<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 1998
---------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------------- ------------------
Commission file number 1-6357
--------
ESTERLINE TECHNOLOGIES CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-2595091
- --------------------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer
Of incorporation or organization) Identification No.)
10800 NE 8th Street, Bellevue, Washington 98004
- ------------------------------------------ ---------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 425/453-9400
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
As of September 9, 1998, 17,288,562 shares of the registrant's common stock
were outstanding.
<PAGE> 1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEET
As of July 31, 1998 and October 31, 1997
(In thousands, except share amounts)
<TABLE>
<CAPTION>
July 31, 1998 October 31, 1997
------------- ----------------
(unaudited)
<S> <C> <C>
ASSETS
- ------
Current Assets
Cash and equivalents $ 24,443 $ 56,045
Accounts receivable, net of allowances of $2,716 and
$2,860 for doubtful accounts 66,412 67,520
Inventories
Raw materials and purchased parts 24,906 17,502
Work in process 32,322 26,191
Finished goods 11,123 9,693
--------- ---------
68,351 53,386
--------- ---------
Deferred income taxes 12,525 14,186
Prepaid expenses 3,381 3,290
--------- ---------
Total Current Assets 175,112 194,427
--------- ---------
Property, Plant and Equipment 192,658 175,615
Accumulated depreciation 117,625 117,239
--------- ---------
75,033 58,376
--------- ---------
Intangibles, net and Other Assets 56,173 37,044
--------- ---------
$ 306,318 $ 289,847
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Accounts payable $ 19,469 $ 20,475
Accrued liabilities 64,031 66,111
Credit facilities 9,977 2,467
Current maturities of long-term obligations 5,851 6,386
Federal and foreign income taxes 126 1,472
--------- ---------
Total Current Liabilities 99,454 96,911
--------- ---------
<PAGE> 2A
Long-Term Obligations, net of current maturities 21,443 27,218
Shareholders' Equity
Common stock, par value $.20 per share, authorized
30,000,000 shares, issued and outstanding 17,288,562
and 17,285,822 shares 3,458 3,457
Capital in excess of par value 46,869 46,831
Retained earnings 139,674 119,007
Cumulative translation adjustment (4,580) (3,577)
--------- ---------
Total Shareholders' Equity 185,421 165,718
--------- ---------
$ 306,318 $ 289,847
========= =========
</TABLE>
<PAGE> 2B
ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three and Nine Months ended July 31, 1998 and 1997
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
---------------------- ----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Sales $ 110,891 $ 102,068 $ 321,172 $ 282,217
Costs and Expenses
Cost of sales 68,840 64,246 198,265 173,586
Selling, general and administrative 29,779 27,251 90,503 81,442
Interest income (466) (579) (1,469) (1,689)
Interest expense 776 912 2,373 2,816
--------- --------- --------- ---------
98,929 91,830 289,672 256,155
--------- --------- --------- ---------
Earnings Before Income Taxes 11,962 10,238 31,500 26,062
Income Tax Expense 4,043 3,313 10,833 8,776
--------- --------- --------- ---------
Net Earnings $ 7,919 $ 6,925 $ 20,667 $ 17,286
========= ========= ========= =========
Net Earnings Per Share - Basic $ .46 $ .40 $ 1.20 $ 1.01
========= ========= ========= =========
Net Earnings Per Share - Diluted $ .45 $ .39 $ 1.17 $ .98
========= ========= ========= =========
</TABLE>
<PAGE> 3
ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Nine Months Ended July 31, 1998 and 1997
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
July 31,
--------------------
1998 1997
-------- --------
<S> <C> <C>
Cash Flows Provided (Used) by Operating Activities
Net earnings $ 20,667 $ 17,286
Depreciation and amortization 12,999 12,577
Deferred income taxes 300 950
Working capital changes
Accounts receivable 1,088 5,738
Inventories (11,685) (10,992)
Prepaid expenses (109) (244)
Accounts payable (864) (2,033)
Accrued liabilities (770) (7,703)
Federal and foreign income taxes (1,315) (512)
Other, net (6,583) 2,399
-------- --------
13,728 17,466
-------- --------
Cash Flows Provided (Used) by Investing Activities
Capital expenditures (26,605) (12,336)
Capital dispositions 569 2,235
Acquisitions (20,130) --
-------- --------
(46,166) (10,101)
-------- --------
Cash Flows Provided (Used) by Financing Activities
Net change in credit facilities 7,476 560
Repayment of long-term obligations (6,162) (6,104)
-------- --------
1,314 (5,544)
-------- --------
Effect of Exchange Rates (478) (1,546)
-------- --------
Net Increase (Decrease) in Cash and Equivalents (31,602) 275
Cash and Equivalents - Beginning of Period 56,045 46,436
-------- --------
Cash and Equivalents - End of Period $ 24,443 $ 46,711
======== ========
Supplemental Cash Flow Information
Cash paid during the period for
Interest expense $ 3,014 $ 3,516
Income taxes 10,962 5,376
</TABLE>
<PAGE> 4
ESTERLINE TECHNOLOGIES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three and Nine Months Ended July 31, 1998 and 1997
1. The consolidated balance sheet as of July 31, 1998 and the consolidated
statements of operations and cash flows for the three and nine months
ended July 31, 1998 and 1997 are unaudited, but in the opinion of
management all adjustments necessary to present fairly the financial
statements referred to above have been made. The results of operations
and cash flows for the interim periods presented are not necessarily
indicative of results for the full year.
2. The notes to the consolidated financial statements in the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 1997
provide a summary of significant accounting policies and additional
financial information that should be read in conjunction with this
Form 10-Q.
3. Classifications have been changed for certain amounts in the preceding
period to conform to the current period's financial presentation.
<PAGE> 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
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Certain sections in this Form 10-Q contain forward-looking statements within
the meanings of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements
involve risks and uncertainties regarding matters that could significantly
affect expected results, including information about industry trends, growth,
orders, Year 2000, capital expenditures and backlog. Thus, actual results may
vary materially from these forward-looking statements depending on a variety of
factors which include, but are not limited to, changes in the
telecommunications, computer, aerospace and defense markets; fluctuations in
foreign currency rates; reductions, terminations or changes in U.S. Government
defense budget priorities; variability of capital equipment markets; changes in
Year 2000 issues and other risks which are detailed in other Company documents
and reports filed with the Securities and Exchange Commission. The Company does
not undertake any obligation to publicly release the results of any revisions
that may be made to these forward-looking statements to reflect any future
events or circumstances.
Results of Operations
- ---------------------
Quarter Ended July 31, 1998 Compared to Quarter Ended July 31, 1997
Net sales for the quarter ended July 31, by Group, were as follows:
(In thousands)
Increase/(Decrease)
from prior period 1998 1997
------------------- --------- ---------
Automation (16%) $ 36,009 $ 42,985
Aerospace and Defense 32% 43,636 32,974
Instrumentation 20% 31,246 26,109
--------- ---------
Total Net Sales $ 110,891 $ 102,068
========= =========
Deliveries to aerospace markets continued at a strong pace in the third
quarter, leading to significant performance improvements for the
Aerospace/Defense and Instrumentation Groups compared with the same period in
1997. In addition, acquisitions in both these Groups have provided additional
product offerings for the Company. Automation Group sales decreased for the
quarter primarily due to a drop in deliveries for printed circuit board
drilling machines.
Total gross margin as a percentage of net sales was 38% for the quarter
compared to 37% during the same period in 1997. Gross margins among the Groups
ranged from 36% to 39% compared with 33% to 40% during the same period in 1997.
Pricing pressures from foreign competitors with weaker currencies continue to
affect the Automation Group. Asian competitors are benefiting from local
currency weaknesses or the strong U.S. dollar, which creates a difficult
environment for suppliers to the global printed circuit board industry.
<PAGE> 6
Selling, general and administrative expenses remained consistent with the prior
year period at 27% of net sales.
The Company employs a diversification strategy that has tended to balance
cycles that occur in its markets from time to time. Earnings from operations
serving commercial aerospace, defense and general manufacturing markets
continue to demonstrate an upward trend while industry pricing pressures have
caused the printed circuit board drilling equipment operations to move
downward. Diversification has been effective in this situation to date, with
the performance from our printed circuit board equipment operations being more
than offset by the Company's other operations.
New orders for the third quarter of 1998 were $102.8 million compared with
$101.6 million for the same period in 1997. Orders for aerospace products were
strong and accounted for the slight increase from period to period.
Nine Months Ended July 31, 1998 Compared to Nine Months Ended July 31, 1997
Year-to-date net sales ended July 31, by Group, were as follows:
(In thousands)
Increase/(Decrease)
from prior year 1998 1997
------------------- --------- ---------
Automation (1%) $ 111,259 $ 111,853
Aerospace and Defense 25% 120,947 97,114
Instrumentation 21% 88,966 73,250
--------- ---------
Total Net Sales $ 321,172 $ 282,217
========= =========
Sales for the first nine months of 1998 showed substantial improvement over the
prior year period. Sales in the Aerospace/Defense and Instrumentation Groups
continued to benefit from strong aerospace product deliveries; increased demand
for quality control instrumentation; and sales contributed by new acquisitions.
Automation Group sales for the year are slightly lower than the previous year,
primarily due to a slowdown in the global printed circuit board industry.
Total gross margin as a percentage of net sales was 38% for the first nine
months of 1998 compared with 39% for the same period in 1997. Gross margins
among the Groups ranged from 36% to 40% compared with 37% to 40% during the
same period in 1997.
Selling, general and administrative expenses as a percentage of net sales for
the first nine months of 1998 improved from 29% during the same prior year
period to 28%.
<PAGE> 7
New orders for the first nine months of 1998 were $339.1 million compared
with $303.7 million for the same period in 1997. Companywide backlog at
July 31, 1998 was $172 million compared with $148.8 million at July 31, 1997
and $180.1 million at April 30, 1998. The increase in backlog from a year ago
is primarily attributable to orders received for aerospace products and from
acquisitions completed during fiscal 1998. Approximately $80.3 million in
backlog is scheduled for delivery after fiscal 1998. All orders in backlog are
subject to cancellation until delivery.
Liquidity and Capital Resources
- -------------------------------
Cash and equivalents on hand at July 31, 1998 totaled $24.4 million, a decrease
of $31.6 million from October 31, 1997. Capital expenditures of $26.6 million
and acquisitions of $20.1 million have been funded through available cash, cash
flow provided by operations of $13.7 million, and an increase in borrowings of
$1.3 million.
Net accounts receivable were $66.4 million at July 31, 1998, a decrease of
$1.1 million from October 31, 1997. Inventories at July 31, 1998 were
$68.4 million, an increase of $15 million from October 31, 1997. The increase
was related to acquisitions and increased production rates. Credit facilities
increased $7.5 million related to the Company's foreign operations and were
offset by a combined decrease of $5 million in accounts payable, accrued
liabilities, income taxes and current maturities of long-term debt. The
decreases were primarily attributable to the timing of payments during the
quarter. Current liabilities increased to $99.5 million at July 31, 1998 from
$96.9 million at October 31, 1997. Working capital decreased $21.9 million from
$97.5 million at October 31, 1997 to $75.6 million at July 31, 1998.
Capital expenditures, consisting of buildings, machinery, equipment and
computers, are anticipated to be approximately $28 million during fiscal 1998,
compared with $21.6 million in fiscal 1997. Capital expenditures through
July 31, 1998 totaled $26.6 million and were related to additions of buildings,
equipment and leasehold improvements. In May 1998, the Company completed the
purchase of a new facility in Valencia, California, for TA Mfg. Co. The new
facility was occupied in June 1998.
Total debt at July 31, 1998 was $37.3 million, representing an increase of
$1.2 million from October 31, 1997. At July 31, 1998, $22.9 million was
outstanding under the Company's Senior Notes, and $14.4 million was outstanding
under various foreign currency debt agreements, including capital lease
obligations for the Bourges, France facility. The annual principal repayment of
$5.7 million on the Senior Notes was made on July 30, 1998. This repayment
schedule will continue annually until maturity on July 30, 2002.
On April 20, 1998 the Company effected a two-for-one stock split. All earnings
per share calculations have been adjusted for the split. At July 31, 1998,
total shares outstanding were 17,288,562.
<PAGE> 8
The Company is aware of the issues associated with programming code in existing
computer systems as the year 2000 ("Y2K") approaches. The Company is utilizing
both internal and external resources to address Y2K compliance.
The Company continues to assess the Y2K risk from failure of its internal
systems as low. It is the Company's belief that the impact of a Y2K failure at
any one location would not have a material impact on the Company due to its
diversified and decentralized nature. Based on current information available,
it is estimated that the cost of compliance will be less than $1 million.
The Company recognizes that not all of its internal computer systems are
compliant and steps are being taken to resolve these issues. Currently it is
expected that the Company will have materially compliant systems by March 1999,
even though efforts on ancillary and supporting modules will continue
throughout the year.
The Company does not have a complete assessment of third party exposure for
Y2K issues. Our decentralized structure minimizes the reliance on single
product vendors and most third party relationships are deemed replaceable.
Subsequent Event
- ----------------
In August 1998, the Company signed a definitive agreement to purchase all of
the outstanding shares of Kirkhill Rubber Company ("Kirkhill"). The Company
purchased 67% of the outstanding shares from the Kirkhill Employee Stock
Ownership and Savings Plan and made a tender offer for the remaining 33%. As of
September 10, shares representing 98% of the balance have been tendered. The
Company expects to complete the purchase of the remaining shares outstanding by
the end of September 1998. Kirkhill is a leading manufacturer of a broad array
of specialty elastomer products for the aerospace, construction, and recreation
markets.
The total purchase price is $83 million in cash, subject to customary closing
adjustments. The Company funded the acquisition from internally generated cash
and borrowings under its existing credit facilities with Bank of America. The
acquisition will be accounted for using the purchase method of accounting. The
Company is currently exploring the terms and conditions that might be available
for obtaining a private placement of debt of $100 million.
Recent Accounting Pronouncements
- --------------------------------
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income", establishes standards for reporting and display of comprehensive
income and its components. Comprehensive income represents net income plus
certain items that are charged directly to shareholder's equity. This Statement
will not be effective for the Company until fiscal 1999.
<PAGE> 9
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information", establishes standards for
the disclosure of information relating to operating segments. This Statement
will not be effective for the Company until fiscal 1999. The Company is
studying the pronouncement to determine what impact it may have on future
disclosure requirements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
- -------------------------------------------------------------------
Not Applicable.
<PAGE> 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- --------------------------
The Company is a party to various lawsuits and claims, none of which, in the
opinion of management, is expected to have a material effect on the Company's
financial position or results of operations.
Item 5. Other Information
- --------------------------
The Securities and Exchange Commission (the "SEC") recently amended
Rule 14a-4, which governs the use by the Company of discretionary voting
authority with respect to shareholder proposals. SEC Rule 14a-4(c)(1) provides
that, if the proponent of a shareholder proposal fails to notify the Company at
least 45 days prior to the month and day of mailing the prior year's proxy
statement, the proxies of the Company's management would be permitted to use
their discretionary authority at the Company's next annual meeting of
shareholders if the proposal were raised at the meeting without any discussion
of the matter in the proxy statement. For purposes of the Company's 1999 Annual
Meeting of Shareholders, this deadline is December 9, 1998.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits.
Exhibit
Number Exhibit
------- -------
10.26 Industrial and build-to-suit purchase and sale agreement between
The Newhall Land and Farming Company, Esterline Technologies
Corporation and TA Mfg. Co., dated February 13, 1997 including
Amendments. The agreement is for land and building located at
28065 West Franklin Parkway, Valencia, CA 91384, effective upon
acceptance of construction completion (May 12, 1998).
11. Schedule setting forth computation of basic and diluted earnings
per common share for the three and nine months ended July 31, 1998
and 1997.
27. Financial Data Schedule (EDGAR Only).
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended July 31, 1998.
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Esterline Technologies Corporation
(Registrant)
Dated: September 14, 1998 By: /s/ Robert W. Stevenson
-------------------------------------
Robert W. Stevenson
Executive Vice President,
Chief Financial Officer and Secretary
(Principal Financial Officer)
By: /s/ Robert D. George
-------------------------------------
Robert D. George
Treasurer and Controller
(Principal Accounting Officer)
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Page
------- ------- ----
<S> <C> <C>
10.26 Industrial and build-to-suit purchase and sale agreement between 14
The Newhall Land and Farming Company, Esterline Technologies
Corporation and TA Mfg. Co., dated February 13, 1997 including
Amendments. The agreement is for land and building located at
28065 West Franklin Parkway, Valencia, CA 91384, effective upon
acceptance of construction completion (May 12, 1998).
11. Schedule setting forth computation of basic and diluted earnings 62
per common share for the three and nine months ended July 31, 1998
and 1997.
27. Financial Data Schedule (EDGAR Only). 63
</TABLE>
<PAGE> 13
INDUSTRIAL AND BUILD-TO-SUIT
PURCHASE AND SALE AGREEMENT
By and Between
THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership), as Seller,
and
ESTERLINE TECHNOLOGIES CORP., a Corporation
and
TA MFG COMPANY, a California Corporation,
collectively as Buyer
Dated as of February 13, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I PURCHASE AND SALE............................................... 1
ARTICLE II PURCHASE PRICE AND DEPOSITS.................................... 2
2.01 Escrow.......................................................... 2
2.02 Purchase Price.................................................. 2
2.03 Form of Deposit and Payment..................................... 3
2.04 Buyer's Review Period........................................... 3
ARTICLE III CONDITIONS PRECEDENT.......................................... 4
3.01 Conditions to Buyer's Obligations............................... 4
A. Delivery of Title Report................................. 4
B. Delivery of Title and Title Insurance................... 4
C. Substantial Completion of Improvements................... 5
E. Representations and Warranties........................... 6
<PAGE> 14
3.02 Conditions to Seller's Obligations.............................. 6
A. Governmental Approvals.................................. 6
B. Delivery of Purchase Price.............................. 6
C. Board Approval.......................................... 6
D. Representations and Warranties.......................... 6
E. Performance of Buyer's Covenants........................ 6
3.03 Failure of Conditions........................................... 6
ARTICLE IV CLOSING........................................................ 7
4.01 Closing......................................................... 7
A. Closing Date........................................... 7
B. Closing Documents....................................... 7
C. Closing Procedure....................................... 8
4.02 Fees; Expenses; Prorations...................................... 9
A. Fees, Expenses, Transfer Taxes.......................... 9
B. Real Property Taxes and Assessments..................... 9
C. Brokerage Commission.................................... 9
ARTICLE V BREACH.......................................................... 9
5.01 Notice.......................................................... 9
5.02 Failure to Cure................................................. 10
5.03 Remedies........................................................ 10
5.04 Build-to-Suit................................................... 10
5.05 Limitation of Liability......................................... 11
ARTICLE VI SELLER'S OBLIGATION TO CONSTRUCT IMPROVEMENTS.................. 11
6.01 Seller's Work................................................... 11
ARTICLE VII CONDITION OF PROPERTY......................................... 11
7.01 Condition of Property........................................... 11
7.02 Seller's Warranty............................................... 12
7.03 No Additional Warranties........................................ 12
7.04 Governmental Approvals.......................................... 12
7.05 Environmental Conditions........................................ 13
7.06 Cooperation with Development of Adjacent Property............... 13
7.07 Covenants, Conditions and Restrictions.......................... 14
ARTICLE VIII REPRESENTATIONS AND WARRANTIES............................... 15
8.01 Buyer's Representations and Warranties.......................... 15
8.02 Seller's Representations and Warranties......................... 15
ARTICLE IX CONDEMNATION, DAMAGE AND DESTRUCTION........................... 17
9.01 Condemnation.................................................... 17
9.02 Damage and Destruction.......................................... 17
ARTICLE X ANTI-SPECULATION................................................ 18
<PAGE> 15
ARTICLE XI MISCELLANEOUS.................................................. 18
11.01 Assignment...................................................... 18
11.02 Attorneys' Fees................................................. 18
11.03 Notices......................................................... 18
11.04 Cooperation..................................................... 19
11.05 Survival........................................................ 20
11.06 Interpretation.................................................. 20
11.07 Successors and Assigns; Time Is of the Essence.................. 20
11.08 Waivers......................................................... 20
11.09 Severability.................................................... 21
11.10 Counterpart Execution........................................... 21
11.11 Duty of Confidentiality......................................... 21
11.12 Force Majeure................................................... 21
11.13 Waiver of Jury Trial............................................ 21
ARTICLE XII ARBITRATION................................................... 21
LIST OF EXHIBITS
Exhibit "A-1" Legal Description of Build-to-Suit Parcel
Exhibit "A-2" Legal Description of Expansion Parcel
Exhibit "B" Work Letter Agreement
Exhibit "C" Title Report
Exhibit "D" Declaration of Covenants, Conditions & Restrictions
Exhibit "E" Non-Foreign Investor Affidavit
Schedule 2.04 Seller's Delivery Items Schedule
</TABLE>
<PAGE> 16
INDUSTRIAL AND BUILD-TO-SUIT
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT ("Agreement") is dated as of
February 13, 1997 by and between THE NEWHALL LAND AND FARMING COMPANY (A
CALIFORNIA LIMITED PARTNERSHIP) ("Seller"), and Esterline Technologies Corp., a
corporation, and TA MFG COMPANY, a California Corporation (individually and
collectively and jointly and severally, "Buyer").
RECITALS
A. Seller is the owner of those certain parcels of real property,
located in the County of Los Angeles, State of California and more particularly
described on Exhibit "A-1" (the "Build-to-Suit-Parcel") and Exhibit "A-2" (the
"Expansion Parcel"), both of which are attached hereto and incorporated herein
by this reference and which together with the build-to-suit improvements (the
"Improvements) that Seller intends to construct for Buyer pursuant to the Work
Letter Agreement attached hereto as Exhibit "B" and incorporated by reference
herein, are collectively referred to as the "Property."
B. Buyer desires to purchase the Property from Seller, and Seller
desires to sell the Property to Buyer, on the terms, covenants and conditions
contained in this Agreement.
C. TA MFG Company is the wholly-owned subsidiary of Esterline
Technologies Corp.
In consideration of the mutual covenants, agreements and representations
contained herein, the adequacy and sufficiency of which are hereby
acknowledged, Seller and Buyer agree as follows:
<PAGE> 17
ARTICLE I
PURCHASE AND SALE
Buyer agrees to purchase the Property from Seller, and Seller agrees to
sell the Property to Buyer, subject to the conditions, covenants and terms
contained in this Agreement. The Property shall consist of the Build-to-Suit
Parcel, Expansion Parcel, and the Improvements, including those certain
"Building Shell Improvements," "Site Improvements" and "Interior Improvements,"
all of which are defined in the Work Letter Agreement, that Seller intends to
construct for Buyer pursuant to those certain "Building Shell Plans," "Site
Work Plans" and "Interior Plans" that have been, or will be, approved by Buyer
and Seller pursuant to the Work Letter Agreement. The Build-to-Suit Parcel
consists of approximately 4.42 acres (approximately 192,906 square feet) and
the Expansion Parcel consists of approximately 1.88 acres (approximately
81,829 square feet), for a total of approximately 6.3 acres (approximately
274,735 square feet) of land located in the County of Los Angeles, State of
California, as determined by a survey of the Build-to-Suit Parcel and Expansion
Parcel prepared by Sikand Engineering Associates ("Sikand"). The Building Shell
Improvements will include an approximately 85,000 square foot building with an
approximately 75,000 square foot footprint and 10,000 square feet of mezzanine
space. The Site Improvements will include related on-site and offsite
improvements that will be constructed in accordance with plans and
specifications that are approved by Buyer and Seller pursuant to the Work
Letter Agreement. The Interior Improvements will include certain interior
improvements that are constructed pursuant to the Interior Plans that have been
approved by Buyer and Seller pursuant to the Work Letter Agreement so that the
Improvements can be used by Buyer for Buyer's conduct of its manufacturing
business on the Property in accordance with the CC&R's (as defined in Section
7.07). The Building Shell Improvements shall consist of a concrete tilt-up
industrial building that will be constructed substantially in accordance with
the most recent Uniform Building Code and other applicable laws, codes and
regulations.
ARTICLE II
PURCHASE PRICE AND DEPOSITS
2.01 Escrow. Within three (3) business days after this Agreement is
executed by both parties, Seller and Buyer shall open an escrow ("Escrow") with
Continental Lawyer's Title Company, located at 800 East Colorado Boulevard,
Suite #200, Pasadena, California, Attention: Renee Blair, escrow officer
("Escrow Agent"), and shall deliver to Escrow Agent an executed copy of this
Agreement, together with the Initial Deposit, as defined in Section 2.02 below
("Opening of Escrow"). The Escrow Agent shall deposit the Initial Deposit and
Additional Deposits when received and as defined in Section 2.02, into a
federally insured interest bearing account or accounts that are segregated and
refer to the Escrow and require the signature of an authorized officer of
Escrow Agent for withdrawal of funds. All interest earned on the Initial
Deposit and Additional Deposits shall be credited to and be for the benefit and
account of the Buyer. The Closing of Escrow shall be in accordance with Article
IV of this Agreement.
<PAGE> 18
2.02 Purchase Price. The total purchase price ("Purchase Price") for the
Property shall be Six Million Two Hundred and Eighty Thousand Four Hundred
Ninety-Six and no/100 Dollars ($6,280,496.00), consisting of $4,541,949.50 for
the Build-to-Suit Parcel, Site Work Improvements and Building Shell
Improvements; $1,043,000 for the Interior Improvements and $695,546.50 for the
Expansion Parcel. The Purchase Price for the Build-to-Suit Parcel and the
Expansion Parcel shall be increased or decreased by $8.50 for each square foot
above or under 274,735 as determined by a survey of the Build-to-Suit Parcel
and Expansion Parcel by Sikand following the County of Los Angeles' approval of
a lot line adjustment for the Expansion Parcel and Build-to-Suit Parcel. For
purposes of calculating the acreage and square feet for determining any
Purchase Price adjustment, Sikand shall determine the gross acreage and number
of square feet within the perimeter boundaries of the Build-to-Suit Parcel and
Expansion Parcel and subtract from such gross number the area contained within
the cut slopes that are at the rear of and along Braxton Avenue adjacent to the
Build-to-Suit Parcel and that are not included within building set back or side
yard areas. The Purchase Price shall be subject to increase in accordance with
the terms of the Work Letter Agreement that is not caused by Seller's default
under this Agreement or the Work Letter Agreement. The Purchase Price shall be
paid as follows:
A. Upon the Opening of Escrow, Buyer shall deposit with the Escrow
Agent cash, or cashier's check or certified check drawn on good and sufficient
funds of a federally insured bank in California and made payable to the order
of the Escrow Agent, in the amount of Two Hundred Fifty Thousand Dollars
($250,000.00) ("Initial Deposit");
B. Three additional deposits of One Hundred Thousand Dollars
($100,000.00) each, aggregating to a total amount of Three Hundred Thousand
Dollars ($300,000) in additional deposits, (each an "Additional Deposit" and
collectively the "Additional Deposits,") shall be deposited into Escrow by
Buyer in immediately available federal funds in accordance with the following
schedule: (i) an Additional Deposit of $100,000 upon commencement of
construction of the Building Shell Improvements; (ii) an Additional Deposit of
$100,000 upon substantial completion of the concrete tilt-up walls for the
Building Shell Improvements as certified by the architect and general
contractor; and (iii) an Additional Deposit of $100,000 upon substantial
completion of the Building Shell Improvements as certified by the architect and
general contractor. The Initial Deposit and Additional Deposits and all
interest earned on the Initial Deposit and Additional Deposits are collectively
referred to as the "Deposit."
C. Upon the close of Escrow, the Deposit shall be disbursed to Seller
and credited toward the Purchase Price. One (1) business day before the close
of Escrow, Buyer shall deposit with the Escrow Agent the balance of the
Purchase Price in cash or a cash equivalent, as described below in
Section 2.03 such that the Escrow Agent will be able to disburse the cash
proceeds owed to Seller on the Close of Escrow.
2.03 Form of Deposit and Payment. All money payable under this Agreement,
including the Deposit, additional sums payable under the Work Letter Agreement,
the balance of the Purchase Price or otherwise, shall be paid in cash, a
cashier's check or certified check, or wire transfer of immediately available
federal funds of the United States.
<PAGE> 19
2.04 Buyer's Review Period. Prior to the execution of this Agreement,
Seller has provided Buyer with a list and copies of current reports, studies,
surveys, assessments, inspections and tests ("Delivery Items") pertaining to
the Property (other than confidential or proprietary property or data of
Seller) that Seller has in its possession or control. The Delivery Items are
identified on Schedule 2.04 attached hereto and incorporated by reference
herein. Buyer acknowledges that within twenty (20) business days after the date
of this Agreement (i.e. March 2, 1997, "Buyer's Review Period"): (i) Buyer
shall have reviewed and approved or shall have or will have conducted such
surveys, reports, studies, assessments, tests and inspections, and made such
boring, percolation, geologic, seismic, environmental and soils tests and other
studies of the Property, as Buyer determines, to be prudent or advisable in
Buyer's commercially reasonable judgment, and (ii) Buyer shall have had an
adequate opportunity to make such inspection of the Property (including an
inspection for zoning, land use, environmental and other laws, regulations and
restrictions, as Buyer has, in Buyer's commercially reasonable discretion,
deemed necessary as a condition precedent to Buyer's purchase of the Property
and to determine the physical and land use characteristics of the Property
(including its subsurface) and its suitability for Buyer's intended use. Buyer
shall protect, defend, indemnify, and hold Seller (and Seller's general
partners and the agents, employees, partners, unitholders, shareholders,
affiliates, officers and directors of Seller and its general partners,
collectively "Seller's Indemnitees"), harmless from and against any and all
losses, costs, expenses (including reasonable attorneys' fees and court costs)
claims, damages, personal injuries, property damage, liens, and stop notices
whatsoever, including, without limitation, repairing any and all damages to any
portion of the Property, arising out of or related to Buyer's conducting such
inspections, surveys, tests, and studies or relating to Buyer's access to or
entry onto the Property prior to the close of Escrow.
ARTICLE III
CONDITIONS PRECEDENT
The purchase and sale under this Agreement shall be subject to the
satisfaction of the following conditions (unless waived in writing by the party
to whom the benefit runs) on or before the Closing Date:
<PAGE> 20
3.01 Conditions to Buyer's Obligations.
A. Delivery of Title Report. Prior to the execution of this Agreement,
Seller has provided Buyer with a title report for the Property, a copy of which
is or shall be attached hereto and incorporated herein by this reference as
Exhibit "C" ("Title Report"). Buyer shall have until the expiration of Buyer's
Review Period to provide Seller with written notice specifying any reason(s) if
Buyer disapproves any item or exception shown on the Title Report. Failure of
Buyer to disapprove any item or exception shown on the Title Report during such
time period shall be deemed to be an approval of title to the Property in its
entirety. If Buyer disapproves of any item or exception shown in the Title
Report, Seller shall have the right, but not the obligation, to (a) remove or
cure the defect to the reasonable satisfaction of Buyer or (b) elect not to
cure such defect. If Seller fails to notify Buyer of Seller's election to cure
such item or exception within five (5) days after Seller's receipt of Buyer's
notice of disapproval, Seller shall be deemed to have elected not to cure such
defect. If Seller elects not to cure any such defect, then Buyer's exclusive
remedy shall be to (i) accept such item or exception and proceed to take title
to the Property without either deduction or offset to the Purchase Price and
waive such defect without cause of action hereunder against Seller, or (ii)
terminate this Agreement and the Escrow by giving five (5) days' prior written
notice of such termination to Seller and to Escrow Agent after Buyer's receipt
or deemed receipt of Seller election not to cure. Buyer's failure to provide
Seller with five (5) days' prior written notice of termination shall constitute
Buyer's election under (i) above.
