EXHIBIT 10.20
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement")
is made as of the 15th day of September, 1997, by and among MID-
AMERICA APARTMENTS, L.P., a Tennessee limited partnership
("MAALP"), and MID-AMERICA APARTMENT COMMUNITIES, INC., a
Tennessee corporation and the sole general partner of MAALP
("MAAC"), jointly and severally, on the one hand, and XXXXXXXX
DEVELOPMENT COMPANY, a Georgia corporation ("FDC"), on the other
hand (MAALP, MAAC and FDC being hereinafter collectively referred
to as the "Parties" and individually as a "Party"), under the
following circumstances (all capitalized terms hereinafter used
shall have the meanings ascribed to such terms in Article 1 of
this Agreement or as otherwise defined herein):
PREAMBLE
A. FDC owns directly, or through its interests in the
Property Partnerships, certain of the Properties and an interest
in other Properties, Acquisition Contracts, Intercompany Loans,
Core Business Assets, Third Party Business Assets and Other
Assets.
B. MAAC and MAALP desire to acquire the Assets through a
merger of FDC into MAAC and through a series of merger, exchange
and purchase transactions involving the Property Partnerships, as
more particularly described in the Steps Memorandum, in
consideration of the payment of the cash and issuance of the
Merger Shares and Units set forth in the Allocation Schedule, the
assumption of the Assumed Liabilities, the repayment at Closing
of the Prepaid Debt, and, upon attainment of certain operating
goals more particularly described in Article 5 herein, in
consideration of the issuance of the Contingent Value Shares.
C. Subject to the provisions of Section 8.05 of the MAALP
Partnership Agreement, as amended and restated, at any time after
six (6) months following the Closing Date, a Person who holds
Units may exercise a Redemption Right and Units may be redeemed
for Shares or, in MAALP's sole discretion, cash as provided in
the MAALP Partnership Agreement.
D. The Parties intend that the Partnership Mergers and
Exchange Transactions qualify as contributions to a partnership
described in Section 721 of the Code and that the Merger qualify
as a tax-free reorganization pursuant to Section 368(a)(1)(A) of
the Code.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1: DEFINITIONS
1.1 Definitions. In addition to the terms defined
elsewhere in this Agreement, the following terms shall have the
meanings set forth in this Section 1.1:
1.1.1 "Acquisition Contracts" means the contracts
to acquire certain real property to which FDC is a party,
which contracts, together with scheduled closing dates, are
listed in Schedule 1.1.1.
1.1.2 "Acquisition Properties" means the Real
Property and other assets that are the subject of the
Acquisition Contracts or otherwise acquired by FDC for its
own account prior to Closing.
1.1.3 "Adjusted Net Equity" has the meaning set
forth in Section 13.1.1.
1.1.4 "Adjusted FFO Per Share" for calendar year
1998, 1999, or 2000, as the case may be, means the FFO Per
Share for such calendar year, as the same may be adjusted
pursuant to the provisions of Section 5.3 hereof.
1.1.5 "Agreement Not to Compete" means an Agreement
Not To Compete substantially in the form attached hereto as
Exhibit "I" and binding upon Xxxx X. Xxxxxxxx and W. Xxxxxxx
Xxxxx.
1.1.6 "Affiliate" means, with respect to any
Person, any Person directly or indirectly controlling,
controlled by or under common control with such Person.
1.1.7 "Allocation Schedule" means the Allocation of
Consideration as set forth on Schedule 1.1.7.
1.1.8 "Alternative Reorganization Step" means, as
applicable, a Partial Interest Cash Sale, a Partial Interest
Exchange, a Property Contribution or a Reverse Cash Merger.
1.1.9 "Amal" means Amal Group, Inc., a Georgia
corporation and a wholly owned subsidiary of FDC.
1.1.10 "Assets" means all assets and properties to
be acquired by MAAC or MAALP upon consummation of the
Reorganization as described in the Steps Memorandum,
including, without limitation, the Properties, the
Acquisition Properties, Acquisition Contracts, Intercompany
Loans, Third Party Business Assets, Core Business Assets,
Contracts, Third Party Business Purchase Note, Resale
Properties Purchase Note, and Other Assets.
1.1.11 "Assumed Liabilities" means, collectively,
(i) the Intercompany Loans, the Retained Mortgage Debt, the
ML Agreement, the Contracts, the Leases, insurance policies,
Permitted Exceptions, and all accounts payable, accrued
expenses, and Liabilities of FDC and the Merger Partnerships
existing at the Closing Date and assumed or retained by MAAC
or MAALP after the Closing, but excluding the Prepaid
Mortgage Debt and (ii) obligations and Liabilities arising
on or after the Closing under any Contracts, Leases,
insurance policies, and Permitted Exceptions to which a
Property Seller Partnership or Exchange Partnership is a
party or which encumber the Properties owned by them.
Assumed Liabilities shall also include any liability of FDC
under certain Section 42 Low Income Housing Tax Credit loans
relating to the "carve outs" or exceptions to the non-
recourse provisions contained in the loan documents relating
thereto.
1.1.12 "BDBC" means Baker, Donelson, Bearman &
Xxxxxxxx, a professional corporation, counsel to MAAC and
MAALP.
1.1.13 "Business Day" means any day of the year
other than Saturday, Sunday or any other day on which banks
located in New York, New York generally are closed for
business.
1.1.14 "Capital Expenditure Budget and Schedule"
means, collectively, the capital expenditure budget and
schedule for each Property, copies of which have been
provided to MAAC, which describes the capital expenditures
that FDC and the Property Partnerships have budgeted for
each Property for the years ending December 31, 1997 and
1998, respectively.
1.1.15 "Cash-Out Partners" means those partners of
the Cash-Out Partnerships who are not Non-Consenting
Partners.
1.1.16 "Cash-Out Partnerships" means the Property
Seller Partnerships and the Surviving Cash-Out Partnerships.
1.1.17 "Charter" means the Charter of MAAC, as filed
with the Tennessee Secretary of State, as further amended or
restated from time to time.
1.1.18 "Claim" means any action, cause of action,
suit, debt, dues, account, reckoning, xxxx, xxxx, covenant,
contract, controversy, promise, trespass, damage, judgment,
execution, penalty, fine, claim, liability and demand
whatsoever, in law or equity.
1.1.19 "Closing" means generally the execution and
delivery of those documents, securities and/or funds
necessary to effect the transactions contemplated by this
Agreement.
1.1.20 "Closing Date" means the date established for
the Closing pursuant to Section 12.1.
1.1.21 "Closing Date Balance Sheet" means the
balance sheet prepared as of the Closing Date pursuant to
the procedures set forth in Section 13.1.1.
1.1.22 "CMM" means Xxxxxx, Xxxxxx & Xxxxxxx, general
counsel to FDC and the Property Partnerships.
1.1.23 "Code" means the Internal Revenue Code of
1986, as amended, and any successor legislation thereto,
including all of the rules and regulations promulgated
thereunder.
1.1.24 "Common Stock" means the voting Common Stock,
$.01 par value per share, of MAAC.
1.1.25 "Consensual Balance Sheet Adjustments" has
the meaning set forth in Section 13.1.1.
1.1.26 "Core Business Assets" means the assets of
FDC utilized in the conduct of its business of constructing,
developing, managing, leasing and operating multifamily
residential properties for its own account (including for
the account of the Property Partnerships), including,
without limitation, the FDC Headquarters, the Columbus,
Georgia office and storage facility, Personal Property used
in such business, and all Ordinary Contracts that are not
Third Party Business Assets, but specifically excluding all
Third Party Business Assets.
1.1.27 "CERCLA" means the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. ' 9601 et seq.
1.1.28 "Construction in Progress" means the amount
of Construction in Progress set forth on the Recent Balance
Sheet.
1.1.29 "Construction Contracts" means all contracts
listed on Schedule 1.1.29 pursuant to which FDC is obligated
to construct improvements on real property for third
parties.
1.1.30 "Construction and Development Debt" means all
debt listed as such on the Debt Schedule.
1.1.31 "Contracts" means the Acquisition Contracts,
the Construction Contracts, the Development Contracts, the
Management Contracts, the HAP Contracts, the ML Agreement,
the Ordinary Contracts and the Reorganization Contracts.
1.1.32 "Credit Line Debt" means all debt listed as
such on the Debt Schedule.
1.1.33 "Debt Schedule" means the schedule of
Existing Debt attached as Schedule 1.1.33.
1.1.34 "Defective Property Basket" means Excluded
Properties containing up to one thousand (1,000) apartment
units which may be excluded from the Reorganization pursuant
to the provisions of Sections 6.13, 6.14, 6.15, 6.16, 7.6 or
10.1 hereof.
1.1.35 "Development Budget and Schedule" has the
meaning set forth in Section 7.2.16.
1.1.36 "Development Contracts" means all contracts
listed on Schedule 1.1.36 for the development or
redevelopment of real estate for third parties.
1.1.37 "Development Properties" means the Properties
listed on Schedule 1.1.37, each of which consists of Real
Property which is in the process of being developed or
redeveloped by FDC for its own account.
1.1.38 Intentionally Omitted.
1.1.39 "Contingent Value Holders" means the holders
of the Contingent Value Rights. At the Closing, the initial
Contingent Value Holders shall be the FDC Shareholders, and
the Contingent Value Rights shall be allocated among the FDC
Shareholders pro rata in accordance with their Contingent
Value Percentages.
1.1.40 "Contingent Value Percentage" means for any
Contingent Value Holder the following: (i) with respect to
the Contingent Value Rights granted to the FDC Shareholders
at the Closing pursuant to Article 5 hereof, the respective
percentage ownership interest in FDC held by the FDC
Shareholders (based on their ownership of FDC Common Stock)
immediately prior to the Closing; and (ii) upon the transfer
or assignment of any portion of the Contingent Value Rights
by any FDC Shareholder pursuant to Section 5.6 hereof, the
percentage of Contingent Value Rights transferred or
assigned to such Contingent Value Holder.
1.1.41 "Contingent Value Representative" means (i)
Xxxx X. Xxxxxxxx, (ii) upon the death or incapacity of Xxxx
X. Xxxxxxxx, W. Xxxxxxx Xxxxx, and (iii) upon the death or
incapacity of Xxxx X. Xxxxxxxx and W. Xxxxxxx Xxxxx, one of
the Contingent Value Holders selected and approved in
writing by the Contingent Value Holders who hold, as of such
time, more than fifty percent (50%) of the Contingent Value
Percentages.
1.1.42 "Contingent Value Rights" means the rights to
receive Contingent Value Shares as provided in Article 5
hereof.
1.1.43 "Contingent Value Shares" means the number of
Shares of MAAC Common Stock that may be issued by MAAC to
the Contingent Value Holders pursuant to Article 5.
1.1.44 "Effective Time" means, as to the Merger, the
Effective Time of the Merger as stated in the Articles of
Merger filed with the Secretary of State of the State of
Tennessee and Georgia, respectively, pursuant to Section
2.1, and, as to each Partnership Merger, the Effective Time
of such Partnership Merger as stated in the applicable
partnership certificate of merger.
1.1.45 "Environmental Claim" means any Claim,
investigation or notice (written or oral) by any Person
alleging potential liability (including potential liability
for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages,
personal injuries or fatalities, or penalties) arising out
of, based on or resulting from (i) a Hazardous Material
Activity, or (ii) activities or conditions forming the basis
of any violation, or alleged violation of, or liability or
alleged liability under, any Environmental Law.
1.1.46 "Environmental Laws" means federal, state,
local, provincial, municipal and foreign laws, ordinances,
principles of common law, rules, by-laws, orders,
governmental policies, statutes, regulations, agreements,
treaties, customary law, and international principles
relating to the pollution or protection of the environment
or of flora or fauna or their habitat or of human health and
safety, or to the cleanup or restoration of the environment,
including, without limitation, any law or regulation
relating to (i) generation, treatment, storage, disposal or
transportation of Materials of Environmental Concern,
emissions or discharges or protection of the environment
from the same, (ii) exposure of Persons to, or Release or
threat of Release of, Materials of Environmental Concern,
and (iii) noise.
1.1.47 "ERISA" mean the Employee Retirement Income
Security Act of 1974, as amended, and any successor
legislation thereto.
1.1.48 "Exchange Act" means the Securities Exchange
Act of 1934, as amended.
1.1.49 "Exchange Agreement" means an agreement
between MAALP, FDC and the partners of an Exchange
Partnership pursuant to which such partners (other than FDC
and, in the case of a Partial Partnership Interest Exchange,
all Non-Consenting Partners) shall contribute and transfer
all their interests in the Exchange Partnership to MAALP in
exchange for Units, the form of which shall be substantially
the same as Exhibit "B."
1.1.50 "Exchange Partnership" means each partnership
listed in the Steps Memorandum as an Exchange Partnership,
and "Exchange Partnerships" means all such partnerships.
1.1.51 "Exchange Transaction" means a Partnership
Interest Exchange, a Partial Partnership Interest Exchange
or a Property Contribution.
1.1.52 "Excluded Property" means any Property
excluded from the Reorganization and included within the
Defective Property Basket pursuant to the provisions of
Sections 6.13, 6.14, 6.15, 6.16, 7.6, or 10.1 hereof.
1.1.53 "Existing Debt" means, collectively, the
Construction and Development Debt, the Credit Line Debt, the
Prepaid Mortgage Debt and the Retained Mortgage Debt.
1.1.54 "FCC" means Xxxxxxxx Construction Company,
L.L.C., a Georgia limited liability company wholly owned by
FDC.
1.1.55 "FDC" has the meaning set forth in the first
paragraph of this Agreement.
1.1.56 "FDC Common Stock" means the shares of voting
common stock, $.01 par value per share, of FDC.
1.1.57 "FDC Financial Statements" means (i) the
audited combined balance sheets of Xxxxxxxx Properties Group
as of December 31, 1995 and 1996, and the related audited
combined statements of operations, partners' and owners'
deficit, and cash flows for the years ended December 31,
1994, 1995 and 1996 (including the notes and schedules
contained therein or annexed thereto), which financial
statements have been audited by KPMG Peat Marwick LLP,
independent auditors for Xxxxxxxx Properties Group for such
years, whose unqualified audit report is a part thereof, and
(ii) an unaudited balance sheet of Xxxxxxxx Properties Group
as of June 30, 1997, and the related unaudited statements of
income and cash flows for the six months then ended
(including the notes and schedules contained therein or
annexed thereto).
1.1.58 "FDC Headquarters" means the building (which
is one of the Properties) occupied by FDC at 000 Xxxxxxxxxx
Xxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxx 00000.
1.1.59 "FDC Shareholders" means all Persons who
shall own FDC Common Stock on the Closing Date.
1.1.60 "FDC Transactions Costs" means all costs and
expenses incurred by FDC in connection with the
Reorganization, including amounts payable under the ML
Agreement, as described on Schedule 15.5.
1.1.61 "FFO" means net income (computed in
accordance with generally accepted accounting principles and
as reported in the audited consolidated financial statements
of MAAC for the applicable calendar year), excluding
extraordinary items, minority interest in MAALP income, gain
or loss on disposition of real estate assets, and certain
non-cash items, primarily depreciation and amortization,
less preferred stock distributions. FFO is computed in
accordance with the current National Association of Real
Estate Investment Trusts, Inc. ("NAREIT") definition, which
eliminates amortization of deferred financing costs and
depreciation of non-real estate assets as items added back
to net income when computing FFO.
1.1.62 "FFO Per Share" means an amount determined
with respect to calendar year 1998, 1999 or 2000, as the
case may be, equal to the quotient obtained by dividing (i)
the FFO generated during such calendar year over (ii) the
Outstanding Shares during such calendar year.
1.1.63 "Fixed Valuation Assets" means the Properties
(except Acquisition Properties), and Third Party Businesses.
1.1.64 "Government Entity" means any court,
arbitrator, department, commission, board, bureau, agency,
authority, instrumentality or other governmental body,
whether federal, state, municipal, foreign or other.
1.1.64(a) "HAP Contracts" means those certain Housing
Assistance Payment Contracts listed on Schedule 1.1.64(a).
1.1.65 "Hazardous Material Activity" means any
activity, event, or occurrence at or prior to the Closing
involving any Materials of Environmental Concern, including,
without limitation, the manufacture, possession, presence,
use, generation, transportation, treatment, storage,
disposal, Release, threatened Release, abatement, removal,
remediation, handling or corrective or response action to
any Materials of Environmental Concern.
1.1.66 "Intangible Property" means all intangible
property (except as expressly excluded elsewhere herein) now
or on the Closing Date owned by FDC or a Property
Partnership and used in connection with FDC's business or
the Assets, including, without limitation, all of their
right, title and interest in and to all: goodwill, going
concern value, workforce in place, computer systems,
proprietary rights, business methods, licenses; approvals;
applications and permits issued or approved by any
Government Entity and relating to the use, operation,
ownership, occupancy and/or maintenance of the Assets; the
intangible value in the various Contracts; utility
arrangements; Claims against third parties; plans; drawings;
specifications; surveys; maps; engineering reports and other
technical descriptions; books and records; insurance
proceeds and condemnation awards; and all other intangible
rights used in connection with or relating to the Assets,
including rights, if any, to current and past names of any
Property; excluding, however, the name "Xxxxxxxx" or any
derivation thereof; provided, however, that such name shall
be licensed to MAAC pursuant to Section 2.5.
1.1.67 "Intercompany Loans" means the loans by FDC
to certain Property Partnerships. The Intercompany Loans
will be Assumed Liabilities of the Property Partnerships and
an Asset of FDC to be transferred to MAAC in connection with
the Merger. The amount of the Intercompany Loans will
change prior to the Closing, and FDC shall represent to MAAC
the outstanding amount of the Intercompany Loans in
connection with the Closing.
1.1.68 "IRS" means the Internal Revenue Service.
1.1.69 "K&S" means King & Spalding, special counsel
to FDC.
1.1.70 "Law" means any statute, law, ordinance,
rule, regulation or judicial decision of any Government
Entity.
1.1.71 "Leases" means, as to each Property, all
resident or tenant leases, including, without limitation,
all resident or tenant leases which are made by FDC or a
Property Partnership after the date hereof and before the
Closing as permitted by this Agreement.
1.1.72 "Liability" means any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage,
deficiency, cost, expense, obligation or responsibility,
fixed or contingent, known or unknown, asserted or
unasserted, liquidated or unliquidated, secured or
unsecured. The term "Liabilities" means the aggregate of
Liabilities.
1.1.73 "Lien" means a lien (statutory or otherwise),
security interest, mortgage, deed of trust, deed to secure
debt, claim, charge, pledge, license, equity, option,
conditional sales contract, easement, assessment, levy,
covenant, condition, right of way, reservation, restriction,
exception, limitation, charge or encumbrance of any nature
whatsoever.
1.1.74 "Litigation" means any action, suit,
proceeding, arbitration, investigation or inquiry, whether
civil, criminal or investigative, by or before any
Government Entity.
1.1.75 "MAAC" has the meaning set forth in the
initial paragraph of this Agreement.
1.1.76 "MAAC Exchange Act Reports" means the
following documents filed by MAAC with the SEC since
December 31, 1996 and prior to the Closing: (i) MAAC's
annual report on Form 10-K for the year ended December 31,
1996, (ii) all quarterly reports on Form 10-Q and 10Q/A and
periodic reports on Form 8-K and 8-K/A, (iii) all definitive
proxy statements, (iv) all other reports required to be
filed by MAAC under the Securities Exchange Act of 1934, and
(v) all amendments or supplements to any of the foregoing.
1.1.77 Intentionally Omitted.
1.1.78 "MAAC Transaction Costs" means all costs and
expenses incurred by MAAC in connection with the
Reorganization, as described on Schedule 15.5.
1.1.79 "MAALP" has the meaning set forth in the
initial paragraph of this Agreement.
1.1.80 "MAALP Partnership Agreement" means the
Second Amended and Restated Agreement of Limited Partnership
of MAALP in the form attached as Exhibit "C," to be revised
pursuant to the revisions of Section 6.20.
1.1.81 "Management Contracts" means all property
management agreements, asset management agreements and
leasing agreements listed on Schedule 1.1.81 pursuant to
which FDC currently provides to unrelated third parties
leasing and/or management services with respect to any real
property.
1.1.82 "Material Adverse Effect" means, as the
context requires, (i) with respect to FDC, a material
adverse effect on the Assets or the financial condition,
results of operations, business or prospects of FDC and its
Affiliates (including the Property Partnerships) taken as a
whole, (ii) with respect to a Property, a material adverse
effect on the financial condition, value, marketability,
ability to finance, results of operations, business or
prospects of such Property, (iii) with respect to a Property
Partnership, a material adverse effect on such Property
Partnership's Properties or assets or the financial
condition, results of operations, business or prospects of
such Property Partnership taken as a whole, (iv) with
respect to MAAC, a material adverse effect on the assets or
the financial condition, results of operations, business or
prospects of MAAC, MAALP and their respective Affiliates and
subsidiaries, taken as a whole, and (v) with respect to the
Reorganization contemplated by this Agreement, a material
adverse effect on the consummation thereof.
1.1.83 "Materials of Environmental Concern" means
all chemicals, pollutants, contaminants, wastes, toxic
substances, petroleum or any fraction thereof, petroleum
products and hazardous substances (as defined in Section
101(14) of CERCLA), or solid or hazardous wastes as now
defined and regulated under any Environmental Law.
1.1.84 "Merger" means the merger of FDC with and
into MAAC.
1.1.85 "Merger Partnership" means each partnership
listed in the Steps Memorandum as a Merger Partnership, and
"Merger Partnerships" means all such partnerships.
1.1.86 "Merger Shares" means the shares of Common
Stock issued at Closing pursuant to the Merger.
1.1.87 "Miscellaneous Balance Sheet Assets" means
the aggregate amount of cash and cash equivalents, trading
securities, restricted cash, due from affiliates, and other
assets set forth on the Valuation Balance Sheet described in
Section 13.1.1.
1.1.88 "Miscellaneous Balance Sheet Liabilities"
means the aggregate amount of accounts payable, accrued
expenses, accrued interest payable, due to affiliates,
deferred development income and security deposits set forth
on the Valuation Balance Sheet described in Section 13.1.1.
1.1.89 "ML Agreement" means that certain agreement
between FDC and Xxxxxxx Xxxxx & Co. pursuant to which the
latter has agreed to perform financial advisory services for
FDC in exchange for a fee to be paid upon consummation of
the Reorganization.
1.1.90 "Non-Consenting Partners" means those
partners of the Property Partnerships who shall not consent
to the Reorganization.
1.1.91 "Order" means any order, writ, injunction,
judgment, plan or decree of any Government Entity.
1.1.92 "Ordinary Contracts" means all contracts to
which FDC or any Property Partnership is a party or to which
FDC or any Property Partnership is obligated which are or
have been entered into in the Ordinary Course of Business
and provide for the provision or receipt of services, the
sale or purchase of property, or the use of any asset,
including, without limitation, service agreements,
maintenance contracts, repair contracts, equipment leases,
real estate brokerage contracts, agreements to purchase or
sell Resale Properties, agreements to purchase equipment,
agreements to purchase or sell utility services, sanitation
contracts, pest control contracts, security contracts and
advertising contracts, but excluding Acquisition Contracts,
Construction Contracts, Development Contracts, Management
Contracts, the ML Agreement and all Reorganization
Contracts.
1.1.93 "Ordinary Course of Business" means the
ordinary course of business of a Person consistent with past
practices.
1.1.94 "Other Assets" means all assets of FDC, an
FDC Affiliate or a Property Partnership to be acquired by
MAAC or MAALP upon consummation of the Reorganization,
except the Properties, the Acquisition Properties, the
Contracts, the Core Business Assets, the Intercompany Loans,
and the Third Party Business Assets, and including, without
limitation, the aggregate of (i) all utility deposits, (ii)
all deposits under the Leases, (iii) all other deposits,
(iv) all prepaid expenses and taxes, (v) all accounts
receivable and (vi) all Intangible Property.
1.1.95 "Outstanding Shares" means the number of
shares of Common Stock (but not Series A Preferred Stock or
other preferred stock) and Units issued and outstanding
during an accounting period determined pursuant to customary
accounting practices.
1.1.96 "Partial Interest Cash Sale" means the sale
to MAALP for cash by Cash-Out Partners of their interests in
a Surviving Cash-Out Partnership in a transaction
necessitated by the existence of Non-Consenting Partners in
a Reorganization Step intended as a Partnership Interest
Cash Sale.
1.1.97 "Partial Partnership Interest Exchange" means
the contribution by partners of an Exchange Partnership,
other than Non-Consenting Partners and FDC, of their
interests in an Exchange Partnership to MAALP in exchange
for Units in a transaction necessitated by the existence of
Non-Consenting Partners in a Reorganization Step intended as
a Partnership Interest Exchange.
1.1.98 "Partnership Interest Cash Sale" means the
sale to MAALP (or an Affiliate of MAALP designated by MAALP)
for cash of all partnership interests in a Surviving Cash-
Out Partnership by one hundred percent (100%) of the
partners of such Surviving Cash-Out Partnership.
1.1.99 "Partnership Interest Exchange" means the
contribution to MAALP in exchange for Units of all
partnership interests in an Exchange Partnership by all
partners of such Exchange Partnership other than FDC.
1.1.100 "Partnership Merger" or "Partnership Mergers"
means singly or collectively, as appropriate, the merger(s)
of the Merger Partnerships with and into MAALP.
1.1.101 "Partnership Plan of Merger" means the
Agreement and Plan of Merger between MAALP and a Merger
Partnership pursuant to which the Merger Partnership will
merge with and into MAALP, the form of which shall be
substantially the same as Exhibit "D." Any Reverse Cash
Merger shall be consummated pursuant to an agreement and
plan of merger that is in substantially the same form as the
Partnership Plan of Merger.
1.1.102 "Partnership Property Transaction" means each
transaction involving a Property Partnership described in
the Steps Memorandum, and includes any Alternative
Reorganization Step in respect of any Property Partnership
or Property owned by any Property Partnership.
1.1.103 "Permitted Exceptions" means:
(a) Liens (other than Liens imposed under ERISA
or any Environmental Law or in connection with any
Environmental Claim) for Taxes or other assessments
that are not yet delinquent;
(b) except as disclosed on the Rent Roll, rights
of residents or tenants, as residents or tenants only,
under the Leases;
(c) those existing title matters affecting the
Properties described on Schedule 1.1.103(c);
(d) those matters shown on the Surveys of the
Properties described on Schedule 1.1.103(c);
(e) easements, rights-of-way, covenants and
restrictions which are customary and typical for
properties similar to the Properties and which do not
(i) interfere with the ordinary conduct of any Property
or the business of FDC or the Property Partnership, as
applicable, as a whole or (ii) have a Material Adverse
Effect on the Properties to which they apply;
(f) the Existing Debt, provided the Prepaid
Mortgage Debt, Construction and Development Debt, and
Credit Line Debt shall be paid off and satisfied by
MAAC or MAALP in connection with the Closing;
(g) any other matter not objected to by MAAC in
accordance with Section 6.13 or for which MAAC elects
to close notwithstanding such matters in accordance
with Section 6.13; and
(h) any other matter that is not a Title Defect.
1.1.104 "Person" means an individual or a
corporation, partnership, limited liability company, joint
venture, trust, unincorporated organization, association,
other form of business or legal entity or Government Entity.
1.1.105 "Personal Property" means all tangible
property owned or leased by FDC or a Property Partnership
now or on the Closing Date and used in conjunction with
FDC's business or the operation, maintenance, ownership
and/or occupancy or development of any other Asset,
including without limitation: airplanes; furniture;
furnishings; art work; sculptures; paintings; office
equipment and supplies; landscaping; plants; lawn equipment;
and whether stored on or off the Real Property, tools and
supplies, construction equipment, maintenance equipment,
materials and supplies, shelving and partitions, and any
construction and finish materials and supplies not
incorporated into any real property as improvements,
fixtures, or otherwise, and held for repairs and
replacements thereto or development thereof, wherever
located.
1.1.106 "Plan of Merger" means the Agreement and
Plan of Merger in respect of the Merger, the form of which
shall be substantially the same as Exhibit "E."
1.1.107 "Prepaid Mortgage Debt" means the debt listed
as such on the Debt Schedule.
1.1.108 "Projected Balance Sheet" means the projected
balance sheet attached hereto as Schedule 1.1.108 which the
Parties used to establish the Target FFO Per Share amounts.
1.1.109 "Property" means, for each property described
on Schedule 1.1.109, and any Acquisition Property acquired
by FDC pursuant to Section 6.4 or 6.5 hereof prior to the
Closing, the Real Property, Leases, Personal Property and
Intangible Property related to it, and the "Properties"
means all of the Properties.
1.1.110 "Property Contribution" means the
contribution to MAALP of an Exchange Property by an Exchange
Partnership in exchange for Units in a transaction
necessitated by the existence of Non-Consenting Partners in
a Reorganization Step intended as a Partnership Interest
Exchange.
1.1.111 "Property Held for Development" means the
amount of real estate held for development or sale set forth
on the Recent Balance Sheet.
1.1.112 "Property Partnerships" means the Cash-Out
Partnerships, the Exchange Partnerships and the Merger
Partnerships.
1.1.113 "Property Seller Partnership" means each
partnership listed in the Steps Memorandum as a Property
Seller Partnership, and "Property Seller Partnerships" means
all such partnerships.
1.1.114 "Qualified Appraiser" means either (i) a
current "Big Six" accounting firm or its successor, (ii) a
nationally recognized accounting firm, or (iii) a nationally
recognized investment banking or real estate advisory
company, provided any such Qualified Appraiser shall have
experience in evaluations of U.S. based real estate
companies operating as real estate investment trusts. In
addition, other entities may be Qualified Appraisers
hereunder if MAAC and the Contingent Value Representative
mutually approve and agree, acting in their sole discretion,
upon such other Qualified Appraisers.
1.1.115 "REIT" means a real estate investment trust
within the meaning of Section 856 of the Code.
1.1.116 "Real Property" means, as to each Property,
the real property comprising such Property, together with
all rights, privileges, hereditaments and interests
appurtenant thereto including, without limitation: any
water and mineral rights, development rights, air rights,
easements, and any and all rights of FDC or a Property
Partnership in and to any streets, alleys, passages and
other rights of way; and all buildings, structures and other
improvements located on or affixed to such real property and
all replacements and additions thereto.
1.1.117 "Recent Balance Sheet" means the June 30,
1997 Balance Sheet of the Xxxxxxxx Properties Group as set
forth in the Consolidated Financials as of that date and for
the period then ended, a copy of which is attached hereto as
part of the FDC Financial Statements.
1.1.118 "Recent Balance Sheet Date" means June 30,
1997.
1.1.119 "Redemption Right" means the right of each
Person who shall receive Units in the Reorganization,
exercisable at any time or from time to time after the date
which is six (6) months after the Closing Date, to redeem
Units for Common Stock, or, in MAALP's sole discretion,
cash, pursuant to the MAALP Partnership Agreement.
1.1.120 "Registration Rights Agreement" means the
Registration Rights and Lock-Up Agreement in the form
attached as Exhibit "F."
1.1.121 "Release" means any spilling, leaking,
pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, or disposing into
the indoor or outdoor environment, including, without
limitation, the abandonment or discarding of barrels, drums,
containers, tanks, and other receptacles containing or
previously containing any Materials of Environmental Concern
at or prior to the Closing Date.
1.1.122 "Rent Roll" means for each Property the rent
roll attached as part of Schedule 1.1.122.
1.1.123 "Reorganization" means the series of
transactions contemplated hereby as more particularly
described herein and in the Steps Memorandum.
1.1.124 "Reorganization Contracts" means the Exchange
Agreements, the Plan of Merger, the Partnership Plans of
Merger, this Agreement and such other contracts and
agreements between MAAC and/or MAALP, on the one hand, and
FDC and its Affiliates, the Property Partnerships and/or
their partners on the other hand, entered into in connection
with the Reorganization.
1.1.125 "Reorganization Step" means each step in the
consummation of the Reorganization, including each step of
each transaction described in the Steps Memorandum.
1.1.126 "Required Title Insurance" means the title
insurance policies or endorsements listed on Schedule
1.1.126.
1.1.127 "Resale Properties Purchase Note" means the
note payable in respect of the sale of the Resale Properties
to the Third Party Service Subsidiary in accordance with the
Steps Memorandum, the form of which shall be substantially
the same as Exhibit "H."
1.1.128 "Resale Properties" means the properties held
by FDC for resale listed on Schedule 1.1.128.
1.1.129 "Retained Mortgage Debt" means the debt
listed as such on the Debt Schedule.
1.1.130 "Reverse Cash Merger" means a transaction
pursuant to which a newly-formed partnership of which MAALP
shall be a 99% limited partner and MAAC or any MAAC
Affiliate shall be a 1% general partner shall merge with and
into a Surviving Cash-Out Partnership, with the latter
surviving the merger, in a transaction necessitated by the
existence of Non-Consenting Partners in a Reorganization
Step intended as a Partnership Interest Sale.
1.1.131 "Sale Properties" means the Properties owned
by the Property Seller Partnerships as described in the
Steps Memorandum.
1.1.132 "SEC" means the Securities and Exchange
Commission.
1.1.133 "Securities Act" means the Securities Act of
1933, as amended.
1.1.134 "Shares" means shares of Common Stock.
1.1.135 "Steps Memorandum" means the Steps Memorandum
attached as Exhibit "A" hereto.
1.1.136 "Survey" means each survey described in
Schedule 1.1.103(c), and "Surveys" means all such surveys.
1.1.137 "Surviving Cash-Out Partnership" means each
partnership listed in the Steps Memorandum as a Surviving
Cash-Out Partnership, and "Surviving Cash-Out Partnerships"
means all such partnerships.
1.1.138 "Surviving Cash-Out Property" means each
Property owned by a Surviving Cash-Out Partnership as
described in the Steps Memorandum.
1.1.139 "Target FFO Per Share" means (i) $3.15 for
calendar year 1998, (ii) $3.32 for calendar year 1999, and
(iii) $3.61 for calendar year 2000.
1.1.140 "Tax" means any federal, state, local, or
foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar),
unemployment, disability, real property, personal property,
sales, use, transfer, registration, value added, alternative
or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not. The term "Tax" also
includes any amounts payable pursuant to any tax sharing
agreement to which any relevant entity is liable as a
successor or pursuant to contract.
1.1.141 "Third Party Businesses" means FDC's
businesses of (i) managing and/or leasing properties owned
by third parties, (ii) developing properties for third
parties, and constructing improvements on properties for
third parties, (iii) arranging for property acquisitions by
third parties, (iv) arranging financing for third parties,
and (v) consulting and business services performed for third
parties, including without limitation, money management, tax
consulting and reporting, asset management, construction
management and other consulting services. For purposes
hereof, "third parties" shall not include any Property
Partnership.
1.1.142 "Third Party Business Assets" means all
assets and properties owned by FDC and its Affiliates and
used in the conduct of the Third Party Businesses,
including, without limitation, the Construction Contracts,
the Development Contracts, the Management Contracts, all
Ordinary Contracts that are related to the conduct of the
Third Party Businesses, and all Resale Properties.
1.1.143 "Third Party Business Purchase Note" has the
meaning set forth in Section 4.1, the form of which shall be
substantially the same as Exhibit "G."
1.1.144 "Third Party Service Subsidiary" means Mid-
America Service Company, a Georgia corporation which, upon
consummation of the Reorganization, will own the Third Party
Business Assets and operate the Third Party Businesses.
1.1.145 "Title Defect" means any matter, other than a
Permitted Exception described in subparagraphs (a) through
(g) of Section 1.1.103(c), which would have a Material
Adverse Effect on the subject Property.
1.1.146 "Transaction Documents" means, collectively,
the Reorganization Contracts, the MAALP Partnership
Agreement, the Plan of Merger, the Registration Rights
Agreement, the Resale Properties Purchase Note, the Third
Party Business Purchase Note, the Agreements Not to Compete
and the various other agreements, certificates and documents
executed and delivered in connection with the transactions
contemplated hereby.
1.1.147 "Units" means Class A Common Units of limited
partnership interests in MAALP as more fully described in
the MAALP Partnership Agreement.
1.1.148 "Value" means, with respect to a Share, the
average of the daily market price of the Common Stock for
the ten (10) consecutive trading days immediately preceding
the Valuation Date. The market price for each such trading
day shall be: (i) if the Common Stock is listed or admitted
to trading on any securities exchange or the NASDAQ-National
Market, the closing price, regular way, on such day; or if
no such sale takes place on such day, the average of the
closing bid and asked prices on such day; (ii) if the Common
Stock is not listed or admitted to trading on any securities
exchange or the NASDAQ-National Market, the last reported
sale price on such day or, if no sale takes place on such
day, the average of the closing bid and asked prices on such
day, as reported by a reliable quotation source designated
by MAAC; or (iii) if the Common Stock is not listed or
admitted to trading on any securities exchange or the NASDAQ-
National Market and no such last reported sale price or
closing bid and asked prices are available, the average of
the reported high bid and low asked prices on such day, as
reported by a reliable quotation source designated by MAAC,
or if there shall be no bid and asked prices on such day,
the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than ten (10)
days prior to the date in question) for which prices have
been so reported; provided, however, if there are no bid and
asked prices reported during the ten (10) days prior to the
date in question, the Value of a Share shall be determined
by the MAAC board of directors acting in good faith on the
basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.
1.1.149 "Valuation Date" means the date on which the
Contingent Value Shares are to be valued for purposes of
determining the number of Contingent Value Shares to be
issued pursuant to Article 5 hereof, which is December 31,
1998, December 31, 1999, December 31, 2000, or the date of
the issuance of Contingent Value Shares pursuant to Section
5.5 hereof, as the case may be.
ARTICLE 2: MERGER OF FDC WITH AND INTO MAAC
2.1 The Merger. On the Closing Date, upon satisfaction in
full of each condition set forth in Articles 10 and 11 of this
Agreement, or waiver of such condition by the appropriate party,
FDC shall merge with and into MAAC, with MAAC being the surviving
corporation, pursuant to the provisions of, and with the effects
provided in, the Plan of Merger, Section 00-00-000, et seq. of
the Tennessee Business Corporation Act, as amended, and
Section 14-2-1101, et seq. of the Georgia Business Corporation
Code, as amended. As consideration for the Merger of FDC with
and into MAAC, the FDC Shareholders shall be entitled to receive
(i) the number of Merger Shares set opposite their respective
names in the Allocation Schedule and (ii) such FDC Shareholder's
Contingent Value Percentage of the Contingent Value Rights. In
addition, by operation of law, MAAC shall assume the Credit Line
Debt and the Construction and Development Debt and all other
Assumed Liabilities that are Liabilities of FDC as of the
Effective Time. The Merger shall be effective upon filing with
the Secretary of State of the State of Tennessee and Georgia,
respectively, Articles of Merger in compliance with the above-
referenced statutes.
2.2 No Fractional Shares. Notwithstanding any other
provision hereof, no fractional shares of MAAC Common Stock and
no certificates or scrip therefor, or other evidence of ownership
thereof, will be issued in the Merger; instead, MAAC shall pay to
each FDC Shareholder who would otherwise be entitled to a
fractional share an amount in cash determined by multiplying such
holder's fractional interest by Twenty-Eight Dollars ($28.00).
2.3 Procedures. Certificates which represent shares of FDC
Common Stock that are outstanding at the Effective Time (each, a
"Certificate") and are converted into the right to receive Merger
Shares upon consummation of the Merger shall, at the Closing, be
delivered to MAAC by the holders thereof for cancellation. MAAC
shall cause new certificates representing the Merger Shares into
which such shares of FDC Common Stock shall have been converted
to be issued and delivered to the FDC Shareholders at the
Closing. Such certificates shall bear a customary legend noting
the fact that the offer and sale of the Merger Shares have not
been registered under the Securities Act and that the Merger
Shares are subject to transfer restrictions under the Securities
Act and the Registration Rights Agreement.
No holder of FDC Common Stock shall be entitled to exercise
any right as a shareholder of MAAC until such holder shall have
properly surrendered his Certificate(s) (together with all
required documents) as set forth above. No dividend or other
distribution payable after the Effective Time with respect to the
Merger Shares shall be paid to the holder of any unsurrendered
Certificate until the holder thereof properly surrenders such
Certificate (together with all required documents), at which time
such holder shall receive all dividends and distributions,
without interest thereon, previously withheld from such holder
pursuant hereto. After the Effective Time, there shall be no
transfers on the stock transfer books of FDC of any shares of FDC
Common Stock which were issued and outstanding at the Effective
Time and converted into the right to receive Merger Shares
pursuant to the provisions of the Plan of Merger. If, after the
Effective Time, Certificates are presented for transfer to FDC,
they shall be canceled and exchanged for certificates
representing the Merger Shares deliverable in respect thereof.
After the Effective Time, holders of FDC Common Stock shall
cease to be, and shall have no rights as stockholders of, FDC
other than the right to receive the Merger Shares into which such
shares of FDC Common Stock shall have been converted or
fractional share payments pursuant to this Agreement and the Plan
of Merger.
Notwithstanding the foregoing, neither MAAC nor FDC nor any
other person shall be liable to any former holder of FDC Common
Stock for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar
laws.
In the event any Certificate shall have been lost, stolen or
destroyed, upon receipt of appropriate evidence as to such loss,
theft or destruction and to the ownership of such Certificate by
the person claiming such Certificate to be lost, stolen or
destroyed, and the receipt by MAAC of appropriate and customary
indemnification, including, where appropriate, the posting of a
bond, MAAC will issue in exchange for such lost, stolen or
destroyed certificate Merger Shares of MAAC Stock or the
fractional share payment, if any, deliverable in respect thereof
as determined in accordance with this Article 2.
2.4 Contribution of Certain Assets to MAALP; Retention of
Remaining Assets. Immediately after the Effective Time, MAAC
shall contribute to MAALP, solely in exchange for Class B Common
Units (as defined in the MAALP Partnership Agreement), the Core
Business Assets, the Third Party Business Purchase Note and the
Resale Properties Purchase Note. MAAC shall retain the
Acquisition Properties, the Acquisition Contracts, all interests
formerly owned by FDC in the Property Partnerships, the
Development Properties, Intercompany Loans and the Other Assets
acquired by MAAC in the Merger.
2.5 Xxxxxxxx Name. Immediately prior to the Effective
Time, the trade name "Xxxxxxxx" or any derivation thereof shall
be distributed and assigned by FDC to Xxxx X. Xxxxxxxx, and FDC
shall cause Xxxx X. Xxxxxxxx to license such trade name or
derivation thereof to MAAC and MAALP by MAAC or MAALP for a
period terminating on the later to occur of (i) termination of
his employment by MAAC or MAALP; (ii) the end of any non-compete
period applicable to Xxxx X. Xxxxxxxx pursuant to his Agreement
Not To Compete; or (iii) Xxxx X. Xxxxxxxx'x resignation or
removal from MAAC's board of directors. Such license shall be
evidenced by a written license agreement in form and substance
reasonably acceptable to the parties thereto.
ARTICLE 3: PARTNERSHIP PROPERTY TRANSACTIONS
3.1 Reorganization Steps; Alternative Reorganization Steps.
MAAC and MAALP shall acquire the Partnership Properties or
interests in the Property Partnerships, as the case may be, in
exchange for cash or Units, all in the manner described in Part
III of the Steps Memorandum, as augmented by Section 3.3 below.
The Parties acknowledge and agree that the Reorganization Steps
set forth in the Steps Memorandum assume that there are no Non-
Consenting Partners in respect of any Reorganization Step. In
the event that there is a Non-Consenting Partner in respect of
any Reorganization Step and such consent is required as described
in Schedule 7.1.2(b), then, subject to the provisions of Section
6.17, the Parties hereby agree to use their reasonable best
efforts to consummate an Alternative Reorganization Step in lieu
of the preferred Reorganization Step set forth in the Steps
Memorandum, with the particular Alternative Reorganization Step
to be agreed upon in good faith by the Parties at the appropriate
time, taking into account the relative economic efficiencies and
required consents with respect to each Alternative Reorganization
Step that might be appropriate in lieu of the preferred
Reorganization Step.
3.2 Consideration for Partnership Property Transactions.
The consideration deliverable by MAALP to the partners of the
Property Partnerships (other than FDC and Non-Consenting
Partners, who will not be entitled to any consideration in
respect of any Partnership Property Transaction, except as
provided in Section 3.3.4(c)) is described in the Steps
Memorandum and set forth on the Allocation Schedule. In
addition, at Closing MAALP shall repay in full the Prepaid
Mortgage Debt, Construction and Development Debt, and Credit Line
Debt, and, to the extent required by the terms of the specific
notes, agreements and other documents evidencing the Retained
Mortgage Debt in connection with the transfer of interests in the
Property Partnerships that are obligors on such Retained Mortgage
Debt, MAALP shall assume the Retained Mortgage Debt.
3.3 Consummation of Specific Reorganization Steps
Affecting Partnership Properties. The Steps Memorandum and
Allocation Schedule set forth the Reorganization Steps with
respect to each Property Partnership and the consideration to be
received by each partner thereof (assuming such partner is not a
Non-Consenting Partner). The following subparagraphs generically
describe the legal obligations of the parties to each type of
Reorganization Step and Alternative Reorganization Step, as the
case may be, with respect to each Property Partnership and are
intended to augment the information in Part III of the Steps
Memorandum.
3.3.1 Partnership Mergers. On the Closing Date, upon
satisfaction in full of each condition set forth in Articles
10 and 11 of this Agreement or waiver by the appropriate
party of such condition, for the consideration described in
Part III of the Steps Memorandum and the Allocation
Schedule, each of the Merger Partnerships shall merge with
and into MAALP, with MAALP being the surviving limited
partnership, pursuant to the provisions of, and with the
effects set forth in, the Partnership Plans of Merger, the
Tennessee Revised Uniform Limited Partnership Act, as
amended, and the Georgia Revised Uniform Limited Partnership
Act, as amended. Any Partnership Merger shall be effective
upon filing with the Secretary of State of the State of
Tennessee and the State of Georgia, respectively, a
certificate of merger in compliance with the above-
referenced statutes.
3.3.2 Exchange Transactions; Partial Partnership
Interest Exchanges. On the Closing Date, upon satisfaction
in full of each condition set forth in Articles 10 and 11 of
this Agreement or waiver by the appropriate party of any
such condition, for the consideration described in Part III
of the Steps Memorandum and the Allocation Schedule, MAALP
agrees to acquire from each partner of the Exchange
Partnerships (except FDC and the Non-Consenting Partners),
and FDC agrees to cause all such partners to contribute and
transfer to MAALP in exchange for such consideration, all of
the outstanding limited partnership interests of each of the
Exchange Partnerships owned by such partners, free and clear
of any and all Liens.
3.3.3 Property Contribution. As an Alternative
Reorganization Step to the transactions described in Section
3.3.2, in the event that an Exchange Partnership shall have
Non-Consenting Partners and MAALP and FDC shall reasonably
determine that a Property Contribution is fully authorized
and permitted and preferable to a Partial Partnership
Interest Exchange, on the Closing Date upon satisfaction in
full of each condition set forth in Articles 10 and 11 of
this Agreement or waiver by the appropriate party of any
such condition, for the consideration described in Part III
of the Steps Memorandum and the Allocation Schedule, MAALP
agrees to acquire from each such Exchange Partnership, and
FDC agrees to cause each such Exchange Partnership to
contribute, transfer and convey to MAALP, the Exchange
Property owned thereby, by special or limited warranty deed
in form and substance reasonably satisfactory to MAALP and
BDBC, subject only to Permitted Exceptions.
3.3.4 Cash-Out Properties. The following forms of
Partnership Property Transactions shall be consummated with
respect to the Cash-Out Properties.
(a) On the Closing Date, upon satisfaction in full of
each condition set forth in Articles 10 and 11 of this
Agreement or waiver by the appropriate party of any such
condition, for the consideration described in Part III of
the Steps Memorandum and the Allocation Schedule, MAALP
agrees to purchase from each Property Seller Partnership,
and FDC agrees to cause each Property Seller Partnership to
sell and convey to MAALP, the Sale Properties owned thereby,
by limited or special warranty deed in form and substance
reasonably satisfactory to MAALP and BDBC, subject only to
Permitted Exceptions.
(b) On the Closing Date, upon satisfaction in full of
each condition set forth in Articles 10 and 11 of this
Agreement or waiver by the appropriate party of any such
condition, for the consideration described in Part III of
the Steps Memorandum and the Allocation Schedule, MAALP
agrees to purchase from each partner of the Surviving Cash-
Out Partnership, in the case of a Partnership Interest Cash
Sale, and from each partner of the Surviving Cash-Out
Partnership except Non-Consenting Partners, in the case of a
Partial Interest Cash Sale, and FDC agrees to cause each
such partner to sell and convey to MAALP or a MAAC
Affiliate, as directed by MAALP, in a manner designed to
cause such Surviving Cash-Out Partnership to survive, the
partnership interests in such Surviving Cash-Out
Partnerships owned thereby, by general assignment in form
and substance reasonably satisfactory to MAALP and BDBC,
free and clear of all Liens.
(c) As an Alternative Reorganization Step to a
transaction described in subparagraph (b) immediately above,
if MAALP and FDC shall reasonably determine that a Reverse
Cash Merger is fully authorized and permitted and a
preferable Reorganization Step with respect to any Surviving
Cash-Out Partnership, on the Closing Date, upon satisfaction
in full of each condition set forth in Articles 10 and 11 of
this Agreement or waiver by the appropriate party of such
condition, for the consideration described in Part III of
the Steps Memorandum and the Allocation Schedule, the
parties agree to effect a Reverse Cash Merger of each such
Surviving Cash-Out Partnership, with the particular
Surviving Cash-Out Partnership being the surviving limited
partnership, pursuant to the provisions of, and with the
effects set forth in, the applicable Partnership Merger
Plan, the Tennessee Revised Uniform Limited Partnership
Act, as amended, and the Georgia Revised Uniform Limited
Partnership Act, as amended, or such other limited
partnership statute as shall govern the Surviving Cash-Out
Partnership.
3.3.5 Procedures. No certificate will be issued in
respect of any Unit issued pursuant to any Partnership
Merger, Partnership Interest Exchange, Partial Partnership
Interest Exchange or Property Contribution. On the Closing
Date, there shall be issued, in book-entry only form, to
each partner of each Merger Partnership and Exchange
Partnership, other than Non-Consenting Partners or FDC, the
number of Units set forth with respect to each such partner
on the Allocation Schedule, and each such Person shall have
no other evidence of his ownership of Units other than the
Allocation Schedule and any confirmation memorandum that may
be issued in respect thereof. After the Effective Time of
each Partnership Merger or Exchange Transaction (other than
a Property Contribution, after consummation of which such
Exchange Partnership shall liquidate and dissolve), no
partner of any such Merger Partnership or Exchange
Partnership shall have any right in respect of such Merger
Partnership or Exchange Partnership, and there shall be no
further transfers of partnership interests in such Merger
Partnership or Exchange Partnership. Notwithstanding the
foregoing, neither MAALP, nor any Merger Partnership or
Exchange Partnership, nor any other Person shall be liable
to any former Property Partnership partner for any amount
properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
3.3.6 No Fractional Units. Notwithstanding any other
provision hereof, no fractional Units and no certificates or
scrip therefor, or other evidence of ownership thereof, will
be issued in connection with any Partnership Merger or
Exchange Transaction; instead, MAALP shall pay to each
partner of each Merger Partnership and Exchange Partnership
(other than Non-Consenting Partners and FDC) whose limited
partnership interests shall be converted into or exchanged
for Units pursuant to this Agreement who would otherwise be
entitled to a fractional Unit an amount, in cash, determined
by multiplying such holder's fractional Unit interest by
Twenty-Eight Dollars ($28.00).
ARTICLE 4: THIRD PARTY BUSINESSES
4.1 Third Party Businesses Reorganization Steps. The
Reorganization Steps in respect of the Third Party Businesses and
the Third Party Business Assets are described in Steps 5 through
8 on page 43 and Steps 1 and 2 on page 45 in Part IV of the Steps
Memorandum as augmented by the following subparagraphs (a)
through (d).
(a) Immediately prior to consummation of the Merger, FDC
will cause FCC to liquidate and dissolve, distributing all its
assets and properties to FDC, who shall thereafter contribute and
transfer to MAALP a portion of the Third Party Business Assets in
consideration of MAALP's issuance to FDC of Units having a value
(based on a $28 per Unit price) equal to the agreed upon value of
the Third Party Business Assets so contributed.
(b) Immediately after receipt of the foregoing interest in
the Third Party Business Assets, MAALP shall contribute its
interest in such Third Party Business Assets to the Third Party
Service Subsidiary solely in exchange for one hundred percent
(100%) of the non-voting common stock of the Third Party Service
Subsidiary, which non-voting common stock shall represent ninety-
five percent (95%) of the economic value of all outstanding
capital stock of the Third Party Service Subsidiary.
Simultaneous therewith, FDC Holdings, L.L.C., a Tennessee limited
liability company (which shall always be controlled by Xxxxxx X.
Xxxxx or his successors, unless otherwise approved by the
Contingent Value Representative), and Xxxx X. Xxxxxxxx shall each
contribute to the Third Party Service Subsidiary cash in an
amount equal to two and one-half percent (2 1/2%) of the total
economic value of all outstanding capital stock of the Third
Party Service Subsidiary solely in exchange for fifty percent
(50%) of the voting common stock of the Third Party Service
Subsidiary. The parties intend that the foregoing transfers of
property and cash qualify as a transaction described in Section
351 of the Code.
(c) Immediately after the formation of the Third Party
Service Subsidiary described in subparagraph (b) above but prior
to the Effective Time of the Merger, FDC shall sell to the Third
Party Service Subsidiary the remaining portion of the Third
Party Business Assets in exchange for the Third Party Business
Purchase Note, the principal amount of which shall be equal to
the agreed upon value of such Third Party Business Assets so
sold.
(d) Contemporaneous with the Reorganization Step set forth
in subparagraph (c) above, FDC shall bargain, sell and convey the
Resale Properties, by special or limited warranty deed in form
and substance reasonably satisfactory to BDBC, free and clear of
all Liens except Permitted Encumbrances, to the Third Party
Service Subsidiary for an aggregate consideration of Four Million
Five Hundred Eighty-Nine Thousand Nine Hundred Twenty-Three
Dollars ($4,589,923.00) payable by the Third Party Service
Subsidiary by delivery of the Resale Properties Purchase Note in
the principal amount equal to such amount.
ARTICLE 5: CONTINGENT VALUE PROVISIONS
5.1 Contingent Value Rights. In connection with the merger
of FDC with and into MAAC as described in Article 2 hereof, MAAC
shall issue to the Contingent Value Holders additional Common
Stock (the "Contingent Value Shares"), having a Value, determined
as of the dates described below, of up to $7,500,000, subject to
the following terms and conditions and the provisions of this
Article 5:
(a) If the Adjusted FFO Per Share for calendar year
1998 exceeds $3.15, MAAC shall issue to the Contingent Value
Holders, on or before March 15, 1999, Contingent Value
Shares having a Value as of December 31, 1998 of $2,500,000
(the "1998 Contingent Value Shares");
(b) If (i) the Adjusted FFO Per Share for calendar
year 1999 exceeds $3.32 or (ii) the aggregate Adjusted FFO
Per Share for calendar years 1998 and 1999 exceeds $6.47,
MAAC shall issue to the Contingent Value Holders, on or
before March 15, 2000, Contingent Value Shares having a
Value as of December 31, 1999 of $2,500,000 (the "1999
Contingent Value Shares");
(c) If (i) the Adjusted FFO Per Share for calendar
year 2000 exceeds $3.61 or (ii) the aggregate Adjusted FFO
Per Share for calendar years 1998, 1999 and 2000 exceeds
$10.08, MAAC shall issue to the Contingent Value Holders, on
or before March 15, 2001, Contingent Value Shares having a
Value as of December 31, 2000 of $2,500,000 (the "2000
Contingent Value Shares");
(d) If the 1998 Contingent Value Shares are not issued
pursuant to subparagraph (a) above and either (i) the
aggregate Adjusted FFO Per Share for calendar years 1998 and
1999 exceeds $6.47 or (ii) the aggregate Adjusted FFO Per
Share for calendar years 1998, 1999 and 2000 exceeds $10.08,
MAAC shall issue to the Contingent Value Holders, on or
before March 15, 2001, Contingent Value Shares having a
Value as of December 31, 2000 of $2,500,000, in addition to
the 1999 Contingent Value Shares, 2000 Contingent Value
Shares and/or 1999 Make-Up Shares which may have been issued
pursuant to subparagraphs (b), (c) and (e) hereof (the
Contingent Value Shares issued pursuant to this subparagraph
(d) are herein referred to as the "1998 Make-Up Shares");
and
(e) If the 1999 Contingent Value Shares are not issued
pursuant to subparagraph (b) above and either (i) the
aggregate Adjusted FFO Per Share for calendar years 1999 and
2000 exceeds $6.93 or (ii) the aggregate Adjusted FFO Per
Share for calendar years 1998, 1999, and 2000 exceeds
$10.08, MAAC shall issue to the Contingent Value Holders, on
or before March 15, 2001, Contingent Value Shares having a
Value as of December 31, 2000 of $2,500,000 (the "1999 Make-
Up Shares"), in addition to any 1998 Contingent Value
Shares, 2000 Contingent Value Shares and/or 1998 Make-Up
Shares which may have been issued pursuant to subparagraphs
(a), (c) and (d) hereof.
5.2 Allocation of Contingent Value Rights. The Contingent
Value Shares issued to the Contingent Value Holders pursuant to
this Article 5 shall be allocated among the Contingent Value
Holders in accordance with their respective Contingent Value
Percentages.
5.3 Adjusted FFO Per Share. The Parties have established
the Target FFO Per Share amounts based upon the Projected Balance
Sheet, including the following assumptions set forth therein: (i)
the amount of Outstanding Shares, which includes Common Stock and
Units (the "Outstanding Share Assumption"); (ii) the amount of
Outstanding Series A Preferred Stock; (iii) the leverage, capital
structure, debt structure, and amount of outstanding debt; (iv)
the debt amortization payments; (v) interest rates; and (vi) the
mix between acquisition and development properties (the
assumptions described in (ii) - (vi) above, together with similar
assumptions reflected in the Projected Balance Sheet, are herein
collectively referred to as the "Financial Assumptions"). In the
event the amount of the Outstanding Shares during any calendar
year 1998, 1999, or 2000 differ from the Outstanding Share
Assumption, then the FFO Per Share for such calendar year shall
be adjusted, up or down, to the extent necessary to reasonably,
fairly and in good faith reflect the FFO Per Share which would
have been realized during such calendar year if the Outstanding
Share Assumption was, in fact, true throughout such calendar year
pursuant to the procedures hereinafter provided; and in the event
the balance sheet of MAAC and MAALP or any other facts or
circumstances during any calendar year 1998, 1999 or 2000 differ
from the Financial Assumptions set forth in the Projected Balance
Sheet and result in a lesser FFO Per Share, then the FFO Per
Share for such calendar year shall be increased (but not
decreased) to the extent necessary to reasonably, fairly and in
good faith reflect the increased FFO Per Share which would have
been realized during such calendar year if the Financial
Assumptions were, in fact, true throughout such calendar year
(such adjusted FFO Per Share described in this Section 5.3 is
herein referred to as the "Adjusted FFO Per Share"). If, at any
time or from time to time, the Contingent Value Representative
shall reasonably determine that there has been a change of
circumstances that has changed the Outstanding Share Assumption
or Financial Assumptions, then MAAC shall cause a new Projected
Balance Sheet and recomputation of Adjusted FFO Per Share to be
prepared. The Contingent Value Representative and MAAC shall use
their reasonable best efforts to agree upon all numbers in the
new Projected Balance Sheet and upon the Adjusted FFO Per Share.
If the Contingent Value Representative and MAAC cannot agree upon
the Adjusted FFO Per Share for any calendar year 1998, 1999 or
2000, then either party may, upon ten (10) days notice to the
other party, request the Board of Directors of MAAC to appoint an
independent committee of outside directors (the "Independent
Committee") to recommend an amount of the Adjusted FFO Per Share.
In the event the Contingent Value Representative does not approve
in writing the Adjusted FFO Per Share recommended by the
Independent Committee, then the Contingent Value Representative
shall have the right to have the Adjusted FFO Per Share
determined by arbitration in the manner set forth in Section 5.4
below.
5.4 Arbitration. In the event the Contingent Value
Representative does not approve the Adjusted FFO Per Share
recommended by the Independent Committee pursuant to Section 5.3
above, then the Contingent Value Representative shall have the
right to request binding arbitration of the Adjusted FFO Per
Share as hereinafter provided. In such event, the Adjusted FFO
Per Share shall be determined by a Qualified Appraiser selected
by agreement between MAAC and the Contingent Value Representative
within fifteen (15) days after notice from the Contingent Value
Representative to MAAC requesting such arbitration; provided,
however, in the event MAAC and the Contingent Value
Representative cannot agree upon the selection of a Qualified
Appraiser on or before the end of said fifteen (15) day period,
then the Adjusted FFO Per Share shall be determined by a
committee of three (3) Qualified Appraisers chosen as follows:
one (1) Qualified Appraiser shall be chosen by MAAC within
fifteen (15) days after the end of said fifteen (15) day period;
the second (2nd) Qualified Appraiser shall be chosen by the
Contingent Value Representative within fifteen (15) days after
the end of said fifteen (15) day period; and the third (3rd)
Qualified Appraiser shall be chosen by the two (2) Qualified
Appraisers chosen as aforesaid; provided, however, if such two
(2) Qualified Appraisers cannot agree on such third Qualified
Appraiser within ten (10) days after the appointment of the last
of such two (2) Qualified Appraisers, then such third Qualified
Appraiser shall be chosen by the American Arbitration Association
within fifteen (15) days after the end of said ten (10) day
period. Each Qualified Appraiser shall make an independent
determination of the Adjusted FFO Per Share, and the Adjusted FFO
Per Share to be utilized and applied hereunder shall be the
average of the two (2) determinations closest in amount. The
cost and expenses of a single Qualified Appraiser and the third
Qualified Appraiser, if three (3) are used, shall be shared
equally by MAAC and the Contingent Value Holders, and, in the
event three (3) Qualified Appraisers are used, each Party shall
pay the cost and expenses of the Qualified Appraiser picked by
such Party. The Qualified Appraisers shall be required to
deliver their respective appraisals of Adjusted FFO Per Share
within thirty (30) days after the appointment of all Qualified
Appraisers. The determination of the Adjusted FFO Per Share
hereunder shall be final and binding on MAAC and the Contingent
Value Holders.
5.5 Major Transaction and Change in Control.
Notwithstanding anything contained in this Article 5 to the
contrary, in the event there is (i) a merger, consolidation,
combination, contribution of assets, or other similar transaction
involving MAAC or MAALP or any Affiliate of MAAC or MAALP and a
publicly traded REIT, private REIT or other entity where MAAC,
MAALP or any Affiliate of MAAC or MAALP is not the surviving
entity, or a sale of all or substantially all of the assets of
MAAC or MAALP (collectively, a "Major Transaction") or (ii) a
change in the management or control of MAAC so that either
(a) any three (3) of the six (6) officers of MAAC described on
Schedule 5.5 are no longer responsible for the management and
operation of MAAC for any reason, even if resulting from the
death or incapacity of such officers, or (b) Xxxx X. Xxxxxxxx is
removed from the Board of Directors of MAAC, unless due to his
death or incapacity or "for cause" (as defined in his Agreement
Not to Compete), or (c) any four (4) members of the current Board
of Directors of MAAC (after admission of Xxxx X. Xxxxxxxx) are
removed from such Board of Directors, even if resulting from the
death or incapacity of such members (any such event described in
(a), (b) or (c) above being referred to herein as a "Change in
Control"), and such Major Transaction or Change in Control occurs
on or before the end of calendar year 2000, then the Contingent
Value Rights shall fully vest, and after such Major Transaction
or Change in Control, and MAAC, its successors or assigns shall
promptly issue to the Contingent Value Holders Contingent Value
Shares having a Value, determined as of the date of the issuance
of such Contingent Value Shares, equal to the difference of (i)
$7,500,000 less (ii) the Value, determined as of the Valuation
Date when issued, of any Contingent Value Shares issued to the
Contingent Value Holders prior to such Major Transaction or
Change in Control of MAAC.
5.6 Transfer of Contingent Value Rights. The Contingent
Value Holders shall have the right to transfer, convey or assign
all or any portion of the Contingent Value Rights held by the
Contingent Value Holders to any Person without the consent or
approval of MAAC, in which event such transferees or assignees
shall be deemed Contingent Value Holders hereunder.
5.7 Enforceability. The provisions of this Article 5 shall
survive the Closing and be binding upon MAAC and inure to the
benefit of and be enforceable by the Contingent Value Holders
after the Closing.
ARTICLE 6: COVENANTS
6.1 Implementing Agreement. Subject to the terms and
conditions hereof, each party hereto shall use its reasonable
best efforts to take all action required of it to fulfill its
obligations under the terms of this Agreement, to cause the
conditions to Closing to be satisfied, and to facilitate the
consummation of the transactions contemplated hereby and thereby,
including, without limitation, the execution and delivery of all
Transaction Documents. Notwithstanding anything contained in
this Agreement to the contrary, any action to be taken hereunder
by FDC with respect to a Property Partnership is subject to the
provisions of Section 6.17 and to FDC's fiduciary duty to its
partners in such Property Partnership and the restrictions,
limitations or other provisions contained in the partnership
agreement or any other agreement relating to such Property
Partnership.
6.2 Preservation of Business. (a) From the date of this
Agreement until the Closing Date, subject to the provisions of
Section 6.17 and except for Reorganization Steps contemplated to
occur prior to consummation of the Reorganization, FDC (i) shall
operate, and shall use its reasonable best efforts to cause the
Property Partnerships to be operated, only in the Ordinary Course
of Business, and shall not, without MAAC's prior written consent,
engage in any transaction outside the Ordinary Course of Business
except as otherwise permitted herein, (ii) shall not, without
MAAC's prior written consent, sell or list for sale any of the
Properties or any of its interests in the Property Partnerships,
except for sale of Resale Properties in the Ordinary Course of
Business, (iii) shall use its reasonable best efforts to preserve
the Assets, including the goodwill, going concern value, employee
base, systems and advantageous relationships of FDC and the
Property Partnerships with residents, customers, suppliers,
independent contractors, employees and other Persons material to
the operation of the Properties and the Third Party Businesses,
(iv) shall perform its, and shall use its reasonable best efforts
to cause the Property Partnerships to perform their respective,
material obligations under the Leases and other material
agreements affecting FDC or the Properties, (v) shall perform
FDC's material obligations, and use its reasonable best efforts
to cause the Property Partnerships to perform their material
obligations, under all Contracts, and (vi) shall not take or
permit any action or omission which would cause any of its
representations or warranties contained herein to become
inaccurate in any material respect or any of the covenants made
by it to be breached in any material respect. Without limiting
the foregoing, without MAAC's prior written consent, FDC will not
cause or permit any default to occur under the Existing Debt or
cause or permit any increase in the outstanding aggregate
principal balance thereof from the date hereof until the Closing;
provided, however, that (i) the outstanding principal amount of
any Construction and Development Debt may be increased to fund
expenditures made in conformity with the Development Budget and
Schedule, and (ii) the outstanding principal amount of the Credit
Line Debt may be increased to fund the closing of the Acquisition
Contracts in accordance with Section 6.4, and for other working
capital purposes consistent with operating in the Ordinary Course
of Business. FDC shall continue to maintain and shall cause each
Property Partnership to continue to maintain all insurance
policies referred to in Section 7.1.13 in full force and effect
up to and including the Closing Date. If FDC or any Property
Partnership contemplates entering into any transaction or
agreement or taking any other action requiring MAAC's prior
written consent under this Agreement, then FDC shall give MAAC
notice of such proposed transaction or agreement a reasonable
time in advance of the proposed effective date thereof, and MAAC
shall have three (3) business days in which to respond in writing
either affirmatively or negatively. If MAAC shall fail to so
respond, then MAAC's consent will be irrebuttably presumed. In
no event shall MAAC's consent to any such transaction, agreement
or other action be unreasonably withheld.
(b) From the date of this Agreement until the Closing Date,
MAAC and MAALP (i) shall cause their respective properties (and
the properties owned by their Affiliates) to be operated only in
the Ordinary Course of Business, (ii) shall use its reasonable
best efforts to preserve the goodwill, going concern value,
employee base, systems and advantageous relationships of MAAC and
MAALP and their Affiliates with residents, customers, suppliers,
independent contractors, employees and other Persons material to
the operation of MAAC, MAALP, their respective properties and
Affiliates, (iii) shall perform its, and cause their Affiliates
to perform their, material obligations under the leases and other
material agreements affecting their respective properties, and
(iv) shall not take or permit any action or omission which would
cause any of MAAC's or MAALP's representations or warranties
contained herein to become inaccurate in any material respect or
any of the covenants made by it to be breached in any material
respect.
6.3 Consents and Approvals. Subject, in respect of FDC, to
the provisions of Section 6.17, each Party shall use its
reasonable best efforts to obtain all consents, approvals,
certificates and other documents required in connection with the
performance by it of this Agreement and the consummation of the
transactions contemplated hereby and thereby, including the
consents required for FDC listed on Schedule 7.1.2(b) and shall
make all filings, applications, statements and reports to all
Government Entities and other Persons which are required to be
made prior to the Closing Date by or on behalf of such party or
any of their Affiliates pursuant to any applicable Law or
contract in connection with this Agreement and the transactions
contemplated hereby. It is contemplated that HUD may require the
completion of certain maintenance and/or capital improvements in
connection with its approval of the assumption of certain HUD
loans, and the obligation and costs related thereto shall be an
Assumed Liability.
6.4 Purchase of Acquisition Properties. FDC shall use its
reasonable best efforts to close on each Acquisition Contract and
acquire each Acquisition Property in accordance with the closing
dates set forth on Schedule 1.1.1. FDC will make available
copies of all material correspondence or other documentation with
respect to any Acquisition Contract promptly upon receipt by FDC,
and will confer with MAAC in all material decisions with respect
to the due diligence, documentation and closing of any
Acquisition Contract. FDC may incur additional Credit Line Debt
in connection with the acquisition of the Acquisition Properties.
6.5 Additional Acquisitions. From the date hereof until
the Closing, except as provided in Section 6.4 and Section 6.17
and subject to FDC's fiduciary duties under the partnership
agreement of each Property Partnership, FDC shall not, and shall
use its reasonable best efforts to not allow any Property
Partnership to, enter into a binding contract for the acquisition
of, nor acquire, any real property or a material amount of other
assets, whether by purchase of assets or stock, merger,
consolidation or other business combination, without MAAC's prior
written consent. If FDC identifies any potential acquisition, it
shall consult with MAAC prior to the end of any applicable
inspection or due diligence period and MAAC shall advise FDC
promptly (and prior to the end of any such period) whether or not
it supports such acquisition opportunity. The parties shall
cooperate in pursuing any acquisition opportunity agreed on by
both parties, and if FDC enters into a binding contract, with
MAAC's consent, for an acquisition, the parties shall enter into
any necessary technical amendment to this Agreement. If MAAC
does not so consent to such a contract with a Property
Partnership, subject to the provisions of Section 6.17, prior to
the Closing FDC shall cause any Property Partnership that is a
party to any such contract to transfer the contract to a third
party and obtain a full release of the Property Partnership from
any obligation thereunder. FDC shall not transfer to MAAC any
such new contract to which FDC is a party if MAAC has not
consented to such contract.
6.6 Intentionally Omitted.
6.7 Retention of Employees. FDC agrees to use its
reasonable best efforts to persuade each FDC employee, except for
those FDC employees who FDC and MAAC shall mutually agree to
discharge at or before Closing, to continue employment with MAAC
or a MAAC Affiliate immediately following the Closing. MAAC
agrees to retain or cause a MAAC Affiliate to hire each such
employee, other than those who are discharged in accordance with
the preceding sentence, immediately following the Closing,
provided that such employee does not engage in malfeasance prior
to the Closing. MAAC and MAALP shall be responsible for all
reasonable severance compensation agreed upon by the Parties, if
any, for those FDC employees whose employment is terminated in
accordance with this Section 6.7. Nothing herein is intended to
make any employee hired by MAAC or any MAAC Affiliate other than
an employee at will.
6.8 MAAC Disclosure Document. FDC and MAAC agree to
cooperate in preparing and distributing to each partner of each
Property Partnership and each FDC Shareholder, as promptly as
practicable following the execution of this Agreement, a
disclosure document jointly prepared by MAAC and FDC for use by
such partners and FDC Shareholders in determining whether to
consent to the Reorganization contemplated by this Agreement and
to receive Merger Shares or Units at the Closing. FDC agrees to
supply information for the disclosure document concerning FDC,
the Properties, the Property Partnerships, the solicitation of
consents to the Reorganization from the partners of the Property
Partnerships and the allocation among the FDC Shareholders and
the partners of the Property Partnerships of the Merger Shares
and Units to be delivered by MAAC and MAALP, respectively, in
connection with the Reorganization. MAAC agrees to supply
information concerning MAAC, MAALP, their respective properties
and businesses, the pro forma effect of the Reorganization and
the securities being offered by MAAC or MAALP pursuant to the
Reorganization. The information provided by FDC for inclusion in
the disclosure document is referred to hereinafter as the "FDC
Information" and the information provided by MAAC for inclusion
in the disclosure document is referred to hereinafter as the
"MAAC Information." FDC and MAAC each shall advise the other if
it becomes aware of any additional information that should be
included in the FDC Information or the MAAC Information,
respectively, for inclusion in the disclosure document or a
supplement thereto. FDC covenants that the FDC Information shall
not, and MAAC covenants that the MAAC Information shall not,
contain any untrue statement of material fact or omit to state
any material fact required to be stated or necessary to make the
FDC Information or the MAAC Information, respectively, that is
included in the disclosure document, in light of the
circumstances under which it was made, not misleading. MAAC
acknowledges that FDC is not offering securities as an issuer in
connection with the transactions contemplated by this Agreement,
and nothing herein is intended to make FDC liable as an issuer of
securities, and that FDC is not making any representation or
determination as to the adequacy of such disclosure document with
respect to the issuance of, or the legality of the issuance of,
any securities in connection with the transactions contemplated
herein. FDC acknowledges that nothing herein is intended to
impose on MAAC, or relieve FDC of, any liability with respect to
FDC's fiduciary duties in connection with obtaining consents from
the partners of the Property Partnership in order to consummate
the Reorganization.
6.9 Exclusivity. (a) Subject to the provisions of Section
6.17, unless and until this Agreement is terminated pursuant to
its terms, FDC shall not, directly or indirectly, through any
officer, director, partner, agent or otherwise, initiate, solicit
or knowingly encourage (including by way of furnishing non-public
information or assistance), or take any other action to
facilitate knowingly, any inquiry or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any
FDC Competing Transaction, or enter into or maintain or continue
discussions or negotiate with any Person in furtherance of any
such inquiry or with a view toward soliciting or consummating an
FDC Competing Transaction, or agree to or endorse any FDC
Competing Transaction, or authorize or knowingly permit any of
the officers, directors, partners or employees of such party or
any of its Affiliates or any investment banker, financial
advisor, attorney, accountant or other representative retained by
such Party or any of such Party's Affiliates to take any such
action. FDC shall notify MAAC orally (within one Business Day
after FDC obtains knowledge of same) and in writing (as promptly
as practicable) of all of the relevant details relating to all
inquiries and proposals which FDC or any officer, director,
partner, agent, or other Person may receive relating to any of
such matters. An "FDC Competing Transaction" means the sale by
FDC or any Property Partnership of any equity interest in FDC or
such Property Partnership or the sale or other transfer by FDC or
such Property Partnership of its assets or business, in whole or
in part, whether through direct sale, merger, consolidation,
asset sale, exchange, recapitalization, other business
combination, liquidation, or other action out of the Ordinary
Course of Business.
(b) Unless and until this Agreement is terminated pursuant
to its terms, MAAC shall not, without the advance written consent
of FDC, directly or indirectly, through any officer, director,
partner, agent or otherwise, negotiate, undertake or consummate a
MAAC Competing Transaction. A "MAAC Competing Transaction" means
any business combination, whether through a direct purchase,
merger, consolidation, asset purchase, exchange,
recapitalization, other business combination, or other
acquisition or sale, where the other party is either (i) a
publicly-traded REIT, or (ii) a privately-held REIT or other
entity that owns and operates multifamily residential properties,
provided that in the case of any entity described in clause (ii),
the entity shall own or control more than 2,500 apartment units
and the transaction consideration, consisting of the sum of all
equity, debt and cash issued by MAAC or its Affiliates in such
transaction, plus debt assumed, shall exceed $100,000,000;
excluding, however, an unsolicited tender or exchange offer that
is either opposed by MAAC's Board or Directors or with respect to
which MAAC's Board of Directors makes no recommendation.
6.10 Obligation to Supplement Information. From time to
time prior to the Closing, FDC, on the one hand, and MAAC on the
other, will promptly disclose in writing to the other Party any
matter hereafter arising or discovered which, if existing,
occurring or known at the date of this Agreement would have been
required to be disclosed by any Party or which would render
inaccurate any representation or warranty by any Party.
Additionally, FDC agrees to provide MAAC with prompt written
notice of any matter hereafter arising or discovered which could
have a Material Adverse Effect on FDC, any Property or Property
Partnership, and MAAC agrees to provide FDC with prompt written
notice of any matter hereafter arising or discovered which could
have a Material Adverse Effect on MAAC. No information provided
to a Party pursuant to this Section 6.10 shall be deemed to cure
any breach of any representation, warranty or covenant made in
this Agreement.
6.11 Access to Information; Environmental Audits. At all
times before the Closing, FDC shall provide MAAC, its agents,
employees, consultants, and representatives, with continuing and
reasonable access to all files, books, records and other
materials in FDC's possession or control relating to the Assets
and the business and operations of FDC and the right to examine,
inspect and make copies of such materials as appropriate
(including for the purpose of reviewing or preparing pro forma
financial statements required pursuant to Article 11 of
Regulation S-X of the SEC). During such period, FDC shall also
provide for such parties to have reasonable physical access to
the Properties for the purpose of conducting surveys,
architectural, engineering, geotechnical and environmental
inspections and tests (including sampling and invasive testing
for the presence of Materials of Environmental Concern performed
in connection with Phase I and Phase II environmental audits),
feasibility studies and any other inspections, studies or tests
reasonably required by them, provided, however, that MAAC shall
obtain FDC's prior approval (which shall not be unreasonably
withheld) for any invasive testing. With reasonable advance
notice to FDC, MAAC may conduct a "walk-through" of resident
units upon appropriate notice to residents and subject to the
rights of residents. In the course of its investigations, MAAC
may make inquiries to third parties, including, without
limitation, contractors, property managers, lenders, residents
and Government Entities. MAAC shall keep the Properties free of
any Liens claimed by MAAC's contractors or consultants in
connection with such entry and will indemnify, defend and hold
FDC and the Property Partnerships harmless from all Claims and
Liabilities caused by MAAC, its contractors or consultants that
are asserted against or incurred by FDC as a result of such entry
and investigation. Any Liability or loss and expense related to
a condition of any Property discovered or disclosed by MAAC or
any consultant or contractor of MAAC in connection with such
investigation is not a Liability that is covered by this
indemnity. At all times before the Closing, MAAC and MAALP shall
provide FDC and its agents, employees, consultants, and
representatives, with continuing and reasonable access to all
files, books, records and other materials in MAAC's or MAALP's
possession or control relating to the business and operations of
MAAC, MAALP and their respective Affiliates, and the right to
examine, inspect and make copies of such materials as
appropriate. During such period, MAAC and MAALP shall also
provide for such parties to have the same access to their
properties as FDC shall have granted under this Section 6.11. No
investigation made by a party shall limit, qualify or modify any
representation, warranty, covenant or agreement made by another
party hereunder, notwithstanding the knowledge and information
obtained as a result of any such investigation, but if a party
discovers as a result of any investigation made by it prior to
the Closing that any representation or warranty made herein by
the other party is materially inaccurate, it shall promptly
notify and advise the other party.
6.12 Monthly Updates of Rent Rolls and Operating Statements.
FDC will promptly provide MAAC, upon reasonable request, with
monthly updates of the Rent Roll and operating statements for the
Properties.
6.13 Title Matters; Title Defects. MAAC and MAALP have
approved the Permitted Exceptions as of the date of this
Agreement. In the event that either MAAC or FDC shall discover
prior to the Closing any matter affecting title to any Property
that would be a Title Defect as defined herein, MAAC shall give
FDC written notice of such matter no later than three (3)
business days after first discovering or receiving notice from
FDC of same, as the case may be, of its objection to such matter.
If MAAC shall not object in writing within such time period, then
such matter shall become a Permitted Exception. If MAAC shall
object in writing within such time, then such matter shall be a
Title Defect. FDC shall notify MAAC in writing within ten (10)
days of receipt of MAAC's notice if FDC intends to cure any Title
Defect. If FDC elects not to cure such Title Defect, MAAC shall
have ten (10) days after receipt of FDC's notice to elect to (i)
waive such Title Defect and proceed to close the Reorganization,
subject to such Title Defect, (ii) designate the affected
Property an Excluded Property pursuant to Section 6.16 hereof,
provided the Defective Property Basket is not exceeded, or (iii)
if the designation of such affected Property as an Excluded
Property would cause the Defective Property Basket to be
exceeded, terminate this Agreement. If MAAC fails to respond
within said ten (10) day period, MAAC shall be deemed to have
waived such Title Defect as provided in (i) above. If FDC elects
to cure or cause a Property Partnership to cure such a Title
Defect, FDC or the Property Partnership, as the case may be,
shall use diligent efforts to cure the Title Defect by the
Closing Date (as it may be extended as provided below), which may
include insuring over or bonding off such Title Defect at FDC's
expense, but neither the Property Partnership nor FDC shall be
required to spend any money or bring any legal action to cure any
such Title Defect (other than the payment of any amount necessary
to satisfy, insure or bond over a monetary Lien). FDC or the
Property Partnership, as the case may be, shall have at least
thirty (30) days to cure any Title Defect, and, if the Closing
Date shall fall within such period during which FDC may cure such
Title Defect, then the Closing Date shall be postponed for a
period up to thirty (30) days (but not beyond December 31, 1997)
in order to give sufficient time to satisfy, release, cure or
remove such Lien or exception. Upon the cure, removal, insurance
over or bonding off of any such Title Defect, the Closing Date
shall be scheduled upon ten (10) days prior written notice to FDC
but in no event earlier than the original Closing Date,
notwithstanding such Title Defect. If FDC or the Property
Partnership, as the case may be, is unable to cure, remove, bond
off or otherwise dispose of any such Title Defect on or before
the Closing, as the Closing may be extended as provided above,
then MAAC shall have the right to choose among the options
described in (i)-(iii) above in this Section 6.13. The
obligations of FDC set forth in this Section 6.13 with respect to
Property Partnerships are subject to Section 6.17.
6.14 Damage. FDC shall promptly give MAAC written notice of
any damage to any Property, describing such damage whether such
damage is covered by insurance and the estimated cost of
repairing such damage. The obligations of FDC set forth in this
Section 6.14 with respect to Property Partnerships are subject to
the provisions of Section 6.17.
(a) If such damage does not render untenantable more
than thirty percent (30%) of the apartment units within an
affected Property, (i) FDC or the Property Partnership
shall, to the extent possible, begin repairs prior to the
Closing, (ii) at the Closing, the successor owner of the
affected Property after the Reorganization shall receive all
insurance proceeds not applied to the repair of any such
Property prior to the Closing (including rent loss insurance
applicable to any period from and after the Closing) due to
FDC or a Property Partnership for the damage, together with
an assignment of any unsettled insurance claim, and (iii)
after the Closing, such successor owner shall assume the
responsibility for the repair after the Closing. Such
successor owner shall be entitled to any excess of the
proceeds of insurance over and above the actual cost of
repair and restoration. No modification to the Allocation
Schedule shall result from such event.
(b) If such damage renders untenantable more than
thirty percent (30%) of the apartment units within a
Property, MAAC may elect by notice to FDC given within
twenty (20) Business Days after MAAC is notified of such
damage (and the Closing shall be extended, if necessary, to
give MAAC such twenty (20) Business Day period to respond to
such notice) to (i) proceed in the same manner as in the
case of damage described in subparagraph (a) above, or (ii)
designate the affected Property an Excluded Property
pursuant to Section 6.16 hereof, provided the Defective
Property Basket is not exceeded, or (iii) if the designation
of such affected Property as an Excluded Property would
cause the Defective Property Basket to be exceeded,
terminate this Agreement. Any waiver of the matters
addressed in this Section 6.14 pursuant to clause (i) above
shall be deemed an election by MAAC, FDC and/or the affected
Property Partnership to follow the procedures described in
subparagraph (a) of this Section 6.14.
6.15 Condemnation. FDC will give MAAC prompt written notice
of the institution or threat of any exercise of the power of
eminent domain on any Property or portion thereof. If the
exercise of such power of eminent domain would result in a taking
of more than thirty percent (30%) of the rentable apartment units
at such Property, MAAC may elect by notice to FDC given within
twenty (20) Business Days after MAAC shall have received the
notice of such institution or threat (and the Closing shall be
extended, if necessary, to give MAAC such twenty (20) Business
Day period to respond to such notice) to (i) proceed with the
Closing and receive any condemnation award or proceeds from any
such proceeding, without modification in the Allocation Schedule,
or (ii) designate the affected Property an Excluded Property
pursuant to Section 6.16 hereof, provided the Defective Property
Basket is not exceeded, or (iii) if the designation of such
affected Property as an Excluded Property would cause the
Defective Property Basket to be exceeded, terminate this
Agreement.
6.16 Defective Property Basket. In the event that the
number of apartment units within all of the Excluded Properties
designated pursuant to Sections 6.13, 6.14, 6.15, 7.6 and 10.1
hereof is less than one thousand (1,000) units, then FDC, MAAC
and MAALP will remain obligated to consummate the Reorganization
in accordance with this Agreement notwithstanding such matters,
assuming satisfaction in full of each other condition set forth
in Articles 10 and 11 of this Agreement or waiver by the
appropriate Party of any such condition. In such event, (i) the
Excluded Properties shall no longer be deemed part of the
Properties hereunder, (ii) the Steps Memorandum shall be amended
to delete the Excluded Properties and any Reorganization Step
relating thereto, which shall no longer be part of the
Reorganization, and (iii) the Allocation Schedule shall be
amended to delete the Excluded Properties and any consideration
or value relating thereto (whether in the form of cash, Units or
Shares) otherwise payable or issuable to any Person, and such
deleted consideration shall not be paid or issued at the Closing.
If an Excluded Property consists of a Property held by FDC, or if
the Property is owned by a Property Partnership in which FDC has
an interest, then FDC shall, prior to closing, sell or otherwise
distribute such Property or interest prior to Closing, so that
such Excluded Property or interest therein shall not be held by
FDC at Closing.
6.17 Lack of Control over Property Partnerships. FDC has
not obtained from the partners of the Property Partnerships the
consents described elsewhere in this Agreement (including the
Schedules). The parties acknowledge that this Agreement is not
binding upon the Property Partnerships or any of their partners,
and FDC does not control the ability or obligation of certain
Property Partnerships to satisfy the conditions or otherwise
comply with the covenants and agreements set forth in this
Agreement or to consummate the Reorganization. Nothing contained
herein shall obligate FDC to commit any act or do any thing
which, in the reasonable opinion of counsel, would cause FDC to
violate any fiduciary obligation to any Property Partnership or
its partners, or to take any action in violation of any
partnership agreement of any Property Partnership or any other
agreement relating thereto. Subject to the foregoing, FDC shall
use its reasonable best efforts to obtain all required consents
and to cause the obligations hereunder to be performed; provided,
however, that except for the direct obligations of FDC under this
Agreement, (i) FDC shall not be required to expend any of its own
corporate funds or bring any legal action in connection with
obtaining such consents or causing such performance, and (ii) FDC
will have no liability whatsoever to MAAC or MAALP for failure to
obtain such consents or cause such performance.
6.18 Tax Covenants.
6.18.1 Transfer of Assets after Merger. Without the
advance written consent of the Contingent Value Representative
for a period of two years after consummation of the Merger, MAAC
shall not (i) transfer to MAALP or any other entity that is not a
Qualified REIT Subsidiary within the meaning of Section 856(i) of
the Code any of the Assets received by MAAC in connection with
the Merger except to the extent described in the Steps
Memorandum, or (ii) otherwise dispose of any such Asset in a
taxable transaction except in the Ordinary Course of Business.
6.18.2 Election under IRS Notice 88-19. In its first
federal income tax return after consummation of the
Reorganization, MAAC shall make an election under IRS Notice 88-
19 to apply the principles of Section 1374 of the Code to defer
the recognition of any "built-in gain" of FDC to which MAAC
succeeds by reason of the Merger.
6.18.3 Services to Residents. To the extent that the
Parties determine that any services currently provided to the
residents and tenants of the Properties would be non-customary
services, and such services would, in the reasonable judgment of
the tax advisors to FDC and MAAC, after Closing jeopardize MAAC's
qualification as a REIT under the Code for 1997 or subsequent tax
years, then FDC shall cooperate in good faith with MAAC and MAALP
to restructure any non-customary services in such manner that
such services would not jeopardize MAAC's REIT qualification.
6.19 FDC ERISA Compliance. FDC shall take all action
reasonably requested by MAAC to cause each employee benefit plan
listed on Schedule 7.1.16, including, without limitation, its
"phantom stock" plan and any 401(k) benefit plan, to comply in
all material respects with the provisions of ERISA and the Code.
6.20 Revisions to MAALP Partnership Agreement. On or before
the Closing and prior to the execution thereof, MAAC and MAALP
shall cause the MAALP Partnership Agreement to be revised to
reflect the following, with such revisions to be reasonably
acceptable to the Parties: (i) a prohibition on the sale of any
of the Properties (except Cash-Out Properties) owned by MAALP,
directly or indirectly through interests in Property
Partnerships, for a period of two (2) years after the Closing;
(ii) the agreement of MAAC, as the general partner of MAALP, to
use its reasonable best efforts to cause MAALP to effect all
dispositions of the foregoing Properties pursuant to non-taxable
exchanges in accordance with Section 1031 or any successor
provision of the Code; (iii) the addition of a provision granting
to any limited partner of MAALP the right to elect to be
obligated to restore any negative balance in such partner's
capital account (up to a maximum amount designated by such
partner) upon the liquidation of such partner's interest in the
Partnership; (iv) revisions to certain provisions to properly
reflect the allocation of profits and losses among the partners
of MAALP; (v) the agreement of MAAC, as the general partner of
MAALP, to use its reasonable best efforts to manage and operate
the assets of MAALP, and to make distributions of "Distributable
Cash" (as defined in the MAALP Partnership Agreement) from time
to time, so as to distribute to the limited partners of MAALP an
amount equal to the product of (x) the cash dividend per Share of
Common Stock of MAAC (including any dividend designated as a
capital gain dividend pursuant to Section 857(b)(3)(C) of the
Code) multiplied by (y) the number of Shares of Common Stock of
MAAC which would be issuable to limited partners of MAALP upon
the exercise of Redemption Rights with respect to all Units held
by the limited partners; and (vi) a clarification that the
definition of the "REIT Shares Amount" described therein shall be
adjusted in the event MAAC declares or pays a stock dividend,
subdivides its Common Stock, or combines its Common Stock into a
smaller number of Shares.
ARTICLE 7: REPRESENTATIONS, WARRANTIES AND
FURTHER COVENANTS OF FDC
FDC hereby represents, warrants and covenants to MAAC and
MAALP as of the date of this Agreement and the Closing as
follows. All representations made in this Article 7 shall
survive the Closing for a period of one (1) year. All
representations that are made "to FDC's knowledge" means to the
actual knowledge of the individuals listed on Schedule 7.0
attached hereto without any duty or obligation to inquire as to
such matters. FDC represents that such individuals are the
appropriate individuals who, in the course of their duties, would
normally be aware of material issues and facts affecting the
Properties, the Other Assets, the Property Partnerships and FDC.
All representations and warranties with respect to the Rent Roll
are made as of September 1, 1997.
7.1 As to FDC and the Property Partnerships.
7.1.1 Due Incorporation, etc. FDC and each Property
Partnership is duly organized, validly existing and in good
standing under the Laws of the State of Delaware, Georgia,
Massachusetts or Tennessee, as applicable, with all requisite
power and authority to own, lease, operate and sell their assets
and to carry on their businesses as they are now being conducted.
FDC and each Property Partnership is in good standing as a
foreign entity authorized to do business in each jurisdiction
where they engage in business, except to the extent such
violation or failure does not cause or is not reasonably expected
to cause a Material Adverse Effect. Neither FDC (except for its
interests in the Property Partnerships) nor any Property
Partnership will hold as of the Closing any interest in any
security issued by any other Person. The states in which each
Property Partnership is qualified to do business are listed on
Schedule 7.1.1(b). The parties understand that certain Property
Partnerships may terminate for tax purposes, pursuant to the
applicable tax laws, upon consummation of the Reorganization.
7.1.2 Due Authorization; Consents; No Violations.
(a) FDC has full power and authority (subject to receipt of
the consents referred to in Sections 7.1.2(b)) to enter into this
Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance by FDC of this Agreement
have been, and the Transaction Documents to be executed and
delivered by it pursuant to this Agreement shall be, duly and
validly approved by FDC and the FDC Shareholders, and no other
proceeding on the part of FDC is necessary to authorize this
Agreement and the transactions contemplated hereby, other than
obtaining the consents set forth on Schedule 7.1.2(b)). This
Agreement has been duly and validly executed and delivered by FDC
and, assuming due authorization, execution and delivery of this
Agreement by MAAC and MAALP, this Agreement constitutes, and
(subject to the receipt of the consents set forth on Schedule
7.1.2(b))the Transaction Documents to be executed and delivered
by FDC pursuant to this Agreement when executed will constitute,
valid and binding obligations of FDC enforceable in accordance
with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium,
reorganization, or similar laws or court decisions from time to
time in effect that affect creditors' rights generally and by
legal and equitable limitations on the availability of specific
remedies.
(b) Schedule 7.1.2(b) sets forth with specificity each and
every consent to be obtained by FDC and/or each Property
Partnership in respect of the Reorganization and transactions
contemplated hereby. Except for obtaining the consents set forth
on Schedule 7.1.2(b), no consents, waivers, exemptions or
approvals of, or filings or registrations by FDC with, any
Government Entity or any other Person not a party to this
Agreement are necessary in connection with the execution,
delivery and performance by FDC of this Agreement or the
consummation of the transactions contemplated hereby except to
the extent the failure to obtain the same does not cause or is
not reasonably expected to cause a Material Adverse Effect on FDC
or the Reorganization.
(c) Upon obtaining those consents set forth on Schedule
7.1.2(b) and (assuming receipt of such consents) except to the
extent same does not cause or is not reasonably expected to cause
a Material Adverse Effect, the execution, delivery and
performance by FDC of this Agreement and the Transaction
Documents to be executed, delivered and performed by FDC pursuant
hereto, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (i) violate any Order
applicable to or binding on FDC, any of the Assets, or any
Property Partnership or its assets; (ii) violate any Law; (iii)
violate or conflict with, result in a breach of, constitute a
default (or an event which with the passage of time or the giving
of notice, or both, would constitute a default) under, permit
cancellation of, or result in the creation of any Lien upon any
of the Assets or any of the assets of any Property Partnership
under, any Contract to which FDC or any Property Partnership is a
party or by which FDC, any of the Assets, or any Property
Partnership or its assets, are bound; (iv) permit the
acceleration of the maturity of any indebtedness of FDC or any
Property Partnership, or any indebtedness secured by the Assets
or any Property Partnership's assets; or (v) violate or conflict
with any provision of FDC's Articles of Incorporation or Bylaws
or any of the respective limited partnership agreements of the
Property Partnerships.
7.1.3 FDC Financial Statements. Schedule 7.1.3 contains
true, complete and accurate copies of the FDC Financial
Statements. The FDC Financial Statements have been prepared in
accordance with generally accepted accounting principals,
consistently applied, and on that basis present fairly the
combined financial position and assets and Liabilities of the
entities and Properties included therein (including the Property
Partnerships) as going concerns, and the combined results of the
operations, changes in partners' and owners' equity, and cash
flows for the periods covered thereby and as of the dates
thereof. The FDC Financial Statements are in accordance with the
books and records of the entities included therein (including the
Property Partnerships), do not reflect any transactions which are
not bona fide transactions, and do not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements contained therein, in light of
the circumstances in which they were made, not misleading. The
FDC Financial Statements make full and adequate disclosure of and
provision for all material Liabilities of the entities included
therein (including the Property Partnerships) as of the dates
thereof. Except as set forth in the balance sheets included in
the FDC Financial Statements, there are no Liabilities (including
"off-balance sheet" Liabilities), whether due or to become due,
which have had or are reasonably likely to have a Material
Adverse Effect on FDC or any Property Partnership.
7.1.4 No Adverse Change. Except as listed on Schedule
7.1.4 and except for the Closing and Reorganization Steps
contemplated hereby, since the Recent Balance Sheet Date, there
has not been (i) any change in FDC or any Property Partnership
which would cause or reasonably be expected to result in a
Material Adverse Effect on FDC or the Property Partnership, (ii)
any material loss, damage or destruction to any of the Assets or
any assets of any Property Partnership (whether or not covered by
insurance) or any other event or condition which has had or could
have a Material Adverse Effect on FDC or the Property
Partnership, (iii) any one indebtedness in excess of $50,000 or
total indebtedness in excess of $250,000 incurred by FDC relating
to, or taking as security any interest whatsoever in, the Assets,
except as permitted in Section 6.2 hereof, (iv) any one
indebtedness in excess of $50,000 or total indebtedness in excess
of $250,000 incurred by any Property Partnership, except as
permitted in Section 6.2 hereof, (v) any Contract or other
transaction entered into by FDC or any Property Partnership
relating to, or otherwise affecting in any way, their respective
businesses or the operation thereof, other than in the Ordinary
Course of Business or as permitted in Section 6.2 hereof, (vi)
any sale, lease or other transfer or disposition of the Assets or
of any assets of any Property Partnership, or any cancellation of
any debts or claim of FDC or any Property Partnership, except in
the Ordinary Course of Business or as permitted in Section 6.2
hereof, and (vii) any changes in the accounting systems, policies
or practices of FDC or any Property Partnership. Since the
Recent Balance Sheet Date, FDC's and each Property Partnership's
business has been conducted in all material respects only in the
Ordinary Course of Business.
7.1.5 Title to Assets. FDC has good and marketable title
to all of the Assets other than the Real Properties (which is
addressed in Section 7.2.1), free and clear of any Lien, other
than Permitted Exceptions.
7.1.6 Leased Real Property. There are no leases pursuant
to which FDC or any Property Partnership holds any real property
used in connection with their respective businesses.
7.1.7 Leased Personal Property. Schedule 7.1.7 lists all
leases pursuant to which FDC or any Property Partnership holds
equipment, vehicles, furniture or any other item of personal
property used in connection with their respective businesses.
All of the personal property leased by FDC or any Property
Partnership under such leases is presently utilized by FDC or
such Property Partnership in the Ordinary Course of Business.
FDC has made available to MAAC true and complete copies of all
such leases.
7.1.8 Intellectual Property. There are no trade names,
trademarks, service marks or copyrights (or any registrations
with any Government Entity of, or applications for registration
pending with respect to, any of the foregoing) owned or licensed
by FDC or any Property Partnership that are material to the
conduct of FDC's or any Property Partnership's business. FDC has
no knowledge of any allegation or assertion that FDC or any
Property Partnership has infringed upon any trade name,
trademark, service xxxx or copyright (or any pending or actual
registration thereof) of any other Person.
7.1.9 Existing Debt. There are no defaults (and no FDC
Affiliate has received any notice of a default asserted by any
lender that has not been cured) under the Existing Debt, or facts
or circumstances which with the passage of time or the giving of
notice, or both, would result in such a default, except to the
extent such a default does not cause and is not reasonably
expected to cause a Material Adverse Effect on FDC or any
Property Partnership or the Reorganization. The aggregate
principal balances outstanding under the Existing Debt and the
applicable transfer charges and assumption fees, and prepayment
charges and penalties are set forth on the Debt Schedule.
7.1.10 Contracts. Except for Ordinary Contracts, the ML
Agreement and the Leases described on the Rent Roll, the items
(collectively, the "Scheduled Contracts") listed on Schedules
1.1.1 (Acquisition Contracts), 1.1.29 (Construction Contracts),
1.1.33 (Debt Schedule), 1.1.36 (Development Contracts), 1.1.64(a)
(the HAP Contracts), 1.1.67 (Intercompany Loans), 1.1.81
(Management Contracts), 7.1.7 (Leased Personal Property), 7.1.13
(Insurance Policies), 7.1.20 (Commissions), and 7.1.22 (Property
Partnership Agreements) include all of the Contracts of the
following types (i) to which FDC is a party or is bound and which
MAAC or MAALP is assuming, (ii) to which any Asset is subject or
bound, (iii) to which any Property Partnership is a party or
bound, or (iv) to which any asset of any Property Partnership is
subject or bound:
(a) all property management agreements, asset
management agreements, and development agreements;
(b) all partnership agreements;
(c) any Contract of any kind with any partner of FDC
or of any Property Partnership or any Affiliate of such
partner;
(d) any Contract with a dealer, broker, investment
banking firm, leasing agency, advertising agency or Person
engaged in sales, or promotional activities;
(e) any Contract of any nature which involves an
unperformed commitment in excess of, or services having a
value in excess of, $25,000;
(f) any Contract pursuant to which FDC or any Property
Partnership has made or will make loans or advances, or has
or will have incurred debts or become a guarantor,
indemnitor or surety or pledged their credit on or otherwise
become contingently or secondarily liable with respect to
any undertaking or obligation of any other Person (except
for the negotiation or collection of negotiable instruments
in transactions in the Ordinary Course of Business);
(g) any indenture, credit agreement, loan agreement,
note, letter of credit, mortgage, security agreement, lease
of real property or personal property, deed of trust or
other agreement for financing;
(h) any Contract involving a partnership, joint
venture or other cooperative undertaking;
(i) any Contract involving any restrictions relating
to FDC or a Property Partnership with respect to the
geographical area of operations or scope or type of business
of FDC or a Property Partnership;
(j) any power of attorney or agency agreement or
arrangement with any Person pursuant to which such Person is
granted the authority to act for or on behalf of FDC or any
Property Partnership;
(k) any Contract under which the requirements for
performance extend beyond 60 days from the date of this
Agreement; and
(l) all other Contracts relating to FDC's or any
Property Partnership's business not made in the Ordinary
Course of Business which are to be performed at or after the
date of this Agreement.
FDC has made available to MAAC true and complete copies of each
Scheduled Contract. All such Scheduled Contracts are duly
authorized and enforceable in accordance with their terms by FDC
or the relevant Property Partnership, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization, similar laws or court
decisions from time to time in effect that affect creditors'
rights generally and by legal and equitable limitations on the
availability of specific remedies, and except to the extent such
unenforceability does not cause or is not reasonably expected to
cause a Material Adverse Effect.
7.1.11 Management Contracts. Except as disclosed on
Schedule 7.1.11, to FDC's knowledge, no other party to a
Management Contract has rights of set-off or counterclaim against
FDC under such Management Contract, and FDC is not in default
thereunder nor is FDC aware of any fact or circumstance which,
with notice or passage of time, or both, would constitute a
default by FDC under any Management Contract, except to the
extent such default does not cause and is not reasonably expected
to cause a Material Adverse Effect on FDC. Except as set forth
on Schedule 7.1.11, FDC has not received notice of termination of
any Management Contract from any other party thereto, nor is FDC
aware that any other party presently intends to terminate, or
contemplates terminating a Management Contract.
7.1.12 Permits. FDC and each Property Partnership holds
all of the permits, certificates, franchises, rights, variances,
interim permits, approvals, authorizations or consents, whether
federal, state, local or foreign, currently necessary for the
lawful operation of FDC's or any Property Partnership's business,
except for those the absence of which would not cause and would
not be reasonably expected to cause a Material Adverse Effect on
FDC or the Property Partnership.
7.1.13 Insurance Policies. Schedule 7.1.13 is a list of
all casualty, liability, business interruption and other
insurance policies insuring against loss of the assets held by
FDC and each Property Partnership. All such insurance policies
are in full force and effect.
7.1.14 Tax Matters.
(a) No Unpaid Taxes. There are no material unpaid
Taxes arising from the operation of FDC's or any Property
Partnership's business (or as a result of FDC or any
Property Partnership succeeding to the Liabilities of any
other Person by operation of law pursuant to a purchase of
assets or stock, merger, consolidation or similar
transaction) during any period prior to the Closing Date for
which MAAC, MAALP or any Property Partnership will become
liable or which will become a Lien against any of the Assets
following the Closing other than Taxes which are not yet
delinquent that are accrued on the FDC Financial Statements.
(b) Tax Audits. Except as set forth on Schedule
7.1.14, neither FDC nor any Property Partnership has
received from the IRS or from the Tax authorities of any
state, county, local or other jurisdiction (i) any notice of
underpayment of Taxes or other deficiency which has not been
paid, (ii) any objection to any Tax return or report filed
by FDC or any Property Partnership, nor (iii) any notice of
audit with respect to any Tax, nor is FDC or any Property
Partnership currently the subject of any such audit. There
are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any Tax return
or report filed by either FDC or any Property Partnership.
(c) Foreign Person. FDC and each Property Partnership
is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Code, and FDC will furnish to
MAAC, if requested by MAAC, an affidavit in form
satisfactory to MAAC confirming the same.
(d) Representations Relative to MAAC's Continued REIT
Qualification. To FDC's knowledge:
(i) FDC does not have, and at Closing will not
have, any earnings and profits accumulated to which
MAAC would succeed pursuant to Section 381 of the Code
by reason of the Merger.
(ii) the apartment units at each Property (other
than corporate and guest units) contain substantially
the same personal property. With respect to each
Property for each taxable year since 1993 (or such
shorter period as a Property shall have been owned by
FDC or a Property Partnership), the ratio of (i) the
average of the adjusted bases of the personal property
contained in the Property at the beginning and end of
such taxable year to (ii) the average of the aggregate
adjusted bases of both the real property and personal
property comprising the Property at the beginning and
at the end of such taxable year (the "Adjusted Basis
Ratio") did not exceed 15% and will not exceed 15% in
future taxable years.
(iii) FDC and each Property Partnership has not
received or accrued and will not receive or accrue,
directly or indirectly, any rent, interest, contingency
fees, or other amounts that were determined in whole or
in part with reference to the income or profits derived
by any person excluding amounts received (i) as rents
that are (A) based solely on a percentage or
percentages of receipts or sales and the percentage or
percentages are fixed at the time the leases are
entered into, are not renegotiated during the term of
the leases in a manner that has the effect of basing
rent on income or profits, and conform with normal
business practices, or (B) attributable to qualified
rents from subtenants as provided by Section 856(d)(6)
of the Code, and (ii) as interest that was (A) based
solely on a fixed percentage or percentages of receipts
or sales, or (B) attributable to qualified rents
received or accrued by debtors as provided by
Section 856(f)(2) of the Code.
(iv) FDC and the Property Partnerships have held,
and will hold, the Properties (and all other assets of
such entities), excluding the Resale Properties for
investment purposes and not as (i) stock in trade or
other property of a kind which would be includible in
inventory if on hand at the close of the taxable year,
or (ii) property held primarily for sale to customers
in the ordinary course of the trade or business of any
such entity.
(e) Partnership Status. Each Property Partnership is
qualified, and since the date of its formation has been
qualified, to be treated as a partnership for federal income
tax purposes.
(f) Other. Except as set forth on Schedule 7.1.14,
since January 1, 1994, no Property Partnership has (i)
applied for any Tax ruling, or (ii) entered into a closing
agreement with any Taxing authority.
7.1.15 Allocation of Consideration and Payments. Assuming
that the requisite number or percentage interests of the FDC
Shareholders and partners of the Property Partnerships required
by law or the FDC Articles of Incorporation or the partnership
agreement of any Property Partnership (as described in Section
7.1.2(b)) consent in writing to the transactions contemplated by
this Agreement, the allocation of the Merger Shares and Units to
be delivered as consideration in the Reorganization as described
in Article 2 of this Agreement or set forth elsewhere in the
Transaction Documents will not violate (or when any such
Transaction Document is executed will not violate) any Law, the
FDC Articles of Incorporation, or the partnership agreement of
any Property Partnership, and neither MAAC nor MAALP shall have
any Liability as to any such matters. Except as set forth on
Schedule 7.1.15, no other Person holds any options, warrants,
securities or other rights entitling, or which if exercised would
entitle, them to receive Merger Shares or Units.
7.1.16 Employee Benefit Plans.
(a) Disclosure. Schedule 7.1.16 identifies each
employee benefit plan, fund, program, contract, policy or
arrangement maintained or contributed to by FDC and covering
or benefiting employees of FDC, former employees of FDC, or
dependents of employees or former employees of FDC,
including, but not limited to, all "employee benefit plans,"
as defined in Section 3(3) of ERISA, and specifically
including each retirement, pension, profit sharing, stock
bonus, savings, thrift, bonus, medical, health,
hospitalization, welfare, life insurance, disability,
accident insurance, group insurance, sick pay, holiday and
vacation programs, executive or deferred compensation plans
or contracts, stock purchase, stock option or stock
appreciation rights plans or arrangements, employment and
consulting contracts, and severance agreements or plans
(collectively, the "Employee Benefit Plans"). With respect
to each of the Employee Benefit Plans:
(1) No such plan has been terminated so as to
subject, directly or indirectly, MAAC, MAALP, or any
Exchange Partnership, or the Assets to any Liability or
the imposition of any Lien and the consummation of the
Reorganization will not result in the occurrence of any
such event, except as referred to in Section 6.19;
(2) No condition or event currently exists or
currently is expected to occur that could subject,
directly or indirectly, MAAC, MAALP, or any Exchange
Partnership, or the Assets to any Liability or the
imposition of any Lien, except as referred to in
Section 6.19;
(3) If any such plan were terminated, neither
MAAC, MAALP, nor any Exchange Partnership, nor the
Assets would be subject, directly or indirectly, to any
Liability or the imposition of any Lien, except as
referred to in Section 6.19;
(4) No such plan is a "multiemployer plan" or
"defined benefit plan" (as defined in Section 4001 of
ERISA), and neither FDC nor any member of FDC's
controlled group (as defined in Section 4001(a)(14) of
ERISA) has ever contributed nor been obligated to
contribute to any such plan, nor is FDC or any such
member of FDC's controlled group either actually or
contingently so obligated; and
(5) There have been no "prohibited transactions"
within the meaning of Section 406 or 407 of ERISA or
Section 4975 of the Code for which a statutory or
administrative exemption does not exist, and the
consummation of the transactions contemplated by this
Agreement will not result in any prohibited
transaction.
(6) Each Employee Benefit Plan complies in all
material respects and has been operated and
administered in all material respects in accordance
with its terms and all applicable requirements of all
laws and regulations, including, without limitation,
all reporting and disclosure requirement under ERISA
and/or the Code, except as referred to in Section 6.19.
(7) To FDC's knowledge, there is no basis for the
assertion by the IRS that any Employee Benefit Plan
which is intended to be "tax qualified" under the Code
is not so qualified.
7.1.17 Other Employee Matters. FDC has and currently is
conducting its business in full compliance with all Laws relating
to employment and employment practices, terms and conditions of
employment, wages and hours and nondiscrimination in employment,
except to the extent failure to do so does not cause or is not
reasonably expected to cause a Material Adverse Effect. No
employee of FDC is represented by any union, nor is FDC a party
to any collective bargaining agreement. To FDC's knowledge,
there is no union organization activity occurring or contemplated
with respect to its employees.
7.1.18 No Defaults or Violations. Except as disclosed on
Schedule 7.1.18 and except to the extent any default or non-
compliance does not cause or is not reasonably expected to cause
a Material Adverse Effect as to FDC or a Property Partnership:
(a) neither FDC nor any Property Partnership has materially
breached any provision of, nor is in material default under the
terms of, any Contract to which it is a party or under which it
has any right or by which it is bound or which relates to its
business, the Assets or the assets of any Property Partnership
and, to FDC's knowledge, no other party to any such Contract has
breached such Contract or is in default thereunder (nor has FDC
or any Property Partnership waived any such default) in any
material respect, and no event has occurred and no condition or
state of facts exists which with the passage of time or the
giving of notice, or both, would constitute such a default or
breach by FDC or any Property Partnership, or to FDC's knowledge,
by any such other party, or give right to an automatic
termination or the right of discretionary termination thereof;
(b) FDC has complied in all material respects with its
obligations, and has not breached any of its duties, under the
respective limited partnership agreements of the Property
Partnerships as to which FDC is a partner; (c) to FDC's
knowledge, each of the Assets and each Property Partnership is in
material compliance with, and no material violation exists under,
any Law or Order applicable in any way to FDC, any of the Assets
or any Property Partnership; and (d) no notice from any
Government Entity has been received by FDC or any Property
Partnership claiming any violation of any Law (including any
building, zoning or other ordinance) or Order, or requiring any
work, construction or expenditure.
7.1.19 Litigation. Except for those matters described in
Schedule 7.1.19 which, to FDC's knowledge, do not have a Material
Adverse Effect on FDC, a Property Partnership or the transactions
contemplated by this Agreement, there is no Litigation pending
or, to FDC's knowledge, threatened against any of the properties
or businesses of FDC or any Property Partnership. Each matter
listed on Schedule 7.1.19 in the nature of a personal injury
claim, whether based on a claim of negligence or intent, is
within the coverage limits of an insurance policy listed on
Schedule 7.1.13, and the insurance carrier with respect to each
such matter has assumed the defense thereof and has no ability
under the applicable insurance contract to recover any amount
from the insured party except deductible amounts and losses in
excess of coverage limits. Except as disclosed on Schedule
7.1.19, neither FDC, any of the Assets, any Property Partnership
nor any asset of any Property Partnership is subject to any Order
which has had or could have a Material Adverse Effect on FDC, a
Property Partnership or the transactions contemplated by this
Agreement.
7.1.20 Brokers. Neither MAAC, MAALP nor any Affiliate of
either has or shall have any Liability or otherwise suffer or
incur any loss as a result of or in connection with any brokerage
or finder's fee or other commission of any Person retained by FDC
in connection with the transactions contemplated by this
Agreement or for any other transaction involving the Properties,
except for the ML Agreement and the items described on Schedule
7.1.20.
7.1.21 Insolvency. Neither FDC nor any Property
Partnership has filed, nor has FDC or any Property Partnership
received notice of the filing by any other Person of, a petition
in bankruptcy or any other insolvency proceeding, or for the
reorganization or appointment of a receiver or trustee, with
respect to FDC or any Property Partnership, nor has FDC or any
Property Partnership made an assignment for the benefit of
creditors, nor filed a petition for arrangement, nor entered into
an arrangement with creditors, nor admitted in writing its
inability to pay debts as they become due.
7.1.22 As to the Property Partnerships Only. Schedule
7.1.22 contains a true, complete and accurate list of the
respective limited partnership agreements (including, without
limitation, the execution date of each original agreement and
each amendment thereto) for the Property Partnerships. FDC has
made available to MAAC true and complete copies of all such
limited partnership agreements, together with any and all
amendments thereto. Each equity owner of the respective Property
Partnerships (except the Cash-Out Partnerships) is set forth on
the Allocation Schedule and in the Steps Memorandum and, to FDC's
knowledge, no other Person holds, or has held any type of equity
interest, including, without limitation, options, warrants, and
securities, or other rights in the Property Partnerships. Except
for the Properties and for the properties described on Schedule
7.1.22, no Property Partnership has ever owned, or is a party to
an outstanding contract for the purchase of, real property.
Except as disclosed on Schedule 7.1.22, no Property Partnership
has succeeded to the Liabilities of any other Person by operation
of Law pursuant to a purchase of assets or stock, merger,
consolidation or similar transaction.
7.2 As to the Properties.
7.2.1 Title. FDC or a Property Partnership has good and
marketable title to each Property, in fee simple, free and clear
of all Liens and encroachments, and free and clear of all
tenancies and adverse or other rights of possession, subject only
to the Permitted Exceptions. To FDC's knowledge, each Property
constitutes a separate and legally subdivided parcel and a
separate tax parcel.
7.2.2 Purchase Agreement. No Property is subject to any
outstanding agreement of sale, option or other right of third
parties to acquire any interest therein, except pursuant to this
Agreement. Neither FDC nor any Property Partnership has any
outstanding option, contract or right of first refusal to
purchase any real or personal property except for the Acquisition
Contracts.
7.2.3 Compliance with Laws; Zoning. To FDC's knowledge,
each Property, and the Real Property comprising same, is legally
and properly zoned for its intended use, and all present uses
and operations thereof comply with all applicable zoning, land-
use, building, fire, health, labor, safety, subdivision and other
Laws (except the Americans with Disabilities Act), all Orders,
and all deed or other title covenants and restrictions applicable
thereto, except to the extent the failure to do so does not cause
and is not reasonably expected to cause a Material Adverse Effect
on such Property. FDC or a Property Partnership has received a
certificate of occupancy (or other comparable governmental
approval), to the extent required by any Governmental Entity, for
all improvements on the Properties except for improvements on
Development Properties which remain under construction. FDC has
not received notice from any Person that any Property or the
operation thereof fails to comply with the Americans with
Disabilities Act. Neither FDC nor any Property Partnership has
made any application or agreement with any Government Entity or
other Person with respect to any variance or exception from
zoning, building or other Laws that has not been disclosed to
MAAC in writing. To FDC's knowledge, the use of each Property is
consistent with any land use designation for such Property under
any comprehensive plan or plans applicable thereto, and any
concurrency requirements have been satisfied.
7.2.4 Accuracy of Documents and Information. FDC has
delivered or made available to MAAC true and complete copies of
all Surveys, engineering reports, inspection reports, maintenance
plans and other documents relating to each Property which, to
FDC's knowledge, are in the possession or control of FDC or any
Property Partnership. The documents and information delivered to
MAAC at the Closing will be all of the available documents and
information relevant, to FDC's knowledge, to the condition and
operation of each Property in any material respect, will be true
and correct copies or originals, and will be in full force and
effect, without default by FDC or any Property Partnership, as
applicable, or, to FDC's knowledge, by any other party thereto,
and without any right of set-off, except as disclosed on Schedule
7.2.4 and except to the extent such default, set-off, or other
fact or circumstance does not cause and is not reasonably
expected to cause a Material Adverse Effect on the applicable
Property.
7.2.5 Fees; Assessments; Condemnation. Except as disclosed
on the Development Budget and Schedule, to FDC's knowledge there
are no outstanding and unpaid impact fees or other charges in
connection with any Property; there are not pending or, to FDC's
knowledge, threatened any special assessments or obligations for
roads and other improvements with respect to any Property or any
part thereof; and, except for matters described on Schedule 7.2.5
which do not or are not expected to have a Material Adverse
Effect on such Property, there is not pending or to FDC's
knowledge, threatened any condemnation, expropriation,
requisition (temporary or permanent) or similar proceeding with
respect to any Property or any part thereof (including access
thereto or any easement benefiting the Property).
7.2.6 Insurance Violations; Soil. To FDC's knowledge, there
are no violations of any applicable insurance underwriting
guideline relating to safety, structural, mechanical, or other
physical systems or portions of any Property, except to the
extent such violation does not cause and is not reasonably
expected to cause a Material Adverse Effect on the applicable
Property. To FDC's knowledge, there are no soil or subsurface
conditions located on any Property which would materially impair
the useability of any Property for continuation of the current
use or the contemplated redevelopment.
7.2.7 Utilities; Access. To FDC's knowledge, all water,
sewer, gas, electric, telephone, and storm water and drainage
facilities and all other utilities required by Law and in the
normal operation of each Property are available and are installed
across public property or valid easements to the property lines
of such Property, are all connected with valid permits, and are
adequate to service such Property for their current use and to
permit full compliance with all requirements of Law, except to
the extent such failure does not cause and is not reasonably
expected to cause a Material Adverse Effect on the applicable
Property. All permits and connection fees which are currently
due and payable are fully paid or accrued, and there are no such
amounts which are deferred or payable under future installments.
To FDC's knowledge, all points of access, both pedestrian and
vehicular, to and from public roads currently used at each
Property are adequate for the current use and operation of such
Property in FDC's reasonable judgment and, to FDC's knowledge, in
accordance with all Laws, except to the extent such failure does
not cause and is not reasonably expected to cause a Material
Adverse Effect on such Property, and to FDC's knowledge, there is
no existing fact or condition which would currently result, or
with the passage of time or the giving of notice, or both, would
result, in the termination of such utility services or of such
access.
7.2.8 Permits. Except with regard to environmental matters
which are addressed exclusively by Sections 7.2.12 and 7.2.13
below, to FDC's knowledge, all licenses, building, and other
permits, certificates of use and occupancy, easements, and rights-
of-way, including proof of dedication, have been obtained as
required by all Government Entities having jurisdiction over any
Property in connection with any construction, renovations,
expansions, or other improvements at such Property and in
connection with the present use and operation of such Property,
except to the extent such failure does not cause and is not
reasonably expected to cause a Material Adverse Effect on the
applicable Property.
7.2.9 No Default. Neither FDC nor any Property
Partnership, if applicable, is in default with respect to any of
its Contracts or Liabilities pertaining to any Property
(including, without limitation, all Leases, the Existing Debt or
other instruments related thereto), nor are there any facts or
circumstances which with the passage of time or the giving of
notice, or both, would constitute or result in any such default,
except to the extent such default does not cause and is not
reasonably expected to cause a Material Adverse Effect on the
applicable Property; and, subject to the receipt of all required
consents to the following, neither this Agreement, nor anything
provided to be done hereunder, including, without limitation, the
transfer, assignment, and sale of certain of the Properties,
violates or shall violate any written or oral Contract to which
FDC or such Property Partnership is a party on the date hereof
which affects any Property or any part thereof on the date
hereof, except to the extent such violation does not cause and is
not reasonably expected to cause a Material Adverse Effect on the
applicable Property.
7.2.10 Use of Property. FDC has not misrepresented any
fact which would prevent MAAC, MAALP or an Exchange Partnership
from operating each Property after the Closing in the manner in
which such Property is currently being used and operated in all
material respects. The Properties comprise all multifamily
residential real property and other real property which is or
could reasonably be expected to be developed by FDC for
multifamily residential use owned by FDC and its Affiliates.
7.2.11 Contract Payments. At the time of the Closing, any
and all improvements to each Property and any services provided
by any Person and related to such Property (the nonpayment of
which could result in the imposition of a Lien upon such
Property) will have been fully paid for, except for the Assumed
Liabilities.
7.2.12 Environmental Matters-Properties. Certain
Properties as set forth on Schedule 7.2.12 have been the subject
of an Environmental Assessment by an environmental consultant to
FDC or the Property Partnership owning such Property, which
consultant prepared a report concerning the environmental
condition of the Property. A list of all such Environmental
Assessment Reports obtained by FDC or the Property Partnerships
is attached as Schedule 7.2.12 (the Environmental Assessment
Reports described on Schedule 7.2.12 and any reports, studies,
tests, and analysis obtained by MAAC as of the date hereof are
herein collectively referred to as the "Environmental
Assessments"). The parties acknowledge that neither FDC nor any
Property Partnership possesses any expertise with regard to
Materials of Environmental Concern, and accordingly, the
following representations and warranties are based exclusively on
the Environmental Reports.
(a) Except for those matters set forth in the
Environmental Assessments, to FDC's knowledge, neither FDC
nor any Property Partnership or any Property are presently
in ongoing violation of any applicable Environmental Law
which could subject the owner or operator to any fine or
require any remedial action;
(b) Except for those matters set forth in the
Environmental Assessments and except for storage and usage
of ordinary household materials and cleaning supplies which,
to FDC's knowledge, comply with applicable law, to FDC's
knowledge, neither FDC nor any Property Partnership, nor any
tenant at any Property, have stored or used any Materials of
Environmental Concern at any Property;
(c) To FDC's knowledge, neither FDC nor any Property
Partnership have received any notice, complaint, warning
letter or notice of violation from any Government Authority
or any other person that FDC or any Property Partnership is
in violation of any Environmental Law or environmental
permit or that they are responsible (or potentially
responsible) for the assessment or remediation of any
release of any Material of Environmental Concern at, on or
beneath any Property;
(d) To FDC's knowledge, neither FDC nor any Property
Partnership are the subject of any actual or threatened
federal, state, local or private litigation involving a
claim of liability or a demand for damages arising out of
violation of any Environmental Law or from the release or
threatened release of any Material of Environmental Concern
at or beneath any Property;
(e) To FDC's knowledge, FDC and the Property
Partnerships have timely filed all reports required by any
applicable Environmental Law and have generated and
maintained all data, documentation, and records required
under any Environmental Law;
(f) Except for those matters set forth in the
Environmental Assessments and on Schedule 7.2.12(f), FDC has
no knowledge of any release or threatened release of a
Material of Environmental Concern, the presence of any
current or former drycleaning facility, the presence of any
current or former storage tanks, the presence of any
asbestos containing material, or the presence of any
condition or circumstance which could subject the owner or
operator of any Property to liability or claims under the
Environmental Laws or any private cause of action arising
out of an environmental condition;
(g) FDC has no knowledge of any existing or imminent
restriction on the ownership, occupancy, use, or
transferability of any Property arising out of any known
environmental condition or violation of any Environmental
Law; and
(h) Except as set forth in the Environmental
Assessments and on Schedule 7.2.12(f), to FDC's knowledge,
there are no environmental conditions present at any
Property which pose a risk to the environment or the health
or safety of any Person.
7.2.13 Environmental Matters - Previously Owned Properties.
With respect to each property previously, but not currently,
owned by FDC or any Property Partnership ("Previously Owned
Property"), FDC makes the representations and warranties set
forth in Section 7.2.12 as if such representations and warranties
were made as of the last day that such Previously Owned Property
was owned by FDC or any Property Partnership.
7.2.14 Rent Roll. The Rent Roll is true and correct in all
material respects.
7.2.15 Leases. FDC has made available to MAAC true,
correct and complete copies of all forms of resident Leases used
at the Properties. Such forms of resident leases are the only
forms of resident Leases currently used and in effect with
respect to the Properties. There are no inducements,
concessions, consideration or side agreements in favor of any
resident not expressly stated in the Leases or in the Rent Roll.
7.2.16 Development Properties. Schedule 7.2.16 contains
the budget and development schedule therefor prepared by or for
FDC for each of the Development Properties (collectively, the
"Development Budget and Schedule"). Except as set forth on
Schedule 7.2.16, to FDC's knowledge, each Development Property is
zoned for the lawful development and/or redevelopment thereon,
and FDC has obtained all permits, licenses, consents and
authorizations required for the current stage of development or
redevelopment thereon, the absence of which would have a Material
Adverse Effect on FDC or the applicable Development Property.
Except as set forth on Schedule 7.2.16, to FDC's knowledge, there
are no material impediments to or constraints on the development
or redevelopment of any Development Property, in all material
respects within the time frame and for the cost set forth in the
Development Budget and Schedule applicable thereto. In the case
of each Development Property, the development or redevelopment of
which has commenced, to FDC's knowledge, the costs and expenses
incurred in connection with such Development Property and the
progress thereof are consistent and in compliance in all material
respects with all aspects of the Development Budget and Schedule
applicable thereto. To FDC's knowledge, FDC has made available
to MAAC all feasibility studies, soil tests, due diligence
reports and other studies, test or reports performed by or for
FDC or otherwise in the possession of FDC, which relate to the
Development Properties.
7.2.17 Budgets and Projections. To FDC's knowledge, all
budgets and projections, including, without limitation, the
Capital Expenditure Budget and Schedule for each Property
represent FDC's reasonable good faith estimate of capital
expenditures anticipated to be made in each year covered by such
budget.
7.2.18 Construction Contracts and Development Contracts.
To FDC's knowledge, the Construction and Development Contracts
are in full force and effect, no party is in default thereunder,
nor are there any facts or circumstances which with the passage
of time or the giving of notice, or both, would result in any
such default, the absence of which would not have a Material
Adverse Effect on FDC or any applicable Property. To FDC's
knowledge, the cost of completing the Construction Contracts will
not exceed the guaranteed maximum amount payable to FDC under the
Construction Contracts.
7.2.19 Acquisition Properties. To FDC's knowledge, each
Acquisition Contract is enforceable by FDC and neither FDC, nor,
to FDC's knowledge, any other party thereto, is in default under
any Acquisition Contract. Without limiting the foregoing, except
for matters revealed in the environmental reports, copies of
which have been provided to MAAC or as otherwise disclosed to
MAAC in writing, FDC has no knowledge that the contract seller is
in breach of any representations and warranties made by it in any
Acquisition Contract. The Acquisition Contracts are assignable
to MAAC or MAALP, as applicable.
7.3 Accredited Investor Status. Except as set forth on
Schedule 7.3, to FDC's knowledge based upon investor
questionnaires received in connection with a potential initial
public offering of FDC Common Stock, all FDC Shareholders and
Property Partnership Limited Partners (except those limited
partners of the Cash-Out Partnerships) were at such time
"accredited investors" as defined by the SEC, and nothing has
come to FDC's attention since that time to indicate any of such
Persons no longer is an "accredited investor."
7.4 Accuracy of Statements. To FDC's knowledge, neither
this Agreement nor any document, instrument, schedule, exhibit,
statement, list, certificate or other information furnished or to
be furnished by or on behalf of FDC or any Property Partnership
to MAAC in connection with this Agreement or consummation of the
Reorganization contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein, in
light of the circumstances in which they are made, not
misleading.
7.5 Limitation on Representations. Except for the express
representations and warranties of FDC set forth in this
Agreement, MAAC and MAALP acknowledge and agree that the Assets
are being acquired in the Reorganization "as is, where is, and
with all faults" without any other representation or warranty by
FDC, the Property Partnerships, or any other individual or entity
and neither FDC, the Property Partnerships, nor any other
individual or entity has made any other express or implied
representation or warranty with respect to the Assets whatsoever,
and except for the representations and warranties expressly set
forth in this Agreement, MAAC and MAALP acknowledge that MAAC and
MAALP accept the Assets without relying on any other
representation or warranty whatsoever by FDC or any other Person,
and based solely upon MAAC's and MAALP's own inspections,
investigations and analyses of the Assets.
7.6 Limitation on Remedies. The representations and
warranties set forth in this Article 7 shall be true and correct
in all material respects on and as of the Closing Date with the
same force and effect as if made at that time; provided, however,
in the event that any of such representations and warranties is
proved to be false on or before the Closing Date as a result of
any change of circumstances or knowledge obtained by FDC and such
misrepresentation has a Material Adverse Effect and is disclosed
to MAAC and MAALP in writing, then MAAC's and MAALP's sole and
exclusive remedies hereunder shall be as follows: (i) to waive
such misrepresentation and close with no liability to FDC for
such misrepresentation; (ii) if such misrepresentation relates to
a Property, designate the affected Property as an Excluded
Property pursuant to Section 6.16 hereof, provided the Defective
Property Basket is not exceeded, or if the designation of such
affected Property as an Excluded Property would cause the
Defective Property Basket to be exceeded, terminate this
Agreement pursuant to Article 14 (including Section 14.3.1, if
applicable); or (iii) if such misrepresentation does not relate
to a Property, terminate this Agreement pursuant to Article 14
(including Section 14.3.1, if applicable).
ARTICLE 8: REPRESENTATIONS, WARRANTIES AND
FURTHER COVENANTS OF MAAC
MAAC hereby represents, warrants and covenants to FDC, for
the benefit of FDC and any Person receiving Merger Shares or
Units in the Reorganization as of the date of this Agreement and
(except with respect to outstanding capital stock as described in
Section 8.3.1) the Closing as follows. All representations made
in this Article 8 shall survive the Closing for a period of one
(1) year. All representations that are made "to MAAC's
knowledge" means to the actual knowledge of the individuals
listed on Schedule 8.0 attached hereto without any duty or
obligation to inquire as to such matters. MAAC represents that
such individuals are the appropriate individuals who, in the
course of their duties, would normally be aware of material
issues and facts affecting MAAC.
8.1 Due Incorporation, etc.
(a) MAAC is duly organized, validly existing and in
good standing under the Laws of the State of Tennessee, with
all requisite power and authority to own, lease, operate and
sell its assets and to carry on its business as it is now
being conducted. MAAC is in good standing as a foreign
entity authorized to do business in each jurisdiction where
it engages in business, except to the extent such violation
or failure does not cause or is not reasonably expected to
cause a Material Adverse Effect.
(b) MAAC owns all of the outstanding capital stock of
its subsidiaries listed on Exhibit 21 of MAAC's Form 10-K
annual report filed with the SEC for the fiscal year ended
December 31, 1996. Each such subsidiary is a "qualified
REIT subsidiary" within the meaning of Section 856(i) of the
Code. Except as set forth on Schedule 8.1(b) and except
for its interests in its subsidiaries, MAAC does not hold
any interest in any security issued by any other Person.
8.2 Due Authorization; Consents; No Violations.
(a) MAAC has full power and authority to enter into
this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and
performance by MAAC of this Agreement have been, and the
Transaction Documents to be executed and delivered by it
pursuant to this Agreement shall be, duly and validly
approved by MAAC, acting through its Board of Directors, and
no other proceeding on the part of MAAC is necessary to
authorize this Agreement and the transactions contemplated
hereby. This Agreement has been duly and validly executed
and delivered by MAAC and, assuming due authorization
(including the consummation of the matters described in the
foregoing sentence), execution and delivery of this
Agreement by MAALP and FDC, this Agreement constitutes, and
the Transaction Documents to be executed and delivered by
MAAC pursuant to this Agreement when executed will
constitute, valid and binding obligations of MAAC
enforceable in accordance with their respective terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization, similar
laws or court decisions from time to time in effect that
affect creditors' rights generally and by legal and
equitable limitations on the availability of specific
remedies.
(b) Except for an application to list the Shares
issuable pursuant to the transactions contemplated by this
Agreement on the New York Stock Exchange, no consents,
waivers, exemptions or approvals of, or filings or
registrations by MAAC with, any Government Entity or any
other Person, including the shareholders of MAAC, not a
party to this Agreement are necessary in connection with the
execution, delivery and performance by MAAC of this
Agreement or the consummation of the transactions
contemplated hereby, except to the extent the failure to
obtain the same does not cause or is not expected to cause a
Material Adverse Effect on MAAC or the transactions
contemplated by this Agreement.
(c) The execution, delivery and performance by MAAC of
this Agreement and the Transaction Documents to be executed,
delivered and performed by MAAC pursuant hereto, and the
consummation of the transactions contemplated hereby and
thereby, do not and will not (i) violate any Order
applicable to or binding on MAAC or its assets; (ii) violate
any Law; (iii) violate or conflict with, result in a breach
of, constitute a default (or an event which with the passage
of time or the giving of notice, or both, would constitute a
default) under, permit cancellation of, accelerate the
performance required by, or result in the creation of any
Lien upon any of MAAC's assets under, any contract or other
arrangement of any kind or character to which MAAC is a
party or by which MAAC or any of its assets are bound; (iv)
permit the acceleration of the maturity of any indebtedness
of MAAC, or any indebtedness secured by any of MAAC's
assets; or (v) violate or conflict with any provision of the
Charter or MAAC's bylaws.
8.3 Capitalization.
(a) The authorized capital stock of MAAC consists of
(i) 20,000,000 shares of Common Stock and (ii) 5,000,000
shares of preferred stock, of which as of the date hereof,
2,000,000 shares have been designated 9.5% Series A
Cumulative Preferred Stock ("Series A Preferred Stock").
The MAAC Exchange Act Reports set forth the Common Stock and
Series A Preferred Stock issued and outstanding as of the
dates thereof.
(b) No shares of MAAC's capital stock are entitled to
preemptive rights. Except as disclosed in the MAAC Exchange
Act Reports, in the Charter relating to the Series A
Preferred Stock, in the MAALP Partnership Agreement, in this
Agreement or on Schedule 8.3(b), there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital
stock of MAAC or any of its subsidiaries, or contracts or
other arrangements by which MAAC or any of its subsidiaries
is or may become bound to issue additional shares of capital
stock of MAAC or any of its subsidiaries. MAAC has
furnished to FDC true and correct copies of the Charter and
MAAC's Bylaws, as in effect on the date hereof.
(c) Except as set forth on Schedule 8.3(c) and
dividends and distributions in the Ordinary Course of
Business, MAAC has no obligation (contingent or otherwise)
to purchase, redeem or otherwise acquire any of its capital
stock or any interest therein or to pay any dividend or make
any other distribution in respect thereof.
(d) MAAC has no knowledge of any voting agreements,
voting trusts, stockholders' agreement, proxies or other
agreements or understandings that are currently in effect or
that are currently contemplated with respect to the voting
of any capital stock of MAAC.
(e) All of the outstanding securities of the Company
were issued in compliance with all applicable federal and
state securities laws.
8.4 Valid Issuance of Shares. The Merger Shares and the
Contingent Value Shares to be issued hereunder, when issued and
delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly authorized and
validly issued, fully paid and nonassessable and, based upon the
representations of FDC in this Agreement, will be issued in
compliance with all applicable federal and state securities laws.
The Common Stock issuable upon the exercise of the Redemption
Rights will be duly authorized and validly reserved for such
issuance, and, upon issuance in redemption of Units, will be duly
authorized and validly issued, fully paid and nonassessable, and
will be issued in compliance with all applicable federal and
state securities laws.
8.5 MAAC Exchange Act Reports.
(a) Since February 4, 1994, MAAC has timely filed all
MAAC Exchange Act Reports. As of their respective dates,
(i) the MAAC Exchange Act Reports complied in all material
respects with the requirements of the Exchange Act and the
rules and regulations of the SEC promulgated thereunder
applicable to the MAAC Exchange Act Reports, and (ii) no
MAAC Exchange Act Report contained any untrue statement of
material fact or omitted a material fact necessary to make
the statements contained therein, in light of the
circumstances under which they were made, not misleading.
(b) The combined or consolidated (as the case may be)
financial statements of MAAC included in the MAAC Exchange
Act Reports comply as to form in all material respects with
applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with
GAAP applied on a consistent basis during the periods
involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto or (ii) in the
case of unaudited interim statements, to the extent they may
not include footnotes or may be condensed or summary
statements) and on that basis present fairly in all material
respects the combined or consolidated (as the case may be)
financial position and assets and Liabilities of the
entities included therein (including the Subsidiaries) as
going concerns, and the combined or consolidated (as the
case may be) results of the operations, changes in partners'
or owners' equity, and cash flows of such entities for the
periods covered thereby and as of the dates thereof. Such
financial statements are in accordance with the books and
records of the entities included therein, do not reflect any
transactions which are not bona fide transactions and do not
contain any untrue statement of a material fact or omit to
state any material fact necessary to make the statements
contained therein, in light of the circumstances in which
they were made, not misleading. Such financial statements
make full and adequate disclosure of, and provision for all
material Liabilities of the entities included therein
(including MAAC's subsidiaries) as of the dates thereof.
Except as set forth in the balance sheets included in the
MAAC Exchange Act Reports, there are no Liabilities
(including "off-balance sheet" Liabilities), whether due or
to become due, which have had or are reasonably likely to
have a Material Adverse Effect.
8.6 Permits. MAAC holds all licenses, certificates,
permits, franchises, rights, variances, interim permits,
approvals, authorizations or consents, whether federal, state,
local or foreign, which are currently necessary for the lawful
operation of MAAC's business, except for those the absence of
which would not cause and would not be reasonably expected to
cause a Material Adverse Effect on MAAC.
8.7 No Adverse Change. Since the Recent Balance Sheet
Date, there has not been (i) any change in MAAC which would cause
or reasonably be expected to result in a Material Adverse Effect
on MAAC, (ii) any material loss, damage or destruction to any of
MAAC's assets (whether or not covered by insurance) or any other
event or condition which has had or could have a Material Adverse
Effect on MAAC, (iii) any contract or other transaction entered
into by MAAC relating to, or otherwise affecting in any way, its
business or the operation thereof, other than in the Ordinary
Course of Business, (iv) any sale, lease or other transfer or
disposition of any of MAAC's assets, or any cancellation of any
debt or claim of MAAC, except in the Ordinary Course of Business,
and (v) any change in the accounting systems, policies or
practices of MAAC. Since the Recent Balance Sheet Date, MAAC's
business has been conducted in all material respects only in the
Ordinary Course of Business.
8.8 No Defaults or Violations. Except to the extent any
default or non-compliance does not cause or is not reasonably
expected to cause a Material Adverse Effect as to MAAC: (i) MAAC
has not materially breached any provision of, nor is it in
material default under the terms of, any lease, contract or
commitment to which it is a party or under which it has any
rights or by which it is bound or which relates to its business
or its assets and, to MAAC's knowledge, no other party to any
such lease, contract, or other commitment has breached such
lease, contract or commitment or is in default thereunder (nor
has MAAC waived any such default) in any material respect, and no
event has occurred and no condition or state of facts exists
which with the passage of time or the giving of notice, or both,
would constitute such a default or breach by MAAC, or to MAAC's
knowledge, by any such other party, or give right to an automatic
termination or the right of discretionary termination thereof;
(ii) MAAC is in material compliance with, and no Liability or
material violation exists under, any Law or Order applicable in
any way to MAAC; and (iii) no notice from any Government Entity
has been received by MAAC claiming any violation of any Law
(including any building, zoning or other ordinance) or Order, or
requiring any work, construction or expenditure.
8.9 Litigation. Except for certain matters which, to
MAAC's knowledge, do not have a Material Adverse Effect on MAAC
or the transactions contemplated by this Agreement, there is no
Litigation pending or, to MAAC's knowledge, threatened against
any of the properties or businesses of MAAC or relating to its
assets or the transactions contemplated by this Agreement.
Except as disclosed on Schedule 8.9, neither MAAC nor any of its
assets are subject to any Order which has had or could have a
Material Adverse Effect on MAAC.
8.10 Title to Properties; Leasehold Interests. MAAC has
good and marketable title to, or a valid leasehold interest in,
each of the properties and assets owned or leased by it, and each
qualified REIT subsidiary of MAAC that owns or leases properties
has good and marketable title to, or a valid leasehold interest
in, each of the properties and assets owned or leased by it.
Except as set forth in the MAAC Exchange Act Reports or in
Schedule 8.10, none of the properties owned or leased by MAAC or
any qualified REIT subsidiary of MAAC is subject to any Lien
which could reasonably be expected to materially and adversely
affect the assets, properties, liabilities, business, affairs,
results of operations, condition (financial or otherwise) or
prospects of MAAC. Each lease or agreement to which MAAC is a
party under which it is the lessee of any property, real or
personal, is a valid and subsisting agreement without any
material default of MAAC thereunder and, to the best of MAAC's
knowledge, without any material default thereunder of any other
party thereto. No event has occurred and is continuing which,
with due notice or lapse of time or both, would constitute a
default or event of default by MAAC under any such lease or
agreement or, to the best of MAAC's knowledge, by any party
thereto, except for such defaults that would not individually or
in the aggregate have a Material Adverse Effect on MAAC. MAAC's
possession of such property has not been disturbed and, to the
best of MAAC's knowledge, no claim has been asserted against it
adverse to its rights in such leasehold interests.
8.11 Environmental Matters - MAAC Properties. For purposes
of this Section 8.11, the term "MAAC" means MAAC and its
Affiliates, and the term "MAAC Property" means a property owned
by MAAC or its Affiliates and any property in which MAAC or its
Affiliates has an interest. The parties acknowledge that MAAC
does not possess any expertise with regard to Materials of
Environmental Concern and, accordingly, the following
representations and warranties are based exclusively on reports
prepared by environmental consultants to MAAC.
(a) Except for those matters described in Schedule
8.11(a), MAAC and each MAAC Property are not presently in
violation of any applicable Environmental Law;
(b) MAAC has not stored or used any Materials of
Environmental Concern at any MAAC Property;
(c) MAAC has not received any notice, complaint,
warning letter or notice of violation from any Government
Authority or any other person that MAAC is in violation of
any Environmental Law or environmental permit or that they
are responsible (or potentially responsible) for the
assessment or remediation of any release of any Material of
Environmental Concern at, on or beneath any MAAC Property;
(d) MAAC is not the subject of any actual or
threatened federal, state, local or private litigation
involving a claim of liability or a demand for damages
arising out of violation of any Environmental Law or from
the release or threatened release of any Material of
Environmental Concern;
(e) MAAC has timely filed all reports required by any
applicable Environmental Law and has generated and
maintained all data, documentation, and records required
under any Environmental Law;
(f) Except for those matters described in Schedule
8.11(f), which, to MAAC's knowledge, do not have a Material
Adverse Effect on MAAC, MAAC is not aware of any release or
threatened release of a Material of Environmental Concern,
the presence of any current or former drycleaning facility,
the presence of any current or former storage tanks, the
presence of any asbestos containing material, or the
presence of any condition or circumstance which could
subject MAAC or any MAAC Property to liability or claims
under the Environmental Laws or any private cause of action
arising out of an environmental condition;
(g) No MAAC Property is subject to, and MAAC has no
knowledge of any imminent restriction on the ownership,
occupancy, use, or transferability of any MAAC Property; or
(h) To MAAC's knowledge, there are no conditions or
circumstances at any MAAC Property which pose a risk to the
environment or the health or safety of any Person.
8.12 Environmental Matters - Previously Owned Properties.
With respect to each property previously, but not currently,
owned by MAAC, MAALP or any Affiliate thereof ("Previously Owned
Property"), MAAC and MAALP make the representations and
warranties set forth in Section 8.11 as if such representations
and warranties were made as of the last day that such Previously
Owned Property was owned by MAAC, MAALP or any Affiliate thereof.
8.13 Taxes. MAAC has filed all federal, state, local and
other Tax returns and reports (except for foreign returns and
reports the failure to file which has not and is not reasonably
expected to cause a Material Adverse Effect), and any other
material returns and reports with any Government Entity, required
to be filed by it. MAAC has paid or caused to be paid all Taxes
that are due and payable, except those which are being contested
by it in good faith by appropriate proceedings and in respect of
which adequate reserves are being maintained on its books in
accordance with GAAP consistently applied. MAAC does not have
any material Liability for Taxes other than those incurred in the
Ordinary Course of Business and in respect of which adequate
reserves are being maintained by it in accordance with GAAP
consistently applied. Federal and state income Tax returns for
MAAC have not been audited by the IRS or any state authority. No
deficiency assessment with respect to or proposed adjustment of
MAAC's federal, state, local or other Tax returns is pending or,
to the best of MAAC's knowledge, threatened. There is no Tax
Lien, whether imposed by any federal, state, local or other tax
authority outstanding against the assets, properties or business
of MAAC. There are no applicable Taxes, fees or other
governmental charges payable by MAAC in connection with the
execution and delivery of this Agreement.
8.14 MAAC and MAALP Tax Status. MAAC has met the
requirements for qualification and taxation as a REIT under
Sections 856 through 860 of the Code for the tax years ended
December 31, 1994, 1995 and 1996, respectively, and its current
organization and method of operation (taking into account the
Reorganization, and subject to FDC's compliance with Section
6.18.3 hereof) should allow MAAC to continue to qualify as a REIT
in the future. MAALP and each of its Subsidiaries are
partnerships for federal income tax purposes (or are "qualified
REIT subsidiaries" under Section 856(i) of the Code or are
otherwise disregarded) and are not "publicly-traded partnerships"
(taking into account the Reorganization) within the meaning of
Sections 7704 and 469(k)(2) of the Code.
8.15 Employees: ERISA. MAAC has good relationships with its
employees and has not had and does not expect any substantial
labor problem. MAAC does not have any knowledge as to any
intention of any key employee or any group of employees to leave
the employ of MAAC. Other than as disclosed in the MAAC Exchange
Act Reports and materials provided to FDC, MAAC has not
established, sponsored, maintained, made any contribution to or
been obligated by law to establish, maintain, sponsor or make any
contribution to any "employee pension benefit plan" or "employee
welfare benefit plan" (as such terms are defined in ERISA),
including, without limitation, any "multi-employer plan." MAAC
has complied in all material respects with all applicable Laws
relating to the employment of labor, including provisions
relating to wages, hours, equal opportunity, collective
bargaining and the payment of Social Security and other Taxes,
and with ERISA.
8.16 Accuracy of Statements. To MAAC's knowledge, neither
this Agreement nor any document, instrument, schedule, exhibit,
statement, list, certificate or other information furnished or to
be furnished by or on behalf of MAAC to FDC in connection with
this Agreement or any of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the
circumstances in which they are made, not misleading.
8.17 Limitation on Remedies. The representations and
warranties set forth in this Article 8 shall be true and correct
in all material respects on and as of the Closing Date with the
same force and effect as if made at that time; provided, however,
in the event that any of such representations and warranties is
proved to be false on or before the Closing Date as a result of
any change of circumstances or knowledge obtained by MAAC and
such misrepresentation has a Material Adverse Effect and is
disclosed to FDC in writing, then FDC's sole and exclusive
remedies hereunder shall be to (i) terminate this Agreement
pursuant to Article 14 (including Section 14.3.1, if applicable),
or (ii) waive such misrepresentation and close with no liability
to MAAC for such misrepresentation.
8.18 Continuity of Business Enterprise; Tax Treatment of
Reorganization. MAAC and MAALP have no plan or intention of
disposing of the partnership interests or Properties acquired
from FDC. Except as described in Section 2.4, MAAC has no plan
or intention of transferring any Asset received by it in the
Reorganization to MAALP or any other partnership. MAAC agrees to
treat the acquisition of the Assets of FDC in exchange for Merger
Shares and the right to receive Contingent Value Shares as a tax-
free reorganization under Code Section 368(a)(1)(A).
ARTICLE 9: REPRESENTATIONS, WARRANTIES AND
FURTHER COVENANTS OF MAALP
MAALP hereby represents, warrants and covenants to FDC as of
the date of this Agreement and the Closing as follows. All
representations made in this Article 9 shall survive the Closing
for a period of one (1) year. All representations that are made
"to MAALP's knowledge" means to the actual knowledge of the
individuals listed on Schedule 9.0 attached hereto without any
duty or obligation to inquire as to such matters. MAALP
represents that such individuals are the appropriate individuals
who, in the course of their duties, would normally be aware of
material issues and facts affecting MAALP. Except as otherwise
provided or where the context otherwise requires, all references
in this Article 9 to "MAALP" shall be deemed to include all
partnerships in which MAALP has an interest, including those
listed in Schedule 9.1(b).
9.1 Due Formation, etc.
(a) MAALP is limited partnership, duly organized,
validly existing and in good standing under the Laws of the
State of Tennessee, with all requisite power and authority
to own, lease, operate and sell its assets and to carry on
its businesses as it is now being conducted. MAALP is in
good standing as a foreign entity authorized to do business
in each jurisdiction where it engages in business, except to
the extent such violation or failure does not cause or is
not reasonably expected to cause a Material Adverse Effect.
(b) MAALP owns the interests in the partnerships
("subsidiary partnerships") listed in Schedule 9.1(b) as a
limited partner therein. Each subsidiary partnership is a
limited partnership, duly organized and validly existing,
and in good standing under the Laws of its jurisdiction of
organization, with all requisite power and authority to own,
lease, operate and sell its assets and to carry on it
business as it is now being conducted.
9.2 Due Authorization; Consents; No Violations.
(a) MAALP has full power and authority to enter into
this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and
performance by MAALP of this Agreement have been, and the
Transaction Documents to be executed and delivered by it
pursuant to this Agreement shall be, duly and validly
approved by MAALP, and no other proceeding on the part of
MAALP is necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by MAALP and,
assuming due authorization (including the consummation of
the matters described in the foregoing sentence), execution
and delivery of this Agreement by MAAC and FDC, this
Agreement constitutes, and the Transaction Documents to be
executed and delivered by MAALP pursuant to this Agreement
when executed will constitute, valid and binding obligations
of MAALP enforceable in accordance with their respective
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium,
reorganization, similar laws or court decisions from time to
time in effect that affect creditors' rights generally and
by legal and equitable limitations on the availability of
specific remedies.
(b) No consents, waivers, exemptions or approvals of,
or filings or registrations by MAALP with, any Government
Entity or any other Person not a party to this Agreement are
necessary in connection with the execution, delivery and
performance by MAALP of this Agreement or the consummation
of the transactions contemplated hereby, except to the
extent the failure to obtain the same does not cause or is
not expected to cause a Material Adverse Effect on MAALP or
the transactions contemplated by this Agreement.
(c) The execution, delivery and performance by MAALP of
this Agreement and the Transaction Documents to be executed,
delivered and performed by MAALP pursuant hereto, and the
consummation of the transactions contemplated hereby and
thereby, do not and will not (i) violate any Order
applicable to or binding on MAALP or its assets; (ii)
violate any Law; (iii) violate or conflict with, result in a
breach of, constitute a default (or an event which with the
passage of time or the giving of notice, or both, would
constitute a default) under, permit cancellation of,
accelerate the performance required by, or result in the
creation of any Lien upon any of MAALP's assets under, any
contract or other arrangement of any kind or character to
which MAALP is a party or by which MAALP or any of its
assets are bound; (iv) permit the acceleration of the
maturity of any indebtedness of MAALP, or any indebtedness
secured by any of MAALP's assets; or (v) violate or conflict
with any provision of the MAALP Partnership Agreement.
9.3 Capitalization.
(a) Except as disclosed in this Agreement or the MAALP
Partnership Agreement, there are no outstanding options,
warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or
securities or rights convertible into, any Units of MAALP,
or contracts or other arrangements by which MAALP or any of
its subsidiaries is or may become bound to issue additional
Units of MAALP or any of its subsidiaries. MAALP has
furnished to FDC a true and correct copies of the MAALP
Partnership Agreement, as in effect on the date hereof.
(b) Except as set forth in the MAALP Partnership
Agreement, MAALP has no obligation (contingent or otherwise)
to purchase, redeem or otherwise acquire any of its Units or
any interest therein or to make any other distribution in
respect thereof.
(c) MAAC has no knowledge of any voting agreements,
voting trusts, partners' agreement, other agreements or
understandings that are currently in effect or that are
currently contemplated with respect to the voting of any
Units of MAALP.
(d) All of the outstanding securities of MAALP were
issued in compliance with all applicable federal and state
securities laws.
9.4 Valid Issuance of Units. The Units to be issued
hereunder, when issued and delivered in accordance with the terms
hereof for the consideration expressed herein, will be duly
authorized and validly issued, fully paid and nonassessable, and,
based upon the representations of FDC in this Agreement (without
independent verification), will be issued in compliance with all
applicable federal and state securities laws.
9.5 Permits. MAALP holds all licenses, certificates,
permits, franchises, rights, variances, interim permits,
approvals, authorizations or consents, whether federal, state,
local or foreign, which are currently necessary for the lawful
operation of MAALP's business, except for those the absence of
which would not cause and would not be reasonably expected to
cause a Material Adverse Effect on MAALP.
9.6 No Adverse Change. Since the Recent Balance Sheet
Date, there has not been (i) any change in MAALP which would
cause or reasonably be expected to result in a Material Adverse
Effect on MAALP, (ii) any material loss, damage or destruction to
any of MAALP's assets (whether or not covered by insurance) or
any other event or condition which has had or could have a
Material Adverse Effect on MAALP, (iii) any contract or other
transaction entered into by MAALP relating to, or otherwise
affecting in any way, its business or the operation thereof,
other than in the Ordinary Course of Business, (iv) any sale,
lease or other transfer or disposition of any of MAALP's assets,
or any cancellation of any debts or claim of MAALP, except in the
Ordinary Course of Business, and (v) any changes in the
accounting systems, policies or practices of MAALP. Since the
Recent Balance Sheet Date, MAALP's business has been conducted in
all material respects only in the ordinary course and consistent
with past practices.
9.7 No Defaults or Violations. Except to the extent any
default or non-compliance does not cause or is not reasonably
expected to cause a Material Adverse Effect as to MAALP:
(i) MAALP has not materially breached any provision of, nor is it
in material default under the terms of, any lease, contract or
commitment to which it is a party or under which it has any
rights or by which it is bound or which relates to its business
or its assets and, to MAALP's knowledge, no other party to any
such lease, contract, or other commitment has breached such
lease, contract or commitment or is in default thereunder (nor
has MAALP waived any such default) in any material respect, and
no event has occurred and no condition or state of facts exists
which with the passage of time or the giving of notice, or both,
would constitute such a default or breach by MAALP, or to MAALP's
knowledge, by any such other party, or give right to an automatic
termination or the right of discretionary termination thereof;
(ii) MAALP is in material compliance with, and no Liability or
material violation exists under, any Law or Order applicable in
any way to MAALP; and (iii) no notice from any Government Entity
has been received by MAALP claiming any violation of any Law
(including any building, zone or other ordinance) or Order, or
requiring any work, construction or expenditure.
9.8 Litigation. Except for certain matters which, to
MAALP's knowledge, do not have a Material Adverse Effect on MAALP
or the transactions contemplated by this Agreement, there is no
Litigation pending or, to MAALP's knowledge, threatened against
any of the properties or businesses of MAALP or relating to its
assets or the transactions contemplated by this Agreement.
Neither MAALP nor any of its assets are subject to any Order
which has had or could have a Material Adverse Effect on MAALP.
9.9 Title to Properties; Leasehold Interests. MAALP has
good and marketable title to, or a valid leasehold interest in,
each of the properties and assets owned by it. Except as set
forth on Schedule 9.9, none of the properties owned or leased by
MAALP is subject to any Liens which could reasonably be expected
to materially and adversely affect the assets, properties,
liabilities, business, affairs, results of operations, condition
(financial or otherwise) or prospects of MAALP. Each lease or
agreement to which MAALP is a party under which it is the lessee
of any property, real or personal, is a valid and subsisting
agreement without any material default of MAALP thereunder and,
to the best of MAALP's knowledge, without any material default
thereunder of any other party thereto. No event has occurred and
is continuing which, with due notice or lapse of time or both,
would constitute a default or event of default by MAALP under any
such lease or agreement or, to the best of MAALP's knowledge, by
any party thereto, except for such defaults that would not
individually or in the aggregate have a Material Adverse Effect
on MAALP. MAALP's possession of such property has not been
disturbed and, to the best of MAALP's knowledge, no claim has
been asserted against it adverse to its rights in such leasehold
interests.
9.10 Environmental Matters. For purposes of this Section
9.10, the term "MAALP" means MAALP and its Affiliates, and the
term "MAALP Property" means a property owned by MAALP or its
Affiliates and any property in which MAALP or its Affiliates has
an interest. The parties acknowledge that MAALP does not possess
any expertise with regard to Materials of Environmental Concern
and, accordingly, the following representations and warranties
are based exclusively on reports prepared by environmental
consultants to MAALP.
(a) Except for those matters described in Schedule
9.10(a), MAALP and each MAALP Property are not presently in
violation of any applicable Environmental Law;
(b) MAALP has not stored or used any Materials of
Environmental Concern at any MAALP Property;
(c) MAALP has not received any notice, complaint,
warning letter or notice of violation from any Government
Authority or any other person that MAALP is in violation of
any Environmental Law or environmental permit or that they
are responsible (or potentially responsible) for the
assessment or remediation of any release of any Material of
Environmental Concern at, on or beneath any MAALP Property;
(d) MAALP is not the subject of any actual or
threatened federal, state, local or private litigation
involving a claim of liability or a demand for damages
arising out of violation of any Environmental Law or from
the release or threatened release of any Material of
Environmental Concern;
(e) MAALP has timely filed all reports required by any
applicable Environmental Law and has generated and
maintained all data, documentation, and records required
under any Environmental Law;
(f) Except for those matters described in Schedule
9.10(a), which, to MAALP's knowledge, do not have a Material
Adverse Effect on MAALP, MAALP is not aware of any release
or threatened release of a Material of Environmental
Concern, the presence of any current or former drycleaning
facility, the presence of any current or former storage
tanks, the presence of any asbestos containing material, or
the presence of any condition or circumstance which could
subject MAALP or any MAALP Property to liability or claims
under the Environmental Laws or any private cause of action
arising out of an environmental condition;
(g) No MAALP Property is subject to, and MAALP has no
knowledge of any imminent restriction on the ownership,
occupancy, use, or transferability of any MAALP Property; or
(h) To MAALP's knowledge, there are no conditions or
circumstances at any MAALP Property which pose a risk to the
environment or the health or safety of any Person.
9.11 Taxes. MAALP has filed all federal, state, local and
other Tax returns and reports (except for foreign returns and
reports the failure to file which has not and is not reasonably
expected to cause a Material Adverse Effect), and any other
material returns and reports with any Government Entity, required
to be filed by it. MAALP has paid or caused to be paid all Taxes
that are due and payable, except those which are being contested
by it in good faith by appropriate proceedings and in respect of
which adequate reserves are being maintained on its books in
accordance with GAAP consistently applied. MAALP does not have
any material Liabilities for Taxes other than those incurred in
the Ordinary Course of Business and in respect of which adequate
reserves are being maintained by it in accordance with GAAP
consistently applied. Federal and state income Tax returns for
MAALP have not been audited by the IRS or any state authority.
No deficiency assessment with respect to or proposed adjustment
of MAALP's federal, state, local or other Tax returns is pending
or, to the best of MAALP's knowledge, threatened. There is no
Tax Lien, whether imposed by any federal, state, local or other
tax authority outstanding against the assets, properties or
business of MAALP. There are no applicable Taxes, fees or other
governmental charges payable by MAALP in connection with the
execution and delivery of this Agreement.
9.12 Accuracy of Statements. To MAALP's knowledge, neither
this Agreement nor any document, instrument, schedule, exhibit,
statement, list, certificate or other information furnished or to
be furnished by or on behalf of MAALP to FDC in connection with
this Agreement or any of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the
circumstances in which they are made, not misleading.
9.13 Limitation on Remedies. The representations and
warranties set forth in this Article 9 shall be true and correct
in all material respects on and as of the Closing Date with the
same force and effect as if made at that time; provided, however,
in the event that any of such representations and warranties is
proved to be false on or before the Closing Date as a result of
any change of circumstances or knowledge obtained by MAALP and
such misrepresentation has a Material Adverse Effect and is
disclosed to FDC in writing, then FDC's sole and exclusive
remedies hereunder shall be to (i) terminate this Agreement
pursuant to Article 14 (including Section 14.3.1, if applicable),
or (ii) waive such misrepresentation and close with no liability
to MAALP for such misrepresentation.
ARTICLE 10: CONDITIONS PRECEDENT TO OBLIGATIONS OF MAAC
10.1 Conditions for the Closing. The obligation of MAAC and
MAALP to consummate the Closing is subject to the fulfillment, at
or prior to the Closing, of each of the following conditions
precedent, and the failure to satisfy any such condition
precedent shall excuse and discharge all obligations of MAAC and
MAALP to carry out the provisions of this Agreement unless such
failure is waived in writing by MAAC and MAALP; provided,
however, that to the extent that the failure of any condition
shall relate to (i) a matter described in Sections 6.13, 6.14,
6.15 or 7.6 and the affected Property is deemed an Excluded
Property pursuant to said provisions or (ii) any other matter
relating to a Property (including, without limitation, the
failure of FDC to obtain any required consents), then the
affected Property shall be designated as an Excluded Property
pursuant to Section 6.16 hereof, provided the Defective Property
Basket is not exceeded, and such matter shall not constitute a
failure to satisfy any condition precedent relating thereto.
10.1.1 Representations and Warranties. The
representations and warranties made by FDC in Article 7, and
the statements and information contained in any certificate,
instrument, schedule, document or exhibit delivered by or on
behalf of either FDC or any Property Partnership in
connection with the Closing pursuant to this Agreement,
shall be true, correct and complete in all material respects
on and as of the date hereof and thereof, and shall be true,
correct and complete in all material respects on and as of
the Closing Date with the same effect as though such
representations and warranties were made on and as of the
Closing Date, provided, however, that if any representation
and warranty is already qualified in any respect by
materiality or as to Material Adverse Effect, the
materiality qualification immediately before this proviso
shall not apply. FDC shall have delivered to MAAC a
certificate signed by the Chief Executive Officer or
President and the Chief Financial Officer of FDC in form and
substance reasonably satisfactory to MAAC dated as of the
Closing Date to such effect.
10.1.2 Compliance with Covenants and Agreements. The
covenants, obligations and agreements of FDC, the Property
Partnerships and the FDC Affiliates to be performed and
complied with on or before the Closing Date shall have been
duly performed and complied with in all respects; and FDC
shall have delivered to MAAC a certificate signed by the
Chief Executive Officer or President and the Chief Financial
Officer of FDC in form and substance reasonably satisfactory
to MAAC dated as of the Closing Date to such effect.
10.1.3 No Material Adverse Change. Since the date of
execution of this Agreement, there shall not have been any
change, circumstance or event in the Assets, business or
prospects of FDC which has had or would reasonably be
expected to have a Material Adverse Effect on FDC or on the
transactions contemplated by this Agreement, except as set
forth in Sections 6.2, 6.13, 6.14 and 6.15.
10.1.4 No Injunction. There shall not be in effect
any Order (unless caused by any action taken by MAAC or
MAALP) which enjoins or prohibits consummation of the
transactions contemplated hereby.
10.1.5 Title. MAAC and MAALP shall have obtained the
Required Title Insurance as of the date and time of the
Closing.
10.1.6 Lender Estoppels; Payoff Letters. Estoppel
letters shall have been received from each lender with
respect to the Retained Mortgage Debt in form and substance
reasonably acceptable to MAAC. Payoff Letters shall have
been received from each lender with respect to the Prepaid
Mortgage Debt, the Construction and Development Debt, and
the Credit Line Debt.
10.1.7 Consents. FDC and the Property Partnerships
shall have obtained the consents set forth on Schedule 7.1.2
(b).
ARTICLE 11: CONDITIONS PRECEDENT TO OBLIGATIONS OF FDC
11.1 Conditions for the Closing. The obligation of FDC to
consummate and to cause the Property Partnerships to consummate
the Closing is subject to the fulfillment, at or prior to the
Closing, of each of the following conditions precedent, and the
failure to satisfy any such condition precedent shall excuse and
discharge all obligations of FDC to carry out the provisions of
this Agreement unless such failure is waived in writing by FDC:
11.1.1 Representations and Warranties. The
representations and warranties made by MAAC in Article 8 and
by MAALP in Article 9 and the statements and information
contained in any certificate, instrument, schedule, document
or exhibit delivered by or on behalf of MAAC or MAALP in
connection with the Closing pursuant to this Agreement,
shall be true, correct and complete in all material respects
on and as of the date hereof, and shall be true, correct and
complete in all material respects as of the Closing Date
with the same effect as though such representations and
warranties were made on and as of the Closing Date provided,
however, that if any representation and warranty is already
qualified in any respect by materiality or as to Material
Adverse Effect, the materiality qualification immediately
before this proviso shall not apply. MAAC shall have
delivered to FDC a certificate signed by the Chief Executive
Officer or President, and the Chief Financial Officer of
MAAC in form and substance reasonably satisfactory to FDC
dated as of the Closing Date to such effect.
11.1.2 Compliance with Covenants and Agreements. The
covenants, obligations and agreements of MAAC and MAALP to
be performed and complied with on or before the Closing Date
shall have been duly performed and complied with in all
respects; and MAAC shall have delivered to FDC a certificate
signed by the Chief Executive Officer or President and the
Chief Financial Officer of MAAC in form and substance
reasonably satisfactory to FDC dated as of the Closing Date
to such effect.
11.1.3 No Material Adverse Change. Since the date of
this Agreement, there shall not have been any change,
circumstance or event in the business or prospects of MAAC
or MAALP which would reasonably be expected to have a
Material Adverse Effect on MAAC or MAALP or a material
adverse effect on the transactions contemplated by this
Agreement.
11.1.4 No Injunction. There shall not be in effect
any Order (unless caused by any action taken by FDC) which
enjoins or prohibits consummation of the transactions
contemplated hereby.
11.1.5 Consents. FDC and the Property Partnerships
shall have obtained the consents set forth on Schedule 7.1.2
(b).
ARTICLE 12: CLOSING
12.1 Closing. The Closing shall take place at a time and
place mutually agreed upon by the parties as soon as practicable
following the satisfaction or waiver of all conditions precedent
to the Closing, but the parties will use all reasonable efforts
to close on or before November 17, 1997 (or as soon thereafter as
practicable); provided, however, that if the Closing has not
previously occurred, the Closing shall occur on December 31, 1997
(notwithstanding any extensions otherwise provided herein). The
Closing shall take place at 10:00 a.m. EST on the Closing Date at
the offices of K&S, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000,
Xxxxxxx, Xxxxxxx.
12.2 Deliveries at the Closing.
At the Closing, in addition to any other document or
agreement required under any other provision of this Agreement,
the following deliveries shall be made by the Parties, in each
event where execution of a document shall be required, duly
executed by the Persons required to execute same.:
12.2.1 Deliveries by FDC.
(a) Stock Certificates and Partnership Interest
Certificates. (i) Certificates representing the shares
of FDC Common Stock held by the FDC Shareholders as of
the Effective Time, and (ii) certificates (if in
existence) duly endorsed for transfer to MAAC or MAALP,
as appropriate, representing all transferred
partnership interests in the Merger Partnerships and
the Exchange Partnerships.
(b) Partner Consents. Consents to the
Reorganization duly executed by the requisite interests
of limited and general partners of each Property
Partnership.
(c) FDC Officers' Certificates. The certificates
described in Sections 10.1.1 and 10.1.2.
(d) Legal Opinions. Opinions of K&S and CMM as
to the due organization of FDC and each Property
Partnership, due authorization of the Reorganization,
consents, violations (to such firm's knowledge),
qualification of the Merger as a reorganization under
the Code (limited to a "should qualify" standard and
addressed solely to FDC and the FDC Shareholders),
litigation (to such firm's knowledge), and such other
matters as counsel to MAAC may reasonably request prior
to the Closing, with the responsibility for such
opinion being divided among K&S and CMM in accordance
with their relative representative roles for FDC and
the Property Partnerships.
(e) FIRPTA. A Foreign Investment in Real
Property Tax Act affidavit executed by the appropriate
Person with respect to the Reorganization in accordance
with said Act. If FDC fails to provide the necessary
affidavit and/or documentation of exemption on the
Closing Date, MAALP may proceed in accordance with the
withholding provisions as provided in such Act.
(f) Affidavits. Owner's affidavits to the extent
reasonably and customarily required by the title
company to issue the Required Title Insurance, subject
only to the Permitted Exceptions.
(g) Permits and Approvals. To the extent
possessed by FDC or obtained or obtainable from the
Property Partnerships, the material licenses, permits,
approvals, zoning exceptions and approvals, consents
and Orders of Government Entities relating to the
ownership, operation and use of the Properties,
including, without limitation, certificates of
occupancy for such Properties.
(h) Authority. Evidence of the existence,
organization and authority of FDC and each Property
Partnership, and of the authority of the Persons
executing documents on behalf of such Persons
reasonably satisfactory to MAAC.
(i) Possession. Possession of all Assets,
subject only to Permitted Exceptions.
(j) Books and Records. Delivery to the offices
of MAAC and MAALP of the original Leases and Contracts
(or copies if the originals cannot be located) and to
the extent now or subsequently coming into FDC's or a
Property Partnership's possession or control: copies
or originals (including information stored
electronically) of all books and records of account;
contracts; copies of correspondence with tenants and
suppliers; receipts for deposits; unpaid bills and
other papers or documents which pertain to the
Properties; all advertising materials, booklets, keys
and other items, if any, used in the operation of FDC,
the Third Party Businesses, or the Properties; all
books and records of each entity that is a party to the
Reorganization (including Tax records); and, if in such
entity's possession or control, the original "as-built"
plans and specifications and all other available plans
and specifications with respect to any Property.
(k) Articles of Merger. Articles of Merger of FDC
into MAAC to be filed with the Georgia Secretary of
State, and a certificate of merger of each Merger
Partnership into MAALP to be filed with the Georgia
Secretary of State.
(l) Transfer Documents. The deeds, assignments
and other transfer documents which are listed on
Schedule 12.2.1(l) transferring title to the Assets to
MAAC or MAALP, as the case may be, free of any claims,
except for Permitted Encumbrances.
(m) Transfer Documents related to Third Party
Business Assets. The bills of sale, assignments and
other transfer documents which are listed on Schedule
12.2.1(l) transferring title and otherwise assigning
the Third-Party Business Assets to MAALP free of any
claims, except for Permitted Encumbrances.
(n) Registration Rights Agreement. Registration
Rights Agreement executed by or on behalf of the
parties thereto.
(o) Agreement Not to Compete. The Agreement Not
to Compete executed by Xxxx X. Xxxxxxxx and W. Xxxxxxx
Xxxxx.
(p) Transaction Documents. All other Transaction
Documents not otherwise specifically described herein.
(q) Additional Documents. Any additional
documents that MAAC may reasonably require for the
proper consummation of the transactions contemplated by
this Agreement.
12.2.2 Deliveries by MAAC and MAALP.
(a) MAAC Officers' Certificates. The
certificates described in Sections 11.1.1, 11.1.2,
12.1.1, and 12.1.2.
(b) MAALP Partnership Agreement. The MAALP
Partnership Agreement.
(c) Authority. Evidence of existence,
organization and authority of MAAC and MAALP and the
authority of the Person executing documents on behalf
of MAAC and MAALP reasonably satisfactory to FDC.
(d) Legal Opinion. An opinion of BDBC as to due
organization and existence of MAAC and MAALP; due
authorization of the Reorganization; due authorization
of amendment and restatement of the MAALP Partnership
Agreement; due authorization and valid issuance of the
Merger Shares and the Units; due reservation and valid
issuance of Shares upon redemption of Units in exercise
of Redemption Rights, subject to the assumptions in
Section 8.4; enforceability of the Registration Rights
Agreement; violations (to such firm's knowledge);
litigation (to such firm's knowledge), qualification of
the Merger as a reorganization under the Code (limited
to a "should qualify" standard and addressed solely to
MAAC); enforceability; the tax qualification of MAAC,
MAALP and certain Affiliates under the Code; and such
other matters as K&S may reasonably request prior to
the Closing. The tax opinion of BDBC shall provide
(subject to customary conditions and factual
representations) (i) that MAAC has met the requirements
for qualification and taxation as a REIT under the Code
for its taxable years ended December 31, 1994, 1995,
and 1996, and that, taking into account the
Reorganization, MAAC's organization and method of
operation are such that MAAC should continue to qualify
for taxation as a REIT in the future, and (ii) that
MAALP and each of its Subsidiaries qualify as
partnerships for federal income tax purposes (or are
"qualified REIT subsidiaries" under Section (i) of the
Code or are otherwise disregarded and do not constitute
"publicly traded partnerships" for purposes of Sections
7704 and 469(k) of the Code, taking into account the
Reorganization;
(e) Election to Board and Advisory Board of MAAC.
Certified Board resolutions creating an additional seat
on MAAC's Board of Directors and electing Xxxx X.
Xxxxxxxx to fill the vacancy, effective immediately
following the Closing and an indemnity agreement,
evidence of D&O insurance, or such other documents or
other items to the extent available to and benefiting
the other members of the Board of Directors; and the
appointment of W. Xxxxxxx Xxxxx to the Advisory Board
of MAAC.
(f) Election to Board of Third Party Service
Subsidiary. Certified Board resolutions electing
Xxxxxx X. Xxxxx, Xxxx X. Xxxxxxxx, W. Xxxxxxx Xxxxx and
H. Xxxx Xxxxxx, Xx. as the sole members of the Board of
Directors of the Third Party Service Subsidiary and
indemnity agreements, evidence of D&O insurance and
such other documents or other items to the same extent
available to and benefiting the members of the Board of
Directors of MAAC.
(g) Existing Debt Assumption. The documents
required by lenders evidencing the assumption of the
Retained Mortgage Debt, duly executed by MAALP, MAAC,
or such Affiliates thereof as shall be appropriate
under the circumstances.
(h) Merger Shares. The certificates representing
the Merger Shares.
(i) Units. Evidence that the Units have been
issued, in such form as shall be reasonably acceptable
to FDC.
(j) Cash Consideration. The cash consideration
provided for in Article 3 and the other cash required
of MAAC and MAALP to consummate the Reorganization.
(k) Articles of Merger. Articles of Merger of
FDC into MAAC to be filed with the Tennessee Secretary
of State, and a certificate of merger of each Merger
Partnership into MAALP to be filed with the Tennessee
Secretary of State.
(l) Registration Rights Agreement. Registration
Rights Agreement executed by or on behalf of the
parties thereto.
(m) Transaction Documents. All other Transaction
Documents not otherwise specifically described herein.
(n) Additional Documents. Any additional
documents that FDC or the lenders of the Existing
Mortgage Debt may reasonably require for the proper
consummation of the transactions contemplated by this
Agreement.
ARTICLE 13: ADJUSTMENT OF MERGER CONSIDERATION.
13.1 Adjustment of Merger Consideration. The Parties shall
cause the Closing Date Balance Sheet to be prepared as of the
Closing Date pursuant to the provisions of Section 13.1.1 below
within sixty (60) days following the Closing Date. Based on the
Closing Date Balance Sheet, the number of Merger Shares delivered
in accordance with this Agreement shall be adjusted in the manner
described in Section 13.1.2 below.
13.1.1 Methodology of Preparation of Closing Date
Balance Sheet. As of the Closing Date, the Parties shall
cause the Closing Date Balance Sheet to be prepared in the
same manner as the Valuation Balance Sheet attached hereto
as Schedule 13.1.1 (the "Valuation Balance Sheet"), to wit:
the assets on the Closing Date Balance Sheet shall consist
of the Fixed Valuation Assets, Construction in Progress
(except with respect to Properties), Property Held for
Development, and Miscellaneous Balance Sheet Assets. The
liabilities on the Closing Date Balance Sheet shall consist
of Existing Debt and Miscellaneous Balance Sheet
Liabilities. The amount of Consensual Balance Sheet
Adjustments shall be added to assets or liabilities, as the
case may be, in a manner consistent with the Valuation
Balance Sheet. The Parties agree that the adjustment
amounts set forth on the Valuation Balance Sheet as
consensual balance sheet adjustments (the "Consensual
Balance Sheet Adjustments") have been computed by the
Parties and reflected in the Valuation Balance Sheet in
determining the Adjusted Net Equity as of the Recent Balance
Sheet Date, as itemized in the Valuation Balance Sheet on
Schedule 13.1.1. The net sum of the foregoing shall be the
"Adjusted Net Equity." The Closing Date Balance Sheet shall
be prepared in accordance with generally accepted accounting
principles applied in a manner consistent with the
preparation of the Valuation Balance Sheet, utilizing the
same general ledger classifications and groupings as were
utilized in preparing the Valuation Balance Sheet. The
Parties have agreed that the value of the Fixed Valuation
Assets on the Closing Date Balance Sheet shall be
$369,555,000.
13.1.2 Timing of Preparation of Closing Date Balance
Sheet; Disputes. MAAC shall cause the Closing Date Balance
Sheet to be prepared and delivered to the Parties within
sixty (60) days after the Closing Date. MAAC shall permit
the Contingent Value Representative as of the Closing Date
and one (1) additional former FDC officer to assist in the
preparation of the Closing Date Balance Sheet. MAAC shall
use its reasonable best efforts to prepare a list of
proposed Consensual Balance Sheet Adjustments within forty-
five (45) days after the Closing Date, but in no event later
than five (5) days before delivery of the Closing Date
Balance Sheet. The Contingent Value Representative shall
agree on the Consensual Balance Sheet Adjustments no later
than two (2) days prior to the due date of the Closing Date
Balance Sheet. If the Contingent Value Representative shall
not agree with the computation of Adjusted Net Equity, or if
such parties shall not be able to agree on the amount of the
Consensual Balance Sheet Adjustments, then such parties
shall submit to binding arbitration pursuant to the
procedures set forth in Section 5.4 hereof the computation
of Adjusted Net Equity or the amount of Consensual Balance
Sheet Adjustments, as applicable. In the event such
arbitration process shall be required, the decision of the
arbitrator shall be final and binding on both Parties.
13.1.3 Adjustment of Merger Shares and Cash Offset
Based on Closing Date Balance Sheet. If Adjusted Net Equity
as reflected in the Closing Date Balance Sheet shall be more
or less than $57,070,000, then the amount of such difference
shall be divided by $28.00, and the number of Merger Shares
delivered as consideration for the Merger shall be adjusted
by the quotient as follows: (i) if the Adjusted Net Equity
shall be more than $57,070,000, then MAAC shall deliver to
the FDC Shareholders, in the same ratios as the Merger
Shares shall have been delivered at Closing, the additional
Merger Shares computed as hereinabove described, which
additional Merger Shares shall be issued and delivered in
the same manner as the original Merger Shares; and (ii) if
the Adjusted Net Equity shall be less than $57,070,000, then
the FDC Shareholders shall deliver to MAAC, in the same
ratios as the Merger Shares shall have been delivered at
Closing, together with stock powers containing appropriate
signature guarantees and letters instructing MAAC's transfer
agent to effect the transfer, certificates representing the
number of Merger Shares computed in the foregoing manner.
All deliveries pursuant to this Section 13.1.3 shall be made
within ten (10) Business Days after delivery of the Closing
Date Balance Sheet, if there shall be no disagreement with
respect thereto, or within ten (10) Business Days after the
parties shall receive the report of the arbitrator, if the
computation of the Closing Date Balance Sheet or any aspect
thereof shall be submitted to arbitration in accordance with
Section 13.1.2. All Merger Shares transferred in accordance
with this Section 13.1.3 shall be deemed an addition to or
subtraction in the consideration given for the
Reorganization for all purposes of this Agreement.
13.1.4 Dividend/Distribution Adjustment. The amount
equal to the distribution payable by MAAC and MAALP on or
about January 31, 1998 for the fourth quarter of 1997 in
respect of the Merger Shares and Units issued in the
Reorganization multiplied by a fraction, the numerator of
which shall be the number of days between October 1 and the
Closing Date and the denominator of which shall be 92 is
hereinafter called the "Pro Rata 4th Quarter Distribution".
To adjust for the fact that the Pro Rata 4th Quarter
Distribution would otherwise be payable to the holders of
the Merger Shares and Units, even though such holders did
not hold the Merger Shares and Units for the period prior to
the Closing, the amount of the Pro Rata 4th Quarter
Distribution shall be settled in cash either by offset
against distributions payable by MAAC or MAALP to such
holders of Merger Shares and Units or by separate cash
payments by such holders.
ARTICLE 14: TERMINATION AND REMEDIES
14.1 Termination. This Agreement may be terminated:
14.1.1 Mutual Consent. At any time prior to the
Closing Date, with the written consent of MAAC and FDC;
14.1.2 Termination by MAAC and MAALP. At any time
prior to the Closing Date, by MAAC and MAALP (provided they
are not in breach of any of their material obligations
hereunder), if there shall have been a material breach of
any covenant, representation or warranty of FDC hereunder,
or failure of any condition to MAAC's obligation to close,
and such breach or failure shall not have been remedied
within 10 Business Days after receipt by FDC of a notice in
writing from MAAC specifying the breach or failure and
requesting such be remedied (and the Closing Date shall be
extended to provide for such cure period), provided such
termination right shall be subject to the provisions of
Section 6.16 hereof;
14.1.3 Termination by FDC. At any time prior to the
Closing Date, by FDC (provided it is not in breach of any of
its material obligations hereunder), if there shall have
been a material breach of any covenant, representation or
warranty of MAAC or MAALP hereunder, or any failure of any
condition of FDC's obligation to close, and such breach or
failure shall not have been remedied within 10 Business Days
after receipt by MAAC or MAALP of a notice in writing from
FDC specifying the breach or failure and requesting such be
remedied (and the Closing Date shall be extended to provide
for such cure period); or
14.1.4 Failure to Close by Closing Date. If the
Closing has not taken place by December 31, 1997
(notwithstanding any extensions otherwise provided herein),
at any time thereafter, by FDC or MAAC, upon delivery of
written notice of termination to the other; provided,
however, that the right to terminate this Agreement under
this Section 14.1.4 shall not be available to any Party
whose failure to fulfill any obligation under this Agreement
has been the cause of or has resulted in the failure of the
Closing to occur on or before such date.
14.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 14.1, all obligations of the parties
hereunder shall terminate, except for the obligations that
expressly survive the termination of this Agreement. No such
termination shall relieve any party from liability pursuant to
Section 14.3 below.
14.3 Remedies. In the event that a Party shall fail to
perform such Party's obligation to consummate the Reorganization
as described herein (a "Default"), all conditions precedent to
such Party's obligation to perform having been met, the sole and
exclusive remedy of the non-defaulting Party shall be as follows:
14.3.1 Waiver of Specific Performance or Suit for
Damages. The Parties expressly waive any right to elect
specific performance and covenant not to bring any action
against the other for specific performance or for damages
(except any suit to collect the amounts described in
Sections 14.3.2 and 14.3.3 below) before any Government
Entity.
14.3.2 Remedy upon Default. Subject to the provisions
of Section 14.3.3 below, the sole remedy of the non-
defaulting Party in the event of a Default by the other
Party shall be to terminate this Agreement, and the
defaulting Party shall pay to the non-defaulting Party
within five (5) business days after such termination, as
liquidated damages for such Default, the cash amount of Two
Hundred Fifty Thousand Dollars ($250,000). The Parties
agree that in the event of a Default, the damages from such
Default would be difficult to determine, and that the
foregoing liquidated damages amount is a reasonable estimate
of the actual, out-of-pocket costs that would be incurred by
each of the Parties if the Reorganization were not
consummated. Each Party agrees not to bring an action
before any Government Entity against the other Party seeking
damages on account of the Default, it being agreed that the
liquidated damages amount stated herein shall be the sole
monetary remedy to the non-breaching Party.
14.3.3 Default followed by a Competing Transaction.
If a Party shall commit a Default and the non-defaulting
Party shall terminate this Agreement pursuant to Section
14.3.2 above, and (i) the defaulting Party (if the
defaulting Party is FDC) shall close a FDC Competing
Transaction consisting of the Assets of FDC and at least
fifty percent (50%) of the apartment units owned by the
Property Partnerships within one (1) year after the date of
termination of this Agreement or (ii) the defaulting Party
(if the defaulting Party is MAAC or MAALP) shall close a
MAAC Competing transaction within one (1) year after the
date of termination of this Agreement, then the non-
defaulting Party shall be entitled to receive from the
defaulting Party, its successors and assigns, and the
defaulting Party, its successors and assigns, shall pay to
the non-defaulting Party a termination fee of Eight Million
Five Hundred Thousand Dollars ($8,500,000.00) in cash not
later than the date of closing of the Competing Transaction.
The Parties agree that such termination fee shall be
reasonable compensation to a non-defaulting Party for
enhanced competitive risks resulting from the defaulting
Party consummating a competing transaction, market risks in
announcing the Reorganization, management time expended in
pursuit of the Reorganization, lost opportunities,
transaction costs and expenses and other incidental expenses
and losses, and that the non-defaulting party should be
entitled to a fee for such items. The liquidated damages
amount paid by the defaulting Party pursuant to Section
14.3.2 above shall be a credit against the termination fee
described herein.
ARTICLE 15: MISCELLANEOUS
15.1 Headings. The headings contained in this Agreement are
for reference purposes only and are in no way intended to
described, interpret, define or limit the scope, extent or intent
of this Agreement or any provision hereof.
15.2 Pronouns and Plurals. Whenever required by the
context, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the
plural and vice versa.
15.3 Time. Time is of the essence for this Agreement.
15.4 Survival. The provisions set forth in Article 1,
Article 5, Article 6 (subject to the limitations set forth
therein), Article 7 (subject to the limitations set forth
therein), Article 8 (subject to the limitations set forth
therein), Article 9 (subject to the limitations set forth
therein), Article 12 (to the extent not performed at the
Closing), Article 13, Article 14 and Article 15 shall survive the
Closing and shall not be deemed to be merged into or waived by
the instruments of such Closing. Except as provided in the
foregoing sentence, no other provisions, representations,
warranties or other covenants or agreements contained in this
Agreement shall survive the Closing.
15.5 Expenses. The expenses of the Reorganization,
including, without limitation, those expenses set forth in
Schedule 15.5, shall be Assumed Liabilities at the time of
Closing and shall be paid by MAAC or MAALP. In the event that
this Agreement is terminated before the Closing, each party
hereto shall pay its own expenses incident to this Agreement and
the transactions contemplated hereunder, including all legal and
accounting fees and disbursements.
15.6 Additional Actions and Documents. Each party hereto
hereby agrees to take or cause to be taken such further actions,
to execute, deliver and file or cause to be executed, delivered
and filed such further documents, and to obtain such consents, as
may be necessary or as may be reasonably requested on or after
the Closing Date in order to fully effectuate the purposes, terms
and conditions of this Agreement.
15.7 Entire Agreement; Amendment and Modification. This
Agreement, including the schedules, exhibits, Transaction
Documents and other documents referred to herein or furnished
pursuant hereto, together with the letter agreement regarding
confidentiality between FDC and MAAC dated August 19, 1997 (the
terms of which are incorporated herein) constitutes the entire
understanding and agreement among the parties hereto with respect
to the transactions contemplated herein, and supersedes all prior
oral or written agreements, commitments or understandings with
respect to the matters provided for herein. No amendment,
modification or discharge of, or supplement to, this Agreement
shall be valid or binding unless set forth in writing and duly
executed and delivered by the party against whom enforcement of
the amendment, modification, or discharge is sought.
15.8 Notices. All notices, demands, requests, and other
communications which may be or are required to be given, served,
or sent by any party to any other party pursuant to this
Agreement shall be in writing and shall be hand delivered, sent
by overnight courier or mailed by first-class, registered or
certified U.S. mail, return receipt requested and postage
prepaid, or transmitted by facsimile, telegram, telecopy or
telex, addressed as follows:
(i) If to FDC: Xxxxxxxx Development Company
Xxxx X. Xxxxxxxx Chairman and CEO
000 Xxxxxxxxxx Xxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
copies to: Xxxxxxx X. Xxxxx, Esq.
King & Spalding
000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 0000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxx, Xxxxxx & Xxxxxxx
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(ii) If to MAAC
or to MAALP: Mid-America Apartment Communities, Inc.
Xxxxxx X. Xxxxx, Chairman and CEO
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
copy to: Xxxx X. Good, Esq.
Baker, Donelson, Bearman & Xxxxxxxx
First Tennessee Building, Suite 2000
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If personally delivered, such communication shall be deemed
delivered upon actual receipt; if electronically transmitted
pursuant to this Section 15.8, such communication shall be deemed
delivered the next business day after transmission (and sender
shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this Section 15.8, such communication shall
be deemed delivered upon receipt; and if sent by U.S. mail
pursuant to this Section 15.8, such communication shall be deemed
delivered as of the date of delivery indicated on the receipt
issued by the relevant postal service, or, if the addressee fails
or refuses to accept delivery, as of the date of such failure or
refusal. Any party to this Agreement may change its address for
the purposes of this Agreement by giving notice thereof in
accordance with this Section 15.8.
15.9 Waivers. No delay or failure on the part of any party
hereto in exercising any right, power or privilege under this
Agreement or under any other documents furnished in connection
with or pursuant to this Agreement shall impair any such right,
power or privilege to be construed as a waiver of any default or
any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further
exercise of such right, power or privilege, or the exercise of
any other right, power or privilege. No waiver shall be valid
against any party hereto unless made in writing and signed by the
party against whom enforcement of such waiver is sought and then
only to the extent expressly specified therein.
15.10 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
15.11 Governing Law. This Agreement, the rights and
obligations of the parties hereto, and any claim or disputes
relating thereto, shall be governed by and construed and enforced
in accordance with the Laws and judicial decisions of the State
of Tennessee, without regard to conflict of Law principles
(excluding the choice of Law rules thereof), except for actions
affecting title to real property, in which case the Laws of the
State in which the real property is located shall apply.
15.12 Assignment; Parties in Interest.
15.12.1 No party hereto shall assign its rights and/or
obligations under this Agreement, in whole or in part,
whether by operation of Law or otherwise, without the prior
written consent of the other parties hereto.
15.12.2 Parties in Interest. This Agreement shall be
binding upon, inure to the benefit of, and be enforceable by
the respective administrators, successors, legal
representatives and permitted assigns of the parties hereto.
Nothing contained herein shall be deemed to confer upon any
other Person any right or remedy under or by reason of this
Agreement.
15.13 No Third-Party Beneficiaries. This Agreement is
solely for the benefit of the parties hereto, and no provision of
this Agreement shall be deemed to confer any third-party benefit,
provided that all representations, warranties and covenants made
by MAAC and MAALP in this Agreement shall run in favor of FDC's
shareholders following the Merger and the partners of the
Property Partnerships.
15.14 Severability. Every provision of this Agreement
is intended to be severable. If any provision or term of this
Agreement, or the application of a provision or term to any
Person or circumstance, shall be held invalid, illegal or
unenforceable, the validity, legality or enforceability of the
other provisions and terms hereof, or the application of such
provision or term to Persons or circumstances other than those to
which it is held invalid, illegal or enforceable, shall not be
affected thereby, and there shall be deemed substituted for the
provision or term at issue a valid, legal and enforceable
provision as similar as possible to the provision or term at
issue.
15.15 Limitation of Liability. Any obligation or
liability whatsoever of any Party which may arise at any time
under this Agreement or any obligation or liability which may be
incurred by such Party pursuant to any other instrument,
transaction or undertaking contemplated hereby shall be
satisfied, if at all, out of such Party's assets, as appropriate,
only. No such obligation or liability shall be personally
binding upon, nor shall resort for the enforcement thereof be had
to, the property of any of such Party's shareholders, trustees,
officers, employees or agents, regardless of whether such
obligation or liability is in the nature of contract, tort or
otherwise.
15.16 Tax Advice. The Parties have relied on their
respective accountants, attorneys and other advisors for advice
in connection with structuring the transactions contemplated by
this Agreement and are not relying on the accountants, attorneys
or other advisors of the other Party with regard to the structure
of such transactions, except to the extent of any legal opinions
which may be issued in connection with the Closing.
15.17 Acknowledgment of Agreement. If requested by FDC,
MAAC and MAALP shall enter into an agreement reflecting the terms
contained herein relating to the Sale Properties and the Property
Seller Partnerships for submission to and review by the Property
Seller Partnerships and in a form reasonably acceptable to the
Parties.
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Reorganization to be duly executed on their
behalf as of the date first above written.
MID-AMERICA APARTMENT COMMUNITIES, INC.
By: /s/Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx, Chairman and
Chief Executive Officer
MID-AMERICA APARTMENTS, L.P.
BY: Mid-America Apartment Communities, Inc.,
sole General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Xxxxxx X. Xxxxx, Chairman and
Chief Executive Officer
SIGNATURE PAGE TO AGREEMENT AND PLAN
OF REORGANIZATION
XXXXXXXX DEVELOPMENT COMPANY
By: /s/Xxxx X. Xxxxxxxx
---------------------------------
Xxxx X. Xxxxxxxx, Chairman and
Chief Executive Officer
