their respective officers,
Trust Managers, directors or partners, nor any Associate of any
such individual, has any material interest in any property used
in or pertaining to the respective businesses of the Trust, any
Subsidiary or any Trust Partnership. Except as set forth in
Schedule 3.1 and Schedule 3.9, no such Person is indebted or
otherwise obligated to the Trust, any Subsidiary or any Trust
Partnership. Except as set forth in Schedule 3.9, the Trust,
Subsidiaries and Trust Partnerships are not indebted or otherwise
obligated to any such Person, except for amounts due under normal
arrangements applicable to all employees generally as to salary
or reimbursement of ordinary business expenses not unusual in
amount or significance. Except as set forth in Schedule 3.1 and
Schedule 3.9, there are no material transactions between the
Trust, any Subsidiary or any Trust Partnership and any Affiliate
of the Trust, any Subsidiary or any Trust Partnership or any
Associate of any such Affiliate that have continuing obligations
of any party thereunder. Except as set forth in Schedule 3.9, the
consummation of the transactions contemplated by this Agreement
will not (either alone, or upon the occurrence of any act or
event, or with the lapse of time, or both) result in any
compensation or severance or other payment or benefit arising or
becoming due from the Trust, any Subsidiary or any Trust
Partnership or any of its assigns to any Person.
9 No Brokers or Finders. No agent, broker, finder, or
investment or commercial banker, or other Person or firm engaged
by or acting on behalf of Seller, the Trust or any of their
Affiliates in connection with the negotiation, execution or
performance of this Agreement or the transactions contemplated by
this Agreement, is or will be entitled to any brokerage or
finder's or similar fee or other commission as a result of this
Agreement or such transactions except for a fee payable to
EVEREN.
10 Employee Benefit Plans. Schedule 3.11 lists all
employee benefit plans and collective bargaining, labor and
employment agreements or other similar benefit arrangements to
which either the Trust, any Subsidiary, or any Trust Partnership
is a party or by which either the Trust, any Subsidiary, or any
Trust Partnership is bound (collectively, the "the Trust Benefit
Plans"), including (i) any profit-sharing, deferred compensation,
bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, severance, welfare or incentive plan,
agreement or arrangement, (ii) any plan, agreement or arrangement
providing for "fringe benefits" or perquisites to employees,
officers, directors, trust managers or agents, including benefits
relating to automobiles, clubs, vacation, child care, parenting,
sabbatical, sick leave, medical, dental, hospitalization, life
insurance and other types of insurance, (iii) any employment
agreement not terminable on 30 days (or less) written notice or
(iv) any other "employee benefit plan" within the meaning of
Section 3(3) of ERISA. True and complete copies of the Trust
Benefit Plans, current descriptive booklets and summary plan
descriptions of the Trust Benefit Plans, any relevant trust
agreements or insurance policies or contracts and, if applicable,
the most recent annual return on Form 5500 (or equivalent form)
have been made available to Buyer. To the extent applicable, the
Trust Benefit Plans comply, in all material respects, with the
requirements of ERISA and the Code. Except as set forth in
Schedule 3.11, no Trust Benefit Plan is or is intended to be a
stock bonus, pension or profit-sharing plan within the meaning of
Section 401(a) of the Code. Neither any Trust Benefit Plan nor
the Trust, any Subsidiary, or any Trust Partnership has incurred
any liability or penalty under Section 4975 of the Code or
Section 502(i) of ERISA. Each Trust Benefit Plan has been
maintained and administered in all material respects in
compliance with its terms and with ERISA and the Code to the
extent applicable thereto. Except as set forth in Schedule 3.11,
there are no pending, or to the knowledge of Seller and the Trust
threatened, claims (other than pursuant to the terms of any such
plan) against or otherwise involving any of the Trust Benefit
Plans and no Action has been brought against or with respect to
any Trust Benefit Plan, and neither the Trust nor any Subsidiary
nor any Trust Partnership has incurred any liability to any party
with respect to any Trust Benefit Plan. All contributions
required to be made to the Trust Benefit Plans have been made or
provided for. Except as set forth in Schedule 3.11, neither the
Trust nor any Subsidiary nor any Trust Partnership maintains or
contributes to any plan or arrangement which provides or has any
liability to provide life insurance or medical or other employee
welfare benefits to any employee or former employee upon his
retirement or termination of employment and neither the Trust nor
any Subsidiary nor any Trust Partnership has represented,
promised or contracted (whether in oral or written form) to any
employee or former employee that such benefits would be provided.
Except as set forth in Schedule 3.11, the execution of, and
performance of the transactions contemplated by, this Agreement
will not (either alone or upon the occurrence of any additional
or subsequent event) constitute an event under any Trust Benefit
Plan or other policy, arrangement or any trust or loan that will
or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits
with respect to any employee. No Trust Benefit Plan is subject to
Title IV of ERISA and neither the Trust nor any Subsidiary nor
any Trust Partnership has, within six years prior to the date of
this Agreement, contributed to or had any obligation to
contribute to any employee benefit plan subject to Title IV of
ERISA. For purposes of this Section 3.11, (i) the term "Trust"
includes any entity required to be aggregated with the Trust
pursuant to Code Section 414(b), (c), (m) or (o) and (ii)
provisions of ERISA or the Code include regulations prescribed
under such provisions.
11 Labor Matters. Neither the Trust nor any Subsidiary
nor any Trust Partnership is a party to or bound by any
collective bargaining or other labor union contracts. There is no
pending or, to the knowledge of Seller and the Trust, threatened
labor dispute, strike or work stoppage against the Trust, any
Subsidiary, or any Trust Partnership. Neither the Trust nor any
Subsidiary nor any Trust Partnership, nor their respective
representatives or employees, has committed any unfair labor
practices in connection with the operation of the respective
businesses of the Trust, each Subsidiary, and each Trust
Partnership, and there is no pending or, to the knowledge of the
Seller and the Trust, threatened charge or complaint against the
Trust, any Subsidiary, or any Trust Partnership by the National
Labor Relations Board or any comparable state agency. The Trust,
Subsidiaries, and Trust Partnerships are in compliance with all
applicable Laws respecting employment, consulting, employment
practices, wages, hours, and terms and conditions of employment.
12 Properties.
( ) Schedule 3.13 contains a complete and correct list of
all real property owned or leased by the Trust, each Subsidiary
and each Trust Partnership (collectively, the "Properties").
Except as set forth in Schedule 3.13, the Trust, Subsidiary or
Trust Partnership, as applicable, owns good and indefeasible
title to each Property, including the land and all improvements,
all personalty and the Tenant Leases (as hereinafter defined).
Except as set forth in Schedule 3.13, the Properties are free and
clear of all Encumbrances of any nature, except for (i) liens for
real property taxes or similar assessments not yet due and
payable, (ii) easements for utilities servicing the Properties
and (iii) such Encumbrances as do not materially detract from or
interfere with the present use of the Properties subject thereto
or affected thereby, or otherwise materially impair the use or
value of such Properties.
(a) The Trust has delivered to Buyer a true, correct and
complete copy of a rent roll with respect to each Property
setting forth, among other matters, the term (commencement or
renewal date and expiration date) of each lease with respect to
the Properties (collectively, the "Tenant Leases"), the square
feet for each of the Tenant Leases, the monthly base rental rates
for each of the Tenant Leases and the security deposits for each
of the Tenant Leases. Other than the Tenant Leases, no party has
been granted any license, lease or other material right relating
to the use or possession of the Properties which is material to
the use or value of the Properties. Except as set forth in
Schedule 3.13, all of the Tenant Leases are valid and subsisting
and in full force and effect with respect to the Trust,
Subsidiaries and Trust Partnerships and, to Seller's and the
Trust's knowledge, with respect to any other party thereto, and
no tenant of the Properties is more than 30 days delinquent on
its rental as of October 31, 1996 except as set forth in Schedule
3.13. To Seller's and the Trust's knowledge, no tenant of the
Properties has initiated or threatened bankruptcy since January
1, 1996. No tenant of the Properties is an Affiliate or
Associate of the Trust, any Subsidiary or any Trust Partnership.
