SECURITIES PURCHASE AGREEMENT
RELATING TO
SERIES A CONVERTIBLE PREFERRED PARTNERSHIP UNITS
of
VININGS INVESTMENT PROPERTIES, L.P.
by and among
VININGS INVESTMENT PROPERTIES TRUST,
VININGS INVESTMENT PROPERTIES, L.P.
and
THE PURCHASERS NAMED HEREIN
Dated as of April 29, 1999
TABLE OF CONTENTS
Section Page
1. Agreement to Sell and Purchase the Preferred Units.......................................................1
2. Closing of Sale of Preferred Units.......................................................................1
3. Conditions to Closing....................................................................................2
3.1. Conditions Precedent to Obligations of the Purchasers on the Closing Date.......................2
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(a) Representations and Warranties.............................................................2
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(b) Performance................................................................................2
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(c) Proceedings and Documents..................................................................2
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(d) Registration Rights Agreement..............................................................2
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(e) Related Matters............................................................................2
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(f) Title and Legal Compliance.................................................................2
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(g) Additional Certificates.........................................................................3
3.2. Conditions Precedent to Obligations of the Operating Partnership on the Closing Date............3
(a) Representations and Warranties.............................................................3
(b) Performance................................................................................3
4. Representations, Warranties and Covenants of the REIT and the Operating Partnership......................3
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4.1. Organization and Qualification; Authority.......................................................3
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4.2. Corporate and Governmental Authorization; No Contravention......................................4
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4.3. Validity and Binding Effect.....................................................................5
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4.4. Capitalization..................................................................................5
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4.5. Use of Proceeds.................................................................................5
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4.6. Qualification of the REIT.......................................................................5
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4.7. Qualification of the Operating Partnership......................................................5
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4.8. Bankruptcy, etc.................................................................................6
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4.9. Private Offering................................................................................6
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4.10. Purchase of Additional Properties...............................................................6
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4.11. Right of First Refusal..........................................................................7
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5. Representations, Warranties and Covenants of the Purchasers..............................................7
5.1. Purchase for Investment; Source of Funds........................................................7
5.2. Conversion to Preferred Shares..................................................................8
6. Restrictions on Transfer.................................................................................8
6.1. Restrictive Legends.............................................................................8
6.2. Transfers; Opinions of Counsel..................................................................8
7. Miscellaneous............................................................................................9
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7.1. Survival of Representations and Warranties; Severability........................................9
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7.2. Amendment and Waiver............................................................................9
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7.3. Notices, Etc....................................................................................9
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7.4. Successors and Assigns.........................................................................10
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7.5. Descriptive Headings...........................................................................10
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7.6. Satisfaction Requirement.......................................................................10
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7.7. GOVERNING LAW..................................................................................10
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7.8. Counterparts...................................................................................10
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8. Definitions.............................................................................................10
EXHIBITS
EXHIBIT A -- Form of Registration Rights Agreement
EXHIBIT B -- Form of Amendment to the Agreement of Limited Partnership
EXHIBIT C -- Description of the Heritage Transaction
SECURITIES PURCHASE AGREEMENT
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SECURITIES PURCHASE AGREEMENT dated as of April 29, 1999 among VININGS
INVESTMENT PROPERTIES TRUST, a Massachusetts business trust (the "REIT"),
VININGS INVESTMENT PROPERTIES, L.P., a Delaware limited partnership (the
"Operating Partnership," and together with the REIT, unless the context
otherwise indicates, the "Companies"), and the purchasers listed on the
signature page hereto (each a "Purchaser," and collectively, the "Purchasers").
Unless otherwise defined, capitalized terms used in this Agreement are defined
in Section 7; references to an "Exhibit" are, unless otherwise specified, to an
Exhibit attached to this Agreement; references to a "Section" are, unless
otherwise specified, to a section of this Agreement.
In consideration of the mutual covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the Companies and the
Purchasers respectively agrees with each such other party, as follows:
1. AGREEMENT TO SELL AND PURCHASE THE PREFERRED UNITS.
1.1. At the Closing provided for in Section 2, the Operating
Partnership will issue and sell to the Purchasers and, subject to the terms and
conditions of this Agreement, the Purchasers will purchase from the Operating
Partnership, up to an aggregate of Two Million Fifty Thousand (2,050,000) of
Operating Partnership Series A Convertible Preferred Partnership Units (the
"Preferred Units"). Each Purchaser shall purchase the number of Preferred Units
set forth opposite such Purchaser's name on the signature pages hereto.
1.2. The cash purchase price for the Preferred Units is $4.25
per Preferred Unit.
2. CLOSING OF SALE OF PREFERRED UNITS. The purchase and delivery of the
Preferred Units to be purchased by the Purchasers shall take place at the
offices of the Companies, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
at a closing (the "Closing") on April 30, 1999 or at such other place or on such
other date as the Purchasers and the Companies may agree upon (such date on
which the Closing shall have actually occurred, the "Closing Date"). At the
Closing, the Operating Partnership will deliver or cause to be delivered to each
Purchaser the Preferred Units to be purchased by it against payment of the
purchase price therefor. Payment of the purchase price by the Purchasers shall
be by wire transfer to an account designated by the Operating Partnership to the
Purchasers in writing at least one business day prior to the Closing. If at the
Closing (i) the Operating Partnership fails to tender to a Purchaser any of the
Preferred Units to be purchased as provided in this Section 2, or (ii) such
Purchaser fails to tender the cash purchase price for the Preferred Units to the
Operating Partnership, such Purchaser or the Operating Partnership, as the case
may be, shall, at its or their election, be relieved of all further obligations
under this Agreement, without thereby waiving any other rights each may have by
reason of such failure or such non-fulfillment.
3. CONDITIONS TO CLOSING.
3.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASERS ON
THE CLOSING DATE. The Purchasers' obligation to purchase and pay for the
Preferred Units to be sold to it at the Closing is subject to the fulfillment
prior to or at the Closing of the following conditions, any or all of which may
be waived in writing at the option of the Purchasers:
(a) REPRESENTATIONS AND WARRANTIES. The repres-
entations and warranties of the REIT and the Operating
Partnership contained in Section 4 hereof shall be correct in all material
respects at the time of the Closing, after giving effect to the sale of the
Preferred Units, except that any representations and warranties that relate to a
particular date or period shall be true in all material respects as of such date
or period.
(b) PERFORMANCE. Each of the REIT and the Operating
Partnership shall have performed and complied in
all material respects with all agreements and conditions contained in this
Agreement required to be performed or complied with by it prior to or at the
Closing.
(c) PROCEEDINGS AND DOCUMENTS. All corporate,
partnership and other proceedings contemplated by this Agreement and the other
Transaction Documents shall be satisfactory to the Purchasers and their
counsel, and the Purchasers and their counsel shall have received all such
counterpart originals or certified or other copies of such documents as the
Purchasers or their counsel may reasonably request.
(d) REGISTRATION RIGHTS AGREEMENT. Simultaneously
with or prior to the issuance and sale to the Purchasers of the Preferred
Units to be purchased by the Purchasers at the Closing, the REIT and the
Purchasers shall have entered into the Registration Rights Agreement
substantially in the form of Exhibit A, the Purchasers shall have received a
fully-executed counterpart of the Registration Rights Agreement, such agreement
shall be in full force and effect and no term or condition thereof shall
have been amended, modified or waived.
(e) RELATED MATTERS. As of the Closing, each of (i)
the REIT's Charter Documents and (ii) the Operating Partnership's Partnership
Documents shall not have been modified or amended since the date such documents
were delivered to the Purchasers by the REIT and Operating Partnership,
except for any such amendment to the Operating Partnership's Partnership
Agreement, as is contemplated or necessitated by this transaction, substantially
in the form of Exhibit B.
(f) TITLE AND LEGAL COMPLIANCE. As of the Closing,
(i) the Operating Partnership will be able to acquire good and marketable
title to each Portfolio Property, subject only to Permitted Title
Exceptions, (ii) the title and survey conditions of each Portfolio
Property furnished to the Purchasers shall be satisfactory to the
Purchasers; (iii) the Properties shall be in compliance with all applicable
state and municipal laws, laws or regulations of any Governmental Authority,
including zoning and building codes, laws and regulations, and all applicable
environmental laws and regulations, except for those violations that, when taken
together, could not be reasonably expected to have a Material Adverse Effect.
(g) ADDITIONAL CERTIFICATES. The Purchasers shall
have received a certificate, dated the Closing Date, from each of the Secretary
(or Assistant Secretary) of the REIT and the general partner of the Operating
Partnership, (i) certifying as true, complete and correct their Charter
Documents and Partnership Documents (as appropriate) and resolutions relating
to the transactions contemplated hereby attached thereto, (ii) as to the
absence of proceedings or other action for dissolution, liquidation or
reorganization of any of the REIT, the Operating Partnership or the
Subsidiaries, (iii) as to the incumbency and specimen signatures of officers
who shall have executed instruments, agreements and other documents in
connection with the transactions contemplated hereby, (iv) as to the effect that
certain agreements, instruments and other documents are in the form approved in
the resolutions referred to in clause (i) above, (v) as to certain tax matters
regarding each of the REIT and the Operating Partnership, and (vi) covering such
other matters, and with such other attachments thereto, as counsel to the
Purchasers may reasonably request at least three business days before the
Closing Date, which certificate and attachments thereto shall be satisfactory in
form and substance to the Purchasers.
3.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE OPERATING
PARTNERSHIP ON THE CLOSING DATE. The Operating Partnership's obligation to issue
the Preferred Units at the Closing is subject to the fulfillment prior to or at
the Closing of the following conditions, any or all of which may be waived in
writing at the option of the Operating Partnership:
(a) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Purchasers in Section 5 hereof shall be
correct in all material respects at the time of the Closing, after giving
effect to the purchase of the Preferred Units, except that any
representations and warranties that relate to a particular date or period shall
be true in all material respects as of such date or period.
(b) PERFORMANCE. Each Purchaser shall have performed
and complied in all material respects with all agreements and conditions
contained in this Agreement required to be performed or complied with prior to
or at the Closing.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE REIT AND THE
OPERATING PARTNERSHIP. In order to induce the Purchasers to purchase the
Preferred Units, the REIT and the Operating Partnership each hereby jointly and
severally make the representations, warranties and covenants set forth in this
Section 4, with such exceptions as are specifically set forth in a letter
delivered by the Companies to the Purchasers prior to the execution of this
Agreement (the "Disclosure Letter," which Disclosure Letter shall be appended to
and shall be deemed to be part of this Agreement).
4.1. ORGANIZATION AND QUALIFICATION; AUTHORITY.
(a) Each of the REIT and the Subsidiaries is a
corporation duly incorporated or trust, partnership or limited partnership duly
formed and is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, has full corporate, trust,
or partnership power and authority to own and lease its respective
properties and carry on its respective business as presently
conducted, is duly qualified, registered or licensed as a foreign corporation,
trust, partnership or limited partnership to do business and is in good standing
in each jurisdiction in which the ownership or leasing of its respective
properties or the character of its present operations makes such qualification,
registration or licensing necessary, except where the failure so to qualify or
be in good standing would not have a material adverse effect on the condition
(financial or otherwise), assets, business or results of operations of the REIT
and the Subsidiaries on a consolidated basis (a "Material Adverse Effect"). The
REIT has heretofore made available to the Purchasers' counsel complete and
correct copies of the Declaration of Trust and of the by-laws of the REIT, each
as amended and restated to date and as presently in effect (collectively, the
"Charter Documents").
(b) The Operating Partnership is a limited
partnership duly formed, validly existing and in good standing under the laws
of the State of Delaware, has full partnership power and authority to own and
lease its properties and carry on its business as presently conducted, is duly
qualified, registered or licensed as a foreign limited partnership to do
business and is in good standing in each jurisdiction in which the ownership
or leasing of its properties or the character of its present operations
makes such qualification, registration or licensing necessary, except
where the failure to so qualify or be in good standing would not have a Material
Adverse Effect. The Operating Partnership has heretofore made available to the
Purchasers' counsel complete and correct copies of its Partnership Agreement and
certificate of limited partnership, each as amended and restated to date and as
presently in effect (collectively, the "Partnership Documents").
4.2. CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by the REIT, the
Operating Partnership and the Subsidiaries of the Transaction Documents to which
they are a party and all other instruments or agreements to be executed in
connection herewith or therewith and the issuance and sale to (and the purchase
hereunder by) the Purchasers of the Preferred Units pursuant to this Agreement
(a) are within the REIT's, the Operating Partnership's and the Subsidiaries'
respective corporate or partnership powers; (b) have been duly authorized by all
necessary corporate or partnership action on the part of the REIT, the Operating
Partnership and each such Subsidiary; (c) do not contravene or constitute a
default under or violation of (i) any provision of applicable law or regulation
of any Governmental Authority, (ii) the Charter Documents or Partnership
Documents of the REIT, the Operating Partnership or any of the Subsidiaries,
(iii) any material agreement (or require the consent of any Person under any
material agreement that has not been made or obtained) to which the REIT, the
Operating Partnership or any of the Subsidiaries are a party, or (iv) any
judgment, injunction, order, decree or other instrument binding upon the REIT,
the Operating Partnership, any of the Subsidiaries or any of their respective
properties, except where such contravention, default or violation would not have
a Material Adverse Effect; and (d) do not and will not result in the creation or
imposition of any Lien on any asset of the REIT, the Operating Partnership or
any of the Subsidiaries, except where the creation or imposition of such Lien
would not have a Material Adverse Effect. The Preferred Units have been duly and
validly authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued, free and clear of all liens,
encumbrances, equities or claims of any nature whatsoever.
4.3. VALIDITY AND BINDING EFFECT. Each of the Transaction
Documents to which it is a party has been duly executed and delivered by each of
the REIT and the Operating Partnership and is a valid and binding agreement of
the REIT and the Operating Partnership, as applicable, enforceable against the
REIT, the Operating Partnership, as applicable, in accordance with its terms.
4.4. CAPITALIZATION.
(a) As of April 29, 1999, the Operating
Partnership had no Series A Preferred Partnership Units and 1,343,171 common
partnership units of limited and general partnership interest issued and
outstanding.
(b) Except as disclosed in the SEC Filings or the
Partnership Agreement, as of the Closing Date, there are no outstanding
subscriptions, options, warrants, rights, convertible or exchangeable
securities or other agreements or commitments of any character obligating
the REIT or the Operating Partnership to issue any securities. As of the
Closing Date, there are no voting trusts or other agreements or
understandings to which the REIT, the Operating Partnership or the Subsidiaries
are a party with respect to the voting of the Capital Stock or Partnership
Interests of the REIT, the Operating Partnership or the Subsidiaries, as the
case may be. Except as contemplated by the Registration Rights Agreement and the
Existing Rights Agreements, neither the REIT, the Operating Partnership nor any
of the Subsidiaries has entered into any agreement to register their equity or
debt securities under the Securities Act.
4.5. USE OF PROCEEDS. The Operating Partnership agrees to use
the net proceeds of the Preferred Units to consummate the Portfolio Transaction.
4.6. QUALIFICATION OF THE REIT. The REIT is organized and
operates, and currently intends to continue to operate, in a manner so as to
qualify as a "real estate investment trust" under Sections 856 through 860 of
the Code. So long as twenty percent (20%) of the Capital Preferred Units issued
pursuant to this Agreement remain outstanding, and subject to the discretion of
the Board of Trustees contained in the Second Amended and Restated Declaration
of Trust of the REIT, dated February 6, 1995, as amended, the REIT shall
continue to operate in a manner so as to qualify as a "Real Estate Investment
Trust" under Sections 856-860 of the Code.
4.7. QUALIFICATION OF THE OPERATING PARTNERSHIP. The Operating
Partnership is organized as a partnership and is treated for federal income tax
purposes, and intends to continue to be treated as a partnership and not as a
corporation or as an association taxable as a corporation, and so long as twenty
percent (20%) of the Preferred Units issued pursuant to this Agreement remain
outstanding, the Operating Partnership shall continue to be treated as a
partnership for federal income tax purposes. The Operating Partnership intends
for the allocations of profit and loss pursuant to the Partnership Agreement to
have substantial economic effect within the meaning of Section 704(b) of the
Code and the regulations promulgated thereunder.
4.8. BANKRUPTCY, ETC. So long as twenty percent (20%) of the
Preferred Units issued pursuant to this Agreement are outstanding, neither the
Operating Partnership nor the REIT shall: (a) petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of the
Operating Partnership or the REIT, as the case may be, or any substantial part
of the assets of the Operating Partnership or the REIT; (b) commence any case or
other proceeding relating to the Operating Partnership or the REIT under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect; (c) take any action to authorize or in furtherance of any of the
foregoing; or (d) if any such petition or application shall be filed or any such
case or other proceeding shall be commenced against the Operating Partnership or
the REIT, as applicable, indicate its approval thereof, consent thereto or
acquiescence therein, without the prior written consent of the Purchasers, which
consent shall not be unreasonably withheld.
4.9. PRIVATE OFFERING. No form of general solicitation or
general advertising, including, but not limited to, advertisements, articles,
notices or other communications, published in any newspaper, magazine or similar
medium or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising,
was used by the REIT, the Operating Partnership or any of the Subsidiaries or
any of the REIT's, Operating Partnership's or such Subsidiary's representatives,
or, to the knowledge of the REIT or the Operating Partnership, any other Person
acting on behalf of the REIT, the Operating Partnership or any of the
Subsidiaries, in connection with the offering of the Preferred Units being
purchased under this Agreement or under any other Transaction Document, if any.
The REIT and the Operating Partnership further represent to the Purchasers that,
subject to the accuracy of the representations of the Purchasers as set forth in
Section 5 hereof, it is not necessary in connection with the offer, sale and
delivery of the Preferred Units in the manner contemplated by this Agreement to
register the offer and sale of the Preferred Units under the Securities Act.
4.10. PURCHASE OF ADDITIONAL PROPERTIES. So long as twenty
percent (20%) of the Preferred Units issued pursuant to this Agreement are
outstanding, neither the Operating Partnership nor any Subsidiary shall purchase
any material real property, other than the Portfolio Properties, without the
prior written consent of such Purchaser, which cannot be unreasonably withheld,
unless the following acquisition guidelines have been met: (a) the property
shall be used or intended to be used by the Operating Partnership for
multifamily residential purposes; (b) any securities issued by the REIT, the
Operating Partnership or any Subsidiary in exchange for such property shall be
issued at fair market value, provided that any price negotiated with the sellers
of such property in an arm's length third party transaction shall be deemed to
be fair market value for such security; and (c) the Trustees shall have
concluded that such property will produce positive net operating income, after
allocating reasonable reserves, upon acquisition by the Operating Partnership.
So long as twenty percent (20%) of the Preferred Units issued pursuant to this
Agreement are outstanding, without the prior written consent of such Purchaser
which shall not be unreasonably withheld, after the Closing Date neither the
REIT nor any Subsidiary of the REIT shall acquire any material real property
other than indirectly through an acquisition or real property by the Operating
Partnership or its Subsidiaries.
4.11. RIGHT OF FIRST REFUSAL. So long as twenty percent (20%)
of the Preferred Units issued pursuant to this Agreement are outstanding, each
Purchaser (an "Eligible Purchaser") shall have the right of First Refusal set
forth in this Section 4.11 on a pro rata basis in accordance with the number of
Preferred Units or Preferred Shares owned by each such Purchaser. Whenever the
REIT or the Operating Partnership proposes to sell equity securities solely for
cash it shall notify the Eligible Purchaser in writing (a "Sale Notice") of the
rights, preferences, terms, purchase price and number of securities proposed to
be sold at least ten (10) business days prior to the proposed sale. Each
Eligible Person shall have the right to purchase a pro rata portion of such
securities, based on the number of Preferred Units or Preferred Shares owned by
such Eligible Purchaser, on the terms proposed by the Companies by delivering a
written notice of acceptance to the REIT, together with a nonrefundable cash
deposit in the amount of ten percent (10%) of the purchase price of the
securities to be purchased by the Eligible Purchaser, within five (5) days of
the Eligible Purchaser's receipt of Sale Notice. Any securities to be purchased
by Eligible Holders shall be paid for by the Eligible Purchasers and issued by
the Companies on the closing established by the REIT. If any Eligible Purchaser
fails to pay the full purchase price for all securities it has elected to
purchase on the designated closing date, such purchaser shall forfeit its entire
deposit and shall have no further rights under this Section 4.11 with respect to
the currently proposed or any further issuance of equity securities. Any equity
securities that the Eligible Purchasers have not elected to purchase or have
failed to purchase may be offered and sold by the Companies on terms no less
favorable to the Companies than the terms on which such securities were offered
to the Eligible Purchasers. Notwithstanding anything herein to the contrary, no
Eligible Purchaser may exercise its rights under this Section 4.11 if to do so
would violate any law, rule or regulation or would result in the Eligible
Purchaser owning shares in excess of the ownership limits in the REITs Charter
Documents.
5. Representations, Warranties and Covenants of the
Purchasers. In order to induce each of the REIT and the Operating Partnership to
sell the Preferred Units, each Purchaser hereby severally makes the
representations and warranties set forth in this Section 5 with respect to
itself:
5.1. Purchase for Investment; Source of Funds.
(a) Such Purchaser is an "accredited investor"
as defined in Regulation D under the Securities Act and that it is purchasing
the Preferred Units for its own account for independent purposes and not
with a view to the distribution thereof or with any present intention of
distributing or selling any of the Preferred Units. Such Purchaser understands
and agrees that the Preferred Units have not been registered under the
Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from such registration is
available.
(b) Such Purchaser has full power and authority and
has taken all action necessary to authorize it to enter into and perform its
obligations under the Transaction Documents and all other documents or
instruments contemplated hereby. The Transaction Documents are the legal,
valid and binding obligation of such Purchaser, and are enforceable in
accordance with their terms.
5.2. CONVERSION TO PREFERRED SHARES. If at any time the REIT,
in its sole discretion, creates a class or series of Preferred Shares, each
Purchaser shall exchange each Preferred Unit held by such Purchaser for one
Preferred Share, without additional consideration, at the request of the REIT;
provided that such conversion would not adversely affect the rights,
obligations, preferences or economic benefits that the Purchaser would otherwise
be entitled to if the Preferred Units were retained.
6. RESTRICTIONS ON TRANSFER.
6.1. Restrictive Legends. Except as otherwise permitted by
this Section 6, each certificated Preferred Unit issued pursuant to this
Agreement shall be stamped or otherwise imprinted with a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR
PURSUANT TO THE SECURITIES OR "BLUE SKY" LAWS OF ANY STATE.
SUCH SECURITIES MAY NOT BE TRANSFERRED, SOLD, OR OTHERWISE
DISPOSED OF EXCEPT IN ACCORDANCE WITH APPLICABLE "BLUE SKY"
LAWS AND PURSUANT TO (i) A REGISTRATION STATEMENT WITH RESPECT
TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE SECURITIES
ACT, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT.
Each of the Companies shall maintain a copy of this Agreement and any
amendments thereto on file in their respective principal offices, and will make
such copy available during normal business hours for inspection to any party
thereto or will provide such copy to the Purchasers upon its or their request.
Whenever the legend requirements imposed by this Section 6.1 shall
terminate, as provided in Section 6.2, the respective holders of Preferred Units
for which such legend requirements have terminated shall be entitled to receive
from each of the Companies, at the Companies' expense, Preferred Units without
such legend.
6.2. TRANSFERS; OPINIONS OF COUNSEL. The Preferred Units may
not be transferred by the Purchasers without the prior written consent of the
Operating partnership, which consent shall not be unreasonably withheld. Each
holder of Preferred Units (a "Restricted Security"), further agrees with respect
to any permitted transfer of such Restricted Security to give to the Operating
Partnership, (a) written notice describing the transferee and the circumstances,
if any, necessary to establish the availability of an exemption from the
registration requirements of the Securities Act or any state law and (b) upon
reasonable request by the Operating Partnership, to such transferring holder, an
opinion from counsel reasonably satisfactory to the Operating Partnership (at
the expense of such holder), in form and substance reasonably satisfactory to
the Operating Partnership, to the effect that the proposed transfer of such
Restricted Security may be effected without registration of such Restricted
Security under the Securities Act or any state law. If for any reason the
Operating Partnership, (after having been furnished with the opinion required to
be furnished pursuant to this Section 6.2) shall fail to notify such holder
within five (5) business days after such holder shall have delivered such notice
and opinion to the Operating Partnership, that, in its or its counsel's opinion,
the transfer may not be legally effective (the "Illegal Transfer Notice"), such
holders shall thereupon be entitled to transfer the Restricted Security to such
permitted transferee as proposed. If the holder of a certificated Restricted
Security delivers to the Operating Partnership an opinion of counsel from
counsel reasonably satisfactory to the Operating Partnership in form and
substance reasonably satisfactory to the Operating Partnership, that subsequent
transfers of such Restricted Security will not require registration under the
Securities Act or any state law, the Operating Partnership, will promptly after
such contemplated transfer deliver new certificates for such Restricted Security
which do not bear the Securities Act legend set forth in Section 6.1 above. The
restrictions imposed by this Section 6 upon the transferability of any
particular Restricted Security shall cease and terminate when such Restricted
Security has been sold pursuant to an effective registration statement under the
Securities Act or transferred pursuant to Rule 144 promulgated under the
Securities Act. The holder of any certificated Restricted Security as to which
such restrictions shall have terminated shall be entitled to receive from the
Operating Partnership, a new security of the same type but not bearing the
restrictive Securities Act legend set forth in Section 6.1 and not containing
any other reference to the restrictions imposed by this Section 6.
Notwithstanding any of the foregoing, no opinion of counsel will be required to
be rendered pursuant to this Section 6.2 with respect to the transfer of any
certificated securities on which the restrictive legend has been removed in
accordance with this Section 6.2. As used in this Section 6.2, the term
"transfer" encompasses any sale, transfer or other disposition of any securities
referred to herein.
7. MISCELLANEOUS.
7.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND COVENANTS;
SEVERABILITY. Except as otherwise set forth in Sections 4.6, 4.7, 4.8, 4.10 and
4.11, the representations and warranties contained in this Agreement and the
Transaction Documents or made in writing by or on behalf of the Companies or the
Purchasers in connection with the transactions contemplated by this Agreement or
the Transaction Documents shall survive the execution and delivery of this
Agreement for a period of one (1) year. Additionally, the provisions of Section
6.2 shall survive the execution and delivery of this Agreement without
limitation as to time. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.
7.2. AMENDMENT AND WAIVER. This Agreement may be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may be given, provided that the same are in writing and signed
by the Purchasers and each of the Companies.
7.3. NOTICES, ETC. Except as otherwise provided in this
Agreement, notices and other communications under this Agreement shall be in
writing and shall be delivered, or mailed by registered or certified mail,
return receipt requested, or by a nationally recognized overnight courier,
postage prepaid, addressed, (a) if to any Purchaser, at the address set forth on
such Purchaser's signature page hereto or such other address as such Purchaser
shall have furnished to the Companies in writing, or (b) if to any other holder
of any Preferred Units, at such address as such other holder shall have
furnished to the Companies in writing, or, until any such other holder so
furnishes to the Companies an address, then to and at the address of the last
holder of such Preferred Units who has furnished an address to the Companies, or
(c) if to the Companies, at the address set forth at the beginning of this
Agreement, to the attention of President, or at such other address, or to the
attention of such other officer, the Companies shall have furnished to the
Purchasers and each such other holder in writing. This Agreement and the other
Transaction Documents and all documents delivered in connection herewith or
therewith embody the entire agreement and understanding between the Purchasers
and the Companies and supersedes all prior agreements and understandings
relating to the subject matter hereof.
7.4. SUCCESSORS AND ASSIGNS. The terms and provisions of this
Agreement and the other Transaction Documents shall inure to the benefit of and
shall be binding only upon the parties to this Agreement. No transfer or
assignment of the rights and privileges herein conferred upon the Purchasers
shall be effective, and such right and privileges shall not extend to or be
vested in, or become a right of, any transferee or assignee, without the prior
written consent of the Companies, which may be withheld in their sole and
absolute discretion.
7.5. DESCRIPTIVE HEADINGS. The headings in this Agreement
are for purposes of reference only and shall not limit or otherwise affect
the meaning hereof.
7.6. SATISFACTION REQUIREMENT. If any agreement, certificate
or other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to a particular party, the determination
of such satisfaction shall be made by such party, as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
7.7. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAW.
7.8. COUNTERPARTS. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart.
8. DEFINITIONS. As used herein the following terms have the following
respective meanings:
"1934 Act," means the Securities Exchange Act of 1934, and the
rules and regulations of the Commission promulgated thereunder, as from time to
time amended.
"Affiliate," except as otherwise defined in this Agreement,
means with respect to any Person any other Person directly or indirectly
controlling or controlled by or under common control with such first Person or
any of its Subsidiaries, provided that, for purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by agreement or otherwise.
"Agreement" means this Agreement, as amended, modified or
supplemented from time to time, together with any exhibits, schedules,
appendices or other attachments thereto.
"Agreement of Purchase and Sale" shall mean, with respect to
any Portfolio Property, that certain Amended and Restated Agreement of Purchase
and Sale, dated February 15, 1999, as the same may be further amended, restated
or modified from time to time, that relates to the purchase and sale of such
Portfolio Property.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participation, rights in or other equivalents (however
designated) of such Person's capital stock, and any rights (other than debt
securities convertible into capital stock), warrant or options exchangeable for
or convertible into such capital stock.
"Charter Documents" means certificates or articles of
incorporation, declaration of trust, by-laws or other equivalent organizational
documents, each as amended and restated to date and presently in effect.
"Closing" has the meaning ascribed thereto in Section 2
hereof.
"Closing Date" has the meaning ascribed thereto in Section 2
hereof.
"Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
"Companies" has the meaning ascribed thereto in the
introduction hereof.
"Company Counsel" means Goodwin, Procter, ▇▇▇▇ LLP.
"Company Indemnified Party" has the meaning ascribed thereto
in Section 8.1(b) hereof.
"Declaration of Trust" means the Declaration of Trust of the
REIT, as amended to date and presently in effect.
"Disclosure Letter" has the meaning ascribed thereto in
Section 4 hereof.
"Existing Rights Agreements" means, collectively, each
registration rights agreement and registration rights and lock-up agreement by
and among the REIT and the parties named therein, as filed as exhibits to the
REIT's SEC Filings and listed in the Disclosure Letter.
"General Partner's Certificate" means a certificate executed
on behalf of the Operating Partnership by its general partner.
"Governmental Authority" means any governmental or
quasi-governmental authority including, without limitation, any federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, department or other
instrumentality or political unit or subdivision, whether domestic or foreign.
"Heritage Transaction" shall mean the direct or indirect
purchase by the Operating Partnership of any interest in the Portfolio
Properties.
"Illegal Transfer Notice" has the meaning ascribed thereto in
Section 6.2 hereof.
"Lien" means any mortgage, lien (statutory or otherwise),
charge, pledge, hypothecation, conditional sales agreement, adverse claim, title
retention agreement or other security interest, encumbrance or other title
defect in or on any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale, trust receipt or
other title retention agreement with respect to any Property or asset of such
Person.
"Losses" has the meaning ascribed thereto in Section 8.1(a)
hereof.
"Material Adverse Effect" has the meaning ascribed thereto in
Section 4.1(a) hereof.
"Officer's Certificate" means a certificate executed on behalf
of the REIT by any authorized officer of the REIT.
"Operating Partnership" has the meaning ascribed thereto in
the introduction hereof.
"Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of the Operating Partnership dated June 30,
1997, as amended.
"Partnership Amendment" means the Sixth Amendment to the
Partnership Agreement by and between the Operating Partnership and the
Purchasers.
"Partnership Documents" means partnership, limited
partnership, limited liability company agreements and operating agreements, each
as amended and restated to date and presently in effect, and certificates
required to be filed in such entities' state of organization or formation.
"Partnership Interests" means, with respect to any Person, any
and all shares, units, interests, participation rights in or other equivalents
of such person's interest in the Operating Partnership or any of the Operating
Partnership's or the REIT's subsidiary partnerships, limited partnerships or
limited liability companies, including without limitation, the Series A
Preferred Partnership Units of the Operating Partnership.
"Permitted Title Exceptions" shall mean, with respect to any
Portfolio Property, those "Permitted Title Exceptions" enumerated in Article 6
of the Agreement of Purchase and Sale for such Portfolio Property.
"Person" means any individual, corporation, limited or general
partnership, limited liability company, joint venture, association, joint stock
company, trust, unincorporated organization, or government or any agency or
political subdivision thereof.
"Portfolio Property" means any one of the properties
constituting the Heritage Transaction as described in Article II of the
Agreement of Purchase and Sale relating thereto, and "Portfolio Properties"
shall mean all of the 17 multifamily properties constituting the Heritage
Transaction and described on Exhibit C hereto which are being purchased by the
Property Partnerships, whether directly or indirectly, in the Heritage
Transaction.
"Preferred Shares" means the preferred shares of beneficial
interest, $.01 par value per share, of the REIT, that have the same economic
rights as the Preferred Units issued pursuant to the terms of this Agreement, to
the extent that an amendment to the Charter Documents permitting the creation of
the Preferred Shares is approved by the shareholders of the REIT.
"Preferred Units" has the meaning ascribed thereto in Section
1 hereof.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Property Partnership" has the meaning ascribed to the term
"Purchaser" in Article I of the Agreement of Purchase and Sale for a particular
Portfolio Property, and "Property Partnerships" shall mean collectively each
Property Partnership purchasing a Portfolio Property in the Heritage
Transaction.
"Purchaser" and "Purchasers" have the meaning ascribed
thereto in the introduction hereof.
"Registration Rights Agreement" means the registration rights
agreement by and between the REIT and the Purchasers, as amended or supplemented
from time to time in accordance with the terms thereof.
"REIT" has the meaning ascribed thereto in the introduction
hereof.
"Restricted Security" has the meaning ascribed thereto in
Section 6.2 hereof.
"Rule 144" means Rule 144 as promulgated by the Commission
under the Securities Act, and any successor rule or regulation thereto.
"Rule 144A" means Rule 144A as promulgated by the Commission
under the Securities Act, and any successor rule or regulation thereto.
"SEC Filings" means official filings of the REIT filed with
the Commission in accordance with the Securities Act and the 1934 Act with
respect to events occurring, or periods ending on or after December 31, 1997.
"Securities Act" means the Securities Act of 1933, and the
rules and regulations of the Commission promulgated thereunder, as from time to
time amended.
"Series A Preferred Partnership Units" means Series A
Preferred Partnership Units of limited partnership interest of the Operating
Partnership to be created by the Partnership Amendment.
"Subsidiaries" means subsidiary corporations, partnerships,
limited partnerships, joint ventures and limited liability companies which are
directly or indirectly at least majority owned by the REIT or the Operating
Partnership, including, unless the context requires otherwise, the Operating
Partnership.
"Transaction Documents" means, collectively, this Agreement,
the Registration Rights Agreement, the Partnership Amendment and any and all
agreements, certificates, instruments and other documents contemplated thereby
or executed and delivered in connection therewith.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
VININGS INVESTMENT PROPERTIES TRUST,
a Massachusetts business trust
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
VININGS INVESTMENT PROPERTIES, L.P.,
a Delaware limited partnership
By: VININGS INVESTMENT PROPERTIES TRUST
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
President and Chief Executive Officer
Accepted and agreed as of the
date first written above:
KINDER GELT, L.P.
By: ECI Properties, Inc.
General Partner
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------- Series A Preferred Partnership
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ Units of Vinings
Title: President Investment Properties, L.P.
Address: Kinder Gelt, L.P.. Number of Units: 588,235
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Cash Purchase Price Per Unit: $4.25
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Total Purchase Price: $2,500,000
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Accepted and agreed as of the
date first written above:
STRICO VININGS, LLC
By: ▇▇▇▇▇▇▇▇▇ & Co.
Manager
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Series A Preferred Partnership
---------------------------- Units of Vinings
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Investment Properties, L.P.
Title: Sole General Partner
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Number of Units: 470,588
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Cash Purchase Price Per Unit: $4.25
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Total Purchase Price: $2,000,000
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Accepted and agreed as of the
date first written above:
▇▇▇▇▇ AGENT, L.P.
Series A Preferred Partnership
Units of Vinings
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. Investment Properties, L.P.
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Managing Partner
Address: Mini Warehouses Number of Units: 470,588
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Cash Purchase Price: $4.25
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Total Purchase Price: $2,000,000
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Accepted and agreed as of the
date first written above:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Signed:/s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Series A Preferred Partnership
-------------------- Units of Vinings
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Investment Properties, L.P.
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇ Number of Units: 235,294
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cash Purchase Price Per Unit:$4.25
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Total Purchase Price: $1,000,000
Accepted and agreed as of the
date first written above:
▇▇▇▇▇▇▇ ▇▇▇▇▇
Signed:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Series A Preferred Partnership
-------------------------- Units of Vinings
▇▇▇▇▇▇▇ ▇▇▇▇▇ InvestmentProperties, L.P.
Address: 567 Grammercy Number of Units: 47,059
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cash Purchase Price: $4.25
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Total Purchase Price: $200,000
Telecopier:
Accepted and agreed as of the
date first written above:
SYLCO, L.P.
By: Lake ▇▇▇▇▇ Associates,
General Partner
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Series A Preferred Partnership
Title: President Units of Vinings
Investment Properties, L.P.
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇ Number of Units: 117,647
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cash Purchase Price Per Unit: $4.25
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ Total Purchase Price: $500,000
Accepted and agreed as of the
date first written above:
▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, JTWRS
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Series A Preferred Partnership
------------------------------------------- Units of Vinings
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Investment Properties, L.P.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Number of Units: 17,647
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ Cash Purchase Price: $4.25
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Total Purchase Price: $75,000.00
Telephone:
Telecopier:
Accepted and agreed as of the
date first written above:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Signed:/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Series A Preferred Partnership
-------------------------- Units of Vinings
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ InvestmentProperties, L.P.
Address: 88 Parkside Number of Units: 11,764
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cash Purchase Price: $4.25
Telephone: Total Purchase Price: $50,000
Telecopier:
