ACQUISITION AGREEMENT
DATED AS OF MAY 14, 1998
among
MISSION WEST PROPERTIES,
CERTAIN PARTNERSHIPS AND THE BERG GROUP
(AS DEFINED THEREIN).
ACQUISITION AGREEMENT
This Acquisition Agreement is made and entered into as of May __, 1998, by
and among Mission West Properties, a California corporation (the "Company"),
Mission West Properties, L.P., a Delaware limited partnership ("MWP"), Berg
Family Partners, L.P., a Delaware limited partnership ("MWP I"), Berg & Berg
Developers, L.P., a Delaware limited partnership ("MWP II"), Kontrabecki
Associates, a California limited partnership ("MWP III"), and each of the
partners of the respective partnerships (the "Partners"), holders of equity
interests in the other entities listed in Appendix I hereto, and certain other
persons identified on exhibits and schedules hereto.
RECITALS
WHEREAS, the Company, a publicly owned corporation which desires to
qualify as a real estate investment trust ("REIT") under the Internal Revenue
Code of 1986, as amended (the "Code"), for the tax year ending December 31,
1998, desires to rapidly acquire a substantial portfolio of San Francisco Bay
Area properties used primarily for office, research and development, light
manufacturing and assembly ("R&D Properties);
WHEREAS, MWP, formerly known as Berg Properties, L.P., owns and operates
the R&D Properties listed on Schedule 1 hereto (the "MWP Properties"); MWP I
owns and operates the R&D Properties listed on Schedule 2 hereto (the "MWP I
Properties"); MWP II owns and operates the R&D Properties listed on Schedule 3
hereto (the "MWP II Properties");
WHEREAS, John Kontrabecki ("Kontrabecki") is the general partner of three
limited partnerships, including MWP III, that own R&D Properties (the
"Kontrabecki Partnerships"). MWP III owns and operates the R&D Properties listed
on Schedule 4 hereto (the "MWP III Properties");
WHEREAS, the Kontrabecki Partnerships and the individuals and other
entities listed on Schedule 5 hereto (the "Contributing Entities") own and
operate the R&D Properties set forth opposite such Contributing Entity's name on
Schedule 5 (the "Contributed Properties");
WHEREAS, the Company intends to acquire a general partnership interest in
each of MWP, MWP I, MWP II and MWP III (collectively, the "Operating
Partnership") in exchange for Thirty-Five Million Two Hundred Thousand Dollars
($35,200,000) (the "Berg Acquisition");
WHEREAS, in order to raise funds for the Berg Acquisition, the Company
intends to issue and sell 5,800,000 shares of its Common Stock ("Common Stock")
for $26,100,000 to a group of private investors introduced to the Company by
Ingalls & Snyder LLC as placement agent and intends to issue and sell 695,058
shares of its Common Stock for $2,227,761 in cash and such other consideration
as the Company deems acceptable to certain additional investors in a separate
private placement (collectively, the "Private Placement");
WHEREAS, each of MWP, MWP I, MWP II, and MWP III holds and will hold its
Properties subject to certain secured indebtedness and is and will be liable
with respect to one or more lines of credit, some or all of which have been
guaranteed or assumed proportionately by the existing partners therein and which
they will continue to assume or guaranty in the same proportion after the
transactions contemplated by this Agreement;
WHEREAS, in connection with the acquisition by the Company of the general
partnership interest in the Operating Partnership, each of MWP, MWP I, MWP II
and MWP III intends to issue units of limited partnership interest (the "L.P.
Units") in each respective limited partnership in exchange for the existing
interests in such partnerships in accordance with the schedule attached hereto;
WHEREAS, following the Berg Acquisition, each of the existing general
partners of MWP, MWP I, MWP II and MWP III intends to resign as the general
partner and become a limited partner in their respective limited partnerships
through the acquisition of additional L.P. Units in exchange for such interest
as a general partner;
WHEREAS, following the Berg Acquisition, the Company will manage the
Operating Partnership as a single enterprise while maintaining separate books
and records for each of MWP, MWP I, MWP II, and MWP III, and each of the
partners therein shall share only in the income or loss of that partnership for
federal and state income tax purposes;
WHEREAS, at the closing for the Berg Acquisition, the Operating
Partnership intends to enter into an agreement (the "Pending Projects
Acquisition Agreement") regarding the acquisition by the Company or the
Operating Partnership of certain pending R&D Property developments in exchange
for the issuance to the owners of such R&D Properties for cash or L.P. Units,
when each such project has been completed and fully leased;
WHEREAS, at the closing for the Berg Acquisition, certain of the Partners
will grant to the Company and the Operating Partnership the right to purchase
certain land holdings of such Partners in exchange for cash, in the aggregate,
pursuant to the terms and conditions of an option agreement (the "Berg Land
Holdings Option Agreement");
WHEREAS, upon consummation of the Berg Acquisition, the Company intends to
reincorporate in the State of Maryland through a merger (the "Reincorporation
Merger") with and into its wholly-owned subsidiary, Mission West Properties,
Inc. ("Mission West-Maryland");
WHEREAS, in connection with the Berg Acquisition and the Reincorporation
Merger, the Company and certain Partners and their affiliates referred to as the
"Berg Group" intend to agree to certain corporate governance and management
covenants; and
WHEREAS, promptly following the consent of the shareholders of the Company
to the transactions contemplated hereby, the parties hereto wish to consummate
the transactions contemplated hereby, upon all of the terms and conditions
hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
conditions and promises hereinafter set forth, the parties agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms have the meanings specified or
referred to in this Section 1.
1.1 "AFFILIATE" shall have the meaning ascribed to such term in Rule 12b-2
under the Exchange Act.
1.2 "APPLICABLE LAWS" shall have the meaning set forth in Section 7.8.
1.3 "AMEX" shall mean the American Stock Exchange.
1.4 "ARTICLES OF INCORPORATION" shall mean the Articles of Incorporation of
Mission West-Maryland attached as Exhibit A to the Merger Agreement.
1.5 "AVAILABLE CASH" shall mean, with respect to the applicable period of
measurement (i.e., any period beginning on the first day of the fiscal
year, quarter or other period commencing immediately after the last day of
the fiscal year, quarter or other applicable period for purposes of the
prior calculation of Available Cash for or with respect to which a
distribution has been made, and ending on the last day of the fiscal year,
quarter or other applicable period immediately preceding the date of the
calculation) the excess, if any, as of such date, of:
(a) the gross cash receipts of all of the Constituent Partnerships
combined for such period from all sources whatsoever, including,
without limitation, the following:
(i) all rents, revenues, income and proceeds derived from
operations, including, without limitation, distributions received
from any Entity in which the Constituent Partnership has an
interest;
(ii) all proceeds and revenues received on account of any sales
of property or as a refinancing of or payments of principal,
interest, costs, fees, penalties or otherwise on account of any
borrowings or loans made by the Constituent Partnership or
financings or refinancings of any property of the Constituent
Partnership;
(iii)the amount of any insurance proceeds and condemnation awards
received by either Constituent Partnership; and
(iv) all capital contributions or loans received by the
Constituent Partnership from its partners:
(b) over the sum of:
(i) all operating costs and expenses, including costs relating to
tenant improvements, brokerage expenses, taxes and other expenses
of the Properties, of the Partnership and capital expenditures
made during such period (without deduction, however, for any
capital expenditures, charges for Depreciation or other expenses
not paid in cash or expenditures from reserves described in
(viii) below);
(ii) all costs and expenses expended or paid during such period
in connection with the sale or other disposition, or financing or
refinancing, of property of the Partnership or the recovery of
insurance or condemnation proceeds;
(iii)all fees provided for under this Agreement;
(iv) all debt service, including principal and interest, paid
during such period on all indebtedness (including under any line
of credit);
(v) all capital contributions, advances, reimbursements or
similar payments made to any person in which a Partnership has an
interest;
(vi) all loans made by the Constituent Partnership in accordance
with the terms of this Agreement;
(vii) all reimbursements to the General Partner or its Affiliates
during such period; and
(viii) any new reserves or increases in reserves reasonably
determined by the General Partner in its sole discretion to be
necessary for working capital, capital improvements, payments of
periodic expenditures, debt service or other purposes of the
Operating Partnership or any Person in which the Partnership has
an interest.
1.6 "BERG GROUP" means Carl E. Berg, Clyde J. Berg, the members of their
Immediate Family, and any Entity which is an Affiliate of either Carl
E. Berg or Clyde J. Berg (excluding any Constituent Partnership and
the Company).
1.7 "BERG LAND HOLDINGS OPTION AGREEMENT" shall mean the agreement among
the Company, the Operating Partnership and certain members of the
Berg Group substantially in the form attached hereto as Exhibit A.
1.8 "BYLAWS" shall mean the Bylaws of Mission West-Maryland attached as
Exhibit B to the Merger Agreement.
1.9 "CHARTER" shall have the meaning set forth in Rule 405 under the
Securities Act.
1.10 "CLOSING" shall have the meaning set forth in Section 3.
1.11 "CLOSING DATE" shall mean the date and time of the Closing.
1.12 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
1.13 "COMPANY" shall mean Mission West Properties, a California
corporation and its successor corporation, Mission West Properties,
Inc., a Maryland corporation, in the event that the Reincorporation
Merger is approved.
1.14 "COMPANY SEC FILINGS" shall have the meaning set forth in Section
6.6.
1.15 "COMPANY FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 6.6.
1.16 "CONSTITUENT PARTNERSHIP" shall mean any of the four limited
partnerships comprising the Operating Partnership.
1.17 "CONTRIBUTED PROPERTIES" shall mean those R&D Properties listed on
Schedule 5.
1.18 "CONTRIBUTING ENTITY" shall mean an Entity which is contributing any
of the Contributed Properties to the Operating Partnership as part of
the Berg Acquisition.
1.19 "CONTRIBUTING ENTITIES" shall mean all such Entities.
1.20 "CONTRIBUTION AMOUNT" shall mean Thirty-Five Million Two Hundred
Thousand Dollars ($35,200,000) payable to the Operating Partnership
by the Company at the closing of the Berg Acquisition.
1.21 "ENTITY" shall mean any general partnership, limited partnership,
corporation, joint venture, trust, business trust, real estate
investment trust, limited liability company, cooperative or
association.
1.22 "EQUITY SECURITIES" shall have the meaning set forth in Rule 405
under the Securities Act.
1.23 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.24 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
1.25 "EXCHANGE RIGHTS AGREEMENT" shall mean the agreement between the
Company and the Limited Partners with respect to the exchange of L.P.
Units for shares of Common Stock of the Company, in the form attached
hereto as Exhibit B.
1.26 "EXISTING PROPERTIES" shall mean the R&D Properties held by MWP, MWP
I, and MWP II immediately prior to the closing of the Berg
Acquisition.
1.27 "FUNDS FROM OPERATIONS" shall mean funds from operations as
determined in accordance with the standards established by the Board
of Governors of NAREIT in its March 1995 White Paper.
1.28 "GOVERNMENTAL BODY" shall mean any domestic or foreign national,
state or municipal or other local government or multi-national body,
any subdivision, agency, commission or authority thereof, or any
quasi-governmental or private body exercising any regulatory or
taxing authority thereunder.
1.29 "IMMEDIATE FAMILY" means, with respect to any Person,
such Person's spouse, parents, parents-in-law, children,
nephews, nieces, brothers, sisters, brothers-in-law,
sisters-in-law, stepchildren, sons-in-law and daughters-in-law
or any trust solely for the benefit of any of the foregoing
family members whose sole beneficiaries include the foregoing
family members.
1.30 "INDEMNIFIED PARTIES" shall have the meaning set forth in Section
8.7(b).
1.31 "INDEPENDENT DIRECTOR" shall mean any director of the Company who is
not a member of the Berg Group.
1.32 "LEASES" shall mean the leases for the Properties to be set forth on
Schedule 7.2(a).
1.33 "LIENS" means, with respect to any property of any Person, (i) any
mortgage, deed of trust, lien, pledge, encumbrance, charge,
restriction or security interest in or on such asset, (ii) the
interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to
such asset and (iii) in the case of securities, any purchase option,
call or similar right of a third party with respect to such
securities.
1.34 "LIMITED PARTNER" shall mean any limited partner in the Operating
Partnership after the Closing Date.
1.35 "MATERIAL ADVERSE EFFECT" shall mean any change or effect that is
materially adverse to the business, assets, properties, results of
operation or financial condition.
1.36 "MERGER AGREEMENT" shall mean the agreement to be entered into
between the Company and Mission West-Maryland to effect the
Reincorporation Merger, subject to Shareholder Approval,
substantially in the form attached to this Agreement as Exhibit C.
1.37 "OPERATING PARTNERSHIP" shall mean MWP, MWP I, MWP II, and MWP III,
collectively.
1.38 "OPERATING PARTNERSHIP AGREEMENT" shall mean the agreement of limited
partnership for MWP, MWP I, MWP II and MWP III substantially in the
form attached to this Agreement as Exhibit D.
1.39 "PENDING PROJECTS ACQUISITION AGREEMENT" shall mean the agreement
among the Company, the Operating Partnership, and certain members of
the Berg Group substantially in the form attached hereto as Exhibit
E.
1.40 "PERSON" shall mean an individual or an Entity.
1.41 "PROPERTIES" shall mean the Existing Properties and the Contributed
Properties.
