PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of December
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12, 2001 is by and between Catellus Development Corporation, a Delaware
corporation ("Catellus"), and California Public Employees' Retirement System, a
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government employee pension fund, which is a unit of the State and Consumer
Services Agency of the State of California ("CalPERS").
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WHEREAS, CalPERS is the beneficial owner of 18,782,276 shares of
Catellus common stock, par value $.01 per share ("Common Stock"), of which
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CalPERS desires to sell and Catellus desires to purchase 10,600,000 of such
shares (the "Catellus Shares") subject to the terms described herein;
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NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and warranties herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
1. Purchase and Sale. Subject to the terms and upon the conditions herein
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set forth, Catellus agrees to purchase and CalPERS agrees to sell on the
Closing Date (as hereinafter defined) the Catellus Shares, free and clear
of all liens, encumbrances, claims and security interests, in exchange for
the delivery by Catellus to CalPERS of an aggregate amount equal to
$183,120,300 (the "Purchase Price") in immediately available funds,
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payable by wire transfer;
2. Representations and Warranties of Catellus. Catellus hereby represents
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and warrants to CalPERS as follows:
(a) Due Organization. Catellus is duly organized, validly existing
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and in good standing under the laws of the State of Delaware.
(b) Authorization. Catellus has the requisite corporate power to
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enter into this Agreement and the transactions and agreements
contemplated hereby and to carry out its obligations hereunder.
This Agreement has been duly authorized, executed and delivered
by Catellus and constitutes a valid and binding agreement
enforceable against Catellus in accordance with its terms.
Neither the execution and delivery of this Agreement, the
consummation of the transactions and agreements contemplated
hereby, nor compliance with the terms, conditions or provisions
of this Agreement will be a violation of any provision of law
applicable to Catellus; of any of the terms, conditions or
provisions of Catellus' Restated Certificate of Incorporation, as
amended, or bylaws or of any material agreement or instrument to
which it or one of its subsidiaries is a party or by which it or
one of its subsidiaries or its or their material properties may
be bound, or
constitute a default or create a right of termination or
acceleration thereunder, except for any such violation, default
or right of termination or acceleration which has been waived or
consented to in connection with the transactions contemplated
hereby. The Board of Directors of Catellus has duly approved this
Agreement and the transactions contemplated hereby. No consent,
approval, authorization, or order of, or qualification with, any
governmental body or agency is required for the performance of
any of Catellus' obligations hereunder.
(c) Common Stock Outstanding. As of November 30, 2001, Catellus had
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issued and outstanding 97,155,082 shares of Common Stock, and
Catellus has not repurchased any shares of its Common Stock since
November 30, 2001 through the date hereof. From November 1, 2001
through the date hereof, the Company has not sold any shares of
its Common Stock, other than shares of Common Stock issued or
issuable upon exercise of stock options.
(d) Disclosure of Information. Catellus is not currently engaged in
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any discussions or negotiations regarding a sale of all or
substantially all of the assets of Catellus, or a merger,
consolidation or other business combination involving Catellus in
which the shareholders of Catellus would own less than 50% of the
surviving entity, nor does Catellus have any current plan or
intention to engage in any such discussions or negotiations.
3. Representations and Warranties of CalPERS. CalPERS hereby represents
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and warrants to Catellus as follows:
(a) Due Organization. CalPERS is duly organized and validly existing
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under the laws of the State of California.
(b) Authorization. CalPERS has the requisite power to enter into this
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Agreement and the transactions and agreements contemplated hereby
and to carry out its obligations hereunder and thereunder. This
Agreement has been duly authorized, executed and delivered by
CalPERS and constitutes a valid and binding agreement of CalPERS
enforceable against CalPERS in accordance with its terms. Neither
the execution and delivery of this Agreement, consummation of the
transactions and agreements contemplated hereby, nor compliance
with the terms, conditions or provisions of this Agreement, will
be a violation of any provision of law applicable to CalPERS; of
any statutes governing the organization and operation of CalPERS;
or of any material agreement or instrument to which CalPERS is a
party or by which CalPERS or any of its material properties may
be bound, or constitute a default or create a right of
termination or acceleration thereunder, except for any such
violation, default or right of termination or acceleration which
has been waived or consented to in connection with the
transactions contemplated hereby.
The Board of Administration of CalPERS has duly approved this
Agreement and the transactions contemplated hereby. No consent,
approval, authorization, or order of or qualification with, any
governmental body or agency is required for the performance of
any of CalPERS' obligations hereunder.
(c) Title. CalPERS owns the Catellus Shares free and clear of all
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liens, encumbrances, claims and security interests.
(d) Ownership. CalPERS is the sole beneficial owner of the Catellus
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Shares and the Remaining Shares. To its knowledge, the Catellus
Shares and the Remaining Shares are the only securities of
Catellus beneficially owned by CalPERS, and from November 1, 2001
to the date hereof, CalPERS has not purchased any shares of the
Catellus Common Stock. For purposes of this Section 3(d), the
term "knowledge" shall be deemed limited to the actual knowledge
of Michael McCook and Kent Haggerty.
4. Public Announcements. The parties hereto will consult with each other
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before issuing, and provide each other with the reasonable opportunity to review
and comment upon, any press release or other written public statements with
respect to the transactions contemplated by this Agreement, and shall not issue
any such press release or make any such public statement without the reasonable
consent of the other party, except as may be required by applicable law, rule or
regulation, by court process or by obligations pursuant to any listing agreement
with any national securities exchange or transaction reporting system so long as
the other party is notified promptly by the disclosing party of such press
release or public statement. For the avoidance of doubt, the parties acknowledge
that CalPERS will be filing, with respect to these transactions, an amendment to
its report on Schedule 13D, and Catellus will be filing, with respect to these
transactions, a Current Report on Form 8-K.
5. Closing. Subject to the satisfaction of the conditions set forth in
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Section 6 and Section 7, the purchase and sale of the Catellus Shares
(the "Closing") shall occur at 10:00 am (Pacific time) on December 14,
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2001, or on such later date as shall be agreed upon by Catellus and
CalPERS as soon as reasonably practicable thereafter (such date being
the "Closing Date"). The Closing shall take place at the offices of
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Latham & Watkins, 633 West Fifth Street, Suite 4000, Los Angeles,
California 90071, at which time the parties shall make the deliveries
described below, in addition to any other documents required to be
delivered under this Agreement.
(a) Deliveries by Catellus. At the Closing, Catellus shall deliver or
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cause to be delivered the following to CalPERS:
(1) $183,120,300 by wire transfer of immediately available
funds to the account specified by CalPERS;
(2) a certificate of Catellus' secretary certifying resolutions
of the Board of Directors of Catellus approving this
Agreement and the
transactions contemplated hereby (together with an
incumbency and signature certificate regarding the
officer(s) signing on behalf of Catellus);
(3) a certificate, dated the Closing Date, of an executive
officer of Catellus, certifying that, as of such date,
the representations and warranties of Catellus
contained herein are accurate, true and correct with
the same force and effect as though made on and as of
such date; and
(4) certificates representing the Remaining Shares.
(b) Deliveries by CalPERS. At or prior to the Closing, CalPERS
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shall deliver or cause to be delivered the following:
(1) At least two business days prior to the Closing, (i) a
copy of the certificate or certificates representing
the 18,782,276 shares of Common Stock owned by CalPERS
shall be delivered to American Stock Transfer & Trust
Company, accompanied by an executed stock power with
respect to the Catellus Shares; and (ii) the names and
denominations of the Remaining Shares;
(2) On or prior to the Closing, an actual certificate or
certificates representing the 18,782,276 shares of
Common Stock owned by CalPERS shall be delivered to
American Stock Transfer & Trust Company, accompanied by
an executed stock power with respect to the Catellus
Shares;
(3) a certificate of an executive officer of CalPERS
certifying delegation resolutions of the Board of
Administration of CalPERS approving this Agreement and
the transactions contemplated hereby (together with an
incumbency and signature certificate regarding the
officer(s) signing on behalf of CalPERS) to Catellus;
and
(4) a certificate, dated the Closing Date, of an executive
officer of CalPERS, certifying that, as of such date,
the representations and warranties of CalPERS contained
herein are accurate, true and correct with the same
force and effect as though made on and as of such date
to Catellus.
6. Conditions to the Obligations of Catellus. The obligations of
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Catellus under this Agreement are subject to the fulfillment of each of the
following conditions:
(a) Performance. CalPERS shall have performed and complied
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in all material respects with all agreements, covenants,
obligations and conditions required by this Agreement
to be performed or complied with by it.
(b) Injunctions. No preliminary or permanent injunction or other
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final order by any United States federal or state court
shall have been issued which prevents the consummation of
the transactions contemplated hereby.
7. Conditions to the Obligations of CalPERS. The obligations of CalPERS
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under this Agreement are subject to the fulfillment of each of the following
conditions:
(a) Performance. Catellus shall have performed and complied in
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all material respects with all agreements, covenants,
obligations and conditions required by this Agreement to be
performed or complied with by it.
(b) Injunctions. No preliminary or permanent injunction or other
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final order by any United States federal or state court
shall have been issued which prevents the consummation of
the transactions contemplated hereby.
8. Termination of Existing Agreements. Effective upon the Closing, the
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Existing Agreements (as defined below) shall terminate without any further
action by the parties hereto or thereto and all rights and obligations arising
out of, or related to any of the Existing Agreements shall terminate and neither
CalPERS nor the Company shall have any obligations or rights thereunder to the
other party thereto on or after the Closing Date. "Existing Agreements" shall
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mean: (i) the Agreement dated as of January 14, 1993, as amended by Amendment
No. 1 to Agreement dated as of February 4, 1993, between Catellus and Bay Area
Real Estate Investment Associates L.P. (predecessor in interest of CalPERS)
("BAREIA"), (ii) the Stockholders Agreement dated as of January 29, 1993 among
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BAREIA, Olympia & York SF Holding Corporation ("Olympia"), Itel Corporation
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("Itel") and Catellus, (iii) the Standby Stockholders Agreement dated as of
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February 4, 1993 among BAREIA, Itel and Catellus and (iv) the Stock Subscription
Agreement between BAREIA and Santa Fe Pacific Realty Corporation ("Santa Fe")
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dated as of November 13, 1989, as amended by Amendment No. 1 to Stock
Subscription Agreement dated as of December 29, 1989, between BAREIA and Santa
Fe.
9. Removal of Legend. Upon the satisfaction of the following condition,
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Catellus shall instruct the transfer agent to remove any restrictive legend from
any certificate or certificates representing the 8,182,276 shares of Common
Stock owned by CalPERS immediately after the Closing (the "Remaining Shares")
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and to issue a certificate (which may be the certificate referred to in Section
5(a)(4) above) representing the Remaining Shares in the name of CalPERS or its
nominee: Catellus and its transfer agent shall have received a written opinion
of outside counsel to CalPERS in the form attached hereto as Exhibit A.
10. Survival. The representations and warranties of the parties shall
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survive the Closing forever.
11. Indemnification.
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(a) Each party (the "Indemnifying Party") agrees to indemnify
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the other party, and each of their affiliates and their
respective officers, directors, employees, agents and
representatives (each, an "Indemnified Party" and together
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the "Indemnified Parties") against, and agrees to hold each
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of them harmless from, any and all liabilities, losses,
costs, claims, damages,
penalties and expenses (including, without limitation,
reasonable attorneys' fees and expenses and costs of
investigation and litigation) ("Losses") (i) incurred or
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suffered by them relating to or arising out of or in
connection with any breach of or any inaccuracy in any
representation or warranty made by the Indemnifying Party in
this Agreement or any document delivered by it at the
Closing pursuant to Section 5 hereof or (ii) arising out of
or in connection with any action, suit, inquiry, or
proceeding against or involving any Indemnified Party as a
result of any Indemnifying Party's actions (or lack thereof)
in connection with the negotiation or execution of this
Agreement or any of the transactions contemplated hereby, or
based upon any allegation or claim that the Indemnified
Party is in any way responsible or liable for any action (or
lack thereof) of the Indemnifying Party. No person shall be
entitled to indemnification hereunder to the extent that the
act or omission of such person for which indemnification is
claimed arises out of such person's fraud, bad faith or
willful misconduct.
(b) As soon as is reasonably practicable after becoming aware of
a claim for indemnification under this Agreement, the
Indemnified Party shall promptly give notice to the
Indemnifying Party of such claim and the amount the
Indemnified Party will be entitled to receive hereunder from
the Indemnifying Party; provided that the failure of the
Indemnified Party to give notice shall not relieve the
Indemnifying Party of its obligations hereunder except to
the extent (if any) that the Indemnifying Party shall have
been prejudiced thereby. If the Indemnifying Party agrees
that it has an indemnification obligation but objects that
it is obligated to pay only a lesser amount, the Indemnified
Party shall nevertheless be entitled to recover promptly
from the Indemnifying Party the lesser amount, without
prejudice to the Indemnified Party's claim for the
difference.
(c) After receiving a claim as set forth above, the Indemnifying
Party may, at its own expense, (i) participate in the
defense of any claim, suit, action or proceeding and (ii)
except in the case of a claim indemnification for which is
available pursuant to clause (ii) of paragraph (a) above, as
to which this clause (ii) shall be inapplicable, upon notice
to the Indemnified Party and the Indemnifying Party's
delivering to the Indemnified Party a written agreement that
the Indemnified Party is entitled to indemnification for all
Losses arising out of such claim, suit, action or
proceeding, assume the defense thereof; provided, however,
that (x) the Indemnifying Party's counsel is reasonably
satisfactory to the Indemnified Party, and (y) the
Indemnifying Party shall thereafter consult with the
Indemnified Party upon the Indemnified Party's reasonable
request for such consultation from time to time with respect
to such claim, suit, action or proceeding. If the
Indemnifying Party assumes such defense, the Indemnified
Party shall have the right (but not the duty) to participate
in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the
Indemnifying Party. If, however, the Indemnified Party
reasonably
determines in its judgment that representation by the
Indemnifying Party's counsel of both the Indemnifying Party and
the Indemnified Party would present such counsel with a conflict
of interest, then such Indemnified Party may employ separate
counsel to represent or defend it in any such claim, action, suit
or proceeding and the Indemnifying Party shall pay the reasonable
fees and disbursements of such separate counsel. Whether or not
the Indemnifying Party chooses to defend or prosecute any such
claim, suit, action or proceeding, all of the parties hereto
shall cooperate in the defense or prosecution thereof.
(d) Notwithstanding anything in this Section 11 to the contrary,
neither the Indemnifying Party nor the Indemnified Party shall,
without the written consent of the other, settle or compromise
any claim or permit a default or consent to entry of any judgment
unless the claimant and such party provide to such other party an
unqualified release from all liability in respect of such claim.
Notwithstanding the foregoing, if a settlement offer solely for
money damages is made by the applicable third party claimant, and
the Indemnifying Party notifies the Indemnified Party in writing
of the Indemnifying Party's willingness to accept the settlement
offer and pay the amount called for by such offer, and the
Indemnified Party declines to accept such offer, the Indemnified
Party may continue to contest such claim, free of any
participation by the Indemnifying Party, and the amount of any
ultimate liability with respect to such claim that the
Indemnifying Party has an obligation to pay hereunder shall be
limited to the lesser of (i) the amount of the settlement offer
that the Indemnified Party declined to accept or (ii) the
aggregate Losses of the Indemnified Party with respect to such
claim. If the Indemnifying Party makes any payment on any claim,
the Indemnifying Party shall be subrogated, to the extent of such
payment, to all rights and remedies of the Indemnified Party to
any insurance benefits or other claims of the Indemnified Party
with respect to such claim.
(e) In the event that the Indemnifying Party does not elect to assume
the defense of any claim, suit, action or proceeding, then any
failure of the Indemnified Party to defend or to participate in
the defense of any such claim, suit, action or proceeding or to
cause the same to be done, shall not relieve the Indemnifying
Party of its obligations hereunder.
12. Successors and Assigns. This Agreement shall be binding upon, and inure
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to the benefit of, the parties hereto and their respective heirs, personal
representatives, successors, assigns and affiliates.
13. Notices. Any notice or other communication provided for herein or given
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hereunder to a party hereto shall be in writing and shall be given by delivery,
by telex, telecopier or by mail (registered or certified mail, postage prepaid,
return receipt requested) to the respective parties as follows:
If to Catellus:
Catellus Development Corporation
201 Mission Street, Second Floor
San Francisco, California 94105
Attention: C. William Hosler
Facsimile: (415) 974-4502
with a copy to:
Latham & Watkins
633 West Fifth Street
Suite 4000
Los Angeles, California 90071
Attention: Brian Cartwright, Esq.
Facsimile: (213) 891-8763
If to CalPERS:
California Public Employees' Retirement System
Lincoln Plaza
400 "P" Street
Sacramento, California 95814
Attention: Michael McCook
Facsimile: (916) 326-3965
with a copy to:
Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
Attention: Alan L. Dye
Facsimile: (202) 637-5910
or to such other address with respect to a party as such party shall notify the
other in writing.
14. Waiver. No party may waive any of the terms or conditions of this
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Agreement, nor may this Agreement be amended or modified, except by a duly
signed writing referring to the specific provision to be waived, amended or
modified.
15. Entire Agreement. This Agreement constitutes the entire agreement with
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respect to the subject matter hereof, and supersedes all other prior agreements
and understandings, both written and oral, among the parties hereto and their
affiliates.
16. Expenses. Regardless of whether the transactions contemplated hereby
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are consummated, each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby.
17. Captions. The Section and Paragraph captions herein are for convenience
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of reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof.
18. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
19. Governing Law. This Agreement shall be governed by, and construed and
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enforced in accordance with, the laws of the State of Delaware.
20. No Presumption Against Drafter. Each of the parties hereto has jointly
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participated in the negotiation and drafting of this Agreement. In the event of
an ambiguity or a question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by each of the parties hereto and no
presumptions or burdens of proof shall arise favoring any party by virtue of the
authorship of any of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the day and year first executed.
CATELLUS DEVELOPMENT CORPORATION
By: /s/ Nelson C. Rising
Name: Nelson C. Rising
Title: Chairman and Chief Executive Officer
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
By: /s/ Michael McCook
Name: Michael McCook
Title: Senior Investment Officer-Real Estate
Purchase and Sale Agreement - Catellus Development Corp. and California Public Employees' Retirement System (CalPERS)
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