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EXHIBIT 10.15
MEMBER'S INTEREST PURCHASE AGREEMENT
This Member's Interest Purchase Agreement ("Agreement") is made
effective as of August 13, 1999 (the "Effective Date"), by and among PAN PACIFIC
RETAIL PROPERTIES, INC., a Maryland corporation, and PAN PACIFIC (RLP), INC., a
California corporation (collectively, "Buyer"), and STANLEY W. GRIBBLE, AS
TRUSTEE OF THE STANLEY W. GRIBBLE TRUST, under trust agreement dated September
24, 1991, as amended ("Seller"), with the consent and cooperation of PAN PACIFIC
(RANCHO LAS PALMAS), LLC, a Nevada limited liability company (the "Company"),
and the Members thereof.
RECITALS
WHEREAS, the Company was formed on the 23rd day of September, 1999, by
filing Articles of Organization of the Company with the Nevada Secretary of
State;
WHEREAS, immediately prior to the Effective Date of this Agreement,
Rancho Las Palmas Center Associates, a California Limited Partnership (the
"Partnership") was the sole owner of the Real Property which is subject to the
Loan;
WHEREAS, prior to the Effective Date of this Agreement the Partnership
has contributed the Real Property to the Company pursuant to the Contribution
Agreement and will receive in exchange therefore Managing Member Units and
Non-Managing Member Units in the Company in accordance with the Contribution
Agreement;
WHEREAS, immediately subsequent to the foregoing exchange, the
Partnership will distribute all of the Managing Member Units it receives in the
exchange to Seller, and all of the Non-Managing Member Units to Ronald C.
Waranch as Trustee of the Ronald Charles Waranch Intervivos Trust under trust
agreement dated July 6, 1995 (the "Waranch Trust");
WHEREAS, immediately following the distribution of the Managing Member
Units to the Gribble Trust, the Gribble Trust desires to sell, transfer and
convey all of its right, title and interest in and to such Managing Member Units
to the Buyer pursuant to this Agreement, and upon the consummation of such sale,
transfer, and conveyance, Seller will no longer have any interest in the Company
and will have withdrawn with the consent of the other Members as a Member in the
Company;
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
have the meanings specified or referred to in this Section 1:
"ASSUMPTION" -- as defined in the Contribution Agreement.
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"BEST EFFORTS" -- the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible; provided, however, that an obligation
to use Best Efforts under this Agreement does not require the Person subject to
that obligation to take actions that would result in a materially adverse change
in the benefits to such Person of this Agreement and the Contemplated
Transactions.
"BREACH" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
"BUSINESS DAY" -- any day other than a Saturday, Sunday or a Holiday.
"BUYER" -- as defined in the first paragraph of this Agreement.
"CLOSING" -- as defined in Section 2.3.
"CLOSING DATE" -- the date and time as of which the Closing actually
takes place.
"COMPANY" -- Pan Pacific (Rancho Las Palmas), LLC, a Nevada limited
liability company.
"CONSENT" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS" -- all of the transactions contemplated by
this Agreement, including:
(a) the sale of all of Seller's Managing Member Units by Seller to
Buyer; and
(b) the performance by Buyer and Seller of their respective covenants
and obligations under this Agreement.
"CONTRACT" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"CONTRIBUTION AGREEMENT" -- the Contribution Agreement by and between
the Partnership and the Company pursuant to which the Real Property was
contributed to the Company in exchange for Managing Member Units and
Non-Managing Member Units.
"DAMAGES" -- as defined in Section 10.2.
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"ENCUMBRANCE" -- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
"ESCROW AGREEMENT" -- as defined in Section 2.4.
"ESCROW HOLDER" -- the Company where escrow shall be established, whose
address for this transaction shall be:
Transnation Title Insurance Company
2200 US Bancorp Tower
111 SW 5th Avenue
Portland, OR 97201
Attn: Theresa Kilmer
Telephone No: 503-222-9931
Facsimile No: 503-228-4276
"ESCROW PERIOD" -- the period from and after the Effective Date through
the Closing Date or any earlier termination of this Agreement.