Except as set forth in Schedule 3.13, there are no contracts or
other material obligations outstanding for the sale, exchange or
transfer of the Properties or any portion thereof. There are no
attachments, executions, assignments for the benefit of
creditors, receiverships, conservatorship or voluntary or
involuntary proceedings in bankruptcy or pursuant to any other
debtor relief laws filed by, or pending against, the Trust,
Subsidiaries, Trust Partnerships or the Properties. Except as
set forth in Schedule 3.13, since January 1, 1996, no tenants
have terminated their leases prior to expiration and, to Seller's
and the Trust's knowledge, have no intent to do so.
(c) Except as set forth in Schedule 3.13 there is no
pending condemnation or similar proceeding affecting the land,
the improvements or the personalty situated at the Properties or
any portion thereof, and neither the Trust nor any Subsidiary nor
any Trust Partnership has received any written notice and has no
knowledge that any such proceeding is contemplated.
(d) The continued ownership, operation, use and
occupancy of the land or the improvements thereon do not violate
any zoning, building, administrative or other law, ordinance,
order or regulation or any restrictive covenant applicable to the
Properties, the violation of which would have a material adverse
effect on the business, financial condition, assets, results of
operations or prospects of the Trust, Subsidiaries or Trust
Partnerships, as applicable, and no written notice of any such
violation has been received by the Trust, any Subsidiary or any
Trust Partnership from any Governmental Entity.
(e) The Trust, Subsidiaries or Trust Partnerships, as
applicable, currently has in place title, liability, casualty and
other insurance coverage with respect to the Properties in such
amounts as are reasonable and customary for properties similar to
the Properties. Each of such policies is in full force and
effect, and all premiums due and payable thereunder have been,
and on the Closing Date will be, fully paid when due. No notice
of cancellation has been received, or to the knowledge of Seller
and the Trust threatened, with respect thereto.
(f) Except as set forth in Schedule 3.13, there is no
Action pending, or to the knowledge of Seller and the Trust
contemplated, by any Governmental Entity or third party to levy
any special assessments against the Properties that, if
successful, would have a material adverse effect on the business,
financial condition, assets, results of operations or prospects
of the Trust.
(g) To the Seller's and the Trust's knowledge, each
unsatisfied brokerage obligation that is in excess of $25,000
with respect to the Properties is set forth on Schedule 3.13.
(h) To Seller's and the Trust's knowledge and except
as set forth on Schedule 3.13, no capital expenditures are
contemplated by the Trust to be incurred by the Trust, any
Subsidiary or any Trust Partnership within twelve months after
the date of this Agreement in excess of $50,000 per Property with
respect to any Property.
(i) Except as set forth in Schedule 3.13, all
management contracts with respect to the Properties are
terminable by the Trust on 30 days notice.
(j) To Seller's and the Trust's knowledge, except for
customary easements for access to building systems or utilities
and except as set forth in Schedule 3.13, each Property is an
independent unit which does not now rely on any facilities (other
than facilities of municipalities or public utilities) located on
any property that is not part of the Property for the furnishing
to the Property of any essential building systems or utilities
(including drainage facilities, catch basins and retention ponds)
that if the owner of the Property could not avail the use of
which, would materially detract from the value of the Property or
materially interfere with the use of the Property.
3.14 Tax Matters.
(a) For purposes of this Agreement, "Taxes" means any
federal (including, without limitation, tax on its undistributed
taxable income, alternative minimum tax, tax on certain sale
proceeds or other nonqualifying income from foreclosure property
or on income from prohibited transactions, and any taxes imposed
upon the Trust, Subsidiaries or Trust Partnerships under Section
857 or Section 4981 of the Code), state, county, local or foreign
taxes, charges, fees, levies, or other assessments, including,
without limitation, all net income, gross income, sales and use,
ad valorem, transfer, gains, profits, excise, franchise, real and
personal property, gross receipt, capital stock, business and
occupation, disability, employment, payroll, license, estimated,
or withholding taxes or charges imposed by any Governmental
Entity, and includes any interest and penalties (civil or
criminal) on or additions to any such taxes.
(b) For purposes of this Agreement, "Tax Return"
means a report, return or other information required to be filed
with or supplied to a Governmental Entity with respect to Taxes
including, without limitation, any notices or information reports
or returns required to be filed by the Trust, Subsidiaries or
Trust Partnerships with respect to their respective operations,
income, assets and shareholders or partners in order to maintain
the Trust's status as a real estate investment trust ("REIT")
under the Code.
(c) The Trust elected to be taxed as a REIT under
Sections 856 through 860 of the Code effective for its taxable
year ended December 31, 1985 (the "Initial REIT Year"). The
Trust, since the Initial REIT Year through the end of the
immediately preceding taxable year, has always qualified as a
REIT under the Code. At all times from and after the Initial REIT
Year to the date hereof, the Trust has complied with, and through
the Closing Date will comply with, all applicable Code and
regulatory requirements necessary to maintain its qualification
as a REIT under the Code and has otherwise operated, and through
the Closing Date will have otherwise operated, in the manner
necessary to maintain its qualification as a REIT under the Code.
No dividend will be required to be distributed before December
31, 1996 in order for the Trust to maintain its qualification as
a REIT under the Code.
(d) Except as disclosed in Schedule 3.14, the Trust,
Subsidiaries and Trust Partnerships have (i) filed all Tax
Returns required to be filed by applicable Law since December 31,
1990, and all such Tax Returns were in all material respects
(and, as to Tax Returns not filed as of the date hereof but filed
on or before the Closing Date, will be in all material respects)
true, complete and correct and filed on a timely basis and (ii)
within the time and in the manner prescribed by law, paid (and
until the Closing Date will pay within the time and in the manner
prescribed by law) all material Taxes that were or are due and
payable.
(e) Except as set forth in Schedule 3.14, the Trust,
Subsidiaries and Trust Partnerships have established (and until
the Closing Date will maintain) on their respective books and
records reserves adequate to pay all Taxes of the Trust,
Subsidiaries and Trust Partnerships not yet due and payable in
accordance with GAAP which are reflected in the Audited Financial
Statements and Unaudited Financial Statements to the extent
required by GAAP.
(f) Except as disclosed in Schedule 3.14, as of the
date hereof, there are no, and, as of the Closing Date, there
will be no, material Tax liens upon the assets of the Trust,
Subsidiaries and Trust Partnerships, except liens for Taxes not
yet due.
(g) Except as disclosed in Schedule 3.14, the Trust,
Subsidiaries, and Trust Partnerships have complied (and until the
Closing Date will comply) in all material respects with the
provisions of the Code relating to the payment and withholding of
Taxes, including the withholding and reporting requirements under
Code Sections 1441 through 1464, 3401 through 3406, and 6041
through 6049, as well as similar provisions under any other laws,
and have, within the time and in the manner prescribed by law,
withheld from employee wages and paid over to the proper
governmental authorities all material amounts required by
applicable Law.
(h) Except as disclosed in Schedule 3.14, the Trust,
Subsidiaries and Trust Partnerships have not executed any
outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any
Taxes or Tax Returns.
(i) No notice of any material deficiency for any
Taxes has been received by the Trust, any Subsidiary or any Trust
Partnership that has not been resolved and paid in full or
otherwise settled, no audits or other administrative proceedings
or court proceedings are presently pending or, to Seller's and
the Trust's knowledge, threatened with regard to any Taxes or Tax
Returns of the Trust, Subsidiaries or Trust Partnerships, and no
notice of any material claim has been received by the Trust, any
Subsidiary or any Trust Partnership from any authority in a
jurisdiction where the Trust, Subsidiaries or Trust Partnerships
do not file Tax Returns that the Trust, any Subsidiary or any
Trust Partnership is or may be subject to Tax in that
jurisdiction.
(j) The Trust, Subsidiaries and Trust Partnerships
have not received a Tax Ruling or entered into a Closing
Agreement with the Internal Revenue Service that would have any
continuing effect after the Closing Date.
(k) The Trust has made available (or, with respect to
all Tax Returns filed after the date hereof, will make available)
to Buyer complete and accurate copies of all Tax Returns, and
amendments thereto, filed by the Trust, any Subsidiary or any
Trust Partnership for all taxable periods or years ending on or
prior to the Closing Date.
(l) Neither the Trust nor any Subsidiary nor any
Trust Partnership is required to include in income any adjustment
pursuant to Code Section 481(a) by reason of a voluntary change
in federal income tax accounting method (other than a change of
federal income tax accounting method required as a result of a
change in law) initiated by the Trust, and the Internal Revenue
Service has not proposed any such adjustment or change in
accounting method.
(m) The Trust has made available to Buyer all
relevant information with respect to the federal income tax net
operating loss carryovers of the Trust as of December 31, 1995,
based on the federal income Tax Returns filed by the Trust as of
such date.
(n) For all taxable years from and including its
Initial REIT Year through the Closing Date, (i) the Trust has
maintained permanent records containing the information required
to be maintained by Code Section 857(a)(2) and Treasury
Regulation Sections 1.857-(8)(a), 1.857-8(c) and 1.857-8(e) and
(ii) the Trust has demanded the written statements from its
shareholders required by Treasury Regulation Section 1.857-8(d)
in accordance with Treasury Regulation Section 1.857-8(e).
3.15 Material Contracts. Schedule 3.15 sets forth an
accurate list of all Material Contracts of the Trust,
Subsidiaries and Trust Partnerships. The Trust has made
available to Buyer complete and correct copies of all Material
Contracts. All Material Contracts are in full force and effect.
Except as set forth in Schedule 3.15, the Trust, Subsidiaries and
Trust Partnerships are not in violation of or default in any
material respect (nor is there any waiver in effect of any event
that would constitute a default but for such waiver) under, and
no event has occurred that (with notice or the lapse of time or
both) would constitute a violation of or default under, any
Material Contract. Except as set forth in Schedule 3.15, to the
knowledge of Seller and the Trust, no other party to any Material
Contract is in breach of the terms, provisions and conditions of
such Material Contract and no other party to any Material
Contract has notified the Trust, any Subsidiary or any Trust
Partnership that it intends to terminate or modify a Material
Contract.
3.16 Insurance. Schedule 3.16 sets forth a complete
and correct list of all insurance policies, except for title
insurance policies, currently in force insuring against risks of
the Trust, Subsidiaries and Trust Partnerships. The Trust,
Subsidiaries and Trust Partnerships are in compliance with the
terms of such policies applicable to them and there are no claims
by the Trust, any Subsidiary or any Trust Partnership under any
such policy as to which any insurance company is denying
liability or defending under a reservation of rights clause.
3.17 Environmental Matters.
(a) Except as set forth in the documentation provided
to the Trust pursuant to Section 3.17(b) and in Schedule 3.17,
there is no material Environmental Noncompliance with respect to
any Property and there are no material Environmental Claims with
respect to any Property or the Trust, any Subsidiary or any
Trust Partnership or, to the knowledge of Seller and the Trust,
any tenants under any of the Tenant Leases. All material
permits, consents, licenses, certificates, approvals,
registrations, and authorizations in connection with
environmental matters (collectively, "Environmental Permits")
which are required by any Law have been obtained and are valid.
The Properties (and all uses thereof and operations conducted
thereon) comply in all material respects with all Environmental
Permits. All operations on or at the Properties conducted by the
Trust are and have been conducted in all material respects in
compliance with applicable Environmental Laws. Except as set
forth in the documentation provided to the Trust pursuant to
Section 3.17(b) and in Schedule 3.17, the Trust has not received
any Notification from any Governmental Entity seeking any
information or alleging any violation of any Law regarding
Environmental Conditions. Except as set forth in the
documentation provided to the Trust pursuant to Section 3.17(b)
and in Schedule 3.17, the Trust has not caused or given its
verbal or written authorization to cause, and has no knowledge
of, any Release of any Hazardous Materials on-site or off-site of
the Properties in violation of any Environmental Law.
(b) The Trust has made available to Buyer true,
correct, and complete copies of all written reports of any
environmental assessment, compliance or regulatory audit,
inspection, or investigation of the Properties in its possession,
and the Trust has not received any other written report
containing any evidence of Environmental Noncompliance.
(c) Except as set forth in the documentation provided
to the Trust pursuant to Section 3.17(b) and in Schedule 3.17,
there is not now, nor has there been in the past, any "friable"
asbestos (as the term "friable" is defined under 40 C.F.R.
Section 61.141) or friable asbestos containing materials located
on, incorporated in, or otherwise contained in the Properties or
any portion thereof, and there are not now, and have not in the
past been, any underground storage tanks located on the
Properties or any portion thereof.
(d) Except as set forth in the documentation provided
to the Trust pursuant to Section 3.17(b), and in Schedule 3.17,
none of the tenants under any Tenant Lease handle or store any
Hazardous Material as a principal or primary business.
3.18 Trust Records; Accounting Records. The minute
books of Seller and the Trust accurately reflect in all material
respects all actions taken to the date of this Agreement by the
shareholder of Seller, the holders of Common Shares, the Board of
Directors of Seller, the Trust Managers and committees of the
Trust Managers, as applicable, except for those matters set forth
in Schedule 3.18 for which minutes of such actions have not yet
been prepared or approved. The share certificate books and
records of the Trust accurately reflect the ownership of the
Common Shares. The Trust maintains accounting records which
fairly reflect, in all material respects, the Trust's
transactions.
3.19 New York Stock Exchange Listing. The
outstanding Common Shares are listed on the New York Stock
Exchange. The sale and delivery of the Shares to Buyer pursuant
to this Agreement along with the subsequent sale and delivery of
any other Common Shares to Buyer will not violate any listing
requirements of the New York Stock Exchange for the listing of
Common Shares, including the Shares.
3.20 Disclosure of Facts. There are no facts peculiar
to the Trust, Subsidiaries or the Trust Partnerships that the
Trust has not disclosed to Buyer that materially adversely
affect, or insofar as Seller and the Trust can reasonably
foresee, will materially adversely affect, the business,
financial condition, assets, results of operations or prospects
of the Trust, Subsidiaries or Trust Partnerships.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to, and agrees with,
Seller and the Trust as follows:
0 Organization and Related Matters. Buyer is a
corporation duly organized and validly existing under the laws of
the State of Delaware. Buyer has all necessary corporate power
and corporate authority to carry on its business as now being
conducted. Buyer has all necessary corporate power and corporate
authority to execute, deliver and perform this Agreement and the
transactions contemplated hereby. USAA beneficially owns, and at
Closing will beneficially own, directly or indirectly, all of the
capital stock of Buyer.
1 Authorization. The execution, delivery and
performance of this Agreement by Buyer has been duly and validly
authorized by Buyer and by all other necessary corporate action
on the part of Buyer and no other corporate proceedings on the
part of Buyer are necessary to authorize this Agreement or
consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Buyer and constitutes the
legally valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
The execution and delivery of this Agreement by Buyer and the
consummation of the transactions contemplated hereby will not
require filing or registration with, or the issuance of any
Permit by, any other third party or Governmental Entity under the
terms of any applicable Law or material Contracts of Buyer, other
than any filing required under the Exchange Act.
2 No Conflicts. The execution, delivery and
performance of this Agreement by Buyer will not violate the
provisions of, or constitute a breach or default (whether upon
lapse of time and/or the occurrence of any act or event or
otherwise) under, (a) Buyer's certificate of incorporation and
bylaws, pursuant to which Buyer was organized and by which Buyer
is governed, (b) any Law to which Buyer is subject or (c) any
Contract to which Buyer is a party that is material to the
financial condition, results of operations or conduct of the
business of Buyer.
3 No Brokers or Finders. No agent, broker, finder or
investment or commercial banker, or other Person or firms engaged
by or acting on behalf of Buyer or their respective Affiliates in
connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is
or will be entitled to any broker's or finder's or similar fees
or other commissions as a result of this Agreement or such
transactions.
4 Legal Proceedings. There is no Order or Action
pending against or, to the knowledge of Buyer, affecting Buyer
that individually or when aggregated with one or more other
Actions has, or if determined adversely would have, a material
adverse effect on the business, properties, or financial
condition of Buyer or on Buyer's ability to perform this
Agreement.
5 Investment Representation. Buyer is acquiring the
Shares from Seller for Buyer's own account, for investment
purposes only and not with a view to or for sale in connection
with the distribution thereof. Buyer agrees to execute any
further certificate or other document representing Buyer's
investment intent or as to any other matter reasonably requested
by Seller or the Trust to assure compliance with applicable
securities laws.
6
Legends; Stop-Transfer Orders.
( ) The certificates for the Shares will bear a legend
relating to restrictions on transfer imposed pursuant to the
percentage ownership limitation contained in the Charter
Documents.
(a) The Trust may impose appropriate stop-transfer
instructions relating to the restrictions set forth herein.
7 Status for REIT Ownership and Income Tests. At the
Closing, applying the stock ownership rules of Code Section
856(h), Buyer will be treated as a corporation, and the Shares
that it owns will be treated as owned proportionately by Buyer's
policyholders (its "shareholders" for this purpose).
2. COVENANTS WITH RESPECT TO CONDUCT OF SELLER PRIOR TO
CLOSING
From the date of this Agreement up to and including
the Closing Date, Seller and the Trust, jointly and severally,
covenant and agree to take such actions, or refrain from taking
such actions, as are set forth in this Section 5.
0 Access. The Trust shall, and shall cause the
Subsidiaries and Trust Partnerships to, authorize and permit
Buyer and its representatives (which term shall be deemed to
include its independent accountants and counsel) to have
reasonable access during normal business hours, upon reasonable
notice and in such manner as will not unreasonably interfere with
the conduct of business, to all of the Properties, books,
records, operating instructions and procedures, Tax Returns and
all other information with respect to the businesses of the
Trust, Subsidiaries and Trust Partnerships as Buyer may from time
to time reasonably request, and to make copies of such books,
records and other documents and to discuss the business of the
Trust, Subsidiaries and Trust Partnerships with Buyer and its
partners and their respective officers, employees, accountants
and counsel, as Buyer considers necessary or appropriate for the
purposes of familiarizing itself with the business of the Trust,
obtaining any necessary Approvals of, or Permits for, the
transactions contemplated by this Agreement and conducting an
evaluation of the organization and business of the Trust. From
the date of this Agreement up to and including the Closing Date,
the Trust will permit, and cause Subsidiaries and Trust
Partnerships to permit, Buyer and its partners, and their
respective officers, directors, agents, attorneys, accountants,
and representatives, to audit such books and records, to meet
with tenants of the Properties, and to conduct such
investigations, tests, or inspections of the Properties as the
Trust shall approve in the Trust's sole discretion, including
intrusive sampling studies to ascertain whether or not there are
any Hazardous Materials on, in, or under the Properties.
1 Material Adverse Changes; SEC Filings; Reports;
Financial Statements.
( ) The Trust shall promptly notify Buyer of any event of
which Seller or the Trust obtains knowledge which has had or
might reasonably be expected to have a material adverse effect on
the Trust's business or which if known as of the date hereof
would have been required to be disclosed to Buyer.
(a) The Trust will, and will cause the Subsidiaries and
Trust Partnerships to, furnish to Buyer as soon as available
copies of all SEC Filings, reports, renewals, filings,
certificates, statements and other documents filed with any
Governmental Entity.
2 Conduct of Business. Except as set forth in Schedule
5.3 and as provided in Section 5.4, from the date of this
Agreement until December 24, 1996, the Trust agrees with and for
the benefit of Buyer that the Trust shall not, and the Trust
shall cause Subsidiaries and Trust Partnerships not to, without
the prior written consent of Buyer, which consent may not
unreasonably be withheld:
( ) conduct the business of the Trust, Subsidiaries and
Trust Partnerships in any manner except in the ordinary course
consistent with past practices; or
(a) purchase any real property; or
(b) declare, issue, make or pay any dividend or other
distribution of assets, whether consisting of money, other
tangible or intangible personal property, real property or other
thing of value, to its shareholders, or split, combine, dividend,
distribute or reclassify any Common Shares or any shares of its
Capital Stock, as applicable, except for dividends the record
date of which is after the Closing Date; or
(c) issue, sell, redeem or acquire for value, or agree to
do so, any debt obligations, Common Shares or Capital Stock; or
(d) incur or agree to incur any obligation or liability
(absolute or contingent) that individually calls for payment by
the Trust, any Subsidiary or any Trust Partnership of more than
$50,000 individually or in the aggregate except for (i)
liabilities (other than indebtedness for borrowed money) incurred
in the ordinary course of business consistent with past practices
(including, but not limited to, tenant improvements and capital
improvements to Properties) and (ii) liabilities arising out of,
incurred in connection with, or related to the consummation of
the transactions contemplated by this Agreement; or
(e) merge, sell substantially all of its assets or enter
into any other contract involving any other form of business
combination or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution) or adopt any plan of liquidation or
dissolution; or
(f) change the number of Trust Managers or the Board of
Directors of any of the Subsidiaries, or admit any additional
partners to the Trust Partnerships; or
(g) amend the Charter Documents or the charter or
organizational documents of the Subsidiaries or Trust
Partnerships; or
(h) sell, lease, transfer or otherwise dispose of, or
mortgage, pledge or otherwise encumber, other than the lease of
any Property or space therein in the ordinary course of business
consistent with past practices, any of the Properties; or
(i) cancel, satisfy or prepay any debt, obligation,
liability or encumbrance, or waive any claim or right of value of
the Trust, Subsidiaries or Trust Partnerships; or
(j) (i) increase in any manner the compensation or fringe
benefits (including, but not limited to, severance benefits)
payable or to become payable by the Trust, Subsidiaries, or Trust
Partnerships to any officer, Trust Manager, director, partner,
consultant or independent contractor as salary or wages or under
any bonus, insurance, welfare, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including,
without limitation, the granting of any stock option or stock
appreciation right or performance or restricted stock award),
stock purchase or other employee benefit plan, (ii) increase in
any manner the compensation or fringe benefits (including, but
not limited to, severance benefits) payable or to become payable
by the Trust, Subsidiaries or Trust Partnerships to any employee
who is not an officer, Trust Manager, director or partner of the
Trust, Subsidiaries or Trust Partnerships as salary or wages or
under any bonus, insurance, welfare, severance, deferred
compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of any stock option
or stock appreciation right or performance or restricted stock
award) stock purchase or other employee benefit plan, except for
such increase in salary, bonuses or severance benefits to such
employees in the ordinary course of business consistent with past
practices and provided that all such increases in salary, bonuses
or severance benefits do not have a material adverse effect on
the business, assets, financial condition or prospects of the
Trust, Subsidiaries or Trust Partnerships, or (iii) enter into,
adopt, amend in any material respect (except as required by law)
or terminate any Trust Benefit Plan or any agreement,
arrangement, plan or policy between the Trust, Subsidiaries or
Trust Partnerships, as applicable, and one or more of its Trust
Managers, directors, partners, officers, employees or independent
contractors; or
(k) make any tax election other than in connection with
maintaining the Trust's qualification as a REIT or take any
action that would cause the Trust not to qualify as a REIT, or
fail to take any reasonable action to preserve the Trust's
qualification as a REIT; or
(l) make any change in any significant accounting
principles or practices used by the Trust, Subsidiaries or Trust
Partnerships, except as required by the SEC; or
(m) amend, modify or change the terms of any Material
Contract other than in the ordinary course of business consistent
with past practice and provided that such amendment, modification
or change does not have a material adverse effect on the
business, assets, financial condition or prospects of the Trust,
Subsidiaries or Trust Partnerships; or
(n) acquire any Person (or interest therein) or any
material amount of assets, or make any loans, advances or capital
contributions to, or investments in, any Person; or
(o) incur any indebtedness for borrowed money or assume,
endorse (other than endorsements of negotiable instruments in the
ordinary course of business), guarantee or otherwise become
liable or responsible (whether directly, contingently or
otherwise) for the liabilities or obligations of any Person; or
(p) take any action that would, or fail to take any action
which failure would, result in any of Seller's and the Trust's
representations and warranties set forth in this Agreement not
being true; or
(q) agree to or make any commitment to take any action
prohibited by this Section 5.3.