1.42 "PROPOSED TRANSACTIONS" shall mean (i) the Berg Acquisition; (ii) the
Private Placement; and (iii) the Reincorporation Merger.
1.43 "PROTECTIVE PROVISIONS EXPIRATION DATE" shall mean the date on which
the members of the Berg Group own less than 15% of the Equity
Securities of the Company, treating all L.P. Units in the Operating
Partnership owned by such members as Common Stock outstanding for
this purpose.
1.44 "PROXY STATEMENT/PROSPECTUS" shall mean the proxy
statement/prospectus of the Company which forms a part of the
S-4 Registration Statement and which will be mailed to the
Company's shareholders in connection with obtaining Shareholder
Approval at the Special Meeting.
1.45 "RELATED AGREEMENTS" shall mean the Operating Partnership Agreement,
the Exchange Rights Agreement, the Berg Land Holdings Option
Agreement, and the Pending Projects Acquisition Agreement.
1.46 "REQUIRED CONSENTS" shall mean the licenses, authorizations,
consents, orders and approvals to be listed on Schedule 6.5 and such
other material licenses, authorizations, consents, orders and
approvals that are necessary for the consummation of the Proposed
Transactions.
1.47 "REQUIRED DIRECTORS" shall mean a majority of the directors of the
Company including Carl E. Berg or an individual designated by Carl E.
Berg to replace him on the board of directors.
1.48 "S-4 REGISTRATION STATEMENT" shall mean the registration statement on
SEC Form S-4 to be filed by the Company with respect to the
Reincorporation Merger.
1.49 "SEC" shall mean the Securities and Exchange Commission.
1.50 "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
1.51 "SHAREHOLDER APPROVAL" shall mean the vote of the shareholders of the
Company approving a Proposed Transaction at the Special Meeting.
1.52 "SPECIAL MEETING" shall mean the Special Meeting of Shareholders of
the Company for which proxies will be solicited for approval of all
of the Proposed Transactions pursuant to the Proxy Statement.
1.53 "SUBSIDIARIES" shall mean MIT Realty, Inc., Mission West Executive
Aircraft Center, Inc., and any other subsidiary of the Company as of
the Closing Date.
1.54 "TOTAL MARKET CAPITALIZATION" shall mean the sum of the aggregate
market value of the outstanding shares of Common Stock, assuming the
exchange of all L.P. Units for shares of Common Stock, plus the
aggregate market value of all publicly traded Equity Securities of
the Company (other than Common Stock) which may be outstanding from
time to time, plus the Company's total outstanding debt.
1.55 "VOTING SECURITIES" means any Equity Security within the meaning of
SEC Rule 405 which entitles the holder thereof to vote on all matters
submitted for a vote of equity holders by the issuer of such Equity
Security, including the right to vote for directors in the case of a
corporation.
2. THE PARTIES.
2.1 THE COMPANY. The Company is a publicly owned corporation which has its
Common Stock listed on the AMEX. The Company is incorporated in California
as an infinite life corporation.
2.2 THE OPERATING PARTNERSHIP AND ITS PARTNERS. As of the date hereof, the
Constituent Partnerships are three (3) Delaware limited partnerships, MWP,
MWP I, MWP II, and one California limited partnership, MWP III. Such
limited partnerships hold the Existing Properties listed in Schedules 1, 2,
3 and 4, respectively. The general and limited partners of each of MWP, MWP
I, MWP II and MWP III are set forth on Appendix I hereto.
2.3 THE CONTRIBUTING ENTITIES. The Contributing Entities consist of the
eight Persons set forth on Schedule 5, including MWP III.
2.4 CARL E. BERG AND THE BERG GROUP. Carl E. Berg and the other members of
the Berg Group, as identified on Appendix I are the promoters of the
Operating Partnership and, collectively, are principal Affiliates of the
Company. Some of the Berg Group members also will be limited partners of
the Operating Partnership.
3. THE TRANSACTIONS SUBJECT TO THIS AGREEMENT.
3.1 AGREEMENT TO FORM THE OPERATING PARTNERSHIP. Each of the Constituent
Partnerships hereby agrees to adopt the Operating Partnership Agreement and
to be managed and operated as a participant in the Operating Partnership.
Subject to the consummation of the Berg Acquisition, the Company shall
manage the Operating Partnership, in its capacity as general partner of
each of the Constituent Partnerships, in accordance with the principles and
procedures contained in Section 9.7. Upon the Closing, all of the limited
partnership interests and the existing general partner interests in each of
the Constituent Partnerships shall be converted automatically into the
number of L.P. Units set forth opposite the name of each Constituent
Partnership on Schedule 6; MWP III shall elect to become a Delaware limited
partnership pursuant to Section 17-217(b) of the Delaware Revised Uniform
Limited Partnership Act; and the existing limited partnership agreement of
each of the limited partnerships shall be amended and restated to
substantially conform to the provisions of the Operating Partnership
Agreement.
3.2 ACQUISITION OF THE CONTRIBUTED PROPERTIES. Subject to the terms and
conditions hereof and in reliance upon the representations, warranties, and
agreements contained herein, at the Closing, the Operating Partnership
shall acquire the Contributed Properties and the Contributing Entities
(other than MWP III) shall convey their respective Contributed Properties
to MWP. In exchange each Contributing Entity shall be entitled to receive
that number of L.P. Units set forth opposite its name on Schedule 5 at the
Closing.
3.3 THE BERG ACQUISITION.
(a) Subject to the terms and conditions hereof and in reliance upon
the representations, warranties, and agreements contained herein, at
the Closing: (i) the Company shall acquire the general partnership
interests in each of the Constituent Partnerships for the total amount
of Thirty-Five Million Two Hundred Thousand Dollars ($35,200,000)
payable in cash to each of the Constituent Partnerships as set forth
below (the "Contribution Amount"); (ii) Berg & Berg Enterprises, Inc.,
Berg Family Partners LLC, Berg & Berg Developers LLC, and John
Kontrabecki shall resign as the general partner of MWP, MWP I, MWP II,
and MWP III, respectively; and (iii) the Company shall receive a
general partner interest equal to 10.91% of the capital, profits,
losses and distributions of each Constituent Partnership (or 10.91% of
the Operating Partnership) in accordance with the terms of the
Operating Partnership Agreement. The capital contribution and amount
payable by the Company for its general partner interest in each of the
Constituent Partnerships at the Closing is equal to the following
percentages of the total Contribution Amount, subject to adjustment as
provided in Section 3.3(b), as follows:
PARTNERSHIP PERCENTAGE
MWP 24.25529%
MWP I 19.01593%
MWP II 53.87997%
MWP III 2.84881%
(b) At or prior to the Closing, the Operating Partnerships may obtain
new loans or refinance existing debt of the Constituent Partnerships,
which will be, or is secured by, certain Existing Properties and/or
Contributed Properties. The amount of debt encumbering such Properties
will affect the value of each of the Constituent Partnerships and the
percentage of the total Contribution Amount allowable to each such
Partnership. Accordingly, the parties agree that proportional
adjustments will be made in the percentages set forth in the table in
Section 3(a) to reflect the difference between the amount of
indebtedness for borrowed funds which encumbers the Properties of a
Constituent Partnership as of the Closing Date and the amount of such
indebtedness as of the date of this Agreement. Furthermore, the
parties acknowledge and agree that for income tax purposes, limited
partners in the Operating Partnership, and the partners or other
equity owners in such limited partners have assumed or guaranteed, or
will wish to assume or guaranty certain indebtedness of their
respective Constituent Partnerships. All parties acknowledge and agree
that all limited partners or owners of interests therein shall be
entitled to assume or guaranty indebtedness of the Operating
Partnership as of the Closing Date in such proportions as they
request.
4. THE CLOSING.
4.1 THE CLOSING DATE. Subject to Shareholder Approval, the closing of
the transactions described in Sections 3.1, 3.2, and 3.3 (the
"Closing") shall take place at the offices of Berg & Berg Enterprises,
Inc., 10050 Bandley Drive, Cupertino, California at 10:00 a.m.,
P.D.T., on the last business day of the calendar month in which the
Special Meeting is held.
4.2 DELIVERIES. On the Closing Date: (i) the Company shall pay the
Contribution Amount to the Operating Partnership in immediately
available funds for the credit of each of the Constituent Partnerships
as provided in Section 3.3, and the Company shall receive the general
partner interest in each of the Constituent Partnerships and such
certificates representing the same as shall be available; (ii) the
Contributing Entities shall deliver good and marketable title to the
Contributed Properties by grant deeds executed and acknowledged by the
applicable Contributing Entity, and the Operating Partnership shall
deliver to the Contributing Entities certificates representing the
number of L.P. Units set forth opposite each respective Contributing
Entity's name on Schedule 5 hereto; (iii) the parties to the Pending
Projects Acquisition Agreement and the Berg Land Holdings Option
Agreement shall deliver duly executed copies of the agreements to each
party thereto; (iv) the Company and all other partners in each of the
Constituent Partnerships shall sign and deliver the Operating
Partnership Agreement to representatives of the respective parties at
the Closing; and (v) the Company, each Constituent Partnership and all
of the Limited Partners shall sign and deliver the Exchange Rights
Agreement to the representatives of the respective parties at the
Closing; and (vi) each of the general partners in each of the
Constituent Partnerships shall execute and deliver a certificate of
amendment of certificate of limited partnership designating the
Company as the new sole general partner in the partnership.
4.3 ADJUSTMENTS. The amounts receivable by or payable to the
Contributing Entities (other than MWP III) at the Closing based upon
the pro rations required under this Section 4.3 shall be determined
and the net amount shall be paid in cash at the Closing by or to the
Contributing Entity that owns the particular Contributed Property to
which the adjustment relates. The items to be pro rated as of the
Closing Date include the following: real estate taxes (on the basis of
the due dates of the tax bills for the period for which such taxes are
assessed) on the Contributed Properties, personal property taxes on
the Personal Property, minimum water and sewer rentals, rents,
including without limitation, expense pass-throughs, percentage rents,
income from and expenses for electricity and other sums paid by
tenants, licensees and concessionaires and collected by the
Contributing Entities prior to the Closing Date under the Leases
covering the Contributed Properties, payments due under service
agreements which are to be assigned to the benefit of the Operating
Partnership, prepaid license fees and other charges for licenses and
permits for its Contributed Properties, which will remain in effect
for the benefit of the Operating Partnership after the Closing Date,
rental under any ground lease, municipal rubbish removal charges,
lease rejection awards made in any bankruptcy proceedings of a tenant,
and prepaid insurance premiums for insurance which will remain in
effect for the benefit of the Operating Partnership after the Closing
Date, if any, shall be apportioned pro rata between the Contributing
Entity and the Operating Partnership, on a per diem basis as of
midnight on the day before the Closing Date, so that the Contributing
Entity shall bear all expenses with respect to its Contributed
Properties and benefit from all items of income with respect to its
Contributed Properties through the day before the Closing Date. To the
extent that the amounts of the items to be adjusted are not reasonably
ascertainable as of the Closing Date or there are any other items
which should properly be allocated at that time, they shall be
adjusted or taken into account by the affected Contributing Entity and
the Operating Partnership as promptly after the Closing Date as the
amounts thereof are ascertained.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO OBLIGATIONS OF ALL PARTIES. The obligations of the
parties to this Agreement to effect the Closing shall be subject to
the satisfaction at or prior to the Closing of the following
conditions:
(a) APPROVAL OF SHAREHOLDERS. The transactions contemplated by
this Agreement shall have received Shareholder Approval under
applicable California law, the Company's articles of
incorporation and bylaws, and the rules of AMEX.
(b) NO INJUNCTION. No permanent or preliminary injunction or
restraining order or other order by any court or other
Governmental Body of competent jurisdiction or other legal
restraint or prohibition preventing consummation of the Proposed
Transactions shall be in effect.
(c) APPROVALS AND CONSENTS. All Required Consents shall have been
obtained and shall be in full force and effect.
(d) CONSUMMATION OF THE PRIVATE PLACEMENTS. The Company shall
have consummated the Private Placement.
(e) OFFERING OF L.P. UNITS. The offer, sale and issuance of the
L.P. Units to the Company and the Contributing Entities shall
have complied with Rule 506 promulgated under the Securities Act
and applicable blue sky and state securities laws.
5.2 CONDITIONS TO OBLIGATIONS OF THE CONTRIBUTING ENTITIES. The obligations
of the Contributing Entities to effect the Closing shall be subject to the
satisfaction at or prior to the Closing of the following conditions:
(a) REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The representations
and warranties of the Company and each of the Constituent Partnerships
set forth in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Closing Date
as though made at such time, except for such changes permitted or
contemplated by the terms of this Agreement and except insofar as any
such representations and warranties relate solely to a particular date
or period, in which case they shall be true and correct in all
material respects on the Closing Date with respect to such date and
period, and the Company shall have performed and complied in all
material respects with all obligations, covenants and agreements
contained in this Agreement required to be performed and complied with
by it at or prior to the Closing Date. (b) ADDITIONAL DOCUMENTS. The
Company shall have delivered or caused to be delivered to the
Contributing Entities all other documents required to be delivered to
them pursuant to this Agreement.
(c) NO MATERIAL ADVERSE CHANGE. Since the date hereof nothing shall
have occurred which, individually or in the aggregate, has had, or is
reasonably likely to have, a Material Adverse Effect on the Company,
or the Properties.
(d) CASH CONTRIBUTION. The Company shall have contributed to the
Operating Partnership a total of Thirty-Five Million Two Hundred
Thousand Dollars ($35,200,000).
5.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligations of the
Company to effect the Closing shall be subject to the satisfaction at or
prior to the Closing of the following conditions:
(a) REPRESENTATIONS, WARRANTIES AND AGREEMENTS. (i) The
representations and warranties of the Constituent Partnerships and the
Contributing Entities set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
as of the Closing Date as though made at such time, except for such
changes permitted or contemplated by the terms of this Agreement, and
except insofar as any such representations and warranties relate
solely to a particular date or period, in which case they shall be
true and correct in all material respects on the Closing Date with
respect to such date and period and (ii) the Constituent Partnerships,
the Contributing Entities and their respective partners, as the case
may be, shall have performed and complied in all material respects
with all obligations, covenants and agreements contained in this
Agreement required to be performed and complied with by them at or
prior to the Closing Date. Prior to the Closing Date, each of the
Contributing Entities and Owners shall submit the following
representation and warranty schedules for the Company's approval
concerning the consistency of the information provided therein with
the representations and warranties made by each of such parties under
this Agreement:
REPRESENTATION AND WARRANTY SCHEDULES
5.4(a) Permitted Encumbrances
6.5 Required Consents
6.11 ERISA Plans
6.13 Certain Changes or Events
7.2(a) Leases
7.2(c) Rent Roll
7.2(d) Tenant Security Deposits
7.5(b) Non-Qualified Income
7.6 Insurance Policies
(b) WITHDRAWALS. At the Closing, each of BBE, Berg Family Partners
LLC, Berg & Berg Developers LLC, and Kontrabecki shall deliver a
letter to the Company declaring their resignations as general partners
from MWP, MWP I, MWP II and MWP III, respectively, and their
respective agreement to become Limited Partners in such partnership
subject to the terms of the Operating Partnership Agreement.
(c) ADDITIONAL DOCUMENTS. The Operating Partnership, the Contributing
Entities and the other parties to this Agreement shall have delivered
or caused to be delivered to the Company all other documents required
by any of them to be delivered to the Company pursuant to this
Agreement.
(d) NO MATERIAL ADVERSE CHANGE. Since the date hereof nothing shall
have occurred which, individually or in the aggregate, has had, or is
reasonably likely to have, a Material Adverse Effect on the Existing
Properties or the Contributed Properties, taken as whole.
5.4 ADDITIONAL CONDITIONS WITH RESPECT TO THE CONTRIBUTED PROPERTIES. The
obligations of the Company and the parties hereto other than the
Contributing Entities to effect the Closing with respect to the acquisition
of the Contributed Properties shall be subject to the satisfaction of the
following conditions at or prior to the Closing Date by each of the
Contributing Entities with respect to its particular Contributed
Property(ies):
(a) Title to its Contributed Properties shall be such as will be
insured, solely in the name of the appropriate Contributing Entity as
good and marketable by a national title insurance company (the "Title
Insurance Company") at regular rates pursuant to the standard
stipulations and conditions of the 1970 Form B ALTA Owner's Title
Insurance Policy as revised in 1984 and as the same may be modified by
such endorsements, affirmative coverage and other matters which have
been requested by the Company prior to the date hereof (and such other
endorsements and affirmative coverages as may hereafter be reasonably
required by the Company), free and clear of all Liens and
encumbrances, except for the Permitted Encumbrances. The term
"Permitted Encumbrances" shall mean those title matters and Liens set
forth as to such Contributed Property on Schedule 5.4(a). At Closing,
title to the personal property associated with each Contributed
Property shall only be subject to the Permitted Encumbrances as to
such Contributed Property except for the personal property described
on Schedule 5.4(a) which is denoted as being leased or financed. The
Contributing Entity shall deliver to the Title Insurance Company such
commercially reasonable instruments as the Title Insurance Company
requires to issue endorsements and other coverages, in such form as
the Company reasonably requires. The premiums and other costs of title
insurance shall be borne by the Operating Partnership.
(b) The Contributing Entity shall have delivered to the Company prior
to the Closing Date current searches of all Uniform Commercial Code
financing statements filed with the Secretary of State and/or county
clerk against its Contributed Properties, together with bankruptcy,
tax lien and judgment searches and searches for pending litigation in
all appropriate jurisdictions. It is a condition of Closing that such
searches reveal that other than the Permitted Encumbrances there are
no bankruptcies, actions, claims or liens affecting or encumbering or
which might affect or encumber its Contributed Properties or any
interest in its Contributed Properties which will continue after the
Closing Date.
(c) The Contributing Entity shall have delivered estoppel certificates
acceptable to the Company obtained from lessors under any ground lease
under which a Contributing Entity is a lessee.
(d) The Contributing Entity shall have delivered the estoppel letters
received by the Contributing Entity from those parties under
reciprocal easement agreements, if any, for which the Company has
requested that the Contributing Entity request estoppel letters. The
Contributing Entity agrees to use reasonable and diligent efforts to
obtain such estoppel letters.
(e) The Contributing Entity shall have delivered the originals, if
available, of all Leases and amendments thereto and guarantees
thereof, all ground leases and all mortgages and related documents
relating to its Contributed Properties directly to the Operating
Partnership.
(f) The Contributing Entity shall have executed and delivered a notice
(suitable for reproduction) to tenants advising of the transfer of the
Contributed Property to the Operating Partnership and advising the
tenants to pay all future rentals to or upon the order of the
Operating Partnership.
(g) The Contributing Entity shall have delivered to the Operating
Partnership, all Security Deposits, together with all interest earned
thereon as of the Closing Date which the Contributing Entity is
obligated, by law, contract or otherwise, to pay to tenants with
respect to its Contributed Properties.
(h) The Contributing Entity shall have delivered directly to the
Company, copies of building plans and specifications for its
Contributed Properties, if available.
(i) The Contributing Entity shall have delivered directly to the
Company, the following, to the extent in the possession of the
Contributing Entity: copies of all certificates of occupancy,
licenses, permits, authorizations and approvals required by law and
issued by all Governmental Bodies having jurisdiction over its
Contributed Properties, together with copies of all certificates
issued by any local board of fire underwriters (or other body
exercising similar functions). The Contributing Entity also shall have
delivered at the Closing the original or copies of each bill, together
with proof of payment thereof (if any of the same have been paid), for
current real estate and personal property taxes.
(j) Each of the Contributing Entities shall have delivered to the
Company, a Non-Foreign Transferor Certificate, certifying that such
the Contributing Entity is not a "foreign person" within the meaning
of Section 1445 of the Internal Revenue Code of 1986, as amended (the
"Code").
(k) The Contributing Entity shall have executed and delivered to the
Company such other documents or instruments as in the reasonable
opinion of counsel for the Company may be necessary to effectuate the
transactions described in this Agreement, provided that such documents
or instruments do not increase the liability of the Contributing
Entities.
6. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE PARTIES.
Each of the Company, the Constituent Partnerships and the Contributing Entities,
severally as to itself only, represents and warrants to, and agrees with, the
other parties hereto as follows:
6.1 ORGANIZATION OF THE CONSTITUENT PARTNERSHIPS; AUTHORIZATION. Each
Constituent Partnership is a limited partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, with full partnership power and authority to execute and
deliver this Agreement and any other agreements contemplated hereby and to
perform its obligations hereunder and thereunder. The execution, delivery
and performance of this Agreement and the consummation of the Proposed
Transactions have been duly authorized by all necessary partnership action.
This Agreement constitutes a valid and binding obligation of the
Constituent Partnership, enforceable against such Partnership in accordance
with its terms.
6.2 ORGANIZATION OF THE CONTRIBUTING ENTITIES; AUTHORIZATION. Each
Contributing Entity is an Entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, with full
power and authority to execute and deliver this Agreement, and any other
agreements contemplated hereby and to perform its obligations hereunder and
thereunder. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate or partnership action. This Agreement
constitutes a valid and binding obligation of the Contributing Entity,
enforceable in accordance with its terms.
6.3 ORGANIZATION OF THE COMPANY; AUTHORIZATION; CAPITALIZATION.
(a) The Company is a California corporation duly organized, validly
existing and in good standing under the laws of the State of
California, with full power and authority to execute and deliver this
Agreement and any other agreements contemplated hereby and, subject to
obtaining the consent of its shareholders, to perform its obligations
hereunder and thereunder. The execution, delivery and performance by
the Company of this Agreement, and the Related Agreements, and the
consummation of the Proposed Transactions have been duly authorized by
the board of directors of the Company and by all other necessary
action, subject to Shareholder Approval. This Agreement constitutes a
valid and binding obligation of the Company, enforceable in accordance
with its terms.
(b) The authorized capital stock of the Company consists of Two
Hundred Million (200,000,000) shares of Common Stock, no par value, of
which, as of April 30, 1998, 1,698,536 shares were issued and
outstanding and Twenty Million (20,000,000) shares of Preferred Stock,
no par value, none of which were issued and outstanding as of April
30, 1998. All outstanding shares of the Company have been validly
issued, and are fully paid and nonassessable. Except for shares of
Common Stock reserved for (i) exchange of the L.P. Units, (ii) the
Private Placement, and (iii) options for the purchase of 605,000
shares of common stock under the Company's 1997 Stock Option Plan,
there are no outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or calls, demands or
commitments of any kind relating to the issuance, sale or transfer of
the Company's common stock or securities convertible into or
exchangeable for, the Company's common stock.
(c) The Company does not own any Equity Securities of, and has no
direct or indirect ownership interest in, any Person other than the
Subsidiaries. The Company owns all of the issued and outstanding
shares of capital stock of each such Subsidiary. There are no
outstanding subscriptions, options, rights, warrants, convertible
securities or other agreements or calls, demands or commitments of any
kind relating to the issuance, sale or transfer of the such shares.
6.4 NO CONFLICTS. Neither the execution and delivery of this Agreement nor
the consummation of any or all of the transactions contemplated hereunder,
or of the Proposed Transactions will (a) violate any provision of the
certificate of incorporation, bylaws, partnership agreement or other
governing instrument of the Company, the Constituent Partnerships, or the
Contributing Entities or (b) violate, be in conflict with, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under any material contract to which the Company, the
Constituent Partnership, or any of the Contributing Entities is party or
(c) violate any statute or law or any judgment, decree, order, regulation
or rule of any court or other Governmental Body applicable to the Company,
the Constituent Partnership, or any of the Contributing Entities.
6.5 CONSENTS AND APPROVALS. Except for the filing with the SEC of the Proxy
Statement, and the Shareholder Approval, and as set forth on Schedule 6.5
(the "Required Consents"), no consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Body or any
other Person is required in connection with the execution, delivery and
performance of this Agreement, any of the Related Agreements or the
consummation of the Proposed Transactions by the Company, the Operating
Partnership or the Contributing Entity or any of the Contributing Entities.
6.6 COMPANY REPORTS AND FINANCIAL STATEMENTS. The Company has heretofore
made available to the Constituent Partnerships and the Contributing
Entities true and complete copies of all documents that the Company has
filed with the SEC (the "Company SEC Filings") since January 1997. The
Company SEC Filings constitute all of the documents (other than preliminary
material) that the Company was required to file with the SEC since such
date. As of their respective dates, each of the Company SEC Filings
complied in all material respects with the applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations under each
such Act. When filed with the SEC, the financial statements (the "Company
Financial Statements") included in the Company SEC Filings complied as to
form in all material respects with the applicable rules and regulations of
the SEC and were prepared in accordance with generally accepted accounting
principles consistently applied (except as may be indicated therein or in
the notes or schedules thereto).
6.7 LITIGATION. There is no action, suit, inquiry, proceeding or
investigation by or before any court or Governmental Body pending or,
to the best knowledge of the Company, the Constituent Partnerships or
the Contributing Entities, threatened against or involving the Company,
the Constituent Partnerships or the Contributing Entities which
questions or challenges the validity of this Agreement or the Related
Agreements or any action taken or to be taken pursuant to this
Agreement or the Related Agreements or in connection with the
transactions contemplated hereunder or the Proposed Transactions, nor
is there any valid basis for any such action, proceeding or
investigation. Neither the Company, the Constituent Partnerships nor
the Contributing Entity is in default under or in violation of any
agreement, commitment or restriction to which it is a party or by which
it is bound; or is subject to any judgment, order or decree that may
have an adverse effect on its business practices or on its ability to
acquire any property or conduct any business.
6.8 COMPLIANCE WITH LAW. The operations of the Company, the Constituent
Partnerships and the Contributing Entities have been conducted in
accordance with all applicable laws, regulations and other requirements of
all Governmental Bodies.
6.9 BROKERS AND FINDERS. No agent, broker, finder or investment or
commercial banker, or other Person or firms engaged by or acting on behalf
of the Company, any of the Constituent Partnerships or any of the
Contributing Entities or any of their respective Affiliates in connection
with the negotiation, execution or performance of this Agreement or the
consummation of the transactions contemplated hereunder, is or will be
entitled to any broker's or finder's or similar fees or other commissions
as a result of the Closing except for the fee of 200,000 shares of the
Company's Common Stock to be sold and issued to John Moran by the Company
in connection with the Private Placement.
6.10 MATERIAL ADVERSE CHANGES.
(a) With respect to each of the Properties, since the date of the most
recent rent roll relating to the applicable Properties, (i) there has
not been any material adverse change in the business, results of
operations, properties, assets or financial condition of the
Properties, respectively, or, to the best knowledge of the Constituent
Partnership or the Contributing Entity, any event, condition or
contingency that is likely to result in such a material adverse change
and (b) neither the Constituent Partnership nor the Contributing
Entities have taken any action which, if taken after the date hereof,
would violate Sections 8.8, 8.9 or 8.10.
(b) Except as disclosed in the Company SEC Filings, prior to the date
hereof there has not been any Material Adverse Effect on the business,
results of operations, properties, assets or financial condition of
the Company or any event, condition or contingency that is likely to
result in a Material Adverse Effect.
6.11 EMPLOYEE BENEFIT PLANS; COMPLIANCE WITH ERISA.
(a) Except as set forth in Schedule 6.11, neither the Company, any
Constituent Partnership nor any Contributing Entity (i) maintains or
contributes to or has any obligation with respect to, and none of the
employees of the Company, the Operating Partnership or any
Contributing Entity is covered by, any ERISA plans, or (ii) is a party
to any contract for the employment of any employee or any other person
who renders services to it. Neither the Company, any Constituent
Partnership nor any Contributing Entity has any agreement or
commitment to create any additional ERISA plan, enter into any
additional employment agreement or to modify or change any existing
Plan or employment agreement.
(b) Neither the execution and delivery of this Agreement nor the
consummation of any or all of the transactions contemplated hereunder
will (i) entitle any current or former employee of the Company, any
Constituent Partnership or any Contributing Entity to severance pay,
unemployment compensation or any similar payment, or (ii) accelerate
the time of payment or vesting or increase the amount of any
compensation due to any such employee or former employee.
6.12 FINANCIAL STATEMENTS.
(a) Each of the Contributing Entities has provided to the Company all
of the financial information requested by the Company for the
preparation of financial statements and other financial data required
by the Company for the S-4 Registration Statement, and will provide
promptly all such additional financial information and data requested
by the Company. Each of the Contributing Entities will permit the
Company's auditors to review the books and records of the Contributing
Entity. All financial information provided to the Company is correct
and complete.
(b) The books and records of the Contributing Entity, all of which
have been or will be made available to the Company, are complete and
correct, have been maintained in accordance with sound business
practices and fairly reflect the assets, liabilities and operations of
the Contributing Entity and the aforesaid financial statements are in
conformity therewith.
6.13 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1997, the
business of the Contributing Entity has been conducted in the ordinary
course and, except as shall be set forth on Schedule 6.13, the Contributing
Entity has not:
(a) incurred any indebtedness for money borrowed or any noncurrent
indebtedness for the purchase price of any fixed or capital asset;
(b) made (A) any change, except in the ordinary course of business, in
its properties and assets or in its liabilities, (B) any commitment
for any capital expenditure or (C) any sale, lease or other
disposition of any capital asset;
(c) made any change in its corporate charter or partnership agreement;
(d) made any partnership or other distribution or payment, or set
aside any amount for payment with respect to any partnership interest;
(e) amended, made or entered into any agreement with, or increased the
salaries of, any employee, agent, consultant, advisor or sales or
other representative of the Contributing Entity;
(f) amended any material contract, Lease or agreement;
(g) entered into any agreement resulting in the imposition of any
mortgage or pledge of, or the creation of any lien, charge or
encumbrance on, any of its properties or assets; or
(h) voluntarily incurred any material obligation or liability,
absolute or contingent, except in the ordinary course of business or
pursuant to existing contracts and agreements described in this
Agreement or in the Schedules delivered pursuant hereto.
6.14 SUITABILITY. Each of the partners in the Constituent Partnerships and
each of the Contributing Entities is an "accredited investor," or is
represented by a "purchaser representative," as defined in Rule 501 of
Regulation D promulgated under the Securities Act.
6.15 INVESTMENT. Each of the partners in the Constituent Partnerships and
each of the Contributing Entities is acquiring the L.P. Units for
investment for such party's own account and not with a view to, or for
resale, in connection with, any distribution of the L.P. Units, and such
party has no present intention of selling or distributing any of such L.P.
Units. Each of the partners in the Constituent Partnerships and each of the
Contributing Entities understands that the L.P. Units have not been
registered under the Securities Act by reason of a specific exemption from
the registration provisions of the Securities Act which depends upon, among
other things, the BONA FIDE nature of the party's investment intent as
expressed herein.
6.16 RULE 144. Each of the partners in the Constituent Partnerships and
each of the Contributing Entities acknowledges that, because they have not
been registered under the Securities Act, the L.P. Units constitute
"restricted securities" as defined in Rule 144(a)(3) and must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. Each of the partners in the
Constituent Partnerships and each of the Contributing Entities is aware of
the provisions of Rule 144 promulgated under the Securities Act which
permit limited resale of securities purchased in a private placement
subject to the satisfaction of certain conditions, including, among other
things, the existence of a public market for the securities, the
availability of certain current public information about the issuer, the
resale occurring not less than one year after a party has purchased and
paid for the security to be sold, the sale being through a "broker's
transaction" or in transactions directly with a "market maker" (as provided
by Rule 144(f)) and the number of securities being sold during any
three-month period not exceeding specified limitations (unless the
securities satisfy the requirements of Rule 144(k)).
7. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE PROPERTIES.
Each of the Contributing Entities represents and warrants to the Company and the
Operating Partnership, severally and for itself with respect only to the
particular Contributed Property or Contributed Properties being contributed by
such Contributing Entity, and each of the Constituent Partnerships (other than
MWP III) represents and warrants to the Company, severally for itself with
respect only to the Existing Properties of such Constituent Partnership, (each
of the foregoing an "Owner") as follows:
7.1 TITLE TO PREMISES.
(a) The Owner has not done or suffered or permitted to be done or
committed any act or matter which would render legal and equitable
title to its Properties to not be good and marketable, such as will be
insured as such by the Title Insurance Company, as specified in
Section 5.4(a), subject only to the Permitted Encumbrances and the
Leases.
(b) There has been no violation by the Owner or its Properties of any
provision, condition or agreement contained in any restrictive
covenant, cross-easement agreement or similar instrument or agreement
affecting its Properties or any portion thereof, which would have a
material adverse effect on its Properties.
(c) The Personal Property located on its Properties, other than that
owned by tenants, utility companies or contractors is owned or leased
by the Owner, includes all the types and approximate quantities of
personal property heretofore owned or leased by the Owner and used in
the ownership, operation and maintenance of the improvements located
on its Properties and, if owned or leased by the Owner, as of the
Closing Date, is owned or leased by the Owner free and clear of any
liens or security interests of any kind, except for Permitted
Encumbrances.
(d) Its Properties are an independent unit which does not now rely on
any facilities (other than facilities covered by Permitted
Encumbrances including, without limitation, any reciprocal easement
agreements, or facilities of municipalities or public utility and
water companies and other than parking areas which its Properties make
legal use of under any reciprocal easement agreements) located on any
property not included in its Properties to fulfill any requirement of
any Governmental Body or for the furnishing to its Properties of any
essential building systems or utilities.
(e) Except as may be contained in the Leases, there are no purchase
contracts, options, or any other agreements of any kind, written or
oral, recorded or unrecorded, whereby any person or entity other than
the Owner has or will have any basis to assert any right, title or
interest in, or right to possession, use, enjoyment or proceeds of all
or a portion of its Properties.
7.2 LEASES.
(a) Except for the Leases of its Properties to be set forth on
Schedule 7.2(a), the Owner has not entered into any other contracts
for the sale or leasing of its Properties or any portion thereof.
(b) As of the Closing Date, no persons or entities, other than the
Owner and the tenants under the Leases and their permitted subtenants
and licensees, shall have any right to the possession, use or
occupancy of its Properties or any portion thereof for any reason
whatsoever.
(c) As of the Closing Date, Schedule 7.2(c) (the "Rent Roll") will be
true and correct in all material respects as of the date noted thereon
and discloses all Leases and the rents due for the dates shown thereon
(collectively, "Rents"). The Leases include all tenancies, licenses
and subleases and other rights of occupancy or use for all or any
portion of its Properties pursuant to which the Owner is landlord or
licensor, all as amended, renewed and extended to the date of the Rent
Roll, whether oral or written.
(d) As of the Closing Date, Schedule 7.2(d) will contain a list of all
security deposits given by the lessees under the Leases (the "Security
Deposits"). Each Security Deposit has been and is held by the Owner or
its agents in compliance with the respective Lease and applicable law.
There are no unfulfilled obligations as to Security Deposits to
tenants under Leases the terms of which have expired or been
terminated and there is no suit, action or other claim made, or, to
the knowledge of the Owner, pending or threatened with respect to any
such Security Deposit.
(e) The following is true with respect to each Lease:
(i) the Lease is valid and existing and in full force and effect
in accordance with its terms. No Lease has been modified, in
writing or otherwise;
(ii) all obligations of the lessor thereunder which accrue prior
to or on the Closing Date shall have been performed and paid for
in full by the Owner on or prior to the Closing Date;
(iii) except for delinquencies in payment of rent of less than
thirty (30) days, to the knowledge of the Owner there has been no
material default or event which, with the giving of notice or the
lapse of time, or both, would constitute a default, on the part
of the lessor thereunder and, the tenant has not asserted and, to
the knowledge of the Owner, has no defense to or offset or claim
against its rent or the performance of its other obligations
under the Lease;
(iv) no tenant has prepaid any rent for more than one month if
the lease term has commenced and two months if the lease term has
not yet commenced;
(v) the Owner has received no written notice from any tenant or
any guarantor of a Lease that such tenant or guarantor is or may
become unable or unwilling to pay its rent or other sums due
under its Lease, continue to operate for the balance of the term
of the Lease, operate in accordance with the exclusives
prescribed under the Lease or otherwise perform any of its other
material obligations under the Lease;
(vi) the Owner has not, and to the knowledge of the Owner, no
other person has, released or discharged any guarantor,
voluntarily or involuntarily or by operation of law, from any
obligation with respect to the Lease that such guarantor has
guaranteed;
(vii) at the time of Closing, no rents will have been assigned,
pledged or encumbered;
(viii) except as shall be set forth on Schedule 7.2(a) as of the
Closing Date, the Owner does not own, directly or indirectly, (A)
five percent (5%) or more of the total combined voting power of
all classes of stock entitled to vote, or ten percent (10%) or
more of the total number of shares of all classes of stock, of
any tenant of its Properties or (B) an interest of ten percent
(10%) or more in the assets or net profits of any tenant of its
Properties; and
(ix) all tenant improvements required under the Leases have been
installed and/or completed, all costs relating thereto have been
paid, and there is no on-going work with respect to any tenant
improvement.
7.3 ENVIRONMENTAL MATTERS. The Owner, or any Person in control of the
Owner, has not done anything to cause or knowingly permit and, to the
knowledge of the Owner, no other person or entity has done anything to
cause or permit Hazardous Materials (as defined below) to be now located on
(except for reasonable amounts used in the ordinary course for the
construction, operation or maintenance of its Properties by the Owner in
accordance with all applicable laws or used by tenants of its Properties in
the ordinary course of operation of their business, which use by tenants
is, and has been, to the knowledge of the Owner, in accordance with all
applicable laws), in or under its Properties or released into the
environment, or discharged, placed or disposed of at, on or under its
Properties; (ii) the Owner has not done anything to cause or knowingly
permit and, to the knowledge of the Owner, no other person or entity has
done anything to cause or permit any underground storage tanks to be
located at its Properties now or during the time of such Owner's ownership
of the property; (iii) during the time of such Owner's ownership of the
property, the Owner has not done anything to cause any of its Properties to
be used to store, treat or dispose of Hazardous Materials and the Owner has
not become aware of any Hazardous Materials stored or disposed of or
adjacent to any of its Properties; and (iv) the Owner has not done anything
to cause or knowingly permit its Properties and its prior uses to fail to
comply with, at all times, any applicable Environmental Laws (as hereafter
defined) or any other governmental law, regulation or requirement relating
to environmental and occupational health and safety matters and Hazardous
Materials. To the knowledge of the Owner, there currently exist no facts or
circumstances that would give rise to a material Environmental Claim (as
defined below).
The term "Hazardous Materials" shall mean any substance, material, waste,
gas or particulate matter which is regulated by any local Governmental
Body, the state in which its Properties are located, or the United States
Government, including, but not limited to, any material or substance which
is (i) defined as a "hazardous waste", "hazardous material", "hazardous
substance", "extremely hazardous waste", or "restricted hazardous waste" or
words of similar import under any provision of any Environmental Law; (ii)
petroleum or petroleum products; (iii) polychlorinated biphenyl; (iv)
radioactive material; (v) radon gas; (vi) designated as a "hazardous
substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
Section 1251 et seq. (33 U.S.C. Section 1317); (vii) defined as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903); or
(viii) defined as a "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601). The term
"Environmental Laws" shall mean all statutes specifically described in the
foregoing sentence and all federal, state and local environmental health
and safety statutes, ordinances, codes, rules, regulations, orders and
decrees regulating, relating to or imposing liability or standards
concerning or in connection with Hazardous Materials. The term
"Environmental Claim" shall mean any administrative, regulatory or judicial
action, suit, demand, demand letter, claim, lien, notice of non-compliance
or violation, investigation or proceeding relating in any way to any
Environmental Law or any permit issued under any such Environmental Law
including, without limitation, (a) by any Governmental Body for
enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law, and (b) by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment.
7.4 ENGINEERING MATTERS.
(a) To the knowledge of the Owner there are no material defects in or
damage to the structure (including the roof and walls) of its
Properties. To the knowledge of the Owner, the systems of its
Properties, including any elevators, heating, ventilation, air
conditioning, plumbing, electrical, drainage, fire alarm,
communications, sprinkler, security and exhaust systems are in
operational and working order and such systems do not contain any
material hidden defect.
(b) The Owner has no knowledge that the flood hazard area designation
for its Properties as shown on a survey of its Properties is
incorrect.
(c) All water, sewer, gas, electric, telephone, and other public
utilities and all storm water drainage necessary for the operation of
its Properties (i) either enter its Properties through open public
streets adjoining its Properties, or, if they pass through adjoining
private land, do so in accordance with valid public or private
easements or rights of way which will inure to the benefit of the
Operating Partnership, (ii) are installed, connected and operating,
with all installation and connection charges paid in full, including,
without limitation, connection and the permanent right to discharge
sanitary waste into the collector system of the appropriate sewer
authority, (iii) to the knowledge of the Owner, are being utilized in
compliance with all applicable governmental and environmental
protection authorities' laws, rules, regulations and requirements, and
(iv) to the knowledge of the Owner, have been adequate and, to the
knowledge of the Owner, will continue to be adequate to service its
Properties as improved and presently used. To the knowledge of the
Owner, no moratorium, proceeding or other fact or condition exists
which (A) threatens to impair continued furnishing of such services to
its Properties at regular rates and fees, or (B) could result in the
discontinuance of such services presently available or necessary.
Water and sanitary sewer provided for its Properties are public.
7.5 FINANCIAL MATTERS.
(a) All alterations, improvements or other work required to have been
completed by the Owner under any reciprocal easement agreements,
Leases executed prior to the Closing Date, and other agreements to
which it is a party, including, without limitation, all alterations,
improvements and other work or allowances therefor required to prepare
space for the initial occupancy of each tenant under a lease, has
heretofore been completed and/or paid for in full.
(b) Except as may be set forth on Schedule 7.5(b) as of the Closing
Date, there is no income derived from the Owner's Properties other
than rental income and interest income. The rental income derived from
its Properties constitutes "rent from real property" as defined in
Section 856(d)(1) of the Code. The interest income derived from the
operation of its Properties constitutes "interest" as defined in
Section 856(c)(2)(B) of the Code.
7.6 INSURANCE.
(a) As of the Closing Date, Schedule 7.6 shall set forth an accurate
and complete list of the insurance policies relating to its Properties
or any part thereof and naming the Owner as an insured; all such
policies are in full force and effect and all premiums thereunder as
of the Closing Date have been paid to the extent due; and no notice of
cancellation has been received with respect thereto and, to the
knowledge of the Owner, none is threatened. The Owner represents that
it does not currently self-insure with respect to any portion of the
insurance, other than earthquake insurance.
(b) The Owner has not received any notice from any insurance company
of any defect or inaccuracies in any of its Properties, or any parts
thereof, which would adversely affect the insurability of any of its
Properties, or would increase the cost of insurance beyond that which
would ordinarily and customarily be charged for similar properties in
the vicinity of such Properties. All of its Properties are fully
insured in accordance with prudent and customary practice.
(c) To the knowledge of the Owner, the Owner has complied with all
work orders, requirements and demands of each and every insurance
company insuring all or any part of its Properties.
7.7 REAL ESTATE TAXES AND ASSESSMENTS.
(a) The copies of the real property tax bills for its Properties for
the current tax year which have been furnished by the Owner to the
Operating Partnership are true and correct and complete copies of all
of such tax bills. All real estate taxes due and payable as of the
Closing Date have been paid in full and there are no pending or, to
the knowledge of the Owner, threatened proceedings for the correction
or reduction of the assessed valuation of its Properties for the
current or prior tax years.
(b) Each of its Properties alone constitutes one or more entire tax
parcel(s) for real estate tax purposes, and are not taxed as part of a
larger tax parcel.
(c) The Owner has not received notice that, and to the knowledge of
the Owner, there are no public improvements in the nature of off-site
improvements, or otherwise, which have been ordered to be made and/or
which have not heretofore been assessed and there are no special or
general assessments (other than regular, annual real estate taxes)
pending against or presently being considered in formal municipal or
quasi-municipal proceedings which will affect its Properties.
7.8 CONDEMNATION; COMPLIANCE WITH LAWS, ETC.
(a) The Owner has not received any written notice with respect to its
Properties from any public authority concerning any eminent domain or
condemnation proceeding, or any uncorrected violation of any
ordinance, public regulation, statute, permit, site plan approval,
zoning or subdivision regulation or urban redevelopment plan
applicable to its Properties.
(b) To the knowledge of the Owner, its Properties, when built, did not
violate any federal, state, county or municipal laws, ordinances,
codes, regulations or requirements affecting all or any of its
Properties including, without limitation, housing, building, safety,
health, environmental, fire or zoning ordinances, codes and
regulations of the respective jurisdictions within which its
Properties are located (together, "Applicable Laws").
(c) To the knowledge of the Owner, there are no material unperformed
obligations relative to its Properties outstanding pursuant to any
written agreements with any Governmental Body.
8. COVENANTS.
8.1 FINANCIAL STATEMENTS. As soon as practicable following any request by
the Company, the Contributing Entities and the Constituent Partnerships
shall cause to be prepared and delivered to the Company such financial
statements prepared in accordance with the applicable rules of SEC
Regulation S-X, including any updates of such financial statements needed
to satisfy the requirements of Rule 3-12 of Regulation S-X as needed in
connection with the S-4 Registration Statement. When and if these financial
statements are delivered, such financial statements will be true and
correct in all material respects and will fairly present the assets,
liabilities and financial condition and the results of operations of the
Properties of the Constituent Partnerships or the Contributing Entities, as
the case may be, as at the respective dates thereof and for the periods
therein referred to, all in accordance with generally accepted accounting
principles consistently applied throughout the periods involved, subject,
in the case of unaudited interim financial statements, to normal, recurring
year-end audit adjustments.
8.2 CONSENT OF CONTRIBUTING ENTITIES. As promptly as practicable, and in
any event prior to the Closing Date, each of the Contributing Entities
shall, to the extent that the terms of its charter, bylaws or partnership
agreement require, use commercially reasonable efforts to solicit and
obtain all required consents of certain Persons listed on Exhibit F to this
Agreement and the consummation of the transactions contemplated hereunder
substantially in the form of the Consents of Certain Persons attached
hereto as Exhibit F.
8.3 COMPANY CORPORATE ACTIONS.
(a) SPECIAL MEETING. As soon as practicable, in accordance with the
CGCL and the Company's articles of incorporation and bylaws, and the
policies and regulations of the AMEX, the Company shall take all
action necessary to convene the Special Meeting as soon as practicable
to consider and vote to approve the Proposed Transactions.
(b) PROXY STATEMENT; OTHER FILINGS. As soon as practicable, the
Company shall prepare, and the Company shall file an S-4 Registration
Statement with the Commission to register all of the securities to be
issued by the Company's successor, Mission West-Maryland, as part of
the Reincorporation Merger pursuant to Section 5 of the Securities
Act, and shall use its best efforts to have it declared effective by
the Commission. Upon the effectiveness of the S-4 Registration
Statement the Company shall mail to its shareholders the Proxy
Statement/Prospectus contained therein, and a form of proxy with
respect to the meeting of the Company's shareholders referred to in
subparagraph (a) above. In connection with the Company's preparation
of the Proxy Statement/Prospectus, the Constituent Partnerships and
the Contributing Entities shall provide to the Company a description
of the Properties, the financial statements referred to in Section 8.1
and such other information with respect to the Properties, the
Constituent Partnerships, and the Contributing Entities as the Company
shall reasonably request.
(c) DISCLOSURE. None of the information supplied or to be supplied by
the Limited Partners, the Constituent Partnerships or the Contributing
Entities, or any of their respective Affiliates, directors, officers,
employees, agents or representatives for inclusion in the S-4
Registration Statement or any other document filed or to be filed with
the SEC or any Governmental Body in connection with the Proposed
Transactions will, at the time it is provided, be false or misleading
with respect to any material fact, or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading.
8.4 ACCESS. Between the date of this Agreement and the Closing Date, the
Limited Partners, the Constituent Partnerships, and the Contributing
Entities shall (and shall use commercially reasonable efforts to cause
their respective Affiliates to) afford to the officers, employees, counsel,
auditors, financial advisors and other authorized representatives of the
Company full access during normal business hours to all its properties,
personnel, books and records that relate (directly or indirectly) to the
assets or properties that, following the Closing, will be owned by the
Operating Partnership and furnish promptly to such persons such information
concerning its business, properties, personnel and affairs as such persons
shall from time to time reasonably request.
8.5 PUBLIC ANNOUNCEMENTS. No party to this Agreement other than the Company
shall (and each such party shall use its reasonable efforts to cause its
Affiliates, directors, trustees, officers, employees, agents and
representatives not to), issue any press release, make any public
announcement concerning the S-4 Registration Statement or any of the
Proposed Transactions
8.6 INDEMNIFICATION AND INSURANCE.
(a) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether civil, criminal or
administrative, including, without limitation, any such claim, action,
suit, proceeding or investigation in which any of the present officers
or directors of the Company is, or is threatened to be, made a party
by reason of the fact that he is or was a director, officer, employee
or agent of the Company, or is or was serving at the request of the
Company as a trustee, director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
whether before or after the Closing, the Company shall use its best
efforts to defend against such claim, action, fact, proceeding or
investigation and to respond promptly thereto. It is understood and
agreed that the Company shall indemnify and hold harmless, as and to
the full extent permitted by applicable law, each such officer or
director against any losses, claims, damages, liabilities, costs,
expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement in connection with any such claim, action, suit,
proceeding or investigation, and in the event of any such claim,
action, suit, proceeding or investigation (whether arising before or
after the Closing), (i) the Company shall retain counsel reasonably
satisfactory to the officer or director and shall pay all fees and
expenses of such counsel for the officer or director promptly as
statements therefor are received and (ii) the Company will use its
best efforts to assist in the vigorous defense of any such matter;
provided that the Company shall not be liable for any settlement
effected without its prior written consent; and provided further that
the Company shall have no obligation hereunder to any officer or
director when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final
and non-appealable, that indemnification of such officer or director
in the manner contemplated hereby is prohibited by applicable law. Any
officer or director wishing to claim indemnification under this
Section 8.6(a), upon learning of any such claim, action, suit,
proceeding or investigation, shall notify the Company thereof.
(b) The Company acknowledges and agrees that all rights to
indemnification existing in favor of the present or former directors,
officers, employees, fiduciaries and agents of the Company or any of
its Subsidiaries (collectively, the "Indemnified Parties") as provided
in the Company's articles of incorporation or bylaws or the
certificate or articles of incorporation, bylaws or similar documents
of any of the Company's Subsidiaries as in effect as of the date
hereof with respect to matters occurring prior to the Closing shall
survive the Closing and shall not be amended in a manner which would
have the effect of limiting such indemnification rights for any period
of time.
8.7 MATERIAL CHANGES.
(a) Between the date of this Agreement and the Closing Date, each of
the parties to this Agreement will give prompt notice to all other
parties of: (i) the occurrence, or failure to occur, of any event that
would be likely to cause any representation or warranty of such party
contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date of this Agreement to the Closing
Date (except for changes permitted or contemplated by this Agreement),
(ii) any failure of such party to comply with or satisfy, in any
material respect, any covenant, condition or agreement to be complied
with by it under this Agreement, (iii) any notice or other
communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement, or that such transactions otherwise
may violate the rights of or confer remedies upon such third party,
and (iv) any notice of, or other communication relating to, any
violation of Applicable Laws, any litigation or any order or judgment
entered or rendered therein.
(b) Between the date of the mailing of the Proxy Statement/Prospectus
to the Company's shareholders and the Closing Date, all parties other
than the Company shall notify the Company of any material change in
the information supplied by it or any of its respective Affiliates,
directors, officers, agents or representatives for inclusion in the
Proxy Statement/Prospectus.
8.8 APPROVALS. Each party to this Agreement shall as promptly as
practicable, (a) use commercially reasonable efforts to obtain all Required
Consents, and give all necessary notices to and make all necessary filings
with and applications and submissions to, any Governmental Body or other
person or entity in connection with the consummation of the transactions
contemplated hereunder, and (b) cooperate with the reasonable requests of
any other party in connection with the foregoing.
8.9 CONDUCT OF BUSINESS PRIOR TO THE CLOSING.
(a) Between the date of this Agreement and the Closing Date, each
party to this Agreement shall conduct its business only in the
ordinary course and consistent with past practice.
(b) At the Closing, each Contributing Entity will assign to the
Operating Partnership the Leases applicable to its Contributed
Properties.
(c) Between the date of the execution of this Agreement and the
Closing Date, each Owner agrees that:
(i) It shall, at its expense, make all repairs and replacements,
structural and non-structural, which are required with respect to
any portion of the Properties to maintain it in its present
condition; and shall also complete, at their expense to the
extent that the expenses may not be passed through to tenants,
any repairs or capital improvements commenced prior to the
Closing Date.
(ii) It shall operate and manage its Properties in the same
manner as it has been operated and managed prior to the date of
this Agreement and in accordance with Applicable Laws.
(iii) It shall submit to the Company monthly reports of rental
collections, occupancy and vacancies.
(iv) It shall perform any and all acts, and shall make any and
all payments, necessary to cause the representations and
warranties of such party under this Agreement to be true and
correct as of the date made or as of the Closing Date if then
required to be true and correct.
(v) It shall comply with all of the obligations of such party
under the Leases and all other agreements and contractual
arrangements by which the party and/or the Properties are bound
or affected, and to its best knowledge, shall comply with all
Applicable Laws.
(vi) It shall maintain the insurance policies on the Properties
in full force and effect and shall pay all required premiums and
other charges.
(vii) It shall not modify or terminate, any of the Leases (except
by reason of a default by the tenant thereunder).
(viii) Promptly after receipt thereof by the Company, it shall
deliver to the Company, the following:
(A) a copy of any notice of default given or received under
any of the Leases or other agreements or any notices of
termination given for any Lease;
(B) a copy of any tax bill, notice or statement of value, or
notice of change in a tax rate affecting or relating to its
Properties;
(C) a copy of any notice of an actual or alleged violation
of Applicable Laws; and
(D) a copy of any notice of any condemnation proceedings
with respect to its Properties.
(d) Between the date of this Agreement and the Closing Date, each of
the Constituent Partnerships and each Contributing Entity shall not,
without the consent of the other parties hereto (which consent shall
not be unreasonably withheld), except as specifically contemplated by
this Agreement:
(i) make any changes or amendment of its limited partnership
agreement;
(ii) be party to any merger, consolidation or other business
combination; or
(iii) agree or otherwise commit, whether in writing or otherwise,
to do either of the foregoing.
Notwithstanding the foregoing, this Section 8.9(d) shall not apply to
any transaction or event contemplated by this Agreement or the Related
Agreements.
8.10 FIRE OR OTHER CASUALTY. Each Owner shall maintain in full force and
effect until the Closing Date the fire and extended coverage insurance
policies now in effect on the Properties. In the event that any building on
a Property shall have been materially damaged by fire or other casualty (in
a manner which adversely affects the operation of such Property as a whole
or which could have an adverse economic consequence to the Property and not
restored as of the Closing Date) the Company may, in its sole discretion,
continue to include such Property in the Operating Partnership for purposes
of the Berg Acquisition; provided that the proceeds of any insurance policy
attributable to such Property shall be transferred to the Operating
Partnership and in such event, there shall be no reduction in the
consideration received by the Property Owner or its partners or
shareholders.
8.11 RESERVATION AND LISTING OF SHARES. The Company shall take all action
necessary to reserve a sufficient number of Shares for issuance upon (a)
the exchange of all L.P. Units issuable under this Agreement, including the
L.P. Units potentially issuable under the Pending Projects Acquisition
Agreement for shares of the Company's Common Stock in accordance with the
terms of the Exchange Rights Agreement, and shall take all action necessary
to list such reserved shares, subject to official notice of issuance, on
the AMEX.
9. ADDITIONAL COVENANTS.
9.1 EXCHANGE RIGHTS OF LIMITED PARTNERS OF OPERATING PARTNERSHIP. Effective
as of the Closing Date, the Company agrees to give the Limited Partners the
right to exchange each L.P. Unit into one share of the Company's Common
Stock at such times and upon such terms as are set forth in the Exchange
Rights Agreement, and subject to adjustment of such exchange ratio as are
provided therein.
9.2 CORPORATE OPPORTUNITIES; FREEDOM OF ACTION.
(a) CORPORATE OPPORTUNITIES. Effective as of the Closing Date Carl E.
Berg agrees not to directly or indirectly acquire or develop, or
acquire an equity ownership interest in any entity that has an
ownership interest in any real property zoned for industrial or R&D
use or which intends to acquire such interests (with the exception of
investments in the securities of publicly-traded companies, which do
not represent more than 10% of the outstanding voting securities
thereof) in California, Oregon or Washington without first disclosing
such investment opportunity to the Company and making such opportunity
available to the Company subject to the approval of a committee of the
Company's Board of Directors comprised solely of Independent
Directors; PROVIDED, HOWEVER that the foregoing shall not apply to any
acquisition, development or investment with respect to the Berg Land
Holdings, or the Projects subject to the Pending Projects Acquisition
Agreement, or the Excluded Properties (as defined in the S-4
Registration Statement). The foregoing restriction shall remain in
effect until the date on which both of the following conditions are
satisfied: (i) no nominee of the Berg Group is a member of the
Company's board of directors and (ii) the Berg Group beneficially owns
less than 25% of the outstanding Common Stock of the Company
(including for these purposes all shares then issuable upon exercise
of the Exchange Rights).
(b) CERTAIN INTERESTED PARTY TRANSACTIONS. Effective as of the Closing
Date, the Company and each party hereto who is a member of the Berg
Group agrees that prior to undertaking any transaction or entering
into any contract between the Company or the Operating Partnership and
any member of the Berg Group, or any Entity in which a Berg Group
member beneficially owns at least 5% of the outstanding Equity
interests shall be subject to prior review and approval by the
Independent Directors Committee. If the proposed transaction or
contract is not approved by the Independent Directors Committee, at
least as to the Berg Group member(s)' involvement therein, such Berg
Group member or members agree not to participate in the transaction or
enter into such contract. The provisions of this Section 9.2(b) shall
not apply to transactions or contracts of a minor nature determined in
accordance with standards or thresholds established by the Independent
Directors Committee.
(c) FREEDOM OF ACTION. Except as provided in Section 9.2(a) and (b),
after the Closing Date neither Carl E. Berg nor any other member of
the Berg Group shall have any obligation to the Company, the Operating
Partnership, or the Company's shareholders or any other Limited
Partners not to (i) engage in the same or similar activities or lines
of business as the Company, (ii) invest or own any interest publicly
or privately in, or develop a business relationship with, any
corporation, partnership or other entity engaged in the same or
similar activities or lines of business as, or otherwise in
competition with, the Company, or (iii) do business with any client or
customer of the Company. Neither Carl E. Berg nor any other member of
the Berg Group shall have any obligation, or be liable, to the
Company, or the Operating Partnership (A) for or arising out of the
conduct described in (i), (ii), or (iii), above, (B) for exercising or
failing to exercise his or the Berg Group's rights under this
Agreement or any other Related Agreement to which he or they will be a
party, (C) for exercising or failing to exercise his or the Berg
Group's rights as a shareholder of the Company or as a Limited
Partner, (D) for breach of any fiduciary or other duty to the Company,
or the Operating Partnership by reason of the conduct described in
(A), (B) or (C) above. Except as provided otherwise in Section 9.2(a)
or (b), in the event that any member of the Berg Group, acquires
knowledge of a potential transaction, agreement, arrangement or other
matter which may be a corporate opportunity for both such Person and
the Company, neither such Person nor its officers, directors,
employees or former employees shall have any duty to communicate or
offer such corporate opportunity to the Company, and neither such
Person nor its officers, directors, employees or former employees
shall be liable to the Company for breach of any fiduciary or other
duty, as a shareholder or otherwise, by reason of the fact that such
Person pursues or acquires such corporate opportunity for itself,
directs such corporate opportunity to another Person or does not
communicate such corporate opportunity or information regarding such
corporate opportunity to the Company.
9.3 RIGHT OF FIRST REFUSAL. The Company hereby grants to each Limited
Partner the right of first refusal to purchase his, her or its pro rata
share of any New Securities (as defined below) that the Company may, from
time to time, propose to sell and issue. A Limited Partner's pro rata
share, for purposes of this right of first refusal, is the ratio of the
number of shares of Common Stock issuable upon exchange of the L.P. Units
held by such Limited Partner immediately prior to the issuance of New
Securities to the total number of shares of Common Stock outstanding
immediately prior to the issuance of New Securities, assuming conversion or
exchange of all outstanding securities convertible or exchangeable into
Common Stock of the company. This right of first refusal shall be subject
to the following provisions:
(a) "NEW SECURITIES." "New Securities" shall mean any capital stock of
the Company, whether or not now authorized, and rights, options or
warrants to purchase such capital stock, and securities of any type
whatsoever that are or may become convertible into capital stock;
provided, however, that the term "New Securities" shall not include
(i) securities issued pursuant to this Agreement and the Private
Placement, (ii) securities issued upon exchange of L.P. Units, (iii)
securities issued pursuant to the acquisition of another business
entity or business segment of any such entity by the Company by
merger, purchase of substantially all the assets of such entity or
business segment or other reorganization whereby the Company or its
shareholders will own more than fifty percent (50%) of the voting
power of such business entity or business segment of any such entity,
(iv) securities issued to officers, directors, employees or
consultants of or to the Company pursuant to any stock option, stock
purchase or stock bonus plan, agreement or arrangement approved by the
board of directors of the Company, (v) securities issued to any
financial institution in connection with a loan transaction approved
by the board of directors of the Company, (vi) securities issued to
vendors or customers or to other persons in similar commercial
situations with the Company, provided such issuance is approved by the
board of directors, (vii) securities issued in a public offering
pursuant to a registration under the Securities Act with an aggregate
offering price to the public of more than $7,500,000, (viii)
securities issued in connection with any stock split, stock dividend
or recapitalization of the Company, and (ix) any right, option or
warrant to acquire any security convertible into the securities
excluded from the definition of New Securities pursuant to subsections
(i) through (viii) above.
(b) NOTICE OF PROPOSED ISSUANCE. In the event the Company proposes to
undertake an issuance of New Securities, it shall give each Limited
Partner written notice of its intention, describing the type of New
Securities, their price and the general terms upon which the Company
proposes to issue such New Securities. Each Limited Partner shall have
ten (10) days after any such notice is mailed or delivered to agree to
purchase such Limited Partner's pro rata share of such New Securities
for the price and upon the terms specified in the notice by giving
written notice to the Company and stating therein the quantity of New
Securities to be purchased.
(c) SALE OF NEW SECURITIES. In the event the Limited Partners fail to
exercise fully the right of first refusal within said ten (10) day
period, the Company shall have sixty (60) days thereafter to sell or
enter into an agreement (pursuant to which the sale of New Securities
covered thereby shall be closed, if at all, within sixty (60) days
from the date of such agreement) to sell the New Securities respecting
which the Limited Partners' right of first refusal set forth in this
Section 9.3 is not exercised, at a price and upon terms no more
favorable to the purchasers thereof than are specified in the
Company's notice to Limited Partners pursuant to Section 9.3(b). In
the event the Company has not sold the New Securities within the
foregoing period, the Company shall not thereafter issue or sell any
New Securities without first again offering such securities to the
Limited Partners in the manner provided in Section 9.3 (b) above.
(d) ASSIGNMENT. The rights granted by the Company pursuant to this
Section 9.3 may be assigned by any Limited Partner to a transferee or
assignee of not less than 500,000 L.P. Units (as adjusted for stock
splits, combinations and the like), provided that such assignment may
otherwise be effected in accordance with applicable securities laws
and that the Company is given written notice at the time of said
assignment stating the name and address of said transferee or assignee
and identifying the securities with respect to which such rights are
being assigned.
(e) TERMINATION OF RIGHT OF FIRST REFUSAL. The right of first refusal
granted under this Section 9.3 shall terminate upon the earlier of (i)
May 14, 2003 or (ii) written agreement of the Company and the holders
of a majority of the L.P. Units then outstanding.
9.4 REIT ELECTION. After the Closing, the Company agrees to take all action
necessary to qualify as a REIT and to make an election to be taxed as a
REIT in the tax year ending December 31, 1998.
9.5 BERG GROUP BOARD REPRESENTATIVES; REQUIRED DIRECTORS CONSENT; SUPER
MAJORITY APPROVAL. The Company agrees that the Berg Group will have the
right to nominate two directors for election to the board of directors so
long as the Berg Group members together with their Affiliates (other than
the Company and the Operating Partnership) own at least 15% of the Equity
Securities of the Company treating all L.P. Units owned by such members and
their Affiliates as Common Stock for this purpose, and the right to
nominate one director if such ownership interest is less than 15% but at
least 10% of such Equity Securities. The Company agrees to take all steps
necessary to cause the election of such Berg Group nominees to the board of
directors. The Company agrees that until the Protective Provisions
Expiration Date it will not take or permit to be taken any of the following
actions without the approval of the Required Directors (in addition to all
other approvals required by the Company's articles of incorporation,
bylaws, contracts or applicable law): (i) establishing a quorum for any
meeting of the board of directors which is not attended by a Required
Director; (ii) amending the Company's articles of incorporation or bylaws;
(iii) merging the Company with or into any other Entity; or (iv) any sale
of all or substantially all of the Company's assets. The Company agrees
further, and the bylaws of Mission West-Maryland shall provide following
the Reincorporation Merger that the approval of more than 75% of the entire
board of directors will be required for (i) the Company's taking title to
assets or conducting business other than through the Operating Partnership,
(ii) the termination of the Company's status as a REIT; and (iii) incurring
indebtedness in excess of 50% of the Company's Total Market Capitalization.
9.6 REINCORPORATION MERGER. After the Closing, and subject to Shareholder
Approval of the Reincorporation Merger, the Company shall take all actions
and file all documents necessary and shall cause Mission West-Maryland to
take all actions and file all documents necessary to effectuate the
Reincorporation Merger. The Company agrees to cause the provisions of
Sections 9.2 and 9.5 to be incorporated into either the Articles of
Incorporation or the Bylaws of Mission West-Maryland.
9.7 OPERATION OF THE OPERATING PARTNERSHIP.
(a) CASH; DISTRIBUTIONS. The Constituent Partnerships acknowledge and
agree that from and after the Closing Date, as provided in the
Operating Partnership Agreement, the Available Cash will be commingled
and used to pay the obligations of all Constituent Partnerships. In
addition, the Operating Partnership shall and will make any
distributions of Available Cash to the Constituent Partnerships on a
pro rata basis in proportion to the ratio of the number of L.P. Units
then outstanding in each such limited partnership to the total member
of L.P. Units then outstanding in the Operating Partnership, and shall
pay distributions simultaneously to the General Partner of each
Constituent Partnership in accordance with the General Partner's
interest in each such limited partnership. Notwithstanding the
foregoing, separate books and records shall be maintained for each
Constituent Partnership, and all costs shall be accounted for
separately and properly credited to the general ledger of each
Constituent Partnership.
(b) FUTURE OPERATIONS. The Company, as general partner of the
Operating Partnership, shall make investment, financing and
operational decisions as though the Operating Partnership was a
consolidated entity; provided that accounts, books and records shall
be properly maintained on a separate basis for each Constituent
Partnership. The Operating Partnership may transact business and
otherwise act for all of the Constituent Partnerships in the name
"Mission West Properties, L.P." The Company, as general partner of the
Operating Partnership, shall endeavor to structure all transactions in
such manner as will maintain the current pro rata interests of each
Constituent Partnership, and of the Limited Partners thereof, to the
Operating Partnership, as a whole, based on the ratio which the
outstanding L.P. Units of each such limited partnership bears to the
total number of L.P. Units set forth on Schedule 6.
9.8 REIT QUALIFICATION OF THE COMPANY. For the purposes of Section
856(a)(6) and (h) of the Code, the Berg Group members agree that they shall
not own (within the meaning of Section 544(a) of the Code), both
individually and as a group, more than 20% of the total value of the
Company's outstanding stock (as determined for purposes of Section
542(a)(2) of the Code) (the "Berg Ownership Limit"); and (ii) for purposes
of all other ownership attribution rules under the Code (in particular
Section 318 of the Code), no single Berg Group member shall directly or
indirectly own 50% or more of the value of the Company's outstanding stock.
The Berg Group members further agree that at no time while the Company is a
REIT shall they acquire or permit any person within their control to
acquire shares of Common Stock or other Equity Securities of the Company if
such acquisition would cause the Company to fail to satisfy the REIT
requirement that five or fewer individuals cannot own more than 50% of the
value of the Company's outstanding stock within the meaning of Sections
544(a)(2) and Section 856(a)(6) and (h) of the Code. The Company
acknowledges and agrees that the right of Limited Partners to exchange L.P.
Units for Common Stock pursuant to the Exchange Rights Agreement does not
constitute the ownership of stock by such Limited Partners under Section
544(a) or 318 of the Code.
10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
10.1 SURVIVAL. All representations, warranties and agreements contained in
this Agreement or in any certificate delivered pursuant to this Agreement
shall survive the Closing for a period of one year.
10.2 INDEMNIFICATION. Each party to this Agreement shall severally
indemnify and hold harmless all other parties and their Affiliates, for any
loss, liability, claim, damage, expense (including, but not limited to,
costs of investigation and defense and reasonable attorneys' fees) or
diminution of value (collectively, "Damages") arising from or in connection
with (a) any inaccuracy in any of the representations and warranties of
such party in this Agreement, (b) any failure by such party to perform or
comply with any covenant, obligation or agreement in this Agreement, (c)
any liabilities of such party not specifically assumed by the Operating
Partnership or the Company hereunder, (d) any claim by any Person for
brokerage or finder's fees or commissions or similar payments based upon
any agreement or understanding alleged to have been made by any such Person
with such party (or any Person acting on such party's behalf) in connection
with any of the Proposed Transactions.
10.3 PROCEDURE FOR INDEMNIFICATION. Promptly after receipt by an
indemnified party ("Indemnified Party") under Section 10.2 of notice of the
commencement of any action, such Indemnified Party shall, if a claim in
respect thereof is to be made against an indemnifying party ("Indemnifying
Party") under such section, give notice to the Indemnifying Party of the
commencement thereof, but the failure so to notify the Indemnifying Party
shall not relieve it of any liability that it may have to any Indemnified
Party except to the extent the Indemnifying Party demonstrates that the
defense of such action is prejudiced thereby. In case any such action shall
be brought against an Indemnified Party and it shall give notice to the
Indemnifying Party of the commencement thereof, the Indemnifying Party
shall be entitled to participate therein and, to the extent that it shall
wish, to assume the defense thereof with counsel reasonably satisfactory to
such Indemnified Party and, after notice from the Indemnifying Party to
such Indemnified Party of its election so to assume the defense thereof,
the Indemnifying Party shall not be liable to such Indemnified Party under
such section for any fees of other counsel or any other expenses, in each
case subsequently incurred by such Indemnified Party in connection with the
defense thereof, other than reasonable costs of investigation. If an
Indemnifying Party assumes the defense of such an action, (a) no compromise
or settlement thereof may be effected by the Indemnifying Party without the
Indemnified Party's consent unless (i) there is no finding or admission of
any violation of law or any violation of the rights of any Person and no
effect on any other claims that may be made against the Indemnified Party
and (ii) the sole relief provided is monetary damages that are paid in full
by the Indemnifying Party and (b) the Indemnifying Party shall have no
liability with respect to any compromise or settlement thereof effected
without its consent (which consent will not be unreasonably withheld). If
notice is given to an Indemnifying Party of the commencement of any action
and it does not, within ten (10) days after the Indemnified Party's notice
is given, give notice to the Indemnified Party of its election to assume
the defense thereof, the Indemnifying Party shall be bound by any
determination made in such action or any compromise or settlement thereof
effected by the Indemnified Party. Notwithstanding the foregoing, if an
Indemnified Party determines in good faith that there is a reasonable
probability that an action may adversely affect it or its affiliates other
than as a result of monetary damages, such Indemnified Party may, by notice
to the Indemnifying Party, assume the exclusive right to defend, compromise
or settle such action, but the Indemnifying Party shall not be bound by any
determination of an action so defended or any compromise or settlement
thereof effected without its consent (which consent shall not be
unreasonably withheld). Notwithstanding the foregoing, any determination
with respect to the Company's determination to make a claim for
indemnification against the Contributing Entities shall be made solely by a
majority of the Independent Directors.
11. TERMINATION.
11.1 TERMINATION.
(a) This Agreement may be terminated by the Company or by Carl E. Berg
before the Closing occurs, whether before or after the Shareholder
Meeting, only as follows:
(i) if the consummation of the Proposed Transactions by the
Company would violate any non-appealable final order, decree or
judgment of any Governmental Body having competent jurisdiction;
(ii) if any material representation or warranty of the Operating
Partnership or any of the Contributing Entities or the
Constituent Partnerships made herein is untrue in any material
respect (other than a change permitted or contemplated by this
Agreement) and such breach is not cured within 60 days of receipt
of a notice from the Company that such breach exists or has
occurred;
(iii) if the conditions to the Company's obligations to
consummate the Closing as set forth in Sections 5.3 and 5.4
cannot reasonably be satisfied on or before September 30, 1998;
(iv) if the Company's shareholders do not approve the Private
Placements and the Berg Acquisition at the Special Meeting.
(b) This Agreement may be terminated by the Company alone if any
consent of any Limited Partner other than a Limited Partner who is a
member of the Berg Group shall not have been obtained on or before the
Closing Date.
11.2 EFFECT OF TERMINATION. In the event that this Agreement is terminated
pursuant to Section 11.1, this Agreement shall terminate without any
liability or further obligation of any party to another, except for
Sections 8.6, 10.2, and 10.3 which shall survive termination. A termination
under Section 11.1 shall not relieve a defaulting or breaching party (or
any party who has liability under this Agreement in respect of the actions
of a defaulting or breaching party) from any liability to the other party
or parties hereto for or in respect of such default or breach.
12. NOTICES.
All notices, consents and other communications under this agreement shall
be in writing and shall be deemed to have been duly given when (a)
delivered by hand, (b) sent by facsimile transmission (with receipt
confirmed), provided that a copy is mailed by registered mail, return
receipt requested, or (c) when received by the addressee, if sent by
Express Mail, Federal Express or other express delivery service (receipt
requested), in each case to the appropriate addresses, and telecopier
numbers set forth in Appendix I hereto (or to such other addresses, and fax
numbers as a party may designate as to itself by notice to the other
parties).
13. GOVERNING LAW; JURISDICTION; ETC.
13.1 GOVERNING LAW. This Agreement and (unless otherwise provided) all
amendments hereof and waivers and consents hereunder shall be governed by
the internal laws of the State of California, without regard to the
conflicts of law principles thereof.
13.2 JURISDICTION. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this agreement may be
brought against any of the parties in the courts of the State of
California, or, if it has or can acquire jurisdiction, in the Northern
District of California, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in
any such action or proceeding and waives any objection to venue laid
therein.
14. MISCELLANEOUS.
14.1 SPECIFIC PERFORMANCE. The parties acknowledge that the subject matter
of this Agreement is unique and that no adequate remedy of law would be
available for breach of this Agreement. Accordingly, each party agrees that
the other parties will be entitled to an appropriate decree of specific
performance or other equitable remedies to enforce this Agreement (without
any bond or other security being required) and each party waives the
defense in any action or proceeding brought to enforce this Agreement that
there exists an adequate remedy at law.
14.2 CAPTIONS. The captions or headings of the Sections of this Agreement
are for convenience only, and shall not control or affect the meaning or
construction of any of the terms or provisions of this Agreement.
References in this Agreement to Sections are references to Sections of this
Agreement, unless expressly stated to the contrary. References in this
Agreement to Schedules are, unless expressly stated to the contrary,
references to Schedules to this Agreement, each of which is part of this
Agreement.
14.3 NO WAIVER. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must
be in writing.
14.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement supersedes all prior
agreements among the parties with respect to its subject matter, and is
intended (with the documents referred to herein) as a complete and
exclusive statement of the terms of the agreement among the parties with
respect thereto and cannot be changed or terminated except by a written
instrument executed by the party or parties against whom enforcement
thereof is sought. This Agreement shall bind and inure to the benefit of
the parties hereto and their respective heirs, executors, personal
representatives, successors and assigns.
14.5 BINDING NATURE. This Agreement shall be binding on each party hereto
at the time that such party executes this Agreement notwithstanding that
other signatories hereto executed and delivered the Agreement at a later
date or not at all.
14.6 COUNTERPARTS. This Agreement may be executed in counterparts and
delivered by electronic facsimile transmission, and each signed counterpart
transmitted by electronic facsimile shall be considered an original, but
all of which together shall constitute the same instrument.
[Remainder of page intentionally left blank]
SIGNATURE PAGES OF ACQUISITION AGREEMENT
IN WITNESS WHEREOF, the parties hereto have hereunto executed this Agreement
as of the first date written above, and a party's signature hereon in any
capacity shall constitute such party's execution of this Agreement in all
capacities which the party holds for purposes of this Agreement.
CONSTITUENT PARTNERSHIPS
MISSION WEST PROPERTIES, L.P., A DELAWARE LIMITED PARTNERSHIP
By:
Berg & Berg Enterprises, Inc., a California corporation
Its: General Partner
By:
Carl E. Berg
Its: President
By:
Thelmer Aalgaard
Its: Limited Partner
By:
Clyde J. Berg, Trustee, 1981 Kara Ann Berg Trust
Its: Limited Partner
By:
Michael L. Knapp
Its: Limited Partner
By:
Thelmer Aalgaard, Trustee of the Sonya L. Berg Trust
Its: Limited Partner
By:
Thelmer Aalgaard, Trustee of the Sherri L. Berg Trust
Its: Limited Partner
BERG FAMILY PARTNERS L.P., A DELAWARE LIMITED PARTNERSHIP
By:
Berg Family Partners, LLC
Its: General Partner
By:
Carl E. Berg
Its: Manager
By:
Berg Living Trust UTA dated May 1, 1981
Its: Limited Partner
By:
Carl E. Berg
Its: Trustee
By:
Mary Ann Berg
Its: Trustee
By:
Clyde J. Berg, Trustee, 1995 Clyde J. Berg Revocable Trust, dated
April 4, 1995
Its: Limited Partner
By:
Clyde J. Berg
Its: Trustee
By:
Clyde J. Berg, Trustee, Carl Berg Child's Trust UTA dated June 2, 1978
Its: Limited Partner
By:
Clyde J. Berg
Its: Trustee
BERG & BERG DEVELOPERS, L.P., A DELAWARE LIMITED PARTNERSHIP
By:
Berg & Berg Developers, LLC, a Delaware limited liability company
Its: General Partner
By:
Carl E. Berg
Its: Manager
By:
Carl E. Berg
Its: Limited Partner
By:
Mary Ann Berg
Its: Limited Partner
By:
Clyde J. Berg
Its: Limited Partner
KONTRABECKI ASSOCIATES, A CALIFORNIA LIMITED PARTNERSHIP
By:
John T. Kontrabecki
Its: General Partner
CONTRIBUTING ENTITIES
KONTRABECKI ASSOCIATES, A CALIFORNIA LIMITED PARTNERSHIP
By:
John T. Kontrabecki
Its: General Partner
TRIANGLE DEVELOPMENT, A CALIFORNIA LIMITED PARTNERSHIP
By:
Berg Ventures I
Its: General Partner
By:
John T. Kontrabecki
Its: General Partner
BERG VENTURES II, A CALIFORNIA LIMITED PARTNERSHIP
By:
John T. Kontrabecki
Its: General Partner
BACCARAT FREMONT DEVELOPERS, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY
By:
Michael L. Knapp
Its: Managing Member
BACCARAT CAMBRIAN, A CALIFORNIA GENERAL PARTNERSHIP
By:
Carl E. Berg
Its: General Partner
BERG & BERG ENTERPRISES INC., A CALIFORNIA CORPORATION
By:
Carl E. Berg
Its: President
DE ANZA OFFICE PARTNERS, A CALIFORNIA GENERAL PARTNERSHIP
By:
Carl E. Berg
Its: General Partner
THE COMPANY
MISSION WEST PROPERTIES, A CALIFORNIA CORPORATION
By:
Michael J. Anderson
Its: Vice President and Chief Operating Officer
ADDITIONAL CONSENTING BERG GROUP MEMBERS
The terms of the foregoing Acquisition Agreement are acknowledged and
accepted by the undersigned.
Michael J. O'Rosky
Sonya O'Rosky
James R. Zorn
Sherri Zorn
APPENDIX I
LIMITED PARTNERS IN THE OPERATING PARTNERSHIP POST-CLOSING
L.P.
NAME ADDRESS UNITS
----------------------------------------------------------
Carl E. Berg, Mary 10050 Bandley Drive 31,869,313
Ann Berg, and Berg Cupertino,
Living Trust UTA California 95014
Dated May 1, 1981 Fax No. (408)
725-1626
----------------------------------------------------------
Clyde J. Berg and 10050 Bandley Drive 20,006,201
Clyde J. Berg Cupertino,
Revocable Trust, California 95014
dated April 4, 1995 Fax No. (408)
725-1626
----------------------------------------------------------
Clyde J. Berg, 10050 Bandley Drive 910,958
Trustee, Cupertino,
Carl Berg Child's California 95014
Trust UTA Dated Fax No. (408)
June 2, 1978 725-1626
----------------------------------------------------------
Berg & Berg 10050 Bandley Drive *
Developers, LLC Cupertino,
California 95014
Fax No. (408)
725-1626
----------------------------------------------------------
Berg Family 10050 Bandley Drive *
Partners, LLC Cupertino,
California 95014
Fax No. (408)
725-1626
----------------------------------------------------------
Clyde J. Berg, 10050 Bandley Drive 998,472
Trustee Cupertino,
of the 1981 Kara California 95014
Ann Berg Trust Fax No. (408)
725-1626
----------------------------------------------------------
Thelmer G. 10050 Bandley Drive 297,524
Aalgaard, Trustee Cupertino,
of the Sonya L. California 95014
Berg Trust Fax No. (408)
725-1626
----------------------------------------------------------
Thelmer G. 10050 Bandley Drive 297,524
Aalgaard, Trustee Cupertino,
of the Sherri L. California 95014
Berg Trust Fax No. (408)
725-1626
----------------------------------------------------------
Thelmer G. Aalgaard 10050 Bandley Drive 302,567
Cupertino,
California 95014
Fax No. (408)
725-1626
----------------------------------------------------------
Michael L. Knapp 10050 Bandley Drive 100,856
Cupertino,
California 95014
Fax No. (408)
725-1626
----------------------------------------------------------
Berg & Berg 10050 Bandley Drive 4,542,121
Enterprises, Inc. Cupertino, CA 95014
Fax No. (408)
725-1626
----------------------------------------------------------
Baccarat Cambrian 10050 Bandley Drive 2,878,152
Partnership Cupertino,
California 95014
Fax No. (408)
725-1626
----------------------------------------------------------
Baccarat Fremont 10050 Bandley Drive 1,216,290
Developers Cupertino,
California 95014
Fax No. (408)
725-1626
----------------------------------------------------------
DeAnza Office 10050 Bandley Drive 806,846
Partners Cupertino,
California 95014
Fax No. (408)
725-1626
----------------------------------------------------------
Triangle 2755 Campus Drive, 482,911
Development Company #100
San Mateo, CA 94403
Fax No. (650)
312-1333
----------------------------------------------------------
John Kontrabecki 2755 Campus Drive, 953,018
#100
San Mateo, CA 94403
Fax No. (650)
312-1333
----------------------------------------------------------
Berg Venture II 2755 Campus Drive, 1,243,653
#100
San Mateo, CA 94403
Fax No. (650)
312-1333
----------------------------------------------------------
Total 66,906,406
* Initial holder of 0.50% of the total L.P. Units outstanding in each of
Mission West Properties L.P. I and Mission West Properties L.P., II which will
be distributed after the closing to the owners of the LLC in identical
proportion to their percentage interests in each such partnership. Such
distributed Units are included in the individual L.P. Unit totals reflected
above.
SCHEDULE 1
SCHEDULE OF MISSION WEST PROPERTIES, L.P.
PRE-CONTRIBUTION PROPERTIES
Assessor's PROPERTY ADDRESS
PARCEL #
---------------------------------------------------
519-1010-1174 48700-48800 Milmont
Drive, Fremont
---------------------------------------------------
104-04-120 4750-4800 Patrick Henry
Drive, Santa Clara
---------------------------------------------------
SCHEDULE 2
SCHEDULE OF MISSION WEST PROPERTIES, L.P. I (FORMERLY BERG FAMILY PARTNERS)
PROPERTIES
ASSESSOR'S PARCEL # PROPERTY ADDRESS
------------------------------------------------------------
110-29-007 1190 Morse Avenue, Sunnyvale
------------------------------------------------------------
160-54-017 450 National Avenue, Mountain View
------------------------------------------------------------
205-23-011 1135 Kern Avenue, Sunnyvale
------------------------------------------------------------
216-35-024 1230 E. Arques Avenue, Sunnyvale
------------------------------------------------------------
216-35-026 1250 E. Arques Avenue, Sunnyvale
------------------------------------------------------------
224-44-019 2251 Lawson Lane, Santa Clara
------------------------------------------------------------
224-44-020 3120 Scott Boulevard, Santa Clara
------------------------------------------------------------
224-47-019 3301 Olcott Street, Santa Clara
------------------------------------------------------------
316-22-018 20400 Mariani Avenue, Cupertino
------------------------------------------------------------
326-10-046 20605-705 Valley Green Drive, Cupertino
------------------------------------------------------------
357-20-020 10300 Bubb Road, Cupertino
------------------------------------------------------------
357-20-036 10440 Bubb Road, Cupertino
------------------------------------------------------------
357-20-037 10460 Bubb Road, Cupertino
------------------------------------------------------------
316-22-017 10500 N. DeAnza Boulevard, Cupertino
------------------------------------------------------------
519-1005-72 2800 Bayview
------------------------------------------------------------
SCHEDULE 3
SCHEDULE OF MISSION WEST PROPERTIES, L.P. II (FORMERLY BERG & BERG
DEVELOPERS) PROPERTIES
Assessor's DESCRIPTION
PARCEL #
--------------------------------------------------
086-33-092 McCandless-Parcel 7, Milpitas
--------------------------------------------------
086-33-093 McCandless-Parcel 8, Milpitas
--------------------------------------------------
086-33-094 McCandless-Parcel 9, Milpitas
--------------------------------------------------
086-33-095 McCandless-Parcel 10, Milpitas
--------------------------------------------------
086-33-098 McCandless-Parcel 4, Milpitas
--------------------------------------------------
086-33-099 McCandless-Parcel 5, Milpitas
--------------------------------------------------
086-33-100 McCandless-Parcel 6, Milpitas
--------------------------------------------------
086-41-016 McCandless 2A & 2B, Milpitas
--------------------------------------------------
086-41-017 McCandless-Parcel 3, Milpitas
--------------------------------------------------
086-41-018 McCandless-Parcel 3, Milpitas
--------------------------------------------------
086-41-019 McCandless-Parcel 11, Milpitas
--------------------------------------------------
086-41-020 McCandless-Parcel 11, Milpitas
--------------------------------------------------
086-41-021 McCandless-Parcel 12, Milpitas
--------------------------------------------------
086-41-022 McCandless-Parcel 13, Milpitas
--------------------------------------------------
097-13-054 75 E. Trimble Road and
2600-2610 North First St., San Jose
--------------------------------------------------
097-13-055 2600-2610 North First St.,
and 75 E. Trimble Road, San Jose
--------------------------------------------------
110-14-198 1170 Morse Avenue, Sunnyvale
--------------------------------------------------
110-25-040 1212 Bordeaux Drive, Sunnyvale
--------------------------------------------------
216-29-112 3236 Scott Boulevard, Santa Clara
--------------------------------------------------
224-65-006 1600 Memorex Drive, Santa Clara
--------------------------------------------------
421-07-021 2033-2243 Samaritan Drive, San Jose
--------------------------------------------------
706-02-025 6850 Santa Teresa, San Jose
--------------------------------------------------
706-02-026 140-160 Great Oaks Boulevard and
6781 Via Del Oro, San Jose
--------------------------------------------------
706-02-034 6385-6387 San Ignacio and
6540 Via Del Oro, San Jose
--------------------------------------------------
706-09-023 6320-6360 San Ignacio, San Jose
--------------------------------------------------
706-09-094 6311-6351 San Ignacio, San Jose
--------------------------------------------------
SCHEDULE 4
MISSION WEST PROPERTIES, L.P. III (FORMERLY KONTRABECKI ASSOCIATES) PROPERTIES
ASSESSOR'S PROPERTY ADDRESS
PARCEL #
---------------------------------------
104-15-128-00 3506-3510 Bassett,
Santa Clara
---------------------------------------
104-15-130-00 3540-3544 Bassett,
Santa Clara
---------------------------------------
104-15-131-00 3550-3580 Bassett,
Santa Clara
---------------------------------------
104-15-132-00 Cul-de-Sac
---------------------------------------
SCHEDULE 5
SCHEDULE OF CONTRIBUTED PROPERTIES
CONTRIBUTING ASSESSOR'S DESCRIPTION NUMBER OF
ENTITY PARCEL #'S UNITS
- ---------------------------------------------------------------------
Carl E. Berg 525-1350-54-1, 4050 Starboard Drive, 3,061,427
525-1350-18, 45700 Northport,
525-1350-24 45738 Northport Loop,
Fremont, CA
- ---------------------------------------------------------------------
MWPIII 104-15-128-00, 3506-3510 Bassett 1,906,036*
104-15-130-00, Street,
104-15-131-00 3540-3544 Bassett
Street,
3550-3580 Bassett
Street
Santa Clara, CA
- ---------------------------------------------------------------------
Triangle 104-15-133-00 3530 Bassett Street 482,911
Development Santa Clara, CA
Company
- ---------------------------------------------------------------------
Berg Venture 104-15-134-00 3520 Bassett Street 1,243,653
II Santa Clara, CA
- ---------------------------------------------------------------------
Baccarat 519-850-102 3501 W. Warren and 1,216,290
Fremont 46600 Fremont
Developers Boulevard
LLC
- ---------------------------------------------------------------------
Baccarat 421-07-025 2001 Logic Drive 2,878,152
Cambrian
Partnership
- ---------------------------------------------------------------------
Berg & Berg 678-16-005 4949 Hellyer Avenue 4,521,950
Enterprises,
Inc.
- ---------------------------------------------------------------------
De Anza 357-20-010 10401-10411 Bubb 806,846
Office Road, Cupertino, CA
Partners
- ---------------------------------------------------------------------
* Included on Schedule 6 also.
SCHEDULE 6
POST-CONTRIBUTION SCHEDULE OF L.P. UNITS OUTSTANDING
FOR EACH PARTNERSHIP IN THE OPERATING PARTNERSHIP
PARTNERSHIP NAME NUMBER OF L.P. UNITS
--------------------------------------------------
Mission West Properties, 16,228,344
L.P.
--------------------------------------------------
Mission West Properties, 12,722,876
L.P. I
--------------------------------------------------
Mission West Properties, 36,049,150
L.P. II
--------------------------------------------------
Mission West Properties, 1,906,036
L.P. III
--------------------------------------------------
Total: 66,906,406
--------------------------------------------------
EXHIBIT F
CONSENT OF CERTAIN PERSONS
EACH OF THE FOLLOWING PERSONS/ENTITIES HEREBY ACKNOWLEDGES THE TERMS OF THE
ACQUISITION AGREEMENT DATED AS OF MAY 14, 1998 TO WHICH A LIMITED PARTNERSHIP IN
WHICH THE UNDERSIGNED IS A LIMITED PARTNER, AND CONSENTS TO THE LIMITED
PARTNERSHIP'S AGREEMENT TO BE BOUND BY THOSE TERMS.
By:
Brian Aalgaard
Dated:
By:
James Koch
Dated:
By: KLA Development Corporation
By:
Its:
Dated:
By:
Karen Bella
Dated: