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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
MISSION WEST PROPERTIES
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
60520010-4
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(CUSIP Number)
Michael Knapp, Secretary, Berg & Berg Enterprises, Inc.
10050 Bandley Drive, Cupertino, CA 95014
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with a copy to:
Alan B. Kalin, Esq., Graham & James LLP
600 Hansen Way, Palo Alto, CA 94304-1043; (415) 856-6500
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May 27, 1997
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act, but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 60520010-4
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Berg & Berg Enterprises, Inc.
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
WC
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
California
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Number of Shares (7) Sole Voting Power
Beneficially Owned 6,000,000
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting Power
0
--------------------------------------------------
(9) Sole Dispositive Power
6,000,000
--------------------------------------------------
(10) Shared Dispositive Power
0
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,000,000
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row 11
79.65%
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(14) Type of Reporting Person (See Instructions)
CO
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CUSIP No. 60520010-4
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Berg & Berg Developers
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(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
Not Applicable
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
California
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power
Beneficially Owned
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting Power
6,000,000
--------------------------------------------------
(9) Sole Dispositive Power
--------------------------------------------------
(10) Shared Dispositive Power
6,000,000
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,000,000
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row 11
79.65%
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(14) Type of Reporting Person (See Instructions)
PN
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CUSIP No. 60520010-4
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Carl E. Berg
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(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) / /
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(3) SEC Use Only
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(4) Source of Funds*
Not Applicable
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
USA
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Number of Shares (7) Sole Voting Power
Beneficially Owned
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting Power
6,000,000
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(9) Sole Dispositive Power
--------------------------------------------------
(10) Shared Dispositive Power
6,000,000
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,000,000
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row 11
79.65%
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(14) Type of Reporting Person (See Instructions)
IN
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CUSIP No. 60520010-4
- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
Clyde J. Berg
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(2) Check the Appropriate Box if a Member (a) / /
of a Group* (b) / /
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(3) SEC Use Only
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(4) Source of Funds*
Not Applicable
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
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(6) Citizenship or Place of Organization
USA
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting Power
Beneficially Owned 0
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting Power
6,000,000
--------------------------------------------------
(9) Sole Dispositive Power
0
--------------------------------------------------
(10) Shared Dispositive Power
6,000,000
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
6,000,000
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions)
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row 11
79.65%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person (See Instructions)
IN
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INTRODUCTION.
This Statement constitutes the initial filing of Berg & Berg Enterprises,
Inc. ("BBE") and certain other Reporting Persons (as defined below). Effective
May 27, 1997, BBE, on one hand, and Mission West Properties (the "Issuer"), on
the other hand, entered into a Stock Purchase Agreement (the "Agreement")
containing terms generally described in Item 6. Pursuant to the Agreement, the
Issuer will sell 6,000,000 shares of the Issuer's newly issued Common Stock (the
"Shares") to BBE for a purchase price of $900,000 in cash, or $0.15 per share.
Upon the consummation of the transaction, which is subject to the fulfillment
of certain conditions, BBE will be the beneficial owner of 6,000,000 shares of
Mission West Common Stock, representing 79.65% of the 7,533,121 shares of
Mission West Common Stock which will be outstanding. There were 1,533,121
shares of Mission West Common Stock outstanding as of May 27, 1997, as stated in
the Agreement.
ITEM 1. SECURITY AND ISSUER:
This Statement relates to the common stock of the Issuer (the "Mission West
Common Stock"). The Mission West Common Stock trades on the American Stock
Exchange and the Pacific Stock Exchange. The Issuer's principal executive
offices are located at 6815 Flanders Drive, Suite 250, San Diego,
California 92121-3914. The Issuer's telephone number is (619) 450-3135.
ITEM 2. IDENTITY AND BACKGROUND:
(a-c) This Statement is filed by BBE and certain affiliates of BBE,
namely, Berg & Berg Developers ("B&B"), Carl E. Berg, and Clyde J. Berg
(collectively with BBE, the "Reporting Persons"), with respect to the
Shares, which are beneficially owned by BBE solely by reason of its rights
under the Agreement. The principal business address of BBE is 10050
Bandley Drive, Cupertino, California 95014. The principal business of BBE
is commercial real estate development and management.
The Reporting Persons other than BBE are included in this statement due to
their indirect beneficial ownership of the Shares to be acquired by BBE
pursuant to the Agreement. None of the Reporting Persons beneficially owns
any other shares of Mission West Common Stock.
B&B holds 50.323% of the outstanding voting stock of BBE and, therefore,
can be deemed, to possess voting power and dispositive power with respect
to the Shares to be acquired by BBE. B&B's principal offices are located
at 10050 Bandley Drive, Cupertino, California 95014.
Carl E. Berg is a general partner owning 50% of B&B and directly holds
1.677% of the outstanding voting stock of BBE. Clyde J. Berg is a general
partner owning 50% of B&B, and directly holds 24% of the outstanding voting
stock of BBE as Trustee, 1981 Kara Ann Berg Trust, dated 6/25/81. Carl E.
Berg and Clyde J. Berg may be deemed to possess voting power and
dispositive power with respect to the Shares to be acquired by BBE.
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Carl E. Berg and Clyde J. Berg also are directors and/or executive officers
of BBE. The information required for responses to Item 2(a) through (f) is
provided with respect to each of them in their capacities as directors
and/or executive officers of BBE.
The attached Exhibit 1 provides the following information with respect to
each director, executive officer or general partner of any Reporting Person
(i) name; (ii) residence or business address; (iii) present principal
occupation or employment and the name, principal business and address of
any corporation or other organization in which such employment is
conducted; and (iv) citizenship.
(d) Neither BBE nor, to the best of knowledge of any Reporting Person, any
individual named in Exhibit 1 has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) Neither BBE nor, to the best of knowledge of any Reporting Person, any
individual named in Exhibit 1 was, during the last five years, a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
(f) BBE is a California corporation. B&B is a California general
partnership. The citizenship of each of BBE's directors and executive
officers (including each individual Reporting Person) is set forth on
Exhibit 1.
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
BBE will pay $900,000 to the Issuer upon the closing of the purchase of the
Shares pursuant to the Agreement. The source of funds for such purchase is
working capital of BBE.
ITEM 4. PURPOSE OF TRANSACTION.
BBE will be acquiring the shares pursuant to the Agreement to obtain a
controlling equity interest in the Issuer.
Pursuant to the Agreement, after the closing of the purchase of the Shares
the Issuer's current board of directors intends to resign in accordance
with the Agreement and a new board of directors will be designated by BBE.
BBE has advised the Issuer that BBE intends, when reasonably practicable
after the closing, to cause the Issuer to engage in the real estate
business through the ownership and leasing of more than 1,500,000 square
feet of office/R&D real estate, which BBE and/or BBE's affiliates
presently own and which will be exchanged for equity interests or options
to acquire equity interests in the Issuer on terms to be negotiated between
BBE and the Issuer.
In addition to BBE, other Reporting Persons and one or more non-affiliated
sophisticated investors may acquire some of the Shares from the Issuer.
Under the terms of the Agreement, BBE will identify all such additional
<PAGE>
participants in the transaction for the Issuer prior to the closing.
Depending upon their evaluation of the Issuer's business and prospects, and
upon future developments (including, but not limited to, performance of
Mission West Common Stock in the market, availability of funds, alternative
uses of funds, and money, stock market and general economic conditions),
any of the Reporting Persons, or other individuals or entities affiliated
with them, may from time to time purchase shares of Mission West Common
Stock, or may dispose of any shares of Mission West Common Stock held by
any such person (including Shares), or may cease buying or selling shares
of Mission West Common Stock. Any such additional purchases or sales of
shares of Mission West Common Stock may be in the open market or
privately-negotiated transaction or otherwise.
Except as described in this Item 4, none of the Reporting Persons, nor to
the best knowledge of such persons, any other person named in Exhibit 1 has
formulated any plans or proposals which relate to or would result in any
matter required to be disclosed in response to paragraphs (a) through (j)
of this Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) BBE is the beneficial owner of the Shares, which will represent 79.65%
of the outstanding shares of Mission West Common Stock. Under the
Agreement, the shareholders representing approximately 60% of the presently
outstanding shares of Mission West Common Stock have agreed to vote their
shares to approve the Agreement and the transactions contemplated by the
Agreement. Upon the closing for the purchase of the Shares under the
Agreement, BBE will be the record holder of the Shares. Each of the other
Reporting Persons has indirect beneficial ownership of the Shares
representing the same percentage interest of the outstanding shares of
Mission West Common Stock by virtue of such Person's relationship with BBE.
(b) BBE has the sole power to dispose of all of the Mission West Common
Stock owned by it and the sole power to vote the Shares. The other
Reporting Persons identified in Item 2 share indirect voting power and
dispositive power with respect to the Shares because each may be deemed to
control the actions of BBE with respect to the Shares.
(c) During the past 60 days, none of the Reporting Persons nor, to the
best knowledge of any Reporting Person, has any other person named in
Exhibit 1, effected any transaction with respect to the Mission West Common
Stock, except for BBE's agreement to acquire the Shares pursuant to the
terms of the Agreement.
(d) BBE will have the right to receive or the power to direct the receipt
of dividends from or the proceeds of sale of the Shares. The other
Reporting Persons could be deemed to have the power to direct BBE with
respect to investment decisions concerning the Shares.
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(e) Inapplicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The following summary of the terms of the Agreement does not purport to be
complete and is qualified in its entirety by reference to the Agreement, a
copy of which (without the Appendices thereto) is attached hereto as
Exhibit 2.
CLOSING
The closing of the sale of the Shares to BBE is scheduled to occur in July
1997, subject to extension in certain cases by both parties.
PURCHASE PRICE
The purchase price for the Shares being sold is $900,000, payable in cash
upon shareholder approval of the Transaction (the "Effective Date").
REPRESENTATIONS AND WARRANTIES
The Agreement contains representations and warranties by the Issuer
customarily made by issuers in similar transactions, including
representations and warranties relating to (i) the Issuer's organization
and good standing, (ii) the absence of litigation or any notice of
violation of any applicable regulation or law (including environmental) or
undisclosed liabilities, and (iii) the accuracy and completeness of all
documents filed by the Issuer with the Securities and Exchange Commission.
CERTAIN COVENANTS PRIOR TO CLOSING
The Issuer and BBE have agreed, prior to closing, to cooperate in the
obtaining of any approvals or consents necessary to close the transaction.
CONDITIONS TO CLOSING
The obligations of BBE are subject to satisfaction of certain conditions
including (i) accuracy of the Issuer's representations and warranties at
the time of Closing, (ii) compliance with applicable securities laws, (iii)
BBE's determination that the Issuer will be able to qualify as a "REIT"
within the meaning of the Internal Revenue Code of 1986, as amended, and to
participate as a part of an "UPREIT" in which the Issuer would hold
interests in a partnership or similar entity owning real estate, (iv)
approval of the Agreement and the transaction by the Issuer's Shareholders,
(v) approval for listing of the Shares on the American Stock Exchange and
the Pacific Exchange, Inc.
FIDUCIARY OUT
The Agreement prohibits the Issuer from actively marketing BBE's stock but
provides that the Issuer is entitled to respond to unsolicited inquiries
from third parties. The Agreement also provides, however, that until the
<PAGE>
date of the shareholders meeting to approve the transaction, the Issuer
may provide financial information about the Issuer to third parties who
request such information and who have signed a confidentiality agreement.
In the event any such third party makes an offer to purchase all or
substantially all of the Issuer's stock or proposes a business combination
or other transaction on terms that the Issuer's board of directors
determines are economically superior to BBE's offer such that acceptance of
the offer would be required in the exercise of the Board's fiduciary
obligations to the Issuer's shareholders, then the Issuer shall have the
right (the "Fiduciary Out") to terminate the transaction.
If the Issuer elects to exercise its Fiduciary Out, the Issuer will pay to
BBE a fee of $250,000 as compensation for BBE's loss of the opportunity to
purchase the Shares. The $250,000 will be payable within two days after
Purchaser's request therefore following the Issuer's exercise of its
Fiduciary Out.
SHAREHOLDER AGREEMENTS
The Issuer's largest shareholder and two of its Directors holding an
aggregate of 922,484 shares (60.17%) of the Issuer's issued and outstanding
shares, have agreed to vote their shares to approve the Agreement and the
Transaction, subject to the exercise of the Fiduciary Out.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1. Directors and Executive Officers of BBE; General Partners of B&B
Exhibit 2. Stock Purchase Agreement, dated May 27, 1997
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certify that the information set forth in this Statement is true,
complete and correct.
Date: June __, 1997
By: /S/_______________________________ By: /S/___________________________
Carl E. Berg Clyde J. Berg
Signing as President and Chief Financial Signing as General Partner of Berg
Officer of Berg & Berg Enterprises, & Berg Developers and as Trustee
Inc., as General Partner of Berg & Berg of the 1981 Kara Ann Berg Trust
Developers, and as an individual dated 6/25/81
<PAGE>
EXHIBIT 1
DIRECTORS AND EXECUTIVE OFFICERS OF BERG & BERG ENTERPRISES, INC.
Name and Business Address Position/Occupation Citizenship
- ------------------------- ------------------- -----------
Carl E. Berg President, Chief Financial USA
10050 Bandley Drive Officer, and Director of
Cupertino, CA 95014 Berg & Berg Enterprises, Inc.,
Real Estate Developer,
Venture Capitalist
Clyde J. Berg Director of Berg & Berg USA
10050 Bandley Drive Enterprises, Inc.,
Cupertino, CA 95014 Real Estate Developer
Thelmer Aalgaard Director of Berg & Berg USA
10050 Bandley Drive Enterprises, Inc.,
Cupertino, CA 95014 Construction Manager
PARTNERS OF BERG & BERG DEVELOPERS
Carl E. Berg ( see information above)
Clyde J. Berg (see information above)
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EXHIBIT 2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 27th day
of May, 1997, by and between a group of private investors identified on Appendix
I to this Agreement, as amended hereunder, (the "Schedule of Purchasers")
(individually a "Purchaser" and collectively "Buyer"), which is led by Berg &
Berg Enterprises, Inc., a California corporation ("Buyer's Representative"), on
one hand, and Mission West Properties, a California corporation (the "Company")
and the shareholders of the Company identified on Appendix II to this Agreement
(the "Holders"), on the other hand.
R E C I T A L S
A. The Company has recently sold substantially all of its operating
assets.
B. Buyer would like to acquire from the Company shares of Common Stock
representing a controlling interest in the Company with a view to engaging in
real estate activities through the Company as a real estate investment trust
within the meaning of Section 856 of the Internal Revenue Code of 1986, as
amended (the "Code").
C. The Holders own, in the aggregate, approximately 60% of the
outstanding voting stock of the Company.
A G R E E M E N T
The parties to this Agreement agree as follows:
1. AUTHORIZATION AND SALE OF COMMON STOCK.
1.1 AUTHORIZATION OF THE SHARES. The Board of Directors of the Company
has approved and authorized for issuance 6,000,000 shares of the Common Stock
of the Company (the "Shares").
1.2 SALE OF THE SHARES. Subject to the terms and conditions hereof, on
the Closing Date, the Company will issue and sell to each Purchaser, and each
Purchaser agrees, severally, to purchase from the Company, the number of
Shares of Common Stock specified opposite such Purchaser's name on the
Schedule of Purchasers as of the Closing Date at a purchase price of Fifteen
Cents ($0.15) per share for the aggregate purchase price set forth opposite
each such Purchaser's name. The Company agrees that Buyer may amend the
Schedule of Purchasers from time to time prior to the Effective Date (as
defined in Section 2.1) in the sole discretion of Buyer's Representative.
<PAGE>
1.3 SEPARATE AGREEMENTS. The Company's agreement with each Purchaser is
a separate agreement, and the sale of the shares of Common Stock to each
Purchaser is a separate sale.
2. EFFECTIVE DATE; CLOSING DATE; DELIVERY
2.1 EFFECTIVE DATE. Upon execution and delivery of this Agreement by
the Company and approval of this Agreement and all of the transactions
contemplated hereby by the Board of Directors of the Company (the "Board of
Directors"), the Company, the Board of Directors, and the Holders shall
perform timely all covenants set forth in Sections 5.3, 5.4 and 5.5, and, in
particular, within five (5) business days following the execution and
delivery of the Agreement, they shall set a record date for a meeting of the
shareholders of the Company to consider and vote upon the transactions
contemplated by this Agreement and file with the Securities and Exchange
Commission (the "SEC") preliminary proxy material relating to such meeting.
The date of the shareholders meeting shall be the "Effective Date". Buyer,
through Buyer's Representative, shall advance $900,000 to the Company on the
Effective Date, if the Company or the Holders are not then in default under
this Agreement and the shareholders shall have approved the transactions
contemplated hereby. The amount of such advance shall be credited against
the purchase price for the Shares at the Closing.
2.2 CLOSING DATE. The closing of the purchase and sale of the Shares
hereunder (the "Closing") with each of the Purchasers shall be held at the
offices of Graham & James LLP, 600 Hansen Way, Palo Alto, California, at
10:00 a.m. on the date two (2) business days following the record date for
the dividend declared pursuant to Section 6.5, or at such other time and
place to which the Company and Buyer's Representative may agree upon orally
or in writing (the "Closing Date").
2.3 DELIVERY. At the Closing, the Company will deliver to each
Purchaser a certificate representing the Shares to be purchased by such
Purchaser from the Company (which shall be issued in such Purchaser's name as
set forth on the Schedule of Purchasers) against payment of the purchase
price therefor by credit of the amount advanced by Buyer pursuant to Section
2.1.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to each Purchaser that,
subject to and except as set forth in a Schedule of Exceptions (the "Schedule
of Exceptions") delivered to the Purchasers, specifically identifying the
relevant subsections hereof:
3.1 ORGANIZATION AND STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of California. The Company has all requisite corporate power and authority to
carry on its business as presently conducted and as proposed to be conducted.
The Company is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure to be so qualified would have a
material adverse effect on its business or properties.
<PAGE>
3.2 SUBSIDIARIES. Other than Mission West Executive Aircraft Center,
Inc. and MIT Realty, Inc. (the "Company Subsidiaries") which are wholly owned
by the Company, the Company does not own or control, directly or indirectly,
any interest in any other corporation, association, partnership or other
business entity. As used in this Section 3, references to the Company
include the Company Subsidiaries. The Company is not a participant in any
joint venture, partnership, or similar arrangement.
3.3 CAPITALIZATION. The authorized capital stock of the Company as of
the Effective Date will consist of 10,000,000 shares of Common Stock, of
which 1,533,121 shares are issued and outstanding. All such issued and
outstanding shares have been duly authorized and validly issued, are fully
paid and nonassessable and have been issued in compliance with all applicable
state and federal laws concerning the issuance of securities. The Company
has reserved 6,000,000 shares for issuance hereunder. Except for the
foregoing, there are no outstanding options, warrants, rights (including
conversion or preemptive rights) or agreements for the purchase or
acquisition from the Company of any shares of its capital stock.
3.4 AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations
of the Company hereunder and thereunder, and the authorization, sale and
issuance of the Shares pursuant hereto has been taken or will be taken prior
to the Closing Date. This Agreement, when executed and delivered by the
Company, will constitute a valid and binding obligation of the Company,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, and (ii) as
limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.
3.5 VALID ISSUANCE OF COMMON STOCK. The Shares that are being purchased
by the Purchasers hereunder, when issued, sold and delivered in accordance
with the terms of this Agreement for the consideration expressed herein, will
be duly and validly issued, fully paid, and nonassessable, and will be free
of restrictions on transfer other than restrictions on transfer under this
Agreement, and under applicable state and federal securities laws.
3.6 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
or default of any term of the Articles of Incorporation, or Bylaws of the
Company, nor is the Company in violation or default of any term of any
contract, agreement, instrument, judgment, decree, order, statute, rule or
regulation (collectively, "Instruments and Laws") to which the Company is
subject and a violation of which would have a material adverse effect on the
condition, financial or otherwise, or operations of the Company. The
execution, delivery and performance of this Agreement, and the consummation
of the transactions pursuant hereto, will not result in a violation of or be
in conflict with the Articles of Incorporation, as amended, or the Bylaws of
the Company or constitute, with or without the passage of time and giving of
notice, a material default under any such Instrument or Law, except where
such violations or defaults, singularly or in the aggregate, would not have a
material adverse effect on the business, operations, property or condition
(financial or otherwise) of the Company, require any consent or waiver (which
has not been obtained) under any such Instrument or Law, or result in the
creation of any lien, encumbrance or charge upon any of the properties or
assets of the Company pursuant to any such Instrument or Law.
<PAGE>
3.7 LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to the best of the Company's knowledge, threatened
against the Company.
3.8 GOVERNMENTAL CONSENT, ETC. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing (other than filing a proxy statement with the SEC with, any federal,
state or local governmental authority on the part of the Company is required
in connection with the consummation of the transactions contemplated by this
Agreement.
3.9 COMPANY SEC INFORMATION. As of their respective filing dates
(except as thereafter amended) all documents that the Company has filed with
the SEC ("Company SEC Documents") have complied in all material respects with
the applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act") or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and none of the Company SEC Documents has contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading except to the extent corrected by a subsequently filed Company SEC
Document.
3.10 OFFERING. Subject in part to the truth and accuracy of each
Purchaser's representations set forth in Section 4 of this Agreement, the
offer, sale and issuance of the Shares as contemplated by this Agreement are
exempt from the registration requirements under Section 5 of the Securities
Act, and neither the Company nor any authorized agent acting on its behalf
will take any action hereafter that would cause the loss of such exemption.
3.11 TITLE TO PROPERTY AND ASSETS. The Company owns its property and
assets free and clear of all mortgages, loans, liens and encumbrances, except
such encumbrances and liens which arise in the ordinary course of business
and do not materially impair the Company's ownership or use of such property
or assets. With respect to the property and assets it leases, the Company is
in compliance with such leases and, to the best of its knowledge, holds a
valid leasehold interest free of any liens, claims or encumbrances.
3.12 TAX RETURNS AND PAYMENTS. The Company has filed all tax returns and
reports as required by law. All such returns and reports are true and
correct in all material respects. The Company has paid in full all taxes and
other assessments due.
3.13 COMPLIANCE WITH APPLICABLE LAWS.
(a) The Company and its properties, assets, operations and business
have been operated and are in compliance with all applicable statutes, laws,
ordinances, administrative orders, rules and regulations of any Governmental
Authority and any filing requirements relating thereto, except for violations
that would not, individually and in the aggregate, have a material adverse
effect on the Company or prevent or materially delay the Closing, including
Environmental and Safety Laws. No investigation or review by any
Governmental Authority with respect to the Company is pending or, to the
knowledge of the Company, threatened.
<PAGE>
(b) The Company has obtained all permits, licenses and other
authorizations from Governmental Authorities that are required with respect
to the operation of its business and the ownership of its assets under
applicable laws, including Environmental and Safety Laws, other than any
permits, licensees or authorizations the failure of which to obtain would
not, individually or in the aggregate, have a material adverse effect on the
Company or prevent or materially delay the consummation of the Closing. The
Company is in compliance in all material respects with all terms and
conditions of such permits, licenses and authorizations.
(c) There are no past or present or, to the knowledge of the
Company, future events, conditions, circumstances, activities, practices,
incidents, actions or plans that are reasonably likely to interfere with or
prevent compliance or continued compliance by the Company with any
Environmental and Safety Laws governing the Company's present and currently
contemplated future operations or with any law, judgment, injunction, notice
of demand letter issued, entered, promulgated or approved thereunder, (ii)
give rise to any liability of the Company under any Environmental and Safety
Law governing the Company's past, present and currently contemplated future
operations or (iii) otherwise form the basis of any litigation, hearing,
notice of violation, study or investigation against or affecting the Company,
based on or related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling, or the emission,
discharge, release or threatened release into the environment, of any
Hazardous Substance.
As used in this Section 3.13:
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, local or
foreign court, governmental or administrative agency or commission or other
governmental agency, authority, instrumentality or regulatory body.
"HAZARDOUS SUBSTANCE" shall mean "hazardous substance" as defined in
any law, rule or regulation applicable to such substance of any Governmental
Authority.
"ENVIRONMENTAL AND SAFETY LAWS" shall mean any and all federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, or toxic or hazardous substances or wastes into the environment,
including ambient air, surface water, groundwater, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants,
petroleum or petroleum products, or toxic or Hazardous Substances or
Hazardous Wastes or the clean-up or other remediation thereof.
3.14 APPROVAL BY BOARD OF DIRECTORS. The Board of Directors has approved
this Agreement and all of the transactions contemplated by this Agreement.
3.15 FINANCIAL STATEMENTS. The Company has delivered to Buyer's
Representative true and accurate copies of (i) the Company's audited balance
sheet as of November 30, 1996 (the "Audited Balance Sheet") and the related
statements of operations and cash flows for the fiscal year then ended (the
"Audited Income Statement"; together with the Audited Balance Sheet, the
"Audited Financial Statements"), (ii) the unaudited balance sheet of the
Company as of February 28, 1997 (the "Unaudited Balance Sheet"), and the
related unaudited statements of operations
<PAGE>
and cash flows of the Company for the three-month period ended at the date of
the Balance Sheet, all certified by the Chief Financial Officer (the
"Unaudited Income Statement"; together with the Unaudited Balance Sheet, the
"Unaudited Financial Statements"), and (iii) a Pro Forma Balance Sheet stated
as of the Effective Date (the "Pro Forma Balance Sheet"). (The Audited
Financial Statements, the Unaudited Financial Statements, and the Pro Forma
Balance Sheet are referred to collectively as the "Financial Statements".)
The Financial Statements are in accordance with the books and records of the
Company, have been prepared in conformity with generally accepted accounting
principles consistently applied (except as described in the notes included
therein and except that the Unaudited Financial Statements, and the Pro Forma
Balance Sheet do not have notes thereto), and fairly present the financial
condition of the Company as of the dates thereof and the results of its
operations for the periods then ended, subject, in the case of the Unaudited
Financial Statements, to year-end adjustments.
3.16 CASH FORECAST. The Company has delivered to Buyer's Representative
a Monthly Cash Forecast dated as of May 23, 1997 (the "Cash Forecast"), which
is true and accurate in all respects taking into account the past and
currently projected operations of the Company, except for the omission of
additional distributions to the Company's shareholders as contemplated in
Section 6.5.
3.17 UNDISCLOSED LIABILITIES. The Company has no liabilities or
obligations of any nature (whether accrued, absolute, contingent, unasserted
or otherwise, except (i) as set forth or reflected on the Financial
Statements (or described in the notes thereto) or the Cash Forecast, (ii) for
purchase contracts and orders for supplies or services in the ordinary course
of business, (iii) for liabilities and obligations incurred in the ordinary
course of business not exceeding $10,000 in the aggregate and not disclosed
on the Schedule of Exceptions; PROVIDED that such Schedule discloses the
nature of such liability.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser severally represents and warrants to the Company as follows:
4.1 EXISTENCE AND POWER. Purchaser, if a corporation, partnership or
limited liability company, is a corporation, partnership or limited liability
company duly organized, validly existing and in good standing under the laws
of the state under which it was organized, with full power and authority to
enter into this Agreement and to perform its obligations under this Agreement.
4.2 AUTHORIZATION. Purchaser's execution, delivery and performance of
this Agreement, and the consummation by Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all requisite
corporate, partnership or limited liability company action of the Purchaser.
Purchaser has authorized Buyer's Representative to act on Purchaser's behalf
in the manner specified in this Agreement.
4.3 BINDING EFFECT. This Agreement has been duly executed and delivered by
Purchaser, and constitutes a valid and binding agreement of Purchaser.
<PAGE>
4.4 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution and
delivery of this Agreement by Purchaser nor the consummation by Purchaser of
the transactions contemplated hereby will (a) conflict with or result in any
breach of any provision of the articles of incorporation, bylaws, partnership
agreement or operating agreement of Purchaser; (b) require any filing with,
or the obtaining of any permit, authorization, consent or approval of, any
court or governmental or regulatory authority; (c) to the best knowledge of
Purchaser, result in a default (give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement, lease
or other instrument or obligation to which Purchaser is a party or by which
Purchaser or any of its assets may be bound, except for defaults (or rights
of termination, cancellation or acceleration) as to which requisite waivers
or consents have been obtained; or (d) to the best knowledge of Purchaser,
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Purchaser; or any of its assets; PROVIDED, that the foregoing
clauses (b), (c) and (d) shall not apply to requirements, defaults or
violations which would not have a material adverse effect on the business,
operations or financial condition of Purchaser.
4.5 BROKERS' FEES. No investment banker, broker, finder or other
intermediary has been retained by or is authorized to act on behalf of Buyer
or Purchaser who might be entitled to any fee or commission from the Company
or any of the Holders upon consummation of the transactions contemplated by
this Agreement.
4.6 SUITABILITY. Purchaser is an "accredited investor" or is
represented by a "purchaser representative" as defined in Regulation D
promulgated under the Securities Act.
4.7 INVESTMENT. Purchaser is acquiring the number of Shares set forth
opposite Purchaser's name on the Schedule of Purchasers for investment for
Purchaser's own account and not with a view to, or for, resale in connection
with, any distribution of the Shares, and Purchaser has no present intention
of selling or distributing any of such Shares. Purchaser understands that
the Shares have not been registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the BONA FIDE nature of Purchaser's
investment intent as expressed herein.
4.8 RULE 144. Purchaser acknowledges that, because they have not been
registered under the Securities Act, the Shares constitute "restricted
securities" as defined in Rule 144(a)(3) and must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of
securities purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things, the existence of a public
market for the securities, the availability of certain current public
information about the issuer, the resale occurring not less than one year
after a party has purchased and paid for the security to be sold, the sale
being through a "broker's transaction" or in transactions directly with a
"market maker" (as provided by Rule 144(f)) and the number of securities
being sold during any three-month period not exceeding specified limitations
(unless the securities satisfy the requirements of Rule 144(k)).
<PAGE>
5. ADDITIONAL COVENANTS OF THE COMPANY AND THE HOLDERS
5.1 NON-SOLICITATION; EXCLUSIVITY; BREAK-UP FEE. Neither the Company
nor the Holders shall, directly or indirectly, initiate contact with, solicit
or, encourage any inquiries or proposals by, or negotiations with, any person
or entity (other than Buyer) in connection with any possible proposal (an
"Acquisition Proposal") regarding a sale of all or any of the Shares, nor
shall the Company or the Holders sell, agree to sell or arrange for the sale
of any shares of Common Stock during the term of this Agreement.
Notwithstanding the foregoing, the Company may, if counsel to the Company
advises that it is necessary for the Board of Directors of the Company, in
accordance with its fiduciary duties, (i) furnish information concerning the
Company to any corporation, partnership, person or other entity or group, who
or which may request such information pursuant to appropriate confidentiality
agreements; and (ii) engage in discussions and negotiations with such person
or entity; provided, however, that the Company shall give prior notice to
Buyer as promptly as practicable of its intent to furnish such information or
to enter into discussions and negotiations with such person or entity. The
Company shall promptly thereafter communicate to Buyer the terms of any
proposal or inquiry made with respect to any Acquisition Proposal and the
identity of the party making the Acquisition Proposal. If the Company
accepts any Acquisition Proposal or if the company otherwise terminates this
Agreement prior to the Effective Date, the Company will pay to Buyer a
cancellation or "break-up" fee of Two Hundred Fifty Thousand Dollars
($250,000) within two (2) days after Buyer's Representative requests in
writing the payment of such fee. The Company agrees that the amount of such
fee is reasonable and appropriate in light of the circumstances existing and
applicable to the parties hereto as of the date of this Agreement. The
provisions of this Section 5.1 shall cease to apply after the Effective Date.
5.2 MATERIAL TRANSACTIONS. Except as otherwise contemplated by this
Agreement, during the term of this Agreement, the Company shall not enter
into any transaction outside the ordinary course and scope of its current
business activity or incur any item or amount of expense that is not set
forth in the Cash Forecast without the prior written consent of Buyer's
Representative.
5.3 SHAREHOLDER APPROVAL. Subject to the terms and conditions contained
herein, this Agreement shall be submitted for approval to the holders of
voting stock of the Company at a meeting to be duly held for this purpose by
the Company (the "Company Meeting"). If the Company shall not have
terminated this Agreement pursuant to Section 5.1 prior to the Company
Meeting, the Company, the current Board of Directors, and the Holders shall
recommend that the shareholders of the Company approve and adopt this
Agreement and the transactions contemplated hereby, and such recommendation
shall be contained in a proxy statement acceptable to Buyer's Representative
and its legal counsel.
5.4 VOTING AGREEMENTS. If the Company shall not have terminated this
Agreement pursuant to Section 5.1 previously, each Holder severally agrees
with, and covenants to, Buyer at any meeting of shareholders of the Company
called to vote upon the Agreement (the "Company Meeting") or at any
adjournment thereof, or in any other circumstances upon which a vote, consent
or other approval with respect to the Agreement is sought, such Holder shall
vote or cause to be voted such Holder's shares of Company voting stock in
favor of the Agreement and the approval of the terms thereof, and each of the
other transactions contemplated by the Agreement.
<PAGE>
5.5 BOARD OF DIRECTORS OF THE COMPANY; OFFICERS. The Board of Directors
shall take action necessary immediately as of the Closing Date to fix the
number of directors constituting the Board of Directors to be at least five
(5) members, and to cause three (3) individuals designated by Buyer's
Representative to be elected as directors of the Company to replace existing
directors who shall resign as of the Closing Date. In addition, all
executive officers of the Company shall resign as of the Closing Date.
Katrina Thompson must agree to stay with the Company for at least thirty (30)
days after the Effective Date, as part of her severance agreement with the
Company, to assist with financial matters of the Company upon request by
Buyer's Representative.
5.6 INVESTIGATION. Upon reasonable notice, the Company shall afford to
Buyer's Representative and to its officers, employees, accountants, counsel
and other authorized representatives full and complete access during normal
business hours, throughout the period prior to the earlier of the Effective
Date or the date of termination of this Agreement, to its plants, properties,
contracts, commitments, books and records (including, but not limited, to tax
returns) and to the employees and accountants of the Company responsible for
such matters, and shall use its reasonable best efforts to cause its
representatives to furnish promptly to Buyer's Representative such additional
financial and operating data and other information as to its businesses and
properties as Buyer's Representative or its duly authorized representatives
may from time to time reasonably request.
5.7 SHELF REGISTRATION. As promptly as practicable upon request by
Buyer's Representative, or any group of Purchasers who are record holders, in
the aggregate of not less than 250,000 shares at any time following the
Closing Date, the Company shall file and cause to be declared effective a
"shelf" Registration Statement on any appropriate form pursuant to rule 415
(or similar rule that may be adopted by the SEC) under the Securities Act for
all the Shares ("Registrable Securities"), which form shall be available for
the sale of the Registrable Securities in accordance with the intended method
or methods of distribution thereof (which shall not include an underwritten
offering). The Company agrees to use its best efforts to keep such
Registration Statement continuously effective and usable for resale of
Registrable Securities for a period of twelve (12) months from the date on
which the SEC declares such Registration Statement effective, or such shorter
period which will terminate when all the Registrable Securities covered by
such Registration Statement have been sold or may be sold pursuant to Rule
144. The Company will pay all registration expenses in connection with all
registrations of Registrable Securities pursuant to this Agreement upon the
written request of any of the Purchasers, and each Purchaser shall pay all
commissions and transfer taxes, if any, relating to the sale or disposition
of such Purchasers' Registrable Securities pursuant to the Registration
Statement. For this purpose:
"REGISTRATION EXPENSES" mean any and all expenses of the Company
incident to performance of or compliance with this Agreement, including,
without limitation, (i) all SEC and securities exchange registration and
filing fees, (ii) all printing, messenger and deliver expenses, (iii) all
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange, and the fees and disbursements of
counsel for the Company and of its independent public accountants, but
excluding underwriting discounts and commissions and transfer taxes, if any.
5.8 TAX RETURNS. Prior to the Effective Date the Company agrees to
prepare and file its federal and all required state income tax returns for
the tax year ended November 30, 1996.
<PAGE>
6. CERTAIN MUTUAL COVENANTS.
6.1 CLOSING CONDITIONS. The Company, the Holders and Buyer shall use
their respective best efforts to cause the conditions precedent to the
Closing to be fulfilled.
6.2 CONSENTS AND APPROVALS. Prior to the Closing, the Company, the
Holders and Buyer shall use their respective best efforts to obtain the
authorizations, consents, orders and approvals of federal, state and local
regulatory bodies and officials, courts and other third parties that may be
necessary for the performance of their respective obligations under this
Agreement and the consummation of the transactions contemplated by this
Agreement, and shall cooperate fully with each other in seeking promptly to
obtain such authorizations, consents, orders and approvals as may be
necessary for the performance of their respective obligations pursuant to
this Agreement.
6.3 CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS. Through the Closing Date,
except to the extent required by applicable law or stock exchange rules, and
except for a form of press release acceptable to all parties, no party to
this Agreement shall make any public announcement with respect to this
Agreement or the transactions contemplated in this Agreement or otherwise
communicate with any third party, including, without limitation, news media,
without prior notification to the other party, and the parties shall
cooperate as to the timing and contents of any such announcement.
6.4 FURTHER ACTION. Each of the parties to this Agreement shall execute
such documents and other papers and take such further actions as may be
reasonably required or desirable to carry out the provisions of this
Agreement and the transactions contemplated in this Agreement or, at or after
the Closing Date, to evidence the consummation of the transactions
contemplated in this Agreement. Each of the parties to this Agreement shall
take, or cause to be taken, all actions and to do, or cause to be done, all
other things necessary, proper or advisable to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement,
to satisfy the conditions to this Agreement and to obtain in a timely manner
all necessary waivers, consents, and approvals and to effect all necessary
registrations and filings.
6.5 DISTRIBUTION TO COMPANY SHAREHOLDERS. Within two (2) business days
after the Effective Date, the Board of Directors of the Company will declare
a distribution to shareholders which shall not exceed $4,914,000 in the
aggregate; including the distribution of a note payable by the Company in the
principal amount of $300,000 (or such lesser amount as is received from
Spieker Properties by the Company with respect to a note for the same amount
subsequent to the date of this Agreement "the Spieker Properties Note
Receivable") to Alarmguard Holdings, Inc. in lieu of cash of like amount.
Such distribution will be payable to shareholders of record of the Company as
of a date as soon as practicable following the Effective Date (and prior to
the Closing Date) such that Buyer will not be entitled to exercise any
portion thereof. Prior to the Effective Date Alarmguard Holdings, Inc. shall
agree in writing to receive a distribution of the lesser of (i) the face
amount of such Company note and (ii) the net proceeds realized by the Company
from the Spieker Properties Note Receivable in lieu of cash.
6.6 POST-CLOSING OPERATIONS. When reasonably practicable after the
Closing Date, the Buyer will cooperate with the Company to engage in the real
estate business through the ownership and leasing of more than 1,500,000
square feet of office/R&D real estate, which Buyer and/or Buyer's affiliates
presently own and will be held in an
<PAGE>
entity in which the Company will receive equity interests and Buyer and/or
Buyer's affiliates will receive equity interests convertible into shares of
the Company's Common Stock, all upon terms and conditions to be determined by
the Company and Buyer, or Buyer's affiliates.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. Except to the extent
expressly waived in writing by Buyer, all obligations of Buyer under this
Agreement are subject to the fulfillment, at or before the Closing, of all of
the following conditions:
7.1 REPRESENTATION AND WARRANTIES TRUE AT CLOSING. Each of the
representations and warranties of the Company contained in this Agreement
shall be true in all material respects on and as of the Closing Date with the
same effect as though made on and as of such date.
7.2 PERFORMANCE. The Company and the Holders shall have performed in
all material respects each of their respective obligations to be performed on
or prior to the Closing pursuant to this Agreement.
7.3 NO CONFLICT. Neither the Company nor any of its assets shall be
subject to or obligated under its Articles of Incorporation or Bylaws or
under any material contract, lease or other instrument or any license,
franchise or permit, or subject to any statute, rule, order or decree, which
would be defaulted, breached, terminated, forfeited or violated by or in
conflict (or upon the failure to give notice or the lapse of time, or both,
would result in a default, breach, termination, forfeiture or conflict) with
its execution and performance of this Agreement and the transactions
contemplated hereby. Except as contemplated under this Agreement, no consent
of any person not a party to this Agreement, nor consent of or filing with
(including any waiting period) any governmental authority is required to be
obtained or performed on the part of the Company to permit the consummation
of the transactions contemplated by this Agreement.
7.4 SECURITIES LAW COMPLIANCE. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
including, but not limited to, the sale and issuance of the Shares by the
Company to the Purchasers shall comply with and be effected in accordance
with the applicable provisions of all federal and state securities laws.
7.5 AMEX LISTING. The Company shall have complied with all rules and
requirements of the American Stock Exchange and the Pacific Stock Exchange, and
the Shares shall have been listed with the American Stock Exchange and the
Pacific Stock Exchange.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY. Except to the extent
expressly waived in writing by the Company, the obligations of the Company
set forth in this Agreement are subject to the fulfillment, at or before the
Closing, of all of the following conditions:
8.1 REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. Each of the
representations and warranties of each Purchaser contained in this Agreement
shall be true in all material respects on and as of the Closing Date with the
same effect as though made on and as of such date.
<PAGE>
8.2 PERFORMANCE. Buyer and each Purchaser shall have performed in all
material respects each of the obligations of Buyer or each such Purchaser to
be performed on or prior to the Closing pursuant to this Agreement.
9. TERMINATION.
9.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned prior to the Effective Date:
(i) at any time, by mutual written agreement of the Company and
Buyer's Representative;
(ii) at any time, by the Company, if the Company accepts an
Acquisition Proposal pursuant to Section 5.1 (NON-SOLICITATION; EXCLUSIVITY;
BREAK-UP FEE) and pays to Buyer the cancellation or break-up fee specified
therein;
(iii) at any time prior to the Effective Date, if Buyer shall
default in the observance, or in the due and timely performance, of any of
the agreements or covenants contained in this Agreement, or if any of the
Purchasers' (and Buyer's ) representations or warranties set forth in this
Agreement were untrue in any material respect as of the date of this
Agreement or became untrue in any material respect as of a subsequent date,
the Company may terminate this Agreement upon five (5) calendar days' notice
to Buyer's Representative, during which time Buyer shall have an opportunity
to cure the default or breach; and
(iv) at any time prior to the Effective Date, if the Company or any
of the Holders shall default in the observance, or in the due and timely
performance, of any of the agreements or covenants contained in this
Agreement, or if the Company's representations or warranties set forth in
this Agreement were untrue in any material respect as of the date of this
Agreement or became untrue in any material respect as of a subsequent date,
Buyer may terminate this Agreement upon five (5) calendar days' notice to the
Company, during which time the Company shall have an opportunity to cure the
default or breach.
(v) by either party, if such party is not then in default under
this Agreement, at any time after October 31, 1997 if the Closing has not
occurred by then.
9.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement, (a) each party shall re-deliver all documents and information of
the other party relating to the transactions completed hereby and all
confidential information received by any party to this Agreement with respect
to the other party shall be treated in accordance with Section 6.3
(CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS) of this Agreement and the
Confidentiality Agreement dated as of March 27, 1997 between the Company and
Berg & Berg Enterprises, Inc.; (b) to the extent practicable, all filings,
applications other submissions with any court or governmental or regulatory
authority made pursuant to this Agreement shall, at the option of the
Company, be withdrawn from the court or governmental or regulatory authority
to which made; and (c) if this Agreement has been terminated pursuant to
either Section 9.1(iii) or Section 9.1 (iv) (TERMINATION) of this Agreement,
the parties shall retain all rights and remedies available to each of them at
law or in equity, including but not limited to the right to bring an action
against the defaulting party for specific performance.
<PAGE>
10. GENERAL.
10.1 SURVIVAL. The covenants, representations and warranties of the
parties to this Agreement shall survive the Closing.
10.2 BINDING EFFECT; BENEFITS; ASSIGNMENT. All of the terms of this
Agreement shall be binding upon, inure to the benefit of and be enforceable
by and against the successors and permitted assigns of the Company, the
Holders and Buyer. Nothing in this Agreement, express or implied, is intended
to confer upon any other person any rights or remedies under or by reason of
this Agreement except as expressly indicated in this Agreement. Neither the
Company, the Holders nor Buyer shall assign any of their respective rights or
obligations under this Agreement to any other person, firm or corporation
without the prior written consent of the other party to this Agreement,
except that Buyer may assign its rights and delegate its obligations under
this Agreement pursuant to its right to amend the Schedule of Purchasers
under Section 1.2.
10.3 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of California without regard to its principles governing conflicts of
laws.
10.4 NOTICES. All notices, requests, demands and other communications
to be given pursuant to the terms of this Agreement shall be in writing and
shall be delivered personally, telecopied or sent by nationally recognized
overnight delivery service, and shall be deemed given and effective when so
delivered personally, telecopied or sent, as follows:
(a) If to Buyer or any Purchaser:
Berg & Berg Enterprises, Inc.
10050 Bandley Drive
Cupertino, California
Telecopier: 408/725-1626
Attention: Carl E. Berg
with a copy to:
Graham & James LLP
600 Hansen Way
Palo Alto, California 94304
Telecopier: 415/856-3619
Attention: Alan B. Kalin
(b) If to the Company:
Mission West Properties
6815 Flanders Drive, Suite 250
San Diego, California 92121-2905
Telecopier: 619/450-1618
Attention: Michael M. Earley
<PAGE>
with a copy to
Pillsbury Madison & Sutro LLP
101 West Broadway, Suite 1800
San Diego, California 92101
Telecopier: 619/236-1995
Attention: David R. Snyder
Each party may change its address or telecopier number by prior written
notice to the other parties.
10.5 COUNTERPARTS. This Agreement may be executed by facsimile and in
counterparts, each of which when so executed shall be deemed to be an
original, and such counterparts shall together constitute one and the same
instrument.
10.6 EXPENSES. Buyer, the Company and the Holders shall pay their own
respective expenses, costs and fees (including, without limitation,
attorneys' and accountants' fees) incurred in connection with the
negotiation, preparation, execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement.
10.7 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
and understanding of the Company, the Holders and Buyer with respect to the
transactions contemplated by this agreement, and supersedes all prior
agreements, arrangements and understandings relating to the subject matter of
this Agreement.
10.8 AMENDMENT AND WAIVER. This Agreement may be amended, modified,
superseded or canceled, and any of the terms, covenants, representations,
warranties or conditions of this Agreement may be waived, only by a written
instrument executed by the Company and Buyer's Representative or, in the case
of a waiver, by or on behalf of the party waiving compliance. The failure of
any party at any time to require performance of any provision of this
Agreement shall in no manner affect the right at a later time to enforce the
same. No waiver by any party of any condition or of any breach of any term,
covenant, representation or warranty contained in this Agreement, in any one
or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or of any breach of any such term,
covenant, representation or warranty or any other term, covenant,
representation or warranty set forth in this Agreement.
10.9 HEADINGS. The headings of the sections and paragraphs of this
agreement have been inserted for convenience or reference only and shall in
no way restrict or otherwise modify any of the terms or provisions of this
Agreement.
10.10 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement, express
or implied, is intended to or shall (a) confer on any person other than the
parties hereto and their respective successors or assigns any rights
(including third-party beneficiary rights), remedies, obligations or
liabilities under or by reason of this Agreement or (b) constitute the
parties hereto as partners or as participants in a joint venture. This
Agreement shall not provide third parties with any remedy, claim, liability,
reimbursement, cause of action or other right in excess of those existing
without reference to the terms of this Agreement. No third party shall have
any right, independent of any right that exists irrespective of this
Agreement, under or granted by
<PAGE>
this Agreement, to bring any suit at law or equity for any matter governed by
or subject to the provisions of this Agreement.
10.11 RULES OF CONSTRUCTION. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation or
rule of construction providing that ambiguities in any agreement or other
document will be construed against the party drafting such agreement or
document.
10.12 SEVERABILITY. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further
agree to replace such void or unenforceable provision of this Agreement with
a valid and enforceable provision that will achieve, to the extent possible,
the economic, business and other purposes of such void or unenforceable
provision.
[Remainder of page intentionally left blank]
<PAGE>
SIGNATURE PAGE FOR STOCK PURCHASE AGREEMENT
IN WITNESS WHEREOF, the Company, each of the Holders and each Purchaser
has executed this Agreement as of the day and year first above written.
BUYER:
--------------------------------------------
(Print or type name of Purchaser)
By:
--------------------------------------
(signature)
Name: --------------------------------------
(Print or type if signing on
Purchaser's behalf)
Title: -------------------------------------
(if applicable)
THE COMPANY: MISSION WEST PROPERTIES
By:
--------------------------------------
(signature)
Name: --------------------------------------
(Print or type name)
Title: -------------------------------------
(if applicable)
THE HOLDERS:
ALARMGUARD HOLDINGS, INC.
By:
--------------------------------------
(signature)
Name: --------------------------------------
(Print or type name)
Title: -------------------------------------
(if applicable)
<PAGE>
ADDITIONAL SIGNATURE PAGE FOR STOCK PURCHASE AGREEMENT
BYRON WEBB, JR.
--------------------------------------------
(signature)
WILLIAM E. NELSON
--------------------------------------------
(signature)