"GOVERNMENTAL AUTHORIZATION" -- any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"GOVERNMENTAL BODY" -- any:
(a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
"INFORMATION" -- all documents, reports, studies, and other information
or materials (including, without limitation, the Records) delivered or disclosed
to Buyer by Seller or their agents.
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"IRC" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS" -- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"KNOWLEDGE" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if such individual is actually aware of such
fact or other matter.
A Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director, officer, partner, executor, or trustee of such
Person (or in any similar capacity) has, or at any time had, Knowledge of such
fact or other matter.
"LEGAL REQUIREMENT" -- any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"LENDER" -- as defined in the Contribution Agreement.
"LIEN" -- any mortgage, deed of trust, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not limited to, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code or comparable law or any jurisdiction in connection
with such mortgage, pledge, security interest, encumbrance, lien or charge).
"LOAN" -- that certain loan in the approximate unpaid principal amount
of $12,500,000.00 secured by a deed of trust and security agreement encumbering
the Company's ownership interest in the Property.
"MANAGING MEMBER UNIT" -- has the meaning set forth in the Operating
Agreement.
"NON-MANAGING MEMBER UNIT" -- has the meaning set forth in the Operating
Agreement.
"ORDER" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such Person and
is taken in the ordinary course of the normal day-to-day operations of such
Person;
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(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority); and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or by
any Person or group of Persons exercising similar authority), in the ordinary
course of the normal day-to-day operations of other Persons that are in the same
line of business as such Person.
"ORGANIZATIONAL DOCUMENTS" -- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any amendment
to any of the foregoing.
"PARTNERSHIP" -- as defined in the Recitals of this Agreement.
"PERSON" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability Company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"PROCEEDING" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"REAL PROPERTY" -- shall have the meaning set forth in the Contribution
Agreement.
"RELATED PERSON" -- with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by such
individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such individual's
Family hold (individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which such individual or one or more
members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person;
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(b) any Person that holds a Material Interest in such specified Person;
(c) each Person that serves as a director, officer, partner, executor,
or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material Interest;
(e) any Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity); and
(f) any Related Person of any individual described in clause (b) or (c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least ten percent
(10.0%) of the outstanding voting power of a Person or equity securities or
other equity interests representing at least ten percent (10.0%) of the
outstanding equity securities or equity interests in a Person.
"REPRESENTATIVE" -- with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"SECURITIES ACT" -- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"SELLER" -- as defined in the first paragraph of this Agreement.
"SELLER'S RELEASES" -- as defined in Section 2.5.A.
"THREATENED" -- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.
2. AGREEMENT OF SALE AND TRANSFER OF SELLER'S INTEREST IN THE
COMPANY; DUE DILIGENCE; CLOSING
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2.1 MEMBER'S INTEREST. Subject to the terms and conditions of this
Agreement, at the Closing, Seller will sell and transfer all of its Managing
Member Units in the Company to Buyer, and Buyer will purchase all of Seller's
Managing Member Units in the Company from Seller.
2.2 PURCHASE PRICE. The purchase price (the "Purchase Price") for
the Seller's Managing Member Units will be determined by subtracting from the
sum of Twenty Million Two Hundred Thousand and No/100ths Dollars
($20,200,000.00); (a) the unpaid principal balance of the Loan plus all interest
accrued thereon as of the Closing Date; and (b) The Partnership's share of all
Closing Costs as that term is defined in the Contribution Agreement, and
multiplying the resulting amount times sixteen percent (16.0%).
2.3 CLOSING. The purchase and sale (the "Closing") provided for in
this Agreement will take place at the offices of the Escrow Holder on the date
that is three (3) days after Lender advises the Company that the Assumption has
been approved and that Lender is ready to close the Assumption; or (ii) at such
other time and place as the parties may agree. Subject to the provisions of
Section 9, failure to consummate the purchase and sale provided for in this
Agreement on the date and time and at the place determined pursuant to this
Section 2.3 will not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
2.4 ESCROW AGREEMENT. Within ten (10) days following the mutual
execution and delivery of this Agreement, Buyer and Seller will enter into an
escrow agreement in the form of EXHIBIT "1" attached hereto (the "Escrow
Agreement") with Escrow Holder.