B. Delivery of Title and Title Insurance. Seller shall convey fee
title to the Property to Buyer at the Closing, subject to the Permitted
Exceptions. The term "Permitted Exceptions" as used herein shall mean: (i)
liens for real property taxes and assessments and all other taxes shown as
exceptions in the Title Report, provided that the taxes are not delinquent and
do not include any utility hook-up fees or building fees relating to Seller's
construction of the Improvements; (ii) the standard exceptions to coverage
under Chicago Title Insurance Company (Title Insurer's) 1992 ALTA-Owner's
Extended Coverage Policy of Title Insurance; (iii) such exceptions to coverage
as may be shown in the Title Report and that are approved by Buyer during
Buyer's Review Period; (iv) the CC&R's, as described in Section 7.07 of this
Agreement; (v) reasonable water, sanitary sewer, utility, slope, and drainage
and street widening easements that are necessary in connection with the
subdivision or development of the Property and any Adjacent Property, as
defined in Section 7.06 of this Agreement, that are either shown on a survey or
tract, subdivision or boundary line adjustment map for the Build-to-Suit Parcel
and Expansion Parcel that Buyer approves during Buyer's Review Period or that
are located within utility corridors within the perimeter boundaries of the
Property as shown on such maps and do not adversely affect or increase the cost
of Buyer's proposed expansion of its improvements or conduct of business within
the Improvements after the close of Escrow; (vi) minor boundary line
adjustments that are contemplated by the boundary line adjustment map that is
approved by Buyer during Buyer's Review Period and that do not interfere or
impair the use of the Property and do not reduce Buyer's ability to expand its
improvements after the Close of Escrow as contemplated by Section 7.07 of this
Agreement; and (vi) any other exception Buyer has approved in writing or caused
or permitted to encumber the Property. Buyer agrees that Seller's obligation to
convey insurable title to Buyer shall be deemed satisfied upon Title Insurer's
willingness to issue the Title Policy subject only to the Permitted Exceptions.
<PAGE> 21
C. Substantial Completion of Improvements. Seller shall have
substantially completed the Improvements in accordance with the Work Letter
Agreement and Seller shall have received a temporary certificate of occupancy
or its equivalent for the Improvements, unless Seller is prevented from
obtaining a temporary certificate of occupancy as a result of any act or
omission of Buyer or Buyer's employees, agents or contractors or as a result of
Buyer's failure or delay in obtaining any necessary environmental permit
related to Buyer's manufacturing use of the Property, including any necessary
permit from SCAQMD. Any costs incurred by Buyer in examining and investigating
the Property under this Agreement shall be at Buyer's sole cost and expense.
During the five (5) day period between substantial completion of the
Improvements and Closing, Buyer and Seller shall complete a walk-through of the
Property and prepare and initial a punch-list of those items which remain
incomplete, but are not material to substantial completion of the Improvements.
Seller shall promptly obtain bids from the applicable subcontractors to
complete such punch-list items and shall promptly cause the general contractor
and subcontractors to complete such work. If the estimated cost of completing
such punch-list exceeds $20,000, Seller shall withhold the estimated cost of
completing such punch-list work from the final payment due the general
contractor until such punch-list work is completed.
D. During Buyer's Review Period and after substantial completion of
the Building Shell Improvements but prior to substantial completion of the
Improvements, Seller agrees that Buyer and its agents and contractors may enter
the Property for the purpose of the examination and investigation under this
Section 3.01(D) from time to time or for the purpose of installing Buyer's Work
in accordance with the Work Letter Agreement; provided that such activity does
not unreasonably interfere with Seller's performance under this Agreement,
including the Work Letter Agreement. Buyer shall keep the Property free and
clear of any mechanics' lien or materialmen's liens related to any such
activity, and Buyer shall provide Seller with two (2) days prior written notice
of such entry onto the Property and evidence that Buyer has procured the
insurance required by the Work Letter Agreement and named Seller and its
general contractor as additional insureds prior to any such entry onto the
Property.
E. Representations and Warranties. Each of the representations and
warranties by Seller contained in Article VIII was true and correct in all
material respects as of the date made and continues to be true and correct in
all material respects as of the Closing Date.
3.02 Conditions to Seller's Obligations.
A. Governmental Approvals. On or before July 21, 1997, the Seller
shall have obtained a building permit for the Building Shell Improvements and
on or before October 21, 1997, or such later date as may be agreed to by Buyer
and Seller during Buyer's Review Period in connection with Buyer and Seller's
approval of the construction schedule for the Improvements pursuant to the Work
Letter Agreement, Seller have obtained a building permit for the Interior
Improvements to be constructed pursuant to the Work Letter Agreement. Seller
agrees to use due diligence to obtain such permits by such dates subject to
Force Majeure Delays and Buyer Delays and any extensions to such dates as may
be approved by Buyer and Seller pursuant to the Work Letter Agreement.
B. Delivery of Purchase Price. The Purchase Price shall have been
delivered to Escrow Agent in immediately available funds on or before the
Closing Date.
<PAGE> 22
C. Board Approval. Approval of this Agreement and the consolidated
financial statements of Buyer and Guarantor that have been prepared in
accordance with generally accepted accounting principles consistently applied
by Seller's Board of Directors or senior management on or before
February 7, 1997.
D. Representations and Warranties. Each of the representations and
warranties by Buyer contained in Article VIII was true and correct in all
material respects as of the date made and continues to be true and correct in
all material respects as of the Closing Date.
E. Performance of Buyer's Covenants. Buyer shall have performed in
full all of its obligations under this Agreement and the Work Letter Agreement.
3.03 Failure of Conditions. If any of the conditions precedent contained
in this Article III are not satisfied (or waived or the time for satisfaction
extended by the party to whom the benefit of the condition runs) within the
time periods specified in this Agreement, the party to whose benefit the
condition runs shall have the right to terminate this Agreement by delivering
written notice to the other party within the time period specified by this
Agreement and if either party elects to so terminate this Agreement, neither
party shall have any further obligations or liabilities thereunder or pursuant
to the terms of this Agreement; provided, however, that each party shall pay
one-half (1/2) of Escrow Agent and Title Insurer's normal Escrow and title
policy cancellation fees, if any. Nothing contained herein is intended nor
shall permit any party in default to terminate this Agreement or the Escrow
provided for herein as a result of such default. If Buyer elects to terminate
this Agreement during Buyer's Review Period, Buyer shall reimburse Seller for
the out-of-pocket costs and expenses that Seller incurs pursuant to the Work
Letter Agreement for the Work Cost (as defined in the Work Letter Agreement) up
to a maximum amount of $17,000. Seller shall provide Buyer with bills,
receipts, invoices and other written evidence that Seller has incurred such
out-of-pocket costs and expenses.
ARTICLE IV
CLOSING
4.01 Closing. The purchase and sale of the Property shall be consummated
through a closing ("Closing") in accordance with the following:
<PAGE> 23
A. Closing Date. The closing date ("Closing Date") shall occur at the
Pasadena office of the Escrow Agent, or such other location as is acceptable to
the parties hereto, on or before 4:00 p.m. on the earlier to occur of: (i) five
(5) days after substantial completion of the Improvements, as certified by the
Architect and general contractor or (ii) on February 21, 1998 such later date
as may be agreed to by Buyer and Seller in connection with Buyer and Seller's
approval of the construction schedule pursuant to the Work Letter Agreement,
provided all contingencies have been completed and subject to extensions for
Force Majeure Events beyond Seller's reasonable control and Seller Delays
totaling up to thirty (30) days in the aggregate but in no event later than
October 31, 1998. Buyer and Seller acknowledge that both parties would prefer
to close Escrow on or before December 31, 1997, and shall cooperate with each
other in good faith to coordinate and expedite the construction schedule to the
extent that it is commercially reasonable to do so without increasing
construction costs in the prudent business judgment of Buyer and Seller. For
example, Buyer and Seller agree to approve design-build subcontracts with the
major trade subcontractors who are approved pursuant to the Work Letter
Agreement.
B. Closing Documents. (i) Seller. Not less than one (1) business day
prior to the Closing Date, Seller shall duly execute, acknowledge if required,
and deliver to Escrow Agent the following:
(a) Grant Deed ("Deed") conveying the Property to Buyer, along with
Seller's share of any costs or expenses to be paid to or through Escrow
Agent;
(b) A Non-Foreign Entity Affidavit, in the form attached hereto as
Exhibit "E";
(c) An assignment, without recourse and on a non-exclusive basis
for a period of one year after the Closing Date, of all contractor and
manufacturer warranties regarding the Improvements;
(d) Such documents and instruments as Escrow Agent or Title Insurer
may reasonably require to evidence the due authorization and execution of
the documents and instruments to be delivered by Seller hereunder and to
issue its title insurance policy; and
(e) Lien releases (which may be conditional as to the final payment
and unconditional as to all prior payments) from the general contractor
and major trade subcontractors and suppliers of material and equipment
for the Improvements and an owner's indemnity agreement for Seller's Work
as may be required by the Title Insurer to issue its 1992-ALTA Owner's
Extended Coverage Title Policy.
(ii) Buyer. Not less than one (1) business day prior to the Closing Date,
Buyer shall deliver to the Escrow Agent the following:
(a) Purchase Price, along with Buyer's share of any costs and
expenses to be paid to or through Title Insurer and Escrow Agent;
(b) A Change of Ownership Statement, as required by Title Insurer
or Escrow Agent; and
<PAGE> 24
(c) Documents and instruments executed and acknowledged as may be
reasonably required by Escrow Agent or Title Insurer to evidence the due
authorization and execution of the various documents and instruments to
be delivered by Buyer hereunder and to issue its title insurance policy,
including an owner's indemnity agreement for any Buyer's Work (as defined
in the work Letter Agreement) that is commenced by Buyer prior to the
Closing Date.
C. Closing Procedure. At such time as the Escrow Agent has received
all of the items specified in Section 4.01, and at such time as Title Insurer
is prepared to issue a policy of title insurance in accordance with Section
3.01 hereof, Buyer and Seller hereby authorize and instruct Escrow Agent to:
(i) cause Title Insurer to record the Deed; (ii) pay to the authorities
lawfully entitled thereto any recordation fees and transfer taxes in connection
therewith; (iii) compute prorations relating to taxes and assessments for the
accounts of Seller and Buyer; (iv) pay to Seller an amount equal to the
Purchase Price less any prorations chargeable to Seller and any amounts payable
by Seller to Escrow Agent for its services and expenditures in connection
herewith; and (v) pay to Buyer the balance of the funds then held by Escrow
Agent, less any prorations chargeable to Buyer and any amounts payable by Buyer
to Escrow Agent for its services and expenditures in connection herewith.
4.02 Expenses; Prorations.
A. Fees, Expenses, Transfer Taxes. Seller shall pay the documentary
transfer taxes, one-half of the escrow fees and the cost of a 1992-CLTA
standard coverage Owner's Policy of Title Insurance for Buyer in the amount of
the Purchase Price. Buyer shall pay the recordation fees of the Deed and
one-half of the fees and expenses of Escrow Agent in connection with the escrow
and any other customary fees and charges and expenditures authorized by Buyer,
and Buyer shall pay for the increased cost of the ALTA Extended Coverage
Policy, the cost of any survey that the Escrow Agent requires for issuance of
an ALTA Policy or any ALTA, as-built survey that Buyer requires pursuant to the
Work Letter Agreement and for the cost of any other increase in the amount or
scope of title insurance if Buyer elects to increase the amount or scope of
title insurance coverage.
B. Real Property Taxes and Assessments. All real property taxes and
assessments for the fiscal years of the taxing and assessing authorities, or
any owner's association annual dues under the CC&R's described in Section 7.07
becoming due prior to the Closing Date shall be prorated at the Closing with
appropriate debits and credits to the accounts of Buyer and Seller so that
Seller shall be responsible for paying all of the same, to the extent duly
allocable to the period ending on the day immediately prior to the Closing
Date, and Buyer shall be responsible for paying all of the same, to the extent
duly allocable to the period commencing upon the Closing Date. At Closing,
Buyer shall reimburse Seller for any taxes and assessments, which are allocable
to the period commencing upon the Closing Date and which Seller has already
paid.
<PAGE> 25
C. Brokerage Commission. With the exception of Locker Realty Corp,
having its business address at 601 East Glenoaks Blvd., Suite 200, Glendale,
California 91207-1760 ("Buyer's Broker") and CB Commercial Real Estate Group,
Inc., having its business address at 15301 Ventura Blvd., Suite 120, Sherman
Oaks, California 91403-3157 ("Seller's Broker"), Buyer and Seller represent and
warrant to each other that to the best of their knowledge no other person or
entity may claim or is entitled to a real estate commission, finder's fee or
any similar payment with respect to this Agreement or the Property. The
Seller's Broker and Buyer's Broker are collectively referred to as the
"Brokers." Buyer and Seller shall each protect, defend, indemnify and hold the
other harmless from and against all such claims for fees or commissions in
connection with the sale of the Property or this Agreement. Seller shall pay to
the Brokers a brokerage commission pursuant to separate written agreements
between Seller and Buyer's Broker and Seller's Broker.
ARTICLE V
BREACH
5.01 Notice. The failure by either party to observe or perform any of
the covenants or provisions of this Agreement, where such a failure shall
continue for a period of five (5) days after written notice thereof from the
non-breaching party to the breaching party, shall constitute a breach under
this Agreement. If the nature of the breaching party's default is non-monetary
and such that more than five (5) days are reasonably required for its cure,
then the breaching party shall not be deemed to be in default if the breaching
party shall commence such cure within said five (5) day period and thereafter
diligently prosecute such cure to completion, which completion shall occur not
later than thirty (30) days from the date of such notice or not later than the
Outside Closing Date if the breach relates to Seller's failure to substantially
complete the Improvements.
5.02 Failure to Cure. If a breaching party fails to cure or commence to
cure the default after notice, the non-breaching party may, without terminating
this Agreement, suspend performance under this Agreement.
<PAGE> 26
5.03 Remedies. If either party breaches this Agreement, upon expiration
of the cure period, the non-breaching party may sue for specific performance;
provided, however, Buyer's right to sue for specific performance is conditioned
upon Esterline's delivery of an agreement in writing to Seller on or before the
Closing Date to segregate the Purchase Price in a segregated account and Seller
shall have the right to expunge any lis pendens filed by Buyer without posting
a bond if Esterline fails to deliver such written agreement to Seller prior to
Buyer's commencement of its action for specific performance. In addition to an
action for specific performance, the non-breaching party may commence an
arbitration proceeding for damages pursuant to Article XII of this Agreement.
Buyer agrees that its damages will be limited to Holdover Rental Costs (as
defined below) and $1,250 for each additional day of Seller Delay as liquidated
damages for Seller's failure to substantially complete the Improvements on or
before the date permitted by clause (ii) of Section 1.4 of the Work Letter
Agreement as a result of more than thirty (30) days of Seller's Delays (subject
to extension for the number of days of Buyer's Delays and Force Majeure
Delays), provided Seller substantially completes the Improvements on or before
the Outside Closing Date subject to extension for the number of days of Buyer
Delays and Force Majeure Delays. The parties acknowledge that it would be
difficult to estimate Buyer's actual damages and $1,250 per day and Holdover
Rental Costs represents a reasonable amount. Holdover Rental Costs shall mean
the difference between (a) TA MFG Company's existing occupancy costs ("TA's
Existing Occupancy Cost") for its existing facilities as set forth on Schedule
5.03 attached hereto and incorporated by reference herein and (b) the lower of
(i) TA's actual holdover costs or (ii) 150% of TA's Existing Occupancy Cost,
for Seller's failure to substantially complete the Improvements on or before
the date permitted by clause (ii) of Section 1.4 of the Work Letter Agreement
as a result of more than thirty (30) days of Seller Delay. Buyer represents and
warrants to Seller that Schedule 5.03 accurately sets forth TA's existing lease
obligations, and the existing termination dates of TA's existing leases. Buyer
and Seller shall act reasonably and in good faith and cooperate with each other
to minimize Buyer's holdover costs and to minimize Buyer and Seller's damages
as a result of Seller Delays, Buyer Delays and Force Majeure Delays. Buyer
represents and warrants to Seller that TA has the right to terminate its
existing lease on its manufacturing facility on 365 days prior notice to its
landlord. Buyer agrees not to send any termination notice prior to approval of
its Interior Plans and meeting with Seller and agreeing upon the projected date
of substantial completion of the Improvements and the number of days of Seller
Delays, Buyer Delays, and Force Majeure Delays then existing. Buyer also agrees
to meet with Seller prior to extending its office lease or agreeing to any
increase in its occupancy cost above in TA's Existing Occupancy Cost. /s/ SRL,
RWS
<PAGE> 27
5.04 Build-to-Suit. BUYER ACKNOWLEDGES AND AGREES THAT SELLER IS
CONSTRUCTING THE IMPROVEMENTS TO ACCOMMODATE AND SATISFY THE UNIQUE AND
SPECIFIC REQUIREMENTS OF BUYER THAT ARE REQUIRED FOR THE MANUFACTURING BUSINESS
REQUIREMENTS OF BUYER AND THAT SELLER WOULD NOT CONSTRUCT THE IMPROVEMENTS BUT
FOR THE AGREEMENT OF BUYER UNDER THIS AGREEMENT AND THE WORK LETTER AGREEMENT.
IF BUYER BREACHES ITS OBLIGATION TO PURCHASE THE PROPERTY HEREUNDER, THEN
SELLER WILL BE IRREPARABLY DAMAGED DUE TO THE UNIQUE AND BUILD-TO-SUIT NATURE
OF THE IMPROVEMENTS THAT SELLER IS CONSTRUCTING ON BEHALF OF BUYER.
CONSEQUENTLY, SELLER SHALL HAVE THE RIGHT OF SPECIFIC PERFORMANCE AGAINST BUYER
IN ADDITION TO ANY REMEDIES SELLER HAS AT LAW, IN EQUITY, OR PURSUANT TO THIS
AGREEMENT OR THE WORK LETTER AGREEMENT FOR SUCH BREACH, INCLUDING BUT NOT
LIMITED TO CLAIMS FOR DAMAGES, ATTORNEYS' FEES AND INDEMNITY. SELLER AND BUYER
WITNESS THEIR APPROVAL OF THIS SPECIFIC PERFORMANCE CLAUSE BY INITIALING THIS
SECTION 5.04.
Seller's Initials: /s/ JB Buyer's Initials: /s/SRL, /s/RWS
5.05 Limitation of Liability. The obligations of the Seller under this
Agreement shall be without recourse to the assets of the general partners or of
any general partner, officer, shareholder, director, unit holder or employee of
Seller or any general partner of Seller. The sole recourse of Buyer for any
obligation of the Seller under this Agreement shall be limited solely to the
Property and the income and proceeds therefrom.
ARTICLE VI
SELLER'S OBLIGATION TO CONSTRUCT IMPROVEMENTS
6.01 Seller's Work. Seller will be responsible for substantially
completing the Improvements in accordance with the Work Letter Agreement prior
to the Closing Date, subject to extensions for up to thirty (30) days of Seller
Delays and extensions for Force Majeure Events or delays caused by Buyer.
Seller shall also install, at Buyer's expense, a fully irrigated landscape
strip fronting Franklin Parkway on the Expansion Parcel in accordance with
landscaping plans that are approved by Buyer during the landscaping phase of
the development of the adjacent building. Buyer's obligation to pay for the
cost of such work as it progresses shall survive the Closing Date and
recordation of the Deed.
ARTICLE VII
CONDITION OF PROPERTY
7.01 Condition of Property. Buyer understands and acknowledges that the
Property may be subject to earthquake, fire, floods, erosion, high water table,
dangerous underground soil conditions and similar occurrences that may alter
its condition or affect its suitability for any proposed use. Seller shall have
no responsibility or liability with respect to any such occurrence. Except for
the express representations and warranties of Seller contained in this
Agreement, Buyer represents and warrants that it is acting, and will act only,
upon information obtained by it directly from its own inspection of the
Property. The suitability or lack of suitability of the Property for Buyer's
intended use, or availability or lack of availability of permits or approvals
of governmental or regulatory authorities (other than a temporary certificate
of occupancy for the Improvements) shall not affect the rights or obligations
of the Buyer hereunder. Seller shall deliver the Property to Buyer clean and
free of debris on the Closing Date.
<PAGE> 28
7.02 Seller's Warranty. Seller warrants to Buyer that all items of
"Seller's Work" as defined in Paragraph 1.1 of the Work Letter Agreement, shall
be in good operating condition on the Closing Date and shall be completed
substantially in accordance with the requirements of this Agreement. Seller's
warranty shall not extend to, or provide a remedy for, abuse, defects caused by
Buyer's alteration or modification of Seller's Work, improper or insufficient
maintenance, improper operation, and normal wear and tear under normal usage.
Seller's warranty obligations shall commence at the time of substantial
completion of Seller's Work. If within one year after substantial completion of
Seller's Work any portion of Seller's Work is found not to be in accordance
with the requirements of this Agreement, Seller shall, after receipt of written
notice from Buyer, promptly correct, or cause the general contractor to
correct, such work. Seller hereby agrees to execute any documentation
reasonably requested by Buyer in order to evidence the fact that effective one
(1) year after the Closing Date, Seller shall assign on a non-exclusive basis
all of its right, title and interest in and to any warranties regarding
workmanship and material with respect to the Seller's Work to be performed
pursuant to the terms of this Agreement, including, but not limited to, the
warranties regarding the operation of systems such as air-conditioning or
heating. Seller shall cooperate with Buyer, at no cost to Seller, with respect
to the enforcement of any such warranties upon the written request by Buyer and
Buyer shall cooperate with Seller in enforcing any such warranties in
connection with the performance of Seller's obligations under this Section
7.02. In no event shall Seller be liable to Buyer for any latent or patent
construction defects that are not asserted by Buyer within one (1) year after
the Closing Date.
7.03 No Additional Warranties. Except as expressly provided in this
Agreement, the Property is purchased and sold "AS IS". The Purchase Price and
the terms and conditions set forth herein are the result of arm's-length
bargaining between entities familiar with transactions of this kind, and said
price, terms, and conditions reflect the fact that, Buyer shall have the
benefit of, and is relying upon, no statements, representations, or warranties
whatsoever made by or enforceable directly against Seller relating to the
condition, operations, dimensions, descriptions, soil condition, suitability,
compliance or lack of compliance with any state, federal, county or local law,
ordinance, order, permit or regulation, or any other attribute or matter of or
relating to the Property. Buyer represents, warrants, and covenants to Seller
that, except for Seller's express representations and warranties specified in
this Agreement, Buyer is relying solely upon its own investigation of the
Property. If Seller obtains or has obtained the services, opinions, or work
product of surveyors, architects, engineers, Escrow Agent, Title Insurer,
governmental authorities, or any other third person or entity with respect to
the Property, Buyer and Seller agree that Seller shall do so only for the
convenience of both parties, and the reliance by Buyer upon any such services,
opinions, or work product shall not create or give rise to any liability of or
against Seller.
<PAGE> 29
7.04 Governmental Approvals. It is understood and agreed by the parties
that Seller's performance of its obligations under this Agreement, including
the Work Letter Agreement, is subject to obtaining all necessary governmental
permits and approvals from all appropriate governmental authorities for the
Improvements. Seller will use due diligence to obtain said governmental permits
or approvals to construct the Improvements. Nothing contained in this Agreement
shall be construed as authorizing or requiring Buyer to apply for a zone
change, variance, subdivision maps, lot line adjustment, or other discretionary
governmental act, approval or permit with respect to the Property prior to the
Close of Escrow and Buyer agrees not to do so without Seller's prior written
approval, which approval may be withheld in Seller's sole and absolute
discretion. Buyer agrees not to submit any reports, studies or other documents,
including without limitation, plans and specifications, impact statements for
water, sewage, drainage or traffic, environmental review forms, or energy
conservation checklists to any governmental agency, or any amendment or
modification to any such instruments or documents prior to the Close of Escrow
unless first approved by Seller, which approval Seller may withhold in Seller's
sole discretion. Buyer's obligation to purchase the Property shall not be
subject to or conditioned upon Buyer's obtaining any variances, zoning
amendments, subdivision maps, lot line adjustment or other discretionary
governmental act, approval or permit.
7.05 Environmental Conditions. Except as disclosed to Buyer in writing,
to the best of Seller's knowledge, as of the date of this Agreement, there has
been no release of Hazardous Materials in violation of applicable law on the
Property. Seller's obligations to disclose matters "known to Seller," "to the
best of Seller's knowledge" or words of like import shall be deemed breached
only if Thomas E. Dierckman, Senior Vice President of Seller, had actual
knowledge (as opposed to imputed, inquiry or constructive knowledge after
consultation with the staff of Seller's commercial and industrial division of
the Valencia Company, a division of Seller) of the material inaccuracy of the
matter not disclosed to Buyer. Except as set forth above in this Paragraph,
Buyer shall rely upon its own inspection and environmental audit of the
Property in determining the Property's physical and environmental condition,
including an examination of all public records relating to the environmental
condition of the Property. If Buyer discovers that there has been a release of
Hazardous Materials on the Property in violation of applicable law, Buyer shall
immediately notify Seller in writing. Buyer shall protect, defend indemnify and
hold Seller free and harmless from and against any and all claims, liabilities,
damages, costs and expenses (including reasonable cleanup and remediation costs
and reasonable attorney and consultant fees) relating to a release of Hazardous
Materials on or beneath the Property by Buyer or its agents or contractors in
violation of applicable law after the Close of Escrow. Buyer's indemnity
obligations shall survive the Close of Escrow. As used in this Paragraph,
Hazardous Materials shall mean any and all hazardous substances, hazardous
materials or hazardous waste as defined under federal, state or local laws or
regulations.
<PAGE> 30
7.06 Cooperation with Development of Adjacent Property. Buyer shall
cooperate with Seller and the Declarant under CC&R's, as defined in Section
7.07 below, and with the owners of the property surrounding, abutting or
adjoining the Property ("Adjacent Property"), in the development of the
Adjacent Property, by executing subdivision maps and other appropriate
documents necessary to obtain all government approvals to develop the Adjacent
Property. Seller hereby reserves easements for drainage, sewer, utilities, and
slopes across the Property that are reasonably necessary for the subdivision,
development and construction of the Adjacent Property and that are Permitted
Exceptions under this Agreement. If requested by Seller or Declarant under the
CC&R's or owners of Adjacent Property, Buyer shall execute and record easements
precisely describing the location thereof.
7.07 Covenants, Conditions and Restrictions.
A. Buyer acknowledges and agrees to comply with the Declaration of
Covenants, Conditions and Restrictions encumbering the Property dated
August 26, 1996 and recorded in the Los Angeles County Recorder's Office as
Instrument No. 961516213, a copy of which will be attached hereto as Exhibit
"D" and incorporated herein by this reference and as may be amended from time
to time (the "CC&R's"). Buyer acknowledges and agrees that construction of the
Improvements on the Property and construction of any additional improvements on
the Property after the Close of Escrow is subject to compliance with the size,
density, building material, aesthetic and other architectural controls under
the CC&R's. At the Closing, Seller shall deliver to Buyer a certificate
executed by the Declarant under the CC&R's to evidence that construction of the
Improvements was in compliance with the CC&R's. Prior to expiration of Buyer's
Review Period, Seller shall cause the Declarant to deliver a letter to Buyer
confirming that Buyer's intended use of the Build-to-Suit Parcel is permitted
under the CC&R's subject to Declarant's approval of the plans and
specifications for the Improvements and Buyer's compliance with all applicable
laws and regulations. Buyer shall obtain the approval of the Architectural
Review Committee and Declarant under the CC&R's prior to submitting any plans
or applications for approval to any governmental authority regarding any
expansion of the Improvements after the Closing Date. The parties acknowledge
that after the Close of Escrow, Buyer contemplates expanding the Improvements
on the Build-to-Suit and Expansion Parcels by approximately 50,000 square feet
subject to Buyer's compliance with all applicable laws, ordinances, codes and
regulations in connection with any expansion of the Improvements by Buyer.
Buyer acknowledges that Buyer's ability to expand may be affected by changes in
laws and regulations and by Buyer's use of the Improvements and proposed use of
the expansion area. In connection with any such expansion Seller agrees to be
bound by the following provisions.
(i) Buyer shall have no obligation to develop the Expansion Parcel
for up to five (5) years after the Closing Date. If Buyer has not
commenced construction of any improvement on the Expansion Parcel on or
before the fifth (5th) anniversary of the Closing Date, Buyer shall
market the sale of the Expansion Parcel to a purchaser who agrees to
construct improvements on the Expansion Parcel in accordance with and
subject to the limitations set forth in the CC&R's. The marketing of the
Property will be done by listing the Expansion Parcel with licensed
California real estate broker.
<PAGE> 31
(ii) Approval of Buyer's submittal as to design, materials and
color of Buyer's proposed expansion shall not be withheld if the
improvements for the Expansion Parcel shall have a substantially similar
design and shall include substantially similar materials and color unless
the use of such design or materials are prohibited by applicable laws and
regulations then in effect.
(iii) Seller agrees to cause the Declarant under the CC&R's to
consider on the Architectural Committee agenda a submittal made by Buyer
for an improvement on the Expansion Parcel within two (2) meetings of the
Architectural Committee after proper delivery of such submittal by Buyer
to the Declarant in accordance with the CC&R's.
(iv) If Declarant disapproves Buyer's submittal, Seller will cause
the Declarant to deliver to Buyer, in writing, as detailed explanation
for such disapproval.
(v) In calculating maximum lot coverage under the CC&R's for any
such proposed expansion by Buyer, Seller shall cause the Declarant to
consider the Expansion Parcel and the Build-to-Suit Parcel to be as one
Site (as defined in the CC&R's) as long as the Build-to-Suit Parcel and
Expansion Parcel are both owned by Buyer, Buyer agrees to execute and
record a covenant to hold the Expansion Parcel and Build-to-Suit Parcel
as one parcel in compliance with all applicable laws and Buyer complies
with all applicable laws and regulations regarding any such expansion.
(vi) If Buyer sells the Expansion Parcel to a third party, Buyer
and such third party shall each be entitled to place a monument sign
identifying Buyer on the Build-to-Suit Parcel and the third party on the
Expansion Parcel in compliance with the CC&R's.
(vii) Declarant shall have the right to assign its interest under
the CC&R's to any person, corporation or association subject to any such
assignee's assumption of Seller's obligations under this Section 7.07.
B. Subject to Subsection 7.07A above, Buyer shall obtain the approval
of the Architectural Review Committee and Declarant under the CC&R's prior to
submitting any plans or applications for approval to any governmental authority
regarding any alteration to the Improvements or construction of additional
improvements on the Build-to-Suit Parcel after the Closing Date. The CC&R's
shall also restrict Buyer's use of the Property to light manufacturing and
related office, administrative, warehouse and storage in compliance with all
applicable laws and regulations.
<PAGE> 32
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
8.01 Buyer's Representations and Warranties. Buyer represents and
warrants to Seller that, as of the date this Agreement is executed, and as of
the Closing Date, Buyer has full right, power, and authority to execute and
deliver this Agreement and to perform the undertakings of Buyer contained
herein and therein, and that this Agreement constitutes valid and binding
obligations of Buyer that are legally enforceable in accordance with their
terms, and that to the best of Buyer's knowledge none of the undertakings of
Buyer contained herein violates any applicable statute, law, regulation or
ordinance or any order or ruling of any court or governmental entity, or
conflicts with, or constitutes a breach or default under, any agreement by
which Buyer is bound or regulated.
8.02 Seller's Representations and Warranties. Seller hereby represents
and warrants to Buyer that, as of the date this Agreement is executed, and as
of the Closing Date (except as provided otherwise below), as follows:
A. The persons executing this Agreement on behalf of the Seller are
duly authorized to do so and are authorized to sell the Property. Seller is the
owner in fee of the Property and the Property will not be encumbered by any
liens, easements, or licenses except for the Permitted Exceptions, as defined
in Section 3.01B hereof.
B. To the best of Seller's knowledge, there is no pending condemnation
or similar proceeding affecting the Property or any portion thereof, and Seller
has not received any notice and has no knowledge that any such proceeding is
contemplated as of the date of this Agreement.
C. There are no contracts or other obligations outstanding for the
sale, exchange, lease or transfer of the Property or any portion thereof.
D. Seller is not aware of any violation of any zoning, land use,
building, health, flood control, fire or other law, ordinance, or regulation
relating to the Build-to-Suit Parcel or the Expansion Parcel as of the date of
this Agreement.
E. Except as disclosed in writing to Buyer by the Delivery Items
and/or as disclosed on the Title Report, or Survey, or as approved by Buyer
pursuant to the Work Letter Agreement, Seller has not made and will not make
any commitments to the applicable governmental authorities, or any adjoining or
surrounding property owners that would interfere with Buyer's ability to expand
the Improvements on the Expansion Parcel and Build-to-Suit Parcel in the manner
contemplated by this Agreement.
F. There are no attachments, executions, assignments for the benefit
of creditors, receiverships, conservatorships or voluntary or involuntary
proceedings in bankruptcy or pursuant to any other debtor relief laws
contemplated or filed by Seller or pending against Seller or the Property.
G. Seller is not a foreign individual, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in
the Internal Revenue Code and Income Tax Regulations). Seller shall execute and
deliver to Buyer at the Closing an affidavit substantially in the form of
Exhibit "E" attached hereto, certifying the representations and warranties made
pursuant to this subsection.
<PAGE> 33
H. All the documents executed by Seller which are to be delivered to
Buyer on or before the Closing Date are, and on the Closing Date will be legal,
valid, and binding obligations of Seller.
I. Except as disclosed by the Delivery Items or Buyers review of
public records and other reports it receives during Buyer's Review Period,
including existing environmental, zoning, land use, health, fire, flood control
and other applicable laws, ordinances and regulations, or as disclosed to Buyer
pursuant to the Work Letter Agreement, Seller has not failed to disclose to
Buyer any material fact that Seller has actual knowledge of and that materially
and adversely affects the condition of the Build-to-Suit Parcel or Expansion
Parcel as of the date of this Agreement.
J. From and after the date hereof, and except as otherwise provided in
this subparagraph, Seller shall not without the prior written consent of Buyer
enter into any agreement, contract, commitment, lease or other transaction to
sell, dispose of or lease any portion of the Property.
ARTICLE IX
CONDEMNATION, DAMAGE AND DESTRUCTION
9.01 Condemnation.
A. If, between the date hereof and the Closing Date, condemnation or
eminent domain proceedings affecting the Property (defined as 10% or more of
the Build-to-Suit Parcel and the Expansion Parcel) are initiated or are
threatened to be initiated, then, both Seller and Buyer shall have the option
by written notice to: (i) affirm this Agreement, which shall remain in full
force and effect without any diminution of the Purchase Price, and Seller shall
assign to Buyer upon the Closing Date all of Seller's rights to any
condemnation awards by depositing an assignment of said award with the Escrow
Agent; or (ii) terminate this Agreement and return the Deposit to Buyer, less
one-half (1/2) of the Escrow Agent's and Title Insurer's escrow and title
cancellation fees and costs.
B. If, between the date hereof and the Closing Date, condemnation or
eminent domain proceedings affecting a portion of the Property (defined as 10%
or less of either the Expansion Parcel or the Build-to-Suit Parcel) are
initiated or are threatened to be initiated, then, Seller shall have the option
by written notice to Buyer to: (i) affirm this Agreement, which shall remain in
full force and effect without any diminution of the Purchase Price, and Seller
shall assign to Buyer upon the Closing Date all of Seller's rights to any
condemnation awards by depositing an assignment of said award with the Escrow
Agent or (ii) terminate this Agreement and all obligations to Buyer, and return
the Deposit to Buyer, less one-half (1/2) of the Escrow Agent's and Title
Insurer's escrow and title cancellation fees and costs. As of the date hereof,
Seller has received no notice that there are any eminent domain or condemnation
proceedings pending or threatened against the Property. As used herein,
material portion means more than 10% of the aggregate land area of the
Build-to-Suit Parcel and Expansion Parcel or any portion of the land on which
the Shell Improvements are located.
<PAGE> 34
9.02 Damage and Destruction. Seller shall maintain insurance, or cause
the general contractor to maintain insurance, on the Property in accordance
with the Work Letter Agreement until the Closing Date in accordance with the
Work Letter Agreement. If, between the date hereof and the Closing Date, any
material portion of the Property is damaged or destroyed (defined as 10% or
more of the replacement cost of the Improvements), the Buyer shall have the
option by written notice to Seller to terminate this Agreement, and subject to
Seller's rights set forth below, Buyer shall have no obligation to purchase the
Property, and Seller shall have no obligation to sell the Property to Buyer,
unless Seller elects, in its sole and absolute discretion, to pay for the cost
of restoring and substantially completing the Improvements in accordance with
the approved plans prior to the Outside Closing Date under the Work Letter
Agreement, in which event Buyer will not have the right to terminate this
Agreement and shall be obligated to close on or before the Outside Closing
Date. If this Agreement is so terminated, Escrow Agent shall return to Buyer
the Deposit, less one-half (1/2) of escrow and Escrow Agent's costs and fees
and any cancellation fees. If the Property is materially damaged by a casualty
and Seller cannot complete the restoration of the Improvements prior to the
Outside Closing Date, either Buyer or Seller may terminate this Agreement by
delivering written notice to the other party. If this Agreement is so
terminated, the Deposit less one-half of the Escrow termination fees shall be
returned to Buyer and all insurance proceeds shall be paid to Seller. If Seller
elects to restore the Property following any such damage on or before the
Outside Closing Date, Buyer and Seller shall reaffirm this Agreement, which
shall remain in full force and effect without any diminution or increase in the
Purchase Price.
ARTICLE X
ANTI-SPECULATION
Buyer acknowledges that it has represented to Seller that it is acquiring
the Property for business purposes for use as a manufacturing facility and not
to speculate in the appreciation in the value of the Build-to-Suit Parcel or
Expansion Parcel. Buyer further acknowledges that Seller would not have entered
into this Agreement, including the Work Letter Agreement if Buyer were
acquiring the Property for speculative purposes.
ARTICLE XI
MISCELLANEOUS
11.01 Assignment. Buyer shall neither assign its rights nor delegate is
obligations hereunder, without obtaining Seller's prior written consent, which
shall not be unreasonably withheld but which may be conditioned upon the
assignee's express written assumption of all of Buyer's obligations hereunder
and the Buyer's reaffirmation of its obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have the right to assign this
Agreement to an affiliate or a successor by merger or consolidation, as long as
Esterline Technologies Corp. reaffirms its obligation under this Agreement. In
no event shall any assignment delay the Closing Date or release Buyer from any
liability under this Agreement, including the Work Letter Agreement, as
applicable. Any other purported or attempted assignment or delegation without
obtaining Seller's prior written consent shall be void and of no effect. Seller
acknowledges that Buyer shall have the right to designate TA MFG Company, a
California corporation, to take title to the Property at the Closing without
the consent of Seller.
<PAGE> 35
11.02 Attorneys' Fees. If any action or proceedings is brought to
interpret or enforce the terms of this Agreement, the prevailing party shall be
entitled, in addition to all other damages, to receive reasonable attorney's
fees and costs.
11.03 Notices. All notices and requests hereunder shall be in writing and
shall be sent by personal delivery or by certified or registered mail, postage
prepaid, return receipt requested, or delivered in person to the following
street addresses:
SELLER:
The Newhall Land and Farming Company
23823 Valencia Boulevard
Valencia, California 91355
Attention: Mr. Jim Brown
Phone: (805) 255-4261
Fax: (805) 259-2957
With a copy to:
Brobeck, Phleger & Harrison LLP
550 South Hope Street, Suite 2100
Los Angeles, California 90071
Attention: Jerry Walsh, Esq.
Phone: (213) 745-3358
Fax: (213) 745-3345
BUYER:
TA MFG Company
375 West Arden Avenue
P.O. Box 2500
Glendale, California 91209-2500
Attention: Dennis Miller
Phone: (818) 240-4600
Fax: (818) 241-3948
AND
Esterline Technologies Corp.
c/o Bogle & Gates PLLC
601 Union Street, Suite 5100
Seattle, Washington 98121
Attention: Serena M. Schourup, Esq.
Phone: (206) 621-1415
Fax: (206) 621-2660
All notices shall be effective upon the earlier of facsimile, personal delivery
or receipt of the United States mail's return receipt, as set forth above;
provided, however, receipt of the Purchase Price shall only be effective upon
actual receipt in the form required under Section 2.04 hereof. Either party may
change its fax number, address or designate a new street address for notices
hereunder by notice complying with the terms of this Section.
11.04 Cooperation. Each party shall fully cooperate with the other in
connection with the requirements imposed by this Agreement upon the other, to
the end that neither party shall act in any manner to impede the other in
performing its obligations hereunder.
<PAGE> 36
11.05 Survival. The provisions of this Agreement shall survive the
Closing and shall not be merged into or defeated by the execution, delivery, or
recordation of the Deed given in connection herewith. Written disclosures made
to Buyer by Seller or any other entity prior to the Closing Date shall
constitute notice to Buyer of the matter disclosed, and Seller shall have no
further liability thereafter if Buyer waives such matter and consummates the
transaction contemplated hereby. If prior to the Closing Date, Buyer receives
notice of any information which indicates that any of Seller's representations
and warranties are untrue in any material respect, Buyer shall promptly advise
Seller in writing of such information. If Buyer fails to notify Seller, Buyer
shall be deemed to have waived such representation and warranty. If Buyer
waives any representation or warranty, then Seller shall have no liability
under this Agreement for such representation or warranty to the extent waived.
If this Agreement is terminated because of a failure of conditions in Article
IV or pursuant to Article IX, then neither Buyer nor Seller shall have any
liability if any of Buyer's or Seller's representations or warranties are
inaccurate. In no event shall Seller have any liability for a breach of a
representation or warranty under this Agreement if Buyer fails to assert any
such breach within one year after the Closing Date, except for those
representations and warranties contained in subsections 4.02C, Sections 7.05
and 7.07 and subsections 8.02C, E, G, and I for which Seller shall have
continuing liability.
11.06 Interpretation. This Agreement shall be construed and enforced in
accordance with the laws of the State of California as applicable to contracts
entered into in California among parties doing business therein and the parties
consent to the personal jurisdiction and venue of the Superior Courts of the
State of California located in Los Angeles County and the service of process by
any means authorized by such courts. This Agreement contains the entire
agreement between the parties respecting the purchase and sale of the Property
and supersedes all prior agreements between the parties hereto with respect to
such matters. Exhibits "A" through "E", as attached hereto are incorporated by
reference herein. The paragraph headings of this Agreement are for convenience
only and are not to be construed as part of this Agreement, and do not in any
way amplify or define the terms, conditions, and covenants of this Agreement,
and shall not be used in construction or interpretation hereof. There are no
third party beneficiaries to this Agreement. TA MFG Company and Esterline
Technologies Corp. are jointly and severally liable for the obligations of
Buyer under this Agreement. Unless the context otherwise indicates, whenever
used in this Agreement, the word "party" or "parties" means Buyer or Seller or
both, as the context may require.
11.07 Successors and Assigns; Time Is of the Essence. This Agreement
shall be binding upon and inure to the benefits of the heirs, successors and
assigns of the parties hereto. In no event shall Buyer have any right to delay
or postpone the Closing to create a partnership, corporation or other form of
business association or to obtain financing to acquire title to the Property or
to coordinate with any other sale, transfer, exchange or conveyance. Time is of
the essence of each term of this Agreement.
<PAGE> 37
11.08 Waivers. Except as herein otherwise expressly provided, no waiver
by a party of any breach of this Agreement or of any warranty or representation
hereunder shall be deemed to be a waiver of any other breach not of the same or
similar nature, and no acceptance of payment or performance by a party after
any breach by any other party shall be deemed to be a waiver of any breach of
this Agreement or of any representation or warranty hereunder by such other
party whether or not the first party knows of such breach at the time it
accepts such payment or performance. No failure or delay by a party to exercise
any right it may have by reason of the default of the other party shall operate
as a waiver of default or modification of this Agreement or shall prevent the
exercise of any right by the first party while the other party continues to be
in default.
11.09 Severability. If any term or provision of this Agreement is
determined to be invalid or unenforceable, the remaining terms and provisions
shall not be affected thereby and shall remain in full force and effect to the
maximum extent permitted by law.
11.10 Counterpart Execution. This Agreement may be executed in several
counterparts, each of which shall be fully effective as an original and all of
which together shall constitute one and the same instrument.
11.11 Duty of Confidentiality. Buyer and Seller represent and warrant
that each shall keep all information obtained from the other, or related to or
connected with the Property, the other party, or this transaction, confidential
and will not disclose any such information to any person or entity (other than
its accountants, lawyers and consultants) without obtaining the prior written
consent of the other party, which consent shall not be unreasonably withheld.
11.12 Force Majeure. The performance of Seller's obligations under this
Agreement shall be extended by any delay caused by any of the following events
(each a "Force Majeure Event"): any acts of god, casualty, damage, destruction,
fire, flood, severe weather, war, riot, civil unrest, earthquake, strike,
lockout, unavailability of building materials or supplies, embargoes,
epidemics, labor unrest, governmental action or inaction or any other event
beyond Seller's control. The financial condition of Seller shall not be deemed
to be a Force Majeure Event. Within five (5) days after the occurrence of a
Force Majeure Event, Seller shall provide Buyer with a written notice which
describes the Force Majeure Event in detail and sets forth the number of
calendar days of extension caused or estimated to be caused by such Force
Majeure Event.
11.13 Waiver of Jury Trial. The parties hereto waive any right to have a
jury trial for any dispute under this Agreement and/or the Work Letter
Agreement.
<PAGE> 38
ARTICLE XII
ARBITRATION
Issues relating to specific performance shall be determined by the
Superior Court for the County where the Property is located. Any other dispute
between the parties hereto may be determined by arbitration. Whenever any such
dispute arises between the parties hereto in connection with Improvements, Work
Letter Agreement or this Agreement and either party gives written notice to the
other that such dispute shall be determined by arbitration, then within thirty
(30) days after the giving of the notice, both parties shall select and hire
one member of the panel of Judicial Arbitration and Mediation Services, Inc.
("Judge"). The Judge shall be a retired judge experienced with commercial real
property lease disputes in the County in which Improvements are located. As
soon as reasonably possible, but no later than forty (40) days after the Judge
is selected, the Judge shall meet with the parties at a location reasonably
acceptable to Seller, Buyer and the Judge. The Judge shall determine the matter
within ten (10) days after any such meeting. Each party shall pay half the
costs and expenses of the Judge.
If Judicial Arbitration and Mediation Services, Inc. ceases to exist, and
either party gives written notice to the other that a dispute shall be
determined by arbitration, then, unless agreed otherwise in writing by the
parties, all arbitrations hereunder shall be governed by California Code of
Civil Procedure Sections 1280 through 1294.2, inclusive, as amended or
recodified from time to time, to the extent they do not conflict with this
Article. Any determination by arbitration hereunder may be entered in any court
having jurisdiction. Within ten (10) days after delivery of such notice, each
party shall select an arbitrator with at least five (5) years' experience in
commercial real property build-to-suit transactions in the County in which the
Property is located and advise the other party of its selection in writing. The
two arbitrators so named shall meet promptly and seek to reach a conclusion as
to the matter to be determined, and their decision, rendered in writing and
delivered to the parties hereto, shall be final and binding on the parties. If
said arbitrators shall fail to reach a decision within ten (10) days after the
appointment of the second arbitrator, said arbitrators shall name a third
arbitrator within the succeeding period of five (5) days. Said three
arbitrators thereafter shall meet promptly for consideration of the matter to
be determined and the decision of any two (2) of said arbitrators rendered in
writing and delivered to the parties hereto shall be final and binding on the
parties.
If either party fails to appoint an arbitrator within the prescribed
time, and/or if either party fails to appoint an arbitrator with the
qualifications specified herein, and/or if any two arbitrators are unable to
agree upon the appointment of a third arbitrator within the prescribed time,
then the Superior Court of the County in which the Property is located may,
upon request of any party, appoint such arbitrators, as the case may be, and
the arbitrators as a group shall have the same power and authority to render a
final and binding decision as where the appointments are made pursuant to the
provisions of the preceding paragraph. All arbitrators shall be individuals
with at least five (5) years' experience negotiating or arbitrating disputes
arising out of commercial real property build-to-suit transactions in the
County where the Property is located. All determinations by arbitration
hereunder shall be binding upon Seller and Buyer.
<PAGE> 39
NOTICE: BY INITIALLING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW
AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE
LITIGATED IN A COURT OR JURY TRIAL. BY INITIALLING IN THE SPACE BELOW
YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS
THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF
DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER
THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR
AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND
UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF
THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO
NEUTRAL ARBITRATION.
/s/ Stephen R. Larson, /s/ R. W. Stevenson /s/ JB /s/ George M. Jones
BUYER SELLER
SELLER AND BUYER HAVE CAREFULLY READ AND REVIEWED THIS AGREEMENT AND EACH
TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS AGREEMENT, SHOW
THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT
THE TIME THIS AGREEMENT IS EXECUTED, THE TERMS OF THIS AGREEMENT ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF SELLER AND
BUYER WITH RESPECT TO THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have executed this Agreement this
13th day of February, 1997.
SELLER:
THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)
By: NEWHALL MANAGEMENT LIMITED PARTNERSHIP,
A California Limited Partnership
its Managing General Partner
By: NEWHALL MANAGEMENT CORPORATION,
A California Corporation
its Managing General Partner
By: /s/ Thomas Dierckman
------------------------------------
Its: Senior Vice President
By: /s/ James Backer
------------------------------------
Its: Vice President
BUYER:
TA MFG COMPANY, a California corporation
<PAGE> 40
By: /s/ George M. Jones
------------------------------------
Its: President
By:
------------------------------------
Its:
ESTERLINE TECHNOLOGIES CORP., a corporation
By: /s/ Stephen R. Larson
------------------------------------
Its: Group VP
By: /s/ R. W. Stevenson
------------------------------------
Its: EVP & CFO
<PAGE> 41
EXHIBIT A-1
(Legal Description of
Build-to-Suit Parcel)
ALL OF PARCELS 4, 5 AND 18 OF PARCEL MAP NO. 20839 IN THE UNINCORPORATED
TERRITORY OF THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA. AS SHOWN ON MAP
FILED IN BOOK 273 PAGES 38 TO 43, INCLUSIVE, OF PARCEL MAPS, RECORDS OF SAID
COUNTY.
SAID LAND IS SHOWN AS PARCEL 3 OF CERTIFICATE OF COMPLIANCE FOR LOT LINE
ADJUSTMENT RECORDED NOVEMBER 14, 1996 AS INSTRUMENT NO. 96-1846305.
(Subject to minor lot line adjustment that is approved by Buyer and Seller
pursuant to the Agreement.)
RESERVING THEREFROM all rights, title and interest in and to minerals,
oil, gas, tars, hydrocarbons, and metalliferous substances of every kind, and
wells of every kind, together with the right to drill, pump or mine for same,
without, however, the right to drill or mine through the surface or the upper
500 feet of the subsurface of said property.
ALSO EXCEPTING and reserving therefrom all rights to subsurface waters,
and to water, aquifers, reservoirs, and wells of every kind, including, but not
limited to, the right to take, use and develop for use any and all water that
may now exist or may hereafter exist under said land, including the right to
drill, explore pump for same without, however, the right to drill or pump
through the surface or the upper fifty feet (50') of the subsurface of the
lands hereinabove.
<PAGE> 42
EXHIBIT A-2
(Legal Description of
Expansion Parcel)
PARCEL 3 OF PARCEL MAP NO. 20839, IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS PER MAP FILED IN BOOK 273 PAGES 38 TO 43 INCLUSIVE OF PARCEL
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
(Subject to minor lot line adjustment that is approved by Buyer and Seller
pursuant to the Agreement.)
RESERVING THEREFROM all rights, title and interest in and to minerals,
oil, gas, tars, hydrocarbons, and metalliferous substances and wells of every
kind, together with the right to drill, pump or mine for same, without,
however, the right to drill or mine through the surface or the upper 500 feet
of the subsurface of said property.
ALSO EXCEPTING and reserving therefrom all rights to subsurface waters,
and to water, aquifers, reservoirs, and wells of every kind, including, but not
limited to, the right to take, use and develop for use any and all water that
may now exist or may hereafter exist under said land, including the right to
drill, explore and pump for same, without, however, the right to drill or pump
through the surface or the upper fifty feet (50') of the subsurface of the
lands hereinabove.
<PAGE> 43
EXHIBIT B
WORK LETTER AGREEMENT
This Work Letter Agreement dated as of February 13, 1997 between The
Newhall Land and Farming Company (a California Limited Partnership), as Seller,
and TA MFG Company, a California corporation, as Buyer ("Work Letter
Agreement") supplements the Purchase and Sale Agreement (the "Purchase
Agreement"), dated and executed concurrently herewith, by and between Seller
and Buyer, covering certain property (the "Property") described in the Purchase
Agreement. All terms not defined herein shall have the same meaning as set
forth in the Purchase Agreement.
1. Construction.
1.1 Seller's Work, Seller shall construct, through the architect, or such
other architect (the "Architect") as may be selected by Seller and through its
general contractor, Oltmans Construction Company, or such other contractor as
may be selected by Seller, a parking lot with sufficient parking to comply with
current building codes, landscaping and all work required to bring utilities
from the street to the interior perimeter of the Building, (the "Site Work
Improvements") and the Building shell and roof, all in accordance with the
outline specifications attached hereto as Schedule 1 to this Exhibit "B"
(collectively "Building Shell Improvements") and such other work (the "Interior
Improvements") as specifically set forth on Schedule 2 of this Exhibit "B" and
pursuant to the plans and specifications (collectively the "Final Plans")
finally approved by Seller and Buyer pursuant to Paragraph 2 below. All
Building Shell Improvements, Site Work Improvements and Interior Improvements
set forth on Schedules 1 and 2 shall be constructed by Seller pursuant to this
Work Letter and shall be together referred to as "Seller's Work" or the
"Improvements."
1.2 Buyer's Work. During a period of time after substantial completion of
the Building Shell Improvements but prior to completion of the Interior
Improvements or the Site Work Improvements (the "Early Possession Period"),
Buyer shall have the right to enter the Property to furnish and install within
the Property those items of personal property, trade fixtures, equipment,
furniture, and furnishings (collectively "Buyer's Work") in compliance with all
applicable codes and regulations, and at Buyer's sole cost and expense,
provided such installation shall not interfere with the construction or
completion of Seller's Work and provided Buyer obtains and maintains the
insurance required by this Agreement naming Seller and its general contractor
as additional insureds prior to any such entry. Buyer and Seller shall
cooperate with each other in scheduling Buyer's Work and Seller's Work;
provided, however, the performance of Seller's Work shall be given preference
if there is a conflict in the scheduling of Seller's work and Buyer's Work.
Buyer shall comply with reasonable construction rules and regulations that may
be adopted by Seller's general contractor from time to time. During such time
period, Buyer's obligation to pay insurance premiums and any other costs and
expenses payable by Buyer pursuant to the terms of this Work Letter Agreement
or the Purchase Agreement shall commence, Seller shall cause its general
contractor to name Buyer as an additional insured on the Builder's All Risk
insurance policy that the general contractor obtains at no additional cost or
expense to Seller.
<PAGE> 44
1.3 Construction Representatives. Seller hereby appoints the following
person(s) as Seller's representatives ("Seller's Representative") to act for
Seller in all matters covered by this Exhibit "B": Scott Sheridan and Steve
Kessler. Buyer hereby appoints the following person as Buyer's representative
("Buyer's Representative") to act for Buyer in all matters covered by this
Exhibit "B": . All inquires, requests, instructions, authorizations and other
communications with respect to the matters covered by this Exhibit "B" shall be
made to Seller's Representative or Buyer's Representative, as the case may be.
Either party may change its representative under this Exhibit "B" at any time
by written notice to the other Party.
1.4 Delays. The target date for the Closing Date is February 21, 1998,
subject to extension if approved by Buyer and Seller during Buyer's Review
Period if the date for substantial completion of the Improvements set forth in
the construction schedule that is approved by Buyer and Seller during Buyer's
Review Period is a date after February 21, 1998, at which time Buyer's
obligation to pay the Purchase Price and any other costs and expenses payable
by Buyer pursuant to the terms and conditions of the Purchase Agreement shall
be due and owing, which date shall be extended for one (1) day for each day
that Seller is actually delayed in substantially completing Seller's Work
because of (i) "Force Majeure Delays" and (ii) up to thirty (30) days of
"Seller Delays". In no event shall the Closing Date be delayed as a result of
Buyer's Delays. The substantial completion of Seller's Work shall be deemed to
have occurred upon the substantial completion of the construction of the items
described as Seller's Work in this Work Letter Agreement (other than punchlist
items) as certified to Seller and Buyer by the Architect and general
contractor. Buyer shall provide any necessary assistance toward the efforts of
Seller to obtain any governmental approvals necessary to allow Seller to
legally commence the installation of Seller's Work within the Property. Any
Force Majeure Delays shall be agreed upon by Seller's Representative and
Buyer's Representative. In the event that they are unable to agree, the delay
issue shall be submitted to arbitration in accordance with Article XII of the
Purchase Agreement.
1.5 Force Majeure Delays. As used herein, the term "Force Majeure Delay"
shall mean delays in the construction and completion of Seller's Work which
were actually and directly caused by strikes, lockouts, labor disputes, acts of
God, severe weather, fire, floods, earthquake, epidemics, freight embargoes,
unavailability of materials and supplies, development moratoria imposed by any
governmental authority, permitting and processing approvals from the building,
safety and other governmental authorities or departments or other causes beyond
the reasonable control of Seller or its contractors, subcontractors or
suppliers.
1.6 Buyer Delays. As used herein, "Buyer Delays" shall mean any delay in
the substantial completion of Seller's Work which is actually and directly
caused by all or any of the following:
(a) Buyer's failure to respond to any requests for approval of
the plans contemplated by Paragraph 2 of this Exhibit "B" within
two (2) business days after request by Seller in writing to Buyer;
(b) Buyer's interference through its contractors or otherwise, with
Seller's Work prior to the delivery of Seller's Work to Buyer;
<PAGE> 45
(c) Changes in the plans and specifications for Seller's Work after
approval of any such plans and specifications by Seller and Buyer, which
changes are requested by Buyer; and
(d) Any other act or failure to act by Buyer, its agents or
contractors which delays the substantial completion of Seller's Work.
1.7 Seller Delay. As used herein, the term "Seller Delay" shall mean any
delay in substantial completion of Seller's Work which is actually and directly
caused by all or any of the following:
(a) Seller's failure to respond to any request for approval of the
Space Plans or Buyer's Plans within two (2) business days after request
by Buyer in writing to Seller;
(b) Seller's failure to provide Buyer or Buyer's Representative any
necessary access to the Property;
(c) Seller's failure to substantially complete Seller's Work and
deliver the Property to Buyer by February 21, 1998, as such date may be
extended by Buyer and Seller's approval of the construction schedule,
Force Majeure Delays and Buyer's Delays described in Subparagraph 1.4 and
1.6 hereinabove; and
(d) Any other act or failure to act by Seller, its subcontractors
or contractors which delays the substantial completion of Seller's Work.
Notwithstanding anything to the contrary contained in the foregoing Seller
Delay shall not include any delay caused by the Architect in preparing,
revising or submitting Buyer's Interior Plans, Buyer's Plans or Buyer's Final
Plans for the Interior Improvements.
2. Plans for Construction and Design
<PAGE> 46
2.1 Construction Plans for Seller's Work. Seller shall engage Oltmans
Construction Company, as Seller's general contractor for Seller's Work. Buyer
shall have the right to require that Seller's general contractor obtain a
minimum of three (3) competitive bids from the major trades for the Building
Shell Improvements and Site Work Improvements (other than concrete work) and
Interior Improvements. Major trades shall include, but not be limited to,
heating, ventilating and air conditioning, plumbing, electrical, interior
framing, painting and elevator contractor. Concrete work will be performed by
the general contractor. Except for the office layout on the mezzanine level and
the office finishes, Buyer and Seller agree that the construction contract and
such major trade subcontracts may be entered into by Seller on a design-build
basis to fast-track the construction process. Seller shall list on Schedule 3
attached hereto prior to commencement of Seller's Work the engineers who will
be used by Seller for Seller's Work, any of whom may be engaged by Buyer to
install Buyer's Work without the prior approval of Seller. Seller agrees to
furnish to Buyer (a) schematic and design development plans and specifications
for the construction of the Building Shell Improvements and Site Work
Improvements, which plans and specifications ("Building Shell Plans" and "Site
Work Plans," as applicable) shall be a reasonable promulgation of the outline
specifications attached as Schedule 1 hereto and (b) schematic and space plans
("Interior Plans") for the Interior Improvements, which Interior Plans shall be
reasonably acceptable to Seller and Buyer and a description shall be attached
hereto as Schedule 2. Concurrently with Seller's delivery of Building Shell
Plans, Site Work Plans and Interior Plans to Buyer, Seller shall also deliver
to Buyer an initial estimate of the Work Cost of the Improvements which shall
be itemized for each major trade or subcontract. Buyer shall not unreasonably
withhold, condition or delay its approval of the Building Shell Plans, Interior
Plans, Site Work Plans or the estimated Work Cost of the Improvements. To the
extent Buyer disapproves of any portion of the Building Shell Plans, Site Work
Plans, Interior Plans and/or the estimated Work Cost of the Improvements, Buyer
shall advise Seller in writing of such disapproval and the reasons therefor.
Seller shall then submit to Buyer for Buyer's reasonable approval, a redesign
of Building Shell Plans, Interior Plans, Site Work Plans and/or the estimated
Work Cost of the Improvements, incorporating those revisions required by Buyer,
which approval shall be granted or withheld by written notice to Seller
delivered not later than two (2) business days following Buyer's receipt of the
revised Building Shell Plans, Interior Plans, Site Work Plans or estimated Work
Cost of the Improvements, as appropriate. The foregoing process shall continue
until the Building Shell Plans, Interior Plans, Site Work Plans and the
estimated Work Cost of the Improvements are approved by Buyer. Subject to
extension for Force Majeure Delays and Buyer Delays, Buyer and Seller shall
agree upon a schedule for reviewing and approving the Building Shell Plans,
Interior Plans, Site Work Plans and estimated Work Cost of the Improvements
during Buyer's Review Period. Building Shell Plans and Site Work Plans, as
finally approved shall be referred to herein as "Seller's Final Plans." Any
dispute with respect to Seller's Plans, Seller's Final Plans, Interior Plans,
Buyer's Plans, Buyer's Final Plans or the estimated Work Cost of the
Improvements which shall not be resolved by Seller and Buyer shall be submitted
to one of the 3 architects listed on Schedule 4 and selected by Seller, for
resolution within two (2) business days from the date of submission.
<PAGE> 47
2.2 Preparation of Interior Plans. Based on the approved Interior Plans,
the Architect, in consultation with Seller's engineers, shall prepare
architectural plans, drawings and specifications and the Architect or a
qualified, licensed mechanical and/or electrical engineer shall prepare
engineering, mechanical, structural and electrical working drawings for
portions of the Interior Improvements or phases of the build-out of the
Interior Improvements ("Interior Plans"). The Interior Plans shall ultimately
show: (a) the subdivision (including partitions and walls), layout lighting and
finish desired by Buyer for the Property; and (b) all internal and external
communications and utility facilities which will require conduiting or other
improvements from the Building Shell. Interior Plans shall be delivered to
Seller and Buyer not later than forty-five (45) days after final approval of
the Buyer design development plans, and shall be approved in the same manner as
provided in Subparagraph 2.1 above for approval of Buyer's space plans, but in
no event shall the final approval of the plans occur later than the date
specified on the Work Schedule attached hereto as Schedule 5, subject to
extension for Force Majeure Delays and Buyer Delays. Buyer acknowledges that
the parties intend for Seller to construct Seller's Work on a
build-to-suit/design build basis, and that Buyer may periodically submit to
Seller for Seller's review and approval partial working drawings, working
drawings in various stages of completion, and modifications to the previously
submitted Buyer's Plans. Seller shall review and approve or disapprove such
partial or incomplete working drawings or changes thereto as promptly as
possible, and in any event within two (2) business days of Seller's receipt of
the same. Seller agrees to use due diligence and good faith to respond to
requests by Buyer for approval of the Interior Plans or any portions thereof or
changes thereto as soon as reasonably possible, including where possible sooner
than the two (2) business day period provided for in this Subparagraph 2.2;
provided, however, for purposes of determining Seller Delays, Seller shall have
the full two (2) business day period in which to respond to any such request
for approval.
2.3 Requirements of Buyer's Final Plans. The Interior Plans as finalized
and approved by Seller ("Buyer's Final Plans") shall include locations and
complete dimensions, and shall: (a) be compatible with the Building Shell and
with the design, construction and equipment of the Building; (b) comply with
all applicable insurance regulations for a fire resistant building of the type
described in Schedule 1 hereto; and (c) be consistent with the scope of the
work for the Interior Improvements set forth in the Interior Plans; (d) comply
with all applicable laws and ordinances, and the rules and regulations of all
governmental authorities having jurisdiction. The provisions of clauses
2.3(b) and (d) shall also apply to the Seller's Final Plans described in
Subparagraph 2.1 above.
<PAGE> 48
2.4 Approvals. Seller shall be solely responsible for obtaining approval
of Seller's Final Plans and Buyer's Final Plans by (i) the County of
Los Angeles, (ii) any other governmental agencies having jurisdiction including
all necessary permits and the temporary and permanent certificate of occupancy
(or other required, equivalent approval from the local governmental authority
permitting occupancy of the Improvements); provided, however, Buyer shall be
responsible for obtaining approval from the SCAQMD and any other environmental
permit relating to Buyer's use of Hazardous Materials, and Seller shall
cooperate with Buyer in obtaining such approvals, (iii) the Architectural
Review Committee under the Valencia Commerce Center Design Guideline, a current
copy of which has been delivered to Buyer, and (iv) the Architectural Review
Committee Approving Agent under the Valencia Commerce Center Declaration of
Covenants, Conditions and Restrictions, to be recorded. Buyer shall be solely
responsible for obtaining approval of Buyer's business operations contemplated
to be conducted in the Property by (i) the County of Los Angeles, and (ii) any
other governmental agencies, including the Environmental Protection Agency, and
SCAQMD, having jurisdiction, including all necessary permits and temporary and
permanent licenses such as, by way of illustration and limitation, any
licenses, permits or approvals necessary to install or operate any
manufacturing equipment or to store, manufacture or dispose of the supplies,
equipment or waste products related to manufacturing, distributing or storing
material or that are necessary to discharge non-hazardous waste product of
Buyer's operations in the Premises into the sewer system servicing the
Improvements. Buyer shall deliver certified copies of all such permits,
approvals and certificates within ten (10) days of Buyer's receipt thereof, and
in any event not later than thirty (30) days following Buyer's commencement of
business operation from the Property. Seller shall reasonably cooperate with
Buyer in obtaining such approvals. Seller shall promptly provide to Buyer a
record set of Seller's Final Plans, the space plans and Buyer's Final Plans, a
copy of the Building Department submittal, all permits related to Seller's
Final Plans and Buyer's Final Plans, and a set of as-built drawings for the
Interior Improvements and an as-built survey of the Property following
substantial completion of the Improvements.
3. Allowance for Seller's Work.
3.1 Allowance. Buyer shall be credited with an allowance ("Allowance") of
$1,043,000 against the cost of the Interior Improvements and such other costs
specified in the definition of Work Costs (as set forth in Paragraph 5 below)
for the Interior Improvements. The Allowance shall be used for the costs of
design, including the engineering plans and specifications, an as-built survey,
construction management, and construction of the Interior Improvements and
provides for construction of interior improvements of the quality and scope of
Seller's standard interior building improvements for industrial buildings in
Valencia Commerce Center. If the initial budget, delivered to Buyer pursuant to
Subparagraph 2.1 hereof, is more than the Allowance, Buyer shall deposit with
Seller the amount in excess of the Allowance at such times and in such amounts
as required pursuant to Subparagraph 3.2 of this Work Letter. If the final Work
Cost (after deducting any costs caused by Buyer Delays or changes in the scope
of work for which Buyer shall be responsible) of the Interior Improvements
exceeds the Allowance, Buyer shall pay for such excess amount. If any of the
final Work Cost is attributable to Buyer Delays or changes in the scope of work
requested by Buyer, Buyer shall be obligated to pay for such costs and such
costs shall not be properly paid out of the Allowance. If the final Work Cost
of the Interior Improvements is less than the Allowance, the difference shall
be credited against the Purchase Price for the account of Buyer at the Closing.
<PAGE> 49
3.2 Funding. Seller shall pay for the Work Cost of Seller's Work monthly
as construction of Seller's Work progresses; provided, however, after Seller
disburses the total amount of the Allowance for Interior Improvements; Buyer
shall pay for the remaining balance of the Work Cost of the Interior
Improvements monthly as construction progresses. Buyer shall also pay for all
increases in the Work Cost of Seller's Work arising from any Buyer Delays or
changes in the scope of Seller's Work requested by Buyer. The funding shall be
handled by Seller and Buyer in a commercially reasonable manner in order to
expedite the flow of funds to the contractor if all of the following conditions
are met:
(a) approval of the plans and specifications and construction costs
by Buyer and Seller,
(b) receipt of evidence of the obtaining by the contractors of
builder's all risk and other usual insurance,
(c) receipt of all necessary building permits for the construction
of Seller's Work, and all necessary authorizations of the County of Los
Angeles for the curb cuts and/or vehicular ingress and egress from the
Premises to Franklin Parkway or Braxton Avenue, as applicable,
(d) the certificate of Seller of the amounts then to be disbursed
together with copies of invoices of the applicable contractors and
suppliers and waivers of lien for the amounts to be disbursed, and
(e) the making of an inspection by the Buyer's Representative, who
shall approve all construction to date and the Seller's certificate as to
amounts to be disbursed.
Disbursements after the initial disbursement shall be conditioned upon
the approval by Seller and Buyer of all change orders and receipt by Seller of
lien waivers by all of the contractors and suppliers to be paid pursuant to
such disbursement for all work to the date of the prior months disbursement.
With regard to the final disbursement, the same shall also be conditioned upon
the delivery of (x) the temporary certificate of occupancy, certificate of
substantial completion by the Architect and general contractor and any other
necessary certificates of authorization for the temporary occupancy of the
Property, (y) a final survey showing the location of the improvements, and (z)
evidence of delivery of all contractors, suppliers, and manufacturer's
warranties.
4. Construction.
4.1 Contractor. Upon approval of Buyer's Interior Plans and Seller's
Plans, the general contractor shall submit an estimate of the Work Cost of
Seller's Work, including an itemization of the Work Cost of the Interior
Improvements. Promptly following Seller's and Buyer's approval of Seller's
Final Plans, Seller shall commence construction of Seller's Work. Seller shall
be solely responsible for the performance of the work constituting Seller's
Work to be performed by Seller's general contractor and any and all
subcontractors, suppliers and the like performing services for the general
contractor, unless Buyer requests changes in the scope of Seller's Work or
unless costs increase or problems arise from Buyer Delays, in which events,
Buyer shall be responsible for such increases in the Work Cost of Seller's
Work, including the Interior Improvements.
<PAGE> 50
4.2 Construction Schedule. Schedule 5 sets forth the Work Schedule for
Seller's Work and the actions that Buyer and Seller need to take in order to
timely complete Seller's Work. Prior to commencement of construction of any
Interior Improvements, Seller and the general contractor shall furnish to
Buyer's Construction Representative a schedule setting forth projected
completion dates and showing the projected approximate deadlines for any
actions required to be taken by Seller and Buyer, if any, during such
construction.
5. Work Cost. "Work Cost" means: (a) all design and engineering fees
incurred in connection with the preparation of Seller's Plans, Seller's Final
Plans, Buyer Space Plans and Buyer's Final Plans; (b) costs of permits, fees
and taxes for the Improvements; (c) the actual costs and charges for material
and labor, construction management, contractor's profit and contractor's
general overhead incurred by Seller in causing the completion of Seller's Work,
including the Interior Improvements pursuant to Seller's Final Plans, Buyer's
Final Plans and any change orders which have been approved by Buyer in writing,
or approved as a field change by Buyer's Construction Representative identified
in Subparagraph 1.3 above; (d) such other costs and expenses set forth in
Schedule 6 hereof which sets forth the preliminary budget of the Work Cost; (e)
the general contractor's builder's all-risk extended coverage policy of
casualty insurance which shall name Seller and Buyer as additional insureds;
and (f) all other costs expended in the construction of Seller's Work pursuant
to the approved Seller's Final Plans, Buyer's Final Plans and any change orders
which have been approved by Buyer in writing, or approved as a field change by
Buyer's Construction Representative identified in Subparagraph 1.3 above. For
purposes of determining whether Seller has fully disbursed the Allowance for
Work Cost of Interior Improvements pursuant to Subparagraph 3.2 of this Work
Letter, the Work Cost of the Interior Improvements shall be separately itemized
by the general contractor and Architect and shall include items (a) to (c), and
(e) and (f) of this paragraph 5. If Seller paid any sum that Buyer is
responsible for paying under this Work Letter Agreement, the Purchase Price
shall be increased pursuant to Article III of the Purchase Agreement.
6. Outside Date.
If Seller is unable to deliver Seller's Work as substantially completed
pursuant to Seller's Final Plans and Buyer's Final Plans by February 21, 1998,
or such later date as is set forth in the construction schedule that is
approved by Buyer and Seller during Buyer's Review Period, as such date is
extended by Seller Delays for up to thirty (30) days or by Force Majeure Delays
but in no event beyond October 31, 1998 (the "Outside Date"), then, Buyer shall
have the right to terminate this Purchase Agreement, as its sole and exclusive
remedy, by delivery to Seller of written notice not later than the Outside
Date. In no event shall Buyer have the right to extend the Closing Date or
terminate the Purchase Agreement as a result of Buyer Delays. If Seller fails
to substantially complete the Seller's Work required by the terms of
Subparagraph 1.1 of this Work Letter Agreement within thirty (30) days after
receipt of Buyer's notice of termination, then Buyer shall have the right,
effective at the end of such thirty (30) day grace period, to terminate the
Purchase Agreement by delivering a final notice of termination within (30) days
thereafter.
<PAGE> 51
7. Additional Deposits. The Architect and general contractor shall
periodically issue certificates of substantial completion of the applicable
phase of construction when: (i) the concrete tilt-up walls have been
constructed; (ii) the Building Shell Improvements have been substantially
completed and (iii) the Improvements have been substantially completed, as
applicable. Upon receipt of each such certificate of substantial completion of
the applicable phase of construction, Buyer shall promptly pay the Additional
Deposits to Escrow Agent in accordance with the Purchase Agreement.
8. Buyer's Insurance. Prior to Buyer's entry onto the Property during
Buyer's Early Possession Period, Buyer shall procure and maintain comprehensive
general liability insurance, including blanket contractual liability, broad
form of property damage, personal injury, automobile liability in an amount of
not less than Five Million Dollars ($5,000,000) with a combined single limit
for both property damage and personal injury on an occurrence basis and naming
Seller and the general contractor as additional insureds and issued by an
insurance company licensed to do business in California with a best insurance
guide rating of A/X. 9. Schedules. Schedules 1 through 6, as attached hereto,
are incorporated by reference herein.
"SELLER"
THE NEWHALL LAND & FARMING COMPANY,
a California limited partnership
By: NEWHALL MANAGEMENT LIMITED PARTNERSHIP,
a California limited partnership
its Managing General Partner
By: NEWHALL MANAGEMENT CORPORATION,
a California corporation,
its Managing General Partner
By: /s/ Thomas Dierckman
------------------------------------
Its: Senior Vice President
Dated: 2/18/97
By: /s/ James S. Backer
------------------------------------
Its: Asst Secretary
Dated: 2/18/97
"BUYER"
TA MFG COMPANY, a California corporation
By: /s/ George M. Jones
------------------------------------
Its: President
Dated: 2/3/97
<PAGE> 52
By:
------------------------------------
Its:
Dated:
and
ESTERLINE TECHNOLOGIES CORP., a corporation
By: /s/ Stephen R. Larson
------------------------------------
Its: Group VP
Dated: 2/3/97
By: /s/ R.W Steveson
------------------------------------
Its: EVP & CFO
Dated: 2/3/97
<PAGE> 53
EXHIBIT E
(Non-Foreign Investor Affidavit)
AFFIDAVIT
I. The undersigned is an Assistant Secretary of THE NEWHALL LAND AND
FARMING COMPANY (a California Limited Partnership), a California limited
partnership;
II. THE NEWHALL LAND AND FARMING COMPANY (a California Limited
Partnership) is not a foreign individual, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in
the Internal Revenue Code and Income Tax Regulations);
III. The U.S. employer identification number of THE NEWHALL LAND AND
FARMING COMPANY (a California Limited Partnership) is 95-3931727;
IV. THE NEWHALL LAND AND FARMING COMPANY'S office address is
23823 Valencia Boulevard, Valencia, California 91355;
V. The undersigned understands and acknowledges that this affidavit may
be disclosed to the Internal Revenue Service by TA MFG Company, a corporation
("Buyer") in connection with that certain Purchase and Sale Agreement dated as
of February 13, 1997, by and between TA MFG, a California corporation, as
Buyer, and THE NEWHALL LAND AND FARMING COMPANY (a California Limited
Partnership), a California limited partnership, as Seller, as evidence of
Buyer's compliance with Section 1445 of the Internal Revenue Code. The
undersigned understands that any false statements contained herein could be
punished by fine or imprisonment or both.
The undersigned certifies under penalty of perjury that the foregoing is
true and correct.
Dated as of this 11th day of May, 1998 at Valencia, California.
THE NEWHALL LAND AND FARMING COMPANY
(a California Limited Partnership)
By: /s/ Daniel N. Bryant
------------------------------------
Assistant Secretary
<PAGE> 54
FIRST AMENDMENT TO
INDUSTRIAL AND BUILD-TO-SUIT
PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO INDUSTRIAL AND BUILD-TO-SUIT PURCHASE AND SALE
AGREEMENT ("First Amendment") is made and entered into as of the 18th day of
March, 1997 by and between THE NEWHALL LAND AND FARMING COMPANY, a California
limited partnership ("Seller"), on the one hand, and ESTERLINE TECHNOLOGIES
CORP., a corporation, and TA MFG. COMPANY, a California corporation, on the
other hand (collectively, "Buyer"), with reference to the following facts:
A. Seller and Buyer entered into that certain Industrial and
Build-to-Suit Purchase and Sale Agreement dated as of January 31, 1997
("Purchase Agreement"), pursuant to which Seller agreed to sell to Buyer and
Buyer agreed to purchase from Seller certain real property ("Property") in the
Valencia Commerce Center located in the County of Los Angeles, State of
California, and more particularly described in the Purchase Agreement.
B. During its due diligence investigation of the Property, Buyer as
noted several items of concern regarding land use that have caused it to
request a limited purpose extension of the "Buyer's Review Period" provided for
in the Purchase Agreement.
C. Seller has agreed to modify the Purchase Agreement to allow for
such extension of the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants
and conditions hereinafter set forth, the parties hereto agree as follows:
1. Defined Terms. Except as otherwise indicated, capitalized terms in
this First Amendment shall have the same meaning as in the Purchase Agreement.
2. Extension.
The end of Buyer's Review Period is hereby extended from March 18, 1997
until April 7, 1997 to allow Buyer to finalize its review of various land use,
zoning, and planning issues. Other than land use, zoning, and planning issues,
Buyer hereby acknowledges that all other due diligence matters have been
approved by Buyer. Seller agrees to cooperate in all reasonable respects with
such review efforts.
3. Miscellaneous.
(a) Continuing Effectiveness of Purchase Agreement. Except as expressly
modified by this First Amendment, the Purchase Agreement shall continue
unmodified and in the full force and effect, and this First Amendment shall be
subject to all of the unmodified terms of the Purchase Agreement, which hereby
are hereby incorporated by this reference.
(b) Counterparts and Execution. This First Amendment may be executed in
multiple counterparts, each of which shall be deemed an original First
Amendment, but all of which constitute one (1) First Amendment, binding on the
parties hereto. The signature of any party hereto to any counterpart hereof
shall be deemed a signature to, and any be appended to, any other counterpart.
<PAGE> 55
(c) Applicable Law. This First Amendment shall be governed by and
construed in accordance with the laws of the State of California.
(d) Entire Agreement Modification. This First Amendment contains the
entire understanding among the parties hereto and supersedes any prior or
contemporaneous understanding, correspondence, negotiations, or agreements
between them respecting the within subject matter. No alteration, modification
or interpretation of this First Amendment shall be binding unless in writing
and signed by all parties.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the date and year first written above.
"SELLER"
THE NEWHALL LAND & FARMING COMPANY,
a California limited partnership
By: NEWHALL MANAGEMENT LIMITED PARTNERSHIP,
a California limited partnership
its Managing General Partner
By: NEWHALL MANAGEMENT CORPORATION,
a California corporation,
its Managing General Partner
By: James E. Brown
-------------------------------------------
Its: Vice President
Dated: 3/27/97
By:
-------------------------------------------
Its:
Dated:
"BUYER"
TA MFG COMPANY, a California corporation
By: /s/ George M. Jones
-------------------------------------------
Its: President
Dated: 3/27/97
And
ESTERLINE TECHNOLOGIES CORP., a corporation
By: /s/ R. W. Stevenson
-------------------------------------------
Its: EVP & CFO
Dated: 3/27/97
<PAGE> 56
SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT (the "Amendment") to Industrial and Build-to-Suit
Purchase and Sale Agreement is dated as of August 18, 1997 and is entered into
by and between The Newhall Land and Farming Company (a California limited
Partnership), as Seller, and Esterline Technologies Corp., a Corporation and TA
MFG Company, a California corporation, collectively as Buyer.
RECITALS
A. Buyer and Seller entered into that certain Industrial and
Build-to-Suit Purchase and Sale Agreement dated as of January 31, 1997
("Original Agreement").
B. Buyer and Seller entered into an amendment to the original
Agreement dated as of March 18, 1997 to extend Buyer's Review Period to
April 7, 1997 (the "First Amendment").
C. Buyer and Seller desire to amend the Original Agreement and First
Amendment with this Amendment (collectively the "Agreement").
NOW, THEREFORE, in consideration of the terms, covenants and conditions
set forth in the Agreement, the adequacy and sufficiency of which are hereby
acknowledged, Buyer and Seller hereby agree as follows:
1. Due Diligence Period. Buyer's Review Period has expired and Buyer
has received and approved the Title Report for the Property (and underlying
exceptions shown in the Title Report), zoning for the Property, Buyer's due
diligence and the Delivery Items, a description of which is attached hereto as
Exhibit A and the form of sideyard agreement to be reserved by Seller, the form
of which is attached hereto as Exhibit B. Seller has caused or shall cause its
architect to submit plans that disclose and permit the future construction of a
fence at the top of the slope within the side-yard area. Buyer shall be
responsible for the installation of any fence Buyer requires at the top of the
slope located within the sideyard area. Seller shall not withhold its approval
of the fence as long as Buyer's fence complies with the Valencia Commerce
Center Design Guidelines and Buyer obtains the approval of the Architectural
Review Committee with respect to aesthetic compatibility and Buyer complies
with all applicable permits and approvals regarding the construction of the
fence. The sideyard agreement is included within the definition of Permitted
Exceptions.
2. Work Letter Agreement. The Work Letter Agreement attached as
Exhibit B to the Original Agreement is hereby amended as follows:
a. The construction schedule attached as Schedule 5 to the Work Letter
Agreement is superseded and replaced in its entirety with the construction
schedule attached to this Amendment as Exhibit C;
b. Attached as Exhibit D to this Amendment is the list of pre-approved
engineers to be attached as Schedule 3 to the Work Letter Agreement;
c. Attached as Exhibit E to this Amendment is a preliminary budget of the
Work Cost to be attached as Schedule 6 to the Work Letter Agreement;
<PAGE> 57
d. Attached hereto as Exhibit F is a description of the Interior Plans to
be attached as Schedule 2 to the Work Letter Agreement;
e. Section 1.4 of the Work Letter Agreement is hereby amended to extend
the targeted Closing Date from February 21, 1998, to March 19, 1998;
f. Sections 1.7(c) and 6 of the Work Letter Agreement are hereby amended
by extending the date for substantial completion of Seller's Work from
February 21, 1998 by the number of days of force majeure delay in obtaining the
building permit for the Building Shell Improvements; and
g. Buyer and Seller acknowledge that no Buyer Delays or Seller Delays
have occurred as of the date of this Amendment and that 28 days of force
majeure delays have occurred as of August 18, 1997 in obtaining the building
permit for the Building Shell Improvements.
3. Governmental Approval. Section 3.02A of the Original Agreement is
hereby amended to extend the date for Seller to obtain a building permit for
the Building Shell Improvements from July 21, 1997 to August 22, 1997, provided
Seller shall exercise due diligence to obtain the building permit as soon as
possible.
4. Closing Date. Section 4.01 of the Original Agreement is hereby
amended to extend the Closing Date from February 21, 1998 by the number of days
of force majeure delays in obtaining the building permit for the Building Shell
Improvements from July 21, 1997. For example, if the building permit for the
Building Shell Improvements is obtaining on August 18, 1997, there are 28 days
of force majeure delays, and the Closing Date would be extended to
March 21, 1997.
5. Closing Costs. Section 4.02A of the Original Agreement is hereby
amended to provide that Buyer and Seller shall each pay one-half (1/2) of the
premium charged by the Title Company for issuance of a zoning endorsement to
the Title Policy.
6. Definitions. Except as expressly provided otherwise in this
Amendment, all capitalized terms used in this Amendment shall have the meanings
given to them in the Original Agreement.
7. Non-Impairment. Except as expressly amended by this Amendment, the
Agreement remains unmodified and remains in full force and effect. This
Amendment supersedes the April 18, 1997 letter of TA MFG Company and the
July 8, 1997 letter of Serena Schourup, Esq. of Bogle & Gates LLP (counsel for
Buyer) in their entirety.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date written above.
"SELLER"
THE NEWHALL LAND & FARMING COMPANY, a California limited partnership
By: NEWHALL MANAGEMENT LIMITED PARTNERSHIP,
a California limited partnership
its Managing General Partner
<PAGE> 58
By: NEWHALL MANAGEMENT CORPORATION,
a California corporation,
its Managing General Partner
By: /s/ Thomas Dierckman
-------------------------------------------
Its: Senior Vice President
Dated: 9/2/97
By: /s/ Daniel N. Bryant
-------------------------------------------
Its: Vice President
Dated: 9/2/97
"BUYER"
TA MFG COMPANY, a California corporation
By: /s/ George M. Jones
-------------------------------------------
Its: President
Dated: 3/27/97
And
ESTERLINE TECHNOLOGIES CORP., a corporation
By: /s/ R. W. Stevenson
-------------------------------------------
Its: EVP & CFO
Dated: 3/27/97
<PAGE> 59
EXHIBIT "A"
(Delivery Items)
1. Sideyard Setback Plan prepared by Sikand Engineering;
2. Environmental Site Assessment Report dated as of August 12, 1996 prepared
by Agra;
3. Report of Observation and Testing Rough Grading dated as of
April 17, 1996 prepared by R.T. Frankian;
4. Report of Revised Grading Plan Review dated as of April 23, 1996 prepared
by R.T. Frankian;
5. Lot Line Adjustment Maps 101,501 and 101,524 prepared by Sikand
Engineering.
6. Letter from Los Angeles County Department of Regional Planning to Dennis
Miller dated April 7, 1997 regarding Parcel Map 20839, Zone Change,
Conditional Use Permit, Local Plan Amendment for Valencia Commerce
Center.
7. Certificate of Compliance for Lot Line Adjustment Maps 101,524 and
101,501.
8. Preliminary title Report dated January 8, 1997 (Order No.
007125000 - x22) and under-lying documents, including Valencia Commerce
Center Declaration of Covenants, Conditions and Restrictions dated as of
August 26, 1996 and recorded on September 16, 1996, as
Instrument No. 96 1516213 in the Los Angeles County Recorder's Office.
9. First Amendment to Valencia Commerce Center Declaration of Covenants,
Conditions and Restrictions dated as of July 21, 1997.
10. Valencia Commerce Center Design Guidelines dated as of June 1, 1993 and
prepared by HRP LanDesign.
<PAGE> 60
EXHIBIT "F"
(Schedule 2/Description of Interior Improvements)
Project Name: TA Manufacturing Company Esterline Corporation
Architect: Hill Pinckert Architects Inc
16969 Von Karman Avenue, Suite 230
Irvine, CA 92606
Project No. 96229
Drawn By: Francis Wang
Date: May 10, 1997
Sheets: A0.1
A1.1
A2.1
A2.2
A2.3
A3.1
A3.2
<PAGE> 61
ESTERLINE TECHNOLOGIES CORPORATION
Computation of Basic and Diluted Earnings Per Common Share
For the Three and Nine Months Ended July 31, 1998 and 1997
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
July 31, July 31,
-------------------- --------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Basic:
- ------
Net Earnings $ 7,919 $ 6,925 $ 20,667 $ 17,286
======== ======== ======== ========
Weighted Average Number of Common Shares
Outstanding 17,289 17,150 17,287 17,082
======== ======== ======== ========
Net Earnings per Common Share - Basic $ .46 $ .40 $ 1.20 $ 1.01
======== ======== ======== ========
Diluted:
- --------
Net Earnings $ 7,919 $ 6,925 $ 20,667 $ 17,286
======== ======== ======== ========
Weighted Average Number of Common Shares
Outstanding 17,289 17,150 17,287 17,082
Net Shares Assumed to be Issued for Stock
Options 458 466 433 486
-------- -------- -------- --------
Weighted Average Number of Common Shares
and Common Equivalent Shares Outstanding 17,747 17,616 17,720 17,568
======== ======== ======== ========
Net Earnings per Common Share - Diluted $ .45 $ .39 $ 1.17 $ .98
======== ======== ======== ========
</TABLE>
All per share data reflect the two-for-one stock split for shareholders of
record on March 31, 1998 and effective April 20, 1998.
<PAGE> 62
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule Contains Summary Financial Information Extracted From the Esterline
Technologies Corporation Consolidated Balance Sheet at July 31, 1998 and the
Related Consolidated Statements of Operations for the Nine Months then Ended and
is Qualified in its Entirety by Reference to Such Financial Statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1998
<PERIOD-START> NOV-01-1997
<PERIOD-END> JUL-31-1998
<CASH> 24,443
<SECURITIES> 0
<RECEIVABLES> 69,128
<ALLOWANCES> 2,716
<INVENTORY> 68,351
<CURRENT-ASSETS> 175,112
<PP&E> 192,658
<DEPRECIATION> 117,625
<TOTAL-ASSETS> 306,318
<CURRENT-LIABILITIES> 99,454
<BONDS> 21,443
0
0
<COMMON> 3,458
<OTHER-SE> 181,963
<TOTAL-LIABILITY-AND-EQUITY> 306,318
<SALES> 321,172
<TOTAL-REVENUES> 321,172
<CGS> 198,265
<TOTAL-COSTS> 198,265
<OTHER-EXPENSES> 90,503
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 904
<INCOME-PRETAX> 31,500
<INCOME-TAX> 10,833
<INCOME-CONTINUING> 20,667
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,667
<EPS-PRIMARY> 1.20<F1>
<EPS-DILUTED> 1.17<F1>
<FN>
<F1> All per share data reflect the two-for-one stock split for shareholders
of record on March 31, 1998 and effective April 20, 1998. Prior Financial
Data Schedules have not been restated for the stock split.
</FN>
</TABLE>
