<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 1-14166
MERIDIAN INDUSTRIAL TRUST, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
MARYLAND 94-3224765
- --------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
455 MARKET STREET
17TH FLOOR
SAN FRANCISCO, CALIFORNIA 94105
- ---------------------------------------- -----------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 281-3900
---------------------
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
------- -------
Indicate the number of shares outstanding of the common and preferred stock,
as of the latest practicable date:
SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK AS OF AUGUST 1, 1997: 2,272,727
SHARES OF COMMON STOCK AS OF AUGUST 1, 1997 :13,610,255
<PAGE>
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PART I: FINANCIAL INFORMATION
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ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the 1996 Form 10-K and the quarterly report
on Form 10-Q for the three months ended March 31, 1997 of Meridian Industrial
Trust, Inc. (the "Company"). These condensed consolidated statements have been
prepared in accordance with the instructions of the Securities and Exchange
Commission to Form 10-Q and do not include all the information and footnotes
required by generally accepted accounting principles for complete financial
statements.
In the opinion of the Company's management, all adjustments (consisting
only of a normal, recurring nature) considered necessary for a fair
presentation of results of operations for the interim period have been
included. The results of consolidated operations for the three and six month
periods ended June 30, 1997 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1997.
1
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
INVESTMENT IN REAL ESTATE:
Rental Properties Held for Investment $ 390,200 $ 318,671
Less: Accumulated Depreciation (8,030) (4,217)
---------- ----------
382,170 314,454
Rental Properties Held for Sale, Net of Accumulated Depreciation of
$148 at December 31, 1996 -- 7,530
---------- ----------
Total Investment in Real Estate 382,170 321,984
OTHER ASSETS:
Cash and Cash Equivalents 2,095 2,942
Restricted Cash and Cash Held In Escrow 1,998 2,314
Accounts Receivable, Net of Reserves of $420 and $571 at June 30, 1997
and December 31, 1996, respectively 830 1,659
Capitalized Loan Fees, Lease Commissions and Other Assets, Net 11,943 4,164
---------- ----------
TOTAL ASSETS $ 399,036 $ 333,063
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Mortgage Loan $ 66,094 $ 66,094
Unsecured Credit Facility 60,500 11,500
Mortgage Notes Payable, Net 16,414 --
Accrued Dividends Payable 4,650 4,648
Accounts Payable, Prepaid Rent and Other Liabilities 8,269 7,308
---------- ----------
TOTAL LIABILITIES 155,927 89,550
---------- ----------
Minority Interest in Consolidated Limited Partnerships 1,130 --
---------- ----------
STOCKHOLDERS' EQUITY:
Authorized Shares - 175,000,000 shares of Common Stock and 25,000,000
shares of Preferred Stock authorized, each with par value of $0.001;
13,603,676 and 13,595,563 shares of Common Stock issued and outstanding at
June 30, 1997 and December 31, 1996, respectively; and 2,272,727
shares of Series B Preferred Stock with a liquidation preference of $35,000
issued and outstanding at June 30, 1997 and December 31, 1996 16 16
Paid-in Capital 243,770 243,683
Distributions in Excess of Income (1,807) (186)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 241,979 243,513
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 399,036 $ 333,063
---------- ----------
---------- ----------
</TABLE>
The accompanying notes are an integral part of these statements
2
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
--------- -------- --------- -------
<S> <C> <C> <C> <C>
REVENUES:
Rentals from Real Estate Investments $ 12,870 $ 9,904 $ 24,564 $13,372
Interest and Other Income 147 228 304 384
--------- -------- --------- -------
TOTAL REVENUES 13,017 10,132 24,868 13,756
--------- -------- --------- -------
EXPENSES:
Interest Expense 2,160 1,679 3,784 2,537
Property Taxes 1,764 1,347 3,393 1,896
Property Operating Costs 956 1,144 2,042 1,314
General and Administrative 1,350 1,183 2,501 1,788
Depreciation and Amortization 2,211 1,337 4,216 1,843
--------- -------- --------- -------
TOTAL EXPENSES 8,441 6,690 15,936 9,378
--------- -------- --------- -------
Income Before Gain (Loss) on Sale of Properties
and Extraordinary Item 4,576 3,442 8,932 4,378
Gain (Loss) on Sale of Properties, Net (877) 7 (448) 7
--------- -------- --------- -------
Income Before Extraordinary Item 3,699 3,449 8,484 4,385
Extraordinary Item - Expenses Incurred in
Connection with Debt Restructuring
and Retirements (808) (36) (808) (411)
--------- -------- --------- -------
NET INCOME $ 2,891 $ 3,413 $ 7,676 $ 3,974
--------- -------- --------- -------
--------- -------- --------- -------
Net Income $ 2,891 $ 3,413 $ 7,676 $ 3,974
Less: Preferred Dividends Declared (705) (705) (1,409) (1,000)
--------- -------- --------- -------
NET INCOME ALLOCABLE TO COMMON SHARES $ 2,186 $ 2,708 $ 6,267 $ 2,974
--------- -------- --------- -------
--------- -------- --------- -------
NET INCOME ALLOCABLE TO COMMON PER WEIGHTED
AVERAGE COMMON SHARE OUTSTANDING $ 0.16 $ 0.28 $ 0.44 $ 0.44
--------- -------- --------- -------
--------- -------- --------- -------
</TABLE>
The accompanying notes are an integral part of these statement
3
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 7,676 $ 3,974
Adjustments to Reconcile Net Income to Cash
Provided by
Operating Activities:
Depreciation and Amortization 4,216 1,817
Amortization of Debt Premium (22) --
Amortization of Financing Costs 176 212
Straight Line Rent (851) (530)
Loss (Gain) on Sale of Properties, Net 448 (7)
Extraordinary Item - Expenses Incurred in Connection
with Debt Restructuring and Debt Retirements 808 411
(Increase) Decrease in Accounts Receivable and
Other Assets (6,004) 888
Net Decrease in Accounts Payable, Due to Affiliates,
Prepaid Rent, and Other Liabilities (75) (1,952)
-------- --------
Net Cash Provided by Operating Activities 6,372 4,813
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Contributed by Merged Trusts -- 11,892
Net Proceeds from Property Sales 11,195 3,889
Decrease (Increase) in Restricted Cash/Cash Held
In Escrow 317 (29)
Net Cash Paid in Connection with Asset Purchase -- (3,257)
Redemption of Series A Preferred Stock and Accrued
Dividends Payable -- (83)
Investment In Real Estate (57,148) (22,171)
Recurring Building Improvements (228) (204)
Recurring Tenant Improvements (637) (294)
Recurring Leasing Commissions (735) (477)
Maturity of Marketable Security -- 2,607
Receipt of Note Receivable 503 --
Purchase of Other Assets (94) (203)
-------- --------
Net Cash Used in Investing Activities (46,827) (8,330)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of Capitalized Loan Fees (121) (455)
Principal Payment on Mortgage Notes (24) --
Retirement of Debt and Advances from Affiliates -- (60,158)
Payoff of Short-Term Loan Payable -- (2,351)
Borrowings on Unsecured Credit Facility 53,500 40,900
Repayment of Borrowings on Unsecured Credit
Facility (4,500) (29,000)
Distributions Paid to Stockholders (9,295) (1,278)
Net Proceeds from issuance of Common and Preferred
Stock, Warrant Conversion and Stock Options 48 58,022
-------- --------
Net Cash Provided by Financing Activities 39,608 5,680
-------- --------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (847) 2,163
Cash and Cash Equivalents -- Beginning of Period 2,942 475
-------- --------
CASH AND CASH EQUIVALENTS -- END OF PERIOD $ 2,095 $ 2,638
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these statements
4
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 1997
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE AND PROPERTY DATA)
1. ORGANIZATION.
Meridian Industrial Trust, Inc. (the "Company") was incorporated in the
state of Maryland on May 18, 1995. The Company is a self-administered and
self-managed real estate investment trust ("REIT") engaged primarily in the
business of owning, acquiring, developing, managing and leasing
income-producing warehouse/distribution and light industrial properties. At
June 30, 1997, the Company's principal asset was its portfolio of sixty four
warehouse/distribution properties, eighteen light industrial properties and
two retail properties. In addition, at June 30, 1997, the Company had seven
build-to-suit properties under construction.
On February 23, 1996, the Company merged with Meridian Point Realty Trust
IV Co., Meridian Point Realty Trust VI Co. and Meridian Point Realty Trust VII
Co. ("Trust IV," "Trust VI" and "Trust VII," respectively, and collectively
referred to as the "Merged Trusts"), with the Company as the surviving entity
(that transaction is referred to below as the "Merger"). In addition,
concurrent with the Merger, the Company acquired certain properties that were
subject to certain mortgage notes and other liabilities, from Meridian Point
Realty Trust '83 ("Trust 83") (that transaction is referred to below as the
"Asset Purchase").
Prior to February 23, 1996, the Company had no operations other than
receiving interest on its investments and paying general and administrative
expenses.
The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the Company's 1996 Form 10-K and quarterly
report on Form 10-Q for the three months ended March 31, 1997.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
(a) BASIS OF PRESENTATION. The accompanying condensed consolidated
financial statements include the results of the Company, its wholly-owned
subsidiaries and its majority-owned and controlled partnerships. All
intercompany transactions have been eliminated. In accordance with generally
accepted accounting principles, the Company's investments in real estate
through partnerships are consolidated as the Company exercises control over
such investments.
(b) USE OF ESTIMATES. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
(c) CASH AND CASH EQUIVALENTS. The Company considers all short-term
investments with an original maturity of three months or less to be cash
equivalents.
5
<PAGE>
(d) NET INCOME PER SHARE. Net income per share is calculated by
dividing net income, after deduction of preferred stock dividends declared,
by the weighted average number of shares of the Company's common stock
("Common Stock") outstanding during the period. The weighted average number
of shares Common Stock outstanding was 14,099,794 and 14,098,608 for the
three and six months ended June 30, 1997, respectively. The weighted average
number of shares Common Stock outstanding was 9,830,547 and 6,712,366 for the
three and six months ended June 30, 1996, respectively.
The weighted average number of shares takes into account the dilutive
effects of stock options granted by the Company to its directors, officers and
employees pursuant to its stock plan, warrants issued in connection with the
Merger and shares to be issued pursuant to a stock option agreement with one of
its stockholders, aggregating to 501,039 additional shares of Common Stock for
the three and six months ended June 30, 1997. For the three and six months
ended June 30, 1996, the dilutive effect of the stock options granted
aggregated to 174,057 additional shares of Common Stock.
During the first quarter of 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard (SFAS) No. 128, "Earnings Per
Share". SFAS 128 requires the disclosure of basic earnings per share and
modifies existing guidance for computing diluted earnings per share. Under the
new standard, basic earnings per share are computed as earnings divided by the
weighted average number of shares of Common Stock outstanding, excluding the
dilutive effects of stock options and other potentially dilutive securities.
The effective date of SFAS No. 128 is December 15, 1997 and early adoption is
not permitted. The Company intends to adopt SFAS No. 128 during the quarter
and year ended December 31, 1997. Had the provisions of SFAS No. 128 been
applied to the Company's results of operations for the three months ended June
30, 1997 and 1996, the Company's basic earnings per share would have been $0.16
and $0.28 per share, respectively, and $0.46 and $0.45 per share for the six
months ended June 30, 1997 and 1996, respectively. The Company's diluted
earnings per share would have been $0.16 and $0.28 per share for the three
months ended June 30, 1997 and 1996, respectively, and $0.44 and $0.44 for the
six months ended June 30, 1997 and 1996, respectively.
May 23, 1997, was the first day of the exercise period for the
approximately 553,000 warrants ("Warrants") issued to former holders of Trust
VI and Trust VII common stock in connection with the merger of those entities
with the Company. Each Warrant entitles the holder to purchase one share of
the Company's Common Stock at the exercise price of $16.23. The exercise
period ends February 23, 1999. As of June 30, 1997 the Company has issued
1,562 shares pursuant to exercises of the Warrants.
(e) CONSTRUCTION IN PROGRESS. Costs clearly associated with the
development and construction of a real estate project are capitalized as
construction in progress. In addition, interest, real estate taxes, insurance
and other holding costs are capitalized until the property is placed in
service. During the three and six months ended June 30, 1997, interest
expenses totaling $473 and $684, respectively, were capitalized for properties
under construction. For the three and six months ended June 30, 1996, interest
expense totaling $46 was capitalized for properties under construction.
(f) INVESTMENT IN REAL ESTATE. Investments in Real Estate are
depreciated over 35 years using the straight-line method. Expenditures for
maintenance, repairs and improvements which do not materially prolong the
normal useful life of an asset are charged to operations as incurred. Tenant
improvements are capitalized and amortized under the straight-line method over
the term of the related lease.
6
<PAGE>
3. MORTGAGE NOTES PAYABLE.
The Company assumed a mortgage note with a principal balance of $5,724 in
connection with the acquisition of a property located in Corona, California on
April 29, 1997. The new loan has a maturity date of February 1, 1998 and
calls for monthly principal and interest payments of $55 based on an interest
rate of 10% per annum and a ten-year amortization schedule. As of June 30,
1997 this mortgage note had an outstanding balance of $5,702. Subsequent to
June 30, 1997, the Company paid off the balance on this mortgage note.
On May 13, 1997, the Company purchased a property located in Montebello,
California, subject to a mortgage note bearing an interest rate different from
the prevailing market rate at the date of acquisition. This interest rate
differential was recorded as a premium. The new loan amounting to $10,429 has
a maturity date of July 15, 1998 and provides for monthly principal and
interest payments of $96 based on an interest rate of 9.89% per annum and a 30-
year amortization schedule. The premium totaling $324 is amortized over the
term of the note using the effective interest method. As of June 30, 1997,
this mortgage note and debt premium had outstanding balances of $10,410 and
$302, respectively.
4. DEBT FACILITIES.
The Company acquired a fixed rate facility (the "Mortgage Loan") in
connection with the Merger. The Mortgage Loan has a principal balance of
$66,094, bears interest at the annual rate of 8.63%, requires interest only
payments until its maturity in 2005 and is secured by a pool of the Company's
properties having a net book value of $122,252 as of June 30, 1997.
Concurrent with the Merger, the Company entered into an unsecured credit
facility (the "Unsecured Credit Facility"). The Unsecured Credit Facility
bore interest at LIBOR plus 1.7%, was scheduled to mature in February 1998,
and provided for a maximum borrowing amount of $75,000. On April 22, 1997,
the Unsecured Credit Facility was amended and restated. The amended and
restated Unsecured Credit Facility provides for: (i) an increase of the
borrowing limit from $75,000 to $150,000, (ii) a decrease in the interest
rate spread over LIBOR from 1.7% to 1.4% and (iii) an extension of the
maturity date to April 3, 2000, from February 26, 1998. In addition, the
agreement provides that the interest rate spread will be lowered to 1.2% over
LIBOR upon the Company obtaining an investment-grade credit rating. The
Company wrote off $808 in loan costs in connection with this restructuring.
5. PROPERTY ACQUISITIONS AND DEVELOPMENTS.
During the six months ended June 30, 1997, the Company purchased land in
California for the development of two facilities that are expected to have an
aggregate square footage of 771,753. The facilities have target completion
dates of December 1997 and March 1998. The aggregate cost for the design and
construction of the two facilities is estimated to be approximately $28,576.
As of June 30, 1997, the Company had incurred total project costs of $11,002
relating to these two projects. The Company funded a portion of these costs
with cash on-hand and anticipates funding a majority of the remaining costs
with borrowings under its Unsecured Credit Facility
During the six months ended June 30, 1997, the Company purchased six
properties located in California, Texas and Wisconsin, with an aggregate
square footage of 1,384,098. The total purchase price totaled $49,129. The
Company funded a portion of these costs with cash on-hand and funded a
majority of the remaining costs with borrowings under its Unsecured Credit
Facility. In addition, the Company assumed mortgage notes totaling $16,153
and a corresponding premium totaling $324 on two properties located in
California (see Note 3).
7
<PAGE>
On February 11, 1997, the Company, through limited partnerships in which
it has a 50% interest, entered into agreements to develop two
warehouse/distribution facilities containing 129,600 and 117,600 square feet,
respectively. Both properties are located in Allen, Texas and have a target
completion date of August 1997. The development and lease-up costs for these
two facilities are estimated to total $7,800. The Company has contributed
$1,130 to the partnerships; these contributions were used to fund the initial
development costs. The other limited partners initially contributed the land
to the partnerships valued at $1,130. As of June 30, 1997, the Company had
incurred total project costs of $3,398 relating to these two projects. The
Company funded a portion of these costs with cash on-hand and anticipates
funding a majority of the remaining costs with borrowings under its Unsecured
Credit Facility.
For the six months ended June 30, 1997, the Company incurred total project
costs of $5,177 relating to build-to-suit facilities that it owns in Minnesota
and Georgia. The facility located in Minnesota was placed in service in March
1997. The Company funded a portion of the construction costs for these projects
with cash on-hand and anticipates funding a majority of the remaining costs
with borrowings under its Unsecured Credit Facility.
On December 20, 1996, the Company, through a limited partnership in which
it has an 86% interest, purchased a 19.15 acre property located in Orlando,
Florida. The property is being improved with a 242,160 square foot build-to-
suit facility with a target completion date of September 1997. The cost for
acquisition of the property and design and construction of the facility is
estimated to total $8,917. As of June 30, 1997, this partnership had incurred
total project costs of $7,780, of which $5,292 was incurred in 1997.
Subsequent to June 30, 1997, the partnership purchased land in Tennessee for
the development of a facility that is expected to have an aggregate square
footage of 178,630. The aggregate cost for the design and construction of this
facility is estimated to be approximately $7,282, with a target completion date
of September 1998.
Also subsequent to June 30, 1997, the Company purchased two properties
located in California and New Jersey with an aggregate square footage of
291,370. The purchase prices totaled $13,456. The Company funded the costs
with borrowings under its Unsecured Credit Facility.
6. PROPERTY DISPOSITIONS.
On January 10, 1997, the Company sold two properties located in
Birmingham, Alabama for an aggregate sales price of $3,400. After closing
costs and pro-rated items which totaled $173, the Company received net proceeds
totaling $3,227.
On May 15, 1997, the Company sold the Wildwood property located in Irving,
Texas for an aggregate sales price of $4,555. After closing costs and pro-
rated items which totaled $198, the Company received net proceeds totaling
$4,357.
On June 18, 1997, the Company sold the Golden Cove property located in
Rancho Palos Verdes, California for an aggregate sales price of $3,000. After
closing cost and pro-rated items which totaled $189, the Company received net
proceeds totaling $2,811.
On June 26, 1997, the Company sold the Phoenix North 23rd property located
in Phoenix, Arizona for an aggregate sales price of $878. After closing cost
and pro-rated items which totaled $78, the Company received net proceeds
totaling $800.
8
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7. SHELF REGISTRATION.
The Company has filed a universal shelf registration statement with the
Securities and Exchange Commission covering Common Stock, the Company's
preferred stock ("Preferred Stock"), warrants and debt securities having an
aggregate offering price of up to $600 million which may be offered by the
Company from time to time in one or more transactions. The Company expects to
use the proceeds of any offering under its universal shelf registration
statement for the acquisition and development of modern industrial properties
as well as the repayment of debt. There can be no assurance that the Company
will offer any of the securities that are registered under this registration
statement.
8. PORTFOLIO ACQUISITIONS.
On May 29, 1997, the Company agreed to acquire from Ameritech Pension
Trust ("Ameritech") certain warehouse/distribution properties in a property-for-
stock swap of 23 properties for 7,314,026 shares of Common Stock. The
Ameritech portfolio consists of 29 buildings comprising 4.1 million square feet
including a participating loan secured by a seven building, 623,566 square foot
project. The properties are located in six markets with the largest
concentrations in Dallas, the Los Angeles Basin, Phoenix and Chicago.
The Company has also agreed to acquire from The Prudential Insurance
Company of America and related entities (collectively "Prudential") (i) a total
of 57 industrial buildings comprising 5.23 million square feet for
approximately $182,000 and (ii) approximately 179 acres of land intended for
development of an additional 3.5 million square feet of industrial buildings
for approximately $14,200. The properties and land are located in seven
markets with the largest concentrations in the Los Angeles Basin and Florida.
The Company will issue and sell 7,096,153 shares of restricted Common Stock to
Prudential and three accounts managed by Prudential ("Prudential Purchasers")
at a purchase price of $19.73 per share providing net proceeds of $140,000.
The Company intends to use the net proceeds of the stock sale to the Prudential
Purchasers to partially fund the Prudential property acquisitions. If the
Prudential Purchasers stock transaction (which is conditioned on certain
approvals) does not close, the Company expects to fund the Prudential portfolio
acquisition with debt financing or the issuance of additional equity.
On June 19, 1997, the Company signed two letters of intent ("Agreements")
to acquire 12 industrial properties comprising 1.8 million square feet from two
separate accounts ("Portfolio A" and "Portfolio B") managed by Prudential Real
Estate Investors. The properties to be acquired are located in Atlanta,
Chicago, Columbus and Dallas. The Company has agreed to pay approximately
$9,500 and issue 1,106,932 shares of Common Stock for Portfolio A and pay
approximately $16,300 and issue 808,887 shares of Common Stock for Portfolio B.
The total $25,800 cash portion of the purchase prices will be funded from
borrowings on the Company's Unsecured Credit Facility.
9
<PAGE>
9. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION.
The following table reflects supplemental disclosure of cash flow
transactions for the six months ended June 30, 1997 and 1996.
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Cash Paid For Interest Expense $ 4,023 $ 1,652
Merger Transaction:
Acquisition Cost Allocated to Investment in Real Estate -- 203,489
Restricted Cash -- 5,551
Receivables, Net -- 2,889
Note Receivable from Affiliate -- 720
Capitalized Loan Fees -- 992
Cancellation of Redeemable Series A Preferred Stock -- 960
Mortgage Loan Assumed -- (66,094)
Other Long-Term Debts Assumed -- (43,191)
Accounts Payable Assumed -- (2,869)
Shares of Common Stock Issued, at Par Value -- (8)
Paid-in Capital -- (109,842)
Other Net Liabilities Assumed -- (4,489)
Asset Purchase Transaction:
Acquisition Cost Allocated to Investment in Real Estate -- 26,342
Restricted Cash Applied to Debt Payment -- 117
Mortgage Notes Payable Assumed -- (16,334)
Paid-in Capital of Common Shares Issued -- (6,392)
Accrued Closing Costs and Pro-rated Items -- (476)
</TABLE>
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
(DOLLARS IN THOUSANDS, UNLESS INDICATED OTHERWISE)
INTRODUCTION
The Company is a self-administered and self-managed real estate investment
trust engaged primarily in the business of owning, acquiring, managing, leasing
and developing income-producing warehouse/distribution and light industrial
properties. At June 30, 1997, the Company's principal asset was its portfolio
of sixty four warehouse/distribution properties, eighteen light industrial
properties and two retail properties. In addition, at June 30, 1997, the
Company had seven build-to-suit properties under construction. As of June 30,
1997 and 1996, the Company's properties were 97% and 92% occupied,
respectively.
The following discussion should be read in conjunction with the Company's
Form 10-K for 1996, the Company's quarterly report on Form 10-Q for the three
months ended March 31, 1997, and the Condensed Consolidated Balance Sheets,
Condensed Consolidated Statements of Operations and Condensed Consolidated
Statements of Cash Flows and the notes thereto included in pages 2 through 10
of this report. Unless otherwise defined in this report, or unless the context
otherwise requires, the capitalized words or phrases used in this section
either (i) describe accounting terms that are used as line items in such
financial statements, or (ii) have the meanings ascribed to them in such
financial statements and the notes thereto.
LIQUIDITY AND CAPITAL RESOURCES
GENERAL
The Company intends to finance property acquisitions, expansions and
renovations using a combination of cash flow from operations and debt
financing, supplemented with private or public debt or equity placements.
Where intermediate or long-term debt financing is employed, the Company will
generally seek to obtain fixed interest rates or enter into agreements intended
to cap the effective interest rate on floating rate debt.
SOURCES OF LIQUIDITY
The Company's main sources of liquidity are: (i) cash flows from operating
activities, (ii) cash reserves, (iii) borrowings under its Unsecured Credit
Facility, (iv) proceeds from private or public equity or debt placements, and
(v) proceeds from property dispositions. A summary of the Company's historical
cash flows is as follows:
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1997 JUNE 30, 1996
------------- -------------
<S> <C> <C>
Cash flows provided by (used in):
Operating activities $ 6,372 $ 4,813
Investing activities (46,827) (8,330)
Financing activities 39,608 5,680
</TABLE>
11
<PAGE>
In addition to cash flows and net income, management and industry analysts
generally consider Funds From Operations to be one additional measure of the
performance of an equity REIT because, together with net income and cash flows,
Funds From Operations provides investors with an additional basis to evaluate
the ability of the Company to incur and service debt and to fund acquisitions
and other capital expenditures. However, Funds From Operations does not
measure whether cash flow is sufficient to fund all of the Company's cash needs
including principal amortization, capital improvements and distributions to
stockholders. Funds From Operations also does not represent cash generated
from operating, investing or financing activities as determined in accordance
with generally accepted accounting principles. Funds From Operations should not
be considered as an alternative to net income as an indicator of the Company's
operating performance or as an alternative to cash flow as a measure of
liquidity. Funds From Operations represents net income before extraordinary
items, adjusted for depreciation on real property and amortization of tenant
improvement costs and lease commissions, and gains or losses from the sale of
properties (if any). A reconciliation of the Company's income before gains or
losses on sale of properties and extraordinary item to Funds From Operations
for the six month periods ended June 30, 1997 and 1996 is as follows:
SIX MONTHS ENDED
JUNE 30,
1997 1996
-------- --------
Income Before Gain (Loss) on Sale
of Properties and Extraordinary Item $ 8,932 $ 4,378
Reconciling Item:
Depreciation and Amortization
Relating to Real Estate Operations 4,179 1,830
-------- --------
Funds From Operations $ 13,111 $ 6,208
-------- --------
-------- --------
As of June 30, 1997, the Company had $2,095 in unrestricted cash and cash
equivalents.
At June 30, 1997, the outstanding balance on the Mortgage Loan was
$66,094. The Mortgage Loan bears interest at the annual rate of 8.63% and
requires interest only payments until its maturity in 2005.
During the six months ended June 30, 1997, the Company borrowed $53,500
under its Unsecured Credit Facility to fund property acquisitions and
developments. Also, the Company repaid borrowings under the facility totaling
$4,500. As of June 30, 1997, the Company had borrowings of $60,500 outstanding
under the Unsecured Credit Facility.
On April 22, 1997, the Unsecured Credit Facility was amended and restated.
The amended and restated Unsecured Credit Facility provides for: (i) an
increase of the borrowing limit from $75,000 to $150,000, (ii) a decrease in
the interest rate spread over LIBOR from 1.7% to 1.4% and (iii) an extension of
the maturity date to April 3, 2000, from February 26, 1998. In addition, the
agreement provides that the interest rate spread will be lowered to 1.2% over
LIBOR upon the Company obtaining an investment-grade credit rating.
On April 29, 1997, the Company assumed a mortgage note totaling $5,724 in
connection with the acquisition of a property located in Corona, California.
The loan has monthly principal and interest payments of $55. The Company
assumed the mortgage loan in order to avoid penalty charges on early payment of
the loan. The Company paid off this mortgage note subsequent to June 30, 1997.
On May 13, 1997, the Company purchased a property located in Montebello,
California, subject to a mortgage note and a corresponding premium totaling
$10,429 and $324, respectively, at acquisition. The loan has monthly principal
and interest payments of $96 and matures on July 15, 1998.
12
<PAGE>
In addition, the Company may incur indebtedness in the future that bears
interest at a variable rate or may be required to refinance its debt at higher
rates. Increases in interest rates could increase the Company's interest
expense, which could adversely affect the Company's ability to pay
distributions to stockholders.
The Company has filed a universal shelf registration statement with the
Securities and Exchange Commission covering Common Stock, Preferred Stock,
warrants and debt securities that have an aggregate offering price of up to
$600 million and which may be offered by the Company from time to time in one
or more transactions. The Company expects to use the proceeds of any offering
under its universal shelf registration statement for the acquisition and
development of industrial properties as well as the repayment of debt. There
can be no assurance that the Company will offer any of the securities that are
registered under this registration statement.
On January 10, 1997, the Company sold two properties located in
Birmingham, Alabama for an aggregate sales price of $3,400. After closing
costs and pro-rated items which totaled $173, the Company received net proceeds
totaling $3,227.
On May 15, 1997, the Company sold the Wildwood property located in Irving,
Texas for an aggregate sales price of $4,555. After closing costs and pro-
rated items which totaled $198, the Company received net proceeds totaling
$4,357.
On June 18, 1997, the Company sold the Golden Cove property located in
Rancho Palos Verdes, California for an aggregate sales price of $3,000. After
closing cost and pro-rated items which totaled $189, the Company received net
proceeds totaling $2,811.
On June 26, 1997, the Company sold the Phoenix North 23rd property located
in Phoenix, Arizona for an aggregate sales price of $878. After closing cost
and pro-rated items which totaled $78, the Company received net proceeds
totaling $800.
USES OF LIQUIDITY
The Company's principal applications of its cash resources are: (i)
payment of operating costs including property expenses, property taxes, general
and administrative expenses, and interest expense, (ii) payments for capital
improvements and leasing costs, (iii) payment of distributions, (iv) principal
paydowns on its debt, and (v) funding of property acquisitions and
developments.
The Company anticipates during 1997 that it will have sufficient Funds
From Operations and cash flows to fund: (i) its operating needs, (ii) capital
improvements on its properties, and (iii) the proposed distributions to its
common and preferred stockholders. Planned capital improvements on the
Company's properties consists of tenant improvements and other expenditures
necessary to lease and maintain the properties.
During the six months ended June 30, 1997, the Company declared dividends
to holders of its Common Stock and Series B Preferred Stock in the aggregate
amounts of $7,888 and $1,409, respectively, or $0.29 and $0.31 per share,
respectively.
During the six months ended June 30, 1997, the Company purchased land in
California for the development of two facilities that are expected to have an
aggregate square footage of 771,753. The facilities have target completion
dates of December 1997 and March 1998. The aggregate cost for the design and
construction of the two facilities is estimated to be approximately $28,576.
As of June 30, 1997, the Company had incurred total project costs of $11,002
relating to these two projects. The Company funded a portion of these costs
with cash on-hand and anticipates funding a majority of the remaining costs
with borrowings under its Unsecured Credit Facility
13
<PAGE>
During the six months ended June 30, 1997, the Company purchased six
properties located in California, Texas and Wisconsin, with an aggregate square
footage of 1,384,098. The purchase prices totaled $49,129. The Company funded
these costs with cash on-hand, assumption of two mortgage notes aggregating to
$16,153, and borrowings under its Unsecured Credit Facility.
On February 11, 1997, the Company, through limited partnerships in which
it has a 50% interest, entered into agreements to develop two
warehouse/distribution facilities containing 129,600 and 117,600 square feet,
respectively. Both properties are located in Allen, Texas and have a target
completion date of August 1997. The development and lease-up costs for the two
facilities are estimated to total $7,800. The Company has contributed $1,130 to
the partnerships; these contributions were used to fund the initial development
costs. The other limited partners initially contributed the land to the
partnerships valued at $1,130. As of June 30, 1997, the Company had incurred
total project costs of $3,398 relating to these two projects. The Company
funded a portion of these costs with cash on-hand and anticipates funding a
majority of the remaining costs with borrowings under its Unsecured Credit
Facility.
For the six months ended June 30, 1997, the Company incurred total project
costs of $5,177 relating to build-to-suit facilities that it owns in Minnesota
and Georgia. The facility located in Minnesota was placed in service in March
1997. The Company funded a portion of the construction costs for these projects
with cash on-hand and anticipates funding a majority of the remaining costs
with borrowings under its Unsecured Credit Facility.
On December 20, 1996, the Company, through a limited partnership in which
it has an 86% interest, purchased a 19.15 acre property located in Orlando,
Florida. The property is being improved with a 242,160 square foot build-to-
suit facility with a target completion date of September 1997. The cost for
acquisition of the property and design and construction of the facility is
estimated to total $8,917. As of June 30, 1997, this partnership had incurred
total project costs of $7,780, of which $5,292 was incurred in 1997.
Subsequent to June 30, 1997, the partnership purchased land in Tennessee for
the development of a facility that is expected to have an aggregate square
footage of 178,630. The aggregate cost for the design and construction of this
facility is estimated to be approximately $7,282, with a target completion date
of September 1998.
Subsequent to June 30, 1997, the Company purchased two properties located
in California and New Jersey with an aggregate square footage of 291,370. The
purchase prices totaled $13,456. The Company funded the costs with borrowings
under its Unsecured Credit Facility.
On May 29, 1997, the Company agreed to acquire from Ameritech Pension
Trust ("Ameritech") certain warehouse/distribution properties in a property-for-
stock swap of 23 properties for 7,314,026 shares of Common Stock. The
Ameritech portfolio consists of 29 buildings comprising 4.1 million square feet
including a participating loan secured by a seven building, 623,566 square foot
project. The properties are located in six markets with the largest
concentrations in Dallas, the Los Angeles Basin, Phoenix and Chicago.
14
<PAGE>
The Company has also agreed to acquire from The Prudential Insurance
Company of America and related entities (collectively "Prudential") (i) a total
of 57 industrial buildings comprising 5.23 million square feet for
approximately $182,000 and (ii) approximately 179 acres of land intended for
development of an additional 3.5 million square feet of industrial buildings
for approximately $14,200. The properties and land are located in seven
markets with the largest concentrations in the Los Angeles Basin and Florida.
The Company will issue and sell 7,096,153 shares of restricted Common Stock to
Prudential and three accounts managed by Prudential ("Prudential Purchasers")
at a purchase price of $19.73 per share providing net proceeds of $140,000.
The Company intends to use the net proceeds of the stock sale transaction to
the Prudential Purchasers to partially fund the Prudential property
acquisitions. If the Prudential Purchasers stock transaction (which is
conditioned on certain approvals) does not close, the Company expects to fund
the Prudential portfolio acquisition with debt financing or the issuance of
additional equity.
On June 19, 1997, the Company signed two letters of intent ("Agreements")
to acquire 12 industrial properties comprising 1.8 million square feet from two
separate accounts ("Portfolio A" and "Portfolio B") managed by Prudential Real
Estate Investors. The properties to be acquired are located in Atlanta,
Chicago, Columbus and Dallas. The Company has agreed to pay approximately
$9,500 and issue 1,106,932 shares of Common Stock for Portfolio A and pay
approximately $16,300 and issue 808,887 shares of Common Stock for Portfolio B.
The total $25,800 cash portion of the purchase prices will be funded from the
Company's Unsecured Credit Facility.
Upon closing the Ameritech, Prudential and Prudential Real Estate
Investors portfolio transactions, the Company anticipates that it will be fully
drawn on the Unsecured Credit Facility. The Company is currently negotiating
with its bank lenders to obtain additional financing to fund its future cash
requirements. There can however be no assurances that the Company will be
successful in its negotiations.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
The Company was incorporated on May 18, 1995. The Merger and Asset
Purchase were consummated on February 23, 1996. Prior to the Merger and Asset
Purchase, the Company had no operating activities other than receiving interest
on its investments and paying general and administrative expenses. In
comparison to the operating activities of the Company for 1997 which reflect
six full months of operations from January 1, 1997 to June 30, 1997, the
historical results of operations for the six months ended June 30, 1996 reflect
the operating activities of the Company from February 23, 1996 to June 30, 1996
(the difference between these two time periods are referred to as "Short Period
Differences").
Rentals from Real Estate Investments for the six months ended June 30,
1997 and 1996 totaled $24,564 and $13,372, respectively. The increase of
$11,192 was primarily due to: (i) the Short Period Differences, (ii)
properties acquired during 1996 and 1997 ("Property Acquisitions") which
increased rental revenues by $5,385, and (ii) the rental revenues generated by
the build-to-suit properties placed in service during 1996 and 1997 ("Completed
Build-to-Suits") totaling $1,805. These increases were partially offset by
properties disposed of during 1996 and 1997 ("Property Dispositions") which
reduced rental revenues by $2,229.
Compared to the same period in 1996, Interest Expense increased by $1,247
to $3,784 during the six months ended June 30, 1997. The increase was
primarily due to the Short Period Differences.
Property Taxes increased by $1,497 to $3,393 during the six months ended
June 30, 1997 compared to the same period in 1996. The increase was primarily
due to: (i) the Short Period Differences, (ii) the property taxes attributable
to the Property Acquisitions totaling $577, and (iii) the property taxes for
the Completed Build-to-Suits amounting to $309. These increases were partially
offset by Property Dispositions which reduced Property Taxes by $254.
15
<PAGE>
Property Operating Costs increased by $728 to $2,042 during the six months
ended June 30, 1997 compared to the same period in 1996. The increase was
primarily due to: (i) the Short Period Differences and (ii) the operating
costs attributable to the Property Acquisitions totaling $248. These increases
were partially offset by Property Dispositions which reduced Property Operating
Costs by $353.
General and Administrative expenses totaled $2,501 and $1,788 for the six
months ended June 30, 1997 and 1996, respectively. The increase of $713 is
primarily due to the Short Period Differences.
Depreciation and Amortization expense increased by $2,373 to $4,216 during
the six months ended June 30, 1997 compared to the same period in 1996. The
increase was primarily due to: (i) the Short Period Differences, (ii) the
depreciation costs attributable to the Property Acquisitions totaling $1,110
and (iii) the depreciation for the Completed Build-to-Suits amounting to $424.
These increases were partially offset by Property Dispositions which reduced
Depreciation and Amortization expenses by $230.
The Net Loss on Sale of Properties totaling $448 for the six months ended
June 30, 1997 was attributable to the disposition of the Wildwood and Golden
Cove properties which resulted in a total loss of $1,158. The losses were
partially offset by gains on the disposition of the Birmingham I, Birmingham II
and Phoenix North 23rd properties totaling $710.
The Extraordinary Item totaling $808 for the six months ended June 30,
1997 was attributable to the restructuring of the Company's Unsecured Credit
Facility. The Extraordinary Item totaling $411 for the six months ended June
30, 1996 was incurred in connection with the retirement of debt assumed in
connection with the Merger and Asset Purchase.
RISKS AND UNCERTAINTIES ASSOCIATED WITH FORWARD LOOKING STATEMENTS
This report contains statements which constitute forward looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Those statements appear in a number
of places in this report and include statements regarding the intent, belief or
current expectations of the Company, its directors or its officers with respect
to, among other things: (i) potential acquisitions or property developments by
the Company; (ii) the Company's financing plans; (iii) trends affecting the
Company's financial condition or results of operations; (iv) the Company's
growth strategy, operating strategy and financing strategy; (v) the declaration
and payment of dividends; and (vi) regulatory matters affecting the Company.
Prospective investors are cautioned that any such forward looking statements
are not guarantees of future performance and involve risks and uncertainties,
and that actual results may differ materially from those projected in the
forward looking statements as a result of various factors. Risks and
uncertainties associated with the Company's acquisition activities include
risks that: acquisition opportunities explored by the Company may be abandoned,
investments will fail to perform in accordance with expectations and that
analysis with respect to the cost of improvements to bring an acquired project
up to standards will prove inaccurate, as well as general investment risks
associated with any new real estate investment. The Company disclaims any
obligation to update the forward looking statements in this report.
16
<PAGE>
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company or
any partnership in which the Company has an interest is a party or to
which any of the assets of the Company or any such partnership is subject.
ITEM 2. CHANGES IN SECURITIES. [TO BE UPDATED]
A provision in the Company's Amended and Restated Employee and Director
Incentive Stock Plan allows directors to elect to receive all or a portion
of their annual director fees in Company Common Stock rather than in cash.
Pursuant to this provision, the Company on April 1, 1997, issued 844
shares of its Common Stock to directors who so elected. There shares were
valued at $22.375 per share for purposes of this issuance. The Company
issued these shares in reliance on a exemption from registration under
section 4(2) of the Securities Act of 1933.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Company held its annual meeting of stockholders on May 16, 1997. At
that meeting, the stockholders voted on and approved the following
proposals:
1. The election of seven directors for terms expiring in 1998.
2. A proposal to ratify the selection of Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending December 31,
1997.
3. An amendment to the Company's Employee and Director Incentive Stock
Plan.
The proposals were approved by the following votes:
1. ELECTION OF DIRECTORS
Name For Against
---- --- -------
Allen J. Anderson 12,193,641 132,987
C.E. Cornutt 12,194,181 132,447
T. Patrick Duncan 12,194,135 132,493
Peter O. Hanson 12,194,124 132,504
John S. Moody 11,635,364 691,264
Kenneth N. Stensby 12,194,268 132,360
Lee W. Wilson 12,194,288 132,340
17
<PAGE>
2. RATIFICATION OF INDEPENDENT AUDITORS
For Against Abstentions Broker Non-Votes
--- ------- ----------- ----------------
12,249,980 25,686 50,962 N/A
3. AMENDMENT TO THE EMPLOYEE DIRECTOR INCENTIVE STOCK PLAN
For Against Abstentions Broker Non-Votes
--- ------- ----------- ----------------
9,598,187 1,465,660 159,014 N/A
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
NO. DESCRIPTION
---- -----------
10.1 Amended and Restated Stock Purchase Agreement dated June 12,
1997 by and between the Company as Seller and The Prudential
Insurance Company of America, as Purchaser together with a summary
of the economic terms of three additional Stock Purchase
Agreements into which the Company as Seller has entered with
Strategic Performance Fund-II, Inc. as Purchaser, The Prudential
Variable Contract Real Property Partnership as Purchaser, and The
Prudential Insurance Company of America on behalf of a single
client insurance company account contained in Group Annuity
Contract No. GA-9032 as Purchaser.
10.2 Purchase and Sale Agreement dated May 29, 1997 by and
between The Prudential Insurance Company of America and the
Company covering Texas properties together with the First
Amendment thereto dated July 7, 1997, the Second Amendment thereto
dated July 22, 1997, and the Third Amendment thereto dated August 5,
1997.
10.3 Summary of the Purchase and Sale Agreement dated May 29,
1997 by and between The Prudential Insurance Company of America
and the Company covering the Cedarpointe (California) properties
together with the First Amendment thereto dated July 7, 1997, the
Second Amendment thereto dated July 22, 1997, and the Third
Amendment thereto dated August 5, 1997.
10.4 Summary of the Purchase and Sale Agreement dated May 29,
1997 by and between The Prudential Insurance Company of America
and the Company covering the 460 Ellis Road (Jacksonville) and
Centerport properties together with the First Amendment thereto
dated July 7, 1997, the Second Amendment thereto dated July 22,
1997, and the Third Amendment thereto dated August 5, 1997.
10.5 Summary of the Purchase and Sale Agreement dated May 29,
1997 by and between The Prudential Insurance Company of America
and the Company covering Michigan, Louisiana, and Virginia
properties together with the First Amendment thereto dated July 7,
1997, the Second Amendment thereto dated July 22, 1997, and the
Third Amendment thereto dated August 5, 1997.
18
<PAGE>
NO. DESCRIPTION
---- -----------
10.6 Summary of the Purchase and Sale Agreement dated May 29,
1997 by and between The Prudential Insurance Company of America
and the Company covering Illinois, Michigan and California land
together with the First Amendment thereto dated July 7, 1997, the
Second Amendment thereto dated July 22, 1997, and the Third
Amendment thereto dated August 5, 1997.
10.7 Agreement of Purchase and Sale and Joint Escrow
Instructions dated May __, 1997 between the Company and State
Street Bank and Trust Company, as Trustee for Ameritech Pension
Trust.
10.8 Second Amended and Restated Revolving Credit Agreement
dated April 21, 1997 among the (i) the Company, (ii) The First
National Bank of Boston, Texas Commerce Bank National Association,
Nationsbank of Texas, N.A., Wells Fargo Bank, N.A., Dresdner Bank
A.G., and First American Bank Texas, S.S.B. (collectively, the
"Banks"). (iii) The First National Bank of Boston as agent for the
Banks, and (iv) Texas Commerce Bank, National Association and
Nationsbank of Texas, N.A. as co-agents for the Banks.
10.9 First Amended and Restated Guaranty of Payment and Performance dated
April 21, 1997 and executed by MIT Unsecured L.P.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K: No Form 8-K reports were filed during the
quarter ended June 30, 1997
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
MERIDIAN INDUSTRIAL TRUST, INC.
Dated: August 13, 1997 By: /s/ Allen J. Anderson
------------------------------------
Allen J. Anderson
Chairman and Chief Executive Officer
(Principal Executive Officer)
Dated: August 13, 1997 By: /s/ Milton K. Reeder
------------------------------------
Milton K. Reeder
President and Chief Financial Officer
(Principal Financial Officer)
20
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number
(corresponding to the Sequentially
Exhibit Table of Item Numbered
601 of Regulation S-K) Description Page
- ---------------------- ----------- ------------
<S> <C> <C>
10.1 Amended and Restated Stock Purchase Agreement dated June 12,
1997 by and between the Company as Seller and The Prudential
Insurance Company of America, as Purchaser together with a
summary of the economic terms of three additional Stock
Purchase Agreements into which the Company as Seller has
entered with Strategic Performance Fund-II, Inc. as Purchaser,
The Prudential Variable Contract Real Property Partnership as
Purchaser, and The Prudential Insurance Company of America on
behalf of a single client insurance company account contained
in Group Annuity Contract No. GA-9032 as Purchaser.
10.2 Purchase and Sale Agreement dated May 29, 1997 by and between
The Prudential Insurance Company of America and the Company
covering Texas properties together with the First Amendment
thereto dated July 7, 1997, the Second Amendment thereto dated
July 22, 1997, and the Third Amendment thereto dated August 5,
1997.
10.3 Summary of the Purchase and Sale Agreement dated May 29, 1997
by and between The Prudential Insurance Company of America and
the Company covering the Cedarpointe (California) properties
together with the First Amendment thereto dated July 7, 1997,
the Second Amendment thereto dated July 22, 1997, and the Third
Amendment thereto dated August 5, 1997.
10.4 Summary of the Purchase and Sale Agreement dated May 29, 1997
by and between The Prudential Insurance Company of America and
the Company covering the 460 Ellis Road (Jacksonville) and
Centerport properties together with the First Amendment thereto
dated July 7, 1997, the Second Amendment thereto dated July 22,
1997, and the Third Amendment thereto dated August 5, 1997
10.5 Summary of the Purchase and Sale Agreement dated May 29, 1997
by and between The Prudential Insurance Company of America and
the Company covering Michigan, Louisiana, and Virginia
properties together with the First Amendment thereto dated July
7, 1997, the Second Amendment thereto dated July 22, 1997, and
the Third Amendment thereto dated August 5, 1997.
10.6 Summary of the Purchase and Sale Agreement dated May 29, 1997
by and between The Prudential Insurance Company of America and
the Company covering Illinois, Michigan and California land
together with the First Amendment thereto dated July 7, 1997,
the Second Amendment thereto dated July 22, 1997, and the Third
Amendment thereto dated August 5, 1997.
21
<PAGE>
Exhibit Number
(corresponding to the Sequentially
Exhibit Table of Item Numbered
601 of Regulation S-K) Description Page
- ---------------------- ----------- ------------
10.7 Agreement of Purchase and Sale and Joint Escrow Instructions
dated May __, 1997 between the Company and State Street Bank
and Trust Company, as Trustee for Ameritech Pension Trust.
10.8 Second Amended and Restated Revolving Credit Agreement dated
April 21, 1997 among the (i) the Company, (ii) The First
National Bank of Boston, Texas Commerce Bank National
Association, Nationsbank of Texas, N.A., Wells Fargo Bank,
N.A., Dresdner Bank A.G., and First American Bank Texas, S.S.B.
(collectively, the "Banks"). (iii) The First National Bank of
Boston as agent for the Banks, and (iv) Texas Commerce Bank,
National Association and Nationsbank of Texas, N.A. as co-
agents for the Banks.
10.9 First Amended and Restated Guaranty of Payment and Performance
dated April 21, 1997 and executed by MIT Unsecured L.P.
27.1 Financial Data Schedule.
</TABLE>
22
<PAGE>
EXECUTION
- -------------------------------------------------------------------------------
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
BY AND BETWEEN
MERIDIAN INDUSTRIAL TRUST, INC.,
AS SELLER
AND
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
AS PURCHASER
COMMON STOCK
(par value $.001 per share)
June 12, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definition. . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II PURCHASE OF COMMON STOCK. . . . . . . . . . . . . . . . . . . . 6
Section 2.1 Purchase of Shares; Closing . . . . . . . . . . . . . . . . . 6
Section 2.2 Dividend Adjustment.. . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . 7
Section 3.1 Representations and Warranties of the Company.. . . . . . . . 7
Section 3.2 Representations and Warranties of Purchaser.. . . . . . . . . 15
ARTICLE IV CONDITIONS PRECEDENT TO CLOSING . . . . . . . . . . . . . . . . 17
Section 4.1 Conditions Precedent to Obligations of Purchaser. . . . . . . 17
Section 4.2 Conditions Precedent to Obligations of the Company. . . . . . 19
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.1 Furnishing of Information.. . . . . . . . . . . . . . . . . . 20
Section 5.2 Real Estate Investment Trust. . . . . . . . . . . . . . . . . 21
Section 5.3 Sale of Shares by Purchaser.. . . . . . . . . . . . . . . . . 21
Section 5.4 Approvals.. . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.5 Registration Rights Agreement.. . . . . . . . . . . . . . . . 21
Section 5.6 Excepted Holder Agreements. . . . . . . . . . . . . . . . . . 21
Section 5.7 Notification of Certain Matters.. . . . . . . . . . . . . . . 21
Section 5.8 Nomination of Board Member. . . . . . . . . . . . . . . . . . 22
Section 5.9 Shareholders' Meeting; Preparation of Proxy Statement . . . . 22
Section 5.10 Publicity and Reports . . . . . . . . . . . . . . . . . . . . 23
Section 5.11 Conduct of Business . . . . . . . . . . . . . . . . . . . . . 23
Section 5.12 Negative Covenants of the Company . . . . . . . . . . . . . . 23
Section 5.13 Inspection Rights . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.14 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 5.15 Real Estate Operating Company . . . . . . . . . . . . . . . . 24
Section 5.16 Amendment to Investor Rights Agreement. . . . . . . . . . . . 24
i
<PAGE>
PAGE
Section 5.17 Delivery of Certain Documents . . . . . . . . . . . . . . . . 24
Section 5.18 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.1 Survival of Provisions. . . . . . . . . . . . . . . . . . . . 25
Section 6.2 Termination.. . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.3 No Waiver; Modification in Writing. . . . . . . . . . . . . . 26
Section 6.4 Communications. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 6.5 Execution in Counterparts.. . . . . . . . . . . . . . . . . . 26
Section 6.6 Binding Effect; Assignment. . . . . . . . . . . . . . . . . . 26
Section 6.7 Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.8 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.9 Severability of Provisions. . . . . . . . . . . . . . . . . . 27
Section 6.10 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.11 Integration.. . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.12 Enforcement of Covenants. . . . . . . . . . . . . . . . . . . 27
Section 6.13 Waiver by Jury Trial. . . . . . . . . . . . . . . . . . . . . 28
ii
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PAGE
EXHIBITS
Exhibit A Form of Registration Rights Agreement
Exhibit B Form of Excepted Holder Agreement
SCHEDULES
Schedule 3.1(c) List of Rights to Acquire Equity Securities; Voting
Restrictions;Etc.
Schedule 3.1(d) List of Third Party Consents
Schedule 3.1(i) List of Governmental Consents, Etc.
Schedule 3.1(o) List of Certain Liabilities
Schedule 3.1(s) List of Ownership in Subsidiaries
Schedule 3.1(y) List of Merger, Sale of Equity and Sale of Assets
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AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
AMENDED AND RESTATED STOCK PURCHASE AGREEMENT, dated as of June 12, 1997,
by and among Meridian Industrial Trust, Inc., a Maryland corporation (the
"COMPANY"), and The Prudential Insurance Company of America, a New Jersey
insurance company (the "PURCHASER").
RECITALS
WHEREAS, the Company and the Purchaser have entered into that certain
Stock Purchase Agreement dated as of May 27, 1997 (the "Existing Stock
Purchase Agreement");
WHEREAS, under the Existing Stock Purchase Agreement, the Purchaser
agreed to purchase from the Company, and the Company agreed to sell to the
Purchaser, 3,548,256 shares of Common Stock;
WHEREAS, the Purchaser and the Company desire to increase the number of
shares of Common Stock to be sold to the Purchaser by an additional 253,447
shares from 3,548,256 shares to 3,801,703 shares; and
WHEREAS, the Purchaser and Company desire to amend and restate the
Existing Stock Purchase Agreement to provide for an increase the number of
shares purchased by Purchaser from 3,548,256 shares to 3,801,703 shares and
as otherwise set forth herein;
NOW THEREFORE, In consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITION. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Accrued Dividends Per Share" means the product of (i) the dividends per
Share distributed by the Company for the quarter ending September 30, 1997
MULTIPLIED by (ii) the Dividend Adjustment.
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"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, a specified Person.
"Agreement" means this Stock Purchase Agreement, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Approval" means any approval, authorization, consent, qualification or
registration, or any waiver of the foregoing, or any notice, statement or
other communication required to be filed with or delivered to any
Governmental Entity or any other Person.
"Benefit Plans" means all employee benefit plans and collective
bargaining, labor and employment agreements or other similar benefit
arrangements to which the Company or any Subsidiary of the Company will be a
party at the Closing or by which the Company or any Subsidiary of the Company
will be bound at the Closing, including (A) any profit-sharing, deferred
compensation, bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, severance, welfare or incentive plan, agreement or
arrangement, (B) any plan, agreement or arrangement providing for "fringe
benefits" or perquisites to employees, officers, directors or agents,
including benefits relating to automobiles, clubs, vacation, child care,
parenting, sabbatical, sick leave, medical, dental, hospitalization, life
insurance and other types of insurance, (C) any employment agreement not
terminable on 30 days (or less) written notice or (D) any other "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"Books and Records" means the books and records of the Company and each
of its Subsidiaries, including without limitation financial data (including
projections) and operating data covering each of such entities, their
businesses, operations and financial performance.
"Business Day" means any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State
of New York generally are authorized or required by law or other government
actions to close.
"Bylaws" means the Company's Second Amended and Restated Bylaws dated as
of January 26, 1996, as amended from time to time.
"Charter" means the Company's Third Amended and Restated Articles of
Incorporation dated as of March 30, 1996, as amended from time to time.
"Closing" has the meaning provided therefor in Section 2.1(b) of this
Agreement.
"Closing Date" has the meaning provided therefor in Section 2.1(b) of
this Agreement.
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"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $.001 per
share.
"Company" means Meridian Industrial Trust, Inc., a Maryland corporation.
"Confidential Information" has the meaning provided therefor in Section
5.1(b) of this Agreement.
"Current SEC Reports" means the 1996 Form 10-K, the 1997 Form 10-Q and
the 1997 Proxy Statement.
"Dividend Adjustment" means the quotient of (x) the number of calendar
days between July 1, 1997 (including such date) and the Closing Date
(excluding such date) DIVIDED by (y) 92 days.
"Employee and Director Stock Plan" means the Company's Amended and
Restated Employee and Director Stock Plan dated as of January 26, 1996, as
amended through the date hereof, a true, correct and complete copy of which
has been delivered to Purchaser prior to the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended (or, with respect to any provision thereof referred to herein, any
corresponding provision of any succeeding law).
"Excepted Holder Agreement" means the Excepted Holder Agreement,
substantially in the form of EXHIBIT B hereto, as the same may be amended,
restated, supplemented or otherwise modified in accordance with its terms.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Existing Stock Purchase Agreement" means the Stock Purchase Agreement,
dated as of May 27, 1997, entered into between the Purchaser and the Company.
"Governmental Entity" means any agency, bureau, commission, court,
department, official, political subdivision, tribunal or other
instrumentality of any government, whether federal, state or local, domestic
or foreign.
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"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended and related rules, regulations and
published interpretations thereunder.
"Initial Purchase Price" means the aggregate purchase price for the
Shares based on the price per Share set forth in Section 2(a).
"Investor Rights Agreement" means that certain Amended and Restated
Investor Rights Agreement dated as of February 23, 1996 by and among the
Company and certain shareholders of the Company.
"Law" means any constitutional provision, statute or other law, rule,
regulation or interpretation of any thereof and any Order of any Governmental
Entity (including environmental laws).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in or on such asset or
the revenues or income thereon or therefrom.
"Material Adverse Effect" shall have the meaning set forth in Section
3.1(a).
"Minimum Ownership Level" means, at any time, 10% of the outstanding
shares of Common Stock on a fully diluted basis.
"NYSE" means the New York Stock Exchange.
"Order" means any decree, injunction, judgment, order, ruling,
assessment or writ.
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, limited liability company, joint
venture, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Proxy Statement" shall have the meaning set forth in Section 5.9.
"Purchaser" means The Prudential Insurance Company of America and its
successors and permitted assigns.
"Recommendations" shall have the meaning set forth in Section 3.1(u).
"REIT" shall have the meaning set forth in Section 3.1(q).
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"Registration Rights Agreement" means the Registration Rights Agreement,
substantially in the form of EXHIBIT A hereto, as the same may be amended,
restated, supplemented or otherwise modified in accordance with its terms.
"REOC" shall have the meaning set forth in Section 3.1(k).
"Rule 144" means Rule 144 under the Securities Act of 1933, as amended,
and any successor rule thereto.
"SEC Documents" shall have the meaning set forth in Section 3.1(x).
"SEC Financial Statements" shall have the meaning set forth in Section
3.1(x).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Separate Account Purchaser" shall have the meaning set forth in Section
5.14.
"Series B Preferred Stock" means the shares of Series B Preferred Stock,
par value $.001 per share, of the Company.
"Shareholders' Meeting" shall have the meaning set forth in Section 5.9.
"Shares" means the shares of Common Stock purchased by Purchaser
pursuant to this Agreement.
"Subsequent Purchasers" shall mean the purchasers, if any, of shares of
Common Stock as contemplated by Section 5.14.
"Subsidiary" means, with respect to any Person, (a) a corporation, a
majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly,
owned by such Person, by a Subsidiary of such Person or by such Person and a
Subsidiary thereof or (b) any other Person (other than a corporation) in
which such Person, a Subsidiary thereof or such Person and a Subsidiary
thereof, directly or indirectly, at the date of determination thereof has at
least a majority ownership interest.
"Taxes" means all taxes, charges, fees, levies, duties, imposts,
withholdings, restrictions, fines, interest, penalties, additions to tax or
other assessments or charges, including, but not limited to, income, excise,
property, withholding, sales, use, gross receipts, value added and franchise
taxes, license recording, documentation and registration fees and custom
duties imposed by any Governmental Entity.
5
<PAGE>
"Tax Return" means a report, return or other information required to be
filed by a Person with or submitted to a Governmental Entity with respect to
Taxes, including, where permitted or required, combined or consolidated
returns for any group of entities that includes the Person.
"Termination Date" means the earlier of (i) September 30, 1997 and (ii)
the record date established by the Board of Directors of the Company for the
distribution of dividends for the fiscal quarter of the Company ended
September 30, 1997.
"Transaction Documents" means this Agreement, the Registration Rights
Agreement, the Excepted Holder Agreement and all other documents executed in
connection therewith.
"Transfer" shall have the meaning set forth in Section 3.2(b).
"1996 Form 10-K" means the Company's annual report on Form 10-K for the
year ended December 31, 1996 filed with the Commission.
"1997 Form 10-Q" means the Company's quarterly report on Form 10-Q for
the fiscal quarter ended March 31, 1997 filed with the Commission.
"1997 Proxy Statement" means that certain Proxy Statement dated April
14, 1997 in respect of the annual meeting of the shareholders of the Company
held on May 16, 1997.
ARTICLE II
PURCHASE OF COMMON STOCK
Section 2.1 PURCHASE OF SHARES; CLOSING.
(a) Subject to the terms and conditions herein set forth and the
Dividend Adjustment, the Company will sell to Purchaser, and Purchaser will
purchase from the Company, 3,801,703 shares of Common Stock at a purchase
price of $19.728 per Share (the "Initial Purchase Price").
(b) The purchase and sale of the Shares will take place at a
closing (the "CLOSING") to be held at the offices of O'Melveny & Myers LLP,
275 Battery Street, San Francisco, California 94111 or such other location as
may be mutually agreed upon by the parties hereto on a date mutually agreed
upon by the parties hereto, provided that the Closing shall occur on or
before the earlier of (i) the fifth calendar day after all conditions set
forth in Article IV have been satisfied or waived by the appropriate party
and (ii) the Termination Date. The date and time at which the Closing is to
be concluded is the "CLOSING DATE."
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(c) Delivery of the Shares shall be made at the Closing by
delivery to Purchaser, against payment of the Initial Purchase Price therefor
as provided herein, of a share certificate representing the total number of
Shares or, at Purchaser's option, issuance of the Shares in book entry form.
(d) Payment of the Initial Purchase Price shall be made by or on
behalf of Purchaser by wire transfer of immediately available funds to an
account of the Company (the number for which account shall have been
furnished to Purchaser at least two Business Days prior to the Closing Date),
or certified or official bank check payable in immediately available funds to
the order of the Company.
Section 2.2 DIVIDEND ADJUSTMENT. In addition to the Initial Purchase
Price, Purchaser shall pay to the Company, promptly after receipt of
dividends for the quarter ended September 30, 1997, an amount equal to the
product of (x) Accrued Dividends Per Share (x) MULTIPLIED by (y) 3,801,703
shares. Payment of such Dividend Adjustment shall be made in the manner as
set forth in Section 2.1(d) or as otherwise agreed to by Purchaser and the
Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants as of the date hereof as follows.
(a) ORGANIZATION AND GOOD STANDING. (i) The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland. Each Subsidiary of the Company is a
corporation or other entity duly organized, validly existing and, with
respect to each Subsidiary that is a corporation, in good standing under the
laws of its state of incorporation or formation, as the case may be. The
Company and each Subsidiary of the Company is duly qualified or licensed and,
with respect to each Subsidiary that is a corporation, in good standing as a
foreign corporation and authorized to do business, in each jurisdiction in
which the ownership or leasing of its properties or the character of its
operations makes such qualification, licensing or authorization necessary,
except where the failure to obtain such qualification, license, authorization
or good standing would not individually or in the aggregate reasonably be
expected to have a material adverse effect upon the assets, liabilities,
financial condition, earnings or operations of the Company and its
Subsidiaries taken as a whole or any transaction contemplated by the
Transaction Documents (any such material adverse effect, whether individually
or in the aggregate, a "MATERIAL ADVERSE EFFECT"). The Company and each
Subsidiary of the Company has all requisite corporate power and authority to
own its assets and to carry on its business as presently proposed to be
conducted except where a lack of such corporate power or authority could not
reasonably be expected to have a Material Adverse Effect.
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(ii) The Company has delivered to Purchaser true, correct and
complete copies of the Charter and the Bylaws of the Company.
(b) AUTHORIZATIONS. The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Transaction Documents. The execution and delivery by the Company of the
Transaction Documents and the consummation of the transactions contemplated
thereby have been duly and validly authorized by the Company.
(c) CAPITALIZATION. As of the date hereof, the equity
capitalization of the Company is as set forth in the balance sheet of the
Company included in the 1997 Form 10-Q, except for any shares of Common Stock
issued under the Employee and Director Stock Plan since March 31, 1997. At
the Closing Date, all of the outstanding shares of stock of the Company will
be duly and validly issued, fully paid and non-assessable and not subject to
any preemptive rights of other shareholders. Except as set forth in the
Current SEC Reports and in SCHEDULE 3.1(c), a certificate (certified by the
Chief Executive Officer or Chief Financial Officer of the Company) delivered
to Purchaser on or prior to the Closing Date or contemplated by the Employee
and Director Stock Plan, (i) there are no outstanding securities or
indebtedness convertible into, exchangeable for, or carrying the right to
acquire, Common Stock or other equity securities of the Company, or
subscriptions, warrants, options, rights, or other arrangements or
commitments obligating the Company to issue or dispose of any Common Stock or
other equity securities or any ownership therein, (ii) there is no agreement
or arrangement restricting the voting or transfer of any equity securities of
the Company, and (iii) there are no outstanding contractual obligations,
commitments, understandings or arrangements of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire, require or make any
payment in respect of any shares of equity securities of the Company or such
Subsidiary. Except with respect to statutory restrictions of general
application, as provided in the Charter with respect to the Series B
Preferred Stock and the terms of the Company's Second Amended and Restated
Revolving Credit Agreement with The First National Bank of Boston and certain
other Banks named therein, there are no legal, contractual or other
restrictions on the payment of dividends or other distributions or amounts on
or in respect of the Common Stock. As of the date hereof, except as
contemplated by the Registration Rights Agreement and the Investor Rights
Agreement, there are no agreements or arrangements to which any of the
Company or its Subsidiaries is a party pursuant to which the Company is or
could be required to register shares of Common Stock or other securities
under the Securities Act.
(d) CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction compliance with which
could reasonably be expected to have a Material Adverse Effect. Assuming the
filing of a Form D with the Commission, the listing of the Shares on the NYSE
and the accuracy of the representations and warranties of, and the
performance of the agreements of, Purchaser set forth in Section 3.2 and
elsewhere herein, neither the execution and delivery of the Transaction
Documents nor fulfillment of nor compliance with the terms and
8
<PAGE>
provisions thereof, nor the issuance of the Shares will (i) violate any
provision of any Law presently in effect or in effect at the Closing Date
having applicability to the Company or any Subsidiary or any of their
properties, except such violations as could not reasonably be expected to
have a Material Adverse Effect, (ii) conflict with or result in a breach of
or constitute a default under the Charter or Bylaws of the Company or any
organizational document of its Subsidiaries, (iii) except as set forth in
SCHEDULE 3.1(d), require any consent, approval or notice under, or conflict
with or result in a breach of, constitute a default or accelerate any right
under, any note, bond, mortgage, license, indenture or loan or credit
agreement, or any other agreement or instrument, to which the Company or any
of its Subsidiaries is a party or by which any of their respective properties
is bound, except such consents, approvals, notices, conflicts, breaches or
defaults as could not reasonably be expected to have a Material Adverse
Effect or (iv) result in, or require the creation or imposition of, any Lien
upon or with respect to any of the properties now owned or hereafter acquired
by the Company or any of its Subsidiaries. Neither the Company nor any of
its Subsidiaries is bound by any agreement which would impose upon Purchaser
any personal obligation or personal liability which is greater than the
personal obligations and personal liabilities imposed upon Purchaser under
this Agreement, the Registration Rights Agreement and the Excepted Holder
Agreement to be entered into by the Company and Purchaser pursuant to
Sections 5.5 and 5.6 hereof. In addition, the Company is not aware of any
facts or circumstances that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(e) DUE EXECUTION, ETC. This Agreement, constitutes, and when
executed and delivered by the Company at the Closing each of the Registration
Rights Agreement and the Excepted Holder Agreement will constitute, a legal,
valid and binding obligation of the Company, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights generally and to general principles of
equity.
(f) LITIGATION, PROCEEDING, ETC. There is no action, suit, notice
of violation, proceeding or investigation pending or, to the best knowledge
of the Company, threatened against or affecting the Company or any of its
Subsidiaries or any of their respective properties before or by any
Governmental Entity which (i) challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares or (ii)
could (individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect or (iii) would (individually or in the aggregate)
impair the ability of the Company to perform fully on a timely basis any
obligations which it has under any of the Transaction Documents.
(g) NO DEFAULT OR VIOLATION. Neither the Company nor any of its
Subsidiaries is (i) in default under or in violation of any indenture, loan
or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound, except such defaults
or violations as could not reasonably be expected to have a Material Adverse
Effect, (ii) in violation of any Order of any Governmental Entity, except for
such violations as
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could not reasonably be expected to have a Material Adverse Effect, or (iii)
in violation of any Law which could reasonably be expected to (A) adversely
affect the legality, validity or enforceability of the Transaction Documents,
(B) have a Material Adverse Effect or (C) adversely impair the Company's
ability or obligation to perform fully on a timely basis any obligation which
it has under the Transaction Documents.
(h) STATUS OF SHARES. Subject to approval of the shareholders of
the Company, which approval shall be solicited pursuant to Section 5.9 prior
to the Closing, the issuance and sale of the Shares have been duly authorized
by all necessary corporate action on the part of the Company and such Shares,
when delivered to Purchaser at the Closing against payment therefor as
provided herein, will be validly issued, fully paid and non-assessable and
the issuance and sale of the Shares is not and will not be subject to
preemptive rights of any other shareholder of the Company.
(i) GOVERNMENTAL CONSENTS, ETC. Except as may be required under
any applicable securities law in connection with the performance by the
Company of its obligations under the Registration Rights Agreement, and
except for the filing of a Form D with the Commission and the listing of the
Shares on the NYSE, and assuming the accuracy of the representations and
warranties of, and the performance of the agreements of, Purchaser set forth
in Section 3.2 and elsewhere herein, no authorization, consent, approval,
waiver, license, qualification or formal exemption from, nor any filing,
declaration, qualification or registration with, any Governmental Entity or
any securities exchange is required in connection with the execution,
delivery or performance by the Company of this Agreement and the issuance,
sale or delivery of the Shares except for those that (i) have been made or
obtained by the Company as of the date hereof or (ii) are set forth in
SCHEDULE 3.1(i) and by the Closing shall be made or received by the Company.
At the Closing Date, the Company will have made all filings and given all
notices to Governmental Entities and obtained all necessary ordinances,
registrations, declarations, approvals, orders, consents, qualifications,
franchises, certificates, permits and authorizations from any Governmental
Entity, to own or lease its properties and to conduct its facilities and
businesses as currently conducted, except where failure to do so could not
reasonably be expected to have a Material Adverse Effect. At the Closing
Date, all such registrations, declarations, approvals, orders, consents,
qualifications, franchises, certificates, permits and authorizations, the
failure of which to file, give notice of or obtain could reasonably be
expected to have a Material Adverse Effect, will be in full force and effect.
The assets of the Company qualify as exempt assets for purposes of the
Hart-Scott-Rodino Act and no filing under the Hart-Scott-Rodino Act is
required in connection with the sale and issuance of the Shares hereunder.
(j) PRIVATE OFFERING. Neither the Company nor any Person acting
on its behalf has taken or will take any action (including, without
limitation, any offering of any securities of the Company under circumstances
which would require the integration of such offering with the offering of the
Shares under the Securities Act) which might subject the offering, issuance
or sale of the Shares to the registration requirements of Section 5 of the
Securities Act.
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(k) ERISA.
(i) COMPANY STATUS. The Company currently qualifies as a "real
estate operating company" ("REOC") within the meaning of 29 C.F.R. Section
2510.3-101(e), and has qualified as a REOC during all valuation periods
within the meaning of 29 C.F.R. Section 2510.3-101(d)(5).
(ii) BENEFIT PLANS. To the extent applicable, the Benefit Plans
comply, in all material respects, with the requirements of ERISA and the
Code (including reporting requirements). Neither any Benefit Plan nor the
Company or any Subsidiary of the Company has incurred any liability or
penalty under Section 4975 of the Code or Section 502(i) of ERISA. Each
Benefit Plan has been maintained and administered in all material respects
in compliance with its terms and with ERISA and the Code to the extent
applicable thereto. There are no pending, or to the knowledge of the
Company threatened, material claims (other than claims for benefits
pursuant to the terms of any such plan) against or otherwise involving any
of the Benefit Plans and no action has been brought against or with respect
to any Benefit Plan, and neither the Company nor any Subsidiary of the
Company incurred any material liability to any party with respect to any
Benefit Plan. All contributions required to be made to the Benefit Plans
have been made or provided for as of the date hereof. No Benefit Plan is
subject to Title IV of ERISA and neither the Company nor any Subsidiary of
the Company has, within six years prior to the date of this Agreement,
contributed to or had any obligation to contribute to any employee benefit
plan subject to Title IV of ERISA. For purposes of this Section 3.1(k),
(i) the term "COMPANY" includes any entity required to be aggregated with
the Company pursuant to Code Section 414(b),(c),(m) or (o) and (ii)
provisions of ERISA or the Code include regulations prescribed under such
provisions.
(iii) The terms of this transaction are not less favorable to
Purchaser than the terms that would be available generally in an arms'-
length transaction between unrelated parties.
(l) FINANCIAL STATEMENTS. The consolidated balance sheets and
statements of operations of the Company and its consolidated Subsidiaries as of
the last day of its latest complete fiscal year and the related consolidated
statements of operations, shareholders' equity and cash flows for the fiscal
year then ended, reported on by the independent public accountants (and, with
respect to the Company, filed with the Commission on Form 10-K) for the years
ended December 31, 1995 and December 31, 1996 and the consolidated balance
sheets and statements of operations of the Company and its consolidated
Subsidiaries as of the fiscal quarter ended March 31, 1997 and the related
consolidated statements of operations, shareholders' equity and cash flows for
the fiscal quarter then ended (and, with respect to the Company, included in the
1997 Form 10-Q), present fairly in all material respects the financial position
of the Company and its consolidated Subsidiaries as of the dates indicated and
the results of operations of the Company
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and its consolidated Subsidiaries, for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis and all adjustments
necessary for a fair presentation of results for such periods have been made
(subject, in the case of unaudited financial statements, to normal year-end
audit adjustments).
(m) INSURANCE. At Closing, the Company and its Subsidiaries will
have (i) "all risk" property insurance, including fire, flood, earthquake,
extended coverage and rental loss insurance and (ii) general commercial
liability insurance, under terms and in such amounts and covering such risks
that are customary for properties similar to those of the Company and its
Subsidiaries. There are currently no outstanding material losses for which
the Company or any of its Subsidiaries has failed to give or present notice
or claim under any policy. Policies for all the insurance are in full force
and effect and none of the Company or its Subsidiaries is in default in any
material respect under any of the policies.
(n) INFORMATION PROVIDED. Neither this Agreement, the schedules
and exhibits hereto, the Current SEC Reports nor any other written document
delivered to Purchaser in connection with the transactions contemplated
hereby contain any untrue statement of a material fact or omit any material
fact necessary to make the statements herein or therein, as the case may be,
in light of the circumstances under which it was made, not misleading, and
all material information regarding the Company and its Subsidiaries is
provided therein.
(o) NO OTHER LIABILITIES. Except as set forth in SCHEDULE 3.1(o),
neither the Company nor any Subsidiary of the Company will have any material
liability, whether absolute, accrued, contingent or otherwise, except
liabilities (i) reflected on the consolidated balance sheet of the Company
and its Subsidiaries as at March 31, 1997, or (ii) liabilities that (1) are
incurred by the Company and its Subsidiaries after March 31, 1997 in the
ordinary course of business and (2) could not reasonably be expected to have
a Material Adverse Effect.
(p) NO BROKERS OR FINDERS. No agent, broker, finder or investment
or commercial banker, or other Person or firm engaged by or acting on behalf
of the Company in connection with the negotiation, execution or performance
of this Agreement is or will be entitled to any brokerage or finder's or
similar fee or other commission as a result of this Agreement other than any
such fees or commissions that have been disclosed to Purchaser and as to
which the Company shall have full and sole responsibility.
(q) TAXES; REIT STATUS. Each of the Company and its Subsidiaries
has filed all Tax Returns that are required to be filed with any Governmental
Entity and has paid all Taxes due pursuant to the Tax Returns or any
assessment received by it or otherwise required to be paid, except Taxes
being contested in good faith by appropriate proceedings and for which
adequate reserves or other provisions are maintained, and except for the
filing of Tax Returns as to which the failure to file could not, individually
or in the aggregate, have a Material Adverse Effect. The Company (i) elected
to be taxed as a "real estate investment trust" as defined in Section 856 of
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the Code ("REIT") effective for each of the taxable years since the Company
has been incorporated, (ii) has not revoked such election, (iii) qualifies
for taxation as a REIT for each such taxable year and for its current taxable
year and (iv) has not sold or otherwise disposed of any assets which could
give rise to a material amount of tax pursuant to any election made by the
Company under Notice 88-19, 1988-1 C.B. 486 and does not expect to effect any
such sale or other disposition.
(r) COMPLIANCE WITH LAWS. Neither the Company nor any of its
Subsidiaries has been in or is in, and none of them has received notice of,
violation of or default with respect to, any Law or any decision, ruling,
order or award of any arbitrator applicable to it or its business, properties
or operations, except for violations or defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(s) SUBSIDIARIES.
(i) The 1996 Form 10-K sets forth a correct and complete list of
all of the Company's Subsidiaries as of the date hereof.
(ii) As of the date hereof, except as set forth on SCHEDULE
3.1(s), all outstanding shares of capital stock or other evidences of
equity ownership of each Subsidiary of the Company are duly authorized,
validly issued, fully paid and nonassessable and are owned directly or
indirectly, beneficially and of record by the Company, free and clear of
all Liens.
(t) MATERIAL CONTRACTS. (i) The 1997 Form 10-Q, the 1996 Form
10-K and Schedule 3.1(c) includes a correct and complete list of the
following with respect to the Company and any of its Subsidiaries: (1)
agreements with any shareholder having beneficial ownership of 5% or more of
the shares of common stock of the Company or such Subsidiary then issued and
outstanding, director or officer of the Company or such Subsidiary and all
shareholders' agreements and voting trusts; and (2) agreements not made in
the ordinary course of business and which could reasonably by expected to
result in a Material Adverse Effect.
(ii) All property management agreements to which the Company is a
party provide for a right (without payment of any penalty or termination
fee) of the Company to terminate such agreement upon 30-day prior written
notice and the Company shall deliver each such agreement reasonably
requested by Purchaser within 10 days after the date of such request.
(u) RECOMMENDATIONS. The Board of Directors of the Company, at a
meeting duly called and held, has duly (i) determined that the Transaction
Documents and the transactions contemplated thereby, taken as a whole, are in
the best interests of the Company and its shareholders, (ii) resolved to
recommend that holders of shares of Common Stock and Series B
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Preferred Stock approve the Transaction Documents and the transactions
contemplated thereby (collectively, the "RECOMMENDATIONS") and (iii) approved
the Transaction Documents and the transactions contemplated thereby.
(v) SHAREHOLDER APPROVAL. The affirmative vote of a majority of
the shares of the Common Stock and the Series B Preferred Stock, voting
together as a single class, voted at the duly convened shareholders meeting
of the Company (or any other duly convened meeting of the holders of the
Common Stock and the Series B Preferred Stock) is the only vote of the
holders of any class or series of the equity securities of the Company
necessary to approve the Transaction Documents and the transactions
contemplated thereby.
(w) NO RESTRICTIONS ON SHARES. As of the Closing Date, subject to
satisfaction of Section 4.1(l), no provision of the Charter or Bylaws of the
Company, any other agreement, indenture or other instrument to which the
Company or its properties are subject, or any Law applicable to the Company
(i), except as provided in the Excepted Holder Agreement, directly or
indirectly restricts or impairs the right or ability of Purchaser to vote, or
otherwise to exercise the rights and receive the benefits of a shareholder
with respect to the Shares, including, without limitation, restrictions based
upon the size of the security holdings of Purchaser, the business in which it
is engaged or other considerations applicable to it and not to security
holders generally, or (ii) provides any other security holder of the Company
with any preemptive rights.
(x) SEC DOCUMENTS. The Company has filed with the Commission all
reports, schedules, forms, statements and other documents required by the
Exchange Act to be filed by the Company (collectively, and in each case
including all exhibits and schedules thereto and documents incorporated by
reference therein, the "SEC DOCUMENTS"). The Company has delivered or made
available to Purchaser all SEC Documents. As of their respective dates,
except to the extent revised or superseded by a subsequent filing with the
Commission, the SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and none of the SEC Documents (including any and all financial statements
included therein) as of such dates 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 therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company and its Subsidiaries included in all SEC
Documents, including any amendments thereto (the "SEC FINANCIAL STATEMENTS"),
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission with
respect thereto.
(y) NO MERGER AGREEMENTS. As of the date hereof, except as set
forth in SCHEDULE 3.1(y), none of Company or its Subsidiaries has entered
into any agreement with any Person which has not been terminated as of the
date of this Agreement and under which there remains any liability or
obligation thereof with respect to a merger or consolidation with any of
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the Company or its Subsidiaries, or any other acquisition of a substantial
amount of the assets of the Company or its Subsidiaries.
Section 3.2 REPRESENTATIONS AND WARRANTIES OF PURCHASER.
(a) INVESTMENT INTENT. Purchaser represents and warrants to the
Company that the Shares to be acquired by it hereunder are being acquired for
its own account for investment and with no intention of distributing or
reselling such Shares or any part thereof or interest therein in any
transaction which would be in violation of the securities laws of the United
States of America or any State or any foreign country or jurisdiction.
(b) TRANSFER RESTRICTIONS. If Purchaser should decide to dispose
of any of the Shares, Purchaser understands and agrees that it may do so only
pursuant to an effective registration statement under the Securities Act or
pursuant to an exemption from registration under the Securities Act. In
connection with any offer, resale, pledge or other transfer (individually and
collectively, a "TRANSFER") of any Shares other than pursuant to an effective
registration statement, the Company may require that the transferor of such
Shares provide to the Company an opinion of counsel which opinion shall be
reasonably satisfactory in form and substance to the Company, to the effect
that such Transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act and any State or foreign securities laws. Purchaser agrees to the
imprinting, so long as appropriate, of substantially the following legend on
certificates representing the Shares:
THE SHARES OF COMMON STOCK (THE "SHARES") EVIDENCED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
AGREES THAT IT WILL NOT OFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
(INDIVIDUALLY AND COLLECTIVELY, A "TRANSFER") THE SHARES EVIDENCED HEREBY,
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT SUCH AS THE EXEMPTION SET FORTH IN RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE). IF THE PROPOSED TRANSFER IS TO BE MADE
OTHER THAN PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE COMPANY AND THE TRANSFER AGENT SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE OR FOREIGN SECURITIES LAW.
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The legend set forth above may be removed if and when the Shares
represented by such certificate are disposed of pursuant to an effective
registration statement under the Securities Act or the opinion of counsel
referred to above has been provided to the Company. The share certificates
shall also bear legends regarding permitted ownership levels of Shares and
any additional legends required by applicable Federal, State or foreign
securities Laws or necessary under applicable tax Laws, which legends may be
removed when, in the opinion of counsel to the Company, the same are no
longer required under the Charter or the applicable requirements of such
securities or tax Laws. Purchaser agrees that, in connection with any
Transfer of Shares by it pursuant to an effective registration statement
under the Securities Act, Purchaser will comply with all prospectus delivery
requirements of the Securities Act. The Company makes no representation,
warranty or agreement as to the availability of any exemption from
registration under the Securities Act with respect to any resale of Shares.
(c) STOP TRANSFER INSTRUCTION. Purchaser agrees that the Company
shall be entitled to make a notation on its records and give instructions to
any transfer agent for the Shares in order to implement the restrictions on
transfer set forth in this Agreement.
(d) PURCHASER STATUS. Purchaser represents and warrants to, and
covenants and agrees with, the Company that (i) at the time it was offered
the Shares, it was, (ii) at the date hereof, it is, and (iii) at the Closing
Date, it will be, a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act or an "accredited investor" as defined in Rule 501
under the Securities Act, and has such knowledge, sophistication and
experience in business and financial matters so as to be capable of
evaluating the Company and an investment in the Shares, and is able to bear
the economic risk of such investment.
(e) AUTHORITY. Purchaser represents and warrants to the Company
that, assuming the accuracy of the representation of the Company in Section
3.1(i) hereof, (i) as of the Closing Date, the purchase of the Shares to be
purchased by it has been duly and properly authorized and this Agreement has
been duly executed and delivered by it or on its behalf and constitutes the
valid and legally binding obligation of Purchaser, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights generally and to
general principles of equity; (ii) the purchase of the Shares to be purchased
by it does not conflict with or violate (A) its charter or by-laws or (B) any
Law applicable to it in a manner that could materially hinder or impair the
completion of the transactions contemplated hereby; and (iii) the purchase of
Shares to be purchased by it does not impose any penalty or other onerous
condition on Purchaser that could materially hinder or impact the completion
of the transactions contemplated hereby.
(f) ACCESS TO INFORMATION. Purchaser acknowledges as of the date
of approval by the Finance Committee of the Board of Directors of Purchaser
that it has been afforded (i) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from,
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representatives of the Company concerning the terms and conditions of the
offering of the Shares and the merits and risks of investing in the Shares;
(ii) access to information about the Company, the Company's financial
condition, pro forma results of operations, business properties, management
and prospects sufficient to enable it to evaluate its investment in the
Shares; and (iii) the opportunity to obtain such additional information which
the Company possesses or can acquire without unreasonable effort or expense
that is necessary to verify the accuracy and completeness of the information
contained in the SEC Documents.
(g) RELIANCE. Purchaser also understands and acknowledges that
(i) the Shares are being offered and sold without registration under the
Securities Act in a transaction that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption
depends in part on, and that the Company and, for purposes of the opinion to
be delivered to Purchaser pursuant to Section 4.1(a) hereof, Vinson & Elkins
L.L.P. will rely upon, the accuracy and truthfulness of the foregoing
representations and Purchaser hereby consents to such reliance.
(h) NO BROKERS OR FINDERS. No agent, broker, finder or investment
or commercial banker, or other Person or firm engaged by or acting on behalf
of any Purchaser in connection with the negotiation, execution or performance
of this Agreement is or will be entitled to any brokerage or finder's or
similar fee or other commission as a result of this Agreement other than any
such fees or commission that have been disclosed to the Company and as to
which Purchaser shall have full and sole responsibility.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. The
obligations of Purchaser to purchase the Shares are subject, at the Closing
Date, to the prior or simultaneous satisfaction or waiver by it of the
following conditions:
(a) Purchaser shall have received an opinion of Vinson & Elkins
L.L.P., counsel for the Company; PROVIDED that the form of opinion shall be
negotiated to reasonable satisfaction of Purchaser and its counsel on or
before June 12, 1997. In rendering the foregoing opinion, such counsel may
rely as to factual matters upon certificates or other documents furnished by
directors and officers of the Company and by government officials, and upon
such other documents as such counsel deem appropriate as a basis for such
opinion. Such counsel may specify the jurisdictions in which they are
admitted to practice and that they are not admitted to practice in any other
jurisdiction and are not experts in the law of any other jurisdiction. To
the extent such opinion concerns the laws of any other such jurisdiction,
such counsel may either provide an opinion of counsel admitted to practice in
such jurisdiction (which counsel shall be
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reasonably acceptable to Purchaser) in lieu of its own opinion or rely upon
the opinion of such counsel. Purchaser hereby agrees that the firm of
Ballard Spahr Andrews & Ingersoll is acceptable to Purchaser for purposes of
providing such opinions involving the laws of the State of Maryland. To the
extent that any opinion rendered by counsel admitted to practice in another
jurisdiction or relied upon by Vinson & Elkins L.L.P., including any
exception or limitation thereto, is materially different from the opinion to
be delivered at Closing by Vinson & Elkins L.L.P. such opinion shall be
reasonably satisfactory to Purchaser and a copy of such opinion shall be
delivered to Purchaser at the Closing.
(b) The representations and warranties made by the Company herein
shall be true and correct in all material respects on the date hereof and on
and as of the Closing Date (except as otherwise limited by their terms to the
date hereof) with the same effect as though such representations and
warranties had been made on and as of the Closing Date and the Company shall
have complied in all material respects with all agreements required to be
performed by it hereunder at or prior to the Closing Date.
(c) There shall not have occurred any event which has had, or
could reasonably be expected to have, a Material Adverse Effect subsequent to
March 31, 1997.
(d) At the Closing Date, Purchaser shall have received a
certificate, dated the Closing Date, signed by the Chief Executive Officer of
the Company in such capacity and not individually to the effect set forth in
Sections 4.1(b) and (c), and stating that the conditions specified in this
Section 4.1 have been satisfied at the Closing Date.
(e) At the Closing Date, Purchaser shall have received a
certificate, dated the Closing Date, signed by the Secretary or an Assistant
Secretary of the Company in such capacity and not individually and certifying
(i) that attached thereto is a true, correct and complete copy of (A) the
Charter, (B) Bylaws and (C) resolutions duly adopted by the Board of
Directors of the Company authorizing the execution and delivery of the
Transaction Documents and all other documents to be executed in connection
therewith and the issuance and sale of the Shares, (ii) the incumbency of
officers executing this Agreement and the other Transaction Documents, and
(iii) that attached thereto is a specimen of the share certificate for the
Common Stock.
(f) No Law or Order shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity which prohibits or
restricts the transactions contemplated by this Agreement. No Governmental
Entity shall have notified any party to this Agreement that consummation of
the transactions contemplated by this Agreement would constitute a violation
of any Law of any jurisdiction or that it intends to commence proceedings to
restrain or prohibit such transactions or force divestiture or rescission,
unless such Governmental Entity shall have withdrawn such notice and
abandoned any such proceedings prior to the time which otherwise would have
been the Closing Date.
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(g) The Company shall have entered into the Registration Rights
Agreement for the benefit of Purchaser, and Purchaser shall have received a
copy of such Registration Rights Agreement duly executed by the Company in
favor of Purchaser.
(h) The shareholders of the Company shall have duly approved the
issuance of the Shares as contemplated by the Transaction Documents at the
Shareholders' Meeting.
(i) All Approvals set forth in SCHEDULE 3.1(d) and SCHEDULE 3.1(i)
shall have been received or the applicable waiting periods shall have expired.
(j) The Finance Committee of the Board of Directors of Purchaser
shall have duly authorized the purchase of the Shares pursuant to this
Agreement and the execution, delivery and performance by Purchaser of its
obligations under this Agreement.
(k) Purchaser shall be reasonably satisfied that the Company is
qualified as a "real estate operating company" within the meaning of 29
C.F.R. Section 2510.3-101(e).
(l) The Company shall have taken all actions necessary to ensure
that Purchaser shall have full voting rights with respect to each of the
Shares (including, without limitation, obtaining approvals of the Board of
Directors of the Company and amending the Charter or By Laws of the Company,
as applicable).
Section 4.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY. The
obligation of the Company to issue and sell the Shares hereunder is subject,
at the Closing Date, to the prior or simultaneous satisfaction or waiver by
it of the following conditions:
(a) The representations and warranties made by Purchaser herein
shall be true and correct in all material respects on the date hereof and on
and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except as otherwise limited by their terms to the date hereof) and Purchaser
shall have complied in all material respects with all agreements required to
be performed by it hereunder at or prior to the Closing Date and Purchaser
shall have provided such evidence thereof as the Company may reasonably
request.
(b) No Law or Order shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity which prohibits or
restricts the transactions contemplated by this Agreement. No Governmental
Entity shall have notified any party to this Agreement that consummation of
the transactions contemplated by this Agreement would constitute a violation
of any Law of any jurisdiction or that it intends to commence proceedings to
restrain or prohibit such transactions or force divestiture or rescission,
unless such Governmental Entity shall have withdrawn such notice and
abandoned any such proceedings prior to the time which otherwise would have
been the Closing Date.
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(c) The shareholders of the Company shall have duly approved the
issuance of the Shares as contemplated by the Transaction Documents at the
Shareholders' Meeting.
(d) All Approvals set forth in SCHEDULE 3.1(d) and SCHEDULE 3.1(i)
shall have been received or the applicable waiting periods shall have expired.
(e) The Finance Committee of the Board of Directors of Purchaser
shall have duly authorized the purchase of the Shares pursuant to this
Agreement and the execution, delivery and performance by Purchaser of its
obligations under this Agreement.
(f) The Shares owned by Purchaser will not cause the Company to be
treated as the owner of a 9.8% or more interest in any tenant of the Company
listed on Annex 1 to the Excepted Holder Agreement attached hereto as EXHIBIT B.
(g) At the Closing Date, the Company shall have received a
certificate, dated the Closing Date, signed by the managing director of
Purchaser in such capacity and not individually to the effect set forth in
Section 4.2(a) and certifying that attached thereto is a true, correct and
complete copy of resolutions duly adopted by the Finance Committee of the
Board of Directors of Purchaser authorizing the purchase of the Shares.
ARTICLE V
COVENANTS
Section 5.1 FURNISHING OF INFORMATION. (a) As long as Purchaser
owns Shares representing at least the Minimum Ownership Level, from and after
the Closing Date the Company will promptly furnish to Purchaser all reports
filed by it pursuant to Section 13(a) or 15(d) of the Exchange Act (or if the
Company is not at the time required to file reports pursuant to said Section
13(a) or 15(d), annual and quarterly reports comparable to those required by
Sections 13(a) or 15(d) of the Exchange Act) and all material
non-confidential filings or notifications made with any Governmental Entity.
As long as the Company is required to deliver to Purchaser the reports
described in the first sentence of this Section 5.1, upon request of
Purchaser, the Company shall deliver to Purchaser, the executive summary and
all other documents delivered to the Board of Directors of the Company in
connection with any prior meeting of the Board of Directors of the Company.
(b) Purchaser shall limit access to any confidential information
received by it pursuant to this Section 5.1 and Section 5.13 hereof
("CONFIDENTIAL INFORMATION") to its executives and employees assigned to
review and analyze the Confidential Information. Purchaser shall not
disseminate, or in any way disclose, directly or indirectly, to any other
person, firm or corporation any Confidential Information without receiving
prior written permission from the
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Company; PROVIDED, HOWEVER, that Purchaser may divulge such information to
its accountants, attorneys, investment advisors and other advisors in
connection with evaluation of the investment in the Shares or for other
legitimate business purposes, and Purchaser may divulge the Confidential
Information to the extent that it is legally obligated to do so. If
Purchaser is legally obligated to disclose any of the Confidential
Information, Purchaser shall use best efforts to provide the Company with
prompt notice so that the Company may seek a protective order or other
appropriate remedy. In the event that the Company is not able to obtain
such protective order or other remedy within a reasonable time from the
giving of notice to the Company as aforesaid, Purchaser will furnish only
that portion of the Confidential Information which it is legally required to
disclose.
Section 5.2 REAL ESTATE INVESTMENT TRUST. The Company shall use its
best efforts to continue to qualify as a REIT and so long as Purchaser holds
Shares representing, in the aggregate, at least the Minimum Ownership Level,
the Company shall not, without Purchaser's written consent, take any action
that could reasonably be expected to disqualify the Company as a REIT.
Section 5.3 SALE OF SHARES BY PURCHASER. Purchaser hereby agrees
that during the ninety (90) day period commencing on the Closing Date it will
not sell, assign, transfer or otherwise in any manner dispose of any of the
Shares, other than sales, assignments, transfers or dispositions: (i) in
connection with any merger or consolidation of the Company; (ii) pursuant to
a tender or exchange offer for shares of Common Stock; (iii) to an Affiliate
of Purchaser, provided that such Person agrees to be bound by the terms and
conditions of this Agreement and the Registration Rights Agreement,
including, without limitation, Section 6 of the Registration Rights
Agreement; (iv) as a result of any pledge by Purchaser of the Shares as
security for any indebtedness or guaranty of Purchaser, provided that such
pledgee agrees to be bound by the terms and conditions of this Agreement and
the Registration Rights Agreement, including, without limitation, Section 6
of the Registration Rights Agreement, upon the exercise of its rights under
such pledge; or (v) in private transactions pursuant to one or more
exemptions from registration under the Securities Act.
Section 5.4 APPROVALS. The Company and Purchaser each agree to
cooperate and use their reasonable best efforts to obtain (and will
immediately prepare all registrations, filings and applications, requests and
notices preliminary to) all approvals that may be necessary or which may be
reasonably requested by the Company or Purchaser to consummate the
transactions contemplated by this Agreement. The Company shall, prior to the
Closing Date, take all actions necessary to ensure that Purchaser shall have
full voting rights with respect to each of the Shares (including, without
limitation, obtaining approvals of the Board of Directors of the Company and
amending the Charter or Bylaws of the Company, as applicable).
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Section 5.5 REGISTRATION RIGHTS AGREEMENT. On or before the Closing
Date, the Company and Purchaser shall enter into an Registration Rights
Agreement substantially in the form of EXHIBIT A.
Section 5.6 EXCEPTED HOLDER AGREEMENTS. On or before the Closing
Date, the Company and Purchaser shall enter into an Excepted Holder Agreement
substantially in the form of EXHIBIT B.
Section 5.7 NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Purchaser, and Purchaser shall give prompt notice to the
Company, of (a) the occurrence, or failure to occur, of any event that causes
any representation or warranty contained in any Transaction Document to be
untrue or inaccurate in any material respect at any time from the date of
this Agreement to the Closing Date and (b) any failure of the Company, on the
one hand, or Purchaser, on the other hand, to comply with or satisfy, in any
material respect, any covenant, condition or agreement to be complied with or
satisfied by it under any Transaction Document.
Section 5.8 NOMINATION OF BOARD MEMBER. The Company shall use its
commercially reasonable efforts to cause the Board of Directors of the
Company to increase the size of the Board of Directors by one person and to
elect a designee of the Purchaser to fill such vacancy and shall endorse the
selection of such designee for appointment as a member of the Board Affairs
Committee of the Board of Directors promptly after the Closing Date; PROVIDED
THAT, on or prior to the Closing Date, the Company receives written notice
executed by Purchaser, which notice shall name such designee and shall
provide all other information relating to such designee as the Company may be
required to disclose to its stockholders in connection with such appointment.
Section 5.9 SHAREHOLDERS' MEETING; PREPARATION OF PROXY STATEMENT.
The Company shall, in accordance with applicable law, as soon as practicable
following the execution and delivery of this Agreement, prepare and file with
the Commission a proxy statement in form and substance reasonably
satisfactory to Purchaser (such proxy statement, including the form of proxy
and all such other materials distributed in connection therewith, as amended
or supplemented from time to time, the "PROXY STATEMENT"). Purchaser will
cooperate with the Company in the preparation of the Proxy Statement and will
provide the Company with material and information required to be included
therein. The Company shall use its commercially reasonable efforts to cause
the Proxy Statement to be mailed to its shareholders at the earliest
practicable date. The Company shall call a meeting of its shareholders (the
"SHAREHOLDERS MEETING") to be held as promptly as practicable after the date
hereof (but not before July 9, 1997) for the purpose, among other things, of
considering and taking action upon the issuance of the shares of Common Stock
to Purchaser and the Subsequent Purchasers, if any, as contemplated hereunder
and shall use its commercially reasonable efforts to obtain and furnish the
information required to be included by it in the Proxy Statement and, after
consultation with Purchaser, respond promptly to any comments made by the
Commission with respect to the Proxy Statement and any preliminary version
thereof. The Company will, through its Board of Directors, include the
Recommendations
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in the Proxy Statement and shall solicit and use its reasonable best efforts
to obtain proxies in favor of the issuance of the shares of Common Stock to
Purchaser and the Subsequent Purchasers, if any, as contemplated hereunder.
The Company shall cause the Proxy Statement and the distribution thereof to
comply in all material respects with the Exchange Act and ensure that the
Proxy Statement will not, at the date the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to shareholders and at the
time of the Shareholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not misleading or
necessary to correct any statement in any earlier communication with respect
to the solicitation of proxies for the Shareholders' Meeting which has become
false or misleading. None of the information relating solely to Purchaser as
a shareholder of the Company that is supplied by Purchaser in writing
specifically for inclusion or incorporation by reference in the Proxy
Statement will, at the time the Proxy Statement is filed with the Commission
and at the time of the Shareholders' Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements made therein not misleading, in
the light of the circumstances under which they were made. The obligations
of the Company to distribute the Proxy Statement and convene the Shareholders
Meeting pursuant to this Section 5.9 shall not be affected by the withdrawal
or modification of the Recommendations.
Section 5.10 PUBLICITY AND REPORTS. Except as may be required by
applicable Law, or by obligations pursuant to any listing agreement with a
national securities exchange, neither the Company nor Purchaser shall,
without the approval of the other party, issue any press release or make any
public statement with respect to the transactions contemplated hereby or that
refer to such other party.
Section 5.11 CONDUCT OF BUSINESS. The Company covenants and agrees
that until the earlier of the Closing Date or the termination of this
Agreement, the Company shall, and shall cause its Subsidiaries to, continue
to engage in an efficient and economical manner solely in a business of the
same general type as conducted by it on the date of this Agreement in the
ordinary course, consistent with past practices; and use its reasonable best
efforts to preserve the business of the Company and its Subsidiaries and to
preserve the goodwill of customers and others having business relations with
the Company and its Subsidiaries.
Section 5.12 NEGATIVE COVENANTS OF THE COMPANY. The Company covenants
and agrees as follows, and shall not enter into any agreement or take any
other action inconsistent with the following, in each case until the earlier
of the Closing Date or the termination of this Agreement, except as
specifically contemplated by this Agreement or to the extent such action
shall not reasonably be expected to result in a Material Adverse Effect.
(a) CHARTER DOCUMENTS. The Company shall not amend the
Charter or Bylaws and shall not permit any of its Subsidiaries to amend its
organizational documents.
23
<PAGE>
(b) MERGERS, ETC. Except as shall have been previously
agreed in writing by the parties, the Company shall not, and shall not permit
any of its Subsidiaries to, merge or consolidate with any Person, sell,
lease, license or otherwise dispose of all or substantially all of its assets
(whether now owned or hereafter acquired) to any Person or acquire all or
substantially all of the assets or the business of any Person, in each case
whether in one transaction or in a series of transactions pursuant to which
Company or such Subsidiary shall not be the surviving entity.
Section 5.13 INSPECTION RIGHTS. The Company shall keep proper books
of record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company in
accordance with generally accepted accounting principles, and the Company
shall cause its Subsidiaries to do the same. As long as Purchaser owns
shares representing at least the Minimum Ownership Level, the Company shall,
upon reasonable notice by Purchaser, provide Purchaser with reasonable access
to all Books and Records during regular business hours and allow Purchaser to
make copies and abstracts thereof and the Company shall cause its
Subsidiaries to do the same. Purchaser shall have the right to consult from
time to time with management of the Company at its place of business
regarding operating and financial matters of the Company and its
Subsidiaries. Purchaser shall be bound by the provisions of Section 5.1(b)
with respect to information obtained pursuant to this Section.
Section 5.14 [Reserved].
Section 5.15 REAL ESTATE OPERATING COMPANY. The Company shall
continue to operate as a REOC for so long as Purchaser holds Shares
representing in the aggregate at least the Minimum Ownership Level.
Section 5.16 AMENDMENT TO INVESTOR RIGHTS AGREEMENT. The Company
shall use its best efforts in order to obtain all necessary consents in order
(i) to provide Purchaser and the Subsequent Purchasers rights that are PARI
PASSU with those of each of the Company's shareholders party to the Investor
Rights Agreement under the penultimate paragraph of Section 2(b) and Section
2(c)(i) and (ii) of the Investor Rights Agreement and (ii) to provide that
such shareholders shall not have any right to be included in the shelf
registration to be filed by the Company for the benefit of the Purchaser and
the Subsequent Purchasers.
Section 5.17 DELIVERY OF CERTAIN DOCUMENTS. The Company shall deliver
at least ten days prior to the scheduled date of the Shareholders Meeting,
all agreements, contracts, promissory notes, letters of intent and similar
documents that (i) have been entered into by the Company or any of its
Subsidiaries between March 31, 1997 and the date that is no more than 15 days
prior to the scheduled date for the Shareholders Meeting, (ii) have not been
terminated and (iii) relate to an acquisition or sale of assets, stock or
other equity interest or the incurrence or guarantee of indebtedness by the
Company or such Subsidiary, involving a maximum purchase price or obligation
of more than $75,000,000.
24
<PAGE>
Section 5.18 FURTHER ASSURANCES. Promptly upon request by the other
party, each party shall, and shall cause its Subsidiaries to, take, execute,
acknowledge, deliver, file, re-file, register and re-register, any and all
such further acts, certificates, assurances and other instruments as the
requesting party may require from time to time in order to carry out more
effectively the purposes of each Transaction Document and to better transfer,
preserve, protect and confirm to the requesting party the rights granted or
now or hereafter intended to be granted to the requesting party under each
Transaction Document.
ARTICLE VI
MISCELLANEOUS
Section 6.1 SURVIVAL OF PROVISIONS. The representations, warranties
and covenants of the Company and Purchaser made herein shall remain operative
and in full force and effect pursuant to their terms (a) regardless of (i)
any investigation made by or on behalf of Purchaser or the Company, as the
case may be, or (ii) acceptance of any of the Shares and payment by Purchaser
therefor and (b) except as specifically provided otherwise, after the Closing
Date.
Section 6.2 TERMINATION. This Agreement and the transactions
contemplated by this Agreement may be terminated at any time prior to the
Closing Date as follows and in no other manner:
(a) By either the Company or Purchaser if the Closing has not
occurred on or prior to the Termination Date;
(b) By mutual consent of Purchaser and the Company;
(c) By Purchaser at any time on or prior to June 12, 1997, if the
Finance Committee of the Board of Directors of Purchaser shall not have
authorized the purchase of the Shares pursuant to this Agreement on or before
such date;
(d) By the Company at any time on or prior to August 5, 1997;
(e) By Purchaser if (i) the Board of Directors of the Company
shall have withdrawn or modified the Recommendations in a manner adverse to
Purchaser or (ii) the shareholders shall have failed to approve the issuance
of the Shares pursuant to this Agreement at the Shareholders Meeting; and
(f) By either Purchaser, on the one hand, or the Company, on the
other hand, with written notice to the other party if there has been a
misrepresentation or material breach on the part of the Company or Purchaser,
respectively, in their respective representations, warranties and covenants
set forth herein.
25
<PAGE>
In the event that this Agreement should be terminated pursuant to
Section 6.2, all further obligations of the parties under this Agreement
shall terminate, PROVIDED, however, that a termination under Section 6.2(f)
shall not relieve any party of any liability for a breach of, or any
misrepresentation under, this Agreement or be deemed to constitute a waiver
of any available remedy for any such breach of misrepresentation; PROVIDED,
FURTHER, that in the event of a termination pursuant to Section 6.2(e) or the
failure of the Company to obtain the consents set forth in Schedule 3.1(d)
and 3.1(i), Company shall pay Purchaser within five business days after such
termination, a fee equal to $1,500,000. Notwithstanding anything in the
foregoing to the contrary, no party that is in material breach of this
Agreement shall be entitled to terminate this Agreement except with the
consent of the other party.
Section 6.3 NO WAIVER; MODIFICATION IN WRITING.
(a) No failure or delay on the part of the Company or Purchaser in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or Purchaser at law or in equity. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given without the written consent of the Company, on the
one hand, and Purchaser, on the other hand, provided that notice of any such
waiver shall be given to each party hereto as set forth below. Any
amendment, supplement or modification of or to any provision of this
Agreement, or any waiver of any provision of this Agreement, shall be
effective only in the specific instance and for the specific purpose for
which made or given. Except where notice is specifically required by this
Agreement, no notice to or demand on any party hereto in any case shall
entitle the other party to any other or further notice or demand in similar
or other circumstances.
Section 6.4 COMMUNICATIONS. All notices and demands provided for
hereunder shall be in writing, and shall be given by registered or certified
mail, return receipt requested, telex, telegram, telecopy, courier service or
personal delivery, and, if to Purchaser, addressed to 8 Campus Drive, 4th
Floor, Parsippany, New Jersey 07054, Fax No.: (201) 734-1472, Attention:
Jeffrey L. Danker, with copies to: O'Melveny & Myers LLP, 153 East 53rd
Street, New York, New York 10022, Fax No. (212) 326-2061, Attention: Robert
S. Insolia, Esq., or to the Company at: Meridian Industrial Trust, Inc., 50
California Street, Suite 1600, San Francisco, California 94111, Fax No.:
(415) 344-8430, Attention: Chief Executive Officer, with a copy to Michael D.
Wortley, Esq., Vinson & Elkins L.L.P., 2001 Ross Avenue, Suite 3700, Dallas,
Texas 75201, Fax No.: (214) 999-7732 or to such other address as Purchaser
and Company, as the case may be, may designate in writing, and shall be
deemed given when received.
26
<PAGE>
Section 6.5 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same agreement.
Section 6.6 BINDING EFFECT; ASSIGNMENT. Except as provided in
Section 5.3 hereof, the rights and obligations of the parties under this
Agreement may not be assigned to any other person; PROVIDED, HOWEVER, that
(i) prior to the Closing, Purchaser may assign part or all of its rights
under this Agreement to Strategic Value Investors, L.L.C. or its successor
("SVI") so long as SVI agrees to bound by the terms of this Agreement and the
Registration Rights Agreement (and Purchaser shall be released from its
obligations under this Agreement and the Registration Rights Agreement to the
extent of such assignment) and agrees to enter into an Excepted Holder
Agreement substantially in the form of EXHIBIT B hereto if such assignment
would result in SVI owning shares representing more than 8.5% of the issued
and outstanding shares of Common Stock of the Company on the Closing Date;
and PROVIDED FURTHER, that Purchaser shall not have any further rights under
Section 5.8 if it assigns its rights hereunder and thereunder to SVI and (ii)
after the Closing the Company may assign its rights hereunder to any
successor entity to the Company, whether pursuant to a sale of substantially
all of the Company's assets, or the merger or consolidation of the Company,
that agrees to be bound by the terms and conditions hereof and the other
Transactional Documents. Except as expressly provided in this Agreement,
this Agreement shall not be construed so as to confer any right or benefit
upon any Person other than the parties to this Agreement, and their
respective successors and permitted assigns. This Agreement shall be binding
upon the Company and Purchaser, and their respective successors and permitted
assigns.
Section 6.7 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF MARYLAND, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS.
Section 6.8 EXPENSES. Each of the parties hereto shall pay its own
respective costs and expenses incurred in connection with the negotiation,
execution and performance of this Agreement. Notwithstanding the foregoing,
the costs and expenses of preparing and distributing the Proxy Statement and
obtaining and complying with the antitrust requirements of any Governmental
Entity shall be paid by the Company.
Section 6.9 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
27
<PAGE>
Section 6.10 HEADINGS. The Article and Section headings and Table of
Contents used or contained in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
Section 6.11 INTEGRATION. This Agreement (including the exhibits
hereto) constitutes the entire agreement among the parties with respect to
the purchase and sale of the Shares and there are no promises or undertakings
with respect thereto relative to the subject matter hereof not expressly set
forth or referred to herein or in exhibits hereto.
Section 6.12 ENFORCEMENT OF COVENANTS. The Company agrees that a
violation on its part of the covenants contained in Section 5.8 shall cause
irreparable damage to Purchaser and, consequently, the Company further agrees
that Purchaser shall be entitled, as a matter of right, to an injunction
restraining any violation of such covenants by the Company. Such right to an
injunction shall be cumulative with any and all other remedies Purchaser may
have, including, but not limited to, recover of damages.
Section 6.13 WAIVER BY JURY TRIAL. Each party waives any right to a
trial by jury in any action, suit or other proceeding to enforce or defend
any right under any Transaction Document or any amendment, instrument,
document or agreement delivered, or which in the future may be delivered, in
connection with any Transaction Document and agrees that any such action,
suit or other proceeding shall be tried before a court and not before a jury.
[Remainder of this page intentionally left blank]
28
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officer as of the date first written above.
MERIDIAN INDUSTRIAL
TRUST, INC.
By:______________________________
Name:
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:_____________________________
Name: Jeffrey L. Danker
Title: Managing Director
29
<PAGE>
SCHEDULE
STOCK PURCHASE AGREEMENTS
The following table (a) identifies three Stock Purchase Agreements dated
June 12, 1997 that have been entered into by the Company as Seller and are
substantially identical to the Amended and Restated Stock Purchase Agreement
dated June 12, 1997 by and between the Company as Seller and The Prudential
Insurance Company of America, as Purchaser that is filed with this report
(the "Filed Stock Purchase Agreement") and (b) sets forth material
differences between each of those three Stock Purchase Agreements and the
Filed Stock Purchase Agreement.
<TABLE>
<CAPTION>
PURCHASER # OF SHARES OTHER
<S> <C> <C>
Strategic Performance Fund-II, Inc. 1,013,788 common shares The purchaser has no right to designate
individuals for nomination to the Company's
board of directors or appointment to any
committee of that board.
The Prudential Variable Contract Real 506,894 common shares The purchaser has no right to designate
Property Partnership individuals for nomination to the Company's
board of directors or appointment to any
committee of that board.
The Prudential Insurance Company of America, 1,744,128 common shares The purchaser has no right to designate
on behalf of a single client insurance individuals for nomination to the Company's
company separate account contained in Group board of directors or appointment to any
Annuity Contract No. GA-9032 committee of that board.
</TABLE>
30
<PAGE>
PURCHASE AND SALE AGREEMENT
by and between
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
("Seller")
and
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
("Buyer")
INDUSTRIAL PACKAGE SALE
TEXAS PROPERTIES
Date: May ____, 1997
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 SALE OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . 5
1.1 REAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . 5
1.2 PERSONAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . 5
1.3 OTHER PROPERTY RIGHTS. . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2 PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 DEPOSIT MONEY. . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 CASH AT CLOSING. . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 ALLOCATION OF PURCHASE PRICE . . . . . . . . . . . . . . . . . 6
ARTICLE 3 TITLE MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 TITLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 TITLE DEFECTS. . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2.1 CERTAIN EXCEPTIONS TO TITLE. . . . . . . . . . . . . . . . . 7
3.2.2 DISCHARGE OF OTHER LIENS . . . . . . . . . . . . . . . . . . 7
3.3 TITLE INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 TITLE COMPANY FEE. . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 4 BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY. . . . . . . . 8
4.1 BUYER'S INSPECTION OF PROPERTY . . . . . . . . . . . . . . . . 8
4.2 BUYER'S INSPECTION OF DOCUMENTS. . . . . . . . . . . . . . . . 8
4.4 BUYER'S CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 5 ADJUSTMENTS AND PRORATIONS . . . . . . . . . . . . . . . . . . 10
5.1 LEASE RENTALS AND EXPENSES . . . . . . . . . . . . . . . . . . 10
5.1.1 RENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.1.2 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 REAL ESTATE AND PERSONAL PROPERTY TAXES. . . . . . . . . . . . 11
5.3 PROPERTY OPERATING EXPENSES. . . . . . . . . . . . . . . . . . 12
5.4 CLOSING COSTS. . . . . . . . . . . . . . . . . . . . . . . . . 12
5.5 APPORTIONMENT CREDIT . . . . . . . . . . . . . . . . . . . . . 12
5.6 DELAYED ADJUSTMENT . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 6. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.3 TITLE TRANSFER AND PAYMENT OF PURCHASE PRICE . . . . . . . . . 14
6.4 SELLER'S CLOSING DELIVERIES. . . . . . . . . . . . . . . . . . 14
6.5 BUYER'S CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . 17
ii
<PAGE>
ARTICLE 7 CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . 17
7.1 SELLER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . 17
7.2 BUYER'S OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . 18
7.3 WAIVER OF FAILURE OF CONDITIONS PRECEDENT. . . . . . . . . . . 18
ARTICLE 8 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 18
8.1 BUYER'S REPRESENTATIONS. . . . . . . . . . . . . . . . . . . . 19
8.1.1 BUYER'S AUTHORIZATION. . . . . . . . . . . . . . . . . . . . 19
8.1.2 PROPERTY SOLD AS IS. . . . . . . . . . . . . . . . . . . . . 19
8.1.3 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.2 SELLER'S REPRESENTATIONS . . . . . . . . . . . . . . . . . . . 23
8.2.1 SELLER'S AUTHORIZATION . . . . . . . . . . . . . . . . . . . 23
8.2.2 NO OTHER AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 23
8.2.3 NO OTHER TENANTS . . . . . . . . . . . . . . . . . . . . . . 23
8.2.4 OTHER SELLER'S REPRESENTATIONS . . . . . . . . . . . . . . . 24
8.3 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 24
8.3.1 PARTIES' RIGHT TO AMEND REPRESENTATION . . . . . . . . . . . 24
8.3.2 NO REPRESENTATION AS TO LEASES . . . . . . . . . . . . . . . 24
8.3.3 DEFINITION OF SELLER'S KNOWLEDGE . . . . . . . . . . . . . . 24
8.3.4 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3.5 LIMITATION ON SELLER LIABILITY . . . . . . . . . . . . . . . 25
ARTICLE 9 COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.1 BUYER'S COVENANTS. . . . . . . . . . . . . . . . . . . . . . . 25
9.1.1 CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . 25
9.1.2 APPROVALS NOT A CONDITION TO BUYER'S PERFORMANCE . . . . . . 26
9.2 SELLER'S COVENANTS . . . . . . . . . . . . . . . . . . . . . . 26
9.2.1 MAINTENANCE OF PROPERTY. . . . . . . . . . . . . . . . . . . 26
9.2.2 ACCESS TO PROPERTY . . . . . . . . . . . . . . . . . . . . . 26
9.3 MUTUAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 26
9.3.1 PUBLICITY. . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3.2 BROKER . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 10 FAILURE OF CONDITIONS . . . . . . . . . . . . . . . . . . . . 27
10.1 TO SELLER'S OBLIGATIONS. . . . . . . . . . . . . . . . . . . . 27
10.1.1 BUYER'S BREACH . . . . . . . . . . . . . . . . . . . . . . . 27
10.1.2 NON-AUTHORIZATION FEE. . . . . . . . . . . . . . . . . . . . 28
10.2 TO BUYER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . 28
10.2.1 BUYER'S REMEDY . . . . . . . . . . . . . . . . . . . . . . . 28
iii
<PAGE>
ARTICLE 11 CONDEMNATION/CASUALTY . . . . . . . . . . . . . . . . . . . . 28
11.1 CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.1.1 RIGHT TO TERMINATE . . . . . . . . . . . . . . . . . . . . . 28
11.1.2 ASSIGNMENT OF PROCEEDS . . . . . . . . . . . . . . . . . . . 29
11.2 DESTRUCTION OR DAMAGE. . . . . . . . . . . . . . . . . . . . . 29
11.3 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.4 EFFECT OF TERMINATION. . . . . . . . . . . . . . . . . . . . . 29
11.5 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 12 ESCROW. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.1 ESCROW . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 13 LEASING MATTERS . . . . . . . . . . . . . . . . . . . . . . . 31
13.1 NEW LEASES . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13.2 OTHER LEASE ACTIVITY . . . . . . . . . . . . . . . . . . . . . 32
13.3 LEASE ENFORCEMENT. . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 14 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 32
14.1 BUYER'S ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . 32
14.2 DESIGNATION AGREEMENT. . . . . . . . . . . . . . . . . . . . . 33
14.3 SURVIVAL/MERGER. . . . . . . . . . . . . . . . . . . . . . . . 33
14.4 INTEGRATION; WAIVER. . . . . . . . . . . . . . . . . . . . . . 33
14.5 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . 34
14.6 CAPTIONS NOT BINDING; SCHEDULES AND EXHIBITS . . . . . . . . . 34
14.7 BINDING EFFECT . . . . . . . . . . . . . . . . . . . . . . . . 34
14.8 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 34
14.9 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
14.10 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.11 NO RECORDATION . . . . . . . . . . . . . . . . . . . . . . . . 35
14.12 ADDITIONAL AGREEMENTS; FURTHER ASSURANCES. . . . . . . . . . . 36
14.13 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 36
14.14 ERISA COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . 36
14.15 LIKE-KIND EXCHANGE . . . . . . . . . . . . . . . . . . . . . . 36
14.16 BUYER'S AUDIT RIGHTS . . . . . . . . . . . . . . . . . . . . . 36
14.17 WAIVER OF DECEPTIVE TRADE PRACTICES ACT. . . . . . . . . . . . 37
iv
<PAGE>
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made this ______ day of May,
1997, by and between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey
corporation ("SELLER"), and MERIDIAN INDUSTRIAL TRUST, INC., a Maryland
corporation ("BUYER").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set forth herein the
parties hereto do hereby agree as follows:
ARTICLE 1 - SALE OF PROPERTY
Seller agrees to transfer and assign and Buyer agrees to accept and assume,
subject to the terms and conditions stated herein, all of Seller's right,
title and interest in and to the following (collectively called the
"Property"):
1.1 REAL PROPERTY. Those tracts of the land situated in various Counties in
the State of Texas which are more particularly described in EXHIBIT A and
EXHIBITS A-1, A-2, AND A-11 THROUGH A-14 attached hereto as a part hereof,
together with all buildings, improvements and fixtures located thereon and
owned by Seller or Seller's designee under the terms of a like-kind exchange
as described in Section 14.15 hereof, as of the Closing Date (as defined in
SECTION 6.2) and all rights, privileges and appurtenances pertaining thereto
including all of Seller's right, title and interest in and to all
rights-of-way, open or proposed streets, alleys, easements, strips or gores
of land adjacent thereto (collectively called the "Real Property");
1.2 PERSONAL PROPERTY. All tangible personal property owned by Seller
(excluding any computer or computer equipment and software), located on the
Real Property, and used in the ownership, operation and maintenance of the
Real Property and all non-confidential books, records and files in the
possession or control of Seller's property manager relating to the Real
Property (collectively called the "Personal Property"); and
1.3 OTHER PROPERTY RIGHTS. (a) Seller's interest as landlord in all leases
encumbering the Real Property on the Closing Date; and (b) If and to the
extent assignable by Seller, all licenses, permits and other written
authorizations necessary for the use, operation or ownership of the Real
Property or Personal Property and in Seller's possession or control plus all
rights (if any) to use the project names, but Seller does not represent that
it has exclusive rights to use such name, and Seller has not registered the
same in any manner.
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ARTICLE 2 - PURCHASE PRICE
The total purchase price to be paid by Buyer for the purchase of the Property
is the sum of THIRTY ONE MILLION, FIFTY FIVE THOUSAND, FOUR HUNDRED THIRTY
ONE DOLLARS ($31,055,431.00) in cash (the "Purchase Price"). The Purchase
Price shall be paid in the following manner:
2.1 DEPOSIT MONEY. Upon the full and final execution of this Agreement and
as a condition precedent to the formation of this Agreement, Buyer shall
deposit the sum of ONE HUNDRED FIFTY EIGHT THOUSAND, TWO HUNDRED EIGHTY FIVE
DOLLARS ($158,285.00) in immediately available funds as a deposit (the
"Deposit") with First American Title Insurance Company whose mailing address
is 30 North LaSalle Street, Suite 310, Chicago, IL 60602, Attention: John C.
("Jack") Murray, Vice President & Special Counsel (the "Title Company").
The Deposit, and any additional sums deposited pursuant to Section 6.2
hereof, shall be held and delivered by the Title Company as escrow agent
("Escrow Agent") in accordance with the provisions of ARTICLES 6 AND 12, and
any interest earned thereon shall be considered a part of the Deposit.
Except as expressly otherwise set forth herein, the Deposit shall be applied
against the Purchase Price on the Closing Date.
2.2 CASH AT CLOSING. On the Closing Date, Buyer shall pay to Seller through
Escrow Agent the balance of the Purchase Price (the "Balance") in cash
(subject to the prorations and adjustments set forth in ARTICLE 5 or as
otherwise provided under this Agreement) in immediately available U.S. funds
by wire transfer as more particularly set forth in ARTICLES 6 AND 12.
2.3 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
between the projects as set forth in EXHIBIT B which is annexed hereto
subject to Closing adjustments provided hereunder.
ARTICLE 3 - TITLE MATTERS
3.1 TITLE
REAL PROPERTY. Buyer acknowledges that, commencing upon mutual execution
of this Agreement and ending on July 7, 1997 (the "Due Diligence Period"), Buyer
shall conduct an examination of the status of title to the Property. On or
before the expiration of the Due Diligence Period, Buyer shall notify Seller and
Title Company of the specific exceptions to title to the Property which Buyer is
willing to accept in the Title Policies (as hereinafter defined), including all
title endorsements required by Buyer (collectively, the "Permitted
Exceptions"). Provided Title Company is prepared to issue the Title Policies
subject only to the Permitted Exceptions, then at Closing Seller shall transfer
title to the Real Property subject to (i) applicable zoning ordinances and land
use regulations; (ii) such conditions, easements, agreements, and restrictions
of record as exist on the date hereof, continue to exist on the expiration of
the Due Diligence period, and as are listed on Schedule B of the title reports
issued by Title Company a copy of which reports have been made available to
Buyer and are listed on EXHIBIT C (the "Title
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Reports") which is annexed hereto, (iii) such state of facts as have been
disclosed in the surveys of the Real Property, which have been provided by
Seller to Buyer and which shall be prepared in accordance with the Minimum
Requirements for ALTA/ACSM land title surveys ("Surveys"), (iv) such state of
facts as would be disclosed by a physical inspection of the Property, (v) the
lien of taxes not yet due and payable, and (vi) the Leases (as defined in
SECTION 6.4 (c)). Notwithstanding the foregoing, Seller shall, at Seller's
expense, cause to be removed from the Title Reports all mortgages, deeds of
trust, mechanic's liens, and other monetary liens and judgments described
thereon. Buyer shall pay any additional premiums required for the deletion
of the "survey exception" on Buyer's fee policy of title insurance and for
the issuance of any desired or applicable endorsements requested by Buyer
which are available in the state where each project comprising a portion of
the Property is located. Buyer is aware that ALTA policies and ALTA
endorsements may not be available in all states in which the projects
comprising the Property are located
3.2 TITLE DEFECTS.
3.2.1 ADDITIONAL EXCEPTIONS TO TITLE. If any exceptions to title that
are not Permitted Exceptions arise after the date on which Buyer identifies
the Permitted Exceptions and are not reflected in the Title Reports
provided to Buyer prior to June 15, 1997, which by their terms, may be
removed or satisfied by the payment of a liquidated sum of money (the
"Other Liens"), Seller shall remove the same (or cause the same to be
removed) and shall be entitled to a reasonable adjournment of the Closing
(not to exceed thirty (30) days) for the purpose of such removal.
Notwithstanding the foregoing, Seller may, at its sole election, in
lieu of removing any Other Liens which do not exceed Fifty Thousand
Dollars ($50,000.00): (x) deposit with Title Company such amount of money
or (y) provide such indemnity to the Title Company, as may, in the case of
either clause (x) or (y), be sufficient to induce the Title Company to
insure Buyer against collection of such Other Liens, including interest and
penalties, out of or against the Property, in which event such Other Liens
shall not be deemed to constitute exceptions to title hereunder. Except as
expressly provided above, Seller shall not be required to bring any action
or proceeding or to take any other action to cure or eliminate any title
defect or exception reflected in the Title Reports.
3.2.2 DISCHARGE OF OTHER LIENS. If on the Closing Date there are any
Other Liens which Seller is obligated or has elected to pay and discharge,
Seller may use any portion of the Balance to satisfy the same, provided
Seller shall deliver to Buyer or Title Company at Closing instruments in
recordable form and sufficient to satisfy such Other Liens of record,
together with the cost of recording or filing such instruments, or provided
that Seller shall cause the Title Company to insure over the same, without
any additional cost to Buyer, whether such insurance is made available in
consideration of payment, bonding, indemnity of Seller or otherwise.
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3.3 TITLE INSURANCE. At Closing, the Title Company shall issue to Buyer, for
each project comprising a portion of the Property, at Buyer's sole cost and
expense, an ALTEX Owner's Form of title insurance policy, or form that is
customary in the State where the project is located, in the amount of the
allocated portion of the Purchase Price, insuring that fee simple title to the
Real Property is vested in Buyer subject only to the Permitted Exceptions (the
"Title Policies").
3.4 TITLE COMPANY FEE. In the event Buyer purchases the Property and does
NOT have Title Company issue the Title Policies described in SECTION 3.3,
Buyer shall pay to Title Company an amount equal to Twenty Thousand Dollars
($20,000.00) on the Closing Date, such sum to represent a partial loss of
profits to the Title Company, a loss to Seller, and for the time and services
provided by Title Company to Buyer and Seller in the preparation of this
Agreement, preparation of the Title Reports described in EXHIBIT C, and
assisting Seller with pre-marketing title and survey clarifications. In the
event Buyer elects to pay the Title Company Fee and obtain title insurance
from another title insurance company, Title Company agrees to provide to
Buyer and Seller a release of liability upon Title Company's receipt of the
Title Company Fee.
ARTICLE 4 - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY
4.1 BUYER'S INSPECTION OF PROPERTY. Buyer acknowledges that commencing
prior to the execution of this Agreement and continuing until expiration of
the Due Diligence Period, Buyer has conducted, and shall have the right to
continue to conduct, its examinations, inspections, studies and/or
investigations (collectively, "Due Diligence") of the Property and
information regarding the Property. IF BUYER IS NOT REASONABLY SATISFIED
WITH THE RESULTS OF ITS DUE DILIGENCE, BUYER MAY TERMINATE THIS AGREEMENT by
written notice to Seller on or before the last day of the Due Diligence
Period, and, in the event of such termination, neither Seller nor Buyer shall
have any liability hereunder (except for those obligations which expressly
survive the termination of this Agreement) and Buyer shall be entitled to the
return of the Deposit. In the event Buyer fails to terminate this Agreement
on or before the last day of the Due Diligence Period, Buyer shall be deemed
to have waived its rights to terminate this Agreement in accordance with this
SECTION 4.1. Buyer and Seller each acknowledge and agree that Buyer shall
have no additional period after the expiration of the Due Diligence Period to
conduct further Due Diligence with respect to the Documents (as hereinafter
defined) except as provided for in Section 4.3, the other information
regarding the Property, or the Property. At Closing, Buyer will deliver a
certification in the form annexed hereto as EXHIBIT C-1 certifying that no
representations or warranties concerning the Property have been made, except
as expressly set forth herein.
4.2 BUYER'S INSPECTION OF DOCUMENTS. Buyer acknowledges that prior to
Buyer's execution of this Agreement, Seller made available to Buyer and
otherwise allowed Buyer access to copies of certain documents in Seller's
possession applicable to the Property, including, but not limited to, the
Title Reports and all exceptions thereto, the Surveys, all leases affecting
the Property (collectively, the "Leases"), other reports and any available
documents and other pertinent books and records which pertain to the Property
(collectively, the "Documents"). Buyer shall determine to its satisfaction
the assignability of any Documents to be assigned hereunder. Seller
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shall cooperate with Buyer (but shall not be obligated) to obtain any
consents required in connection with the assignment to Buyer of any of the
Documents. All of the Documents are confidential and, prior to such time, if
any, that Buyer takes title to the Property, shall not be distributed or
disclosed by Buyer to any person or entity not associated with Buyer (which
obligation of Buyer shall survive any termination of this Agreement). If the
transaction fails to close for any reason whatsoever, Buyer shall return to
Seller all of the Documents (together with all copies thereof made by or on
behalf of Buyer) which Seller, its sales agents or brokers may have
previously delivered or made available or any hereafter deliver or make
available to Buyer in accordance with this SECTION 4.2 (which obligation of
Buyer shall survive any termination of this Agreement). BY FURNISHING TO
BUYER THE DOCUMENTS, EXCEPT AS EXPRESSLY SET FORTH HEREIN, WHETHER HERETOFORE
OR HEREAFTER, NONE OF SELLER, ITS SALES AGENTS OR BROKERS, NOR ANY PARTNER,
OFFICER, DIRECTOR, EMPLOYEE, AGENT OR ATTORNEY OF SELLER, NOR ANY OTHER
PARTY RELATED IN ANY WAY TO ANY OF THE FOREGOING (ALL OF WHICH PARTIES ARE
COLLECTIVELY REFERRED TO AS THE "SELLER PARTIES") SHALL BE DEEMED TO HAVE
MADE ANY REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE WHATSOEVER WITH
RESPECT TO ANY MATTER SET FORTH, CONTAINED OR ADDRESSED IN THE DOCUMENTS,
INCLUDING, BUT NOT LIMITED TO, THE ACCURACY AND COMPLETENESS THEREOF, AND
BUYER SHALL CONFIRM INDEPENDENTLY ALL INFORMATION THAT IT CONSIDERS MATERIAL
TO ITS PURCHASE OF THE PROPERTY.
Buyer acknowledges that prior to Buyer's execution of this Agreement Seller has
made available to Buyer, and Seller hereby agrees to continue to make available
to Buyer and otherwise allow Buyer access to, other non-confidential information
regarding the Property, including, but not limited to, information which may
have related to its construction, history, current economic and leasing status,
physical condition and prospects for future use or development, as Buyer has
deemed appropriate. Buyer acknowledges that Buyer will review the Documents and
the other information regarding the Property with the assistance of such experts
as Buyer deems appropriate. While Seller has provided, and will continue to
provide, the Documents and such other information to Buyer and to cooperate with
Buyer, SELLER HAS MADE IT CLEAR THAT IT IS UNWILLING TO SELL THE PROPERTY TO
BUYER UNLESS SELLER AND THE OTHER SELLER PARTIES ARE EXPRESSLY RELEASED FROM
LIABILITY BY BUYER FOR ANY AND ALL REPRESENTATIONS MADE IN ANY STATEMENTS
HERETOFORE OR HEREAFTER MADE, OR INFORMATION HERETOFORE OR HEREAFTER FURNISHED
TO BUYER OR ITS AGENTS OR REPRESENTATIVES BY THE SELLER PARTIES UNLESS SUCH
REPRESENTATIONS ARE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN ANY EXHIBIT
HERETO. Consequently, Buyer, for Buyer and Buyer's successors in interest,
hereby releases the Seller Parties from, and waives all claims and liability
against the Seller Parties for, any and all representations now or hereafter
made, or information now or hereafter furnished, by the Seller Parties to Buyer
or its agents or representatives (including, but not limited to, representations
regarding the ownership, operation, economic and leasing status and physical and
soil condition of the Property), unless the representations are expressly set
forth in this Agreement or any exhibit hereto. The release of Seller Parties
set forth in this SECTION 4.2 shall be deemed to be reaffirmed as of the Closing
and
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shall survive the Closing and shall not be merged therein.
4.3 OPTION CLOSING DATE. In the event Buyer exercises its option to close
on the Option Closing Date (as described in Section 6.2), Buyer shall have
the right from the date of its delivery of notice of such election to Seller,
through September 19, 1997, to re-inspect the Property and conduct such tests
as Buyer may deem appropriate for the purpose of determining whether there
has been a material adverse change ("Material Change") in the condition of
the Property since July 7, 1997. In the event that Buyer determines in its
reasonable opinion that the Property, or a substantial and material portion
thereof, has suffered a Material Change subsequent to July 7, 1997, Buyer
shall on or before September 19, 1997 give Seller written notice of the
nature of the Material Change, and Seller shall be entitled to a reasonable
adjournment of the Option Closing Date (but not beyond December 31, 1997) to
return the Property to the condition existing on July 7, 1997.
4.4 BUYER'S CERTIFICATE. Buyer shall deliver to Seller at the Closing, a
certificate of an authorized officer of Buyer, if Buyer is a corporation, or
of a general partner, if Buyer is a partnership, or of the managing member if
Buyer is a limited liability company, confirming and certifying Buyer's
acceptance and acknowledgment of all matters set forth in this ARTICLE 4 and
in SECTION 8.1.
ARTICLE 5 - ADJUSTMENTS AND PRORATIONS
The following adjustments and prorations shall be made at Closing:
5.1 LEASE RENTALS AND EXPENSES.
5.1.1 RENTS. Rents shall be prorated as of midnight of the day
immediately preceding the Closing Date. Without otherwise limiting the
foregoing, Seller shall be entitled to all rents (including any percentage
rent and any accrued tax and operating expense escalations, subject to the
provisions of SECTION 5.6), charges, and other revenue of any kind
attributable to any period under the Leases to but not including the
Closing Date. Buyer shall be entitled to all rents (including any
percentage rent and any accrued tax and operating expense escalations,
subject to the provisions of SECTION 5.6), charges and other revenue of any
kind attributable to any period under the Leases on and after the Closing
Date. Rents and expense escalations or other reimbursements due landlord
under the Leases not collected as of the Closing Date shall not be prorated
at the time of Closing, but Buyer shall make a good faith effort to collect
the same on Seller's behalf (which obligation of Buyer shall survive the
Closing), and to tender the same to Seller upon receipt, provided that all
rents, escalations and other reimbursements due landlord under the Leases
collected by Buyer on or after the Closing Date shall first be applied to
all amounts due under the Leases at the time of collection (i.e., current
rents and sums due Buyer as the current owner and landlord) with the
balance (if any) payable to Seller, but only to the extent of amounts
delinquent and actually due Seller. Buyer shall not have an exclusive
right to collect the sums due Seller under the Leases and Seller hereby
retains
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its rights to pursue any tenant under the Leases for sums due Seller
for periods attributable to Seller's ownership of the Property;
provided, however, that Seller shall not without Buyer's prior written
consent, which may be withheld for any reason or for no reason, cause any
Lease to be terminated as a result of any default by any tenant under its
Lease. Buyer shall receive a credit against the Purchase Price for all
security deposits and pre-paid rentals held by Seller covering the period
post-Closing. To the extent assignable, Seller shall assign to Buyer any
security deposits held by Seller at Closing.
5.1.2 EXPENSES. Expenses shall be prorated as of midnight of the day
immediately preceding the Closing Date. At Closing, Buyer shall (i)
reimburse Seller on the Closing Date for any and all fees, including
leasing commissions, paid or expenses incurred (collectively the "Lease
Expenses") arising out of or in connection with any extensions, renewals or
expansions under the Leases exercisable by any tenant after April 25, 1997,
which Lease Expenses were paid by Seller prior to Closing, and (ii)
indemnify and hold Seller harmless from and against any and all claims for
such Lease Expenses which Buyer is required to pay hereunder. Expenses in
connection with New Leases or discretionary extensions, renewals and
expansions shall be reimbursed to Seller in accordance with the provisions
of SECTION 13.1.
5.2 REAL ESTATE AND PERSONAL PROPERTY TAXES. Real estate, as opposed to
personal property taxes, shall be prorated only on the basis of real estate
taxes which become due and payable in the calendar year during which Closing
occurs, based upon the latest available tax bill and the number of days elapsed
in the calendar year of Closing, as of midnight of the day immediately preceding
the Closing Date. Personal property taxes shall be prorated as of the Closing
Date based upon the date they become due. Seller shall be entitled to all tax
refunds and credits attributable to the Property prior to the Closing Date.
Buyer shall pay all real estate and personal property taxes and shall be
entitled to all tax refunds and credits attributable to the Property after the
Closing Date. If the real estate and/or personal property tax rate and
assessments have not been set for the year in which the Closing occurs, then the
proration of such taxes shall be based upon the rate and assessments for the
preceding tax year, and there will be no re-proration or adjustment upon
receipt of the actual tax bill even if it differs from the amounts used at
Closing. Seller shall pay all special assessments payable prior to the Closing
Date and Buyer shall pay all special assessments payable on and after the
Closing Date; provided, however, that Seller shall not be responsible for any
special assessments which have not been confirmed or which relate to projects
that have not been completed on the date hereof. Notwithstanding the foregoing,
any obligation of Seller hereunder shall be offset on a dollar for dollar basis
to the extent Buyer is entitled after Closing to recover an increase in taxes
from the tenants under the Leases for any tax period prior to the Closing Date,
regardless of whether Buyer actually collects such increased taxes from such
tenants. In the event the Property has been assessed for property tax purposes
at such rates as would result in reassessment (i.e., "escape assessment" or
"roll-back taxes") based upon the change in land usage or ownership of the
Property, Buyer hereby agrees to pay all such taxes and to indemnify and save
Seller harmless from and against all claims and liability for such taxes. Such
indemnity shall survive the Closing and not be merged therein.
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5.3 PROPERTY OPERATING EXPENSES. Operating expenses for the Property shall
be prorated as midnight of the day immediately preceding the Closing Date.
Seller shall pay all utility charges and other operating expenses
attributable to the Property to, but not including the Closing Date (except
for those utility charges and operating expenses payable by tenants in
accordance with the Leases) and Buyer shall pay all utility charges and other
operating expenses attributable to the Property on or after the Closing Date.
To the extent that the amount of actual consumption of any utility services
is not determined prior to the Closing Date, a proration shall be made at
Closing based on the last available reading and post-closing adjustments
shall be within twenty (20) days of the date that actual consumption for such
pre-closing period is determined. Seller shall not assign to Buyer any
deposits which Seller has with any of the utility services or companies
servicing the Property. Buyer shall arrange with such services and companies
to have accounts opened in Buyer's name beginning at 12:01 a.m. on the day
following the Closing Date.
5.4 CLOSING COSTS. Except as expressly provided herein, Buyer shall pay all
costs associated with Closing other than Seller's attorney's fees and costs.
Without otherwise limiting the foregoing, Buyer shall pay all premiums and
charges of the Title Company for the Owner's Title Policies (including
endorsements requested by Buyer) which Owner's Title Policies will be issued
pursuant to the Title Report, the cost of any Survey obtained by Buyer or
Seller to be used as a part of this transaction (including any Surveys for
the Property prepared for Seller on or after February 1, 1997 in anticipation
of this sale), the cost of any Phase I environmental reports and asbestos
surveys ordered by Seller subsequent to February 1, 1997, all recording and
filing charges in connection with the instrument by which Seller conveys the
Property and all escrow charges, all transfer taxes, and any other costs
customarily paid by the Buyer pursuant to the customs of the state in which
each Property is located. Each party shall pay its own attorneys. The
obligations of the Buyer to pay applicable escrow charges shall survive the
termination of this Agreement. The foregoing notwithstanding, in the event
Seller elects to proceed with a like-kind exchange as described in SECTION
14.15 of this Agreement, Seller will pay any increase in recording or
documentary taxes associated with the recording of documents necessary to
accomplish the like-kind exchange.
5.5 APPORTIONMENT CREDIT. In the event the apportionments to be made at the
Closing result in a credit balance (i) to Buyer, such sum shall be paid (at
Seller's option) at the Closing by giving Buyer a credit against the Balance
in the amount of such credit balance or without reduction of the Balance by
giving Buyer a certified or bank check payable to the order of Buyer or (ii)
to Seller, Buyer shall pay the amount thereof to Seller at the Closing by
wire transfer of immediately available federal funds to the account or
accounts to be designated by Seller for the payment of the Balance or, if no
such account is designated, by certified or bank check payable to the direct
order of Seller.
5.6 DELAYED ADJUSTMENT. If at any time following the Closing Date, the
amount of an item listed in any section of this ARTICLE 5 shall prove to be
incorrect, the party in whose favor the error was made shall promptly pay to
the other party the sum necessary to correct such error upon receipt of proof
of such error, provided that such proof is delivered to the party from whom
payment is requested on or before six (6) months after Closing. The
provisions of this SECTION 5.6 shall survive the Closing.
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ARTICLE 6 - CLOSING
6.1 CLOSING. Buyer and Seller hereby agree that the Transaction (as
hereinafter defined) shall be consummated via a Closing in escrow with the
Escrow Agent. The Escrow Agent shall be paid a closing escrow fee in the
total sum of Seven Hundred Dollars ($700.00) for services as Escrow Agent.
On the Closing Date, Escrow Agent shall close escrow by:
(i) Recording all documents as may be necessary to clear title to
each Property in accordance with the requirements of this
Agreement;
(ii) Recording the Deeds (as hereinafter defined);
(iii) Paying all closing costs and making all prorations in accordance
with the terms of this Agreement and a statement of adjustments
and prorations prepared by Escrow Agent and approved by Buyer and
Seller, copies of which statement shall be signed in multiple
originals by Buyer and Seller and delivered to Escrow Holder
prior to the Closing Date;
(iv) Delivering to Buyer the Title Policies, closing statement(s) duly
executed by Buyer, Seller and Escrow Agent, and an original of
each of the documents described in SECTIONS 6.4 (b) through (m)
and 6.4(p) (the Deeds referred to in SECTION 6.4(a) to be
delivered by Escrow Agent to Buyer after return from the
recorder's office); and
(v) Delivering to Seller, by wire transfer to be received by Seller's
bank not later than 3:00 p.m. Eastern Time, on the Closing Date,
or as may otherwise be directed by written instructions from
Seller, the Purchase Price plus or minus closing adjustments and
prorations; and delivering to Seller, on or promptly after the
Closing Date, a closing statement fully executed by Seller, Buyer
and Escrow Agent, a copy of the Title Policies, conformed copies
of the recorded Deeds, and an original of each of the documents
described in SECTIONS 6.5(a) through (f), and a copy of the
documents described in SECTION 6.5(g).
In the event that Buyer or Seller execute separate escrow instructions,
such separate escrow instructions shall constitute separate agreements between
Escrow Holder on the one hand, and Buyer or Seller, as the case may be, on the
other hand, and shall not constitute agreements between Buyer and Seller. Such
separate escrow instructions shall be enforceable only to the extent not
inconsistent with this Agreement.
6.2 CLOSING DATE. Subject to Seller's right to extend the Closing as
provided in SECTION 3.2, the transaction contemplated by this Agreement
("Transaction") shall close ("Closing") on July 18, 1997 ("Closing Date").
Buyer shall have the option to delay the Closing Date to September 30, 1997
(the "Option Closing Date"). Buyer may exercise its option to delay the
Closing Date to the Option Closing Date only by (a) delivering to Seller on
or before July 7, 1997 a written
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notice of Buyer's election to close on the Option Closing Date ("Election
Notice"), and (b) depositing with Title Company on the first business day
following delivery of the Election Notice an additional deposit of ONE
HUNDRED FIFTY EIGHT THOUSAND, TWO HUNDRED EIGHTY FIVE DOLLARS ($158,285.00).
The Closing shall take place at 11:00 a.m. Central Time in the offices of
the Title Company. Buyer and Seller shall conduct a "pre-closing" no later
than three (3) business days prior to the Closing Date. Seller shall escrow
with the Title Company no later than two (2) business days prior to the
Closing Date fully executed, notarized and recordable Deeds (as hereinafter
defined) for the Real Property bills of sale for the Personal Property, such
documents to be held by the Title Company pursuant to an escrow letter to be
provided by Seller on or before the Closing Date. Title transfer and payment
of the Purchase Price is to be completed on the Closing Date as set forth in
SECTION 6.3. Time is of the essence with respect to the Closing Date.
6.3 TITLE TRANSFER AND PAYMENT OF PURCHASE PRICE. Seller agrees to convey
title to the Real Property to Buyer by special warranty or limited warranty
deed with covenants only against Seller's acts during Seller's term of
ownership and not otherwise (collectively, the "Deeds"). Seller's conveyance
is conditioned upon confirmation of receipt of the Purchase Price by the
Title Company as set forth below or by Seller's written agreement to release
the transfer documents on some other basis. Buyer's acceptance of the Deeds
shall be deemed to be the full performance and discharge of any and all of
Seller's obligations hereunder, except as expressly set forth herein. Buyer
agrees to deliver the Balance to the Title Company no later than 12:00 noon,
Central Time on the Closing Date and Buyer unconditionally directing the
Title Company to deposit the same in Seller's designated account.
Notwithstanding the foregoing, either party shall have the right to terminate
this Agreement if the other party has not performed its obligations under
this Agreement required to be performed as of the Closing Date.
6.4 SELLER'S CLOSING DELIVERIES. At the Closing, Seller shall deliver or
cause to be delivered to Buyer the following:
a. DEEDS. A duly executed and acknowledged special warranty
deed in recordable form and acceptable to Seller and Buyer
conveying to Buyer all of Seller's right, title and interest
in and to the Real Property.
b. BILL OF SALE. A bill of sale in the form attached hereto as
EXHIBIT D ("Bill of Sale") conveying all of the Seller's
right, title and interest in and to the Personal Property
for each project.
c. ASSIGNMENT OF LEASES. An assignment and assumption of
tenant leases, in the form attached hereto as EXHIBIT E-1
("Assignment of Leases") transferring all of Seller's
interest in the tenant space leases and any amendments,
guarantees and other documents relating thereto ("Leases"),
together with all assignable security deposits paid by the
tenants thereunder and not applied by Seller in accordance
with the terms of the Leases and the accrued interest, if
any, on each of such security deposits. EXHIBIT E-2
attached hereto sets forth a list of all Leases, which list
will be updated by Seller as of the Closing Date.
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d. ASSIGNMENT OF WARRANTIES AND GUARANTIES. An assignment of
any warranties and guaranties in the form attached hereto as
EXHIBIT F ("Assignment of Warranties") assigning to Buyer
all of Seller's right, title and interest in any unexpired
warranties and guaranties pertaining to the Property, but
only to the extent the same are assignable without expense
to Seller.
e. ESTOPPEL LETTERS. Estoppel letters from each of those
tenants identified on EXHIBIT G as "Major Tenants" (the
"Major Tenants"), and from each of the other tenants under
the Leases which provide an estoppel letter to Seller in
response to Seller's written request for the same (Seller
being obligated under this Agreement to request the Estoppel
letters from each tenant holding an interest under a Lease,
but without Seller obligation to obtain the same from
tenants other than Major Tenants) (the "Other Tenants"),
dated not earlier than forty-five (45) days prior to the
initially scheduled Closing Date, and substantially in the
form of the estoppel letter attached hereto as EXHIBIT H-1
or in the form which such Other Tenant is required to
provide pursuant to the terms of such Other Tenant's Lease.
In the event Seller cannot, after reasonable efforts, obtain
a tenant estoppel letter from a Major Tenant from whom an
estoppel letter is requested, then Seller shall deliver to
Buyer a Seller's (landlord) estoppel letter in the form of
estoppel letter attached hereto as EXHIBIT H-2 dated within
five (5) business days prior to the Closing Date or the
Option Closing Date, as applicable, which Seller's estoppel
letter shall expire and be of no further force or effect on
the date that is ninety (90) days following the Closing
Date; provided, however, that if Seller shall obtain an
estoppel letter from any such tenant after delivery of such
Seller's estoppel letter, Seller's (landlord) estoppel
letter shall thereafter be without further force or effect.
In the event Buyer gives the Election Notice, Seller shall
deliver to Buyer, within five (5) business days prior to the
Option Closing Date, (a) any tenant estoppel letter that is
dated earlier than forty five (45) days prior to the Option
Closing Date, (b) any tenant estoppel letter dated more than
forty-five days prior to the Option Closing Date, together
with a schedule warranting to Buyer that, to Seller's
Knowledge, except as set forth in such schedule, Seller is
not aware of any default under such tenant's Lease arising
after the date of such tenant estoppel letter, (c) a Seller
estoppel letter for each Major Tenant of the Property for
which a tenant estoppel letter was not received, as
described above, or (d) a combination of (a), (b) and (c).
f. NOTICE TO TENANTS. Letters to each tenant under the Leases
in the form attached hereto as EXHIBIT I notifying them of
the sale of the Property to Buyer and advising them that all
future payments of rent and other payments due under the
Leases are to be made to Buyer at an address designated by
Buyer.
g. NON-FOREIGN STATUS AFFIDAVIT. A non-foreign status
affidavit in the form attached hereto as EXHIBIT J, as
required by Section 1445 of the United States Internal
Revenue
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Code ("Code"), and any similar affidavit or statement required
pursuant to the laws of the States in which the projects
comprising the Property are located.
h. EVIDENCE OF AUTHORITY. A certificate of an Assistant
Secretary of Seller with respect to the authority to act on
behalf of Seller of the individual executing on behalf of
Seller all documents contemplated by this Agreement. Seller
shall deliver to the Title Company such documents as may be
reasonably required by Title Company to evidence the
capacity of the Seller hereto and the authority of the
person executing any documents on behalf of the Seller.
i. SELLER'S CERTIFICATE. The Certificate of Seller certifying
to the matters set forth in SECTIONS 8.2.1, 8.2.2, 8.2.3
and 8.2.4.
j. PROPERTY DOCUMENTS. (i) To the extent in the possession of
Seller or the current manager of the Property, [x] the
original (or, if unavailable, a copy) of the existing
certificate or certificates of occupancy for the
improvements on the Property, [y] all original (or, if
unavailable, copies of) certificates, licenses, permits,
authorizations and approvals issued for or with respect to
the Property by governmental and quasi-governmental
authorities having jurisdiction; (ii) All books and
records located at the Property or at the office of Seller's
building manager relating to the Property and the ownership
and operation thereof.
k. SELLER'S ERISA CERTIFICATE. The certificate of Seller
substantially in the form attached hereto as EXHIBIT K and
any other certificate or other information reasonably
required by Buyer to satisfy Buyer that the transaction
contemplated in this Agreement does not constitute a
non-exempt prohibited transaction under ERISA and that such
transaction complies with ERISA in all respects.
l. OTHER DOCUMENTS. Such other documents as may be reasonably
required by Title Company or as may be agreed upon by Seller
and Buyer to consummate the Transaction.
m. TENANT SECURITY DEPOSITS. Either (i) a separate certified
or cashier's check payable to the order of Buyer, or (ii) a
credit to Buyer against the Balance, in the aggregate amount
of the unapplied cash security deposits then held by Seller
under the Leases and any interest thereon. With respect to
any security deposits which are letters of credit, Seller
shall, if the same are assignable, deliver to Buyer at the
Closing such letters of credit and shall execute and deliver
such other instruments as the issuers of such letters of
credit shall reasonably require and shall cooperate with
Buyer to change the named beneficiary under such letters of
credit to Buyer. Seller shall make good faith efforts to
obtain consent to assignment of all such letters of credit
from the issuers thereof and, if required, from tenants.
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n. KEYS AND ORIGINAL DOCUMENTS. Keys to all locks on the Real
Property in Seller's possession, and originals or, if
originals are not available, copies, of the Leases and of
the assigned warranties and guarantees.
o. TRANSFER TAX FORMS. If applicable, duly completed and
signed real estate transfer tax forms.
6.5 BUYER'S CLOSING DELIVERIES. At the Closing, Buyer shall deliver or cause
to be delivered to Seller the following:
(a) PURCHASE PRICE BALANCE. The Balance, as adjusted for
apportionments and other adjustments required under this
Agreement.
(b) ASSIGNMENTS OF LEASES, WARRANTIES AND GUARANTIES. The
Assignment of Leases and the Assignment of Warranties and
Guaranties executed and acknowledged by Buyer.
(c) BUYER'S CERTIFICATE. The certificate of Buyer certifying to
the matters set forth in ARTICLE 4 and SECTIONS 8.1.1 and
8.1.2.
(d) BUYER'S ERISA CERTIFICATE. The certificate of Buyer substantially in
the form attached hereto as EXHIBIT L and any other certificate or
other information reasonably required by Seller to satisfy Seller that
the transaction contemplated in this Agreement does not constitute a
non-exempt prohibited transaction under ERISA and that such
transaction complies with ERISA in all respects.
(e) EVIDENCE OF AUTHORITY. Documentation to establish to Seller's
reasonable satisfaction the due authorization of Buyer's acquisition
of the Property and Buyer's delivery of the documents required to be
delivered by Buyer pursuant to this Agreement, including, but not
limited to, the organizational documents of Buyer, as they may have
been amended from time to time, resolutions of Buyer, and incumbency
certificates of Buyer.
(f) OTHER DOCUMENTS. Any other documents required by this Agreement to
be delivered by Buyer.
(g) TRANSFER TAX FORMS. If applicable, duly completed and signed real
estate transfer tax returns and check(s) for such payment.
ARTICLE 7 - CONDITIONS TO CLOSING
7.1 SELLER'S OBLIGATIONS. Seller's obligation to close the Transaction is
conditioned on all of the following, any or all of which may be waived by
Seller by an express written waiver, at its sole option:
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(a) CORPORATE APPROVAL. For Seller, the unconditional approval
of the Transaction contemplated in this Agreement by its
corporate officers, its Law Department and, if necessary, by
the Finance Committee of it's Board of Directors, each in
their sole discretion, on or before the date set forth in
SECTION 10.1.2.
(b) REPRESENTATIONS TRUE. All representations and warranties
made by Buyer in this Agreement, as the same may be amended
as provided in SECTION 8.3.1, shall be true and correct in
all material respects on and as of the Closing Date, as if
made on and as of such date except to the extent they
expressly relate to an earlier date.
(c) BUYER'S DELIVERIES COMPLETE. Buyer shall have delivered the funds
required hereunder and all of the documents to be executed by Buyer
set forth in SECTION 6.5 and shall have performed all other covenants,
undertakings and obligations, and complied with all conditions
required by this Agreement to be performed or complied with by Buyer
at or prior to the Closing.
7.2 BUYER'S OBLIGATIONS. Buyer's obligations to close the Transaction is
conditioned on all of the following, any or all of which may be expressly
waived by Buyer in writing, at its sole option:
(a) REPRESENTATIONS TRUE. All representations and warranties made by
Seller in this Agreement, as the same may be amended as provided in
SECTION 8.3.1, shall be true and correct in all material respects on
and as of the Closing Date, as if made on and as of such date except
to the extent that they expressly relate to an earlier date.
(b) TITLE CONDITIONS SATISFIED. At the time of the Closing, title to the
Property shall be as provided in ARTICLE 3 of this Agreement.
(c) SELLER'S DELIVERIES COMPLETE. Seller shall have delivered all of the
documents and other items required pursuant to SECTION 6.4 and shall
have performed all other covenants, undertakings and obligations, and
complied with all conditions required by this Agreement to be
performed or complied with by Seller at or prior to the Closing.
7.3 WAIVER OF FAILURE OF CONDITIONS PRECEDENT. At any time or times on or
before the date specified for the satisfaction of any condition, Buyer or
Seller may elect in writing to waive the benefit of any such condition. By
closing the Transaction, Buyer and Seller shall be conclusively deemed to
have waived the benefit of any such unfulfilled conditions. In the event
any of the conditions set forth herein are neither waived nor fulfilled,
Buyer or Seller (as appropriate) may terminate their obligations to perform
at the Closing and otherwise under this Agreement in accordance with the
provisions of ARTICLE 10.
ARTICLE 8 - REPRESENTATIONS AND WARRANTIES
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8.1 BUYER'S REPRESENTATIONS. Buyer represents and warrants to Seller as
follows:
8.1.1. BUYER'S AUTHORIZATION. Buyer is duly organized (or formed),
validly existing and in good standing under the laws of Maryland and the
State in which the Property is located, and is authorized to consummate the
transactions contemplated hereby and fulfill all of its respective
obligations hereunder and under all documents contemplated hereunder to be
executed by Buyer, and Buyer has received all necessary power to execute
and deliver this Agreement and all documents contemplated hereunder to be
executed by Buyer, and to perform all of Buyer's obligations hereunder and
thereunder. This Agreement and all documents contemplated hereunder to be
executed by Buyer, have been duly authorized by all requisite partnership
or corporate action on the part of Buyer and are the valid and legally
binding obligation of Buyer, enforceable in accordance with their
respective terms. Neither the execution and delivery of this Agreement and
all documents contemplated hereunder to be executed by Buyer, nor the
performance of the obligations of Buyer hereunder or thereunder will result
in the violation of any law or any provision of the agreement of
partnership or articles of incorporation and by-laws of the Buyer or will
conflict with any order or decree of any court or governmental
instrumentality of any nature by which Buyer is bound.
8.1.2. PROPERTY SOLD "AS-IS". Except as expressly set forth herein,
Buyer acknowledges and agrees that the Property is to be sold on an "As-Is,
Where-Is" basis, and Buyer will rely entirely upon its own inspections and
analysis of the Property. Without in any way limiting the foregoing,
Buyer hereby specifically acknowledges and agrees that:
(a) THE PROPERTY SHALL BE SOLD, AND BUYER SHALL ACCEPT
POSSESSION OF THE PROPERTY ON THE CLOSING DATE, "AS-IS,
WHERE-IS, WITH ALL FAULTS", WITH NO RIGHT OF SETOFF OR
REDUCTION IN THE PURCHASE PRICE.
(b) EXCEPT FOR SELLER'S REPRESENTATIONS AND WARRANTIES SET FORTH
IN THIS AGREEMENT, THE REPRESENTATIONS AND WARRANTIES SET
FORTH IN ANY ESTOPPEL LETTER DELIVERED BY SELLER IN
ACCORDANCE WITH THE TERMS OF SECTION 6.4 HEREOF, AND THE
LIMITED WARRANTY TO TITLE TO BE GIVEN IN THE DEEDS (HEREIN
COLLECTIVELY CALLED THE "SELLER'S WARRANTIES"), NONE OF THE
SELLER PARTIES HAVE OR SHALL BE DEEMED TO HAVE MADE ANY
VERBAL OR WRITTEN REPRESENTATIONS, WARRANTIES, PROMISES, OR
GUARANTIES (WHETHER EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE), TO BUYER WITH RESPECT TO THE PROPERTY, IN ANY
MANNER SET FORTH, CONTAINED OR ADDRESSED IN THE DOCUMENTS
(INCLUDING, BUT NOT LIMITED TO, THE ACCURACY AND
COMPLETENESS THEREOF) OR THE RESULTS OF THE INVESTIGATIONS;
AND BUYER HAS CONFIRMED INDEPENDENTLY
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ALL INFORMATION THAT IT CONSIDERS MATERIAL TO ITS PURCHASE
OF THE PROPERTY OR THE TRANSACTION.
(c) BUYER SPECIFICALLY ACKNOWLEDGES THAT, EXCEPT FOR SELLER'S
WARRANTIES, BUYER IS NOT RELYING ON (AND SELLER AND EACH OF
THE OTHER SELLER PARTIES DOES HEREBY DISCLAIM AND RENOUNCE)
ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE
WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, FROM SELLER OR ANY OTHER SELLER
PARTIES, AS TO: (1) THE OPERATION OR INCOME POTENTIAL OF
THE PROPERTY, USES, MERCHANTABILITY OR FITNESS OF ANY
PORTION OF THE PROPERTY FOR A PARTICULAR USE OR PURPOSE;
(2) THE PHYSICAL CONDITION OR SAFETY OF THE PROPERTY OR ANY
IMPROVEMENTS THEREON, INCLUDING, BUT NOT LIMITED TO,
PLUMBING, SEWER, HEATING AND ELECTRICAL SYSTEMS, ROOFING,
AIR CONDITIONING, FOUNDATIONS, SOILS AND GEOLOGY, INCLUDING
HAZARDOUS MATERIALS, LOT SIZE, OR SUITABILITY OF THE
PROPERTY OR ANY IMPROVEMENTS THEREON FOR A PARTICULAR
PURPOSE; (3) THE PRESENCE OR ABSENCE, LOCATION OR SCOPE OF
ANY HAZARDOUS MATERIALS IN, AT OR UNDER THE PROPERTY; (4)
WHETHER THE APPLIANCES, IF ANY, PLUMBING OR UTILITIES ARE
IN WORKING ORDER; (5) THE HABITABILITY OR SUITABILITY FOR
OCCUPANCY OF ANY STRUCTURE AND THE QUALITY OF ITS
CONSTRUCTION; (6) WHETHER THE IMPROVEMENTS ARE STRUCTURALLY
SOUND, IN GOOD CONDITION, OR IN COMPLIANCE WITH APPLICABLE
MUNICIPAL, COUNTY, STATE OR FEDERAL STATUTES, CODES OR
ORDINANCES; (7) THE ACCURACY OF ANY STATEMENTS,
CALCULATIONS, OR CONDITIONS STATED OR SET FORTH IN
SELLER'S BOOKS OR RECORDS CONCERNING THE PROPERTY OR AS
DESCRIBED OR SET FORTH IN ANY OF SELLER'S OFFERING
MATERIALS WITH RESPECT TO THE PROPERTY; (8) THE DIMENSIONS
OF THE PROPERTY OR THE ACCURACY OF ANY FLOOR PLANS, SQUARE
FOOTAGE MEASUREMENTS, LEASE ABSTRACTS, SKETCHES, REVENUE
OR EXPENSE PROJECTIONS WHICH ARE RELATED TO THE PROPERTY;
(9) THE OPERATING PERFORMANCE AND INCOME AND EXPENSES OF
THE PROPERTY OR THE ECONOMIC STATUS OF THE PROPERTY; (10)
THE ABILITY OF THE BUYER TO OBTAIN ANY OR ALL GOVERNMENTAL
APPROVALS OR PERMITS FOR BUYER'S INTENDED USE AND
DEVELOPMENT OF THE PROPERTY; (11) THE LEASING STATUS OF THE
PROPERTY OR THE INTENTIONS OF ANY PARTIES WITH RESPECT TO
THE NEGOTIATION AND/OR EXECUTION OF ANY LEASE FOR ANY
PORTION OF THE
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PROPERTY; AND (12) SELLER'S OWNERSHIP OF ANY PORTION OF THE
PROPERTY. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT
SELLER IS UNDER NO DUTY TO MAKE ANY AFFIRMATIVE DISCLOSURES
OR INQUIRY REGARDING ANY MATTER WHICH MAY OR MAY NOT BE
KNOWN TO SELLER, ITS OFFICERS, DIRECTORS, CONTRACTORS,
AGENTS OR EMPLOYEES.
(d) ANY REPORTS, REPAIRS, OR WORK REQUIRED BY BUYER ARE THE
SOLE RESPONSIBILITY OF BUYER, AND BUYER AGREES THAT THERE
IS NO OBLIGATION ON THE PART OF SELLER TO MAKE ANY CHANGES,
ALTERATIONS OR REPAIRS TO THE PROPERTY. BUYER IS SOLELY
RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR
ANY OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR
OCCUPANCY OF THE PROPERTY AND FOR ANY REPAIRS OR
ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER'S
SOLE COST AND EXPENSE. BUYER ACKNOWLEDGES AND AGREES THAT
BUYER'S OBLIGATIONS HEREUNDER SHALL REMAIN IN FULL FORCE
AND EFFECT WITH BUYER HAVING NO RIGHT TO DELAY THE CLOSING
OR TERMINATE THIS AGREEMENT REGARDLESS OF ANY FACTS OR
INFORMATION LEARNED BY BUYER AFTER THE DATE HEREOF, EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.
(e) Buyer, for Buyer and Buyer's successors in interest,
releases Seller from, and waives all claims and liability
against Seller for or attributable to the following:
(i) any and all statements or opinions heretofore or
hereafter made, or information furnished, by the
Seller Parties to Buyer or its agents or
representatives, except for Seller's Warranties; and
(ii) any structural, physical or environmental condition
at the Property, including without limitation, claims
or liabilities relating to the presence, discovery or
removal of any Hazardous Materials in, at, about or
under the Property, or for, connected with or arising
out of any and all claims or causes of action based
upon CERCLA (Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C.
SECTIONS 9601 et seq., as amended by SARA
[Superfund Amendment and Reauthorization Act of 1986]
and as may be further amended from time to time), the
Resource Conservation and Recovery Act of 1976, 42
U.S.C. SECTIONS 6901 et seq., or any related claims
or causes of action or any other federal or state
based statutory or regulatory causes of action for
environmental contamination at, in or under the
Property.
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(f) Except as expressly provided to the contrary in this
SECTION (f), Buyer hereby (i) assumes and takes
responsibility and liability for all losses, costs, claims,
liabilities, expenses, demand and obligations of every kind
or nature whatsoever attributable to the Property, whether
arising or occurring before or after the date hereof and
whether attributable to events or circumstances which have
heretofore or may hereafter occur, including, without
limitation, all losses, costs, claims, liabilities,
expenses and demands with respect to the structural,
physical or environmental condition of the Property
(including, without limitation, any Hazardous Materials,
in, at, under or about the Property), and (ii) agrees to
indemnify, defend and hold harmless Seller from any loss,
cost, claim, liability, expense or demand with respect
thereto. By its execution of this Agreement, Buyer hereby
agrees that it shall at all times comply with all
applicable federal, state and local laws, rules and
regulations involving hazardous materials in, at, under or
about the Property or their removal from the Property.
Notwithstanding the foregoing, however, Buyer does NOT
assume (and shall not be required to indemnify Seller for)
any responsibility or liability arising out of or in
connection with:
(i) any claims made or causes of action brought by any
third party unrelated to Buyer alleging a default or
breach by Seller which is alleged to have occurred
prior to the Closing Date under any contract or
agreement (other than any Lease (as such term is
herein defined)) entered into between Seller and any
such claimant; PROVIDED, HOWEVER, that Buyer shall be
deemed to assume and shall indemnify Seller in
accordance with the terms of this Section with
respect to any such claims or causes of action to the
extent that the same relates to any alleged defaults
or the breach of any of the Leases (as such term is
herein defined), it being understood and agreed by
Buyer and Seller that Buyer shall rely solely upon
its due diligence with respect to the Property,
Seller's representations (as set forth in SECTION 8.2
herein) and such estoppel letters as Buyer may
receive on or before the Closing Date with respect to
protection against any alleged breach or default by
Seller under any of the Leases that may have occurred
prior to the Closing Date; or
(ii) any tort claims made or brought by a third party
unrelated to Buyer which arise from any acts or
omissions of Seller which occurred during the time
that Seller owned fee title to the Property;
PROVIDED, HOWEVER, that Buyer shall be deemed to
assume and shall indemnify Seller in accordance with
the terms of this Section with respect to any such
claims to the extent that (A) Buyer has the right to
seek recovery from any tenants or previous tenants of
the Property with respect to such tort claims or any
tenant or previous tenant of the Property has
otherwise agreed to indemnify the owner of the
Property with respect to such tort claims, or (B)
Buyer is able, after making all reasonable efforts,
to obtain
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an agreement by any tenants or previous tenants of
the Property or any other party to indemnify or
otherwise compensate Buyer with respect to such tort
claims.
(g) For purposes of this Agreement, the term "Hazardous
Material" shall mean any substance, chemical, waste or
material that is or becomes regulated by any federal, state
or local governmental authority because it is toxic,
infectious, radioactive, explosive, ignitable, corrosive or
reactive, including, without limitation, asbestos or any
substance containing more than 0.1 percent asbestos, the
group of compounds known as polychlorinated biphenyls,
flammable explosives, oil, petroleum or any refined
petroleum product.
(h) The agreements of Buyer set forth in this SECTION 8.1.2
shall be reaffirmed at the Closing and shall not be merged
therein.
8.1.3. SURVIVAL. Buyer's representations and warranties shall survive
the Closing for a period of thirty six (36) months, after which they
shall be of no further force or effect.
8.2 SELLER'S REPRESENTATIONS. Seller represents and warrants to Buyer as
follows:
8.2.1 SELLER'S AUTHORIZATION. Seller is (x) duly organized, validly
existing and in good standing under the laws of the State of New Jersey,
its state of organization, and is qualified to transact business and in
good standing in the state of Texas, (y) authorized to consummate this
transaction and fulfill all of its obligations hereunder, and (z)
subject to obtaining the approvals described in SECTION 7.1(a) has all
necessary power to execute and deliver this Agreement and to perform all
of its obligations hereunder. Neither the execution and delivery of
this Agreement by Seller nor the performance of its obligations
hereunder will result in the violation of any law or any provision of
Seller's articles of incorporation and by-laws or will conflict with any
order or decree of any court or governmental instrumentality of any
nature by which Seller is bound.
8.2.2 NO OTHER AGREEMENTS. Seller has not entered into any currently
effective agreement to sell or dispose all of its interests in and to
the Property (except for this Agreement).
8.2.3 NO OTHER TENANTS. As of the date of this Agreement, the only
tenants of the Property are the tenants listed in the Leases described
in EXHIBIT E-2 annexed hereto, and the copies of the Leases delivered to
or made available to Buyer by Seller pursuant to this Agreement are
true, correct and complete. This representation shall terminate on the
Closing Date for any tenant providing an estoppel letter which (a) is in
conformity with Section 6.4 (e) of this Agreement, and (b) has attached
thereto a copy of such tenant's Lease which is identical to the copy of
such Lease provided to Buyer pursuant to Section 4.2 hereof.
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8.2.4 OTHER SELLER'S REPRESENTATIONS. To the best of Seller's
Knowledge (as such term is hereafter defined):
(a) Except as listed in EXHIBIT M annexed hereto, Seller has
not received any actual (as opposed to constructive) notice
of pending or threatened litigation against the Seller
which would materially and adversely affect the Property.
(b) Except as listed in EXHIBIT N annexed hereto, Seller has
not received any written notice from any governmental
authority of any violation of any zoning, building, fire,
or health code, statute, ordinance, rule or regulation
applicable to the Property.
(c) Seller has not entered into any service, supply,
maintenance or utility contracts affecting the Property
which will be binding upon the Buyer after the Closing
other than the Service Contracts listed in EXHIBIT O
annexed hereto.
(d) Except as disclosed in the schedule described in Section
6.4(e), there are no defaults under any of the Leases for
which Seller obtained a tenant estoppel letter which is
dated more than forty-five (45) days prior to the Option
Closing Date.
8.3 GENERAL PROVISIONS.
8.3.1 Parties' Right to Amend Representation. Seller and Buyer shall
have the right from time to time by notice to the other to amend its
representations and warranties hereunder, by amendment of the schedules
hereto or otherwise, to reflect changes in facts or to correct any
immaterial factual inaccuracies of which Buyer or Seller become aware
after the date of this Agreement. Neither party shall have any
liability in connection with this Agreement by reason of an inaccuracy
of a representation or warranty of which Buyer or Seller become aware,
if and to the extent that such inaccuracy is in fact promptly disclosed
to the other party. If a party is aware of any such inaccuracy at the
time of the Closing and such party elects, nevertheless, to close
hereunder, then the disclosing party shall have no liability for such
inaccuracy.
8.3.2 NO REPRESENTATION AS TO LEASES. Except as expressly set forth
herein or in a Seller estoppel letter, Seller does not represent or
warrant that any particular Lease or Leases will be in force or effect
on the Closing Date or that the tenants will have performed their
obligations thereunder.
8.3.3 DEFINITION OF "SELLER'S KNOWLEDGE". All references in this
Agreement to "Seller's Knowledge" shall refer only to the actual
knowledge of those persons listed on EXHIBIT P (the "Designated
Employees") which Designated Employees' actual knowledge is limited to
the project indicated and none other. Seller's Knowledge shall not be
construed to refer to the knowledge of any other officer, agent or
employee of Seller, any affiliate, its property manager or leasing
agent, or any of their officers or employees, or to
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impose or have imposed upon the Designated Employees any duty to
investigate the matters to which such knowledge, or the absence thereof,
pertains, including, but not limited to, the contents of the files,
documents and materials made available to or disclosed to Buyer or the
contents of files maintained by the Designated Employees. Buyer
acknowledges that Seller has informed Buyer that the Designated
Employees may have limited knowledge as to any project due to Seller's
reorganization of its real estate operations, downsizing over the past
five years, and the resulting reduction in staff. The Designated
Employees have not conducted an extensive search of Seller's files and
are only generally informed of recent property management matters
related to the indicated project. There shall be no personal liability
on the part of any Designated Employee arising out of any
representations or warranties made herein.
8.3.4 SURVIVAL. Seller's representations and warranties shall survive
the Closing for a period of ninety (90) days, after which they shall be
of no further force or effect.
8.3.5 LIMITATION ON SELLER LIABILITY. In the event the Transaction is
closed on the Closing Date and thereafter Seller should be found by a
court of competent jurisdiction to be liable to Buyer for acts or
actions related to this Agreement or any documents provided by Seller
to implement the Closing, the maximum aggregate liability of Seller to
Buyer and any person claiming by, through or under Buyer shall be in the
amount of ONE HUNDRED FIFTY EIGHT THOUSAND TWO HUNDRED EIGHTY FIVE
DOLLARS ($158,285.00). This sum of $158,285.00 is the maximum aggregate
amount of damages which may be awarded to and collected by Buyer under
this Agreement or any document executed by Seller as a part of or in
anticipation of the Closing (including without limitation, any Seller
liability for damages in contract or tort relating to any Seller
representations or warranties contained in this Agreement, and any tort
claims which arise from the actions of Seller, its officers, employees
and agents as the same may relate to or be associated with the Sale of
the Property by Seller).
ARTICLE 9 - COVENANTS
9.1 BUYER'S COVENANTS. Buyer hereby covenants as follows:
9.1.1 CONFIDENTIALITY. Buyer acknowledges that any information
furnished to Buyer with respect to the Property is and has been so
furnished on the condition that Buyer maintain the confidentiality
thereof. Accordingly, Buyer shall hold, and shall cause its directors,
officers and other personnel and representatives to hold, in strict
confidence, and not disclose to any other person without the prior
written consent of Seller until the Closing shall have been consummated,
any of the information in respect of the Property delivered to or for
the benefit of Buyer by Seller or any of its agents, representatives or
employees. In the event the Closing does not occur and this Agreement
is terminated, Buyer shall promptly return to Seller all copies of
documents containing any of such information without retaining any copy
thereof or extract therefrom. Notwithstanding anything to the contrary
hereinabove set forth, Buyer may disclose such information (i) on a
need-to-know basis to its employees or members of professional firms
serving it,
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and (ii) as any governmental agency may require in order to comply with
applicable laws or regulations.
9.1.2 APPROVALS NOT A CONDITION TO BUYER'S PERFORMANCE. Buyer
acknowledges and agrees that its obligation to perform under this
Agreement is not contingent upon Buyer's ability to obtain any (i)
governmental or quasi-governmental approval of changes or modifications
in use or zoning, or (ii) modification of any existing land use
restriction.
9.2 SELLER'S COVENANTS. Seller hereby covenants as follows:
9.2.1 MAINTENANCE OF PROPERTY. Except to the extent Seller is relieved
of such obligations by ARTICLE 11 hereof, Seller shall maintain and keep
the Property in a manner consistent with Seller's past practices with
respect to the Property; PROVIDED, HOWEVER, that Buyer hereby agrees
that it shall accept the Property subject to (i) all violations of law
or municipal ordinances, orders or requirements and (ii) all physical
conditions which would give rise to violations, existing on the date
hereof. From the date hereof through the Closing Date, Seller will (a)
advise and provide to Buyer a copy of any written notice Seller receives
after the date hereof from any governmental authority relating to the
violation of any law or ordinance regulating the condition or sue of the
Property, and (b) promptly notify Buyer of any material change
affecting the Property of which Seller has knowledge.
9.2.2 ACCESS TO PROPERTY. Seller shall allow Buyer or Buyer's
representatives access to the Property upon reasonable prior notice at
reasonable times provided such access does not interfere with the
operation of the Property or the rights of tenants. Buyer shall
indemnify and hold harmless Seller for all damages resulting from
Buyer's activities on the Property. The foregoing indemnification shall
survive the Closing or the earlier termination of this Agreement.
9.3 MUTUAL COVENANTS.
9.3.1 PUBLICITY. Seller and Buyer each hereby covenant that, except to
the extent required by law, neither Seller nor Buyer shall issue any
press release or public statement (a "Release") with respect to the
transactions contemplated hereby without the prior consent of the other,
which consent shall not be unreasonably withheld, delayed or
conditioned. If either Seller or Buyer is required by law to issue a
Release, such party shall, at least two (2) business days prior to the
issuance of the same, deliver a copy of the proposed Release to the
other party for its review.
9.3.2 BROKER. Seller and Buyer expressly acknowledge that C B
Commercial Real Estate Services Group, Inc. ("Broker") has acted as the
exclusive broker with respect to the transaction contemplated herein and
with respect to this Agreement. Seller shall pay any brokerage
commission due to Broker in accordance with the separate agreement
between Seller and Broker. Seller and Buyer each represent and warrant
to the other that it has not dealt with any other broker in this
Transaction and each agrees to hold harmless
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the other and indemnify the other from and against any and all damages,
costs or expenses (including, but not limited to, reasonable attorneys'
fees and disbursements) suffered by the indemnified party as a result
of acts of the indemnifying party that would constitute a breach of its
representation and warranty in this SECTION 9.3. The provisions of this
SECTION 9.3 shall survive the Closing or earlier termination of this
Agreement.
ARTICLE 10 - FAILURE OF CONDITIONS
10.1 TO SELLER'S OBLIGATIONS.
10.1.1 BUYER'S BREACH. If, on or before the Closing Date: (i) Buyer
is in default of any of its obligations hereunder, or (ii) any of
Buyer's material representations or warranties are untrue in any
material respect, or (iii) any condition to the obligation of Seller to
close hereunder has not been satisfied as a result of the failure by
Buyer to materially perform its obligations under this Agreement or
otherwise in a prompt and timely basis, then Seller may elect to (x)
terminate this Agreement by written notice to Buyer, or (y) waive such
default by Buyer and close the Transaction. If this Agreement is so
terminated, then Seller shall be entitled, as its sole and exclusive
remedy for Buyer's breach, to the Deposit as liquidated damages, and
thereafter neither party to this Agreement shall have any further
rights or obligations hereunder, other than as expressly provided
herein.
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10.1.2 NON-AUTHORIZATION FEE. Seller acknowledges that Buyer, upon
execution of this Agreement, will expend a considerable amount of time
and effort, and will incur expenses, related to completion of its Due
Diligence, all with no assurance that Seller will obtain the
authorizations described in SECTION 7.1(a). To provide Buyer with the
assurance that its efforts and expenses are not being unduly put at
risk, Seller agrees (a) to proceed in good faith toward obtaining the
authorizations described in SECTION 7.1(a) on or before June 12, 1997,
and (b) that in the event the Seller is unable to provide the
authorizations described in SECTION 7.1(a), for any reason other than
Seller's receipt of written notice that Buyer has terminated this
Agreement pursuant to SECTION 4.1 of this Agreement, then Seller will
pay to Buyer a fixed sum of SEVENTY NINE THOUSAND ONE HUNDRED FORTY TWO
DOLLARS AND FIFTY CENTS ($79,142.50) as liquidated damages, to be paid
without regard to Buyer's actually incurred costs and this represents
the absolute limit on Seller's liability under the terms of this
Agreement in the event Seller does not obtain the authorizations
described in SECTION 7.1(a).
10.2 TO BUYER'S OBLIGATIONS.
10.2.1 BUYER'S REMEDY. If, at the Closing, any condition to the
obligation of Buyer to close hereunder set forth in Section 7.2 has not
been substantially satisfied, Buyer shall have the right to (i)
terminate this Agreement by written notice to Seller, promptly after
which Seller shall return the Deposit to Buyer, or (ii) Buyer may waive
the condition and proceed to close the transaction.
ARTICLE 11 - CONDEMNATION/CASUALTY
11.1 CONDEMNATION.
11.1.1 RIGHT TO TERMINATE. If, prior to the Closing Date, all or any
significant portion (as hereinafter defined) of any project which
comprises a portion of the Property is taken by eminent domain (or is
the subject of a pending taking which has not yet been consummated),
Seller shall notify Buyer of such fact promptly after obtaining
knowledge thereof, and Buyer shall have the right to terminate this
Agreement by giving notice to Seller not later than ten (10) days after
receipt of notice. For purposes hereof, a "significant portion" of
the Property shall mean (i) such portion as shall have a value in excess
of One Hundred Thousand Dollars ($100,000.00) for each project described
in EXHIBIT A, or (ii) such portion, the taking of which shall have a
material adverse effect on the operation of such project. If Buyer
elects to terminate this Agreement as aforesaid, the provisions of
SECTION 11.4 shall apply.
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11.1.2 ASSIGNMENT OF PROCEEDS. If (i) Buyer elects not to terminate
this Agreement as aforesaid, there shall be no abatement of the
Purchase Price; PROVIDED, HOWEVER, that, at the Closing, Seller shall
pay to Buyer the amount of any award for or other proceeds on account of
such taking which may have been paid to Seller prior to the Closing Date
as a result of such taking and Seller shall assign to Buyer at the
Closing (without recourse to Seller) the rights of Seller to, and Buyer
shall be entitled to receive and keep, all awards for the taking of such
project or such portion thereof.
11.2 DESTRUCTION OR DAMAGE. In the event any project comprising a portion
of the Property is damaged or destroyed prior to the Closing Date and such
damage or destruction (a) would cost less than or equal to One Hundred
Thousand Dollars ($100,000.00) to repair or restore, and (b) would not give
any tenant thereof the right to terminate or materially alter its Lease, then
this Agreement shall remain in full force and effect and Buyer shall acquire
the Property upon the terms and conditions set forth herein. In such event,
the parties shall close the Transaction and Buyer shall receive at Closing a
credit against the Purchase Price equal to the amount required to repair or
restore the project to the condition existing immediately before such damage
or destruction; provided, however, nothing herein shall be construed to
require Seller to repair or restore the project to a condition better than
that existing on the date of this Agreement. If the cost of repair or
restoration of the project would equal or exceed One Hundred Thousand
Dollars ($100,000.00), then Buyer shall have thirty (30) days after Seller
notifies Buyer that a casualty has occurred to make an election to terminate
this Agreement by delivery to Seller of a written election notice (the
"Election Notice"). The failure by Buyer to deliver the Election Notice
within such thirty (30) day period shall be deemed an election not to
terminate this Agreement. In the event Buyer elects not to terminate this
Agreement as set forth above, this Agreement shall remain in full force and
effect, the parties shall close the Transaction, and at Closing Buyer shall
receive a credit against the Purchase Price equal to the cost of repair or
restoration of the project to the condition existing before such damage or
destruction.
11.3 INSURANCE. Seller shall maintain the property insurance coverage
currently in effect for the Property through the Closing Date. Seller shall
not assign to Buyer any insurance policies in connection with the Property.
11.4 EFFECT OF TERMINATION. If this Agreement is terminated pursuant to
this ARTICLE 11, Seller promptly shall direct that the Deposit be refunded
to Buyer. Upon such refund, this Agreement shall terminate and neither party
to this Agreement shall have any further rights or obligations hereunder
other than any arising under any Section herein which expressly provides that
it shall survive the termination of this Agreement.
11.5 WAIVER. The provisions of this ARTICLE 11 supersede the provisions of
any applicable statutory or decisional law with respect to the subject matter
of this ARTICLE 11.
ARTICLE 12 - ESCROW
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12.1 ESCROW. The Deposit and any other sums which the parties agree shall
be held in escrow together with all interest earned thereon (collectively,
the "Escrow Deposits"), shall be held by the Escrow Agent, in trust, and
disposed of only in accordance with the following provisions:
(a) The Escrow Agent shall deposit the Escrow Deposits with a bank or
trust company mutually acceptable to Seller and Buyer in a separate
special money market rate interest-bearing commercial bank account
in the State of Illinois (or otherwise invested in government
insured instruments as may be agreed in writing by Seller, Buyer
and the Escrow Agent), shall not commingle the Escrow Deposits with
any funds of the Escrow Agent or others and shall promptly advise
Buyer and Seller of the number of such account.
(b) If the Closing under this Agreement occurs, the Escrow Agent shall
deliver the Escrow Deposits to, or upon the instructions of, Buyer
and Seller on the Closing Date by wire transfer.
(c) If for any reason the Closing does not occur, the Escrow Agent
shall deliver the Escrow Deposits to Seller or Buyer only upon
receipt of a written demand therefor from such party, subject to
the following provisions of this SECTION 12.1(c). If for any
reason the Closing does not occur and either party makes a written
demand upon the Escrow Agent for payment of the Escrow Deposits,
the Escrow Agent shall give written notice to the other party of
such demand. If the Escrow Agent does not receive a written
objection from the other party to the proposed payment within ten
(10) days after the giving of such notice, the Escrow Agent is
hereby authorized to make such payment. If the Escrow Agent does
receive such written objection within such period, the Escrow Agent
shall continue to hold such amount until otherwise directed by
written instructions signed by Seller and Buyer or a final judgment
of a court.
(d) The parties acknowledge that the Escrow Agent is acting solely as a
stakeholder at their request and for their convenience, that the
Escrow Agent shall not be deemed to be the agent of either of the
parties, and that the Escrow Agent shall not be liable to either of
the parties for any action or omission on its part taken or made in
good faith, and not in disregard of this Agreement, but shall be
liable for its negligent acts and for any loss, cost or expense
incurred by Seller or Buyer resulting from the Escrow Agent's
mistake of law respecting the Escrow Agent's scope or nature of its
duties. Seller and Buyer shall jointly and severally indemnify and
hold the Escrow Agent harmless from and against all costs, claims
and expenses, including reasonable attorneys' fees, incurred in
connection with the performance of the Escrow Agent's duties
hereunder, except with respect to actions or omissions taken or
made by the Escrow Agent in bad faith, in disregard of this
Agreement or involving negligence on the part of the Escrow Agent.
(e) The party receiving the Escrow Deposits and the interest earned
thereon shall pay any income taxes on such interest. The parties
hereto represent and warrant to the Escrow
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Agent that their respective taxpayer identification numbers are:
Seller 22-1856768; and Buyer 94-3224765.
(f) The Escrow Agent has executed this Agreement in the place indicated
on the signature page hereof in order to confirm that the Escrow
Agent has received and shall hold the Escrow Deposits in escrow,
and shall disburse the Escrow Deposits, pursuant to the provisions
of this ARTICLE 12.
(g) The total escrow fee charged by the Escrow Agent shall be the sum
of Seven Hundred Dollars ($ 700.00) paid solely by Buyer, but
Escrow Agent acknowledges that its duties shall be to both Buyer
and Seller equally under the terms of this Agreement.
ARTICLE 13 - LEASING MATTERS
13.1 NEW LEASES. After April 25, 1997, Seller shall not, without Buyer's
prior written consent in each instance, which consent shall not be
unreasonably withheld and shall be given or denied, with the reasons for such
denial, within three (3) business days after receipt by Buyer of the
information referred to in the next sentence, enter into a new lease
affecting any portion of the Property or renew or extend any Lease (except
pursuant to the exercise by a tenant of a renewal, extension or expansion
option contained in such tenant's Lease). Seller shall furnish Buyer with
all information regarding any proposed new leases, renewals and extensions
reasonably necessary to enable Buyer to make informed decisions. Seller
shall deliver to Buyer a true and complete copy of each such new lease,
renewal and extension agreement, if any, promptly after the execution and
delivery thereof. Seller shall keep accurate records of all of the following
types of expenses (collectively, "New Lease Expenses") incurred in connection
with any new lease for space at the Property, or any extension, renewal or
expansion of a Lease where such Lease does not provide for its extension,
renewal or expansion, entered into on or after the date hereof (a "New
Lease"): (a) brokerage commissions and fees to effect such leasing
transaction, (b) expenses incurred for repairs, improvements, equipment,
painting, decorating, partitioning and other items to satisfy the tenant's
requirements with regard to such leasing transaction, (c) legal fees for
services in connection with the preparation of documents and other services
rendered in connection with the effectuation of the leasing transaction, (d)
if there are any rent concessions covering any period that the tenant has the
right to be in possession of the demised space, the rents that would have
accrued during the period of such concession prior to the Closing Date as if
such concession were amortized over the entire initial term of such New
Lease, and (e) expenses incurred for the purpose of satisfying or terminating
the obligations of a tenant under a New Lease to the landlord under another
lease (whether or not such other lease covers space in the Building). At the
Closing, Buyer shall reimburse Seller for all New Lease Expenses paid or
incurred by Seller after April 25, 1997 and prior to the Closing Date and
shall assume Seller's obligations to pay, when due (whether on a stated due
date or accelerated) any such New Lease Expenses unpaid as of the Closing.
Each party shall make available to the other all records, bills, vouchers and
other data in such party's control verifying such New Lease Expenses and the
payment thereof.
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13.2 OTHER LEASE ACTIVITY. Except as provided in this SECTION 13.2, without
the prior consent of Buyer, which shall not be unreasonably withheld (i) no
Lease shall be modified or amended except as provided in SECTION 13.1 with
respect to extensions, renewals or expansions of existing Leases and the
execution of New Leases, (ii) Seller shall not consent to any assignment or
sublease in connection with any Lease or New Lease, and (iii) Seller shall
not remove any tenant under any Lease or New Lease, whether by summary
proceedings or otherwise, except by reason of a default of the tenant under
the Lease or New Lease. In furtherance of the foregoing, Seller shall
deliver to Buyer a written notice of each proposed action of the type
described in clauses (i) - (iii) hereinabove which Seller has been asked or
proposes to take, stating, if applicable, whether Seller is willing to
consent to such action and setting forth the relevant information therefor.
Buyer shall have five (5) business days after delivery to it of such notice
and information to determine whether or not to approve such action. If Buyer
shall not give notice of its disapproval of such action within such five (5)
business day period, Buyer shall be deemed to have approved such action. If
any Lease REQUIRES that the landlord's consent be given under the applicable
circumstances (or not be unreasonably withheld), then Buyer shall be deemed
IPSO FACTO to have approved such action. Seller shall perform all of the
obligations of the landlord under the Leases and New Leases which under the
terms of such Leases and New Leases are required to be performed by the
landlord prior to the Closing Date.
13.3 LEASE ENFORCEMENT. Subject to the provisions of SECTION 13.2 above, prior
to the Closing Date, Seller shall have the right, but not the obligation (except
to the extent that Seller's failure to act shall constitute a waiver of such
rights or remedies), to enforce the rights and remedies of the landlord under
any Lease or New Lease, by summary proceedings or otherwise, and to apply all or
any portion of any security deposits then held by Seller toward any loss or
damage incurred by Seller by reason of any defaults by tenants.
ARTICLE 14 - MISCELLANEOUS
14.1 BUYER'S ASSIGNMENT. Buyer shall not assign this Agreement or its
rights hereunder to any individual or entity without the prior written
consent of Seller, which consent Seller may grant or withhold in its sole
discretion, and any such assignment shall be null and void. Notwithstanding
the foregoing, Buyer shall be permitted to assign this Agreement to an entity
in which Buyer owns or controls one hundred percent (100%) of the beneficial
interests provided (a) Buyer effectuates such assignment in writing prior to
expiration of the Due Diligence Period, (b) the assignee assumes the
obligations of Buyer under the terms of this Agreement, and (c) Buyer
remains liable to Seller under the terms of this Agreement.
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14.2 DESIGNATION AGREEMENT. Section 6045(e) of the Code and the regulations
promulgated thereunder (collectively, the "Reporting Requirements") require
an information return to be made to the United States Internal Revenue
Service, and a statement to be furnished to Seller, in connection with the
Transaction contemplated by this Agreement. Title Company is (i) the person
responsible for closing the Transaction (as described in the Reporting
Requirements) or (ii) the disbursing title or escrow company that is most
significant in terms of gross proceeds disbursed in connection with the
Transaction (as described in the Reporting Requirements). Accordingly:
(i) Escrow Agent is hereby designated as the "Reporting Person" (as
defined in the Reporting Requirements) for the Transaction.
Escrow Agent shall perform all duties that are required by the
Reporting Requirements to be performed by the Reporting Person
for the Transaction.
(ii) Seller and Buyer shall furnish to the Escrow Agent, in a timely
manner, any information requested by Escrow Agent and necessary
for Agent to perform its duties as Reporting Person for the
Transaction.
(iii) Escrow Agent hereby requests Seller to furnish to Escrow Agent
Seller's correct taxpayer identification number. Seller
acknowledges that any failure by Seller to provide Escrow Agent
with Seller's correct taxpayer identification number may
subject Seller to civil or criminal penalties imposed by law.
Accordingly, Seller hereby certifies to Escrow Agent, under
penalties of perjury, that Seller's correct taxpayer
identification numbers is as follows: Seller 22-1856768.
(iv) Each of the parties hereto shall retain this Agreement for a
period of four (4) years following the calendar year during
which Closing occurs.
14.3 SURVIVAL/MERGER. The delivery of the Deeds and any other documents and
instruments by either party hereto, and the acceptance thereof by the other
party shall not effect a merger.
14.4 INTEGRATION: WAIVER; ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH
THE SCHEDULES AND EXHIBITS ATTACHED HERETO, EMBODIES AND CONSTITUTES THE
ENTIRE UNDERSTANDING BETWEEN THE PARTIES WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREIN AND ALL PRIOR AGREEMENTS, UNDERSTANDINGS, REPRESENTATIONS
AND STATEMENTS, ORAL OR WRITTEN, ARE MERGED INTO THIS AGREEMENT. NEITHER
THIS AGREEMENT NOR ANY PROVISION HEREOF MAY BE WAIVED, MODIFIED, AMENDED,
DISCHARGED, OR TERMINATED EXCEPT BY AN INSTRUMENT SIGNED BY THE PARTY
AGAINST WHOM THE ENFORCEMENT OF SUCH WAIVER, MODIFICATION, AMENDMENT,
DISCHARGE, OR TERMINATION IS SOUGHT, AND THEN ONLY TO THE EXTENT SET FORTH IN
SUCH INSTRUMENT. NO WAIVER BY EITHER PARTY HERETO OF ANY FAILURE OR REFUSAL
BY THE OTHER PARTY TO COMPLY WITH ITS
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OBLIGATIONS HEREUNDER SHALL BE DEEMED A WAIVER OF ANY OTHER OR SUBSEQUENT
FAILURE OR REFUSAL TO SO COMPLY.
14.5 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of TEXAS. Buyer and Seller hereby
agree that contacts with the State of TEXAS have been significant in
relation to this Agreement, and all the Property is located in the State of
TEXAS.
14.6 CAPTIONS NOT BINDING; SCHEDULES AND EXHIBITS. The captions in this
Agreement are inserted for reference only and in no way define, describe or
limit the scope or intent of this Agreement or of any of the provisions
hereof. All Schedules and Exhibits attached hereto shall be incorporated by
reference as if set out herein in full.
14.7 BINDING EFFECT. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
14.8 SEVERABILITY. If any term or provision of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
14.9 NOTICES. Any notice, request, demand, consent, approval and other
communications under this Agreement shall be in writing, and shall be deemed
duly given or made at the time and on the business day when personally
delivered as shown on a receipt therefor (which shall include delivery by a
nationally recognized overnight delivery service) or three (3) business days
after being mailed by prepaid registered or certified mail, return receipt
requested, to the address for each party set forth below, or by telecopy on
the date shown on the receiving party's confirmation thereof, unless such
telecopy is received after 2:00 p.m., in which case the date of delivery
shall be the next succeeding business day. Any party, by written notice to
the other in the manner herein provided, may designate an address different
from that set forth below.
IF TO BUYER:
MERIDIAN INDUSTRIAL TRUST, INC.
455 Market Street, 17th Floor
San Francisco, California 94105
Attention: Dennis D. Higgs, Executive Vice President
Telephone: (415) 281-3900
Telecopy: (415) 284-2840
COPY TO:
MERIDIAN INDUSTRIAL TRUST, INC.
455 Market Street, 17th Floor
San Francisco, California 94105
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Attention: Robert A. Dobbin, General Counsel
Telephone: (415) 281-3900
Telecopy: (415) 284-2840
COPY TO:
GREENE RADOVSKY MALONEY & Share LLP
Four Embarcadero Center, Suite 4000
San Francisco, California 94111-4106
Attn: Thomas L. Prestwich, Esquire
Telephone: (415) 981-1400
Telecopy: (415) 777-4961
IF TO SELLER:
The Prudential Insurance Company of America
Prudential Plaza, Suite 1300
Chicago, Illinois 60601-6217
Attention: Bernard C. Buchholz, Vice President
Telephone: (312) 861-4300
Telecopy: (312) 861-4870
COPY TO:
The Prudential Insurance Company of America
Law Department
One Ravinia Drive, Suite 1400
Atlanta, Georgia 30346-2110
Attention: Ralph S. Wheatly, Regional Counsel
Telephone: (770) 395-8437
Telecopy: (770) 512-0495
COPY TO:
The Prudential Insurance Company of America
Law Department
Prudential Plaza, Suite 1300
Chicago, Illinois 60601-6217
Attention: Diamond Mendonides, Regional Counsel
Telephone: (312) 861-4842
Telecopy: (312) 861-4303
14.10 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be an original and all of which counterparts taken together shall
constitute one and the same agreement.
14.11 NO RECORDATION. Seller and Buyer each agrees that neither this
Agreement nor any memorandum or notice hereof shall be recorded and Buyer
agrees (a) not to file any notice of pendency or other instrument (other than
a judgment) against the Property or any portion thereof in connection
herewith and (b) to indemnify Seller against all costs, expenses and damages,
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including, without limitation, reasonable attorneys' fees and disbursements,
incurred by Seller by reason of the filing by Buyer of such notice of
pendency or other instrument.
14.12 ADDITIONAL AGREEMENTS; FURTHER ASSURANCES. Subject to the terms and
conditions herein provided, each of the parties hereto shall execute and
deliver such documents as the other party shall reasonably request in order
to consummate and make effective the transactions contemplated by this
Agreement ; provided, that the execution and delivery of such documents by
such party shall not result in any additional liability or cost to such
party.
14.13 CONSTRUCTION. The parties acknowledge that each party and its counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement or any amendment, Schedule or Exhibits hereto.
14.14 ERISA COMPLIANCE. Buyer hereby represents and warrants that Buyer (a)
is not an employee benefit plan or governmental plan, and (b) the funds being
used to acquire the Property are not "plan assets" within the meaning of 29
C.F.R. SECTION 2510.3-101 of any such plan and are not subject to state laws
regulating investments of and fiduciary obligations with respect to a
governmental plan. As used herein, the terms "employee benefit plan" and
"governmental plan" shall have the respective meanings assigned to them in
the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Seller shall not have any obligation to close the Transaction if the
Transaction for any reason constitutes a prohibited transaction under Section
406 of ERISA or if representations of Buyer d are found to be false or
misleading in any respect.
14.15 LIKE-KIND EXCHANGE. Buyer agrees to cooperate reasonably with Seller
in effecting an exchange transaction which includes the Property, pursuant to
Section 1031 of the Code, provided that any such exchange transaction, and
the related documentation, shall: (a) be at the sole cost and expense of
Seller, (b) not require Buyer to execute any contract, make any commitment,
or incur any obligations, contingent or otherwise, to third parties, (c) not
cause Buyer to be liable or potentially liable for any environmental
conditions affecting property other than the Property, (d) not delay the
closing or the transaction contemplated by this Agreement , (e) not include
Buyer's acquiring title to any property other than the Property or otherwise
becoming involved in an transaction with a third party, and (f) not otherwise
be contrary to or inconsistent with the terms of this Agreement.
Notwithstanding anything to the contrary contained herein, Buyer is not to
incur any, and Seller shall reimburse, indemnify and hold Buyer harmless
from, any and all costs, expenses and liabilities incurred solely from
Buyer's accommodation of such tax deferred exchange, including, without
limitation, reasonable attorneys' fees, and any title or escrow fees or
expenses. The obligations of Buyer under this paragraph shall survive the
execution and delivery of this Agreement and the Closing and shall not be
merged therein.
14.16 BUYER'S AUDIT RIGHTS. Seller acknowledges that Buyer is required to
have audits performed of the records of the real properties acquired by
Buyer. Accordingly, for the period from the Opening of Escrow through
December 31 of the calendar year following the Closing Date, upon fifteen
(15) days advance written notice from Buyer, Seller agrees to make available
36
<PAGE>
to Buyer's independent accountants those items respecting the Property
described in EXHIBIT Q attached hereto. The obligations of Seller under this
subsection shall survive the Closing.
14.17 WAIVER OF DECEPTIVE TRADE PRACTICES ACT. BUYER AND SELLER EACH
ACKNOWLEDGE, ON ITS OWN BEHALF AND ON BEHALF OF ITS SUCCESSORS AND ASSIGNS,
THAT THE TEXAS DECEPTIVE TRADE PRACTICES CONSUMER PROTECTION ACTION,
SUBCHAPTER E OF CHAPTER 17 OF THE TEXAS BUSINESS AND COMMERCE CODE ("DTPA"),
IS NOT APPLICABLE TO THIS TRANSACTION. ACCORDINGLY, THE RIGHTS AND
REMEDIES OF BUYER AND SELLER WITH RESPECT TO ALL ACTS OR PRACTICES OF THE
OTHER, PAST, PRESENT OR FUTURE, IN CONNECTION WITH THE TRANSACTION, SHALL BE
GOVERNED BY LEGAL PRINCIPLES OTHER THAN DTPA. IN FURTHERANCE THEREOF, BUYER
AND SELLER EACH AGREE AS FOLLOWS:
(a) Buyer represents that it is represented by legal counsel, is a
business consumer and that Buyer seeks to acquire by purchase or
lease the goods or services (i.e., the Property) that is the
subject of this Agreement for commercial or business use. Buyer
and Seller each represent to the other that they have knowledge and
experience in financial and business matters that enable it to
evaluate the merits and risks of the Transaction. Buyer and Seller
each further represent to the other that they are not in a
significantly disparate bargaining position in relation to one
another.
(b) Buyer represents to Seller that it either has assets of FIVE
MILLION AND NO/100 DOLLARS ($5,000,000.00) or more or it is owned
or controlled by a corporation or entity with assets of TWENTY-FIVE
MILLION AND NO/100 DOLLARS ($25,000,000.00) or more.
(c) Buyer and Seller each agrees, on its own behalf and on behalf of
its assigns and successors, that all of the rights and remedies
under the DTPA are WAIVED AND RELEASED, including specifically,
without limitation, all rights and remedies resulting from or
arising out of any and all acts or practices of the other party in
connection with the Transaction, regardless of whether such acts or
practices occur before or after the execution of this Agreement.
Notwithstanding anything to the contrary herein and in accordance
with Section 17.42 of the DTPA, neither party hereto waives Section
17.555 of the DTPA. THE PROVISIONS OF THIS SECTION 14.17 SHALL
SURVIVE THE CLOSING. Buyer agrees to have its attorney execute
this Agreement in order to effect this provision in accordance with
Section 17.42 of the DTPA.
THIS WAIVER IS AGREED TO: BUYER'S INITIALS ( ) ________________________
SELLER'S INITIALS ( ) BUYER'S ATTORNEY
37
<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed on its behalf on the day and year first above written.
SELLER
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: ____________________________
Name: Bernard C. Buchholz
Its: Vice President
BUYER
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By: ____________________________
Name:__________________________
Its: ____________________________
The undersigned has executed this
Agreement solely to confirm its
agreement to act as Escrow Agent and
(i) to hold the Escrow Deposits in escrow
in accordance with the provisions of ARTICLE 12,
(ii) to report the Transaction pursuant to
Section 6045(e) of the Code as described in
ARTICLE 14, (iii) to comply with the
closing provisions of ARTICLE 6, and (iv) to
provide a Release to Buyer and Seller under
conditions described in ARTICLE 3.
First American Title Insurance Company
By: ______________________
Name: John C. ("Jack") Murray, Vice President
Date: May ___, 1997
38
<PAGE>
EXHIBIT A
TEXAS PROPERTY PACKAGE
PRUDENTIAL
PROPERTY # PROPERTY NAME LOCATION EXHIBIT
- ---------- ------------- -------- -------
00039000 EXCHANGE SERVICE CENTER ARLINGTON, TX A-1
01152006 HIGHLAND SUPER STORE DALLAS, TX A-2
01315000 PINEMONT DISTRIBUTION CENTER HOUSTON, TX A-11
01316000 PERIMETER DISTRIBUTION CENTER HOUSTON, TX A-12
01317000 BRITTMORE DISTRIBUTION CENTER HOUSTON, TX A-13
01318000 PINE NORTH DISTRIBUTION CENTER HOUSTON, TX A-14
<PAGE>
EXHIBIT A-1
EXCHANGE SERVICE CENTER
ARLINGTON, TEXAS
BEING a tract of land in the M. Harris Survey, Abstract No. 704, Tarrant County,
Texas, a part of that certain 164.868 acre tract of land described in deed to
Vantage Investment Properties, Inc. by Great Southwest Corporation, and being
all of Sites 1 and 2 of the Third Installment, Six Flags Business Park, an
addition to the City of Arlington, Texas, as recorded in Volume 388-65, Page 20
of the Map Records of Tarrant County, Texas, and being more particularly
described as follows:
BEGINNING at a 1/2-inch iron rod with a yellow plastic cap stamped "Halff
Assoc., Inc." (hereafter referred to as "with cap") set at the northeast corner
of said Site 1, and being in the south line of the T & P and G S RR Interchange
and Yard as recorded in Volume 3202, Pages 68 and 332 of the Deed Records of
Tarrant County, Texas, said point being west, a distance of 25.00 feet along the
said south line from the northwest corner of a tract conveyed to T.E.S. Company
by deed recorded in Volume 3137, Page 355 of the Deed Records of Tarrant County,
Texas;
THENCE South, departing said south line a distance of 335.00 feet to a 1/2-inch
iron rod with cap found in the north line of Exchange Drive;
THENCE West, along the north line of Exchange Drive a distance of 1214.43 feet
to an "L" scribed in concrete for the beginning of a circular curve to the left
having a radius of 630.00 feet;
THENCE Westerly, continuing along said north line and along said curve through a
central angle of 13 degrees 55 minutes 16 seconds, an arc distance of 153.06
feet to a 1/2-inch iron rod with cap found for a corner;
THENCE North, departing said north line, a distance of 353.50 feet to a 1/2-inch
iron rod with cap set in said T & P and G S RR Yard south line;
THENCE East, along said south line, a distance of 1366.00 feet to the POINT OF
BEGINNING AND CONTAINING 458,540 square feet or 10.527 acres of land, more or
less.
<PAGE>
EXHIBIT A-2
HIGHLAND SUPER STORE
DALLAS, TEXAS
BEING a tract of land in the John J. Metcalf Survey, Abstract No. 885, and being
that tract of land known as Block D/8026, Redbird Distribution Center, Phase I,
an Industrial Subdivision, as platted for record in Volume 85117, Page 5792, Map
Records, Dallas County, Texas, and being more particularly described as follows:
BEGINNING at a 1/2-inch iron rod with a yellow plastic cap stamped "A. H. HALFF
ASSOC." (hereafter referred to as "with cap") found at the northwest corner of
said Redbird Distribution Center, Phase I;
THENCE South 89 degrees 43 minutes 48 seconds East, along the north line of said
Redbird Distribution Center, Phase I, a distance of 1473.82 feet to a 1/2-inch
found iron rod with cap at the northerly common corner between said Block D/8026
and Block E/8026;
THENCE South 00 degrees 16 minutes 12 seconds West, departing said north line
and along said common line, a distance of 475.00 feet to a 1/2-inch found iron
rod with cap in the north right-of-way line of Highland Place Drive (60-foot
right-of-way);
THENCE North 89 degrees 43 minutes 48 seconds West, departing said common line
and along said north right-of-way line, passing the point of curvature at
1008.30 feet, and continuing along the south line of said Block D/8026, a total
distance of 1468.70 feet to a 1/2-inch found iron rod with cap in the west line
of said Phase I, also being the southwest corner of said Block D/8026;
THENCE North 00 degrees 20 minutes 50 seconds West, along the west line of said
Phase I, a distance of 475.03 feet to the POINT OF BEGINNING AND CONTAINING
698,849 square feet or 16.0434 acres of land, more or less.
<PAGE>
EXHIBIT A-11
PINEMONT DISTRIBUTION CENTER
HOUSTON, TX
-----------
Field note description of a tract of land containing 5.6920 acres (247,944
square feet) which is out of Unrestricted Reserve "A" of the REPLAT OF
PINEWAY SOUTH as recorded in Volume 218, Page 12 of the Harris County Map
Records, and being that same tract described in a Substitute Trustee's Deed
to The Prudential Insurance Company of America recorded under Harris County
Clerk's File No. M508772, in the William C. Wallace Survey, Abstract No. 848,
in the City of Houston, Harris County, Texas, said 5.6920 acre tract being
more particularly described by metes and bounds as follows (all bearings are
referenced to the aforesaid REPLAT OF PINEWAY SOUTH):
COMMENCING at a 5/8-inch iron rod found on the northerly right-of-way line of
Clay Road (100 feet wide) which marks the southwest end of the corner cut
back line at the intersection of the northerly right-of-way line said Clay
Road with the westerly right-of-way line of South Pinemont Drive (width
varies), said point also marks the most southerly southeast corner of said
Unrestricted Reserve "A" of the REPLAT OF PINEWAY SOUTH and a called 5.0441
acre tract described in a deed to Pinemont GPI, LTD. recorded under Harris
County Clerk's File No. S124169;
THENCE, North 42DEG. 34' 32" East, along said corner cut back line a distance
of 14.17 feet to a 5/8-inch iron rod found on the westerly right-of-way line
of said South Pinemont Drive;
THENCE, North 02DEG. 19' 19" West, along the said westerly right-of-way line
of South Pinemont Drive, a distance of 30.29 feet to an "X" cut in concrete
found for the point of curvature of a curve to the right;
THENCE, in a northerly direction, continuing along the said westerly
right-of-way line of South Pinemont Drive, and along said curve to the right
having a radius of 1,000.00 feet, a central angle of 05DEG. 43' 56", (a chord
which bears North 00DEG. 32' 39" East for 100.00 feet), an arc distance of
100.05 feet to a 5/8-inch iron rod found at a point of reverse curvature;
THENCE, in a northerly direction, continuing along said westerly right-of-way
line and along said curve to the left having a radius of 1,000.00 feet, a
central angle of 05DEG. 43' 56", (a chord which bears North 00DEG. 32' 39"
East for 100.00 feet), an arc distance of 100.05 feet to an "X" found cut in
concrete found at the point of tangency of said curve;
THENCE, North 02DEG. 19' 19" West, continuing along said right-of-way line a
distance of 427.71 feet to an "X" found cut in a concrete driveway which
marks the southeast corner of the aforesaid Prudential Insurance Company
tract, the northeast corner of the said 5.0441 acre tract and the southeast
corner and POINT OF BEGINNING of this herein described tract;
THENCE, South 87DEG. 40' 41" West, along the southerly line of the said
Prudential Insurance Company tract, and the northerly line of the said 5.0441
acre tract a distance of 332.00 feet to a
<PAGE>
5/8-inch iron rod found in the westerly line of said Unrestricted Reserve "A"
and the easterly line of Block E of OUTPOST ESTATES Sec. 1 as recorded in
Volume 37, Page 36 of the Harris County Map Records, said point marks the
southwest corner of the said Prudential Insurance Company tract and the
northwest corner of the said 5.0441 acre tract;
THENCE, North 02DEG. 19' 19" West, along the westerly line of the said
Prudential Insurance Company tract, the said westerly line of Unrestricted
Reserve "A" and the said easterly line of Block E of OUTPOST ESTATES Sec. 1 a
distance of 746.81 feet to a 5/8-inch iron rod found at the northwest corner
of the said Prudential Insurance Company tract and the southwest corner of a
called 1.6272 acre tract described in a deed to Steven E. Jackson recorded
under Harris County Clerk's File No. N314140;
THENCE, North 87DEG. 40' 41" East, along the northerly line of the said
Prudential Insurance Company tract and the southerly line of the aforesaid
1.6272 acre a distance of 332.00 feet to a 5/8-inch iron rod found on the
easterly line of said Unrestricted Reserve "A" and the said westerly
right-of-way line of South Pinemont Drive which marks the northeast corner of
said Prudential Insurance Company tract and the southeast corner of the said
1.6272 acre tract;
THENCE, South 02DEG. 19' 19" East, along the said easterly line of
Unrestricted Reserve "A", the said westerly right-of-way line of South
Pinemont Drive and the easterly line of the said Prudential Insurance Company
tract a distance of 746.81 feet to the POINT OF BEGINNING and containing a
computed area of 5.6920 acres (247,944 square feet). This description is
based on a ground survey completed February 27, 1997 and is submitted in
conjunction with a survey drawing completed August 20, 1993 and updated March
18, 1997, Clark Surveying Company Job No. 97-02-3952.
<PAGE>
EXHIBIT A-12
PERIMETER DISTRIBUTION CENTER
HOUSTON, TX
Legal description of a 7.0812 acre tract of land out of the Thomas Hogan Survey,
a-326 Harris County, Texas
Being a 7.0812 acre (308,457 square feet) tract of land out of a 9.3794 acre
tract of land located in the Thomas Hogan Survey, abstract No. 326, Harris
County, Texas, said 9.3794 acre tract of land also being out of Restricted
Reserve "A", Block 1 of Perimeter Park subdivision, a subdivision per map or
plat thereof recorded in Volume 295, Page 62 of the map records of Harris
County, Texas, said 9.3794 acre tract of land being more particularly described
by metes and bounds as follows:
Beginning at a found 5/8 inch iron rod for the northwest corner of Restricted
Reserve "A", said northwest corner also being on the southwest right of way
of a 100 foot wide H. & T.C. railroad right of way as recorded in Volume S,
Page 600 of the Harris County map records and the east line of a called 20
foot wide T. and N.O. railroad easement recorded under Harris County Film
Code No. ###-##-####;
Thence south 52 degrees 44 minutes 30 seconds east, at 154.56 feet pass a
found 5/8 inch iron rod marking the northerly right of way line of a 2.2982
acre tract of land (called 2.3011 acres) taken in condemnation proceedings by
the county of Harris as set forth in that final judgment filed of record
under H.C.C.F. No. M-166347, a distance of 545.40 feet to a found 5/8 inch
iron rod for corner and the southerly right of way line of said 2.2982 acre
tract of land and the most northerly northwest corner of that certain 2.8073
acre tract of land conveyed to McGregor D.C. as per that certain general
warranty deed recorded in H.C.C.F. No. L-419781;
Thence south 66 degrees 29 minutes 57 seconds west and along said southerly
right of way line and along the westerly line of said 2.8073 acre tract of land,
a distance of 36.87 feet to a found 5/8 inch iron rod for corner;
Thence north 52 degrees 43 minutes 58 seconds west, a distance of 2.74 feet to a
found 5/8 inch iron rod for corner;
Thence south 37 degrees 21 minutes 27 seconds west, a distance of 2.19 feet to a
found 5/8 inch iron rod for corner;
Thence north 52 degrees 38 minutes 33 seconds west, a distance of 4.00 feet to a
found 5/8 inch iron rod for corner;
Thence south 37 degrees 21 minutes 27 seconds west, a distance of 9.90 feet to a
found 5/8 inch iron rod for corner;
<PAGE>
Thence south 66 degrees 29 minutes 57 seconds west, a distance of 73.23 feet to
a found 5/8 inch iron rod for corner and the point of curvature on a curve to
the left whose chord bears south 66 degrees 07 minutes 34 seconds west and a
chord distance of 24.95 feet;
Thence along said curve to the left having a central angle of 00 degrees 44
minutes 46 seconds and a radius of 1916.02 feet, an arc distance of 24.95 feet
to a found "x" cut in concrete for corner;
Thence departing from said county of Harris right of way and along the common
line between the aforementioned 2.8073 acre tract of land and the herein
described 9.3794 acre tract of land on a bearing of south 02 degrees 34 minutes
35 seconds east, a distance of 186.81 feet to a found "x" cut in concrete;
Thence continuing along said common line and on a bearing of south 52 degrees 43
minutes 31 seconds east, a distance of 315.03 feet to a found "x" cut in
concrete;
Thence continuing along said common line and on a bearing of north 87 degrees 29
minutes 46 seconds east, a distance of 128.20 feet to a "x" cut in concrete for
corner, said "x" cut in concrete also being on the west right of way line of
perimeter road (60 foot wide) as recorded as per the plat of Perimeter Park
subdivision and being a point on a non-tangent curve to the left whose chord
bears south 02 degrees 09 minutes 23 seconds west, a chord distance of 53.63
feet;
Thence along said west right of way of Perimeter Road and along said curve to
the left having a radius of 330.00 feet and a central angle of 09 degrees 19
minutes 20 seconds, an arc length of 53.69 feet to a set 3/8 inch iron rod for
the point of tangency of said curve;
Thence continuing along said right of way line and on a bearing of south 02
degrees 30 minutes 05 seconds east, a distance of 226.03 feet to a found 3/8
inch iron rod for the southeast corner of the herein described 9.3794 acre tract
of land;
Thence south 87 degrees 29 minutes 55 seconds west, departing from the west
right of way line of Perimeter Road and along the south line of the herein tract
of land, a distance of 651.50 feet to a found 5/8 inch iron rod for the
southwest corner of the herein described 9.3794 acre tract of land, said corner
also being on the east line of the aforementioned 20 foot wide t. And N.O.
railroad easement;
Thence north 02 degrees 14 minutes 06 seconds west, along said west line of
Restricted Reserve "A", at 526.97 feet pass the south line of the aforementioned
2.2982 acre tract and at 892.20 feet pass the north line of said 2.2982 acre
tract of land, and continuing for a total distance of 1070.18 feet to the point
of beginning and containing 9.3794 acres of land, more or less, less, save and
except the aforementioned 2.2982 acre tract of land, said 2.2982 acre tract of
land being more particularly described as follows:
Commencing at a found 5/8 inch iron rod for the northwest corner of Restricted
Reserve "A", said northwest corner also being on the southwest right of way of a
100 foot wide H. & T.C.
<PAGE>
railroad right of way as recorded in Volume S, Page 600 of the Harris County
map records and the east line of a called 20 foot wide T. and N.O. Railroad
easement recorded under Harris County Film Code No. 051-15-1485;
Thence south 52 degrees 44 minutes 30 seconds east, a distance of 154.56 feet to
a found 5/8 inch iron rod for the point of beginning of the herein described
2.2982 acre tract of land (called 2.3011 acres) taken in condemnation
proceedings by the county of Harris as set forth in that final judgment filed of
record under H.C.C.F. No. M-166347;
Thence continuing south 52 degrees 44 minutes 30 seconds east, a distance of
390.84 feet to a found 5/8 inch iron rod for corner and the southerly right of
way line of said 2.2982 acre tract of land and the most northerly northwest
corner of that certain 2.8073 acre tract of land conveyed to McGregor D.C. as
per that certain general warranty deed recorded in H.C.C.F. No. L-419781;
Thence south 66 degrees 29 minutes 57 seconds west and along said southerly
right of way line and along the westerly line of said 2.8073 acre tract of land,
a distance of 36.87 feet to a found 5/8 inch iron rod for corner;
Thence north 52 degrees 43 minute 58 seconds west, a distance of 2.74 feet to a
found 5/8 inch iron rod for corner;
Thence south 37 degrees 21 minutes 27 seconds west, a distance of 2.19 feet to a
found 5/8 inch iron rod for corner;
Thence north 52 degrees 38 minutes 33 seconds west, a distance of 4.00 feet to a
found 5/8 inch iron rod for corner;
Thence south 37 degrees 21 minutes 27 degrees west, a distance of 9.90 feet to a
found 5/8 inch iron rod for corner;
Thence south 66 degrees 29 minutes 57 seconds west, a distance of 73.23 feet to
a found 5/8 inch iron rod for corner and the point of curvature on a curve to
the left whose chord bears south 61 degrees 23 minutes 46 seconds west and a
chord distance of 340.84 feet;
Thence along said curve to the left having a central angle of 10 degrees 12
minutes 21 seconds and a radius of 1916.02 feet, an arc distance of 341.29 feet
to a found 5/8 inch iron rod for corner, said corner also being on the east line
of the aforementioned 20 foot wide T. and N.O. railroad easement;
Thence north 02 degrees 14 minutes 06 seconds west, along said west line of
Restricted Reserve "A", a distance of 365.23 feet for the northwest corner of
said 2.2982 acre tract and the point of beginning of a non-tangent curve to the
right having a chord bearing north 54 degrees 00 minutes 41 seconds east and a
chord distance of 105.12 feet;
Thence along said curve to the right having a central angle of 02 degrees 49
minutes 45 seconds east and a radius of 2129.00 feet, an arc distance of 105.13
feet to the point of tangency and corner;
Thence north 54 degrees 02 minutes 50 seconds east, a distance of 38.32 feet for
the point of beginning and containing 2.2982 acres of land for a net acreage of
7.0812 acres of land.
<PAGE>
EXHIBIT A-13
BRITTMORE DISTRIBUTION CENTER
HOUSTON, TX
Field note description of 12.9373 acres (563,549 square feet) of land, out of
Unrestricted Reserve "A" of Hammerly Industrial Park subd., according to the
map or plat thereof recorded in Volume 296, Page 107 of the map records,
Harris County, Texas, said 12.9373 acre tract being more particularly
described by metes and bounds as follows; [bearings referenced to the
south line of said Hammerly Industrial Park subd., bearing S 87 DEG.
52' 34" w]:
BEGINNING at a 1/2 inch iron rod pipe found in the East right-of-way line of
Brittmore Road (80 feet wide), for the Southwest corner of said Hammerly
Industrial Park and the herein described tract;
THENCE, N 01 DEG. 54' 45" W, along the East line of Brittmore Road, a
distance of 608.00 feet to a P.K. nail found in concrete for the Northwest
corner of the herein described tract;
THENCE, N 87 DEG. 52' 34" E, a distance of 820.00 feet to a found 5/8 inch
iron rod for the most Northeasterly corner of the herein described tract;
THENCE, S 02 DEG. 07' 26" E, a distance of 324.07 feet to a 5/8 inch iron rod
found marking an interior corner of the herein described tract;
THENCE, S 79 DEG. 22' 26" E, a distance of 29.27 feet to a 5/8 inch iron rod
found at the point of curvature of a non-tangent curve to the Right having a
radial line that bears S 13 DEG. 14' 45" W;
THENCE, Southeasterly, along and with said curve to the Right having a radius
of 468.37 feet, a central angle of 46 DEG. 41' 24" an arc length of 381.67
feet and a chord bearing S 53 DEG. 24' 32" E, for a distance of 371.20 feet
to a 5/8 inch iron rod found on the East line of Hammerly Industrial Park,
said iron rod marks an exterior corner of the herein described tract;
THENCE, S 01 DEG. 21' 06" E, along the East line of Hammerly Industrial Park,
a distance of 45.30 feet, to a 5/8 inch iron rod found for the Southeast
corner of the herein described tract;
THENCE, S 87 DEG. 52' 34" W, along the South line of Hammerly Industrial
Park, a distance of 1139.81 feet to the POINT OF BEGINNING and containing
12.9373 acres (563,549 square feet) of land.
<PAGE>
EXHIBIT A-14
PINE NORTH DISTRIBUTION CENTER
HOUSTON, TX
A parcel of land containing 5.8343 acres (254,142 square feet) being a part of
Block 2, Unrestricted Reserve C, Pineway North Subdivision according to the Plat
thereof recorded in Volume 290, Page 49, Map Records, Harris County, Texas, said
tract being in the Richard Rowles Survey, Abstract No. 670, Houston, Harris
County, Texas and being more particularly described as follows;
BEGINNING at a point, said point being in the north line of said Pineway North
Subdivision, said point being in the east line of Guhn Road (60 feet wide) and
in the south line of Block 9, Fawndale Center as recorded in Volume 21, Page 15,
Map Records, Harris County, Texas, from said corner a found iron rod with Clark
Surveying cap bears S 73 DEG W, 1.26 feet in length;
THENCE N 87 DEG 21' 10" E, along the said north line of Pineway North
Subdivision and the said south line of Block 9, Fawndale Center a distance of
611.42 feet to a 4"x 4" wood fence post at the northeast corner of said Pineway
North Subdivision, from said corner a found 5/8 inch iron rod bears
S 03 DEG 50' 40" E, 1.13 feet in length;
THENCE S 03 DEG 50' 40" E, along the east line of said Pineway North
Subdivision, at a distance of 316.52 feet pass a found 1/2 inch iron rod being
3.03 feet east of property line, in all a total distance of 467.54 feet to a
found 5/8 inch iron rod;
THENCE S 86 DEG 09' 20" W, a distance of 447.02 feet to an "X" found in concrete
in the east line of said Guhn Road;
THENCE along the east line of said Guhn Road and the arc of a 530.00 foot radius
curve to the left, through a central angle of 10 DEG 54' 17", a distance of
100.87 feet to a found 5/8 inch iron rod, said curve being subtended by a chord
bearing N 21 DEG 34' 45" W, 100.72 feet in length;
THENCE 27 DEG 01' 54" W, continuing along the east line of said Guhn Road a
distance of 273.82 feet to a found 5/8 inch iron rod at the beginning of a
320.00 foot radius curve to the right;
THENCE along said east line of Guhn Road and the arc of said curve to the right,
through a central angle of 24 DEG 23' 04", a distance of 136.19 feet to the
POINT OF BEGINNING and containing 5.8343 acres (254,142 square feet) of land,
said curve being subtended by a chord bearing N 14 DEG 30' 22" W, 135.16 feet
in length.
<PAGE>
EXHIBIT B
ALLOCATION OF PURCHASE PRICE
PROJECT DESCRIBED ALLOCATED PRICE
- ----------------- ---------------
Exhibit $
A-1 EXCHANGE SERVICE CENTER 5,579,161
A-2 HIGHLAND SERVICE CENTER 7,830,000
A-11 PINEMONT DISTRIBUTION 2,988,440
A-12 PERIMETER DISTRIBUTION 3,291,437
A-13 BRITTMORE DISTRIBUTION 8,099,212
A-14 PINE NORTH DISTRIBUTION 3,267,181
<PAGE>
EXHIBIT C
REPORTS ISSUED BY FIRST AMERICAN TITLE INSURANCE COMPANY
PROPERTY DESCRIBED COMMITMENT # / NATIONAL ACC.#
- ------------------ -----------------------------
EXHIBIT
A-1 97R01107 CR3 NA19805
A-2 97R01106 CR3 NA19804
A-11 531070 NA19806
A-12 531071 NA19807
A-13 531075 NA19808
A-14 531074 NA19809
<PAGE>
EXHIBIT C-1
BUYER'S CERTIFICATION OF NO REPRESENTATIONS
To: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
From: MERIDIAN INDUSTRIAL TRUST, INC.
State of California
County of
Before me the undersigned notary public in and for the State of California, this
day personally appeared known to me to be the President of MERIDIAN INDUSTRIAL
TRUST, INC., a Maryland corporation, who being by me first duly sworn, before
me under oath and penalty of perjury says:
1. That he or she is the President of MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation, and
2. That said MERIDIAN INDUSTRIAL TRUST, INC. is the Buyer in that certain
Purchase and Sale Agreement dated the day of May, 1997 (the
"Agreement"), and
3. That subsection 4.5 of the Agreement requires a Buyer's Certification from
an authorized officer of Buyer confirming and certifying it's acceptance and
acknowledgment of all matters set forth in Article 4 and in subsection 8.1.3
of the Agreement, copies of which are attached hereto incorporated herein as
Exhibit A and Exhibit B, and
4. That without limiting the matters certified to as set forth in Article 4 and
in subsection 8.1.1 and 8.1.2 of the Agreement, the undersigned on behalf of
the Buyer is hereby certifies that Seller, its officers, employees, agents
and legal counsel have made no representations or warranties concerning the
Property except as specifically set forth in the Agreement and the
conveyance documents, and
5. That he or she has been duly authorized by the Board of Directors of
MERIDIAN INDUSTRIAL TRUST, INC. to confirm and acknowledge the matters set
forth in Article 4 and in subsection 8.1.1 and 8.1.2 of the Agreement and he
or she knows of no fact or facts which would alter , amend or modify the
understandings, statements or agreements stated therein.
8. That the undersigned understands that the Seller in the Agreement is relying
upon this representation.
Sworn and subscribed this day of , 1997.
------------------------
Notary Public, State of
My Commission Expires:
<PAGE>
EXHIBIT D
BILL OF SALE
STATE OF ILLINOIS )
) KNOW ALL MEN BY THESE PRESENTS THAT:
COUNTY OF COOK )
WHEREAS, by deed of even date herewith, THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation ("Seller") conveyed to MERIDIAN INDUSTRIAL
TRUST, INC., a Maryland corporation ("Buyer"), whose mailing address is 455
Market Street, 17th Floor, San Francisco, CA 94105, those parcels of land more
particularly described in EXHIBIT "A" attached hereto as a part hereof, together
with all improvements located thereon ("Real Property").
WHEREAS, in connection with the above described conveyance Seller desires to
sell, transfer and convey to Buyer certain items of tangible personal property
as hereinafter described.
NOW, THEREFORE, in consideration of the receipt of TEN AND NO/100 DOLLARS
($10.00) and other good and valuable consideration paid in hand by Buyer to
Seller, the receipt and sufficiency of which are hereby acknowledged, Seller has
GRANTED, CONVEYED, SOLD, TRANSFERRED, SET OVER and DELIVERED and by these
presents does hereby GRANT, SELL, TRANSFER, SET OVER and DELIVER to Buyer, its
legal representatives, successors and assigns, all of its right, title and
interest in and to all fixtures, fittings, appliances, apparatus, equipment,
machinery, and all other items of personal property owned by the Seller which
are affixed or attached to or placed or situated upon the Real Property and used
in the operation and management thereof (excluding any computer equipment and
software) (collectively the "Personal Property"), to have and to hold, all and
singular, the Personal Property unto Buyer forever.
Seller does hereby bind itself, its legal representatives, successors and
assigns, to WARRANT, and FOREVER DEFEND title to the Personal Property unto
Buyer, its legal representatives, successors and assigns, against every person
whomsoever lawfully claiming or to claim same or any part thereof, by, through
or under Seller, but not otherwise.
SELLER MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE CONDITION OF THE
PERSONAL PROPERTY OR ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE. BY ITS ACCEPTANCE OF THIS BILL OF SALE, BUYER ACKNOWLEDGES THAT
IT HAS FULLY INSPECTED THE PERSONAL PROPERTY AND BUYER ACCEPTS THE SAME IN
ITS PRESENT USED AND "AS IS" CONDITION.
SELLER AND BUYER AGREE THAT THE PERSONAL PROPERTY IS SOLD, AND THAT BUYER
ACCEPTS POSSESSION OF THE PERSONAL PROPERTY, "AS IS, WHERE IS, WITH ALL
FAULTS", AND THAT, EXCEPT FOR THE LIMITED WARRANTY OF TITLE GIVEN
HEREINABOVE, SUCH SALE IS MADE
<PAGE>
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND OR NATURE WHATSOEVER BY
SELLER, SELLER'S SALES AGENTS OR BROKERS, ANY PARTNER OR SELLER OR ITS
SALES AGENTS OR BROKERS, OR ANY OFFICER, DIRECTOR, EMPLOYEE, AGENT OR
ATTORNEY OF SELLER OR ITS SALES AGENTS OR BROKERS, OR ANY OTHER PARTY
RELATED IN ANY WAY TO ANY OF THE FOREGOING (COLLECTIVELY, THE "SELLER
PARTIES"), WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING,
WITHOUT LIMITATION, WARRANTY OF INCOME POTENTIAL, OPERATING EXPENSES,
USES, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSES, AND SELLER AND
EACH OF THE SELLER PARTIES DOES HEREBY DISCLAIM AND RENOUNCE ANY SUCH
REPRESENTATION OR WARRANTY. BY ITS ACCEPTANCE OF THIS BILL OF SALE, BUYER
SPECIFICALLY ACKNOWLEDGES THAT, EXCEPT FOR THE LIMITED WARRANTY OF TITLE
GIVEN HEREINABOVE, BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND OR NATURE WHATSOEVER, WHETHER EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, FROM SELLER OR ANY OTHER SELLER PARTIES AS TO ANY
MATTERS CONCERNING THE PERSONAL PROPERTY, AND BUYER FURTHER ACKNOWLEDGES
AND AGREES THAT SELLER IS UNDER NO DUTY TO MAKE ANY AFFIRMATIVE DISCLOSURES
REGARDING ANY MATTER WHICH MAY BE KNOWN TO SELLER, ITS OFFICERS, DIRECTORS,
CONTRACTORS, AGENTS OR EMPLOYEES, AND THAT IT IS RELYING SOLELY UPON ITS
OWN INSPECTION OF THE PERSONAL PROPERTY AND NOT UPON ANY REPRESENTATIONS
MADE TO IT BY ANY PERSON WHOMSOEVER AND THAT BUYER ACCEPTS THE PERSONAL
PROPERTY IN ITS PRESENT USED AND "AS IS, WHERE IS, WITH ALL FAULTS"
CONDITION.
EXECUTED this __ day of , 1997, TO BE EFFECTIVE as of the _____
day of ___________________, 1997.
SELLER:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA,
a New Jersey corporation
By:________________________________________
Name: Bernard C. Buchholz
Title: Vice President
<PAGE>
STATE OF ILLINOIS )
)
COUNTY OF COOK )
This instrument was acknowledged before me on __________, 1997 by Bernard C.
Buchholz, Vice President of The Prudential Insurance Company of America, a New
Jersey corporation, on behalf of said corporation.
______________________________________
_______________________, Notary Public
My Commission Expires:
______________________
<PAGE>
EXHIBIT E-1
ASSIGNMENT OF TENANT LEASES
THIS ASSIGNMENT OF TENANT LEASES ("Assignment"), is made by and between THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation
("Assignor") and MERIDIAN INDUSTRIAL TRUST, INC., a Maryland corporation
("Assignee").
W I T N E S S E T H:
WHEREAS, by Purchase and Sale Agreement ("Sale Agreement") dated as of May
___, 1997, by and between Assignor and Assignee, Assignor agreed to sell to
Assignee certain real property, and the improvements located thereon
("Property") as more particularly described in the Sale Agreement; and
WHEREAS, the Sale Agreement provides, INTER ALIA, that Assignor shall assign
to Assignee certain leases and Assignee shall assume all of the obligations
of Seller under such leases.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. ASSIGNMENT OF TENANT LEASES. Assignor hereby assigns, sets over and
transfers to Assignee all of its right, title and interest in, to and under
those certain tenant space leases set forth in EXHIBIT "E-2" attached hereto
as a part hereof ("Leases"). Assignee hereby assumes all liabilities and
obligations of Assignor under the Leases and indemnifies and holds harmless
Assignor from all of the liabilities and obligations of Assignor under the
Leases.
2. MISCELLANEOUS. This Assignment and the obligations of the parties
hereunder shall survive the closing of the transaction referred to in the
Sale Agreement, shall be binding upon and inure to the benefit of the parties
hereto, their respective legal representatives, successors and assigns, shall
be governed by and construed in accordance with the laws of the State of
Texas applicable to agreements made within said State and may not be
modified or amended in any manner other than by a written agreement signed by
the party to be charged therewith.
<PAGE>
EXECUTED this ___ day of , 1997, TO BE EFFECTIVE as of the _____
day of ____________, 1997.
ASSIGNOR:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey corporation
By:________________________________________
Name: Bernard C. Buchholz
Title: Vice President
ASSIGNEE:
MERIDIAN INDUSTRIAL TRUST, INC.
By:_________________________________________
Name:_______________________________________
Title:______________________________________
<PAGE>
EXHIBIT E-2
LIST OF LEASES
<TABLE>
<CAPTION>
EXH. PROPERTY NAME LEASES
- ---- ------------- ------
<S> <C> <C>
A-1 EXCHANGE SERVICE CENTER THE CROSBY GROUP
GULF SYSTEMS, INC.
GATX LOGISTICS
A-2 HIGHLAND SUPER STORE TREE OF LIFE
A-11 PINEMONT DISTRIBUTION CENTER ACR SUPPLY, INC.
RACHEL SAN MIGUEL & CO.
WESTINGHOUSE ASSIGNED LEASE TO CUTLER-
HAMMER, INC.
ATT HEADWEAR, INC.
GOLDEN CREEK CARPET, INC.
GOLDEN CREEK CARPET, INC.
THE TUDOR MINT
A-CUSTOM CHOP OF TEXAS
A-12 PERIMETER DISTRIBUTION CENTER THE POWELL GROUP
PENNZOIL PRODUCTS
SUN INVENTORY MANAGEMENT CORP.
INTERNATIONAL GROCERS
ICEE USA, INC.
PRESIDENT BAKING CO.
A-13 BRITTMORE DISTRIBUTION CENTER ITL INDUSTRIAL TIRES
MITSUBISHI CATERPILLAR FORKLIFT
IGLOO PRODUCTS CORP.
MITSUBISHI CATERPILLAR FORKLIFT
ROSEN /CW. INC.
DHL AIRWAYS
FLEXIBLE LINE UNDERGROUND TECHNOLOGIES,
INC.
HLF DISTRIBUTORS
FANDELI INTERNATIONAL CORP.
HAROLD LEONARD SOUTHWEST CORP.
A-14 PINE NORTH DISTRIBUTION CENTER ALAMO IRONWORKS
TIME WARNER CABLE
THE SERVICE CENTER
</TABLE>
<PAGE>
EXHIBIT F
ASSIGNMENT OF WARRANTIES/GUARANTIES
THIS ASSIGNMENT OF WARRANTIES/GUARANTIES ("Assignment"), is made by and between
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation
("Assignor") and MERIDIAN INDUSTRIAL TRUST, INC., a Maryland Corporation
("Assignee").
W I T N E S S E T H:
WHEREAS, by Purchase and Sale Agreement ("Sale Agreement") dated as of May ___,
1997, by and between Assignor and Assignee, Assignor agreed to sell to Assignee
certain real property, and the improvements located thereon ("Property") as more
particularly described in the Sale Agreement; and
WHEREAS, the Sale Agreement provides, INTER ALIA, that Assignor shall assign to
Assignee certain warranties and guarantees, and that Assignor and Assignee shall
enter into this Assignment.
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. ASSIGNMENT OF WARRANTIES AND GUARANTEES. Assignor hereby
assigns, set over and transfers to Assignee all of its right, title and
interest in, to and under those certain warranties and guarantees set forth
in SCHEDULE A attached hereto as a part hereof, to the extent assignable.
2. MISCELLANEOUS. This Assignment and the obligations of the
parties hereunder shall survive the closing of the transaction referred to in
the Sale Agreement, shall be binding upon and inure to the benefit of the
parties hereto, their respective legal representatives, successors and
assigns, shall be governed by and construed in accordance with the laws of
the State of Texas applicable to agreements made within said State and may
not be modified or amended in any manner other than by a written agreement
signed by the party to be charged therewith.
EXECUTED this ___ day of , 1997 TO BE EFFECTIVE as of the ___ day of
____________, 1997.
<PAGE>
ASSIGNOR:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey Corporation
By:________________________________________
Name: Bernard C. Buchholz
Title: Vice President
ASSIGNEE:
MERIDIAN INDUSTRIAL TRUST, INC., a Maryland
Corporation
By:_________________________________________
Name:_______________________________________
Title:______________________________________
<PAGE>
EXHIBIT G
LIST OF MAJOR TENANTS
EXH. PROPERTY NAME LEASES
- ---- ------------- ------
A-1 EXCHANGE SERVICE CENTER THE CROSBY GROUP
GULF SYSTEMS, INC.
GATX LOGISTICS, UNIT DISTRIBUTION OF
TEXAS
A-2 HIGHLAND SUPER STORE TREE OF LIFE (GOURMET FOODS)
A-11 PINEMONT DISTRIBUTION CENTER A-CUSTOM CHOP OF TEXAS
A-12 PERIMETER DISTRIBUTION CENTER THE POWELL GROUP
PENNZOIL PRODUCTS
A-13 BRITTMORE DISTRIBUTION CENTER IGLOO PRODUCTS CORP.
FANDELI INTERNATIONAL CORP.
HAROLD LEONARD SOUTHWEST CORP.
A-14 PINE NORTH DISTRIBUTION CENTER THE SERVICE CENTER
<PAGE>
EXHIBIT H-1
TENANT ESTOPPEL LETTER
By lease dated _________________________ ("Lease"), the undersigned ("Tenant")
has leased from THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, or its predecessors
in interest ("Landlord") the lease premises located at _______________________
__________________________________ which are more particularly described in the
Lease. Landlord, as owner of the property ("PROPERTY") of which the lease
premises are a part, intends to sell the said Property to _____________________
____________________________________ ("BUYER") who, as a condition to the
purchase of the Property, has required this Tenant Estoppel Letter.
In consideration of Buyer's agreement to purchase the Property, Tenant agrees
and certifies to Landlord and to Buyer as follows:
1. The leased premises and possession thereof are accepted; the
Lease is in full force and effect; and the lease term begins on
____________________ and ends on _____________________________.
2. Tenant claims no present charge, lien or claim of offset
against rent.
3. Rent is paid for the current month but is not paid and will
not be paid more than one month in advance. Basic or fixed rent is
$____________ per month and is due on the __________ of each month. A
security deposit in the amount of $_____________ has been paid to Landlord.
4. There are no existing defaults by reason of any act or
omission of the Landlord except as
follows:___________________________________
___________________________________________.
5. The Lease has not been modified, except in accordance with the
amendments dated as follows:_____________________________________
______________________________________.
6. Attached is a true and correct copy of the Lease together with
all amendments, modifications or renewals.
TENANT:
__________________________________
By:_______________________________
Name: ____________________________
Title:_____________________________
<PAGE>
EXHIBIT H-2
SELLER ESTOPPEL LETTER
By lease dated _________________________ ("Lease"), the undersigned
("Tenant") has leased from THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, or
its predecessors in interest ("Landlord") the lease premises located at
_______________________ __________________________________ which are more
particularly described in the Lease. Landlord, as owner of the property
("PROPERTY") of which the lease premises are a part, intends to sell the said
Property to _____________________ ____________________________________
("BUYER") who, as a condition to the purchase of the Property, has required
this Tenant Estoppel Letter.
In consideration of Buyer's agreement to
purchase the Property, Landlord certifies to Buyer as follows:
1. The leased premises and possession thereof are accepted;
the Lease is in full force and effect; and the lease term begins on
____________________ and ends on _____________________________.
2. Tenant claims no present charge, lien or claim of offset
against rent.
3. Rent is paid for the current month but is not paid and will not
be paid more than one month in advance. Basic or fixed rent is $____________
per month and is due on the __________ of each month. A security deposit in
the amount of $_____________ has been paid to Landlord.
4. There are no existing defaults by reason of any act or omission
of the Landlord except as follows:___________________________________
___________________________________________.
5. The Lease has not been modified, except in accordance with the
amendments dated as follows:_____________________________________
______________________________________.
ATTACHED IS A TRUE AND CORRECT COPY OF THE LEASE TOGETHER WITH ALL AMENDMENTS,
MODIFICATIONS OR RENEWALS.
The liability of Landlord pursuant to this letter shall be null and void the
earlier of a) the one hundred and eightieth day from the date hereof, or b)
Seller delivering to Purchaser a Tenant Estoppel letter in substantial
conformity with this letter. Any liability on behalf of Landlord under this
letter is subject to the limitations on maximum aggregate Seller liability
as set forth in Section ___ of the Purchase and Sale Agreement dated May ,
1997 in which Seller and Landlord are one and the same party.
Notwithstanding the foregoing, Purchaser hereby expressly waives and releases
any right or remedy available to it at law, in equity or under the Purchase
and Sale Agreement for damages that the Purchaser may incur as a result of
any of Seller's or Landlord's representations being inaccurate if (a)
Purchaser knew or should have known on or
<PAGE>
before this date that such representation was not accurate, or (b)
Purchaser's damages are reasonably estimated aggregate less than $25,000.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:___________________________________
Bernard C. Buchholz, Vice President
<PAGE>
EXHIBIT I
NOTICE TO TENANTS
, 1997
RE: Notice of Change of Ownership of _________________
Property Address (City, State)
Dear _____________:
You are hereby notified as follows:
(1) That as of the date hereof, The Prudential Insurance Company of America
has transferred, sold, assigned, and conveyed all of its interest in and to
the above-described property, (the "Property") to MERIDIAN INDUSTRIAL TRUST,
INC. (the "New Owner").
(2) Future rental payments with respect to your lease premises at the
Property should be made to the New Owner in accordance with your Lease terms
at the following address:
Meridian Industrial Trust, Inc.
455 Market Street, 17th Floor
San Francisco, CA 94105
(3) Your security deposit in the amount of $_________ has been transferred
to the New Owner and as such the New Owner shall be responsible for holding
the same in accordance with the terms of your lease.
Sincerely,
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: ___________________________________
Bernard C. Buchholz, Vice President
<PAGE>
EXHIBIT J
NON-FOREIGN AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a transferee of a United
States real property interest must withhold tax if the transferor is a foreign
person. To inform the transferee that withholding of tax is not required upon
the disposition of a United States real property interest by THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a New Jersey corporation ("Prudential"), the
undersigned hereby certifies the following on behalf of Prudential:
1. Prudential is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations); and
2. Prudential's U.S. employer identification number is 22-1211670;
and
3. Prudential's office address is 751 Broad Street, Newark, New
Jersey, 07102-3777.
Prudential understands that this certification may be disclosed to the Internal
Revenue Service by transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.
The undersigned officer of Prudential declares that he has examined this
certification and to the best of his knowledge and belief it is true, correct
and complete, and he further declares that he has authority to sign this
document on behalf of Prudential.
Dated: _____________, 1997.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey corporation
By:_________________________________________
Name: Bernard C. Buchholz
Title: Vice President
<PAGE>
STATE OF ILLINOIS )
)
COUNTY OF COOK )
This instrument was acknowledged before me on ____________, 1997 by Bernard C.
Buchholz, Vice President of The Prudential Insurance Company of America, a New
Jersey corporation, on behalf of said corporation.
______________________________________
Notary Public, State of Illinois
MY COMMISSION EXPIRES:
<PAGE>
EXHIBIT K
SELLER'S ERISA REPRESENTATION
, 1997
MERIDIAN INDUSTRIAL TRUST, INC.
455 Market Street, 17th Floor
San Francisco, CA 94105
Re: Industrial Sale Package
Dear :
To satisfy compliance with the Employee Retirement Income Security Act of 1974,
as amended, The Prudential Insurance Company of America, a New Jersey
corporation ("Seller") hereby represents and warrants to MERIDIAN INDUSTRIAL
TRUST, INC. that Seller is a "fiduciary" and an "investment manger" of certain
pooled asset separate accounts as those terms are defined under the Employee
Retirement Income Security Act of 1974, as amended and is applicable to
regulations as issued by the Department of Labor and the Internal Revenue
Service ("ERISA"). Seller further represents :
1. The Property listed in Exhibits A-1, A-2 and A-11 through A-14 is not part
of Seller's pooled asset separate accounts which are subject to ERISA.
2. Seller holds the Property in Seller's General Account as part of Seller's
corporate investments managed for its own interest.
The Prudential Insurance Company
of America
By:___________________________
Bernard Buchholz, Vice President
<PAGE>
EXHIBIT L
BUYER'S ERISA REPRESENTATION
, 1997
Mr. Bernard C. Buchholz, Vice President
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
Prudential Plaza, Suite 1300
Chicago, Illinois 60601
Re: Industrial Sale Package
Dear Mr. Buchholz:
To satisfy compliance with the Employee Retirement Income Security Act of 1974,
as amended, MERIDIAN INDUSTRIAL TRUST, INC. , a Maryland ("Buyer") hereby
represents and warrants to The Prudential Insurance Company ("Seller") that:
Upon Buyer's acquisition of the Property, the Property shall not constitute
"plan assets" within the meaning of 29 C.F.R. Section 2510.3-101, because one or
more of the following circumstances is true:
Equity interest in Buyer are publicly offered securities, within the meaning of
20 C.F.R. Section 2510.3-101(b)(2); or
Less than twenty-five (25%) of all equity interests in Buyer are held by
"benefit plan investors" within the meaning of 29 C.F.R. Section
2510.3-101(f)(2); or
Buyer qualifies as an "operating company", "venture capital operating company",
or a "real estate operating company" within the meaning of 29 C.F.R. Section
2510.3-101 (c), (d) or (e).
Buyer is not a "governmental plan" within the meaning of Section 3(32) of ERISA
and the purchase of the Property by Buyer is not subject to state statutes
regulating investments of and fiduciary obligations with respect to governmental
plans.
MERIDIAN INDUSTRIAL TRUST, INC.
By:_________________________
Name:_______________________
Title:______________________
<PAGE>
EXHIBIT M
PENDING LITIGATION
NONE
<PAGE>
EXHIBIT N
NOTICE OF VIOLATIONS
NONE
THIS NOTICE IS NOT INTENDED TO BE A LISTING OF ALL VIOLATIONS RELATING TO THE
PROPERTY BUT RATHER A LISTING OF THOSE VIOLATIONS KNOWN TO OFFICERS OF SELLER
LOCATED IN CHICAGO, ILLINOIS.
<PAGE>
EXHIBIT O
LIST OF SERVICE CONTRACTS
NONE TO BE TRANSFERRED
<PAGE>
EXHIBIT P
DESIGNATED EMPLOYEES
THE NAME OF THE DESIGNATED EMPLOYEES IS UNKNOWN AT THIS TIME.
<PAGE>
EXHIBIT Q
LIST OF ENVIRONMENTAL REPORTS OR SURVEYS
<TABLE>
<CAPTION>
EXHIBIT ENVIRONMENTAL REPORTS
- ------- ----------------------
<S> <C>
A-1 EXCHANGE SERVICE CENTER Asbestos Survey Report (10/85)
A-2 HIGHLAND SERVICE CENTER Asbestos-Containing Materials Survey (10/91)
Phase I Environmental Assessment (10/91)
Phase II Environmental Assessment (12/91)
Hazardous Materials Survey included in Tree of
Life, Inc. d/b/a Gourmet Award Foods
Southwest tenant lease (2/95)
A-11 PINEMONT DISTRIBUTION Level I Environmental Assessment (1/90)
Environmental Assessment Follow-Up (3/92)
Asbestos Engineering & Hygiene Services Proposal
Revision #1 (6/92)
Project Summary Report for Asbestos Removal (8/92)
A-12 PERIMETER DISTRIBUTION Reconnaissance Environmental Assessment(4/88)
Level I Environmental Assessment (7/91) - DRAFT
Survey for Location of Asbestos-Containing
Materials - Final (1/92)
Environmental Surface & Subsurface Assessment
(2/92) - DRAFT
Disposal of Soil Cuttings & Purge Water Proposal
(3/93)
Phase II Subsurface Investigation (11/92)
Phase II Environmental Site Assessment (6/95)
A-13 BRITTMORE DISTRIBUTION Environmental Assessment (11/87)
A-14 PINE NORTH DISTRIBUTION Preliminary Summary of Findings: Environmental
Consultation (6/89) w/ Environmental Assessment
(5/89)
</TABLE>
THIS MAY NOT BE A LISTING OF ALL ENVIRONMENTAL REPORTS OR SURVEYS WHICH
SELLER MAY HAVE WHICH RELATE TO THE PROPERTY. DUE TO SOME OF SELLER'S FILES
BEING LOST, SELLER CANNOT REPRESENT THIS LIST IS COMPLETE.
<PAGE>
EXHIBIT R
AUDIT DOCUMENT LIST
1. COPIES OF PROPERTY OPERATING STATEMENTS AND ACCESS TO YEAR-TO-DATE
GENERAL LEDGERS (OR ACCESS TO BOOKS OF ORIGINAL ACCOUNTING RECORDS)
FOR THE YEAR ENDED DECEMBER 31, 1996 AND FOR THE PERIOD FROM JANUARY
1, 1997 TO THE CLOSING DATE.
2. COPIES OF PROPERTY RENT ROLLS FOR MARCH, AUGUST AND DECEMBER 1996,
JANUARY 1997 AND THE CALENDAR MONTH IMMEDIATELY PRECEDING THE MONTH IN
WHICH THE CLOSING OCCURS.
3. ACCESS TO LEASES FOR ALL TENANTS IN OCCUPANCY OF THE PROPERTY DURING
1996 AND 1997.
4. ACCESS TO BANK STATEMENTS AND CASH RECEIPTS DOCUMENTS (CHECK COPIES
AND DEPOSIT SLIPS) SUPPORTING RECORDED REVENUES FOR MARCH, AUGUST, AND
DECEMBER 1996, JANUARY 1997 AND THE CALENDAR MONTH IMMEDIATELY
PRECEDING THE MONTH IN WHICH THE CLOSING OCCURS.
5. ACCESS TO DETAIL UNPAID RENT AND OTHER CHARGES AS OF DECEMBER 31,
1996, AND MOST RECENT DATE AVAILABLE PRIOR TO THE CLOSING DATE, ALONG
WITH DOCUMENTATION SUPPORTING SUBSEQUENT COLLECTION EXPLANATIONS AND/OR
UNCOLLECTED BALANCES.
6. COPIES OF 1996 AND 1997 OPERATING EXPENSE PASS-THROUGH RECONCILIATION
STATEMENTS AND RELATED ADJUSTMENTS.
7. ACCESS TO INVOICES SUPPORTING OPERATING EXPENSES PAID BY TENANTS IN
1996 AND 1997.
8. COPIES OF REAL PROPERTY TAX BILLS FOR THE TAX YEAR ENDED DECEMBER 31,
1996 AND FOR THE PERIOD FROM JANUARY 1, 1997 TO THE CLOSING DATE.
9. SCHEDULE OF ALL TENANTS GRANTED FREE RENT INCLUDING AMOUNTS GRANTED
DURING 1996 AND 1997, TO THE EXTENT SUCH A SCHEDULE EXISTS.
BUYER RECOGNIZES THAT THESE RECORDS WILL NOT BE LOCATED IN THE SAME OFFICE BUT
ARE LIKELY TO BE SPREAD OVER A NUMBER OF OFFICES IN DIFFERENT STATES.
<PAGE>
FIRST AMENDMENT TO
PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT ("First
Amendment") is entered into as of July 7, 1997 by and between Meridian
Industrial Trust, Inc., a Maryland corporation ("Buyer"), and The Prudential
Insurance Company of America, a New Jersey corporation ("Seller").
RECITALS
A. Buyer and Seller entered into that certain Purchase and Sale
Agreement, dated as of May 29, 1997 (the "Agreement"), for the purchase and
sale of real property designated as "Industrial Package Sale - Texas
Properties" as more particularly described on Exhibit A to the Agreement,
together with certain personal property, lease interests and intangible
property, all as more particularly described in the Agreement.
B. Buyer and Seller now desire to modify the Agreement as provided
herein.
C. Capitalized terms in this First Amendment not defined herein
shall have the meanings ascribed to them in the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Buyer and Seller agree as follows:
1. DUE DILIGENCE PERIOD. The expiration date of the Due Diligence
Period is extended from July 7, 1997 to and including July 22, 1997. In
addition, the date "July 7, 1997" where it appears in Section 4.3 of the
Agreement is deleted and replaced with the phrase "the end of the Due Diligence
Period".
2. CLOSING DATE. Seller acknowledges that the Closing Date has been
extended until September 30, 1997 (I.E., the Option Closing Date) pursuant to
Election Notice duly given by Buyer.
3. CONFLICT IN TERMS. In the event of any conflict or inconsistency
between the terms and conditions of this First Amendment and the terms and
conditions of the Agreement, the terms and conditions of this First Amendment
shall govern and control the rights and obligations of the parties hereto.
4. EFFECT OF FIRST AMENDMENT. Except as expressly modified herein,
all terms and conditions of the Agreement remain unmodified and in full force
and effect.
5. COUNTERPARTS. This First Amendment may be executed in one or
more counterparts, each of which may be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument. This First
Amendment may be executed via telecopied signatures with original signatures to
follow.
IN WITNESS WHEREOF, Buyer and Seller have executed this First
Amendment as of the date first above written.
BUYER
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By: ______________________________
Its: ______________________________
SELLER
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New
Jersey corporation
By: ______________________________
Bernard C. Buchholz
Its: Vice President
<PAGE>
SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Second
Amendment") is entered into as of July 22, 1997 by and between Meridian
Industrial Trust, Inc., a Maryland corporation ("Buyer"), and The Prudential
Insurance Company of America, a New Jersey corporation ("Seller").
RECITALS
A. Buyer and Seller entered into that certain Purchase and Sale
Agreement dated as of May 29, 1997, and that certain First Amendment thereto
dated as of July 7, 1997 (the "First Amendment") (jointly, the "Agreement"), for
the purchase and sale of real property designated "Industrial Package Sale -
Texas Properties", as more particularly described on Exhibit A to the Agreement,
together with certain personal property, lease interests and intangible
property, all as more particularly described in the Agreement.
B. Buyer and Seller now desire to modify the Agreement as
provided herein.
C. Capitalized terms in this Second Amendment not defined
herein shall have the meanings ascribed to them in the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, Buyer and Seller agree as follows:
1. DUE DILIGENCE PERIOD. The expiration date of the Due
Diligence Period is extended from July 22, 1997 to and including August 5,
1997.
2. CONFLICT IN TERMS. In the event of any conflict or
inconsistency between the terms and conditions of this Second Amendment and
the terms and conditions of the Agreement, the terms and conditions of this
Second Amendment shall govern and control the rights and obligations of the
parties hereto.
3. EFFECT OF SECOND AMENDMENT. Except as expressly modified
herein, all terms and conditions of the Agreement remain unmodified and in
full force and effect.
4. COUNTERPARTS. This Second Amendment may be executed in
one or more counterparts, each of which may be deemed an original, and all of
which, when taken together, shall constitute one and the same instrument.
This Second Amendment may be executed via telecopied signatures with original
signatures to follow.
IN WITNESS WHEREOF, Buyer and Seller have executed this Second
Amendment as of the date first above written.
BUYER
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By: ______________________________
Robert A. Dobbin
Secretary
SELLER
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: ______________________________
Bernard C. Buchholz
Its: Vice President
<PAGE>
THIRD AMENDMENT TO
PURCHASE AND SALE AGREEMENT
THIS THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Third
Amendment") is entered into as of August 5, 1997 by and between Meridian
Industrial Trust, Inc., a Maryland corporation ("Buyer"), and The Prudential
Insurance Company of America, a New Jersey corporation ("Seller").
RECITALS
A. Buyer and Seller entered into that certain Purchase and Sale
Agreement dated as of May 29, 1997, that certain First Amendment thereto dated
as of July 7, 1997, and that certain Second Amendment thereto dated July 22,
1997 (collectively, the "Agreement"), for the purchase and sale of real property
designated "Industrial Package Sale - Texas Properties", as more particularly
described on Exhibit A to the Agreement, together with certain personal
property, lease interests and intangible property, all as more particularly
described in the Agreement.
B. Buyer and Seller now desire to modify the Agreement as
provided herein.
C. Capitalized terms in this Third Amendment not defined herein
shall have the meanings ascribed to them in the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, Buyer and Seller agree as follows:
1. DUE DILIGENCE PERIOD. The expiration date of the Due
Diligence Period is extended from August 5, 1997 to and including August 20,
1997.
2. CONFLICT IN TERMS. In the event of any conflict or
inconsistency between the terms and conditions of this Third Amendment and
the terms and conditions of the Agreement, the terms and conditions of this
Third Amendment shall govern and control the rights and obligations of the
parties hereto.
3. EFFECT OF THIRD AMENDMENT. Except as expressly modified
herein, all terms and conditions of the Agreement remain unmodified and in
full force and effect.
4. COUNTERPARTS. This Third Amendment may be executed in
one or more counterparts, each of which may be deemed an original, and all of
which, when taken together, shall constitute one and the same instrument.
This Third Amendment may be executed via telecopied signatures with original
signatures to follow.
IN WITNESS WHEREOF, Buyer and Seller have executed this Third
Amendment as of the date first above written.
BUYER
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By: ______________________________
Robert A. Dobbin
Its: Secretary
SELLER
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: ______________________________
Bernard C. Buchholz
Its: Vice President
<PAGE>
SUMMARY
PURCHASE AND SALE AGREEMENT FOR CEDARPOINTE (CALIFORNIA) PROPERTIES
The Purchase and Sale Agreement dated May 29, 1997, between the Company and
The Prudential Insurance Company of America covering the Cedarpointe
(California) properties as amended by the First Amendment thereto dated July
7, 1997, the Second Amendment thereto dated July 22, 1997, and the Third
Amendment thereto dated August 5, 1997, (the "Cedarpointe Agreement") is
substantially identical to the Purchase and Sale Agreement dated May 29, 1997
between the Company and The Prudential Insurance Company of America covering
Texas properties as amended by the First Amendment thereto dated July 7,
1997, the Second Amendment thereto dated July 22, 1997, and the Third
Amendment thereto dated August 5, 1997, which is filed herewith (the "Filed
Agreement"). Material differences between the Cedarpointe Agreement and the
Filed Agreement are set forth below.
- Description of Cedarpointe properties: see the attached Exhibit A
- Purchase price for Cedarpointe properties: $15,677,178
- Required deposit: $79,904
<PAGE>
EXHIBIT A
PRUDENTIAL OWNED INDUSTRIAL PROPERTY -CEDARPOINTE
PRUDENTIAL
PROPERTY # PROPERTY NAME LOCATION EXHIBIT
101007019 Cedarpointe Industrial Park Ontario, CA A-16*
* Attached
<PAGE>
EXHIBIT A-16
CEDARPOINTE INDUSTRIAL PARK
ONTARIO, CA
Parcels 2, 15, 16, 17 and 18 of parcel Map No. 11914, in the city of Ontario,
county of San Bernardino, state of California, as per plat recorded in Book
140 of parcel maps, Pages 30 through 33, inclusive, records of said county;
and amended by certificate of correction recorded December 27, 1990,
Instrument No. 90-506996, official records.
Also Parcel 14 and the southerly 114.00 feet of Parcel 13 of Parcel Map No.
11914, in the city of Ontario, county of San Bernardino, state of California,
as per plat recorded in Book 140 of parcel maps, Pages 30 through 33,
inclusive, records of said county, and amended by certificate of correction
recorded December 27, 1990, Instrument No. 90-506996, official records.
The above legal description for Parcel 14 and the southerly 114.00 feet of
Parcel 13 is pursuant to that certain certificate approving a lot line
adjustment, Certificate No. Ll91-03, recorded May 22, 1991, Instrument No.
91-174292, official records.
Excepting therefrom all coal, oil, gas, petroleum and other hydrocarbon
substances in and under the property, it being expressly understood and
agreed that the grantor, its successor and assigns, shall retain the
exclusive title and right to remove said substances; together with the sole
right to negotiate and conclude leases and agreements with respect to all
such substances under the property, and to use those portions of the property
which underlie a plane parallel to and 500.00 feet below the present surface
of the property for the purposes of prospecting for, developing and/or
extracting such substances from the property by means of wells drilled into
or through such portions of the property from drill sites located on other
property; it being further expressly understood and agreed that grantor, its
successors and assigns, shall have no right to enter upon the surface of the
property or to use the property or any portion thereof above the level of the
aforesaid 500.00 foot subterranean plane, as reserved by Lusk Ontario
Industrial Partners II, California Limited Partnership, by deed recorded
March 10, 1989, Instrument No. 89-086956, official records.
<PAGE>
SUMMARY
PURCHASE AND SALE AGREEMENT FOR 460 ELLIS ROAD (JACKSONVILLE) AND CENTERPORT
PROPERTIES
The Purchase and Sale Agreement dated May 29, 1997, between the Company and
The Prudential Insurance Company of America covering the 460 Ellis Road
(Jacksonville) and Centerport properties as amended by the First Amendment
thereto dated July 7, 1997, the Second Amendment thereto dated July 22, 1997,
and the Third Amendment thereto dated August 5, 1997, (the "Ellis/Centerport
Agreement") is substantially identical to the Purchase and Sale Agreement
dated May 29, 1997 between the Company and The Prudential Insurance Company
of America covering Texas properties as amended by the First Amendment
thereto dated July 7, 1997, the Second Amendment thereto dated July 22, 1997,
and the Third Amendment thereto dated August 5, 1997, which is filed herewith
(the "Filed Agreement"). Material differences between the Ellis/Centerport
Agreement and the Filed Agreement are set forth below.
- Description of 460 Ellis Road (Jacksonville) and Centerport properties:
see the attached Exhibit A
- Purchase price for 460 Ellis Road (Jacksonville) and Centerport
properties: $19,346,510
- Allocation of purchase price among the 460 Ellis Road (Jacksonville)
and Centerport properties: see the attached Exhibit B
- Required deposit: $98,606
<PAGE>
EXHIBIT A
PRUDENTIAL OWNED FLORIDA PROPERTY PACKAGE
PRUDENTIAL
PROPERTY # PROPERTY NAME LOCATION EXHIBIT
01131001 Centerport Building A Pompano Beach, FL A-20 *
01131002 Centerport Building B Pompano Beach, FL A-21 *
01131005 Centerport Building E Pompano Beach, FL A-22 *
01326000 460 and 500 North Ellis Jacksonville, FL A-27 *
* Attached
<PAGE>
EXHIBIT A-20
CENTERPORT BUILDING A
POMPANO BLEACH, FL
Land description: Buildings A & B
A portion of Parcel "A", Morningstar Lake parcels, according to the plat
thereof as recorded in Plat Book 144, Page 22 of the public records of
Broward County, Florida. More particularly described as follows:
Beginning at the easternmost northeast corner of said plat; thence
South 01(31'35" east, along the east line of said plat, 653.45 feet; thence
south 88^39'10" west 619.83 feet to the east line of northwest 8th Avenue;
thence north 01(17'56" west, along said east line, 407.41 feet; thence north
03(25'54" east 247.11 feet to the westerly extension of a north line of said
plat; thence north 88(40'22" east, along said westerly extension and said
north line, 596.86 feet to the point of beginning.
Said lands lying in the city of Pompano, Broward County, Florida. Containing
9.223 acres more of less.
<PAGE>
EXHIBIT A-21
CENTERPORT BUILDING B
POMPANO BEACH, FL
Land description: Buildings A & B
A portion of Parcel "A", Morningstar Lake parcels, according to the plat
thereof as recorded in Plat Book 144, Page 22 of the public records of
Broward County, Florida. More particularly described as follows:
Beginning at the easternmost northeast corner of said plat; thence
South 01(31'35" east, along the east line of said plat, 653.45 feet; thence
south 88^39'10" west 619.83 feet to the east line of northwest 8th Avenue;
thence north 01(17'56" west, along said east line, 407.41 feet; thence north
03(25'54" east 247.11 feet to the westerly extension of a north line of said
plat; thence north 88(40'22" east, along said westerly extension and said
north line, 596.86 feet to the point of beginning.
Said lands lying in the city of Pompano, Broward County, Florida. Containing
9.223 acres more of less.
<PAGE>
EXHIBIT A-22
CENTERPORT BUILDING E
POMPANO BEACH, FL
Land description: Building "E"
A portion of Parcels "A" & "B", Morningstar Lake parcels, according to the
plat thereof as recorded in Plat Book 144, Page 22 of the public records of
Broward County, Florida. More particularly described as follows.
Commencing at the westernmost northwest corner of said plat; thence south
10(48'34" west, along the west line of said plat, 661.62 feet to the point of
beginning, said point lying on the south right-of-way line of N.W. 33rd
Street; thence north 88(39'10" east, along said south right-of-way line
381.28 feet; thence south 46(19'23" east along said south right-of-way line
42.44 feet to the west right-of-way line of N.W. 8th Avenue; thence south
01(17'56" east along said west right-of-way line 264.97 feet; thence south
88(39'10" west, 474.60 feet to the west line of said plat; thence north
10(48'34" east, along said west line, 301.77 feet to the point of beginning.
Said lands lying in the city of Pompano Broward County, Florida. Containing
2.989 acres more of less.
<PAGE>
EXHIBIT A-27
460 AND 500 NORTH ELLIS
JACKSONVILLE, FL
Phase I: A part of the northwest 1/4 of the northwest 1/4, Section 18,
Township 2 South, Range 26 East, Jacksonville, Duval County, Florida, and all
being more particularly described as follows:
Commence at the intersection of the centerline of Ellis Road, an original 60
foot right of way as described in O.R. Volume 425, Page 417, of the current
public records of said county, with the centerline of Broadway Avenue (a 60
foot right of way as now established), said point being the southeasterly
corner of said northwest 1/4 of the northwest 1/4 of Section 18, Township 2
South, Range 26 East; thence south 88 degrees 25 minutes 10 seconds west
along the westerly prolongation of the centerline of Broadway Avenue and the
southerly line of said northwest 1/4 of the northwest 1/4, a distance of
40.03 feet to the present westerly right of way line of Ellis Road and to the
point of beginning; thence south 89 degrees 26 minutes 50 seconds west,
1245.83 feet, to a point on the westerly line of that certain 20 foot
perpetual right of way and easement for drainage, recorded in O.R. Volume
1969, Page 581 and Page 584 of the current public records of said county;
thence north 00 degrees 45 minutes 10 seconds west, along last said line
377.44 feet; thence north 88 degrees 25 minutes 10 seconds east, 1254.39
feet; to a point on the aforementioned westerly right of way line of Ellis
Road; thence south 00 degrees 27 minutes 20 seconds west, along last said
line 400.00 feet to the point of beginning.
Phase II: A part of the northwest 1/4 of the northwest 1/4, and a part of
the southwest 1/4 of the northwest 1/4 of Section 18, Township 2 South, Range
26 East, Jacksonville, Duval County, Florida, and all being more particularly
described as follows:
Commence at the intersection of the centerline of Ellis Road, an original 60
foot right of way described in O.R. Volume 425, Page 417, of the current
public records of said county, with the centerline of Broadway Avenue (a 60
foot right of way as now established), said point being the southeasterly
corner of said northwest 1/4 of the northwest 1/4 of Section 18, Township 2
South, Range 26 East; thence south 88 degrees 25 minutes 10 seconds west,
along the westerly prolongation of the centerline of Broadway Avenue and the
southerly line of said northwest 1/4 of the northwest 1/4, a distance of
40.03 feet to the present westerly right of way line of Ellis Road and to the
point of beginning; thence south 00 degrees 04 minutes 04 seconds east, along
said westerly right of way line of Ellis Road, a distance of 275.63 feet;
thence south 89 degrees 26 minutes 50 seconds west, 831.58 feet to a point
lying in the easterly line of that certain 80 foot D.O.T. drainage easement
recorded in O.R. Volume 2841, Page 814, and O.R. Volume 2831, Page 1026, of
the current public records of said county; run thence south 00 degrees 31
minutes 37 seconds east, public records of said county; run thence south 00
degrees 31 minutes 37 seconds east, along said easterly line of the
aforedescribed easement, a distance of 341.83 feet; run thence south 89
degrees 26 minutes 50 seconds west, a distance of 80.00 feet to a point lying
on the westerly line of the aforedescribed 80 foot drainage easement, said
point also being the intersection with a curve concave northeasterly, having
a radius of 385.28 feet and a central angle of 64 degrees 48 minutes 00
seconds; run thence along and around the arc of said curve, an arc
<PAGE>
length of 435.74 feet, said arc being subtended by a chord having a bearing
of north 49 degrees 16 minutes 28 seconds west, and a distance of 412.89 feet
to a point of intersection with the easterly line of that certain 20 foot
perpetual right of way and easement for drainage recorded in O.R. Volume
1969, Page 581, and Page 584, of the current public records of said county;
run thence south 89 degrees 14 minutes 51 seconds west, a distance of 20.00
feet to the westerly line of the aforementioned 20 foot perpetual right of
way and easement for drainage; run thence north 00 degrees 45 minutes 10
seconds west, along said westerly line, a distance of 345.14 feet; thence
north 89 degrees 26 minutes 50 seconds east, 1245.83 feet to the point of
beginning.
Phase I and Phase II described together as follows:
A part of the northwest 1/4 of the northwest 1/4, and a portion of the
southwest 1/4 of the northwest 1/4 of Section 18, Township 2 South, Range 26
East, Jacksonville, Duval County, Florida, and all being more particularly
described as follows:
Commence at the intersection of the centerline of Ellis Road, an original 60
foot right of way described in O.R. Volume 425, Page 417, of the current
public records of said county, with the centerline of Broadway Avenue (a 60
foot right of way as now established), said point being the southeasterly
corner of said northwest 1/4 of the northwest 1/4 of Section 18, Township 2
South, Range 26 East; thence south 88 degrees 25 minutes 10 seconds west,
along the westerly prolongation of the centerline of Broadway Avenue and the
southerly line of said northwest 1/4 of the northwest 1/4, a distance of
40.03 feet to the present westerly right of way line of Ellis Road and to the
point of beginning; thence south 00 degrees 04 minutes 04 seconds east,
275.63 feet to a point; thence south 89 degrees 26 minutes 50 seconds west
831.58 feet to a point lying on the easterly line of that certain 80 foot
D.O.T. drainage easement recorded in O.R. Volume 2841, Page 814, and O.R.
Volume 2831, Page 1026, of the current public records of said county; run
thence south 00 degrees 31 minutes 37 seconds east, along said easterly line
of the aforedescribed easement, a distance of 341.83 feet; run thence south
89 degrees 26 minutes 50 seconds west, a distance of 80 feet to a point lying
on the westerly line of the aforedescribed 80 foot drainage easement, said
point also being the intersection with a curve concave northeasterly, having
a radius of 385.28 feet and a central angle of 64 degrees 48 minutes 00
seconds; run thence along and around a curve of said arc, an arc length of
435.74 feet, said arc being subtended by a chord having a bearing of north 49
degrees 16 minutes 28 seconds west, and a distance of 412.89 feet to a point
of intersection with the easterly line of that certain 20 foot perpetual
right of way and easement for drainage recorded in O.R. Volume 1969, Page
581, and Page 584, of the current public records of said county; run thence
south 89 degrees 14 minutes 51 seconds west, a distance of 20 feet to the
westerly line of the aforementioned 20 foot perpetual right of way and
easement for drainage; run thence north 00 degrees 45 minutes 10 seconds west
along said westerly line, a distance of 722.58 feet; thence north 88 degrees
25 minutes 10 seconds east, 1254.39 feet to a point on the aforementioned
westerly right of way line of Ellis Road; thence south 00 degrees 27 minutes
20 seconds west, along said line 400 feet to the point of beginning.
<PAGE>
EXHIBIT B
ALLOCATION OF PURCHASE PRICE
PROJECT DESCRIBED ALLOCATED PRICE
A-20 Centerport Building A $3,556,490
A-21 Centerport Building B $3,369,890
A-22 Centerport Building E $4,397,000
A-27 460 AND 500 N. ELLIS 48,023,130
<PAGE>
SUMMARY
PURCHASE AND SALE AGREEMENT FOR MICHIGAN, LOUISIANA, AND VIRGINIA PROPERTIES
The Purchase and Sale Agreement dated May 29, 1997, between the Company and
The Prudential Insurance Company of America covering the Michigan, Louisiana,
and Virginia properties as amended by the First Amendment thereto dated July
7, 1997, the Second Amendment thereto dated July 22, 1997, and the Third
Amendment thereto dated August 5, 1997, (the "Mich./La./Va. Agreement") is
substantially identical to the Purchase and Sale Agreement dated May 29, 1997
between the Company and The Prudential Insurance Company of America covering
Texas properties as amended by the First Amendment thereto dated July 7,
1997, the Second Amendment thereto dated July 22, 1997, and the Third
Amendment thereto dated August 5, 1997, which is filed herewith (the "Filed
Agreement"). Material differences between the Mich./La./Va. Agreement and the
Filed Agreement are set forth below.
- Description of Michigan, Louisiana, and Virginia properties: see the
attached Exhibit A
- Purchase price for the Michigan, Louisiana, and Virginia properties:
$58,974,193
- Allocation of purchase price among the Michigan, Louisiana, and
Virginia properties: see the attached Exhibit B
- Required deposit: $300,582
<PAGE>
EXHIBIT A
PRUDENTIAL MICHIGAN / OTHER STATES INDUSTRIAL PROPERTY PACKAGE
PRUDENTIAL
PROPERTY # PROPERTY NAME LOCATION EXHIBIT
00600000 Southfield Commercial Center Southfield, MI A-3 *
01152006 Huron Comm. Center-Lot 6(16) New Boston, MI A-4 *
01152026 Huron Comm. Center-Lot 26(11) New Boston, MI A-5 *
01152027 Huron Comm. Center-Lot 27(8) New Boston, MI A-6 *
21140001 Westhills Commerce Center Farmington Hills, MI A-9 *
21140002 H&J Industrial Farmington Hills, MI A-10 *
00587000 Parkway Center New Orleans, LA A-28 *
00802000 Cypress Point Business Center New Orleans, LA A-29 *
00910022 Riverbend Office/Service Center St. Rose, LA A-30 *
00910023 Riverbend Warehouse #2 St. Rose, LA A-31 *
00930000 Riverbend Warehouse #1 St. Rose, LA A-32 *
56510001 North Run III Richmond, VA A-33 *
56510001 North Run IV Richmond, VA A-34 *
* Attached
<PAGE>
EXHIBIT A-3
SOUTHFIELD COMMERCIAL CENTER
SOUTHFIELD, MI
Lots 41 through 44 inclusive, and Lots 46 through 48 inclusive, Iindustrial
Ppark Ssubdivision, according to the recorded plat thereof, as recorded in
Liber 138, of Plats, Pages 24 through 26, Oakland County records.
<PAGE>
EXHIBIT A-4
HURON COMMERCE CENTER
Future Plat Lot 4
17900 Woodland Drive
PARCEL C (HURON COMMERCE)
A PARCEL OF LAND LOCATED IN PART OF THE SW 1/4 OF THE NE 1/4 AND THE SE 1/4
OF THE NW 1/4, AND THE NE 1/4 OF THE SW 1/4, AND THE NW 1/4 OF THE SE 1/4 OF
SECTION 5, T.4S., R.9E., HURON TOWNSHIP, WAYNE COUNTY, MICHIGAN AND BEING
MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE N. 1/4 CORNER OF SECTION 5, T.4S., R.9E., THENCE
N88(28'31"E 464.28 FEET ALONG THE NORTH LINE OF SAID SECTION 5 AND THE
CENTERLINE OF PENNSYLVANIA ROAD (66 FT. WIDE) TO THE INTERSECTION OF THE
CENTERLINES OF PENNSYLVANIA ROAD AND PROPOSED COMMERCE DRIVE EASEMENT(86 FT.
WIDE) TO THE SOUTH; THENCE S01(20'43"E 554.75 FEET ALONG THE CENTERLINE OF
SAID COMMERCE DRIVE TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE LEFT
AND THE CENTERLINE OF SAID COMMERCE DRIVE AN ARC DISTANCE OF 794.81 FEET
(SAID CURVE HAVING A RADIUS OF 1060.00 FEET, A CENTRAL ANGLE OF 42(57'42", A
CHORD BEARING OF S22(49'34"E AND A CHORD DISTANCE OF 776.32 FEET), TO THE
INTERSECTION OF THE CENTERLINES OF COMMERCE DRIVE AND PROPOSED WOODLAND DRIVE
EASEMENT (86 FT. WIDE); THENCE S43(41'32"W 165.96 FEET ALONG THE CENTERLINE
OF PROPOSED WOODLAND DRIVE (86 FT. WIDE) TO A POINT OF CURVATURE; THENCE
ALONG A CURVE TO THE LEFT AND SAID CENTERLINE AN ARC DISTANCE OF 550.23 FEET
(SAID CURVE HAVING A RADIUS OF 700.00 FEET, A CENTRAL ANGLE OF 45(02'15", A
CHORD BEARING OF S21(10'24"W AND A CHORD DISTANCE OF 536.18 FEET); THENCE
S01(20'43"E 148.28 FEET; THENCE S88(39'17"W 43.00 FEET TO THE POINT OF
BEGINNING FOR THIS DESCRIPTION; THENCE S01(20'43"E 620.00 FEET ALONG THE
WESTERLY LINE OF WOODLAND DRIVE EASEMENT (86 FT. WIDE); THENCE S88(39'17"W
418.59 FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF THE CSX RAILROAD
(FORMERLY KNOWN AS THE CHESAPEAKE AND OHIO RAILROAD); THENCE N01(36'45"W
30.53 FEET ALONG SAID EAST RIGHT-OF-WAY LINE; THENCE N01(26'01"W 589.47 FEET;
THENCE N88(39'17"E 419.64 FEET TO THE POINT OF BEGINNING. CONTAINING 5.9512
ACRES AND SUBJECT TO THE ROAD EASEMENTS FOR HURON COMMERCE FOR INGRESS AND
EGRESS AND MAINTENANCE OF PUBLIC UTILITIES AND THE HURON COMMERCE ELECTRIC
EASEMENT AND SUBJECT TO THE RIGHTS AND RESTRICTIONS OF RECORD OR OTHERWISE.
<PAGE>
EXHIBIT A-5
HURON COMMERCE CENTER
Future Lot 25
17757 Woodland Drive
PARCEL B (HURON COMMERCE)
A PARCEL OF LAND LOCATED IN PART OF THE SW 1/2 OF THE NE 1/4 OF SECTION 5,
T.4S., R.9E., HURON TOWNSHIP, WAYNE COUNTY, MICHIGAN AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE N. 1/4 CORNER OF SECTION 5, T.4S., R.9E., THENCE
N88(28'31"E. 464.28 FEET ALONG THE NORTH LINE OF SAID SECTION 5 AND THE
CENTERLINE OF PENNSYLVANIA ROAD (66 FT. WIDE) TO THE INTERSECTION OF THE
CENTERLINES OF PENNSYLVANIA ROAD AND PROPOSED COMMERCE DRIVE EASEMENT (86 FT.
WIDE) TO THE SOUTH; THENCE S01(20'43"E. 554.75 FEET ALONG THE CENTERLINE OF
SAID COMMERCE DRIVE TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE LEFT
AND THE CENTERLINE OF SAID COMMERCE DRIVE AN ARC DISTANCE OF 794.81 FEET
(SAID CURVE HAVING A RADIUS OF 1060.00 FEET, A CENTRAL ANGLE OF 42(57'42", A
CHORD BEARING OF S.22(49'34"E. AND A CHORD DISTANCE OF 776.32 FEET), TO THE
INTERSECTION OF THE CENTERLINES OF COMMERCE DRIVE AND PROPOSED WOODLAND DRIVE
EASEMENT (86 FT. WIDE); AND THENCE S.43(41'32"W 165.96 FEET ALONG THE
CENTERLINE OF PROPOSED WOODLAND DRIVE TO A POINT OF CURVATURE; THENCE ALONG A
CURVE TO THE LEFT AND SAID CENTERLINE AN ARC DISTANCE OF 550.23 FEET (SAID
CURVE HAVING A RADIUS OF 700.00 FEET, A CENTRAL ANGLE OF 45(02'15", A CHORD
BEARING OF S21(10'24"W AND A CHORD DISTANCE OF 536.18 FEET); THENCE
N88(39'17"E 43.00 FEET TO THE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE
S01(20'43"E 373.34 FEET ALONG THE WESTERLY LINE OF PROPOSED WOODLAND DRIVE;
THENCE N88(39'17"E 365.00 FEET; THENCE N01(20'43"W 505.00 FEET TO THE
SOUTHEASTERLY CORNER OF PARCEL "A"; THENCE S88(39'17"W 351.67 FEET ALONG THE
SOUTHERLY LINE OF PARCEL "A" TO A POINT ON THE EASTERLY LINE OF WOODLAND
DRIVE; THENCE ALONG A CURVE TO THE LEFT AND THE EASTERLY LINE OF SAID
WOODLAND DRIVE AN ARC DISTANCE OF 132.56 (SAID CURVE HAVING A RADIUS OF
657.00 FEET, A CENTRAL ANGLE OF 11(33'38", A CHORD BEARING OF S04(26'02"W AND
A CHORD DISTANCE OF 132.34 FEET TO THE POINT OF BEGINNING. CONTAINING 4.2181
ACRES AND SUBJECT TO THE ROAD EASEMENTS FOR HURON COMMERCE FOR INGRESS AND
EGRESS AND MAINTENANCE OF PUBLIC UTILITIES AND THE HURON COMMERCE ELECTRIC
EASEMENT AND SUBJECT TO THE RIGHTS AND RESTRICTIONS OF RECORD OR OTHERWISE.
<PAGE>
EXHIBIT A-6
HURON COMMERCE CENTER
Future Lot 26
17608 Commerce Drive
PARCEL A (HURON COMMERCE)
A PARCEL OF LAND LOCATED IN PART OF THE SW 1/4 OF THE NE 1/4 OF SECTION 5,
T.4S., R.9E., HURON TOWNSHIP, WAYNE COUNTY, MICHIGAN AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE N 1/4 CORNER OF SECTION 5, T.4S., R.9E., THENCE N88(28'31"E
464.28 FEET ALONG THE NORTH LINE OF SAID SECTION 5 AND THE CENTERLINE OF
PENNSYLVANIA ROAD (66 FEET WIDE) TO THE INTERSECTION OF THE CENTERLINES OF
PENNSYLVANIA ROAD AND PROPOSED COMMERCE DRIVE EASEMENT (86 FT. WIDE) TO THE
SOUTH; THENCE S01(20'43"E 554.75 FEET ALONG THE CENTERLINE OF SAID COMMERCE
DRIVE TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE LEFT AND THE
CENTERLINE OF SAID COMMERCE DRIVE AN ARC DISTANCE OF 831.83 FEET (SAID CURVE
HAVING A RADIUS OF 1060.00 FEET, A CENTRAL ANGLE OF 44(57'45", A CHORD
BEARING OF S23(49'35"E AND A CHORD DISTANCE OF 810.65 FEET); THENCE
S46(18'28"E 5.99 FEET ALONG THE CENTERLINE OF SAID COMMERCE DRIVE (86 FT.
WIDE) TO THE BEGINNING OF THE CENTERLINE OF PROPOSED COMMERCE DRIVE (60 FT.
WIDE); THENCE S43(41'32"W 30.00 FEET TO THE INTERSECTION OF THE EASTERLY LINE
OF PROPOSED WOODLAND DRIVE EASEMENT (86 FT. WIDE) AND THE SOUTHERLY LINE OF
COMMERCE DRIVE (60 FT. WIDE) BEING THE POINT OF BEGINNING OF THIS
DESCRIPTION; THENCE S46(18'28"E 357.50 FEET ALONG SAID SOUTHERLY LINE OF
COMMERCE DRIVE; THENCE S 43(41'32"W 248.88 FEET TO THE NORTHEASTERLY CORNER
OF PARCEL "B"; THENCE S88(39'17"W 351.67 FEET ALONG THE NORTH LINE OF PARCEL
"B" TO A POINT ON THE EASTERLY LINE OF THE WOODLAND DRIVE (86 FT. WIDE);
THENCE ALONG A CURVE TO THE RIGHT ALSO BEING THE EASTERLY LINE OF WOODLAND
DRIVE, AN ARC DISTANCE OF 383.87 FEET (SAID CURVE HAVING A RADIUS OF 657.00
FEET, A CENTRAL ANGLE OF 33(28'37", A CHORD BEARING OF N26(57'13"E AND A
CHORD DISTANCE OF 378.44 FEET) TO A POINT OF TANGENCY; THENCE N43(41'32"E
135.32 FEET TO THE POINT OF BEGINNING. CONTAINING 3.0836 ACRES AND SUBJECT
TO THE ROAD EASEMENTS FOR HURON COMMERCE FOR INGRESS AND EGRESS AND
MAINTENANCE OF PUBLIC UTILITIES AND THE HURON COMMERCE ELECTRIC EASEMENT AND
SUBJECT TO THE RIGHTS AND RESTRICTIONS OF RECORD OR OTHERWISE.
<PAGE>
ROAD EASEMENT DESCRIPTIONS (HURON COMMERCE)
A PARCEL OF LAND LOCATED IN PART OF THE E 1/2 OF SECTION 5, T.4S., R.9E.,
HURON TOWNSHIP, WAYNE COUNTY, MICHIGAN FOR THE PURPOSES OF INGRESS AND EGRESS
STORM WATER DRAINAGE, AND THE MAINTENANCE OF PUBLIC UTILITIES AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE N 1/4 CORNER OF SECTION 5, T.4S., R.9E., THENCE N88(28'31"E
464.28 FEET ALONG THE CENTERLINE OF PENNSYLVANIA ROAD (CURRENTLY 66 FEET
WIDE) AND THE NORTH LINE OF SAID SECTION 5; THENCE S01(20'43"E 33.00 FEET TO
A POINT "A1" AND THE POINT OF BEGINNING OF THE CENTERLINE OF COMMERCE DRIVE
EASEMENT (PROPOSED TO BE 86 FEET WIDE); THENCE ALONG SAID CENTERLINE OF
PROPOSED COMMERCE DRIVE THE FOLLOWING 4 COURSES AND DISTANCES: 1) S01(20'43"E
521.75 FEET TO A POINT OF CURVATURE; 2) THENCE ALONG A CURVE TO THE LEFT AN
ARC DISTANCE OF 794.81 FEET TO A POINT "B1" (SAID CURVE HAVING A RADIUS OF
1060.00 FEET, A CENTRAL ANGLE OF 42(57'42", A CHORD BEARING OF S22(49'34"E,
AND A CHORD DISTANCE OF 776.32 FEET); 3) THENCE CONTINUING ALONG A CURVE TO
THE LEFT AN ARC DISTANCE OF 37.02 FEET TO A POINT OF TANGENCY (SAID CURVE
HAVING A RADIUS OF 1060.00 FEET, A CENTRAL ANGLE OF 02(00'03", A CHORD
BEARING OF S45(18'20"E, AND A CHORD DISTANCE OF 37.01 FEET); 4) THENCE
S46(18'28"E 5.99 FEET TO THE END OF PROPOSED COMMERCE DRIVE AS AN 86 FOOT
WIDE EASEMENT AND THE BEGINNING OF SAID COMMERCE DRIVE AS A 60 FT. EASEMENT;
THENCE CONTINUING ALONG THE CENTERLINE OF SAID COMMERCE DRIVE AS A 60 FOOT
EASEMENT THE FOLLOWING COURSES AND DISTANCES: 1) S46(18'28"E 470.92 FEET TO A
POINT OF CURVATURE; 2) THENCE ALONG A CURVE TO THE RIGHT AN ARC DISTANCE OF
708.21 FEET (SAID CURVE HAVING A RADIUS OF 575.00 FEET, A CENTRAL ANGLE OF
70(34'10", A CHORD BEARING OF S11(01'23"E, AND A CHORD DISTANCE OF 664.28
FEET); 3) THENCE S24(15'42"W 190.74 FEET TO A POINT OF CURVATURE; 4) THENCE
ALONG A CURVE TO THE LEFT AN ARC DISTANCE OF 187.60 FEET (SAID CURVE HAVING A
RADIUS OF 475.00 FEET, A CENTRAL ANGLE OF 22(37'45", A CHORD BEARING OF
S12(56'51"W, AND A CHORD DISTANCE OF 186.39 FEET); 5) THENCE S01(37'56"W
799.17 FEET TO A POINT OF CURVATURE; 6) THENCE ALONG A CURVE TO THE RIGHT AN
ARC DISTANCE OF 381.81 FEET (SAID CURVE HAVING A RADIUS OF 800.00 FEET, A
CENTRAL ANGLE OF 27(20'42", A CHORD BEARING OF S 15(18'19"W, AND A CHORD
DISTANCE OF 378.19 FEET); 7) THENCE S 28(58'38"W 150.38 FEET TO A POINT OF
CURVATURE;
<PAGE>
ROAD EASEMENT DESCRIPTIONS (HURON COMMERCE)PAGE 2
8) THENCE ALONG A CURVE TO THE RIGHT AN ARC DISTANCE OF 273.34 FEET (SAID
CURVE HAVING A RADIUS OF 805.00 FEET, A CENTRAL ANGLE OF 19(27'17", A CHORD
BEARING OF S38(42'17"W, AND A CHORD DISTANCE OF 272.03 FEET); 9) THENCE
S48(25'56"W 81.71 FEET TO A POINT OF CURVATURE; 10) THENCE ALONG A CURVE TO
THE RIGHT AN ARC DISTANCE OF 264.07 FEET (SAID CURVE HAVING A RADIUS OF
375.00 FEET, A CENTRAL ANGLE OF 40(20'48", A CHORD BEARING OF S68(36'17"W,
AND A CHORD DISTANCE OF 258.65 FEET); 11) THENCE S88(46'44"W 63.66 FEET TO
THE POINT OF ENDING OF THE CENTERLINE OF COMMERCE DRIVE EASEMENT PROPOSED TO
BE 60 FEET WIDE, SAID POINT OF ENDING ALSO BEING ON THE EAST LINE OF WOODLAND
DRIVE (PROPOSED TO BE 86 FEET WIDE) AND DESCRIBED AS FOLLOWS:
COMMENCING AT POINT "B1"; THENCE S43(41'32"W 43.00 FEET TO THE POINT OF
BEGINNING OF THE CENTERLINE OF WOODLAND DRIVE EASEMENT (PROPOSED TO BE 86
FEET WIDE) SAID POINT OF BEGINNING ALSO BEING ON THE SOUTHWESTERLY LINE OF
SAID COMMERCE DRIVE (PROPOSED TO BE 86 FEET WIDE); THENCE ALONG SAID
CENTERLINE OF WOODLAND DRIVE THE FOLLOWING COURSES AND DISTANCES: 1)
S43(41'32"W 122.96 FEET TO A POINT OF CURVATURE; 2) THENCE ALONG A CURVE TO
THE LEFT AN ARC DISTANCE OF 550.24 FEET (SAID CURVE HAVING A RADIUS OF 700.00
FEET, A CENTRAL ANGLE OF 45(02'15", A CHORD BEARING OF S21(10'24"W, AND A
CHORD DISTANCE OF 536.18 FEET); 3) THENCE S01(20'43"E 1369.52 FEET TO A POINT
OF CURVATURE; 4) THENCE ALONG A CURVE TO THE RIGHT AN ARC DISTANCE OF 200.68
FEET (SAID CURVE HAVING A RADIUS OF 525.00 FEET, A CENTRAL ANGLE OF
21(54'06", A CHORD BEARING OF S09(36'15"W, AND A CHORD DISTANCE OF 199.46
FEET); 5) THENCE S20(33'23"W 180.57 FEET TO A POINT OF CURVATURE; 6) THENCE
ALONG A CURVE TO THE LEFT AN ARC DISTANCE OF 199.55 FEET (SAID CURVE HAVING A
RADIUS OF 525.00 FEET; A CENTRAL ANGLE OF 21(46'39", A CHORD BEARING OF S
09(40'04"W, AND A CHORD DISTANCE OF 198.35 FEET); 7) THENCE S01(13'16"E
501.08 FEET TO A POINT "C1", SAID POINT BEING ON THE CENTERLINE OF PROPOSED
WOODLAND DRIVE (86 FT. WIDE).
ALSO BEGINNING FROM POINT "C1"; THENCE N88(46'44"E 45.37 FEET TO THE
INTERSECTION OF THE EAST LINE OF PROPOSED WOODLAND DRIVE EASEMENT (WIDTH NOW
VARIES) AND THE SOUTH LINE OF COMMERCE DRIVE EASEMENT (60 FT. WIDE); THENCE
S01(17'16"E 870.08 FEET ALONG SAID EAST LINE OF W00DLAND DRIVE TO THE NORTH
RIGHT-OF-WAY LINE OF SIBLEY ROAD (1/2 WIDTH 75 FT. WIDE); THENCE S88(47'37"W
114.38 FEET ALONG SAID NORTH LINE OF SIBLEY ROAD TO THE WEST LINE OF WOODLAND
DRIVE (WIDTH VARIES); THENCE THE FOLLOWING COURSES AND DISTANCES ALONG THE
WEST LINE OF WOODLAND DRIVE: 1) N01(13'16"W 113.81 FEET; 2) N09(42'07"E
131.93 FEET; 3) N01(13'16"W 626.69 FEET; THENCE N88(46'44"E 43.00 FEET TO
POINT C1.
<PAGE>
ROAD EASEMENT DESCRIPTIONS (HURON COMMERCE)PAGE 3
ALSO COMMENCING AT POINT "A1"; THENCE N88(28'31"E 43.00 FEET ALONG THE SOUTH
RIGHT-OF-WAY LINE OF PENNSYLVANIA ROAD (CURRENTLY 66 FEET WIDE) TO THE POINT
OF BEGINNING OF A BOULEVARD SECTION OF PROPOSED COMMERCE DRIVE EASEMENT;
THENCE CONTINUING N88(28'31"E 1.26 FEET ALONG SAID NORTH LINE OF PENNSYLVANIA
ROAD TO A POINT ON THE MICHIGAN DEPARTMENT OF TRANSPORTATION RIGHT-OF-WAY;
THENCE S01(31'30"E 17.00 FEET; THENCE ALONG THE SOUTH LINE OF THE MDOT 50
FOOT RIGHT-OF-WAY N88(28'31"E 22.69 FEET TO THE EAST LINE OF THE BOULEVARD
SECTION OF THE PROPOSED COMMERCE DRIVE EASEMENT; THENCE ALONG THE EAST LINE
OF SAID BOULEVARD THE FOLLOWING TWO COURSES: 1) S01(20'43"E 84.19 FEET; 2)
S09(57'53"W 122.37 FEET TO THE EAST LINE OF COMMERCE DRIVE EASEMENT (86 FEET
WIDE); THENCE N01(20'43"W 221.11 FEET TO THE POINT OF BEGINNING OF THIS
SECTION OF COMMERCE DRIVE BOULEVARD.
<PAGE>
EXHIBIT A-9
WESTHILLS COMMERCE CENTER
FARMINGTON HILLS, MI
A part of the southeast 1/4 of Section 19, Town 1 North, Range 9 East, city
of Farmington Hills, Oakland County, Michigan, more particularly described as
follows:
Commencing at the east 1/4 corner of said Section 19, Town 1 North, Range 9
East; thence due south along the east section line, 403.06 feet to the point
of beginning; thence continuing due south along said east section line,
401.10 feet; thence south 89 degrees 42 minutes 37 seconds west, 432.16 feet;
thence north 0 degrees 08 minutes 00 seconds east, 401.10 feet; thence north
89 degrees 42 minutes 40 seconds east, 431.62 feet to the point of beginning,
except the east 60 feet for road purposes.
<PAGE>
EXHIBIT A-10
H&J INDUSTRIAL
FARMINGTON HILLS, MI
Lot 39 and that part of Lot 40, Farmington Freeway industrial park No. 3, as
recorded in Liber 127 of Plats, Pages 8, 9 and 10, Oakland County records,
described as:
Beginning at the northeast corner of said Lot 40; thence south 72 degrees 31
minutes 00 seconds west, 126.06 feet; thence south 20 degrees 48 minutes 43
seconds east, 29.37 feet to a point on the north right-of-way of Research
Drive (70 feet wide); thence north 69 degrees 11 minutes 17 seconds east
along said right-of-way, 52.40 feet; thence continuing along said
right-of-way northeasterly on a curve to the left, 77.78 feet to the point of
beginning.
<PAGE>
EXHIBIT A-28
PARKWAY CENTER
NEW ORLEANS, LA
LOT 15, PARCEL 1, ELMWOOD INDUSTRIAL PARK
A CERTAIN PIECE OR PORTION OF GROUND, together with all the buildings and
improvements thereon, situated in the Parish of Jefferson, State of
Louisiana, designated as Lot 15 of Parcel 1, Elmwood Industrial Park, on a
plan of subdivision by J. J. Krebs & Sons, Inc., dated August 28, 1973,
approved by the Jefferson Parish Council on September 27, 1973, by Ordinance
No. 11367, registered in COB 801, folio 825, and according to which plan said
Parcel 1 is bounded by Pepsi Street, Elmwood Parkway (formerly Wholesalers
Parkway), Edwards Avenue, Commerce Point and Jefferson Highway and Lot 15 is
more particularly described as follows:
Begin at the intersection of the southerly right of way line of Pepsi Street
and the westerly right of way line of Elmwood Parkway, the point of
beginning. Measure thence from the point of beginning along said westerly
line S18(37'56"E a distance of 275.05'; thence S41(12'39"W a distance of
655.52'; thence S41(54'49"W a distance of 31.91'; thence N34(07'04"E a
distance of 58.57'; thence in a northerly direction along the arc of a curve
to the left having a radius of 440.75' an arc length of 405.78', a chord of
N07(44'34"E a chord distance of 391.60'; thence N18(37'56"W a distance of
236.40'to a point on the southerly right of way line of Pepsi Street; thence
along said southerly line N71(44'19"E a distance of 374.00' to a point on the
westerly right of way line of Elmwood Parkway, the point of beginning.
All as more fully shown on plan of survey by Krebs, LaSalle, LeMieux
Consultants, Inc. dated February 26, 1997.
<PAGE>
EXHIBIT A-29
CYPRESS POINT BUSINESS CENTER
NEW ORLEANS, LA
Lot 7 - ELMWOOD INDUSTRIAL PARK, PARCEL 2
A certain piece or portion of ground, together with all the buildings and
improvements thereon, situated in the Parish of Jefferson, Elmwood Industrial
Park, Parcel 2 designated L0T 7 as identified on a plan of resubdivision by
J. J. Krebs & Sons, Inc. dated January 21, 1977, approved by the Jefferson
Parish Council Ordinance No 12848 on May 5, 1977 and registered in COB 892,
folio 796, and more fully described as follows:
Commence at the intersection of the northerly right of way line of Pepsi
Street and the westerly right of way line of Distributors Row, thence along
said westerly line N18(15'15"W a distance of 275.00 feet to a point, the
point of beginning.
Measure thence from the point of beginning S71(44'45"W a distance of 445.35
feet to a point;
thence N18(15'41"W a distance of 314.70 feet to a point;
thence N71(44'45"E a distance of 445.40 feet to a point on the westerly right
of way line of Distributors Row;
thence along said line S18(15'15"E a distance of 314.70 feet to the point of
beginning.
Said LOT 7 has an area of 139,754.42 square feet or 3.208 acres, more or less.
All as more fully shown on a plan by Krebs, LaSalle, LeMieux Consultants,
Inc. dated February 28, 1997.
<PAGE>
EXHIBIT A-30
RIVERBEND OFFICE/SERVICE CENTER
ST. ROSE, LA
TRACT I
A CERTAIN PIECE OR PORTION OF GROUND, together with all the buildings and
improvements thereon, situated in Section 39, Township 12 South, Range 9
East, Parish of St. Charles, in the Southeastern District of the State of
Louisiana on the left descending bank of the Mississippi River, being a
portion of the upper portion of Fairview Plantation on the East Bank
of
the Mississippi River, identified as Parcel FP-1 on a plan of re-subdivision
of Gerald Swanson, dated November 2, 1982, approved by the Parish of St.
Charles Ordinance No. 83-1-9 on January 18, 1983, filed in COB 292, folio
734, and according to said plan, Parcel FP-1 is more particularly described
as follows:
Begin at the intersection of the southerly right of way line of Airline
Highway and the easterly right of way line of Riverbend Boulevard; thence
along the southerly right of way of Airline Highway N72(51'35"E a distance of
410 feet to a point;
thence S16(10'00"E a distance of 575.08 feet to a point;
thence S72(51'35"W a distance of 410 feet to a point on the easterly right of
way line of Riverbend Boulevard;
thence along said right of way line N16(10'00"W a distance of 575.08 feet to
the point of beginning.
TRACT II
A CERTAIN PIECE OR PORTION OF GROUND, together with all the buildings and
improvements thereon, situated in the Parish of St. Charles, State of
Louisiana in that area known as Riverbend Business Park and identified as Lot
7-A on a plan of re-subdivision of Gerald Swanson, Land Surveyor, dated March
28, 1989, approved by the Parish of St. Charles Council on April 21, 1989,
filed on April 25, 1989 in COB 404, folio 519, and in accordance with said
plan, Lot 7-A is more particularly described as follows:
Begin at the intersection of the easterly right of way line of Riverbend
Boulevard and the northerly right of way line of Y. & M. V. Railroad, thence
along the easterly right of way line of Riverbend Boulevard along a curve to
the left, with a radius of 193.42 feet, an arc length of 118.17 feet, a chord
of N73(40'08"W, a chord length of 116.35 feet to a reverse curve;
<PAGE>
thence along a curve to the right having a radius of 125.40 feet, an arc
length of 162.20 feet, a chord of N54(07'02"W, a chord length of 151.13 feet
to a point on the southerly right of way line of the L. & A. Railroad right
of way line;
thence along said right of way line N72(56'16"E a distance of 434.62 feet to
a point on the line common to Lots 7-A and 7-B;
thence S25(02'00"E a distance of 148.69 feet to a point on the northerly
right of way line of Y. & M. V. Railroad;
thence S64(58'00"W a distance of 269.65 feet to a point on the easterly right
of way line of River Bend Boulevard, the point of beginning.
<PAGE>
EXHIBIT A-31
RIVERBEND WAREHOUSE #2
ST. ROSE, LA
A CERTAIN PIECE OR PORTION OF GROUND, together with all the buildings and
improvements thereon, situated in the State of Louisiana, St. Charles Parish,
Section 39, T12S, R9E, in that area known as Riverbend Business Park and
identified as LOT 4-A on a plan of re-subdivision prepared by J. J. Krebs &
Sons, Inc., dated September 7, 1990, Job No. 900511, approved by St. Charles
Parish on September 17, 1990, and filed in COB 428, folio 518, and in
accordance with said plan of re-subdivision, LOT 4-A is more particularly
described as follows: Begin at the near point of curvature of the northwest
intersection of Delta Drive and Jefferson Highway; thence along the arc of a
curve to the right having a radius of 35 feet a length of 39.56 feet to a
point on the northerly right of way line of Jefferson Highway;
thence S48(36'00"W a distance of 381.86 feet to a point;
thence N16(10'00"W a distance of 1,012.15 feet to a point;
thence N73(50'00"E a distance of 365.50 feet to a point on the westerly right
of way line of Delta Drive;
thence along said right of way line S16(10'00"E a distance of 817.70 feet to
the point of beginning.
<PAGE>
EXHIBIT A-32
RIBERBEND WAREHOUSE #1
ST. ROSE, LA
A CERTAIN PIECE OR PORTION OF GROUND, together with all the buildings and
improvements thereon, situated in the State of Louisiana, St. Charles Parish,
Section 39, T12S, R9E, in that area known as Riverbend Business Park and
identified as LOT 3 on a plan of re-subdivision prepared by J. J. Krebs &
Sons, dated May 16, 1980, Dwg. No. G-73-003-02-A, and approved by St. Charles
Parish Police Jury Ordinance No. 84-5-3, authorizing an Act of
Dedication
filed in COB 315, folio 394, and in accordance with said plan of
re-subdivision, Lot 3 is more particularly described as follows:
Begin at the near point of curvature of the northeast intersection of
Jefferson Highway and River Bend Boulevard, thence along the easterly right
of way line of River Bend Boulevard, N16(10'00"W a distance of 1,706.00 feet
to a point;
thence along the arc of a curve to the right having a radius of 35 feet an
arc length of 49.56 feet, chord bearing of N42(24(00(E a chord distance of
45.52 feet to a point of tangency;
thence N64(58'00"E a distance of 339.95 feet to a point;
thence S16(10'00"E a distance of 1,675.92 feet to a point on the northerly
right of way line of Jefferson Highway;
thence along said northerly right of way line S48(39'00W a distance of 348.87
feet to a point;
thence along the arc of a curve to the right; having a radius of 35 feet an
arc length of 70.39 feet, chord bearing of N73(47(00(W a chord distance of
59.11 to the point of beginning.
Improvements thereon bear Municipal No. 100 River Bend Boulevard.
A CERTAIN PIECE OR PORTION OF GROUND, together with all the buildings and
improvements thereon, situated in the Parish of Jefferson, in that area known
as Elmwood Industrial Park, Parcel 2 thereof, and identified as Lot 7 on a
plan of re-subdivision of J.J. Krebs & Sons, Inc., dated January 21, 1977,
approved by Jefferson Parish Council Ordinance No. 12848 on May 5, 1977 and
registered in COB 892, folio 796, and in accordance with said plan of
re-subdivision, said Lot 7 is more particularly described as follows:
Commence at the southwest intersection of Mounes Street and Distributors Row,
thence along the westerly right of way line of Distributors Row S18(15'15"E a
distance of 314.70 feet to a point;
thence leaving said right of way S71(44'45"W a distance of 445.35 feet to a
point;
<PAGE>
thence N(14'41"W a distance of 314.70 feet to a point;
thence N71(44'45"E a distance of 445.40 feet to the point of beginning.
<PAGE>
EXHIBIT A-33
NORTH RUN III
RICHMOND, VA
ALL that certain lot, piece or parcel of land, situate, lying and being in
Henrico County, Virginia, together with the improvements thereon and
appurtenances thereunto belonging containing 5.262 acres and designated as
Parcel B, as shown on that certain plat entitled "Plat Showing 35.4 + acres
of land lying on the North Line of Parham Road", dated September 30, 1986,
last revised October 17, 1989, prepared by J.K. Timmons & Associates, P.C., a
copy of which plat is recorded in the Clerk's Office of the Circuit Court of
the County of Henrico, Virginia (the "Clerk's Office") in Plat Book 88, page
274 and to which plat reference is made for a more particular description of
the property hereby conveyed.
TOGETHER WITH all the rights granted to CMANE-Richmond #1 Limited
Partnership, a Texas limited partnership, pursuant to that certain Shared
Access and Storm Drainage Easement Agreement dated December 1, 1989, recorded
January 16, 1990, in the Clerk's Office in Deed Book 2224, page 1944.
Being the same property shown on plat of survey prepared by William F. Ware,
Jr., of Timmons, dated March 25, 1997, Job No. 17186, and described as
follows:
Beginning at a point on the west line of Joi drive; thence N 86(45'35" E,
947.32'; thence S 43(12'15" E, 62.23' to a rod found, said rod being the true
point and place of beginning, marked P.O.B.; thence S 43(12'15" E, 484.63' to
a point (said point being referenced by a rod found 2.00' away on line of the
following course); thence S 46(47'45" W, 67.00' to a rod found; thence S
20(28'26" W, 277.68' to a rod found said rod being on north line of East
Parham Road, thence along said north line of East Parham Road along a curve
to the left, previous course being radial to said curve, having a radius of
1195.92', an included angle of 1(50'26", and a length of 38.42' to a rod set;
thence leaving said north line of East Parham Road N 18(38'00" E, 13.00' to a
rod set; thence along a curve to the left, previous course being radial to
said curve, having a radius of 1208.92', an included angle of 0(57'28", and a
length of 20.21' to a rod set; thence S 17(40'30" W, 13.00' to a rod set,
said rod being on the north line of East Parham Road; thence along said north
line of East Parham Road along a curve to the left, previous course being
radial to said curve, having a radius of 1195.92', an included angle of
16(35'54" and a length of 346.45' to a rod found; thence leaving said north
line of East Parham Road N 1(47'45" E, 398.61' to a nail set; thence N
46(47'45" E, 270.99' to the true point and place of beginning containing
5.262 acres, 229,213 square feet.
<PAGE>
EXHIBIT A-34
NORTH RUN IV
RICHMOND, VA
ALL that certain lot, piece or parcel of land, situate, lying and being in
Henrico County, Virginia, together with the improvements thereon and
appurtenances thereunto belonging containing 7.185 acres and designated as
Parcel B 1, as shown on that certain plat entitled "Plat Showing 35.4 + acres
of land lying on the North Line of Parham Road" (the "Survey"), dated
September 30, 1986, last revised October 17, 1989, prepared by J.K. Timmons &
Associates, P.C., a copy of which plat is recorded in the Clerk's Office of
the Circuit Court of the County of Henrico, Virginia (the "Clerk's Office")
in Plat Book 88, page 274 and to which plat reference is made for a more
particular description of the property hereby conveyed.
TOGETHER WITH all the rights granted to CMANE-Richmond #1 Limited
Partnership, a Texas limited partnership, pursuant to that certain Shared
Access and Storm Drainage Easement Agreement dated December 1, 1989, recorded
January 16, 1990, in the Clerk's Office in Deed Book 2224, page 1944.
Being the same property shown on plat of survey prepared by William F. Ware,
Jr., of Timmons, dated March 25, 1997, Job No. 17186, and described as
follows:
Beginning at a rod found, marked P.O.B., said point being N 86(45'35" E,
651.74' to a rod found; thence S 43(12'15" E, 62.23' to a rod found; thence S
46(47'45" W, 270.99' to a nail set; thence S 1(47'45" W, 398.61' to a rod
found on the north line of East Parham Road; thence along said north line of
East Parham Road along a curve to the left having a radius of 1195.92', a
length of 6.13' a chord bearing of N 89(04'12" W, and a chord of 6.13' to a
rod set; thence continuing along the north line of East Parham Road N
89(13'00" W, 495.56' to a nail set; thence leaving the said north line of
East Parham Road N 1(47'45" E, 84.63' to a nail set; thence S 88(12'15" E,
35.00' to a nail found; thence N 1(47'45" E, 418.99' to a nail; thence S
86(45'35" W, 35.14' to a rod set; thence N 1(47'45" E, 85.33' to the true
point and place of beginning; containing 7.185 acres, 312,992 square feet.
<PAGE>
EXHIBIT B
ALLOCATION OF PURCHASE PRICE
PROJECT DESCRIBED ALLOCATED PRICE
A-3 Southfield Commercial $3,590,132
A-4 Huron 17900 Woodland Drive $3,599,204
A-5 Huron 17757 Woodland Drive $2,612,093
A-6 Huron 17608 Commerce Drive $1,896,127
A-9 Westhills Commerce $2,840,299
A-10 H&J Industrial $2,927,901
A-28 Parkway Center $7,027,753
A-29 Cypress Point Bus. Center $2,177,986
A-30 Riverbend Office/Service Center $2,242,640
A-31 Riverbend Warehouse #2 $5,388,573
A-32 Riverbend Warehouse #1 $11,684,329
A-33 North Run III $5,070,705
A-34 North Run IV $7,916,451
<PAGE>
SUMMARY
PURCHASE AND SALE AGREEMENT FOR ILLINOIS, MICHIGAN, AND CALIFORNIA LAND
The Purchase and Sale Agreement dated May 29, 1997, between the Company and
The Prudential Insurance Company of America covering Illinois, Michigan, and
California land as amended by the First Amendment thereto dated July 7, 1997,
the Second Amendment thereto dated July 22, 1997, and the Third Amendment
thereto dated August 5, 1997, (the "Land Agreement") is substantially
identical to the Purchase and Sale Agreement dated May 29, 1997 between the
Company and The Prudential Insurance Company of America covering Texas
properties as amended by the First Amendment thereto dated July 7, 1997, the
Second Amendment thereto dated July 22, 1997, and the Third Amendment thereto
dated August 5, 1997, which is filed herewith (the "Filed Agreement").
Material differences between the Land Agreement and the Filed Agreement are
set forth below.
- Description of the Illinois, Michigan, and California land: see the
attached Exhibit A
- Purchase price for the Illinois, Michigan, and California land:
$14,423,000
- Allocation of purchase price among the parcels comprising Illinois,
Michigan, and California land: see the attached Exhibit B
- Required deposit: $73,512
<PAGE>
EXHIBIT A
INDUSTRIAL LAND PACKAGE
PRUDENTIAL
PROPERTY # PROPERTY NAME LOCATION EXHIBIT
01152000 Huron Comm. Cntr-Land New Boston, MI A-7
01152024 Huron Comm. Cntr-Ford Pk New Boston, MI A-8
01007001 Cedarpointe Phase I Ontario, CA A-17
01007020 Cedarpointe Phase III Ontario, CA A-18
01007021 Cedarpointe Phase II Ontario, CA A-19
01122000 Corporate Crossing Bolingbrook, IL A-35
<PAGE>
EXHIBIT A- 7 and A-8
HURON COMMERCE CENTER
NEW BOSTON, MI
PARCEL D (HURON COMMERCE)
A PARCEL OF LAND LOCATED IN SECTION 5, T.4S., R.9E., HURON TOWNSHIP, WAYNE
COUNTY, MICHIGAN MORE PARTICULARLY DESCRIBED AS BEGINNING AT THE N 1/4 CORNER
OF SAID SECTION 5, THENCE ALONG THE NORTH SECTION LINE OF SECTION 5 AND THE
CENTERLINE OF PENNSYLVANIA ROAD, N88DEG. 28'31"E 508.44 FEET; THENCE S01DEG.
31'29"E 50.00 FEET; THENCE ALONG THE SOUTH RIGHT-OF-WAY LINE OF PENNSYLVANIA
ROAD (VARIABLE WIDTH) N88DEG. 28'31"E 155.00 FEET AND S01DEG. 12'03"E 25.00
FEET AND N88DEG. 28'31"E 261.50 FEET AND S01DEG. 31'29"E 25.00 FEET AND
N88DEG. 28'31"E 258.50 FEET; THENCE S01DEG. 23'03"E 230.00 FEET; THENCE
N88DEG. 28'31"E 130.38 FEET; THENCE ALONG THE WEST RIGHT-OF-WAY LINE OF
INTERSTATE HIGHWAY 275 THE FOLLOWING COURSES AND DISTANCES: (1) S01DEG.
21'18"E 2141.51 FEET; (2) S01DEG. 46'03"W 160.88 FEET; (3) S01DEG. 51'57"W
189.55 FEET; (4) S01DEG. 24'17"E 398.04 FEET; (5) S01DEG. 35'43"W 474.75
FEET; (6) S12DEG. 12'57"W 393.89 FEET; (7) S33DEG. 25'17"W 393.74 FEET; (8)
S44DEG. 00'48"W 295.05 FEET; THENCE S88DEG. 47'37"W 417.75 FEET ALONG A LINE
660 FEET NORTH OF AND PARALLEL WITH THE SOUTH LINE OF SAID SECTION 5; THENCE
S01DEG. 17'16"E 585.00 FEET; THENCE ALONG THE NORTH RIGHT-OF-WAY LINE OF
SIBLEY ROAD (THE NORTH 1/2 BEING 75 FEET WIDE), S88DEG. 47'37"W 330.57 FEET
TO A POINT WHICH IS LOCATED N01DEG. 17'16"W 75.00 FEET ALONG THE N-S 1/4 LINE
OF SAID SECTION 5 FROM THE SOUTH 1/4 CORNER OF SECTION 5; THENCE ALONG THE
NORTH RIGHT-OF-WAY LINE OF SIBLEY ROAD (N 1/2 BEING 75 FEET) S88DEG. 54'17"W
25.65 FEET; THENCE ALONG THE EASTERLY RIGHT-OF-WAY LINE OF THE CSX RAILROAD
(FORMERLY KNOWN AS CHESAPEAKE AND OHIO RAILROAD) THE FOLLOWING COURSES AND
DISTANCES: (1) N01DEG. 19'44"W 1245.25 FEET; (2) N01DEG. 36'46"W 1314.95
FEET; (3) N01DEG. 26'01"W 2626.04 FEET TO THE NORTH LINE OF SECTION 5 AND THE
CENTERLINE OF PENNSYLVANIA ROAD; THENCE ALONG THE NORTH LINE OF SECTION 5,
N88DEG. 41'06"E 40.00 FEET TO THE POINT OF BEGINNING.
EXCEPT PARCELS A, B, AND C WHICH ARE MORE PARTICULARILY DESCRIBED BELOW, AND
SUBJECT TO THE ROAD EASEMENTS FOR INGRESS AND EGRESS AND MAINTENANCE OF
PUBLIC UTILITIES AND ELECTRIC EASEMENTS AND STORM DRAINAGE EASEMENTS AND ALL
OTHER EASEMENTS OR RESTRICTIONS OF RECORD OR OTHERWISE.
CONTAINING 126.5699 ACRES.
<PAGE>
LESS AND EXCEPT THOSE PARCELS A, B AND C MORE PARTICULARILY DESCRIBED AS
FOLLOWS:
PARCEL A (HURON COMMERCE)
A PARCEL OF LAND LOCATED IN PART OF THE SW 1/4 OF THE NE 1/4 OF SECTION 5,
T.4S., R.9E., HURON TOWNSHIP, WAYNE COUNTY, MICHIGAN AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE N 1/4 CORNER OF SECTION 5, T.4S., R.9E., THENCE N88DEG.
28'31"E 464.28 FEET ALONG THE NORTH LINE OF SAID SECTION 5 AND THE CENTERLINE
OF PENNSYLVANIA ROAD (66 FEET WIDE) TO THE INTERSECTION OF THE CENTERLINES OF
PENNSYLVANIA ROAD AND PROPOSED COMMERCE DRIVE EASEMENT (86 FT. WIDE) TO THE
SOUTH; THENCE S01DEG. 20'43"E 554.75 FEET ALONG THE CENTERLINE OF SAID
COMMERCE DRIVE TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE LEFT AND
THE CENTERLINE OF SAID COMMERCE DRIVE AN ARC DISTANCE OF 831.83 FEET (SAID
CURVE HAVING A RADIUS OF 1060.00 FEET, A CENTRAL ANGLE OF 44DEG. 57'45", A
CHORD BEARING OF S23DEG. 49'35"E AND A CHORD DISTANCE OF 810.65 FEET); THENCE
S46DEG. 18'28"E 5.99 FEET ALONG THE CENTERLINE OF SAID COMMERCE DRIVE (86 FT.
WIDE) TO THE BEGINNING OF THE CENTERLINE OF PROPOSED COMMERCE DRIVE (60 FT.
WIDE); THENCE S43DEG. 41'32"W 30.00 FEET TO THE INTERSECTION OF THE EASTERLY
LINE OF PROPOSED WOODLAND DRIVE EASEMENT (86 FT. WIDE) AND THE SOUTHERLY LINE
OF COMMERCE DRIVE (60 FT. WIDE) BEING THE POINT OF BEGINNING OF THIS
DESCRIPTION; THENCE S46DEG. 18'28"E 357.50 FEET ALONG SAID SOUTHERLY LINE OF
COMMERCE DRIVE; THENCE S 43DEG. 41'32"W 248.88 FEET TO THE NORTHEASTERLY
CORNER OF PARCEL "B"; THENCE S88DEG. 39'17"W 351.67 FEET ALONG THE NORTH LINE
OF PARCEL "B" TO A POINT ON THE EASTERLY LINE OF THE WOODLAND DRIVE (86 FT.
WIDE); THENCE ALONG A CURVE TO THE RIGHT ALSO BEING THE EASTERLY LINE OF
WOODLAND DRIVE, AN ARC DISTANCE OF 383.87 FEET (SAID CURVE HAVING A RADIUS OF
657.00 FEET, A CENTRAL ANGLE OF 33DEG. 28'37", A CHORD BEARING OF N26DEG.
57'13"E AND A CHORD DISTANCE OF 378.44 FEET) TO A POINT OF TANGENCY; THENCE
N43DEG. 41'32"E 135.32 FEET TO THE POINT OF BEGINNING. CONTAINING 3.0836
ACRES AND SUBJECT TO THE ROAD EASEMENTS FOR HURON COMMERCE FOR INGRESS AND
EGRESS AND MAINTENANCE OF PUBLIC UTILITIES AND THE HURON COMMERCE ELECTRIC
EASEMENT AND SUBJECT TO THE RIGHTS AND RESTRICTIONS OF RECORD OR OTHERWISE.
<PAGE>
PARCEL B (HURON COMMERCE)
A PARCEL OF LAND LOCATED IN PART OF THE SW 1/2 OF THE NE 1/4 OF SECTION 5,
T.4S., R.9E., HURON TOWNSHIP, WAYNE COUNTY, MICHIGAN AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE N. 1/4 CORNER OF SECTION 5, T.4S., R.9E., THENCE N88DEG.
28'31"E. 464.28 FEET ALONG THE NORTH LINE OF SAID SECTION 5 AND THE
CENTERLINE OF PENNSYLVANIA ROAD (66 FT. WIDE) TO THE INTERSECTION OF THE
CENTERLINES OF PENNSYLVANIA ROAD AND PROPOSED COMMERCE DRIVE EASEMENT (86 FT.
WIDE) TO THE SOUTH; THENCE S01DEG. 20'43"E. 554.75 FEET ALONG THE CENTERLINE
OF SAID COMMERCE DRIVE TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE
LEFT AND THE CENTERLINE OF SAID COMMERCE DRIVE AN ARC DISTANCE OF 794.81 FEET
(SAID CURVE HAVING A RADIUS OF 1060.00 FEET, A CENTRAL ANGLE OF 42DEG.
57'42", A CHORD BEARING OF S.22DEG. 49'34"E. AND A CHORD DISTANCE OF 776.32
FEET), TO THE INTERSECTION OF THE CENTERLINES OF COMMERCE DRIVE AND PROPOSED
WOODLAND DRIVE EASEMENT (86 FT. WIDE); AND THENCE S.43DEG. 41'32"W 165.96
FEET ALONG THE CENTERLINE OF PROPOSED WOODLAND DRIVE TO A POINT OF CURVATURE;
THENCE ALONG A CURVE TO THE LEFT AND SAID CENTERLINE AN ARC DISTANCE OF
550.23 FEET (SAID CURVE HAVING A RADIUS OF 700.00 FEET, A CENTRAL ANGLE OF
45DEG. 02'15", A CHORD BEARING OF S21DEG. 10'24"W AND A CHORD DISTANCE OF
536.18 FEET); THENCE N88DEG. 39'17"E 43.00 FEET TO THE POINT OF BEGINNING FOR
THIS DESCRIPTION; THENCE S01DEG. 20'43"E 373.34 FEET ALONG THE WESTERLY LINE
OF PROPOSED WOODLAND DRIVE; THENCE N88DEG. 39'17"E 365.00 FEET; THENCE
N01DEG. 20'43"W 505.00 FEET TO THE SOUTHEASTERLY CORNER OF PARCEL "A"; THENCE
S88DEG. 39'17"W 351.67 FEET ALONG THE SOUTHERLY LINE OF PARCEL "A" TO A POINT
ON THE EASTERLY LINE OF WOODLAND DRIVE; THENCE ALONG A CURVE TO THE LEFT AND
THE EASTERLY LINE OF SAID WOODLAND DRIVE AN ARC DISTANCE OF 132.56 (SAID
CURVE HAVING A RADIUS OF 657.00 FEET, A CENTRAL ANGLE OF 11DEG. 33'38", A
CHORD BEARING OF S04DEG. 26'02"W AND A CHORD DISTANCE OF 132.34 FEET TO THE
POINT OF BEGINNING. CONTAINING 4.2181 ACRES AND SUBJECT TO THE ROAD
EASEMENTS FOR HURON COMMERCE FOR INGRESS AND EGRESS AND MAINTENANCE OF
PUBLIC UTILITIES AND THE HURON COMMERCE ELECTRIC EASEMENT AND SUBJECT TO THE
RIGHTS AND RESTRICTIONS OF RECORD OR OTHERWISE.
<PAGE>
PARCEL C (HURON COMMERCE)
A PARCEL OF LAND LOCATED IN PART OF THE SW 1/4 OF THE NE 1/4 AND THE SE 1/4
OF THE NW 1/4, AND THE NE 1/4 OF THE SW 1/4, AND THE NW 1/4 OF THE SE 1/4 OF
SECTION 5, T.4S., R.9E., HURON TOWNSHIP, WAYNE COUNTY, MICHIGAN AND BEING
MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE N. 1/4 CORNER OF SECTION 5, T.4S., R.9E., THENCE N88DEG.
28'31"E 464.28 FEET ALONG THE NORTH LINE OF SAID SECTION 5 AND THE CENTERLINE
OF PENNSYLVANIA ROAD (66 FT. WIDE) TO THE INTERSECTION OF THE CENTERLINES OF
PENNSYLVANIA ROAD AND PROPOSED COMMERCE DRIVE EASEMENT(86 FT. WIDE) TO THE
SOUTH; THENCE S01DEG. 20'43"E 554.75 FEET ALONG THE CENTERLINE OF SAID
COMMERCE DRIVE TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE LEFT AND
THE CENTERLINE OF SAID COMMERCE DRIVE AN ARC DISTANCE OF 794.81 FEET (SAID
CURVE HAVING A RADIUS OF 1060.00 FEET, A CENTRAL ANGLE OF 42DEG. 57'42", A
CHORD BEARING OF S22DEG. 49'34"E AND A CHORD DISTANCE OF 776.32 FEET), TO THE
INTERSECTION OF THE CENTERLINES OF COMMERCE DRIVE AND PROPOSED WOODLAND DRIVE
EASEMENT (86 FT. WIDE); THENCE S43DEG. 41'32"W 165.96 FEET ALONG THE
CENTERLINE OF PROPOSED WOODLAND DRIVE (86 FT. WIDE) TO A POINT OF CURVATURE;
THENCE ALONG A CURVE TO THE LEFT AND SAID CENTERLINE AN ARC DISTANCE OF
550.23 FEET (SAID CURVE HAVING A RADIUS OF 700.00 FEET, A CENTRAL ANGLE OF
45DEG. 02'15", A CHORD BEARING OF S21DEG. 10'24"W AND A CHORD DISTANCE OF
536.18 FEET); THENCE S01DEG. 20'43"E 148.28 FEET; THENCE S88DEG. 39'17"W
43.00 FEET TO THE POINT OF BEGINNING FOR THIS DESCRIPTION; THENCE S01DEG.
20'43"E 620.00 FEET ALONG THE WESTERLY LINE OF WOODLAND DRIVE EASEMENT (86
FT. WIDE); THENCE S88DEG. 39'17"W 418.59 FEET TO A POINT ON THE EAST
RIGHT-OF-WAY LINE OF THE CSX RAILROAD (FORMERLY KNOWN AS THE CHESAPEAKE AND
OHIO RAILROAD); THENCE N01DEG. 36'45"W 30.53 FEET ALONG SAID EAST
RIGHT-OF-WAY LINE; THENCE N01DEG. 26'01"W 589.47 FEET; THENCE N88DEG. 39'17"E
419.64 FEET TO THE POINT OF BEGINNING. CONTAINING 5.9512 ACRES AND SUBJECT
TO THE ROAD EASEMENTS FOR HURON COMMERCE FOR INGRESS AND EGRESS AND
MAINTENANCE OF PUBLIC UTILITIES AND THE HURON COMMERCE ELECTRIC EASEMENT AND
SUBJECT TO THE RIGHTS AND RESTRICTIONS OF RECORD OR OTHERWISE.
<PAGE>
SUBJECT TO A
ROAD EASEMENT DESCRIBED AS FOLLOWS:
A PARCEL OF LAND LOCATED IN PART OF THE E 1/2 OF SECTION 5, T.4S., R.9E.,
HURON TOWNSHIP, WAYNE COUNTY, MICHIGAN FOR THE PURPOSES OF INGRESS AND EGRESS
STORM WATER DRAINAGE, AND THE MAINTENANCE OF PUBLIC UTILITIES AND BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE N 1/4 CORNER OF SECTION 5, T.4S., R.9E., THENCE N88DEG.
28'31"E 464.28 FEET ALONG THE CENTERLINE OF PENNSYLVANIA ROAD (CURRENTLY 66
FEET WIDE) AND THE NORTH LINE OF SAID SECTION 5; THENCE S01DEG. 20'43"E 33.00
FEET TO A POINT "A1" AND THE POINT OF BEGINNING OF THE CENTERLINE OF COMMERCE
DRIVE EASEMENT (PROPOSED TO BE 86 FEET WIDE); THENCE ALONG SAID CENTERLINE OF
PROPOSED COMMERCE DRIVE THE FOLLOWING 4 COURSES AND DISTANCES: 1) S01DEG.
20'43"E 521.75 FEET TO A POINT OF CURVATURE; 2) THENCE ALONG A CURVE TO THE
LEFT AN ARC DISTANCE OF 794.81 FEET TO A POINT "B1" (SAID CURVE HAVING A
RADIUS OF 1060.00 FEET, A CENTRAL ANGLE OF 42DEG. 57'42", A CHORD BEARING OF
S22DEG. 49'34"E, AND A CHORD DISTANCE OF 776.32 FEET); 3) THENCE CONTINUING
ALONG A CURVE TO THE LEFT AN ARC DISTANCE OF 37.02 FEET TO A POINT OF
TANGENCY (SAID CURVE HAVING A RADIUS OF 1060.00 FEET, A CENTRAL ANGLE OF
02DEG. 00'03", A CHORD BEARING OF S45DEG. 18'20"E, AND A CHORD DISTANCE OF
37.01 FEET); 4) THENCE S46DEG. 18'28"E 5.99 FEET TO THE END OF PROPOSED
COMMERCE DRIVE AS AN 86 FOOT WIDE EASEMENT AND THE BEGINNING OF SAID COMMERCE
DRIVE AS A 60 FT. EASEMENT; THENCE CONTINUING ALONG THE CENTERLINE OF SAID
COMMERCE DRIVE AS A 60 FOOT EASEMENT THE FOLLOWING COURSES AND DISTANCES: 1)
S46DEG. 18'28"E 470.92 FEET TO A POINT OF CURVATURE; 2) THENCE ALONG A CURVE
TO THE RIGHT AN ARC DISTANCE OF 708.21 FEET (SAID CURVE HAVING A RADIUS OF
575.00 FEET, A CENTRAL ANGLE OF 70DEG. 34'10", A CHORD BEARING OF S11DEG.
01'23"E, AND A CHORD DISTANCE OF 664.28 FEET); 3) THENCE S24DEG. 15'42"W
190.74 FEET TO A POINT OF CURVATURE; 4) THENCE ALONG A CURVE TO THE LEFT AN
ARC DISTANCE OF 187.60 FEET (SAID CURVE HAVING A RADIUS OF 475.00 FEET, A
CENTRAL ANGLE OF 22DEG. 37'45", A CHORD BEARING OF S12DEG. 56'51"W, AND A
CHORD DISTANCE OF 186.39 FEET); 5) THENCE S01DEG. 37'56"W 799.17 FEET TO A
POINT OF CURVATURE; 6) THENCE ALONG A CURVE TO THE RIGHT AN ARC DISTANCE OF
381.81 FEET (SAID CURVE HAVING A RADIUS OF 800.00 FEET, A CENTRAL ANGLE OF
27DEG. 20'42", A CHORD BEARING OF S 15DEG. 18'19"W, AND A CHORD DISTANCE OF
378.19 FEET); 7) THENCE S 28DEG. 58'38"W 150.38 FEET TO A POINT OF CURVATURE;
<PAGE>
ROAD EASEMENT DESCRIPTIONS (HURON COMMERCE)PAGE 2
8) THENCE ALONG A CURVE TO THE RIGHT AN ARC DISTANCE OF 273.34 FEET (SAID
CURVE HAVING A RADIUS OF 805.00 FEET, A CENTRAL ANGLE OF 19DEG. 27'17", A
CHORD BEARING OF S38DEG. 42'17"W, AND A CHORD DISTANCE OF 272.03 FEET); 9)
THENCE S48DEG. 25'56"W 81.71 FEET TO A POINT OF CURVATURE; 10) THENCE ALONG A
CURVE TO THE RIGHT AN ARC DISTANCE OF 264.07 FEET (SAID CURVE HAVING A RADIUS
OF 375.00 FEET, A CENTRAL ANGLE OF 40DEG. 20'48", A CHORD BEARING OF S68DEG.
36'17"W, AND A CHORD DISTANCE OF 258.65 FEET); 11) THENCE S88DEG. 46'44"W
63.66 FEET TO THE POINT OF ENDING OF THE CENTERLINE OF COMMERCE DRIVE
EASEMENT PROPOSED TO BE 60 FEET WIDE, SAID POINT OF ENDING ALSO BEING ON THE
EAST LINE OF WOODLAND DRIVE (PROPOSED TO BE 86 FEET WIDE) AND DESCRIBED AS
FOLLOWS:
COMMENCING AT POINT "B1"; THENCE S43DEG. 41'32"W 43.00 FEET TO THE POINT OF
BEGINNING OF THE CENTERLINE OF WOODLAND DRIVE EASEMENT (PROPOSED TO BE 86
FEET WIDE) SAID POINT OF BEGINNING ALSO BEING ON THE SOUTHWESTERLY LINE OF
SAID COMMERCE DRIVE (PROPOSED TO BE 86 FEET WIDE); THENCE ALONG SAID
CENTERLINE OF WOODLAND DRIVE THE FOLLOWING COURSES AND DISTANCES: 1) S43DEG.
41'32"W 122.96 FEET TO A POINT OF CURVATURE; 2) THENCE ALONG A CURVE TO THE
LEFT AN ARC DISTANCE OF 550.24 FEET (SAID CURVE HAVING A RADIUS OF 700.00
FEET, A CENTRAL ANGLE OF 45DEG. 02'15", A CHORD BEARING OF S21DEG. 10'24"W,
AND A CHORD DISTANCE OF 536.18 FEET); 3) THENCE S01DEG. 20'43"E 1369.52 FEET
TO A POINT OF CURVATURE; 4) THENCE ALONG A CURVE TO THE RIGHT AN ARC DISTANCE
OF 200.68 FEET (SAID CURVE HAVING A RADIUS OF 525.00 FEET, A CENTRAL ANGLE OF
21DEG. 54'06", A CHORD BEARING OF S09DEG. 36'15"W, AND A CHORD DISTANCE OF
199.46 FEET); 5) THENCE S20DEG. 33'23"W 180.57 FEET TO A POINT OF CURVATURE;
6) THENCE ALONG A CURVE TO THE LEFT AN ARC DISTANCE OF 199.55 FEET (SAID
CURVE HAVING A RADIUS OF 525.00 FEET; A CENTRAL ANGLE OF 21DEG. 46'39", A
CHORD BEARING OF S 09DEG. 40'04"W, AND A CHORD DISTANCE OF 198.35 FEET); 7)
THENCE S01DEG. 13'16"E 501.08 FEET TO A POINT "C1", SAID POINT BEING ON THE
CENTERLINE OF PROPOSED WOODLAND DRIVE (86 FT. WIDE).
ALSO BEGINNING FROM POINT "C1"; THENCE N88DEG. 46'44"E 45.37 FEET TO THE
INTERSECTION OF THE EAST LINE OF PROPOSED WOODLAND DRIVE EASEMENT (WIDTH NOW
VARIES) AND THE SOUTH LINE OF COMMERCE DRIVE EASEMENT (60 FT. WIDE); THENCE
S01DEG. 17'16"E 870.08 FEET ALONG SAID EAST LINE OF W00DLAND DRIVE TO THE NORTH
RIGHT-OF-WAY LINE OF SIBLEY ROAD (1/2 WIDTH 75 FT. WIDE); THENCE S88DEG. 47'37"W
114.38 FEET ALONG SAID NORTH LINE OF SIBLEY ROAD TO THE WEST LINE OF WOODLAND
DRIVE (WIDTH VARIES); THENCE THE FOLLOWING COURSES AND DISTANCES ALONG THE WEST
LINE OF WOODLAND DRIVE: 1) N01DEG. 13'16"W 113.81 FEET; 2) N09DEG. 42'07"E
131.93 FEET; 3) N01DEG. 13'16"W 626.69 FEET; THENCE N88DEG. 46'44"E 43.00 FEET
TO POINT C1.
<PAGE>
ROAD EASEMENT DESCRIPTIONS (HURON COMMERCE)PAGE 3
ALSO COMMENCING AT POINT "A1"; THENCE N88DEG. 28'31"E 43.00 FEET ALONG THE SOUTH
RIGHT-OF-WAY LINE OF PENNSYLVANIA ROAD (CURRENTLY 66 FEET WIDE) TO THE POINT OF
BEGINNING OF A BOULEVARD SECTION OF PROPOSED COMMERCE DRIVE EASEMENT; THENCE
CONTINUING N88DEG. 28'31"E 1.26 FEET ALONG SAID NORTH LINE OF PENNSYLVANIA ROAD
TO A POINT ON THE MICHIGAN DEPARTMENT OF TRANSPORTATION RIGHT-OF-WAY; THENCE
S01DEG. 31'30"E 17.00 FEET; THENCE ALONG THE SOUTH LINE OF THE MDOT 50 FOOT
RIGHT-OF-WAY N88DEG. 28'31"E 22.69 FEET TO THE EAST LINE OF THE BOULEVARD
SECTION OF THE PROPOSED COMMERCE DRIVE EASEMENT; THENCE ALONG THE EAST LINE OF
SAID BOULEVARD THE FOLLOWING TWO COURSES: 1) S01DEG. 20'43"E 84.19 FEET; 2)
S09DEG. 57'53"W 122.37 FEET TO THE EAST LINE OF COMMERCE DRIVE EASEMENT (86 FEET
WIDE); THENCE N01DEG. 20'43"W 221.11 FEET TO THE POINT OF BEGINNING OF THIS
SECTION OF COMMERCE DRIVE BOULEVARD.
<PAGE>
EXHIBIT A-17
CEDARPOINTE PHASE I
ONTARIO, CA
Parcel 1 of Parcel Map No. 11914, in the city of Ontario, county of San
Bernardino, state of California, as per plat recorded in Book 140 of parcel
maps, Pages 30 through 33, records of said county.
<PAGE>
EXHIBIT A-18
CEDARPOINTE PHASE III
ONTARIO, CA
Parcel A:
Parcel 3 of Parcel Map No. 11914, in the city of Ontario, county of San
Bernardino, state of California, as per plat recorded in Book 140 of parcel
maps, Pages 30 to 33, inclusive of records of said county.
Parcel B:
All of Parcels 4 through 10, inclusive of Parcel Map No. 11914, in the county
of San Bernardino, state of California, as per plat recorded in Book 140 of
parcel maps, Pages 30 through 33, inclusive, records of said county, combined
as one parcel, described as follows:
Commencing at the southeast corner of said Parcel 7, being the point of
beginning; thence north 89 degrees 17 minutes 40 seconds west 251.00 feet
along the south line of said Parcel 7; thence northerly along a curve concave
to the northeast and having a radius of 34.00 feet through a central angle of
90 degrees 00 minutes 00 seconds, a distance of 53.41 feet; thence north 00
degrees 42 minutes 20 seconds east 915.72 feet; thence northerly along a
curve concave to the east and having a radius of 120.00 feet, through a
central angle of 19 degrees 17 minutes 12 seconds, a distance of 40.39 feet
to a point of reverse curve; thence northerly along a curve concave to the
west and having a radius of 76.00 feet, through a central of 00 degrees 31
minutes 01 seconds, a distance 0.69 feet to a point; thence south 89 degrees
17 minutes 40 seconds east 196.45 feet; thence north 21 degrees 58 minutes 17
seconds east 34.36 feet; thence south 64 degrees 26 minutes 30 seconds east
76.19 feet; thence south 89 degrees 17 minutes 40 seconds east 395.98 feet;
thence south 00 degrees 01 minutes 58 seconds west 955.67 feet; thence
westerly along a curve concave to the northwest and having a radius of 34.00
feet through a central of 90 degrees 40 minutes 22 seconds, a distance of
53.81 feet; thence north 89 degrees 17 minutes 40 seconds west 373.21 feet to
the southeast corner of said Parcel 7, the point of beginning and the end of
this description.
Pursuant to Certificate of Correction No. Ll96-04, recorded October 2, 1996,
Instrument No. 96-364175, official records.
<PAGE>
EXHIBIT A-19
CEDARPOINTE PHASE II
ONTARIO, CA
Parcel No. 1:
Parcel 11 of Parcel Map No. 11914, in the city of Ontario, county of San
Bernardino, state of California, as per plat recorded in Book 140 of parcel
maps, Pages 30 through 33, inclusive, records of said county.
Parcel No. 2
Parcel "B", as per plat attached to that certain certificate approving a lot
line adjustment, Owner's Certificate No. Ll91-03 recorded May 22, 1991,
Instrument No. 91-174292, official records, being further described as
follows:
Parcels 12 and 13 of Parcel Map No. 11914, in the city of Ontario, county of
San Bernardino, state of California, as per plat recorded in Book 140 of
parcel maps, Pages 30 through 33, inclusive, records of said county.
Excepting therefrom the southerly 114.00 feet of said Parcel 13.
<PAGE>
EXHIBIT A-35
CORPORATE CROSSING
BOLINGBROOK, IL
PARCEL 1
Lot 3 (except part conveyed in document R95-003616 Exhibit A) and all of Lot
4 and Outlot A in Corporate Crossing, being a subdivision of part of the
southwest quarter of Section 13, and a part of Section 14, and of part of the
northeast quarter of Section 23, all in Township 37 North, Range 10 East of
the Third Principal Meridian according to the plat thereof recorded July 27,
1992 as Document R92-587855, in the Village of Bolingbrook, Will County,
Illinois.
PARCEL 2
Lots 1 and 3 in I.D.I.'s Second re-subdivision according to the plat thereof
recorded June 24, 1996 as Document R96-55998 being a Subdivision of part of
the southwest quarter of Section 13, and of part of Section 14, and a part of
the northeast quarter of Section 23, all in Township 37 North, Range 10 East
of the Third Principal Meridian, according to the plat thereof recorded on
July 27, 1992 as Document Number R92-57855, in the Village of Bolingbrook,
Will County, Illinois.
PARCEL 3
Lot 3 in I.D.I.'s Third re-subdivision according to the plat thereof
recorded December 12, 1996 as document R96-111032 being a resubdivision of
Lot 6 in Corporate Crossing being a subdivision of part of the southwest
quarter of Section 13, and a part of Section 14, and of part of the northeast
quarter of Section 23, all in Township 37 North, Range 10 East of the Third
Principal Meridian, according to the Plat thereof recorded on July 27, 1992,
as Document Number R92-57855 and also of Lot 1 and Lot 3 in I.D.I.'s First
re-subdivision being a re-subdivision of Lot 7 in said Corporate Crossing
according to the plat thereof recorded on November 20, 1995 as Document
Number R-95-90280, all in the Village of Bolingbrook, Will County, Illinois.
<PAGE>
EXHIBIT B
ALLOCATION OF PURCHASE PRICE
PROJECT DESCRIBED ALLOCATED PRICE
A-7 Huron - (vacant land) $6,690,000
A-8 Huron - Ford Parking Lot (included in above)
A-17 Cedarpointe Phase I (vacant land) $3,055,000
A-18 Cedarpointe Phase III (vacant land) (included in above)
(Timberland Tract)
A-19 Cedarpointe Phase II (vacant land) (included in above)
A-35 Corporate Crossing (vacant land) $4,678,000
<PAGE>
- -------------------------------------------------------------------------------
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
SELLER: STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE FOR AMERITECH PENSION TRUST
BUYER: MERIDIAN INDUSTRIAL TRUST, INC.
May 29, 1997
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
1. Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Condition of Title . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Contingency Period . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Tenant and Lender Estoppel Certificates. . . . . . . . . . . . . . . 6
7. Buyer's Representations and Warranties . . . . . . . . . . . . . . . 7
8. Representations and Warranties of Seller . . . . . . . . . . . . . .15
9. Covenants and Interim Responsibilities of Seller . . . . . . . . . .20
10.A Shareholders' Meeting; Preparation of Proxy Statement. . . . . . . .20
10.B Covenants of Buyer . . . . . . . . . . . . . . . . . . . . . . . . .21
11. Conditions of Closing. . . . . . . . . . . . . . . . . . . . . . . .22
12. Deposits By Seller . . . . . . . . . . . . . . . . . . . . . . . . .23
13. Deposits By Buyer. . . . . . . . . . . . . . . . . . . . . . . . . .24
14. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . .25
15. Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
16. Disbursements and Other Actions by Escrow Holder . . . . . . . . . .26
17. Damage or Condemnation Prior to Closing. . . . . . . . . . . . . . .27
18. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . .28
19. Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . .28
20. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
i
<PAGE>
21. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
22. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
23. Required Actions of Buyer and Seller . . . . . . . . . . . . . . . .29
24. Time of Essence. . . . . . . . . . . . . . . . . . . . . . . . . . .29
25. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
26. Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
27. No Obligations to Third Parties. . . . . . . . . . . . . . . . . . .30
28. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
29. Amendment to this Agreement. . . . . . . . . . . . . . . . . . . . .30
30. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
31. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . .30
32. Fees and Other Expenses. . . . . . . . . . . . . . . . . . . . . . .30
33. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .30
34. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . .30
35. Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
36. Computation of Periods . . . . . . . . . . . . . . . . . . . . . . .31
37. Indemnification of Escrow Holder.. . . . . . . . . . . . . . . . . .31
38. Buyer's Audit Rights . . . . . . . . . . . . . . . . . . . . . . . .31
39. Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . .31
40. Marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
41. Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
42. Restriction on Transfer of Acquisition Common Stock. . . . . . . . .33
ii
<PAGE>
LIST OF DEFINED TERMS
Page No.
--------
1996 Form 10-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1997 Form 10-Q . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1997 Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Acquisition Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Amended and Restated Excepted Holder Agreement . . . . . . . . . . . . . . . . 9
Ardenwood Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Assignment of Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Assignment of Note and Liens . . . . . . . . . . . . . . . . . . . . . . . . .24
Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Bill of Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Buyer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Certification Regarding Withholding. . . . . . . . . . . . . . . . . . . . . .24
Close of Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condition of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Contingency Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Conveying Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Current SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Deeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Delinquent Rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
Environmental Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Escrow Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
General Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Governmental Entity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Group A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Group B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Group B Release. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Group C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Group C Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Harvest Business Park Loan . . . . . . . . . . . . . . . . . . . . . . . . . . 5
iii
<PAGE>
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Intangible Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . 1
Investor Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
knowledge of Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Lender Estoppel Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Major Environmental Matter . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Opening of Escrow. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Order. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Pension-Held REIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Personal Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Project. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Rancho Downey Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Rancho Downey Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . 1
Rancho Downey Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Rancho Downey Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Real Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Registration Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 8
REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
Rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
REOC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
SEC Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
SEC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Seller's Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Series B Preferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Series B Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Shareholders' Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Tenant Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 6
iv
<PAGE>
Title Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Title Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
to the best of Seller's knowledge. . . . . . . . . . . . . . . . . . . . . . .19
Transaction Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
v
<PAGE>
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
("AGREEMENT") is made and entered into May 29, 1997, and constitutes an
agreement by which MERIDIAN INDUSTRIAL TRUST, INC., a Maryland corporation
("BUYER"), agrees to buy, and STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE
FOR AMERITECH PENSION TRUST ("SELLER"), agrees to sell or cause the sale of the
following:
A. Certain of the properties listed on EXHIBIT A, as provided below (each
of which is referred to herein as a "PROJECT" and collectively as the
"PROJECTS"), each of which is located on the tract of land which is described by
street address on EXHIBIT A (collectively, the "LAND").
B. Any and all structures, buildings, facilities, or other improvements
situated on the Land (collectively, the "IMPROVEMENTS").
C. All rights, privileges, easements, and appurtenances to the Land or
the Improvements. The term "REAL PROPERTY" herein shall refer collectively to
the Land, the Improvements and all such attendant rights, privileges, easements
and appurtenances.
D. All tangible personal property (excluding cash items) owned by the
applicable Conveying Entity relating to the Real Property and used at the Real
Property and in the operation of the Real Property (collectively, the "PERSONAL
PROPERTY").
E. The landlord's interest in all leases affecting the Real Property
(collectively, the "LEASES").
F. All intangible property owned by the applicable Conveying Entity used
in connection with the Real Property or the Personal Property (collectively, the
"INTANGIBLE PERSONAL PROPERTY").
G. The secured promissory note (the "RANCHO DOWNEY NOTE") dated March 27,
1990, in the original principal sum of $21,500,000, as amended to be $23,300,000
by amendment dated December 21, 1991, executed by Fremont Rancho, Ltd., payable
to the order of Harris Trust & Savings Bank, as Trustee for the Ameritech
Pension Trust, together with all liens securing payment thereof; the mortgagee's
title policy insuring such liens; all documents executed as further evidence of,
to secure, or otherwise in connection with the indebtedness evidenced by the
Rancho Downey Note (the "RANCHO DOWNEY LOAN DOCUMENTS"); all escrow, security
and other deposits made in connection therewith; and all other rights of Seller
with respect thereto (collectively, the "RANCHO DOWNEY LOAN"). The land,
improvements, and other property securing the Rancho Downey Loan are herein
called the "RANCHO DOWNEY PROPERTY".
1
<PAGE>
H. The Real Property, the Personal Property, the Leases and the
Intangible Personal Property relating to a particular Project are collectively
referred to herein as a "PROPERTY," and when relating to all Projects are
collectively referred to herein as the "PROPERTIES."
The terms and conditions of this Agreement and the instructions to Chicago
Title Insurance Company (the "ESCROW HOLDER" and "TITLE COMPANY") with regard to
the escrow (the "ESCROW") created pursuant hereto are as follows:
1. PURCHASE AND SALE.
(a) For valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Seller agrees to sell or cause the sale of the Rancho
Downey Loan and the Properties to Buyer, and Buyer agrees to purchase the Rancho
Downey Loan and the Properties from Seller (or the applicable Conveying Entity),
upon the terms and conditions set forth herein.
(b) Seller and Buyer acknowledge that title to certain of the
Properties and to the Rancho Downey Loan are held by separate corporations
affiliated with Seller (the "CONVEYING ENTITIES"). Each of the Conveying
Entities is listed on SCHEDULE 1(b). Subject to Section 1.(d) below, Seller
agrees to take all action reasonably necessary and appropriate to cause each
Conveying Entity to take such action as may be necessary to consummate the
transactions herein contemplated.
(c) As more particularly reflected on EXHIBIT A, the Properties have
been divided into three groupings, "GROUP A", "GROUP B" and "GROUP C". The
parties' current intent is that Buyer will acquire Group A and Group B, subject
to satisfaction of certain conditions as set forth below. If such conditions
cannot be satisfied in a timely fashion as herein provided, then the parties
intend that Buyer shall acquire Group C instead of Group B as herein provided.
(d) The Properties in Group B are subject to certain liens securing
existing mortgages, and as a condition of the conveyance of Group B to Buyer,
the Seller must obtain a release of such liens (the "GROUP B RELEASE"). Seller
shall attempt to obtain the Group B Release but shall not be required to take
any action that, in Seller's judgment, would be unduly burdensome in terms of
cost, time, or otherwise, to obtain the Group B Release. Seller shall keep
Buyer informed of the status of its negotiations with the requisite parties to
obtain the Group B Release. If the Group B Release has not been obtained by the
Closing Date, then Seller may elect to extend the Closing Date for Group B for
an additional period not to exceed 60 days. In such event, the Closing shall
occur as otherwise herein provided with regard to Group A, and this Agreement
shall remain in effect as to Group B and Group C. If, at the end of such
extended period, Seller has not obtained the Group B Release, or if Seller shall
determine prior to the Closing Date or prior to the end of such extended period
that the Group B Release is not going to be obtained, then Seller shall give
written notice thereof to Buyer (the "GROUP C NOTICE") and shall sell to Buyer
and Buyer shall acquire Group C as otherwise herein provided, and the Closing
Date therefor shall be fifty-five (55) days after the date on which the Group C
Notice is given to Buyer. Seller shall notify Buyer of any extension in the
Closing Date for Group B by written notice specifying the date to which the
Closing Date for Group B will be extended not later than three (3) days prior to
the original Closing Date.
2
<PAGE>
(e) If Seller does not obtain the Group B Release and is therefore
unable to convey Group B to Buyer, then concurrently with the Closing of the
acquisition of Group C, Seller shall reimburse Buyer for all of its out-of-
pocket due diligence costs expended in conducting due diligence investigations
of Group B, including accounting, fiscal inspection, environmental, legal
expenses and other expenses, up to a maximum reimbursement of $8,700 per
Project.
2. PURCHASE PRICE. The purchase price (the "PURCHASE PRICE") for the
Properties and the Rancho Downey Loan shall be payable as follows: At Closing,
Buyer shall deposit or cause to be deposited with Escrow Holder validly issued
certificated shares representing the Acquisition Common Stock. The "ACQUISITION
COMMON STOCK" shall be the number of shares of Common Stock reflected opposite
each Property (and the Rancho Downey Loan) on EXHIBIT A. "COMMON STOCK" means
Buyer's common stock, par value $.001 per share.
3. ESCROW.
(a) OPENING OF ESCROW. For the purposes of this Agreement, the
Escrow shall be deemed opened (the "OPENING OF ESCROW") on the date Escrow
Holder distributes to Buyer and Seller an executed counterpart of this
Agreement.
(b) CLOSE OF ESCROW. For purposes of this Agreement, the "CLOSE OF
ESCROW" or "CLOSING" shall be defined as the date or dates that each of the
special warranty deeds, or their equivalents (collectively, the "DEEDS")
conveying the respective Land and Improvements for each Project (subject to the
terms hereof) to Buyer are recorded or, as applicable, the date the Rancho
Downey Loan is assigned to Buyer, and the Acquisition Stock therefor is
delivered to Seller as herein provided. The Escrow shall close on or before the
earlier of (1) July 11, 1997, or (2) fifteen (15) days after the end of the
Contingency Period, unless extended by mutual agreement of Buyer and Seller or,
as to Group B or Group C, unless extended as provided in Section 1.(d) ("CLOSING
DATE"), provided that the deposits required of the parties herein have been made
by Seller and Buyer. On or before three (3) business days before the scheduled
Closing Date, Escrow Holder shall prepare a proforma closing statement, setting
forth the estimated adjustments and prorations as of the scheduled Closing Date,
for the Properties being acquired at such Closing (and, if applicable, the
Rancho Downey Loan).
4. CONDITION OF TITLE. It shall be a condition to Buyer's obligations
hereunder that Title Company shall be committed to issue a Texas Owner's Policy
of Title Insurance (with respect to Properties located in Texas) and an ALTA
Owner's Extended Coverage Title Insurance together with such endorsements
thereto as Buyer may reasonably require and which are approved by the Title
Company prior to expiration of the Contingency Period (collectively, the "TITLE
POLICIES"), each in the amount of the Purchase Price allocated to such Property
(as reflected on EXHIBIT A), showing fee title to the respective Land and
Improvements vested in Buyer, subject only to the following (as it relates to
each Property, the "CONDITION OF TITLE"):
(a) A lien to secure payment of real estate taxes, not delinquent;
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(b) Matters affecting the Condition of Title created by or with the
written consent of Buyer; and
(c) If applicable, the Harvest Business Park Loan and the Ardenwood
Loan; and
(d) Exceptions disclosed by a current Texas Form Title Commitment
(with respect to Properties located in Texas) or a current extended coverage
ALTA Title Commitment (with respect to all other Properties) (respectively, a
"COMMITMENT") with respect to the Land and Improvements relating to each
Property issued by the Title Company and which are approved or deemed approved
by Buyer in accordance with this section. Seller shall provide Buyer with each
Commitment for the Properties in Group A and Group B, together with legible
copies of the instruments underlying any exceptions referred to in each such
Commitment (respectively, the "EXCEPTIONS") within fourteen (14) days following
Opening of Escrow, and a survey relating to each Property in Group A and Group B
of the Land and Improvements complying with the standards for a Texas Society of
Professional Surveyors Category 1A, Condition II survey (with respect to
Properties located in Texas) or the standards for an ALTA survey (with respect
to all other Properties) (respectively, a "SURVEY"), within twenty-one (21) days
following the Opening of Escrow; the Surveys may be updates of prior surveys
provided they locate all the Improvements and contain a current certificate
satisfactory to Buyer. The Commitments and Exceptions, and the Surveys for
Properties in Group C shall be delivered within fourteen (14) and twenty-one
(21) days, respectively, following the giving of the Group C Notice. Each
Survey shall be: (1) prepared by a licensed land surveyor in the respective
state where the Property is located, and (2) certified to Title Company, Buyer
and any other entity reasonably required by Buyer, in form reasonably acceptable
to Buyer. If, on or before fifteen (15) days following receipt of each
Commitment, Exceptions and Survey, Buyer disapproves any items described
therein, (Buyer agreeing that it will exercise a commercial reasonableness
standard in disapproving of any such item), Seller shall thereafter have the
right to attempt to eliminate or ameliorate to Buyer's satisfaction such matters
as Buyer shall have so disapproved on or before fifteen (15) days following
receipt of Buyer's disapproval notice, but in no event later than the expiration
of the Contingency Period (as hereafter defined). Seller shall give written
notice to Buyer within such fifteen (15) day period whether Seller is unable or
unwilling to eliminate such disapproved matters. If Seller so notifies Buyer
that it is unable or unwilling to eliminate any such disapproved matters, Buyer
shall have the right, exercisable by written notice delivered to Seller and
Escrow Holder on or before the expiration of the Contingency Period, with
respect to any Property for which such disapproved matters have not been cured
to Buyer's satisfaction, to: (A) waive its prior disapprovals of those matters
which Seller is unable or unwilling to eliminate as to some or all of the
Properties, in which event such disapproved matters with respect to such
Properties shall be deemed approved; or (B) terminate the Escrow with respect to
those Properties for which such disapproved matters have not been cured to
Buyer's satisfaction, in which event this Agreement shall continue to be in
effect with respect only to those Properties for which Buyer has not terminated
the Escrow (subject to Section 41).
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5. CONTINGENCY PERIOD.
(a) INSPECTION OF PROPERTIES. For a period of (1) as to Group A and
Group B, forty-five (45) days from the Opening of Escrow, and (2) as to Group C,
forty-five (45) days after Seller delivers the Group C Notice (the "CONTINGENCY
PERIOD"), Buyer shall have the right to satisfy itself that the physical and
legal aspects of each Property and the Rancho Downey Property are acceptable to
Buyer and that the net operating income budgeted by Seller for the Properties
and the Rancho Downey Property reflects a commercially reasonable calculation of
the projected net operating income (based on industry standards) that may be
expected to be reasonably obtained from operating the Properties and holding the
Rancho Downey Loan. Buyer will not begin its inspections as to Group C until
Seller has given the Group C Notice. Buyer's obligations hereunder shall be
conditioned upon Buyer's satisfaction with or waiver of such matters concerning
the physical and legal aspects and the net operating income of the Properties
and the Rancho Downey Property, which satisfaction or waiver shall be in Buyer's
sole and absolute discretion. If Buyer, at any time on or before the expiration
of the Contingency Period, fails to approve or waive, in a writing delivered to
Seller and Escrow Holder, the matters set forth in this section with respect to
a Property or the Rancho Downey Property (other than with respect to a Major
Environmental Matter), then all of such matters shall be deemed disapproved with
respect to such Property or the Rancho Downey Property, in which case Buyer may,
prior to the expiration of the Contingency Period, terminate the Escrow with
respect to all Properties as to which Closing has not then occurred, in which
event the Escrow, this Agreement and the rights and obligations of the parties
hereunder shall terminate with respect to all Properties as to which Closing has
not then occurred. Notwithstanding the foregoing, if a Property or the Rancho
Downey Property is subject to a Major Environmental Matter, then Buyer may,
prior to the expiration of the Contingency Period, terminate the Escrow with
respect to such Property or the Rancho Downey Loan, in which event this
Agreement shall continue to be in effect with respect only to those Properties
and the Rancho Downey Property for which Buyer has not terminated the Escrow
(subject to Section 41). As used herein, a "MAJOR ENVIRONMENTAL MATTER" shall
mean an environmental condition as to a Property or the Rancho Downey Property
that is set forth in a written report prepared by an independent third party and
which would cause the value of the subject Property or the Rancho Downey
Property to be reduced by 10% or more.
(b) REVIEW OF DOCUMENTS. Seller shall provide access to Buyer, on or
before the date that is five (5) days following the Opening of Escrow, (or, as
to Group C, following the giving of the Group C Notice), the schedules and
copies of the documents described on EXHIBIT B as to the relevant Properties.
Seller shall provide full legal descriptions of each Tract of the Land to Buyer
within five (5) days following the Opening of Escrow; after approval by Buyer,
such descriptions shall be deemed incorporated into this Agreement. As to those
documents relevant to the ownership, operation and maintenance of particular
Property, or the Rancho Downey Property, Buyer will have access to the records
at the offices of Seller's management agents (I.E, at the offices of Cabot or
RREEF as to Group A, Cabot as to Group B, and AMB as to Group C). Seller shall
direct its management agents to fully cooperate with Seller in the conduct of
Seller's inspections, and assist in obtaining such cooperation. Seller shall
furnish to Buyer and Buyer shall acknowledge an inventory of the records
reviewed by it in connection with its inspection. Seller shall deliver to Buyer
for its review copies of the Rancho Downey Note and all other Rancho Downey Loan
Documents and (if the Group C Notice is given) the promissory notes, mortgages
or deed of trust and
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all other documents evidencing, securing or otherwise executed in connection
with mortgage loans secured by the Harvest Business Park Project (the
"HARVEST BUSINESS PARK LOAN") and the Ardenwood Project (the "ARDENWOOD
LOAN"). Except as provided in Section 1.(e), Buyer shall be solely
responsible for any costs incurred in connection with Buyer's: (1) review of
such documents and schedules, and (2) other investigations of the Properties.
Buyer shall maintain copies of all records it receives from Seller with
respect to the Properties so long as Seller is subject to a claim arising
under this Agreement pertaining to such records.
(c) BUYER'S INSPECTION RIGHTS DURING ESCROW. During the term of the
Escrow, Buyer, its agents, contractors and subcontractors shall have the right
to enter upon the Properties and, to the extent permitted by the Rancho Downey
Loan Documents, the Rancho Downey Property at reasonable times during ordinary
business hours, upon reasonable prior notice to Seller and subject to the rights
of tenants under the Leases, to make any and all inspections and tests as may be
necessary or desirable in Buyer's judgment; PROVIDED, that Buyer shall not make
any environmental inspections that are more intrusive than a Phase 1 examination
without Seller's prior approval thereof. Buyer shall indemnify and hold Seller
harmless from any damages to any Property or the Rancho Downey Property to the
extent such damages result from Buyer's entry and/or activities upon the
respective Real Property by Buyer, its agents, contractors and/or
subcontractors.
6. TENANT AND LENDER ESTOPPEL CERTIFICATES.
(a) Seller shall use good faith efforts to obtain from each tenant of
each Property and deliver to Buyer on or before the date that is five (5) days
prior to the Closing Date a duly executed tenant estoppel certificate in the
form of EXHIBIT C (the "TENANT ESTOPPEL CERTIFICATES"). The Tenant Estoppel
Certificates shall be initially prepared by Seller, shall be approved by Buyer,
and shall be dated no earlier than thirty (30) days prior to the originally
scheduled Closing Date.
(b) If Seller (1) fails to timely obtain Tenant Estoppel Certificates
for at least 75% of the total rentable square feet of a Property, (2) fails to
deliver a Tenant Estoppel Certificate for any tenant whose leased premises is
100,000 square feet of area or more, or (3) delivers executed Tenant Estoppel
Certificates containing information concerning Leases that are materially
different from the information contained in the Tenant Estoppel Certificate
prepared by Seller for more than 10% of the total rentable square feet of a
Property or as to any tenant whose leased premises contain 100,000 square feet
of area or more, Buyer shall have the right to (A) waive such defect with
respect to a Property, in which event at the Close of Escrow Seller shall
deliver to Buyer Seller's certification ("SELLER'S CERTIFICATE") as to those
matters for which the Tenant Estoppel Certificates were defective or missing; or
(B) terminate this Agreement with respect to such Property and the Escrow
created hereby, in which event this Agreement shall continue to be in effect
with respect only to those Properties for which Buyer has not terminated this
Agreement and the Escrow (subject to Section 41).
(c) If Buyer is to acquire Group C, as provided in Section 1.(d),
then Seller shall use good faith efforts to obtain from the lenders holding the
Harvest Business Park Loan and Ardenwood Loan, and deliver to Buyer not later
than five (5) days prior to the Closing Date for those Projects, an executed
certificate ("LENDER ESTOPPEL CERTIFICATE") executed and acknowledged by
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a duly authorized officer of such lender: stating that its promissory note
and the liens securing it are in good standing and no uncured breaches or
defaults exist thereunder; setting forth the unpaid principal balance of such
note and the amount of all escrow deposits held in respect thereof; setting
forth the date through which interest on such note has been paid; consenting
to the sale and purchase herein contemplated, to the extent required by the
relevant loan documentation; agreeing to notify Buyer of any default under
any manner relative to its loan; and acknowledging that all of Seller's
rights and all escrow deposits held in respect of its loans have been
assigned to Buyer. If Seller is unable to deliver such Lender Estoppel
Certificates at least five (5) days prior to Closing, then unless Seller (at
its option) elects to pay the Harvest Business Park Loan and/or the Ardenwood
Loan, as applicable, and cause the release of the liens securing such loans,
Buyer shall have the right (1) if consent from a lender is not required or
has been obtained, to waive such matter, in which case Seller shall execute a
certificate certifying as to the matters which would have been contained in
the Lender's Estoppel Certificate; or (2) to terminate this Agreement with
respect to such Property and the Escrow created hereby, in which event this
Agreement shall continue to be in effect with respect only to those
Properties for which Buyer has not terminated this Agreement and the Escrow
(subject to Section 41). Seller shall notify Buyer if it will so pay the
Harvest Business Park Loan or Ardenwood Loan at least five (5) days prior to
Closing. If Seller does so pay either such loan (or both), then the Purchase
Price for the Project in question shall be as set forth in the column
indicated on Exhibit A.
7. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer makes the following
representations and warranties to Seller:
(a) ORGANIZATION AND GOOD STANDING. (1) Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland. Each Subsidiary (as defined below) of Buyer is a corporation or other
entity duly organized, validly existing and, with respect to each Subsidiary
that is a corporation, in good standing under the laws of its state of
incorporation or formation, as the case may be. Buyer and each Subsidiary of
Buyer is duly qualified or licensed and, with respect to each Subsidiary that is
a corporation, in good standing as a foreign corporation and authorized to do
business, in each jurisdiction in which the ownership or leasing of its
properties or the character of its operations makes such qualification,
licensing or authorization necessary, except where the failure to obtain such
qualification, license, authorization or good standing would not individually or
in the aggregate reasonably be expected to have a material adverse effect upon
the assets, liabilities, financial condition, earnings or operations of Buyer
and its Subsidiaries taken as a whole or any transaction contemplated by this
Agreement or any other agreement to be entered into by Buyer and Seller or any
Conveying Entity in accordance herewith (the "TRANSACTION DOCUMENTS") (any such
material adverse effect, whether individually or in the aggregate, a "MATERIAL
ADVERSE EFFECT"). "SUBSIDIARY" means, with respect to any entity, (i) a
corporation, a majority of whose capital stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such entity, by a Subsidiary of such entity or by such entity and a
Subsidiary thereof or (ii) any other entity (other than a corporation) in which
such entity, a Subsidiary thereof or such entity and a Subsidiary thereof,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest. Buyer and each Subsidiary of Buyer has all
requisite corporate power and authority to own its assets
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and to carry on its business as presently proposed to be conducted except
where a lack of such corporate power or authority would not reasonably be
expected to have a Material Adverse Effect.
(2) Buyer has delivered to Seller true, correct and complete
copies of the Charter and the Bylaws of Buyer.
(b) AUTHORIZATIONS. Buyer has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Transaction
Documents. The execution and delivery by Buyer of the Transaction Documents
and the consummation of the transactions contemplated thereby have been duly and
validly authorized by Buyer.
(c) CAPITALIZATION. As of the date hereof, and except for issuances
of Common Stock pursuant to Buyer's Amended and Restated Employee and Director
Stock Plan, the equity capitalization of Buyer is as set forth in the balance
sheet of Buyer included in Buyer's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1997 (the "1997 FORM 10-Q"). At the Closing Date, all
of the outstanding shares of stock of Buyer will be duly and validly issued,
fully paid and non-assessable and not subject to any preemptive rights of other
shareholders. As of the date hereof, except as set forth in Buyer's Annual
Report on Form 10-K for the year ended December 31, 1996 (the "1996 FORM 10-K"),
the 1997 Form 10-Q and Buyer's Proxy Statement dated April 14, 1997 in respect
of Buyer's annual meeting of shareholders held on May 16, 1997 (the "1997 PROXY
STATEMENT" and collectively, the "CURRENT SEC REPORTS") and pursuant to Buyer's
Amended and Restated Employee and Director Stock Plan, (A) except as set forth
in SCHEDULE 7.(c), there are no outstanding securities or indebtedness
convertible into, exchangeable for, or carrying the right to acquire, Common
Stock or other equity securities of Buyer, or subscriptions, warrants, options,
rights, or other arrangements or commitments obligating Buyer to issue or
dispose of any Common Stock or other equity securities or any ownership therein,
(B) there is no agreement or arrangement restricting the voting or transfer of
any equity securities of Buyer, and (C) there are no outstanding contractual
obligations, commitments, understandings or arrangements of Buyer or any of its
Subsidiaries to repurchase, redeem or otherwise acquire, require or make any
payment in respect of any shares of equity securities of Buyer or such
Subsidiary. As of the date hereof, except as contemplated by the Registration
Rights Agreement to be entered into by Buyer and Seller in the form of Exhibit K
(the "REGISTRATION RIGHTS AGREEMENT") and the Amended and Restated Investor
Rights Agreement dated as of February 23, 1996 among Buyer, Seller and the other
parties thereto (the "INVESTOR RIGHTS AGREEMENT"), there are no agreements or
arrangements to which any of Buyer or its Subsidiaries is a party pursuant to
which Buyer is or could be required to register shares of Common Stock or other
securities under the Securities Act of 1933 (the "SECURITIES ACT").
(d) CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither Buyer nor any
of its Subsidiaries is a party to any contract or agreement or subject to any
charter or other corporate restriction compliance with which would have a
Material Adverse Effect. Assuming the filing of a Form D with the Securities
and Exchange Commission (the "COMMISSION"), the listing of the Acquisition
Common Stock on the New York Stock Exchange (the "NYSE") and the accuracy of the
representations and warranties of, and the performance of the agreements of,
Seller set forth in Section 8 and elsewhere herein, neither the execution and
delivery of the Transaction Documents nor fulfillment of nor compliance with the
terms and provisions thereof, nor the issuance of the
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Acquisition Common Stock will (1) violate any provision of any law presently
in effect or in effect at the Closing Date having applicability to Buyer or
any Subsidiary or any of their properties, except such violations as would
not have a Material Adverse Effect, (2) conflict with or result in a breach
of or constitute a default under the Charter or Bylaws of Buyer or any
organizational document of its Subsidiaries, (3) except as set forth on
SCHEDULE 7(d), require any consent, approval or notice under, or conflict
with or result in a breach of, constitute a default or accelerate any right
under, any note, bond, mortgage, license, indenture or loan or credit
agreement, or any other agreement or instrument, to which Buyer or any of its
Subsidiaries is a party or by which any of their respective properties is
bound, except such consents, approvals, notices, conflicts, breaches or
defaults as would not have a Material Adverse Effect or (4) result in, or
require the creation or imposition of, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind ("LIENS") upon or with
respect to any of the properties now owned or hereafter acquired by Buyer or
any of its Subsidiaries. Neither Buyer nor any of its Subsidiaries is bound
by any agreement which would impose upon Seller any personal obligation or
personal liability which is greater than the personal obligations and
personal liabilities imposed upon Seller under this Agreement, the
Registration Rights Agreement and the Amended and Restated Excepted Holder
Agreement to be entered into by Buyer and Seller in the form of EXHIBIT L
(the "AMENDED AND RESTATED EXCEPTED HOLDER AGREEMENT"). In addition, Buyer is
not aware of any facts or circumstances that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) DUE EXECUTION, ETC. This Agreement constitutes, and when
executed and delivered by Buyer at the Closing each of the Registration Rights
Agreement and the Amended and Restated Excepted Holder Agreement will
constitute, a legal, valid and binding obligation of Buyer, enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general principles
of equity.
(f) LITIGATION, PROCEEDING, ETC. There is no action, suit, notice of
violation, proceeding or investigation pending or, to the best knowledge of
Buyer, threatened against or affecting Buyer or any of its Subsidiaries or any
of their respective properties before or by any Governmental Entity which
(1) challenges the legality, validity or enforceability of any of the
Transaction Documents or the Acquisition Common Stock or (2) (individually or in
the aggregate) have a Material Adverse Effect or (3) would (individually or in
the aggregate) impair the ability of Buyer to perform fully on a timely basis
any obligations which it has under any of the Transaction Documents.
(g) NO DEFAULT OR VIOLATION. Neither Buyer nor any of its
Subsidiaries is (1) in default under or in violation of any indenture, loan or
credit agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound, except such defaults or
violations as would not have a Material Adverse Effect, (2) in violation of any
decree, injunction, judgment, order, ruling, assessment or writ ("ORDER") of any
agency, bureau, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign (a "GOVERNMENTAL ENTITY"), except for such violations
as would not have a Material Adverse Effect, or (3) in violation of any law
which would (A) adversely affect the legality, validity or enforceability of the
Transaction Documents, (B) have
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a Material Adverse Effect or (C) adversely impair Buyer's ability or
obligation to perform fully on a timely basis any obligation which it has
under the Transaction Documents.
(h) STATUS OF ACQUISITION COMMON STOCK. Subject to approval of the
shareholders of Buyer, which approval shall be solicited pursuant to
Section 10.A prior to the Closing, the issuance and sale of the Acquisition
Common Stock have been duly authorized by all necessary corporate action on the
part of Buyer and such Acquisition Common Stock, when delivered to Seller at the
Closing against payment therefor as provided herein, will be validly issued,
fully paid and non-assessable and the issuance and sale of the Acquisition
Common Stock is not and will not be subject to preemptive rights of any other
shareholder of Buyer.
(i) GOVERNMENTAL CONSENTS, ETC. Except as may be required under any
applicable securities law in connection with the performance by Buyer of its
obligations under the Registration Rights Agreement, and except for the filing
of a Form D with the Commission and the listing of the Acquisition Common Stock
on the NYSE, and assuming the accuracy of the representations and warranties in
Sections 8.(k), 8.(l), 8.(n) and 8.(p), no authorization, consent, approval,
waiver, license, qualification or formal exemption from nor any filing,
declaration, qualification or registration with, any Governmental Entity or any
securities exchange is required in connection with the execution, delivery or
performance by Buyer of this Agreement and the issuance, sale or delivery of the
Acquisition Common Stock except for those that have been made or obtained by
Buyer as of the date hereof. At the Closing Date, Buyer will have made all
filings and given all notices to Governmental Entities and obtained all
necessary ordinances, registrations, declarations, approvals, orders, consents,
qualifications, franchises, certificates, permits and authorizations from any
Governmental Entity, to own or lease its properties and to conduct its
facilities and businesses as currently conducted, except where failure to do so
would not have a Material Adverse Effect. At the Closing Date, all such
registrations, declarations, approvals, orders, consents, qualifications,
franchises, certificates, permits and authorizations, the failure of which to
file, give notice of or obtain would have a Material Adverse Effect, will be in
full force and effect. The assets of Buyer qualify as exempt assets for
purposes of the Hart-Scott-Rodino Act and no filing under the Hart-Scott-Rodino
Act is required in connection with the sale and issuance of the Acquisition
Common Stock hereunder.
(j) PRIVATE OFFERING. Neither Buyer nor any person acting on its
behalf has taken or will take any action (including, without limitation, any
offering of any securities of Buyer under circumstances which would require the
integration of such offering with the offering of the Acquisition Common Stock
under the Securities Act) which might subject the offering, issuance or sale of
the Acquisition Common Stock to the registration requirements of Section 5 of
the Securities Act.
(k) ERISA.
(1) COMPANY STATUS. Buyer currently qualifies as a "real estate
operating company" ("REOC") within the meaning of C.F.R.
Section 2510.3-101(e), and has qualified as a REOC during all valuation
periods within the meaning of 29 C.F.R. Section 2510.3-101(d)(5).
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(2) BENEFIT PLANS. To the extent applicable, the Benefit Plans
comply, in all material respects, with the requirements of the Employee
Retirement Income Security Act of 1974, as amended (or, with respect to any
provision thereof referred to herein, any corresponding provision of any
succeeding law, "ERISA") and the Code (including reporting requirements).
Neither any Benefit Plan nor Buyer or any Subsidiary of Buyer has incurred
any liability or penalty under Section 4975 of the Code or Section 502(i)
of ERISA. Each Benefit Plan has been maintained and administered in all
material respects in compliance with its terms and with ERISA and the Code
to the extent applicable thereto. There are no pending, or to the
knowledge of Buyer threatened, material claims (other than claims for
benefits pursuant to the terms of any such plan) against or otherwise
involving any of the Benefit Plans and no action has been brought against
or with respect to any Benefit Plan, and neither Buyer nor any Subsidiary
of Buyer incurred any material liability to any party with respect to any
Benefit Plan. All contributions required to be made to the Benefit Plans
have been made or provided for as of the date hereof. No Benefit Plan is
subject to Title IV of ERISA and neither Buyer nor any Subsidiary of Buyer
has, within six years prior to the date of this Agreement, contributed to
or had any obligation to contribute to any employee benefit plan subject to
Title IV of ERISA. "BENEFIT PLANS" means all employee benefit plans and
collective bargaining, labor and employment agreements or other similar
benefit arrangements to which Buyer or any Subsidiary of Buyer will be a
party at the Closing or by which Buyer or any Subsidiary of Buyer will be
bound at the Closing, including (A) any profit-sharing, deferred
compensation, bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, severance, welfare or incentive plan, agreement or
arrangement, (B) any plan, agreement or arrangement providing for "fringe
benefits" or perquisites to employees, officers, directors or agents,
including benefits relating to automobiles, clubs, vacation, child care,
parenting, sabbatical, sick leave, medical, dental, hospitalization, life
insurance and other types of insurance any employment agreement not
terminable on 30 days (or less) written notice or (C) any other "employee
benefit plan" within the meaning of Section 3(3) of ERISA. For purposes of
this Section 8, (i) the term "BUYER" includes any entity required to be
aggregated with Buyer pursuant to Code Section 414(b), (c), (m) or (o) and
(ii) provisions of ERISA or the Code include regulations prescribed under
such provisions.
(3) PROHIBITED TRANSACTIONS. The sale of the Properties and the
Rancho Downey Loan and the issuance of the Acquisition Common Stock as
herein contemplated does not constitute a prohibited transaction for
purposes of Section 4975(c)(1)(A) of the Code or Section 406(a)(1)(A) of
ERISA.
(l) FINANCIAL STATEMENTS. The consolidated balance sheets and
statements of operations of Buyer and its consolidated Subsidiaries as of the
last day of its latest complete fiscal year and the related consolidated
statements of operations, shareholders' equity and cash flows for the fiscal
year then ended, reported on by the independent public accountants (and, with
respect to Buyer, included in the 1996 Form 10-K) for the years ended
December 31, 1995 and December 31, 1996 and the consolidated balance sheets
and statements of operations of Buyer and its consolidated Subsidiaries as of
the fiscal quarter ended March 31, 1997 and the related consolidated
statements of operations, shareholders' equity and cash flows for the fiscal
quarter then ended (and, with respect
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to Buyer, included in the 1997 Form 10-Q), present fairly in all material
respects the financial position of Buyer and its consolidated Subsidiaries as
of the dates indicated and the results of operations of Buyer and its
consolidated Subsidiaries, for the periods specified. Such financial
statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis and all adjustments
necessary for a fair presentation of results for such periods have been made
(subject, in the case of unaudited financial statements, to normal year-end
audit adjustments).
(m) INSURANCE. At Closing, Buyer and its Subsidiaries will have
(1) "all risk" property insurance, including fire, flood, earthquake, extended
coverage and rental loss insurance and (2) general commercial liability
insurance, under terms and in such amounts and covering such risks that are
customary for properties similar to those of Buyer and its Subsidiaries. There
are currently no outstanding material losses for which Buyer or any of its
Subsidiaries has failed to give or present notice or claim under any policy.
Policies for all the insurance are in full force and effect and none of Buyer or
its Subsidiaries is in default in any material respect under any of the
policies.
(n) INFORMATION PROVIDED. Neither this Agreement, the schedules and
exhibits hereto, the Current SEC Reports nor any other written document
delivered to Seller in connection with the transactions contemplated hereby
contain any untrue statement of a material fact or omit any material fact
necessary to make the statements herein or therein, as the case may be, in light
of the circumstances under which it was made, not misleading, and all material
information regarding Buyer and its Subsidiaries is provided therein.
(o) NO OTHER LIABILITIES. Neither Buyer nor any Subsidiary of Buyer
will have any material liability, whether absolute, accrued, contingent or
otherwise, except liabilities (1) reflected on the consolidated balance sheet of
Buyer and its Subsidiaries as at March 31, 1997, or (2) liabilities that (A) are
incurred by Buyer and its Subsidiaries after March 31, 1997 in the ordinary
course of business and (B) would not have a Material Adverse Effect.
(p) NO BROKERS OR FINDERS. No agent, broker, finder or investment or
commercial banker, or other Person or firm engaged by or acting on behalf of
Buyer in connection with the negotiation, execution or performance of this
Agreement is or will be entitled to any brokerage or finder's or similar fee or
other commission as a result of this Agreement other than any such fees or
commissions that have been disclosed to Seller and as to which Buyer shall have
full and sole responsibility.
(q) TAXES; REIT STATUS. Each of Buyer and its Subsidiaries has filed
all tax returns that are required to be filed with any Governmental Entity and
has paid all Taxes due pursuant to the tax returns or any assessment received by
it or otherwise required to be paid, except taxes being contested in good faith
by appropriate proceedings and for which adequate reserves or other provisions
are maintained, and except for the filing of tax returns as to which the failure
to file would not, individually or in the aggregate, have a Material Adverse
Effect. Buyer (1) elected to be taxed as a "real estate investment trust" as
defined in Section 856 of the Internal Revenue Code of 1986, as amended (the
"CODE") ("REIT") effective for each of the taxable years since Buyer has been
incorporated, (2) has not revoked such election, and (A) qualifies for taxation
as a REIT for
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each such taxable year and for its current taxable year. Buyer is not a
foreign person within the meaning of Section 1445 of the Code.
(r) COMPLIANCE WITH LAWS. Neither Buyer nor any of its Subsidiaries
has been in or is in, and none of them has received notice of, violation of or
default with respect to, any law or any decision, ruling, order or award of any
arbitrator applicable to it or its business, properties or operations, except
for violations or defaults that, individually or in the aggregate, would not
have a Material Adverse Effect.
(s) SUBSIDIARIES.
(1) The 1996 Form 10-K sets forth a correct and complete list of
all of Buyer's Subsidiaries as of the date hereof.
(2) As of the date of this Agreement, except as set forth on
SCHEDULE 7(s), all outstanding shares of capital stock or other evidences
of equity ownership of each Subsidiary of Buyer are duly authorized,
validly issued, fully paid and nonassessable and are owned, directly or
indirectly, beneficially and of record by Buyer, free and clear of all
Liens.
(t) MATERIAL CONTRACTS. The 1996 Form 10-K and the 1997 Form 10-Q,
collectively, include a correct and complete list of the following as of the
date of this Agreement with respect to Buyer and any of its Subsidiaries:
(1) agreements with any shareholder having beneficial ownership
of 5% or more of the shares of Common Stock of Buyer or such Subsidiary
then issued and outstanding, director or officer of Buyer or such
Subsidiary and all shareholders' agreements and voting trusts; and
(2) agreements not made in the ordinary course of business and
which could reasonably be expected to result in a Material Adverse Effect.
(u) RECOMMENDATIONS. The Board of Directors of Buyer, at a meeting
duly called and held, has duly (1) determined that the Transaction Documents and
the transactions contemplated thereby, taken as a whole, are in the best
interests of Buyer and its shareholders, (2) resolved, subject to its fiduciary
duties, to recommend that holders of shares of Common Stock and Series B
Preferred Stock approve the issuance of the Acquisition Common Stock as
contemplated hereby and (3) approved the Transaction Documents and the
transactions contemplated thereby.
(v) SHAREHOLDER APPROVAL. The affirmative vote of a majority of the
shares of the Common Stock and Buyer's Series B Preferred Stock par value $.001
per share ("SERIES B PREFERRED STOCK"), voting together as a single class, voted
at the duly convened shareholders meeting of Buyer (or any other duly convened
meeting of the holders of the Common Stock and Series B Preferred Stock) is the
only vote of the holders of any class or series of the equity securities
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of Buyer necessary to approve the Transaction Documents and the transactions
contemplated thereby.
(w) NO RESTRICTIONS ON ACQUISITION COMMON STOCK. No provision of the
Charter or Bylaws of Buyer, any other agreement, indenture or other instrument
to which Buyer or its properties are subject, or any law applicable to Buyer
(1) except as provided in the Amended and Restated Excepted Holder Agreement,
directly or indirectly restricts or impairs the right or ability of Seller to
vote, or otherwise to exercise the rights and receive the benefits of a
shareholder with respect to the Acquisition Common Stock, including, without
limitation, restrictions based upon the size of the security holdings of Seller,
the business in which it is engaged or other considerations applicable to it and
not to security holders generally, or (2) provides any other securityholder of
Buyer with any preemptive rights.
(x) SEC DOCUMENTS. Buyer has filed with the Commission all reports,
schedules, forms, statements and other documents required by the Securities
Exchange Act of 1934 (the "EXCHANGE ACT") to be filed by Buyer (collectively,
and in each case including all exhibits and schedules thereto and documents
incorporated by reference therein, the "SEC DOCUMENTS"). Buyer has delivered or
made available to Seller all SEC Documents. As of their respective dates,
except to the extent revised or superseded by a subsequent filing with the
Commission, the SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
none of the SEC Documents (including any and all financial statements included
therein) as of such dates 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 therein, in light of the circumstances under which
they were made, not misleading. The consolidated financial statements of Buyer
and its Subsidiaries included in all SEC Documents, including any amendments
thereto (the "SEC FINANCIAL STATEMENTS"), comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto.
(y) NO MERGER AGREEMENTS. As of the date hereof, neither Buyer nor
any of its Subsidiaries has entered into any agreement with any person which has
not been terminated as of the date of this Agreement and under which there
remains any liability or obligation thereof with respect to a merger or
consolidation with any of Buyer or its Subsidiaries, or any other acquisition of
a substantial amount of the assets of Buyer or its Subsidiaries.
(z) CERTAIN ACTIONS BY BUYER. Buyer has not: (1) made a general
assignment for the benefit of creditors, (2) filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by Buyer's
creditors, (3) suffered the appointment of a receiver to take possession of all
or substantially all of Buyer's assets, (4) suffered the attachment or other
judicial seizure of all, or substantially all, of Buyer's assets, (5) admitted
in writing Buyer's inability to pay its debts as they come due, or (6) made an
offer of settlement, extension, or composition to its creditors generally.
(aa) PENSION-HELD REIT STATUS. The Buyer is not, and the issuance of
all of the Acquisition Common Stock to Seller will not cause Buyer to be treated
as, a "PENSION-HELD REIT"
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within the meaning of Section 856(h) of the Code, or, if Buyer is a
Pension-Held REIT, for purposes of applying Section 856(h)(3)(C) of the Code
to Seller, which assumes Buyer is treated as a "qualified trust" described in
Section 401(a) of the Code, (1) Buyer's indebtedness qualifies as
indebtedness described in Section 514(c)(9)(A) of the Code, (2) the ratio of
Buyer's gross income from unrelated trades or businesses (within the meaning
of Section 856(h)(3)(C) of the Code) to Buyer's total gross income for each
taxable year (within the meaning of Section 856(h)(3)(C) of the Code) will be
less than 5% and (3) the allocations to Buyer from all partnerships in which
Buyer is a partner for federal income tax purposes (other than MDN/JSC
Limited Partnership) will qualify under Section 514(c)(9)(B)(vi)(III), and
(c)(9)(E) of the Code.
The representations and warranties of Buyer in this Agreement shall survive
the Close of Escrow and be true and correct in all material respects on and as
of the Close of Escrow as if such representations and warranties were made on
and as such date (subject to revisions to reflect changed circumstances or
knowledge obtained between execution of the Agreement and the Close of Escrow).
8. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller makes the following
representations and warranties:
(a) This Agreement has been duly and validly authorized, executed and
delivered by Seller and no other approval on the part of Seller is requisite to
the valid and binding execution, delivery and performance of this Agreement by
Seller, and no consents of any third party are necessary to permit the
consummation by Seller of the transactions contemplated pursuant to this
Agreement, other than appropriate corporate resolutions of the Conveying
Entities, which Seller agrees to cause to be adopted prior to the applicable
Closing.
(b) There are no actions, suits or proceedings pending or, to the
best of Seller's knowledge, threatened which if adversely determined would
materially and adversely affect the Leases or the Properties, in the aggregate,
or any pending or, to the best of Seller's knowledge, threatened proceedings in
eminent domain, which would affect any Property. For the foregoing purposes,
any threatened or pending proceeding which is adequately covered by insurance,
in Buyer's reasonable judgment, shall be deemed not to have a material adverse
effect on the Property in question.
(c) To the best of Seller's knowledge, the Properties are not in
violation of any law or governmental regulation applicable to the Properties in
any manner that would have a material adverse effect on the Properties.
(d) There are no agreements granting any party rights to possession
of the Properties which will affect the Properties subsequent to the Closing,
except the Leases or as set forth in each Commitment. There are no maintenance,
service or other agreements affecting or relating to the Properties except as
made available to Buyer in accordance with EXHIBIT B hereto. Seller is not in
violation of or in default under any of the documents, recorded or unrecorded,
referred to in the Commitments.
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(e) Except as would not have a material adverse effect on the
financial condition or operation of the Properties, or as otherwise disclosed
in writing to Buyer prior to expiration of the Contingency Period (by making
available copies of leases or files or otherwise), the Leases are in full
force and effect and have not been modified or amended; Seller is not in
default with respect to Leases; there have been no claims asserted by tenant
for offsets against rent or any other monetary or other claims made against
Seller, as landlord, which shall apply after the Close of Escrow; no Tenant
has been given any concession or consideration for the rental of any space
which shall apply after the Close of Escrow; no tenant is entitled hereafter
to any concession, rebate, construction of further improvements, moving or
other allowance or free or reduced rent for any period after the Close of
Escrow; Seller is not aware of any default by any tenant under its Lease;
all leasing commissions with respect to the Leases (including any renewal or
expansion option) have been paid by Seller and there are no outstanding
commission obligations or listing agreements that will affect Buyer or the
Properties after the Close of Escrow.
(f) All information and documents supplied or made available to Buyer
by Seller in accordance with EXHIBIT B hereto are true, complete and correct
copies of all of the documents in Seller's possession or control described on
EXHIBIT B and related to the leasing, use, ownership, development, maintenance,
management and repair of the Properties.
(g) To the best of Seller's knowledge, the improvements are in
compliance in all material respects with all applicable governmental laws,
ordinances, rules and regulations, and Seller is not aware of any material
defect in the condition of the Properties which has not been corrected.
(h) To the best of Seller's knowledge, Seller has made available to
Buyer true and correct copies of all site assessment reports within its
possession or control with respect to the presence or absence of "HAZARDOUS
MATERIALS" (as hereinafter defined) on the Properties (the "ENVIRONMENTAL
REPORTS"). To the best of Seller's knowledge, except as disclosed in the
Environmental Reports, there are no Hazardous Materials which require removal,
remediation or encasement of materials or reporting to any governmental
authority or which violate any federal, state or local environmental statute,
regulation or ordinance. To the best of Seller's knowledge, except as disclosed
in the Environmental Reports, there are no underground or other storage tanks
situated on the Properties and no such tanks have been removed from the
Properties. To the best of Seller's knowledge, neither Seller nor any occupant
of any Property has generated, stored, handled or disposed of any Hazardous
Materials at such Property, and there has been no release or discharge,
spillage, of any Hazardous Materials at the Properties. "HAZARDOUS MATERIALS"
herein means any material hazardous to human health which is listed in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Resource Conservation and Recovery Act, the Clean Water Act, the
Clean Air Act, the Toxic Substances Control Act, the Safe Drinking Water Act, or
in the regulations adopted and publications promulgated pursuant thereto.
(i) Seller is not a "foreign person" within the meaning of
Section 1445 of the Code.
(j) Seller has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the filing
of any involuntary petition by
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Seller's creditors, (3) suffered the appointment of a receiver to take
possession of all or substantially all of Seller's assets, (4) suffered the
attachment or other judicial seizure of all, or substantially all, of
Seller's assets, (5) admitted in writing Seller's inability to pay its debts
as they come due, or (6) made an offer of settlement, extension, or
composition to its creditors generally.
(k) The Acquisition Common Stock to be acquired by it hereunder is
being acquired for its own account for investment and with no intention of
distributing or reselling the Acquisition Common Stock or any part thereof or
interest therein in any transaction which would be in violation of the
securities laws of the United States of America or any state or any foreign
country or jurisdiction.
(l) If Seller should decide to dispose of any of the Acquisition
Common Stock to be purchased by it, Seller understands and agrees that it may do
so only pursuant to an effective registration statement under the Securities Act
of 1933, as amended, and the rules and regulations of the Commission promulgated
thereunder (the "SECURITIES ACT") or pursuant to an exemption from registration
under the Securities Act. In connection with any offer, resale, pledge or other
transfer (individually and collectively, a "TRANSFER") of any Acquisition Common
Stock other than pursuant to an effective registration statement, Buyer may
require that the transferor of the Acquisition Common Stock provide to Buyer an
opinion of counsel which opinion shall be reasonably satisfactory in form and
substance to Buyer, to the effect that such Transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and any state or foreign securities laws.
Seller agrees to the imprinting, so long as appropriate, of substantially the
following legends on certificates representing the Acquisition Common Stock:
THE SHARES OF COMMON STOCK (THE "SHARES") EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES THAT IT WILL NOT OFFER,
RESELL, PLEDGE OR OTHERWISE TRANSFER (INDIVIDUALLY AND COLLECTIVELY, A
"TRANSFER") THE SHARES EVIDENCED HEREBY, EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT SUCH AS THE EXEMPTION SET FORTH IN
RULE 144 UNDER THE SECURITIES ACT (IF APPLICABLE). IF THE PROPOSED TRANSFER IS
TO BE MADE OTHER THAN PURSUANT TO CLAUSE (A) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE CORPORATION AND THE TRANSFER AGENT SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR ANY STATE OR FOREIGN SECURITIES LAW.
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER FOR THE PURPOSE OF THE CORPORATION'S
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MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE CODE.
NO PERSON MAY (1) BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF EQUITY
STOCK IN EXCESS OF 8.5% (OR SUCH OTHER PERCENTAGE AS MAY BE DETERMINED BY THE
BOARD OF DIRECTORS OF THE CORPORATION) OF THE LESSER OF THE NUMBER OR VALUE
OF ANY CLASS OR SERIES OF THE OUTSTANDING EQUITY STOCK OF THE CORPORATION
UNLESS SUCH PERSON IS AN EXCEPTED HOLDER (IN WHICH CASE THE EXCEPTED HOLDER
LIMIT SHALL BE APPLICABLE)P OR (2) BENEFICIALLY OWN OR CONSTRUCTIVELY OWN
EQUITY STOCK WHICH WOULD RESULT IN THE CORPORATION BEING "CLOSELY HELD" UNDER
SECTION 856(H) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO
QUALIFY AS A REIT. ANY PERSON WHO ATTEMPTS TO BENEFICIALLY OWN OR
CONSTRUCTIVELY OWN SHARES OF EQUITY STOCK IN EXCESS OF THE ABOVE LIMITATIONS
MUST NOTIFY THE CORPORATION IN WRITING AT LEAST 15 DAYS PRIOR TO SUCH
ATTEMPTED TRANSFER. IF THE RESTRICTIONS ABOVE ARE VIOLATED, THE SHARES OF
EQUITY STOCK REPRESENTED HEREBY WILL BE TRANSFERRED AUTOMATICALLY AND BY
OPERATION OF LAW TO A TRUST AND SHALL BE DESIGNATED SHARES-IN-TRUST.
SHARES-IN-TRUST SHALL BE DEEMED TO HAVE BEEN OFFERED FOR SALE TO THE
CORPORATION, OR ITS DESIGNEE AT A PRICE AS SPECIFIED IN THE CORPORATION'S
CHARTER. ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED IN
THE CORPORATION'S CHARTER, AS THE SAME MAY BE FURTHER AMENDED FROM TIME TO
TIME. THE FOREGOING SUMMARY DOES NOT PURPORT TO BE COMPLETE AND IS SUBJECT TO
AND QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CORPORATION'S CHARTER, A
COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER, WILL BE SENT WITHOUT
CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS. SUCH REQUEST MUST BE MADE TO THE
SECRETARY OF THE CORPORATION.
The first legend set forth above may be removed if and when the Acquisition
Common Stock represented by such certificate is disposed of pursuant to an
effective registration statement under the Securities Act or the opinion of
counsel referred to above has been provided to Buyer.
(m) Seller agrees that Buyer shall be entitled to make a notation on
its records and give instructions to any transfer agent for the Acquisition
Common Stock in order to implement the restrictions on transfer set forth in
this Agreement.
(n) At the time Seller was offered the Acquisition Common Stock,
Seller was, at the date hereof, Seller is, and at the Closing Date, Seller will
be, a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act, and has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating Buyer and an
investment in the Acquisition Common Stock, and is able to bear the economic
risk of such investment.
(o) Assuming the accuracy of the representations of Buyer in
Section 7 hereof, the acquisition of the Acquisition Common Stock to be
purchased by Seller has been duly and properly authorized and this Agreement has
been duly executed and delivered by it or on its behalf
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and constitutes the valid and legally binding obligation of Seller,
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors' rights generally
and to general principles of equity; the acquisition of the Acquisition
Common Stock does not conflict with or violate (1) its organizational
documents, charter or by-laws or (2) any law applicable to it in a manner
that could materially hinder or impair the completion of the transactions
contemplated hereby.
(p) Seller acknowledges that it has received a copy of Buyer's Annual
Report on Form 10-K for the year ended December 31, 1996 and Form 10-Q for the
calendar quarter ended March 31, 1997, and that it has been afforded the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of Buyer concerning the terms and conditions of
the offering of the Acquisition Common Stock and the merits and risks of
investing in the Acquisition Common Stock; access to information about Buyer,
Buyer's financial condition, pro forma results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment in the Acquisition Common Stock; and the opportunity to obtain such
additional information which Buyer possesses or can acquire without unreasonable
effort or expense that is necessary to verify the accuracy and completeness of
such information.
(q) Seller also understands and acknowledges that the Acquisition
Common Stock is being offered and sold without registration under the Securities
Act in a transaction that is exempt from the registration provisions of the
Securities Act and the availability of such exemption depends in part on, and
that Buyer (and, for purposes of the opinion to be delivered to Seller pursuant
to Section 13 hereof, Vinson & Elkins L.L.P., as to those in Sections 8.(k),
8.(l), 8.(m) and 8.(p)) will rely upon, the accuracy and truthfulness of the
foregoing representations and Seller hereby consents to such reliance.
(r) At the Closing, Seller will be a "qualified trust" as described
in Code Section 401(a) that is exempt from federal income tax under Code
Section 501(a).
(s) With respect to the Rancho Downey Loan: Seller has or will
deliver to Buyer true and complete copies of the Rancho Downey Note and the
other Rancho Downey Loan Documents; the Rancho Downey Loan is current in
payment; and no default or event which, with the passage of time or giving of
notice, or both, would constitute a default with respect to the Rancho Downey
Loan, exists.
As used here the term "TO THE BEST OF SELLER'S KNOWLEDGE" or
"KNOWLEDGE OF SELLER", means the actual knowledge of the following parties:
William M. Stephens (as to Seller); Lindsey Schubel (as to Properties managed by
AMB); Robert Chapman (as to Properties managed by RREEF); and Peter Tague (as to
Properties managed by Cabot). If at any time prior to Close of Escrow Seller
shall discover any of the representations and warranties herein set forth are
not true and correct in all material respects, it shall immediately notify Buyer
thereof. The representations and warranties of Seller in this Agreement shall
survive the Close of Escrow and be true and correct in all material respects on
and as of the Close of Escrow as if such representations and warranties were
made on and as of such date (subject to revision to reflect changed
circumstances or knowledge
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obtained between the date of execution of this Agreement and the Close of
Escrow). Those parties named above that are employees of Seller's asset
managers will not be informed of the provisions of this Section 8 until after
this Agreement is executed; Seller shall furnish a copy of such provisions to
such parties promptly following execution hereof, and provide a written
report of all changes required to be made to the foregoing representation and
warranties resulting from such parties' review of this Section 8 within
twenty-one (21) days after the opening of Escrow and upon delivery of such
report, the affected representations and warranties shall be deemed to be
modified as described in such report. With regard to Seller's representation
and warranties: Buyer may not rely on any such representation and warranty
that Buyer actually knows is false or inaccurate; and Seller shall not be
liable in damages to Buyer for the first or initial loss of up to $500,000
arising out of the falsity or inaccuracy or breach of such representations or
warranties; Seller shall, however, be liable for any and all such losses in
excess of $500,000. Seller may pay any such damages arising out of the
falsity or inaccuracy or breach of its representations and warranties by
delivering Common Stock (valued at its then market value) to Buyer.
9. COVENANTS AND INTERIM RESPONSIBILITIES OF SELLER. Seller agrees that
during the period between the Opening of Escrow and the Closing Date:
(a) SELLER'S AFFIRMATIVE COVENANTS. Seller shall: (1) maintain
Seller's existing insurance policies for the Properties continuously in force,
(2) operate and manage the Properties in the same manner as it has heretofore
done so,(3) perform, in all material respects, when due all of Seller's
obligations under the Leases and any and all contracts and agreements affecting
the Properties,(4) comply, in all material respects, with all applicable laws,
ordinances, rules, regulations and requirements affecting the Properties,(5) pay
all bills and invoices for labor, material and services of any kind contracted
for by Seller or the Conveying Entities or their agents and relating to the
Properties, and (6) as soon as Seller has knowledge thereof, promptly notify
Buyer of any change in any condition with respect to the Properties or any event
or circumstance which would render any representation, covenant or warranty of
Seller under this Agreement untrue, misleading or incapable of being performed.
(b) SELLER'S NEGATIVE COVENANTS. Seller shall not, without Buyer's
prior written consent: (1) execute any new lease nor modify any Lease (for
which consents shall not be unreasonably withheld or delayed), (2) accept from
any tenant rent or other charges more than one (1) month in advance, (3) enter
into any contract nor modify any existing contract with respect to the
Properties which will survive Closing, (4) remove any Personal Property from the
Properties unless replaced by Personal Property of equal or greater utility and
value, or (5) alienate, lien, encumber or otherwise transfer the Properties or
any interest therein.
10.A SHAREHOLDERS' MEETING; PREPARATION OF PROXY STATEMENT. Buyer shall,
promptly after the execution and delivery of this Agreement, take all actions
necessary in accordance with the Exchange Act, Maryland law, Buyer's Charter and
Bylaws and the rules of the NYSE to present the issuance of the Acquisition
Common Stock to Buyer's shareholders for their consideration and approval either
pursuant to the consent of the holders of the requisite percentage of Buyer's
outstanding Common Stock and Series B Preferred Stock ("SERIES B PREFERRED"),
voting as a single
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class, or by the vote thereof at a meeting of Buyer's shareholders duly
called and convened to act thereon (the "SHAREHOLDERS' MEETING").
Buyer shall, in accordance with applicable law, as soon as practicable
following the execution and delivery of this Agreement, prepare and file with
the Commission a proxy statement to be used in connection with the solicitation
of the vote or consent of its shareholders required by Maryland law, its Charter
and Bylaws and by the rules of the NYSE to approve the issuance of the
Acquisition Common Stock (such proxy statement, including the form of proxy and
all such other materials distributed in connection therewith, as amended or
supplemented from time to time (the "PROXY STATEMENT").
Buyer shall use commercially reasonable efforts to obtain and furnish the
information required to be included by it in the Proxy Statement and respond
promptly to any comments made by the Commission with respect to the Proxy
Statement and any preliminary version thereof and shall cause the Proxy
Statement to be mailed to its shareholders at the earliest practicable time
following the approval of the Proxy Statement by the Commission. Seller will
use commercially reasonable efforts to provide Buyer with material and
information regarding the Seller which is reasonably requested by Buyer and is
required to be included therein. Buyer shall cause the Proxy Statement and the
distribution thereof to comply in all material respects with the Exchange Act
and ensure that the Proxy Statement will not, at the date the Proxy Statement is
first mailed to shareholders and at the time of the Shareholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Shareholders'
Meeting which has become false or misleading. The information regarding the
Seller which is supplied by Seller in writing for inclusion or incorporation by
reference in the Proxy Statement will not, at the time the Proxy Statement is
filed with the Commission and at the time of the Shareholders' Meeting, contain
any untrue statement of a material fact regarding the Seller or omit to state
any material fact regarding the Seller which is required to be stated therein or
necessary to make the statements made therein not misleading, in the light of
the circumstances under which they are made. Buyer shall include in the Proxy
Statement the recommendation of its Board of Directors that holders of the
Common Stock and the Series B Preferred vote in favor of the issuance of the
Acquisition Common Stock. Buyer shall use its commercially reasonable efforts
to solicit from its shareholders proxies in favor of the approval of the
issuance of the Acquisition Common Stock and to secure the vote or consent of
its shareholders required by Maryland law, its Charter and Bylaws and by the
rules of the NYSE to approve the issuance of the Acquisition Common Stock.
10.B COVENANTS OF BUYER.
(a) During any taxable year in which Buyer is treated as a
"Pension-Held REIT" within the meaning of Section 856(h) of the Code, Buyer
will take all necessary actions or refrain from taking such actions as
necessary to ensure that (1) the ratio of Buyer's gross income from unrelated
trades or businesses (within the meaning of Section 856(h)(3)(C) of the Code)
to Buyer's total gross income for each taxable year (within the meaning of
Section 856(h)(3)(C) of the Code)
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is and will remain less than 5% and (2) all of Buyer's indebtedness meets the
requirements of Section 514(c)(9)(A) of the Code as if Buyer was a qualified
pension plan.
(b) Buyer will take all necessary actions or refrain from taking such
actions as necessary to ensure that Buyer qualifies as a REIT under the Code.
(c) Buyer will at Closing assume those service contracts and similar
agreements in effect at Closing with respect to the Properties; PROVIDED that
true and complete copies thereof have been made available to Buyer for its
review during the Continency Period.
11. CONDITIONS OF CLOSING.
(a) Buyer's obligation to close this transaction shall be subject to
the occurrence and/or satisfaction of the following conditions, as applicable to
the Closing in question:
(1) Buyer has received (or has waived as provided herein) the
Tenant Estoppel Certificates or Seller's Certificates, and the Lender
Estoppel Certificates, in each case complying with the requirements of this
Agreement.
(2) The Title Company is committed to issue the Title Policies
insuring title to each Property vested in Buyer or its nominee in the
amount specified in Section 4 in the approved Condition of Title with
respect to each Property.
(3) As of the Close of Escrow, Seller shall have performed all
of the obligations required to be performed by Seller under this Agreement.
(4) All representations and warranties made by Seller to Buyer
in this Agreement shall be materially true and correct as of the Close of
Escrow.
(5) No law or order shall have been enacted, entered, issued,
promulgated or enforced by any governmental entity which prohibits or
restricts the transactions contemplated by this Agreement. No governmental
entity shall have notified any party to this Agreement that consummation of
the transactions contemplated by this Agreement would constitute a
violation of any law of any jurisdiction or that it intends to commence
proceedings to restrain or prohibit such transactions or force divesture or
rescission, unless such governmental entity shall have withdrawn such
notice and abandoned any such proceedings prior to the time which otherwise
would have been the Closing Date.
(6) The issuance of the Acquisition Common Stock shall have been
approved by the requisite vote of the stockholders of Buyer.
(7) The Acquisition Common Stock shall have been approved for
listing on the NYSE.
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(b) Seller's obligation shall be subject to the occurrence and/or
satisfaction of the following conditions, as applicable to the Closing in
question:
(1) As of the Close of Escrow, Buyer shall have performed all of
the obligations required to be performed by Buyer under this Agreement.
(2) All representations and warranties made by Buyer to Seller
in this Agreement shall be materially true and correct as of the Close of
Escrow.
(3) Seller shall have received an opinion of Vinson & Elkins
L.L.P., counsel for Buyer, substantially in the form of EXHIBIT I. In
rendering the foregoing opinion, such counsel may rely as to factual
matters upon certificates or other documents furnished by directors and
officers of Buyer and by governmental officials, and upon such other
documents as such counsel deem appropriate as a basis for such opinion.
Such counsel may specify the jurisdictions as such counsel deem appropriate
as a basis for such opinion. Such counsel may specify the jurisdictions in
which they are admitted to practice in any other jurisdiction and are not
experts in the law of any other jurisdiction. To the extent such opinion
concerns the laws of any other such jurisdiction, such counsel may either
provide an opinion of counsel admitted to practice in such jurisdiction
(which counsel shall be reasonably acceptable to Seller) in lieu of its own
opinion or rely upon the opinion of such counsel. Seller hereby agrees
that the firm of Ballard Spahr Andrews & Ingersoll is acceptable to Seller
for purposes of providing such opinions involving the laws of the State of
Maryland. To the extent that any opinion rendered by counsel admitted to
practice in another jurisdiction or relied upon by Vinson & Elkins L.L.P.,
including any exception or limitation thereto, is materially different from
the opinion to be delivered to Seller at the Closing by Vinson & Elkins
L.L.P., such opinion shall be reasonably satisfactory to Seller and a copy
of such opinion shall be delivered to Seller at Closing.
(4) No law or order shall have been enacted, entered, issued,
promulgated or enforced by any governmental entity which prohibits or
restricts the transactions contemplated by this Agreement. No governmental
entity shall have notified any party to this Agreement that consummation of
the transactions contemplated by this Agreement would constitute a
violation of any law of any jurisdiction or that it intends to commence
proceedings to restrain or prohibit such transactions or force divesture or
rescission, unless such governmental entity shall have withdrawn such
notice and abandoned any such proceedings prior to the time which otherwise
would have been the Closing Date.
(5) The issuance of the Acquisition Common Stock shall have been
approved by the requisite vote of the stockholders of Buyer.
(6) The Acquisition Common Stock shall have been approved for
listing on the NYSE.
(7) No event shall have occurred and no set of circumstances
shall exist which could reasonably be expected to have a Material Adverse
Effect.
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(c) If Closing has not occurred: (1) as to Group A, within 120
days from the Opening of Escrow; (2) as to Group B, within 120 days from the
Opening of Escrow plus the number of days to which the Closing Date for Group
B is extended pursuant to Section 1.(d); and (3) as to Group C, within 120
days from the date the Group C Notice is given, then either Seller or Buyer
may terminate this Agreement and the Escrow by notifying the other; PROVIDED
that a party may not so terminate this Agreement if Closing has not occurred
because of such party's default hereunder.
12. DEPOSITS BY SELLER. On or prior to the scheduled Closing Date, Seller
shall deliver to Escrow Holder for recordation or delivery to Buyer upon the
Close of Escrow, the following documents and instruments, fully executed by
Seller, or the Conveying Entities (as appropriate) and acknowledged where
appropriate, with respect to the Rancho Downey Loan and with respect to each
Property which Buyer is acquiring on such Closing Date pursuant to the terms
hereof:
(a) The Deeds in a form approved by Buyer, Seller, and Title Company.
(b) The original Leases.
(c) An assignment of leases (the "ASSIGNMENT OF LEASES") in the form
attached hereto as EXHIBIT D.
(d) A bill of sale (the "BILL OF SALE") in the form attached hereto
as EXHIBIT E.
(e) A general assignment and assumption (the "GENERAL ASSIGNMENT") in
the form attached hereto as EXHIBIT F.
(f) A certification regarding withholding (the "CERTIFICATION
REGARDING WITHHOLDING") in the form attached hereto as EXHIBIT G-1.
(g) A letter, in a form approved by Buyer and Seller, advising
tenants of the sale to Buyer and directing that future rent payments and other
charges be forwarded to Buyer.
(h) Proof satisfactory to the Title Company and Buyer that the
persons executing such documents have the power and authority to bind Seller.
(i) Keys to all locks located on the respective Property, to the
extent in Seller's possession.
(j) With respect to Closing of the acquisition of the Rancho Downey
Loan: (1) the original Rancho Downey Note, duly endorsed to Buyer without
recourse, (2) the originals of all other Rancho Downey Loan Documents; (3) an
assignment of note and liens (the "ASSIGNMENT OF NOTE AND LIENS") in the form
attached hereto as EXHIBIT J; and (4) an endorsement to the mortgagee title
policy therefor reflecting Buyer as the insured owner of the Rancho Downey Loan.
(k) An executed counterpart of the Registration Rights Agreement.
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(l) An executed counterpart of the Amended and Restated Excepted
Holder Agreement.
13. DEPOSITS BY BUYER. Buyer shall deposit with Escrow Holder (a) the
Acquisition Common Stock for the Rancho Downey Loan (if applicable) and for the
Properties being acquired at the Closing in question, taking into account a
deduction for the aggregate of the security deposit and/or prepaid rent by
tenants, and such other adjustments resulting from the prorations conducted
pursuant hereto (except to the extent that Seller has elected to pay any net
prorations in cash, which Seller may elect to do), (b) the Opinion, (c) an
executed counterpart of the Registration Rights Agreement,(d) on executed
counterpart of the Amended and Restated Excepted Holder Agreement, and (e) a
Certification Regarding Withholding in the form attached hereto as EXHIBIT G-2.
In addition, at least two (2) business days prior to the scheduled Closing Date,
Buyer shall execute and acknowledge (where appropriate) and deposit with Escrow
Holder for delivery to Seller upon the Close of Escrow a counterpart of the
Assignment of Leases and the General Assignment as to the Properties being
acquired at such Closing.
14. COSTS AND EXPENSES. The cost and expense of the Title Policy
attributable to standard coverage shall be paid by Seller, and Buyer shall pay
for the cost and expense of the Title Policies attributable to ALTA extended
coverage and for any endorsements requested by Buyer. The escrow fee of Escrow
Holder, if any, shall be shared equally by Seller and Buyer; provided, however,
that if the Close of Escrow has not occurred by the Closing Date by reason of a
default hereunder, the defaulting party shall bear all Escrow cancellation
charges. Seller and Buyer shall each pay one-half of all documentary transfer
and other taxes and recording fees payable in connection with the recordation of
the Deeds. All other costs and expenses for each respective Property shall be
allocated between Buyer and Seller in accordance with customary practice in the
county in which such Property is located.
15. PRORATIONS. The following items shall be prorated by Escrow Holder as
of the Close of Escrow with respect to each Property acquired by Buyer
hereunder:
(a) Real property taxes with respect to the Land and Improvements and
personal property taxes based upon the latest available tax information shall be
prorated to the Close of Escrow, taking into account the obligation, if any, of
tenants holding under the Leases to pay such taxes.
(b) Rents and other receivables under the Leases (collectively,
"RENTS") shall be accounted for as follows:
(1) Rents due and payable in the month of the Close of Escrow
shall be prorated between Buyer and Seller on the basis of the actual Rents
collected by Seller for such month.
(2) Rents and other charges which at Closing are past due (the
"DELINQUENT RENTS") shall be collected and applied as follows: For a
period of thirty (30) days after the Closing, Buyer shall use reasonable
efforts to collect Delinquent Rents. Rents
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and other amounts received by Buyer from a tenant owing Delinquent Rent
shall be applied: (A) first, to rents attributable to any period after
the Closing which are past due on the date of receipt, and (B) then, to
Delinquent Rents, which Buyer shall promptly remit to Seller. If within
thirty (30) days after the Close of Escrow Buyer has not collected all
Delinquent Rents, Seller shall have the right to attempt to collect such
Delinquent Rents using all remedies available to Seller at law or in
equity; provided, however, that Seller shall not cause any Lease to be
terminated in Seller's efforts to collect Delinquent Rents.
(3) Buyer shall be credited and Seller shall be charged with any
security deposit or advance rentals in the nature of security deposits made
by tenants under the Leases, except to the extent previously applied by
Seller in accordance with the applicable Lease.
(c) Utilities, services and operating expenses with respect to the
Land and the Improvements shall be prorated to the Close of Escrow based upon
the latest available information taking into account the obligation of tenants
under the Leases to pay such utility, services and operating expenses.
(d) Premiums for casualty and liability insurance shall not be
prorated as Buyer will be obtaining its own such insurance upon the Close of
Escrow.
(e) Interest (at the current pay rate, and not the accrual rate) on
the Rancho Downey Loan shall be prorated at the Closing thereof.
(f) If a Closing occurs other than at the beginning of a calendar
quarter, Seller shall agree to pay to Buyer at the end of such calendar quarter
an amount, such that when Seller receives the dividend on the Acquisition Common
Stock received at such Closing for such calendar quarter (which dividend shall
be paid to Seller regardless of the date during the calendar quarter on which
the Acquisition Common Stock is issued to Seller), the difference between the
amount of the dividend and the amount so paid is equal to the pro-rated amount
the Seller would have received if such dividend were payable only for the actual
time during such calendar quarter that Seller owned such Acquisition Common
Stock.
If any errors or omissions are made regarding adjustments and
prorations as set forth above, the parties shall make the appropriate
corrections promptly upon the discovery thereof.
16. DISBURSEMENTS AND OTHER ACTIONS BY ESCROW HOLDER.
(a) Upon the Close of Escrow, Escrow Holder shall promptly undertake
all of the following in the manner indicated:
(1) Deliver the Title Policies to Buyer.
(2) Disburse the Acquisition Common Stock to Seller.
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(3) Cause the Deeds to be recorded in the Official Records of
the county in which the respective Land is situated, and at the Closing of
the acquisition of the Rancho Downey Loan, cause to be recorded the
Assignment of Note and Liens in the county where the Rancho Downey Property
is located.
(b) Upon confirmation of recordation of the Deeds, Escrow Holder
shall:
(1) Deliver the Leases, Bill of Sale, General Assignment,
Certification Regarding Withholding, and a counterpart of the Assignment of
Leases executed by Seller for each Property being transferred at the
Closing in question to Buyer, and, at the Closing therefor, deliver to
Buyer the endorsed original Rancho Downey Note, the other Rancho Downey
Loan Documents, and the Assignment of Note and Liens.
(2) Deliver a counterpart of the Assignment of Leases,
Registration Rights Agreement, the Amended and Restated Excepted Holder
Agreement, and General Assignment executed by Buyer to Seller, together
with an original copy of the Opinion and the Certificate of Withholding
executed by Buyer.
(3) Mail the approved form of letter to the tenants advising
them of this transaction.
(4) Deliver to both Buyer and Seller copies of all documents
delivered to either party hereto or recorded pursuant to this Agreement.
17. DAMAGE OR CONDEMNATION PRIOR TO CLOSING. Seller shall promptly notify
Buyer of any casualty damage to any Property or the Rancho Downey Property or
any condemnation proceeding proposed or commenced prior to the Close of Escrow
with respect to any Property or the Rancho Downey Property.
(a) If such casualty or proceeding results or may result in a
material reduction in the value of a Property, which for purposes of this
Agreement shall mean a reduction of more than five percent (5%) of the allocated
Purchase Price for such Property (as provided on EXHIBIT A), then Buyer may, at
its option: (1) terminate this Agreement with respect to such Property, in
which event this Agreement shall continue to be in effect with respect only to
those Properties for which Buyer has not terminated this Agreement (subject to
Section 41), or (2) continue this Agreement in effect, in which event upon the
Close of Escrow there shall be credited to the Purchase Price the amount of any
deductible and any uninsured portion of the loss in question (for a casualty)
and Buyer shall be fully entitled to all insurance proceeds available under
Seller's insurance policies, or (for a condemnation) Seller shall assign to
Buyer any compensation, award or other payment or relief Seller has received or
is entitled to receive resulting from such condemnation.
(b) If such casualty or proceeding does not constitute or threaten a
material reduction in the value of a Property, then Buyer shall accept such
Property in its then condition and proceed with Closing, in which case Buyer
shall be entitled to a reduction of the Purchase Price in the amount of any
deductible and any uninsured portion of the loss in question, and Buyer shall be
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entitled to receive any insurance proceeds, compensation, award or other
payment or relief Seller has received or is entitled to receive
resulting from such casualty or condemnation.
(c) Notwithstanding Section 17.(a) or 17.(b) above, if any casualty
or condemnation would give any tenant of any Property that occupies 25% or more
of such Property the right to terminate or materially modify its Lease, or to
abate any payment of rent or other charges due under its Lease that is not fully
covered by valid insurance that will be available to Buyer, then Buyer shall
have the right to terminate this Agreement with respect to such Property, in
which event this Agreement shall continue to be in effect with respect only to
those Properties for which Buyer has not terminated this Agreement (subject to
Section 41).
(d) If any casualty or condemnation occurs with respect to the Rancho
Downey Property and the reduction in value meets the threshold set forth in
Section 17.(a) or in 17.(c), then Buyer shall have the rights set forth in such
Sections with respect to the Rancho Downey Loan.
18. PARTIAL INVALIDITY. If any portion of this Agreement shall be
declared by any court of competent jurisdiction to be invalid, illegal or
unenforceable, such portion shall be deemed severed from this Agreement and the
remaining parts hereof shall remain in full force and effect as fully as though
such invalid, illegal or unenforceable portion had never been part of this
Agreement.
19. ATTORNEYS' FEES. In the event of the bringing of any action or suit
by a party hereto against another party hereto by reason of any breach of any of
the covenants or agreements or any inaccuracies in any of the representations
and warranties on the part of the other party arising out of this Agreement,
then, in that event, the prevailing party in such action or dispute, whether by
final judgment or out-of-court settlement, shall be entitled to have and recover
of and from the other party all costs and expenses of suit, including actual
attorneys' fees.
20. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage prepaid, return receipt requested,
delivered or sent by telecopy or via a reliable overnight courier service, and
shall be deemed received upon the earlier of: (1) if delivered personally or
via overnight courier, the date of delivery to the address of the person to
receive such notice, (2) if mailed, upon the date of receipt as disclosed on the
return receipt, (3) if telecopied, the date of receipt as disclosed by the
transmission record .
To Buyer: Meridian Industrial Trust, Inc.
455 Market Street, 17th Floor
San Francisco, CA 94105
Attn: Robert A. Dobbin
Telecopy: 415-284-2840
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With a copy to: Vinson & Elkins L.L.P.
2001 Ross Avenue, Suite 3700
Dallas, Texas 75201
Attn: Philip D. Weller
Telecopy: 214-999-7738
To Seller: Ameritech Pension Trust
c/o Ameritech Corporation
225 West Randolph, HQ13A
Chicago, Illinois 60606
Attn: Director of Real Estate Investments
Telecopy: 312-609-0231
With a copy to: Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Attn: Andrew J. McDonough
Telecopy: 312-558-5700
To Escrow Holder: Chicago Title Insurance Company
350 North St. Paul Street, Suite 250
Dallas, Texas 75201
Attn: Scott Sargeant
Telecopy: 214-720-1047
Escrow No.:
and Chicago Title Insurance Company
171 N. Clark Street
Chicago, Illinois 60601
Attn: Sharon Sayre
Telecopy: 312-223-5888
Escrow No.:
Notice of change of address shall be given by written notice in the manner
detailed in this section. Rejection or other refusal to accept or the inability
to deliver because of changed address of which no notice was given shall be
deemed to constitute receipt of the notice, demand, request or communication
sent.
21. BROKERS. Buyer and Seller each represent and warrant to the other
that no broker or finder has been engaged by it in connection with the
transaction contemplated by this Agreement. In the event of any such additional
claims for brokers' or finders' fees for the consummation of this Agreement,
then Buyer shall indemnify, save harmless and defend Seller from and against
such claims if they shall be based upon any statement or representation or
agreement by Buyer, and Seller shall indemnify, save harmless and defend Buyer
if such claims shall be based upon any statement,
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representation or agreement made by Seller. The foregoing indemnities
shall survive the Close of Escrow or any termination of this Agreement.
22. SURVIVAL. Except as expressly set forth herein, the covenants,
agreements, representations and warranties of both Buyer and Seller set forth in
this Agreement shall survive any investigation of the parties, the recordation
of the Deed and the Close of Escrow, except that the representations and
warranties made by Buyer in Section 7 and Seller in Section 8, respectively,
shall survive the Close of Escrow for a period of one year after the last
Closing Date hereunder.
23. REQUIRED ACTIONS OF BUYER AND SELLER. Buyer and Seller agree to
execute such instruments and documents and to diligently undertake such actions
as may be required in order to consummate the purchase and sale herein
contemplated and shall use their good faith to accomplish the Close of Escrow in
accordance with the provisions hereof.
24. TIME OF ESSENCE. Time is of the essence of each and every term,
condition, obligation and provision hereof.
25. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute one and the same instrument.
26. CAPTIONS. Any captions to, or headings of, the sections, paragraphs
or subparagraphs of this Agreement are solely for the convenience of the parties
hereto, are not a part of this Agreement, and shall not be used for the
interpretation or determination of the validity of this Agreement or any
provision hereof.
27. NO OBLIGATIONS TO THIRD PARTIES. The execution and delivery of this
Agreement shall not be deemed to confer any rights upon, nor obligate any of the
parties thereto, to any person or entity other than the parties hereto.
28. EXHIBITS. The exhibits attached hereto are hereby incorporated herein
by this reference.
29. AMENDMENT TO THIS AGREEMENT. The terms of this Agreement may not be
modified or amended except by an instrument in writing executed by each of the
parties hereto.
30. WAIVER. The waiver or failure to enforce any provision of this
Agreement shall not operate as a waiver of any future breach of any such
provision or any other provision hereof.
31. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
32. FEES AND OTHER EXPENSES. Except as otherwise provided herein, each of
the parties shall pay its own fees and expenses in connection with this
Agreement.
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33. ENTIRE AGREEMENT. This Agreement supersedes any prior agreements,
negotiations and communications, oral or written, and contains the entire
agreement between Buyer and Seller as to the subject matter hereof. No
subsequent agreement, representation or promise made by either party hereto, or
by or to an employee, officer, agent or representative of either party, shall be
of any effect unless it is in writing and executed by the party to be bound
thereby.
34. SUCCESSORS AND ASSIGNS. This Agreement and all of the terms,
conditions and provisions hereof shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties hereto. Neither party
hereto shall assign its rights or obligations hereunder without the prior
written consent of the other which may be granted or withheld in such party's
absolute discretion. Seller agrees that Buyer may direct that title to certain
of the Properties be taken directly from Seller by certain affiliates of Buyer.
35. DEFAULT. If any of Seller's or Buyer's representations and warranties
contained herein shall not be materially true and correct, or if Seller or Buyer
shall have materially failed to perform any of the covenants and agreements
contained herein to be performed by it within the time for performance as
specified herein, the other party may either: (1) terminate its obligations
under this Agreement with respect to those Properties as to which Closing has
not occurred by written notice to the other party with a copy to Escrow Holder,
and recover its actual damages incurred as a result of such default, or
(2) obtain specific performance of this Agreement and all reasonable costs
incurred in so doing.
36. COMPUTATION OF PERIODS. All periods of time referred to in this
Agreement shall include all Saturdays, Sundays and national holidays, unless the
period of time specifies business days; provided, however, that if the date to
perform any act or give a notice with respect to this Agreement shall fall on a
Saturday, Sunday or national holiday, such act or notice may be timely performed
on the next succeeding day which is not a Saturday, Sunday or a national
holiday.
37. INDEMNIFICATION OF ESCROW HOLDER.
(a) If this Agreement or any matter relating hereto shall become the
subject of any litigation or controversy, Buyer and Seller agree, jointly and
severally, to hold Escrow Holder free and harmless from any loss or expense,
including attorneys' fees, that may be suffered by it by reason thereof, except
for losses or expenses which may arise from Escrow Holder's negligent or willful
misconduct. If conflicting demands are made or notices served upon Escrow
Holder with respect to this Agreement, the parties expressly agree that Escrow
Holder shall be entitled to file a suit in interpleader and obtain an order from
the court requiring the parties to interplead and litigate their several claims
and rights among themselves. Upon the filing of the action in interpleader,
Escrow Holder shall be fully released and discharged from any obligations
imposed upon it by this Agreement.
(b) Escrow Holder shall not be liable for the sufficiency or
correctness as to form, manner, execution or validity of any instrument
deposited with it, nor as to the identity, authority or rights of any person
executing such instrument, nor for failure to comply with any of the provisions
of any agreement, contract or other instrument filed with Escrow Holder or
referred to herein.
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Escrow Holder's duties hereunder shall be limited to the safekeeping of
such money, instruments or other documents received by it as Escrow
Holder, and for their disposition in accordance with the terms of this
Agreement.
38. BUYER'S AUDIT RIGHTS. Seller acknowledges that Buyer is required to
have audits performed of the records of the Properties acquired by Buyer.
Accordingly, for the period from the Opening of Escrow through December 31 of
the calendar year following the Closing Date, upon fifteen (15) days advance
written notice from Buyer, Seller agrees to use all commercially reasonable
efforts to make available to Buyer's independent accountants those items
respecting the Properties described in EXHIBIT H attached hereto. The
obligations of Seller under this section shall survive the Closing.
39. CONFIDENTIALITY. Buyer and Seller each agree that it will (a) use its
best efforts to keep confidential (except for such disclosure to attorneys,
bankers, underwriters, fiduciaries, managers, agents, independent contractors,
and employees as may be appropriate in the furtherance of this transaction or as
required by law) all information of a confidential nature obtained by it from
the other (including the terms of this Agreement and the identity of Buyer and
Seller) in connection with the transaction contemplated hereby and (b) return to
the other all documents and other materials obtained from the other in
connection herewith should this Agreement be terminated. No party hereto will
issue any press release or make any other public announcement relating to the
transaction contemplated hereby without the prior consent of the other party
hereto, except that any party may make any disclosure required to be made by it
under applicable law (including without limitation the federal securities laws)
or stock exchange rules and regulations if such party determines in good faith
that it is appropriate to do so and gives prior notice to the other party
hereto, and affords to the other party a reasonable opportunity to comment on
the proposed disclosure and will make a commercially reasonable effort to
incorporate any comments or requested revisions.
40. MARKETING. In order to induce Buyer to undertake the considerable
effort and to incur the major expenses associated with the transaction
contemplated hereby, during the term of this Agreement as to Group A; as to
Group B, until such time (if ever) as the Group C Notice is given; and as to
Group C, after the Group C Notice is given, Seller shall not and shall cause the
trustees, officers, directors, and employees of Seller not to, (a) solicit,
initiate, or encourage the submission of proposals or offers from any other
person or entity for, or enter into any agreement or arrangement relating to,
the purchase of the Properties or any portion thereof or (b) participate in any
negotiations regarding, or, except as required by legal process, furnish to any
other person or entity any information with respect to or in contemplation of,
the purchase of the Properties or any portion thereof. Notwithstanding the
foregoing provisions of this Section 40, Seller shall have the right to discuss
and negotiate the possible sale of the Group B Properties prior to the giving of
the Group C Notice if such discussions or negotiations are conducted with a
party which is then negotiating for the purchase of the Group C Properties and
the basis for such discussions or negotiations is the possible sale of the
Group B Properties to such party if the Group C Properties are to be sold to
Buyer pursuant to this Agreement.
41. TERMINATION. Notwithstanding anything to the contrary, if Buyer
terminates this Agreement as to certain Properties pursuant to its rights to do
so pursuant to Sections 4, 5 (but only
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with respect to a Major Environmental Matter), 6 or 17 and such
Properties represent more than 20% of the total rentable square feet of
all the Properties in (1) Group A and Group B, aggregated (if the Group
C Notice has not been given) or, (2) Group A and Group C (if the Group C
Notice has been given and the Closing of the Group A sale has not
occurred), or (3) Group C (if the Group C Notice has been given and the
Closing of the Group A sale has occurred) and more than 20% of the
Budgeted NOI of such group or groups of Properties, then Seller or Buyer
may elect to terminate this Agreement (as to Properties as to which
Closing has not occurred) by delivering written notice to the other
within ten (10) days after Seller receives the notice from Buyer
terminating this Agreement as to a Property so as to cause the foregoing
threshold to be reached, in which event the parties hereto shall have no
further duties or liabilities hereunder; provided, however, that Buyer
shall have a period of ten (10) days after receipt of any such notice
from Seller in which to elect to withdraw one or more of its notices of
termination as to such Properties, such that Seller and Buyer would no
longer have the right to terminate this Agreement pursuant to this
Section 41, and if Buyer does so withdraw a sufficient number of its
termination notices, then Seller shall be deemed to have withdrawn its
notice of termination given pursuant to this Section 41. In addition to
Buyer's other rights hereunder, if at the applicable Closing Date there
is any default in respect of any payments due with respect to the Rancho
Downey Loan, Buyer may terminate this Agreement as to the Rancho Downey
Loan only, and this Agreement shall remain in effect as to the
Properties, and such termination shall not be considered in determining
if the threshold set forth in this Section 41 has been reached. For
purposes of the calculations provided in this Section 41, the Rancho
Downey Property shall be deemed to be a Property and one of the
Properties.
42. RESTRICTION ON TRANSFER OF ACQUISITION COMMON STOCK. In consideration
of the benefits to be received by Seller hereunder, Seller hereby agrees and
acknowledges Seller shall not transfer any shares of Acquisition Common Stock to
be received by Seller hereunder for a period of ninety (90) days after the
Closing Date.
33
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first set forth above.
BUYER: MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By:____________________________________
Name:__________________________________
Title:_________________________________
SELLER: AMERITECH PENSION TRUST,
By: State Street Bank and Trust Company,
as Trustee
By:___________________________________
Name:_________________________________
Title:________________________________
ESCROW HOLDER APPROVES THE ESCROW
PROVISIONS AND SPECIFIC INSTRUCTIONS
TO ESCROW HOLDER SET FORTH IN THE
FOREGOING AGREEMENT AND AGREES TO
ACT IN ACCORDANCE THEREWITH.
CHICAGO TITLE INSURANCE COMPANY
By:_______________________________________
Scott Sargeant, Authorized Agent
By:_______________________________________
Sharon Sayre, Authorized Agent
Date: May ___, 1997
34
<PAGE>
SCHEDULE 1(b)
GROUP A
CONVEYING ENTITY PROPERTY NAME ADDRESS
---------------- ------------- -------
Apt Cabot Illinois, Inc. IDG Building 80 Internationale Blvd.
Glendale Heights, IL
Timber Court 3 Timber Court
Bolingbrook, IL
APT Cabot California II, Inc. General Motors 3200 Enterprise Street
Brea, CA
First Street 2711 N. First Street
San Jose, CA
RK Distribution 1051 S. Rockefeller
Ontario, CA
Tab Brockway 114400 Pacific Avenue
Fontana, CA
TYC Industries 14821 North Northam
Street
LaMirada, CA
Vans Distribution 19545 E. San Jose
Avenue
Los Angeles, CA
APT Cabot Arizona II, Inc. Tech Plastic 470 West Vaughn
Tempe, AZ
APT Barrington, Inc. Barrington Business 2550 Barrington Court
Park Hayward, CA
APT Realty Holding #5, Inc. Phantom Drive 5463 Phantom Drive
St. Louis, MO
Fremont Rancho, Ltd. Rancho Business 7700 Imperial Highway
Center Downey, CA
12707 Rives Avenue
Downey, CA
7711 Amigos Avenue
Downey, CA
7373 Flores Avenue
Downey, CA
Schedule 1(b)-1
<PAGE>
GROUP B
CONVEYING ENTITY PROPERTY NAME ADDRESS
---------------- ------------- -------
APT IND/APTS Realty, Inc. Abitibi Price 1701 Timberlake Drive
Arlington, TX
Airborne 2800 E. Plano Parkway
Plano, TX
Burnham Services 8865 Utica Avenue
Rancho Cucamonga, CA
Climatic 1505 Valwood Parkway
Carrollton, TX
Dircks Building 4440 E. Elwood Street
Phoenix, AZ
Fisher Price 500 S. Dupont Street
Ontario, CA
Northern Auto 7000 W. Latham Street
Phoenix, AZ
Prime Paper 11195 Eucalyptus Street
Rancho Cucamonga, CA
Skyway Freight 2022 McKenzie Drive
Carrollton, TX
Southwire 10425 Plano Road
Dallas, TX
Sports Supply 13700 Benchmark Drive
Farmers Branch, TX
Schedule 1(b)-2
<PAGE>
GROUP C
CONVEYING ENTITY PROPERTY NAME ADDRESS
---------------- ------------- -------
APT Harvest, Inc. Harvest Business 6242-6250 S. 196th
Park Street
Kent, WA
6403-6417 S. 194th
Street
Kent, WA
6402-6514 S. 196th
Street
Kent, WA
APT Penn James, Inc. Penn James 9201 Penn Avenue
South
Minneapolis, MN
9208 James Avenue
South
Minneapolis, MN
APT Corporate Corporate Square 990 Apollo Road
Square, Inc. Egan, MN
1000 Apollo Road
Egan, MN
3110 Neil Armstrong
Blvd.
Egan, MN
3160 Neil Armstrong
Blvd.
Egan, MN
Northwestern
Warehouse
Egan, MN
APT Ardenwood, Inc. Ardenwood 6453 Kaiser Drive
Fremont, CA
6505 Kaiser Drive
Fremont, CA
6007 Kaiser Drive
Fremont, CA
34551 Ardenwood
Blvd.
Fremont, CA
APT Fairway, Inc. Fairway Drive 1540 Fairway Drive
(Bldg. 1, 2, 3)
San Leandro, CA
Schedule 1(b)-3
<PAGE>
SCHEDULE 7(c)
CAPITALIZATION
The Buyer's obligations set forth in the letter agreement dated
December 29, 1995, between the Buyer and Ameritech Pension Trust.
The Buyer's obligations set forth in that certain letter agreement dated
May 5, 1997 between the Buyer and The Prudential Insurance Company of America.
Schedule 7(c)-1
<PAGE>
SCHEDULE 7(d)
CONFLICTING AGREEMENTS AND OTHER MATTERS
Consent of holders of the Company's Series B Preferred Stock pursuant to
Section 5.4.(d) of the Stock Purchase Agreement dated December 29, 1995, among
the Buyer, Harris Trust & Savings Bank as Trustee for Ameritech Pension Trust,
and OTR, an Ohio general partnership acting on behalf of and as nominee for the
State Teachers Retirement Board of Ohio.
Consent of Lenders under Second Amended and Restated Revolving Credit
Agreement dated April 21, 1997 among Buyer, the First National Bank of Boston as
Agent and the other Banks party to such Agreement to the Buyer's investment in
the Rancho Downey Loan.
Schedule 7(d)-1
<PAGE>
SCHEDULE 7(s)
SUBSIDIARIES
1. EBP 1, LTD.
- Form of entity: Texas limited partnership
- Ownership
(a) General Partner:
- MIT Unsecured, Inc., a wholly-owned corporate subsidiary of
MIT, is the sole general partner with a 1% interest.
(b) Limited Partners:
- MIT-ULP, Inc., a wholly-owned corporate subsidiary of MIT,
holds a 49% limited partnership interest.
- DFW Fund - Enterprise Business Park Associates, L.P. (which
is not affiliated with MIT) holds a 50% limited partnership
interest.
- Future cash requirements: MIT will be supplying funds to complete the
Partnership's development project by means of a construction loan to
the partnership from the general partner.
2. EBP 2, LTD.
- Form of entity: Texas limited partnership
- Ownership
(1) General Partner:
- MIT Unsecured, Inc., a wholly-owned corporate subsidiary of
MIT, is the sole general partner with a 1% interest.
(2) Limited Partners:
- MIT-ULP, Inc., a wholly-owned corporate subsidiary of MIT,
holds a 49% limited partnership interest.
- DFW Fund - Enterprise Business Park Associates, L.P. (which
is not affiliated with MIT) holds a 50% limited partnership
interest.
- Future cash requirements: MIT will be supplying funds to complete the
Partnership's development project by means of a construction loan to
the partnership from the general partner.
Schedule 7(s)-1
<PAGE>
3. MDN-JSC LIMITED PARTNERSHIP
- Form of entity: California limited partnership
- Ownership
(1) General Partner:
- MJV IV Corp., a wholly-owned corporate subsidiary of MIT,
holds a 1% general partnership interest.
- Jackson-Shaw/Florida, Inc. (which is not affiliated with
MIT) holds a 1% general partnership interest.
(2) Limited Partners:
- MIT holds an 85% limited partnership interest.
- Jackson-Shaw/FOCP Limited Partnership (which is not
affiliated with MIT) holds a 13% limited partnership
interest.
4. MERIDIAN OHIO LIMITED PARTNERSHIP
- Form of entity: Delaware limited partnership
- Ownership
(1) General Partner:
- MJV III Corp., a wholly-owned corporate subsidiary of MIT,
holds a 1% general partnership interest.
- Ohio MDN, a Delaware corporation that is not affiliated with
MIT, holds a 1% general partnership interest.
(2) Limited Partners:
- MIT holds an 19% limited partnership interest.
- OTR, an Ohio general partnership acting on behalf of and as
nominee for The State Teachers' Retirement Board of Ohio
(which is not affiliated with MIT) holds a 79% limited
partnership interest.
Schedule 7(s)-2
<PAGE>
EXHIBIT A
GROUP A
<TABLE>
<CAPTION>
1997 # OF
PROJECT SQUARE BUDGETED COMMON ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
First Street 74,621 2711 N. First Street San Jose, CA 582,000 $6,466,667 325,023 Cabot II
General Motors 132,000 3200 Enterprise St. Brea, CA 393,000 4,366,667 219,475 Cabot II
IDI Building 135,526 80 Internationale Blvd. Glendale Heights, IL 656,000 7,288,889 366,349 Cabot II
RK Distribution 133,775 1051 S. Rockefeller Ontario, CA 385,000 4,277,778 215,007 Cabot II
Tab Brockway 136,260 114400 Pacific Avenue Fontana, CA 495,000 5,500,000 276,437 Cabot II
Tech Plastic 60,633 470 West Vaughn Tempe, AZ 216,000 2,400,000 120,627 Cabot II
Timber Court 320,722 3 Timber Court Bolingbrook, IL 1,124,000 12,488,889 627,709 Cabot II
TYC Industries 70,756 14821 North Northam LaMirada, CA 284,000 3,155,556 158,603 Cabot II
Street
Vans 126,720 19545 East San Jose Ave. City of Industry, 373,000 4,144,444 208,305 Cabot II
Distribution (Los Angeles), CA
Barrington 203,315 2550 Barrington Court Hayward, CA 828,413 9,204,589 462,635 RREEF II
Business Park
Phantom Drive 127,000 5463 Phantom Drive St. Louis, MO 266,373 2,959,700 148,759 RREEF II
Bldg.
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
1997 # OF
PROJECT SQUARE BUDGETED COMMON ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
Rancho Downey- 623,571 7700 Imperial Highway Downey, CA N/A $21,500,000 1,080,619 RREEF II
Part Loan
12707 Rives Avenue Downey, CA
7711 Amigos Avenue Downey, CA
7373 Flores Avenue Downey, CA
2,144,541
---------
---------
</TABLE>
A-2
<PAGE>
EXHIBIT A
GROUP B
<TABLE>
<CAPTION>
1997 # OF
PROJECT SQUARE BUDGET COMMONS ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
Abitibi Price 227,120 1701 Timberlake Dr. Arlington, TX 331,000 $3,677,778 184,850 Cabot I
Airborne 144,000 2800 East Plano Pkwy. Plano, TX 443,000 4,922,222 247,398 Cabot I
Burnham Services 177,744 8865 Utica Ave. Rancho Cucamonga, CA 516,000 5,733,333 288,165 Cabot I
Climatic 83,200 1505 Valwood Pkwy. Carrollton, TX 285,000 3,166,667 159,161 Cabot I
Dircks Building 158,000 4440 E. Elwood Street Phoenix, AZ 625,000 6,944,444 349,037 Cabot I
Fisher Price 275,169 500 S. Dupont St. Ontario, CA 903,000 10,033,333 504,289 Cabot I
Northern Auto 274,000 7000 W. Latham St. Phoenix, AZ 735,000 8,166,667 410,468 Cabot I
Prime Paper 125,952 11195 Eucalyptus St. Rancho Cucamonga, CA 299,000 3,322,222 166,979 Cabot I
Skyway Freight 155,496 2022 McKenzie Dr. Carrollton, TX 452,000 5,022,222 252,424 Cabot I
Southwire 156,600 10425 Plano Rd. Dallas, TX 439,000 4,877,778 245,164 Cabot I
Sports Supply 180,841 13700 Benchmark Dr. Farmers Branch, TX 531,000 5,900,000 296,542 Cabot I
1,960,268
---------
</TABLE>
A-3
<PAGE>
EXHIBIT A
GROUP C
<TABLE>
<CAPTION>
1997 # OF
PROJECT SQUARE BUDGET COMMONS ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
*Harvest Business
Park 192,000 6242-6250 S. 196th Street Kent, WA $375,000 $4,166,667 209,422 AMB II
6403-6417 S. 194th Street Kent, WA
6402-6514 S. 196th Street Kent, WA
Penn James 215,606 9201 Penn Avenue South Minneapolis, MN 788,000 8,755,556 440,066 AMB II
9208 James Avenue South Minneapolis, MN
Corporate Square 526,716 990 Apollo Road Egan, MN 1,453,000 16,144,444 811,442 AMB II
1000 Apollo Road Egan, MN
3110 Neil Armstrong Blvd. Egan, MN
3160 Neil Armstrong Blvd. Egan, MN
Northwestern Warehouse Egan, MN
</TABLE>
A-4
<PAGE>
<TABLE>
<CAPTION>
1997 # OF
PROJECT SQUARE BUDGET COMMONS ADVISORY
NAME FEET ADDRESS LOCATION NOI PRICE SHARES FUND
---- ---- ------- -------- --- ----- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C>
**Ardenwood 295,657 6453 Kaiser Drive Fremont, CA 1,442,000 16,022,222 805,299 AMB II
6505 Kaiser Drive Fremont, CA
6007 Kaiser Drive Fremont, CA
34551 Ardenwood Blvd. Fremont, CA
Fairway Drive 175,324 1540 Fairway Drive San Leandro, CA 753,000 8,366,667 420,520 AMB II
(Bldg. 1, 2, 3)
1,405,303
---------
---------
*Alternate price if 756,000 8,400,000 422,195
Harvest Business Park
Loan paid off
**Alternate price if 2,226,000 24,733,333 1,243,131
Ardenwood Loan paid off
</TABLE>
A-5
<PAGE>
EXHIBIT B
DOCUMENT LIST
DUE DILIGENCE DOCUMENTS
1. Copies of all leases and amendments thereto affecting the Properties,
together with any side letters or other agreements pertaining to such lease.
2. Copies of all certificates of occupancy, licenses and permits
pertaining to the Properties in Seller's possession.
3. A current rent roll prepared by Seller indicating:
(a) The name of each tenant of each respective Property.
(b) The amount of each security deposit from each tenant; the amount
of rent and reimbursable expenses paid and to be paid by each tenant; and the
amount and date of the next scheduled rent increase.
(c) The portion of the improvements and the approximate total of
square footage occupied by each tenant.
(d) The commencement and termination dates of each lease.
(e) All renewal, expansion, and similar rights afforded thereby.
(f) The amount of any discounts, rebates, rental concessions,
brokerage commissions, and other items payable thereunder in connection
therewith.
(g) Expense stop or base year for passing through of operating
expenses.
(h) Any provision for amortization of tenant improvement cost
separately from rent.
(i) Any periods of free rent or any lease buy-out arrangements with
respect to other leases.
(j) Any cancellation, termination or other similar rights.
4. Copies of all tenant financial statements in Seller's possession.
B-1
<PAGE>
5. Copies of all tax statements or bills for the Properties in Seller's
possession for all real estate and personal property taxes for the prior twelve
(12) months.
6. A schedule reflecting the income from and expenses of the operation of
the Properties for the preceding three (3) years through the end of the month
immediately preceding the date of the purchase agreement.
7. A schedule of all Seller's personal property used in the operation of
the Properties.
8. Copies of all soils, geotechnical, environmental, engineering and
building inspection reports and all architectural drawings (including "as
builts") pertaining to the Properties in Seller's possession or control.
9. A schedule of any and all actions, suits, and legal or administrative
proceedings affecting the Properties.
10. Copies of any and all current service contracts, agreements or other
documents affecting or relating to the Properties in Seller's possession or
control.
11. The Rancho Downey Note and all other Rancho Downey Loan Documents
(copies of which shall be delivered to Buyer for examination as opposed to being
made available).
12. Copies of the promissory notes, mortgages, and all other documents
executed as evidence of, as security for, or otherwise in connection with the
Harvest Business Park Loan and the Ardenwood Loan (copies of which shall be
delivered to Buyer for examination as opposed to being made available).
B-2
<PAGE>
EXHIBIT C
TENANT ESTOPPEL CERTIFICATE
____________________________ ("TENANT") hereby certifies as follows:
1. The undersigned is the Tenant under that certain lease dated
____________, 199__, (the "LEASE") executed by _____________________
("LANDLORD") as Landlord, and the undersigned as Tenant respecting those certain
premises located at ___________________________ (the "PREMISES"). True and
correct copies of the Lease and all amendments, modifications and supplements
thereto are attached hereto as SCHEDULE 1.
2. Pursuant to the Lease, Tenant has paid to Landlord a deposit of
$________; the commencement date of the Lease is ______________; the expiration
date of the Lease is _______________; the fixed annual minimum rent is
$____________; the next rental payment in the amount of $____________ is due on
_______________; prepaid rent in the amount of $___________ has been paid for
the month of __________________________.
3. Pursuant to the Lease, Tenant is obligated to reimburse Landlord for
its percentage share of all real property taxes, operating expenses, common area
maintenance and insurance expenses affecting the project of which the Premises
are a part, which percentage share is equal to ____________ percent.
4. The Lease is in full force and effect, and there are no amendments,
modifications or supplements thereto, whether oral or written, except as
follows:
_________________________________________________________________
________________________________________________________________.
5. Tenant has accepted and taken possession of the Premises and is in
occupancy thereof; and Tenant is not aware of any defects in the Premises or in
the building of which the Premises are a part, except as follows:______________
_______________________________________________________________________________
_______________________________________________________________________________
6. All space and improvements leased by Tenant have been completed and
furnished in accordance with the provisions of the Lease; Tenant has accepted
and taken possession of the Premises and is in occupancy thereof; and Tenant is
not aware of any defects in the Premises or in the building of which the
Premises are a part.
C-1
<PAGE>
7. Landlord has satisfied all commitments made to induce Tenant to enter
into the Lease, Landlord is not in any respect in default in the performance of
the terms and provisions of the Lease, and there are no existing defenses which
the undersigned has against the full enforcement of the Lease by Landlord,
except as follows:_____________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
8. Tenant is not in any respect in default under the Lease and has not
assigned, transferred or hypothecated the Lease or any interest therein or
subleased all or any portion of the Premises, except as follows:_______________
_______________________________________________________________________________
_______________________________________________________________________________
9. There are no offsets or credits against rentals payable under the
Lease, and no free periods of rent or other concessions have been granted to
Tenant, except as follows:_____________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
10. Tenant does not have any right or option to renew or extend the term
of the Lease, to lease other space within the building of which the Premises are
a part, nor any preferential right to purchase all or any part of the property
of which the Premises are a part, except as follows:
_______________________________________________________________________________
_______________________________________________________________________________
This certificate has been given to Buyer with the understanding that Buyer
will rely hereon in connection with the acquisition of the property of which the
Premises constitutes a part. The individual executing this instrument hereby
personally certifies that he or she is duly authorized to sign, acknowledge and
deliver this Estoppel Certificate to Buyer.
TENANT: ___________________________,
a ___________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
C-2
<PAGE>
EXHIBIT D
ASSIGNMENT OF LEASES
THIS ASSIGNMENT OF LEASES ("ASSIGNMENT") is executed as of
___________________, 199__, by and between _________________, a
___________________ ("ASSIGNOR"), and MERIDIAN INDUSTRIAL TRUST, INC., a
_________________________ ("ASSIGNEE").
RECITALS:
A. Concurrently herewith, Assignor is conveying to Assignee its interest
in the real property more particularly described on SCHEDULE 1 attached hereto
and by this reference made a part hereof, together with the improvements and
personal property located thereon (herein referred to collectively as the
"PROPERTY" ) pursuant to that certain Agreement of Purchase and Sale and Joint
Escrow Instructions dated as of _________________, 1997, by and between State
Street Bank and Trust Company as Trustee for Ameritech Pension Trust, as
"SELLER" and Assignee, as "BUYER" (the "AGREEMENT") .
B. Assignor is the landlord under certain leases (collectively,
"LEASES"), which Leases Assignor has agreed to assign to Assignee, and Assignee
has agreed to assume upon its purchase of the Property. The Leases and the
security deposits ("SECURITY DEPOSITS") with respect to such Leases are more
particularly described on SCHEDULE 2 attached hereto and incorporated herein.
NOW, THEREFORE, in consideration of the foregoing recitals and for other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns, conveys,
transfers and sets over unto Assignee any and all right, title and interest of
Assignor in and to the Leases, and Assignee hereby accepts said assignment and
assumes all of Assignor's obligations, duties and responsibilities under the
Leases commencing on the Close of Escrow (as defined in the Agreement) and the
transfer of the Property to Assignee.
2. INDEMNIFICATION. Assignor agrees to protect, indemnify, defend and
hold Assignee harmless from and against all claims, obligations and liabilities
to the extent arising out of or relating to the Leases, prior to the Close of
Escrow. Assignee agrees to protect, indemnify, defend and hold Assignor
harmless from and against all claims, obligations and liabilities to the extent
arising out of or relating to the Leases, from and after the Close of Escrow.
3. SUCCESSORS AND ASSIGNS. This Assignment shall inure to the benefit
of, and be binding upon, the successors, executors, administrators, legal
representatives and assigns of the parties hereto.
D-1
<PAGE>
4. GOVERNING LAW. This Assignment shall be construed under and enforced
in accordance with the laws of the State of Illinois.
5. FURTHER ASSURANCES. Assignor and Assignee each agree to execute and
deliver to the other party, upon demand, such further documents, instruments
and-conveyances, and shall take such further actions as are necessary or
desirable to effectuate this Assignment.
6. ATTORNEYS' FEES; COSTS. Upon the bringing of any action, suit or
arbitration by either party against the other arising out of this Assignment or
the subject matter hereof, the party in whose favor final judgment shall be
entered shall be entitled to recover from the other party all costs and expenses
of suit including, without limitation, reasonable attorneys' fees and costs.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the date first set forth above.
ASSIGNOR: ____________________________________
By:______________________________________
______________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
ASSIGNEE: MERIDIAN INDUSTRIAL TRUST, INC., a Maryland
corporation
By:______________________________________
Name:______________________________________
Title:______________________________________
D-2
<PAGE>
EXHIBIT E
BILL OF SALE
Pursuant to that certain Agreement of Purchase and Sale and Joint Escrow
Instructions dated as of _______________, 1997, by and between STATE STREET BANK
AND TRUST COMPANY AS TRUSTEE FOR AMERITECH PENSION TRUST, ___________________
("ASSIGNOR"), and MERIDIAN INDUSTRIAL TRUST, INC., a Maryland corporation
("ASSIGNEE"), and for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Assignor does hereby assign, convey, transfer,
set over and deliver to Assignee all of the personal property ("PERSONAL
PROPERTY") described in SCHEDULE 1 attached hereto.
This Bill of Sale shall be governed by and construed in accordance with the
laws of the State of Illinois. Upon the bringing of any action, suit or
arbitration by either Assignee or Assignor arising out of this Bill of Sale or
the subject matter hereof, the party in whose favor final judgment shall be
entered shall be entitled to recover from the other party all costs and expenses
of suit including, without limitation, reasonable attorneys' fees and costs.
IN WITNESS WHEREOF, Assignor has executed this Bill of
Sale this __________________, 199_.
ASSIGNOR: _________________________________
By:______________________________________
______________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
E-1
<PAGE>
EXHIBIT F
GENERAL ASSIGNMENT AND ASSUMPTION
THIS GENERAL ASSIGNMENT ("ASSIGNMENT") is executed as of
___________________, 199__, by _________________________, a
__________________________ ("ASSIGNOR"), in favor of MERIDIAN INDUSTRIAL TRUST,
INC., a Maryland corporation ("ASSIGNEE").
RECITALS:
A. Concurrently herewith, Assignor is conveying to Assignee its interest
in the real property more particularly described on Schedule 1 attached hereto
and by this reference made a part hereof, together with the improvements and
personal property located thereon (herein referred to collectively as the
"PROPERTY"), pursuant to that certain Agreement of Purchase and Sale and Joint
Escrow Instructions dated as of _______________, 1997, by and between State
Street Bank and Trust Company as Trustee for Ameritech Pension Trust, as
"SELLER," and Assignee, as "BUYER" (the "AGREEMENT").
B. Assignor owns and/or holds certain warranties, guaranties, licenses,
permits, and other documents and instruments pertaining to the Property,
including the contracts and agreements listed on SCHEDULE 2 (the "SERVICE
CONTRACTS") which Assignor has agreed to assign to Assignee upon its purchase of
the Property.
C. This Assignment is executed to effectuate the transfer to Assignee of
all of Assignor's right, title and interest in and to any and all of the items
referred to above and other rights pursuant to the provisions of the Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and for other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor hereby agrees as follows:
1. WARRANTIES AND GUARANTIES. Assignor hereby assigns, conveys,
transfers and sets over unto Assignee, to the extent assignable, any and all of
Assignor's right, title and interest in and to all guaranties, warranties,
certificates and agreements from any contractors, subcontractors, vendors or
suppliers regarding their performance, quality of workmanship and quality of
materials supplied in connection with the construction, manufacture,
development, installation and operation of any and all personal property,
fixtures and improvements located on the Property.
2. GOVERNMENTAL APPROVALS AND CERTIFICATES. Assignor hereby assigns,
transfers, conveys and sets over unto Assignee, to the extent assignable, any
and all of Assignor's right, title and interest in and under any zoning, use,
occupancy and operating permits, and all other permits, licenses, approvals and
certificates to the extent same directly affect the Property.
F-1
<PAGE>
3. PLANS, SPECIFICATIONS AND STUDIES. Assignor hereby assigns, conveys,
transfers and sets over unto Assignee any and all of Assignor's right, title and
interest in and to all maps, plans, specifications, studies, reports and related
documents prepared in connection with the development, construction and
operation of any and all improvements located on the Property.
4. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns to Assignee all of
Assignor's interest in and to the Service Contracts, and Assignee hereby accepts
such assignment and assumes all of Assignor's obligation under the Service
Contracts, commencing on the Close of Escrow (as defined in the Agreement).
5. INDEMNIFICATION. Assignor agrees to protect, indemnify, defend and
hold Assignee harmless from and against all claims, obligations and liabilities
to the extent arising out of or relating to the Service Contracts prior to the
Close of Escrow. Assignee agrees to protect, indemnify, defend and hold
Assignor harmless from and against all claims, obligation, and liabilities to
the extent arising out of or relating to the Service Contracts from and after
the Close of Escrow.
6. GOVERNING LAW. This Assignment shall be construed under and enforced
in accordance with the laws of the State of Illinois.
7. FURTHER ASSURANCES. Assignor agrees to execute and deliver to
Assignor, upon demand, such further reasonable documents, instruments and
conveyances, and shall take such further reasonable actions, as are necessary or
desirable to effectuate this Assignment.
8. ATTORNEYS' FEES; COSTS. Upon the bringing of any action, suit or
arbitration by either party under this Assignment or the subject matter hereof,
the party in whose favor final judgment shall be entered shall be entitled to
recover from the other party all costs and expenses of suit including, without
limitation, reasonable attorneys' fees and costs.
9. SUCCESSORS AND ASSIGNS. This Assignment shall inure to the benefit
of, and be binding upon, the successors, executors, administrators, legal
representatives and assigns of the parties hereto.
F-2
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignor have executed this Assignment as
of the date first set forth above.
ASSIGNOR: ___________________________________
By:______________________________________
______________________________________
By:_________________________________
Name:_______________________________
Title:______________________________
ASSIGNEE: MERIDIAN INDUSTRIAL TRUST, INC., a Maryland
corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
F-3
<PAGE>
EXHIBIT G-1
CERTIFICATION REGARDING WITHHOLDING
A. CERTIFICATION OF NON-FOREIGN STATUS. Section 1445 of the Internal
Revenue Code of 1986, as amended, provides that a transferee of a U.S. real
property interest must withhold tax if the transferor is a foreign person.
AMERITECH PENSION TRUST, a ________________________ ("TRANSFEROR"),
hereby certifies to MERIDIAN INDUSTRIAL TRUST, INC., a Maryland corporation,
("TRANSFEREE"), that withholding of tax is not required upon the transfer of a
U.S. real property interest by Transferor to Transferee.
1. Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
2. Transferor's U.S. Employer identification/social security number
is ___________________; and
3. Transferor's office/residence address is
______________________________________________________________.
B. GENERAL PROVISIONS. Transferor (a) understands that Transferee is
relying on this Certification in determining whether withholding is required
upon said transfer, (b) understands that this Certification may be disclosed to
the Internal Revenue Service by Transferee and that any false statement
contained herein could be punished by fine, imprisonment or both.
Under penalty of perjury the undersigned declares that he/she/it has
examined this Certification and, to the best of his/her/its knowledge and
belief, it is true, correct and complete, and the undersigned further declares
that he/she/it has authority to sign this document on behalf of Transferor.
TRANSFEROR: AMERITECH PENSION TRUST
By: State Street Bank and Trust Company,
as Trustee
By:________________________________________
Name:______________________________________
Title:_____________________________________
Date:______________________________________
G-1-1
<PAGE>
EXHIBIT G-2
CERTIFICATION REGARDING WITHHOLDING
A. CERTIFICATION OF NON-FOREIGN STATUS. Section 1445 of the Internal
Revenue Code of 1986, as amended, provides that a transferee of a U.S. real
property interest (including stock in a domestic corporation that predominantly
owns real estate interests) must withhold tax if the transferor is a foreign
person.
MERIDIAN INDUSTRIAL TRUST, INC., a ________________________
("TRANSFEROR"), hereby certifies to AMERITECH PENSION TRUST ("TRANSFEREE"), that
withholding of tax is not required upon the transfer of a U.S. real property
interest by Transferor to Transferee.
1. Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations);
2. Transferor's U.S. Employer identification/social security number
is ___________________; and
3. Transferor's office/residence address is
______________________________________________________________.
B. GENERAL PROVISIONS. Transferor (a) understands that Transferee is
relying on this Certification in determining whether withholding is required
upon said transfer, (b) understands that this Certification may be disclosed to
the Internal Revenue Service by Transferee and that any false statement
contained herein could be punished by fine, imprisonment or both.
Under penalty of perjury the undersigned declares that he/she/it has
examined this Certification and, to the best of his/her/its knowledge and
belief, it is true, correct and complete, and the undersigned further declares
that he/she/it has authority to sign this document on behalf of Transferor.
TRANSFEROR: MERIDIAN INDUSTRIAL TRUST, INC.
By:______________________________________
Name:____________________________________
Title:___________________________________
Date:_______________________________
G-2-1
<PAGE>
EXHIBIT H
AUDIT DOCUMENT LIST
1. Copies of property operating statements and access to year-to-date general
ledgers (or other books of original accounting record) for the year ended
December 31, 1996 and for the period from January 1, 1997 to the Closing
Date.
2. Copies of property rent rolls for March, June, September and December 1996,
January, February and March 1997 and the calendar month immediately
preceding the month in which the Closing occurs.
3. Access to leases for all tenants in occupancy of the Properties during 1996
and 1997.
4. Access to bank statements and cash receipts documents (check copies and
deposit slips) supporting recorded revenues for March, June, September and
December 1996, January, February and March 1997 and the calendar month
immediately preceding the month in which the Closing occurs.
5. Access to detail unpaid rent and other charges as of December 31, 1996 and
most recent date available prior to the closing date, along with
documentation supporting subsequent collection explanations and/or
uncollected balances.
6. Copies of 1996 operating expense pass-through reconciliation statements and
related adjustments.
7. Access to invoices supporting operating expenses paid by tenants in 1996
and 1997.
8. Copies of real property tax bills for the tax year ended December 31, 1996
and for the period from January 1, 1997 to the Closing Date.
9. Schedule of all tenants granted free rent including amounts granted during
1996 and 1997.
H-2
<PAGE>
EXHIBIT I
FORM OF OPINION
I-1
<PAGE>
EXHIBIT J
ASSIGNMENT OF NOTE AND LIENS
____________________ ("ASSIGNOR"), for $10 and other good and valuable
consideration, whose receipt and sufficiency are acknowledged, assigns to
_________________________________ ("ASSIGNEE"), without recourse or warranty
(except as provided below), the following:
1. The promissory note dated ______________, in the original principal
amount of $________________, executed by ____________________ ("MAKER"), payable
to the order of Assignor as specified therein (the "NOTE"); and
2. All rights, titles and interests of Assignor existing and to exist in
connection with or as security for the payment of the indebtedness evidenced by
the Note, including without limitation all rights, titles and interests arising
under or evidenced by (a) the Mortgage/Deed of Trust dated _______________,
executed by Maker, recorded in Volume _____, Page _____ of the Records of
_________ County, ________, and (b) the Assignment of Rents recorded in Volume
_____, Page _____ of the Records of _________ County, ______.
TO HAVE AND TO HOLD the Note, together and along with all rights, titles
and interests now or hereafter had by Assignor in connection therewith or as
security therefor unto Assignee, its successors and assigns forever. Assignor
hereby represents and warrants that Assignor (1) is the owner and holder of the
Note,(2) has not assigned, mortgaged or hypothecated the Note or any of the
liens or security interests securing payment thereof to any other party, and (3)
has the full right and authority to transfer the Note, all rights, titles, and
interests related thereto, and to execute this instrument.
EXECUTED as of _________, 19___.
______________________________________
By:____________________________________________
Name:__________________________________________
Title:_________________________________________
J-1
<PAGE>
THE STATE OF _________ Section
Section
COUNTY OF ___________ Section
This instrument was acknowledged before me on ________, 19__, by
__________________________, ____________________ of ______________________, a
_______________________, on behalf of said _____________.
________________________________________________
Notary Public, State of ________
My Commission Expires: _________________________
________________________________________________
Printed Name of Notary
J-2
<PAGE>
EXHIBIT K
REGISTRATION RIGHTS AGREEMENT
[to be attached]
K-1
<PAGE>
EXHIBIT L
AMENDED AND RESTATED EXCEPTED HOLDER AGREEMENT
L-1
<PAGE>
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED APRIL 21, 1997
AMONG
MERIDIAN INDUSTRIAL TRUST, INC.
AND
THE FIRST NATIONAL BANK OF BOSTON,
THE OTHER BANKS WHICH ARE
A PARTY TO THIS AGREEMENT
AND
OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
AND
THE FIRST NATIONAL BANK OF BOSTON,
AS AGENT
<PAGE>
TABLE OF CONTENTS
Section 1. DEFINITIONS AND RULES OF INTERPRETATION . . . . . . . . . . . 1
Section 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Rules of Interpretation. . . . . . . . . . . . . . . .19
Section 2. THE REVOLVING CREDIT FACILITY . . . . . . . . . . . . . . . .20
Section 2.1. Commitment to Lend . . . . . . . . . . . . . . . . . .20
Section 2.2. Facility Fee . . . . . . . . . . . . . . . . . . . . .20
Section 2.3. Intentionally Omitted. . . . . . . . . . . . . . . . .21
Section 2.4. Notes. . . . . . . . . . . . . . . . . . . . . . . . .21
Section 2.5. Interest on Loans. . . . . . . . . . . . . . . . . . .21
Section 2.6. Requests for Loans . . . . . . . . . . . . . . . . . .22
Section 2.7. Funds for Loans. . . . . . . . . . . . . . . . . . . .23
Section 2.8. Extension of Maturity Date . . . . . . . . . . . . . .23
Section 2.9. Letters of Credit. . . . . . . . . . . . . . . . . . .24
Section 3. REPAYMENT OF THE LOANS. . . . . . . . . . . . . . . . . . . .26
Section 3.1. Stated Maturity. . . . . . . . . . . . . . . . . . . .26
Section 3.2. Mandatory Prepayments. . . . . . . . . . . . . . . . .27
Section 3.3. Optional Prepayments . . . . . . . . . . . . . . . . .27
Section 3.4. Partial Prepayments. . . . . . . . . . . . . . . . . .27
Section 3.5. Effect of Prepayments. . . . . . . . . . . . . . . . .27
Section 3.6. Proceeds from Debt Offering and Equity Offering. . . .27
Section 4. CERTAIN GENERAL PROVISIONS. . . . . . . . . . . . . . . . . .27
Section 4.1. Conversion Options . . . . . . . . . . . . . . . . . .27
Section 4.2. Commitment Fee . . . . . . . . . . . . . . . . . . . .28
Section 4.3. Agent's Fee . . . . . . . . . . . . . . . . . . . . ..28
Section 4.4. Funds for Payments . . . . . . . . . . . . . . . . . .28
Section 4.5. Computations . . . . . . . . . . . . . . . . . . . . .30
Section 4.6. Inability to Determine Eurodollar Rate . . . . . . . .30
Section 4.7. Illegality . . . . . . . . . . . . . . . . . . . . . .30
Section 4.8. Additional Interest. . . . . . . . . . . . . . . . . .30
Section 4.9. Additional Costs, Etc. . . . . . . . . . . . . . . . .31
Section 4.10. Capital Adequacy . . . . . . . . . . . . . . . . . . .32
Section 4.11. Indemnity of Borrower. . . . . . . . . . . . . . . . .32
Section 4.12. Interest on Overdue Amounts; Late Charge . . . . . . .33
Section 4.13. Certificate. . . . . . . . . . . . . . . . . . . . . .33
Section 4.14. Limitation on Interest . . . . . . . . . . . . . . . .33
Section 5. SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . .33
i
<PAGE>
Section 6. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . .33
Section 6.1. Corporate Authority, Etc.. . . . . . . . . . . . . . .34
Section 6.2. Governmental Approvals . . . . . . . . . . . . . . . .34
Section 6.3. Title to Properties; Leases. . . . . . . . . . . . . .35
Section 6.4. Financial Statements . . . . . . . . . . . . . . . . .35
Section 6.5. No Material Changes. . . . . . . . . . . . . . . . . .36
Section 6.6. Franchises, Patents, Copyrights, Etc.. . . . . . . . .36
Section 6.7. Litigation . . . . . . . . . . . . . . . . . . . . . .36
Section 6.8. No Materially Adverse Contracts, Etc.. . . . . . . . .36
Section 6.9. Compliance with Other Instruments, Laws, Etc.. . . . .36
Section 6.10. Tax Status . . . . . . . . . . . . . . . . . . . . . .37
Section 6.11. No Event of Default. . . . . . . . . . . . . . . . . .37
Section 6.12. Holding Company and Investment Company Acts. . . . . .37
Section 6.13. Absence of UCC Financing Statements, Etc . . . . . . .37
Section 6.14. Intentionally Omitted. . . . . . . . . . . . . . . . .37
Section 6.15. Certain Transactions . . . . . . . . . . . . . . . . .37
Section 6.16. Employee Benefit Plans . . . . . . . . . . . . . . . .37
Section 6.17. Regulations U and X. . . . . . . . . . . . . . . . . .38
Section 6.18. Environmental Compliance . . . . . . . . . . . . . . .38
Section 6.19. Subsidiaries . . . . . . . . . . . . . . . . . . . . .39
Section 6.20. Minority Interests . . . . . . . . . . . . . . . . . .39
Section 6.21. Loan Documents . . . . . . . . . . . . . . . . . . . .40
Section 6.22. Property . . . . . . . . . . . . . . . . . . . . . . .40
Section 6.23. Brokers. . . . . . . . . . . . . . . . . . . . . . . .40
Section 6.24. Other Debt . . . . . . . . . . . . . . . . . . . . . .40
Section 6.25. Solvency . . . . . . . . . . . . . . . . . . . . . . .41
Section 6.26. Guarantor. . . . . . . . . . . . . . . . . . . . . . .41
Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER . . . . . . . . . . . .41
Section 7.1. Punctual Payment . . . . . . . . . . . . . . . . . . .41
Section 7.2. Maintenance of Office. . . . . . . . . . . . . . . . .41
Section 7.3. Records and Accounts . . . . . . . . . . . . . . . . .41
Section 7.4. Financial Statements, Certificates and Information . .41
Section 7.5. Notices. . . . . . . . . . . . . . . . . . . . . . . .44
Section 7.6. Existence; Maintenance of Properties . . . . . . . . .45
Section 7.7. Insurance. . . . . . . . . . . . . . . . . . . . . . .46
Section 7.8. Taxes. . . . . . . . . . . . . . . . . . . . . . . . .46
Section 7.9. Inspection of Properties and Books . . . . . . . . . .46
Section 7.10. Compliance with Laws, Contracts, Licenses, and
Permits. . . . . . . . . . . . . . . . . . . . . . . .46
Section 7.11. Use of Proceeds. . . . . . . . . . . . . . . . . . . .47
Section 7.12. Further Assurances . . . . . . . . . . . . . . . . . .47
Section 7.13. REIT Status. . . . . . . . . . . . . . . . . . . . . .47
ii
<PAGE>
Section 7.14. Restrictions on Acquisitions . . . . . . . . . . . . .47
Section 7.15. Unencumbered Operating Properties. . . . . . . . . . .48
Section 7.16. Limiting Agreements. . . . . . . . . . . . . . . . . .49
Section 7.17. Environmental and Engineering Inspections. . . . . . .49
Section 7.18. Distribution of Income to the Borrower.. . . . . . . .50
Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. . . . . . . . . .50
Section 8.1. Restrictions on Indebtedness . . . . . . . . . . . . .50
Section 8.2. Restrictions on Liens, Etc.. . . . . . . . . . . . . .52
Section 8.3. Restrictions on Investments. . . . . . . . . . . . . .53
Section 8.4. Merger, Consolidation. . . . . . . . . . . . . . . . .54
Section 8.5. Sale and Leaseback . . . . . . . . . . . . . . . . . .55
Section 8.6. Compliance with Environmental Laws . . . . . . . . . .55
Section 8.7. Distributions. . . . . . . . . . . . . . . . . . . . .56
Section 8.8. Asset Sales. . . . . . . . . . . . . . . . . . . . . .57
Section 8.9. Development Activity . . . . . . . . . . . . . . . . .57
Section 8.10. Sources of Capital . . . . . . . . . . . . . . . . . .57
Section 8.11. Restriction on Prepayment of Indebtedness. . . . . . .58
Section 9. FINANCIAL COVENANTS OF THE BORROWER . . . . . . . . . . . . .58
Section 9.1. Liabilities to Tangible Net Worth Ratio. . . . . . . .58
Section 9.2. Debt Coverage. . . . . . . . . . . . . . . . . . . . .58
Section 9.3. Fixed Charge Coverage. . . . . . . . . . . . . . . . .59
Section 9.4. Borrowing Base . . . . . . . . . . . . . . . . . . . .59
Section 9.5. Tangible Net Worth . . . . . . . . . . . . . . . . . .59
Section 9.6. Real Estate Assets . . . . . . . . . . . . . . . . . .59
Section 9.7. Value Adjustment . . . . . . . . . . . . . . . . . . .59
Section 9.8. Annualization of Results . . . . . . . . . . . . . . .59
Section 10. CLOSING CONDITIONS . . . . . . . . . . . . . . . . . . . . .60
Section 10.1. Loan Documents. . . . . . . . . . . . . . . . . . . .60
Section 10.2. Certified Copies of Organizational Documents. . . . .60
Section 10.3. Bylaws; Resolutions and Consents. . . . . . . . . . .60
Section 10.4. Incumbency Certificate; Authorized Signers. . . . . .60
Section 10.5. Opinion of Counsel. . . . . . . . . . . . . . . . . .61
Section 10.6. Payment of Fees . . . . . . . . . . . . . . . . . . .61
Section 10.7. Performance; No Default . . . . . . . . . . . . . . .61
Section 10.8. Representations and Warranties. . . . . . . . . . . .61
Section 10.9. Proceedings and Documents . . . . . . . . . . . . . .61
Section 10.10. Compliance Certificate. . . . . . . . . . . . . . . .61
Section 10.11. Other . . . . . . . . . . . . . . . . . . . . . . . .61
Section 10.12. Intentionally Omitted . . . . . . . . . . . . . . . .61
Section 10.14. Intentionally Omitted . . . . . . . . . . . . . . . .62
iii
<PAGE>
Section 10.15. Tangible Net Worth. . . . . . . . . . . . . . . . . .62
Section 10.16. Due Diligence . . . . . . . . . . . . . . . . . . . .62
Section 10.17. Management of the Borrower. . . . . . . . . . . . . .62
Section 11. CONDITIONS TO ALL BORROWINGS. . . . . . . . . . . . . . . . .62
Section 11.1. Prior Conditions Satisfied. . . . . . . . . . . . . .62
Section 11.2. Representations True; No Default. . . . . . . . . . .62
Section 11.3. No Legal Impediment . . . . . . . . . . . . . . . . .62
Section 11.4. Governmental Regulation . . . . . . . . . . . . . . .62
Section 11.5. Proceedings and Documents . . . . . . . . . . . . . .63
Section 11.6. Borrowing Documents . . . . . . . . . . . . . . . . .63
Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.. . . . . . . . . . . .63
Section 12.1. Events of Default and Acceleration. . . . . . . . . .63
Section 12.2. Limitation of Cure Periods. . . . . . . . . . . . . .66
Section 12.3. Termination of Commitments. . . . . . . . . . . . . .66
Section 12.4. Remedies. . . . . . . . . . . . . . . . . . . . . . .66
Section 12.5. Distribution of Proceeds. . . . . . . . . . . . . . .67
Section 13. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . . . .68
Section 14. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . .68
Section 14.1. Authorization . . . . . . . . . . . . . . . . . . . .68
Section 14.2. Employees and Agents. . . . . . . . . . . . . . . . .68
Section 14.3. No Liability. . . . . . . . . . . . . . . . . . . . .68
Section 14.4. No Representations. . . . . . . . . . . . . . . . . .68
Section 14.5. Payments. . . . . . . . . . . . . . . . . . . . . . .69
Section 14.6. Holders of Notes. . . . . . . . . . . . . . . . . . .70
Section 14.7. Indemnity . . . . . . . . . . . . . . . . . . . . . .70
Section 14.8. Agent as Bank . . . . . . . . . . . . . . . . . . . .70
Section 14.9. Resignation . . . . . . . . . . . . . . . . . . . . .70
Section 14.10. Duties in the Case of Enforcement. . . . . . . . . .71
Section 14.11. Determinations by Agent. . . . . . . . . . . . . . .71
Section 15. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . .71
Section 16. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . .72
Section 17. SURVIVAL OF COVENANTS, ETC.. . . . . . . . . . . . . . . . .73
Section 18. ASSIGNMENT AND PARTICIPATION . . . . . . . . . . . . . . . .73
Section 18.1. Conditions to Assignment by Banks . . . . . . . . . .73
Section 18.2. Register. . . . . . . . . . . . . . . . . . . . . . .74
iv
<PAGE>
Section 18.3. New Notes . . . . . . . . . . . . . . . . . . . . . .74
Section 18.4. Participations. . . . . . . . . . . . . . . . . . . .74
Section 18.5. Pledge by Bank. . . . . . . . . . . . . . . . . . . .75
Section 18.6. No Assignment by Borrower . . . . . . . . . . . . . .75
Section 18.7. Disclosure. . . . . . . . . . . . . . . . . . . . . .75
Section 19. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . .75
Section 20. RELATIONSHIP . . . . . . . . . . . . . . . . . . . . . . . .76
Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE . . . . .77
Section 22. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . .77
Section 23. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . .77
Section 24. ENTIRE AGREEMENT, ETC. . . . . . . . . . . . . . . . . . . .77
Section 25. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . .77
Section 26. DEALINGS WITH THE BORROWER . . . . . . . . . . . . . . . . .78
Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC.. . . . . . . . . . . . .78
Section 28. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . .79
Section 29. NO UNWRITTEN AGREEMENTS. . . . . . . . . . . . . . . . . . .79
Section 30. TIME OF THE ESSENCE. . . . . . . . . . . . . . . . . . . . .79
EXHIBIT A - Form of Note
EXHIBIT B - Form of Request for Loan
EXHIBIT C - Reserved
EXHIBIT D - Form of Compliance Certificate
SCHEDULE 1 - Banks and Commitments
SCHEDULE 2 - Initial Unencumbered Properties
v
<PAGE>
SCHEDULE 3 - Adjusted Asset Values of Real Estate
SCHEDULE 6.3 - Title to Properties; Leases
SCHEDULE 6.7 - Litigation
SCHEDULE 6.19 - Subsidiaries of the Borrower
vi
<PAGE>
SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this
"Agreement") is made the 21st day of April, 1997, by and among MERIDIAN
INDUSTRIAL TRUST, INC. (the "Borrower"), a Maryland corporation having its
principal place of business at 455 Market Street, 17th Floor, San Francisco,
California 94105, THE FIRST NATIONAL BANK OF BOSTON, TEXAS COMMERCE BANK
NATIONAL ASSOCIATION, NATIONSBANK OF TEXAS, N.A., WELLS FARGO BANK, N.A.,
DRESDNER BANK AG, FIRST AMERICAN BANK TEXAS, S.S.B. and the other lending
institutions which may become parties hereto pursuant to Section 18 (the
"Banks"), THE FIRST NATIONAL BANK OF BOSTON, as Agent for the Banks (the
"Agent"), and TEXAS COMMERCE BANK, NATIONAL ASSOCIATION AND NATIONSBANK OF
TEXAS, N.A., as Co-Agents for the Banks (collectively, the "Co-Agent").
RECITALS.
WHEREAS, Borrower, Agent, Co-Agent and certain of the Banks have entered
into that certain Revolving Credit Agreement dated February 26, 1996 (the
"Original Credit Agreement"), as amended and restated by that certain First
Amended and Restated Revolving Credit Agreement dated March 19, 1996 (the
"First Amended Credit Agreement"); and
WHEREAS, Borrower has requested that the Banks increase the Total
Commitment (including the sublimit for letters of credit) and modify certain
other provisions of the First Amended Credit Agreement; and
WHEREAS, Borrower, Agent, Co-Agent and the Banks desire to amend and
restate the First Amended Credit Agreement in its entirety;
NOW, THEREFORE, in consideration of the recitals herein and the mutual
covenants contained herein, the parties hereto hereby agree to amend and
restate the First Amended Credit Agreement in its entirety as follows:
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.1. DEFINITIONS. The following terms shall have the meanings
set forth in this Section l or elsewhere in the provisions of this Agreement
referred to below:
AGENT. The First National Bank of Boston acting as agent for the Banks,
its successors and assigns.
AGENT'S HEAD OFFICE. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent
may designate from time to time by notice to the Borrower and the Banks.
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AGENT'S SPECIAL COUNSEL. Long Aldridge Norman LLP or such other counsel
as may be approved by the Agent.
AGREEMENT. This Second Amended and Restated Revolving Credit Agreement,
including the SCHEDULES and EXHIBITS hereto.
AGREEMENT REGARDING FEES. That certain First Amended and Restated
Agreement Regarding Fees between the Borrower and FNBB dated of even date
herewith.
APPLICABLE MARGIN. On any date that the lower of the Implied Ratings
issued from time to time by either of the Rating Agencies for the Borrower is
an Investment Grade Rating, the Applicable Margin for Eurodollar Rate Loans
shall be one and one-fifth percent (1.20%). In the event that either of the
Rating Agencies issues an Implied Rating for the Borrower that is an
Investment Grade Rating, or in the event of any change in an Implied Rating
of the Borrower by either of the Rating Agencies, or if the Borrower's
Implied Rating, after having obtained an Investment Grade Rating, shall cease
at any time to be an Investment Grade Rating by either of the Rating Agencies
(but subject to the provisions within the definition of the term "Investment
Grade Rating"), such change shall effect a change in the Applicable Margin on
the first Business Day after the Rating Notice Date. On any date that the
lower of the Implied Ratings for the Borrower is not an Investment Grade
Rating or the Borrower has not obtained an Investment Grade Rating from
either of the Rating Agencies, the Applicable Margin for Eurodollar Rate
Loans shall be one and four-tenths percent (1.40%). It is the intention of
the parties that if the Borrower shall only obtain an Investment Grade Rating
from one of the Rating Agencies without seeking an Investment Grade Rating
from the other of the Rating Agencies, the Borrower shall be entitled to the
benefit of the rate reductions described above; provided that if the Borrower
shall have obtained an Investment Grade Rating from both of the Rating
Agencies, the lower of the two ratings (or the loss of the Investment Grade
Rating from one of the Rating Agencies thereafter) shall control.
ASSET VALUE. With respect to the Initial Unencumbered Operating
Properties and any other parcels of Real Estate owned by the Borrower and its
Subsidiaries as of the Closing Date, the book value after adjustment for
market values in accordance with Section 9.7; with respect to Unencumbered
Operating Properties and any other parcels of Real Estate acquired after the
Closing Date, the purchase price (including improvements) and ordinary
related purchase transaction costs, without deduction for depreciation, or if
developed by the Borrower, the completed construction costs, determined in
accordance with generally accepted accounting principles without deduction
for depreciation; and with respect to the Borrower's direct or indirect
interests in joint ventures or partnerships (including the OTR Minority
Interest), the book value of such interests themselves without deduction for
depreciation. If any parcel of Real Estate is purchased as a part of a group
of properties, the Asset Value shall be calculated based upon a reasonable
allocation by the Borrower of the aggregate purchase price among all parcels
of Real Estate purchased in such transaction and agreed to by the Majority
Banks.
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AUTHORIZED OFFICER. As to the Borrower, each of Allen J. Anderson, as
Chairman of the Board of the Borrower; Milton Reeder, as President of the
Borrower; or Jaime Suarez, as Treasurer/Controller of the Borrower; and their
respective successors in office. As to each Guarantor, the managing general
partner of each such Guarantor and their respective successors in office.
BALANCE SHEET DATE. December 31, 1996.
BANKS. FNBB, the other Banks that are a party to this Agreement and any
other Person who becomes an assignee of any rights of a Bank pursuant to
Section 18 (but not including any Participant, as defined in Section 18).
BASE RATE. The higher of (a) the annual rate of interest announced from
time to time by the Agent at its head office as its "base rate", or (b) one
half of one percent (0.5%) above the Federal Funds Effective Rate (rounded
upwards, if necessary, to the next one-eighth of one percent). Any change in
the rate of interest payable hereunder resulting from a change in the Base
Rate shall become effective as of the opening of business on the day on which
such change in the Base Rate becomes effective.
BASE RATE LOANS. Those Loans bearing interest calculated by reference
to the Base Rate.
BORROWER. As defined in the preamble hereto.
BORROWING BASE. At any time, the aggregate Borrowing Base for all of the
Unencumbered Operating Properties which shall be the amount which is the
lesser of (I) the lesser of (a) fifty percent (50%) of the aggregate Asset
Value of all of the Unencumbered Operating Properties, decreased by the book
value of the Subsidiary Minority Interest and, with the prior written
approval of the Majority Banks, increased by the book value of minority
interests of the Borrower in unconsolidated joint ventures and partnerships
recorded under generally accepted accounting principles, or (b) fifty percent
(50%) of the aggregate value of all of the Unencumbered Operating Properties,
such value being determined as follows: (x) for the Initial Unencumbered
Operating Properties and the hereafter acquired Unencumbered Operating
Properties which do not constitute Qualifying Properties, the aggregate value
shall be the amount resulting from dividing (i) the sum of aggregate Net
Operating Income for the four preceding fiscal quarters for all of such
properties MINUS the portion of aggregate Net Operating Income allocable to
the Subsidiary Minority Interest MINUS the aggregate Capital Improvement
Reserve for all of such properties by (ii) ten percent (10%); and (y) for the
Qualifying Properties, the aggregate value shall be the amount resulting from
dividing (i) the sum of aggregate Net Operating Income for the four preceding
fiscal quarters for all of the Qualifying Properties MINUS the portion of
aggregate Net Operating Income allocable to the Subsidiary Minority Interest
MINUS the aggregate Capital Improvement Reserve for all of the Qualifying
Properties by (ii) nine and one-fourth percent (9.25%), and, with the prior
written approval of the Majority Banks, increased by the book value of
minority interests of the Borrower in unconsolidated joint ventures and
partnerships recorded under generally accepted accounting principles; or (c)
the aggregate Debt Service Coverage
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Amount for all of the Unencumbered Operating Properties and, with the prior
written approval of the Majority Banks, increased by the book value of
minority interests of the Borrower in unconsolidated joint ventures and
partnerships recorded under generally accepted accounting principles; and
(II) the lesser of (a) fifty-five percent (55%) of the aggregate Asset Value
of all of the Unencumbered Operating Properties (excluding the OTR Minority
Interest and the minority interests of the Borrower in unconsolidated joint
ventures and partnerships approved by the Majority Banks), decreased by the
book value of the Subsidiary Minority Interest, or (b) fifty-five percent
(55%) of the aggregate value of all of the Unencumbered Operating Properties
(excluding the OTR Minority Interest and the minority interests of the
Borrower in unconsolidated joint ventures and partnerships approved by the
Majority Banks), such value being determined as follows: (x) for the Initial
Unencumbered Operating Properties and the hereafter acquired Unencumbered
Operating Properties which do not constitute Qualifying Properties, the
aggregate value shall be the amount resulting from dividing (i) the sum of
aggregate Net Operating Income for the four preceding fiscal quarters for all
of such properties MINUS the portion of aggregate Net Operating Income
allocable to the Subsidiary Minority Interest MINUS the aggregate Capital
Improvement Reserve for all of such properties by (ii) ten percent (10%); and
(y) for the Qualifying Properties, the aggregate value shall be the amount
resulting from dividing (i) the sum of aggregate Net Operating Income for the
four preceding fiscal quarters for all of the Qualifying Properties MINUS the
portion of aggregate Net Operating Income allocable to the Subsidiary
Minority Interest MINUS the aggregate Capital Improvement Reserve for all of
the Qualifying Properties by (ii) nine and one-fourth percent (9.25%); or (c)
the aggregate Debt Service Coverage Amount for all of the Unencumbered
Operating Properties (excluding the OTR Minority Interest and the minority
interests of the Borrower in unconsolidated joint ventures and partnerships
approved by the Majority Banks); and the amount which is the lesser of (I) or
(II) shall be the aggregate Borrowing Base for all of the Unencumbered
Operating Properties.
BUILDING. With respect to any portion of the Real Estate, all of the
buildings, structures and improvements now or hereafter located thereon.
BUSINESS DAY. Any day on which banking institutions located in the same
city and state as the head office of the Agent are open for the transaction
of banking business and, in the case of Eurodollar Rate Loans, which also is
a Eurodollar Business Day.
CAPITAL IMPROVEMENT PROJECT. With respect to any Real Estate now or
hereafter owned by the Borrower or its Subsidiaries which is utilized
principally for industrial purposes, capital improvements consisting of
rehabilitation, refurbishment, replacement and improvements to the existing
Buildings on such Real Estate which may be properly capitalized under
generally accepted accounting principles.
CAPITAL IMPROVEMENT RESERVE. With respect to the Real Estate or any
portion thereof, a reserve for Capital Improvement Projects in the amount of
fifteen cents ($0.15) multiplied by the average Gross Rentable Area contained
therein for the period in question.
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CAPITALIZED LEASE. A lease under which a Person is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with generally accepted accounting principles.
CASH AVAILABLE FOR DISTRIBUTION. With respect to any Person for any
fiscal period, an amount equal to Funds from Operations, MINUS the Capital
Improvement Reserve with respect to the Real Estate, MINUS actual tenant
improvements and leasing commissions incurred during such fiscal period.
CERCLA. See Section 6.18.
CLOSING DATE. The first date on which all of the conditions set forth
in Section 10 and Section 11 have been satisfied.
CO-AGENT. Texas Commerce Bank National Association and NationsBank of
Texas, N.A., each acting as co-agent with Agent for the Banks, its successors
and assigns.
CODE. The Internal Revenue Code of 1986, as amended.
COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE
1 hereto as the amount of such Bank's Commitment to make or maintain Loans to
the Borrower or purchase participations in Letters of Credit issued by the
Agent to the Borrower, as the same may be changed from time to time in
accordance with the terms of this Agreement.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
COMPLIANCE CERTIFICATE. See Section 7.4(e).
CONSOLIDATED or COMBINED. With reference to any term defined herein,
that term as applied to the accounts of the Borrower and its Subsidiaries,
consolidated or combined in accordance with generally accepted accounting
principles.
CONSOLIDATED TANGIBLE NET WORTH. The amount by which Consolidated Total
Assets exceed Consolidated Total Liabilities, and LESS the sum of:
(a) the total book value of all assets of a Person properly
classified as intangible assets under generally accepted accounting
principles, including such items as good will, the purchase price of
acquired assets in excess of the fair market value thereof, trademarks,
trade names, service marks, brand names, copyrights, patents and licenses,
and rights with respect to the foregoing; PLUS
(b) all amounts representing any write-up in the book value of any
assets of such Person resulting from a revaluation thereof subsequent to
the Balance Sheet Date; PLUS
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(c) prepaid fees and deferred charges (regardless of whether
classified as intangible assets under generally accepted accounting
principles).
CONSOLIDATED TOTAL ASSETS. All assets of the Borrower and its
Subsidiaries determined on a Consolidated basis in accordance with generally
accepted accounting principles, provided that all Real Estate shall be valued
on an undepreciated cost basis. The assets of the Borrower and its
Subsidiaries on the consolidated financial statements of the Borrower and its
Subsidiaries shall be adjusted as of the Closing Date for market values in
accordance with Section 9.7 and to reflect the Borrower's allocable share of
such asset, for the relevant period or as of the date of determination,
taking into account (a) the relative proportion of each such item derived
from assets directly owned by the Borrower and from assets owned by its
respective Subsidiaries, and (b) the Borrower's respective ownership interest
in its Subsidiaries.
CONSOLIDATED TOTAL LIABILITIES. All liabilities of the Borrower and its
Subsidiaries determined on a Consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of the Borrower and its
Subsidiaries, whether or not so classified.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with Section 4.1.
DEBT OFFERING. The issuance and sale by the Borrower or the Guarantor
of any debt securities of the Borrower or the Guarantor.
DEBT SERVICE. For any period, the sum of all interest (including
capitalized interest) and mandatory scheduled principal payments due and
payable during such period with respect to any Indebtedness excluding any
balloon payments due upon maturity of any Indebtedness.
DEBT SERVICE COVERAGE AMOUNT. At any time determined by Agent, an
amount equal to the maximum principal loan amount which, when bearing
interest at a rate per annum equal to the greater of (a) the then-current
annual yield on ten (10) year obligations issued by the United States
Treasury most recently prior to the date of determination plus two percent
(2%) and (b) ten percent (10%), and payable based on a twenty-five year
mortgage style amortization schedule, could be paid by the monthly principal
and interest payment amount resulting from dividing (x) the quotient obtained
by dividing an amount equal to (i) the sum of the Net Operating Income from
an individual Unencumbered Operating Property for the preceding four fiscal
quarters (with respect to a DownREIT, that portion of the Net Operating
Income allocable to the Subsidiary Minority Interest shall be deducted from
the total Net Operating Income), MINUS the Capital Improvement Reserve for
such Unencumbered Operating Property, by (ii) 1.75 by (y) 12.
DEFAULT. See Section 12.1.
DISTRIBUTION. The declaration or payment of any dividend or
distribution on or in respect of any shares of beneficial interest of the
Borrower or the Guarantor, other than dividends or
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distributions payable solely in equity securities of the Borrower or the
Guarantor; the purchase, redemption, exchange or other retirement of any
shares of beneficial interest of the Borrower or the Guarantor, directly or
indirectly through a Subsidiary of the Borrower or the Guarantor or
otherwise, including without limitation, the purchase of shares of beneficial
interest of the Borrower for cash pursuant to the Excepted Holder Agreement
(as defined in the definition of Indebtedness), but excluding the purchase of
shares of beneficial interest of the Borrower from executive officers of the
Borrower where the only consideration for such purchase is the extinguishing
of notes made by such executive officers and held by the Borrower; the return
of capital by the Borrower to its shareholders as such; or any other
distribution on or in respect of any shares of beneficial interest of the
Borrower or the Guarantor, including, without limitation, interest and
premium paid on the Debentures (as defined in the definition of Indebtedness).
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
DOWNREIT. A partnership, limited liability company or other entity
formed by the Borrower and another party for the primary purpose of enabling
the Borrower to acquire industrial properties from third parties that become
investors in such entity on a tax advantaged basis to such investors by
enabling them to defer taxes until such time as they convert their ownership
interest in the DownREIT to common stock of the Borrower. The formation,
structure and operation of each DownREIT shall be subject to the prior
written approval of the Majority Banks, but shall generally be structured
such that (i) the Borrower directly controls its operations and assets,
including, without limitation, the right to sell, transfer, convey or
encumber such assets; (ii) the investors will have the right to convert their
equity to common stock of the Borrower, but will not have buy-sell or similar
rights; (iii) any debt of the DownREIT shall be subordinated to repayment of
the Obligations pursuant to a subordination and standstill agreement in form
and substance satisfactory to the Majority Banks and shall be limited to no
more than a thirty percent (30%) loan to value ratio determined pursuant to
such value assessments satisfactory to the Majority Banks; and (iv) the
DownREIT shall execute and deliver to the Banks a guaranty of payment and
performance in form substantially similar to the Guaranty.
DRAWDOWN DATE. The date on which any Loan is made, and the date on
which any Loan which is made prior to the Maturity Date is converted or
combined in accordance with Section 4.1.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate, other than a Multi-employer Plan.
ENVIRONMENTAL LAWS. See Section 6.18(a).
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EQUITY OFFERING. The issuance and sale by the Borrower or the Guarantor
of any equity securities of the Borrower or the Guarantor.
ERISA. The Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time and any rules and regulations promulgated
pursuant thereto.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which the Reference
Bank would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D or any successor or
similar regulation), if such liabilities were outstanding. The Eurocurrency
Reserve Rate shall be adjusted automatically on and as of the effective date
of any change in the Eurocurrency Reserve Rate.
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or
such other Eurodollar interbank market as may be selected by the Agent in its
sole discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each Bank
designated as such in SCHEDULE 1 hereto; thereafter, such other office of
such Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate per annum equal to the quotient (rounded upwards to the
nearest 1/16 of one percent) of (i) the rate at which the Reference Bank's
Eurodollar Lending Office is offered Dollar deposits two Eurodollar Business
Days prior to the beginning of such Interest Period in whatever interbank
eurodollar market may be selected by the Reference Bank in its sole
discretion, acting in good faith, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan to which such Interest
Period applies (based upon Telerate quotes, page 3750, or such other page as
contains the same information as contained on page 3750), divided by (ii) a
number equal to 1.00 minus the Eurocurrency Reserve Rate.
EURODOLLAR RATE LOANS. Loans bearing interest calculated by reference
to a Eurodollar Rate.
EVENT OF DEFAULT. See Section 12.1.
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EXTENSION REQUEST. See Section 2.8.
FEDERAL FUNDS EFFECTIVE RATE. For any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers,
as published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average
of the quotations for such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by the Agent.
FNBB. The First National Bank of Boston.
FUNDS FROM OPERATIONS. With respect to any Person for any fiscal
period, an amount equal to the Net Income (or Deficit) of such Person
computed in accordance with generally accepted accounting principles,
excluding financing costs and gains (or losses) from debt restructuring and
sales of property, PLUS depreciation and amortization and other non-cash
items, PLUS the amortized portion of the Initial Loan Fees for such fiscal
period (excluding amortization of loan fees not constituting Initial Loan
Fees).
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to
time and (b) consistently applied with past financial statements of the
Borrower or any of its Subsidiaries adopting the same principles; PROVIDED
that a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes in
generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
GROSS CASH RECEIPTS. Gross Cash Receipts shall mean with respect to any
parcel of Real Estate the sum of cash recorded during any period by or for
the account of the Borrower or the Guarantor in payment of the following
items:
(a) Rentals, including minimum or base rent, percentage rent, and
rent attributable to recovery of tenant improvements costs
received from tenants occupying space in such parcel of Real
Estate during such period (prepaid rentals shall be treated in
accordance with generally accepted accounting principles);
(b) All amounts paid by tenants to the Borrower or the Guarantor
under Leases with respect to taxes and assessments imposed on
such parcel of Real Estate or in reimbursement of operating
expenses;
(c) Parking revenues received in connection with the operation of
parking facilities; and
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(d) Receipts from vending machines, recreational facilities and any
and all other operating revenues received from such parcel of
Real Estate.
In the event that the Borrower or the Guarantor receives a payment of
Gross Cash Receipts other than on a monthly basis, then for the purposes of
determining the Gross Cash Receipts for a four quarter period (a
"Determination Period"), only the amount of such payment which relates to the
Determination Period (as opposed to a period either before or after the
Determination Period) shall be included in the calculation of Gross Cash
Receipts for such period.
Any payment of Gross Cash Receipts received from a tenant of a parcel of
Real Estate which is delinquent shall not be included as Gross Cash Receipts
until all delinquencies relating to such tenant for any prior periods have
been paid in full. Gross Cash Receipts shall not include any amounts payable
by tenants holding over pursuant to expired or terminated Leases, nor any
amounts paid by tenants as late charges, default interest or such other
similar charges.
If the Borrower or the Guarantor shall receive cash by reason of fire or
other casualty insurance proceeds, proceeds of rental, loss or business
interruption insurance (except to the extent that such proceeds replace the
rental payments which otherwise would have been due to the Borrower or the
Guarantor from tenants of a parcel of Real Estate), the forfeiting by tenants
of security or other deposits or payments made by tenants to cancel their
Leases or the recovery by the Borrower or the Guarantor of future rentals
under Leases (regardless of whether or not discounted to present value), or a
taking by eminent domain, a loan or advance, a sale, transfer, assignment or
other disposition of any part of a parcel of Real Estate or any interest
therein, or any other items of income which are extraordinary or of a
non-recurring nature, such amounts shall not be included in Gross Cash
Receipts.
Except as otherwise provided herein, Gross Cash Receipts shall be
determined on the basis of generally accepted accounting principles applied
on a consistent basis.
In the event that the Borrower shall not have owned a parcel of Real
Estate for an entire Determination Period, the Agent shall annualize the
available data in such manner as the Agent shall determine in its sole
discretion so as to allow calculations and other tests to be performed with
respect to Gross Cash Receipts for a Determination Period.
GROSS RENTABLE AREA. With respect to any portion of the Real Estate,
the floor area of a Building (exclusive of common areas) available for
leasing to tenants determined in accordance with the Rent Roll for such Real
Estate, the manner of such determination to be consistent for all Real Estate
unless otherwise approved by the Agent.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multi-employer Plan.
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GUARANTOR. Collectively, MIT Unsecured L.P., a California limited
partnership, having a usual place of business at c/o Meridian Industrial
Trust, Inc., 455 Market Street, 17th Floor, San Francisco, California 94105,
and any DownREIT or Subsidiary of the Borrower owning an Unencumbered
Operating Property who executes a guaranty of payment and performance in form
substantially similar to the Guaranty.
GUARANTY. The Guaranty of Payment and Performance dated February 26,
1996 made by the Guarantor in favor of Agent and the Banks, as modified by
that certain First Amendment to Guaranty of Payment and Performance dated
March 19, 1996, and as amended and restated by that certain First Amended and
Restated Guaranty of Payment and Performance dated of even date herewith, and
as the same may be modified or amended hereafter, such Guaranty to be in
form and substance satisfactory to the Agent.
HAZARDOUS SUBSTANCES. See Section 6.18(b).
IMPLIED RATING. With respect to a Person, the most recent rating issued
from time to time by a Rating Agency as is applicable to such Person's senior
unsecured long-term debt, or if no such senior unsecured long-term debt is
outstanding, then the most recent rating issued from time to time by a Rating
Agency as would hypothetically be applicable to such Person's senior
unsecured long-term debt (i.e., an implied rating).
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should
be made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect (including, without limitation, any obligations evidenced by bonds,
debentures, notes or similar debt instruments and all subordinated debt); (b)
all liabilities secured by any mortgage, pledge, security interest, lien,
charge or other encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have been
assumed; (c) all guarantees, endorsements and other contingent obligations
whether direct or indirect in respect of indebtedness of others, including
any obligation to supply funds to or in any manner to invest directly or
indirectly in a Person, to purchase indebtedness, or to assure the owner of
indebtedness against loss through an agreement to purchase goods, supplies or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and the obligation to reimburse
the issuer in respect of any letter of credit; (d) any obligation as a lessee
or obligor under a Capitalized Lease; (e) all obligations to purchase under
agreements to acquire, or otherwise to contribute money with respect to,
properties under "development" within the meaning of Section 8.9; (f) a
Person's pro rata share of any of the above-described obligations of its
unconsolidated affiliates; and (g) all amounts available to be drawn under
Letters of Credit; PROVIDED, HOWEVER, that with respect to the conversion of
certain preferred stock of the Borrower into debentures of the Borrower (the
"Debentures") pursuant to that certain Excepted Holder Agreement to be
entered into between the Borrower and State Street Bank and Trust Company, as
Trustee for Ameritech Pension Trust ("Ameritech"), and that certain letter
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agreement (the "Letter Agreement") dated December 29, 1995, between the
Borrower and Ameritech, such Debentures shall be excluded from the definition
of Indebtedness for the purposes of this Agreement upon the approval by the
Banks of each and every term of the Debentures in the exercise of their sole
discretion, including, without limitation, the terms of the subordination of
such Debentures to payment of the Loans and all renewals, modifications and
extensions thereof, and provided further that Ameritech shall enter into a
subordination and standstill agreement in form and substance satisfactory to
the Banks in their sole discretion.
INITIAL LOAN FEES. The fees payable by the Borrower in connection with
the closing of the transactions contemplated by the Original Credit
Agreement, the First Amended Credit Agreement, this Agreement and the
restructure of the Prudential Loan completed on May 31, 1995, including any
and all fees paid or which may be paid by the Borrower after such date in
connection with collateralizing or modifying the collateralization of the
Prudential Loan pursuant to such restructuring.
INITIAL UNENCUMBERED OPERATING PROPERTIES. The Unencumbered Operating
Properties described on SCHEDULE 2 attached hereto.
INTEREST PAYMENT DATE. As to each Loan, the first day of each calendar
month during the term of such Loan and with respect to each Eurodollar Rate
Loan, the last day of each Interest Period during the term of such Eurodollar
Rate Loan.
INTEREST PERIOD. With respect to each Eurodollar Rate Loan (a)
initially, the period commencing on the Drawdown Date of such Loan and ending
one, two, three or six months thereafter, and (b) thereafter, each period
commencing on the day following the last day of the next preceding Interest
Period applicable to such Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion Request;
PROVIDED that all of the foregoing provisions relating to Interest Periods
are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall end and the next Interest Period shall commence on
the next preceding or succeeding Eurodollar Business Day as determined
conclusively by the Reference Bank in accordance with the then current bank
practice in the applicable eurodollar interbank market;
(B) if the Borrower shall fail to give notice as provided in Section
4.1, the Borrower shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan to a Base Rate Loan on the last day of the
then current Interest Period with respect thereto; and
(C) no Interest Period relating to any Eurodollar Rate Loan shall
extend beyond the Maturity Date.
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INVESTMENT GRADE RATING. With respect to any Person, an Implied Rating
equal to or more favorable than BBB- with respect to a rating issued by
Standard & Poors Corporation (or in the case of a rating issued by Moody's
Investors Service, Inc., a rating of Baa3). If, at any time after a Person
obtains an Investment Grade Rating, (a) no Implied Rating for such Person's
senior unsecured long-term debt shall have been issued or confirmed in
writing by either of the Rating Agencies within the previous 365 days, or (b)
the rating system of either of the Rating Agencies (as opposed to the rating
of a Person) shall change, or (c) either of the Rating Agencies shall no
longer perform the functions of a securities rating agency, then the Borrower
and the Agent shall promptly negotiate in good faith to amend the reference
to the specific ratings in this definition for the determination of the
Investment Grade Rating, and pending such amendment, the applicable rating in
effect as of the date the event described in this paragraph occurred shall
continue to apply.
INVESTMENTS. With respect to any Person, all shares of capital stock,
evidences of Indebtedness and other securities issued by any other Person,
all loans, advances, or extensions of credit to, or contributions to the
capital of, any other Person, all purchases of the securities or business or
integral part of the business of any other Person and commitments and options
to make such purchases, all interests in real property, and all other
investments; PROVIDED, HOWEVER, that the term "Investment" shall not include
(i) equipment, inventory and other tangible personal property acquired in the
ordinary course of business, or (ii) current trade and customer accounts
receivable for services rendered in the ordinary course of business and
payable in accordance with customary trade terms. In determining the
aggregate amount of Investments outstanding at any particular time: (a) the
amount of any investment represented as a guaranty shall be taken at not less
than the principal amount of the obligations guaranteed and still
outstanding; (b) there shall be included as an Investment all interest
accrued with respect to Indebtedness constituting an Investment unless and
until such interest is paid; (c) there shall be deducted in respect of each
such Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease
in the value thereof.
LEASES. Leases, licenses and agreements whether written or oral,
relating to the use or occupation of space in the Building or on the Real
Estate by persons other than the Borrower or the Guarantor.
LETTER OF CREDIT. A standby letter of credit which is payable upon
presentation of a sight draft and other documents, as originally issued
pursuant to this Agreement or as amended, modified, extended, reviewed or
supplemented.
LETTER OF CREDIT REQUEST. See Section 2.9.
LIENS. See Section 8.2.
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LOAN DOCUMENTS. This Agreement, the Notes, the Guaranty and all other
documents, instruments or agreements executed or delivered by or on behalf of
the Borrower or the Guarantor evidencing or securing the Loans.
LOAN REQUEST. See Section 2.6.
LOANS. The aggregate Loans to be made by the Banks hereunder. Amounts
drawn under a Letter of Credit shall also be considered Loans as provided in
Section 2.9(f).
MAJORITY BANKS. As of any date, the Agent and the Bank or Banks whose
aggregate Commitment Percentage is equal to or greater than the percentage
required to approve such matter as set forth in that certain Intercreditor
Agreement dated of even date herewith among the Banks, and as disclosed by
the Agent to the Borrower from time to time.
MATURITY DATE. April 3, 2000, as the same may be extended as provided
in Section 2.8 or such earlier date on which the Loans shall become due and
payable pursuant to the terms hereof.
MULTI-EMPLOYER PLAN. Any Multi-employer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate.
NET CAPITAL EXPENDITURES. With respect to any Person or asset for any
fiscal period, an amount equal to the amount of capital expenditures incurred
by such Person or with respect to such asset during such fiscal period
determined in accordance with generally accepted accounting principles.
NET INCOME (OR DEFICIT). With respect to any Person (or any asset of
any Person) for any fiscal period, the net income (or deficit) of such Person
(or attributable to such asset), after deduction of all expenses, taxes and
other proper charges, determined in accordance with generally accepted
accounting principles.
NET OPERATING INCOME. During any period for any parcel of Real Estate,
the sum of (a) Gross Cash Receipts from such parcel of Real Estate less (b)
Operating Expenses for such parcel of Real Estate.
NON-RECOURSE INDEBTEDNESS. Indebtedness of the Borrower or any
Subsidiary which is secured by one or more parcels of Real Estate and related
personal property or interests therein and Short-term Investments and is not
a general obligation of the Borrower or any Subsidiary, the holder of such
Indebtedness having recourse solely to the parcels of Real Estate securing
such Indebtedness, the improvements thereon, related personal property and
leases thereon, and the rents and profits thereof and the Short-term
Investments securing such Indebtedness.
NOTES. See Section 2.4.
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NOTICE. See Section 19.
OBLIGATIONS. All indebtedness, obligations and liabilities of the Borrower
to any of the Banks and the Agent, individually or collectively, under this
Agreement or any of the other Loan Documents or in respect of any of the Loans,
the Letters of Credit or the Notes, or other instruments at any time evidencing
any of the foregoing, whether existing on the date of this Agreement or arising
or incurred hereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.
OPERATING CASH FLOW. With respect to any parcel of Real Estate for any
period, an amount equal to Net Operating Income less Net Capital Expenditures.
OPERATING EXPENSES. With respect to any parcel of Real Estate during any
period the sum of the following:
(a) All taxes and assessments imposed upon such parcel of Real Estate
actually paid by or on behalf of the Borrower or the Guarantor
(to the extent not paid by tenants of the Borrower or the
Guarantor) during such period in accordance with generally
accepted accounting principles (or if such taxes or assessments
are paid in advance with respect to future periods, such payment
shall be amortized over the period covered by such payment);
(b) The amounts paid by or on behalf of the Borrower or the Guarantor
(to the extent not paid by tenants of the Borrower or the
Guarantor) in such period in accordance with generally accepted
accounting principles on account of insurance premiums for
insurance carried in connection with such parcel of Real Estate
or the Borrower's or the Guarantor's ownership and operation
thereof, and the deductible amounts expended by the Borrower or
the Guarantor not reimbursed under any such insurance (or if such
insurance premiums are paid in advance with respect to future
periods, such payment shall be amortized over the period covered
by such payment); and
(c) Operating expenses paid by or on behalf of the Borrower or the
Guarantor in such period for the operation, cleaning, marketing,
maintenance and repair of such parcel of Real Estate properly
chargeable against income according to generally accepted
accounting principles, including management fees.
For the purposes of this Agreement, Operating Expenses shall not include any of
the following:
(i) Foreign, U.S., state and local income taxes, franchise taxes or
other taxes based on the income imposed on the Borrower or the
Guarantor generally and not as owner of such parcel of Real
Estate;
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(ii) Depreciation and any other non-cash expenditures of the
Borrower or the Guarantor for income tax purposes;
(iii) Any improvements to such parcel of Real Estate of a capital
nature (as determined in accordance with generally accepted
accounting practices);
(iv) Any expense paid or incurred in connection with the sale of all
or any part of such parcel of Real Estate or any interest
therein;
(v) All costs, expenses, fees, commissions or other compensation paid
by or on behalf of the Borrower or the Guarantor in connection
with the renovation, improvement or development of such parcel of
Real Estate to the extent treated as Net Capital Expenditures;
(vi) Any payment of principal or interest under the Notes or other
fees or charges payable under this Agreement; and
(vii) The Capital Improvement Reserve.
Operating Expenses shall be determined on the basis of sound cash basis
accounting practices applied on a consistent basis, modified as described above.
OTR MINORITY INTEREST. The Borrower's minority partnership interest in
Meridian Ohio Limited Partnership, a Delaware limited partnership, as recorded
under generally accepted accounting principles, without deduction for
depreciation.
OTR MINORITY INTEREST PROPERTY. All real property at any time owned by
Meridian Ohio Limited Partnership, a Delaware limited partnership.
OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination. With respect to the Letters of Credit,
the aggregate amount of amounts available to be drawn under Letters of Credit.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by Section 8.2.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
PROSPECTUS. The prospectus included in the registration statement on Form
S-4 of the Borrower dated November 19, 1996 and filed with the SEC.
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PRUDENTIAL LOAN. That certain $66,100,000 Non-recourse loan made by The
Prudential Life Insurance Company of America to Borrower, as restructured by the
predecessors in interest of the Borrower on May 31, 1995, and as amended on
December 14, 1995.
QUALIFYING PROPERTY. With respect to the Unencumbered Operating
Properties, an Unencumbered Operating Property meeting all of the following
requirements at the time of determination: (a) age does not exceed twelve (12)
years; (b) total Gross Rentable Area is not less than 50,000 square feet; (c)
use is non-specialized; and (d) at least two of the following three
characteristics are present: (i) finished out air conditioned office space does
not exceed twenty percent (20%) of total Gross Rentable Area, (ii) ceiling
clearance height is not less than twenty-two (22) feet, and (iii) the average
amount of Gross Rentable Area covered by each Lease is not less than 20,000
square feet.
RATING AGENCIES. Standard & Poor's Corporation and Moody's Investors
Service, Inc.
RATING NOTICE. See Section 7.4(k).
RATING NOTICE DATE. The earlier of (a) the date a Rating Notice is
received by the Agent, or (b) the date the Agent, having received actual notice
of a change by the Rating Agency of the Borrower's Implied Rating, sends notice
to the Borrower of such change, provided that nothing contained herein shall
imply any obligation of the Agent to monitor such rating changes.
REAL ESTATE. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.
RECORD. The grid attached to any Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
REFERENCE BANK. Agent.
REGISTER. See Section 18.2.
REIT STATUS. With respect to the Borrower, its status as a real estate
investment trust as defined in Section 856(a) of the Code.
RELEASE. See Section 6.18(c)(iii).
RENT ROLL. A report prepared and certified by the Borrower or the
Guarantor, as applicable, showing for each unit its type, location, Gross
Rentable Area, occupancy status, lease expiration date, market rent, lease rent
and other information in substantially the form presented to the Banks prior to
the date hereof or in such other form as may have been approved by the Agent,
such approval not to be unreasonably withheld.
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SEC. The federal Securities and Exchange Commission.
SHORT-TERM INVESTMENTS. Investments described in subsections (a) through
(g), inclusive, of Section 8.3.
STATE. A state of the United States of America.
SUBSIDIARY. Any corporation, association, partnership, trust, or other
business entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries a controlling interest that
would require preparation of Consolidated financial statements under generally
accepted accounting principles.
SUBSIDIARY MINORITY INTEREST. The minority interest in a DownREIT or other
Consolidated Subsidiary owned by Persons other than Borrower or its Subsidiaries
as recorded under generally accepted accounting principles.
TEST PERIOD. See Section 9.2.
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.
TYPE. As to any Loan, its nature as a Base Rate Loan or a Eurodollar Rate
Loan.
UNDER DEVELOPMENT. Any Real Estate shall be considered under development
until such time as (i) a Certificate of Occupancy has been obtained, (ii)
seventy percent (70%) of the gross leasable area is leased and occupied, and
(iii) the Gross Cash Receipts from the operation of such Real Estate shall have
equaled or exceeded Operating Expenses for three (3) consecutive months.
UNENCUMBERED OPERATING PROPERTIES. Real Estate which is owned one hundred
percent (100%) in fee simple by the Borrower or the Guarantor and which
satisfies all of the following conditions:
(a) each of the Unencumbered Operating Properties shall be free and
clear of all Liens other than Liens permitted in Section 8.2(ii) and (iv);
(b) to the best of the Borrower's knowledge and belief, none of the
Unencumbered Operating Properties shall have any material environmental,
structural, title, survey or other defects that would give rise to a materially
adverse effect as to the value, use of or ability to sell or refinance such
property; and
(c) each of the Unencumbered Operating Properties shall consist
solely of Real Estate (i) which is fully operational and (ii) with respect to
which valid certificates of occupancy for all Buildings thereon have been issued
and are in full force and effect;
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Notwithstanding anything herein to the contrary, (i) Unencumbered Operating
Properties shall only be owned by the Guarantor to the extent necessary to
reduce or minimize franchise or other similar taxes computed with respect to the
ownership and/or operation of the Unencumbered Operating Properties; (ii) the
OTR Minority Interest Property shall constitute an "Unencumbered Operating
Property", provided (x) Borrower shall not create or incur or suffer to be
created or incurred any lien upon or against the OTR Minority Interest Property
except for liens permitted by Section 8.2(ii) and (iv), and the OTR Minority
Interest Property otherwise complies with the requirements governing
Unencumbered Operating Properties contained in this Agreement; (y) the limited
partnership agreement governing Meridian Ohio Limited Partnership shall permit
the Borrower to provide financial and operating information regarding the OTR
Minority Interest and the OTR Minority Interest Property to the Banks; and (z)
the Borrower shall not be permitted to own any other minority interests without
the prior written approval of the Majority Banks; (iii) real property owned by a
DownREIT shall constitute an Unencumbered Operating Property, provided the
provisions of clauses (x) and (y) (as applied to the applicable DownREIT's
formation agreement) in (ii) above are complied with; (iv) Real Estate owned by
a Subsidiary of the Borrower and approved in writing by the Majority Banks
(which approval shall be conditioned on, among other things, the execution and
delivery by such Subsidiary of a guaranty of payment and performance in form
substantially similar to the Guaranty, direct ownership and control of such
Subsidiary by the Borrower, including, without limitation, the right to sell,
transfer, convey or encumber assets of such Subsidiary, and the assets of such
Subsidiary and the ownership interests of the Borrower in such Subsidiary being
unencumbered) shall constitute Unencumbered Operating Properties, and (v) other
minority interests approved in writing by the Majority Banks shall constitute
Unencumbered Operating Properties.
VOTING INTERESTS. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership, trust or other business entity involved, or (b) to control, manage,
or conduct the business of the corporation, partnership, association, trust or
other business entity involved.
Section 1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
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(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles applied
on a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking approval
after full and fair disclosure to the party giving approval of all material
facts necessary in order to determine whether approval should be granted.
(h) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein.
(i) Reference to a particular "Section ", refers to that section
of this Agreement unless otherwise indicated.
(j) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
Section 2. THE REVOLVING CREDIT FACILITY.
Section 2.1. COMMITMENT TO LEND. Subject to the terms and conditions
set forth in this Agreement, each of the Banks severally agrees to lend to
the Borrower, and the Borrower may borrow (and repay and reborrow) from time
to time between the Closing Date and the Maturity Date upon notice by the
Borrower to the Agent given in accordance with Section 2.6, such sums as are
requested by the Borrower for the purposes set forth in Section 7.11 up to a
maximum aggregate principal amount Outstanding (after giving effect to all
amounts requested and the amount of Letters of Credit Outstanding, including
Letters of Credit accepted but unpaid) at any one time equal to such Bank's
Commitment, PROVIDED, that, in all events no Default or Event of Default
shall have occurred and be continuing; and PROVIDED, FURTHER, that the
Outstanding principal amount of the Loans (after giving effect to all amounts
requested and the amount of Letters of Credit Outstanding, including Letters
of Credit accepted but unpaid) shall not at any time exceed the Total
Commitment or cause a violation of the covenant set forth in Section 9.4.
The Loans shall be made PRO RATA in accordance with each Bank's Commitment
Percentage. The funding of a Loan hereunder shall constitute a
representation and warranty by the Borrower that all of the conditions set
forth in Section 10 and Section 11, in the case of the initial Loan, and
Section 11, in the case of all other Loans, have been satisfied on the date
of such funding.
Section 2.2. FACILITY FEE. The Borrower agrees to pay to the Agent for
the accounts of the Banks in accordance with their respective Commitment
Percentages a facility fee calculated at the rate of one-fourth of one
percent (0.25%) per annum on the average daily amount by which the Total
Commitment exceeds the Outstanding principal amount of Loans and the amount
of Outstanding
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Letters of Credit (including Letters of Credit accepted but unpaid) during
each calendar quarter or portion thereof commencing on the Closing Date and
ending on the Maturity Date, provided, however, that in the event for any
quarter the ratio (expressed as a percentage) of (a) the average daily amount
of the Outstanding principal amount of the Loans and the amount of
Outstanding Letters of Credit (including Letters of Credit accepted but
unpaid) during such quarter to (b) the Total Commitment is greater than
sixty-five percent (65%), then the facility fee shall be calculated at the
rate of three-twentieths of one percent (0.15%) for such quarter. The
facility fee shall be payable quarterly in arrears on the last day of each
calendar quarter for such calendar quarter or portion thereof, with a final
payment on the Maturity Date.
Section 2.3. INTENTIONALLY OMITTED.
Section 2.4. NOTES. The Loans shall be evidenced by separate
promissory notes of the Borrower in substantially the form of EXHIBIT A
hereto (collectively, the "Notes"), dated the date of this Agreement and
completed with appropriate insertions. One Note shall be payable to the
order of each Bank in the principal face amount equal to such Bank's
Commitment and shall be payable as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Loan or at the time of receipt of any payment of
principal thereof, an appropriate notation on such Bank's Record reflecting
the making of such Loan or (as the case may be) the receipt of such payment.
The Outstanding amount of the Loans set forth on such Bank's Record shall be
PRIMA FACIE evidence of the principal amount thereof owing and unpaid to such
Bank, but the failure to record, or any error in so recording, any such
amount on such Bank's Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under any Note to make payments of
principal of or interest on any Note when due. By delivery of the Notes,
there shall not be deemed to have occurred, and there has not otherwise
occurred, any payment, satisfaction or novation of the indebtedness evidence
by the "Notes" as defined in the First Amended Credit Agreement, which
indebtedness is instead allocated among the Banks as of the date hereof and
evidenced by the Notes in accordance with their respective Commitment
Percentages.
Section 2.5. INTEREST ON LOANS.
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the date on which
such Base Rate Loan is repaid or converted to a Eurodollar Rate Loan at the
rate per annum equal to the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the sum
of the Applicable Margin plus the Eurodollar Rate determined for such
Interest Period.
(c) The Borrower promises to pay interest on each Loan in arrears
on each Interest Payment Date with respect thereto.
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(d) Base Rate Loans and Eurodollar Rate Loans may be converted to
Loans of the other Type as provided in Section 4.1.
Section 2.6. REQUESTS FOR LOANS. Except with respect to the initial
Loan, the Borrower (i) shall notify the Agent of a potential request for a
Loan as soon as possible but not less than five (5) Business Days prior to
the Borrower's proposed Drawdown Date, and (ii) shall give to the Agent
written notice in the form of EXHIBIT B hereto (or telephonic notice
confirmed in writing in the form of EXHIBIT B hereto) of each Loan requested
hereunder (a "Loan Request") no less than three (3) Business Days prior to
the proposed Drawdown Date. The Agent shall promptly notify each of the
Banks following the receipt of a Loan Request, but in any event not less than
three (3) Business Days prior to the proposed Drawdown Date. Borrower shall
not make a Loan Request more frequently than five (5) times each month, but
will exercise its best efforts not to exceed three (3) draws each month.
Each such notice shall specify with respect to the requested Loan the
proposed principal amount, Drawdown Date, Interest Period (if applicable) and
Type. Each such notice shall also contain (i) a statement as to the purpose
for which such advance shall be used (which purpose shall be in accordance
with the terms of Section 7.11), (ii) a certification by an Authorized
Officer of the Borrower and the Guarantor that since the date of the last
Compliance Certificate delivered under this Agreement, there have been no
material changes in the matters certified in such Compliance Certificate that
could cause a Default or Event of Default to occur after giving effect to the
making of such Loan, and (iii) a certification by an Authorized Officer of
the Borrower that the Borrower is and will be in compliance with Section 9.4
after giving effect to the making of such Loan. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Except as
provided in this Section 2.6, each such Loan Request shall be irrevocable and
binding on the Borrower and shall obligate the Borrower to accept the Loan
requested from the Banks on the proposed Drawdown Date, provided that, in
addition to the Borrower's other remedies against any Bank which fails to
advance its proportionate share of a requested Loan, such Loan Request may be
revoked by the Borrower by notice received by the Agent no later than the
Drawdown Date if any Bank fails to advance its proportionate share of the
requested Loan in accordance with the terms of this Agreement, provided
further that the Borrower shall be liable in accordance with the terms of
this Agreement to any Bank which is prepared to advance its proportionate
share of the requested Loan for any costs, expenses or damages incurred by
such Bank as a result of the Borrower's election to revoke such Loan Request
(including, without limitation, the items described in Section 4.8, as
applicable, but not including any damages for lost interest earnings as a
result of such Loan not being made). Nothing herein shall prevent the
Borrower from seeking recourse against any Bank that fails to advance its
proportionate share of a requested Loan as required by this Agreement. The
Borrower may without cost or penalty revoke a Loan Request by delivering
notice thereof to each of the Banks no later than three (3) Business Days
prior to the Drawdown Date. Each Loan Request shall be (a) for a Base Rate
Loan in a minimum aggregate amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof, or (b) for a Eurodollar Rate Loan in a minimum
aggregate amount of $1,000,000 or an integral multiple of $100,000 in excess
thereof; PROVIDED, HOWEVER, that there shall be no more than five (5)
Eurodollar Rate Loans outstanding at any one time.
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Section 2.7. FUNDS FOR LOANS. Not later than 2:00 p.m. (Boston time)
on the proposed Drawdown Date of any Loans, each of the Banks will make
available to the Agent, at the Agent's Head Office, in immediately available
funds, the amount of such Bank's Commitment Percentage of the amount of the
requested Loans which may be disbursed pursuant to Section 2.1. Upon receipt
from each Bank of such amount, and upon receipt of the documents required by
Section 10 and Section 11 and the satisfaction of the other conditions set
forth therein, to the extent applicable, the Agent will make available to the
Borrower the aggregate amount of such Loans made available to the Agent by
the Banks by crediting such amount to the account of the Borrower maintained
at the Agent's Head Office. The failure or refusal of any Bank to make
available to the Agent at the aforesaid time and place on any Drawdown Date
the amount of its Commitment Percentage of the requested Loans shall not
relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment Percentage
of any requested Loans, including any additional Loans that may be requested
subject to the terms and conditions hereof to provide funds to replace those
not advanced by the Bank so failing or refusing, provided that the Borrower
may by notice received by the Agent no later than the Drawdown Date refuse to
accept any Loan which is not fully funded in accordance with the Borrower's
Loan Request subject to the terms of Section 2.6. In the event of any such
failure or refusal, the Banks not so failing or refusing shall be entitled to
a priority position as against the Bank or Banks so failing or refusing for
such Loans as provided in Section 12.5.
Section 2.8. EXTENSION OF MATURITY DATE.
(a) The Borrower has requested the ability to extend the Maturity
Date. The Borrower acknowledges and agrees that the Banks have no agreement
or obligation to extend the Maturity Date. Notwithstanding the foregoing,
the Borrower and the Banks have agreed upon the following procedure with
respect to requests by the Borrower to extend the Maturity Date:
(i) The Borrower may request that the Banks extend the Maturity
Date by one (1) year. If the Borrower desires to request that the Maturity
Date be extended by one (1) year, the Borrower shall deliver written notice
of such request to the Agent not earlier than the first anniversary of the
Closing Date and not later than the date which is ninety (90) days prior to
the then effective Maturity Date (an "Extension Request"). The Agent shall
provide a copy of such notice to each of the Banks within ten (10) days
after the Agent's receipt of such notice. The Banks shall notify the Agent
within forty-five (45) days of receipt of such notice from the Agent of
such Bank's approval or rejection of the Extension Request. No Extension
Request shall be deemed approved unless approved by all of the Banks, which
approval may be granted or withheld in each Bank's sole and absolute
discretion. In the event that a Bank shall fail to respond in writing to
the Agent within such forty-five (45) day period, such Bank shall be deemed
to have rejected the Extension Request. The Agent shall promptly notify
the Borrower of the responses received from the Banks with respect to the
Extension Request.
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(ii) If the Extension Request is approved by all of the Banks as
provided in Section 2.8(a)(i), the Borrower shall retain the right to
request further one (1) year extensions in the manner provided in this
Section 2.8(a).
(b) In the event that an Extension Request is approved as provided
in Section 2.8(a), each and every such approval shall be conditioned upon
satisfaction of the following conditions precedent, which terms shall be in
addition to any terms and conditions which may be required by the Banks as a
condition to the approval of the Extension Request and must be satisfied
prior to the effectiveness of any extension of the Maturity Date:
(i) PAYMENT OF EXTENSION FEE. Within fifteen (15) days of
approval of the Extension Request by all of the Banks (but in no event
later than the Maturity Date as determined without regard to such
extension), the Borrower shall pay to the Agent for the PRO RATA accounts
of the Banks in accordance with their respective Commitment Percentages an
extension fee as more particularly described in the Agreement Regarding
Fees, which fee shall, when paid, be fully earned and non-refundable under
any circumstances.
(ii) NO DEFAULT. On the date the Extension Request is given and
on the Maturity Date (as determined without regard to such extension) there
shall exist no Default or Event of Default.
(iii) REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by the Borrower or the Guarantor in the Loan Documents
or otherwise made by or on behalf of the Borrower, the Guarantor or any of
the Borrower's Subsidiaries in connection therewith or after the date
thereof shall have been true and correct in all material respects when made
and shall also be true and correct in all material respects on the Maturity
Date (as determined without regard to such extension) other than for
changes in the ordinary course of business permitted by this Agreement that
have not had any materially adverse affect on the business of the Borrower,
the Guarantor or any of the Borrower's Subsidiaries.
Section 2.9. LETTERS OF CREDIT.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through
the day that is thirty (30) days prior to the Maturity Date, the Agent shall
issue such Letters of Credit as the Borrower may request, for the purposes
provided in Section 7.11, upon the delivery of a written request in the form
of EXHIBIT C hereto (a "Letter of Credit Request") to the Agent, PROVIDED
that (i) upon issuance of such Letter of Credit, the Outstanding Letters of
Credit (including Letters of Credit accepted but unpaid) shall not exceed
Nineteen Million Five Hundred Thousand Dollars ($19,500,000.00), (iii) the
conditions set forth in Sections 10 and 11 shall have been satisfied, and
(iv) in no event shall any amount drawn under a Letter of Credit be available
for reinstatement or a subsequent drawing under such Letter of Credit. The
Borrower assumes all risks with respect to the use of the Letters of Credit.
Unless the Agent and the Majority Banks otherwise consent, the term of any
Letter of Credit shall not exceed the lesser of
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twelve (12) months or a period of time commencing on the issuance of the
Letter of Credit and ending on the date which is fifteen (15) days prior to
the Maturity Date (but in any event the term shall not extend beyond the
Maturity Date), and no Letter of Credit shall contain an automatic extension
or renewal clause. The amount available to be drawn under any Letter of
Credit shall reduce on a dollar for dollar basis the amount available to be
drawn under the Total Commitment as a Loan.
(b) Each Letter of Credit Request shall be submitted to the Agent
at least ten (10) Business Days prior to the date upon which the requested
Letter of Credit is to be issued. Following the receipt of a Letter of
Credit Request, the Agent shall promptly notify each of the Banks of the
Letter of Credit Request. Each such Letter of Credit Request shall contain
(i) a statement as to the purpose for which such Letter of Credit shall be
used (which purpose shall be in accordance with the terms of Section 7.11),
(ii) a certification by an Authorized Officer of the Borrower that the
Borrower is and will be in compliance with all covenants under the Loan
Documents after giving effect to the issuance of such Letter of Credit, and
(iii) a certification by an Authorized Officer of the Borrower that the
Borrower is and will be in compliance with Section 7.15 after giving effect
to the issuance of the Letter of Credit. The Borrower shall further deliver
to the Agent such additional applications and documents as the Agent may
require, in conformity with the then standard practices of its letter of
credit department, in connection with the issuance of such Letter of Credit;
provided that in the event of any conflict, the terms of this Agreement shall
control.
(c) The Agent shall, if it approves of the content of the Letter
of Credit Request (which approval shall not be unreasonably withheld), and
subject to the conditions set forth in this Agreement, issue the Letter of
Credit on or before ten (10) Business Days following receipt of the documents
last due pursuant to Section 2.9(b). Each Letter of Credit shall be in form
and substance satisfactory to the Agent in its sole discretion. Upon
issuance of a Letter of Credit, the Agent shall provide copies of each Letter
of Credit to the Banks.
(d) Upon the issuance of a Letter of Credit, each Bank shall be
deemed to have purchased a participation therein from Agent in an amount
equal to its respective Commitment Percentage of the amount of such Letter of
Credit.
(e) Upon the issuance of each Letter of Credit, the Borrower shall
pay to the Agent (i) for its own account, a Letter of Credit fee calculated
at the rate of two-fifths of one percent (0.40%) per annum of the amount
available to be drawn under such Letter of Credit (which fee shall not be
less than $1,000.00 in any event), and (ii) for the accounts of the Banks in
accordance with their respective percentage shares of participation in such
Letter of Credit, a Letter of Credit fee calculated at the rate of one
percent (1%) per annum of the amount available to be drawn under such Letter
of Credit. Such fees shall be payable in quarterly installments in advance
with respect to each Letter of Credit commencing on its date of issuance and
continuing on each quarter thereafter, as applicable.
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(f) If and to the extent that any amounts are drawn upon any
Letter of Credit, the amounts so drawn shall, from the date of payment
thereof by the Agent, be considered Loans for all purposes hereunder bearing
interest as provided in Section 2.5(a). The Banks shall be required to make
such Loans regardless of whether all of the conditions to disbursement set
forth in Section 11 have been satisfied.
(g) If after the issuance of a Letter of Credit pursuant to
Section 2.9(d) by the Agent, but prior to the funding of any portion thereof
by a Bank, one of the events described in Section 12.1(h), (i) or (j) shall
have occurred, each Bank will, on the date such Loan pursuant to Section
2.9(d) was to have been made, purchase an undivided participating interest in
the Letter of Credit in an amount equal to its Commitment Percentage of the
amount of such Letter of Credit. Each Bank will immediately transfer to the
Agent in immediately available funds the amount of its participation and upon
receipt thereof the Agent will deliver to such Bank a Letter of Credit
participation certificate dated the date of receipt of such funds and in such
amount.
(h) Whenever at any time after the Agent has received from any
Bank such Bank's payment of funds under a Letter of Credit, the Agent
receives any payment on account thereof, the Agent will distribute to such
Bank its participating interest in such amount (appropriately adjusted in the
case of interest payments to reflect the period of time during which such
Bank's participating interest was outstanding and funded); PROVIDED, HOWEVER,
that in the event that such payment received by the Agent is required to be
returned, such Bank will return to the Agent any portion thereof previously
distributed by the Agent to it.
(i) Upon the receipt by the Agent of any draw or other
presentation for payment of a Letter of Credit and the payment of any amount
under a Letter of Credit, the Agent shall, without notice to or the consent
of the Borrower, direct the Banks to fund to the Agent in accordance with
Section 2.7 on or before 2:00 p.m. (Boston time) on the next Business Day
their respective Commitment Percentages of the amount so paid by the Agent.
The proceeds of such funding shall be paid to the Agent to reimburse the
Agent for the payment made by it under the Letter of Credit. The provisions
of Section 2.7 shall apply to any Bank or Banks failing or refusing to fund
its Commitment Percentage of any such draw.
(j) The issuance of any supplement, modification, amendment,
renewal or extension to or of any Letter of Credit shall be treated in all
respects the same as the issuance of a new Letter of Credit.
Section 3. REPAYMENT OF THE LOANS.
Section 3.1. STATED MATURITY. The Borrower promises to pay on the
Maturity Date and there shall become absolutely due and payable on the
Maturity Date, all of the Loans Outstanding on such date, together with any
and all accrued and unpaid interest thereon.
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Section 3.2. MANDATORY PREPAYMENTS. If at any time the aggregate
Outstanding principal amount of the Loans and Outstanding Letters of Credit
(including Letters of Credit accepted but unpaid) exceeds the Total
Commitment, then the Borrower shall immediately pay the amount of such excess
to the Agent for the respective accounts of the Banks for application to the
Loans. If at any time the Borrower is not in compliance with the covenants
contained in Section 9.4, the Borrower shall pay to the Agent for the
accounts of the Banks so much of the Outstanding principal amounts of the
Loans as is necessary to cause the Borrower to be in compliance with Section
9.4.
Section 3.3. OPTIONAL PREPAYMENTS. The Borrower shall have the right,
at its election, to prepay the Outstanding amount of the Loans, as a whole or
in part, at any time without penalty or premium; PROVIDED, that the full or
partial prepayment of the Outstanding amount of any Eurodollar Rate Loans
pursuant to this Section 3.3 may be made only on the last day of the Interest
Period relating thereto unless accompanied by breakage costs computed in
accordance with Section 4.8 and except as otherwise required pursuant to
Section 4.7. The Borrower shall give the Agent, no later than 1:00 p.m.,
Boston time, at least three (3) Business Days prior written notice of any
prepayment pursuant to this Section 3.3 specifying the proposed date of
payment of Loans and the principal amount to be paid.
Section 3.4. PARTIAL PREPAYMENTS. Each partial prepayment of the Loans
under Section 3.2 and Section 3.3 shall be in an integral multiple of
$500,000, shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of payment and, after payment of such interest,
shall be applied, in the absence of instruction by the Borrower, first to the
principal of Base Rate Loans and then to the principal of Eurodollar Rate
Loans.
Section 3.5. EFFECT OF PREPAYMENTS. Amounts of the Loans prepaid under
Section 3.2 and Section 3.3 prior to the Maturity Date may be reborrowed as
provided in Section 2.
Section 3.6. PROCEEDS FROM DEBT OFFERING AND EQUITY OFFERING. Upon the
occurrence of a Default or Event of Default and during any period during
which such Default or Event of Default shall be continuing, the Borrower
shall cause all gross proceeds of each and every Debt Offering and Equity
Offering, less all reasonable costs, fees, expenses, underwriting
commissions, fees and discounts incurred in connection therewith, to be
promptly paid by the Borrower to the Agent for the account of the Banks as a
prepayment of the Loans to the extent of the Outstanding balance of the Loans.
Section 4. CERTAIN GENERAL PROVISIONS.
Section 4.1. CONVERSION OPTIONS.
(a) The Borrower may elect from time to time to convert any
outstanding Loan to a Loan of another Type and such Loan shall thereafter
bear interest as a Base Rate Loan or a Eurodollar Rate Loan, as applicable;
PROVIDED that (i) with respect to any such conversion of a Eurodollar Rate
Loan to a Base Rate Loan, the Borrower shall give the Agent at least three
Business Days' prior written notice of such election, and such conversion
shall only be made on the last day of the Interest Period with respect to
such Eurodollar Rate Loan; (ii) with respect to any such
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conversion of a Base Rate Loan to a Eurodollar Rate Loan, the Borrower shall
give the Agent at least four Eurodollar Business Days' prior written notice
of such election and the Interest Period requested for such Loan, the
principal amount of the Loan so converted shall be in a minimum aggregate
amount of $1,000,000 or an integral multiple of $100,000 in excess thereof
and, after giving effect to the making of such Loan, there shall be no more
than five (5) Eurodollar Rate Loans Outstanding at any one time; and (iii) no
Loan may be converted into a Eurodollar Rate Loan when any Default or Event
of Default has occurred and is continuing. All or any part of the
Outstanding Loans of any Type may be converted as provided herein, PROVIDED
that no partial conversion shall result in a Base Rate Loan in an aggregate
principal amount of less than $1,000,000 or a Eurodollar Rate Loan in an
aggregate principal amount of less than $1,000,000 and that the aggregate
principal amount of each Loan shall be in an integral multiple of $100,000.
On the date on which such conversion is being made, each Bank shall take such
action as is necessary to transfer its Commitment Percentage of such Loans to
its Domestic Lending Office or its Eurodollar Lending Office, as the case may
be. Each Conversion Request relating to the conversion of a Base Rate Loan
to a Eurodollar Rate Loan shall be irrevocable by the Borrower.
(b) Any Loan may be continued as such Type upon the expiration of
an Interest Period with respect thereto by compliance by the Borrower with
the terms of Section 4.1; PROVIDED that no Eurodollar Rate Loan may be
continued as such when any Event of Default has occurred and is continuing,
but shall be automatically converted to a Base Rate Loan on the last day of
the Interest Period relating thereto ending during the continuance of any
Event of Default.
(c) In the event that the Borrower does not notify the Agent of
its election hereunder with respect to any Loan, such Loan shall be
automatically converted to a Base Rate Loan at the end of the applicable
Interest Period.
Section 4.2. COMMITMENT FEE. Upon the execution of this Agreement, the
Borrower agrees to pay to the Banks a nonrefundable commitment fee pursuant
to the Agreement Regarding Fees.
Section 4.3. AGENT'S FEE. The Borrower shall pay to the Agent, for the
Agent's own account, a non-refundable Agent's fee pursuant to the Agreement
Regarding Fees.
Section 4.4. FUNDS FOR PAYMENTS.
(a) All payments of principal, interest, facility fees, Agent's
fees, closing fees, Letter of Credit fees and any other amounts due hereunder
or under any of the other Loan Documents shall be made to the Agent, for the
respective accounts of the Banks and the Agent, as the case may be, at the
Agent's Head Office, not later than 1:00 p.m. (Boston time) on the day when
due, in each case in immediately available funds. The Agent is hereby
authorized to charge the account of the Borrower with FNBB, on the dates when
the amount thereof shall become due and payable, with the amounts of the
principal of and interest on the Loans and all fees, charges, expenses and
other amounts owing to the Agent and/or the Banks under the Loan Documents.
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(b) All payments by the Borrower hereunder and under any of the
other Loan Documents shall be made without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the
Borrower with respect to any amount payable by it hereunder or under any of
the other Loan Documents, the Borrower will pay to the Agent, for the account
of the Banks or (as the case may be) the Agent, on the date on which such
amount is due and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the Banks or the
Agent to receive the same net amount which the Banks or the Agent would have
received on such due date had no such obligation been imposed upon the
Borrower. The Borrower will deliver promptly to the Agent certificates or
other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under such other
Loan Document.
(c) The obligations of the Borrower to the Banks under this
Agreement shall be absolute, unconditional and irrevocable, and shall be paid
and performed strictly in accordance with the terms of this Agreement, under
all circumstances whatsoever, including, without limitation, the following
circumstances: (i) any improper use which may be made of any Letter of
Credit or any improper acts or omissions of any beneficiary or transferee of
any Letter of Credit in connection therewith; (ii) the existence of any
claim, set-off, defense or any right which the Borrower may have at any time
against any beneficiary or any transferee of any Letter of Credit (or persons
or entities for whom any such beneficiary or any such transferee may be
acting) or the Banks (other than the defense of payment to the Banks in
accordance with the terms of this Agreement) or any other person, whether in
connection with any Letter of Credit, this Agreement, any other Loan
Document, or any unrelated transaction; (iii) any statement or any other
documents presented under any Letter of Credit proving to be insufficient,
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever; (iv) any breach of any
agreement between Borrower and any beneficiary or transferee of any Letter of
Credit; (v) any irregularity in the transaction with respect to which any
Letter of Credit is issued, including any fraud by the beneficiary or any
transferee of such Letter of Credit; (vi) payment by the Agent under any
Letter of Credit against presentation of a sight draft or a certificate which
does not comply with the terms of such Letter of Credit, provided that such
payment shall not have constituted gross negligence or willful misconduct on
the part of the Agent, and (vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, provided that
such other circumstances or happenings shall not have been the result of
gross negligence or willful misconduct on the part of the Agent.
(d) Each Bank organized under the laws of a jurisdiction outside
the United States, if requested in writing by the Borrower (but only so long
as such Bank remains lawfully able to do so), shall provide the Borrower with
such duly executed form(s) or statement(s) which may, from time to time, be
prescribed by law and, which, pursuant to applicable provisions of (i) an
income tax treaty between the United States and the country of residence of
such Bank, (ii) the Code, or (iii) any applicable rules or regulations in
effect under (i) or (ii) above, indicating the withholding status of
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such Bank; provided that nothing herein (including without limitation the
failure or inability to provide such form or statement) shall relieve the
Borrower of its obligations under Section 4.4(b). In the event that the
Borrower shall have delivered the certificates or vouchers described above
for any payments made by the Borrower and such Bank receives a refund of any
taxes paid by the Borrower pursuant to Section 4.4(b), such Bank will pay to
the Borrower the amount of such refund promptly upon receipt thereof,
PROVIDED that if at any time thereafter such Bank is required to return such
refund, the Borrower shall promptly repay to such Bank the amount of such
refund.
Section 4.5. COMPUTATIONS. All computations of interest on the Loans
and of other fees to the extent applicable shall be based on a 360-day year
and paid for the actual number of days elapsed. Except as otherwise provided
in the definition of the term "Interest Period" with respect to Eurodollar
Rate Loans, whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension. The Outstanding amount of the
Loans as reflected on the records of the Agent from time to time shall be
considered PRIMA FACIE evidence of such amount.
Section 4.6. INABILITY TO DETERMINE EURODOLLAR RATE. In the event
that, prior to the commencement of any Interest Period relating to any
Eurodollar Rate Loan, the Agent shall determine that adequate and reasonable
methods do not exist for ascertaining the Eurodollar Rate for such Interest
Period, the Agent shall forthwith give notice of such determination (which
shall be conclusive and binding on the Borrower and the Banks) to the
Borrower and the Banks. In such event (a) any Loan Request with respect to
Eurodollar Rate Loans shall be automatically withdrawn and shall be deemed a
request for Base Rate Loans and (b) each Eurodollar Rate Loan will
automatically, on the last day of the then current Interest Period thereof,
become a Base Rate Loan, and the obligations of the Banks to make Eurodollar
Rate Loans shall be suspended until the Agent determines that the
circumstances giving rise to such suspension no longer exist, whereupon the
Agent shall so notify the Borrower and the Banks.
Section 4.7. ILLEGALITY. Notwithstanding any other provisions herein,
if any present or future law, regulation, treaty or directive or the
interpretation or application thereof shall make it unlawful, or any central
bank or other governmental authority having jurisdiction over a Bank or its
Eurodollar Lending Office shall assert that it is unlawful, for any Bank to
make or maintain Eurodollar Rate Loans, such Bank shall forthwith give notice
of such circumstances to the Agent and the Borrower and thereupon (a) the
commitment of the Banks to make Eurodollar Rate Loans or convert Loans of
another type to Eurodollar Rate Loans shall forthwith be suspended and (b)
the Eurodollar Rate Loans then Outstanding shall be converted automatically
to Base Rate Loans on the last day of each Interest Period applicable to such
Eurodollar Rate Loans or within such earlier period as may be required by law.
Section 4.8. ADDITIONAL INTEREST. If any Eurodollar Rate Loan or any
portion thereof is repaid or is converted to a Base Rate Loan for any reason
on a date which is prior to the last day of the Interest Period applicable to
such Eurodollar Rate Loan, the Borrower will pay to the Agent upon demand
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for the account of the Banks in accordance with their respective Commitment
Percentages, in addition to any amounts of interest otherwise payable
hereunder, any amounts required to compensate the Banks for any losses, costs
or expenses which may reasonably be incurred as a result of such payment or
conversion, including, without limitation, an amount equal to daily interest
for the unexpired portion of such Interest Period on the Eurodollar Rate Loan
or portion thereof so repaid or converted at a per annum rate equal to the
excess, if any, of (a) the Eurodollar Rate applicable to such Eurodollar Rate
Loan over (b) the yield obtainable by the Agent upon the purchase of debt
securities customarily issued by the Treasury of the United States of America
which have a maturity date most closely approximating the last day of such
Interest Period (it being understood that the purchase of such securities
shall not be required in order for such amounts to be payable) (it being
agreed that a Bank shall not be obligated or required to have actually
obtained funds at the Eurodollar Rate or to have actually reinvested such
amount as described above).
Section 4.9. ADDITIONAL COSTS, ETC. Notwithstanding anything herein to
the contrary, if any present or future applicable law, which expression, as
used herein, includes statutes, rules and regulations thereunder and legally
binding interpretations thereof by any competent court or by any governmental
or other regulatory body or official with appropriate jurisdiction charged
with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time
hereafter made upon or otherwise issued to any Bank or the Agent by any
central bank or other fiscal, monetary or other authority (whether or not
having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Bank's Commitment, a Letter of
Credit or the Loans (other than taxes based upon or measured by the income or
profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank under this
Agreement or the other Loan Documents, or
(c) impose or increase or render applicable any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by,
or deposits in or for the account of, or loans by, or letters of credit from,
or commitments of any Bank beyond those in effect as of the date hereof, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Agreement, the other Loan Documents, the
Loans, such Bank's Commitment, a Letter of Credit or any class of loans or
commitments of which any of the Loans or such Bank's Commitment forms a part;
and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or Letters of
Credit or such Bank's Commitment, or
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(ii) to reduce the amount of principal, interest or other amount
payable to such Bank or the Agent hereunder on account of such Bank's
Commitment or any of the Loans or Letters of Credit, or
(iii) to require such Bank or the Agent to make any payment
or to forego any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated by reference
to the gross amount of any sum receivable or deemed received by such Bank
or the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, within fifteen (15) days of
demand made by such Bank or (as the case may be) the Agent at any time and from
time to time and as often as the occasion therefor may arise, pay to such Bank
or the Agent such additional amounts as such Bank or the Agent shall determine
in good faith to be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum. Each
Bank and the Agent in determining such amounts may use any reasonable averaging
and attribution methods, generally applied by such Bank or the Agent.
Section 4.10. CAPITAL ADEQUACY. If after the date hereof any Bank
determines that (a) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements of general application for banks or
bank holding companies (as opposed to a particular bank) or any change in the
interpretation or application thereof by any governmental authority charged with
the administration thereof, or (b) compliance by such Bank or its parent bank
holding company with any future guideline, request or directive of any such
entity regarding capital adequacy or any amendment or change in interpretation
of any existing guideline, request or directive (whether or not having the force
of law), has the effect of reducing the return on such Bank's or such holding
company's capital as a consequence of such Bank's commitment to make Loans
hereunder to a level below that which such Bank or holding company could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's or such holding company's then existing policies with respect to
capital adequacy and assuming the full utilization of such entity's capital) by
any amount deemed by such Bank to be material, then such Bank may notify the
Borrower thereof. The Borrower agrees to pay to such Bank the amount of such
reduction in the return on capital as and when such reduction is determined,
upon presentation by such Bank of a statement of the amount setting for the
Bank's calculation thereof. In determining such amount, such Bank may use any
reasonable averaging and attribution methods, generally applied by such Bank.
Section 4.11. INDEMNITY OF BORROWER. The Borrower agrees to indemnify
each Bank and to hold each Bank harmless from and against any loss, cost or
expense that such Bank may sustain or incur as a consequence of (a) default by
the Borrower in payment of the principal amount of or any interest on any
Eurodollar Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its Eurodollar Rate Loans, or (b) default by
the Borrower in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) a Loan Request or a Conversion Request; provided,
however, that the Borrower shall not be required to so indemnify any
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Bank pursuant to clause (b) above which fails or refuses to fund its
proportionate share of a Loan in accordance with the terms of this Agreement.
Section 4.12. INTEREST ON OVERDUE AMOUNTS; LATE CHARGE. Overdue principal
and (to the extent permitted by applicable law) interest on the Loans and all
other overdue amounts payable hereunder or under any of the other Loan Documents
shall bear interest payable on demand at a rate per annum equal to four percent
(4%) above the Base Rate until such amount shall be paid in full (after as well
as before judgment). In addition, the Borrower shall pay a late charge equal to
three percent (3%) of any amount of interest and/or principal payable on the
Loans or any other amounts payable hereunder or under the Loan Documents, which
is not paid within ten days of the date when due.
Section 4.13. CERTIFICATE. A certificate setting forth any amounts
payable pursuant to Section 4.8, Section 4.9, Section 4.10, Section 4.11 or
Section 4.12 and a brief explanation of such amounts which are due, submitted by
any Bank or the Agent to the Borrower, shall be conclusive in the absence of
manifest error.
Section 4.14. LIMITATION ON INTEREST. Notwithstanding anything in this
Agreement to the contrary, all agreements between the Borrower and the Banks and
the Agent, whether now existing or hereafter arising and whether written or
oral, are hereby limited so that in no contingency, whether by reason of
acceleration of the maturity of any of the Obligations or otherwise, shall the
interest contracted for, charged or received by the Banks exceed the maximum
amount permissible under applicable law. If, from any circumstance whatsoever,
interest would otherwise be payable to the Banks in excess of the maximum lawful
amount, the interest payable to the Banks shall be reduced to the maximum amount
permitted under applicable law; and if from any circumstance the Banks shall
ever receive anything of value deemed interest by applicable law in excess of
the maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal balance of the Obligations and to the
payment of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations, such excess shall be refunded to the Borrower.
All interest paid or agreed to be paid to the Banks shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal of the
Obligations (including the period of any renewal or extension thereof) so that
the interest thereon for such full period shall not exceed the maximum amount
permitted by applicable law. This section shall control all agreements between
the Borrower and the Banks and the Agent.
Section 5. SECURITY. The Banks have agreed to make the Loans to the
Borrower on an unsecured basis. Notwithstanding the foregoing, the Obligations
shall be guaranteed by Guarantor pursuant to the Guaranty.
Section 6. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and the Banks as follows:
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Section 6.1. CORPORATE AUTHORITY, ETC.
(a) INCORPORATION; GOOD STANDING. The Borrower (i) is a corporation
duly organized pursuant to its organizational documents and amendments thereto
filed with the Department of Assessments and Taxation of Maryland and is validly
existing and in good standing under the laws of the State of Maryland, (ii) has
all requisite power to own its property and conduct its business as now
conducted and as presently contemplated, (iii) is in good standing as a foreign
entity and is duly authorized to do business in the jurisdictions where the
Unencumbered Operating Properties are located to the extent required to be so
authorized and in each other jurisdiction where a failure to be so qualified in
such other jurisdiction could have a materially adverse effect on the business,
assets or financial condition of the Borrower and (iv) is a real estate
investment trust in full compliance with and entitled to the benefits of Section
856 of the Code.
(b) SUBSIDIARIES. Each of the Subsidiaries of the Borrower
(including the Guarantor) (i) is a corporation, limited partnership, limited
liability company or trust duly organized under the laws of its State of
organization and is validly existing and in good standing under the laws
thereof, (ii) has all requisite power to own its property and conduct its
business as now conducted and as presently contemplated and (iii) is in good
standing and is duly authorized to do business in each jurisdiction where a
failure to be so qualified could have a materially adverse effect on the
business, assets or financial condition of the Borrower or such Subsidiary.
(c) AUTHORIZATION. The execution, delivery and performance of this
Agreement and the other Loan Documents and the transactions contemplated hereby
and thereby (i) are within the authority of the Borrower and the Guarantor, (ii)
have been duly authorized by all necessary proceedings on the part of the such
Person, (iii) do not and will not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which such
Person is subject or any judgment, order, writ, injunction, license or permit
applicable to such Person, (iv) do not and will not conflict with or constitute
a default (whether with the passage of time or the giving of notice, or both)
under any provision of the charter documents, partnership agreement, declaration
of trust or other charter documents or bylaws of, or any agreement or other
instrument binding upon, such Person or any of its properties, and (v) do not
and will not result in or require the imposition of any lien or other
encumbrance on any of the properties, assets or rights of such Person.
(d) ENFORCEABILITY. The execution and delivery of this Agreement and
the other Loan Documents are valid and legally binding obligations of the
Borrower and the Guarantor enforceable in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
Section 6.2. GOVERNMENTAL APPROVALS. The execution, delivery and
performance by the Borrower and the Guarantor of this Agreement and the other
Loan Documents and the transactions
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contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained.
Section 6.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE
6.3 hereto, the Borrower and its Subsidiaries own all of the assets reflected in
the consolidated balance sheet of the Borrower as at the Balance Sheet Date or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date), subject to no rights of
others, including any mortgages, leases (excluding leases entered into in the
ordinary course of the Borrower's business), conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.
Without limiting the foregoing, the Borrower and its Subsidiaries have good and
marketable fee simple title to, or a valid and subsisting leasehold interest in,
all real property reasonably necessary for the operation of its business in
whole, free from all liens or encumbrances of any nature whatsoever, except for
Permitted Liens. The Borrower or its Subsidiary or the Guarantor, as the case
may be, is the insured under owner's policies of title insurance covering all
real property owned by it, in each case in an amount not less than the purchase
price for such real property. Neither the Borrower nor the Guarantor is a party
to a Lease with a tenant which accounts for one-half percent (0.5%) or more of
the total rental revenues of the Borrower and in which Ameritech owns, directly
or indirectly, more than a nine and nine tenths percent (9.9%) interest.
Section 6.4. FINANCIAL STATEMENTS. The Borrower has furnished to each of
the Banks: (a) the pro forma consolidated balance sheet of the Borrower and its
Subsidiaries and of the Guarantor as of the Balance Sheet Date and their related
consolidated statements of income, changes in stockholder equity and cash flows
for the fiscal year then ended, certified by an Authorized Officer of the
Borrower and the Guarantor, as applicable, (b) a pro forma consolidated balance
sheet and a pro forma consolidated statement of income and cash flows of the
Borrower and its Subsidiaries and of the Guarantor for each of the fiscal
quarters of the Borrower ended since the Balance Sheet Date certified by an
Authorized Officer of the Borrower and the Guarantor, as applicable, to have
been prepared in accordance with generally accepted accounting principles
consistent with those used in the preparation of the annual statements delivered
pursuant to subsection (a) above and to fairly present the financial condition
of the Borrower and its Subsidiaries and the Guarantor as at the close of
business on the dates thereof and the results of operations for the fiscal
quarters then ended (subject to year-end adjustments), and (c) an unaudited
consolidated statement of Net Operating Income for the Borrower and its
Subsidiaries and the Guarantor and an unaudited statement of Net Operating
Income for each parcel of Real Estate for the fiscal year ended December 31,
1996, satisfactory in form to the Majority Banks and certified by an Authorized
Officer of the Borrower and the Guarantor, as applicable, as fairly presenting
the operating income for such parcels for such periods. Such balance sheet and
statements of income, stockholder's equity and cash flows have been prepared in
accordance with generally accepted accounting principles and fairly present the
financial condition of the Borrower and its Subsidiaries and the Guarantor as of
such dates and the results of the operations of the Borrower and its
Subsidiaries and the Guarantor for such periods. There are no liabilities,
contingent or otherwise, of the Borrower or any of its Subsidiaries or the
Guarantor involving material amounts not disclosed in said financial statements
and the related notes thereto.
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Section 6.5. NO MATERIAL CHANGES. Since the Balance Sheet Date, there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries or the Guarantor taken as a whole as shown on
or reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries and the Guarantor, adjusted pursuant to Section 9.7, as of the
Balance Sheet Date, or its consolidated statement of Net Operating Income or
Operating Cash Flow for the Real Estate for the fiscal year then ended, other
than changes in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business or
financial condition of such Person.
Section 6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower and its
Subsidiaries and the Guarantor possess all franchises, patents, copyrights,
trademarks, trade names, servicemarks, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of their business
substantially as now conducted without known conflict with any rights of others.
Section 6.7. LITIGATION. Except as stated on SCHEDULE 6.7 there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against the Borrower or any of its Subsidiaries or the Guarantor before any
court, tribunal or administrative agency or board that, if adversely determined,
might, either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of such Person or materially
impair the right of such Person to carry on business substantially as now
conducted by it, or result in any liability not adequately covered by insurance,
or for which adequate reserves are not maintained on the balance sheet of such
Person, or which question the validity of this Agreement or any of the other
Loan Documents, any action taken or to be taken pursuant hereto or thereto, or
which will adversely affect the ability of the Borrower or the Guarantor to pay
and perform the Obligations in the manner contemplated by this Agreement and the
other Loan Documents.
Section 6.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower
nor any of its Subsidiaries nor the Guarantor is subject to any charter,
corporate or other legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a materially adverse
effect on the business, assets or financial condition of the Borrower or any of
its Subsidiaries or the Guarantor. Neither the Borrower nor any of its
Subsidiaries nor the Guarantor is a party to any contract or agreement that has
or is expected, in the judgment of the officers of such Person, to have any
materially adverse effect on the business of any of them.
Section 6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the
Borrower nor any of its Subsidiaries nor the Guarantor is in violation of any
provision of its charter or other organizational documents, by-laws, or any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute, license, rule
or regulation, in any of the foregoing cases in a manner that could result in
the imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of the Borrower or its Subsidiaries
or the Guarantor.
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Section 6.10. TAX STATUS. The Borrower and each of its Subsidiaries
and the Guarantor (a) has made or filed all federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to
which it is subject, (b) has paid all taxes and other governmental
assessments and charges shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and by
appropriate proceedings and (c) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to
the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of such Person know of no
basis for any such claim.
Section 6.11. NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
Section 6.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the
Borrower nor any of its Subsidiaries nor the Guarantor is a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate"
of a "holding company", as such terms are defined in the Public Utility
Holding Company Act of 1935; nor is it an "investment company", or an
"affiliated company" or a "principal underwriter" of an "investment company",
as such terms are defined in the Investment Company Act of 1940.
Section 6.13. ABSENCE OF UCC FINANCING STATEMENTS, ETC. Except with
respect to Permitted Liens, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed or
recorded with any filing records, registry, or other public office, that
purports to cover, affect or give notice of any present or possible future
lien on, or security interest or security title in, any property of the
Borrower or its Subsidiaries or the Guarantor or rights thereunder.
Section 6.14. INTENTIONALLY OMITTED.
Section 6.15. CERTAIN TRANSACTIONS. Except as set forth in the
Prospectus, none of the officers, trustees, directors, or employees of the
Borrower or any of its Subsidiaries or the Guarantor is a party to any
transaction with the Borrower or any of its Subsidiaries or the Guarantor
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, trustee,
director or such employee or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer,
trustee, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.
Section 6.16. EMPLOYEE BENEFIT PLANS. The Borrower and each ERISA
Affiliate has fulfilled its obligations under the minimum funding standards
of ERISA and the Code with respect to each Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code with respect to each Employee Benefit Plan, Multiemployer Plan or
Guaranteed Pension Plan. Neither the Borrower nor any ERISA Affiliate has (a)
sought a waiver of the minimum funding standard under Section 412
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of the Code in respect of any Employee Benefit Plan, Multiemployer Plan or
Guaranteed Pension Plan, (b) failed to make any contribution or payment to
any Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan, or
made any amendment to any Employee Benefit Plan, Multiemployer Plan or
Guaranteed Pension Plan, which has resulted or could result in the imposition
of a Lien or the posting of a bond or other security under ERISA or the Code,
or (c) incurred any liability under Title IV of ERISA other than a liability
to the PBGC for premiums under Section 4007 of ERISA. None of the
Unencumbered Operating Properties constitutes a "plan asset" of any Employee
Plan, Multiemployer Plan or Guaranteed Pension Plan.
Section 6.17. REGULATIONS U AND X. No portion of any Loan is to be
used for the purpose of purchasing or carrying any "margin security" or
"margin stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
Section 6.18. ENVIRONMENTAL COMPLIANCE. The Borrower has conducted or
caused to be conducted Phase I environmental site assessments with respect to
the past usage and condition of the Real Estate and the operations conducted
thereon, and is familiar with the present condition and usage of the Real
Estate and the operations conducted thereon and, based upon such reports and
knowledge, makes the following representations and warranties.
(a) To the best of the Borrower's knowledge, none of the Borrower
or its Subsidiaries or any operator of the Real Estate, or any operations
thereon is in violation, or alleged violation, of any judgment, decree,
order, law, license, rule or regulation pertaining to environmental matters,
including without limitation, those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating to
the environment (hereinafter "Environmental Laws"), which violation involves
the Real Estate and would have a material adverse effect on the environment
or the business, assets or financial condition of the Borrower.
(b) Neither the Borrower nor any of its Subsidiaries has received
notice from any third party including, without limitation, any federal, state
or local governmental authority, (i) that it has been identified by the
United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that any
hazardous waste, as defined by 42 U.S.C. Section 9601(5), any hazardous
substances as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) or any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which it has generated,
transported or disposed of have been found at any site at which a federal,
state or local agency or other third party has conducted or has ordered that
the Borrower or any of its Subsidiaries conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law; or (iii)
that it is or shall be a named party to any claim, action, cause of action,
complaint, or legal or
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administrative proceeding (in each case, contingent or otherwise) arising out
of any third party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the release of Hazardous Substances.
(c) To the best of the Borrower's knowledge, except as set forth
in SCHEDULE 6.18 or, in the case of Real Estate acquired after the date
hereof, except as may be disclosed in writing to the Agent upon the
acquisition of the same: (i) no portion of the Real Estate has been used for
the handling, processing, storage or disposal of Hazardous Substances except
in accordance with applicable Environmental Laws, and no underground tank or
other underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities
conducted by the Borrower, its Subsidiaries or the operators of its
properties, no Hazardous Substances have been generated or are being used on
the Real Estate except in the ordinary course of business and in accordance
with applicable Environmental Laws; (iii) there has been no past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping (a "Release") or
threatened Release of Hazardous Substances on, upon, into or from the Real
Estate, or, to the best of the Borrower's knowledge, on, upon, into or from
the other properties of the Borrower or its Subsidiaries, which Release would
have a material adverse effect on the value of any of the Real Estate or
adjacent properties or the environment; (iv) to the best of the Borrower's
knowledge, there have been no Releases on, upon, from or into any real
property in the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on, and which would
have a material adverse effect on the value of, the Real Estate; and (v) any
Hazardous Substances that have been generated on any of the Real Estate have
been transported off-site only by carriers having an identification number
issued by the EPA or approved by a state or local environmental regulatory
authority having jurisdiction regarding the transportation of such substance
and, to the best knowledge of the Borrower without independent investigation,
treated or disposed of only by treatment or disposal facilities maintaining
valid permits as required under all applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Borrower's
knowledge, operating in compliance with such permits and applicable
Environmental Laws.
(d) Neither the Borrower, its Subsidiaries nor any Real Estate is
subject to any applicable Environmental Law requiring the performance of
Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental agency or
the recording or delivery to other Persons of an environmental disclosure
document or statement by virtue of the transactions set forth herein and
contemplated hereby, or as a condition to the effectiveness of any other
transactions contemplated hereby.
Section 6.19. SUBSIDIARIES. SCHEDULE 6.19 sets forth all of the
Subsidiaries of the Borrower. The form and jurisdiction of organization of
each of the Subsidiaries, and the Borrower's ownership interest therein, is
set forth in said SCHEDULE 6.19.
Section 6.20. MINORITY INTERESTS. Other than the OTR Minority
Interest, the Borrower owns no other minority interests in partnerships,
joint ventures, corporations or other entities.
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Section 6.21. LOAN DOCUMENTS. All of the representations and
warranties of the Borrower made in this Agreement and the other Loan
Documents or any document or instrument delivered to the Agent or the Banks
pursuant to or in connection with any of such Loan Documents are true and
correct in all material respects, and neither the Borrower nor the Guarantor
has failed to disclose such information as is necessary to make such
representations and warranties not misleading.
Section 6.22. PROPERTY. All of the Borrower's and its Subsidiaries'
properties are in good repair and condition in all material respects, subject
to ordinary wear and tear, other than with respect to deferred maintenance
existing as of the date of acquisition of such property as permitted in this
Section 6.22. Without limiting the foregoing, the Borrower has completed an
appropriate investigation of the physical condition of each such property as
of the later of the date of the Borrower's or such Subsidiaries' purchase
thereof or the date upon which such property was last security for
Indebtedness of the Borrower or such Subsidiary, or their predecessors,
including without limitation an analysis of the structural condition and
existence of any material deferred maintenance, and such property is in good
condition, order and repair, and any material deferred maintenance existing
as of the date of acquisition of such property has been corrected or
satisfactory remediation actions are being taken. The Borrower further has
completed an appropriate investigation of the environmental condition of each
such property as of the later of the date of the Borrower's or such
Subsidiaries' purchase thereof or the date upon which such property was last
security for Indebtedness of the Borrower or such Subsidiary, or their
predecessors, including preparation of a "Phase I" report and, if
appropriate, a "Phase II" report, in each case prepared by a recognized
environmental engineer in accordance with customary standards which discloses
that such property is not in violation of the representations and covenants
set forth in this Agreement, unless satisfactory remediation actions are
being taken. There are no unpaid or outstanding real estate or other taxes
or assessments on or against any property of the Borrower or any of its
Subsidiaries which are payable by the Borrower or its Subsidiaries (except
only real estate or other taxes or assessments, that are not yet due and
payable). There are no pending eminent domain proceedings against any
property of the Borrower or its Subsidiaries or any part thereof, and, to the
knowledge of the Borrower, no such proceedings are presently threatened or
contemplated by any taking authority which may individually or in the
aggregate have any materially adverse effect on the business or financial
condition of the Borrower. None of the property of Borrower or its
Subsidiaries is now damaged or injured as a result of any fire, explosion,
accident, flood or other casualty in any manner which individually or in the
aggregate would have any materially adverse effect on the business or
financial condition of the Borrower.
Section 6.23. BROKERS. Neither the Borrower nor any of its
Subsidiaries has engaged or otherwise dealt with any broker, finder or
similar entity in connection with this Agreement or the Loans contemplated
hereunder.
Section 6.24. OTHER DEBT. Neither the Borrower nor any of its
Subsidiaries nor the Guarantor is in default in the payment of any other
Indebtedness or under any agreement, mortgage, deed of trust, security
agreement, financing agreement, indenture or lease to which any of them is a
party, excluding trade payables less than sixty (60) days old. The Borrower
is not a party to or bound by any
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agreement, instrument or indenture that may require the subordination in
right or time of payment of any of the Obligations to any other indebtedness
or obligation of the Borrower.
Section 6.25. SOLVENCY. As of the Closing Date and after giving effect
to the transactions contemplated by this Agreement and the other Loan
Documents, including all of the Loans made hereunder, the Borrower and the
Guarantor are not insolvent on a balance sheet basis such that the sum of
each of their respective assets exceeds the sum of each of their respective
liabilities, each is able to pay its debts as they become due, and each has
sufficient capital to carry on its business.
Section 6.26. MIT UNSECURED L.P. MIT-ULP, Inc., a wholly-owned
Subsidiary of the Borrower, is the sole limited partner of MIT Unsecured
L.P., and MIT Unsecured, Inc., the sole general partner of MIT Unsecured
L.P., is a wholly-owned Subsidiary of the Borrower.
Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note or
Letter of Credit is outstanding or any Bank has any obligation to make any
Loans or the Agent has any obligation to issue any Letters of Credit:
Section 7.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually
pay or cause to be paid the principal and interest on the Loans and all
interest and fees provided for in this Agreement, all in accordance with the
terms of this Agreement and the Notes as well as all other sums owing
pursuant to the Loan Documents.
Section 7.2. MAINTENANCE OF OFFICE. The Borrower will maintain its
chief executive office at 455 Market Street, 17th Floor, San Francisco,
California 94105, or at such other place in the United States of America as
the Borrower shall designate upon prior written notice to the Agent and the
Banks, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.
Section 7.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and
cause each of its Subsidiaries to keep, true and accurate records and books
of account in which full, true and correct entries will be made in accordance
with generally accepted accounting principles and (b) maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation
and amortization of its properties and the properties of its Subsidiaries,
contingencies and other reserves. Neither the Borrower nor the Guarantor nor
any of their respective Subsidiaries shall, without the prior written consent
of the Majority Banks, (x) make any material change to the accounting
procedures used by such Person in preparing the financial statements and
other information described in Section 6.4 or (y) change its fiscal year.
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Section 7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than 90
days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet of the Borrower and its Subsidiaries at the end of
such year, and the related audited consolidated statements of income, changes
in shareholder's equity and cash flows for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and accompanied by an auditor's report
prepared without qualification by Arthur Andersen LLP or by another "Big Six"
accounting firm, the Form 10-K filed with the SEC (unless the SEC has
approved an extension, in which event the Borrower will deliver to the Agent
and each of the Banks a copy of the Form 10-K simultaneously with delivery to
the SEC), and any other information the Banks may need to complete a
financial analysis of the Borrower and its Subsidiaries. At any time that the
Agent has reasonable grounds to request the same (including, without
limitation, at any time that the Compliance Certificate indicates that the
Borrower is at or near minimum compliance with the financial covenants
contained in this Agreement), the Agent may require that such report be
accompanied by a written statement from such accountants to the effect that
they have read a copy of this Agreement, and that, in making the examination
necessary for said certification, they have obtained no knowledge of any
Default or Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default, they shall
disclose in such statement any such Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45
days after the end of each fiscal quarter of the Borrower (including the
fourth fiscal quarter in each year), copies of the unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such
quarter, and the related unaudited consolidated statements of income, changes
in shareholder's equity and cash flows for the portion of the Borrower's
fiscal year then elapsed, all in reasonable detail and prepared in accordance
with generally accepted accounting principles (which may be provided by
inclusion in the Form 10-Q of the Borrower for such period provided pursuant
to subsection (c) below), together with a certification by an Authorized
Officer of the Borrower that the information contained in such financial
statements fairly presents the financial position of the Borrower and its
Subsidiaries on the date thereof (subject to year-end adjustments);
(c) as soon as practicable, but in any event not later than 45
days after the end of each fiscal quarter of the Borrower (excluding the
fourth fiscal quarter in each year), copies of Form 10-Q filed with the SEC
(unless the SEC has approved an extension in which event the Borrower will
deliver such copies of the Form 10-Q to the Agent and each of the Banks
simultaneously with delivery to the SEC);
(d) as soon as practicable, but in any event not later than 45
days after the end of each fiscal quarter of the Borrower (including the
fourth fiscal quarter in each year), copies of a consolidated statement of
the Funds from Operations for such fiscal quarter for the Borrower and its
Subsidiaries and the Net Operating Income and Operating Cash Flow for the
Real Estate and year-to-
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date in form and substance satisfactory to Agent, prepared on a basis
consistent with the statement furnished pursuant to Section 6.4(c) together
with a certification by an Authorized Officer of the Borrower that the
information contained in such statement fairly presents the Funds from
Operations of the Borrower and its Subsidiaries and the Net Operating Income
and Operating Cash Flow for the Real Estate for such period;
(e) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, and within thirty (30) days of
the filing with the SEC of a Form 8-K or any other document amending any
other filing previously made by the Borrower which could reasonably be
expected to have a materially adverse effect on the Borrower, a statement (a
"Compliance Certificate") certified by an Authorized Officer of the Borrower
and the Guarantor in the form of EXHIBIT D hereto setting forth in reasonable
detail computations evidencing compliance with the covenants contained in
Section 9, and (if applicable) reconciliations to reflect changes in
generally accepted accounting principles since the Balance Sheet Date;
(f) concurrently with the delivery of the financial statements
described in subsections (b) and (c) above, a certificate signed by an
Authorized Officer of the Borrower to the effect that, having read this
Agreement, and based upon an examination which they deem sufficient to enable
them to make an informed statement, there does not exist any Default or Event
of Default, or if such Default or Event of Default has occurred, specifying
the facts with respect thereto;
(g) contemporaneously with the filing or mailing thereof, copies
of all material of a financial nature filed with the SEC or sent to the
stockholders of the Borrower;
(h) upon request of the Agent, but in any event not later than 30
days after receipt of notice of such request from the Agent, updated Rent
Rolls with respect to the Real Estate, a summary of each Rent Roll in form
reasonably satisfactory to the Agent, and a leasing activity report with
respect to the Real Estate setting forth the Borrower's efforts to market and
lease the then unleased space in the Real Estate and the results of such
efforts;
(i) simultaneously within the delivery of the financial statement
referred to in subsection (a) above, a statement (i) listing the Real Estate
owned by the Borrower and its Subsidiaries (or in which Borrower or its
Subsidiaries owns an interest) and stating the owner thereof, the location
thereof, the date acquired and the acquisition cost, (ii) listing the
Indebtedness of the Borrower and its Subsidiaries (excluding Indebtedness of
the type described in Section 8.1(b)-(e)), which statement shall include,
without limitation, a statement of the original principal amount of such
Indebtedness and the current amount outstanding, the holder thereof, the
maturity date and any extension options, the interest rate, the collateral
provided for such Indebtedness and whether such Indebtedness is recourse or
Non-recourse, and (iii) listing the properties of the Borrower and its
Subsidiaries which are under "development" (as used in Section 8.9) and
providing a brief summary of the status of such development;
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(j) promptly after they are filed with the Internal Revenue
Service, copies of all annual federal income tax return and amendments
thereto of the Borrower;
(k) not later than five (5) Business Days after the Borrower
receives notice of the same from either of the Rating Agencies or otherwise
learns of the same, notice of the issuance of any change in the rating by
either of the Rating Agencies in respect of any debt of the Borrower
(including any change in an Implied Rating), together with the details
thereof, and of any announcement by either of the Rating Agencies that any
such rating is "under review" or that any such rating has been placed on a
watch list or that any similar action has been taken by either of the Rating
Agencies (collectively a "Rating Notice"); and
(l) from time to time such other financial data and information in
the possession of the Borrower or the Guarantor (including without limitation
separate financial statements for the Guarantor, auditors' management
letters, evidence of payment of taxes, property inspection and environmental
reports and information as to zoning and other legal and regulatory changes
affecting the Borrower or the Guarantor) as the Agent may reasonably request.
Section 7.5. NOTICES.
(a) DEFAULTS. The Borrower will promptly notify the Agent in
writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this
Agreement or under any note, evidence of indebtedness, indenture or other
obligation to which or with respect to which the Borrower or any of its
Subsidiaries or the Guarantor is a party or obligor, whether as principal or
surety, and such default would permit the holder of such note or obligation
or other evidence of indebtedness to accelerate the maturity thereof, which
acceleration would have a material adverse effect on the Borrower or the
Guarantor or the existence of which claimed default might become an Event of
Default under Section 12.1(g), the Borrower shall forthwith give written
notice thereof to the Agent and each of the Banks, describing the notice or
action and the nature of the claimed default.
(b) ENVIRONMENTAL EVENTS. The Borrower will promptly give notice
to the Agent (i) upon the Borrower obtaining knowledge of any potential or
known Release, or threat of Release, of any Hazardous Substances at or from
any Real Estate of the Borrower or its Subsidiaries; (ii) of any violation of
any Environmental Law that the Borrower or any of its Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any written
report supplemental to any oral report is made) to any federal, state or
local environmental agency and (iii) upon becoming aware thereof, of any
inquiry, proceeding, investigation, or other action, including a notice from
any agency of potential environmental liability, of any federal, state or
local environmental agency or board, that in either case involves any Real
Estate of the Borrower or its Subsidiaries or has the potential to materially
affect the assets, liabilities, financial conditions or operations of the
Borrower or any Subsidiary.
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(c) NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will give
notice to the Agent in writing within 15 days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower, any of its Subsidiaries or the Guarantor,
or to which such Person is or is to become a party involving an uninsured
claim against such Person that could reasonably be expected to have a
materially adverse effect on such Person and stating the nature and status of
such litigation or proceedings. The Borrower will give notice to the Agent,
in writing, in form and detail satisfactory to the Agent and each of the
Banks, within ten days of any judgment not covered by insurance, whether
final or otherwise, against the Borrower, any of its Subsidiaries or the
Guarantor in an amount in excess of $250,000.
(d) NOTICE OF PROPOSED SALES, ENCUMBRANCES, REFINANCE OR TRANSFER.
The Borrower will give notice to the Agent of any proposed or completed sale,
encumbrance (excluding encumbrances described in Section 8.2(iv)), refinance
or transfer of any Real Estate or other Investment described in Section
8.3(j) of the Borrower of its Subsidiaries within any fiscal quarter of the
Borrower, such notice to be submitted together with the Compliance
Certificate provided or required to be provided to the Banks under Section
7.4 with respect to such fiscal quarter. The Compliance Certificate shall
with respect to any proposed or completed sale, encumbrance, refinance or
transfer be adjusted in the best good-faith estimate of the Borrower to give
effect to such sale, encumbrance, refinance or transfer and demonstrate that
no Default or Event of Default with respect to the covenants referred to
therein shall exist after giving effect to such sale, encumbrance, refinance
or transfer. Notwithstanding the foregoing, in the event of any sale,
encumbrance, refinance or transfer of any Real Estate or other Investment
described in Section 8.3(j) of the Borrower or its Subsidiaries involving an
amount in excess of twenty percent (20%) of the value of the Consolidated
Total Assets of the Borrower, the Borrower shall promptly give notice to the
Agent of such transaction, which notice shall be accompanied by a
certification of Authorized Officer of the Borrower that no Default or Event
of Default shall exist after giving affect to such event.
(e) NOTIFICATION OF BANKS. Promptly after receiving any notice
under this Section 7.5, the Agent will forward a copy thereof to each of the
Banks, together with copies of any certificates or other written information
that accompanied such notice.
Section 7.6. EXISTENCE; MAINTENANCE OF PROPERTIES.
(a) The Borrower will do or cause to be done all things necessary
to preserve and keep in full force and effect its existence as a Maryland
corporation. The Borrower will cause each of its Subsidiaries to do or cause
to be done all things necessary to preserve and keep in full force and effect
its legal existence. The Borrower will do or cause to be done all things
necessary to preserve and keep in full force all of its rights and franchises
and those of its Subsidiaries. The Borrower will, and will cause each of its
Subsidiaries to, continue to engage primarily in the businesses now conducted
by it and in related businesses.
(b) The Borrower (i) will cause all of its properties and those of
its Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and
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kept in good condition, repair and working order (ordinary wear and tear
excepted) and supplied with all necessary equipment, and (ii) will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof in all cases in which the failure so to do would have a
material adverse effect on the condition of its properties or on the
financial condition, assets or operations of the Borrower and its
Subsidiaries.
Section 7.7. INSURANCE. The Borrower will, at its expense, procure and
maintain or cause to be procured and maintained insurance covering the
Borrower, its Subsidiaries and their respective properties in such amounts
and against such risks and casualties as are customary for properties of
similar character and location, due regard being given to the type of
improvements thereon, their construction, location, use and occupancy.
Section 7.8. TAXES. The Borrower and each Subsidiary will duly pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all taxes, assessments and other governmental charges imposed upon
it and upon the Real Estate, sales and activities, or any part thereof, or
upon the income or profits therefrom, as well as all claims for labor,
materials, or supplies that if unpaid might by law become a lien or charge
upon any of its property; PROVIDED that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall
currently be contested in good faith by appropriate proceedings and if the
Borrower or such Subsidiary shall have set aside on its books adequate
reserves with respect thereto; and PROVIDED, FURTHER, that forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor, the Borrower and each Subsidiary of the Borrower either
(i) will provide a bond issued by a surety reasonably acceptable to the Agent
and sufficient to stay all such proceedings or (ii) if no such bond is
provided, will pay each such tax, assessment, charge, levy or claim. The
Borrower shall certify annually to the Agent that the Borrower is in
compliance with this Section 7.8 with respect to the Unencumbered Operating
Properties.
Section 7.9. INSPECTION OF PROPERTIES AND BOOKS. The Borrower shall
permit the Banks, through the Agent or any representative designated by the
Agent, at the Borrower's expense to visit and inspect any of the properties
of the Borrower or any of its Subsidiaries, to examine the books of account
of the Borrower and its Subsidiaries (and to make copies thereof and extracts
therefrom) and to discuss the affairs, finances and accounts of the Borrower
and its Subsidiaries with, and to be advised as to the same by, its officers,
all at such reasonable times and intervals as the Agent or any Bank may
reasonably request. The Banks shall use good faith efforts to coordinate
such visits and inspections so as to minimize the interference with and
disruption to the Borrower's normal business operations.
Section 7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS.
The Borrower will comply with, and will cause each of its Subsidiaries to
comply in all respects with (i) all applicable laws and regulations now or
hereafter in effect wherever its business is conducted, including all
Environmental Laws, (ii) the provisions of its corporate charter, partnership
agreement or declaration of trust, as the case may be, and other charter
documents and bylaws, (iii) all agreements and instruments to which it is a
party or by which it or any of its properties may be bound, (iv) all
applicable decrees, orders, and judgments, and (v) all licenses and permits
required by applicable laws and regulations for the
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conduct of its business or the ownership, use or operation of its properties
(with respect to subsections (i), (iii) and (v) above, such compliance shall
be in all material respects, subject to the provisions of Section 12.1(f)).
If at any time while any Loan or Note or Letter of Credit is outstanding or
the Banks have any obligation to make Loans hereunder or the Agent has any
obligation to issue any Letters of Credit hereunder, any authorization,
consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower may fulfill any of its obligations hereunder, the Borrower
will immediately take or cause to be taken all steps necessary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
Section 7.11. USE OF PROCEEDS. Subject to the limitations set forth
herein, the Borrower will use the proceeds of the Loans or issuances of
Letters of Credit solely to provide short-term financing (a) for the
acquisition and development of interests in primarily non-specialized
industrial real estate of institutional quality (either direct fee interests
or interests in joint ventures or partnerships owning such property, as
permitted by this Agreement), including reasonable transaction costs related
thereto; (b) for working capital purposes; and (c) for such other purposes as
the Majority Banks in their discretion from time to time may agree to in
writing. Notwithstanding anything herein to the contrary, the amount of
Loans and Letters of Credit Outstanding at any time which has been advanced
for the purpose described in Section 7.11(b) shall not exceed $25,000,000.00,
and may be used by Borrower only for the following purposes: (i) for the
payment of expenditures for Capital Improvement Projects, tenant finish and
leasing commissions; (ii) up to $5,000,000.00 per quarter for payment of
Distributions up to a maximum amount outstanding at one time of
$10,000,000.00, provided that the Borrower shall not draw on the Loans for
payment of Distributions in any two (2) consecutive quarters; (iii) up to a
maximum amount outstanding at any time of $10,000,000.00 to repurchase Voting
Interests of the Borrower (other than Voting Interests owned by Hunt Realty
Acquisitions, L.P., USAA Real Estate Company or subsequent private placement
investors); and (iv) with respect to amounts Outstanding under Letters of
Credit only, for other working capital purposes. Upon repayment of all or a
portion of the Loans, the Borrower will be allowed to reborrow for working
capital purposes subject to the limitations set forth above.
Section 7.12. FURTHER ASSURANCES. The Borrower will cooperate with,
and will cause each of its Subsidiaries to cooperate with the Agent and the
Banks and execute such further instruments and documents as the Banks or the
Agent shall reasonably request to carry out to their satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.
Section 7.13. REIT STATUS. Subject to the terms of Section 8.7, the
Borrower shall at all times comply with all requirements of applicable laws
and regulations necessary to maintain REIT Status and shall operate its
business as described in the Prospectus in all material aspects and in
compliance with the terms and conditions of this Agreement and the other Loan
Documents.
Section 7.14. RESTRICTIONS ON ACQUISITIONS. The Borrower shall, and
shall cause each of its Subsidiaries to, exercise due diligence in connection
with the acquisition of Real Estate or other assets and shall not knowingly
acquire any Real Estate or other assets which has any material title, survey,
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environmental, structural or other defects that would give rise to a
materially adverse effect as to the value, use of or ability to sell or
refinance such property or the business or affairs of the Borrower or its
Subsidiaries.
Section 7.15. UNENCUMBERED OPERATING PROPERTIES.
(a) The Borrower and the Guarantor shall at all times own
Unencumbered Operating Properties which satisfy all of the following
conditions:
(i) at least seventy-five percent (75%) of the Asset
Value of the Unencumbered Operating Properties constitutes industrial
properties;
(ii) as of the end of each fiscal quarter, at least
eighty-five percent (85%) of the total Gross Rentable Area of the
Unencumbered Operating Properties is subject to arms-length Leases
which are in full force and effect and pursuant to which the tenants
are paying rent, and at least seventy-seven percent (77%) of the total
Gross Rentable Area in the Unencumbered Operating Properties is
physically occupied by tenants under arms-length Leases which are in
full force and effect;
(iii) no more than thirty-five (35%) of the Asset Value
of the Unencumbered Operating Properties is located in any one city or
metropolitan area; and
(iv) no one tenant shall comprise more than seven percent (7%)
[ten percent (10%) if the tenant has an Implied Rating of BBB- or better
from Standard & Poor's Corporation and twenty percent (20%) if the tenant
is Sears and it has an Implied Rating of A3 or better from Moody's
Investors Service, Inc. or BBB+ from Standard & Poor's Corporation] of the
Gross Cash Receipts generated by the Unencumbered Operating Properties.
(b) The Borrower shall provide to the Agent as of the Closing Date
and concurrently with the delivery of the financial statements described in
Section 7.4(a) (i) a list of the Unencumbered Operating Properties, (ii) the
certification of an Authorized Officer of the Borrower or the Guarantor, as
applicable, of the Asset Values and that such Unencumbered Operating
Properties are in compliance with Section 7.15(a), and (iii) operating
statements setting forth the Net Operating Income and Operating Cash Flow for
each of the Unencumbered Operating Properties for the previous four (4)
fiscal quarters certified as true and correct by an Authorized Officer of the
Borrower or the Guarantor, as applicable. In the event that all or any
material portion of a property within the Unencumbered Operating Properties
shall be damaged or taken by condemnation, then such property shall no longer
be a part of the Unencumbered Operating Properties unless and until any
damage to such Real Estate is repaired or restored, such Real Estate becomes
fully operational and the Agent shall receive evidence satisfactory to the
Agent of the value, Net Operating Income and Operating Cash Flow of such Real
Estate following such repair or restoration.
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(c) Nothing herein shall be construed as an obligation of the
Borrower to grant any mortgage, pledge or security interest to the Agent or
the Banks in any of the Unencumbered Operating Properties, nor as an
obligation of the Borrower to reserve any particular Unencumbered Operating
Property as potential collateral for the Agent and the Banks; provided,
however, that this Section 7.15(c) shall not diminish the Borrower's
obligation to comply with the terms of this Section 7.15 or Section 7.16.
(d) The Borrower and the Guarantor will use commercially
reasonable efforts to ascertain the equity ownership of each of its potential
tenants prior to executing a Lease (excluding those tenants from whom the
Borrower or the Guarantor derive a sufficiently small amount of revenue such
that, in the reasonable opinion of the management of the Borrower or the
Guarantor, rent from such tenant would not adversely affect the Borrower's
ability to qualify as a REIT), in order to identify any tenants in which
Ameritech owns, directly or indirectly, a ten percent (10%) or greater equity
interest, and neither the Borrower nor any Guarantor shall enter into Leases
with any tenants so identified.
Section 7.16. LIMITING AGREEMENTS.
(a) Neither Borrower nor any of its Subsidiaries nor the Guarantor
shall enter into any agreement, instrument or transaction which has or may
have the effect of prohibiting or limiting the Borrower's or the Guarantor's
ability to pledge to the Agent Real Estate, the OTR Minority Interest, any
other minority interests of the Borrower in unconsolidated joint ventures and
partnerships approved by the Majority Banks, interests of the Borrower in
Subsidiaries or other assets owned by Borrower or Guarantor. Borrower and
Guarantor shall take, and Borrower shall cause its Subsidiaries to take, such
actions as are necessary to preserve the right and ability of Borrower and
Guarantor to pledge those Real Estate assets as security for the Loans
without any such pledge after the date hereof causing or permitting the
acceleration (after the giving of notice or the passage of time, or
otherwise) of any other Indebtedness of Borrower or any of its Subsidiaries
or the Guarantor. This Section 7.16 shall not be construed as limiting
Borrower's or Guarantor's rights under Section 8.2 as it relates to a
particular type of lien which the Borrower or the Guarantor may incur.
(b) Borrower shall, upon demand by the Agent in the exercise of
the Agent's reasonable discretion, provide to the Agent such evidence as the
Agent may reasonably require to evidence Borrower's compliance with this
Section 7.16, which evidence shall include, without limitation, copies of any
agreements or instruments which would in any way restrict or limit the
Borrower's or the Guarantor's ability to pledge assets as security for
Indebtedness, or which provide for the occurrence of a default (after the
giving of notice or the passage of time, or otherwise) if assets are pledged
in the future as security for Indebtedness of the Borrower or any of its
Subsidiaries or the Guarantor.
Section 7.17. ENVIRONMENTAL AND ENGINEERING INSPECTIONS. The Borrower
shall, with respect to each property at any time included as part of the
Unencumbered Operating Properties, provide to the Agent evidence reasonably
satisfactory to the Agent prior to the inclusion of such property within the
Unencumbered Operating Properties that (a) the Borrower has completed an
appropriate
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investigation of the physical condition of such property, including without
limitation an analysis of the structural condition and existence of any
material deferred maintenance, and that such property is in good condition,
order and repair and that any material deferred maintenance has been
corrected or satisfactory remediation actions are being taken, as determined
by the Agent in its reasonable judgment, and (b) that the Borrower has
completed an appropriate investigation of the environmental condition of each
proposed property, including preparation of a "Phase I" report and, if
appropriate, a "Phase II" report, in each case prepared by a recognized
environmental engineer in accordance with customary standards which discloses
that such property is not in violation of the representations and covenants
set forth in this Agreement, unless satisfactory remediation actions are
being taken, as determined by the Agent in its reasonable judgment.
Section 7.18. DISTRIBUTION OF INCOME TO THE BORROWER. The Borrower shall
cause all of its Subsidiaries to promptly distribute to the Borrower (but not
less frequently than once each fiscal quarter of the Borrower), whether in
the form of dividends, distributions or otherwise, all profits, proceeds or
other income relating to or arising from its Subsidiaries' use, operation,
financing, refinancing, sale or other disposition of their respective assets
and properties after (a) the payment by each Subsidiary of its Debt Service
and Operating Expenses for such quarter and (b) the establishment of
reasonable reserves for the payment of Operating Expenses not paid on at
least a quarterly basis and Capital Improvement Projects to be made to such
Subsidiary's assets and properties approved by such Subsidiary in the
ordinary course of business consistent with its past practices.
Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note or
Letter of Credit is outstanding or any of the Banks has any obligation to
make any Loans or the Agent has any obligation to issue any Letters of Credit:
Section 8.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and
will not permit any of its Subsidiaries to, create, incur, assume, guarantee
or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Banks arising under any of the Loan
Documents;
(b) current liabilities of the Borrower or its Subsidiaries
incurred in the ordinary course of business, including letters of credit not
to exceed $1,500,000.00 in the aggregate, but not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for credit on an
open account basis customarily extended and in fact extended in connection
with normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the extent
that payment therefor shall not at the time be required to be made in
accordance with the provisions of Section 7.8;
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(d) Indebtedness in respect of judgments or awards that have been
in force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Borrower shall
at the time in good faith be prosecuting an appeal or proceedings for review
and in respect of which a stay of execution shall have been obtained pending
such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(f) subject to the provisions of Section 9, Non-recourse
Indebtedness of the Borrower or any Subsidiary of the Borrower related to the
acquisition of Real Estate or a refinance of the Prudential Loan in an
aggregate outstanding principal amount not to exceed thirty-five percent
(35%) of the value of the Consolidated Total Assets of the Borrower, adjusted
pursuant to Section 9.7;
(g) Indebtedness in respect of reverse repurchase agreements
having a term of not more than 180 days with respect to Investments described
in Section 8.3(d) or (e);
(h) The Prudential Loan, provided the Prudential Loan shall remain
Non-recourse as to the Borrower;
(i) Indebtedness not to exceed $2,000,000.00 in the aggregate in
respect of note purchase agreement(s) relating to loans made to executive
officers of the Borrower for the purchase of shares of beneficial interest in
the Borrower; and
(j) unsecured Debt Offerings which have been granted an Investment
Grade Rating by either of the Rating Agencies at the time of issuance
provided (i) at the time such Indebtedness is issued the scheduled maturity
date of such Indebtedness is not sooner than six (6) days after the Maturity
Date (after giving effect to any extension of the Maturity Date which may
have been requested by the Borrower prior to the issuance of such
Indebtedness or approved by the Banks, whether or not the same has become
effective), and (ii) Borrower shall exercise its best efforts to ensure that
any covenants or restrictions imposed upon the Borrower, the Guarantor or
their respective Subsidiaries in connection with such Indebtedness shall not
individually or in the aggregate be more restrictive against the Borrower,
the Guarantor and their respective Subsidiaries than the covenants and
restrictions imposed pursuant to this Agreement or the other Loan Documents,
but in any event, the covenants and restrictions imposed in connection with
such Indebtedness shall not be more restrictive than the covenants and
restrictions contained in Section 8.1, Section 8.2, Section 8.3, Section 8.7
and Section 9 of this Agreement; and provided further that neither the
Borrower, Guarantor nor any of their respective Subsidiaries shall incur any
of the Indebtedness described in this Section 8.1(j) unless it shall have
provided to the Banks prior written notice of the proposed issuance of such
Indebtedness, a statement that no Default or Event of Default exists and a
certificate that the Borrower will be in compliance with its covenants
referred to herein after giving effect to such incurrence; and
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(k) Indebtedness of Subsidiaries to Borrower or other Subsidiaries of
Borrower, provided that repayment of such Indebtedness shall be subordinate at
all times to repayment of the Obligations pursuant to a subordination and
standstill agreement in form satisfactory to the Majority Banks.
Section 8.2. RESTRICTIONS ON LIENS, ETC. The Borrower will not, and will
not permit any of its Subsidiaries to, (a) create or incur or suffer to be
created or incurred or to exist any lien, encumbrance, mortgage, pledge,
negative pledge, charge, restriction or other security interest of any kind upon
any of its property or assets of any character whether now owned or hereafter
acquired, or upon the income or profits therefrom; (b) transfer any of its
property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets upon conditional sale
or other title retention or purchase money security agreement, device or
arrangement; (d) suffer to exist for a period of more than 30 days after the
same shall have been incurred any Indebtedness or claim or demand against it
that if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be
given any priority whatsoever over its general creditors; (e) sell, assign,
pledge, encumber or otherwise transfer any accounts, contract rights, general
intangibles, chattel paper or instruments, with or without recourse; or (f)
incur or maintain any obligation to any holder of Indebtedness of the Borrower
or such Subsidiary which prohibits the creation or maintenance of any lien
securing the Obligations (collectively "Liens"); PROVIDED that, the Borrower and
any Subsidiary of the Borrower may create or incur or suffer to be created or
incurred or to exist:
(i) liens in favor of the Borrower on all or part of the assets
of Subsidiaries of the Borrower securing Indebtedness owing by Subsidiaries
of the Borrower to the Borrower;
(ii) liens on properties to secure taxes, assessments and other
governmental charges or claims for labor, material or supplies in respect
of obligations not overdue;
(iii) liens on properties in respect of judgments, awards or
indebtedness, the Indebtedness with respect to which is permitted by
Section 8.1(d) or Section 8.1(f);
(iv) encumbrances on properties consisting of leases entered into
in the ordinary conduct of the business of the Borrower and its
Subsidiaries, easements, rights of way, zoning restrictions, restrictions
on the use of real property and defects and irregularities in the title
thereto, landlord's or lessor's liens under leases to which the Borrower or
a Subsidiary of the Borrower is a party, and other minor non-monetary liens
or encumbrances none of which interferes materially with the use of the
property effected in the ordinary conduct of the business of the Borrower
and its Subsidiaries, which defects do not individually or in the aggregate
have a materially adverse effect on the business of the Borrower
individually or of the Borrower and its Subsidiaries on a consolidated
basis;
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(v) liens on Real Estate and Short-term Investments securing
Non-recourse Indebtedness permitted by Section 8.1(f);
(vi) liens in favor of the Agent and the Banks;
(vii) liens securing the Prudential Loan; and
(viii) liens securing Indebtedness described in Section 8.1(k).
Section 8.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and
will not permit any of its Subsidiaries to, make or permit to exist or to
remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within five (5) years from the date of purchase
by the Borrower or its Subsidiary;
(b) marketable direct obligations of any of the following: Federal
Home Loan Mortgage Corporation, Student Loan Marketing Association, Federal
Home Loan Banks, Federal National Mortgage Association, Government National
Mortgage Association, Bank for Cooperatives, Federal Intermediate Credit
Banks, Federal Financing Banks, Export-Import Bank of the United States,
Federal Land Banks, or any other agency or instrumentality of the United
States of America;
(c) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess of
$100,000,000; PROVIDED, HOWEVER, that the aggregate amount at any time so
invested with any single bank having total assets of less than $1,000,000,000
will not exceed $200,000;
(d) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any State which at the time of purchase are rated by Moody's
Investors Service, Inc. or by Standard & Poor's Corporation at not less than
"P 1" if then rated by Moody's Investors Service, Inc., and not less than "A
1", if then rated by Standard & Poor's Corporation;
(e) mortgage-backed securities guaranteed by the Government
National Mortgage Association, the Federal National Mortgage Association or
the Federal Home Loan Mortgage Corporation and other mortgage-backed bonds
which at the time of purchase are rated by Moody's Investors Service, Inc. or
by Standard & Poor's Corporation at not less than "Aa" if then rated by
Moody's Investors Service, Inc. and not less than "AA" if then rated by
Standard & Poor's Corporation;
(f) repurchase agreements having a term not greater than 90 days
and fully secured by securities described in the foregoing subsection (a),
(b) or (e) with banks described in the foregoing subsection (c) or with
financial institutions or other corporations having total assets in
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excess of $500,000,000;
(g) shares of so-called "money market funds" registered with the
SEC under the Investment Company Act of 1940 which maintain a level per-share
value, invest principally in investments described in the foregoing
subsections (a) through (f) and have total assets in excess of $50,000,000;
(h) subject to the provisions of Section 9.6, Investments in fee
interests in Real Estate constituting institutional grade, non-specialized
industrial property, including earnest money deposits relating thereto and
transaction costs;
(i) Investments in Subsidiaries in which the Borrower holds 100%
of the Voting Interests;
(j) subject to the provisions of Section 9.6, interests in
partnerships, joint ventures, corporations or other entities which own
institutional grade real property used principally for industrial purposes;
(k) Investments in shares of beneficial interest in the Borrower,
provided that the Borrower shall give notice to the Agent concurrently with
the financial statements provided in Section 7.4(b) of any such Investments
that have occurred during the preceding fiscal quarter of the Borrower;
(l) Investments in purchase money notes payable to the order of
the Borrower or any of its Subsidiaries which are received in connection with
the sale by the Borrower or any of its Subsidiaries of Real Estate, provided
that Borrower shall not, for any fiscal quarter, permit the aggregate
outstanding principal balance of such purchase money notes to exceed ten
percent (10%) of the value of the Consolidated Total Assets of the Borrower,
adjusted pursuant to Section 9.7; and
(m) Investments in notes payable to the Borrower made by executive
officers of the Borrower for the purchase of shares of beneficial interest in
the Borrower in an aggregate outstanding principal amount not exceeding
$2,000,000.00.
Section 8.4. MERGER, CONSOLIDATION. The Borrower will not, and will
not permit any of its Subsidiaries to, become a party to any merger,
consolidation or other business combination without the prior written consent
of the Majority Banks except (i) the merger or consolidation of one or more
of the Subsidiaries of the Borrower with and into the Borrower, (ii) the
merger or consolidation of two or more Subsidiaries of the Borrower, and
(iii) the merger or consolidation of one or more unaffiliated corporations or
other entities with and into the Borrower where (a) the Borrower is the
surviving entity, (b) immediately after the merger or consolidation, the
original shareholders of the Borrower at the time of such consolidation or
merger own at least fifty-one percent (51%) of the Voting Interests in the
Borrower, (c) the purpose of the consolidation or merger is the acquisition
of Real Estate as permitted under this Agreement, and (d) immediately prior
to such merger the Borrower shall have provided to the Banks a written
statement that no Default or Event of Default
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exists and a Compliance Certificate demonstrating that the Borrower will be
in compliance with the covenants referred to therein after giving effect to
said merger.
Section 8.5. SALE AND LEASEBACK. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby the Borrower or any Subsidiary of the Borrower shall sell
or transfer any Real Estate owned by it in order that then or thereafter the
Borrower or any Subsidiary shall lease back such Real Estate.
Section 8.6. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will
not, and will not permit any of its Subsidiaries, to do any of the following:
(a) use any of the Real Estate or any portion thereof as a facility for the
handling, processing, storage or disposal of Hazardous Substances, except for
small quantities of Hazardous Substances used in the ordinary course of
business and in compliance with all applicable Environmental Laws, (b) cause
or permit to be located on any of the Real Estate any underground tank or
other underground storage receptacle for Hazardous Substances except in full
compliance with Environmental Laws, (c) generate any Hazardous Substances on
any of the Real Estate except in full compliance with Environmental Laws, (d)
conduct any activity at any Real Estate or use any Real Estate in any manner
so as to cause a Release of Hazardous Substances on, upon or into the Real
Estate or any surrounding properties or any threatened Release of Hazardous
Substances which might give rise to liability under CERCLA or any other
Environmental Law, or (e) directly or indirectly transport or arrange for the
transport of any Hazardous Substances (except in compliance with all
Environmental Laws).
The Borrower shall:
(i) in the event of any change in Environmental Laws governing the
assessment, release or removal of Hazardous Substances, which change would
lead a prudent owner of real property to require additional testing to avail
itself of any statutory insurance or limited liability, take all action
(including, without limitation, the conducting of engineering tests at the
sole expense of the Borrower) to determine whether Hazardous Substances were
ever Released or disposed of on the Real Estate; and
(ii) if any Release or disposal of Hazardous Substances shall occur
or shall have occurred on the Real Estate (including without limitation any
such Release or disposal occurring prior to the acquisition of such Real
Estate by the Borrower), cause the prompt containment and removal of such
Hazardous Substances and remediation of the Real Estate in full compliance
with all applicable laws and regulations and to the satisfaction of the
Majority Banks; PROVIDED, that the Borrower shall be deemed to be in
compliance with Environmental Laws for the purpose of this clause (ii) so
long as it or a responsible third party with sufficient financial resources
is taking reasonable action to remediate or manage any event of noncompliance
to the satisfaction of the Majority Banks and no action shall have been
commenced by any enforcement agency. The Majority Banks may engage their own
environmental engineer to review the environmental assessments and the
Borrower's compliance with the covenants contained herein, the cost of which
shall be borne by the Borrower.
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At any time after an Event of Default shall have occurred hereunder, or,
whether or not an Event of Default shall have occurred, at any time that the
Agent or the Majority Banks shall have reasonable grounds to believe that a
Release or threatened Release of Hazardous Substances may have occurred,
relating to any Real Estate, or that any of the Real Estate is not in
compliance with the Environmental Laws, and, unless such Real Estate is an
Unencumbered Operating Property, that such Release, threatened Release or
noncompliance may be reasonably expected to have a material adverse effect on
the Borrower as determined by the Agent in the exercise of its sole
discretion, the Agent may at its election (and will at the request of the
Majority Banks excluding the Agent) obtain such environmental assessments of
such Real Estate prepared by an environmental engineer as may be necessary or
advisable for the purpose of evaluating or confirming (i) whether any
Hazardous Substances are present in the soil or water at or adjacent to such
Real Estate and (ii) whether the use and operation of such Real Estate comply
with all Environmental Laws. Environmental assessments may include detailed
visual inspections of such Real Estate including, without limitation, any and
all storage areas, storage tanks, drains, dry wells and leaching areas, and
the taking of soil samples, as well as such other investigations or analyses
as are necessary or appropriate for a complete determination of the
compliance of such Real Estate and the use and operation thereof with all
applicable Environmental Laws. All such environmental assessments shall be
at the sole cost and expense of the Borrower.
Section 8.7. DISTRIBUTIONS. The Borrower will not make any
Distributions which would cause it to violate any of the following covenants:
(a) Pay any Distribution to the shareholders of the Borrower if
such Distribution is in excess of the greater of (i) the minimum
Distributions required under the Code to maintain the REIT status of the
Borrower, and (ii) the amount which, when added to the amount of all other
Distributions (a) paid in the same fiscal quarter, would exceed eighty-five
percent (85%) of its Funds from Operations for such fiscal quarter (except
that, for the fiscal quarter ending December 31, 1996 only, such percentage
shall be increased to ninety percent (90%)), and (b) paid for the preceding
four fiscal quarters, would exceed one hundred ten percent (110%) of its Cash
Available for Distribution for the preceding four fiscal quarters (except
that, commencing with any fiscal quarter after December 31, 1996, such
percentage shall be decreased to one hundred percent (100%)); provided,
however, that in making the foregoing calculation, with respect to any
calendar quarter in which Borrower has made an Equity Offering, there shall
be excluded the amount of Distributions made during such calendar quarter to
Persons acquiring such Equity Offering, to the extent such Distributions
exceed the pro rata amount of Distributions that would have been payable to
such persons had Distributions been based upon the actual time that such
Person held interests in Borrower during calendar quarter in question (for
example, if an Equity Offering were successfully concluded in the third month
of any calendar quarter, the Persons acquiring interests pursuant to such new
Equity Offering would receive a full quarterly distribution as of the
relevant record date, as opposed to receiving a one-third (1/3) distribution
based on their actual period of ownership for such calendar quarter if pro
rata Distributions were permissible - in making the foregoing calculation,
then, two-thirds of the Distributions to the acquiring Persons would be
excluded);
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(b) In the event that an Event of Default shall have occurred and
be continuing, the Majority Banks may require that the Borrower make no
Distributions other than the minimum Distributions required under the Code to
maintain the REIT Status of the Borrower, as evidenced by a certification of
an Authorized Officer of the Borrower containing calculations in reasonable
detail satisfactory in form and substance to the Agent; and
(c) Notwithstanding the foregoing, at any time when an Event of
Default shall have occurred and the maturity of the Obligations has been
accelerated, the Majority Banks may prohibit Borrower from making any
Distributions whatsoever, directly or indirectly.
Section 8.8. ASSET SALES. Neither the Borrower nor any Subsidiary
shall sell, transfer or otherwise dispose of any Real Estate or other
Investment described in Section 8.3(j) or (k) or any of the Unencumbered
Operating Properties in excess of twenty percent (20%) of the value of the
Consolidated Total Assets of the Borrower, adjusted pursuant to Section 9.7
(except as the result of a condemnation or casualty and except for the
granting of Permitted Liens, as applicable) unless there shall have been
delivered to the Banks a statement that no Default or Event of Default exists
and a certification that the Borrower will be in compliance with its
covenants referred to therein after giving effect to such sale, transfer or
other disposition.
Section 8.9. DEVELOPMENT ACTIVITY. Neither the Borrower nor any
Subsidiary shall engage, directly or indirectly, in the development of
commercial real estate except for the development of warehouse distribution
facilities (including, without limitation, the speculative development of
warehouse distribution facilities, but excluding build-to-suit development of
warehouse distribution facilities which remain 100% leased during
development), the aggregate cost of which facilities (on a fully developed
basis) Under Development at any one time shall not exceed twenty percent
(20%) of the value of the Consolidated Total Assets of the Borrower, adjusted
pursuant to Section 9.7. For purposes of this Section 8.9, the term
"development" shall include new construction or the substantial renovation or
rehabilitation of improvements to real property. Without limiting the
generality of the foregoing, the Borrower acknowledges that for the purposes
of this Agreement, (i) any interest by the Borrower or any Subsidiary in a
property which is proposed to be developed, or any interest therein pursuant
to which the Borrower or any Subsidiary has the right to approve site plans
or other plans and specifications or pursuant to which such party's
obligations are conditioned upon the achievement of certain initial lease-up
levels, or (ii) any agreement by the Borrower or any Subsidiary which
obligates such party to contribute or otherwise advance funds in connection
with or upon completion of the development of a property, or (iii) any
acquisition of a property which is proposed to be developed or which is under
development and initial lease-up at the time such agreement is entered into,
shall be considered a "development" for the purposes of this Section 8.9;
provided, however, that nothing in this Section 8.9 shall prohibit the
Borrower or any Subsidiary from entering into an agreement to acquire Real
Estate at a time when such Real Estate has been developed and initially
leased by another Person.
Section 8.10. SOURCES OF CAPITAL. The Borrower shall, at all times
that the Borrower or any of its Subsidiaries is engaging in any development
as provided in Section 8.9 or has entered into any agreement to acquire
properties under purchase agreements, maintain available sources of capital
equal to the
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total cost to acquire and complete such developments and to purchase such
properties, which sources of capital shall be acceptable to the Agent in its
reasonable discretion. Amounts available to be disbursed for such purposes
pursuant to this Agreement may be considered as a source of capital for the
purposes of this Section 8.10. The Non-recourse Indebtedness described in
Section 8.1(f) shall be considered a source of such capital.
Section 8.11. RESTRICTION ON PREPAYMENT OF INDEBTEDNESS. The Borrower
shall not prepay the principal amount, in whole or in part, of any
Indebtedness other than the Obligations after the occurrence of any Event of
Default; provided, however, that this Section 8.11 shall not prohibit the
prepayment of Indebtedness which is financed solely from the proceeds of a
new loan which would otherwise be permitted by the terms of Section 8.1.
Section 9. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note or
Letter of Credit is outstanding or any of the Banks has any obligation to
make any Loans or the Agent has any obligation to issue any Letters of Credit
it will comply with the following:
Section 9.1. LIABILITIES TO TANGIBLE NET WORTH RATIO. The Borrower
will not, at the end of any fiscal quarter, permit the ratio of Consolidated
Total Liabilities to Consolidated Tangible Net Worth of the Borrower to
exceed 0.75 to 1.
Section 9.2. DEBT COVERAGE. The Borrower will not, at the end of any
fiscal quarter, permit the Funds from Operations plus expensed interest for
such fiscal quarter and the preceding three fiscal quarters (the "Test
Period") to be less than 2.5 times the Debt Service for the Test Period. For
purposes of testing compliance with this covenant only, if Debt Service
includes capitalized interest incurred as the result of Borrower or its
Subsidiary engaging in a development activity permitted by Section 8.9, Funds
from Operations for each fiscal quarter in which interest is so capitalized
as a result of such development shall include the Pro Forma Development Net
Operating Income for such development. For any fiscal quarter, the Pro Forma
Development Net Operating Income shall be the amount obtained by multiplying
(x) the quarterly Net Operating Income which the Borrower and the Agent
mutually agree will be derived immediately following the completion of such
development project and the delivery of leased premises to tenants with
signed leases on the basis of such signed leases in effect as of the date of
such calculation (any cancellation or termination options contained in such
leases must be acceptable to the Agent in the exercise of its reasonable
discretion), by (y) the quotient obtained by dividing (i) the amount of Loans
advanced under this Agreement in connection with the construction of such
development project during the fiscal quarter in question, by (ii) the total
project costs incurred for such development project as of the end of the
fiscal quarter in question. The Borrower shall provide the Agent with copies
of such leases, information regarding project costs and such other
information, data and reports as the Agent shall require in order to test
compliance with this covenant.
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Section 9.3. FIXED CHARGE COVERAGE. The Borrower will not, at the end
of any fiscal quarter, permit the Cash Available for Distribution plus
expensed interest for any Test Period to be less than 1.75 times the Debt
Service for such Test Period.
Section 9.4. BORROWING BASE. The Borrower will not, at the end of any
fiscal quarter, permit the Outstanding principal balance of the Loans and
Outstanding Letters of Credit (including Letters of Credit accepted but
unpaid) as of the date of determination to be greater than the Borrowing Base
as determined as of the same date.
Section 9.5. TANGIBLE NET WORTH. The Borrower will not, at the end of
any fiscal quarter, permit its Consolidated Tangible Net Worth to be less
than $244,646,000.00 plus the amount of any net proceeds received from any
Equity Offering subsequent to the Closing Date.
Section 9.6. REAL ESTATE ASSETS.
(a) The Borrower shall not, for any fiscal quarter, permit the
Asset Value of its direct or indirect interests in joint ventures or
partnerships (other than DownREITs) to exceed fifteen percent (15%) of the
value of the Consolidated Total Assets of the Borrower, adjusted pursuant to
Section 9.7.
(b) The Borrower shall not, for any fiscal quarter, permit its
direct or indirect interests in non-income producing land assets to exceed
eight percent (8%) of the value of the Consolidated Total Assets of the
Borrower, adjusted pursuant to Section 9.7; provided that such non-income
producing land assets shall be zoned for industrial development and all
infrastructure (including roadways and utilities to the boundaries of such
land assets) necessary for the use and enjoyment of such property when
developed shall be in place prior to purchase of such assets by the Borrower
or the Guarantor. The foregoing provision will not preclude acquisition of
land assets that may require installation of internal roads or utilities.
Section 9.7. VALUE ADJUSTMENT. The Borrower and the Banks have agreed
to a one-time market value adjustment to the Asset Value of each parcel of
Real Estate as contained in SCHEDULE 3 attached hereto and by this reference
incorporated herein, and the financial covenants set forth in Section 9.1,
Section 9.4, Section 9.5 and Section 9.6 shall for the term of this Agreement
be tested against the market value of each such parcel of Real Estate, based
on such one-time market value adjustment. As so adjusted, the Asset Value of
the Initial Unencumbered Operating Properties is $197,452,161.00 and the
Asset Value of the Real Estate is $350,780,715.00. Within thirty (30) days
of the Closing Date, the Borrower shall provide the Agent with a schedule
listing the book value of each parcel of Real Estate.
Section 9.8. ANNUALIZATION OF RESULTS. In the event that the covenants
and other provisions contained in this Agreement shall require the submission
of data for four consecutive fiscal quarters and the Borrower shall not have
such data available at the time in question, the Agent shall annualize the
available data in such manner as the Agent shall determine in its sole
discretion so as to allow calculations and other tests to be performed with
respect to four consecutive fiscal quarters.
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Section 10. CLOSING CONDITIONS.
The obligations of the Agent and the Banks to make the initial Loans
and/or the Agent to issue the initial Letters of Credit shall be subject to
the satisfaction of the following conditions precedent on or prior to April
21, 1997;
Section 10.1. LOAN DOCUMENTS. Each of the Loan Documents (including
any amendments to the Loan Documents securing the Original Credit Agreement
and First Amended Credit Agreement as required by the Agent) shall have been
duly executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory to the
Majority Banks. The Agent shall have received a fully executed copy of each
such document, except that each Bank shall have received a fully executed
counterpart of its Note. The Agent is authorized by the Banks to execute on
behalf of the Banks and the Agent, as applicable, any amendments to the Loan
Documents securing the Original Credit Agreement.
Section 10.2. CERTIFIED COPIES OF ORGANIZATIONAL DOCUMENTS. The Agent
shall have received from the Borrower and the Guarantor, a copy, certified as
of a recent date by the appropriate officer of each State in which the
Borrower and the Guarantor is organized and an Authorized Officer of the
Borrower and the Guarantor, as applicable, to be true and complete, of the
articles or certificate of incorporation of the Borrower and the agreement
and certificate of limited partnership of the Guarantor or its qualification
to do business, as applicable, as in effect on such date of certification (or
a certification satisfactory to the Agent that there have been no changes to
the foregoing since the date they were provided to the Agent in connection
with the execution of the First Amended Credit Agreement).
Section 10.3. BYLAWS; RESOLUTIONS AND CONSENTS. All action on the part
of the Borrower and the Guarantor necessary for the valid execution, delivery
and performance by the Borrower and the Guarantor of this Agreement and the
other Loan Documents to which it is or is to become a party shall have been
duly and effectively taken, and evidence thereof satisfactory to the Agent
shall have been provided to the Agent. The Agent shall have received from
the Borrower true copies of its bylaws and the resolutions adopted by its
board of directors authorizing the transactions described herein, and from
the Guarantor all necessary partner consents authorizing the transactions
described herein, each certified by an Authorized Officer of the Borrower and
the Guarantor, as applicable, as of a recent date to be true and complete
(or a certification satisfactory to the Agent that there have been no changes
to the foregoing since the date they were provided to the Agent in connection
with the execution of the First Amended Credit Agreement).
Section 10.4. INCUMBENCY CERTIFICATE; AUTHORIZED SIGNERS. The Agent
shall have received from the Borrower and the Guarantor an incumbency
certificate, dated as of the Closing Date, signed by an Authorized Officer of
the Borrower and the Guarantor, as applicable, and giving the name and
bearing a specimen signature of each individual who shall be authorized: (a)
to sign, in the name and on behalf of the Borrower and the Guarantor, each of
the Loan Documents to which the Borrower
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and the Guarantor is or is to become a party; (b) to make Loan and Conversion
Requests; and (c) to give notices and to take other action on behalf of the
Borrower and the Guarantor under the Loan Documents.
Section 10.5. OPINION OF COUNSEL. The Agent shall have received a
favorable opinion addressed to the Banks and the Agent and dated as of the
Closing Date, in form and substance satisfactory to the Agent, from each of
Goodwin, Procter & Hoar, Landels Ripley & Diamond and Ballard, Spahr Andrews
& Ingersoll, counsel of the Borrower and the Guarantor, as to such matters as
the Agent shall reasonably request.
Section 10.6. PAYMENT OF FEES. The Borrower shall have paid to the
Agent the fees required to be paid as of the Closing Date pursuant to Section
4.2.
Section 10.7. PERFORMANCE; NO DEFAULT. The Borrower shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by it on or prior to the Closing Date, and on the
Closing Date there shall exist no Default or Event of Default.
Section 10.8. REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Borrower and the Guarantor in the Loan Documents or
otherwise made by or on behalf of the Borrower, the Guarantor or any
Subsidiaries of the Borrower in connection therewith or after the date
thereof shall have been true and correct in all material respects when made
and shall also be true and correct in all material respects on the Closing
Date.
Section 10.9. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall be reasonably satisfactory to the Agent and the Agent's
Special Counsel in form and substance, and the Agent shall have received all
information and such counterpart originals or certified copies of such
documents and such other certificates, opinions or documents as the Agent and
the Agent's Special Counsel may reasonably require.
Section 10.10. COMPLIANCE CERTIFICATE. A Compliance Certificate dated
as of the date of the Closing Date demonstrating compliance with each of the
covenants calculated therein as of the most recent fiscal quarter end for
which the Borrower and the Guarantor have provided financial statements under
Section 6.4, adjusted in the best good faith estimate of the Borrower and the
Guarantor and dated as of the date of the Closing Date shall have been
delivered to the Agent.
Section 10.11. OTHER. The Agent shall have reviewed such other
documents, instruments, certificates, opinions, assurances, consents and
approvals as the Agent or the Agent's Special Counsel may reasonably have
requested.
Section 10.12. INTENTIONALLY OMITTED.
Section 10.13. INTENTIONALLY OMITTED.
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Section 10.14. INTENTIONALLY OMITTED.
Section 10.15. TANGIBLE NET WORTH. The Borrower shall have a Consolidated
Tangible Net Worth, adjusted for market values pursuant to Section 9.7, of not
less than $244,646,000.00.
Section 10.16. DUE DILIGENCE. The Banks shall have completed and found
satisfactory their due diligence regarding the Unencumbered Operating
Properties.
Section 10.17. MANAGEMENT OF THE BORROWER. There shall be no material
change in the management of the Borrower.
Section 11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan or of the Agent to issue any
Letter of Credit, whether on or after the Closing Date, shall also be subject to
the satisfaction of the following conditions precedent:
Section 11.1. PRIOR CONDITIONS SATISFIED. All conditions set forth in
Section 10 shall continue to be satisfied as of the date upon which any Loan is
to be made.
Section 11.2. REPRESENTATIONS TRUE; NO DEFAULT. Each of the
representations and warranties of the Borrower and the Guarantor contained in
this Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Agreement shall be true in all
material respects as of the date as of which they were made and shall also be
true in all material respects at and as of the time of the making of such Loan,
with the same effect as if made at and as of that time (except to the extent of
changes resulting from transactions contemplated or permitted by this Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and except
to the extent that such representations and warranties relate expressly to an
earlier date) and no Default or Event of Default shall have occurred and be
continuing. Each of the Banks shall have received a certificate of the Borrower
signed by an Authorized Officer of the Borrower to such effect.
Section 11.3. NO LEGAL IMPEDIMENT. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Loan.
Section 11.4. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
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Section 11.5. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the Loan shall be satisfactory in substance and in form to the Majority
Banks, and the Majority Banks shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Majority Banks may reasonably request.
Section 11.6. BORROWING DOCUMENTS. In the case of any request for a Loan,
the Agent shall have received a copy of the request for a Loan required by
Section 2.6 in the form of EXHIBIT B hereto, fully completed.
Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loans or any
other sums due hereunder or under any of the other Loan Documents, when the same
shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(c) the Borrower shall fail to comply with any covenant contained in
Section 7.15 or Section 7.16;
(d) the Borrower shall fail to comply with any covenant contained in
Article 9, and such failure shall continue for 45 days after written notice
thereof shall have been given to the Borrower by the Agent;
(e) the Borrower or any of its Subsidiaries or the Guarantor shall
fail to perform any other term, covenant or agreement contained herein or in any
of the other Loan Documents (other than those specified above in this Section
12);
(f) any representation or warranty of the Borrower or any of its
Subsidiaries or the Guarantor in this Agreement or any other Loan Document, or
in any report, certificate, financial statement, request for a Loan, or in any
other document or instrument delivered pursuant to or in connection with this
Agreement, any advance of a Loan or any of the other Loan Documents shall prove
to have been false in any material respect upon the date when made or deemed to
have been made or repeated;
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(g) the Borrower or any of its Subsidiaries or the Guarantor shall
fail to pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or other Indebtedness,
including, without limitation, the Prudential Loan, or fail to observe or
perform any material term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing any such borrowed money or credit
received or other Indebtedness for such period of time as would permit (assuming
the giving of appropriate notice if required) the holder or holders thereof or
of any obligations issued thereunder to accelerate the maturity thereof;
(h) the Borrower or any of its Subsidiaries or the Guarantor, (A)
shall make an assignment for the benefit of creditors, or admit in writing
its general inability to pay or generally fail to pay its debts as they
mature or become due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver of the Borrower or any of
its Subsidiaries or the Guarantor or of any substantial part of the assets of
any thereof, (B) shall commence any case or other proceeding relating to the
Borrower or any of its Subsidiaries or the Guarantor under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect,
or (C) shall take any action to authorize or in furtherance of any of the
foregoing;
(i) a petition or application shall be filed for the appointment
of a trustee or other custodian, liquidator or receiver of the Borrower or
any of its Subsidiaries or the Guarantor or any substantial part of the
assets of any thereof, or a case or other proceeding shall be commenced
against the Borrower or any of its Subsidiaries or the Guarantor under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, and the Borrower or any of its Subsidiaries or the
Guarantor shall indicate its approval thereof, consent thereto or
acquiescence therein or such petition, application, case or proceeding shall
not have been dismissed within 60 days following the filing or commencement
thereof;
(j) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of its
Subsidiaries or the Guarantor bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is entered in
respect of the Borrower or any of its Subsidiaries or the Guarantor, in each
case of the foregoing in an involuntary case under federal bankruptcy laws as
now or hereafter constituted;
(k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than 60 days, whether or not consecutive, any uninsured final
judgment against the Borrower or any of its Subsidiaries or the Guarantor that,
with other outstanding uninsured final judgments, undischarged, against the
Borrower or any of its Subsidiaries or the Guarantor exceeds in the aggregate
$5,000,000.00;
(l) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Banks, or any
action at law, suit in equity or other legal
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proceeding to cancel, revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of the Borrower or the Guarantor or any of its
holders of Voting Interests, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof in any material respect as
determined by the Majority Banks;
(m) any dissolution, termination, partial or complete liquidation,
merger or consolidation of the Borrower or the Guarantor, or any sale, transfer
or other disposition of the assets of the Borrower or the Guarantor, other than
as permitted under the terms of this Agreement or the other Loan Documents;
(n) any suit or proceeding shall be filed against the Borrower or the
Guarantor or any of their respective assets which in the good faith business
judgment of the Majority Banks after giving consideration to the likelihood of
success of such suit or proceeding and the availability of insurance to cover
any judgment with respect thereto and based on the information available to
them, if adversely determined, would have a materially adverse affect on the
ability of the Borrower or the Guarantor to perform each and every one of its
obligations under and by virtue of the Loan Documents;
(o) the Borrower or the Guarantor, shall be indicted for a federal
crime, a punishment for which could include the forfeiture of any assets of the
Borrower or the Guarantor;
(p) Allen J. Anderson shall cease to be the Chairman of the Board and
Milton Reeder shall cease to be the President of the Borrower, and a competent
and experienced successor for such Person shall not be approved by the Majority
Banks within three (3) months of such event;
(q) the Borrower shall no longer own directly or indirectly one
hundred percent (100%) of the Voting Interests of the Guarantor;
(r) the Guarantor denies that the Guarantor has any liability or
obligation under the Guaranty, or shall notify the Agent or any of the Banks of
the Guarantor's intention to attempt to cancel or terminate the Guaranty, or
shall fail to observe or comply with any term, covenant, condition or agreement
under the Guaranty; or
(s) the Borrower shall make any payment with respect to the
Debentures, including principal thereto or interest or premium thereon, except
as specifically approved by the Banks as provided herein or any subordination
and standstill agreement executed pursuant hereto or there shall be a default by
Ameritech pursuant to any subordination and standstill agreement executed
pursuant hereto;
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then, and in any such event, the Agent may, and upon the request of the Majority
Banks shall, by notice in writing to the Borrower declare all amounts owing with
respect to this Agreement, the Notes and the other Loan Documents to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; PROVIDED that in the event of any Event
of Default specified in Section 12.1(h), Section 12.1(i) or Section 12.1(j), all
such amounts shall become immediately due and payable automatically and without
any requirement of notice from any of the Banks or the Agent. The Borrower and
any other Person shall be entitled to conclusively rely on a statement from the
Agent that it has the authority to act for and bind the Banks pursuant to this
Agreement and the other Loan Documents.
Section 12.2. LIMITATION OF CURE PERIODS. Notwithstanding anything
contained in Section 12.1 to the contrary, (i) no Event of Default shall exist
hereunder upon the occurrence of any failure described in Section 12.1(a) or
Section 12.1(b) in the event that the Borrower cures such default within five
(5) days following receipt of written notice of such default, provided that no
such cure period shall apply to any payments due upon the maturity of the Notes;
(ii) no Event of Default shall exist hereunder upon the occurrence of any
failure described in Section 12.1(c) as it pertains to Section 7.15 only in the
event that the Borrower cures such default within sixty (60) days following
receipt of written notice of such default; and (iii) no Event of Default shall
exist hereunder upon the occurrence of any failure described in Section 12.1(e)
in the event that the Borrower cures such default within forty-five (45) days
following receipt of written notice of such default, provided that the
provisions of this clause (iii) shall not pertain to any default consisting of a
failure to comply with Section 7.4(e), or to any default excluded from any
provision of cure of defaults contained in any other of the Loan Documents.
Section 12.3. TERMINATION OF COMMITMENTS. If any one or more Events of
Default specified in Section 12.1(h), Section 12.1(i), Section 12.1(j), Section
12.1(l) or Section 12.1(r) shall occur, then immediately and without any action
on the part of the Agent or any Bank any unused portion of the credit hereunder
shall terminate and the Banks shall be relieved of all obligations to make Loans
or provide Letters of Credit to the Borrower. If any other Event of Default
shall have occurred and be continuing, the Agent, upon the election of the
Majority Banks, may by notice to the Borrower terminate the obligation to make
Loans or provide Letters of Credit to the Borrower. No termination under this
Section 12.2 shall relieve the Borrower of its obligations to the Banks arising
under this Agreement or the other Loan Documents.
Section 12.4. REMEDIES. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Section 12.1, the Agent on
behalf of the Banks, may, with the consent of the Majority Banks but not
otherwise, proceed to protect and enforce their rights and remedies under this
Agreement, the Notes or any of the other Loan Documents by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations are
evidenced, including to the full extent permitted by applicable law the
obtaining of the EX PARTE appointment of a receiver, and, if such amount shall
have become due, by declaration or otherwise, proceed to
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enforce the payment thereof or any other legal or equitable right. No remedy
herein conferred upon the Agent or the holder of any Note is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision
of law. In the event that all or any portion of the Obligations is collected
by or through an attorney-at-law, the Borrower shall pay all costs of
collection including, but not limited to, reasonable attorney's fees not to
exceed fifteen percent (15%) of such portion of the Obligations.
Notwithstanding anything herein to the contrary, upon the occurrence of any
Event of Default, an amount equal to the aggregate amount of the Outstanding
Letters of Credit (including Letters of Credit accepted but unpaid) shall, at
the Majority Banks' option, without demand upon or further notice to the
Borrower, be deemed to have been paid or disbursed by the Agent under the
Letter of Credit and a Loan to the Borrower from the Banks in such amount to
have been made and accepted, which Loan shall be immediately due and payable.
Section 12.5. DISTRIBUTION OF PROCEEDS. In the event that, following the
occurrence or during the continuance of any Event of Default, any monies are
received in connection with the enforcement of any of the Loan Documents, or
otherwise with respect to the realization upon any of the assets of the
Borrower, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of, the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agent in connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the rights,
remedies, powers and privileges of the Agent under this Agreement or any of the
other Loan Documents or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have, priority
over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks shall determine; PROVIDED, HOWEVER, that (i) distributions in
respect of such other Obligations shall be made PARI PASSU among Obligations
with respect to the Agent's fee payable pursuant to Section 4.3 and all other
Obligations; (ii) in the event that any Bank shall have wrongfully failed or
refused to make an advance under Section 2.7 and such failure or refusal shall
be continuing, advances made by other Banks during the pendency of such failure
or refusal shall be entitled to be repaid as to principal and accrued interest
in priority to the other Obligations described in this subsection (b), and
(iii) Obligations owing to the Banks with respect to each type of Obligation
such as interest, principal, fees and expenses, shall be made among the Banks
PRO RATA; and PROVIDED, further that the Majority Banks may in their discretion
make proper allowance to take into account any Obligations not then due and
payable; and
(c) Third, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
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Section 13. INTENTIONALLY OMITTED.
Section 14. THE AGENT.
Section 14.1. AUTHORIZATION. The Agent is authorized to take such action
on behalf of each of the Banks and to exercise all such powers as are hereunder
and under any of the other Loan Documents and any related documents delegated to
the Agent, together with such powers as are reasonably incident thereto,
PROVIDED that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent. The obligations of
the Agent hereunder are primarily administrative in nature, and nothing
contained in this Agreement or any of the other Loan Documents shall be
construed to constitute the Agent as a trustee for any Bank or to create a
fiduciary relationship. Unless they have been expressly notified in writing by
all of the Banks to the contrary, the Borrower and any other Person shall be
entitled to conclusively rely on a statement from the Agent that it has the
authority to act for and bind the Banks pursuant to this Agreement and the other
Loan Documents.
Section 14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent may reasonably determine,
and all reasonable fees and expenses of any such Persons shall be paid by the
Borrower.
Section 14.3. NO LIABILITY. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent, or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
Section 14.4. NO REPRESENTATIONS. The Agent shall not be responsible for
the execution or validity or enforceability of this Agreement, the Notes, any of
the other Loan Documents or any instrument at any time constituting, or intended
to constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
the Borrower or any of its Subsidiaries or the Guarantor, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any other of the Loan
Documents. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or the Guaranty or
any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the creditworthiness or
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financial condition of the Borrower or any of its Subsidiaries or the
Guarantor. Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based upon such information
and documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Bank also acknowledges that it
will, independently and without reliance upon the Agent or any other Bank,
based upon such information and documents as it deems appropriate at the
time, continue to make its own credit analysis and decisions in taking or not
taking action under this Agreement and the other Loan Documents.
Section 14.5. PAYMENTS.
(a) A payment by the Borrower or the Guarantor to the Agent hereunder
or under any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Agent agrees to exercise reasonable
efforts to distribute to each Bank on the same day as (but in no event later
than one Business Day after) the Agent's receipt of good funds, determined in
accordance with the Agent's customary practices, such Bank's PRO RATA share of
payments received by the Agent for the account of the Banks except as otherwise
expressly provided herein or in any of the other Loan Documents. In the event
that the Agent fails to distribute such amounts within one Business Day as
provided above, the Agent shall pay interest on such amount at a rate per annum
equal to the Federal Funds Effective Rate from time to time in effect.
(b) If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder, under the Notes or under any of the
other Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
(c) Notwithstanding anything to the contrary contained in this
Agreement or any of the other Loan Documents, any Bank that fails (i) to make
available to the Agent its PRO RATA share of any Loan or (ii) to comply with the
provisions of Section 13 with respect to making dispositions and arrangements
with the other Banks, where such Bank's share of any payment received, whether
by setoff or otherwise, is in excess of its PRO RATA share of such payments due
and payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time as such
delinquency is satisfied. A Delinquent Bank shall be deemed to have assigned
any and all payments due to it from the Borrower and the Guarantor, whether on
account of outstanding Loans, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective PRO
RATA shares of all Outstanding Loans. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in proportion to
their respective PRO RATA shares of all Outstanding Loans. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all Outstanding
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Loans of the nondelinquent Banks or as a result of other payments by the
Delinquent Banks to the nondelinquent Banks, the Banks' respective PRO RATA
shares of all Outstanding Loans have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment causing
such delinquency.
Section 14.6. HOLDERS OF NOTES. Subject to the terms of Article 18, the
Agent may deem and treat the payee of any Note as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.
Section 14.7. INDEMNITY. The Banks ratably agree hereby to indemnify and
hold harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any reasonable expenses for which the Agent has not been reimbursed by the
Borrower as required by Section 15), and liabilities of every nature and
character arising out of or related to this Agreement, the Notes, or any of the
other Loan Documents or the transactions contemplated or evidenced hereby or
thereby, or the Agent's actions taken hereunder or thereunder, except to the
extent that any of the same shall be directly caused by the Agent's willful
misconduct or gross negligence.
Section 14.8. AGENT AS BANK. In its individual capacity, FNBB shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Loans made by it, and as the holder of any of the Notes
as it would have were it not also the Agent.
Section 14.9. RESIGNATION. Subject to the terms of Section 18.1, the
Agent may resign at any time by giving 60 days' prior written notice thereof to
the Banks and the Borrower. Upon any such resignation, the Co-Agent (if two Co-
Agents, the Co-Agent selected by vote of the Majority Banks) shall be appointed
as a successor Agent provided that the Co-Agent is still a Bank, the Co-Agent's
senior debt obligations are rated not less than "A" or its equivalent by Moody's
Investors Service, Inc. or not less than "A" or its equivalent by Standard &
Poor's Corporation and the Co-Agent has total assets in excess of
$10,000,000,000.00. If the Co-Agent fails to satisfy such conditions or
declines to serve as Agent, the Majority Banks shall have the right to appoint
as a successor Agent the other Co-Agent (if there are two Co-Agents) or any Bank
or any other banks satisfying the conditions contained in the immediately
preceding sentence if there is no other Co-Agent. Unless a Default or Event of
Default shall have occurred and be continuing, such successor Agent (including
the Co-Agent) shall be reasonably acceptable to the Borrower. If no successor
Agent shall have been so appointed by the Majority Banks and shall have accepted
such appointment within 30 days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a bank whose debt obligations are rated not less
than "A" or its equivalent by Moody's Investors Service, Inc. or not less than
"A" or its equivalent by Standard & Poor's Corporation and which has total
assets in excess of $10,000,000,000.00. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder
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as Agent. After any retiring Agent's resignation, the provisions of this
Agreement and the other Loan Documents shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
Section 14.10. DUTIES IN THE CASE OF ENFORCEMENT. In case one or more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority Banks and (b) the Banks have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to exercise all or any legal and
equitable and other rights or remedies as it may have. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such
exercise, the Banks hereby agreeing to indemnify and hold the Agent harmless
from all liabilities incurred in respect of all actions taken or omitted in
accordance with such directions, PROVIDED that the Agent need not comply with
any such direction to the extent that the Agent reasonably believes the Agent's
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction.
Section 14.11. DETERMINATIONS BY AGENT. Any and all determinations to be
made by the Agent pursuant to the provisions of this Agreement shall be
conclusive and binding absent manifest error and so long as the same shall be
determined in good faith by the Agent. Where no procedures for such
determinations are specified, such determinations shall be made in such manner
as Agent shall determine in its sole discretion, subject to the provisions of
this Section 14.11.
Section 15. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's gross or net income), including
any recording, mortgage, documentary or intangibles taxes in connection with the
Loan Documents, or other taxes payable on or with respect to the transactions
contemplated by this Agreement, including any such taxes payable by the Agent or
any of the Banks after the Closing Date under the Original Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) all reasonable internal charges of the Agent (determined in good
faith and in accordance with the Agent's internal policies applicable generally
to its customers) for commercial finance exams and engineering and environmental
reviews and the reasonable fees, expenses and disbursements of the counsel to
the Agent, counsel for the Banks and any local counsel to the Agent incurred in
connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein (excluding, however, the
preparation of agreements evidencing participations granted under Section 18.4),
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (d) the reasonable fees, expenses and disbursements
of the Agent incurred by the Agent in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, and the making of each advance hereunder, (e) all reasonable
out-of-pocket expenses (including reasonable attorneys'
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fees and costs, which attorneys may be employees of any Bank or the Agent and
the fees and costs of appraisers, engineers, investment bankers or other
experts retained by any Bank or the Agent) incurred by any Bank or the Agent
in connection with (i) the enforcement of or preservation of rights under any
of the Loan Documents against the Borrower or the Guarantor or the
administration thereof after the occurrence of a Default or Event of Default
and (ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to the Agent's or any of the Bank's
relationship with the Borrower or the Guarantor, and (f) all reasonable fees,
expenses and disbursements of any Bank or the Agent incurred in connection
with UCC searches, UCC filings, title rundowns or title searches. The
covenants of this Section 15 shall survive payment or satisfaction of payment
of amounts owing with respect to the Notes. Notwithstanding the foregoing,
each of the Banks (excluding the Agent) shall only be entitled to recover up
to $5,000.00 each for the fees, expenses and disbursements of their counsel
incurred on or before the Closing Date.
Section 16. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and the Banks
and each director, officer, employee, agent, attorney and any Person who
controls the Agent or any Bank from and against any and all claims, actions and
suits, whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character arising
out of or relating to this Agreement or any of the other Loan Documents or the
transactions contemplated hereby and thereby including, without limitation, (a)
any leasing fees and any brokerage, finders or similar fees asserted against any
Person indemnified under this Section 16 based upon any agreement, arrangement
or action made or taken, or alleged to have been made or taken, by the Borrower
or any of its Subsidiaries or the Guarantor, (b) any condition of the Real
Estate, (c) any actual or proposed use by the Borrower of the proceeds of any of
the Loans or any actual or proposed use of a Letter of Credit by any beneficiary
of a Letter of Credit, (d) any actual or alleged infringement of any patent,
copyright, trademark, service mark or similar right of the Borrower or any of
its Subsidiaries or the Guarantor, (e) the Borrower and the Guarantor entering
into or performing this Agreement or any of the other Loan Documents, (f) any
actual or alleged violation of any law, ordinance, code, order, rule,
regulation, approval, consent, permit or license relating to the Real Estate, or
(g) with respect to the Borrower and its Subsidiaries and the Guarantor and
their respective properties and assets, the violation of any Environmental Law,
the Release or threatened Release of any Hazardous Substances or any action,
suit, proceeding or investigation brought or threatened with respect to any
Hazardous Substances (including, but not limited to claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; PROVIDED, HOWEVER, that the
Borrower shall not be obligated under this Section 16 to indemnify any Person
for liabilities arising from such Person's own gross negligence or willful
misconduct. In litigation, or the preparation therefor, the Banks and the Agent
shall be entitled to select a single law firm as their own counsel and, in
addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this Section 16 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which
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is permissible under applicable law. The provisions of this Section 16 shall
survive the repayment of the Loans and the termination of the obligations of
the Banks hereunder.
Section 17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries or
the Guarantor pursuant hereto or thereto shall be deemed to have been relied
upon by the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of any
of the Loans, as herein contemplated, and shall continue in full force and
effect so long as any amount due under this Agreement, the Notes, the Letters of
Credit or any of the other Loan Documents remains outstanding or any Bank has
any obligation to make any Loans or the Agent has any obligation to issue any
Letters of Credit. The indemnification obligations of the Borrower provided
herein and the other Loan Documents shall survive the full repayment of amounts
due and the termination of the obligations of the Banks hereunder and thereunder
to the extent provided herein and therein. All statements contained in any
certificate or other paper delivered to any Bank or the Agent at any time by or
on behalf of the Borrower or any of its Subsidiaries or the Guarantor pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower or such Subsidiary or
the Guarantor hereunder.
Section 18. ASSIGNMENT AND PARTICIPATION.
Section 18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided
herein, each Bank may assign to another bank or other entity all (but not less
than all) of its interests, rights and obligations under this Agreement
(including all of its Commitment Percentage and Commitment and the same portion
of the Loans at the time owing to it, and the Notes held by it); provided that
(a) the Agent shall have given its prior written consent to such assignment,
which consent shall not be unreasonably withheld (provided that such consent
shall not be required for any assignment to another Bank, to a bank which is
under common control with the assigning Bank or to a wholly-owned Subsidiary of
such Bank provided that such assignee shall remain a wholly-owned Subsidiary of
such Bank), (b) the Borrower shall have given its prior written consent to such
assignment, which consent shall not be unreasonably withheld or delayed
(provided that such consent shall not be required if a Default or Event of
Default shall have occurred and be continuing or for any assignment to another
Bank, to a bank which is under common control with the assigning Bank or to a
wholly-owned Subsidiary of such Bank provided that such assignee shall remain a
wholly-owned Subsidiary of such Bank), (c) each such assignment shall be of all
the assigning Bank's rights and obligations under this Agreement, (d) the
parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), a notice of such assignment, together
with any Notes subject to such assignment, (e) in no event shall any voting,
consent or approval rights of a Bank be assigned to any Person controlling,
controlled by or under common control with, or which is not otherwise free from
influence or control by, the Borrower or the Guarantor, which rights shall
instead be allocated PRO RATA among the other remaining Banks, (f) such assignee
shall have total assets as of the date of such
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<PAGE>
assignment of not less than $500,000,000, and (g) such assignment is subject
to the terms of any intercreditor agreement among the Banks and the Agent.
Upon such execution, delivery, acceptance and recording, of such notice of
assignment, (i) the assignee thereunder shall be a party hereto and all other
Loan Documents executed by the Banks and, to the extent provided in such
assignment, have the rights and obligations of a Bank hereunder, (ii) the
assigning Bank shall, to the extent provided in such assignment and upon
payment to the Agent of the registration fee referred to in Section 18.2, be
released from its obligations under this Agreement, and (iii) the Agent may
unilaterally amend SCHEDULE 1 to reflect such assignment. In connection with
each assignment, the assignee shall represent and warrant to the Agent, the
assignor and each other Bank as to whether such assignee is controlling,
controlled by, under common control with or is not otherwise free from
influence or control by, the Borrower and the Guarantor.
Section 18.2. REGISTER. The Agent shall maintain a copy of each
assignment delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentages of, and principal amount of the Loans owing to the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $2,000.
Section 18.3. NEW NOTES. Upon its receipt of an assignment executed by
the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein in the
Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
assignee in an amount equal to the amount assumed by such assignee pursuant to
such assignment, and shall cause the Guarantor to deliver to the Agent an
acknowledgment in form and substance satisfactory to the Agent to the effect
that the Guaranty extends to and is applicable to each new Note. Such new Note
shall provide that it is a replacement for the surrendered Note, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Note, shall be dated the effective date of such assignment and shall
otherwise be in substantially the form of the assigned Note. The surrendered
Note shall be canceled and returned to the Borrower.
Section 18.4. PARTICIPATIONS. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; PROVIDED that (a)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower, (b) such sale and participation shall
not entitle such participant to any rights or privileges under this Agreement or
the Loan Documents (including, without limitation, the right to approve waivers,
amendments or modifications), (c) such participant shall have no direct rights
against the Borrower or the Guarantor except the rights granted to the
74
<PAGE>
Banks pursuant to Section 13, and (d) such participant shall not be a Person
controlling, controlled by or under common control with, or which is not
otherwise free from influence or control by, the Borrower or the Guaranty.
Section 18.5. PLEDGE BY BANK. Any Bank may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of its Note) to any of the twelve Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
the enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
Section 18.6. NO ASSIGNMENT BY BORROWER. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
Section 18.7. DISCLOSURE. The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices any Bank may
disclose information obtained by such Bank pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder
provided the Borrower receives prior notice of such disclosures unless such
participant or assignee is one of the Banks.
Section 19. NOTICES.
Each notice, demand, election or request provided for or permitted to be
given pursuant to this Agreement (hereinafter in this Section 19 referred to as
"Notice"), but specifically excluding to the maximum extent permitted by law any
notices of the institution or commencement of foreclosure proceedings, must be
in writing and shall be deemed to have been properly given or served by personal
delivery or by sending same by overnight courier or by depositing same in the
United States Mail, postpaid and registered or certified, return receipt
requested, or as expressly permitted herein, by telegraph, telecopy, telefax or
telex, and addressed as follows:
If to the Agent or FNBB:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
(617) 434-2200
(617) 434-7108 (FAX)
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With a copy to:
The First National Bank of Boston
115 Perimeter Center Place, N.E., Suite 500
Atlanta, Georgia 30346
Attn: Dan Silbert, Assistant Vice President
(770) 390-6552
(770) 390-8434 (FAX)
If to the Borrower:
Meridian Industrial Trust, Inc.
455 Market Street, 17th Floor
San Francisco, California 94105
Attn: Milton K. Reeder, President and Chief Financial Officer
(415) 281-3900
(415) 284-2840 (FAX)
if to a Bank now a party to this Agreement, at the address set forth below the
signature of such Bank attached to this Agreement, and to each other Bank which
may hereafter become a party to this Agreement at such address as may be
designated by such Bank. Each Notice shall be effective upon being personally
delivered or upon being sent by overnight courier or upon being deposited in the
United States Mail as aforesaid or, if sent by facsimile transmission, upon
receipt of such transmission as evidenced by the confirmation notice. The time
period in which a response to such Notice must be given or any action taken with
respect thereto (if any), however, shall commence to run from the date of
receipt if personally delivered, sent by overnight courier or sent by facsimile
transmission, or if so deposited in the United States Mail, the earlier of three
(3) Business Days following such deposit or the date of receipt as disclosed on
the return receipt. Rejection or other refusal to accept or the inability to
deliver because of changed address for which no notice was given shall be deemed
to be receipt of the Notice sent. By giving at least fifteen (15) days prior
Notice thereof, the Borrower, a Bank or Agent shall have the right from time to
time and at any time during the term of this Agreement to change their
respective addresses and each shall have the right to specify as its address any
other address within the United States of America.
Section 20. RELATIONSHIP.
The relationship between each Bank and the Borrower is solely that of a
lender and borrower, and nothing contained herein or in any of the other Loan
Documents shall in any manner be construed as making the parties hereto
partners, joint venturers or any other relationship other than lender and
borrower.
76
<PAGE>
Section 21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SUCH COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN SECTION 19. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
Section 22. HEADINGS.
The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.
Section 23. COUNTERPARTS.
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.
Section 24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated, except as provided in Section
27.
Section 25. WAIVER OF JURY TRIAL.
EACH OF THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY NOTE OR
77
<PAGE>
ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE BORROWER
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE
AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES
BY, AMONG OTHER THINGS, THE WAIVER AND CERTIFICATIONS CONTAINED IN THIS
SECTION 25.
Section 26. DEALINGS WITH THE BORROWER.
The Banks and their affiliates may accept deposits from, extend credit to
and generally engage in any kind of banking, trust or other business with the
Borrower, its Subsidiaries, the Guarantor or any of their affiliates regardless
of the capacity of the Bank hereunder.
Section 27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower of any terms of
this Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Majority Banks. Notwithstanding the foregoing, none of the following may
occur without the written consent of each Bank: (a) any change in the rate of
interest on and the term of the Notes; (b) any change in the amount of the
Commitments of the Banks; (c) any forgiveness, reduction or waiver of the
principal of any unpaid Loan or any interest thereon or fee payable under the
Loan Documents; (d) any change in the amount of any fee payable to a Bank or the
Agent hereunder; (e) any postponement of any date fixed for any payment of
principal of or interest on the Loan; (f) any extension of the Maturity Date;
(g) any change in the manner of distribution of any payments to the Banks;
(h) any release of the Borrower or the Guarantor; (i) except as permitted herein
or in that certain Intercreditor Agreement, the sale, transfer or assignment of
the Loan Documents or any interest therein; (j) any written modification to or
waiver of the definition of the term "Borrowing Base" or any defined term used
within such definition; (k) any amendment of the (i) definition of Majority
Banks, (ii) any requirement for consent by all of the Banks, (iii) the
provisions of Section 14.9 regarding the appointment of the Co-Agent as
successor Agent, (iv) Section 27, or (v) any provision of this Agreement or the
Loan Documents which requires the approval of the Majority Banks to require a
lesser number of Banks to approve such action; and (l) approval of the terms
relating to the Debentures. The amount of the Agent's fee payable for the
Agent's account and the provisions of Section 14 may not be amended without the
written consent of the Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part
78
<PAGE>
of the Agent or any Bank in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon the
Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
Section 28. SEVERABILITY.
The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
Section 29. NO UNWRITTEN AGREEMENTS.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
Section 30. TIME OF THE ESSENCE.
Time is of the essence with respect to each and every covenant,
agreement and obligation of the Borrower under this Agreement and the other
Loan Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
79
<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
MERIDIAN INDUSTRIAL TRUST, INC., a Maryland
corporation
By: /s/ MILTON K. REEDER [SEAL]
----------------------
Milton K. Reeder,
President and Chief Financial Officer
[SIGNATURES CONTINUED ON NEXT PAGE]
80
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By: [Illegible]
--------------------------------
Its: Vice President
--------------------------
[SIGNATURES CONTINUED ON NEXT PAGE]
81
<PAGE>
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, individually and as Co-Agent
By: /s/ Catherine A. Arnold
-----------------------------------
Its: Managing Director
----------------------------------
Texas Commerce Bank National
Association
717 Travis Street, 6th Floor- North
Real Estate Department
Houston, Texas 77002
Attn: Catherine A. Arnold,
Senior Vice President
(713) 216-5391
(713) 216-6190 (FAX)
[SIGNATURES CONTINUED ON NEXT PAGE]
82
<PAGE>
NATIONSBANK OF TEXAS, N.A.,
individually and as Co-Agent
By: [Illegible]
-------------------------------
Its: Vice President
--------------------------
NationsBank of Texas, N.A.
Real Estate Banking Group
901 Main Street, 51st Floor
NationsBank Plaza
Dallas, Texas 75202-3714
Attn: Real Estate Administration
(214) 508-3712
(214) 508-1571 (FAX)
83
<PAGE>
WELLS FARGO BANK, N.A.
By: /s/ LARRY T. ANDOW
-------------------------------
Its: Vice President
--------------------------
Wells Fargo Bank, N.A.
420 Montgomery Street
6th Floor
San Francisco, CA 94163
Attn: Lawrence T. Andow
(415) 394-4056
(415) 956-7238 (FAX)
84
<PAGE>
DRESDNER BANK AG
By: /s/ JOHN W. SWEENEY
----------------------------
John W. Sweeney
Assistant Vice President
By: /s/ THOMAS J. NADRAMIA
----------------------------
Thomas J. Nadramia
Vice President
Dresdner Bank AG
75 Wall Street
New York, New York 10005
Attn: John Sweeney, Credit Department
(212) 429-2955
(212) 429-2130 (FAX)
85
<PAGE>
FIRST AMERICAN BANK TEXAS, S.S.B.
By: Jeffrey C. Schultz
----------------------------
Jeffrey C. Schultz,
Assistant Vice President
First American Bank Texas, S.S.B.
14651 Dallas Parkway, Suite 400
Dallas, Texas 75240-7479
Attn: Jeffrey C. Schultz
(972) 419-3414
(972) 419-3308 (FAX)
86
<PAGE>
EXHIBIT A
FORM OF AMENDED AND RESTATED NOTE
$_____________ April 21, 1997
FOR VALUE RECEIVED, the undersigned MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation, hereby promises to pay to ______________________ or
order, in accordance with the terms of that certain Second Amended and
Restated Revolving Credit Agreement dated April 21, 1997 (the "Credit
Agreement"), as from time to time in effect, among the undersigned, The First
National Bank of Boston, for itself and as Agent, and such other Banks as may
be from time to time named therein, to the extent not sooner paid, on or
before the Maturity Date the principal sum of ___________________________ and
No/100 Dollars ($________________), or such amount as may be advanced by the
payee hereof under the Credit Agreement with daily interest from the date
hereof, computed as provided in the Credit Agreement, on the principal amount
hereof from time to time unpaid, at a rate per annum on each portion of the
principal amount which shall at all times be equal to the rate of interest
applicable to such portion in accordance with the Credit Agreement, and with
interest on overdue principal and, to the extent permitted by applicable law,
on overdue installments of interest and late charges at the rates provided in
the Credit Agreement. Interest shall be payable on the dates specified in
the Credit Agreement, except that all accrued interest shall be paid at the
stated or accelerated maturity hereof or upon the prepayment in full hereof.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings set forth in the Credit Agreement.
Payments hereunder shall be made to The First National Bank of Boston,
as Agent for the payee hereof, 100 Federal Street, Boston, Massachusetts
02110.
This Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Credit
Agreement. The principal of this Note may be due and payable in whole or in
part prior to the maturity date stated above and is subject to mandatory
prepayment in the amounts and under the circumstances set forth in the Credit
Agreement, and may be prepaid in whole or from time to time in part, all as
set forth in the Credit Agreement.
Notwithstanding anything in this Note to the contrary, all agreements
between the Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in
no contingency, whether by reason of acceleration of the maturity of any of
the Obligations or otherwise, shall the interest contracted for, charged or
received by the Banks exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, interest would otherwise be
payable to the Banks in excess of the maximum lawful amount, the interest
payable to the Banks shall be reduced to the maximum amount permitted under
applicable law; and if from any circumstance the Banks shall ever receive
anything of value deemed interest by applicable law in excess of the maximum
lawful amount, an amount equal to any excessive interest shall be applied to
the reduction of the principal balance of the Obligations and to the payment
<PAGE>
of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations, such excess shall be refunded to the Borrower.
All interest paid or agreed to be paid to the Banks shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal of the
Obligations (including the period of any renewal or extension thereof) so
that the interest thereon for such full period shall not exceed the maximum
amount permitted by applicable law. This paragraph shall control all
agreements between the Borrower and the Banks and the Agent.
In case an Event of Default shall occur, the entire principal amount of
this Note may become or be declared due and payable in the manner and with
the effect provided in said Credit Agreement.
This Note shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts (without giving effect to the conflict
of laws rules of any jurisdiction).
The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Credit Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without
notice.
This Note is a note executed in amendment and restatement in part of the
"Notes" as defined in the First Amended Credit Agreement.
IN WITNESS WHEREOF the undersigned has by its duly authorized officers,
executed this Note under seal as of the day and year first above written.
MERIDIAN INDUSTRIAL TRUST, INC.,
a Maryland corporation
By: _______________________________[SEAL]
Milton K. Reeder,
President and Chief Financial Officer
2
<PAGE>
EXHIBIT B
FORM OF REQUEST FOR LOAN
The First National Bank of Boston, for itself and as Agent
115 Perimeter Center Place, Suite 500
Atlanta, Georgia 30346
Attn: Dan Silbert, Assistant Vice President
(770) 390-8434 (FAX)
Ladies and Gentlemen:
Pursuant to the provisions of Section 2.6 of the Second Amended and
Restated Revolving Credit Agreement dated April 21, 1997, as from time to
time in effect (the "Credit Agreement"), among Meridian Industrial Trust,
Inc. (the "Borrower"), The First National Bank of Boston, for itself and as
Agent and the other Banks from time to time party thereto, the Borrower
hereby requests and certifies as follows:
1. LOAN. The Borrower hereby requests a Loan under Section 2.1 of the
Credit Agreement:
Principal Amount: $_______________
Type (Eurodollar, Base Rate):
Drawdown Date: _______________ , 19___
Interest Period:
by credit to the general account of the Borrower with the Agent at the
Agent's Head Office.
2. USE OF PROCEEDS. Such Loan shall be used for the following
purposes permitted by Section 7.11 of the Credit Agreement:
[Describe]
3. NO DEFAULT. The undersigned Authorized Officer of the Borrower
certifies that the Borrower is and will be in compliance with all covenants
under the Loan Documents after giving effect to the making of the Loan
requested hereby.
4. UNENCUMBERED OPERATING PROPERTIES. The undersigned Authorized
Officer of the Borrower certifies that the Borrower is and will be in
compliance with Section 9.4 of the Credit Agreement after giving effect to
the making of the Loan requested hereby. Attached hereto as SCHEDULE A is a
list of each of the Unencumbered Operating Properties, their location, the
year in which each property
<PAGE>
was built, the Gross Rentable Area in each such property, the Asset Value of
each such property, the average occupancy for each of the Unencumbered
Operating Properties for the last two (2) fiscal quarters and the average
occupancy for such period for all of the Unencumbered Operating Properties,
the Net Operating Income and Operating Cash Flow for each of the Unencumbered
Operating Properties, and calculations evidencing the Borrower's compliance
with Section 9.4.
5. REPRESENTATIONS TRUE. Each of the representations and warranties
made by or on behalf of the Borrower and its Subsidiaries and the Guarantor
contained in the Credit Agreement, in the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with the Credit
Agreement was true as of the date as of which it was made and shall also be
true at and as of the Drawdown Date for the Loan requested hereby, with the
same effect as if made at and as of such Drawdown Date (except to the extent
of changes resulting from transactions contemplated or permitted by the
Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not
materially adverse, and except to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default has occurred and is continuing.
6. OTHER CONDITIONS. All other conditions to the making of the Loan
requested hereby set forth in Section 11 of the Credit Agreement have been
satisfied.
7. DRAWDOWN DATE. Except to the extent, if any, specified by notice
actually received by the Agent prior to the Drawdown Date specified above,
the foregoing representations and warranties shall be deemed to have been
made by the Borrower on and as of such Drawdown Date.
8. DEFINITIONS. Terms defined in the Credit Agreement are used herein
with the meanings so defined.
2
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
_______________, 199__.
MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation
By: ________________________________[SEAL]
Milton K. Reeder
President and Chief Financial Officer
The undersigned Authorized Officer of the Guarantor joins in the execution
hereof to certify that since the date of the last Compliance Certificate
delivered pursuant to the Credit Agreement, there have been no material
changes that could cause a Default or Event of Default to occur after giving
effect to the making of the Loan requested hereby.
MIT UNSECURED L.P., a California limited
partnership
By: MIT Unsecured, Inc., a California
corporation, its sole general partner
By: _________________________________
Name:
Title:
[CORPORATE SEAL]
3
<PAGE>
EXHIBIT C
FORM OF LETTER OF CREDIT REQUEST
The First National Bank of Boston, for itself and as Agent
115 Perimeter Center Place, Suite 500
Atlanta, Georgia 30346
Attn: Dan Silbert, Assistant Vice President
(770) 390-8434 (FAX)
Ladies and Gentlemen:
Pursuant to the provisions of Section 2.9 of the Second Amended and
Restated Revolving Credit Agreement dated April 21, 1997, as from time to
time in effect (the "Credit Agreement"), among Meridian Industrial Trust,
Inc. (the "Borrower"), the First National Bank of Boston, for itself and as
Agent and the other Banks from time to time party thereto, the Borrower
hereby requests and certifies as follows:
1. LETTER OF CREDIT. The Borrower hereby requests a Letter of Credit
to be issued under Section 2.9 of the Credit Agreement:
Principal Amount: $
Beneficiary:
2. USE OF PROCEEDS. Such Letter of Credit shall be used for the
following purposes permitted by Section 2.9 and Section 7.11 of the Credit
Agreement:
[Describe]
3. NO DEFAULT. The undersigned Authorized Officer of the Borrower
certifies that the Borrower is and will be in compliance with all covenants
under the Loan Documents after giving effect to the issuance of the Letter of
Credit requested hereby.
4. UNENCUMBERED OPERATING PROPERTIES. The undersigned Authorized
Officer of the Borrower certifies that the Borrower is and will be in
compliance with Section 7.15 of the Credit Agreement after giving effect to
the issuance of the Letter of Credit requested hereby.
5. REPRESENTATIONS TRUE. Each of the representations and warranties
made by or on behalf of the Borrower and its subsidiaries contained in the
Credit Agreement, in the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with the Credit Agreement
was true as of the date as of which it was made and shall also be true at and
as of the issuance date for the Letter of Credit requested hereby, with the
same effect as if made at and as of
<PAGE>
such issuance date (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement and the other
Loan documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and except to the
extent that such representations and warranties relate expressly to an
earlier date) and no default or Event of Default has occurred and is
continuing.
6. OTHER CONDITIONS. All other conditions to the issuance of the
Letter of Credit requested hereby set forth in Section 11 of the Credit
Agreement have been satisfied.
7. ISSUANCE DATE. Except to the extent, if any, specified by notice
actually received by the Agent prior to the issuance date specified above,
the foregoing representations and warranties shall be deemed to have been
made by the Borrower on and as of such issuance date.
8. DEFINITIONS. Terms defined in the Credit Agreement are used herein
with the meanings so defined.
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand this day of
----
, 199 .
- ------------ -
MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation
By: [SEAL]
-------------------------------------
Milton K. Reeder
President and Chief Financial Officer
The undersigned Authorized Officer of the Guarantor joins in the execution
hereof to certify that since the date of the last Compliance Certificate
delivered pursuant to the Credit Agreement, there have been no material
changes that could cause a Default or Event of Default to occur after giving
effect to the making of the Letter of Credit requested hereby.
MIT UNSECURED L.P., a California limited
partnership
By: MIT Unsecured, Inc., a California
corporation, its sole general partner
By:
----------------------------------
Name:
Title:
[CORPORATE SEAL]
3
<PAGE>
EXHIBIT D
FORM OF
COMPLIANCE CERTIFICATE
The First National Bank of Boston, for itself and as Agent
115 Perimeter Center Place, Suite 500
Atlanta, Georgia 30346
Attn: Dan Silbert, Assistant Vice President
(770) 390-8434 (FAX)
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Revolving Credit
Agreement dated April 21, 1997 (the "Credit Agreement") by and among Meridian
Industrial Trust, Inc. (the "Borrower"), The First National Bank of Boston, for
itself and as Agent, and the other Banks from time to time party thereto. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
as defined in the Credit Agreement.
Pursuant to the Credit Agreement, the Borrower and the Guarantor are
furnishing to you herewith (or has most recently furnished to you) the
financial statements of the Borrower and its Subsidiaries and the Guarantor
for the fiscal period ended _______________, 199__ (the "Balance Sheet
Date"). Such financial statements have been prepared in accordance with
generally accepted accounting principles and present fairly the financial
position of the Borrower and its Subsidiaries and the Guarantor covered
thereby at the date thereof and the results of their operations for the
periods covered thereby, subject in the case of interim statements only to
normal year-end audit adjustments.
This certificate is submitted in compliance with requirements of Section
7.4(e), Section 7.5(d) and Section 10.10 of the Credit Agreement. If this
certificate is provided under a provision other than Section 7.4(e), the
calculations provided below are made using the financial statements of the
Borrower and its Subsidiaries and the Guarantor as of the Balance Sheet Date
adjusted in the best good-faith estimate of the Borrower and the Guarantor to
give effect to the making of a Loan, extension of the Maturity Date,
acquisition or disposition of property or other event that occasions the
preparation of this certificate; and the nature of such event and the
Borrower's and the Guarantor's estimate of its effects are set forth in
reasonable detail in an attachment hereto. The undersigned officers of the
Borrower and the Guarantor are Authorized Officers of the Borrower and the
Guarantor .
The undersigned Authorized Officers have caused the provisions of the
Credit Agreement and the Guaranty to be reviewed and have no knowledge of any
Default or Event of Default. (Note: If the signer does have knowledge of any
Default or Event of Default, the form of certificate should be
<PAGE>
revised to specify the Default or Event of Default, the nature thereof and
the actions taken, being taken or proposed to be taken by the Borrower and
the Guarantor with respect thereto.)
The Borrower and the Guarantor are providing the following information
to demonstrate compliance as of the date hereof with the following covenants
(to the extent the Certificate requests a ratio for the previous three
quarters and three quarters have not elapsed since the Closing Date, the
Borrower should specify only such ratios as are then available):
1. SECTION 7.5(d). TRANSFERS AND ENCUMBRANCES.
Describe sales, encumbrances, refinances
and other transfers referred to in Section 7.5(d).
2. SECTION 7.15. UNENCUMBERED OPERATING PROPERTIES.
A. Value of Industrial Properties
1. Total Asset Value of
Unencumbered Operating
Properties constituting
industrial properties $
-----------
2. Total Asset Value of all
Unencumbered Operating
Properties (after one-time
market adjustment of $ ) $
------ -----------
Ratio of A.1 to A.2 %
(shall be at least 75%); ----------
Ratio for previous three quarters
----------, ----------, ----------
B. Geographic Distribution
1. Attach schedules for each
metropolitan area showing
total Asset Value for each
such area $
-----------
2
<PAGE>
2. Total Asset Value of
all Unencumbered Operating
Properties (after one-time
market adjustment) $
-----------
Ratio of B.1 to B.2 %
(shall not exceed 35%) ----------
Ratio for previous three
quarters
----------, ----------, ----------
C. Leases
1. Economic Leases
(a) Total Gross Rentable Area
of Unencumbered Operating
Properties subject to Leases
paying rent
----------
(b) Total Gross Rentable Area
of Unencumbered Operating
Properties
----------
Ratio of C.1(a) to C.1(b) %
(shall be at least 85%) ---------
Ratio for previous three quarters
----------, ----------, ----------
2. All Leases
(a) Total Gross Rentable Area
of Unencumbered Operating
Properties subject to Leases
in which tenants are in occupancy
----------
3
<PAGE>
(b) Total Gross Rentable Area
of Unencumbered Operating
Properties
----------
Ratio of C.2(a) to C.2(b) %
(shall be at least 77%) ---------
Ratio for previous three quarters
----------, ----------, ----------
3. Tenants
(a) Total Gross Cash Receipts
generated by Unencumbered
Operating Properties $
----------
(b) Does any single tenant
account for more than 7% of
C.3(a) (10% if S&P rating of
BBB- or better or 20% if Sears
and Moody's Investors Service, Inc.'s
rating of A-3 or better or S&P rating
of A- or better)?
----------
List top five tenants with respect to
Gross Cash Receipts
4
<PAGE>
3. SECTION 8.1(f). NON-RECOURSE INDEBTEDNESS.
A. Amount of Non-recourse Indebtedness
pursuant to Section 8.1(f) $
------------
B. Consolidated Total Assets per balance sheet $
------------
Plus Depreciation $
------------
One-time market adjustment $
------------
Consolidated Total Assets after
increase for depreciation and
one-time market adjustment $
------------
A may not exceed 35% of B
The amount for the previous
three quarters
----------, ----------, ----------
4. SECTION 8.7. DISTRIBUTIONS.
A. Amount of Distributions for fiscal
quarter most recently ended $
------------
B. Amount of Distributions for previous
four fiscal quarters $
------------
C. Funds from Operations for
Fiscal quarter most recently ended $
------------
D. Cash Available for Distribution for
previous four fiscal quarters $
------------
E. Minimum Distributions required
to maintain REIT status of the
Borrower $
------------
F. A is % of C
-------
5
<PAGE>
For the quarter ending December 31, 1996,
A may not exceed the greater of
(i) 90% of C or (ii) E; thereafter,
A may not exceed the greater of (i)
85% of C or (ii) E.
G. B is % of D
----
For the quarter ending December 31, 1996,
B may not exceed the greater of (a) 110%
of D or (b) E; thereafter, B may not exceed
the greater of (a) 100% of D or (b) E.
5. SECTION 9.1. LIABILITIES TO TANGIBLE NET WORTH RATIO.
A. Consolidated Total Liabilities
per balance sheet $
------------
B. Consolidated Tangible Net Worth $
------------
Ratio of A to B
------------
Ratio of A to B may not exceed 0.75 to 1.
The ratio of A to B for the
previous three quarters
----------, ----------, ----------
6. SECTION 9.2. DEBT COVERAGE.
A. Funds from Operations
Consolidated Net Income for
most recent quarter $
------------
Plus depreciation and amortization $
------------
Plus expensed interest $
------------
Plus amortized portion of $
------------
Initial Loan Fees
Subtotal for most recent quarter $
-----------
6
<PAGE>
Funds from Operations
for three prior quarters:
Quarter ended $
---------- -----------
Quarter ended $
---------- -----------
Quarter ended $
---------- -----------
Total $
-----------
B. Debt Service for four prior
quarters
Principal Paid $
-----------
Interest Paid $
-----------
Total $
-----------
A DIVIDED BY B (expressed as a percentage) %
----------
A must equal or exceed 250% of B.
Coverage for previous
three quarters
----------, ----------, ----------
7. SECTION 9.3. FIXED CHARGE COVERAGE.
A. Cash Available for Distribution
Funds from Operations for
quarter ending $
-------- ----------
Minus Capital Improvement Reserve $
($0.15 x Total Gross Rentable Area) ----------
Minus actual tenant improvements and
leasing commissions
(attach itemization) $
----------
Plus expensed interest $
----------
Subtotal for most recent quarter $
----------
7
<PAGE>
Cash Available for Distribution
for three prior quarters:
Quarter ended $
---------- ----------
Quarter ended $
---------- ----------
Quarter ended $
---------- ----------
Total $
----------
A. Debt Service for four prior
quarters
Principal Paid $
----------
Interest Paid $
----------
Total $
----------
A DIVIDED BY B (expressed as a percentage)
A must equal or exceed 175% of total of B.
8. SECTION 9.4. BORROWING BASE. (Attach separate worksheet)
A. Aggregate of all Borrowing Bases
(per attached worksheet) $
----------
B. Total Outstanding principal
balance of Loans (after giving
effect to any Loan Request) and
Outstanding Letters of Credit $
----------
B may not exceed A.
9. SECTION 9.5. TANGIBLE NET WORTH
Consolidated Tangible Net Worth
A. Consolidated Total Assets per
balance sheet after increase for depreciation
and one-time market adjustment (see 3.B. above) $
----------
8
<PAGE>
Minus Consolidated Total
Liabilities per balance sheet $
----------
Minus aggregate book value of
intangible assets $
----------
Minus asset write-up amounts,
if any $
----------
Minus prepaid fees and deferred
charges $
----------
Total $
----------
Consolidated Tangible Net Worth may not be less
than $244,646.00 plus the amount of any net
proceeds received from any Equity Offering subsequent
to the Closing Date.
10. REAL ESTATE ASSETS
A. SECTION 9.6(a). Partnerships/Joint Ventures
1. Total Asset Value of Borrower's
partnership and joint venture
interests (excluding Subsidiaries
that are 100% owned, directly or
indirectly by Borrower) $
----------
2. Total value of the Consolidated
Total Assets after increase for depreciation
and one-time market adjustment $
(see 3.B. above) ----------
A.1 may not exceed 15% of A.2
9
<PAGE>
B. SECTION 9.6(b). Land
1. Total Asset Value of Borrower's
non-income producing land assets $
----------
2. Total value of the Consolidated
Total Assets after increase for depreciation
and one-time market adjustment $
(see 3.B. above) ----------
B.1 may not exceed 8% of B.2
C. SECTION 8.9. Development
1. Total Asset Value of Borrower's
Real Estate Under Development $
----------
2. Total value of the Consolidated
Total Assets after increase for depreciation
and one-time market adjustment $
(see 3.B. above) ----------
C.1 may not exceed 20% of C.2
10
<PAGE>
IN WITNESS WHEREOF, we have hereunto set our hands this day of
---
, 199 .
- ----------------------- -
MERIDIAN INDUSTRIAL TRUST, INC., a
Maryland corporation
By: [SEAL]
--------------------------------
Milton K. Reeder
President and Chief Financial Officer
MIT UNSECURED L.P., a California limited
partnership
By: MIT Unsecured, Inc., a California
corporation, its sole general partner
By:
---------------------------------
Title:
-------------------------
[CORPORATE SEAL]
11
<PAGE>
BORROWING BASE WORKSHEET
Prepare spread sheet showing following information for all Unencumbered
Operating Properties:
I. INCLUDING OTR MINORITY INTEREST.
A. Asset Value
1. Aggregate Asset Value of all Unencumbered
Operating Properties decreased by book value
of Subsidiary Minority Interest and ,with approval of Majority Banks,
increased by book value of other minority interests
2. 50% of (1)
B. Net Operating Income
1. Gross Cash Receipts
(a) Aggregate Gross Cash Receipts
of all Unencumbered Operating
Properties for quarter ending
________ [Attach worksheet in
form and substance satisfactory
to the Agent]
(b) Aggregate Gross Cash Receipts
of all Unencumbered Operating
Properties for prior quarters:
Quarter ended
----------
Quarter ended
----------
Quarter ended
----------
Total Gross Cash Receipts
2. Operating Expenses
(a) Aggregate Operating Expenses
of all Unencumbered Operating
<PAGE>
Properties for quarter ending
----------
(b) Aggregate Operating Expenses
of all Unencumbered Operating
Properties for prior quarters
Quarter ended
-----------
Quarter ended
-----------
Quarter ended
-----------
Total Operating Expenses
3. Net Operating Income
(a) Total Gross Cash Receipts minus
Total Operating Expenses
(b) Portion of Net Operating Income allocable to
Subsidiary Minority Interest
(c) Capital Improvement Reserve of
$0.15 multiplied by average Gross
Rentable Area of all Unencumbered
Operating Properties
Total Net Operating Income equals
3(a) minus 3(b)minus 3(c)
4. Divide total on line 3 by 10% if
Initial Unencumbered Operating
Properties or after acquired
Unencumbered Operating Properties
which do not constitute a Qualifying
Property (see 5)
2
<PAGE>
5. Divide total on line 3 by 9.25% if
Qualifying Properties
Test for Qualifying Properties
(a) Age
(Must not exceed 12 years)
(b) Gross Rentable Area
(Must not be less than 50,000 s.f.)
(c) Use
(Must be non-specialized)
(d) Must meet 2 of the following 3
requirements
(1) s.f. of finished out air
conditioned office space
(Must not exceed 20% of
total Gross Rentable Area)
(2) ceiling clearance height
(must not be less than 22 feet)
(3) average Gross Rentable Area
covered by each Lease (must
not be less than 20,000 s.f.)
6. Aggregate value is sum of (4) and (5) and, with approval
of the Majority Banks, increased by the book value of other minority
interests
7. 50% of (6)
C. Debt Service Test
1. Total Gross Cash Receipts (See B.1. above)
2. Total Operating Expenses (See B.2 above)
3. Total Net Operating Income (See B.3 above)
4. Divide total on line 3 by 1.75
3
<PAGE>
5. Divide total on line 4 by 12
6. Constant based on 10 year Treasury
Obligations (yield supplied by Agent)
+ 2.0% and 25 year mortgage style
amortization
7. Total on line 5 divided by constant
on line 6, which total is
multiplied by 12, equals aggregate Debt Service
Coverage Amount
8. Total of Line 7 increased, with approval of the Majority
Banks, by the book value of other minority interests
D. Lesser of A.2, B.7 and C.8 is the aggregate Borrowing Base for
all Unencumbered Operating Properties (including the
OTR Minority Interest)
II. EXCLUDING THE OTR MINORITY INTEREST AND OTHER MINORITY INTERESTS OF
BORROWER APPROVED BY MAJORITY BANKS.
A. Asset Value
1. Aggregate Asset Value of all Unencumbered
Operating Properties decreased by book value
of Subsidiary Minority Interest
2. 55% of (1)
B. Net Operating Income
1. Gross Cash Receipts
(a) Aggregate Gross Cash Receipts
of all Unencumbered Operating
Properties for quarter ending
________ [Attach worksheet in
form and substance satisfactory
to the Agent]
(b) Aggregate Gross Cash Receipts
of all Unencumbered Operating
4
<PAGE>
Properties for prior quarters:
Quarter ended
----------
Quarter ended
----------
Quarter ended
----------
Total Gross Cash Receipts
2. Operating Expenses
(a) Aggregate Operating Expenses
of all Unencumbered Operating
Properties for quarter ending
----------
(b) Aggregate Operating Expenses
of all Unencumbered Operating
Properties for prior quarters
Quarter ended
-----------
Quarter ended
-----------
Quarter ended
-----------
Total Operating Expenses
3. Net Operating Income
(a) Total Gross Cash Receipts minus
Total Operating Expenses
(b) Portion of Net Operating Income allocable to
Subsidiary Minority Interest
(c) Capital Improvement Reserve of
$0.15 multiplied by average Gross
Rentable Area of all Unencumbered
Operating Properties
Total Net Operating Income equals
5
<PAGE>
3(a) minus 3(b) minus 3(c)
4. Divide total on line 3 by 10% if
Initial Unencumbered Operating
Properties or after acquired
Unencumbered Operating Properties
which do not constitute a Qualifying
Property (see 5)
5. Divide total on line 3 by 9.25% if
Qualifying Properties
Test for Qualifying Properties
(a) Age
(Must not exceed 12 years)
(b) Gross Rentable Area
(Must not be less than 50,000 s.f.)
(c) Use
(Must be non-specialized)
(d) Must meet 2 of the following 3
requirements
(1) s.f. of finished-out air
conditioned office space
(Must not exceed 20% of
total Gross Rentable Area)
(2) ceiling clearance height
(must not be less than 22 feet)
(3) average Gross Rentable Area
covered by each Lease (must
not be less than 20,000 s.f.)
6. Aggregate value is sum of (4) and (5)
7. 55% of (6)
C. Debt Service Test
6
<PAGE>
1. Total Gross Cash Receipts (See B.1 above)
2. Total Operating Expenses (See B.2 above)
3. Total Net Operating Income (See B.3 above)
4. Divide total on line 3 by 1.75
5. Divide total on line 4 by 12
6. Constant based on 10-year Treasury
Obligations (yield supplied by Agent)
+ 2.0% and 25 year mortgage style
amortization
7. Total on line 5 divided by constant
on line 6, which total is
multiplied by 12, equals aggregate
Debt Service Coverage Amount
D. Lesser of A.2, B.7 and C.7 is the aggregate Borrowing Base for
all Unencumbered Operating Properties (excluding the
OTR Minority Interest and other minority interests of Borrower
approved by Majority Banks)
Lesser of I and II is the aggregate Borrowing Base for all Unencumbered
Operating Properties.
7
<PAGE>
SCHEDULE 1
BANKS AND COMMITMENTS
NAME AND ADDRESS COMMITMENT COMMITMENT PERCENTAGE
The First National Bank of $ 30,000,000.00 20%
Boston
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
Eurodollar Lending Office
Same as above
Texas Commerce Bank $ 25,000,000.00 17%
National Association
717 Travis Street, 6th Floor-North
Real Estate Department
Houston, Texas 77002
Attn: Catherine A. Arnold,
Senior Vice President
Eurodollar Lending Office
Same as above
NationsBank of Texas, N.A. $ 30,000,000.00 20%
Real Estate Banking Group
901 Main Street, 51st Floor
NationsBank Plaza
Dallas, Texas 75202-3714
Attn: Real Estate Administration
Eurodollar Lending Office
Same as above
<PAGE>
Wells Fargo Bank, N.A. $ 25,000,000.00 17%
420 Montgomery Street
6th Floor
San Francisco, CA 94163
Attn: Lawrence T. Andow
Eurodollar Lending Office
Same as above
Dresdner Bank AG $ 25,000,000.00 17%
333 South Grand Avenue
Suite 1700
Los Angeles, CA 90071
Attn: Sidney S. Jordan
Eurodollar Lending Office
Same as above
First American Bank Texas, S.S.B. $ 15,000,000.00 10%
14651 Dallas Parkway, Suite 400
Dallas, Texas 75240-7479
Attn: Jeffrey C. Schultz
Eurodollar Lending Office
Same as above
---------------
Total Commitment $150,000,000.00
Commitment Percentages may not equal 100% due to rounding.
2
<PAGE>
SCHEDULE 2
INITIAL UNENCUMBERED OPERATING PROPERTIES
NAME OWNER
- ----------------------------- ------------------------------
4000 Air Park Cove MIT Unsecured L.P.
Airport Building #3 MIT Unsecured L.P.
Airport Building #14 MIT Unsecured L.P.
Airport Building #16A MIT Unsecured L.P.
Airport Building #16B MIT Unsecured L.P.
Airport Building #17 MIT Unsecured L.P.
Chatsworth Borrower
Scripps Ranch Borrower
Bedford Park MIT Unsecured L.P.
Palisades I & II MIT Unsecured L.P.
Northgate 4 & 5 MIT Unsecured L.P.
Northgate 28 MIT Unsecured L.P.
Las Colinas 4 & 5 MIT Unsecured L.P.
Valley Branch I & II MIT Unsecured L.P.
Beltline MIT Unsecured L.P.
Great Southwest 4 MIT Unsecured L.P.
Olive Branch (expansion) MIT Unsecured L.P.
1550 Heil Quaker MIT Unsecured L.P.
1600 Corporate Place MIT Unsecured L.P.
Hennessey Warehouse MIT Unsecured L.P.
4013 Premier MIT Unsecured L.P.
Live Oak Parkway Borrower
Phoenix N. 23rd Borrower
Phoenix N. 27th Borrower
Phoenix Plaza Three Borrower
Cypress B Borrower
Golden Cove Borrower
Nancy Ridge Two Borrower
North Irvine Borrower
Regal Empress MIT Unsecured L.P.
Las Colinas I MIT Unsecured L.P.
San Carlos Borrower
Meridian Village Borrower
Sarah Jane Parkway MIT Unsecured L.P.
Overlake Place Borrower
Crosswind Drive Borrower
Rustin Avenue Borrower
Wanamaker Avenue Borrower
Gold River Lane Borrower
Mission Oaks Borrower
Crossroads Parkway MIT Unsecured L.P.
Waters Ridge Drive MIT Unsecured L.P.
<PAGE>
SCHEDULE 3
ADJUSTED ASSET VALUE OF REAL ESTATE
<PAGE>
ADJUSTED ASSET VALUE OF REAL ESTATE
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET BOOK
PROPERTY CITY STATE VALUE VALUE ADJUSTMENT
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
UNSECURED
ATLANTA
Live Oak Parkway Norcross GA 4,165,000 3,473,959 (1) 691,041
CHICAGO
Bedford Park Bedford IL 3,615,000 3,015,213 (1) 599,787
Crossroads Parkway Chicago IL 9,357,200 9,357,200 (1) -
------------------------------------------
12,972,200 12,372,413 599,787
------------------------------------------
COLUMBUS
Crosswind Drive Columbus OH 30,954,259 30,954,259 (2) -
MEMPHIS
4000 Air Park Cove Memphis TN 1,886,000 1,573,082 (1) 312,918
4013 Premier Memphis TN 2,071,000 1,727,388 (1) 343,612
Airport Building #14 Memphis TN 2,907,000 2,616,048 (1) 290,952
Airport Building #16A Memphis TN 1,541,797 1,387,483 (1) 154,314
Airport Building #16B Memphis TN 493,000 443,657 (1) 49,343
Airport Building #17 Memphis TN 2,281,325 2,052,994 (1) 228,331
Airport Building #3 Memphis TN 1,120,000 1,007,903 (1) 112,097
Olive Branch (expansion) Olive Branch MS 8,500,000 6,700,000 (1) 1,800,000
------------------------------------------
20,800,122 17,508,555 3,291,567
------------------------------------------
DALLAS/FT. WORTH
Beltline Carrollton TX 1,938,673 1,617,016 (1) 321,657
Great Southwest 4 Arlington TX 1,850,865 1,543,777 (1) 307,088
Las Colinas 1 Irving TX 947,757 790,509 (1) 157,248
Las Colinas 4 & 5 Irving TX 2,339,746 1,951,544 (1) 388,202
Northgate 28 Dallas TX 1,115,582 930,489 (1) 185,093
Northgate 4 & 5 Dallas TX 1,983,176 1,654,135 (1) 329,041
Palisades I & II Plano TX 2,806,973 2,341,251 (1) 465,722
Regal Empress Dallas TX 2,095,450 1,747,781 (1) 347,669
Valley Branch I & II Farmers Branch TX 2,340,401 1,952,091 (1) 388,310
Waters Ridge Drive Lewisville TX 10,171,926 10,171,926 (2) -
Sarah Jane Parkway Grand Prairie TX 15,680,169 15,680,169 (2) -
</TABLE>
<PAGE>
ADJUSTED ASSET VALUE OF REAL ESTATE
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET BOOK
PROPERTY CITY STATE VALUE VALUE ADJUSTMENT
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
43,270,718 40,380,688 2,890,030
------------------------------------------
LOS ANGELES AREA
Chatsworth Chatsworth CA 3,000,000 2,502,252 (1) 497,748
Cypress B Cypress CA 3,500,000 2,919,294 (1) 580,706
Mission Oaks Los Angeles CA 9,068,149 9,068,149 (2) -
------------------------------------------
15,568,149 14,489,695 1,078,454
------------------------------------------
ORANGE COUNTY
Golden Cove Palos Verdes CA 5,291,216 4,761,635 (1) 529,581
North Irvine Santa Ana CA 2,902,507 2,612,004 (1) 290,503
------------------------------------------
8,193,723 7,373,639 820,084
------------------------------------------
INLAND EMPIRE
Rustin Avenue Riverside CA 4,165,526 4,165,526 (2) -
Wanamaker Avenue Ontario CA 4,547,159 4,547,159 (2) -
------------------------------------------
8,712,685 8,712,685 -
------------------------------------------
SAN DIEGO
Nancy Ridge Two San Diego CA 328,595 274,076 (1) 54,519
Scripps Ranch San Diego CA 10,124,996 9,111,617 (1) 1,013,379
------------------------------------------
10,453,591 9,385,693 1,067,898
------------------------------------------
PHOENIX
Phoenix N. 23rd Phoenix AZ 677,240 564,875 (1) 112,365
Phoenix N. 27th Phoenix AZ 1,006,540 839,539 (1) 167,001
Phoenix Plaza Three Phoenix AZ 1,891,000 1,577,253 (1) 313,747
------------------------------------------
3,574,780 2,291,667 593,113
------------------------------------------
NORTHERN CALIFORNIA
San Carlos San Carlos CA 9,264,879 7,727,686 (1) 1,537,193
Overlake Place Newark CA 8,535,314 8,535,314 (2) -
Gold River Lane San Francisco CA 13,456,741 13,456,741 (2) -
------------------------------------------
31,256,934 29,719,741 1,537,193
------------------------------------------
</TABLE>
<PAGE>
ADJUSTED ASSET VALUE OF REAL ESTATE
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET BOOK
PROPERTY CITY STATE VALUE VALUE ADJUSTMENT
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NASHVILLE
1550 Heil Quaker La Vergne TN 4,150,000 3,461,448 (1) 688,552
1600 Corporate Place La Vergne TN 1,700,000 1,417,943 (1) 282,057
Hennessy Warehouse La Vergne TN 1,680,000 1,401,261 (1) 278,739
------------------------------------------
7,530,000 6,280,652 1,249,348
------------------------------------------
TOTAL UNSECURED 197,452,161 183,633,646 13,818,515
------------------------------------------
------------------------------------------
</TABLE>
<PAGE>
ADJUSTED ASSET VALUE OF REAL ESTATE
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET BOOK
PROPERTY CITY STATE VALUE VALUE ADJUSTMENT
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PRUDENTIAL
ATLANTA
Marietta Trade Ctr Marietta GA 22,242,000 18,551,694 (1) 3,690,306
CHICAGO
1000 Lunt Elk Grove IL 2,915,000 2,431,355 (1) 483,645
1090 Pratt Elk Grove IL 737,000 614,720 (1) 122,280
1100 Pratt Elk Grove IL 1,027,000 856,604 (1) 170,396
1180 Pratt Elk Grove IL 633,000 527,975 (1) 105,025
1201 Busse Elk Grove IL 469,000 391,185 (1) 77,815
17025 Wallace South Holland IL 2,101,000 1,752,410 (1) 348,590
17129 Wallace South Holland IL 1,974,000 1,646,482 (1) 327,518
1815 Landmeier Elk Grove IL 2,039,000 1,700,697 (1) 338,303
2375 Touhy Ave Elk Grove Village IL 1,339,000 1,116,838 (1) 222,162
3400 West Lake Glenview IL 3,031,000 2,528,108 (1) 502,892
5101 W. 122nd Street Alsip IL 3,100,000 2,585,660 (1) 514,340
700 Pratt Elk Grove IL 2,118,000 1,766,590 (1) 351,410
801 Lunt Elk Grove IL 998,000 832,416 (1) 165,584
900 Pratt Elk Grove IL 895,000 746,505 (1) 148,495
Lombard I Lombard IL 6,369,000 5,312,280 (1) 1,056,720
Pontiac Pontiac MI 3,057,000 2,549,794 (1) 507,206
Troy Tech II Troy MI 7,804,000 6,509,191 (1) 1,294,809
------------------------------------------
40,606,000 33,868,810 6,737,190
------------------------------------------
LOS ANGELES AREA
Cypress A Cypress CA 1,826,136 1,523,151 (1) 302,985
Cypress C Cypress CA 1,897,734 1,582,869 (1) 314,865
Valencia Valencia CA 5,854,526 4,883,166 (1) 971,360
Arenth Avenue City of Industry CA 9,613,232 9,613,232 (2) 0
------------------------------------------
19,191,628 17,602,418 1,589,210
------------------------------------------
MEMPHIS
Delp Distribution Memphis TN 8,100,000 6,756,080 (1) 1,343,920
Olive Branch Olive Branch MS 11,520,000 9,608,647 (1) 1,911,353
Willow Lake Memphis TN 4,661,000 3,887,665 (1) 773,335
------------------------------------------
24,281,000 20,252,392 4,028,608
------------------------------------------
</TABLE>
<PAGE>
ADJUSTED ASSET VALUE OF REAL ESTATE
DECEMBER 31, 1996
<TABLE>
<CAPTION>
MARKET BOOK
PROPERTY CITY STATE VALUE VALUE ADJUSTMENT
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DALLAS
Centreport 17 Fort Worth TX 2,147,569 1,791,253 (1) 356,316
Great Southwest 110 Arlington TX 3,320,682 2,769,727 (1) 550,955
Northgate International Garland TX 8,536,000 7,119,740 (1) 1,416,260
Regal Row 201 Dallas TX 1,400,000 1,167,717 (1) 232,283
Valwood 20 Farmers Branch TX 3,637,067 3,033,619 (1) 603,448
Wildwood/Pioneer Irving TX 5,665,000 4,725,085 (1) 939,915
------------------------------------------
24,706,318 20,607,141 4,099,177
------------------------------------------
MIDSOUTH
Birmingham I Birmingham AL 1,752,000 1,461,315 (1) 290,685
Birmingham II Birmingham AL 1,620,000 1,351,216 (1) 268,784
Baxter Little Rock AR 1,500,000 1,251,126 (1) 248,874
Port Distribution Little Rock AR 3,670,000 3,061,088 (1) 608,912
------------------------------------------
8,542,000 7,124,745 1,417,255
------------------------------------------
SEATTLE
Park At Woodinville Woodinville WA 13,759,608 11,476,667 (1) 2,282,941
------------------------------------------
TOTAL PRUDENTIAL 153,328,554 129,483,867 23,844,687
------------------------------------------
------------------------------------------
TOTAL FOR ALL ASSETS 350,780,715 313,117,513 37,663,202
------------------------------------------
------------------------------------------
</TABLE>
(1) Reflects market and book values as of February 23, 1996.
(2) Reflects undepreciated book value as of December 31, 1996.
<PAGE>
SCHEDULE 6.3
TITLE TO PROPERTIES; LEASES
NONE.
<PAGE>
SCHEDULE 6.7
LITIGATION
NONE.
<PAGE>
SCHEDULE 6.19
SUBSIDIARIES OF THE BORROWER
THE BORROWER HAS A 100% OWNERSHIP INTEREST (DIRECTLY OR INDIRECTLY) IN THE
FOLLOWING ENTITIES; ALL OF WHICH HOLD DIRECT OR INDIRECT OWNERSHIP INTERESTS IN
COMMERCIAL REAL PROPERTY :
1. MIT Unsecured L.P., a California limited partnership (formerly known
as DFW Nine Limited Partnership)
2. MIT Unsecured, Inc., a California corporation (formerly known as
Metroplex Co.)
3. MIT-ULP, Inc., a California corporation
4. MIT Secured L.P., a California limited partnership (formerly known as
Progress Center/Alabama Limited Partnership)
5. MIT Secured, Inc., a California corporation (formerly known as Pro-
Sierra Corp.)
6. MIT-SLP, Inc., a California corporation
7. MJV III Corp., a California corporation
8. MJV IV Corp., a California corporation
THE BORROWER HAS A 100% OWNERSHIP INTEREST (DIRECT AND INDIRECT) IN THE
FOLLOWING ENTITIES, ALL OF WHICH HAVE NO ASSETS, ARE CONDUCTING NO BUSINESS, AND
ARE SCHEDULED TO BE DISSOLVED:
1. 6834 Limited Partnership, and Illinois limited partnership
2. Dallas Nine Corp., a Nevada corporation
3. Metroplex Co., a Nevada corporation
4. 6834 Corporation, a Nevada corporation
5. Mem-Ind Corporation, a Nevada corporation
6. Texmet Corporation, a California corporation
THE BORROWER'S OWNERSHIP INTEREST IN THE FOLLOWING ENTITIES IS AS SHOWN:
Meridian Ohio Limited Partnership, a Delaware limited partnership (20%)
MDN/JSC Limited Partnership, a California limited partnership (86%)
EPB 1, Ltd., a Texas limited partnership (50%)
EPB 2, Ltd., a Texas limited partnership (50%)
<PAGE>
FIRST AMENDED AND RESTATED
GUARANTY OF PAYMENT AND PERFORMANCE
FOR AND IN CONSIDERATION OF the sum of Ten and No/100 Dollars ($10.00)
and other good and valuable consideration paid or delivered to the
undersigned MIT UNSECURED L.P., a California limited partnership, formerly
known as DFW Nine Limited Partnership, a California limited partnership
(hereinafter referred to as the "Guarantor"), the receipt and sufficiency
whereof are hereby acknowledged by the Guarantor, and for the purpose of
seeking to induce THE FIRST NATIONAL BANK OF BOSTON, a national banking
association (hereinafter referred to as "FNBB"), and the other Banks which
may now be or hereafter become party to the "Credit Agreement" (as
hereinafter defined) (hereinafter referred to as "Lender" which term shall
also include any such individual Bank acting as agent for all of the Banks),
to extend credit or otherwise provide financial accommodations to MERIDIAN
INDUSTRIAL TRUST, INC., a Maryland corporation (hereinafter referred to as
"Borrower"), the Guarantor does hereby absolutely, unconditionally and
irrevocably guarantee to Lender:
a. the full and prompt payment when due, whether by acceleration or
otherwise, either before or after maturity thereof, of (i) that certain
Amended and Restated Note of even date herewith made by Borrower to the order
of FNBB in the principal face amount of Thirty Million and No/100 Dollars
($30,000,000.00) (hereinafter referred to as the "FNBB Note"), and (ii) those
certain Amended and Restated Notes of even date herewith made by Borrower to
the order of the other Banks in the aggregate principal face amount of One
Hundred Twenty Million and No/100 Dollars ($120,000,000.00) (hereinafter
referred to as the "Additional Notes"), together with interest as provided in
the FNBB Note and the Additional Notes, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and
b. the full and prompt payment when due, whether by acceleration or
otherwise, either before or after maturity thereof, of each other note as may
be issued under that certain Second Amended and Restated Revolving Credit
Agreement dated of even date herewith (hereinafter referred to as the "Credit
Agreement"; all terms used herein and not otherwise defined herein shall have
the meanings set forth in the Credit Agreement) among Borrower, FNBB, for
itself and as agent, and the other Banks, together with interest as provided
in each such note, together with any replacements, supplements, renewals,
modifications, consolidations, restatements and extensions thereof (the FNBB
Note, the Additional Notes and each of the notes described in this
subparagraph (b) are hereinafter referred to collectively as the "Note"); and
c. the full and prompt payment and performance of all obligations of
Borrower to Lender under the terms of the Credit Agreement, together with any
replacements, supplements, renewals, modifications, consolidations,
restatements and extensions thereof; and
d. the full and prompt payment and performance of any and all other
obligations of Borrower to Lender under any other agreements, documents or
instruments now or hereafter evidencing, securing or otherwise relating to
the indebtedness evidenced by the Note or the Credit
<PAGE>
Agreement (the Note, the Credit Agreement and said other agreements,
documents and instruments, are hereinafter collectively referred to as the
"Loan Documents" and individually referred to as a "Loan Document");
PROVIDED, HOWEVER, the liability of the Guarantor hereunder shall not exceed
the Maximum Amount for the Guarantor. As used herein, the term "Maximum
Amount" means, with respect to the Guarantor, the greater of (i) the
aggregate Borrowing Base for all Unencumbered Operating Properties from time
to time owned by the Guarantor or (ii) ninety-five percent (95%) of the
difference, from time to time, of (a) the fair saleable value of the property
of the Guarantor MINUS (b) the total liabilities of the Guarantor (including
the probable liabilities on contingent or unliquidated obligations, but
excluding the obligations of the Guarantor hereunder).
This First Amended and Restated Guaranty of Payment and Performance
amends and restates in its entirety that certain Guaranty of Payment and
Performance dated as of February 26, 1996, made by Guarantor to Lender, as
amended by that certain First Amendment to Guaranty of Payment and
Performance dated March 19, 1996.
The Guarantor does hereby further agree as follows:
1. AGREEMENT TO PAY AND PERFORM; COSTS OF COLLECTION. If the Note is
not paid by Borrower in accordance with its terms, or if any and all sums
which are now or may hereafter become due from Borrower to Lender under the
Loan Documents are not paid by Borrower in accordance with their terms, or if
any and all other obligations of Borrower to Lender under the Note and the
Loan Documents are not performed by Borrower in accordance with their terms,
the Guarantor will immediately make such payments and perform such
obligations. The Guarantor further agrees to pay Lender on demand all
reasonable costs and expenses (including court costs and reasonable
attorneys' fees and disbursements) paid or incurred by Lender in endeavoring
to collect the indebtedness guaranteed hereby, to enforce any of the other
obligations of Borrower guaranteed hereby, or any portion thereof, or to
enforce this Guaranty, and until paid to Lender, such sums shall bear
interest at the default rate set forth in the Credit Agreement unless
collection from the Guarantor of interest at such rate would be contrary to
applicable law, in which event such sums shall bear interest at the highest
rate which may be collected from the Guarantor under applicable law.
2. REINSTATEMENT OF REFUNDED PAYMENTS. If, for any reason, any payment
to Lender of any of the obligations guaranteed hereunder is required to be
refunded by Lender to Borrower, or paid or turned over to any other person,
including, without limitation, by reason of the operation of bankruptcy,
reorganization, receivership or insolvency laws or similar laws of general
application relating to creditors' rights and remedies now or hereafter enacted,
the Guarantor agrees to pay the amount so required to be refunded, paid or
turned over (the "Turnover Payment"), the obligations of the Guarantor shall not
be treated as having been discharged by the original payment to Lender giving
rise to the Turnover Payment, and this Guaranty shall be treated as having
remained in full force and effect for any such Turnover Payment so made by
Lender, as well as for any amounts not theretofore paid to Lender on account of
such obligations.
2
<PAGE>
3. RIGHTS OF LENDER TO DEAL WITH COLLATERAL, BORROWER AND OTHER
PERSONS. The Guarantor hereby consents and agrees that Lender may at any
time, and from time to time, without thereby releasing the Guarantor from any
liability hereunder and without notice to or further consent from the
Guarantor, either with or without consideration: release or surrender any
lien or other security of any kind or nature whatsoever held by it or by any
person, firm or corporation on its behalf or for its account, securing any
indebtedness or liability hereby guaranteed; substitute for any collateral so
held by it, other collateral of like kind, or of any kind; modify the terms
of the Note or the Loan Documents; extend or renew the Note for any period;
grant releases, compromises and indulgences with respect to the Note or the
Loan Documents and to any persons or entities now or hereafter liable
thereunder or hereunder; release any other guarantor, surety, endorser or
accommodation party of the Note or any other Loan Documents; or take or fail
to take any action of any type whatsoever. No such action which Lender shall
take or fail to take in connection with the Note or the Loan Documents, or
any of them, or any security for the payment of the indebtedness of Borrower
to Lender or for the performance of any obligations or undertakings of
Borrower, nor any course of dealing with Borrower or any other person, shall
release the Guarantor's obligations hereunder, affect this Guaranty in any
way or afford the Guarantor any recourse against Lender. The provisions of
this Guaranty shall extend and be applicable to all replacements,
supplements, renewals, amendments, extensions, consolidations, restatements
and modifications of the Note and the Loan Documents, and any and all
references herein to the Note and the Loan Documents shall be deemed to
include any such replacements, supplements, renewals, extensions, amendments,
consolidations, restatements or modifications thereof. Without limiting the
generality of the foregoing, the Guarantor acknowledges the terms of Section
18.3 of the Credit Agreement and agrees that this Guaranty shall extend and
be applicable to each new or replacement note delivered by Borrower pursuant
thereto without notice to or further consent from the Guarantor.
4. NO CONTEST WITH LENDER; SUBORDINATION. So long as any obligation
hereby guaranteed remains unpaid or undischarged, the Guarantor will not, by
paying any sum recoverable hereunder (whether or not demanded by Lender) or
by any means or on any other ground, claim any set-off or counterclaim
against Borrower in respect of any liability of the Guarantor to Borrower or,
in proceedings under federal bankruptcy law or insolvency proceedings of any
nature, prove in competition with Lender in respect of any payment hereunder
or be entitled to have the benefit of any counterclaim or proof of claim or
dividend or payment by or on behalf of Borrower or the benefit of any other
security for any obligation hereby guaranteed which, now or hereafter, Lender
may hold or in which it may have any share. The Guarantor hereby expressly
waives any right of contribution from or indemnity against Borrower, whether
at law or in equity, arising from any payments made by the Guarantor pursuant
to the terms of this Guaranty, and the Guarantor acknowledges that it has no
right whatsoever to proceed against Borrower for reimbursement of any such
payments until all indebtedness guaranteed hereby has been completely repaid
and all obligations and undertakings of Borrower under, by reason of, or
pursuant to the Note and the Loan Documents have been completely performed.
In connection with the foregoing, the Guarantor expressly waives any and all
rights of subrogation to Lender against Borrower, and the Guarantor hereby
waives any rights to enforce any remedy which Lender may have against
Borrower and any rights to participate in any collateral for Borrower's
obligations under the Loan Documents. The Guarantor hereby subordinates
3
<PAGE>
any and all indebtedness of Borrower now or hereafter owed to the Guarantor
to all indebtedness of Borrower to Lender, and agrees with Lender that (a)
the Guarantor shall not demand or accept any payment from Borrower on account
of such indebtedness, (b) the Guarantor shall not claim any offset or other
reduction of the Guarantor's obligations hereunder because of any such
indebtedness, and (c) the Guarantor shall not take any action to obtain any
interest in any of the security described in and encumbered by the Loan
Documents because of any such indebtedness; provided, however, that, if
Lender so requests, such indebtedness shall be collected, enforced and
received by the Guarantor as trustee for Lender and be paid over to Lender on
account of the indebtedness of Borrower to Lender, but without reducing or
affecting in any manner the liability of the Guarantor under the other
provisions of this Guaranty except to the extent the principal amount of such
outstanding indebtedness shall have been reduced by such payment.
5. WAIVER OF DEFENSES. The Guarantor hereby agrees that its
obligations hereunder shall not be affected or impaired by, and hereby waives
and agrees not to assert or take advantage of any defense based on:
(a) any statute of limitations in any action hereunder or for the
collection of the Note or for the payment or performance of any obligation
hereby guaranteed;
(b) the incapacity or lack of authority of Borrower or any other
person or entity, or the failure of Lender to file or enforce a claim against
the estate (either in administration, bankruptcy or in any other proceeding)
of Borrower or the Guarantor or any other person or entity;
(c) the dissolution or termination of existence of Borrower or the
Guarantor;
(d) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Borrower;
(e) the voluntary or involuntary receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
assignment, composition, or readjustment of, or any similar proceeding
affecting, Borrower or the Guarantor, or any of Borrower's or the Guarantor's
properties or assets;
(f) the damage, destruction, condemnation, foreclosure or
surrender of all or any part of the Real Estate or any of the improvements
located thereon;
(g) the failure of Lender to give notice of the existence,
creation or incurring of any new or additional indebtedness or obligation or
of any action or nonaction on the part of any other person whomsoever in
connection with any obligation hereby guaranteed;
(h) any failure or delay of Lender to commence an action against
Borrower, to assert or enforce any remedies against Borrower under the Note
or the Loan Documents, or to realize upon any security;
4
<PAGE>
(i) any failure of any duty on the part of Lender to disclose to
the Guarantor any facts it may now or hereafter know regarding Borrower, the
Real Estate or any of the improvements located thereon, whether such facts
materially increase the risk to the Guarantor or not;
(j) failure to accept or give notice of acceptance of this
Guaranty by Lender;
(k) failure to make or give notice of presentment and demand for
payment of any of the indebtedness or performance of any of the obligations
hereby guaranteed;
(l) failure to make or give protest and notice of dishonor or of
default to the Guarantor or to any other party with respect to the
indebtedness or performance of obligations hereby guaranteed;
(m) except as otherwise specifically provided in this Guaranty,
any and all other notices whatsoever to which the Guarantor might otherwise
be entitled;
(n) any lack of diligence by Lender in collection, protection or
realization upon any collateral securing the payment of the indebtedness or
performance of obligations hereby guaranteed;
(o) the invalidity or unenforceability of the Note or any of the
Loan Documents;
(p) the compromise, settlement, release or termination of any or
all of the obligations of Borrower under the Note or the Loan Documents;
(q) any transfer by Borrower of all or any part of the security
encumbered by the Loan Documents;
(r) the failure of Lender to perfect any security or to extend or
renew the perfection of any security; or
(s) to the fullest extent permitted by law, any other legal,
equitable or surety defenses whatsoever to which the Guarantor might
otherwise be entitled (other than the defense of payment), it being the
intention that the obligations of the Guarantor hereunder are absolute,
unconditional and irrevocable.
6. GUARANTY OF PAYMENT AND PERFORMANCE AND NOT OF COLLECTION. This is
a Guaranty of payment and performance and not of collection. The liability
of the Guarantor under this Guaranty shall be primary, direct and immediate
and not conditional or contingent upon the pursuit of any remedies against
Borrower or any other person, nor against securities or liens available to
Lender, its successors, successors in title, endorsees or assigns, except as
otherwise provided herein. The Guarantor hereby waives any right to require
that an action be brought against Borrower or any other
5
<PAGE>
person or to require that resort be had to any security or to any balance of
any deposit account or credit on the books of Lender in favor of Borrower or
any other person.
7. RIGHTS AND REMEDIES OF LENDER. In the event of a default under the
Note or the Loan Documents, or any of them, Lender shall have the right to
enforce its rights, powers and remedies thereunder or hereunder or under any
other agreement, document or instrument now or hereafter evidencing, securing
or otherwise relating to the indebtedness evidenced by the Note or secured by
the Loan Documents, in any order, and all rights, powers and remedies
available to Lender in such event shall be nonexclusive and cumulative of all
other rights, powers and remedies provided thereunder or hereunder or by law
or in equity. Accordingly, the Guarantor hereby authorizes and empowers
Lender upon the occurrence of any event of default under the Note or the Loan
Documents, at its sole discretion, and without notice to the Guarantor, to
exercise any right or remedy which Lender may have, including, but not
limited to, judicial foreclosure, exercise of rights of power of sale,
acceptance of a deed or assignment in lieu of foreclosure, appointment of a
receiver to collect rents and profits, exercise of remedies against personal
property, or enforcement of any assignment of leases, as to any security,
whether real, personal or intangible. At any public or private sale of any
security or collateral for any indebtedness or any part thereof guaranteed
hereby, whether by foreclosure or otherwise, Lender may, in its discretion,
purchase all or any part of such security or collateral so sold or offered
for sale for its own account and may apply against the amount bid therefor
all or any part of the balance due it pursuant to the terms of the Note or
any other Loan Document without prejudice to Lender's remedies hereunder
against the Guarantor for deficiencies. If the indebtedness guaranteed
hereby is partially paid by reason of the election of Lender to pursue any of
the remedies available to Lender, or if such indebtedness is otherwise
partially paid, this Guaranty shall nevertheless remain in full force and
effect, and the Guarantor shall remain liable for the entire balance of the
indebtedness guaranteed hereby even though any rights which the Guarantor may
have against Borrower may be destroyed or diminished by the exercise of any
such remedy.
8. APPLICATION OF PAYMENTS. The Guarantor hereby authorizes Lender,
without notice to the Guarantor, to apply all payments and credits received
from Borrower or from the Guarantor or realized from any security in such
manner and in such priority as Lender in its sole judgment shall see fit to
the indebtedness, obligation and undertakings which are the subject of this
Guaranty.
9. BUSINESS FAILURE, BANKRUPTCY OR INSOLVENCY. In the event of the
business failure of the Guarantor or if there shall be pending any bankruptcy
or insolvency case or proceeding with respect to the Guarantor under federal
bankruptcy law or any other applicable law or in connection with the
insolvency of the Guarantor, or if a liquidator, receiver, or trustee shall
have been appointed for the Guarantor or the Guarantor's properties or
assets, Lender may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of Lender allowed
in any proceedings relative to the Guarantor, or any of the Guarantor's
properties or assets, and, irrespective of whether the indebtedness or other
obligations of Borrower guaranteed hereby shall then be due and payable, by
declaration or otherwise, Lender shall be entitled and empowered to file and
prove a claim for the whole amount of any sums or sums owing with respect to
the indebtedness or other obligations of Borrower guaranteed hereby, and to
collect and receive any moneys or other
6
<PAGE>
property payable or deliverable on any such claim. The Guarantor covenants
and agrees that upon the commencement of a voluntary or involuntary
bankruptcy proceeding by or against Borrower, the Guarantor shall not seek a
supplemental stay or otherwise pursuant to 11 U.S.C. Section 105 or any other
provision of the Bankruptcy Reform Act of 1978, as amended, or any other
debtor relief law (whether statutory, common law, case law, or otherwise) of
any jurisdiction whatsoever, now or hereafter in effect, which may be or
become applicable, to stay, interdict, condition, reduce or inhibit the
ability of Lender to enforce any rights of Lender against the Guarantor by
virtue of this Guaranty or otherwise.
10. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Guarantor hereby
represents and warrants to Lender that all financial statements of the
Guarantor heretofore delivered by the Guarantor to Lender are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles consistently applied, and fairly
present the financial condition of the Guarantor as at the close of business
on the date thereof and the results of operations for the period then ended;
that no material adverse change has occurred in the assets, liabilities,
financial condition or business of the Guarantor as shown or reflected
therein since the date thereof; and that the Guarantor has no liabilities or
known contingent liabilities involving material amounts which are not
reflected in such financial statements or referred to in the notes thereto
other than the Guarantor's obligations under this Guaranty. The Guarantor
hereby agrees that until all indebtedness guaranteed hereby has been
completely repaid, all obligations and undertakings of Borrower under, by
reason of, or pursuant to the Note and the Loan Documents have been
completely performed and Lender has no further obligation to make Loans to
Borrower pursuant to the Credit Agreement, the Guarantor will deliver to
Lender:
(a) as soon as practicable and in any event within 90 days after
the end of each fiscal year of the Guarantor, the audited consolidated
balance sheet of the Guarantor as of the end of such year, and the related
audited consolidated statement of operations and statement of cash flows for
such year, each setting forth in comparative form the figures for the
previous fiscal year and all such statements to be in reasonable detail,
prepared in accordance with generally accepted accounting principles, and
accompanied by an auditor's report prepared without qualification by Arthur
Andersen LLP or by another "Big Six" accounting firm. At any time that the
Agent has reasonable grounds to request the same (including, without
limitation, at any time that the Compliance Certificate indicates that the
Guarantor is at or near the minimum compliance with the financial covenants
in this Guaranty), the Agent may require that such report be accompanied by a
written statement from such accountants to the effect that they have read a
copy of this Guaranty and the Credit Agreement, and that, in making the
examination necessary to said certification, they have obtained no knowledge
of any Default or Event of Default under this Guaranty, or, if such
accountants shall have obtained knowledge of any then existing Default or
Event of Default they shall disclose in such statement any such Default or
Event of Default;
(b) as soon as practicable and in any event within 45 days after
the end of each fiscal quarter of the Guarantor, copies of the unaudited
consolidated balance sheet of the Guarantor as of the end of such quarter,
and the related unaudited consolidated statement of Net Operating
7
<PAGE>
Income and Operating Cash Flow for the portion of the Guarantor's fiscal year
then elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles, together with a certification by an
Authorized Officer of the Guarantor that the information contained in such
financial statements fairly presents the financial position of the Guarantor
on the date thereof (subject to year end adjustment); such financial
statements shall provide all information necessary for calculation of the
Guarantor's Maximum Amount;
(c) contemporaneously with the delivery of the financial statements
referred to in clause (a) above, a statement of all contingent liabilities of
the Guarantor which are not reflected in such financial statements or referred
to in the notes thereto (including, without limitation, all guarantees,
endorsements and other contingent obligations in respect of indebtedness of
others, and obligations to reimburse the issuer in respect of any letters of
credit), and a statement of projected cash flows of the Guarantor for the
current fiscal year, all in reasonable detail and certified by an Authorized
Officer of the Guarantor;
(d) promptly after they are filed with the Internal Revenue
Service, copies of all annual federal income tax returns and amendments
thereto of the Guarantor;
(e) not later than 45 days after the end of each fiscal quarter of
the Guarantor (including the fourth fiscal quarter in each year), a statement,
certified as true and correct by an Authorized Officer of the Guarantor, of all
Indebtedness of the Guarantor as of the end of such fiscal quarter, which
statement shall include the original principal amount of such Indebtedness and
the current amount outstanding, the holder thereof, the maturity date and any
extension options, the interest rate, the collateral provided for such
Indebtedness and whether such Indebtedness is recourse or non-recourse;
(f) concurrently with the delivery of the financial statements
described in subsection (b) above, a certificate signed by an Authorized
Officer of the Guarantor to the effect that, having read this Guaranty, and
that based upon an examination which they deem sufficient to enable them to
make an informed statement, there does not exist any Default or Event of
Default, or if such Default or Event of Default has occurred, specifying the
facts with respect thereto;
(g) promptly upon becoming aware thereof, written notice from the
Guarantor of any event or condition which might have a material adverse
effect on the business, operations, assets, condition (financial or
otherwise) or prospects of the Guarantor or the ability of the Guarantor to
perform under this Guaranty (including but not limited to, litigation
commenced or threatened in writing against the Guarantor, judgments rendered
against the Guarantor, liens filed against any property of the Guarantor,
defaults claimed under indebtedness for borrowed money for which the
Guarantor is primarily or secondarily liable, or bankruptcy, insolvency or
trustee or receivership proceedings commenced against the Guarantor), such
notice to specify the nature and the period of existence of such event or
condition, the anticipated effect thereof, and what action the Guarantor is
taking or proposes to take with respect thereto; and
8
<PAGE>
(h) with reasonable promptness, such other information respecting
the business, operations, assets, liabilities and financial condition of the
Guarantor as Lender may from time to time reasonably request.
Notwithstanding anything herein to the contrary, the Guarantor shall not be
required to deliver any statements or reports described in this Paragraph 10
to the extent the same are included in the Consolidated financial statements
of the Borrower and its Subsidiaries delivered to the Banks by the Borrower
as and when required by the Credit Agreement, or unless the Agent
specifically requests any such statements or reports. The Guarantor will
permit the Banks, through the Agent or any representative designated by the
Agent, at the Guarantor's expense, to visit and inspect any of the properties
of the Guarantor, to examine the records and books of account of the
Guarantor (and to make copies thereof and extracts therefrom) and to discuss
the affairs, finances and accounts of the Guarantor with, and to be advised
as to the same by, its officers, all at such reasonable times and intervals
as the Agent or any Bank may reasonably request.
11. COVENANTS OF GUARANTOR. The Guarantor hereby covenants and agrees
with Lender that until all indebtedness guaranteed hereby has been completely
repaid, Lender has no further obligation to make advances under the Credit
Agreement and all obligations and undertakings of Borrower under, by reason
of, or pursuant to the Note and the Loan Documents have been completely
performed:
(a) the Guarantor will do or cause to be done all things necessary
to preserve and keep in full force and effect its legal existence, material
rights and franchises, as applicable, to effect and maintain its foreign
qualifications, licensing, domestication or authorization, and to comply in
all material respects with all applicable laws and regulations (including,
without limitation, environmental laws);
(b) the Guarantor will duly pay and discharge, before the same
shall become in arrears, all taxes, assessments and other governmental
charges imposed upon it and its properties, sales or activities, or upon the
income or profits therefrom, as well as claims for labor, material, or
supplies which if unpaid might become a lien or charge on any of its
property; provided that any such tax, assessment, charge or claim need not be
paid if the validity or amount thereof shall currently be contested in good
faith by appropriate proceedings and if the Guarantor shall have set aside on
its books adequate reserves with respect thereto; and provided further that
the Guarantor shall pay all such taxes, assessments, charges and claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor;
(c) the Guarantor will maintain and keep the properties used or
deemed by it to be useful in its business in first-class repair, working
order and condition in all material respects, and make or cause to be made
all necessary and proper repairs thereto and replacements thereof;
(d) the Guarantor will maintain with financially sound and
reputable insurers, insurance with respect to its properties and business
against such casualties and contingencies and in
9
<PAGE>
such types and amounts as shall be in accordance with sound business
practices for companies in similar business similarly situated;
(e) the Guarantor will keep complete, proper and accurate records
and books of account in which full, true and correct entries will be made in
accordance with generally accepted accounting principles consistent with the
preparation of the financial statements heretofore delivered to Lender and
will maintain adequate accounts and reserves for all taxes (including income
taxes), all depreciation, depletion, and amortization of its properties, all
other contingencies, and all other proper reserves;
(f) the Guarantor will not create, incur, assume, guarantee or be
or remain liable, contingently or otherwise, with respect to any Indebtedness
other than:
(i) Indebtedness to Lender arising under any of the Note, the
Loan Documents and this Guaranty;
(ii) current liabilities of the Guarantor incurred in
the ordinary course of business but not incurred through the borrowing
of money or the obtaining of credit except for credit on an open
account basis customarily extended and in fact extended in connection
with normal purchases of goods and services;
(iii) Indebtedness in respect of taxes, assessments and
governmental charges to the extent that payment therefor shall not at
the time be required to be made in accordance with the provisions of
subparagraph (b) of this paragraph;
(iv) Indebtedness in respect of judgments or awards
that have been in force for less than the applicable period for taking
an appeal so long as execution is not levied thereunder or in respect
of which the Guarantor shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review; and
(v) endorsements for collection, deposit or
negotiation and warranties of products or services, in each case
incurred in the ordinary course of business.
(g) the Guarantor will not create or incur or suffer to be created
or incurred or to exist any lien, encumbrance, mortgage, pledge, negative
pledge, charge, restriction or other security interest of any kind upon any
of its property or assets of any character whether now owned or hereafter
acquired, or upon the income or profits therefrom; or transfer any of such
property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any
other obligation in priority of payment of its general creditors; or acquire,
or agree to have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security
agreement, devise or arrangement; or suffer to exist for a period of more
than 30 days after the same shall have been incurred any Indebtedness or claim
10
<PAGE>
or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or sell, assign, pledge, encumber or otherwise transfer any
accounts, contract rights, general intangibles, chattel paper or instruments,
with or without recourse, or incur or maintain any obligation to any holder
of Indebtedness of the Guarantor which prohibits the creation or maintenance
of any lien securing the Obligations; provided that the Guarantor may create
or incur or suffer to be created or incurred or to exist:
(i) liens on properties to secure taxes, assessments and
other governmental charges or claims for labor, material or supplies in
respect of obligations not overdue;
(ii) liens with respect of judgments, awards or
indebtedness, the Indebtedness with respect to which is permitted by
subparagraph (f)(iv) of this paragraph;
(iii) liens in favor of Lender; and
(iv) encumbrances on properties consisting of leases
entered into in the ordinary conduct of business of the Guarantor,
easements, rights of way, zoning restrictions, restrictions on the use
of real property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Guarantor is a
party, and other minor non-monetary liens or encumbrances none of which
interferes materially with the use of the property effected in the
ordinary conduct of the business of the Guarantor, which defects do not
individually or in the aggregate have a materially adverse effect on
the business of the Guarantor;
(h) the Guarantor will not become a party to any merger,
consolidation or other business combination, or agree to effect any asset
acquisition, stock acquisition or other acquisition, except as otherwise
permitted in the Credit Agreement;
(i) the Guarantor will not become a party to or agree to or affect
any disposition of assets, except as otherwise permitted in the Credit
Agreement; and
(j) the Guarantor will cooperate with Lender and execute such
further instruments and documents as Lender shall reasonably request to carry
out to their satisfaction the transactions contemplated by this Guaranty and
the other Loan Documents.
12. CHANGES IN WRITING; NO REVOCATION. This Guaranty may not be
changed orally, and no obligation of the Guarantor can be released or waived
by Lender except by a writing signed by a duly authorized officer of Lender.
This Guaranty shall be irrevocable by the Guarantor until all indebtedness
guaranteed hereby has been completely repaid and all obligations and
undertakings of Borrower under, by reason of, or pursuant to the Note and the
Loan Documents have been completely performed.
11
<PAGE>
13. NOTICES. All notices, demands or requests provided for or
permitted to be given pursuant to this Guaranty (hereinafter in this
paragraph referred to as "Notice") must be in writing and shall be deemed to
have been properly given or served by personal delivery or by sending same by
overnight courier or by depositing the same in the United States mail,
postpaid and registered or certified, return receipt requested, at the
addresses set forth below. Each Notice shall be effective upon being
delivered personally or upon being sent by overnight courier or upon being
deposited in the United States Mail as aforesaid. The time period in which a
response to any such Notice must be given or any action taken with respect
thereto, however, shall commence to run from the date of receipt if
personally delivered or sent by overnight courier or, if so deposited in the
United States Mail, the earlier of three (3) Business Days following such
deposit and the date of receipt as disclosed on the return receipt.
Rejection or other refusal to accept or the inability to deliver because of
changed address of which no Notice was given shall be deemed to be receipt of
the Notice sent. By giving at least fifteen (15) days prior Notice thereof,
the Guarantor or Lender shall have the right from time to time and at any
time during the term of this Guaranty to change their respective addresses
and each shall have the right to specify as its address any other address
within the United States of America. For the purposes of this Guaranty:
The address of Lender is:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
with a copy to:
The First National Bank of Boston
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Dan Silbert
(770) 390-6552
(770) 390-8434 (Fax)
and a copy to each other Lender which may now be or hereafter become a party
to the Credit Agreement at such address as may be designated by such Lender
in the Credit Agreement.
12
<PAGE>
The address of Guarantor is:
MIT Unsecured L.P.
c/o Meridian Industrial Trust, Inc.
455 Market Street, 17th Floor
San Francisco, California 94105
Attn: Milton K. Reeder, President and Chief Financial Officer
415/281-3900
415/284-2840 (FAX)
14. GOVERNING LAW. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT THIS
GUARANTY AND THE OBLIGATIONS OF THE GUARANTOR HEREUNDER SHALL BE GOVERNED BY
AND INTERPRETED AND DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW).
15. CONSENT TO JURISDICTION; WAIVERS. THE GUARANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE COMMONWEALTH
OF MASSACHUSETTS OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY, AND (B) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER
THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL BY JURY, (II) TO
OBJECT TO JURISDICTION WITHIN THE COMMONWEALTH OF MASSACHUSETTS OR VENUE IN
ANY PARTICULAR FORUM WITHIN THE COMMONWEALTH OF MASSACHUSETTS, AND (III) TO
THE RIGHT, IF ANY, TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES. THE
GUARANTOR AGREES THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS
PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY SUCH SUIT,
ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO THE GUARANTOR AT THE ADDRESS SET FORTH IN
PARAGRAPH 13 ABOVE, AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER
THE SAME SHALL BE SO MAILED. NOTHING CONTAINED HEREIN, HOWEVER, SHALL
PREVENT LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY
RIGHTS AGAINST ANY SECURITY AND AGAINST THE GUARANTOR PERSONALLY, AND AGAINST
ANY PROPERTY OF THE GUARANTOR, WITHIN ANY OTHER STATE. INITIATING SUCH SUIT,
ACTION OR PROCEEDING OR TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT
CONSTITUTE A WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE
GUARANTOR AND LENDER HEREUNDER OR OF THE SUBMISSION HEREIN MADE BY THE
GUARANTOR TO PERSONAL JURISDICTION WITHIN THE COMMONWEALTH OF MASSACHUSETTS.
THE
13
<PAGE>
GUARANTOR HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN
AN INCONVENIENT COURT. THE GUARANTOR CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THEIR FOREGOING
WAIVERS AND ACKNOWLEDGES THAT LENDER HAS BEEN INDUCED TO ENTER INTO THIS
GUARANTY AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG
OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH 15.
THE GUARANTOR ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO REVIEW THIS
PARAGRAPH 15 WITH ITS LEGAL COUNSEL AND THAT THE GUARANTOR AGREES TO THE
FOREGOING AS ITS FREE, KNOWING AND VOLUNTARY ACT.
16. SUCCESSORS AND ASSIGNS. The provisions of this Guaranty shall be
binding upon the Guarantor and its heirs, successors, successors in title,
legal representatives, and assigns, and shall inure to the benefit of Lender,
its successors, successors in title, legal representatives and assigns.
17. ASSIGNMENT BY LENDER. This Guaranty is assignable by Lender in
whole or in part in conjunction with any assignment of the Note or portions
thereof, and any assignment hereof or any transfer or assignment of the Note
or portions thereof by Lender shall operate to vest in any such assignee the
rights and powers, in whole or in part, as appropriate, herein conferred upon
and granted to Lender.
18. SEVERABILITY. If any term or provision of this Guaranty shall be
determined to be illegal or unenforceable, all other terms and provisions
hereof shall nevertheless remain effective and shall be enforced to the
fullest extent permitted by law. Furthermore, if the Maximum Amount or any
other sums the Guarantor is required to pay under this Guaranty shall exceed
the maximum limits imposed by applicable law, such Maximum Amount or other
sums shall be reduced by the amount of such excess.
19. DISCLOSURE. The Guarantor agrees that in addition to disclosures
made in accordance with standard banking practices, any Lender may disclose
information obtained by such Lender pursuant to this Guaranty to assignees or
participants and potential assignees or participants hereunder.
20. NO UNWRITTEN AGREEMENTS. THIS GUARANTY REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
14
<PAGE>
21. TIME OF THE ESSENCE. Time is of the essence with respect to each
and every covenant, agreement and obligation of the Guarantor under this
Guaranty.
22. RATIFICATION. The Guarantor does hereby restate, reaffirm and
ratify each and every warranty and representation regarding the Guarantor set
forth in the Credit Agreement as if the same were more fully set forth
herein. The Guarantor further warrants that due to the operation of its
properties together with the properties of the Borrower as one consolidated
enterprise, the extension of credit and provision of financial accommodations
by Lender to Borrower will be to the direct and indirect interest, advantage
and benefit of the Guarantor.
23. LIMITATION ON LIABILITY. NO OBLIGATION OR LIABILITY WHATSOEVER OF
THE GUARANTOR (WHETHER AS GUARANTOR OR AS SUBSIDIARY OF THE BORROWER) WHICH
MAY ARISE AT ANY TIME UNDER THIS GUARANTY OR ANY OBLIGATION OR LIABILITY
WHICH MAY BE INCURRED BY IT PURSUANT TO ANY OTHER LOAN DOCUMENT SHALL BE
PERSONALLY BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF BE HAD
TO, THE PRIVATE PROPERTY OF ANY OF THE GUARANTOR'S SHAREHOLDERS, TRUSTEES,
OFFICERS OR EMPLOYEES, REGARDLESS OF WHETHER SUCH OBLIGATION OR LIABILITY IS
IN THE NATURE OF CONTRACT, TORT OR OTHERWISE. NOTHING HEREIN SHALL DIMINISH
OR IMPAIR THE RIGHTS OF AGENT AND THE BANKS TO PURSUE ANY REMEDY AGAINST ANY
ASSETS OF THE GUARANTOR.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
15
<PAGE>
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty under seal
on this 21st day of April, 1997.
MIT UNSECURED L.P., a California limited
partnership
By: MIT Unsecured, Inc., a California
corporation, its sole general partner
By: /s/ MILTON K. REEDER
-----------------------------------
Name: Milton K. Reeder
Title: President
Attest: /s/ ROBERT A. DOBBIN
-------------------------------
Name: Robert A. Dobbin
Title: Secretary
[CORPORATE SEAL]
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,095,000
<SECURITIES> 0
<RECEIVABLES> 1,250,000
<ALLOWANCES> (420,000)
<INVENTORY> 0
<CURRENT-ASSETS> 13,941,000
<PP&E> 390,200,000
<DEPRECIATION> (8,030,000)
<TOTAL-ASSETS> 399,036,000
<CURRENT-LIABILITIES> 14,049,000
<BONDS> 143,008,000
0
2,000
<COMMON> 14,000
<OTHER-SE> 241,963,000
<TOTAL-LIABILITY-AND-EQUITY> 399,036,000
<SALES> 0
<TOTAL-REVENUES> 24,868,000
<CGS> 0
<TOTAL-COSTS> 12,152,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,784,000
<INCOME-PRETAX> 8,932,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 1,256,000
<CHANGES> 0
<NET-INCOME> 7,676,000
<EPS-PRIMARY> 0.46
<EPS-DILUTED> 0.44
</TABLE>