2.5 CLOSING OBLIGATIONS. At the Closing:
A. Seller will deliver to Buyer:
(1) Certificate No. 1, representing all of the Managing
Member's Units in the Company, duly endorsed for the transfer and conveyance by
Seller to Buyer;
(2) releases in the form of EXHIBIT "2" attached hereto
executed by Seller and any Related Person of Seller designated by Buyer;
(3) a certificate executed by Seller representing and
warranting to Buyer that each of Seller's representations and warranties in this
Agreement was accurate in all respects as of the date of this Agreement and is
accurate in all respects as of the Closing Date as if made on the Closing Date;
and
(4) the opinion of Seller's counsel and the other
documents referred to in Section 7.11B.
B. Buyer will deliver to Seller:
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(1) the Purchase Price, in the form of a bank cashier's
or certified check payable to the order of Seller or by wire transfer to such
accounts as are specified in writing by Seller; and
(2) a certificate executed by Buyer to the effect that
each of Buyer's representations and warranties in this Agreement was accurate in
all respects as of the date of this Agreement and is accurate in all respects as
of the Closing Date as if made on the Closing Date.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING. Seller has not, through any act
or failure to act, caused the Company to cease to be a limited liability company
that is validly existing and in good standing under the laws of Nevada, with
full power and authority to conduct its business as it is now being conducted,
and to own or use the properties and assets that it purports to own or use.
3.2 AUTHORITY; NO CONFLICT.
A. This Agreement constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its terms.
Upon the execution and delivery by Seller of the Escrow Agreement, it will
constitute the legal, valid, and binding obligation of Seller, enforceable
against Seller in accordance with its terms. Seller has the absolute and
unrestricted right, power, and authority to execute and deliver this Agreement
and the Escrow Agreement and to perform its obligations under this Agreement and
the Escrow Agreement.
B. The execution and delivery of this Agreement and the
Escrow Agreement, and the consummation or performance of any of the Contemplated
Transactions will not directly or indirectly (with or without notice or lapse of
time):
(1) as a result of any act or failure to act on the
part of Seller or any predecessor in interest of Seller, contravene, conflict
with, or result in a violation of any provision of the Organizational Documents
of the Company;
(2) contravene, conflict with, or result in a violation
of, or give any Governmental Body or other Person the right to challenge any of
the Contemplated Transactions or to exercise any remedy or obtain any relief
under, any Legal Requirement or any Order to which the Company, as a result of
any act or failure to act on the part of Seller or any predecessor in interest
of Seller, or Seller, or any of the assets owned or used by the Company, as a
result of any act or failure to act on the part of Seller or any predecessor in
interest of Seller, may be subject;
(3) except for any Tax resulting solely from Buyer's
status as a REIT, cause Buyer or the Company to become subject to, or to become
liable for the payment of, any Tax;
(4) cause any of the assets owned by the Company to be
reassessed or revalued by any taxing authority or other Governmental Body;
(5) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or used by the
Company.
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Seller is not and will not be required to give any notice to or obtain any
Consent from any Person in connection with the execution and delivery of this
Agreement or the Escrow Agreement or the consummation or performance of any of
the Contemplated Transactions, other than those Consents which have or will have
been obtained at or prior to the Closing.
3.3 EQUITY INTERESTS. The equity interests of Seller in the Company
immediately prior to the Closing, will consist of sixteen percent (16.0%) of the
Members' Interests, all of which shall be in Managing Member Units, the exact
number of which shall be determined in accordance with the Contribution
Agreement, and no other Person owns or will own Managing Member Units.
All of the Managing Member Units in the Company that have been or will
be issued to Seller have been duly authorized, validly issued and are fully
paid. Except for this Agreement and the Contribution Agreement, there are no
contracts or agreements to which Seller or any predecessor in interest to Seller
is a party relating to the issuance, sale, or transfer of any Units in the
Company.
3.4 LEGAL PROCEEDINGS; ORDERS.
A. There is no pending Proceeding:
(1) that to the Knowledge of Seller has been commenced
by or against the Company or that otherwise relates to or may affect the
business of, or any of the assets owned or used by, the Company; or
(2) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
B. To the Knowledge of Seller: (1) no such Proceeding has
been Threatened, and (2) no event has occurred or circumstance exists that may
give rise to or serve as a basis for the commencement of any such Proceeding.
C. Except as set forth in EXHIBIT "3" attached hereto:
(1) to the Knowledge of Seller, there is no Order to
which the Company, or any of the assets owned or used by the Company, is
subject;
(2) Seller is not subject to any Order that relates to
the business of, or any of the assets owned or used by, the Company.
3.5 SECTION 754 ELECTION. The Partnership shall duly file and have
in effect for the tax year of the Partnership in which the Contemplated
Transactions are consummated, a valid election under Section 754 of the Code.
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3.6 CONSENT TO TRANSFER. All of the Members in the Company have or
will have consented prior to the Closing to the Contemplated Transactions in
accordance with the Organizational Documents of the Company.
3.7 INDEPENDENT COUNSEL. Seller has had independent counsel with
respect to the tax and legal effects of this Agreement, the Contribution
Agreement, and all related agreements, documents, exhibits, instruments referred
to herein or therein, and the Contemplated Transactions, and Seller is not
relying on any advice or statements of Buyer or any of its agents or employees
with respect thereto.
3.8 SELLER'S TITLE. Seller is, or prior to the Closing will be, the
owner, beneficially and of record, of all of Seller's Managing Member Units free
and clear of all liens, encumbrances, security agreements, equities, options,
claims, charges and restrictions.
3.9 DISCLOSURE
A. No representation or warranty of Seller in this Agreement
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
B. No notice given pursuant to Section 5.2 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in which
they were made, not misleading.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING. Buyer is two (2) corporations
duly organized, validly existing, and in good standing under the laws of the
State of Maryland and the State of Nevada, respectively, with full power and
authority to conduct its business as it is now being conducted, and to own or
use the properties and assets that it purports to own or use.
4.2 AUTHORITY; NO CONFLICT.
A. This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Upon the execution and delivery by Buyer of the Escrow Agreement, it will
constitute the legal, valid, and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms. Buyer has the absolute and
unrestricted right, power, and authority to execute and deliver this Agreement
and the Escrow Agreement and to perform its obligations under this Agreement and
the Escrow Agreement.
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B. The execution and delivery of this Agreement and the
Escrow Agreement, and the consummation or performance of any of the Contemplated
Transactions will not directly or indirectly (with or without notice or lapse of
time):
(1) as a result of any act or failure to act on the
part of Buyer contravene, conflict with, or result in a violation of any
provision of the Organizational Documents of the Company;
(2) cause any of the assets owned by the Company to be
reassessed or revalued by any taxing authority or other Governmental Body;
(3) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets owned or used by the
Company.
(4) any provision of Buyer's Organizational Documents;
(5) any resolution adopted by the board of directors or
the stockholders of Buyer;
(6) any Legal Requirement or Order to which Buyer may
be subject; or
(7) any Contract to which Buyer is a party or by which
Buyer may be bound.
Buyer is not and will not be required to obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
4.3 CERTAIN PROCEEDINGS. The provisions of Section 3.4 are
incorporated herein as if fully set forth except "Buyer" shall be substituted
for "Seller" as the same appear in said Section. There is no pending Proceeding
that has been commenced against Buyer and that challenges, or may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions. To Buyer's Knowledge, no such Proceeding
has been Threatened.
4.4 INDEPENDENT COUNSEL. The provisions of Section 3.7 are
incorporated herein as if fully set forth except "Buyer" shall be substituted
for "Seller" as the same appear in said Section.
4.5 DISCLOSURE. The provisions of Section 3.9A are incorporated
herein as if fully set forth except "Buyer" shall be substituted for "Seller" as
the same appear in said Section.
5. COVENANTS OF SELLER PRIOR TO CLOSING DATE
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5.1 REQUIRED APPROVALS. As promptly as practicable after the date
of this Agreement, Seller will make all filings required by Legal Requirements
to be made by it in order to consummate the Contemplated Transactions. Between
the date of this Agreement and the Closing Date, Seller will (a) cooperate with
Buyer with respect to all filings that Buyer elects to make or is required by
Legal Requirements to make in connection with the Contemplated Transactions, and
(b) cooperate with Buyer in obtaining all Consents required to consummate the
Contemplated Transactions.
5.2 NOTIFICATION. Between the date of this Agreement and the
Closing Date, Seller will promptly notify Buyer in writing if Seller becomes
aware of any fact or condition that causes or constitutes a Breach of any of
Seller's representations and warranties as of the date of this Agreement, or if
Seller becomes aware of the occurrence after the date of this Agreement of any
fact or condition that would (except as expressly contemplated by this
Agreement) cause or constitute a Breach of any such representation or warranty
had such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition.
5.3 BEST EFFORTS. Between the date of this Agreement and the
Closing Date, Seller will use its Best Efforts to cause the conditions in
Section 7 to be satisfied.
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE
6.1 BEST EFFORTS. Between the date of this Agreement and the
Closing Date, Buyer will use its Best Efforts to cause the conditions in Section
8 to be satisfied.
6.2 REQUIRED APPROVALS. As promptly as practicable after the date
of this Agreement, Buyer will make all filings required by Legal Requirements to
be made by it in order to consummate the Contemplated Transactions. Between the
date of this Agreement and the Closing Date, Buyer will (a) cooperate with
Seller with respect to all filings that Seller elects to make or is required by
Legal Requirements to make in connection with the Contemplated Transactions, and
(b) cooperate with Seller in obtaining all Consents required to consummate the
Contemplated Transactions.
6.3 NOTIFICATION. Between the date of this Agreement and the
Closing Date, Buyer will promptly notify Seller in writing if Buyer becomes
aware of any fact or condition that causes or constitutes a Breach of any of
Buyer's representations and warranties as of the date of this Agreement, or if
Buyer becomes aware of the occurrence after the date of this Agreement of any
fact or condition that would (except as expressly contemplated by this
Agreement) cause or constitute a Breach of any such representation or warranty
had such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE. Buyer's
obligation to purchase Seller's Managing Member Units in the Company and to take
the other actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
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7.1 ACCURACY OF REPRESENTATIONS All of Seller's representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
7.2 SELLER'S PERFORMANCE
A. All of the covenants and obligations that Seller is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
B. Each document required to be delivered pursuant to
Section 2.5 must have been delivered, and each of the other covenants and
obligations in Sections 5.1 and 5.3 must have been performed and complied with
in all respects.
7.3 NO PROCEEDINGS. Since the date of this Agreement, there must
not have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions.
7.4 NO CLAIM REGARDING INTEREST OWNERSHIP OR SALE PROCEEDS. There
must not have been made or Threatened by any Person any claim asserting that
such Person (a) is the beneficial owner of, or has the right to acquire or to
obtain beneficial ownership of, Seller's Managing Member Units, or any other
voting, equity, or ownership interest of Seller in the Company, or (b) is
entitled to all or any portion of the Purchase Price payable for Seller's
Managing Member Units.
7.5 NO PROHIBITION. Neither the consummation nor the performance of
any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time), materially contravene, or conflict with, or
result in a material violation of, or cause Buyer or any Person affiliated with
Buyer to suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise proposed by or before any Governmental Body.
7.6 DUE DILIGENCE REVIEW. Buyer shall have completed its due
diligence review within the Inspection Period under the Contribution Agreement,
and shall be satisfied or be deemed to be satisfied with the results of such
review and assessment, as provided in the Contribution Agreement.
7.7 RELEASES. At the Closing, Seller and any Related Person of
Seller as may be designated by Buyer shall deliver to Buyer Seller's Releases,
releasing all claims against Buyer
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and the Company up to and through the Closing Date, other than with respect to
obligations of Buyer under this Agreement.
7.8 NO INSOLVENCY. The Seller (i) shall not be in receivership or
dissolution, (ii) shall not have made an assignment for the benefit of creditors
or admitted in writing its inability to pay its debts as they mature, or (iii)
shall not have been adjudicated a bankrupt or filed a petition in voluntary
bankruptcy or a petition or answer seeking reorganization or an arrangement with
creditors under the Federal bankruptcy law or any other similar law or statute
of the United States or any jurisdiction and no such petition shall have been
filed against Seller.
7.9 CONCURRENT CLOSINGS. The Company and the Partnership shall have
entered into and closed that certain agreement entitled Contribution Agreement
and Escrow Instructions.
7.10 DOWNREIT CONSUMMATION. Company, Buyer and Waranch shall have
entered into the Operating Agreement in form and substance acceptable to Buyer
and Waranch as of the Closing Date.
7.11 ADDITIONAL DOCUMENTS. Each of the following documents must
have been delivered to Buyer:
A. an opinion of Solomon, Ward, Seidenwurm & Smith, LLP,
dated the Closing Date, in the form of EXHIBIT "4";
B. such other documents as Buyer may reasonably request for
the purpose of (i) evidencing the accuracy of any of Seller's representations
and warranties, (ii) evidencing the performance by Seller of, or the compliance
by Seller with, any covenant or obligation required to be performed or complied
with by Seller, (iii) evidencing the satisfaction of any condition referred to
in this Section 7, or (iv) otherwise facilitating the consummation or
performance of any of the Contemplated Transactions.
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE. Seller's
obligation to sell its Managing Member Units and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
8.1 ACCURACY OF REPRESENTATIONS. All of Buyer's representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
8.2 BUYER'S PERFORMANCE.
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A. All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and complied
with in all material respects.
B. Buyer must have delivered each of the documents required
to be delivered by Buyer pursuant to Section 2.5.B and must have made the cash
payment required to be made by Buyer pursuant to Section 2.5.B(i).
8.3 NO INJUNCTION. There must not be in effect any Legal
Requirement or any injunction or other Order that has been adopted or issued, or
has otherwise become effective, which prohibits the sale of the Managing Member
Units by Seller to Buyer.
8.4 NO PROCEEDINGS. Since the date of this Agreement, there must
not have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions.
8.5 NO INSOLVENCY. The Buyer (i) shall not be in receivership or
dissolution, (ii) shall not have made an assignment for the benefit of creditors
or admitted in writing its inability to pay its debts as they mature, or (iii)
shall not have been adjudicated a bankrupt or filed a petition in voluntary
bankruptcy or a petition or answer seeking reorganization or an arrangement with
creditors under the Federal bankruptcy law or any other similar law or statute
of the United States or any jurisdiction and no such petition shall have been
filed against Buyer.
8.6 CONCURRENT CLOSINGS. The Company and the Partnership shall have
entered into and closed that certain agreement entitled Contribution Agreement
and Escrow Instructions.
9. TERMINATION
9.1 TERMINATION EVENTS. This Agreement may, by notice given prior
to or at the Closing, be terminated:
A. by Buyer if there has been a Material Breach of any
provision of the Contribution Agreement by any other party and such Breach has
not been waived;
B. by either Buyer or Seller if a Material Breach of any
provision of this Agreement has been committed by the other party and such
Breach has not been waived;
C. (i) by Buyer if any of the conditions in Section 7 has
not been satisfied as of the Closing Date or if satisfaction of such a condition
is or becomes impossible (other than through the failure of Buyer to comply with
its obligations under this Agreement) and Buyer has not waived such condition on
or before the Closing Date; or (ii) by Seller, if any of the conditions in
Section 8 has not been satisfied as of the Closing Date or if satisfaction of
such a
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condition is or becomes impossible (other than through the failure of Seller to
comply with his obligations under this Agreement) and Seller has not waived such
condition on or before the Closing Date;
D. by mutual consent of Buyer and Seller; or
E. by either Buyer or Seller if the Closing has not occurred
(other than through the failure of any party seeking to terminate this Agreement
to comply fully with its obligations under this Agreement) on or before the date
set forth in Section 2.3.
9.2 EFFECT OF TERMINATION. Each party's right of termination under
Section 9.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 9.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections 11.1 and 11.3 will survive; provided, however,
that if this Agreement is terminated by a party because of the Breach of the
Agreement by the other party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
10. INDEMNIFICATION; REMEDIES
10.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE.
All representations, warranties, covenants, and obligations in this Agreement,
the certificate delivered pursuant to Section 2.5.A(iii), the certificate
delivered pursuant to Section 2.5.B(ii), and any other certificate or document
delivered pursuant to this Agreement will survive the Closing. The right to
indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER. Seller will
indemnify and hold harmless Buyer, the Company, and their respective
Representatives, partners, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability, claim, damage (including incidental
and consequential damages), expense (including costs of investigation and
defense and reasonable attorneys' fees) or diminution of value, whether or not
involving a third-party claim (collectively, "Damages"), arising, directly or
indirectly, from or in connection with:
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A. any Breach of any representation or warranty made by
Seller in this Agreement or any other certificate or document delivered by
Seller pursuant to this Agreement;
B. any Breach of any representation or warranty made by
Seller in this Agreement as if such representation or warranty were made on and
as of the Closing Date;
C. any Breach by Seller of any covenant or obligation of
Seller in this Agreement;
The remedies provided in this Section 10.2 will not be exclusive of or limit any
other remedies that may be available to Buyer or the other Indemnified Persons.
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER. Buyer will
indemnify and hold harmless Seller and its Representatives (collectively, the
"Indemnified Persons") for, and will pay to the Indemnified Persons the amount
of, any loss, liability, claim, damage (including incidental and consequential
damages), expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising, directly or indirectly, from or in
connection with:
A. any Breach of any representation or warranty made by
Buyer in this Agreement or any other certificate or document delivered by Buyer
pursuant to this Agreement;
B. any Breach of any representation or warranty made by
Buyer in this Agreement as if such representation or warranty were made on and
as of the Closing Date;
C. any Breach by Buyer of any covenant or obligation of
Buyer in this Agreement;
The remedies provided in this Section 10.3 will not be exclusive of or limit any
other remedies that may be available to Seller or the other Indemnified Persons.
10.4 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.
A. Promptly after receipt by an Indemnified Person under
Section 10.2 or Section 10.3 of notice of the commencement of any Proceeding
against it, such Indemnified Person will, if a claim is to be made against an
Indemnifying Person under such Section, give notice to the Indemnifying Person
of the commencement of such claim, but the failure to notify the Indemnifying
Person will not relieve the Indemnifying Person of any liability that it may
have to any Indemnified Person, except to the extent that the Indemnifying
Person demonstrates that the defense of such action is prejudiced by the
Indemnifying Person's failure to give such notice.
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B. If any Proceeding referred to in Section 10.4.A is
brought against an Indemnified Person and it gives notice to the Indemnifying
Person of the commencement of such Proceeding, the Indemnifying Person will be
entitled to participate in such Proceeding and, to the extent that it wishes
(unless (i) the Indemnifying Person is also a party to such Proceeding and the
Indemnified Person determines in good faith that joint representation would be
inappropriate, or (ii) the Indemnifying Person fails to provide reasonable
assurance to the Indemnified Person of its financial capacity to defend such
Proceeding and provide indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel satisfactory to the
Indemnified Person and, after notice from the Indemnifying Person to the
Indemnified Person of its election to assume the defense of such Proceeding, the
Indemnifying Person will not, as long as it diligently conducts such defense, be
liable to the Indemnified Person under this Section 10 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the Indemnified Person in connection with the
defense of such Proceeding, other than reasonable costs of investigation. If the
Indemnifying Person assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the Indemnifying
Person without the Indemnified Person's consent unless (A) there is no finding
or admission of any violation of Legal Requirements or any violation of the
rights of any Person and no effect on any other claims that may be made against
the Indemnified Person, and (B) the sole relief provided is monetary damages
that are paid in full by the Indemnifying Person; and (iii) the Indemnified
Person will have no liability with respect to any compromise or settlement of
such claims effected without its consent. If notice is given to an Indemnifying
Person of the commencement of any Proceeding and the Indemnifying Person does
not, within ten days after the Indemnified Person's notice is given, give notice
to the Indemnified Person of its election to assume the defense of such
Proceeding, the Indemnifying Person will be bound by any determination made in
such Proceeding or any compromise or settlement effected by the Indemnified
Person.
C. Notwithstanding the foregoing, if an Indemnified Person
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the Indemnified Person may, by notice to the Indemnifying Person,
assume the exclusive right to defend, compromise, or settle such Proceeding, but
the Indemnifying Person will not be bound by any determination of a Proceeding
so defended or any compromise or settlement effected without its consent (which
may not be unreasonably withheld).
D. Buyer and Seller each hereby consents to the
non-exclusive jurisdiction of any court in which a Proceeding is brought against
any Indemnified Person for purposes of any claim that an Indemnified Person may
have under this Agreement with respect to such Proceeding or the matters alleged
therein, and agrees that process may be served on Seller or Buyer with respect
to such a claim anywhere in the world.
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10.5 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
11. GENERAL PROVISIONS
11.1 EXPENSES. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
11.2 PUBLIC ANNOUNCEMENTS. Any public announcement or similar
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, at such time and in such manner as Buyer determines.
Unless consented to by Buyer in advance or required by Legal Requirements, prior
to the Closing, Seller shall, and shall cause the Partnership to, keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person.
11.3 CONFIDENTIALITY. Between the date of this Agreement and the
Closing Date, Buyer and Seller will maintain in confidence, and will cause the
directors, officers, employees, agents, and advisors of Buyer to maintain in
confidence, and not use to the detriment of another party or an Acquired Company
any written information stamped "confidential" when originally furnished by
another party or the Partnership in connection with this Agreement or the
Contemplated Transactions, unless (a) such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the Contemplated
Transactions, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings.
If the Contemplated Transactions are not consummated, each party will
return or destroy as much of such written information as the other party may
reasonably request.
11.4 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopier (with written confirmation of receipt),
provided that a copy is mailed by registered mail, return receipt requested, or
(c) when received by the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
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Seller: Stanley W. Gribble, Trustee
The Stanley W. Gribble Trust
c/o Bend Properties
1920 Main Street
Irvine, CA 92614
Facsimile No.: (949) 261-6331
with a copy to: Robert F. La Scala, Esq.
Solomon Ward Seidenwurm & Smith, LLP
401 B Street, Suite 1200
San Diego, CA 92101
Facsimile No.: (619) 231-4755
Buyer: Pan Pacific Retail Properties, Inc.
1621-B South Melrose Drive
Vista, CA 92083
Attn: Steve Boss
Facsimile No.: (760) 727-1274
with a copy to: Hale Lane Peek Dennison Howard and Anderson
100 W. Liberty Street, Tenth Floor
Reno, NV 89501
Attn: William C. Davis
Facsimile No.: 775-786-6179
11.5 FURTHER ASSURANCES. The parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
11.6 WAIVER. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
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11.7 ENTIRE AGREEMENT AND MODIFICATION. This Agreement supersedes
all prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
11.8 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. Neither
party may assign any of its rights under this Agreement without the prior
consent of the other parties, except that Buyer may assign any of its rights,
but not its obligations, under this Agreement to any Subsidiary or Related
Person of Buyer. Subject to the preceding sentence, this Agreement will apply
to, be binding in all respects upon, and inure to the benefit of the successors
and permitted assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
11.9 SEVERABILITY. If any provision of this Agreement is held
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. Any provision
of this Agreement held invalid or unenforceable only in part or degree will
remain in full force and effect to the extent not held invalid or unenforceable.
11.10 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement. All words used in
this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "including"
does not limit the preceding words or terms.
11.11 TIME OF ESSENCE. With regard to all dates and time periods
set forth or referred to in this Agreement, time is of the essence.
11.12 GOVERNING LAW. This Agreement will be governed by the laws of
the State of Nevada without regard to conflicts of laws principles.
11.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
BUYER: SELLER:
PAN PACIFIC RETAIL PROPERTIES, INC., THE STANLEY W. GRIBBLE TRUST UNDER
A MARYLAND CORPORATION TRUST AGREEMENT DATED SEPTEMBER 24, 1991
By: /s/ JEFFREY S. STAUFFER /s/ STANLEY W. GRIBBLE
----------------------------- -----------------------------------------
Jeffrey S. Stauffer, Stanley W. Gribble, Trustee
Executive Vice President and
Chief Operating Officer
PAN PACIFIC (RLP) INC.
A CALIFORNIA CORPORATION
By: /s/ JEFFREY S. STAUFFER
----------------------------
Jeffrey S. Stauffer,
Executive Vice President and
Chief Operating Officer
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