3 Prohibition of Solicitation.
( ) General Prohibition. The Trust shall not, and it
shall direct and use its best efforts to cause its officers,
Trust Managers, employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant
retained by it), and Seller to not, directly or indirectly,
initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to
facilitate, the making or implementation of any proposal or offer
(including, without limitation, any proposal or offer to its
shareholders) with respect to a merger, acquisition,
consolidation or similar transaction involving, or any purchase
of all or any significant portion of the assets or Common Shares
of the Trust (any such proposal or offer being hereinafter
referred to as an "Alternative Proposal") or engage in any
negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any Person relating to
an Alternative Proposal, or otherwise facilitate any effort or
attempt to make or implement an Alternative Proposal. Except as
disclosed to Buyer in writing prior to the date of this
Agreement, Seller and the Trust represent and warrant to Buyer
that there are no existing activities, discussions or
negotiations with any Person with respect to an Alternative
Proposal. Seller and the Trust hereby agree to notify Buyer
immediately if any inquiries or proposals are received by, any
information is requested from, or any negotiations or discussions
are sought to be initiated or continued with Seller or the Trust
with respect to an Alternative Proposal.
(a) Unsolicited Offers. Nothing contained in Section
5.4(a) shall prohibit the Trust Managers or Board of Directors of
Seller from: (i) furnishing information to or entering into
discussions or negotiations with any Person that makes an
unsolicited bona fide Alternative Proposal if, and only to the
extent that, (1) prior to furnishing such information to, or
entering into discussions or negotiations with, such Person, the
Trust or Seller provides written notice to Buyer to the effect
that it is furnishing information to, or entering into
discussions or negotiations with, such Person, (2) prior to
furnishing such information to, or entering into discussions or
negotiations with, such Person, the Trust or Seller receives from
such Person an executed confidentiality agreement in customary
form on terms not less favorable in any material respect to the
Trust or Seller than the terms of the letter agreement, dated
July 12, 1996 by and between Buyer and the Trust (the
"Confidentiality Agreement"), (3) the Trust or Seller keeps Buyer
informed of the status of any such discussions or negotiations
and (4) the Trust and Seller shall not disclose the terms of this
Agreement and other information with respect to transactions
among Seller, the Trust and Buyer except as permitted under
Section 12.9 hereto; and (ii) to the extent applicable, complying
with Rule 14e-2 promulgated under the Exchange Act with regard to
an Alternative Proposal. Nothing in this Section 5.4 shall permit
Seller or the Trust to terminate this Agreement or affect any
other obligation of Seller or the Trust under this Agreement.
(b) Buyer's Continuing Rights. Seller or the Trust shall
be permitted to enter into a binding agreement relating to an
Alternative Proposal only if the Trust Managers or the Board of
Directors of Seller, as applicable, determine, after considering
the advice of its legal counsel, that the failure to consummate
such a transaction might reasonably be expected to subject the
Trust Managers or Board of Directors of Seller to liability for
breach of their fiduciary duties to the Trust's or Seller's
shareholders. The terms of any Alternative Proposal to which the
Trust or Seller is a party in which the Trust is the surviving
entity shall provide that Buyer shall have the right, at its
election, to purchase the Shares upon payment of the Purchase
Price prior to consummation of any such transaction. In the event
that the Trust shall not be the surviving entity of such
transaction, upon consummation of such transaction the Trust and
Seller shall cause such third party to assume the obligations of
Seller and the Trust under this Agreement and Buyer shall have
the right, at its election, to acquire, upon payment of the
Purchase Price, such securities or other property as it would
have been entitled to receive upon exchange of the Shares if
Buyer had purchased the Shares immediately prior to the
consummation of such transaction.
(c) Reimbursement of Expenses. If for any reason,
regardless of fault, the Shares are not sold by Seller to Buyer,
Seller or the Trust shall reimburse Buyer for all out-of-pocket
expenses incurred by Buyer in connection with the transactions
contemplated by this Agreement upon the submission by Buyer to
Seller and the Trust of documentation evidencing the incurrence
of such expenses.
4 Notification of Certain Matters. Seller and the
Trust shall give prompt notice to Buyer, and Buyer shall give
prompt notice to Seller and the Trust, of (a) the occurrence, or
failure to occur, of any event that causes any representation or
warranty contained in this Agreement to be untrue or inaccurate
at any time from the date of this Agreement to the Closing Date
and (b) any failure of Buyer, the Trust or Seller, as the case
may be, to comply with or satisfy, in any material respect, any
covenant, condition or agreement to be complied with or satisfied
by it under this Agreement.
5 Permits and Approvals.
( ) Seller, the Trust and Buyer each agree to cooperate
and use their best efforts to obtain (and will immediately
prepare all registrations, filings and applications, requests and
notices preliminary to all) Approvals and Permits that may be
necessary or which may be reasonably requested by Seller, the
Trust or Buyer to consummate the transactions contemplated by
this Agreement.
(a) To the extent that the Approval of a third party with
respect to any Material Contract is required in connection with
the transactions contemplated by this Agreement, Seller and the
Trust shall use their best efforts to obtain such Approval prior
to the Closing Date.
3. ADDITIONAL CONTINUING COVENANTS AND AGREEMENTS
0 Use of Proceeds. The proceeds from the sale of the
Shares to Buyer, net of any costs (including any accounting and
legal costs and expenses) associated with the transactions
contemplated by this Agreement, shall be applied by Seller to
expenses provided for in the Settlement Agreement and general
reserves.
1 Environmental Matters. Seller and the Trust will
advise Buyer promptly (a) upon obtaining knowledge that a Release
has occurred at or upon the Properties and/or (b) upon receipt of
a Notification pertaining to the Properties.
2 Status for REIT Ownership and Income Tests. Following
the Closing, and at all subsequent times during which Buyer owns
any of the Shares, applying the stock ownership rules of Code
Section 856(h), Buyer will be treated as a corporation, and the
Shares that it owns will be treated as owned proportionately by
Buyer's policyholders (its "shareholders" for this purpose).
3 Prohibited Transactions. The Trust shall not effect
any business transactions, or agree to effect any business
transactions, with Affiliates, Trust Managers or employees of the
Trust except in the ordinary course of business and unless the
consideration paid by the Trust in any such business transaction
is fair value at market rates.
4 Registration Rights Agreement. Contemporaneously
with the Closing, Buyer and the Trust shall enter into a
Registration Rights Agreement substantially in the form of
Exhibit B.
5 REIT Qualification. The Trust shall take all actions
necessary to maintain the Trust's qualification as a REIT and,
without the written consent of Buyer, shall take no action that
would cause the Trust not to qualify as a REIT or fail to take
any action that would preserve the Trust's qualification as a
REIT.
6 Services by Buyer. To the extent permitted by law and
the Charter Documents, Buyer shall have the right to provide
management and leasing services to the Trust at fair market
rates.
GENERAL CONDITIONS OF PURCHASE
The obligations of the parties to effect the Closing
shall be subject to the following conditions unless waived in
writing by all parties:
0 No Orders. No Law or Order shall have been enacted,
entered, issued, promulgated or enforced by any Governmental
Entity which prohibits or restricts the transactions contemplated
by this Agreement. No Governmental Entity shall have notified any
party to this Agreement that consummation of the transactions
contemplated by this Agreement would constitute a violation of
any Law of any jurisdiction or that it intends to commence
proceedings to restrain or prohibit such transactions or force
divestiture or rescission, unless such Governmental Entity shall
have withdrawn such notice and abandoned any such proceedings
prior to the time which otherwise would have been the Closing
Date.
1 Approvals. To the extent required by applicable Law,
all Permits and Approvals required to be obtained in connection
with the Closing from any Governmental Entity or any consent from
a third party material to the Trust or its business shall have
been received or obtained on or prior to the Closing Date.
2 Absence of Litigation. No Action before any
Governmental Entity pertaining to the transactions contemplated
by this Agreement shall have been instituted on or before the
Closing Date whether or not Buyer or its Affiliates is a party.
3 New York Stock Exchange. The Trust will use its best
efforts to maintain the listing of its Common Shares on the New
York Stock Exchange.
5. CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to effect the Closing shall
be subject to the following conditions except to the extent
waived in writing by Buyer:
0 Settlement Agreement. The final settlement of the
Pure World Litigation by the court overseeing such settlement
shall have occurred on or before the Closing Date.
1 Accuracy of Representations and Warranties. All
representations and warranties of Seller and the Trust set forth
in this Agreement shall be true and correct at the Closing Date
as if made on and as of the Closing Date.
2 Performance by Seller and the Trust. Seller and the
Trust shall have in all material respects performed, satisfied
and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by Seller and the Trust on or before the Closing Date,
including the covenants set forth in Section 5.
3 No Material Adverse Change. During the period from
the date of the Audited Financial Statements to the Closing Date,
(i) there shall not have been any material adverse change in the
business, assets, prospects, financial condition or the results
of operations of the Trust, and the Trust shall not have
sustained any material Loss or damage to its assets (including
those of Subsidiaries and Trust Partnerships), except for Losses
covered by insurance, that adversely affects its ability to
conduct a material part of its business and (ii) there shall not
have occurred any material adverse change in the financial
markets in the United States, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or
international political, financial or economic conditions, in
each case the effect of which is such as to, in the judgment of
Buyer, significantly impair the marketability or value of the
Shares, (iii) the trading in any securities of the Company shall
not have been suspended or limited by the Commission or the New
York Stock Exchange, trading generally on the American Stock
Exchange or the New York Stock Exchange or in the Nasdaq National
Market shall not have been suspended or limited, minimum or
maximum prices for trading shall not have been fixed, and maximum
ranges for prices shall not have been required, by any of said
exchanges or by such system or by order of the Commission, the
National Association of Securities Dealers, Inc. or any other
Governmental Entity, and (iv) a banking moratorium shall not have
been declared by Federal, Texas or New York authorities.
4 Certification by Seller and the Trust. Buyer shall
have received a certificate, dated as of the Closing Date, signed
by the President of Seller and by the President of the Trust,
certifying, in such detail as Buyer and its counsel reasonably
may request, that the conditions specified in Section 8.1,
Section 8.2, Section 8.3, and Section 8.4 have been fulfilled.
5 Opinion of Seller and the Trust's Counsel. Buyer
shall have received from counsel for Seller and the Trust an
opinion, dated as of the Closing Date, in form and substance
reasonably satisfactory to Buyer as to the matters set forth in
Schedule 8.6.
6 No Other Business Combination Transaction. Seller or
the Trust shall not have entered into an agreement relating to an
Alternative Proposal and the Board of Directors of Seller or the
Trust Managers shall not have recommended an Alternative
Proposal.
6. CONDITIONS TO OBLIGATIONS OF SELLER AND THE TRUST
The obligations of Seller and the Trust to effect the
Closing shall be subject to the following conditions, except to
the extent waived in writing by Seller and the Trust:
0 Settlement Agreement. The final settlement of the
Pure World Litigation by the court overseeing such settlement
shall have occurred on or before the Closing Date.
1 Accuracy of Buyer's Representations and Warranties.
All representations and warranties of Buyer set forth in this
Agreement shall be true and correct at the Closing Date as if
made on and as of the Closing Date.
2 Buyer's Performance. Buyer shall have in all
material respects performed, satisfied and complied with all
covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by Buyer on or before
the Closing Date.
3 Certification by Buyer. Seller and the Trust shall
have received a certificate, dated as of the Closing Date, signed
by the President or a Vice President of Buyer, certifying, in
such detail as Seller, the Trust and their counsel reasonably may
request, that the conditions specified in Section 9.2 and Section
9.3 have been fulfilled.
4 Opinion of Buyer's Counsel. Seller and the Trust
shall have received from counsel to Buyer an opinion, dated as of
the Closing Date, in form and substance reasonably satisfactory
to the Trust as to the matters set forth in Schedule 9.5.
7. TERMINATION OF OBLIGATIONS; SURVIVAL
0 Termination of Agreement. This Agreement and the
transactions contemplated by this Agreement may be terminated at
any time before the Closing Date, as follows and in no other
manner:
( ) Mutual Consent. By mutual consent in writing of
Buyer, the Trust and Seller.
(a) Conditions to Buyer's Performance Not Met. By Buyer
with written notice to Seller and the Trust if the Closing Date
has not occurred on or before December 31, 1996. Notwithstanding
the foregoing, Buyer may not exercise any right to terminate this
Agreement pursuant to this paragraph if Buyer has breached in any
material respect its covenants or agreements set forth in this
Agreement in any manner that shall have proximately contributed
to the failure of the Closing Date to occur on or before December
31, 1996.
(b) Conditions to Seller's and the Trust's Performance Not
Met. By Seller and the Trust with written notice to Buyer if
the Closing Date has not occurred on or before December 31, 1996.
Notwithstanding the foregoing, Seller and the Trust may not
exercise any right to terminate this Agreement pursuant to this
paragraph if Seller or the Trust has breached in any material
respect its covenants or agreements set forth in this Agreement
in any manner that shall have proximately contributed to the
failure of the Closing Date to occur on or before December 31,
1996.
(c) Misrepresentation or Material Breach. By Buyer,
Seller or the Trust with written notice to the other party if
there has been a misrepresentation or material breach on the part
of Seller, the Trust or Buyer, respectively, in their respective
representations, warranties and covenants set forth herein,
which, with respect to a breach of a covenant, if curable, has
not been cured within ten business days after receipt of notice
from Buyer, Seller or the Trust of the terminating party's
intention to terminate.
(d) Environmental Noncompliance. By Buyer in the event
of the discovery of any Release or other matter prior to the
Closing Date which, if known to Seller or the Trust as of the
date of this Agreement, would have constituted a breach of the
representations and warranties contained in Section 3.17.
1 Effect of Termination. In the event that this
Agreement shall be terminated pursuant to Section 10.1, all
further obligations of the parties under this Agreement shall
terminate; provided that the obligations of the parties contained
in this Section 10.2, Section 11, and Section 12, (other than
Sections 12.3 and 12.8) shall survive any such termination. A
termination under Section 10.1 shall not relieve any party of any
liability for a breach of, or for any misrepresentation under,
this Agreement, or be deemed to constitute a waiver of any
available remedy (including specific performance if available)
for any such breach or misrepresentation.
2 Survival of Representations and Warranties. The
representations and warranties contained in or made pursuant to
this Agreement shall expire on the third anniversary of the
Closing except that (a) the representations and warranties
contained in Section 3.2 shall continue forever (subject to all
defenses of Seller and the Trust available under applicable Law,
including the expiration of the applicable statute of limitations
period), (b) the representations and warranties contained in
Section 3.14 shall continue through the applicable statute of
limitations, (c) representations and warranties which are
intentionally misrepresented shall continue through the later of
the first anniversary of the Closing Date and one year following
the date of actual discovery of such intentional
misrepresentation, and (d) if a claim or notice is given under
Section 11 with respect to the breach of any representation or
warranty prior to the applicable expiration date, such
representation or warranty shall continue indefinitely until such
claim is finally resolved. All covenants and agreements of the
parties hereto shall be continuing and shall survive the Closing
Date pursuant to the terms thereof.
8. INDEMNIFICATION
0 Obligations of Seller and the Trust. Seller and the
Trust, jointly and severally, agree to indemnify, defend and hold
harmless Buyer and its officers, employees, agents, directors and
Affiliates (collectively, the "Buyer Indemnified Parties") from
and against any and all Losses of the Buyer Indemnified Parties
(as incurred) as a result of, or based upon, relating to or
arising out of, directly or indirectly, the transactions
contemplated hereby or by the Registration Rights Agreement,
including, without limitation, as a consequence of (a) any
inaccuracy in, or breach or nonperformance of, any of the
representations, warranties, covenants or agreements made by
Seller and the Trust in, or pursuant to, this Agreement, or (b)
any pending or threatened Action brought by the Trust's
shareholders or creditors or any other Person other than the
Buyer Indemnified Parties or their creditors relating to, or
arising out of or in connection with, directly or indirectly, the
transactions contemplated under this Agreement; provided,
however, that Seller and the Trust shall not be obligated to
indemnify, defend or hold harmless any of the Buyer Indemnified
Parties for any claims based solely on actions taken by any of
the Buyer Indemnified Parties other than the performance of the
covenants and agreements to be undertaken by Buyer pursuant to
the terms and conditions of this Agreement and any other action
authorized in writing by Seller and the Trust. As a condition to
the rights of any of the Buyer Indemnified Parties under this
Section 11, Seller and the Trust may require that any such Person
provide a written undertaking that such Person will repay to
Seller or the Trust, as applicable, any amount expended by Seller
or the Trust to indemnify, defend or hold harmless such Person in
the event and to the extent a court determines that Seller's and
the Trust's indemnification or defense of such Person is
prohibited by applicable Law.
1 Obligations of Buyer. Buyer agrees to indemnify,
defend and hold harmless Seller and the Trust and their Trust
Managers, officers, employees, agents, directors and Affiliates
(collectively, the "Seller Indemnified Parties") from and against
any Losses of the Seller Indemnified Parties as a result of, or
based upon or arising out of, directly or indirectly, (a) any
material inaccuracy in, or material breach or material
nonperformance of, any of the representations, warranties,
covenants or agreements made by Buyer in, or pursuant to, this
Agreement, or (b) any pending or threatened Action brought by
Buyer's policyholders or creditors relating to, or arising out of
or in connection with, directly or indirectly, the transactions
contemplated under this Agreement; provided, however, that Buyer
shall not be obligated to indemnify, defend or hold harmless any
of the Seller Indemnified Parties for any claims based solely on
actions taken by any of the Seller Indemnified Parties other than
the performance of the covenants and agreements to be undertaken
by Seller and the Trust pursuant to the terms and conditions of
this Agreement and any other action authorized in writing by
Buyer. As a condition to the rights of any of the Seller
Indemnified Parties under this Section 11, Buyer may require that
any such Person provide a written undertaking that such Person
will repay to Buyer any amount expended by Buyer to indemnify,
defend or hold harmless such Person in the event and to the
extent a court determines that Buyer's indemnification or defense
of such Person is prohibited by applicable Law.
2 Procedure.
( ) Notice. Any party seeking indemnification with
respect to any Loss shall give notice to the party required to
provide indemnity hereunder (the "Indemnifying Party") on or
before the date specified in Section 11.4.
(a) Defense of Claim. If any claim, demand or liability
is asserted by any third party against any Indemnified Party, the
Indemnifying Party shall have the right, unless otherwise
precluded by applicable law, to conduct and control the defense,
compromise or settlement of any Action or threatened Action
brought against the Indemnified Party in respect of matters
embraced by the indemnity set forth in this Section 11. The
Indemnified Party shall have the right to employ counsel separate
from counsel employed by the Indemnifying Party in connection
with any such Action or threatened Action and to participate in
the defense thereof, but the fees and expenses of such counsel
employed by the Indemnified Party shall be at the sole expense of
the Indemnified Party unless (i) the Indemnifying Party shall
have elected not, or, after reasonable written notice of any such
Action or threatened Action, shall have failed, to assume or
participate in the defense thereof, (ii) the employment thereof
has been specifically authorized by the Indemnifying Party in
writing, or (iii) the parties to any such Action or threatened
Action (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and the Indemnified
Party shall have been advised in writing by counsel for the
Indemnified Party that there may be one or more defenses
available to the Indemnified Party that are not available to the
Indemnifying Party or legal conflicts of interest pursuant to
applicable rules of professional conduct between the Indemnifying
Party and the Indemnified Party (in any which case, the
Indemnifying Party shall not have the right to assume the defense
of such Action on behalf of the Indemnified Party), in either of
which events referred to in clauses (i), (ii) and (iii) the fees
and expenses of such counsel employed by the Indemnified Party
shall be at the expense of the Indemnifying Party. The
Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise any such Action or
threatened Action or consent to the entry of any judgment which
does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party a release
from all liability in respect of such Action or threatened
Action. Unless the Indemnifying Party shall have elected not, or
shall have after reasonable written notice of any such Action or
threatened Action failed, to assume or participate in the defense
thereof, the Indemnified Party may not settle or compromise any
Action or threatened Action without the written consent of the
Indemnifying Party. If, after reasonable written notice of any
such Action or threatened Action, the Indemnifying Party neglects
to defend the Indemnified Party, a recovery against the latter
suffered by it in good faith, is conclusive in its favor against
the Indemnifying Party; provided, however, that no such
conclusive presumption shall be made if the Indemnifying Party
has not received reasonable written notice of the Action against
the Indemnified Party.
3 Survival. The indemnity set forth in this Section 11
shall survive the Closing or termination of this Agreement and
shall remain in effect for a period of (a) with respect to a
breach of a representation or warranty, for the period through
which such representation or warranty shall continue pursuant to
Section 10.3 (including such period of time through which such
representation or warranty shall be extended until resolution of
a claim with respect thereto) and (b) with respect to a breach of
a covenant or agreement or an Action referred to in clause (b) of
Sections 11.1 or 11.2, forever.
4 Notice by Seller and the Trust. Seller, the Trust
and Buyer agree to notify in writing the other party of any
liabilities, claims or misrepresentations, breaches or other
matters covered by this Section 11 upon discovery or receipt of
notice thereof (other than from such other party), whether before
or after Closing.
9. GENERAL
0 Amendments; Waivers. This Agreement and any Schedule
or Exhibit attached hereto or referenced herein may be amended
only by agreement in writing of all parties. No waiver of any
provision nor consent to any exception to the terms of this
Agreement shall be effective unless in writing and signed by the
party to be bound and then only to the specific purpose, extent
and instance so provided.
1 Schedules; Exhibits; Integration. Each Exhibit and
Schedule delivered pursuant to the terms of this Agreement shall
be in writing and shall constitute a part of the Agreement. This
Agreement, together with such Exhibits and Schedules, constitutes
the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and
understandings of the parties in connection therewith.
2 Best Efforts; Further Assurances. Each party will
use its best efforts to cause all conditions to its obligations
to be timely satisfied and to perform and fulfill all obligations
on its part to be performed and fulfilled under this Agreement.
The parties shall cooperate with each other in such actions and
in securing requisite Approvals. Each party shall execute and
deliver such further certificates, agreements and other documents
and take such other actions as the other party may reasonably
request to consummate or implement the transactions contemplated
hereby or to evidence such events or matters, including the
seeking of any necessary shareholder approvals.
3 Governing Law. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS
OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW
OR CONFLICT OF LAW PROVISION (WHETHER OF THE STATE OF TEXAS OR
ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.
4 No Assignment. Except as otherwise specifically
provided herein, neither this Agreement nor any rights or
obligations under it are assignable by any party, except that
Buyer may assign its rights hereunder (including but not limited
to its rights under Section 11) to any member of the USAA Group.
Buyer shall remain liable to Seller for the payment of the
Purchase Price and for other obligations of Buyer hereunder
notwithstanding a permitted assignment.
5 Headings. The descriptive headings of the Sections
and subsections of this Agreement are for convenience only and do
not constitute a part of this Agreement.
6 Counterparts. This Agreement and any other
agreement or document delivered pursuant hereto may be executed
in one or more counterparts and by different parties in separate
counterparts. All of such counterparts shall constitute one and
the same agreement or other document and shall become effective
when one or more counterparts of this Agreement have been signed
by each party and delivered to the other party.
7 Publicity and Reports. The Trust and Buyer shall
coordinate all publicity relating to the transactions
contemplated by this Agreement and no party shall issue any press
release, publicity statement or other public notice relating to
this Agreement, or the transactions contemplated by this
Agreement, without obtaining the prior consent of the other
party, except to the extent that independent legal counsel to the
Trust or Buyer, as the case may be, shall advise the Trust or
Buyer in writing that a particular action is required by
applicable Law (in which event the party taking such action shall
cooperate with the other party in connection with any disclosure
or publicity resulting from such action).
8 Confidentiality. All information disclosed by any
party (or its representatives) to the other party whether before
or after the date hereof, in connection with the transactions
contemplated by, or the discussions and negotiations preceding,
this Agreement to any other party (or its representatives) shall
be kept confidential by such other party and its representatives
and shall not be used by any such Persons other than as
contemplated by this Agreement, except (a) to the extent that
such information (i) was known by the recipient when received,
(ii) is or hereafter becomes lawfully obtainable from other
public sources or (iii) is necessary or appropriate to be
disclosed to a Governmental Entity having jurisdiction over the
parties, (b) may otherwise be required by Law to be disclosed or
(c) to the extent such duty as to confidentiality is waived in
writing by the other party. If this Agreement is terminated in
accordance with its terms, each party shall use all reasonable
efforts to return upon written request from the other party all
documents (and reproductions thereof) received by it or its
representatives from such other party (and, in the case of
reproductions, all such reproductions made by the receiving
party) that include information not within the exceptions
contained in the first sentence of this Section 12.9, unless the
recipients provide assurances reasonably satisfactory to the
requesting party that such documents have been destroyed.
9 Parties in Interest. This Agreement shall be binding
upon and inure to the benefit of each party, and nothing in this
Agreement, express or implied, is intended to confer upon any
other Person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. Nothing in this Agreement
is intended to relieve or discharge the obligation of any third
Person to or to confer any right of subrogation or action over or
against any party to this Agreement.
10 Notices. Any notice or other communication hereunder
must be given in writing and (a) either delivered in person, (b)
transmitted by telex, telefax or telecopy mechanism, (c) mailed
by first class mail, return receipt requested, or (d) delivered
by overnight mail or courier service, as follows:
If to Buyer, addressed to:
USAA Real Estate Company
8000 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Freeway
▇▇-▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller or the Trust, addressed to:
American Industrial Properties REIT
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or to such other person as any
party shall have last designated by such notice to the other
parties. Each such notice or other communication shall be
effective (i) if given by telecommunication, when transmitted to
the applicable number so specified in this Section 12.11 and an
appropriate answer back is received, (ii) if given by mail, three
days after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iii) if
given by any other means, when actually delivered at such
address.
11 Expenses. Seller, the Trust and Buyer shall pay
their own respective expenses incident to the negotiation,
preparation and performance of this Agreement and the
transactions contemplated hereby, including but not limited to
the fees, expenses and disbursements of their respective
financial advisers, accountants and counsel.
12 Remedies; Waiver. All rights and remedies existing
under this Agreement and any related agreements or documents are
cumulative to and not exclusive of any rights or remedies
otherwise available under applicable Law. No failure on the part
of any party to exercise or delay in exercising any right
hereunder shall be deemed a waiver thereof, nor shall any single
or partial exercise preclude any further or other exercise of
such or any other right. Buyer, Seller and the Trust shall be
entitled to seek any equitable remedy to the extent such remedy
is available under applicable Law.
13 Representation By Counsel; Interpretation. Seller,
the Trust and Buyer each acknowledge that each party to this
Agreement has been represented by counsel in connection with
this Agreement and the transactions contemplated by this
Agreement. Accordingly, any rule of Law or any legal decision
that would require interpretation of any claimed ambiguities in
this Agreement against the party that drafted it has no
application and is expressly waived. The provisions of this
Agreement shall be interpreted in a reasonable manner to effect
the intent of Buyer, Seller and the Trust, and no rule of strict
construction shall be applied against any party to this
Agreement.
14 Severability. If any provision of this Agreement is
determined to be invalid, illegal or unenforceable by any
Governmental Entity, the remaining provisions of this Agreement
to the extent permitted by Law shall remain in full force and
effect to the extent permitted by Law, and the parties hereby to
the same extent waive any provision of Law that renders any
provision hereof prohibited or unenforceable in any respect.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed by its duly authorized officers as
of the day and year first above written.
"BUYER"
USAA REAL ESTATE COMPANY
By:
T. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President - Operations
"SELLER"
AMERICAN INDUSTRIAL PROPERTIES REIT, INC.
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
"TRUST"
AMERICAN INDUSTRIAL PROPERTIES REIT
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer