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EXHIBIT 99.1
CONTRIBUTION AND EXCHANGE AGREEMENT
by and among
▇▇▇▇▇▇▇ WEST INVESTMENT CORPORATION,
a Delaware corporation
as
the "Contributor"
and
AIP-SWAG OPERATING PARTNERSHIP, L.P., a
Delaware limited partnership
as
the "Operating Partnership"
and
AMERICAN INDUSTRIAL PROPERTIES REIT, a
Texas real estate investment trust
as
the "Company"
Dated as of September 25, 1997
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TABLE OF CONTENTS
SCHEDULES.....................................................................................................(iii)
EXHIBITS .....................................................................................................(iii)
ARTICLE 1. SUBJECT OF ASSIGNMENT...........................................................................1
Section 1.1 Assignment of the Purchase Agreements........................................1
ARTICLE 2. VALUE AND PAYMENT TERMS.........................................................................1
Section 2.1 Issuance of OP Units.........................................................1
Section 2.2 Sale and Issuance of Company Warrants.........................................2
Section 2.3 Due Diligence Reimbursement..................................................2
Section 2.4 Closing Under Purchase Agreements.............................................2
ARTICLE 3. DUE DILIGENCE INVESTIGATION; TITLE..............................................................2
Section 3.1 ▇▇▇▇▇▇▇ Money.................................................................2
Section 3.2 Independent Contract Consideration...........................................2
Section 3.3 No Inspection Period.........................................................3
Section 3.4 Inspection Materials.........................................................3
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR...............................................3
Section 4.1 The Contributor's Representations and Warranties.............................3
Section 4.2 Legend........................................................................5
Section 4.3 Contributor's Knowledge......................................................5
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE OPERATING
PARTNERSHIP AND THE COMPANY.....................................................................5
Section 5.1 The Transferee's Representations and Warranties..............................6
(i)
3
Section 5.2 No Liability for Exception Matters...........................................7
Section 5.3 The Transferee's Independent Investigation...................................8
ARTICLE 6. COVENANTS.......................................................................................8
Section 6.1 Covenants of the Contributor.................................................8
Section 6.2 Registration Rights.........................................................10
Section 6.3 Confidentiality.............................................................10
Section 6.4 Cooperation.................................................................10
Section 6.5 Time of the Essence.........................................................11
ARTICLE 7. CLOSING........................................................................................11
Section 7.1 The Closing.................................................................11
Section 7.2 Deliveries at the Closing by the Contributor................................11
Section 7.3 Deliveries at the Closing by the Transferee.................................12
Section 7.4 Fees and Expenses...........................................................12
ARTICLE 8. CONDITIONS PRECEDENT TO CLOSING................................................................12
Section 8.1 Conditions to Obligations of the Contributor................................13
Section 8.2 Conditions to Obligations of the Transferee.................................13
ARTICLE 9. ASSIGNMENT.....................................................................................14
ARTICLE 10. BROKERS/COMMISSIONS............................................................................14
ARTICLE 11. DEFAULT/REMEDIES...............................................................................14
Section 11.1 Mutual Termination/Termination by Transferee.................................14
Section 11.2 Default by the Transferee...................................................14
(ii)
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Section 11.3 Default by Contributor......................................................15
ARTICLE 12. NOTICE................................................................................15
ARTICLE 13. MISCELLANEOUS.........................................................................16
Section 13.1 Survival of Representation and Warranties...................................16
Section 13.2 Entire Agreement; No Third-Party Rights.....................................17
Section 13.3 Amendment...................................................................17
Section 13.4 Governing Law; Binding Arbitration..........................................17
Section 13.5 Section Headings............................................................17
Section 13.6 Severability................................................................17
Section 13.7 No Other Rights or Obligations..............................................17
Section 13.8 Counterparts................................................................17
Section 13.9 Construction................................................................17
Section 13.10 Representatives.............................................................17
Section 13.11 Attorneys' Fees.............................................................18
Section 13.12 Interpretation..............................................................18
Section 13.13 Indemnity for Transferee Acts...............................................18
Section 13.14 Indemnity for Contributor Acts..............................................18
SCHEDULES
Schedule 1 Purchase Agreements
Schedule 5.1(f) Transferee Litigation
(iii)
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EXHIBITS
Exhibit 2.2 Form of Warrant Agreement
Exhibit 2.4 Form of Assignment and Assumption
Exhibit 6.1(f) Form of OP Agreement
Exhibit 6.2 Form of Registration Rights Agreement
(iv)
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CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "AGREEMENT") dated as of
September 25, 1997 (the "EFFECTIVE DATE") is made and entered by ▇▇▇▇▇▇▇ WEST
INVESTMENT CORPORATION, a Delaware corporation (the "CONTRIBUTOR"), AMERICAN
INDUSTRIAL PROPERTIES REIT, a Texas real estate investment trust (the
"COMPANY"), and AIP-SWAG OPERATING PARTNERSHIP , L.P., a Delaware limited
partnership (the "OPERATING PARTNERSHIP"). The Company and the Operating
Partnership are sometimes hereinafter collectively referred to as the
"TRANSFEREE".
RECITALS
A. The Contributor, acting on behalf of AG Industrial Investors,
L.P. and ▇▇▇▇▇▇▇ West Acquisition Company, LLC (collectively, the "CONTRIBUTOR
PARTIES"), owns the right to purchase approximately 783,700 rentable square feet
of certain improved industrial real property identified on Schedule 1 pursuant
to four (4) certain purchase agreements identified on Schedule 1 (the "PURCHASE
AGREEMENTS") with Merit Industrial Properties Limited Partnership, Merit 1995
Industrial Portfolio Limited Partnership, Merit VV 1995 Industrial Portfolio
Limited Partnership and Merit VV Land 1995 Industrial Portfolio Limited
Partnership (collectively, "MERIT"). The term "PROPERTY" as used herein shall
have the same meaning collectively provided in the Purchase Agreements.
B. The Operating Partnership desires to acquire the right to
purchase the Contributor's right, title and interest in and to the Purchase
Agreements from the Contributor in exchange for issuing the Contributor Parties
units of limited partnership interest in the Operating Partnership (the "OP
UNITS"), which OP Units will be convertible into beneficial interests of the
Company (the "SHARES"). Additionally, the Company has agreed to sell to the
Contributor Parties warrants to purchase Shares, as hereinafter provided.
NOW, THEREFORE, in consideration of the mutual promises hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, do hereby agree as follows:
ARTICLE 1. SUBJECT OF ASSIGNMENT.
Section 1.1 Assignment of the Purchase Agreements. In accordance
with the terms and conditions of this Agreement and subject to the Transferee's
performance and satisfaction of the conditions, covenants and obligations
contained herein, the Contributor, acting on behalf of the Contributor Parties,
shall assign and convey to the Operating Partnership all of its right, title
and interest in and to the Purchase Agreements.
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ARTICLE 2. VALUE AND PAYMENT TERMS.
Section 2.1 Issuance of OP Units. As consideration for the
assignment of the Purchase Agreements by the Contributor to the Operating
Partnership, at Closing, the Operating Partnership shall issue to the
Contributor 895,425 OP Units, which amount was determined by dividing
$2,740,000.00 by the Share Price (subject to adjustment for Share splits and
similar events implemented by the Company). As used in this Agreement, the term
"SHARE PRICE" shall initially mean $3.06.
Section 2.2 Sale and Issuance of Company Warrants. In
consideration of the payment of $2,000.00 by the Contributor Parties (the
"WARRANT PURCHASE PRICE"), at Closing, the Company shall sell and issue to each
of the Contributor Parties 100,000 warrants (the "COMPANY WARRANTS") to
purchase additional Shares at a purchase price of $3.50 per Share (subject to
adjustment for Share splits and similar events implemented by the Company)
exercisable for a period of three (3) years after Closing. The Company Warrants
will be issued pursuant to two (2) "WARRANT AGREEMENTS" each in the form of
Exhibit 2.2 hereof.
Section 2.3 Due Diligence Reimbursement. At the Closing, the
Operating Partnership shall reimburse the Contributor an amount of cash
designated as the "REIMBURSEMENT AMOUNT", of $260,000.00 to reimburse the
Contributor for certain costs the Contributor has incurred relating to the
negotiation and performance of the Purchase Agreements and as consideration for
the Contributor's delivery and assignment to the Transferee of the Inspection
Materials.
Section 2.4 Closing Under Purchase Agreements. At Closing, the
Contributor, acting on behalf of the Contributor Parties, shall assign all of
its right, title and interest in, to and under the Purchase Agreements to the
Operating Partnership, and the Operating Partnership shall accept such
assignment and assume all of the Contributor's obligations under the Purchase
Agreements, all in accordance with that certain Assignment and Assumption of
Purchase Agreements in the form attached hereto as Exhibit 2.4 (the "ASSIGNMENT
AND ASSUMPTION").
ARTICLE 3. DUE DILIGENCE INVESTIGATION; TITLE.
Section 3.1 ▇▇▇▇▇▇▇ Money. Concurrent with the full execution of
this Agreement, the Company, acting on behalf of the Operating Partnership,
shall deposit with Commonwealth Land Title Company of Dallas, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ (the "TITLE
COMPANY"), Five Hundred Thousand Dollars ($500,000.00) as ▇▇▇▇▇▇▇ money (the
"▇▇▇▇▇▇▇ MONEY"). The Title Company shall invest the ▇▇▇▇▇▇▇ Money in an
interest bearing account acceptable to Operating Partnership. Interest earned
on the ▇▇▇▇▇▇▇ Money shall be deemed to be a part of the ▇▇▇▇▇▇▇ Money. In the
event the transaction contemplated by this Agreement is closed, the ▇▇▇▇▇▇▇
Money shall be delivered into the escrow established under the Purchase
Agreements and delivered to Merit for application against the "Purchase Price"
under and defined in the Purchase Agreements, and the escrow holder under the
Purchase Agreements shall directly return to the Contributor and/or its
designee each "Deposit" under and defined in the
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Purchase Agreements. In the event the transaction contemplated by this
Agreement is not closed, the ▇▇▇▇▇▇▇ Money shall be disbursed in accordance
with the provisions of this Agreement.
Section 3.2 Independent Contract Consideration.
Contemporaneously with the execution and delivery of this Agreement, the
Company has delivered to the Contributor, and the Contributor hereby
acknowledges the receipt of, a check in the amount of One Hundred Dollars
($100.00) ("INDEPENDENT CONTRACT CONSIDERATION"), which amount the parties
bargained for and agreed to as consideration for the Company's exclusive right
to acquire the Contributor's rights under the Purchase Agreements pursuant to
this Agreement and for the Contributor's execution, delivery and performance of
this Agreement. The Independent Contract Consideration is in addition to and
independent of any other consideration or payment provided in this Agreement,
is nonrefundable, and it is fully earned and shall be retained by the
Contributor notwithstanding any other provision of this Agreement.
Section 3.3 No Inspection Period.
(a) The Transferee acknowledges and agrees that prior to
the date hereof the Contributor has delivered to the Transferee what the
Contributor has represented as complete copies of the Purchase Agreements and
what the Contributor has represented as complete copies of all documents,
information and materials in the Contributor's possession relating to the
Property and/or the Purchase Agreements excluding interim drafts and other
similar items that could not be reasonably anticipated to have any effect
whatsoever on the Transferee's valuation of the Property (the "INSPECTION
MATERIALS"), that the Transferee has been given prior to the date of this
Agreement an opportunity to inspect and investigate such Purchase Agreements
and the Property, either independently or through agents of the Transferee's
choosing, that there is no "due diligence period" or "inspection" contingency
set forth in this Agreement and that the sole conditions precedent to the
Transferee's obligations hereunder are as set forth in Section 9.2 below.
(b) From the Effective Date until the Closing Date, the
Contributor shall use its commercially reasonable efforts to cause Merit to
provide the Transferee's representatives and independent accounting firm access
to all financial and other information relating to the Property which would be
sufficient to enable the Transferee's representatives and independent
accounting firm to prepare audited financial statements for 1996 and 1997 to
September 30, 1997 in conformity with generally accepted accounting principles
and to enable them to prepare such statements, reports or disclosures as the
Transferee may deem necessary or advisable. From the Effective Date until the
Closing Date, the Contributor shall reasonably cooperate with the Transferee's
representatives and independent accounting firm in connection with the
aforementioned financial analysis and shall use commercially reasonable efforts
to cause Merit to provide, any additional information necessary to allow the
Transferee to make disclosures required by and otherwise comply with the
financial accounting requirements of the SEC (defined below).
Section 3.4 Inspection Materials. At the Contributor's sole
expense, the Contributor shall cause all environmental, physical inspection and
appraisal reports prepared on behalf of the
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Contributor to be issued or reissued and recertified to the Operating
Partnership or to obtain one or more reliance letters in the form previously
provided to the Transferee by the Contributor.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR.
Section 4.1 The Contributor's Representations and Warranties.
In order to induce the Company and the Operating Partnership to enter into this
Agreement and to perform their respective obligations hereunder, the
Contributor hereby warrants and represents to the Transferee the following:
(a) Organization, Good Standing and Power. The Contributor
is a corporation duly organized and validly existing, and in good standing,
under the laws of the jurisdiction in which it was organized, is duly authorized
to transact business under the laws of each state in which the transaction of
its business makes such qualification necessary, and has all requisite corporate
power and authority to execute and deliver this Agreement and all other
documents and instruments to be executed and delivered by it hereunder and to
perform its obligations hereunder and thereunder in accordance with the terms
and conditions hereof and thereof.
(b) Authorization; No Violation. Assuming the due and
valid authorization, execution and delivery of this Agreement by the
Transferee, this Agreement, and the other agreements and documents to be
executed by the Contributor hereunder, will be the legal, valid and binding
obligation of the Contributor, enforceable against the Contributor in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium or similar laws relating to creditors' rights and
general principles of equity. The performance by the Contributor of its duties
and obligations under this Agreement and the documents and instruments to be
executed and delivered by it hereunder will not conflict with, or result in a
breach of, or default under, any provision of any of the organizational
documents of the Contributor or any agreement, instrument, decree, judgment,
injunction, order, writ, law, rule or regulation, or any determination or award
of any court or arbitrator, to which the Contributor is a party or by which its
assets are or may be bound (a "LEGAL REQUIREMENT"), require any consent,
approval or authorization of, declaration, filing or registration with, or
notice to, (a "THIRD PARTY CONSENT") any federal, state or local governmental
or regulatory authority having jurisdiction over the Property or the
Contributor (a "GOVERNMENTAL AUTHORITY") or any other person or entity.
(c) Existence of Agreements and Leases. To the
Contributor's knowledge, except as reflected in the Inspection Materials, there
are no material service contracts, management or maintenance agreements, leases
or other material agreements affecting the use or occupancy of the Property. To
the Contributor's knowledge, the Inspection Materials heretofore delivered by
the Contributor to the Operating Partnership or its representatives for
examination constitute complete copies of all documents, information and
materials in the Contributor's possession relating to the Property and the
Purchase Agreements excluding interim drafts and other similar items that could
not be reasonably anticipated to have any effect whatsoever on the Transferee's
valuation of the Property.
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(d) Litigation. The Contributor has no knowledge of any
litigation, claim, audit, action, or proceeding pending or threatened before or
by any Governmental Authority or by any other person or entity in any manner
adversely affecting the ability of the Contributor to perform any of its
obligations hereunder.
(e) Solvency; Bankruptcy. The Contributor is solvent,
and has not made a general assignment for the benefit of creditors or a
transfer in fraud of creditors, or been adjudicated a bankrupt or insolvent,
nor has a receiver, liquidator, custodian, or trustee of the Contributor or any
of its properties been appointed or taken possession of any of its properties,
or a petition filed by or against the Contributor for bankruptcy, composition,
rearrangement, extension, reorganization, or arrangement pursuant to the
Federal Bankruptcy Act or any similar federal or state insolvency or bankruptcy
law or statute, or any proceeding instituted for the dissolution or liquidation
of the Contributor.
(f) Validity of Purchase Agreements. The Purchase
Agreements are in full force and effect, and the Contributor has not received
written notice from Merit of any default or event of default under any of the
Purchase Agreements.
(g) Property Reports. The Contributor has delivered to
the Transferee complete copies of all environmental, engineering and appraisal
reports regarding the Property in its possession as part of the Inspection
Materials.
(h) The Contributor Not a Foreign Person. The
Contributor is not a "foreign person" which would subject the Operating
Partnership to the withholding tax provisions of Section 1445 of the Internal
Revenue Code of 1986, as amended.
(i) No Known Breach. To the Contributor's knowledge,
except as set forth in the Inspection Materials, the Contributor has not
received any written materials indicating that Merit is in breach of any of its
representations and warranties set forth in any of the Purchase Agreements.
Section 4.2 Legend. The Contributor hereby acknowledges that
each certificate representing an OP Unit or a Company Warrant shall bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT
MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (A) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), (B) ANY AVAILABLE RULE OR EXEMPTION FROM
REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES, OR (C) AN OPINION OF COUNSEL, REASONABLY
SATISFACTORY TO COUNSEL FOR THE PARTNERSHIP, THAT
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SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER."
Section 4.3 Contributor's Knowledge. For purposes of this Agreement and
any document delivered at Closing, whenever the phrase "to the Contributor's
knowledge" or the "knowledge" of the Contributor or words of similar import are
used, they shall be deemed to refer to the current actual knowledge of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and/or ▇▇▇▇ ▇▇▇▇▇, and not any implied, imputed or constructive
knowledge of either such person.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF THE OPERATING PARTNERSHIP
AND THE COMPANY.
Section 5.1 The Transferee's Representations and Warranties. In
order to induce the Contributor to enter into this Agreement and to perform its
obligations hereunder, the Operating Partnership and the Company hereby jointly
and severally warrant and represent the following:
(a) Organization, Good Standing and Power of the Company.
The Company is a real estate investment trust duly organized and validly
existing under the laws of the State of Texas, is duly authorized to transact
business under the laws of any state in which the character of the properties
owned or leased by it therein or in which the transaction of its business makes
such qualification necessary and has all requisite trust power and authority to
execute and deliver this Agreement and all other documents and instruments to be
executed and delivered by it hereunder and to perform its obligations hereunder
and thereunder in accordance with the terms and conditions hereof and thereof.
(b) Organization, Valid Existence and Partnership Power of
the Operating Partnership. The Operating Partnership is a limited partnership
duly organized and validly existing under the laws of the State of Delaware, is
duly authorized to transact business under the laws of any state in which the
character of the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary, and has all
requisite partnership power and authority to execute and deliver this Agreement
and all other documents and instruments to be executed and delivered by it
hereunder and to perform its obligations hereunder and thereunder in accordance
with the terms and conditions hereof and thereof.
(c) Authorization; No Violation. Assuming the due and
valid authorization, execution and delivery of this Agreement by the
Contributor, this Agreement and the other agreements and documents to be
executed and delivered by each of the Operating Partnership and the Company
hereunder, when duly executed and delivered, will be the legal, valid and
binding obligation of each of the Operating Partnership and the Company,
enforceable against the Operating Partnership and the Company in accordance with
their respective terms, subject to applicable bankruptcy, insolvency, moratorium
or similar laws relating to creditors' rights and general
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principles of equity. The performance by each of the Operating Partnership and
the Company of its respective duties and obligations under this Agreement and
the documents and instruments to be executed and delivered by each of them
hereunder will not (i) conflict with, or result in a breach of, or default
under, any provision of any of the organizational documents of either of the
Operating Partnership or the Company or any agreements, instruments or Legal
Requirements to which either of the Operating Partnership or the Company is a
party or by which the assets of either are or may be bound, or (ii) require any
consent, approval or authorization of, or declaration, filing or registration
with, or notice to, any Governmental Authority.
(d) Solvency; Bankruptcy. The Company and the Operating
Partnership is each solvent and each has not made a general assignment for the
benefit of creditors or a transfer in fraud of creditors, or been adjudicated,
bankrupt or insolvent, nor has a receiver, liquidator, custodian, or trustee of
the Company or the Operating Partnership or any of their respective properties
been appointed or taken possession of any of their respective properties, or a
petition filed by or against the Company or the Operating Partnership for
bankruptcy, composition, rearrangement, extension, reorganization, or
insolvency or bankruptcy law or statute, or any proceeding instituted for the
dissolution or liquidation of either the Company or the Operating Partnership.
(e) OP Units, Warrants and Shares. The OP Units to be
issued to the Contributor Parties are duly authorized and, when issued by the
Operating Partnership, will be fully paid and non-assessable, free and clear of
any mortgage, pledge, lien, encumbrance, security interest, claim or rights of
interest of any third party of any nature whatsoever. The Shares to be issued by
the Company upon conversion of the OP Units or exercise of the Company Warrants
will be, upon such issuance, fully paid and non-assessable, free and clear of
any mortgage, pledge, lien, encumbrance, security interest, claim or rights of
interest of any third party of any nature whatsoever. The Company shall at all
times reserve and maintain a sufficient number of authorized but unissued Shares
to permit it to issue and deliver the Shares obtained upon conversion of the OP
Units and exercise the Company Warrants.
(f) Litigation. Except as set forth in Schedule 5.1(f),
there is no pending or, to the Transferee's knowledge, threatened litigation
against the Operating Partnership or the Company that if adversely determined
would have a material adverse effect on the Transferee or its ability to
perform its obligations under this Agreement in a timely manner.
Section 5.2 No Liability for Exception Matters.
(a) As used herein, the term "Exception Matter" shall refer to a
matter disclosed to the Transferee in writing after the Effective Date hereof,
referenced in any document, report, or other item delivered to the Transferee
by the Contributor or its agents or otherwise obtained or reviewed by the
Transferee, or discovered by the Transferee, before the Closing, that
constitutes, as of the date of this Agreement, a breach of a representation or
warranty of the Contributor contained in this Agreement or in any document or
instrument delivered pursuant hereto. Under no circumstances shall the
Contributor have any obligation to cure or remedy any Exception Matter.
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(b) The Transferee shall promptly notify the Contributor in writing of
any Exception Matter of which the Transferee obtains knowledge before the
Closing, and of any matter discovered by Transferee prior to the Closing that
constitutes, as of the date of this Agreement, a breach of a representation or
warranty of the Contributor contained in this Agreement. Upon receipt of any
such written notice from the Contributor, the Transferee shall have the right
to terminate this Agreement by written notice to the Contributor and the
Company and receive an immediate return of the ▇▇▇▇▇▇▇ Money. If the Transferee
obtains knowledge of any Exception Matter before the Closing, but nonetheless
elects to proceed with the Closing hereunder, the Transferee shall consummate
the transactions contemplated by this Agreement subject to such Exception
Matter and the Contributor shall have no liability with respect to such
Exception Matter, notwithstanding any contrary provision, covenant,
representation or warranty contained in this Agreement. If the Transferee
elects to terminate this Agreement on the basis of any Exception Matter, the
▇▇▇▇▇▇▇ Money shall be immediately returned to the Transferee and neither party
shall have any further rights or obligations hereunder, except as otherwise
expressly provided herein. Notwithstanding anything to the contrary contained
herein, the Contributor shall have no liability whatsoever to the Transferee
with respect to any Exception Matters.
Section 5.3 The Transferee's Independent Investigation. THE
TRANSFEREE SPECIFICALLY ACKNOWLEDGES AND AGREES THAT CONTRIBUTOR IS ASSIGNING
ITS RIGHTS TO ACQUIRE THE PROPERTY PURSUANT TO THE PURCHASE AGREEMENTS, AND THE
TRANSFEREE IS ACCEPTING SUCH ASSIGNMENT, ON AN "AS IS WITH ALL FAULTS" BASIS
AND THAT THE TRANSFEREE IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF
ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM THE CONTRIBUTOR, ITS AGENTS, OR
BROKERS AS TO ANY MATTERS CONCERNING THE PURCHASE AGREEMENTS, THE INSPECTION
MATERIALS OR THE PROPERTY EXCEPT AS EXPRESSLY SET FORTH IN SECTION 4.1 ABOVE.
ARTICLE 6. COVENANTS.
Section 6.1 Covenants of the Contributor. The Contributor covenants
and agrees that between the Effective Date and the Closing Date, unless the
Transferee has consented in writing to any other act or omission which shall not
be unreasonably withheld, delayed or conditioned, it shall perform or observe
the following:
(a) The Contributor shall enforce Merit's obligations under
the Purchase Agreements and shall exercise its rights under the Purchase
Agreements in the same manner as the Contributor would enforce such obligations
and exercise such rights had the Contributor not entered into this Agreement,
provided that in no event shall the Contributor be obligated to commence
litigation to enforce any such obligations.
(b) The Contributor will comply in all material respects
with its obligations set forth in the Purchase Documents and will not terminate
or amend the Purchase Agreements or (to the extent permitted in the Purchase
Agreements) consent to Merit entering into any new agreements
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or leases affecting the Property or to Merit extending, renewing, amending,
canceling or terminating any existing agreements or leases affecting the
Property without first receiving the Operating Partnership's prior written
consent which shall not be unreasonably, withheld, delayed or conditioned.
(c) If the Contributor obtains actual knowledge of any
error or omission in any Inspection Material or in any representation or
warranty made in Section 4.1, the Contributor will give the Operating
Partnership prompt written notice thereof accompanied by reasonably detailed
information.
(d) The Contributor shall promptly give the Operating
Partnership written notice of, and promptly deliver to the Operating
Partnership, a true and complete copy of any written notice the Contributor may
receive, on or before the Closing Date, from any Governmental Authority,
concerning a violation of any applicable Legal Requirement pertaining to the
Property or of any written notice of default from Merit under the Purchase
Agreements.
(e) At Closing, the Contributor Parties shall execute and
deliver: (i) the amended and restated agreement of limited partnership of the
Operating Partnership (the "OP AGREEMENT") in the form attached hereto as
Exhibit 6.1(f), and (ii) the Warrant Agreements.
(f) The Contributor, without cost or expense to the
Contributor, shall cooperate to the extent reasonably requested in the
preparation by the Company of any reports, registration statements or other
filings required to be filed by the Company with the Securities and Exchange
Commission ("SEC") relating to the transactions contemplated hereunder. The
Contributor shall also provide (or cause Merit to provide) to the Company's
representatives an original of the signed representation letter which has been
approved by the Transferee's accountants.
(g) The Contributor shall, and shall cause any other person
designated by it to receive OP Units and/or Company Warrants to, execute and
deliver to the Operating Partnership and/or the Company at or prior to Closing
a certificate in a form reasonably satisfactory to the Transferee (the
"INVESTOR CERTIFICATE") to the effect that each such person (a) is acquiring
the OP Units or Company Warrants being acquired hereunder for investment (for
its own account or for accounts over which it exercises investment control),
and not with a view to, or for offer or sale in connection with, any
distribution thereof that would be in violation of the Securities Act of 1933,
as amended (the "1933 ACT"), without prejudice, however, to such person's right
at all times to sell or otherwise dispose of all or any part of such OP Units
or Company Warrants pursuant to an effective registration statement under the
1933 Act, or under an exemption from such registration available under the 1933
Act, (b) is knowledgeable, sophisticated and experienced in business and
financial matters and fully understands the limitations on transfer described
above and (c) is an "accredited investor" as such term is defined in Rule
501(a) of Regulation D under the 1933 Act.
(h) Notwithstanding anything to the contrary provided in
this Section 6.1 or any other provision of this Agreement, (i) the Transferee
agrees that the Contributor shall have the right, without the consent of the
Transferee, to (x) amend the Purchase Agreements to accelerate the
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"Closing Date" under and defined in the Purchase Agreements to a date no
earlier than September 30, 1997 or later than October 15, 1997, and (y) waive
the estoppel conditions set forth in Paragraphs 6(b) of the Purchase Agreements
provided that the Contributor receives from Merit tenant estoppel certificates
reasonably satisfactory to the Transferee and its lender from tenants occupying
the Property paying in the aggregate at least eighty percent (80%) of the gross
rental income being generated by the Property as well as from the nine (9)
largest tenants based on gross rental payments made relating to the Property,
and (ii) if the Transferee fails to respond in writing with respect to any
written request, by the Contributor for the Transferee's consent under this
Section 6.1 within one (1) business day after such request (or in the event
that such issue arises within one (1) business day of the Closing, prior to
Closing), the Transferee shall be deemed to have approved such matter, and
(iii) in the event that the Transferee has the right to approve any matter
under this Section 6.1 and timely disapproves a request for its approval, the
Contributor shall nonetheless be entitled to take the action with respect to
which such request for approval has been made despite the Transferee's
disapproval, provided that, if the Contributor takes such an action
notwithstanding the Transferee's disapproval thereof, the Transferee shall have
the right to terminate this Agreement by delivering written notice of
termination to the Contributor within one (1) business day after the
Contributor notifies the Transferee in writing that the Contributor has taken
such action (or, in the event that such issue arises within one (1) business
day of the Closing, prior to the Closing). In the event that the Transferee
terminates this Agreement pursuant to the immediately preceding proviso, the
Contributor shall have the right in its sole and absolute discretion to proceed
with the consummation of all or any of the transactions described in the
Purchase Agreements, free of any claims by the Transferee with respect to the
Property, and the Contributor may retain any Extension Fee, provided however,
if the Transferee promptly returns all of the Inspection Materials to the
Contributor and is not in otherwise in default hereunder (including, without
limitation, by unreasonably withholding approval), the ▇▇▇▇▇▇▇ Money shall be
immediately returned to the Transferee. In the event that the Transferee fails
to deliver written notice of termination within such one (1) business day
period (or, in the event that such issue arises within one (1) business day of
the Closing, prior to Closing), the Transferee shall be deemed to have approved
such matter and waived such right of termination, and in all events the
occurrence of the Closing shall constitute the Transferee's approval of such
matter and waiver of such applicable termination right.
Section 6.2 Registration Rights. The Company has, or promptly after
demand by the Contributor Parties under the Registration Rights Agreement (as
defined below), the Company shall cause to be, filed with the SEC a
registration statement and related prospectus that comply in all material
respects with applicable SEC rules providing for registration under the 1933
Act of the public offer and sale by the Contributor Parties of the Shares. The
Company shall use its best efforts to cause such registration statement to be
declared effective by the SEC as soon as practicable and to keep such
registration effective thereafter for the period specified in the Registration
Rights Agreement. The Company and each of the Contributor Parties shall enter
into a registration rights agreement (the "REGISTRATION RIGHTS AGREEMENT"),
substantially in the form of Exhibit 6.2, on or prior to the Closing Date,
providing for, among other things, the registration of the total number of
Shares that each of the Contributor Parties would own if it were to convert all
OP Units owned by it.
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Section 6.3 Confidentiality. Except as hereinafter provided, from
and after the execution of this Agreement until the Closing, the Transferee and
the Contributor shall abide by the confidentiality provisions of the Purchase
Agreements and shall keep the terms, conditions and provisions of this
Agreement confidential and neither shall make any public announcements hereof
unless the other first approves of same in writing, nor shall either disclose
the terms, conditions and provisions hereof, except to their respective
employees, agents, partners, investors, attorneys, accountants, engineers,
surveyors, financiers and bankers. The Contributor acknowledges and agrees that
the Transferee is a public company and as such will be required pursuant to the
rules and regulations of the SEC to disclose the terms of this Agreement and
the transactions contemplated herein. Notwithstanding the foregoing, in
connection with the performance of its obligations under Section 6.2 and under
the Registration Rights Agreement, the Transferee will have the absolute right
to prepare and file all necessary or required registration statements and other
papers, documents and instruments necessary or required in Transferee's
judgment and that of its attorneys and underwriters to file a registration
statement with respect to the Shares with the SEC and/or similar state
authorities and to cause same to become effective and to disclose therein and
thus to its underwriters, to the SEC and/or to similar state authorities and to
the public all of the terms, conditions and provisions of this Agreement. The
obligations of this Section 6.3 shall survive any termination of this
Agreement.
Section 6.4 Cooperation. Subject to the terms and conditions herein
provided and without additional cost or expense, the parties to this Agreement
shall use commercially reasonable efforts to take, or cause to be taken, all
other actions and do, or cause to be done, all other things necessary, proper
or appropriate to consummate and make effective the transactions contemplated
by this Agreement pursuant to their respective rights and obligations
hereunder. If, at any time after the Closing Date, any further action is
reasonably necessary or desirable to further carry out the purposes of this
Agreement, the proper officers and directors and other duly authorized
representatives of the parties shall take all such necessary action (provided
that no such requested action shall increase the applicable party's obligations
or liabilities hereunder or result in any additional cost or expense).
Section 6.5 Time of the Essence. Time is of the essence of this
Agreement.
ARTICLE 7. CLOSING.
Section 7.1 The Closing. The consummation of the transactions
contemplated hereunder (the "CLOSING") shall take place through the escrow
established under, and on the date of closing specified in the Purchase
Agreements or at such other place or such other date as the parties hereto
shall mutually agree in writing (the "CLOSING DATE"), and shall occur
simultaneously with, the "Closing" under and defined in each of the Purchase
Agreements.
Section 7.2 Deliveries at the Closing by the Contributor. At the
Closing, the Contributor will deliver or cause to be delivered to the Operating
Partnership the Assignment and Assumption and:
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(a) Any affidavits and such other documents or instruments
reasonably required by the Title Company to consummate the transactions
contemplated hereby (provided that no such documents shall increase the
Contributor's obligations or liabilities hereunder).
(b) Affidavits and other instruments evidencing the power
and authority of the Contributor to enter into and perform this Agreement and
any documents to be delivered hereunder.
(c) A certificate executed by a duly authorized
representative of the Contributor stating that the representations and
warranties made by the Contributor in this Agreement are true and correct in
all material respects as of the Closing Date, or if there have been any
changes, a description thereof.
(d) In order to avoid the imposition of the withholding tax
payment pursuant to Section 1445 of the Code, a certificate signed by a duly
authorized representative of the Contributor to the effect that the Contributor
is not a "foreign person" as that term is defined in section 1445(f)(3) of the
Code.
(e) The Investors' Certificates.
(f) The OP Agreement.
(g) The Warrant Agreements.
(h) The Registration Rights Agreements.
(i) The Warrant Purchase Price.
(j) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement (provided that no such documents shall increase the
Contributor's obligations or liabilities under this Agreement).
Section 7.3 Deliveries at the Closing by the Transferee. At the
Closing, the Operating Partnership and the Company shall deliver or cause to be
delivered to the Contributor the following and, where appropriate, duly
executed by all necessary parties thereto other than the Contributor:
(a) The Reimbursement Amount.
(b) The certificates representing the OP Units to be
issued at the Closing properly issued to the appropriate party.
(c) The certificates representing the Company Warrants to
be issued at the Closing properly issued to the appropriate party.
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(d) The Assignment and Assumption.
(e) A certificate executed by a duly authorized
representative of the Operating Partnership and the Company stating that the
representations and warranties made by the Operating Partnership and the Company
in this Agreement are true and correct in all material respects as of the
Closing Date, or if there have been any changes, a description thereof.
(f) Affidavits and other instruments evidencing the power
and authority of the Operating Partnership and the Company to enter into and
perform this Agreement and any documents to be delivered hereunder.
(g) The OP Agreement.
(h) The Warrant Agreements.
(i) The Registration Rights Agreements.
(j) Such other documents as may be reasonably required or
appropriate to effectuate the consummation of the transactions contemplated by
this Agreement (provided that no such documents shall increase the Transferee's
obligations or liabilities under this Agreement).
Section 7.4 Fees and Expenses. Subject to Section 13.11, each party
shall pay all other fees and expenses charged by the attorney engaged to
represent it. The parties shall share equally the Title Company's escrow
closing expenses, if any. The provisions of this Section 7.4 shall survive the
Closing.
ARTICLE 8. CONDITIONS PRECEDENT TO CLOSING.
Section 8.1 Conditions to Obligations of the Contributor. The
obligations of the Contributor to assign and convey all of its right, title and
interest in and to the Purchase Agreements to the Operating Partnership and to
perform the other covenants and obligations to be performed by the Contributor
on the Closing Date shall be subject to satisfaction of the following
conditions (all or any of which may be waived, in whole or in part, by the
Contributor Group):
(a) The representations and warranties made by the
Operating Partnership and the Company herein shall be true and correct in all
material respects with the same force and effect as though such representations
and warranties had been made on and as of the Closing Date; provided, however,
that a failure of any representations or warranties to be true and correct in
all material respects shall not give rise to a claim or right of termination by
the Contributor hereunder so long as such matters do not have a material adverse
effect on the transactions contemplated herein.
(b) The Operating Partnership and the Company shall have
executed and delivered to the Contributor all of the items and documents
provided herein for said delivery.
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(c) The Operating Partnership and the Company shall have
performed all covenants and obligations undertaken by the Operating Partnership
and the Company herein in all material respects and materially complied with
all conditions required by this Agreement to be performed or complied with by
them on or before the Closing Date.
Section 8.1 Conditions to Obligations of the Transferee. The
obligations of the Operating Partnership to accept the assignment and
conveyance of the Purchase Agreements and the Operating Partnership's and the
Company's obligation to perform the other covenants and obligations to be
performed by the Operating Partnership and the Company on the Closing Date
shall be subject to satisfaction of the following conditions (all or any of
which may be waived, in whole or in part, by the Operating Partnership or the
Company):
(a) The representations and warranties made by the
Contributor herein shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date; provided, however, that a failure of a
representation or warranty to be true and correct in all material respects
shall not give rise to a claim or right of termination by the Operating
Partnership or the Company hereunder so long as such matters do not have a
material adverse effect on the transactions contemplated herein.
(b) The Contributor shall have executed and delivered to
the Operating Partnership and the Company all of the items and documents
provided herein for said delivery.
(c) The Contributor shall have performed all covenants and
obligations undertaken by the Contributor herein in all material respects and
materially complied with all conditions required by this Agreement to be
performed or complied with by it on or before the Closing Date.
(d) The closings contemplated in the Purchase Agreements
shall occur simultaneously with Closing under this Agreement in accordance with
the terms and conditions of the Purchase Agreements, subject to Section 6.1(h).
ARTICLE 9. ASSIGNMENT.
No party may assign this Agreement or any interest therein to any
other person without the prior written consent of the other parties hereto,
provided that the Transferee acknowledges and consents to the Contributor
acting on behalf of the Contributor Parties hereunder.
ARTICLE 10. BROKERS/COMMISSIONS.
The Contributor and the Transferee covenant and agree one with the
other that no real estate commissions, finders' fees or brokers' fees have been
or will be incurred in connection with this Agreement or the transaction
contemplated hereby except for certain commissions payable by the
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Company to Prudential Securities Incorporated (the "BROKER"), as to which the
Company will indemnify, defend and hold harmless the Contributor from and
against any claim asserted by the Broker for any commissions, finders' fees or
brokers' fees or other compensation claimed to be due broker in connection with
the transactions contemplated by this Agreement. Except for any amount payable
by the Company to the Broker, the Contributor and the Transferee shall
indemnify, defend and hold each other harmless from and against any claims,
liabilities, obligations or damages for commissions, finders' or brokers' fees
resulting from or arising out of the Transferee's acquisition of the Property
or the transactions contemplated hereby, asserted against either party by any
broker or other person claiming by, through or under the indemnifying party or
whose claim is based on the indemnifying party's acts or omissions. The
provisions of this Article 10 shall survive the Closing or other termination of
this Agreement.
ARTICLE 11. DEFAULT/REMEDIES.
Section 11.1 Mutual Termination/Termination by Transferee. The
Contributor and the Transferee may terminate this Agreement at any time prior
to Closing by mutual written agreement. Either the Transferee or the
Contributor may terminate this Agreement at any time prior to Closing upon a
material failure of any condition set forth in Section 8.2. Upon a termination
of this Agreement in its entirety under this Section 11.1, all Inspections
Materials shall be promptly returned to the Contributor, the ▇▇▇▇▇▇▇ Money
shall be immediately returned to the Transferee, and neither the Contributor
nor the Transferee shall have any further rights or obligations hereunder,
except for such rights and obligations which survive termination.
Notwithstanding the preceding sentence, if the failure of a condition set forth
in Section 8.2 was caused by a default by the Contributor, the Transferee may,
at its option, exercise its rights and remedies under Section 11.3.
Section 11.2 Default by the Transferee. In the event that the
transaction contemplated by this Agreement does not close on or prior to the
Closing Date by reason of the failure of a condition set forth in Section 8.1
the Contributor may, as its sole and exclusive remedy (except as otherwise set
forth in this Section 11.2), terminate this Agreement by written notice to the
Transferee and the Title Company shall immediately deliver to the Contributor
the ▇▇▇▇▇▇▇ Money. In such event, the Contributor may recover the ▇▇▇▇▇▇▇ Money
as liquidated damages and not as a penalty. The Contributor and the Transferee
have agreed that such amount is a reasonable estimate of the damages that the
Contributor would be likely to sustain in the event of the Transferee's
default, as the actual amount of such damages would be difficult or
impracticable to determine. In addition to the foregoing, in the event that (i)
the transaction contemplated by this Agreement does not close on or prior to
the Closing Date by reason of the failure of a condition set forth in Section
8.1 caused by the Transferee and (ii) Merit terminates the Purchase Agreements
as a result of a default by the Contributor thereunder, the Company shall
immediately pay to the Contributor the Reimbursement Amount. Nothing contained
in this Section 11.2 shall limit or impair any of the provisions of Section
6.3, Article 10, Section 13.11, Section 13.13 and the obligations of Transferee
set forth in this Agreement to return the Inspection Materials upon termination
of this Agreement.
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Section 11.3 Default by Contributor. In the event that the
transaction contemplated by this Agreement does not close on or prior to the
Closing Date by reason of the failure of a condition set forth in Section 8.2
that was caused by a default by the Contributor hereunder, the Transferee may,
at its option, exercise any one or more of the following remedies as its sole
and exclusive remedies: (a) terminate this Agreement in its entirety by written
notice to the Contributor, and obtain an immediate refund of the ▇▇▇▇▇▇▇ Money;
or (b) solely in the event that Merit proceeds to close the transactions under
the Purchase Agreements and the Contributor willfully refuses to consummate the
transactions hereunder, to enforce specific performance of this Agreement.
ARTICLE 12. NOTICE.
All notices, demands, requests, or other writings in this Agreement
provided to be given, made or sent, or which may be given, made or sent, by
either party hereto to the other, shall be in writing and shall be delivered by
depositing the same with any nationally recognized overnight delivery service,
or by telecopy or fax machine, in either event with all transmittal fees
prepaid, properly addressed, and sent to the following addresses:
If to the Contributor: ▇▇▇▇▇▇▇ West Investment Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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and: AG Industrial Investors, L.P.
c/o ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and: Shapiro, Shapses, Block & Stachenfeld LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Operating American Industrial Properties REIT
Partnership or the ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
Company: ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Liddell, Sapp, Zivley,
Hill & ▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and
▇▇▇ ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party may from time to time designate by
written notice to the other. Notices given by (i) overnight delivery service as
aforesaid shall be deemed received and effective on the first business day
following such dispatch and (ii) telecopy or fax machine shall be deemed given
at the time and on the date of machine transmittal provided same is sent prior
to 5:00 p.m., Dallas, Texas time, on a business day (if sent later, then notice
shall be deemed given on the next business day) and if the sending party
receives a written send confirmation on its machine and forwards a copy thereof
by regular mail accompanied by such notice or communication. Notices may be
given by counsel for the parties described above, and such notices shall be
deemed given by said party, for all purposes hereunder.
ARTICLE 13. MISCELLANEOUS.
Section 13.1 Survival of Representation and Warranties. The
representations and warranties made by the Contributor in Article 4 and by the
Transferee in Article 5 shall survive the Closing for a period of one (1) year.
Any claim which the Transferee may have at any time against the Contributor for
a breach of any representation or warranty, whether known or unknown, which
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is not asserted by written notice to the Contributor within such one (1) year
period shall not be valid or effective, and the Contributor shall have no
liability with respect thereto. Notwithstanding anything to the contrary
provided herein or in any document or instrument delivered pursuant hereto, in
no event shall the Contributor or the Contributor Parties have liability in
excess of, and in no event shall the Transferee have recourse to any assets
other than, the OP Units delivered to the Contributor Parties pursuant to the
provisions of this Agreement. The Transferee specifically acknowledges and
agrees that the sole recourse of the Transferee with respect to any breach of
any of the Contributor's representations and warranties shall be against the OP
Units, and in no event shall the Contributor or any of the Contributor Parties
have any personal liability with respect thereto.
Section 13.2 Entire Agreement; No Third-Party Rights. This Agreement
constitutes the entire agreement between the parties and incorporates and
supersedes all prior negotiations and discussions between the parties. This
Agreement shall be binding upon and inure solely to the benefit of each party
hereto and their successors and assigns, and nothing in the Agreement, express
or implied, is intended to confer upon any other person any rights or remedies
of any nature whatsoever under or by reason of this Agreement.
Section 13.3 Amendment. This Agreement cannot be amended, waived
or terminated orally, but only by an agreement in writing signed by each party
hereto.
Section 13.4 Governing Law; Binding Arbitration. This Agreement
shall be performable in Dallas County, Texas and shall be interpreted and
governed by the laws of the State of Texas, without regard to its rules of
conflicts of laws and shall be binding upon the parties hereto and their
respective successors and assigns. ANY DISPUTE OR CLAIM IN LAW OR EQUITY ARISING
OUT OF OR RELATED TO THIS AGREEMENT (A "CLAIM") SHALL BE RESOLVED BY NEUTRAL
BINDING ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE
AMERICAN ARBITRATION ASSOCIATION AND JUDGMENT ON THE AWARD RENDERED BY THE
ARBITRATION PANEL MAY BE ENTERED IN ANY COURT OR TRIBUNAL OF COMPETENT
JURISDICTION. ANY ARBITRATION OCCURRING UNDER THIS SECTION 13.4 SHALL BE HELD IN
DALLAS, TEXAS. ANY PARTY WHICH SHALL BE THE PREVAILING PARTY IN ANY ARBITRATION
CONDUCTED HEREUNDER (AS DETERMINED BY THE ARBITRATOR) SHALL BE ENTITLED TO
RECOVER FROM THE NON-PREVAILING PARTY REIMBURSEMENT OF ALL REASONABLE COSTS OF
SUCH ARBITRATION (INCLUDING REASONABLE ATTORNEYS' FEES). EACH PARTY HERETO
HEREBY WAIVES ITS RIGHTS TO COMMENCE ANY ACTION IN CONNECTION WITH ANY CLAIM IN
ANY COURT (OTHER THAN AN ACTION FOR THE SOLE PURPOSE TO ENFORCING THE OBLIGATION
OF A PARTY HERETO TO SUBMIT TO BINDING ARBITRATION OR THE ENFORCEMENT OF AN
AWARD GRANTED BY ARBITRATION HEREUNDER) AND EXPRESSLY AGREES TO BE BOUND BY THE
DETERMINATION OF THE ARBITRATOR UNDER THIS SECTION 13.4.
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Section 13.5 Section Headings. The caption headings in this
Agreement are for convenience only and are not intended to be part of this
Agreement and shall not be construed to modify, explain or alter any of the
terms, covenants or conditions herein contained.
Section 13.6 Severability. If any term, covenant or condition of
this Agreement is held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be construed without such provision.
Section 13.7 No Other Rights or Obligations. Nothing contained in
this Agreement shall be deemed to create any rights or obligations of
partnership, joint venture or similar association between the Contributor and
the Company.
Section 13.8 Counterparts. This Agreement may be executed by the
parties hereto in counterparts, all of which together shall constitute a single
Agreement.
Section 13.9 Construction. All references herein to any Section or
Schedule shall be to the Sections of this Agreement and to the Schedules
annexed hereto unless the context clearly dictates otherwise. All of the
Schedules annexed hereto are, by this reference, incorporated herein.
Section 13.10 Representatives. Any approval, consent, mutual
satisfaction or similar determination required to be made hereunder by the
Contributor or any person included within such term shall be granted exclusively
by any one of the "CONTRIBUTOR REPRESENTATIVES", who for purposes of this
Agreement, until further notice to the Transferee Representative, shall be ▇▇▇▇
▇. ▇▇▇▇▇▇▇. Any approval, consent, mutual satisfaction or similar determination
required to be made hereunder by the Transferee or any person included in such
term shall be granted exclusively by the "TRANSFEREE REPRESENTATIVES", who for
purposes of this Agreement, until further notice to the Contributor
Representatives, shall be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
Section 13.11 Attorneys' Fees. In the event of any litigation or
alternative dispute resolution between the Operating Partnership or the
Company, on the one hand, and the Contributor, on the other hand, in connection
with this Agreement or the transactions contemplated herein, the non-prevailing
party in such litigation or alternative dispute resolution shall be responsible
for payment of all expenses and reasonable attorneys' fees incurred by the
prevailing party. The provisions of this Section 13.11 shall survive the
Closing or termination of this Agreement.
Section 13.12 Interpretation. Whenever used herein, the singular
number shall include the plural, the plural shall include the singular, and the
use of any gender shall be applicable to all genders.
Section 13.13 Indemnity for Transferee Acts. The Transferee hereby
agrees to indemnify, defend and hold the Contributor and the Contributor Parties
harmless from and against any and all claims, judgments, damages, losses,
penalties, fines, demands, liabilities, encumbrances, liens, costs and expenses
(including attorneys' fees, court costs and costs of appeal) suffered or
incurred by the
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Contributor (i) to the extent arising out of or resulting from any entry on the
Property by the Transferee or its employees, agents or contractors, (ii)
pursuant to Sections 12, 17(b), 17(h) or 17(l) of any of the Purchase
Agreements to the extent arising out of or resulting from any act or omission
of the Transferee or any of its agents, employees or contractors, and (iii) any
claims asserted by Merit as a result of actions taken by Transferee after the
Closing pursuant to or relating to the Purchase Agreements.
Section 13.14 Indemnity for Contributor Acts. The Contributor hereby
agrees to indemnify, defend and hold the Transferee harmless form and against
any and all claims, judgments, damages, losses, penalties, fines, demands,
liabilities, encumbrances, liens, costs and expenses (including attorneys'
fees, court costs and costs of appeal) suffered or incurred by the Transferee
(i) to the extent arising out of or resulting from any entry on the Property by
the Contributor or its employees, agents or contractors, and (ii) pursuant to
Sections 12, 17(b), 17(h) or (17(l) of any of the Purchase Agreements to the
extent arising out of or resulting from any act or omission of the Contributor
or any of its agents, employees or contractors.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
▇▇▇▇▇▇▇ WEST INVESTMENT CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: President
-----------------------------------
AIP-SWAG OPERATING PARTNERSHIP, L.P.
By: American Industrial Properties REIT
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice President
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AMERICAN INDUSTRIAL PROPERTIES REIT
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice President
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