EXHIBIT 99.1
EXECUTION COPY
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CENTRO WATT AMERICA III, L.P.,
CENTRO WATT AMERICA III OP, LLC
CWAR OP MERGER SUB, LLC,
CWAR OP MERGER SUB II, LLC,
CWAR OP MERGER SUB III TRUST
CENTRO PROPERTIES LIMITED,
CENTRO PROPERTY TRUST,
KRAMONT REALTY TRUST,
KRAMONT OPERATING PARTNERSHIP, L.P.,
AND
XXXXXXXXXX XX REALTY L.P.
DATED AS OF JANUARY 27, 2005
TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS .................................................................. 2
Section 1.1. Definitions................................................................ 2
ARTICLE II THE MERGERS ......................................................................... 15
Section 2.1. The Mergers................................................................ 15
Section 2.2. Closing.................................................................... 15
Section 2.3. Effective Times of the Mergers............................................. 16
Section 2.4. Effects of the Mergers..................................................... 16
Section 2.5. Surviving Entity's Organizational Documents................................ 17
Section 2.6. Surviving OP Partnership's Organizational Documents........................ 17
Section 2.7. Surviving Xxxxxxxxxx Partnership's Organizational Documents................ 17
Section 2.8. Officers of the Surviving Entity........................................... 17
Section 2.9. Officers of the Surviving OP Partnership................................... 18
Section 2.10. Officers of the Surviving Xxxxxxxxxx Partnership........................... 18
ARTICLE III EFFECT OF THE MERGERS ON COMMON SHARES, PREFERRED SHARES, COMPANY OPTIONS,
MEMBERSHIP INTERESTS AND PARTNERSHIP UNITS......................... ....... 18
Section 3.1. Effect of REIT Merger on Common Shares and Preferred Shares................ 18
Section 3.2. Company Options............................................................ 19
Section 3.3. Restricted Shares.......................................................... 20
Section 3.4. Adjustments to REIT Merger Consideration................................... 20
Section 3.5. Effect of the REIT Merger on REIT Merger Sub Shares........................ 21
Section 3.6. Effect of the OP Merger on the Operating Partnership Units................. 21
Section 3.7. Effect of the Xxxxxxxxxx Merger on the Xxxxxxxxxx OP Units................. 22
Section 3.8. Surrender of Certificates.................................................. 24
ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................................... 27
Section 4.1. Representations and Warranties of the Company Parties...................... 27
Section 4.2. Representations and Warranties of the Purchaser Parties,
Parent and Parent Trust............................................ ....... 48
Section 4.3. Representations and Warranties of Purchaser Parties,
Parent and Parent Trust with respect to the Guarantee and the Indemnity.... 51
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGERS......................... 53
Section 5.1. Conduct of Business by the Company and its Subsidiaries.................... 53
ARTICLE VI ADDITIONAL COVENANTS ................................................................ 57
Section 6.1. Access to Information; Confidentiality..................................... 57
Section 6.2. Commercially Reasonable Efforts; Notification.............................. 57
Section 6.3. Tax Treatment.............................................................. 59
Section 6.4. No Solicitation............................................................ 59
Section 6.5. Certain Litigation......................................................... 61
Section 6.6. Notification of Certain Matters............................................ 62
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Section 6.7. Section 16 Matters......................................................... 62
Section 6.8. Employee Matters........................................................... 62
Section 6.9. Indemnification............................................................ 64
Section 6.10. Company Shareholders Meeting; Proxy Statement.............................. 65
Section 6.11. Certain Resignations....................................................... 66
Section 6.12. Title Defects.............................................................. 66
Section 6.13. Financing.................................................................. 66
Section 6.14. Liquidation of REIT Merger Sub............................................. 66
Section 6.15. Covenants of the Responsible Entity........................................ 67
ARTICLE VII CONDITIONS TO CLOSING .............................................................. 68
Section 7.1. Conditions to Each Party's Obligation to Effect the Mergers................ 68
Section 7.2. Conditions to the Obligation of the Purchaser Parties to
Effect the Mergers................................................. ....... 68
Section 7.3. Conditions to the Obligation of the Company to Effect the Mergers.......... 70
Section 7.4. Frustration of Closing Conditions.......................................... 71
ARTICLE VIII TERMINATION AND AMENDMENTS......................................................... 71
Section 8.1. Termination................................................................ 71
Section 8.2. Effect of Termination...................................................... 73
Section 8.3. Fees and Expenses.......................................................... 73
Section 8.4. Termination Fee............................................................ 74
Section 8.5. Amendment.................................................................. 74
Section 8.6. Extension; Waiver.......................................................... 74
ARTICLE IX GENERAL PROVISIONS .................................................................. 75
Section 9.1. Nonsurvival of Representations, Warranties, Covenants and Agreements....... 75
Section 9.2. Notices.................................................................... 75
Section 9.3. Interpretation............................................................. 76
Section 9.4. Intentionally Omitted...................................................... 76
Section 9.5. Counterparts............................................................... 76
Section 9.6. Entire Agreement; No Third-Party Beneficiaries............................. 76
Section 9.7. Governing Law.............................................................. 77
Section 9.8. Assignment................................................................. 77
Section 9.9. Enforcement................................................................ 77
Section 9.10. Severability............................................................... 78
Section 9.11. Modification............................................................... 78
Section 9.12. Remedies Cumulative........................................................ 78
Section 9.13. Publicity.................................................................. 78
Section 9.14. Exhibits; Disclosure Schedules............................................. 78
Section 9.15. Parent and Parent Trust Guarantee and Indemnity............................ 78
Section 9.16. The Responsible Entity's Capacity and Limitation on Liability.............. 82
EXHIBITS AND SCHEDULES
Schedule 1.1(a) - Company Knowledge Persons
Schedule 6.2(a) - Minority Interests Holders
Schedule 7.2(e) - List of Consents
Exhibit A - Form of Amended and Restated Certificate of Limited Partnership
Exhibit B - Form of Plan of Liquidation of REIT Merger Sub
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AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this "Agreement"),
dated as of January 27, 2005, by and among Centro Watt America III, L.P., a
Delaware limited partnership ("Acquiror"), Centro Watt America III OP, LLC, a
Delaware limited liability company ("Acquiror Subsidiary"), CWAR OP Merger Sub,
LLC, a Delaware limited liability company ("OP Merger Sub"), CWAR OP Merger Sub
II, LLC, a Delaware limited liability company ("Xxxxxxxxxx Merger Sub"), CWAR OP
Merger Sub III Trust, a Maryland real estate investment trust ("REIT Merger
Sub"), Kramont Realty Trust, a Maryland real estate investment trust (the
"Company"), Kramont Operating Partnership, L.P., a Delaware limited partnership
(the "Operating Partnership"), Xxxxxxxxxx XX Realty L.P., a Delaware limited
partnership ("Xxxxxxxxxx"), and, solely for purposes of Sections 4.2, 4.3, 6.15
and Article 9 of this Agreement, Centro Properties Limited ABN 52 006 378 365, a
corporation organized under the Corporations Act (2001) of the Commonwealth of
Australia ("Parent"), and, solely for purposes of Section 4.2, 4.3, 6.15 and
Article 9 of this Agreement, CPT Manager Limited ABN 37 054 494 307 (the
"Responsible Entity"), in its capacity as the responsible entity of Centro
Property Trust ARSN 000 000 000, a trust organized under the laws of the
Commonwealth of Australia (in such capacity, "Parent Trust"), both in that
capacity and in its own right.
RECITALS
WHEREAS, on December 18, 2004, certain of the parties hereto entered
into the Agreement and Plan of Merger (the "Original Agreement") by and among
Centro Watt America REIT III LLC, OP Merger Sub, Xxxxxxxxxx Merger Sub, the
Company, the Operating Partnership, Xxxxxxxxxx, and, for limited purposes,
Parent and the Responsible Entity, in its capacity as the responsible entity of
the Parent Trust and in its own right; and
WHEREAS, the Purchaser Parties intend, immediately following
consummation of the Mergers contemplated by the Original Agreement, to cause the
surviving entity in the merger of the Company with and into REIT Merger Sub to
be liquidated, wound up and dissolved in accordance with Maryland law; and
WHEREAS, pursuant to Section 9.4 of the Original Agreement, the
Purchaser Parties desire to amend and restate the Original Agreement in order to
provide for, among other things, certain changes in the structure of the
transactions contemplated by the Original Agreement in order to expedite such
transactions and the payments of merger consideration to shareholders of the
Company and unitholders of the Operating Partnership and Xxxxxxxxxx; and
WHEREAS, the parties hereto believe that such changes to the
structure of the transactions contemplated by the Original Agreement will
expedite such transactions for regulatory and other reasons and benefit all
shareholders of the Company and unitholders of the Operating Partnership and
Xxxxxxxxxx.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements contained in this
Agreement, each of the parties hereto agrees as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Definitions. Capitalized and certain other terms used in this
Agreement have the meanings set forth below. Unless the context otherwise
requires, such terms shall include the singular and plural and the conjunctive
and disjunctive forms of the terms defined:
"2000 Incentive Plan" has the meaning set forth in Section 4.1(c)(i)(C).
"2004 Fourth Quarter Distributions" has the meaning set forth in Section
4.1(c)(i)(E).
"Accrued Vacation" has the meaning set forth in Section 6.8(f).
"Acquiror" has the meaning set forth in the introductory paragraph.
"Acquiror Material Adverse Effect" shall mean a fact, event or
circumstance which has had, or is reasonably likely to have, together with all
similar or related facts, events and circumstances, a material adverse effect on
the ability of Acquiror, REIT Merger Sub, OP Merger Sub or Xxxxxxxxxx Merger Sub
to perform its obligations hereunder or which would prevent or materially
impede, interfere with, hinder or delay the consummation of the transactions
contemplated hereby.
"Acquiror Merger Subs" means REIT Merger Sub, OP Merger Sub and Xxxxxxxxxx
Merger Sub.
"Acquiror Subsidiary" has the meaning set forth in the introductory
paragraph.
"Acquiror's Title Notice" has the meaning set forth in Section 6.12.
"Acquisition Agreement" has the meaning set forth in Section 6.4(c).
"Acquisition Financing" means financings to be arranged by the Purchaser
Parties that are necessary to consummate the transactions contemplated by this
Agreement.
"Affiliate" has the meaning set forth in Rule 12b-2 promulgated under the
Exchange Act.
"AGAAP" has the meaning set forth in Section 4.2(e).
"Agreement" has the meaning set forth in the introductory paragraph.
"Amended and Restated LP Certificate" has the meaning set forth in Section
2.6.
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"Articles of Merger" means the articles of merger with respect to the REIT
Merger, containing the provisions required by, and executed in accordance with,
the Maryland REIT Law.
"Assignment and Assumption Agreement" has the meaning set forth in the
Plan of Liquidation.
"Beneficiaries" has the meaning set forth in Section 9.15(a).
"B-1 Preferred Units Merger Consideration" has the meaning set forth in
Section 3.6(b)(i).
"Business Day" means any day other than a Saturday, Sunday and any day
which is a legal holiday under the Laws of the State of New York or is a day on
which banking institutions in New York, New York are authorized or obligated by
Law or other governmental action to close.
"Certificates" means, collectively, the Common Share Certificates, the
Preferred B-1 Certificates, the Preferred E Certificates, the OP Unit
Certificates and the Xxxxxxxxxx Certificates.
"Certificates of Merger" means the OP Merger Certificate and the
Xxxxxxxxxx Merger Certificate.
"Class A Preferred Units" has the meaning set forth in Section
4.1(c)(ii)(A).
"Class B-1 Preferred Units" has the meaning set forth in Section
4.1(c)(ii)(A).
"Class D Preferred Units" has the meaning set forth in Section
4.1(c)(ii)(A).
"Class E Preferred Units" has the meaning set forth in Section
4.1(c)(ii)(A).
"Closing" has the meaning set forth in Section 2.2.
"Closing Date" has the meaning set forth in Section 2.2.
"COBRA" has the meaning set forth in Section 6.8(e).
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Shares" has the meaning set forth in the first paragraph of
Section 3.1.
"Common Share Certificates" has the meaning set forth in Section 3.1(a).
"Common Share Merger Consideration" has the meaning set forth in Section
3.1(a).
"Company" has the meaning set forth in the introductory paragraph.
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"Company 1992 Employee Option Plan" has the meaning set forth in Section
4.1(c)(i)(C).
"Company 1992 Trustee Option Plan" has the meaning set forth in Section
4.1(c)(i)(C).
"Company 1995 Incentive Plan" has the meaning set forth in Section
4.1(c)(i)(C).
"Company 1997 Stock Option Plan" has the meaning set forth in Section
4.1(c)(i)(C).
"Company Adverse Recommendation Change" has the meaning set forth in
Section 6.4(c).
"Company Benefit Plan" has the meaning set forth in Section 4.1(l)(i).
"Company Board" means the Board of Trustees of the Company.
"Company Bylaws" has the meaning set forth in Section 4.1(a).
"Company Charter" has the meaning set forth in Section 4.1(a).
"Company EO Stock Option Plan" has the meaning set forth in Section
4.1(c)(i)(C).
"Company Filed SEC Documents" has the meaning set forth in Section 4.1(f).
"Company Financial Advisor" has the meaning set forth in Section 4.1(s).
"Company Indemnity Agreements" has the meaning set forth in Section
6.9(a).
"Company Insurance Policy" means any insurance policy which is owned by
the Company and/or a Company Subsidiary or which names the Company or any of the
Company Subsidiaries as an insured (or loss payee), including any which pertains
to the Company's or its Subsidiaries' assets, employees or operations.
"Company Joint Venture" and "Company Joint Ventures" have the meanings set
forth in Section 4.1(b)(ii).
"Company Material Adverse Effect" means a fact, event or circumstance
which has had, or could reasonably be expected to have, together with all
similar or related facts, events and circumstances, a material adverse effect on
the financial condition, business, assets or results of operations of the
Company and the Company Subsidiaries taken as a whole or on the ability of the
Company and the Company Subsidiaries to perform their respective obligations
hereunder or which would prevent or materially impede, interfere with, hinder or
delay the consummation of the transactions contemplated hereby; provided,
however, that any such effect resulting from or arising out of (i) economic or
financial market conditions (including interest rates) affecting the U.S.
economy generally and that do not have a materially disproportionate effect on
the Company and the Company Subsidiaries taken as a whole, (ii) (A) general
changes or developments in the retail real estate development, redevelopment,
management and leasing industry or (B) general changes or developments in the
neighborhood and community shopping
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center development, redevelopment, management and leasing industry or (C) acts
of war, insurrection, sabotage or terrorism that, in each of (A), (B) or (C), do
not have a materially disproportionate effect (relative to other industry
participants) on the Company and the Company Subsidiaries taken as a whole, or
(iii) any suit, claim, action, proceeding, litigation, arbitration or
investigation pending or threatened against or affecting the Company or any
Company Subsidiary or their respective assets, trustees, directors, managers or
officers arising out of or relating to this Agreement, the Mergers or any other
transaction contemplated hereby, shall not be considered in determining if a
Company Material Adverse Effect has occurred.
"Company Non-Employee Director Stock Option Plan" has the meaning set
forth in Section 4.1(c)(i)(C).
"Company Option" has the meaning set forth in Section 3.2(a).
"Company Parties" means the Company, the Operating Partnership and
Xxxxxxxxxx.
"Company Parties Disclosure Schedule" has the meaning set forth in the
first paragraph of Section 4.1.
"Company Parties Resignations" has the meaning set forth in Section 6.11.
"Company Permits" has the meaning set forth in Section 4.1(k).
"Company Property" and "Company Properties" have the meanings set forth in
Section 4.1(o)(i).
"Company Property Restrictions" has the meaning set forth in Section
4.1(o)(i).
"Company Record Date" has the meaning set forth in Section 4.2(i)(i).
"Company SEC Documents" means each report, schedule, registration
statement and definitive proxy statement filed by the Company with the SEC since
January 1, 2002 (together with all exhibits and schedules thereto and all
information incorporated therein by reference).
"Company Shareholder Approval" has the meaning set forth in Section
4.1(d)(i).
"Company Shareholders Meeting" has the meaning set forth in Section
6.10(a).
"Company Shares" means the Common Shares, the Series B-1 Preferred Shares
and the Series E Preferred Shares.
"Company Stock Option Plans" has the meaning set forth in Section
4.1(c)(i)(C).
"Company Subsidiary" means the Operating Partnership and each other
Subsidiary of the Company or the Operating Partnership.
"Confidentiality Letter" means that letter agreement, dated August 12,
2004, by and between the Company and Watt Commercial.
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"Confidentiality Agreements" means the Confidentiality Letter and Section
6 (confidentiality) of the Exclusivity Agreement.
"Contract" means any note, bond, mortgage, indenture, lease, license,
permit, concession, franchise, contract, agreement or other instrument or
obligation.
"Controlled Entities" has the meaning set forth in Section 4.2(e).
"Covered Employees" has the meaning set forth in Section 6.8(c).
"Cure Period" has the meaning set forth in Section 6.12.
"DLLCA" has the meaning set forth in Section 2.1(b).
"DRULPA" has the meaning set forth in Section 2.1(b).
"E Preferred Units Merger Consideration" has the meaning set forth in
Section 3.6(b)(ii).
"Effective Time" means the latest to occur of the OP Effective Time, the
Xxxxxxxxxx Effective Time and the REIT Effective Time.
"Eligible Xxxxxxxxxx XX Unit" and "Eligible Xxxxxxxxxx XX Units" have the
meanings set forth in Section 3.7(a)(i).
"Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any Person alleging potential
liability (including, without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on or
resulting from (a) the presence, or release into the environment, of any
Material of Environmental Concern at any location, whether or not owned or
operated by the Company or any of the Company Subsidiaries or (b) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law.
"Environmental Laws" means all federal, state and local Laws and common
laws relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata, and natural resources), including, without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of Materials of Environmental Concern, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is under common control, or which is treated as a single
employer with the Company under Section 414(b), (c), (m) or (o) of the Code.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Excluded Xxxxxxxxxx XX Units" has the meaning set forth in Section
3.7(a)(ii).
"Excluded Shares" has the meaning set forth in Section 3.1(d).
"Exclusivity Agreement" means that letter agreement, dated December 9,
2004, by and between the Company and Acquiror.
"Existing Credit Facility" means the Loan Agreement, dated December 20,
2002, as amended, among Kramont Operating Partnership, LP, Bank of America
(previously Fleet National Bank, N.A.), Wachovia Bank, CommerzBank AG,Compass
Bank, First Trust Bank and Fleet Securities, Inc.
"Fairness Opinion" has the meaning set forth in Section 4.1(s).
"FIRPTA Certificate" means a certificate in form and substance reasonably
satisfactory to Acquiror duly executed and acknowledged certifying facts that
would exempt from any withholding requirement under Section 1445 of the Code any
consideration distributed in or in connection with the Mergers for any United
States real property interests being transferred pursuant to this Agreement.
"GAAP" has the meaning set forth in Section 4.1(e)(i).
"Governmental Entities" means any federal, state, local, municipal, or
other government or governmental authority of any nature (including any
governmental agency, branch, body, regulatory or other authority department,
official, or entity and any court or other tribunal); or any body exercising, or
entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature.
"GP Units" has the meaning set forth in Section 4.1(c)(ii)(A).
"Guarantee" has the meaning set forth in Section 9.15(a).
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent: (a) in respect of
borrowed money; (b) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof); (c) in
respect of banker's acceptances; (d) representing capital lease obligations; (e)
representing the balance deferred and unpaid of the purchase price of any
property (except (i) any such balance that constitutes an accrued expense or
trade payable and (ii) obligations to consignors to pay under normal trade terms
for consigned goods); or (f) representing any hedging obligations, if and to the
extent any of the preceding items (other than letters of credit and hedging
obligations) would appear as a liability upon a balance sheet of the specified
Person prepared in accordance with GAAP. In addition, the term "Indebtedness"
includes all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person).
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"Indemnified Parties" has the meaning set forth in Section 6.9(a).
"Indemnity" has the meaning set forth in Section 9.15(b).
"Knowledge," or any similar expression, shall mean with respect to the
Company or any Company Subsidiary, the actual knowledge of the persons set forth
on Schedule 1.1(a) after reasonable inquiry.
"Law" means any statute, law, ordinance, rule, regulation, or other
requirement of any Governmental Entity.
"Lease" and "Leases" have the meanings set forth in Section 4.1(o)(iv).
"Liens" means, with respect to any asset, pledges, mortgages, title
defects or objections, claims, liens, charges, encumbrances and security
interests of any kind or nature.
"Limited Partner Tax Agreements" shall mean any agreement pursuant to
which (a) any liability to partners in the Operating Partnership or any other
Company Subsidiary or to any transferors of property to the Company or any of
the Company Subsidiaries relating to Taxes may arise, whether or not as a result
of the consummation of the transactions contemplated by this Agreement; (b) the
Company or any of the Company Subsidiaries have agreed to, or agreed not to, or
only with the consent of a limited partner or a group of limited partners to, do
any or all of the following: (i) maintain a minimum level of debt or continue a
particular debt or allocate debt under Treasury Regulation Section 1.752-3 to
any particular limited partner, (ii) retain or not dispose of assets in a
taxable transaction for a period of time that has not since expired, (iii) make
or refrain from making Tax elections, (iv) operate (or refrain from operating)
in a particular manner, and (v) only dispose of assets in a particular manner;
or (c) limited partners (other than the Company or any Subsidiary of the
Company) of the Operating Partnership, Xxxxxxxxxx, or any other partnership
which is a Company Subsidiary have (i) guaranteed debt of such partnership or
(ii) agreed to indemnify another Person with respect to such Person's liability
for debt of such partnership.
"Liquidation Effective Time" means the effective time of the liquidation,
dissolution and winding up of REIT Merger Sub as specified in Section 3 of the
Plan of Liquidation.
"LP Units" has the meaning set forth in Section 4.1(c)(ii)(A).
"Major Title Defect" has the meaning set forth in Section 6.12.
"Maryland Department" means the State Department of Assessments and
Taxation of Maryland.
"Maryland REIT Law" has the meaning set forth in Section 2.1(a).
"Material Contracts" has the meaning set forth in Section 4.1(r)(i).
"Materials of Environmental Concern" means such chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum and
petroleum products, friable
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asbestos or friable asbestos-containing materials or products, polychlorinated
biphenyls, lead or lead-based paints or materials, radon, fungus or mold that
are regulated under applicable Environmental Laws.
"Mergers" has the meaning set forth in Section 2.1(c).
"Merger Consideration" means the REIT Merger Consideration, the OP Merger
Consideration and the Xxxxxxxxxx Merger Consideration.
"MGCL" means the Maryland General Corporation Law.
"Xxxxxxxxxx" has the meaning set forth in the introductory paragraph.
"Xxxxxxxxxx Certificates" has the meaning set forth in Section 3.7(a)(i).
"Xxxxxxxxxx Effective Time" has the meaning set forth in Section 2.3(c).
"Xxxxxxxxxx XX Units" has the meaning set forth in Section 4.1(c)(ii)(C).
"Xxxxxxxxxx XX Units" has the meaning set forth in Section 4.1(c)(ii)(C).
"Xxxxxxxxxx Merger" has the meaning set forth in Section 2.1(c).
"Xxxxxxxxxx Merger Certificate" means the certificate of merger with
respect to the Xxxxxxxxxx Merger, containing the provisions required by, and
executed in accordance with, the DRULPA.
"Xxxxxxxxxx Merger Consideration" has the meaning set forth in Section
3.7(a)(i).
"Xxxxxxxxxx Merger Sub" has the meaning set forth in the introductory
paragraph.
"Xxxxxxxxxx OP Units" has the meaning set forth in Section 4.1(c)(ii)(C).
"Xxxxxxxxxx Partnership Agreement" has the meaning set forth in Section
4.1(c)(ii)(D).
"New Preferred B-1 Liquidation Preference" has the meaning set forth in
Section 6.14(b).
"New Series B-1 Preferred Shares" means the Surviving Entity's 9.75%
Series B-1 Cumulative Convertible Preferred Shares, par value $0.01 per share.
"Notice of Adverse Recommendation" has the meaning set forth in Section
6.4(c).
"Obligation" and "Obligations" have the meanings set forth in Section
9.15(a).
"OP B-1 Preferred Certificates" has the meaning set forth in Section
3.6(b)(i).
"OP Common Certificates" has the meaning set forth in Section 3.6(a).
"OP Common Units" means the GP Units and the LP Units.
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"OP Common Units Merger Consideration" has the meaning set forth in
Section 3.6(a).
"OP E Preferred Certificates" has the meaning set forth in Section
3.6(b)(ii).
"OP Effective Time" has the meaning set forth in Section 2.3(b).
"OP Merger" has the meaning set forth in Section 2.1(b).
"OP Merger Certificate" means the certificate of merger with respect to
the OP Merger, containing the provisions required by, and executed in accordance
with, the DRULPA.
"OP Merger Consideration" means the OP Common Units Merger Consideration,
the B-1 Preferred Units Merger Consideration and the E Preferred Units Merger
Consideration.
"OP Merger Sub" has the meaning set forth in the introductory paragraph.
"OP Preferred Units" means the Class B-1 Preferred Units and the Class E
Preferred Units.
"OP Unit Certificates" means the OP Common Certificates, the OP B-1
Preferred Certificates and the OP E Preferred Certificates.
"Operating Partnership" has the meaning set forth in the introductory
paragraph.
"Operating Partnership Actions" has the meaning set forth in Section
6.2(a).
"Operating Partnership Agreement" means the Amended and Restated Agreement
of Limited Partnership of the Operating Partnership, as amended through the date
hereof.
"Operating Partnership Units" means the OP Common Units and the OP
Preferred Units.
"Option Merger Consideration" has the meaning set forth in Section 3.2(a).
"Order" means any judgment, order, writ, preliminary or permanent
injunction or decree of any Governmental Entity.
"Parent" has the meaning set forth in the introductory paragraph.
"Parent Parties" means Parent and Parent Trust.
"Parent Documents" means the annual and half-year reports (including any
amendments and supplements thereto) filed by Parent with the Australian Stock
Exchange since January 1, 2002.
"Parent Trust" has the meaning set forth in the introductory paragraph.
"Partnerships Amendments" has the meaning set forth in Section 6.2(a).
"Paying Agent" has the meaning set forth in Section 3.8(a).
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"Paying Agent Agreement" has the meaning set forth in Section 3.8(a).
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, or any other entity or organization,
including Governmental Entities.
"Plan of Liquidation" has the meaning set forth in Section 6.14(a).
"Preferred B Certificate" and "Preferred B Certificates" have the meanings
set forth in Section 3.1(b)(i).
"Preferred B Merger Consideration" has the meaning set forth in Section
3.1(b).
"Preferred E Certificates" has the meaning set forth in Section 3.1(c).
"Preferred E Merger Consideration" has the meaning set forth in Section
3.1(c).
"Preferred Shares" means Series B-1 Preferred Shares and Series E
Preferred Shares.
"Property Agreements" has the meaning set forth in Section 4.1(o)(i).
"Proxy Statement" has the meaning set forth in Section 6.10(b).
"Purchaser Parties" means (a)(i) prior to the REIT Effective Time,
Acquiror, Acquiror Subsidiary and REIT Merger Sub; (ii) at and after the REIT
Effective Time, Acquiror, Acquiror Subsidiary and the Surviving Entity; (b)(i)
prior to the OP Effective Time, OP Merger Sub and (ii) at and after the OP
Effective Time, the Surviving OP Partnership; and (c)(i) prior to the Xxxxxxxxxx
Effective Time, Xxxxxxxxxx Merger Sub and (ii) at and after the Xxxxxxxxxx
Effective Time, the Surviving Xxxxxxxxxx Partnership.
"Purchaser Parties Disclosure Schedule" has the meaning set forth in the
introductory paragraph to Section 4.2.
"RE Commitment" has the meaning set forth in Section 5.1(b)(v).
"REA" and "REAs" have the meaning set forth in Section 4.1(o)(iv).
"REIT" has the meaning set forth in Section 4.1(j)(ii).
"REIT Effective Time" has the meaning set forth in Section 2.3(a).
"REIT Merger" has the meaning set forth in Section 2.1(a).
"REIT Merger Consideration" means, collectively, the Common Share Merger
Consideration, the Preferred B Merger Consideration and the Preferred E Merger
Consideration.
"REIT Merger Sub" has the meaning set forth in the introductory paragraph.
"REIT Merger Sub Common Shares" has the meaning set forth in Section 3.5.
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"REIT Merger Sub Preferred Shares" means preferred shares of beneficial
interest, par value $0.01 per share, of REIT Merger Sub.
"REIT Merger Sub Meeting Date" has the meaning set forth in Section
4.2(i)(i).
"REIT Merger Sub Shareholders Meeting" means a duly noticed meeting of the
sole shareholder of REIT Merger Sub.
"Rent Roll" has the meaning set forth in Section 4.1(o)(iv).
"Representatives" has the meaning set forth in Section 6.4(a).
"Responsible Entity" has the meaning set forth in the introductory
paragraph.
"Xxxxxxxx-Xxxxx Act" has the meaning set forth in Section 4.1(e)(ii).
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Series A-1 Preferred Shares" means the Company's Series A-1 Increasing
Rate Cumulative Convertible Preferred Shares, par value $0.01 per share.
"Series B-1 Preferred Shares" means the Company's 9.75% Series B-1
Cumulative Convertible Preferred Shares, par value $0.01 per share.
"Series D Preferred Shares" means the Company's Series D Cumulative
Redeemable Preferred Shares.
"Series E Preferred Shares" means the Company's 8.25% Series E Cumulative
Redeemable Preferred Shares, par value $0.01 per share.
"Shareholder Litigation" has the meaning set forth in Section 6.5.
"Skadden No-Action Letter" means the Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP no-action letter (January 12, 1999).
"Subsidiary" or "Subsidiaries" of any Person shall mean (i) a corporation
more than 50% of the combined voting power of the outstanding voting stock of
which is owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person or by such Person and one or more other Subsidiaries
thereof, (ii) a partnership of which such Person, or one or more other
Subsidiaries of such Person or such Person and one or more other Subsidiaries
thereof, directly or indirectly, is the general partner and has the power to
direct the policies, management and affairs of such partnership, (iii) a limited
liability company of which such Person or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, is the managing member (or manager) and has the power to direct the
policies, management and affairs of such company or (iv) any other Person
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(other than a corporation, partnership or limited liability company) in which
such Person, or one or more other Subsidiaries of such Person or such Person and
one or more other Subsidiaries thereof, directly or indirectly, has at least a
majority ownership and power to direct the policies, management and affairs
thereof.
"Subsidiary Mergers" means the OP Merger and the Xxxxxxxxxx Merger.
"Superior Proposal" shall mean a bona fide written Takeover Proposal that
was not solicited by, or the result of any solicitation by, the Company or any
of its Subsidiaries or by any of their respective officers, trustees, directors,
Affiliates, investment banks, accountants, financial advisors or other
representatives or agents, made by a third party to purchase all of the
outstanding equity securities of the Company, the Operating Partnership and/or
Xxxxxxxxxx pursuant to a tender offer, exchange offer, merger, consolidation or
business combination or the sale of all or substantially all of the assets of
the Company on a consolidated basis (a) on terms which the Company Board
determines in good faith (after consultation with its financial advisors) to be
superior for all of the shareholders of the Company (in their capacity as
shareholders), taken as a group, from a financial point of view as compared to
the transactions contemplated hereby (after giving effect to the payment of the
Termination Fee set forth in Section 8.4(a)) and any alternative proposed by
Acquiror in accordance with Section 6.4(c), (b) which is reasonably likely to be
consummated (taking into account, among other things, all legal, financial,
regulatory and other aspects of the proposal, including any conditions, and the
identity of the offeror) and (c) in respect of which any required financing has
been determined in good faith by the Company Board to be reasonably likely to be
obtained.
"Surviving Bylaws" has the meaning set forth in Section 2.5.
"Surviving Entity" has the meaning set forth in Section 2.1(a).
"Surviving Xxxxxxxxxx Agreement" has the meaning set forth in Section 2.7.
"Surviving Xxxxxxxxxx Partnership" has the meaning set forth in Section
2.1(c).
"Surviving OP Agreement" has the meaning set forth in Section 2.6.
"Surviving OP Partnership" has the meaning set forth in Section 2.1(b).
"T&O Insurance" has the meaning set forth in Section 6.9(b).
"Takeover Proposal" shall mean any inquiry, proposal or offer from any
Person or group relating to (a) the acquisition of more than ten percent (10%)
of the outstanding shares of beneficial interest, capital stock or any other
voting securities of the Company or any of the Company Subsidiaries (or any
interests in the Company or any of the Company Subsidiaries), (b) a merger,
consolidation, combination, reorganization, share exchange, sale of
substantially all assets, recapitalization, liquidation, dissolution or similar
transaction which would result in any Person acquiring ten percent (10%) or more
of the fair market value of the assets (including capital stock of the Company
Subsidiaries) of the Company and the Company Subsidiaries, taken as a whole, (c)
the refinancing or recapitalization of the Company's or any Company Subsidiary's
securities or indebtedness, other than with respect to indebtedness in the
ordinary
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course of business, (d) the liquidation, dissolution or reorganization of the
Company or any material Company Subsidiary, (e) the acquisition by the Company
or any of the Company Subsidiaries of capital stock or assets and properties of
any third party in excess of $60.0 million in the aggregate, or (f) the sale,
lease or other disposition of assets or rights of the Company or any Company
Subsidiary outside of the ordinary course of business which would result in any
Person acquiring ten percent (10%) or more of the fair market value of the
assets or rights of the Company and the Company Subsidiaries, taken as a whole.
"Takeover Statute" has the meaning set forth in Section 4.1(u).
"Tax" or "Taxes" means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions, levies
and liabilities, including taxes that are based upon or measured by gross
receipts, income, profits, sales, use and occupation, and value added, ad
valorem, alternative or add-on minimum, severance, capital stock, premium,
registration, transfer, gains, franchise, withholding, payroll, recapture,
employment, excise, estimated, unemployment, insurance, social security,
business license, occupation, business organization, stamp, environmental and
property taxes, together with all interest, penalties and additions imposed with
respect to such amounts. For purposes of this Agreement, "Taxes" also includes
any obligations under any agreements or arrangements with any Person with
respect to the liability for, or sharing of, Taxes (including pursuant to
Treasury Regulations Section 1.1502-6 or comparable provisions of state, local
or foreign tax Law) and including any liability for Taxes as a transferee or
successor, by Contract or otherwise.
"Tax Return" means any report, return, election, notice, estimate,
declaration, information statement or other form or document (including all
schedules, exhibits and other attachments thereto) relating to and filed or
required to be filed with a Taxing authority in connection with any Tax
(including estimated Taxes), and shall include any amendment to any of the
foregoing.
"Termination Date" has the meaning set forth in Section 8.1(b)(ii).
"Termination Fee" has the meaning set forth in Section 8.4(a).
"Title Insurance Policies" has the meaning set forth in Section 4.1(o)(i).
"Trust Deed" has the meaning set forth in Section 4.3(b)(i).
"Trust Funds" has the meaning set forth in Section 4.3(b)(ii).
"U.S. Dollars" and the sign "$" shall each mean the lawful currency of the
United States of America.
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ARTICLE II
THE MERGERS
Section 2.1. The Mergers.
(a) REIT Merger; Surviving Entity. Upon the terms and subject to
the conditions set forth in this Agreement, and in accordance with Title 8 of
the Corporations and Associations Article of the Annotated Code of Maryland (the
"Maryland REIT Law"), immediately following the OP Effective Time and the
Xxxxxxxxxx Effective Time, (i) the Company shall be merged with and into REIT
Merger Sub (the "REIT Merger"), effective as of the REIT Effective Time, (ii)
the separate existence of the Company shall thereupon cease and (iii) REIT
Merger Sub shall continue its existence under Maryland law as the surviving
entity in the REIT Merger (the "Surviving Entity"), and the separate existence
of REIT Merger Sub with all its rights, privileges, immunities, powers and
franchises shall continue.
(b) OP Merger; Surviving OP Partnership. Upon the terms and
subject to the conditions set forth in this Agreement, and in accordance with
the Delaware Revised Uniform Limited Partnership Act ("DRULPA") and the Delaware
Limited Liability Company Act ("DLLCA"), at the OP Effective Time and
immediately prior to the REIT Effective Time and concurrent with the Xxxxxxxxxx
Effective Time, (i) OP Merger Sub shall be merged with and into the Operating
Partnership (the "OP Merger"), (ii) the separate existence of OP Merger Sub
shall thereupon cease and (iii) the Operating Partnership shall continue its
existence under Delaware law as the surviving entity in the OP Merger (the
"Surviving OP Partnership"), and the separate limited partnership existence of
the Operating Partnership with all its rights, privileges, immunities, powers
and franchises shall continue.
(c) Xxxxxxxxxx Merger; Surviving Xxxxxxxxxx Partnership. Upon the
terms and subject to the conditions set forth in this Agreement, and in
accordance with the DRULPA and the DLLCA, at the Xxxxxxxxxx Effective Time and
immediately prior to the REIT Effective Time and concurrent with the OP
Effective Time, (i) Xxxxxxxxxx Merger Sub shall be merged with and into
Xxxxxxxxxx (the "Xxxxxxxxxx Merger" and, together with the REIT Merger and the
OP Merger, the "Mergers"), (ii) the separate existence of Xxxxxxxxxx Merger Sub
shall thereupon cease and (iii) Xxxxxxxxxx shall continue its existence under
Delaware law as the surviving entity in the Xxxxxxxxxx Merger (the "Surviving
Xxxxxxxxxx Partnership"), and the separate limited partnership existence of
Xxxxxxxxxx with all its rights, privileges, immunities, powers and franchises
shall continue.
Section 2.2. Closing. Unless this Agreement shall have terminated and the
Mergers shall have been abandoned pursuant to Section 8.1, and subject to the
satisfaction or waiver (as permitted by applicable Law) of all of the conditions
set forth in Article VI hereof, the closing of the REIT Merger, the OP Merger
and the Xxxxxxxxxx Merger (such closings are referred to together as the
"Closing") shall take place (a) at the offices of Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP, Xxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the first Business
Day after the day on which the last of such conditions (other than any
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions) is satisfied or waived (as
permitted by applicable Law) in accordance with this Agreement or (b) at such
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other place and time or on such other date as Acquiror and the Company may agree
in writing. The date on which the Closing occurs is referred to herein as the
"Closing Date."
Section 2.3. Effective Times of the Mergers.
(a) On the Closing Date, immediately following the OP Effective
Time and the Xxxxxxxxxx Effective Time, REIT Merger Sub and the Company shall
file the Articles of Merger, in accordance with, and shall make all other
filings or recordings and take all such other action required with respect to
the REIT Merger under, the Maryland REIT Law. The REIT Merger shall become
effective when the Articles of Merger have been accepted for record by the
Maryland Department or at such other subsequent date or time as Acquiror and the
Company may agree in writing and specify in the Articles of Merger in accordance
with the Maryland REIT Law. The time at which the REIT Merger becomes effective
is referred to as the "REIT Effective Time."
(b) On the Closing Date and immediately before the OP Effective
Time, OP Merger Sub and the Operating Partnership shall file the OP Merger
Certificate, in accordance with, and shall make all other filings or recordings
and take all such other action required with respect to the OP Merger under, the
DRULPA. The OP Merger shall become effective when the OP Merger Certificate has
been accepted for filing by the office of the Secretary of State of the State of
Delaware or at such other subsequent date or time as Acquiror and the Company
may agree in writing and specify in the OP Merger Certificate in accordance with
the DRULPA and the DLLCA. The time at which the OP Merger becomes effective is
referred to as the "OP Effective Time."
(c) On the Closing Date and immediately before the Xxxxxxxxxx
Effective Time, Xxxxxxxxxx Merger Sub and Xxxxxxxxxx shall file the Xxxxxxxxxx
Merger Certificate, in accordance with, and shall make all other filings or
recordings and take all such other action required with respect to the
Xxxxxxxxxx Merger under, the DRULPA. The Xxxxxxxxxx Merger shall become
effective when the Xxxxxxxxxx Merger Certificate has been accepted for filing by
the office of the Secretary of State of the State of Delaware or at such other
subsequent date or time as Acquiror and the Company may agree in writing and
specify in the Xxxxxxxxxx Merger Certificate in accordance with the DRULPA and
the DLLCA. The time at which the Xxxxxxxxxx Merger becomes effective is referred
to as the "Xxxxxxxxxx Effective Time."
Section 2.4. Effects of the Mergers.
(a) The REIT Merger shall have the effects set forth herein and in
the applicable provisions of the Maryland REIT Law. Without limiting the
generality of the foregoing sentence, and subject thereto, at the REIT Effective
Time, all the properties, rights, privileges, powers and franchises of the
Company and REIT Merger Sub shall vest in the Surviving Entity, and all debts,
liabilities and duties of the Company and REIT Merger Sub shall become the
debts, liabilities and duties of the Surviving Entity.
(b) The OP Merger shall have the effects set forth herein and in
the applicable provisions of the DRULPA and the DLLCA. Without limiting the
generality of the foregoing sentence, and subject thereto, at the OP Effective
Time, all properties, rights, privileges, powers
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and franchises of the Operating Partnership and OP Merger Sub shall vest in the
Surviving OP Partnership, and all debts, liabilities and duties of the Operating
Partnership and OP Merger Sub shall become the debts, liabilities and duties of
the Surviving OP Partnership.
(c) The Xxxxxxxxxx Merger shall have the effects set forth herein
and in the applicable provisions of the DRULPA and the DLLCA. Without limiting
the generality of the foregoing sentence, and subject thereto, at the Xxxxxxxxxx
Effective Time, all properties, rights, privileges, powers and franchises of
Xxxxxxxxxx and Xxxxxxxxxx Merger Sub shall vest in the Surviving Xxxxxxxxxx
Partnership, and all debts, liabilities and duties of Xxxxxxxxxx and Xxxxxxxxxx
Merger Sub shall become the debts, liabilities and duties of the Surviving
Xxxxxxxxxx Partnership.
Section 2.5. Surviving Entity's Organizational Documents. Effective upon
and as part of the REIT Merger, (i) the declaration of trust of REIT Merger Sub
in effect immediately prior to the REIT Effective Time shall be the declaration
of trust of the Surviving Entity from and after the REIT Effective Time until
thereafter changed or amended as provided therein or in accordance with the
Maryland REIT Law, and (ii) the bylaws of REIT Merger Sub in effect immediately
prior to the REIT Effective Time shall be the bylaws of the Surviving Entity
from and after the REIT Effective Time (the "Surviving Bylaws") until thereafter
changed or amended as provided therein or in accordance with the Maryland REIT
Law.
Section 2.6. Surviving OP Partnership's Organizational Documents.
Effective upon and as part of the OP Merger, (i) the certificate of limited
partnership of the Operating Partnership in effect immediately prior to the OP
Effective Time shall be amended and restated in the form attached hereto as
Exhibit A (the "Amended and Restated LP Certificate"), which shall be the
certificate of limited partnership of the Surviving OP Partnership from and
after the OP Effective Time until thereafter changed or amended as provided
therein or in accordance with the DRULPA, and (ii) the Operating Partnership
Agreement in effect immediately prior to the OP Effective Time shall be the
partnership agreement of the Surviving OP Partnership from and after the OP
Effective Time (the "Surviving OP Agreement") until thereafter changed or
amended as provided therein or in accordance with applicable Law.
Section 2.7. Surviving Xxxxxxxxxx Partnership's Organizational Documents.
Effective upon and as part of the Xxxxxxxxxx Merger, (i) the certificate of
limited partnership of Xxxxxxxxxx in effect immediately prior to the Xxxxxxxxxx
Effective Time shall be the certificate of limited partnership of the Surviving
Xxxxxxxxxx Partnership from and after the Xxxxxxxxxx Effective Time until
thereafter changed or amended as provided therein or in accordance with the
DRULPA, and (ii) the Xxxxxxxxxx Partnership Agreement in effect immediately
prior to the Xxxxxxxxxx Effective Time shall be the partnership agreement of the
Surviving Xxxxxxxxxx Partnership from and after the Xxxxxxxxxx Effective Time
(the "Surviving Xxxxxxxxxx Agreement") until thereafter changed or amended as
provided therein or in accordance with applicable Law.
Section 2.8. Officers of the Surviving Entity. The officers of the Company
immediately prior to the REIT Effective Time shall be, from and after the REIT
Effective Time, the officers of the Surviving Entity until their successors are
duly elected and qualified or until
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their earlier death, resignation or removal in accordance with the Surviving
Bylaws and the Maryland REIT Law.
Section 2.9. Officers of the Surviving OP Partnership. The officers of the
Operating Partnership immediately prior to the OP Effective Time shall be, from
and after the OP Effective Time, the officers of the Surviving OP Partnership
until their successors are duly elected and qualified or until their earlier
death, resignation or removal in accordance with the Surviving OP Agreement and
the DRULPA.
Section 2.10. Officers of the Surviving Xxxxxxxxxx Partnership. The
officers of Xxxxxxxxxx immediately prior to the Xxxxxxxxxx Effective Time shall
be, from and after the Xxxxxxxxxx Effective Time, the officers of the Surviving
Xxxxxxxxxx Partnership until their successors are duly elected and qualified or
until their earlier death, resignation or removal in accordance with the
Surviving Xxxxxxxxxx Agreement and the DRULPA.
ARTICLE III
EFFECT OF THE MERGERS ON COMMON SHARES,
PREFERRED SHARES, COMPANY OPTIONS, MEMBERSHIP
INTERESTS AND PARTNERSHIP UNITS
Section 3.1. Effect of REIT Merger on Common Shares and Preferred Shares.
At the REIT Effective Time, by virtue of the REIT Merger and without any action
on the part of any of the Purchaser Parties, the Company, the holders of any
common shares of beneficial interest, par value $0.01 per share, of the Company
(the "Common Shares") or the holders of any preferred shares of beneficial
interest, par value $0.01 per share, of the Company:
(a) Conversion of Common Shares. Each Common Share (other than the
Excluded Shares) issued and outstanding immediately prior to the REIT Effective
Time (including all Common Shares issued after the date of this Agreement and
prior to the REIT Effective Time) shall be converted automatically into the
right to receive $23.50 (as adjusted to reflect adjustments in the Common Share
Merger Consideration pursuant to Section 5.1(b)(i)) in cash, without interest
(the aggregate of such amounts hereinafter referred to as the "Common Share
Merger Consideration"). At the REIT Effective Time, all Common Shares converted
into the right to receive the Common Share Merger Consideration shall be
cancelled automatically and shall cease to exist, and the holders of
certificates which immediately prior to the REIT Effective Time evidenced such
Common Shares (the "Common Share Certificates") shall cease to have any rights
with respect to the Common Shares, other than the right to receive the Common
Share Merger Consideration per share (without any interest being payable
thereon) to be paid in consideration therefor upon surrender of the Common Share
Certificates in accordance with Section 3.8.
(b) Conversion of Series B-1 Preferred Shares.
(i) Each Series B-1 Preferred Share (other than the Excluded
Shares) issued and outstanding immediately prior to the REIT Effective
Time (including all
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Series B-1 Preferred Shares issued after the date of this Agreement and
prior to the REIT Effective Time) shall be converted automatically into
one New Series B-1 Preferred Share (the aggregate of such shares
hereinafter referred to as the "Preferred B Merger Consideration").
(ii) Each share certificate that immediately prior to the
REIT Effective Time evidenced Series B-1 Preferred Shares (each, a
"Preferred B Certificate" and collectively, the "Preferred B
Certificates") shall, from and after the REIT Effective Time,
automatically and without the necessity of presenting the same for
exchange, evidence that number of New Series B-1 Preferred Shares into
which the shares evidenced by such certificate shall have been converted
pursuant to the provisions of this Section 3.1(b). Each Person holding of
record a Preferred B Certificate shall receive, upon surrender of such
certificate or certificates, a new certificate evidencing and representing
the number of New Series B-1 Preferred Shares into which such Person's
Series B-1 Preferred Shares shall have been converted.
(c) Conversion of Series E Preferred Shares. Each Series E
Preferred Share (other than the Excluded Shares) issued and outstanding
immediately prior to the REIT Effective Time (including all Series E Preferred
Shares issued after the date of this Agreement and prior to the REIT Effective
Time) shall be converted automatically into the right to receive $25.00 (plus
all accrued and unpaid distributions (whether or not declared) existing prior to
the REIT Effective Time) in cash, without interest (the aggregate of such
amounts hereinafter referred to as the "Preferred E Merger Consideration"). At
the REIT Effective Time, all Series E Preferred Shares converted into the right
to receive the Preferred E Merger Consideration shall be cancelled automatically
and shall cease to exist, and the holders of certificates which immediately
prior to the REIT Effective Time evidenced such Series E Preferred Shares (the
"Preferred E Certificates") shall cease to have any rights with respect to the
Series E Preferred Shares, other than the right to receive the Preferred E
Merger Consideration per share (without any interest being payable thereon) to
be issued in consideration therefor upon surrender of the Preferred E
Certificates in accordance with Section 3.8.
(d) Cancellation of Certain Common Shares and Preferred Shares.
Each Common Share and Preferred Share issued and outstanding and owned by any
Company Subsidiary, or by the Purchaser Parties or any of their respective
Subsidiaries, immediately prior to the REIT Effective Time (collectively, the
"Excluded Shares") shall be cancelled automatically and shall cease to exist,
without payment of any consideration being made in respect thereof.
(e) Dissenters' Rights. No dissenters' or objectors' rights to
appraisal or similar rights shall be available with respect to the REIT Merger.
Section 3.2. Company Options.
(a) The Company shall take all actions necessary to assure that,
as of the REIT Effective Time, each option to acquire Common Shares (each, a
"Company Option") issued under the Company Stock Option Plans or otherwise and
outstanding immediately prior to the REIT Effective Time, whether or not then
exercisable or vested, by virtue of the REIT
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Merger and without any further action on the part of the Purchaser Parties, the
Company or the holder of that Company Option, shall be cancelled and converted
into the right to receive an amount in cash, without interest, equal to the
product of (x) the excess, if any, of the Common Share Merger Consideration per
share over the exercise or purchase price per share of such Company Option, and
(y) the number of Common Shares subject thereto (the aggregate of such amounts
hereinafter referred to as the "Option Merger Consideration"). The payment of
the Option Merger Consideration to the holder of a Company Option shall be
reduced by any income or employment Tax withholding required under (i) the Code
or (ii) any applicable state, local or foreign Tax Laws. To the extent that
amounts are so withheld, such withheld amounts shall be timely paid to the
appropriate tax authority and shall be treated for all purposes under this
Agreement as having been paid to the holder of that Company Option. At the REIT
Effective Time, all Company Options shall be cancelled and each Company Stock
Option Plan shall terminate. The Company shall take such actions as are
necessary to ensure that each Company Stock Option Plan shall terminate as of
the REIT Effective Time. The Option Merger Consideration paid with respect to
Company Options in accordance with this Section 3.2(a) shall be deemed to have
been paid in full satisfaction of all rights pertaining to the cancelled Company
Options and on and after the REIT Effective Time the holder of a Company Option
shall have no further rights to exercise any Company Option. All administrative
and other rights and authorities granted under the Company Stock Option Plans to
the Company, the Company Board or any committee or designee thereof, shall,
following the REIT Effective Time, reside with the Surviving Entity.
Notwithstanding the foregoing, if the exercise price per share or unit provided
for in any Company Option exceeds the Common Share Merger Consideration per
share, at the REIT Effective Time, such Company Option shall be cancelled and no
cash shall be paid with regard to such Company Option to the holder of such
Company Option. The Option Merger Consideration shall be paid by the Surviving
Entity to the holders of cancelled Company Options promptly following the REIT
Effective Time but in no event later than five (5) Business Days after the
Closing Date.
(b) The Company shall take all actions necessary to cause
dispositions of Company equity securities (including derivative securities)
pursuant to the transactions contemplated by this Agreement by each individual
that is an officer or trustee of the Company to be exempt from Section 16(b) of
the Exchange Act under Rule 16b-3 under the Exchange Act in accordance with the
Skadden No-Action Letter.
Section 3.3. Restricted Shares. The Company shall take all actions
necessary so that as of the REIT Effective Time, each restricted Common Share
granted by the Company Board which as of the Closing Date is issued and
outstanding but not vested shall fully vest. At the REIT Effective Time, each
issued and outstanding restricted Common Share shall be converted into the right
to receive the Common Share Merger Consideration per share as provided in
Section 3.1(a).
Section 3.4. Adjustments to REIT Merger Consideration. If, during the
period between the date of this Agreement and the REIT Effective Time, any
change in the outstanding Company Shares shall occur, including, but not limited
to, by reason of any reclassification, recapitalization, share dividend, share
split, reverse split or combination, exchange or readjustment of Company Shares,
or any share dividend thereon with a record date during such period (but not as
a result of (x) the exercise of outstanding Company Options, (y) the
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redemption of any outstanding OP Common Units or Xxxxxxxxxx XX Units for Common
Shares or (z) the conversion of Series B-1 Preferred Shares into Common Shares,
the amount per share to be paid to holders of Company Shares as the REIT Merger
Consideration and the holders of Company Options as the Option Merger
Consideration shall be appropriately adjusted.
Section 3.5. Effect of the REIT Merger on REIT Merger Sub Shares. As of
the REIT Effective Time, by virtue of the REIT Merger and without any action on
the part of any holder of common shares of beneficial interest, par value $0.01
per share, of REIT Merger Sub (the "REIT Merger Sub Common Shares"), each REIT
Merger Sub Common Share issued and outstanding immediately prior to the REIT
Effective Time (including all REIT Merger Sub Common Shares issued after the
date of this Agreement and prior to the REIT Effective Time) shall be converted
into one issued and outstanding common share of the Surviving Entity and shall
constitute the only outstanding common shares of the Surviving Entity.
Section 3.6. Effect of the OP Merger on the Operating Partnership Units.
At the OP Effective Time, by virtue of the OP Merger and without any action on
the part of any of the Purchaser Parties, the Operating Partnership or the
holders of any of the outstanding equity interests of OP Merger Sub or the
Operating Partnership Units or any other Person:
(a) Conversion of OP Common Units. Each OP Common Unit issued and
outstanding immediately prior to the OP Effective Time shall be converted
automatically into the right to receive $23.50 (as adjusted to reflect
adjustments to the OP Merger Consideration pursuant to Section 5.1(b)(i)) in
cash, without interest (the aggregate of such amounts hereinafter referred to as
the "OP Common Units Merger Consideration"). At the OP Effective Time, all OP
Common Units converted into the right to receive the OP Common Units Merger
Consideration shall be cancelled automatically and shall cease to exist, and the
holders of certificates which immediately prior to the OP Effective Time
represented OP Common Units (the "OP Common Certificates") shall cease to have
any rights with respect to the OP Common Units, other than the right to receive
the OP Common Units Merger Consideration per unit (without any interest being
payable thereon) to be issued in consideration therefor upon surrender of the OP
Common Certificates in accordance with Section 3.8.
(b) Conversion of OP Preferred Units.
(i) Class B-1 Preferred Units. Each Class B-1 Preferred Unit
issued and outstanding immediately prior to the OP Effective Time
(including all Class B-1 Preferred Units issued after the date of this
Agreement and prior to the OP Effective Time), shall be converted
automatically into the right to receive $25.00 (plus all accrued and
unpaid distributions (whether or not declared) existing prior to the OP
Effective Time) in cash, without interest (the aggregate of such amounts
hereinafter referred to as the "B-1 Preferred Units Merger
Consideration"). At the OP Effective Time, all Class B-1 Preferred Units
converted into the right to receive the B-1 Preferred Units Merger
Consideration shall be cancelled automatically and shall cease to exist,
and the holders of certificates which immediately prior to the OP
Effective Time evidenced such Class B-1 Preferred Units (the "OP B-1
Preferred Certificates") shall cease to have any rights with respect to
the Class B-1 Preferred Units, other than the right to receive the B-1
Preferred Units Merger Consideration per unit (without any interest being
payable thereon) to be
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issued in consideration therefor upon surrender of the OP B-1 Preferred
Certificates in accordance with Section 3.8.
(ii) Class E Preferred Units. Each Class E Preferred Unit
issued and outstanding immediately prior to the OP Effective Time
(including all Class E Preferred Units issued after the date of this
Agreement and prior to the OP Effective Time), shall be converted
automatically into the right to receive $25.00 (plus all accrued and
unpaid distributions (whether or not declared) existing prior to the OP
Effective Time) in cash, without interest (the aggregate of such amounts
hereinafter referred to as the "E Preferred Units Merger Consideration").
At the OP Effective Time, all Class E Preferred Units converted into the
right to receive the E Preferred Units Merger Consideration shall be
cancelled automatically and shall cease to exist, and the holders of
certificates which immediately prior to the OP Effective Time evidenced
such Class E Preferred Units (the "OP E Preferred Certificates") shall
cease to have any rights with respect to the Class E Preferred Units,
other than the right to receive the E Preferred Units Merger Consideration
per unit (without any interest being payable thereon) to be issued in
consideration therefor upon surrender of the OP E Preferred Certificates
in accordance with Section 3.8.
(c) Conversion of Limited Liability Company Interests of OP Merger
Sub. Each limited liability company interest in OP Merger Sub issued and
outstanding immediately prior to the OP Effective Time shall be converted into
one unit of common partnership interest in the Surviving OP Partnership, and the
members of OP Merger Sub immediately prior to the OP Effective Time shall
automatically be admitted as partners of the Surviving OP Partnership from and
after the OP Effective Time with the managing member of OP Merger Sub
immediately prior to the OP Effective Time being the new general partner of the
Surviving OP Partnership and the non-managing member of OP Merger Sub
immediately prior to the OP Effective Time being the new limited partner of the
Surviving OP Partnership.
(d) Dissenters' Rights. No dissenters' or objectors' rights to
appraisal or similar rights shall be available with respect to the OP Merger.
(e) Adjustments to OP Merger Consideration. If, during the period
between the date of this Agreement and the OP Effective Time, any change in the
outstanding Operating Partnership Units shall occur, including, but not limited
to, by reason of any reclassification, recapitalization, equity distribution,
equity split, reverse split or combination, exchange or readjustment of
Operating Partnership Units, or any equity distribution thereon with a record
date during such period (but not as a result of the redemption of any
outstanding OP Common Units for Common Shares), the amount per Operating
Partnership Unit to be paid to holders of Operating Partnership Units as the OP
Merger Consideration shall be appropriately adjusted.
Section 3.7. Effect of the Xxxxxxxxxx Merger on the Xxxxxxxxxx OP Units.
At the Xxxxxxxxxx Effective Time, by virtue of the Xxxxxxxxxx Merger and without
any action on the part of any of the Purchaser Parties, Xxxxxxxxxx or the
holders of any of the outstanding equity interests of Xxxxxxxxxx Merger Sub or
the Xxxxxxxxxx OP Units or any other Person:
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(a) Xxxxxxxxxx XX Units.
(i) Conversion of Xxxxxxxxxx XX Units. Each Xxxxxxxxxx XX
Unit (other than the Excluded Xxxxxxxxxx XX Units) issued and outstanding
immediately prior to the Xxxxxxxxxx Effective Time (such Xxxxxxxxxx XX
Units are each hereinafter referred to as an "Eligible Xxxxxxxxxx XX Unit"
and collectively, as the "Eligible Xxxxxxxxxx XX Units"), shall be
converted automatically into the right to receive $23.50 (as adjusted to
reflect adjustments to the Xxxxxxxxxx Merger Consideration pursuant to
Section 5.1(b)(i)) in cash, without interest (the aggregate of such
amounts hereinafter referred to as the "Xxxxxxxxxx Merger Consideration").
At the Xxxxxxxxxx Effective Time, all Eligible Xxxxxxxxxx XX Units
converted into the right to receive the Xxxxxxxxxx Merger Consideration
shall be cancelled automatically and shall cease to exist, and the holders
of certificates which immediately prior to the Xxxxxxxxxx Effective Time
represented Eligible Xxxxxxxxxx XX Units (the "Xxxxxxxxxx Certificates")
shall cease to have any rights with respect to the Eligible Xxxxxxxxxx XX
Units, other than the right to receive the Xxxxxxxxxx Merger Consideration
per unit (without any interest being payable thereon) to be issued in
consideration therefor upon surrender of the Xxxxxxxxxx Certificates in
accordance with Section 3.8.
(ii) Cancellation of Certain Xxxxxxxxxx XX Units. Each
Xxxxxxxxxx XX Unit issued and outstanding and owned by the Company or any
Company Subsidiary, or by the Purchaser Parties, or any of their
respective Subsidiaries, immediately prior to the Xxxxxxxxxx Effective
Time (collectively, the "Excluded Xxxxxxxxxx XX Units") shall be cancelled
automatically and shall cease to exist, without payment of any
consideration being made in respect thereof.
(b) Xxxxxxxxxx XX Units. The Xxxxxxxxxx Merger shall have no
effect on the outstanding Xxxxxxxxxx XX Units and at and after the Xxxxxxxxxx
Effective Time, the Xxxxxxxxxx XX Units outstanding immediately prior to the
Xxxxxxxxxx Effective Time shall continue to be outstanding GP Units of the
Surviving Xxxxxxxxxx Partnership.
(c) Conversion of Limited Liability Company Interests of
Xxxxxxxxxx Merger Sub. Each limited liability company interest in Xxxxxxxxxx
Merger Sub issued and outstanding immediately prior to the Xxxxxxxxxx Effective
Time shall be converted into one unit of common limited partner interest in the
Surviving Xxxxxxxxxx Partnership, and the members of the Xxxxxxxxxx Merger Sub
immediately prior to the Xxxxxxxxxx Effective Time shall be automatically
admitted as limited partners of the Surviving Xxxxxxxxxx Partnership from and
after the Xxxxxxxxxx Effective Time.
(d) Dissenters' Rights. No dissenters' or objectors' rights to
appraisal or similar rights shall be available with respect to the Xxxxxxxxxx
Merger.
(e) Adjustments to Xxxxxxxxxx Merger Consideration. If, during the
period between the date of this Agreement and the Xxxxxxxxxx Effective Time, any
change in the outstanding Xxxxxxxxxx XX Units shall occur, including, but not
limited to, by reason of any reclassification, recapitalization, equity
distribution, equity split, reverse split or combination,
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exchange or readjustment of Xxxxxxxxxx XX Units, or any equity distribution
thereon with a record date during such period (but not as a result of the
redemption of any outstanding Xxxxxxxxxx XX Units for Common Shares), the amount
per Xxxxxxxxxx XX Unit to be paid to holders of Eligible Xxxxxxxxxx XX Units as
the Xxxxxxxxxx Merger Consideration shall be appropriately adjusted.
Section 3.8. Surrender of Certificates.
(a) Paying Agent. Prior to the OP Effective Time, the Purchaser
Parties and the Company Parties shall select a mutually acceptable bank or trust
company to act as the paying agent in the Mergers and the liquidation of REIT
Merger Sub (the "Paying Agent"). The Purchaser Parties shall enter into a paying
agent agreement with the Paying Agent prior to the OP Effective Time in a form
reasonably satisfactory to the Company (the "Paying Agent Agreement").
(b) Payments. Immediately following the Effective Time, the
Purchaser Parties shall deposit, or cause to be deposited, with the Paying Agent
for exchange and payment in accordance with this Section 3.8(b), an amount in
cash sufficient to deliver, for the benefit of the holders of the Common Shares,
the Series E Preferred Shares, the Operating Partnership Units and the Eligible
Xxxxxxxxxx XX Units for exchange in accordance with this Article III, the
aggregate REIT Merger Consideration, OP Merger Consideration and the Xxxxxxxxxx
Merger Consideration. The Paying Agent shall, pursuant to irrevocable
instructions given by Acquiror, deliver the Merger Consideration contemplated to
be paid pursuant to Article III of this Agreement out of the funds to be
delivered to it as provided in this Agreement and, subject to Section 3.8(f),
such funds shall not be used for any other purpose except as permitted under
this Section 3.8(b). Any and all interest earned on any funds provided to the
Paying Agent by the Purchaser Parties pursuant to this Section 3.8(b) shall be
paid to the Surviving Entity. Subject to the obligations of the Purchaser
Parties under this Article III, pending the distribution of funds provided to
the Paying Agent pursuant to this Section 3.8(b), the Paying Agent shall invest
such funds as directed by Acquiror in accordance with the Paying Agent
Agreement. Any interest and other income resulting from such investment shall be
deemed property of, and shall be paid promptly to, the Surviving Entity.
(c) Payment Procedures.
(i) Letter of Transmittal. As of or promptly after the
Effective Time, the Surviving Entity shall cause the Paying Agent to mail
to each holder of record of a Certificate at the Effective Time (A) a
letter of transmittal in customary form specifying that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon proper delivery of the Certificates to the Paying Agent and which
letter shall be in such form and have such other provisions (including
provisions for the delivery of certificates of non-foreign status) as
Acquiror shall reasonably specify and (B) instructions for surrendering
the Certificates.
(ii) Surrender of Certificates. Upon surrender of a
Certificate for cancellation to the Paying Agent or such agent or agents
as Acquiror may designate, together with a duly executed letter of
transmittal and any other documents reasonably
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required by the Paying Agent (including, if applicable, duly executed
certificates of non-foreign status), the holder of such Certificate shall
be entitled to receive in exchange therefor the applicable Merger
Consideration payable in respect of the equity interests evidenced by such
Certificate less any required withholding of Taxes in accordance with
Section 3.8(e). Any Certificates so surrendered shall be cancelled
immediately. No interest shall accrue or be paid on any amount payable
upon surrender of the Certificates.
(iii) Unregistered Transferees. If any Merger Consideration is
to be paid to a Person other than the Person in whose name the surrendered
Certificate is registered, then the Merger Consideration may be paid to
such a transferee so long as (A) the surrendered Certificate is
accompanied by all documents reasonably required to evidence and effect
such transfer and (B) the Person requesting such payment (1) pays any
applicable transfer Taxes or (2) establishes to the reasonable
satisfaction of the Paying Agent that such Taxes have already been paid or
are not applicable.
(iv) No Other Rights. Until surrendered in accordance with
this Section 3.8(c), each Certificate shall be deemed, except as provided
in this Agreement or by applicable Law, from and after the Effective Time,
to represent for all purposes solely the right to receive the applicable
Merger Consideration in accordance with the terms hereof. Payment of the
applicable Merger Consideration upon the surrender of any Certificate
shall be deemed to have been paid in full satisfaction of all rights
pertaining to that Certificate and the equity interests formerly evidenced
by it.
(d) No Further Transfers. Upon and after the REIT Effective Time,
the share transfer books of the Company shall be closed and there shall be no
further registration of transfers of any Company Shares that were outstanding
immediately prior to the REIT Effective Time. If, after the REIT Effective Time,
Certificates evidencing Company Shares that were outstanding immediately prior
to the REIT Effective Time are presented to the Surviving Entity for any reason,
they shall be cancelled and exchanged for cash as provided in this Article III,
or, in the case of Series B-1 Preferred Shares, New Series B-1 Preferred Shares
as provided in Section 3.1(b)(ii). Upon and after the OP Effective Time, the
unit transfer books of the Operating Partnership shall be closed and there shall
be no further registration of transfers of any Operating Partnership Units that
were outstanding immediately prior to the OP Effective Time. If, after the OP
Effective Time, Certificates evidencing Operating Partnership Units that were
outstanding immediately prior to the OP Effective Time are presented to the
Surviving Entity or the Surviving OP Partnership for any reason, they shall be
cancelled and exchanged for cash as provided in this Article III. Upon and after
the Xxxxxxxxxx Effective Time, the unit transfer books of Xxxxxxxxxx shall be
closed and there shall be no further registration of transfers of any Xxxxxxxxxx
OP Units that were outstanding immediately prior to the Xxxxxxxxxx Effective
Time. If, after the Xxxxxxxxxx Effective Time, Certificates evidencing Eligible
Xxxxxxxxxx XX Units that were outstanding immediately prior to the Xxxxxxxxxx
Effective Time are presented to the Surviving Entity or the Surviving Xxxxxxxxxx
Partnership for any reason, they shall be cancelled and exchanged for cash as
provided in this Article III.
(e) Required Withholding. The Purchaser Parties and the Paying
Agent shall be entitled to deduct and withhold from any Merger Consideration
payable under this Agreement such amounts as may be required to be deducted or
withheld therefrom under (i) the Code or (ii)
-25-
any applicable state, local or foreign Tax Laws. To the extent that amounts are
so deducted and withheld, such amounts shall be timely paid to the appropriate
taxing authority and shall be treated for all purposes under this Agreement as
having been paid to the Person in respect of which such deduction and
withholding was made. The Purchaser Parties shall be responsible for any real
estate or real property transfer taxes imposed on any holder of Common Shares,
any holder of OP Common Units and any holder of Xxxxxxxxxx XX Units as a result
of the Mergers.
(f) No Liability. Neither the Purchaser Parties nor the Paying
Agent shall be liable to any holder of Certificates for any amount properly paid
by the Paying Agent or delivered to a public official under any applicable
abandoned property, escheat or similar Law.
(g) Termination of Payment Funds. Any portion of the funds
delivered to the Paying Agent pursuant to Section 3.8(b) that remains unclaimed
by the holders of Certificates six (6) months after the Effective Time shall be
delivered by the Paying Agent to the Surviving Entity upon demand, which shall
hold such amounts for the holders of Certificates. Any holder of Certificates
who has not complied with this Article III shall look thereafter only to the
Surviving Entity for payment of the applicable Merger Consideration, without
interest on such Merger Consideration, and only as general creditors thereof. In
addition, if any Certificate has not been surrendered by the earlier of (i) the
fifth (5th) anniversary of the Closing Date and (ii) the date immediately prior
to the date on which the cash amount that such Certificate represents the right
to receive would otherwise escheat to or become the property of any Governmental
Entity, then such cash amount shall, to the extent permitted by applicable Law,
become the property of the Surviving Entity, free and clear of all claims or
interest of any Person previously entitled thereto.
(h) Lost, Stolen or Destroyed Certificates. If any Certificate is
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Entity, the posting by such Person of a bond in such
reasonable and customary form and amount as the Surviving Entity may direct as
indemnity against any claim that may be made against the Surviving Entity with
respect to the alleged loss, theft or destruction of such Certificate, the
Paying Agent shall pay the applicable Merger Consideration to such Person in
exchange for such lost, stolen or destroyed Certificate.
(i) Preferred B Merger Consideration. Anything herein to the
contrary notwithstanding, (1) this Section 3.8 (other than Section 3.8(d)) shall
not apply to the Series B-1 Preferred Shares, the Preferred B Certificates or
the Preferred B Merger Consideration and (2) for purposes of, and wherever used
in, this Section 3.8 (other than Section 3.8(d)) only, the term "Certificate"
shall be deemed to exclude any Preferred B Certificate, the term "Company
Shares" shall be deemed to exclude the Series B-1 Preferred Shares, and the
terms "REIT Merger Consideration" and "Merger Consideration" shall be deemed to
exclude the Preferred B Merger Consideration.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Company Parties. Except
as set forth (i) in the disclosure schedule delivered by the Company Parties to
the Purchaser Parties prior to or concurrently with the execution of this
Agreement (the "Company Parties Disclosure Schedule"), which Schedule identifies
the Section (or, if applicable, subsection) to which such exception relates
(provided that any disclosure in the Company Parties Disclosure Schedule
relating to one section or subsection shall also apply to other sections and
subsections to the extent that it is reasonably apparent that such disclosure
would also apply to or qualify such other sections and subsections), or (ii) in
the Company SEC Documents filed prior to the date hereof, the Company Parties
represent and warrant to the Purchaser Parties as follows:
(a) Organization, Standing and Trust Power of the Company. The
Company is duly organized, validly existing as a Maryland real estate investment
trust and in good standing under the Laws of the State of Maryland and has the
requisite trust power, authority and all licenses, permits and authorizations
necessary to own, lease and operate its properties and other assets and to carry
on its business as now being conducted. The Company is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of the business it is conducting, or the ownership, operation or
leasing of its properties and other assets or the management of properties for
others makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed, individually or
in the aggregate, has not had, and would not reasonably be expected to have, a
Company Material Adverse Effect. The Company has heretofore made available to
Acquiror complete and correct copies of the Company's Amended and Restated
Declaration of Trust, as supplemented as of the date hereof (the "Company
Charter"), and the amended and restated bylaws (the "Company Bylaws"). The
Company Charter and the Company Bylaws are each currently in full force and
effect as of the date hereof. Each jurisdiction in which the Company is
qualified or licensed to do business and each assumed name under which it
conducts business in any jurisdiction are identified in Section 4.1(a) of the
Company Parties Disclosure Schedule.
(b) Company Subsidiaries; Interests in Other Persons.
(i) Each Company Subsidiary that is a corporation is duly
incorporated, validly existing and in good standing under the Laws of its
jurisdiction of incorporation and has the requisite corporate power,
authority and all licenses, permits and authorizations necessary to own,
lease and operate its properties and other assets and to carry on its
business as now being conducted, except where the failure to have such
licenses, permits and authorizations, individually or in the aggregate,
has not had, or would not reasonably be expected to have, a Company
Material Adverse Effect. Each Company Subsidiary, including the Operating
Partnership and Xxxxxxxxxx, that is a partnership, limited liability
company or trust is duly formed or created, validly existing and in good
standing under the Laws of its jurisdiction of formation or creation and
has the requisite power, authority and all licenses, permits and
authorizations necessary to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failure to
have such licenses, permits and authorizations, individually or
-27-
in the aggregate, has not had, or would not reasonably be expected to
have, a Company Material Adverse Effect. Each Company Subsidiary,
including the Operating Partnership and Xxxxxxxxxx, is duly qualified or
licensed to do business and is in good standing in each jurisdiction in
which the nature of its business or the ownership, operation or leasing of
its properties and other assets or the management of properties for others
makes such qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or licensed,
individually or in the aggregate, has not had, or would not reasonably be
expected to have a Company Material Adverse Effect. All outstanding shares
of stock of each Company Subsidiary that is a corporation have been duly
authorized, are validly issued, fully paid and nonassessable, and are not
subject to any preemptive rights and are owned by the Company and/or
another Company Subsidiary, and are so owned free and clear of all Liens
and are not subject to any option or right to purchase any such shares of
stock. All equity interests in each Company Subsidiary, including the
Operating Partnership and Xxxxxxxxxx, that is a partnership, limited
liability company, trust or other entity have been duly authorized and are
validly issued and, in each case of such equity interests that are
indicated on Section 4.1(b)(i) of the Company Parties Disclosure Schedule
as owned by the Company and/or another Company Subsidiary, are owned by
the Company and/or another Company Subsidiary and are so owned free and
clear of all Liens and are not subject to any option or right to purchase
any such equity interest. The Company Parties have heretofore made
available to each of the Purchaser Parties complete and correct copies of
the charter, bylaws or other organizational documents of each of the
Company Subsidiaries, each as amended to date and each as currently in
full force and effect. Section 4.1(b)(i) of the Company Parties Disclosure
Schedule sets forth (A) all Company Subsidiaries and their respective
jurisdictions of incorporation or formation or creation, (B) each owner
and the respective amount of such owner's equity interest in each Company
Subsidiary and (C) a list of each jurisdiction in which each Company
Subsidiary is qualified or licensed to do business and each assumed name
under which each such Company Subsidiary conducts business in any
jurisdiction.
(ii) Section 4.1(b)(ii) of the Company Parties Disclosure
Schedule sets forth the name and jurisdiction of each Person that is not a
Company Subsidiary but in which the Company, directly or indirectly, holds
an equity interest (each, a "Company Joint Venture" and collectively, the
"Company Joint Ventures"). All of the Company's interests in the Company
Joint Ventures are owned, directly or indirectly, by the Company or by one
or more of the Company Subsidiaries, in each case free and clear of all
Liens. Neither the Company nor any Company Subsidiary has a contractual
obligation, contingent or otherwise, to fund or participate in the debts
of any Company Joint Venture, which as of the date of this Agreement, has
not been funded.
(iii) Section 4.1(b)(iii) of the Company Parties Disclosure
Schedule sets forth the name of each Person that holds, directly or
indirectly, an equity interest in any Company Subsidiary (other than the
Operating Partnership and Xxxxxxxxxx), which Person is not the Company or
another Company Subsidiary, and the type and amount of equity interest
held by each such Person.
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(c) Capital Structure.
(i) Shares of Beneficial Interest.
(A) As of the date of this Agreement, the authorized
shares of beneficial interest of the Company consists of (1)
93,483,845 Common Shares and (2) 6,516,155 preferred shares of
beneficial interest. Shares of the Company's preferred shares of
beneficial interest have been designated as set forth in Section
4.1(c)(i)(A) of the Company Parties Disclosure Schedule.
(B) As of the date of this Agreement, (1) 24,443,680
Common Shares are issued and outstanding, (2) no shares of Series
A-1 Preferred Shares and Series D Preferred Shares are issued and
outstanding, (3) 1,176,040 Series B-1 Preferred Shares are issued
and outstanding, and (4) 2,800,000 Series E Preferred Shares are
issued and outstanding.
(C) As of the date of this Agreement, (1) (i) 273,845
Common Shares are reserved for issuance upon exercise of outstanding
Company Options, (ii) no additional Common Shares are reserved for
issuance under the Kramont Realty Trust Executive Officer Stock
Option Plan (the "Company EO Stock Option Plan"), (iii) 305,000
additional Common Shares are reserved for issuance under the Kramont
Realty Trust 1997 Stock Option Plan (the "Company 1997 Stock Option
Plan"), (iv) 100,000 additional Common Shares are reserved for
issuance under the Kramont Realty Trust Non-Employee Director 1998
Stock Option Plan (the "Company Non-Employee Director Stock Option
Plan"), (v) no additional Common Shares are reserved for issuance
under the Kranzco Realty Trust 1992 Employee Share Option Plan (the
"Company 1992 Employee Option Plan"), (vi) no additional Common
Shares are reserved for issuance under the Kranzco Realty Trust 1992
Trustee Share Option Plan (the "Company 1992 Trustee Option Plan"),
(vii) 936,378 additional Common Shares are reserved for issuance
under the Kranzco Realty Trust 1995 Incentive Plan (the "Company
1995 Incentive Plan") and (viii) 521,909 additional Common Shares
are reserved for issuance under the Kramont Realty Trust 2000
Incentive Plan (the "2000 Incentive Plan," and collectively with the
Company EO Stock Option Plan, the Company 1997 Stock Option Plan,
the 1992 Employee Option Plan, the 1992 Trustee Option Plan, the
1995 Incentive Plan and the Company Non-Employee Director Stock
Option Plan, the "Company Stock Option Plans"), (2) 1,653,879 Common
Shares are reserved for issuance upon redemption of outstanding OP
Common Units for Common Shares pursuant to the Operating Partnership
Agreement and (3) 12,272 Common Shares are reserved for issuance
upon redemption of outstanding Xxxxxxxxxx XX Units. As of the date
of this Agreement, Company Options to purchase 273,845 Common Shares
are issued and outstanding. There are no outstanding Company Options
that were not issued under one of the Company Stock Option Plans.
(D) Except as disclosed in Sections 4.1(c)(i)(A)-(C),
there are issued and outstanding or reserved for issuance: (1) no
shares or units of beneficial
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interest or other voting securities of the Company or any Company
Subsidiary; (2) no restricted Company Shares, performance share
awards or dividend equivalent rights relating to the equity
interests of the Company, the Operating Partnership or Xxxxxxxxxx;
(3) no securities of the Company or any Company Subsidiary or
securities or assets of any other entity convertible into or
exchangeable for shares of beneficial interest, or other voting
securities of the Company or any Company Subsidiary; and (4) no
subscriptions, options, warrants, conversion rights, stock
appreciation rights, calls, claims, rights of first refusal, rights
(including preemptive rights), commitments, arrangements or
agreements to which the Company or any Company Subsidiary is a party
or by which it is bound in any case obligating the Company or any
Company Subsidiary to issue, deliver, sell, purchase, redeem or
acquire, or cause to be issued, delivered, sold, purchased, redeemed
or acquired, additional shares of beneficial interest or other
voting securities of the Company or of any Company Subsidiary, or
obligating the Company or any Company Subsidiary to grant, extend or
enter into any such subscription, option, warrant, conversion right,
stock appreciation right, call, right, commitment, arrangement or
agreement. All outstanding Company Shares are, and all Company
Shares reserved for issuance will be, upon issuance in accordance
with the terms specified in the instruments or agreements pursuant
to which they are issuable, duly authorized, validly issued, fully
paid and nonassessable and not subject to or issued in violation of,
any preemptive right, purchase option, call option, right of first
refusal, subscription or any other similar right.
(E) Other than the regular quarterly cash
distributions declared by the Company Board on December 7, 2004, in
respect of the Common Shares, the Series B-1 Preferred Shares and
the Series E Preferred Shares and the corresponding cash
distributions declared on December 7, 2004 by the general partner of
the Operating Partnership in respect of the Operating Partnership
Units and by the general partner of Xxxxxxxxxx in respect of
Xxxxxxxxxx OP Units, (such distributions, the "2004 Fourth Quarter
Distributions"), all dividends or distributions on securities of the
Company or any Company Subsidiary that is not directly or indirectly
wholly owned by the Company that have been declared or authorized
prior to the date of this Agreement have been paid in full. The
aggregate amount of the 0000 Xxxxxx Xxxxxxx Distributions to Persons
other than the Company or any Company Subsidiary is not more than
$10,573,000.
(ii) Operating Partnership Units.
(A) As of the date of this Agreement, (1) 1 OP Common
Unit owned by the general partner of the Operating Partnership in
its capacity as a general partner of the Operating Partnership (the
"GP Units"), (2) 26,097,560 OP Common Units in the Operating
Partnership owned by limited partners of the Operating Partnership
in their capacity as limited partners of the Operating Partnership
(the "LP Units"), (3) no Class A OP Preferred Units in the Operating
Partnership (the "Class A Preferred Units"), (4) 1,176,040 Class B-1
OP Preferred Units in the Operating Partnership (the "Class B-1
Preferred Units"), (5) no Class D OP Preferred Units in the
Operating Partnership (the "Class D Preferred Units")
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and (6) 2,800,000 Class E Preferred Units (the "Class E Preferred
Units") are validly issued and outstanding and are not subject to
preemptive rights, and any capital contribution required to be made
by the holders thereof has been made.
(B) The Company is the sole general partner of the Operating
Partnership as of the date of this Agreement and holds (1) 1 GP
Unit, representing 100% of the outstanding GP Units in the Operating
Partnership, (2) 24,443,680 LP Units, representing approximately
93.7% of the outstanding LP Units, (3) no Class A Preferred Units,
(4) 1,176,040 Class B-1 Preferred Units, representing 100% of the
outstanding Class B-1 Preferred Units and (5) 2,800,000 Class E
Preferred Units, representing 100% of the outstanding Class E
Preferred Units. Section 4.1(c)(ii)(B) of the Company Parties
Disclosure Schedule sets forth the name, number and class of GP
Units, LP Units, Class A Preferred Units, Class B-1 Preferred Units
and Class E Preferred Units held by each partner in the Operating
Partnership.
(C) As of the date of this Agreement, 8,423,422 partnership
units in Xxxxxxxxxx owned by the general partner of Xxxxxxxxxx in
its capacity as general partner of Xxxxxxxxxx (the "Xxxxxxxxxx XX
Units") and 1,005,604 partnership units of Xxxxxxxxxx owned by
limited partners of Xxxxxxxxxx in their capacity as limited partners
of Xxxxxxxxxx ("Xxxxxxxxxx XX Units" and together with the
Xxxxxxxxxx XX Units, the "Xxxxxxxxxx OP Units") are validly issued
and outstanding and are not subject to preemptive rights, and any
capital contribution required to be made by the holders thereof has
been made. CV GP L.P., a Delaware limited partnership and a Company
Subsidiary, is the sole general partner of Xxxxxxxxxx and, as of the
date of this Agreement, holds 8,423,422 Xxxxxxxxxx XX Units,
representing 100% of the outstanding Xxxxxxxxxx XX Units. CV Partner
Holdings, L.P., a Delaware limited partnership and a Company
Subsidiary, as of the date of this Agreement holds 994,326
Xxxxxxxxxx XX Units, representing approximately 98.88% of the
outstanding Xxxxxxxxxx XX Units. Section 4.1(c)(ii)(C) of the
Company Parties Disclosure Schedule sets forth the name, number and
class of Xxxxxxxxxx OP Units held by each partner in Xxxxxxxxxx.
(D) Each OP Common Unit and Xxxxxxxxxx XX Unit may, under
certain circumstances and subject to certain conditions set forth in
the Operating Partnership Agreement and the Second Amended and
Restated Agreement of Limited Partnership of Xxxxxxxxxx (the
"Xxxxxxxxxx Partnership Agreement"), be redeemed for cash or, at the
election of the general partner, in lieu of cash redeemed for Common
Shares on a one-for-one basis, subject to certain adjustments set
forth in the Operating Partnership Agreement and the Xxxxxxxxxx
Partnership Agreement. As of the date of this Agreement, no notice
from any holder of Company Shares, OP Common Units or Xxxxxxxxxx XX
Units has been received by the Company, the Operating Partnership or
Xxxxxxxxxx of the exercise of any of the rights of redemption for
cash set forth in this paragraph (D), which are not reflected in
this Section 4.1(c)(ii)(D).
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(iii) Miscellaneous. Except as set forth in Section
4.1(c)(iii) of the Company Parties Disclosure Schedule, no holder of
securities in the Company or any Company Subsidiary has any right to have
such securities registered by the Company or any Company Subsidiary, as
the case may be.
(d) Authority; No Violations; Consents and Approval.
(i) Each Company Party has all requisite power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby, subject (A) in the case of the Company solely with
respect to the consummation of the REIT Merger, to the receipt of the
Company Shareholder Approval and the acceptance for record of the Articles
of Merger by the Maryland Department, (B) in the case of the Operating
Partnership, solely with respect to the consummation of the OP Merger, to
the Operating Partnership Actions and to the acceptance for record of the
OP Merger Certificate by the Secretary of State of the State of Delaware
and (C) in the case of Xxxxxxxxxx, solely with respect to the consummation
of the Xxxxxxxxxx Merger, to the acceptance for record of the Xxxxxxxxxx
Merger Certificate by the Secretary of State of the State of Delaware. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary action on the part of each Company Party, subject (I) in the
case of the Company solely with respect to the consummation of the REIT
Merger, to the receipt of the affirmative vote of the holders of Common
Shares and Series B-1 Preferred Shares, voting together as a single class,
casting at least a majority of the votes entitled to be cast (the "Company
Shareholder Approval"), and (II) in the case of the Operating Partnership
solely with respect to the consummation of the OP Merger, the requisite
approval for the Operating Partnership Actions. The Company Board, at a
meeting duly called and held, has, by unanimous vote of its trustees, (i)
determined that this Agreement and the Mergers and the other transactions
contemplated hereby are advisable, fair to and in the best interests of
the Company, (ii) approved this Agreement and (iii) recommended that this
Agreement be adopted by and the REIT Merger be approved by the holders of
Common Shares and Series B-1 Preferred Shares. This Agreement, the REIT
Merger and the Subsidiary Mergers and the other transactions contemplated
hereby have been approved by the requisite vote of the outstanding units
of partnership interest in the Operating Partnership (with respect to the
REIT Merger and OP Merger) and in Xxxxxxxxxx (with respect to the REIT
Merger and the Xxxxxxxxxx Merger), in each case in accordance with the
Operating Partnership Agreement (with respect to the REIT Merger and the
OP Merger) and the Xxxxxxxxxx Partnership Agreement (with respect to the
REIT Merger and the Xxxxxxxxxx Merger), subject, in the case of the
Operating Partnership solely with respect to the consummation of the OP
Merger, to the requisite approval for the Operating Partnership Actions.
This Agreement has been duly executed and delivered by each Company Party
and, subject (1) in the case of the Company solely with respect to the
consummation of the REIT Merger, to receipt of the Company Shareholder
Approval and (2) in the case of the Operating Partnership solely with
respect to the consummation of the OP Merger, the requisite approval for
the Operating Partnership Actions, constitute valid and binding
obligations of such Company Party, enforceable against such Company Party
in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
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moratorium and other similar Laws of general applicability relating to or
affecting creditors' rights and by the exercise of judicial discretion in
accordance with general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at Law).
(ii) Except (solely with respect to the consummation of the
REIT Merger) for the Company Shareholder Approval, (solely with respect to
the consummation of the OP Merger) for the requisite approval for the
Operating Partnership Actions or (solely with respect to compensation or
benefits) as otherwise set forth in Section 4.1(l)(vi) of the Company
Parties Disclosure Schedule, the execution and delivery of this Agreement
by each Company Party do not, and the consummation of the transactions
contemplated hereby or thereby, and compliance with the provisions hereof
or thereof, will not conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any
material obligation, or the loss of a material benefit under, or give rise
to a right of purchase under, result in the creation of any Lien upon any
of the properties or assets of the Company or any of the Company
Subsidiaries under, or require the notice, consent or approval of any
third party or otherwise result in a material detriment or default to the
Company or any of the Company Subsidiaries under, any provision of (A) the
Company Charter or the Company Bylaws or any provision of the comparable
charter or organizational documents of any of the Company Subsidiaries,
(B) any loan or credit agreement, note, bond, mortgage, indenture, lease
or other material agreement, instrument, permit, concession, franchise or
license applicable to the Company or any of the Company Subsidiaries, or
their respective material properties or assets or any guarantee by the
Company or any of the Company Subsidiaries of any of the foregoing, (C)
any employment, consulting or labor-related agreement or any joint venture
or other ownership arrangement of any Company Party, or (D) assuming the
consents, approvals, authorizations or permits and filings or
notifications referred to in Section 4.1(d)(ii) are duly and timely
obtained or made, the Company Shareholder Approval is obtained and the
requisite approval for the Operating Partnership Actions is obtained, any
Order or Law applicable to the Company or any of the Company Subsidiaries,
or any of their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from, any Governmental
Entity, is required by or on behalf of any Company Party in connection
with the execution and delivery of this Agreement by such Company Party or
the consummation by such Company Party of the transactions contemplated
hereby other than: (A) the acceptance for record of the Articles of Merger
by the Maryland Department and the filing of the Certificates of Merger
with the Secretary of State of the State of Delaware; (B) the filing of
the Amended and Restated LP Certificate with the Secretary of State of the
State of Delaware; (C) compliance with any applicable requirements of the
Securities Act, the Exchange Act, state securities and "blue sky" Laws, or
the Takeover Statute; and (D) such other consents, approvals, orders,
authorizations, registrations, declarations, filings, permits or actions,
the failure of which to obtain would not have or be reasonably expected to
have, individually or in the aggregate, a Company Material Adverse Effect.
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(e) SEC.
(i) The Company SEC Documents, as of their respective dates
or, if amended, as of the date of the last such amendment, complied in all
material respects with the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the SEC
thereunder applicable to such Company SEC Documents (including setting
forth disclosures required under the Securities Act and the Exchange Act
regarding material arrangements, agreements or contracts entered into by
the Company or any of the Company Subsidiaries, on the one hand, and any
Person who is a current or former officer, trustee, director or Affiliate
of the Company or any Company Subsidiary, any relative of the foregoing or
an entity of which any of the foregoing is an Affiliate, on the other
hand). None of the Company SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company has
no outstanding and unresolved comments from the SEC with respect to any of
the Company SEC Documents. The consolidated financial statements of the
Company (including the notes thereto) included in the Company SEC
Documents complied as to form in all material respects with the applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto, were prepared in accordance with generally accepted
accounting principles in the United States ("GAAP") applied on a
consistent basis during the periods involved (except, in the case of the
unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the
SEC) and fairly presented, in accordance with applicable requirements of
GAAP and the applicable rules and regulations of the SEC (subject, in the
case of the unaudited statements, to normal, recurring adjustments, none
of which are material), the consolidated financial position of the Company
and the Company Subsidiaries, taken as a whole, as of their respective
dates and the consolidated statements of operations and the consolidated
statements of cash flows of the Company and the Company Subsidiaries for
the periods presented therein. Since January 1, 2002, there has been no
material change in the Company's accounting methods or principles that
would be required to be disclosed in the Company's financial statements in
accordance with GAAP, except as described in the notes to such Company
financial statements.
(ii) The Company and each of its officers and trustees are in
compliance, and have complied, in all material respects with (i) the
applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the related
rules and regulations promulgated under such Act (the "Xxxxxxxx-Xxxxx
Act") or the Exchange Act and (ii) the applicable listing and corporate
governance rules and regulations of the New York Stock Exchange, Inc.
There are no outstanding loans made by the Company or any of the Company
Subsidiaries to any executive officer (as defined under Rule 3b-7 under
the Exchange Act), trustee or director of the Company. Since the enactment
of the Xxxxxxxx-Xxxxx Act, neither the Company nor any of the Company
Subsidiaries has made any loans to any executive officer, trustee or
director of the Company or any of the Company Subsidiaries. The Company
has established and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the Exchange Act); such disclosure
controls and procedures are designed to ensure that all material
information
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relating to the Company, including its consolidated Subsidiaries, is made
known on a timely basis to the Company's principal executive officer and
its principal financial officer by others within those entities; and the
Company believes that such disclosure controls and procedures are
effective in timely alerting the Company's principal executive officer and
its principal financial officer to material information required to be
included in the Company's periodic reports required under the Exchange
Act.
(f) Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Documents filed with the SEC since December 31, 2003 and
publicly available prior to the date of this Agreement (the "Company Filed SEC
Documents"), (a) the Company and the Company Subsidiaries have conducted their
respective businesses only in the ordinary course, (b) there has not been any
event or events that, individually or in the aggregate, has had or could
reasonably be expected to have a Company Material Adverse Effect and (c) neither
the Company nor any Company Subsidiary has taken any action that is prohibited
by Section 5.1.
(g) No Undisclosed Material Liabilities. Except as and to the
extent disclosed in the Company Filed SEC Documents, neither the Company nor any
Company Subsidiary has any liabilities or obligations of any nature, whether or
not accrued, absolute, contingent, unliquidated or otherwise, whether due or to
become due and whether or not required to be disclosed, reserved against or
otherwise provided for (including any liability for breach of Contract, breach
of warranty, torts, infringements, claims or lawsuits) other than (i)
liabilities or obligations incurred in the ordinary course of business after
September 30, 2004, (ii) liabilities or obligations that would not, individually
or in the aggregate, reasonably be expected to result in liabilities or
obligations in excess of $10.0 million, and (iii) fees and expenses actually
incurred by the Company Parties in connection with the transactions contemplated
hereby.
(h) No Default. Neither the Company nor any of the Company
Subsidiaries is in default or violation (and no event has occurred which, with
notice or the lapse of time or both, would constitute a default or violation) of
any term, condition or provision of (A) the Company Charter or the Company
Bylaws or the comparable charter or organizational documents of any of the
Company Subsidiaries, (B) any loan or credit agreement or note, including, but
not limited to, any bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license to which the Company or any
of the Company Subsidiaries is now a party or by which the Company or any of the
Company Subsidiaries or any of their respective properties or assets is bound,
or (C) any Order or Law applicable to the Company or any of the Company
Subsidiaries, except, in the case of clauses (B) or (C), for defaults or
violations which, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect.
(i) Litigation. Except as disclosed in the Company Filed SEC
Documents and except for routine litigation arising from the ordinary course of
business of the Company and the Company Subsidiaries which is adequately covered
by insurance (subject to applicable deductibles or retentions), there is no
litigation, arbitration, claim, investigation, suit, action or proceeding
pending before any Governmental Entity or, to the Knowledge of the Company,
threatened against or affecting the Company or any Company Subsidiary or their
respective assets that would, individually or in the aggregate, reasonably be
expected to result in liabilities or obligations in excess of $10.0 million;
provided, however, that the existence of any suit,
-35-
claim, action, proceeding, litigation, arbitration or investigation pending or
threatened against or affecting the Company or any Company Subsidiary or their
respective assets, trustees, directors, managers or officers arising out of or
relating to this Agreement, the Mergers or any other transaction contemplated
hereby shall not be deemed to be a breach of this sentence or of Section 4.1(g)
and Section 4.1(h). Neither the Company nor any Company Subsidiary is subject to
any outstanding Order or Orders. As of the date hereof, there is no suit, claim,
action, proceeding, arbitration or investigation pending or, to the Company's
Knowledge, threatened against the Company or any Company Subsidiary, which seeks
to, or could reasonably be expected to, restrain, enjoin or delay the
consummation of any of the Mergers or any of the other transactions contemplated
hereby or which seeks damages in connection therewith, and no injunction of any
type has been entered or issued.
(j) Taxes.
(i) Each of the Company and the Company Subsidiaries has
timely filed all Tax Returns required to be filed by it (after giving
effect to any filing extension properly granted by a Governmental Entity
having authority to do so or otherwise permitted by Law). Each such Tax
Return was, at the time filed, true, correct and complete in all material
respects. The Company and each Company Subsidiary has paid (or the Company
has paid on behalf of such Company Subsidiary), within the time and in the
manner prescribed by Law, all Taxes that are due and payable. The most
recent financial statements contained in the Company SEC documents filed
with the SEC prior to the date of this Agreement reflect an adequate
reserve or accrued liabilities or expenses for all Taxes (exclusive of any
accrual for "deferred taxes" or similar item that reflects timing
differences between tax and financial accounting principles) due and
payable by the Company and the Company Subsidiaries as a group for all
taxable periods and portions thereof through the date of such financial
statements. The Company and the Company Subsidiaries (as a group) have
established on their books and records reserves or accrued liabilities or
expenses that are adequate for the payment of all Taxes (exclusive of any
accrual for "deferred taxes" or similar item that reflect timing
differences between tax and financial accounting principles) for which the
Company or any Company Subsidiary is liable but are not yet due and
payable. Since December 31, 1999, (A) the Company has incurred no
liability for any Taxes under Sections 857(b), 860(c) or 4981 of the Code
or Internal Revenue Service Notice 88-19 or Treasury Regulation Section
1.337(d)-6 or 1.337(d)-7 (including in the case of each of the foregoing
any similar state or local provision), including, without limitation, any
Tax arising from a prohibited transaction described in Section 857(b)(6)
of the Code, and (B) neither the Company nor any Company Subsidiary has
incurred any liability for Taxes other than in the ordinary course of
business. No deficiencies for Taxes have been asserted or assessed in
writing by a Governmental Entity against the Company or any of the Company
Subsidiaries, including claims by any Governmental Entity in a
jurisdiction where the Company or any Company Subsidiary does not file Tax
Returns and no requests for waivers of the time to assess any such Taxes
have been granted and remain in effect or are pending.
(ii) The Company (A) for each taxable year of the Company's
existence through its taxable year ended December 31, 2003, has been
subject to taxation
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as a real estate investment trust (a "REIT") within the meaning of the
Code and has satisfied the requirements to qualify as a REIT for such
years, (B) has operated consistent with the requirements for qualification
and taxation as a REIT for the period from December 31, 2003 through the
date hereof, (C) has not taken any action or omitted to take any action
which would reasonably be expected to result in a successful challenge by
the Internal Revenue Service to its status as a REIT, and no such
challenge is pending, or to the Company's Knowledge, threatened. The
nature of the assets of the Company and the Company Subsidiaries (as a
group) is such that if (a) the fair market value of all the property of
the Company and the Company Subsidiaries is no more than $1,270,000,000,
(b) the aggregate fair market value of the real property (including
interests in real property and interests in mortgages on real property)
which is not property described in section 1221(a)(1) of the Code (as such
terms are used in section 856 of the Code) owned by them is no less than
$1,175,000,000, and (c) the aggregate fair market value of the stock,
securities, and real property (including interests in real property and
interests in mortgages on real property) which is not property described
in section 1221(a)(1) of the Code (as such terms are used in section 856
of the Code) owned by them is no less than $1,255,000,000, then the sale
of all of the assets owned by them on the date hereof at their respective
fair market values would not cause the Company to fail to qualify as a
REIT under Section 856(c)(2) or (3) of the Code if the Company's taxable
year ended on the date hereof. Each Company Subsidiary which files Tax
Returns as a partnership for federal income tax purposes has since its
inception or acquisition by the Company been classified for federal income
tax purposes as a partnership or as a disregarded entity and not as an
association taxable as a corporation, or a "publicly traded partnership"
within the meaning of Section 7704(b) of the Code that is treated as a
corporation for federal income tax purposes under Section 7704(a) of the
Code. Each Company Subsidiary which is a corporation has been since its
formation classified as a qualified REIT subsidiary under Section 856(i)
of the Code. Neither the Company nor any Company Subsidiary holds any
asset (x) the disposition of which would be subject to rules similar to
Section 1374 of the Code as announced in IRS Notice 88-19 or Treasury
Regulation Sections 1.337(d)-6 or 1.337(d)-7 (or any similar state or
local provision), or (y) that is subject to a consent filed pursuant to
Section 341(f) of the Code.
(iii) As of the date of this Agreement, the Company does not
have any earnings and profits attributable to the Company or any other
corporation in any non-REIT year within the meaning of Section 857 of the
Code.
(iv) All material Taxes which the Company or the Company
Subsidiaries are required by Law to withhold in connection with amounts
paid or owing to any employee, independent contractor, creditor,
stockholder or other third party and sales, gross receipts and use taxes,
have been duly withheld or collected and, to the extent required, have
been paid over to the proper Governmental Entities or are held in separate
bank accounts for such purpose. There are no Liens for Taxes upon the
assets of the Company or the Company Subsidiaries except for statutory
Liens for Taxes not yet due.
(v) For periods beginning after December 31, 1997, (a) the
Tax Returns of the Company or any Company Subsidiary have not been audited
by any taxing authority and (b) there are no audits by and contests with
any taxing authority currently
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being conducted with regard to Taxes or Tax Returns of the Company or any
Company Subsidiary and there are no audits pending with or proposed by any
taxing authority with respect to any Taxes or Tax Returns of the Company
or any Company Subsidiary.
(vi) Neither the Company nor any of the Company Subsidiaries
is a party to any Tax allocation or sharing agreement.
(vii) The Company does not have any liability for the Taxes of
any Person other than the Company and the Company Subsidiaries, and none
of the Company Subsidiaries have any liability for the Taxes of any Person
other than the Company and the Company Subsidiaries (A) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or
foreign Law), (B) as a transferee or successor or (C) by contract.
(viii) The Company and the Company Subsidiaries have disclosed
to the IRS all positions taken on their federal income Tax Returns which
could give rise to a substantial understatement of Tax under Section 6662
of the Code.
(ix) Neither the Company nor any of the Company Subsidiaries
has received or is subject to any written ruling of a taxing authority
related to Taxes or has entered into any written and legally binding
agreement with a taxing authority relating to Taxes.
(x) Neither the Company nor any of the Company Subsidiaries
has entered into or is subject, directly or indirectly, to any Limited
Partner Tax Agreements . The Company and each of the Company Subsidiaries
have complied with all material terms of the Limited Partner Tax
Agreements. There are no restrictions on the sale, exchange, or other
disposition, financing or other transactions applicable to any Company
Properties or with respect to any of their respective assets and no
obligations to maintain any particular amounts of debt.
(xi) None of the Company or any of the Company Subsidiaries
has distributed stock of another person, or has had its stock distributed
by another person, in a transaction that was purported or intended to be
governed in whole or in part by Section 355 of the Code.
(xii) The Company has the right to make or to require, and,
after the Effective Time will continue to have the right to make or to
require, each Company Subsidiary that is subject to federal income tax as
a partnership to make, in the manner provided in Section 1.754-1(b) of the
Treasury Regulations, an election under Section 754 of the Code (and any
corresponding elections under state or local tax law) to adjust the basis
of its property as provided in Sections 734(b) and 743(b) of the Code.
(xiii) Neither the Company nor any Company Subsidiary is a
party to any understanding or arrangement described in Section
6662(d)(2)(C)(ii) of the Code, or has "participated" in a "reportable
transaction" within the meaning of Treasury Regulations Section 1.6011-4
entered into on or after January 1, 2003.
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(xiv) Notwithstanding anything to the contrary contained
herein, all of the representations and warranties contained in this
Section 4.1(j) have been made by taking into account the tax effects of
the Mergers or any related transactions contemplated under this Agreement
based on the assumptions that (a) the fair market value of all the
property of the Company and the Company Subsidiaries is no more than
$1,270,000,000, (b) the aggregate fair market value of the real property
(including interests in real property and interests in mortgages on real
property) which is not property described in section 1221(a)(1) of the
Code (as such terms are used in section 856 of the Code) owned by them is
no less than $1,175,000,000, and (c) the aggregate fair market value of
the stock, securities, and real property (including interests in real
property and interests in mortgages on real property) which is not
property described in section 1221(a)(1) of the Code (as such terms are
used in section 856 of the Code) owned by them is no less than
$1,255,000,000, and the Company Parties shall not be considered to have
breached any such representation or warranty solely because a statement
contained in such representation or warranty is determined to have been
rendered untrue or incomplete by reason of one or more of such assumptions
having been incorrect. For the avoidance of doubt, it is provided that
this clause (xiv) shall apply for purposes of Section 7.2(a) and the
opinion described in Section 7.2(g)(i).
(k) Compliance with Applicable Law. Other than matters covered in
Section 4.1(n) (Environmental Matters), each of the Company and the Company
Subsidiaries holds all material permits, licenses, variances, exemptions, Orders
and approvals of all Governmental Entities necessary for the lawful conduct of
their respective businesses or ownership of their respective assets and
properties (the "Company Permits"). Each of the Company and the Company
Subsidiaries is in compliance, in all material respects, with the terms of the
Company Permits. Other than matters covered in Section 4.1(n) (Environmental
Matters), the businesses of the Company and the Company Subsidiaries have not
been, and are not being, conducted in violation of any Law (including all
applicable Laws in respect of employment and employment practices, terms and
conditions of employment, wages, hours of work and occupational safety and
health), except to the extent any such violations, individually or in the
aggregate, would not be reasonably expected to cause a Company Material Adverse
Effect. No investigation or review by any Governmental Entity with respect to
the Company or any of the Company Subsidiaries is pending or, to the Company's
Knowledge, threatened, nor, to the Company's Knowledge, has any Governmental
Entity indicated an intention to conduct any such investigation or review.
(l) Employee Benefits Plans.
(i) Section 4.1(l)(i) of the Company Parties Disclosure
Schedule lists each "employee benefit plan" within the meaning of Section
3(3) of ERISA, stock option, stock purchase, stock appreciation rights,
stock based, equity, deferred compensation, incentive, bonus, performance
award, fringe benefit, change in control, profit sharing, loan,
employment, consulting, termination, severance and compensation plan,
agreement, policy or arrangement that covers current or former employees,
trustees and directors of the Company or any of its Subsidiaries, and is
sponsored by the Company, any Company Subsidiary or any ERISA Affiliate
for the benefit of current or former employees, trustees and directors of
the Company or any Company Subsidiary (each, a "Company
-39-
Benefit Plan"). A copy of each Company Benefit Plan has been made
available to Purchaser Parties prior to the date hereof as well as a
summary plan description, the most recent determination letter from the
IRS for all Benefit Plans qualified under Section 401(a) of the Code, the
most recent annual report and all related trust agreements, insurance
contracts or other funding arrangements or third party arrangements that
implement such Company Benefit Plans. No current or former employee,
trustee or director is entitled to receive any benefit or compensation
(other than base salary) that is not pursuant to a Company Benefit Plan.
(ii) All of the Company Benefit Plans have been administered
in all material respects in accordance with their terms and are in
substantial compliance with the currently applicable provisions of ERISA,
the Code and any other applicable Law. Each Company Benefit Plan that is
intended to be qualified under Section 401(a) of the Code has received
determination letters from the Internal Revenue Service, or is entitled to
rely on an opinion letter issued to a prototype sponsor, and, to the
Knowledge of the Company, there are no circumstances that would reasonably
be expected to adversely affect the qualified status of such Company
Benefit Plan.
(iii) None of the Company Benefit Plans is a plan subject to
Title IV of ERISA, the minimum funding requirements of Section 302 of
ERISA or Section 412 of the Code. None of the Company, any of the Company
Subsidiaries nor any ERISA Affiliate, has ever sponsored, maintained,
contributed to or had any liability with respect to a plan subject to
Title IV of ERISA, the minimum funding requirements of Section 302 of
ERISA or Section 412 of the Code. None of the Company, any Company
Subsidiary or any ERISA Affiliate maintains, contributes to, or has any
obligation to contribute to or has ever maintained or contributed to is or
was a party to a "multiemployer plan" as that term is defined in Section
3(37) of ERISA.
(iv) As of the date hereof, there is no litigation pending
or, to the Knowledge of the Company, threatened relating to any Company
Benefit Plan. To the Knowledge of the Company, none of the Company, any of
its Subsidiaries nor any ERISA Affiliate has engaged in any transactions
with respect to any Company Benefit Plan that could subject the Company or
any of its Subsidiaries to a material tax or penalty imposed by Section
4975, 4976 or 4980B of the Code or Sections 406, 409 or 502(i) of ERISA.
(v) All contributions required to be made by the Company or
any of its Subsidiaries under the terms of any Company Benefit Plan as of
the date hereof have been timely made or have been reflected in the
Company's most recent business financial statements.
(vi) Except as set forth on Section 4.1(l)(vi) of the Company
Parties Disclosure Schedule, the consummation of the transactions
contemplated by this Agreement alone or in combination with another event
will not (A) entitle any of the employees of any Company to severance pay,
(B) accelerate the time of payment or vesting of payment or trigger any
payment of compensation or benefits under, increase the amount payable, or
trigger any other material obligation pursuant to, any Company
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Benefit Plan (C) result in any breach or violation of, or a default under,
or trigger any forfeiture under any Company Benefit Plan or (D) result in
any payments under any Company Benefit Plan with respect to which the
Company or any of its Subsidiaries may have any liability that would not
be deductible under Section 162(m) or Section 280G of the Code.
(vii) Neither the Company nor any of the Company Subsidiaries
has any obligations to provide health benefits to an employee after the
employee's termination of employment or retirement except as required
under Section 4980B of the Code, Sections 601 through 608 of ERISA, or
similar provision of state or local Law.
(viii) The Company hereby certifies that the information set
forth in Section 4.1(l)(viii) of the Company Parties Disclosure Schedule
is true, accurate and complete in all respects.
(m) Labor Matters. Except as disclosed in the Company SEC
Documents filed on or after January 1, 2003 or as would not constitute a Company
Material Adverse Effect:
(i) Neither the Company nor any of the Company Subsidiaries
is a party to any collective bargaining agreement or other current labor
agreement with any labor union or organization, and there is no question
involving current union representation of employees of the Company or any
of the Company Subsidiaries, nor does the Company or any of the Company
Subsidiaries know of any activity or proceeding of any labor organization
(or representative thereof) or employee group (or representative thereof)
to organize any such employees. To the Knowledge of the Company, there are
no organizational efforts presently being made involving any of the
presently unorganized employees of the Company or any of the Company
Subsidiaries. There is no strike, slowdown, work stoppage or lockout
pending, or, to the Knowledge of the Company, threatened, against or
involving the Company or any of the Company Subsidiaries.
(ii) There is no complaint, lawsuit or proceeding in any
forum by or on behalf of any present or former employee, any applicant for
employment or any classes of the foregoing, alleging breach of any express
or implied contract of employment, any Law or regulation governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship pending,
or, to the Knowledge of the Company, threatened against the Company or any
of the Company Subsidiaries.
(iii) Neither the Company nor any of the Company Subsidiaries,
nor their respective employees, agents or representatives, has committed
an unfair labor practice. All personnel policies, rules and procedures
applicable to employees of the Company and/or each of the Company
Subsidiaries are in writing.
(n) Environmental Matters.
(i) Except as would not reasonably be expected to result,
individually or in the aggregate, in liabilities or obligations in excess
of $10.0 million, the Company
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and each Company Subsidiary are in compliance with Environmental Laws,
which compliance includes, but is not limited to, the possession by the
Company or such Company Subsidiary of all permits and other governmental
authorizations required under Environmental Laws, and compliance with the
terms and conditions thereof. The Company and each Company Subsidiary have
not received any written communication, whether from a Governmental
Entity, citizens group, employee or other third party, that alleges that
the Company or such Company Subsidiary, as the case may be, is not in such
compliance with Environmental Laws.
(ii) There is no Environmental Claim that would reasonably be
expected to result, individually or in the aggregate, in liabilities or
obligations in excess of $10.0 million pending or, to the Knowledge of the
Company, threatened against the Company or any of the Company Subsidiaries
or against any Person whose liability for any Environmental Claim the
Company or any of the Company Subsidiaries has retained or assumed either
contractually or by operation of law. To the Knowledge of the Company,
there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the
release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that are reasonably likely to form the basis of any
such Environmental Claim that would reasonably be expected to result,
individually or in the aggregate, in liabilities or obligations in excess
of $10.0 million against the Company or any of the Company Subsidiaries or
against any Person whose liability for any such Environmental Claim the
Company or any of the Company Subsidiaries has retained or assumed either
contractually or by operation of law.
(iii) To the Knowledge of the Company, none of the Company or
any Company Subsidiary is required, by virtue of the transactions
contemplated hereby, or as a condition to the effectiveness of any
transactions contemplated hereby, (A) to perform a site assessment for
Materials of Environmental Concern, (B) to remove or remediate Materials
of Environmental Concern, (C) to give notice to or receive approval from
any governmental authority, or (D) to record or deliver to any Person any
disclosure document or statement pertaining to environmental matters.
(iv) The Company and all Company Subsidiaries have provided
to Acquiror copies of all material reports, evaluations, assessments and
analyses of environmental conditions at any property currently or formerly
owned, leased or operated by the Company or any Company Subsidiary which
reports, evaluations, assessments or analyses are in the possession or
custody of the Company or any Company Subsidiary.
(o) Properties.
(i) (A) The Company or a Company Subsidiary owns fee simple
title to, or has a valid leasehold interest in, each of the real
properties reflected on the most recent balance sheet of the Company
included in the Company SEC Documents and as identified in Section
4.1(o)(i)(A) of the Company Parties Disclosure Schedule (each, a "Company
Property" and collectively, the "Company Properties"), which are all of
the real estate properties owned or leased by them, free and clear of
Liens except for, subject
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to the provisions of Section 6.12, (1) debt and other matters identified
in Section 4.1(o)(i)(A)(1) of the Company Parties Disclosure Schedule, (2)
inchoate Liens imposed for construction work in progress (now or at any
time prior to closing) or otherwise incurred in the ordinary course of
business, (3) mechanics', workmen's and repairmen's Liens (other than
inchoate Liens for work in progress), (4) Leases, REAs and all matters
disclosed on existing title policies or as would be disclosed on current
title reports or surveys (excluding outstanding indebtedness listed in
Section 4.1(o)(i)(A)(1) of the Company Parties Disclosure Schedule) and
(5) real estate Taxes, charges of any nature for public utility services
and special assessments as identified in Section 4.1(o)(i)(A)(5) of the
Company Parties Disclosure Schedule or adopted subsequent to the date
hereof and prior to the Closing; (B) except as would not constitute a
Company Material Adverse Effect, none of the Company Properties is subject
to any rights of way, written agreements, Laws, ordinances and regulations
affecting building use or occupancy, or reservations of an interest in
title (collectively, "Company Property Restrictions"), except for (1)
Company Property Restrictions imposed or promulgated by Law with respect
to real property, including zoning regulations, (2) Leases on the Rent
Roll, REAs and all covenants, restrictions and other matters disclosed on
existing title policies or as would be disclosed on current title reports
or surveys (excluding outstanding indebtedness listed in Section
4.1(o)(i)(A)(1) of the Company Parties Disclosure Schedule), (3) real
estate Taxes, charges of any nature for public utility services and
special assessments and (4) service contracts, management agreements,
leasing commission agreements and other contractual arrangements relating
to the ownership, development or construction of the Company Properties;
(C) valid policies of title insurance (the "Title Insurance Policies")
have been issued insuring the applicable fee simple (or ground leasehold,
as applicable) title to each Company Property, the Title Insurance
Policies are in full force and effect as of the date hereof and no claim
has been made against any Title Insurance Policy; (D) except as would not
constitute a Company Material Adverse Effect, there is no certificate,
permit or license from any Governmental Entity having jurisdiction over
any of the Company Properties or any agreement, easement or any other
right which is necessary to permit the lawful use and operation of the
buildings and improvements on any of the Company Properties or which is
necessary to permit the lawful use and operation of all driveways, roads
and other means of egress and ingress to and from any of the Company
Properties (collectively, the "Property Agreements") that has not been
obtained and is not in full force and effect; (E) except as would not
constitute a Company Material Adverse Effect, neither the Company nor any
Company Subsidiary has received written notice of, or has any Knowledge
of, any violation of any federal, state or municipal Law, ordinance,
order, regulation or requirement affecting any portion of any of the
Company Properties issued by any Governmental Entity that has not
otherwise been resolved; (F) except as would not constitute a Company
Material Adverse Effect, neither the Company nor any Company Subsidiary
has received written notice to the effect, or has any Knowledge, that
there are any (1) condemnation or rezoning proceedings that are pending
or, to the Knowledge of the Company, threatened with respect to any
material portion of any of the Company Properties or (2) zoning, building
or similar Laws or orders that are presently being violated or will be
violated by the continued maintenance, operation or use of any buildings
or other improvements on any of the Company Properties or by the continued
maintenance, operation or use of the
-43-
parking areas; (G) except as would not constitute a Company Material
Adverse Effect, neither the Company nor any Company Subsidiary has
received written notice that it is currently in default or violation of
any Company Property Restrictions; and (H) except as would not constitute
a Company Material Adverse Effect, neither the Company nor any Company
Subsidiary has received written notice, and has no Knowledge, that it is
currently in default of any material Property Agreements.
(ii) Except as would not, individually or in the aggregate,
constitute a Company Material Adverse Effect, each Company Property
complies with the Company Property Restrictions.
(iii) Except as would not, individually or in the aggregate,
constitute a Company Material Adverse Effect, all properties currently
under development or construction by the Company or any of the Company
Subsidiaries and all properties currently proposed for acquisition,
development or commencement of construction prior to the Effective Time by
the Company or any of the Company Subsidiaries are listed as such in
Section 4.1(o)(iii) of the Company Parties Disclosure Schedule. Except as
would not, individually or in the aggregate, have a Company Material
Adverse Effect, all executory agreements entered into by the Company or
any of the Company Subsidiaries which would require payments by the
Company or any Company Subsidiary in excess of $500,000, in the aggregate,
relating to the development or construction of real estate properties
(other than agreements for leases, accounting, legal or other professional
services or agreements for material or labor) are listed in Section
4.1(r)(i) of the Company Parties Disclosure Schedule.
(iv) Complete, accurate and current copies of (1) all lease
documents under which the Company or any Company Subsidiary is the
landlord (individually, a "Lease" and collectively, the "Leases") with
respect to the Company Properties has been provided or made available to
Acquiror, (2) all operation and reciprocal easement agreements or other
similar agreements under which the Company or any Company Subsidiary is a
party (individually, an "REA" and collectively, the "REAs") with respect
to the Company Properties has been provided or made available to Acquiror,
and (iii) the rent roll for each of the Company Properties (the "Rent
Roll") as of a date not more than 30 days prior to the date of this
Agreement has been provided or made available to Acquiror. Except for
discrepancies that, either individually or in the aggregate, would not
constitute a Company Material Adverse Effect, the information set forth in
the Rent Roll is true, correct and complete as of the date thereof.
Neither the Company nor any Company Subsidiary, on the one hand, nor any
other party, on the other hand, has received written notice that it is in
default under any Lease or REA which, individually or in the aggregate,
would reasonably be expected to result in a Company Material Adverse
Effect.
(v) Section 4.1(o)(v) of the Company Parties Disclosure
Schedule sets forth a complete and correct list, as of the date of this
Agreement, of all material leases which have been executed, but are either
not yet included on the Rent Roll or relate to property not yet open for
business.
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(vi) Except as set forth in Section 4.1(o)(vi) of the Company
Parties Disclosure Schedule, no tenants under any of the Leases or
counterparties under any of the REAs have been granted options to purchase
or rights of first refusal under their applicable agreements.
(vii) The Company and each of the Company Subsidiaries have
good and sufficient title to, or is permitted to use under valid and
existing leases, all their personal and non-real properties and assets
reflected in their books and records as being owned by them (including
those reflected in the consolidated balance sheet of the Company as of
December 31, 2003, except as since sold or otherwise disposed of in the
ordinary course of business) or used by them in the ordinary course of
business, free and clear of all liens and encumbrances, except such as are
reflected on the consolidated balance sheet of the Company as of December
31, 2003, and the notes thereto, and except for liens for current taxes
not yet due and payable, and liens or encumbrances which are normal to the
business of the Company and the Company Subsidiaries and are not, in the
aggregate, material in relation to the assets of the Company on a
consolidated basis and except also for such imperfections of title or
leasehold interest, easement and encumbrances, if any, as do not
materially interfere with the present use of the properties subject
thereto or affected thereby, or as would not otherwise constitute a
Company Material Adverse Effect.
(p) Insurance. Section 4.1(p) of the Company Parties Disclosure
Schedule lists all Company Insurance Policies. None of the Company Parties is in
any material default with respect to its obligations under any Company Insurance
Policy, and each such insurance policy is in full force and effect, is in such
amounts and against such losses and risks as are consistent with industry
practice for companies engaged in businesses similar to those of the Company and
each of the Company Subsidiaries (taking into account the cost and availability
of such insurance) and, in the reasonable judgment of senior management of the
Company, are adequate to protect the properties and businesses of the Company
and each of the Company Subsidiaries and all premiums due thereunder have been
paid. No Company Party has been refused any insurance with respect to its
business, properties or assets, nor has its coverage been limited, by any
insurance carrier to which it has applied for any such insurance with which it
has carried insurance since January 1, 2002. Section 4.1(p) of the Company
Parties Disclosure Schedule lists all claims of the Company and each Company
Subsidiary related to the business, assets or properties of the Company or such
Subsidiary, as the case may be, which are currently pending or which have been
made with an insurance carrier since January 1, 2002. Neither the Company nor
any of the Company Subsidiaries has received notice of cancellation of any
Company Insurance Policy.
(q) Investment Company Act of 1940. Neither the Company nor any of
the Company Subsidiaries is, or at the Closing Date will be, required to be
registered as an investment company under the Investment Company Act of 1940, as
amended.
(r) Contracts.
(i) Section 4.1(r)(i) of the Company Parties Disclosure
Schedule lists all Material Contracts (as defined below) of the Company
and each Company Subsidiary.
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Each Material Contract is (A) valid, binding and enforceable against the
Company or the Company Subsidiary party to such Material Contract and, to
the Company's Knowledge, against each other party thereto and (B) in full
force and effect and will continue to be in full force and effect
immediately following the Effective Time in accordance with the terms
thereof as in effect prior to the Effective Time, except, in each case,
where such failure to be so valid, binding and enforceable and in full
force and effect would not have or be reasonably expected to have,
individually or in the aggregate, a Company Material Adverse Effect. There
are no defaults or violations under any of the Material Contracts, nor
does there exist any condition which upon the passage of time or the
giving of notice or both would cause such a violation of or a default
thereunder, except those defaults or violations that would not reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. For purposes of this Agreement, "Material Contracts" shall
mean (1) any loan or credit agreement, indenture, pledge agreement, note,
security agreement, bond, debenture, mortgage, letter of credit or any
other document, agreement or instrument evidencing a capitalized lease
obligation or other Indebtedness to any Person, other than Indebtedness in
a principal amount less than $1.0 million, applicable to the Company or
any of the Company Subsidiaries or their respective material properties or
assets, (2) each commitment, contractual obligation, capital expenditure
or transaction entered into by the Company or any Company Subsidiary which
may result in total payments by or liability of the Company or any Company
Subsidiary in excess of $1.0 million, other than leases reflected on
Section 4.1(o)(v) of the Company Parties Disclosure Schedule, (3) any
non-employee commission, management, leasing agent or representative
agreement providing for the management, leasing and/or sale of any of the
real properties of the Company or any Company Subsidiary, (4) any
guaranty, performance, bid or completion bond, or surety or
indemnification agreement (excluding any such item between the Company and
a Company Subsidiary and other than indemnification agreements described
in Section 4.1(r)(iii), (5) any contract of the Company or any Company
Subsidiary containing change of control provisions or requiring payment of
cash or other consideration following a change of control and (6) any
other agreements filed or required to be filed as exhibits to the Company
SEC Documents pursuant to Item 601(b)(10) of Regulation S-K of Title 17,
Part 229 of the Code of Federal Regulations.
(ii) All mortgages on any of the assets of the Company or the
Company Subsidiaries are listed in Section 4.1(r)(ii) of the Company
Parties Disclosure Schedule. Except as set forth on Section 4.1(r)(ii)(1)
of the Company Parties Disclosure Schedule, the REIT Merger, the OP Merger
and the other transactions contemplated by this Agreement will not trigger
any due-on-sale or other acceleration provision on any of such mortgages,
and will not require the consent of any mortgage lender. Section
4.1(r)(ii)(1) of the Company Parties Disclosure Schedule sets forth the
name of each Person entitled to receive any payment in respect of the
triggering of any due-on-sale or other acceleration provision under each
such mortgage (including any penalties or fees) and the approximate amount
of any such payment.
(iii) There is no confidentiality agreement, non-competition
agreement or other contract or agreement that contains covenants that
restrict the Company's or any Company Subsidiary's ability to conduct its
business in any location. There are no
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indemnification agreements entered into by and between the Company, the
Operating Partnership or Xxxxxxxxxx, on the one hand, and any director or
officer of the Company or any of the Company Subsidiaries, on the other
hand.
(s) Opinion of Financial Advisor. The Company Board has received
the written opinion (the "Fairness Opinion") of Xxxx Xxxxx Xxxx Xxxxxx,
Incorporated (the "Company Financial Advisor"), dated December 18, 2004, to the
effect that, as of such date, (A) the consideration to be received by holders of
the Common Shares pursuant to the Original Agreement is fair to such holders
from a financial point of view, (B) the consideration to be received by holders
of the OP Common Units is fair to the holders of OP Common Units from a
financial point of view and (C) the consideration to be received by holders of
the Eligible Xxxxxxxxxx XX Units is fair to the holders of Eligible Xxxxxxxxxx
XX Units from a financial point of view. The Company Board has received a
letter, dated January 24, 2005, from the Company Financial Advisor to the
effect that, subject to the conditions and assumptions referred to therein, the
Company Board may continue to rely on the Fairness Opinion as of the date of
the letter. To the Knowledge of the Company, the Company Financial Advisor
has not withdrawn such opinion or informed the Company Board that it may not
rely on such opinion. A copy of the written opinion of the Company Financial
Advisor has been delivered to each of the Purchaser Parties.
(t) Brokers and Finders. Except for the fees and expenses payable
to the Company Financial Advisor and Xxxxx & Steers Capital Advisors LLC (acting
as a financial advisor to the Company) (which fees and the engagement letters
have been disclosed to Acquiror), no broker, investment banker or other Person
is entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
(u) Inapplicability of Takeover Statutes and Certain Charter and
Bylaw Provisions. The Company has taken all appropriate and necessary actions to
exempt the REIT Merger and this Agreement from the restrictions of Subtitles 6
and 7 of Title 3 of the MGCL (the "Takeover Statute"). The Company and the
Company Board have taken all appropriate and necessary actions to (A) render any
anti-takeover or other provision contained in the Company Charter or Company
Bylaws inapplicable to the REIT Merger or either of the Subsidiary Mergers and
this Agreement and (B) render inapplicable any and all limitations on ownership
of (1) Company Shares as set forth in the Company Charter; (2) the Operating
Partnership Units in the Operating Partnership as set forth in the Operating
Partnership Agreement and (3) the Xxxxxxxxxx OP Units in Xxxxxxxxxx as set forth
in the Xxxxxxxxxx Partnership Agreement. No other "control share acquisition,"
"fair price" or other anti-takeover regulation enacted under state Laws in the
United States applies to this Agreement or any of the transactions contemplated
hereby and thereby.
(v) Information Supplied. None of the written information supplied
or to be supplied by the Company or any of its Affiliates or Representatives
expressly for inclusion or incorporation by reference in, and which is included
or incorporated by reference in the Proxy Statement or any other documents filed
or to be filed with the SEC in connection with the transactions contemplated
hereby, will, at the respective times such documents are filed, at the time of
mailing of the Proxy Statement (or any amendment thereof or supplement thereto)
to the
-47-
Company's shareholders, at the time of the Company Shareholders Meeting or at
the Effective Time, be false or misleading with respect to any material fact, or
omit to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading or necessary to correct any statement in any earlier communication.
Section 4.2. Representations and Warranties of the Purchaser Parties,
Parent and Parent Trust. Except as set forth in the disclosure schedule
delivered by the Purchaser Parties, Parent and Parent Trust to the Company
Parties prior to or concurrently with the execution of this Agreement (the
"Purchaser Parties Disclosure Schedule"), which Schedule identifies the section
to which such exception relates (provided that any disclosure in the Purchaser
Parties Disclosure Schedule relating to one section or subsection shall also
apply to other sections and subsections to the extent that it is reasonably
apparent that such disclosure would also apply to or qualify such other sections
and subsections), the Purchaser Parties, Parent and Parent Trust represent and
warrant to the Company Parties as follows:
(a) Organization, Standing and Entity Power of each Purchaser
Party, Parent and Parent Trust.
(i) Acquiror is a Delaware limited partnership duly formed
and validly existing under the laws of Delaware and is in good standing in
such jurisdiction and has the requisite power and authority to own, lease
and operate its properties and other assets and to carry on its business
as now being conducted. REIT Merger Sub is a Maryland real estate
investment trust duly formed and validly existing under the Laws of the
State of Maryland and is in good standing with the Maryland Department and
has the requisite trust power and authority to own, lease and operate its
properties and other assets and to carry on its business as now being
conducted. Each of Acquiror Subsidiary, OP Merger Sub and Xxxxxxxxxx
Merger Sub is a Delaware limited liability company duly formed and validly
existing under the laws of Delaware and is in good standing in such
jurisdiction and has the requisite power and authority to own, lease and
operate its properties and other assets and to carry on its business as
now being conducted. Acquiror has made available to the Company complete
and correct copies of the certificate of limited partnership and the
limited partnership agreement of Acquiror, the declaration of trust and
bylaws of REIT Merger Sub and the certificate of formation and limited
liability company agreement of each of Acquiror Subsidiary, OP Merger Sub
and Xxxxxxxxxx Merger Sub, each of which is currently in full force and
effect.
(ii) Parent is a corporation duly organized and validly
existing under the laws of the Commonwealth of Australia and is in good
standing in such jurisdiction. Parent Trust is a trust duly organized and
validly existing under the laws of the Commonwealth of Australia and is in
good standing in such jurisdiction.
(iii) The Assignment and Assumption Agreement will be entered
into between REIT Merger Sub and OP Merger Sub prior to the OP Effective
Time.
-48-
(b) Authority; No Violations; Consents and Approvals.
(i) Each Purchaser Party and each Parent Party has all
requisite power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on
the part of each Purchaser Party and each Parent Party.
(ii) This Agreement has been duly executed and delivered by
each Purchaser Party and each Parent Party and constitutes valid and
binding obligations of such Purchaser Party and such Parent Party
enforceable in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other similar Laws of general applicability relating to or
affecting creditors' rights and by the exercise of judicial discretion in
accordance with general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at Law).
(iii) The execution and delivery of this Agreement by the
Purchaser Parties and each Parent Party do not, and the consummation of
the transactions contemplated hereby, and compliance with the provisions
hereof, will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to
a right of termination, cancellation or acceleration of any material
obligation or the loss of a material benefit under, or give rise to a
right of purchase under, result in the creation of any Lien upon any of
the properties or assets of such parties under, or require the notice,
consent or approval of any third party or otherwise result in a material
detriment or default to such parties under, any provision of (A) such
Purchaser Party's or Parent Party's organizational documents, (B) any loan
or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable
to such Purchaser Party or Parent Party or their respective material
properties or assets or any guarantee by such Purchaser Party or Parent
Party, (C) any joint venture or other ownership arrangement of such
Purchaser Party or Parent Party, or (D) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in
Section 4.2(b)(iv) are duly and timely obtained or made, any Order or Law
applicable to such Purchaser Party or Parent Party or any of their
respective properties or assets.
(iv) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from any Governmental
Entity is required by or with respect to any Purchaser Party or Parent
Party in connection with the execution and delivery by such Purchaser
Party or Parent Party of this Agreement or the consummation by such
Purchaser Party or Parent Party of the transactions contemplated hereby,
other than: (A) the acceptance for record of the Articles of Merger by the
Maryland Department and the filing of the Certificates of Merger with the
Secretary of State of the State of Delaware; (B) compliance with any
applicable requirements of the Securities Act, the Exchange Act, state
securities and "blue sky" Laws, or the Takeover Statute; and (C) such
other consents, approvals, orders, authorizations, registrations,
declarations,
-49-
filings, permits or actions, the failure of which to obtain would not have
or be reasonably expected to have, individually or in the aggregate, an
Acquiror Material Adverse Effect.
(c) Brokers. No broker, investment banker or other Person, other
than as set forth in Section 4.2(c) of the Purchaser Parties Disclosure
Schedule, is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of any Purchaser Party, for which
fee or commission the Company or any Company Subsidiary may be liable.
(d) Information Supplied. None of the written information supplied
or to be supplied by Acquiror or any of its Affiliates or Representatives
expressly for inclusion or incorporation by reference in, and which is included
or incorporated by reference in the Proxy Statement or any other documents filed
or to be filed with the SEC in connection with the transactions contemplated
hereby, will, at the respective times such documents are filed, at the time of
mailing of the Proxy Statement (or any amendment thereof or supplement thereto)
to the Company's shareholders, at the time of the Company Shareholders Meeting
or at the Effective Time, be false or misleading with respect to any material
fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading or necessary to correct any statement in any earlier
communication.
(e) Public Filings; Financial Statements. Parent has delivered or
made available to the Company a copy of each Parent Document. The consolidated
financial statements of the Parent Parties and their controlled entities (as
defined by Accounting Standard AASB 1024 "Consolidated Accounts" (such entities,
the "Controlled Entities")) (including the notes thereto) included in Section
4.2(e) of the Purchaser Parties Disclosure Schedule were prepared in accordance
with generally accepted accounting principles in Australia ("AGAAP") applied on
a consistent basis during the periods involved and fairly present, in accordance
with AGAAP (subject, in the case of the unaudited statements, to normal
recurring adjustments, none of which are material), the consolidated financial
position of the Parent Parties and the Controlled Entities, taken as a whole, as
of their respective dates and the consolidated statements of operations and the
consolidated statements of cash flows of the Parent Parties and the Controlled
Entities for the periods presented therein. Since January 1, 2002, there has
been no material change in Parent's or Parent Trust's accounting methods or
principles that would be required to be disclosed in the consolidated financial
statements of the Parent Parties and the Controlled Entities in accordance with
AGAAP, except as described in the notes to such financial statements.
(f) Absence of Certain Changes or Events. Except as disclosed in
the Parent Documents filed with the Australian Stock Exchange since December 31,
2003 and delivered or made available to the Company prior to the date of this
Agreement, (i) the Parent Parties and the Controlled Entities have conducted
their respective businesses only in the ordinary course and (ii) there have not
been any event or events that, individually or in the aggregate, has had or
could reasonably be expected to have, together with all similar or related
facts, events and circumstances, a material adverse effect on the financial
condition, business, assets or results of operations of the Parent Parties and
the Controlled Entities taken as a whole or on the ability of the Parent Parties
to perform their obligations hereunder.
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(g) No Ownership of Company Shares, Operating Partnership Units
and Xxxxxxxxxx OP Units. Except as contemplated by Section 3.6(c) and Section
3.7(c), none of the Purchaser Parties, the Parent Parties or any of their
respective Affiliates owns, beneficially or of record, any Company Shares,
Operating Partnership Units or Xxxxxxxxxx OP Units.
(h) Financial Ability. The Purchaser Parties will have on the
Closing Date, immediately available funds sufficient to consummate the
transactions contemplated hereby.
(i) REIT Merger Sub.
(i) As of the date of this Agreement, the authorized shares
of beneficial interest of REIT Merger Sub consist of (A) 93,483,845 REIT
Merger Sub Common Shares and (B) 1,235,000 REIT Merger Sub Preferred
Shares, all of which have been designated as "9.75% Series B-1 Cumulative
Convertible Preferred Shares." As of the date of this Agreement, (1) 1,000
REIT Merger Sub Common Shares are issued and outstanding and (2) no REIT
Merger Sub Preferred Shares are issued and outstanding. Except as
described in this Section 4.2(i) or contemplated by this Section 4.2(i) or
the REIT Merger, no other securities of REIT Merger Sub have been
authorized or are issued and outstanding.
(ii) The board of trustees of REIT Merger Sub and OP Merger
Sub, as the sole shareholder of REIT Merger Sub, will each have approved,
prior to the REIT Effective Time, the Plan of Liquidation.
(iii) The Plan of Liquidation will have the effect described
therein.
Section 4.3. Representations and Warranties of Purchaser Parties, Parent
and Parent Trust with respect to the Guarantee and the Indemnity. Except as set
forth in the Purchaser Parties Disclosure Schedule, the Purchaser Parties,
Parent, Parent Trust and the Responsible Entity represent and warrant to the
Company Parties as follows:
(a) Parent.
(i) The Board of Directors of Parent has fully and carefully
considered the corporate benefit to it of giving the Guarantee and the
Indemnity (contained in Section 9.15 of this Agreement) and considers that
it is in the interests of and benefits Parent to give the Guarantee and
the Indemnity;
(ii) Parent has in full force and effect the authorizations
necessary for it to give the Guarantee and the Indemnity and to comply
with its obligations under this Agreement and exercise its rights under
it;
(iii) Parent's obligations under the Guarantee and the
Indemnity are valid, binding and enforceable against it in accordance with
their terms;
(iv) The giving of the Guarantee and the Indemnity by Parent
complies in all respects with applicable law;
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(v) Parent does not enter into the Guarantee and the
Indemnity in the capacity of a trustee of any trust or settlement;
(vi) The giving of the Guarantee and the Indemnity and
entering into and performing the related transactions contemplated by this
Agreement do not constitute an "insolvent transaction" or "unfair loan"
within the meaning of sections 588FC or 588FD respectively of the
Xxxxxxxxxx Xxxxxxxxxxxx Xxx 0000 (Cwlth); and
(vii) The Responsible Entity is solvent at the time of, and
will be solvent after giving effect to, the entry into of this Agreement
and the transactions contemplated hereby.
(b) Parent Trust.
(i) The Responsible Entity is the only trustee of the Parent
Trust, no action has been taken or proposed to remove it as trustee of
that trust or to terminate the Parent Trust and it has power under the
constituent documents of that trust (the "Trust Deed"), and has in full
force and effect all authorizations necessary, to enter into and comply
with its obligations, including the Guarantee and the Indemnity, under
this Agreement, and to enable those obligations to be enforced;
(ii) The Responsible Entity is not, and never has been, in
default under the constituent documents of the Parent Trust, including the
Trust Deed, and has the right to be fully indemnified out of the property
held on trust by it in connection with the Parent Trust or under the Trust
Deed ("Trust Funds") in respect of obligations incurred by it hereunder,
including the Guarantee and the Indemnity, and the Trust Funds are
sufficient to satisfy that right of indemnity and all other obligations in
respect of which the Responsible Entity has a right to be indemnified out
of the Trust Funds;
(iii) The Responsible Entity and its directors and other
officers have complied with their obligations in connection with the
Parent Trust;
(iv) The Responsible Entity has carefully considered the
purpose of this Agreement, including the Guarantee and the Indemnity, and
considers that entry into this Agreement and giving the Guarantee and the
Indemnity is for the benefit of the beneficiaries and the terms of this
Agreement, including the Guarantee and the Indemnity, are fair and
reasonable;
(v) The Responsible Entity has not exercised any power to
release, abandon or restrict any power conferred on it by the trust deed
for the Parent Trust;
(vi) The entry into, delivery and performance of this
Agreement by the Responsible Entity is part of the proper administration
of the Parent Trust, is a proper exercise of its fiduciary duties as
responsible entity of the Parent Trust, and is for the benefit of the
Parent Trust and the beneficiaries of the Parent Trust; and
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(vii) No direction, instruction or consent required to be
given to the Responsible Entity under the trust deed for the Parent Trust
or otherwise in respect of its execution, delivery and performance of this
Agreement has been withdrawn or revoked.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGERS
Section 5.1. Conduct of Business by the Company and its Subsidiaries.
(a) During the period from the date of this Agreement to the
earlier of the termination of this Agreement or the Effective Time, the Company
shall, and shall cause each of the Company Subsidiaries to, (i) carry on its
businesses in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted and, to the extent consistent therewith, (ii) use
all commercially reasonable efforts to preserve intact its current business
organization, goodwill and ongoing businesses, (iii) preserve the Company's
status as a REIT within the meaning of the Code, and (iv) use all commercially
reasonable efforts to keep available the services of its present trustees,
officers, managers and employees and preserve its relationships with customers,
suppliers, business partners, distributors and others having business dealings
with the Company and any of the Company Subsidiaries. The Company Parties shall
confer on a regular and frequent basis with Acquiror, report on operational
matters and promptly advise Acquiror orally and in writing of any Company
Material Adverse Effect or any matter which could reasonably be expected to
result in the Company Parties being unable to deliver the certificate described
in Section 7.2(c) of this Agreement.
(b) Without limiting the generality of the foregoing, during the
period from the date of this Agreement until the earlier of the termination of
this Agreement or the Effective Time, except as expressly required or permitted
in this Agreement or otherwise expressly agreed to in writing by Acquiror, the
Company shall not and shall not authorize or commit or agree to, and shall cause
the Company Subsidiaries not to (and not to authorize or commit or agree to):
(i) (A) declare, set aside or pay any distributions on, or
make any other distributions in respect of, any Company Shares or the
partnership interests, stock or other equity interests in any Company
Subsidiary that is not directly or indirectly wholly owned by the Company,
provided, the Company may (i) pay the 0000 Xxxxxx Xxxxxxx Distributions,
(ii) declare and pay regular quarterly cash distributions with respect to
the Series B-1 Preferred Shares and the Series E Preferred Shares (and the
Operating Partnership and Xxxxxxxxxx may declare and pay the corresponding
cash distributions with respect to the Operating Partnership Units and the
Xxxxxxxxxx OP Units), and (iii) declare and pay any distribution in
respect of Company Shares (and the Operating Partnership and Xxxxxxxxxx
may declare and pay the corresponding cash distributions with respect to
the Operating Partnership Units and the Xxxxxxxxxx OP Units) that it is
required to make by the Code in order to maintain REIT status and those
that are sufficient to eliminate any federal tax liability; provided,
however, that the declaration and payment of any distribution with respect
to Common Shares described in clause (iii) shall reduce the Common Share
Merger Consideration (and any declaration
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and payment of any distribution with respect to the OP Common Units or the
Eligible Xxxxxxxxxx XX Units shall reduce the OP Merger Consideration and
the Xxxxxxxxxx Merger Consideration, respectively) dollar for dollar and
shall be determined by including the REIT Merger Consideration as a
distribution qualifying for the dividends paid deduction under Sections
561 and 562 of the Code; (B) reclassify, recapitalize, split, reverse
split or combine, exchange or readjust any shares of beneficial interest,
stock, partnership interests or other equity interests, or issue (except
for the issuance of Common Shares in connection with the redemption of any
LP Units or Xxxxxxxxxx XX Units, upon conversion of any Series B-1
Preferred Share or upon any exercise of Company Options) or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for, such shares of beneficial interest, stock, partnership
interests or other equity interests; or (C) purchase, redeem (except for
the redemption of any LP Units or Xxxxxxxxxx XX Units for Common Shares in
accordance with their terms) or otherwise acquire any Company Shares or
the partnership interests, stock or other equity interests in any Company
Subsidiary or any options, warrants or rights to acquire, or security
convertible into, Company Shares or the partnership interests, stock or
other equity interests in any Company Subsidiary, except with respect to
any of the foregoing in connection with satisfying the requirements of
Section 3.2 or the use of Company Shares to pay the exercise price or Tax
withholding obligation upon the exercise of a Company Option or upon the
lapse of any restrictions on Common Shares to the extent permissible under
the Company Stock Option Plans;
(ii) issue, deliver, sell or grant any option or other right
in respect of any shares of beneficial interest, stock, any other voting
or redeemable securities (including Operating Partnership Units,
Xxxxxxxxxx OP Units or other partnership interests) of the Company or a
Company Subsidiary or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities or
convertible or redeemable securities, except (A) as required under the
Operating Partnership Agreement or the Xxxxxxxxxx Partnership Agreement as
presently in effect, or (B) in connection with the exercise of outstanding
Company Options under the Company Stock Option Plans or the redemption of
OP Common Units or Xxxxxxxxxx XX Units for Common Shares pursuant to the
terms of such units;
(iii) except as necessary to give effect to the transactions
contemplated by this Agreement, amend the Company Charter or the Company
Bylaws, the Operating Partnership Agreement or the Xxxxxxxxxx Partnership
Agreement prior to the Effective Time, provided that any such amendment
shall be in a form reasonably satisfactory to Acquiror;
(iv) merge, consolidate or enter into any other business
combination transaction with any Person;
(v) (A) enter into any new commitment obligating the Company
or any Company Subsidiary to make capital expenditures or acquire, enter
into any option to acquire, exercise an option or other right or election
or enter into any commitment or contractual obligation for the acquisition
of any personal or real property (each of the foregoing, a "RE
Commitment"), other than any RE Commitment referred to in Section
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5.1(b)(v) of the Company Parties Disclosure Schedule, in excess of $2.0
million individually or $10.0 million in the aggregate, provided that on a
weekly basis, the Company Parties shall provide Acquiror with notice of
any new RE Commitments entered into irrespective of the amount thereof;
(B) incur additional Indebtedness (secured or unsecured) under the
Existing Credit Facility, provided that any Indebtedness incurred under
this clause (B) shall only be used by the Company or a Company Subsidiary
to fund capital expenditures set forth on Section 5.1(b)(v) of the Company
Parties Disclosure Schedule (or otherwise agreed to in writing by
Acquiror), make interest payments or dividends in the ordinary course of
business of the Company or a Company Subsidiary, or pay trade payables and
other debts incurred in the ordinary course of business of the Company or
a Company Subsidiary; provided, further, that no Indebtedness incurred
under this clause (B) shall be used to fund or otherwise make payments to
Representatives of the Company or any Company Subsidiary in connection
with the transactions contemplated by this Agreement without the prior
written consent of Acquiror; (C) except as permitted by the immediately
preceding clause (B), incur additional Indebtedness (secured or unsecured)
in excess of $1.0 million, except refinancings or extensions of existing
Indebtedness in an amount not to exceed the amount refinanced or extended,
or prepay or amend any existing Indebtedness irrespective of the amount
thereof; provided that the Company Parties shall provide Acquiror with
prompt notice of any refinancings, extensions or amendments of existing
Indebtedness permitted hereunder; provided, however, that the Company
Parties may make reasonable modifications to existing Indebtedness in
connection with obtaining any consent, approval or waiver required
pursuant to the terms of this Agreement as long as Acquiror has had the
opportunity to review and comment upon any such consent, approval or
waiver; or (D) enter into, amend or modify in any material way or
terminate any lease, provided that any Company Party may enter into a new
lease with respect to 5,000 square feet or less of space in the ordinary
course of business of such Company Party without the prior written consent
of Acquiror, provided that such Company Party shall promptly provide
Acquior with notice of entry into any such new lease and an executed copy
of such lease;
(vi) sell, mortgage, subject to Lien or otherwise dispose of
or agree to do any of the foregoing with respect to any of the Company
Properties, except those that are disclosed in Section 5.1(b)(vi) of the
Company Parties Disclosure Schedule;
(vii) sell, lease, mortgage, subject to Lien or otherwise
dispose of or agree to do any of the foregoing with respect to any of its
personal or intangible property in excess of $1.0 million, individually or
in the aggregate;
(viii) except as set forth in Section 5.1(b)(viii) of the
Company Parties Disclosure Schedule, guarantee the indebtedness of another
Person, enter into any "keep well" or other agreement to maintain any
financial statement condition of another Person or enter into any
arrangement having the economic effect of any of the foregoing or make any
investments in any other Person in excess of $500,000 other than a Company
Subsidiary;
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(ix) make or rescind any election relating to Taxes unless
the Company reasonably determines, after prior consultation with Acquiror,
that such action is (A) required by Law; or (B) necessary or appropriate
to preserve the Company's status as a REIT or the partnership status of
the Operating Partnership or any other Company Subsidiary which files Tax
Returns as a partnership for federal tax purposes;
(x) (A) change any of its methods, principles or practices
of accounting in effect other than as required by any changes in GAAP
after the date hereof, provided that Acquiror receives notice of any
required changes; or (B) settle or compromise any claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or controversy
relating to Taxes;
(xi) except as set forth in Section 5.1(b)(xi) of the Company
Parties Disclosure Schedule, adopt any new employee benefit plan,
incentive plan, severance plan, bonus plan, share option or similar plan,
make any new grants under any Company Stock Option Plan, amend any Company
Benefit Plan, or enter into or amend any employment agreement or similar
agreement or arrangement or grant or become obligated to grant any
increase in the compensation of officers or employees, except such changes
as are required by Law or which are not more favorable to participants
than provisions presently in effect; or terminate the employment of any
key employee, take any affirmative action to amend or waive any
performance or vesting criteria or accelerate vesting, exercisability or
funding under any Company Benefit Plan;
(xii) settle or compromise any material litigation, including,
without limitation, any shareholder derivative or class action claims
arising out of or in connection with any of the transactions contemplated
by this Agreement or waive, release or assign any material rights or
claims;
(xiii)except as set forth in Section 5.1(b)(xiii) of the
Company Parties Disclosure Schedule and excluding the matters covered by
Section 5.1(b)(xi) above, enter into or amend or otherwise modify any
agreement or arrangement with Persons that are Affiliates of the Company
(other than agreements with Company Subsidiaries) or, as of the date of
this Agreement, are employees, officers, trustees, partners or directors
of the Company or any Company Subsidiary;
(xiv) authorize, recommend, propose or announce an intention
to adopt a plan of complete or partial liquidation or dissolution of the
Company or any of the Company Subsidiaries;
(xv) fail to use its commercially reasonable efforts to
maintain with financially responsible insurance companies insurance in
such amounts and against such risks and losses as are customary for
companies engaged in their respective businesses;
(xvi) (A) materially amend or terminate, or waive compliance
with the terms of or breaches under any Material Contract, or (B) fail to
comply, in any material respect, with the terms of any Material Contract,
or (C) enter into a new contract, agreement or arrangement that, if
entered into prior to the date of this Agreement, would
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have been required to be listed in Section 4.1(r)(i) of the Company
Parties Disclosure Schedule;
(xvii) fail to use its commercially reasonable efforts to
comply or remain in compliance with all material terms and provisions of
any agreement relating to any outstanding indebtedness of the Company or
any Company Subsidiary;
(xviii) take any action that would, or that would reasonably
be expected to, result in (A) any of the representations and warranties of
the Company Parties set forth in this Agreement becoming untrue in any
material respect or (B) any of the conditions specified in Section 7.1 or
7.2 not being satisfied; and
(xix) agree in writing or otherwise to take any action
inconsistent with any of the foregoing.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1. Access to Information; Confidentiality. The Company shall,
and shall cause each of the Company Subsidiaries to, afford to Acquiror, any of
its investors and financing sources and their respective officers, employees,
consultants, accountants, counsel, agents and other Representatives reasonable
access to all of the properties, books, contracts, commitments, personnel and
records of the Company and such Company Subsidiaries (including, without
limitation, Tax Returns filed and those in preparation, workpapers and other
items relating to Taxes; Company Insurance Policies; and environmental
investigations, studies, tests, reviews or other written analyses within the
possession or control of the Company or any of the Company Subsidiaries in
relation to any property or facility now or previously owned, leased or operated
by the Company or any of the Company Subsidiaries), and, during such period, the
Company shall, and shall cause each of the Company Subsidiaries to, furnish
reasonably promptly to Acquiror (a) a copy of each report, schedule,
registration statement and other document prior to its filing pursuant to the
requirements of federal or state securities Laws and (b) all other information
concerning its business, properties and personnel as Acquiror may reasonably
request. All such information shall be kept confidential in accordance with the
terms of the Confidentiality Agreements.
Section 6.2. Commercially Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the Purchaser Parties and the Company Parties agrees to use
its commercially reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to fulfill all
conditions to Closing applicable to such party pursuant to this Agreement and to
consummate and make effective, in the most expeditious manner practicable, the
REIT Merger, the OP Merger, the Xxxxxxxxxx Merger and the other transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Entities and the preparation and making of all necessary
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registrations and filings and the taking of all reasonable steps as may be
necessary to obtain all necessary approvals, waivers or exemptions from any
Governmental Entity; (ii) the obtaining of all necessary consents, approvals,
waivers or exemptions from non-governmental third parties, including the
consents, approvals, waivers or exemptions set forth on Schedule 7.2(e) hereof;
and (iii) the execution and delivery of any additional documents or instruments
necessary to consummate the transactions contemplated by, and to fully carry out
the purposes of, this Agreement and to effectuate the Partnerships Amendments
described in this Section 6.2(a). In addition, prior to the Closing, the Company
shall use its commercially reasonable efforts to, or cause one or more of the
Company Subsidiaries to, acquire, repurchase or otherwise redeem (or otherwise
enable a designee of Acquiror to acquire or purchase) the equity interests of
the Persons identified on Schedule 6.2(a) hereto in the entities set forth
opposite the name of such Persons on Schedule 6.2(a) hereto, on terms and
conditions set forth on Schedule 6.2(a) hereto or such other terms and
conditions as may be reasonably requested by Acquiror, pursuant to agreements
and other documentation reasonably satisfactory to Acquiror. Each of the parties
hereto shall furnish to the other parties such necessary and reasonable
assistance as such other party may reasonably request in connection with the
foregoing. Prior to the consummation of the OP Merger, the Operating Partnership
shall take all actions necessary or appropriate (including obtaining the
requisite approval or consents of holders of the LP Units) to amend the
Operating Partnership Agreement to permit the withdrawal of the Company as the
general partner of the Operating Partnership and the admission of a new general
partner of the Surviving OP Partnership pursuant to the OP Merger as
contemplated by Section 3.6(c) (the "Operating Partnership Actions").
Immediately following the OP Effective Time and prior to the REIT Effective
Time, the Surviving OP Partnership shall amend and restate the Surviving OP
Agreement in a form reasonably satisfactory to Acquiror (the foregoing
amendments and restatements collectively referred to as the "OP Partnership
Amendments") to, among other things, remove any restriction on the consummation
of the REIT Merger as contemplated herein. Immediately following the Xxxxxxxxxx
Effective Time and prior to the REIT Effective Time, the Surviving Xxxxxxxxxx
Partnership shall amend and restate the Surviving Xxxxxxxxxx Agreement in a form
reasonably satisfactory to Acquiror (the "Xxxxxxxxxx Partnership Amendments,"
and together with the OP Partnership Amendments, the "Partnerships Amendments")
to, among other things, remove any restriction on the consummation of the REIT
Merger as contemplated herein. At Acquiror's request, upon reasonable notice,
the Company Parties shall provide reasonable assistance to Acquiror and its
Affiliates in obtaining the Acquisition Financing (including by participating in
meetings, due diligence sessions and the preparation of presentation materials,
bank book and similar documents and the execution and delivery of financing
documents and other requested certificates or documents). From the date of this
Agreement through the Effective Time, the Company shall timely file, or cause to
be filed, with the SEC all Company SEC Documents required to be so filed by
applicable Law.
(b) From time to time prior to the Effective Time, (i) the Company
shall notify Acquiror with respect to any matter hereafter arising or any
information obtained after the date hereof which, if existing, occurring or
known at or prior to the date of this Agreement, would have been required to be
set forth or described in the Company Parties Disclosure Schedule and (ii)
Acquiror shall notify the Company with respect to any matter hereafter arising
or any information obtained after the date hereof which, if existing, occurring
or known at or prior to the date of this Agreement, would have been required to
be set forth or described in the Purchaser Parties Disclosure Schedule. For
purposes of determining the accuracy of any
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representation or the satisfaction of the conditions to the consummation of the
transactions contemplated hereby, no such supplement, amendment or information
provided by either the Company or Acquiror shall be considered.
Section 0.0.Xxx Treatment.
(a) Unless required by Law (as evidenced by the legal opinion of a
nationally recognized U.S. law firm reasonably acceptable to the Purchaser
Parties and the Company), the Company Parties shall not take or omit to take any
action, or permit any status to exist, prior to the Effective Time, that would
or may jeopardize, or that is inconsistent with, the Company's status as a REIT
under the Code or the status of the Operating Partnership or any applicable
Subsidiary of the Company as a partnership for purposes of Taxes for any period.
(b) The parties hereto shall treat the Mergers for all income tax
purposes as a taxable purchase of assets by Acquiror in exchange for the Merger
Consideration, and a liquidating distribution of the REIT Merger Consideration
to the shareholders of the Company within the meaning of Section 562(b)(1) of
the Code, including filing the Company's final Tax Returns consistent with such
treatment, and no party shall take any position inconsistent with such
treatment. This Agreement shall constitute the Company's plan of liquidation
within the meaning of Section 562(b)(1) of the Code and, prior to the date on
which the REIT Effective Time shall occur, the Company Board shall adopt this
Agreement as such a plan of liquidation.
Section 6.4. No Solicitation.
(a) The Company shall, and shall cause its Affiliates,
Subsidiaries, and its and each of their respective officers, directors,
trustees, managers, employees, consultants, financial advisors, attorneys,
accountants and other advisors, representatives and agents (collectively,
"Representatives") to, immediately cease and cause to be terminated immediately
any discussions or negotiations with any parties that may be ongoing with
respect to, or that are intended to or could reasonably be expected to lead to,
a Takeover Proposal. The Company shall not, and shall cause its Affiliates,
Subsidiaries and its and their respective Representatives not to, (i) directly
or indirectly solicit, initiate, encourage or take any other action to knowingly
facilitate (including by way of furnishing or disclosing information) any
Takeover Proposal, (ii) enter into any agreement, arrangement or understanding
with respect to any Takeover Proposal (including any letter of intent, agreement
in principle, memorandum of understanding or confidentiality agreement) or enter
into any agreement, arrangement or understanding (including any letter of
intent, agreement in principle, memorandum of understanding or confidentiality
agreement) requiring it to abandon, terminate or fail to consummate, or which is
intended to or which would reasonably be expected to result in the abandonment,
termination or failure to consummate of, any of the Mergers or any other
transaction contemplated by this Agreement, (iii) initiate or participate in any
way in any negotiations or discussions regarding, or furnish or disclose to any
Person (other than a party to this Agreement) any information with respect to,
or take any other action to facilitate or in furtherance of any inquiries or the
making of any proposal that constitutes, or would reasonably be expected to lead
to, any Takeover Proposal, or (iv) grant any waiver or release under any
standstill or any similar agreement with respect to any class of the equity
securities of the Company, the Operating Partnership or Xxxxxxxxxx; provided,
however, that at any time prior to obtaining the Company Shareholder Approval,
in response to a bona fide
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written unsolicited Takeover Proposal received after the date hereof that the
Company Board determines in good faith (after consultation with outside counsel
and a financial advisor of nationally recognized reputation) constitutes or
would reasonably be expected to result in a Superior Proposal, and which
Takeover Proposal was not, directly or indirectly, the result of a breach of
this Section 6.4 or the Exclusivity Agreement, the Company may, if the Company
Board determines in good faith (after consulting with outside counsel) that it
is required to do so in order to comply with its duties under applicable Law,
and subject to compliance with Section 6.4(c), (A) furnish information with
respect to the Company and its Subsidiaries to the Person making such Takeover
Proposal (and its representatives) pursuant to a customary confidentiality
agreement that contains terms and conditions not less restrictive of such Person
than the Confidentiality Agreements; provided that all such information has
previously been provided to Acquiror or is provided to Acquiror prior to or
concurrently with the time it is provided to such Person and (B) participate in
discussions or negotiations with the Person making such Takeover Proposal (and
its representatives) regarding such Takeover Proposal.
(b) The Company shall provide Acquiror with prompt written notice
of any meeting of the Company Board at which the Company Board is reasonably
expected to consider any Takeover Proposal (such written notice shall in any
event be at least 12 hours prior to such meeting).
(c) Neither the Company Board nor any committee thereof shall (i)
(A) withdraw (or modify in a manner adverse to Acquiror), or propose to withdraw
(or modify in a manner adverse to Acquiror), the approval, recommendation or
declaration of advisability by such Board or any such committee thereof of, this
Agreement, any of the Mergers or the other transactions contemplated by this
Agreement or (B) recommend, adopt or approve, or propose to recommend, adopt or
approve, any Takeover Proposal (any action described in this clause (i) being
referred to as a "Company Adverse Recommendation Change") or (ii) approve or
recommend, or propose to approve or recommend, or allow the Company or any of
its Subsidiaries to execute or enter into, any letter of intent, memorandum of
understanding, agreement in principle, merger agreement, acquisition agreement,
option agreement, joint venture agreement, partnership agreement or other
agreement constituting or related to, or that is intended to or would reasonably
be expected to lead to, any Takeover Proposal (other than a confidentiality
agreement referred to in and as permitted by Section 6.4(a)) (an "Acquisition
Agreement") or which is intended to or which could reasonably be expected to
result in the abandonment, termination or failure to consummate any of the
Mergers or any other transaction contemplated by this Agreement. Notwithstanding
the foregoing, at any time prior to obtaining the Company Shareholder Approval,
the Company Board may make a Company Adverse Recommendation Change in response
to a Superior Proposal if the Company Board determines in good faith (after
consultation with outside counsel and a financial advisor of nationally
recognized reputation) that it is required to do so in order to comply with its
duties under applicable Law; provided, however, that (A) no Company Adverse
Recommendation Change shall be made until after the fifth (5th) Business Day
following Acquiror's receipt of written notice (a "Notice of Adverse
Recommendation") from the Company advising Acquiror that the Company Board
intends to take such action and the terms and conditions of any Superior
Proposal that is the basis of the proposed action by the Company Board (it being
understood and agreed that any amendment to the financial terms or any other
material term of such Superior Proposal shall require a new Notice of Adverse
Recommendation and a new five (5) Business
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Day period) and representing that the Company has complied with this Section
6.4, (B) during such five (5) Business Day period, the Company, if requested by
Acquiror, shall negotiate with Acquiror in good faith to make such adjustments
to the terms and conditions of this Agreement as would enable the Company to
proceed with its recommendation of this Agreement and the REIT Merger and not
make a Company Adverse Recommendation Change and (C) the Company shall not make
a Company Adverse Recommendation Change if, prior to the expiration of such five
(5) Business Day period, Acquiror delivers a proposal to adjust the terms and
conditions of this Agreement that the Company Board determines in good faith
(after consultation with its financial advisors) causes the Takeover Proposal,
after giving effect to the payment of the Termination Fee set forth in Section
8.4, to no longer be a Superior Proposal.
(d) The Company agrees, that in addition to the obligations of the
Company set forth in paragraphs (a), (b) and (c) of this Section 6.4, promptly
on the date of receipt thereof, the Company shall advise Acquiror in writing of
any request for information or any Takeover Proposal, or any inquiry,
discussions or negotiations with respect to any Takeover Proposal and the terms
and conditions of such request, Takeover Proposal, inquiry, discussions or
negotiations (including the identity of the Person making such Takeover
Proposal) and the Company shall promptly provide to Acquiror copies of any
written materials received by the Company in connection with any of the
foregoing, and the identity of the Person or group making any such request,
Takeover Proposal or inquiry or with whom any discussions or negotiations are
taking place. The Company agrees that it shall keep Acquiror reasonably informed
of the status and the material terms and conditions (including amendments or
proposed amendments) of any such request, Takeover Proposal or inquiry and keep
Acquiror reasonably informed of any information requested of or provided by the
Company and as to the status of all discussions or negotiations with respect to
any such request, Takeover Proposal or inquiry.
(e) Nothing contained in this Section 6.4 shall prohibit the
Company from (i) taking and disclosing to its shareholders a position
contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange Act,
although compliance by the Company with such obligations shall not relieve the
Company of any of its obligations under the provisions of Section 6.4(c).
Section 6.5. Certain Litigation. The Company shall promptly advise
Acquiror orally and in writing of any litigation commenced after the date hereof
against the Company, the Operating Partnership, Xxxxxxxxxx or any trustees,
managers or directors of any of them by any shareholder of the Company or any
holder of OP Common Units or any holder of Xxxxxxxxxx XX Units, as the case may
be (collectively, the "Shareholder Litigation") relating to this Agreement, any
of the Mergers and/or the other transactions contemplated hereby and shall keep
Acquiror fully informed regarding any Shareholder Litigation. The Company
Parties shall give Acquiror the opportunity to consult with the Company Parties
regarding the defense or settlement of any such Shareholder Litigation, shall
give due consideration to Acquiror's advice with respect to such Shareholder
Litigation and shall not settle any such Shareholder Litigation without the
prior written consent of Acquiror, which consent shall not be unreasonably
withheld or delayed. In addition, the Company shall not cooperate with any third
party that may hereafter seek to restrain or prohibit or otherwise oppose any of
the Mergers and shall cooperate with Acquiror, REIT Merger Sub, OP Merger Sub
and Xxxxxxxxxx Merger Sub to resist any such effort to restrain or prohibit or
otherwise oppose the Mergers.
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Section 6.6. Notification of Certain Matters. The Company shall give
prompt written notice to Acquiror of (a) any notice or other communication from
any third party alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this Agreement or
(b) the occurrence or existence of any event which would, or could with the
passage of time or otherwise, make any representation or warranty contained
herein (without giving effect to any exception or qualification contained
therein relating to materiality or a Company Material Adverse Effect) untrue in
any material respect as of the Closing Date; provided, however, that the
delivery of notice pursuant to this Section 6.6 shall not limit or otherwise
affect the remedies available hereunder to Acquiror.
Section 6.7. Section 16 Matters. Prior to the Effective Time, the Company
shall take all such steps as may be required and permitted to cause the
transactions contemplated by this Agreement, including any dispositions of
Shares (including derivative securities with respect to such Shares) by each
individual who is or will be subject to the reporting requirements of Section
16(a) of the Exchange Act with respect to the Company, to be exempt under Rule
16b-3 promulgated under the Exchange Act.
Section 6.8. Employee Matters.
(a) Except as set forth in Section 6.8(a) of the Company Parties
Disclosure Schedule, prior to the Effective Time, the Company shall use its
commercially reasonable efforts to cause each officer, trustee, director or
employee who has any outstanding loan from, or other debt obligations to, the
Company or any of its Subsidiaries, for any purpose, to repay such loan in
accordance with the terms thereof; provided, however, that the Acquiror and its
Affiliates shall permit loans with respect to the Company's 401(k) plan to be
repaid by Covered Employees in accordance with the same terms as applied to such
loans prior to the Effective Time.
(b) The Company and each Company Subsidiary shall take all actions
as may be necessary under the Company Stock Option Plans to effect the
cancellations described in Section 3.2 and shall comply with any requirements
regarding tax withholding in connection therewith. In addition to the foregoing
and subject to the terms of the Company Stock Option Plans and applicable Law,
the Company and its Subsidiaries shall take all actions necessary to cause the
Company Stock Option Plans to be terminated at or prior to the Effective Time,
and to satisfy Acquiror that no holder of Company Options or other awards under
such Company Stock Option Plans or participant in the Company Stock Option
Plans, will have any right to acquire any interest in Acquiror or any Affiliate
or Subsidiary of Acquiror as a result of the exercise of Company Options or
other awards or rights pursuant to the Company Stock Option Plans at or after
the Effective Time.
(c) After the Effective Time, Acquiror shall cause the Surviving
Entity to continue to employ all employees of the Company and the Company
Subsidiaries who were employed immediately before the Effective Time ("Covered
Employees"), with no reductions in base salary for a period of twelve (12)
months after the Closing Date and with employee benefits satisfying the
requirements of Section 6.8(d); provided, however, that Acquiror shall retain
the right to terminate the employment of any employee of the Surviving Entity or
its Subsidiaries at any time after the Closing.
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(d) Acquiror shall provide, or cause the Surviving Entity to
provide, all Covered Employees, for at least twelve (12) months after the
Closing Date, with employee benefits that in the aggregate are no less favorable
than the benefits provided to such Covered Employees immediately prior to the
Closing (not including in the calculation of such benefits, any cash bonus or
equity awards), and Acquiror shall give, and shall cause the Surviving Entity to
give, each of those Covered Employees past service credit (to the extent such
service was generally recognized under a Company Benefit Plan prior to the
Closing Date) (i) for purposes of eligibility and vesting under all employee
benefit plans for employees of Acquiror (except benefit accrual under any
defined benefit plan) at or after the Closing and (ii) for all purposes
(including the amount of benefits) under the severance, vacation, and sick pay
policies of Acquiror. Notwithstanding the foregoing, nothing contained in this
Agreement or otherwise shall require the Company to continue any Company Benefit
Plan or prevent the amendment, modification or termination thereof at any time
following the Closing.
(e) After the Effective Time, Acquiror shall provide, or cause the
Surviving Entity to provide, all Covered Employees (and their dependents upon
payment of premium for dependents by such Covered Employee) with medical and
dental benefit coverage under the plans maintained by the Company and the
Company Subsidiaries or plans maintained by Acquiror or its affiliate. Subject
to the approval of any insurance carrier and to the extent consistent with the
terms of such plans, Acquiror and the Surviving Entity shall cause such plan(s)
to waive any pre-existing condition exclusions and waiting periods (except to
the extent that such exclusions would have then applied or waiting periods were
not satisfied under the employee's current company provided medical plan and to
credit or otherwise consider any deductibles or co-pays paid under the Company's
or a Subsidiary's medical plan by Covered Employees (or their dependents) prior
to the Closing Date toward any deductibles, co-pays or other maximums under its
plan(s) during the plan year during which the Closing Date occurs. Acquiror
shall be responsible for satisfying its obligations under section 601 et seq. of
ERISA and section 4980B of the Code to provide continuation coverage ("COBRA")
to any Covered Employee in accordance with law. Acquiror shall provide COBRA
coverage to any employees of the Company and Subsidiaries not employed by
Acquiror on the Closing Date (and to any former employees of the Company or any
of the Company and Subsidiaries being provided COBRA coverage by the
Subsidiaries on the Closing Date) to the extent required by COBRA.
(f) Effective as of the Closing, Acquiror shall, or shall cause
the Surviving Entity to, recognize all accrued vacation pay balances ("Accrued
Vacation") of Covered Employees and to recognize such employees' service with
the Company for purposes of vacation pay accrual under Acquiror's policies or
the Surviving Entity's policies regarding vacation pay. Acquiror shall, or shall
cause the Surviving Entity to, allow all Covered Employees to utilize Accrued
Vacation for a period of twenty-four (24) months, subject, for employees not
parties to an employment agreement with the Company, to a five (5) day annual
maximum for vacation carryovers under Acquiror's vacation policies. For purposes
of determining the sick leave entitlement of each Covered Employee, Acquiror
shall, or shall cause the Surviving Entity to, recognize that Covered Employee's
service prior to the Closing Date that was recognized by the Company in
determining sick leave entitlement.
(g) Absent advance written permission by the Company, the Acquiror
and its Affiliates shall not communicate with any employees of the Company or
the Company
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Subsidiaries regarding the possible terms of such employees' employment or any
benefits or other compensation to which they may become entitled following the
Closing Date.
Section 6.9. Indemnification.
(a) From and after the Effective Time, the Surviving Entity shall
maintain exculpation and indemnify and hold harmless, to the fullest extent
permitted under applicable Law, in accordance with any indemnity agreements of
the Company (the "Company Indemnity Agreements"), the Company Charter, the
Company Bylaws or similar organizational documents of any Company Subsidiary and
the Company Benefit Plans, in each case as in effect on the date of this
Agreement, (and the Surviving Entity shall also advance attorneys' fees and
expenses as incurred; provided that the Person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately determined
that such Person is not entitled to indemnification), each present and former
trustee, director, officer, general partner, managing member, manager or
fiduciary of the Company or any Company Subsidiary (in their capacities as such,
and not as shareholders, optionholders or unitholders of the Company or a
Company Subsidiary) (collectively, the "Indemnified Parties") against any costs
or expenses (including reasonable attorneys' fees and expenses), judgments,
fines, losses, claims, settlements, damages or liabilities incurred in
connection with any claim, action, suit, demand, proceeding or investigation,
whether civil, criminal, administrative or investigative, arising out of or
pertaining to matters existing or occurring at or prior to the later of the
Effective Time or the Liquidation Effective Time (including the transactions
contemplated hereby) and such obligation shall continue in full force and effect
until the expiration of the applicable statute of limitations.
(b) For a period of six (6) years from the Effective Time, the
Surviving Entity shall maintain in effect the Company's current trustees',
directors' and officers' liability insurance ("T&O Insurance") in respect of
acts or omissions occurring at or prior to the Effective Time, covering each
person currently covered by the T&O Insurance (a complete and accurate copy of
which has been heretofore delivered to Acquiror), on terms with respect to the
coverage and amounts no less favorable than those of the T&O Insurance in effect
on the date of this Agreement; provided, however, that the Surviving Entity may
substitute therefor policies of the Surviving Entity containing terms with
respect to coverage and amounts no less favorable to such trustees and officers;
provided, further, however, that in satisfying its obligations under this
Section 6.9(b), the Surviving Entity shall not be obligated to pay annual
premiums at a rate in excess of 200% of the rate of the Company's annual premium
for coverage for its current fiscal year (which premiums the Company represents
and warrants to be $237,600 in the aggregate), it being understood and agreed
that Acquiror shall nevertheless be obligated to provide such coverage as may be
obtained for such annual 200% amount.
(c) If the Surviving Entity or any of its successors or assigns
shall (i) consolidate with or merge into any other Person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfer all or substantially all of its properties and assets to any
Person, then, and in each such case, proper provisions shall be made so that the
successors and assigns of the Surviving Entity shall assume all of the
obligations of the Surviving Entity set forth in this Section 6.9.
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(d) The rights of each Indemnified Party under this Section 6.9
shall be in addition to any right such Person might have under the Company
Charter, Company Bylaws or similar organizational documents of any Company
Subsidiary and the Company Benefit Plans, or under any agreement of any
Indemnified Party with the Company or any Company Subsidiary. The provisions of
this Section 6.9 are intended to be for the benefit of, and shall be enforceable
by, each of the Indemnified Parties, their respective heirs and representatives.
Section 6.10. Company Shareholders Meeting; Proxy Statement.
(a) The Company shall, as promptly as reasonably practicable
following the execution of this Agreement, establish a record date for, duly
call, and give notice of, the special meeting of the shareholders of the Company
to be held to consider the approval of this Agreement and the REIT Merger (the
"Company Shareholders Meeting") and mail the Proxy Statement to the Company's
shareholders. Subject to Section 6.4(c) and Section 6.4(e), the Company shall,
through the Company Board, recommend to its shareholders adoption of this
Agreement and the approval of the REIT Merger and shall include such
recommendation in the Proxy Statement. Without limiting the generality of the
foregoing, the Company's obligations pursuant to the first sentence of this
Section 6.10(a) shall not be affected by (i) the commencement, public proposal,
public disclosure or communication to the Company of any Takeover Proposal or
(ii) the withdrawal or modification by the Company Board or any committee
thereof of the Company Board's or such committee's approval or recommendation of
this Agreement, the REIT Merger or the other transactions contemplated by this
Agreement.
(b) As promptly as practicable after the execution of this
Agreement, but in no event later than ten (10) Business Days after the date of
this Agreement, the Company shall prepare and the Company shall cause to be
filed with the SEC a proxy statement (together with any amendments thereof or
supplements thereto, the "Proxy Statement") in a form reasonably satisfactory to
Acquiror. The Company will cause the Proxy Statement to comply as to form in all
material respects with the applicable provisions of the Exchange Act and the
rules and regulations promulgated thereunder, and shall provide Acquiror with
reasonable opportunities to review and comment on the Proxy Statement. Each of
Acquiror and the Company shall furnish all information concerning it and its
Subsidiaries or Affiliates as may reasonably be requested by the other party in
connection with the preparation of the Proxy Statement.
(c) The Company shall notify Acquiror promptly after receipt by
the Company of any comments of the SEC on, or of any request by the SEC for
amendments or supplements to, the Proxy Statement. The Company shall supply
Acquiror with copies of all correspondence between the Company or any of its
representatives and the SEC with respect to the Proxy Statement. If at any time
prior to the Effective Time, any event shall occur relating to the Company or
any of its Subsidiaries or any of their respective officers, trustees, directors
or Affiliates which should be described in an amendment or supplement to the
Proxy Statement, the Company shall inform Acquiror promptly after becoming aware
of such event. If at any time prior to the Effective Time, any event shall occur
relating to Acquiror or any of its Subsidiaries or any of their respective
officers, directors or Affiliates which should be described in an amendment or
supplement to the Proxy Statement, Acquiror shall inform the Company promptly
after becoming aware of such event. Whenever the Company learns of the
occurrence of any event which should be described in an amendment of, or
supplement to, the Proxy Statement, the
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parties shall cooperate to promptly cause such amendment or supplement to be
prepared, filed with and cleared by the SEC and, if required by applicable Law,
disseminated to the persons and in the manner required. The Company shall mail
the Proxy Statement to its shareholders within the time period specified in
Section 6.10(a) and shall convene and hold the Company Shareholders Meeting no
later than twenty (20) Business Days after the mailing of the Proxy Statement.
Section 6.11. Certain Resignations. The Company shall cause to be
delivered to Acquiror the resignations of all of the trustees and directors (and
comparable managers, officers and other personnel requested by Acquiror) of the
Company and each Company Subsidiary (the "Company Parties Resignations"), each
to be effective upon the consummation of the Mergers.
Section 6.12. Title Defects. If any Title Insurance Policy shows title
defects which would be reasonably expected to cause an Acquiror Material Adverse
Effect on the ability to generate revenue at the Property as presently
constructed or the inability of Acquiror to provide a first priority mortgage
lien on the Company Property (a "Major Title Defect"), and Acquiror has
delivered to the Company and its counsel an itemized written notice of such
Major Title Defects ("Acquiror's Title Notice") within thirty (30) Business Days
after the receipt of such Title Insurance Policy, then the Company or Company
Subsidiaries shall, within ten (10) calendar days after receipt of Acquiror's
Title Notice (the "Cure Period"), begin the process to cure the Major Title
Defects identified in Acquiror's Title Notice and to continue to diligently
prosecute such cure until such Major Title Defect is removed from title;
provided, however, that if such Merger Title Defect has not been cured,
notwithstanding such diligence prosecution by the date for Closing, prescribed
by this Agreement, the Company shall have no obligation to complete such cure
and the failure to cure shall not constitute a breach of the foregoing
representation and warranty, unless the cost to cure the Merger Title Defect
could reasonably be expected to exceed $1,000,000 and is capable of being cured
for financial consideration.
Section 6.13. Financing. As soon as reasonably practicable after the date
hereof and in any event not later than five (5) Business Days prior to the
Closing, the Purchaser Parties shall deliver to the Company copies of executed
equity and debt commitment letters (or other evidence reasonably satisfactory to
the Company) pursuant to which the investors, lenders or other(s) party thereto
have agreed, in accordance with the terms set forth therein, to the Company, to
provide the Purchaser Parties with funds necessary to consummate the
transactions contemplated hereby.
Section 6.14. Liquidation of REIT Merger Sub.
(a) REIT Merger Sub covenants to the Company that, prior to the OP
Effective Time, it will adopt a plan of liquidation in substantially the form
attached as Exhibit B hereto (the "Plan of Liquidation") and submit the Plan of
Liquidation for approval to the sole shareholder of REIT Merger Sub, and will,
upon the requisite shareholder approval, implement the liquidation, dissolution
and winding up of the REIT Merger Sub in accordance with the terms of the Plan
of Liquidation. OP Merger Sub, as the sole shareholder of REIT Merger Sub,
covenants to the Company that it will approve the Plan of Liquidation prior to
the OP Effective Time.
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(b) Pursuant to the Plan of Liquidation, (i) upon its liquidation,
REIT Merger Sub will pay to holders of New Series B-1 Preferred Shares a
liquidation preference of $25.00 per share (plus all accrued but unpaid
distributions (whether or not declared) as of the effective time of the
liquidation of REIT Merger Sub) (the aggregate of such amounts herein referred
to as the "New Preferred B-1 Liquidation Preference"), and (ii) prior to the OP
Effective Time, OP Merger Sub and REIT Merger Sub shall execute the Assignment
and Assumption Agreement providing for the assignment of all of the assets of
the Surviving Entity to, and assumption of all of the liabilities of the
Surviving Entity by, OP Merger Sub.
(c) Immediately following the Liquidation Effective Time, (i) the
share transfer books of the Surviving Entity shall be closed and there shall be
no registration of transfers of any New Series B-1 Preferred Shares that were
outstanding immediately prior to the Liquidation Effective Time (except
transfers permitted by operation of Law or by will), (ii) the Surviving Entity
shall deposit the New Preferred B-1 Liquidation Preference with the Paying
Agent, and (iii) for administrative convenience only, notwithstanding anything
to the contrary in this Agreement, holders of Preferred B Certificates shall
receive, in lieu of the Preferred B Merger Consideration, the New Preferred B-1
Liquidation Preference upon surrender of their Preferred B Certificates (or any
replacement therefor issued pursuant to Section 3.1(b)(ii)); provided, further,
that the Preferred B Liquidation Preference shall only be paid to the Person in
whose name the surrendered Preferred B Certificate (or such replacement
therefor) is registered.
Section 6.15. Covenants of the Responsible Entity. The Responsible Entity
hereby covenants and agrees:
(a) to do anything a Company Party reasonably requests, at such
Company Party's expense, including obtaining consents, signing and producing
documents, producing receipts and getting documents completed and signs, to the
extent necessary to bind the Responsible Entity under this Agreement;
(b) at a Company Party's request and subject to applicable Law, to
exercise its right of indemnity from the Trust Fund in respect of obligations
incurred by it under this Agreement;
(c) to comply with its obligations as responsible entity and
trustee of the Parent Trust;
(d) not to do anything which:
(i) effects or facilitates its retirement, removal or
replacement as trustee and responsible entity of the Parent Trust;
(ii) could restrict its right of indemnity from the Trust
Fund in respect of obligations incurred by it under this Agreement;
(iii) could restrict or impair its ability to comply with its
obligations under this Agreement; or
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(iv) effects or facilitates the termination of the Parent
Trust, the variation of its constituent documents in a manner adverse to
the interests of the Company Parties, the resettlement of the Trust Fund
or anything which could result in the Trust Fund being mixed with other
property; and
(e) to notify the Company Parties of anything that occurs or fails
to occur which would mean that it could not truthfully repeat all of its
representations and warranties at any time by reference to the current
circumstances;
provided, that from and after the REIT Effective Time, references to "Company
Party" or "Company Parties" in this Section 6.15 shall be deemed to refer to
"Beneficiary" or "Beneficiaries."
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1. Conditions to Each Party's Obligation to Effect the Mergers.
The respective obligations of each party to effect the Mergers are subject to
the satisfaction or waiver (a permitted by applicable Law) at or prior to the OP
Effective Time, the Xxxxxxxxxx Effective Time or the REIT Effective Time, as the
case may be, of the following conditions:
(a) The Company Shareholder Approval shall have been obtained.
(b) All necessary consents and approvals of any Governmental
Entity required for the consummation of the transactions contemplated by this
Agreement shall have been obtained, including consents and approvals relating to
antitrust, competition, trade or other regulatory matters.
(c) No Law or Order issued by any court of competent jurisdiction
or other Governmental Entity or other legal restraint or prohibition preventing
the consummation of any of the Mergers shall be in effect; provided, however,
that each of the parties shall have used commercially reasonable efforts to
prevent the entry of any such Order and to appeal as promptly as possible any
Order that may be entered.
Section 7.2. Conditions to the Obligation of the Purchaser Parties to
Effect the Mergers. The obligations of the Purchaser Parties to effect the
Mergers are further subject to satisfaction or waiver (as permitted by
applicable Law) at or prior to the OP Effective Time, the Xxxxxxxxxx Effective
Time or the REIT Effective Time, as the case may be, of the following
conditions:
(a) The (i) representations and warranties of the Company Parties
contained herein shall be true and correct as of the date of this Agreement, and
(ii) the representations and warranties of the Company Parties that are
qualified as to materiality shall be true and correct (and any such
representations and warranties that are not so qualified shall be true and
correct in all material respects) as of the Closing Date (except to the extent
that any such representation or warranty, by its terms, is expressly limited to
a specific date, in which case such representation
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or warranty shall be true and correct as of such date; provided, however, that
in the case of Section 4.1(j)(ii)(A), December 31, 2004 shall replace December
31, 2003).
(b) Each of the Company Parties shall have performed or complied
with, in all material respects, each of its agreements, obligations, covenants
and conditions contained in this Agreement required to be performed or complied
with by it at or prior to the OP Effective Time, the Xxxxxxxxxx Effective Time
and the REIT Effective Time.
(c) The Purchaser Parties shall have received a certificate,
signed by a senior executive officer of the Company, certifying as to the
matters set forth in Sections 7.2(a) and 7.2(b).
(d) Since the date of this Agreement there shall not have occurred
any event or events that would constitute a Company Material Adverse Effect.
(e) Acquiror shall have received evidence, in form and substance
satisfactory to it, that the Company Parties shall have obtained all material
consents, approvals, authorizations, qualifications and Orders of third parties
required in connection with this Agreement and the transactions contemplated
hereby, including the consents, approvals, authorizations, qualifications and
Orders set forth on Schedule 7.2(e) hereto.
(f) There shall not be pending or threatened any suit, action or
proceeding by any Governmental Entity: (i) challenging the acquisition by
Acquiror of any Company Shares or the acquisition by OP Merger Sub of any
Operating Partnership Units or the acquisition by Xxxxxxxxxx Merger Sub of any
Xxxxxxxxxx OP Units, seeking to restrain or prohibit the consummation of any of
the Mergers, or seeking to place limitations on the ownership of Company Shares
(or the membership units of the Surviving Entity) by Acquiror, the ownership of
Operating Partnership Units (or the partnership interests in the Surviving OP
Partnership) by OP Merger Sub or the ownership of Xxxxxxxxxx OP Units (or the
partnership interests in the Surviving Xxxxxxxxxx Partnership) by Xxxxxxxxxx
Merger Sub or seeking to obtain from the Company Parties or the Purchasing
Parties any damages that are material in relation to the Company, the Operating
Partnership or Xxxxxxxxxx, (ii) seeking to prohibit or materially limit the
ownership or operation by the Company, Acquiror or any of their respective
Subsidiaries or Affiliates of any portion of any business or of any assets of
the Company, Acquiror or any of their respective Subsidiaries, or to compel the
Company, Acquiror or any of their respective Subsidiaries to divest or hold
separate any portion of any business or of any assets of the Company, Acquiror
or any of their respective Subsidiaries, as a result of the Mergers, (iii)
seeking to prohibit Acquiror or any of its Subsidiaries from effectively
controlling in any material respect the business or operations of the Company or
any of its Subsidiaries or (iv) otherwise constituting an Acquiror Material
Adverse Effect or a Company Material Adverse Effect.
(g) The Purchaser Parties shall have received a legal opinion,
dated as of the Closing Date, from Xxxxxxx & Holland LLP, in form and substance
reasonably satisfactory to Acquiror, to the effect that: (i) commencing with its
taxable year ended December 31, 2000, the Company has been organized in
conformity with the requirements for qualification and taxation as a REIT under
the Code, and its method of operation has enabled it to meet, through the
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Closing Date, the requirements for qualification and taxation as a REIT under
the Code; and (ii) each of the Operating Partnership, since the formation of the
Operating Partnership, and all other Company Subsidiaries which are organized as
partnerships or limited liability companies or which file tax returns as
partnerships, since the later of the date of formation of the applicable Company
Subsidiary or the date on which the Company acquired an interest in such Company
Subsidiary, (x) has qualified at all times as a partnership or as a disregarded
entity under the Code and not as an association taxable as a corporation, and
(y) has not qualified as a "publicly traded partnership" to which Section
7704(a) of the Code applies. Xxxxxxx & Xxxxxxx LLP may rely on the opinion of
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxxxx & Xxxxxx LLP, the former counsel to Kranzco
Realty Trust, in rendering its opinion with respect to the qualification of the
Company as a REIT.
(h) The Purchaser Parties shall have received legal opinions, each
dated as of the Closing Date, in form and substance reasonably satisfactory to
them, from Proskauer Rose LLP (New York counsel to the Company Parties), Xxxxxxx
LLP (Maryland counsel to the Company) and Xxxxxxxx, Xxxxxx & Finger, P.A.
(Delaware counsel to the Company Parties) (including, among other things, an
opinion from Xxxxxxx LLP to the effect that after acceptance for record of the
Articles of Merger with the Maryland Department, the REIT Merger shall, pursuant
to the Maryland REIT Law, become effective at the time set forth in the Articles
of Merger, assuming such effective time is not later than 30 days after such
acceptance for record).
(i) The Company shall have delivered to Acquiror the Company
Parties Resignations.
(j) The Company Parties shall have delivered to Acquiror an
executed FIRPTA Certificate.
(k) The Company and each of the Company Subsidiaries shall have
provided tenant estoppel certificates in the form previously agreed by each
tenant, or if no such form was previously agreed to, in the form reasonably
acceptable to Acquiror, with respect to 75% of the tenants under a Lease with
respect to more than 20,000 square feet of space.
Section 7.3. Conditions to the Obligation of the Company to Effect the
Mergers. The obligation of the Company Parties to effect the Mergers is further
subject to satisfaction or waiver (as permitted by applicable Law) at or prior
to the OP Effective Time, the Xxxxxxxxxx Effective Time or the REIT Effective
Time, as the case may be, of the following conditions:
(a) The (i) representations and warranties of the Purchaser
Parties, the Parent Parties and the Responsible Entity contained herein shall be
true and correct as of the date of this Agreement, and (ii) the representations
and warranties of the Purchasing Parties, the Parent Parties and the Responsible
Entity contained herein that are qualified as to materiality shall be true and
correct (and any such representations and warranties that are not so qualified
shall be true and correct in all material respects) as of the Closing Date
(except to the extent that any such representation or warranty, by its terms, is
expressly limited to a specific date, in which case such representation or
warranty shall be true and correct as of such date).
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(b) Each of the Purchaser Parties, the Parent Parties and the
Responsible Entity shall have performed and complied with, in all material
respects, each of its agreements, obligations, covenants and conditions
contained in this Agreement required to be performed by it at or prior to the OP
Effective Time, the Xxxxxxxxxx Effective Time and the REIT Effective Time.
(c) The Company shall have received a certificate, signed by a
senior executive officer of each of the Purchaser Parties, the Parent Parties
and the Responsible Entity certifying as to the matters set forth in Sections
7.3(a) and 7.3(b).
(d) The Company Parties shall have received legal opinions, each
dated as of the Closing Date, in form and substance reasonably satisfactory to
them, from Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP and Xxxxx Xxxxxxx LLP, each
counsel to the Purchaser Parties.
(e) The Company Parties shall have received a legal opinion, dated
as of the Closing Date, in form and substance reasonably satisfactory to them,
from Freehills, Australian counsel to the Purchaser Parties.
(f) The board of trustees of REIT Merger Sub shall have approved
the Plan of Liquidation and OP Merger Sub shall have approved the Plan of
Liquidation at a meeting of the sole shareholder of REIT Merger Sub.
(g) REIT Merger Sub shall have entered into the Assignment and
Assumption Agreement with OP Merger Sub.
Section 7.4. Frustration of Closing Conditions. None of the parties hereto
may rely on the failure of any condition set forth in this Article VII to be
satisfied if such failure was caused by such party's failure to act in good
faith or its breach of its covenants contained in this Agreement.
ARTICLE VIII
TERMINATION AND AMENDMENTS
Section 8.1. Termination. This Agreement may be terminated and the Mergers
may be abandoned at any time prior to the Effective Time, whether before or
after receipt of the Company Shareholder Approval:
(a) by mutual written consent of Acquiror and the Company;
(b) by either Acquiror or the Company (if, in the case of the
Company with respect to clauses (i) and (ii) below, it has not violated any of
Sections 6.1, 6.4 or 6.10):
(i) if the Company Shareholder Approval is not obtained at
the Company Shareholders Meeting;
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(ii) if the Mergers shall not have been consummated by June
30, 2005 (the "Termination Date"); provided, however, that the right to
terminate this Agreement under this Section 8.1(b)(ii) shall not be
available to any party whose breach of any provision of this Agreement has
been the cause of, or resulted in, the failure of the Mergers to occur on
or before the Termination Date; or
(iii) there shall be any Law or Order that has the effects set
forth in Section 7.1(c).
(c) by the Company:
(i) if (A) Acquiror, Acquiror Subsidiary, any Acquiror
Merger Sub, Parent, Parent Trust or the Responsible Entity shall have
breached any of the covenants or agreements contained in this Agreement to
be complied with by Acquiror, Acquiror Subsidiary, the applicable Acquiror
Merger Sub, Parent, Parent Trust or the Responsible Entity, as the case
may be, such that the closing condition set forth in Section 7.3(b) would
not be satisfied or (B) there exists a breach of any representation or
warranty of Acquiror, Acquiror Subsidiary, any Acquiror Merger Sub,
Parent, Parent Trust or the Responsible Entity contained in this Agreement
such that the closing condition set forth in Section 7.3(a) would not be
satisfied, and, in the case of both (A) and (B), such breach is incapable
of being cured by the Termination Date or is not cured by Acquiror,
Acquiror Subsidiary, the applicable Acquiror Merger Sub, Parent, Parent
Trust or the Responsible Entity, as the case may be, within twenty (20)
Business Days after Acquiror, Acquiror Subsidiary, the applicable Acquiror
Merger Sub, Parent, Parent Trust or the Responsible Entity, as the case
may be, receives written notice of such breach from the Company; or
(ii) if prior to the obtaining of the Company Shareholder
Approval (A) the Company Board has received a Superior Proposal, (B) the
Company Board determines in good faith, after consultation with a
financial advisor of nationally recognized reputation and outside legal
counsel, that such termination is required to comply with the duties of
the Company Board under applicable Law, (C) the Company has complied with
Sections 6.1, 6.4 and 6.10, (D) not later than the day of such
termination, Acquiror has received the fee set forth in Section 8.4, and
(E) the Company simultaneously enters into a definitive agreement with
respect to such Superior Proposal with the party making such Superior
Proposal; provided that the Company Board shall only be able to terminate
this Agreement pursuant to this clause (ii) after five (5) Business Days
following Acquiror's receipt of written notice advising Acquiror that the
Company Board is prepared to do so, and only if, during such five (5)
Business Day period, the Company and its advisors, if requested by
Acquiror, will have negotiated in good faith with Acquiror to make such
adjustments in the terms and conditions of this Agreement as would enable
the parties to proceed with the transactions contemplated herein on such
adjusted terms.
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(d) by Acquiror:
(i) if (A) any Company Party shall have breached any of the
covenants or agreements contained in this Agreement to be complied with by
such Company Party such that the closing condition set forth in Section
7.2(b) would not be satisfied or (B) there exists a breach of any
representation or warranty of any Company Party contained in this
Agreement such that the closing condition set forth in Section 7.2(a)
would not be satisfied, and, in the case of both (A) and (B), such breach
is incapable of being cured by the Termination Date or is not cured by
such Company Party within twenty (20) Business Days after such Company
Party receives written notice of such breach from Acquiror;
(ii) if any Law or Order having any of the effects set forth
in Section 7.2(f) shall be in effect and shall have become final and
nonappealable;
(iii) if, prior to the obtaining of the Company Shareholder
Approval (A) a Company Adverse Recommendation Change shall have occurred,
(B) the Company shall have failed to include in the Proxy Statement the
recommendation of the Company Board that the Company's shareholders vote
in favor of the REIT Merger and the transactions contemplated hereby, (C)
a tender or exchange offer relating to any Company Shares will have been
commenced and the Company will not have sent to its security holders,
within ten (10) Business Days after the commencement of such tender or
exchange offer, a statement disclosing that the Company recommends
rejection of such tender or exchange offer, or (D) a Takeover Proposal is
publicly announced, and the Company fails to issue, within ten (10)
Business Days after such Takeover Proposal is announced, a press release
that reaffirms the recommendation of the Company Board that its
shareholders vote in favor of the REIT Merger and the transactions
contemplated hereby; or
(iv) if the Company breaches, in any material respect, any of
its obligations under Section 6.4 or 6.10(a).
Section 8.2. Effect of Termination. Except as otherwise set forth in this
Agreement, in the event of a termination of this Agreement by either the Company
or Acquiror as provided in Section 8.1, this Agreement shall forthwith become
void and there shall be no liability or obligation on the part of Acquiror,
Acquiror Subsidiary, any Acquiror Merger Sub, Parent, Parent Trust, the
Responsible Entity, the Company, the Operating Partnership or Xxxxxxxxxx or
their respective officers, directors or trustees; provided, however, that no
such termination shall relieve any party hereto of any liability or damages
resulting from any material breach of this Agreement; and provided further, that
the provisions of this Section 8.2, Section 8.3 (Fees and Expenses), Section 8.4
(Termination Fee), Article IX of this Agreement (other than Sections 9.15 and
9.16) and the Confidentiality Agreements (Confidentiality) shall remain in full
force and effect and survive any termination of this Agreement.
Section 8.3. Fees and Expenses. Except as otherwise expressly set forth in
this Agreement, all fees and expenses incurred in connection herewith and the
transactions
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contemplated hereby shall be paid by the party incurring such expenses, whether
or not the Mergers are consummated.
Section 8.4. Termination Fee.
(a) If this Agreement shall be terminated pursuant to:
(i) Section 8.1(b)(i), 8.1(b)(ii), 8.1(d)(i), 8.1(d)(iii)(C)
or 8.1(d)(iii)(D) and (A) at any time after the date hereof a Takeover
Proposal shall have been publicly announced or otherwise communicated to
the Company Board and (B) within twelve (12) months of the termination of
this Agreement, the Company enters into a definitive agreement with any
third party with respect to a Takeover Proposal (with all percentages in
the definition of Takeover Proposal increased to 50%) or any such
transaction is consummated; or
(ii) Section 8.1(c)(ii), 8.1(d)(iii)(A) or 8.1(d)(iii)(B) or
8.1(d)(iv) hereof,
then the Company shall (1) in the case of termination pursuant to clause (i) of
this Section 8.4(a), upon the earlier to occur of the execution of such
definitive agreement and such consummation or (2) in the case of termination
pursuant to clause (ii) of this Section 8.4(a), on the date of such termination,
pay Acquiror a non-refundable fee in an amount equal to $24.0 million (the
"Termination Fee"), payable by wire transfer of immediately available funds to
an account designated in writing to the Company by Acquiror.
(b) If the Company fails to promptly pay the Termination Fee, and,
in order to obtain such payment Acquiror commences a suit which results in a
judgment against the Company for the Termination Fee, the Company shall pay to
Acquiror its costs and expenses (including attorney's fees) in connection with
such suit, together with interest on the amount of the fee at a rate of 12% per
annum.
Section 8.5. Amendment. To the extent permitted by applicable Law, this
Agreement may be amended by the parties in writing by action of their respective
boards of trustees or directors, general partners or managers, as applicable, at
any time before or after the Company Shareholder Approval is obtained but, after
the Company Shareholder Approval is obtained, no amendment shall be made which
decreases the REIT Merger Consideration or which materially adversely affects
the rights of the holders of the Company Shares without the approval of such
holders.
Section 8.6. Extension; Waiver. At any time prior to the Effective Time,
each of the Company Parties and the Purchaser Parties may, to the extent
permitted by applicable Law, subject to Section 9.11, (a) extend the time for
the performance of any of the obligations or other acts of the other party, (b)
waive any inaccuracies in the representations and warranties of the other party
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) waive (as permitted by applicable Law) compliance with any of
the agreements or conditions of the other party contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed
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on behalf of such party. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise shall not constitute a
waiver of those rights.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1. Nonsurvival of Representations, Warranties, Covenants and
Agreements. None of the representations and warranties in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time. All covenants and agreements shall survive in accordance with their terms.
This Article IX, the agreements of Acquiror, the Surviving Entity and the
Company in Section 6.9 (Indemnification), Section 8.3 (Fees and Expenses) and
Section 8.4 (Termination Fee) and those other covenants and agreements contained
herein that by their terms apply, or that are to be performed in whole or in
part, after the Effective Time shall survive the consummation of the Mergers.
Section 9.2. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, sent by overnight courier (provided proof of
delivery is received) to the parties or sent by telecopy (provided a
confirmation of transmission is received) at the following addresses or telecopy
numbers (or at such other address or telecopy number for a party as shall be
specified by like notice):
(a) if to any Purchaser Party, any Parent Party or the Responsible
Entity, to
Centro Watt America III, L.P.
c/o Centro Properties Group
Corporate Offices 0xx Xxxxx
Xxx Xxxx Xxxxxxxx Xxxxxx
235 Springvale Road
Xxxx Waverly Victoria, Australia 3150
Attention: Xxxxxx Xxxxx
Facsimile number: 011-61-3-9886-1345
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile number: (000) 000-0000
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(b) if to any Company Party, to
Kramont Realty Trust
000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx 000
Plymouth Meeting, PA 19462
United States
Attention: Xxxxx X. Xxxxxx, Xx.
Facsimile number: (000) 000-0000
with a copy (which shall not constitute notice) to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx, Esq.
Facsimile number: 000-000-0000
Section 9.3. Interpretation.
(a) When a reference is made in this Agreement to an Article or a
Section, such reference shall be to an Article or a Section of this Agreement
unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(c) This Agreement is the result of the joint efforts of each of
the parties hereto, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the parties hereto and there shall be
no construction against any party based on any presumption of that party's
involvement in the drafting thereof.
(d) The words "include," "includes" or "including" shall be deemed
to be followed by the words "without limitation."
(e) The term "ordinary course of business" (or similar terms)
shall be deemed to be followed by the words "consistent with past practice."
Section 9.4. Intentionally Omitted.
Section 9.5. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.6. Entire Agreement; No Third-Party Beneficiaries. This
Agreement (together with the Confidentiality Agreements), the exhibits and
schedules hereto, the Company Parties Disclosure Schedule and the Purchaser
Parties Disclosure Schedule constitute the entire agreement and supersede all
prior agreements and understandings (including the Exclusivity
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Agreement and the Original Agreement), both written and oral, between the
parties with respect to the subject matter of this Agreement. Except for the
provisions of Section 6.9, this Agreement is not intended to confer upon any
Person other than the parties hereto any rights or remedies.
Section 9.7. Governing Law. Except as provided in this Section 9.7, this
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York (without reference to the principles of conflicts of law
except Sections 5-1401 and 5-1402 of the New York General Obligations Law and
Rule 327(b) of the New York Civil Practice Laws and Rules). The REIT Merger and
matters pertaining thereto shall be governed by, and construed in accordance
with, the laws of the State of Maryland (without regard to any conflicts of laws
principles thereof). The Subsidiary Mergers and matters pertaining thereto shall
be governed by, and construed in accordance with, the laws of the State of
Delaware (without regard to any conflicts of laws principles thereof).
Section 9.8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties. Any such purported assignment or
delegation in violation of the foregoing sentence shall be null and void.
Subject to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors, permitted assigns, heirs, executors and administrators.
Section 9.9. Enforcement. The parties agree that irreparable damage would
occur and the parties would not have any adequate remedy at Law in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in the United States District Court for the Southern District
of New York or any court of the State of New York sitting in New York, New York,
this being in addition to any other remedy to which they are entitled at Law or
in equity. In addition, each of the parties hereto unconditionally and
irrevocably (a) consents to submit itself (without making such submission
exclusive) to the personal jurisdiction of the United States District Court for
the Southern District of New York or any court of the State of New York sitting
in New York, New York in the event any dispute arises out of this Agreement or
any of the transactions contemplated hereby, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by any application or motion (of
whatever nature) or other request for leave from any such court (including,
without limitation, by taking any objection to an action being brought in those
courts on the basis that the action has not been brought in a convenient forum
or that those courts do not have jurisdiction), and (c) agrees that notice or
service of process in any proceeding shall be properly served or delivered if
delivered in the manner contemplated by Section 9.2. In addition, each of the
parties hereto waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby. Each of the Parent Parties and the Responsible
Entity covenants that it will promptly, but in no event later than three (3)
Business Days after the date hereof, irrevocably appoint CT Corporation System
(New York) (the "Agent") as the authorized agent for service of process of such
Parent Party and the Responsible Entity in any proceeding in the United States
District Court for the Southern District of New York or any court of the State
of New York sitting in New York, New York, and
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confirms that the Agent has agreed to act as agent for service of process and
that such service shall be deemed completed on delivery to the Agent (whether or
not it is forwarded to and received by such Parent Party and the Responsible
Entity).
Section 9.10. Severability. This Agreement shall be deemed severable; the
invalidity or unenforceability of any term or provision of this Agreement shall
not affect the validity or enforceability of the balance of this Agreement or of
any other term hereof, which shall remain in full force and effect. If any of
the provisions hereof are determined to be invalid or unenforceable, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible.
Section 9.11. Modification. No supplement, modification or amendment of
this Agreement will be binding unless made in a written instrument that is
signed by all of the parties hereto and that specifically refers to this
Agreement.
Section 9.12. Remedies Cumulative. The remedies provided in this Agreement
shall be cumulative and shall not preclude the assertion by the parties hereto
of any other rights or the seeking of any other remedies, whether at law or in
equity, against the other parties, or their respective successors or assigns.
Section 9.13. Publicity. None of the parties hereto shall (and each of the
parties shall cause its Affiliates and Representatives not to) issue any press
release or make any public announcement concerning this Agreement or the
transactions contemplated hereby without obtaining the prior written approval of
the Company, in the event the disclosing party is any of the Purchasing Parties
(or any of their respective Affiliates and Representatives), or Acquiror, in the
event the disclosing party is any of the Company Parties (or any of its
Affiliates and Representatives), such consent not to be unreasonably withheld or
delayed; provided, however, that, if a party determines, based upon advice of
counsel, that disclosure is otherwise required by applicable Law or the rules or
regulations of any stock exchange upon which the securities of such party is
listed, such party may make such disclosure to the extent so required.
Section 9.14. Exhibits; Disclosure Schedules. All Exhibits referred to
herein and in the Company Parties Disclosure Schedule are intended to be and
hereby are specifically made a part of this Agreement.
Section 9.15. Parent and Parent Trust Guarantee and Indemnity.
(a) Each of Parent and Parent Trust hereby jointly and severally,
unconditionally and irrevocably guarantees (the "Guarantee"), prior to the
Effective Time, to each of the Company Parties and, on or after the Effective
Time, to the former holders of Company Shares, former holders of Operating
Partnership Units, former holders of Eligible Xxxxxxxxxx OP Units and former
holders of Company Options and the Indemnified Parties and, on or after the
effective time of the liquidation of REIT Merger Sub, the former holders of New
Series B-1 Preferred Shares (in such capacity, collectively, the
"Beneficiaries"), as primary obligor and not merely as surety, the due and
punctual payment in full of each obligation of the Purchaser Parties which now
exists or which may arise at any time under this Agreement, the Plan of
Liquidation and the Assignment and Assumption Agreement, as any of them may be
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from time to time amended, supplemented or modified in accordance with its
respective terms, and the transactions contemplated hereby and thereby (each
such obligation, an "Obligation" and, collectively, the "Obligations"). Parent
and Parent Trust jointly and severally agree that if for any reason whatsoever
any of the Purchaser Parties shall fail or be unable to duly, punctually and
fully pay any Obligation, they shall unconditionally and promptly pay the
Obligation upon demand. Nothing shall discharge or satisfy the liability of
Parent or Parent Trust under the guarantee contained in this Section 9.15(a)
except the full and enduring payment of the Obligations. The Guarantee
constitutes a continuing guarantee of payment when due and not of collection.
(i) Subject to Section 9.15(c), the obligations of Parent
and Parent Trust under this Section 9.15(a) shall be performed in
accordance with the terms of this Agreement and shall not be subject to
any reduction, limitation, impairment or termination whatsoever by reason
of the invalidity, illegality or unenforceability of any Obligation.
Without limiting the generality of the foregoing, the obligations of
Parent and Parent Trust under the Guarantee shall be primary, absolute and
unconditional irrespective of: (1) any default, failure or delay, willful
or otherwise, in the payment of all or any part of any Obligation; (2) any
act or omission releasing a Purchaser Party or any other guarantor of or
in relation to the Obligations or settling any claim in respect of the
Obligations; (3) any acquiescence or delay by any Beneficiary or any other
Person; (4) the liquidation, insolvency or administration of any person,
including a Purchaser Party, Parent, the Responsible Entity or Parent
Trust; or (5) any other act or omission or delay to do any other act which
might in any manner or to any extent vary the risk of Parent or Parent
Trust or which would otherwise operate as a discharge of a guarantor as a
matter of law, and each of Parent and Parent Trust hereby waives (x) all
rights to require presentments, demands for payment to the Purchaser
Parties, commencement or completion of proceedings or enforcement of
rights against the Purchaser Parties, notices of protest for non-payment,
notices of default, any other notice, any proof of reliance by any
Beneficiary upon the Guarantee or acceptance of the Guarantee and all
other formalities, (y) any rights to notice in relation to any variation
of the Obligations or any matter relating to them or their enforcement,
and (z) any right to revoke, challenge or terminate the Guarantee.
(ii) In furtherance of the foregoing and not in limitation of
any other right which the Beneficiaries may have at law or in equity
against Parent or Parent Trust by virtue of the Guarantee contained in
this Section 9.15, upon failure of the Purchaser Parties to make any
payment pursuant to any Obligation, when and as the same shall become due
whether at Closing or at any time thereafter, under any provision
contained in this Agreement, each of Parent and Parent Trust agrees
jointly and severally to pay such Obligation on demand.
(b) Each of Parent and Parent Trust jointly and severally
indemnifies each of the Beneficiaries against any liability, cost or loss
(including reasonable attorneys' fees) arising from (1) a failure by a Purchaser
Party to comply with an Obligation or the failure by Parent or Parent Trust to
comply with this Section 9.15, or (2) any obligation of a Purchaser Party,
Parent or Parent Trust arising under any part of this Agreement, including this
Section 9.15, being found to be unenforceable for any reason, and, in either
case, jointly and severally agrees to pay any
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amounts due under this indemnity on demand by a Beneficiary. The obligations of
Parent and Parent Trust (collectively, the "Indemnifying Parties") under this
Section 9.15(b) is referred to herein as the "Indemnity." If a claim or action
is made or threatened against any Beneficiary for repayment or recovery of any
amount or amounts received in payment or on account of any of the Obligations
(each such claim or action, a "Claim") and any such Beneficiary repays all or
part of said amount by reason of (y) any judgment, decree or order of any court
or administrative body having jurisdiction over such Beneficiary or any of its
property, or (z) any settlement or compromise of any such claim effected by such
Beneficiary with any such claimant (including any Purchaser Party), then and in
such event the Indemnifying Parties agree that any such judgment, decree, order,
settlement or compromise shall be binding upon them, provided that the following
provisions shall have been complied with:
(i) Anything in this Section 9.15(b) notwithstanding,
promptly after receipt by such Beneficiary of notice of the commencement
of any Claim, such Beneficiary shall promptly notify Parent of the
commencement thereof in writing (but the failure to notify Parent shall
not relieve an Indemnifying Party from any liability that it may have
under this Section 9.15(b) except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure). In case any such Claim is brought against a
Beneficiary and such Beneficiary notifies Parent of the commencement
thereof, an Indemnifying Party will be entitled to participate therein
and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof (with counsel
reasonably satisfactory to such Beneficiary), and after notice from such
Indemnifying Party to such Beneficiary of its election so to assume the
defense thereof, the Indemnifying Parties will not be liable to such
Beneficiary under this Section 9.15(b) for any legal or other expenses
subsequently incurred by such Beneficiary in connection with the defense
thereof other than reasonable costs of investigation. In the event an
Indemnifying Party elects to assume the defense of a Claim, such
Indemnifying Party shall be entitled to effect any settlement, enter into
any compromise or consent to the entry of any decree, order or judgment,
with respect to such Claim in respect of which such Beneficiary is or
could have been a party and indemnity could have been sought hereunder by
such Beneficiary if such settlement (x) includes a general and
unconditional release of such Beneficiary from all liability on any claims
that are the subject matter of such Claim, (y) does not provide for any
injunction or other non-monetary relief affecting such Beneficiary, and
(z) does not include a statement as to, or an admission of, fault,
culpability or a failure to act by or on behalf of such Beneficiary.
Notwithstanding the foregoing, (1) if a Beneficiary determines, in good
faith, and on the advice of its counsel that the assumption of the defense
of a Claim by the Indemnifying Parties is inappropriate due to a conflict
of interest between the Indemnifying Parties, on the one hand, and such
Beneficiary, on the other hand, or (2) if a Beneficiary determines, in
good faith, that the Indemnifying Parties are not defending such Claim
actively and in good faith, then such Beneficiary shall have the right at
all times to take over and assume control over the defense, settlement and
compromise of such Claim at the expense of the Indemnifying Parties;
provided, however, that if such Beneficiary does so take over and assume
control of the defense, settlement or compromise of such Claim, the
Indemnifying Party may participate in, but not control, such defense with
its own counsel and at its own expense.
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(ii) None of the Beneficiaries shall, without the prior
written consent of the Indemnifying Parties effect any settlement, enter
into any compromise or consent to the entry of any decree, order or
judgment, with respect to any Claim in respect of which such Beneficiary
is or could have been a party and indemnity could have been sought
hereunder by such Beneficiary without the consent of the Indemnifying
Parties (which consent shall not be unreasonably withheld or delayed).
(c) Notwithstanding anything to the contrary set forth in this
Section 9.15, each of Parent and Parent Trust shall have the right to assert as
a defense to any of its obligations hereunder any defense or exercise of rights
that would be available to it had it entered into the Obligations directly in
the place of the Purchaser Parties.
(d) All payments under the Guarantee or in respect of the
Indemnity shall be made in the currency in which the Obligation is or was due
and in immediately available funds.
(e) If under any Law relating to liquidation, administration,
insolvency or the protection of creditors, a person may claim that a payment
under or in connection with this Section 9.15 is void or voidable and that claim
is made and upheld, conceded or compromised, then the Beneficiaries are
immediately entitled, as against Parent and Parent Trust, to the rights in
connection with the Guarantee and the Indemnity to which they were entitled
immediately before the payment in question and, upon request by a Beneficiary
and to the extent permitted by applicable Law, each of Parent and Parent Trust
agrees to take any action (including signing any document) reasonably required
to restore to such Beneficiary the full benefit of the Guarantee and the
Indemnity as held by it immediately before that payment.
(f) Neither Parent nor Parent Trust shall exercise any rights
which it may acquire by way of subrogation under the Guarantee or the Indemnity,
by any performance or payment made hereunder or otherwise until all Obligations
have been performed or indefeasibly paid in full in cash, as the case may be. If
any amount shall be paid to Parent or Parent Trust on account of such
subrogation rights at any time when all the Obligations have not been performed
or indefeasibly paid in full in cash, as the case may be, such amount shall be
held in trust for the benefit of the Beneficiaries and shall forthwith be paid
to the Beneficiaries to be credited and applied to the Obligations, whether
matured or unmatured, in accordance with the terms of this Agreement. In
addition, (i) the obligations of Parent and Parent Trust under the Guarantee and
the Indemnity shall not be subject to any setoff, counterclaim, deduction,
abatement or deferment and (ii) the Obligations of Parent and Parent Trust under
the Guarantee and the Indemnity shall not be affected in any manner by the
failure of any Beneficiary to assert any claim or demand or to enforce any right
or remedy under this Section 9.15, except to the extent that Parent or Parent
Trust, as the case may be, has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure.
(g) Each of Parent and Parent Trust acknowledges and agrees that
the Beneficiaries are entitled to obtain recognition and enforcement in any
Australian court of any judgment obtained in the United States giving effect to
the Guarantee or the Indemnity. Each of Parent and Parent Trust unconditionally
and irrevocably waives any right to assert, and covenants that it will not
assert, in any such recognition and enforcement proceedings in an
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Xxxxxxxxxx xxxxx any defense to such recognition and enforcement, other than a
defense which cannot be waived or excluded by law.
(h) Any act or omission varying or replacing this Agreement
(including Article III or Section 9.15 of this Agreement), including any change
or modification to the structure of the transactions contemplated hereby in
accordance with Section 9.4, shall not affect or otherwise modify the
obligations of Parent and Parent Trust made in favor of the Beneficiaries under
the Guarantee and the Indemnity, or the rights of the Beneficiaries under the
Guarantee and the Indemnity.
Section 9.16 The Responsible Entity's Capacity and Limitation on
Liability. Except with respect to the representations, warranties and covenants
of the Responsible Entity contained in Section 4.3 and Section 6.15, which are
made by the Responsible Entity in its personal capacity:
(a) the Responsible Entity is entering into this Agreement as the
trustee of Parent Trust and in no other capacity;
(b) the parties other than the Responsible Entity acknowledge that
the Trustee Obligations are incurred by the Responsible Entity solely in its
capacity as (i) the trustee of Parent Trust, and that the Responsible Entity
will cease to have any obligation under this Agreement if the Responsible Entity
ceases for any reason to be trustee of Parent Trust and another trustee is
appointed;
(c) the Responsible Entity will not be liable to pay or satisfy
any Trustee Obligations except out of the Assets against which it is entitled to
be indemnified in respect of any liability incurred by it as trustee of the
relevant trust;
(d) the parties other than Responsible Entity may enforce their
rights against the Responsible Entity arising from non-performance of the
Trustee Obligations only to the extent of the Responsible Entity's right of
indemnity out of the Assets of the relevant trust;
(e) if any party other than the Responsible Entity does not
recover all money owing to it arising from non-performance of the Trustee
Obligations, it may not seek to recover the shortfall by: (i) bringing
proceedings against the Responsible Entity in its personal capacity; or (ii)
applying to have the Responsible Entity wound up or proving in the winding up of
the Responsible Entity;
(f) except in the case of and to the extent of fraud, negligence
or breach of trust on the part of the Responsible Entity, the parties other than
the Responsible Entity waive their rights and release the Responsible Entity
from any personal liability whatsoever, in respect of any loss or damage:
(i) which they may suffer as a result of any:
(1) breach by the Responsible Entity of any of its
Trustee Obligations; or
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(2) non-performance by the Responsible Entity of the
Trustee Obligations; and
(ii) which cannot be paid or satisfied out of the Assets of
which the Responsible Entity is entitled to be indemnified in respect of
any liability incurred by it as trustee of the relevant trust; and
(g) the parties other than the Responsible Entity acknowledge that
the whole of this Agreement is subject to this Section 9.16 and the Responsible
Entity shall in no circumstances be required to satisfy any liability of the
Responsible Entity arising under, or for non-performance or breach of any
Trustee Obligations under or in respect of, this agreement or under or in
respect of any other document to which it is expressed to be a party out of any
funds, property or assets other than the Assets of the relevant trust provided
that if the liability of the Responsible Entity is not fully satisfied out of
the Assets of the relevant trust as referred to in this clause, the Responsible
Entity will be liable to pay out of its own funds, property and assets the
unsatisfied amount of that liability but only to the extent of the total amount,
if any, by which the Assets of the relevant trust have been reduced by reason of
fraud, negligence or breach of trust by the Responsible Entity in the
performance of the Responsible Entity's duties as trustee of the relevant trust.
In this Section 9.16, "Trustee Obligations" means all obligations and
liabilities of whatever kind undertaken or incurred by, or devolving upon, the
Responsible Entity under or in respect of this Agreement; and "Assets" includes
all assets, property and rights real and personal of any value whatsoever.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Agreement and Plan of Merger to be signed by their respective officers
thereunto duly authorized, all as of the date first written above.
CENTRO WATT AMERICA III, L.P.
By: CPT Manager Limited,
its General Partner
EXECUTED by CPT MANAGER )
LIMITED in accordance with )
section 127(1) of the Corporations )
Xxx 0000 (Cwlth) ) by authority of its )
power of attorney: ) )
) /s/ A. T. Xxxxx
/s/ X. Xxxxxxxxxx ) ...................................
................................... ) Signature of power of attorney*
Signature of power of witness ) *delete whichever is not applicable
) A. T. Xxxxx
X. Xxxxxxxxxx ) ...................................
................................... ) Name of power of attorney* (block
Name of power of witness (block letters)
letters) *delete whichever is not applicable
CENTRO WATT AMERICA III OP, LLC
By: /s/ A. T. Xxxxx
---------------------------
Name: A. T. Xxxxx
Title: Chief Executive Officer
CWAR OP MERGER SUB, LLC
By: /s/ A. T. Xxxxx
---------------------------
Name: A. T. Xxxxx
Title: Chief Executive Officer
CWAR OP MERGER SUB II, LLC
By: /s/ A. T. Xxxxx
---------------------------
Name: A. T. Xxxxx
Title: Chief Executive Officer
CWAR OP MERGER SUB III TRUST
By: /s/ A. T. Xxxxx
---------------------------
Name: A. T. Xxxxx
Title: Chief Executive Officer
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KRAMONT REALTY TRUST
By: /s/ Xxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: President and Chief
Executive Officer
KRAMONT OPERATING PARTNERSHIP, L.P.
BY: KRAMONT REALTY TRUST, GENERAL PARTNER
By: /s/ Xxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: President and Chief
Executive Officer
XXXXXXXXXX XX REALTY L.P.
BY: CV GP L.P., GENERAL PARTNER
CV GP LLC, GENERAL PARTNER
KRAMONT OPERATING PARTNERSHIP, L.P., SOLE
MEMBER
KRAMONT REALTY TRUST, GENERAL PARTNER
By: /s/ Xxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxx X. Xxxxxx, Xx.
Title: President and Chief
Executive Officer
EXECUTED by CPT MANAGER )
LIMITED in accordance with )
section 127(1) of the Corporations )
Xxx 0000 (Cwlth) by authority of its )
power of attorney: ) )
) /s/ A. T. Xxxxx
/s/ X. Xxxxxxxxxx ) ...................................
........................................) Signature of power of attorney*
Signature of power of witness ) *delete whichever is not applicable
) A. T. Xxxxx
X. Xxxxxxxxxx ) ...................................
........................................) Name of power of attorney* (block
Name of power of witness (block letters)
letters) *delete whichever is not applicable
EXECUTED by CENTRO )
PROPERTIES LIMITED in )
accordance with section 127(1) of )
the Corporations Xxx 0000 (Cwlth) )
by authority of its power of )
attorney: ) ) /s/ A. T. Xxxxx
) ...................................
/s/ X. Xxxxxxxxxx ) Signature of power of attorney*
........................................) *delete whichever is not applicable
Signature of power of witness ) A. T. Xxxxx
) ...................................
X. Xxxxxxxxxx ) Name of power of attorney* (block
........................................ letters)
Name of power of witness (block *delete whichever is not applicable
Solely for purposes of consenting to the amendment and restatement of the
Original Agreement, as required by Section 9.11 thereof, and not to be made a
party to this Agreement:
CENTRO WATT AMERICA REIT III LLC
/s/ A. T. Xxxxx
By: ---------------------------
Name
Title
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