EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
DATED AS OF SEPTEMBER 25, 2000
BY AND AMONG
RODAMCO NORTH AMERICA N.V.,
HEXALON REAL ESTATE, INC.,
HEAD ACQUISITION, L.P.,
HEAD ACQUISITION CORP.,
URBAN SHOPPING CENTERS, INC.
AND
URBAN SHOPPING CENTERS, L.P.
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TABLE OF CONTENTS
ARTICLE I THE TENDER OFFER............................................................................3
Section 1.1. The Offer...................................................................................3
Section 1.2. Company Action..............................................................................6
ARTICLE II THE MERGER..................................................................................9
Section 2.1. The Merger..................................................................................9
Section 2.2. Closing.....................................................................................9
Section 2.3. Effective Time..............................................................................9
Section 2.4. Merger Consideration.......................................................................10
Section 2.5. Organizational Documents...................................................................10
Section 2.6. Officers of the Surviving Entity...........................................................10
Section 2.7. Urban Stock Options, Urban LP Unit Options and Related Matters.............................10
ARTICLE III EFFECTS OF THE MERGER; EXCHANGE OF CERTIFICATES............................................11
Section 3.1. Effect on Stock............................................................................11
Section 3.2. Payment for Securities/Exchange of Certificates............................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES.............................................................15
Section 4.1. Representations and Warranties of Urban....................................................15
Section 4.2. Representations and Warranties of Rodamco, Hexalon, Head Acquisition LP and Head
Acquisition Corp...........................................................................40
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER...............................43
Section 5.1. Conduct of Business by Urban and the Urban LP..............................................43
ARTICLE VI ADDITIONAL COVENANTS.......................................................................47
Section 6.1. Access to Information; Confidentiality.....................................................47
Section 6.2. Reasonable Efforts; Notification...........................................................47
Section 6.3. Tax Treatment..............................................................................48
Section 6.4. No Solicitation of Transactions............................................................49
Section 6.5. Public Announcements.......................................................................50
Section 6.6. Transfer and Gains Taxes; Stockholder Demand Letters.......................................50
Section 6.7. Employee Arrangements......................................................................51
Section 6.8. Indemnification; Directors'and Officers'Insurance..........................................52
Section 6.9. Interim Transactions Committee.............................................................54
Section 6.10. Transactions Relating to the Urban LP......................................................54
Section 6.11. Assistance.................................................................................54
Section 6.12. Environmental Matters......................................................................54
ARTICLE VII CONDITIONS PRECEDENT.......................................................................55
Section 7.1. Conditions to Each Party's Obligation to Effect the Merger.................................55
ARTICLE VIII CONTINGENT OPTION OF HEXALON...............................................................55
Section 8.1. Grant of Common Share Option...............................................................55
Section 8.2. Exercise of Option.........................................................................56
Section 8.3. Payment of Purchase Price and Delivery of Certificates for Option Shares...................56
Section 8.4. Securities Act.............................................................................56
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Section 8.5. Adjustment upon Changes in Capitalization..................................................56
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER..........................................................56
Section 9.1. Termination................................................................................57
Section 9.2. Expenses...................................................................................59
Section 9.3. Effect of Termination......................................................................61
Section 9.4. Amendment..................................................................................61
Section 9.5. Extension; Waiver..........................................................................62
ARTICLE X GENERAL PROVISIONS.........................................................................62
Section 10.1. Nonsurvival of Representations and Warranties..............................................62
Section 10.2. Notices....................................................................................62
Section 10.3. Interpretation.............................................................................63
Section 10.4. Counterparts...............................................................................64
Section 10.5. Entire Agreement; No Third-Party Beneficiaries.............................................64
Section 10.6. Governing Law..............................................................................64
Section 10.7. Assignment.................................................................................64
Section 10.8. Enforcement................................................................................64
Section 10.9. Exhibits; Disclosure Letter................................................................65
ARTICLE XI CERTAIN DEFINITIONS........................................................................65
Section 11.1. Certain Definitions........................................................................65
ANNEXES, EXHIBITS AND SCHEDULES
Annex I - Conditions to the Offer
Exhibit A-1 REIT Tax Opinion
Exhibit A-2 Maryland Corporate Opinion
Exhibit B Form of Amended and Restated Urban LP Agreement
Exhibit C Stock Purchase Agreement
Exhibit D Voting Agreement
Exhibit E Head Acquisition LP Organizational Documents
Exhibit F Financing Commitment Letter
Exhibit G-1 Bring-Down Letter to REIT Tax Opinion
Exhibit G-2 Bring-Down Letter to Maryland Corporate Opinion
Schedule 11.1(a) - Urban Knowledge Persons
Schedule 11.1(b) - Hexalon Knowledge Persons
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AGREEMENT AND PLAN OF MERGER (the "AGREEMENT"), dated as of September
25, 2000, by and among Rodamco North America N.V., a company organized under the
laws of the Netherlands ("RODAMCO"), Hexalon Real Estate, Inc., a Delaware
corporation ("HEXALON"), Head Acquisition, L.P., a Delaware limited partnership
(the "HEAD ACQUISITION LP"), Head Acquisition Corp., a Delaware corporation,
("HEAD ACQUISITION CORP" and, together with Rodamco, Hexalon, Head Acquisition
LP and any other Subsidiary of Hexalon, the "HEAD PARTIES"), Urban Shopping
Centers, Inc., a Maryland corporation ("URBAN"), and Urban Shopping Centers,
L.P., an Illinois limited partnership (the "URBAN LP").
RECITALS
A. It is proposed that Hexalon, through Head Acquisition LP or Head
Acquisition Corp, will acquire all of the issued and outstanding shares of
common stock, par value $.01 per share, of Urban (the "PUBLIC COMMON STOCK") and
unit voting stock, par value $.01 per share, of Urban (the "UNIT VOTING STOCK"
and, together with the Public Common Stock, the "URBAN COMMON STOCK"), including
the associated Preferred Stock Purchase Rights (the "RIGHTS") issued pursuant to
the Rights Agreement dated May 5, 1999 between Urban and First Chicago Trust
Company of New York, as Rights Agent (the "URBAN RIGHTS AGREEMENT"), which are
not beneficially owned by the Head Parties.
B. It is proposed that Hexalon will cause Head Acquisition LP to make a
cash tender offer (as such may be amended from time to time as permitted by this
Agreement, the "OFFER") in compliance with Section 14(d)(1) of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and the rules and
regulations promulgated thereunder to acquire (i) each issued and outstanding
share of Urban Common Stock for $48.00 per share (such amount, or any greater
amount per share paid pursuant to the Offer, being hereinafter referred to as
the "PER COMMON SHARE AMOUNT"), and (ii) each issued and outstanding share of
Series A Cumulative Convertible Redeemable Preferred Stock, par value $.01 per
share, of Urban (the "SERIES A PREFERRED STOCK") and Series B Cumulative
Convertible Redeemable Preferred Stock, par value $.01 per share, of Urban (the
"SERIES B PREFERRED STOCK" and together with the Series A Preferred Stock, the
"URBAN PREFERRED STOCK"; the Urban Common Stock and the Urban Preferred Stock
are referred to collectively herein as the "URBAN STOCK") for $48.00 per share
(such amount, or any greater amount per share paid pursuant to the Offer, being
hereinafter referred to as the "PER PREFERRED SHARE AMOUNT" and together with
the Per Common Share Amount, the "PER SHARE AMOUNTS"), each net to the seller in
cash subject to reduction only for any federal backup withholding or stock
transfer taxes payable by such seller, upon the terms and subject to the
conditions of this Agreement and Annex I hereto.
C. If the Head Parties shall have the right to acquire or otherwise
own, in the aggregate, shares of Urban Common Stock pursuant to the Offer or
otherwise (including pursuant to the Common Share Option) that are entitled to
cast, in the aggregate, at least 90.0% of the votes entitled to be cast on the
Merger, it is proposed that Head Acquisition LP shall assign the rights to
acquire the Urban Stock pursuant to the Offer to Head Acquisition Corp, and Head
Acquisition Corp shall acquire the Urban Stock tendered pursuant to the Offer.
D. If Head Acquisition LP acquires the Urban Common Stock tendered
pursuant to the Offer, it is proposed that Urban shall merge (the "PARTNERSHIP
MERGER") with and into Head
Acquisition LP with Head Acquisition LP surviving in accordance with Maryland
General Corporation Law (the "MGCL") and the Delaware Revised Uniform Limited
Partnership Act (the "DRULPA"), pursuant to which each issued and outstanding
share of Urban Stock shall be converted into the right to receive the
applicable Per Share Amount upon the terms and conditions provided herein.
E. If Head Acquisition Corp acquires the Urban Common Stock tendered
pursuant to the Offer, it is proposed that Head Acquisition Corp shall merge
(the "CORPORATE MERGER") with and into Urban with Urban surviving in accordance
with the MGCL and Delaware General Corporate Law (the "DGCL" and together with
DRULPA, "DELAWARE LAW"), pursuant to which each outstanding share of Urban Stock
shall be converted into the right to receive the applicable Per Share Amount
upon the terms and subject to the conditions provided herein. It is further
proposed that following the Corporate Merger Urban shall be immediately merged
with and into Head Acquisition LP with Head Acquisition LP surviving, in
accordance with the MGCL and Delaware Law (the "ALTERNATIVE PARTNERSHIP
MERGER").
F. A special committee, comprised solely of disinterested directors
(the "URBAN SPECIAL COMMITTEE") of the Board of Directors of Urban (the "URBAN
BOARD OF DIRECTORS") and the Urban Board of Directors have received the written
opinion (the "FAIRNESS OPINION") of Xxxxxx Xxxxxxx & Co. Incorporated (the
"URBAN FINANCIAL ADVISOR") to the effect that, based on, and subject to the
various assumptions and qualifications set forth in such opinion, as of the date
of such opinion, the consideration to be received by holders of shares of Public
Common Stock and the Urban Preferred Stock, in the aggregate, pursuant to this
Agreement is fair from a financial point of view to such holders (other than
Hexalon and its affiliates).
G. The Urban Special Committee has determined that this Agreement, the
Offer, the Merger and the other transactions contemplated hereby, taken
together, are fair to, and advisable and in the best interests of Urban and its
stockholders (other than holders of Unit Voting Stock), and has voted to
recommend to the Urban Board of Directors that the Urban Board of Directors
approve this Agreement, the Offer, the Merger and the other transactions
contemplated hereby, subject to the terms and conditions set forth in this
Agreement.
H. The Urban Board of Directors has determined that this Agreement, the
Offer, the Merger and the other transactions contemplated hereby, taken
together, are fair to, advisable and in the best interests of Urban and its
stockholders and has voted to approve this Agreement and recommend acceptance
and approval by the holders of Urban Common Stock of this Agreement, the Offer,
the Merger and the other transactions contemplated hereby.
I. The supervisory board of Rodamco, the board of directors of Hexalon
and the general partner of Head Acquisition LP have each voted to approve this
Agreement, the Offer, the Merger and the other transactions contemplated hereby.
J. Concurrently with, and as a condition to, the execution of this
Agreement, Hexalon, Head Acquisition LP and Head Acquisition Corp have received
(i) opinions of Xxxxx, Xxxxx & Xxxxx, dated the date hereof, in the form
attached hereto as Exhibit A-1 (the "REIT TAX OPINION") and (ii) an opinion of
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, dated the date hereof, in the form
attached hereto as Exhibit A-2 (the "MARYLAND CORPORATE OPINION").
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K. At the Effective Time, the Urban LP's Second Amended and Restated
Agreement of Limited Partnership, dated as of October 14, 1993, as amended (the
"URBAN LP AGREEMENT"), will be amended and restated (the "AMENDMENT") in the
form attached hereto as EXHIBIT B. In connection with the Amendment, the holders
of common limited partnership interests in the Urban LP (the "LP UNITHOLDERS")
who do not elect to exchange their common limited partnership interests for
shares of Public Common Stock will receive a cash distribution in respect of
their units and retain a continuing partnership interest in the Urban LP.
L. At the Effective Time, an affiliate of Hexalon will purchase the
common stock of Urban Retail Properties Co., a Delaware corporation ("URBAN
MANAGEMENT COMPANY"), from JMB Properties Company pursuant to the terms of a
stock purchase agreement in the form attached hereto as EXHIBIT C.
M. Hexalon and Urban intend that, for federal income tax purposes, the
portions of the transactions contemplated hereby constituting the Partnership
Merger or the Alternative Partnership Merger, as the case may be, shall be
treated as a liquidation of Urban into Head Acquisition LP governed by Sections
331 and 562(b) of the Internal Revenue Code of 1986, as amended (the "CODE"),
and that this Agreement shall constitute a plan of liquidation.
N. Contemporaneously with the execution and delivery of this Agreement,
certain Urban stockholders and LP Unitholders have entered into a voting
agreement, substantially in the form of EXHIBIT D (the "VOTING AGREEMENT"), with
Rodamco, Hexalon, Head Acquisition LP, Head Acquisition Corp and Urban pursuant
to which, among other things, such stockholders and unitholders have agreed to
vote and/or tender their shares and units in favor of the Merger, the Amendment,
this Agreement and the other transactions contemplated hereby.
O. Certain capitalized terms used in this Agreement are defined in
ARTICLE XI.
AGREEMENT
In consideration of the representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
THE TENDER OFFER
Section 1.1. THE OFFER.
(a) Provided that this Agreement shall not have been
terminated in accordance with ARTICLE IX and none of the events or conditions
set forth in ANNEX I (the "TENDER OFFER CONDITIONS") shall have occurred and
be existing, Head Acquisition LP shall, and Rodamco and Hexalon shall cause
Head Acquisition LP to, commence (within the meaning of Rule 14d-2 under the
Exchange Act) the Offer to purchase at the Per Share Amounts all of the
issued and outstanding Urban Stock (including any and all Rights) as promptly
as reasonably practicable, but in no event later than five Business Days
following the public announcement by Head
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Acquisition LP and Urban of the execution of this Agreement, and shall take
the actions specified in SECTION 1.1(c). The obligation of Head Acquisition
LP to accept for payment and pay for any Urban Stock tendered pursuant to the
Offer shall be subject only to the satisfaction of the Tender Offer
Conditions. Head Acquisition LP expressly reserves the right from time to
time, without the consent of Urban, to waive any such conditions, subject to
SECTION 1.1(b), and to irrevocably increase the Per Share Amounts. Urban
agrees that no shares of Urban Stock held by Urban or any Urban Subsidiary
will be tendered pursuant to the Offer. If Head Acquisition LP shall have the
right to acquire or otherwise owns, pursuant to the Offer or otherwise
(including pursuant to the Common Share Option (as defined in SECTION 8.1)),
shares of Urban Common Stock which, together with the shares of Urban Stock
owned by the Head Parties, shall be entitled to cast at least 90.0% of the
votes entitled to be cast on the Merger, Head Acquisition LP will assign (the
"ASSIGNMENT") its rights and obligations with respect to the Offer and the
Merger under this Agreement to Head Acquisition Corp, which shall then become
obligated to the same extent hereunder as Head Acquisition LP; PROVIDED,
HOWEVER, that no such assignment shall relieve Rodamco, Hexalon or Head
Acquisition LP of any of its rights or obligations under this Agreement.
(b) Without the prior written consent of Urban, Head
Acquisition LP shall not, and Rodamco and Hexalon shall cause Head
Acquisition LP not to, (i) decrease the Per Share Amounts or change the form
of consideration payable in the Offer, (ii) decrease the number of shares of
Urban Stock sought in the Offer, (iii) modify or amend the Tender Offer
Conditions or impose conditions to the Offer in addition to the Tender Offer
Conditions, (iv) waive the Minimum Condition or (v) except as provided in
SECTION 1.1(d), extend the Offer if all of the Tender Offer Conditions are
satisfied. Upon the terms and subject to the conditions of the Offer and this
Agreement, Head Acquisition LP shall, and Rodamco and Hexalon shall cause
Head Acquisition LP to, accept for payment and pay for all shares of Urban
Stock validly tendered and not withdrawn prior to the expiration of the Offer
as promptly as possible after expiration of the Offer, unless terminated in
accordance with its terms. Rodamco and Hexalon shall provide or cause to be
provided to Head Acquisition LP on a timely basis funds sufficient to accept
for payment and pay for any and all shares of Urban Stock that Head
Acquisition LP becomes obligated to accept for payment and pay for pursuant
to the Offer. Commencing with the consummation of the Offer, if necessary in
order to preserve the status of Urban as a REIT for purposes of the Code,
Head Acquisition LP shall cause up to one hundred and five (105) persons
designated by it to purchase Urban Stock in compliance with Regulation D
under the Securities Act or another available exemption from registration
under the Securities Act on terms and conditions satisfactory to Urban;
PROVIDED, that no such purchaser shall buy less than $1,000 in stock.
Commencing with the consummation of the Offer until the Effective Time,
Urban, Rodamco, Hexalon, Head Acquisition LP and Head Acquisition Corp shall
not take any action which would cause Urban to fail to qualify as a REIT for
purposes of the Code. For purposes of this Agreement and unless otherwise set
forth herein, any actions permitted or required to be taken by the Urban
Board of Directors or Urban pursuant to this Agreement may be taken only upon
the approval of both the Urban Board of Directors and the Urban Special
Committee.
(c) The Offer shall be made by means of an offer to purchase
(the "OFFER TO PURCHASE") subject only to the Tender Offer Conditions. As soon
as reasonably practicable on the date the Offer is commenced, Head Acquisition
LP and Head Acquisition Corp shall file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule TO
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(together with all amendments and supplements thereto, the "SCHEDULE TO")
with respect to the Offer that will comply in all material respects with the
provisions of all applicable federal securities laws, and will contain
(including as an exhibit) or incorporate by reference the Offer to Purchase,
forms of the related letter of transmittal and summary advertisement and any
other documents required to be filed in connection with the Offer (which
documents, together with any supplements or amendments thereto, are referred
to collectively herein as the "OFFER DOCUMENTS"), which shall be mailed to
the holders of shares of Urban Stock and to LP Unitholders. Head Acquisition
LP agrees to promptly correct the Schedule TO and the Offer Documents if and
to the extent that they shall have become false or misleading in any material
respect (and Urban and the Urban LP, with respect to information supplied by
them specifically for use in the Schedule TO or the Offer Documents, shall
promptly notify Head Acquisition LP of any required corrections of such
information and shall reasonably cooperate with Head Acquisition LP with
respect to correcting such information) and to supplement the Schedule TO or
the Offer Documents to include any information that shall become necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading (and Urban and the Urban LP shall
supplement the information provided by them specifically for use in the
Schedule TO or the Offer Documents, shall promptly notify Head Acquisition LP
of any required corrections of such information and shall reasonably
cooperate with Head Acquisition LP with respect to correcting such
information) and Head Acquisition LP further agrees to supplement the
Schedule TO or the Offer Documents to include any information that shall
become necessary in order to make the statements therein that are based on
such provided information, in light of the circumstances under which they
were made, not misleading, and to take all steps necessary to cause the
Schedule TO, as so corrected or supplemented, to be filed with the SEC and
the Offer Documents, as so corrected or supplemented, to be disseminated to
holders of shares of Urban Stock and to LP Unitholders, in each case to the
extent required by applicable federal securities laws. Urban and its counsel
shall be given a reasonable opportunity to review and comment on the Schedule
TO and the Offer Documents before they are filed with the SEC and before they
are distributed to holders of Urban Stock and to LP Unitholders. Head
Acquisition LP shall provide Urban and its counsel copies of any written
comments and telephone notification of any oral comments that Head
Acquisition LP or its counsel receive from the SEC or its staff with respect
to the Schedule TO or the Offer Documents promptly after receipt of such
comments. Head Acquisition LP shall use its commercially reasonable efforts
to respond to such comments promptly, shall provide Urban and its counsel
with a reasonable opportunity to participate in all communications with the
SEC and its staff, including meetings and telephone conferences, relating to
the Schedule TO and the Offer Documents, this Agreement or the transactions
contemplated hereby, and shall provide Urban and its counsel copies of any
written responses and telephonic notification of any verbal responses by Head
Acquisition LP or its counsel.
(d) So long as this Agreement has not been terminated in
accordance with the terms hereof, and subject to the terms and conditions
hereof, the Offer shall expire at midnight, New York time, on the date that
is twenty (20) Business Days after the Offer is commenced; PROVIDED, that
without the consent of Urban, Head Acquisition LP may (i) extend the Offer,
if at the scheduled expiration date of the Offer any of the conditions to the
Offer shall not have been satisfied or waived, until such time as such
conditions are satisfied or waived, (ii) extend the Offer for any period
required by any rule, regulation, interpretation or position of the SEC or
the staff thereof applicable to the Offer or (iii) extend the Offer for a
total of not more than ten (10)
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Business Days beyond the initial expiration date or the latest expiration
date that would otherwise be permitted under clauses (i) or (ii) of this
sentence if, on such expiration date, the shares of Urban Common Stock
validly tendered pursuant to the Offer and not withdrawn are sufficient to
satisfy the Minimum Condition (as defined in ANNEX I) but, together with all
other shares of Urban Common Stock owned by the Head Parties, are entitled to
cast less than 90.0% of the votes entitled to be cast on the Merger. So long
as this Agreement is in effect, the Offer has been commenced and the Tender
Offer Conditions have not been satisfied or waived, Head Acquisition LP shall
cause the Offer not to expire, subject, however, to Head Acquisition LP's
right of termination under this Agreement. Head Acquisition LP may, in
addition, provide a "subsequent offer period" (as contemplated by Rule 14d-11
under the Exchange Act) of not less than three (3) Business Days and not more
than ten (10) Business Days following its acceptance for payment of Urban
Stock in the Offer; PROVIDED, that doing so shall not require any extension
of what would otherwise be the final expiration date of the Offer.
(e) The parties understand and agree that the Per Share
Amounts have been calculated based upon the accuracy of the representation
and warranty set forth in SECTION 4.1(c) and that, in the event the number of
outstanding shares of Urban Stock, stock or stock equivalents of Urban
issuable upon the exercise of, or subject to, options or other agreements
exceeds the amounts specifically set forth in SECTION 4.1(c) (including,
without limitation, as a result of any stock split, reverse stock split,
stock dividend, including any dividend or distribution of securities
convertible into stock or stock equivalent of Urban, recapitalization, or
other like change occurring after the date of this Agreement, but excluding
any shares of Urban Stock or units of the Urban LP issued pursuant to the
Urban Option Plan or an Urban Incentive Program, in accordance with, and
subject to, SECTION 2.7), the Per Share Amounts shall be appropriately
adjusted downward. The provisions of this SECTION 1.1(e) shall not, however,
affect the representation and warranty set forth in SECTION 4.1(c).
Section 1.2. COMPANY ACTION.
(a) Urban hereby approves of and consents to the Offer and
represents and warrants that (i) the Urban Special Committee, at a meeting
duly called and held on September 25, 2000, (A) determined that this
Agreement, the Offer, the Merger and the other transactions contemplated
hereby, taken together, are fair to, and advisable and in the best interests
of Urban and its stockholders (other than holders of Unit Voting Stock) and
(B) voted to recommend to the Urban Board of Directors that the Urban Board
of Directors approve this Agreement, the Offer, the Merger and the other
transactions contemplated hereby, subject to the terms and conditions set
forth in this Agreement; and (ii) the Urban Board of Directors, at a meeting
duly called and held on September 25, 2000, (A) approved the Amendment in its
capacity as general partner of the Urban LP and submitted it to the LP
Unitholders; (B) determined that this Agreement, the Offer, the Merger, and
the other transactions contemplated hereby, taken together, are fair to,
advisable and in the best interests of Urban and its stockholders; (C) voted
to (1) approve this Agreement and (2) recommend acceptance and approval by
the holders of Urban Common Stock of this Agreement, the Offer, the Merger
and the other transactions contemplated hereby; (D) took all other action
necessary to render the dilution provisions of the Urban Rights Agreement
inapplicable to the Offer and the Merger, without any payment to the holders
of the Rights; and (E) subject to the accuracy of the representation and
warranty in SECTION 4.2(h) and the performance of the covenants in SECTIONS
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6.3(b), (c), AND (d), took all action necessary to waive the application of
the ownership limit (the "OWNERSHIP LIMIT") set forth in the Urban Charter to
the purchase or ownership of any shares of Urban Stock acquired pursuant to
the Offer, the Merger, the Amendment or otherwise pursuant to this Agreement.
Subject to the terms of this Agreement, Urban consents to the inclusion of
such recommendations and approvals in the Offer Documents; PROVIDED, HOWEVER,
that notwithstanding anything to the contrary contained herein, such
recommendations and approvals may be withdrawn, modified or amended to the
extent that the Urban Special Committee or the Urban Board of Directors
determines in good faith and on a reasonable basis, after consultation with
outside counsel, that failure to take such action might be inconsistent with
the duties of the directors of Urban under applicable Law.
(b) Urban hereby agrees to file with the SEC, as promptly as
practicable after the filing by Rodamco, Hexalon, Head Acquisition LP and Head
Acquisition Corp of the Schedule TO with respect to the Offer, a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "SCHEDULE 14D-9") that will (i) comply in
all material respects with the provisions of all applicable federal securities
laws, (ii) reflect the recommendations and actions of the Urban Board of
Directors and the Urban Special Committee referred to in SECTION 1.2(a) and
(iii) include the opinion of the Urban Financial Advisor, in each case subject
to the terms of this Agreement. Urban agrees to include such Schedule 14D-9 and
LP Unitholders in the mailing of the Offer Documents by Head Acquisition LP to
the holders of shares of Urban Stock promptly after the commencement of the
Offer. Urban agrees promptly to correct the Schedule 14D-9 if and to the extent
that it shall become false or misleading in any material respect (and Rodamco,
Hexalon, Head Acquisition LP and Head Acquisition Corp, with respect to
information supplied by them specifically for use in the Schedule 14D-9, shall
promptly notify Urban of any required corrections of such information and
cooperate with Urban with respect to correcting such information) and to
supplement the information contained in the Schedule 14D-9 to include any
information that shall become necessary in order to make the statements therein,
in light of the circumstances under which they were made, not misleading (and
Rodamco, Hexalon, Head Acquisition LP and Head Acquisition Corp shall supplement
the information provided by them specifically for use in the Schedule 14D-9 to
include any information that shall become necessary in order to make the
statements therein that are based on such provided information, in light of the
circumstances under which they were made, not misleading), and Urban shall take
all steps necessary to cause the Schedule 14D-9, as so corrected or
supplemented, to be filed with the SEC and disseminated to the holders of shares
of Urban Stock and LP Unitholders, in each case to the extent required by
applicable federal securities laws. Hexalon and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 before it is
filed with the SEC.
(c) In connection with the Offer, Urban shall promptly, or
cause its transfer agent to promptly, following execution of this Agreement
furnish Head Acquisition LP with mailing labels containing the names and
addressees of all record holders of shares of Urban Stock and of common limited
partnership interests of Urban LP, a non-objecting beneficial owners list and
security position listings of shares of Urban Stock held in stock depositories,
each as of a recent date, and shall promptly furnish Head Acquisition LP with
such additional information, including updated lists of stockholders and LP
Unitholders, mailing labels and security position listings, and such other
information and assistance as Head Acquisition LP or
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its agents may reasonably request for the purpose of communicating the Offer
to the record and beneficial holders of shares of Urban Stock and LP
Unitholders. Subject to the requirements of applicable law, and except for
such steps as are appropriate to disseminate the Offer Documents and any
other documents necessary to consummate the Merger, Rodamco, Hexalon and Head
Acquisition LP and their affiliates, associates, agents and advisors shall
hold in confidence and use only in connection with the Offer, the Amendment
and the Merger the information contained in any such labels, listings and
files, and, if this Agreement shall be terminated, will promptly deliver to
Urban all copies of such information then in their possession.
(d) Promptly upon the acceptance for payment and payment
for shares of Urban Stock by either Head Acquisition LP or Head Acquisition
Corp pursuant to the Offer, either Head Acquisition LP or Head Acquisition
Corp (the "HEAD PURCHASER") shall be entitled to designate such number of
directors on the Urban Board of Directors as will give the Head Purchaser,
subject to compliance with Section 14(f) of the Exchange Act, representation
on the Urban Board of Directors in the same proportion as the number of
shares of Urban Common Stock accepted for payment and paid for by the Head
Purchaser pursuant to the Offer bears to the total number of diluted shares
of Urban Common Stock deemed outstanding for financial reporting purposes. At
such time, Urban shall also cause, if requested by the Head Purchaser, (i)
each committee of the Urban Board of Directors other than the Urban Special
Committee, (ii) the board of directors of each of Urban's Subsidiaries and
(iii) each committee of each such Subsidiary board to include individuals
designated by the Head Purchaser constituting up to the same percentage of
each such committee or board as the Head Purchaser designees constitute on
the Urban Board of Directors. Urban shall, upon request by the Head
Purchaser, promptly take all actions necessary to cause the Head Purchaser's
designees to be elected to the Urban Board of Directors in accordance with
the terms of this SECTION 1.2, including by increasing the size of the Urban
Board of Directors and/or, at Urban's election, securing the resignations of
such number of directors as is necessary to enable the Head Purchaser's
designees to be elected to the Urban Board of Directors in accordance with
the terms of this SECTION 1.2; PROVIDED, that at all times prior to the
Effective Time, Hexalon agrees that each of the members of the Urban Special
Committee are entitled to remain as members of the Urban Special Committee
and the Urban Board of Directors. In the event that the Head Purchaser's
designees are elected to the Urban Board of Directors, until the Effective
Time, those continuing members of the Urban Board of Directors who are
members of the Urban Special Committee on the date hereof and who are neither
officers of Urban nor designees, Affiliates or associates (within the meaning
of the federal securities laws) of the Head Purchaser shall be deemed the
"Independent Directors" for purposes of the provisions of this Agreement.
Subject to applicable law, Urban shall promptly take all action necessary
pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder in order to fulfill its obligations under this SECTION 1.2 and
shall include in the Schedule 14D-9 mailed to holders of shares of Urban
Stock promptly after the commencement of the Offer (or an amendment thereto
or an information statement pursuant to Rule 14f-1 if the Head Purchaser has
not theretofore designated directors or timely provided the requisite
information) such information with respect to Urban and its officers and
directors as is required under Section 14(f) and Rule 14f-1 in order to
fulfill its obligations under this SECTION 1.2. The Head Purchaser will
promptly supply Urban and be solely responsible for any information with
respect to itself and its nominees, officers, directors and Affiliates
required by Section 14(f) and Rule 14f-1. Notwithstanding anything in this
Agreement to the contrary, following the time directors designated by the
Head Purchaser are elected to the Urban Board of
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Directors and prior to the Effective Time, the affirmative vote of a majority of
the Independent Directors shall be required to (i) amend or terminate this
Agreement on behalf of Urban, (ii) exercise or waive any of Urban's rights or
remedies hereunder, (iii) extend the time for performance of the Head
Purchaser's obligations hereunder, (iv) take any other action by Urban in
connection with this Agreement required to be taken by the Urban Special
Committee or the Urban Board of Directors, or (v) take any action taken by Urban
in connection with the transactions contemplated by this Agreement, and such
affirmative majority vote shall be sufficient to take any such action. Urban
acknowledges and agrees that the delegation of authority and power by the Urban
Board of Directors to the Urban Special Committee has been expressly limited
during the period from the date hereof to the Effective Time to matters
regarding the Offer, the Merger, the Amendment, this Agreement and the
transactions contemplated hereby and thereby.
ARTICLE II
THE MERGER
Section 2.1. THE MERGER.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time (as defined in SECTION 2.3), either (i) if
the conditions of SECTION 3.2(k) are satisfied and the Assignment occurs, Head
Acquisition Corp shall be merged with and into Urban with Urban surviving in
accordance with MGCL and Delaware Law and the Articles of Merger and the
Certificate of Merger and then Urban shall be immediately merged with and into
Head Acquisition LP with Head Acquisition LP surviving in accordance with MGCL
or (ii) if the conditions of SECTION 3.2(k) are not satisfied or if the
Assignment does not occur, Urban shall be merged with and into Head Acquisition
LP in accordance with MGCL and Delaware Law and the Articles of Merger and the
Certificate of Merger. In either case, the separate corporate existence of Urban
shall cease and Head Acquisition LP shall continue as the Surviving Entity (in
such capacity, the "SURVIVING ENTITY").
(b) The Merger shall have the effects set forth in the MGCL
and Delaware Law. Accordingly, from and after the Effective Time, the Surviving
Entity shall have all the properties, rights, privileges, purposes and powers
and debts, duties and liabilities of Urban.
Section 2.2. CLOSING. The closing of the Merger (the "CLOSING") will
take place at 10:00 a.m. Chicago, Illinois time as promptly as practicable but
in no event later than the third Business Day after the satisfaction or waiver
of the conditions (other than those conditions that by their nature are to be
satisfied at Closing, but subject to the fulfillment or waiver of those
conditions) set forth in ARTICLE VII (the "CLOSING DATE"), at the offices of
Winston & Xxxxxx, 00 X. Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, unless another
date or place is agreed to in writing by the parties.
Section 2.3. EFFECTIVE TIME. On the Closing Date, the parties shall
execute and file the Articles of Merger and the Certificate of Merger, in
accordance with, and shall make all other filings or recordings and take all
such other action required with respect to the Merger under, the MGCL and
Delaware Law. The Merger shall become effective when the later of the Articles
of
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Merger or the Certificate of Merger, have been accepted for filing by the
Maryland Department or the Delaware Office, as the case may be, or at such
other time or times as may be agreed by Head Purchaser and Urban (not to
exceed 30 days after the later of the latest date the Articles of Merger or
the Certificate of Merger, as the case may be, are accepted for recording in
Maryland and/or Delaware, as the case may be) and specified in the Articles
of Merger and the Certificate of Merger, as the case may be (the "EFFECTIVE
TIME"), it being understood that the parties shall cause the Effective Time
to occur as soon as practicable after the Closing.
Section 2.4. MERGER CONSIDERATION. At the Effective Time, by virtue of
the Merger and without any further action on the part of Head Acquisition LP,
Head Acquisition Corp, Urban, the Urban stockholders or the LP Unitholders, the
following shall occur:
(a) each share of Urban Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted
into the right to receive the greater of the Per Common Share
Amount, or any higher price paid per share of Urban Common
Stock in the Offer, in cash, without interest thereon (the
"COMMON STOCK MERGER CONSIDERATION"), upon surrender of the
Certificate (as defined in SECTION 3.2(b)) formerly
representing such share; and
(b) each share of Urban Preferred Stock issued and outstanding
immediately prior to the Effective Time shall be converted
into the right to receive the Per Preferred Share Amount, or
any higher price paid per share of Urban Preferred Stock in
the Offer, in cash, without interest thereon (the "PREFERRED
STOCK MERGER CONSIDERATION" and, together with the Common
Stock Merger Consideration, the "MERGER CONSIDERATION"), upon
surrender of the Certificate formerly representing such share.
All such shares of Urban Stock, when so converted, shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of a Certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive the Common
Stock Merger Consideration or the Preferred Stock Merger Consideration, as
applicable, to be paid in consideration therefor upon the surrender of such
Certificates in accordance with SECTION 3.2, without interest.
Section 2.5. ORGANIZATIONAL DOCUMENTS. The organizational documents of
Head Acquisition LP, which are substantially in the form attached hereto as
EXHIBIT E, shall continue to be the organizational documents of the Surviving
Entity following the Effective Time until further amended in accordance with
Delaware Law.
Section 2.6. OFFICERS OF THE SURVIVING ENTITY. From and after the
Effective Time, the officers of Hexalon and Head Acquisition LP shall serve
until their successors have been duly elected or appointed (in the case of
officers) and qualified, or until their death, resignation or removal from
office in accordance with the Surviving Entity's organizational documents.
Section 2.7. URBAN STOCK OPTIONS, URBAN LP UNIT OPTIONS AND RELATED
MATTERS.
(a) At the Effective Time, each outstanding option
(collectively, the "URBAN OPTIONS") to purchase Urban Common Stock granted under
Urban's 1993 Option Plan (the
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"URBAN OPTION PLAN"), whether or not then vested or exercisable, shall be
cancelled and of no further force and effect and the holder of any such
option shall be entitled to receive, from and after the Effective Time, an
amount in cash equal to the product of (i) the number of shares of Urban
Common Stock provided for in such Urban Option and (ii) the excess, if any,
of the Common Stock Merger Consideration over the exercise price per share
provided for in such Urban Option, which cash payment shall be treated as
compensation and shall be net of any applicable Tax. Notwithstanding the
foregoing, if the exercise price per share or unit provided for in any Urban
Option exceeds the Common Stock Merger Consideration, no cash shall be paid
with regard to such Urban Option to the holder of such Urban Option. Prior to
the Effective Time, Hexalon and Urban shall establish a procedure to effect
the surrender of Urban Options contemplated by this SECTION 2.7(a).
(b) At the Effective Time, (i) each outstanding earned
incentive unit (the "INCENTIVE UNITS"), granted under the Urban LP's 1996
Incentive Unit Program (the "INCENTIVE UNIT PROGRAM") and (ii) and each
outstanding earned incentive share, including shares for the 2000 performance
year which are deemed earned for purposes of this Agreement (the "INCENTIVE
SHARES" and together with the Incentive Units, the "INCENTIVE SECURITIES")
granted under Urban's 1999 Incentive Stock Program and 1999 Supplemental
Incentive Stock Program (together, the "INCENTIVE STOCK PROGRAM" and together
with the Incentive Unit Program, the "URBAN INCENTIVE PROGRAMS")), whether or
not then vested, shall be cancelled and of no further force and effect and the
holder of any such Incentive Security shall be entitled to receive, from and
after the Effective Time, an amount in cash equal to the product of (i) the
number of Incentive Securities owned by such holder and (ii) the Merger
Consideration, which cash payment shall be treated as compensation and shall be
net of any applicable Tax.
(c) Except as may be otherwise agreed to by Head Acquisition
LP and Urban, each of Urban and the Urban LP covenants that the Urban Option
Plan and the Urban Incentive Programs shall terminate as of the Effective Time
and the provisions in any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the equity interests of
Urban or any of the Urban Subsidiaries (including, without limitation, the Urban
LP) shall be of no further force or effect and shall be deemed to be terminated
as of the Effective Time and no holder of an Urban Option, Incentive Unit or
Incentive Share or any participant in any Urban Option Plan or Urban Incentive
Program shall have any right thereunder to acquire any securities of Urban, the
Urban LP, the Surviving Entity or any Subsidiary thereof.
ARTICLE III
EFFECTS OF THE MERGER; EXCHANGE OF CERTIFICATES
Section 3.1. EFFECT ON STOCK.
(a) STOCK OWNED BY THE HEAD PURCHASER OR URBAN SUBSIDIARIES.
As of the Effective Time, any shares of stock of Urban that are owned by the
Head Purchaser or any Urban Subsidiary automatically shall be canceled and
retired and all rights with respect thereto shall cease to exist and no
consideration shall be delivered in exchange therefor.
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(b) EQUITY INTERESTS OF HEAD ACQUISITION LP. Upon the
Effective Time, each unit of partnership interest of Head Acquisition LP
outstanding immediately prior to the Effective Time shall remain outstanding
and shall represent one unit of validly issued, fully paid and nonassessable
partnership interest of the same class, series and designation.
Section 3.2. PAYMENT FOR SECURITIES/EXCHANGE OF CERTIFICATES.
(a) PAYING AGENT. At the Effective Time, Rodamco and Hexalon
shall deposit or cause to be deposited with a bank or trust company designated
by Hexalon and reasonably acceptable to Urban (the "PAYING AGENT"), for the
benefit of the holders of shares of Urban Stock and for payment in accordance
with this ARTICLE III, through the Paying Agent, cash in an amount sufficient to
pay the aggregate amount of the Merger Consideration (such cash being
hereinafter referred to as the "PAYMENT FUND"), payable pursuant to SECTION 2.4
in exchange for outstanding shares of Urban Stock.
(b) EXCHANGE PROCEDURES. (i) Within five Business Days after
the Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates which, immediately prior to the Effective Time,
represented outstanding shares of Urban Stock (each, a "CERTIFICATE"), which
holder's shares of Urban Stock were converted into the right to receive the
Merger Consideration as set forth in SECTION 2.4: (A) a letter of transmittal (a
"LETTER OF TRANSMITTAL") which shall specify that delivery shall be effected and
risk of loss and title to the Certificates shall pass only upon delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as the Surviving Entity may reasonably specify; and (B) instructions
for use in effecting the surrender of the Certificates in exchange for the
applicable Merger Consideration.
(ii) Upon surrender of a Certificate for cancellation
to the Paying Agent, together with a Letter of Transmittal, duly
executed, and any other documents reasonably required by the Paying
Agent or the Surviving Entity, (A) the holder of a Certificate formerly
representing shares of Urban Stock or shall be entitled to receive in
exchange therefor the applicable amount of the Merger Consideration
which such holder has the right to receive pursuant to the provisions
of SECTION 2.4; and (B) the Certificate so surrendered shall forthwith
be canceled. Until so surrendered, each such Certificate shall
represent the right to receive the aggregate Merger Consideration
relating thereto.
(iii) In the event of a transfer of ownership of
Urban Stock, which is not registered in the transfer records of Urban,
the appropriate amount of the Merger Consideration may be paid to a
transferee if the Certificate representing such Urban Stock is
presented to the Paying Agent properly endorsed or accompanied by
appropriate stock powers and otherwise in proper form for transfer and
accompanied by all documents reasonably required by the Paying Agent to
evidence and effect such transfer and to evidence that any applicable
Taxes have been paid. Until surrendered as contemplated by this SECTION
3.2, each such Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such
surrender the appropriate amount of the applicable Merger
Consideration.
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(iv) The Amendment shall govern the terms and
conditions of the conversion, redemption or exchange of the units of
the Urban LP.
(c) LIQUIDATING DISTRIBUTION. Urban hereby intends that this
Agreement shall constitute a plan of liquidation and that the portions of the
transactions contemplated hereby constituting the Partnership Merger or the
Alternative Partnership Merger, as the case may be, shall be treated as a
liquidation of Urban into Head Acquisition LP which is governed by Section 331
of the Code and Section 562(b) of the Code.
(d) NO FURTHER OWNERSHIP RIGHTS. All Merger Consideration paid
upon the surrender for exchange of the Certificates representing shares of Urban
Stock in accordance with the terms hereof shall be deemed to have been paid in
full satisfaction of all rights pertaining to such shares of Urban Stock and,
after the Effective Time, there shall be no further registration of transfers on
the transfer books of the Surviving Entity, of the shares of Urban Stock that
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Entity, for any
reason, they shall be canceled and exchanged as provided in this ARTICLE III.
(e) TERMINATION OF PAYMENT FUND. Any portion of the Payment
Fund that remains undistributed to the former Urban stockholders on the
six-month anniversary of the Effective Time shall be delivered to the Surviving
Entity upon demand, and any former Urban stockholders who have not theretofore
received any applicable Merger Consideration to which they are entitled under
this ARTICLE III, shall thereafter look only to the Surviving Entity for payment
of their claims with respect thereto and only as general creditors thereof.
(f) NO LIABILITY. None of Hexalon, the Surviving Entity or
Head Acquisition Corp shall be liable to any holder of shares of Urban Stock for
any part of the Merger Consideration delivered in good faith to a public
official pursuant to any applicable abandoned property, escheat or similar Law.
Any amounts remaining unclaimed by holders of any such shares five years after
the Effective Time or at such earlier date as is immediately prior to the time
at which such amounts would otherwise escheat to, or become property of, any
federal, state or local government or any court, regulatory or administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign (a "GOVERNMENTAL ENTITY"), shall, to the extent permitted by
applicable Law, become the property of the Surviving Entity free and clear of
any claims or interest of any such holders or their successors, assigns or
personal representatives previously entitled thereto.
(g) LOST, STOLEN OR DESTROYED CERTIFICATES. If any Certificate
shall have been 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 amount as the Surviving Entity may direct as
indemnity against any claim that may be made against it with respect to such
Certificate, the Paying Agent shall issue in exchange for such lost, stolen or
destroyed Certificate the appropriate amount of the applicable Merger
Consideration.
(h) WITHHOLDING OF TAX. The Surviving Entity or the Paying
Agent shall be entitled to deduct and withhold from the Merger Consideration
such amount as the Surviving
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Entity, any Affiliate of the Surviving Entity or the Paying Agent is required
to deduct and withhold with respect to the making of such payment under the
Code or any provision of state, local or foreign Tax Law. To the extent that
amounts are so withheld by the Surviving Entity or the Paying Agent, such
withheld amounts shall be (i) paid over to the applicable Governmental Entity
in accordance with applicable law and (ii) treated for all purposes of this
Agreement as having been paid to the former holder of a Certificate in
respect of which such deduction and withholding was made by the Surviving
Entity or the Paying Agent.
(i) NO DISSENTERS' RIGHTS. Except with respect to the Unit
Voting Stock, no dissenters' or appraisal rights shall be available with respect
to the Merger or the other transactions contemplated hereby; PROVIDED, that the
requirements of Section 3-202 of MGCL have been complied with.
(j) STOCKHOLDERS' MEETING.
(i) If required by applicable law to consummate the
Merger, Urban, acting through the Urban Board of Directors, shall, in
accordance with the Urban Charter, Urban By-Laws and applicable Law and
provided that this Agreement shall not have been terminated:
(A) duly call, give notice of, convene and
hold a special meeting of its stockholders (the "URBAN
STOCKHOLDER MEETING") as promptly as reasonably practicable
following the acceptance for payment and payment for Urban
Stock by Head Purchaser pursuant to the Offer for the purpose
of considering and taking action upon the approval of the
Merger and the adoption of this Agreement.
(B) as promptly as reasonably practicable,
prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement
and use its commercially reasonable efforts, subject to the
terms of this Agreement, (1) to obtain and furnish the
information required to be included by the SEC in the proxy or
information statement and, after consultation with Hexalon, to
respond promptly to any comments made by the SEC with respect
to the preliminary proxy or information statement and cause a
definitive proxy or information statement, including any
amendment or supplement thereto, to be mailed to its
stockholders; PROVIDED, that no amendment or supplement to the
proxy or information statement will be made by Urban without
consultation with Hexalon and its counsel and (2) to obtain the
necessary approvals of the Merger and this Agreement by its
stockholders; and
(C) subject to the terms of this Agreement,
include in the proxy or information statement (i) the
recommendation of the Urban Board of Directors that
stockholders of Urban vote in favor of the approval of the
Merger and this Agreement and (ii) the opinion of the Urban
Financial Advisor.
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(ii) The Head Parties shall vote, or cause to be
voted, all of the shares of Urban Common Stock purchased in the Offer
or otherwise acquired or owned by such parties in favor of the approval
of the Merger and this Agreement.
(k) MERGER WITHOUT MEETING OF STOCKHOLDERS. Notwithstanding
SECTION 3.2(j), if the Head Parties shall acquire or otherwise own, in the
aggregate, shares of Urban Common Stock entitled to cast at least 90.0% of the
votes entitled to be cast on the Merger, pursuant to the Offer or otherwise
(including pursuant to the Common Share Option), the parties hereto shall take
all necessary and appropriate action to cause the Merger of Head Acquisition
Corp with and into Urban to become effective as soon as practicable after
acceptance for payment of and payment for the shares of Urban Common Stock by
Head Acquisition Corp pursuant to the Offer without a meeting of stockholders of
Urban, in accordance with Section 3-106 of the MGCL and Section 253 of Delaware
Law, including providing notice, as promptly as practicable, of the Merger to
each stockholder of record of Urban in accordance with Section 3-106(d) of the
MGCL.
(l) ADDITIONAL ACTIONS. If, at any time after the Effective
Time, Hexalon shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other documents, actions or things are necessary
or desirable to vest, perfect or confirm of record or otherwise in Head
Acquisition LP its right, title or interest in, to or under any of the rights,
properties or assets of Hexalon, Head Acquisition Corp, Urban or the Urban LP,
or otherwise to carry out this Agreement, the officers of Head Acquisition LP
shall be authorized to execute and deliver, in the name and on behalf of
Hexalon, Head Acquisition LP, Head Acquisition Corp, Urban or the Urban LP, all
such deeds, bills of sale, assignments, assurances and other documents and to
take and do, in the name and on behalf of Hexalon, Head Acquisition LP, Head
Acquisition Corp, Urban or the Urban LP, all such other actions and things as
may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in Head
Acquisition LP or otherwise to carry out this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. REPRESENTATIONS AND WARRANTIES OF URBAN. Urban
represents and warrants to Hexalon, Head Acquisition LP and Head Acquisition
Corp as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER OF URBAN. Urban
is a corporation duly incorporated, validly existing and in good standing under
the Laws of the State of Maryland and has the requisite corporate power,
authority and all necessary government approvals or licenses to own, lease and
operate its properties and to carry on its business as now being conducted.
Urban 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 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, would not have a material adverse effect on
the business, properties, condition (financial or otherwise) or results of
operations of Urban, the
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Urban LP and the Urban Subsidiaries taken as a whole or prevent or materially
delay the consummation of the Offer, the Merger or the Amendment or any other
transaction contemplated hereby, not including the effect of general economic
changes, changes in the U.S. financial markets generally, changes that affect
REITs generally and changes that affect the retail industry or retail real
estate properties generally (a "URBAN MATERIAL ADVERSE EFFECT"). Urban has
heretofore made available to Hexalon complete and correct copies of Urban's
charter, as amended (the "URBAN CHARTER"), and by-laws, as amended (the
"URBAN BY-LAWS"). The Urban Charter and the Urban By-laws are each in full
force and effect as of the date hereof. Each jurisdiction in which Urban 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
disclosure letter dated as of the date of this Agreement and delivered to
Hexalon in connection with the execution hereof (the "URBAN DISCLOSURE
LETTER").
(b) URBAN SUBSIDIARIES; INTERESTS IN OTHER PERSONS. (i) Each
Urban 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 necessary government approvals
and licenses to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to have such approvals
or licenses, individually or in the aggregate, would not have an Urban Material
Adverse Effect. Each Urban Subsidiary, including the Urban LP, that is a
partnership, limited liability company or trust is duly organized, validly
existing and in good standing under the Laws of its jurisdiction of organization
and has the requisite power, authority and all necessary government approvals
and licenses to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to have such approvals
or licenses, individually or in the aggregate, would not have an Urban Material
Adverse Effect. Each Urban Subsidiary, including the Urban LP, 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 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, would not reasonably
be expected to have an Urban Material Adverse Effect. All outstanding shares of
stock of each Urban 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 Urban and/or another Urban Subsidiary, except
as disclosed in Section 4.1(b)(i) of the Urban Disclosure Letter, and are so
owned free and clear of all pledges, claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever (collectively, "LIENS"). All
equity interests in each Urban Subsidiary, including the Urban LP, that is a
partnership, limited liability company, trust or other entity have been duly
authorized and are validly issued and are owned by Urban and/or another Urban
Subsidiary, except as disclosed in Section 4.1(b)(i) or Section 4.1(c)(i)(D) of
the Urban Disclosure Letter, and are so owned free and clear of all Liens.
Except as set forth in Section 4.1(b)(i) of the Urban Disclosure Letter, there
are no outstanding options, warrants or other rights to acquire ownership
interests from any Urban Subsidiary. Urban has heretofore made available to
Hexalon complete and correct copies of the charter, by-laws or other
organizational documents of each of the Urban Subsidiaries, each as amended to
date and each as in full force and effect as of the date hereof. Section
4.1(b)(i) of the Urban Disclosure Letter sets forth (A) all Urban Subsidiaries
and their respective jurisdictions of incorporation or organization, (B) each
owner and the respective amount of such owner's equity interest in each Urban
Subsidiary and (C) a list of each
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jurisdiction in which each Urban Subsidiary is qualified or licensed to do
business and each assumed name under which each such Urban Subsidiary
conducts business in any jurisdiction.
(ii) Except for the stock of, or other equity
interests in, the Urban Subsidiaries, equity interests in publicly
traded companies with an original cost to Urban, in the aggregate, of
less than $25,000 and the other interests disclosed in Section
4.1(b)(ii) of the Urban Disclosure Letter (the "URBAN OTHER
INTERESTS"), neither Urban nor any of the Urban Subsidiaries owns any
stock or other ownership interest in any Person. Neither Urban nor any
Urban Subsidiary has violated any provision of any organizational
documents governing or otherwise relating to its rights in any Urban
Other Interest that would be reasonably expected to have an Urban
Material Adverse Effect.
(c) CAPITAL STRUCTURE.
(i) STOCK
(A) As of the date of this Agreement, the
authorized stock of Urban consists of (1) 140,000,000 shares of
Public Common Stock, (2) 5,000,000 shares of Unit Voting Stock
and (3) 5,000,000 shares of series preferred stock. Shares of
Urban's series preferred stock have been designated as set
forth in Section 4.1(c)(i)(A) of the Urban Disclosure Letter.
(B) As of the date of this Agreement, (1)
17,781,018 shares of Public Common Stock are issued and
outstanding, (2) 407,935 shares of Unit Voting Stock are issued
and outstanding, (3) 2,999,400 shares of Series A Preferred
Stock are issued and outstanding, (4) 773,515 shares of Series
B Preferred Stock are issued and outstanding and (5) no shares
of Series C Cumulative Redeemable Preferred Stock (the "SERIES
C PREFERRED STOCK"), Series D Cumulative Redeemable Preferred
Stock (the "SERIES D PREFERRED STOCK") or Junior Participating
Preferred Stock are issued and outstanding.
(C) As of the date of this Agreement, (1)
904,885 shares of Public Common Stock are reserved for issuance
upon exercise of outstanding Urban Options and 6,401 additional
shares of Public Common Stock are reserved for issuance under
the Urban Option Plan, (2) 9,041,369 shares of Public Common
Stock are reserved for issuance upon exchange of LP Units for
shares of Urban Common Stock pursuant to the Urban LP
Agreement, (3) 1,018,182 shares of Public Common Stock are
reserved for issuance upon redemption and exchange of the
outstanding Convertible Preferred Units pursuant to the Urban
LP Agreement, (4) 261,489 shares of Public Common Stock are
reserved for issuance upon redemption and exchange of the
outstanding Incentive Units, (5) 629,500 shares of Public
Common Stock are reserved for issuance pursuant to the
Incentive Stock Program, (6) 2,999,400 shares of Public Common
Stock are reserved for issuance upon the redemption and
exchange of shares of the outstanding Series A Preferred Stock
pursuant to the Urban Charter, (7) 773,515 shares of Public
Common Stock are reserved for issuance upon the redemption and
exchange of shares of outstanding Series B Preferred Stock
pursuant to the Urban Charter, (8) 3,278,161
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shares of Public Common Stock are reserved for issuance to
certain significant security holders or their affiliates as
payment of part or all of the purchase price of interests in
certain developed and undeveloped properties in the event
that Urban purchases these interests and (9) 407,935 shares
of Public Common Stock are reserved for issuance upon
conversion of outstanding Unit Voting Stock. Shares of
Urban's series preferred stock are reserved for issuance as
set forth in Section 4.1(c)(i)(C) of the Urban Disclosure
Letter.
(D) Except as set forth in this SECTION
4.1(c) or in Section 4.1(c)(i)(C) or Section 4.1(c)(i)(D) of
the Urban Disclosure Letter, there are issued and outstanding
or reserved for issuance: (1) no shares of stock, Voting Debt
or other voting securities of Urban; (2) no restricted shares
of Urban Stock, performance share awards or dividend equivalent
rights relating to the equity interests of Urban or the Urban
LP, (3) no securities of Urban or any Urban Subsidiary or
securities or assets of any other entity convertible into or
exchangeable for shares of stock, Voting Debt or other voting
securities of Urban or any Urban 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 Urban or any Urban Subsidiary is a party
or by which it is bound in any case obligating Urban or any
Urban Subsidiary to issue, deliver, sell, purchase, redeem or
acquire, or cause to be issued, delivered, sold, purchased,
redeemed or acquired, additional shares of stock, Voting Debt
or other voting securities of Urban or of any Urban Subsidiary,
or obligating Urban or any Urban 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 shares of stock of
Urban are, and all 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) Except as set forth in Section
4.1(c)(i)(E) of the Urban Disclosure Letter, all dividends or
distributions on securities of Urban or any Urban Subsidiary
that have been declared or authorized prior to the date of this
Agreement have been paid in full.
(ii) PARTNERSHIP UNITS
(A) As of the date of this Agreement,
18,188,953 units of general partner interest in the Urban LP
(the "GP UNITS"), 9,041,369 units of limited partner interest
in the Urban LP (the "LP UNITS"), 1,018,182 7% Cumulative
Convertible Redeemable Preferred Partnership Units of the Urban
LP (the "CONVERTIBLE PREFERRED UNITS"), 2,999,400 Series A
Preferred Units (the "SERIES A UNITS"), 773,515 Series B
Preferred Units (the "SERIES B UNITS"), 800,000 Series C
Preferred Units (the "SERIES C UNITS") and 3,400,000 Series D
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Preferred Units (the "SERIES D UNITS" and together with the
Convertible Preferred Units, the Series A Units, the Series B
Units and the Series C Units, the "URBAN PREFERRED UNITS") are
validly issued and outstanding, are not subject to preemptive
rights and any capital contribution required to be made by the
holders thereof has been made.
(B) Urban is the sole general partner of the
Urban LP as of the date of this Agreement and holds (1)
18,188,953 GP Units, representing 100% of the outstanding GP
Units in the Urban LP, (2) 2,999,400 Series A Units,
representing 100% of the outstanding Series A Units and (3)
773,515 Series B Units, representing 100% of the outstanding
Series B Units. Section 4.1(c)(ii)(B) of the Urban Disclosure
Letter sets forth the name, number and class of GP Units, LP
Units and Urban Preferred Units held by each partner in the
Urban LP.
(C) Each LP Unit may, under certain
circumstances and subject to certain conditions set forth in
the Urban LP Agreement, be converted to shares of Urban Common
Stock on a one-for-one basis. The holders of Convertible
Preferred Units have the right, under certain circumstances, to
convert such units into Class B Units of the Urban LP on a
one-for-one basis pursuant to the terms of the Convertible
Preferred Units. The holders of Series C Units have the right,
under certain circumstances, to exchange such units for shares
of Series C Preferred Stock on a one-for-one basis pursuant to
the terms of the Series C Units. The holders of the Series D
Units have the right, under certain circumstances, to exchange
such units for shares of Series D Preferred Stock on a
one-for-one basis pursuant to the terms of the Series D Units.
As of the date of this Agreement, no notice has been received
by Urban or the Urban LP of the exercise of any of the rights
set forth in this paragraph (C), which are not reflected in
this SECTION 4.1(c).
(iii) MISCELLANEOUS
(A) Except for the Transaction Documents (as
defined in SECTION 4.1(d)(i)) and except as set forth in
Section 4.1(c)(iii)(A) or Section 4.1(c)(iii)(B) of the Urban
Disclosure Letter, there are not any (i) stockholder
agreements, voting trusts, proxies or other agreements or
understandings relating to the voting of any shares of stock of
Urban or partnership interests in the Urban LP or (ii)
agreements or understandings relating to the sale or transfer
(including agreements imposing transfer restrictions) of any
shares of stock of Urban or any ownership interests in any
Urban Subsidiary, to which Urban or any Urban Subsidiary is a
party or by which it is bound. Except as set forth in Section
4.1(c)(iii)(A) of the Urban Disclosure Letter, there are no
restrictions on Urban's ability to vote the equity interests of
any of the Urban Subsidiaries.
(B) Except as set forth in Section
4.1(c)(iii)(B) of the Urban Disclosure Letter, no holder of
securities in Urban or any Urban Subsidiary has any right to
have such securities registered by Urban or any Urban
Subsidiary, as the case may be.
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(C) Except as set forth in Section 4.1(b)(i)
or Section 4.1(c)(iii)(C) of the Urban Disclosure Letter and
except for LP Units, there are not any Urban Subsidiaries in
which any officer or director of Urban or any Urban Subsidiary
owns any stock or other securities. There are no agreements or
understandings between Urban or any Urban Subsidiary and any
Person listed in Section 4.1(b)(i) or Section 4.1(c)(iii)(C) of
the Urban Disclosure Letter that could cause such Person to be
treated as holding any stock or security in Urban or any Urban
Subsidiary as an agent for, or nominee of, Urban or any Urban
Subsidiary.
(d) AUTHORITY; NO VIOLATIONS; CONSENTS AND APPROVAL; LP UNITS.
(i) Urban has all requisite power and authority to
enter into this Agreement and all other documents to be executed by
Urban in connection with the transactions contemplated hereby
(collectively, the "TRANSACTION DOCUMENTS") and to consummate the
transactions contemplated hereby and thereby, subject, solely with
respect to the consummation of the Merger, to receipt of the Urban
Stockholder Approval and the acceptance for record of the Articles of
Merger and the Certificate of Merger by the Maryland Department and the
Delaware Office and subject, solely with respect to the Amendment, to
the approval of the Amendment by the LP Unitholders. Each Urban
Subsidiary that is a party to any Transaction Document has all
requisite power and authority to enter into such Transaction Document
and to consummate the transactions contemplated thereby. The execution
and delivery of the Transaction Documents and the consummation of the
transactions contemplated hereby or thereby have been duly authorized
by all necessary action on the part of Urban and each applicable Urban
Subsidiary, subject, solely with respect to the consummation of the
Merger, to receipt of the Urban Stockholder Approval and subject,
solely with respect to the Amendment, to the approval of the Amendment
by the LP Unitholders. The Transaction Documents have been duly
executed and delivered by Urban and each applicable Urban Subsidiary
and subject, solely with respect to the consummation of the Merger, to
receipt of the Urban Stockholder Approval and subject, solely with
respect to the Amendment, to the approval of the Amendment by the LP
Unitholders, constitute valid and binding obligations of Urban and each
applicable Urban Subsidiary, enforceable against Urban and each Urban
Subsidiary in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other Laws of general applicability
relating to or affecting creditors' rights and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at Law).
(ii) Except as set forth in Section 4.1(d)(ii) of the
Urban Disclosure Letter and except for the Urban Stockholder Approval
and the approval of the Amendment by the LP Unitholders, the execution
and delivery of the Transaction Documents by Urban or each applicable
Urban Subsidiary 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
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any of the properties or assets of Urban or any of the Urban
Subsidiaries under, require the consent or approval of any third
party or otherwise result in a material detriment or default to
Urban or any of the Urban Subsidiaries under, any provision of (A)
the Urban Charter or the Urban By-laws or any provision of the
comparable charter or organizational documents of any of the Urban
Subsidiaries, (B) any loan or credit agreement or note, except for
the Triggered Loans (as defined below) (it being understood that no
representation is being given as to whether the Surviving Entity and
the Urban Subsidiaries will be in compliance with any financial
covenants contained therein following the Merger) or any bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Urban or any of the
Urban Subsidiaries, or their respective properties or assets or any
guarantee by Urban or any of the Urban Subsidiaries of any of the
foregoing, (C) any joint venture or other ownership arrangement or
any Material Contract (as defined in Section 4.1(w)(i)) or (D)
assuming the consents, approvals, authorizations or permits and
filings or notifications referred to in SECTION 4.1(d)(iii) are duly
and timely obtained or made and the Urban Stockholder Approval has
been obtained, any judgment, order, decree, statute, Law, ordinance,
rule or regulation applicable to Urban or any of the Urban
Subsidiaries, or any of their respective properties or assets, other
than, in the case of clauses (B) (except with respect to the
Triggered Loans), (C) and (D), any such conflicts, violations,
defaults, rights, Liens or detriments that, individually or in the
aggregate, would not reasonably be expected to have an Urban
Material Adverse Effect. For the purposes of this Agreement, the
term "TRIGGERED LOANS" means the loans identified as "Triggered
Loans" in Section 4.1(d)(ii) of the Urban Disclosure Letter.
(iii) Except as set forth in Section 4.1(d)(iii) of
the Urban Disclosure Letter, 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
Urban or any of the Urban Subsidiaries in connection with the execution
and delivery of the Transaction Documents by Urban and each of the
applicable Urban Subsidiaries or the consummation by Urban or the
applicable Urban Subsidiaries of the transactions contemplated hereby
or thereby, except for: (A) the filing with the SEC of (1) (a) if
required by the rules and regulations of the SEC, a proxy or
information statement in preliminary and definitive form relating to
the Urban Stockholder Meeting held in connection with the Merger or (b)
other documents otherwise required in connection with the transactions
contemplated hereby and (2) such reports under Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and
such other compliance with the Exchange Act and the rules and
regulations thereunder, as may be required in connection with the
Transaction Documents and the transactions contemplated hereby or
thereby; (B) the filing of the Articles of Merger and the Certificate
of Merger with, and the acceptance for record of the Articles of Merger
and the Certificate of Merger by, the Maryland Department and the
Delaware Office; (C) the amendment of the certificate of limited
partnership of Urban LP to reflect the change in its general partner;
(D) such filings and approvals as may be required by any applicable
state securities or "blue sky" Laws, Takeover Statute or Environmental
Laws (as defined in SECTION 4.1(o)) as more specifically described in
Section 4.1(d)(iii) of the Urban Disclosure Letter; (E) the filing, if
applicable, of a pre-merger notification and report by Urban under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
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(xxx "XXX XXX"), and the expiration or termination of the applicable
waiting period thereunder; and (F) any such consent, approval,
order, authorization, registration, declaration, filing or permit
that the failure to obtain or make individually or in the aggregate,
would not reasonably be expected to have an Urban Material Adverse
Effect.
(iv) Except as expressly contemplated by this
Agreement, the holders of Urban Preferred Units will not have, any
right to (A) cause the redemption of such Urban Preferred Units, (B)
exchange such Urban Preferred Units for any other securities, except as
provided in SECTION 4.1(c) or (C) convert, redeem or receive a
distribution with respect to such Urban Preferred Units, in each case
solely as a result of the Offer, the Merger, the Amendment or the other
transactions contemplated by the Transaction Documents.
(e) SEC DOCUMENTS.
(i) Urban has made available (including by filing via
XXXXX) to Hexalon a true and complete copy of each report, schedule,
registration statement and definitive proxy statement filed by Urban
with the SEC since January 1, 1999 and prior to or on the Closing Date
(the "URBAN SEC Documents"), which are all the documents (other than
preliminary material) that Urban was required to file with the SEC
between January 1, 1999 and the Closing Date. As of their respective
dates, the Urban SEC Documents complied in all material respects with
the requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such Urban
SEC Documents and none of the Urban 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, except to the extent such statements have been modified or
superseded by later Urban SEC Documents filed and publicly available
prior to the date of this Agreement. Urban has no outstanding and
unresolved comments from the SEC with respect to any of the Urban SEC
Documents except to the extent such statements have been amended,
modified or superseded by later filed Urban SEC Documents. None of the
Urban SEC Documents is the subject of any confidential treatment
request by Urban. The consolidated financial statements of Urban
(including the notes thereto) included in the Urban 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 ("GAAP") applied on a consistent basis
during the periods involved (except as may be indicated in the notes
thereto, or, 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 Urban and the Urban
Subsidiaries, taken as a whole, as of their respective dates and the
consolidated statements of income and the consolidated cash flows of
Urban and the Urban Subsidiaries for the periods presented therein. The
books of account and other financial records of Urban are accurately
reflected in all material respects in the financial
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statements included in the Urban SEC Documents. Other than Urban, no
Urban Subsidiary, including the Urban LP, is required to make any
filing with the SEC.
(ii) The GP Units, LP Units and the Urban
Preferred Units are not registered under Section 12 of the Exchange
Act.
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
or reflected in the Urban SEC Documents filed with the SEC prior to the date of
this Agreement or as disclosed in Section 4.1(f) of the Urban Disclosure Letter,
since December 31, 1999, Urban and the Urban Subsidiaries have conducted their
business only in the ordinary course and there has not been: (i) (A) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of Urban's stock; (B)
any amendment of any term of any outstanding equity security of Urban or any
Urban Subsidiary; (C) any repurchase, redemption or other acquisition by Urban
or any Urban Subsidiary of any outstanding shares of stock or other equity
securities of, or other ownership interests in, Urban or any Urban Subsidiary;
(D) any change in any method of accounting or accounting practice or any
material change in any tax method or election by Urban or any Urban Subsidiary;
(E) any amendment of any employment, consulting, severance, retention or any
other agreement between Urban and any officer or director of Urban, except for
additions or deletions of individuals to severance plans (other than the senior
executive severance plan) in the ordinary course of business and except as set
forth in Section 4.1(f) of the Urban Disclosure Letter; or (F) any change,
event, effect, damage, destruction or loss relating to the business or
operations of Urban that has had, or would reasonably be expected to have, an
Urban Material Adverse Effect and (ii) any split, combination or
reclassification of any of Urban's stock or any issuance or the authorization of
any issuance of any other securities in respect of, in lieu of or in
substitution for, or giving the right to acquire by exchange or exercise, shares
of its stock or any issuance of an ownership interest in, any Urban Subsidiary.
(g) NO UNDISCLOSED MATERIAL LIABILITIES. Except as disclosed
in the Urban SEC Documents, as set forth in Section 4.1(w)(i) of the Urban
Disclosure Letter or as otherwise would not reasonably be expected to have an
Urban Material Adverse Effect, there are no liabilities of Urban or any of the
Urban Subsidiaries, whether accrued, contingent, absolute or determined, other
than: (i) liabilities adequately provided for on the balance sheet of Urban
dated as of December 31, 1999 (including the notes thereto) contained in the
Annual Report on Form 10-K for the fiscal year ended December 31, 1999 of Urban
or (ii) liabilities incurred in the ordinary course of business subsequent to
December 31, 1999.
(h) NO DEFAULT. Neither Urban nor any of the Urban
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 Urban Charter or the Urban By-laws
or the comparable charter or organizational documents of any of the Urban
Subsidiaries, (B) any loan or credit agreement or note, including, but not
limited to, the Triggered Loans or any bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license to which Urban
or any of the Urban Subsidiaries is now a party or by which Urban or any of the
Urban Subsidiaries or any of their respective properties or assets is bound, or
(C) any order, writ, injunction, decree, statute, rule or regulation applicable
to Urban or any of the Urban Subsidiaries, except, in the case of clauses (B)
and (C), for defaults or
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violations which, individually or in the aggregate, would not reasonably be
expected to have an Urban Material Adverse Effect.
(i) COMPLIANCE WITH APPLICABLE LAWS. Urban and the Urban
Subsidiaries hold all permits, licenses, certificates, registrations, variances,
exemptions, orders, franchises and approvals of all Governmental Entities
necessary for the lawful conduct of their respective businesses (the "URBAN
PERMITS"), except where the failure so to hold, individually or in the
aggregate, would not reasonably be expected to have an Urban Material Adverse
Effect. Urban and the Urban Subsidiaries are in compliance with the terms of the
Urban Permits, except where the failure to so comply, individually or in the
aggregate, would not reasonably be expected to have an Urban Material Adverse
Effect. Except as disclosed in the Urban SEC Documents or as would not
reasonably be expected to have an Urban Material Adverse Effect, the businesses
of Urban and the Urban Subsidiaries are not being conducted in violation of any
Law of any Governmental Entity. No investigation or review by any Governmental
Entity with respect to Urban or any of the Urban Subsidiaries is pending and of
which Urban has Knowledge or, to the Knowledge of Urban, is threatened, other
than those the outcome of which, individually or in the aggregate, would not
reasonably be expected to have an Urban Material Adverse Effect.
(j) LITIGATION. Except as disclosed in the Urban SEC Documents
or as set forth in Section 4.1(j) or Section 4.1(n) of the Urban Disclosure
Letter and except for routine litigation arising from the ordinary course of
business of Urban and the Urban Subsidiaries which are adequately covered by
insurance (it being understood that litigation arising from or related in any
way to Hazardous Material (as defined in Section 4.1(o)) shall not be considered
routine litigation), there is no litigation, arbitration, claim, investigation,
suit, action or proceeding pending in which service of process has been received
by an employee of Urban or, to the Knowledge of Urban, threatened against or
affecting Urban or any Urban Subsidiary that, individually or in the aggregate,
would reasonably be expected to have an Urban Material Adverse Effect, nor is
there any judgment, award, decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against Urban or any Urban Subsidiary of which
Urban has Knowledge and which would reasonably be expected to, individually or
in the aggregate, (A) have an Urban Material Adverse Effect, (B) cause any of
the transactions contemplated by the Transaction Documents to be rescinded
following their consummation, including, without limitation, the Offer, the
Merger or the Amendment or (C) materially adversely affect the rights of
Hexalon, Head Acquisition LP or Head Acquisition Corp to own their respective or
Urban's or any Urban Subsidiary's assets and to operate their respective or
Urban's or any Urban Subsidiary's business.
(k) TAXES.
(i) Each of Urban and the Urban Subsidiaries has
timely filed all material 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. Urban and each Urban Subsidiary has
paid (or Urban has paid on behalf of such Urban Subsidiary), within the
time and in the manner prescribed by Law, all material Taxes that are
due and payable. The most recent financial statements contained in the
Urban SEC Documents filed with the SEC prior
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to the date of this Agreement reflect an adequate reserve or accrued
liabilities or expenses for all material Taxes due and payable by
Urban and the Urban Subsidiaries as a group for all taxable periods
and portions thereof through the date of such financial statements.
Urban and the Urban Subsidiaries (as a group) have established on
their books and records (which may, but are not required to, be
reflected only on the books and records of Urban or Urban LP)
reserves or accrued liabilities or expenses that are adequate for
the payment of all Taxes for which Urban or any Urban Subsidiary is
liable but are not yet due and payable. Since the date of the most
recent audited financial statements included in the Urban SEC
Documents, (A) Urban has incurred no liability for any material
Taxes under Sections 857(b), 860(c) or 4981 of the Code or IRS
Notice 88-19 or Treasury Regulation Section 1.337(d)-5T, including,
without limitation, any material Tax arising from a prohibited
transaction described in Section 857(b)(6) of the Code, and (B)
neither Urban nor any of the Urban Subsidiaries has incurred any
material liability for Taxes other than in the ordinary course of
business. No deficiencies for material Taxes have been asserted or
assessed in writing by a Governmental Entity against Urban or any of
the Urban Subsidiaries, including claims by any Governmental Entity
in a jurisdiction where Urban or any Urban Subsidiary does not file
Tax Returns and no requests for waivers of the time to assess any
such material Taxes have been granted and remain in effect or are
pending.
(ii) Urban (A) for each taxable year of Urban's
existence through its taxable year ended December 31, 1999, has been
subject to taxation 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, 1999 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 Urban's
Knowledge, threatened. The nature of the assets of Urban and the Urban
Subsidiaries (as a group) is such that the sale of all of the assets
owned by them on the date hereof at their respective fair market values
would not cause Urban to fail to qualify as a REIT under Section
856(c)(2) or (3) of the Code if Urban's taxable year ended on the date
hereof. Each Urban Subsidiary which files Tax Returns as a partnership
for federal income tax purposes has since its acquisition by Urban been
classified for federal income tax purposes as a partnership 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. Except in the case of Urban Management Company or
any subsidiary thereof, each Urban Subsidiary which is a corporation
has been since its formation classified as a qualified REIT subsidiary
under Section 856(i) of the Code. Neither Urban nor any Urban
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 Section 1.337(d)-5T or (y) that
is subject to a consent filed pursuant to Section 341(f) of the Code.
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(iii) As of the date of this Agreement, Urban does
not have any earnings and profits attributable to Urban or any other
corporation in any non-REIT year within the meaning of Section 857 of
the Code.
(iv) All material Taxes which Urban or the Urban
Subsidiaries are required by Law to withhold or collect, including
material Taxes required to have been withheld 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 material Taxes upon the assets of Urban or the Urban Subsidiaries
except for statutory Liens for Taxes not yet due.
(v) For periods beginning after December 31, 1994,
except as set forth in Section 4.1(k)(v) of the Urban Disclosure
Letter, (a) the Tax Returns of Urban or any Urban Subsidiary have not
been audited by any taxing authority and (b) there are no audits by and
contests with any taxing authority currently being conducted with
regard to material Taxes or Tax Returns of Urban or any Urban
Subsidiary and, to the Knowledge of Urban, there are no audits pending
with or proposed by any taxing authority with respect to any material
Taxes or Tax Returns.
(vi) Except as set forth in Section 4.1(k)(vi) of the
Urban Disclosure Letter, neither Urban nor the Urban Subsidiaries are a
party to any Tax allocation or sharing agreement.
(vii) Urban does not have any material liability for
the Taxes of any Person other than Urban and the Urban Subsidiaries and
the Urban Subsidiaries do not have any material liability for the Taxes
of any Person other than Urban and the Urban Subsidiaries (A) under
Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign Law), (B) to the Knowledge of Urban as a
transferee or successor or (C) by contract.
(viii) Except as set forth in Section 4.1(k)(viii) of
the Urban Disclosure Letter, neither Urban nor the Urban Subsidiaries
have made any payments, are obligated to make any payments, or are
parties to an agreement that could obligate them to make any payments
that will not be deductible under Section 280G of the Code. Urban and
the Urban 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.
(l) PENSION AND BENEFIT PLANS; ERISA. Except as set forth in
the Urban SEC Documents: (i) all "employee pension benefit plans," as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained or contributed to by Urban or any trade or business
(whether or not incorporated) which is under common control, or which is treated
as a single employer, with Urban under Section 414(b), (c), (m) or (o) of the
Code (a "URBAN ERISA AFFILIATE") or to which Urban or any of the Urban
Subsidiaries or any Urban ERISA Affiliate contributed or is obligated to
contribute thereunder
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within six years prior to the Effective Time (the "URBAN PENSION PLANS")
intended to qualify under Section 401 of the Code have received a favorable
determination letter from the IRS and, to the Knowledge of Urban, such
determination has not been modified, revoked or limited, and, to the
Knowledge of Urban as of the Closing Date, nothing has occurred with respect
to the operation of the Urban Pension Plans that could reasonably be expected
to cause the loss of such qualification or the imposition of any material
liability, penalty or Tax under ERISA or the Code.
(ii) Except as set forth in Section 4.1(l)(ii) of the
Urban Disclosure Letter, neither Urban nor any Urban ERISA Affiliate
currently sponsors, contributes to, maintains or has liability (whether
contingent or otherwise) under (i) a "multiemployer plan" (as defined
in Section 4001(a)(3) of ERISA) or (ii) an employee benefit plan that
was subject to Part 3 of Subtitle B of Title I of ERISA, or Section 412
of the Code, or Title IV of ERISA.
(iii) To the Knowledge of Urban, there is no
violation of ERISA or the Code with respect to (A) the filing of
applicable reports, documents, and notices with the Secretary of Labor
and the Secretary of the Treasury regarding all "employee benefit
plans," as defined in Section 3(3) of ERISA, and all other employee
compensation and benefit arrangements or payroll practices, including,
without limitation, severance pay, sick leave, vacation pay, salary
continuation for disability, consulting or other compensation
agreements, retirement, deferred compensation, bonus (including,
without limitation, any retention bonus plan), long-term incentive,
stock option, stock purchase, hospitalization, medical insurance, life
insurance and scholarship programs maintained by Urban or any of the
Urban Subsidiaries or with respect to which Urban or any of the Urban
Subsidiaries has any liability or the Urban Pension Plans (all such
plans, including Urban Pension Plans, being hereinafter referred to as
the "URBAN EMPLOYEE BENEFIT PLANS") or (B) the furnishing of such
documents to the participants or beneficiaries of Urban Employee
Benefit Plans.
(iv) Each Urban Employee Benefit Plan, related trust
(or other funding or financing arrangement) and all amendments thereto
are listed in Section 4.1(l)(iv) of the Urban Disclosure Letter, true
and complete copies of which have been made available to Hexalon, as
have the most recent summary plan descriptions, administrative service
agreements, Form 5500s and, with respect to any Urban Employee Benefit
Plan intended to be qualified pursuant to Section 401(a) of the Code, a
current IRS determination letter.
(v) Each of the Urban Employee Benefit Plans is, and
its administration is and has been, in material compliance with, and
none of Urban nor any of the Urban Subsidiaries has received any claim,
notice or information that any such Urban Employee Benefit Plan is not
in compliance with, its terms and all applicable Laws, regulations,
rulings and all other applicable governmental Laws, regulations and
orders, and prohibited transaction exemptions, including, without
limitation, the requirements of ERISA, bonding requirements and the
furnishing of documents to the participants and beneficiaries (and
other individuals entitled to such documents) of each such plan. Except
as described in Section 4.1(l)(v) of the Urban Disclosure Letter, to
the Knowledge of Urban, there is no liability for breaches of fiduciary
duty in connection with Urban Employee Benefit Plans, and neither Urban
nor any of the Urban Subsidiaries
-27-
or any "party in interest" or "disqualified person" with respect to
the Urban Employee Benefit Plans has engaged in a non-exempt
"prohibited transaction" within the meaning of Section 4975 of the
Code or Section 406 of ERISA.
(vi) There are no actions, disputes, suits, claims,
arbitration or legal, administrative or other proceeding or
governmental investigation pending (other than routine claims for
benefits) or, to the Knowledge of Urban, threatened, alleging any
breach of the terms of any Urban Employee Benefit Plan or of any
fiduciary duties thereunder or violation of any applicable Law with
respect to any such Urban Employee Benefit Plan.
(vii) Except for the payments contemplated by SECTION
2.7 and except as described in Section 4.1(l)(vii), Section
4.1(k)(viii) or Section 4.1(1)(xv) of the Urban Disclosure Letter,
neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (A) result in
any payment (including, but not limited to, any retention bonuses,
parachute payments or noncompetition payments) becoming due to any
employee or former employee or group of employees or former employees
of Urban or any of the Urban Subsidiaries; (B) increase any benefits
otherwise payable under any Urban Employee Benefit Plan; (C) result in
the acceleration of the time of payment or vesting of any such rights
or benefits; or (D) otherwise result in the payment of any "excess
parachute payment" within the meaning of Section 280G of the Code with
respect to a current or former employee of Urban or any of the Urban
Subsidiaries. Except as described in Section 4.1(l)(vii) of the Urban
Disclosure Letter, there are no severance agreements, noncompetition
agreements or employment agreements between Urban or any of the Urban
Subsidiaries and any employee of Urban or such Urban Subsidiary. True
and complete copies of all severance agreements and employment
agreements described in Section 4.1(l)(vii) of the Urban Disclosure
Letter have been provided to Hexalon.
(viii) Except as set forth in Section 4.1(l)(viii) of
the Urban Disclosure Letter, neither Urban nor any of the Urban
Subsidiaries has any consulting agreement or arrangement, whether oral
or written, with any Person involving annual compensation in excess of
$100,000.
(ix) All contributions, premiums and other payments
required by Law or any Urban Employee Benefit Plan or applicable
collective bargaining agreement have been made under any such plan to
any fund, trust or account established thereunder or in connection
therewith by the due date thereof, and no amounts are or will be due to
the Pension Benefit Guaranty Corporation as of the Closing Date (except
for premiums in the ordinary course of business); and any and all
contributions, premiums and other payments with respect to compensation
or service before and through the Closing Date, or otherwise with
respect to periods before and through the Closing Date, due from any of
Urban or its ERISA Affiliates to, under or on account of each Urban
Employee Benefit Plan shall have been paid prior to the Closing Date or
shall have been fully reserved and provided for or accrued on the Urban
financial statements.
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(x) Except as set forth in Section 4.1(x) of the
Urban Disclosure Letter, no stock or other security issued by Urban or
any of the Urban Subsidiaries forms or has formed a part of the assets
of any Urban Employee Benefit Plan.
(xi) Except as set forth in Section 4.1(l)(xi) of the
Urban Disclosure Letter, no Urban Employee Benefit Plan that is a
"welfare benefit plan" as defined in Section 3(1) of ERISA provides for
continuing benefits or coverage for any participant or beneficiary or
covered dependent of a participant after such participant's termination
of employment, except to the extent required by Law. Except as set
forth in Section 4.1(l)(xi) of the Urban Disclosure Letter, all Urban
Employee Benefit Plans that provide medical, dental health or long-term
disability benefits are fully insured and claims with respect to any
participant or covered dependent under such Urban Employee Benefit Plan
could not reasonably result in any uninsured liability to Urban, any
Urban Subsidiary or Hexalon, Head Acquisition LP or Head Acquisition
Corp. Urban and the Urban ERISA Affiliates have complied in all
material respects with the requirements of Section 4980B of the Code
and Parts 6 and 7 of Subtitle B of Title I of ERISA regarding health
care coverage under Urban Employee Benefit Plans.
(xii) Except as set forth in Section 4.1(l)(xii) of
the Urban Disclosure Letter, no amount has been paid by Urban or any of
the Urban ERISA Affiliates, and no amount is expected to be paid by
Urban or any of the Urban ERISA Affiliates, which would be subject to
the provisions of Section 162(m) of the Code such that all or a part of
such payments would not be deductible by the payor.
(xiii) Without limiting any other provision of this
SECTION 4.1(l), no event has occurred and no condition exists, with
respect to any Urban Employee Benefit Plan, that has subjected or could
subject Urban or any Urban ERISA Affiliate, or any Urban Employee
Benefit Plan or any successor thereto, to any Tax, fine, penalty or
other liability (other than, in the case of Urban, an Urban ERISA
Affiliate and the Urban Employee Benefit Plans, a liability arising in
the normal course to make contributions or payments, as applicable,
when ordinarily due under an Urban Employee Benefit Plan with respect
to employees of Urban and the Urban Subsidiaries). No event has
occurred and no condition exists, with respect to any Urban Employee
Benefit Plan that could subject Hexalon, Head Acquisition LP or Head
Acquisition Corp or any of its Affiliates, or any plan maintained by
Hexalon, Head Acquisition LP or Head Acquisition Corp or any Affiliate
(other than an Affiliate which becomes such pursuant to the
transactions contemplated by this Agreement) thereof, to any Tax, fine,
penalty or other liability, that would not have been incurred by
Hexalon, Head Acquisition LP or Head Acquisition Corp or any of its
Affiliates, or any such plan, but for the transactions contemplated
hereby. No plan other than an Urban Employee Benefit Plan is or will be
directly or indirectly binding on Hexalon, Head Acquisition LP or Head
Acquisition Corp by virtue of the transactions contemplated hereby.
Hexalon, Head Acquisition LP, Head Acquisition Corp and their
Affiliates, including on and after the Closing Date, Urban and any
Urban ERISA Affiliate, to the knowledge of Urban, shall have no
liability for, under, with respect to or otherwise in connection with
any plan, which liability arises under ERISA or the Code, by virtue of
Urban or any Urban Subsidiary being aggregated in a controlled group or
affiliated service group with any Urban ERISA Affiliate for purposes
-29-
of ERISA or the Code at any relevant time prior to the Closing Date
(other than a liability from providing benefits arising in the
ordinary course of business).
(xiv) Each Urban Employee Benefit Plan may be
unilaterally amended or terminated in its entirety by Urban or the
Surviving Entity without liability except as to benefits accrued
thereunder prior to amendment or termination.
(xv) All individual employment, termination,
severance, change in control, retention bonus, post-employment and
other compensation agreements, arrangements and plans existing prior to
the execution of this Agreement or which will exist prior to the
Closing, which are between Urban or an Urban Subsidiary and any current
or former director, officer or employee thereof, including the name and
title of such current or former director, officer or employee, the type
of agreement and the amount of any estimated severance payment
(including estimated gross up) owed thereunder due solely to the
transactions contemplated by this Agreement, are listed in Section
4.1(1)(vii) or Section 4.1(l)(xv) of the Urban Disclosure Letter
(collectively, the "URBAN SEVERANCE AGREEMENTS").
(m) LABOR AND EMPLOYMENT MATTERS. Except as set forth in the
Urban SEC Documents or as would not be reasonably expected to have an Urban
Material Adverse Effect:
(i) Except as set forth in Section 4.1(m)(i) of the
Urban Disclosure Letter, neither Urban nor any of the Urban
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
Urban or any of the Urban Subsidiaries, nor does Urban or any of the
Urban 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.
(ii) There is no unfair labor practice charge or
grievance arising out of a collective bargaining agreement or other
grievance procedure pending, or, to the Knowledge of Urban, threatened
against Urban or any of the Urban Subsidiaries.
(iii) Except as set forth in Section 4.1(j) of the
Urban Disclosure Letter or as otherwise provided above, 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 Urban, threatened against Urban or any of the Urban
Subsidiaries.
(iv) There is no strike, slowdown, work stoppage or
lockout pending, or, to the Knowledge of Urban, threatened, against or
involving Urban or any of the Urban Subsidiaries.
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(v) The employees of Urban and the Urban Subsidiaries
are lawfully authorized to work in the United States according to
federal immigration Laws.
(vi) Urban and each of the Urban Subsidiaries are in
compliance with all applicable Laws in respect of employment and
employment practices, terms and conditions of employment, wages, hours
of work and occupational safety and health.
(vii) As of the date of this Agreement, there is no
proceeding, claim, suit, action or governmental investigation pending
or, to the Knowledge of Urban, threatened, with respect to which any
current or former director, officer, employee or agent of Urban or any
of the Urban Subsidiaries is claiming indemnification from Urban or any
of the Urban Subsidiaries.
(n) INTANGIBLE PROPERTY. Urban and the Urban Subsidiaries own,
possess or have adequate rights to use all trademarks, trade names, patents,
service marks, brand marks, brand names, computer programs, databases,
industrial designs and copyrights currently used in the operation of the
businesses of each of Urban and the Urban Subsidiaries (collectively, the "URBAN
INTANGIBLE PROPERTY"), except where the failure to possess or have adequate
rights to use such property, individually or in the aggregate, would not
reasonably be expected to have an Urban Material Adverse Effect. All of the
Urban Intangible Property is owned or licensed by Urban or the Urban
Subsidiaries free and clear of any and all Liens, except as would not,
individually or in the aggregate, reasonably be expected to have an Urban
Material Adverse Effect, and neither Urban nor any such Urban Subsidiary has
forfeited or otherwise relinquished any Urban Intangible Property. Except as set
forth in Section 4.1(n) of the Urban Disclosure Letter, to the Knowledge of
Urban, the use of Urban Intangible Property by Urban or the Urban Subsidiaries
does not in any material respect, conflict with, infringe upon, violate or
interfere with or constitute an appropriation of any right, title, interest or
goodwill, including, without limitation, any intellectual property right,
trademark, trade name, patent, service xxxx, brand xxxx, brand name, computer
program, database, industrial design, copyright or any pending application
therefor, of any other Person. Except as set forth in Section 4.1(n) of the
Urban Disclosure Letter, to the Knowledge of Urban, there have been no claims
made, and neither Urban nor any of the Urban Subsidiaries has received any
notice of any claim nor does Urban otherwise have Knowledge that any of the
Urban Intangible Property is invalid or conflicts with the asserted rights of
any other Person or has not been used or enforced or has failed to have been
used or enforced in a manner that would result in the abandonment, cancellation
or unenforceability of any of the Urban Intangible Property, except as would
not, individually or in the aggregate, reasonably be expected to have an Urban
Material Adverse Effect.
(o) ENVIRONMENTAL MATTERS. For purposes of this Agreement, (x)
"ENVIRONMENTAL LAW" means any current and future Law of any Governmental Entity
relating to the protection of human health, safety or the environment, (y)
"HAZARDOUS MATERIAL" means (A) any petroleum or petroleum products, radioactive
materials, asbestos-containing materials, urea formaldehyde foam insulation and
polychlorinated biphenyls ("PCBs"); (B) any chemicals, materials, substances or
wastes which are defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"pollutant," "contaminant" or words of similar import, or regulated as such,
under any Environmental Law or for which a
-31-
person may be subject to liability under any Environmental Law, and (z)
"RELEASE" means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, leaching, dispersing, migrating, dumping or
disposing into the indoor or outdoor environment (including, without
limitation, ambient air, surface water, groundwater, and surface or
subsurface strata) or into or out of any property, including the movement of
Hazardous Material through or into the air, soil, surface water, or
groundwater. Except as disclosed in Section 4.1(o) of the Urban Disclosure
Letter and except as would not have an Urban Material Adverse Effect:
(i) No administrative or compliance order has been
issued that is still in effect, no complaint has been filed that has
not been resolved, no penalty has been assessed that has not been paid
and no investigation or review is pending or, to the Knowledge of
Urban, threatened by any Governmental Entity with respect to any
alleged failure by Urban or any Urban Subsidiary to have any Urban
Permit required under any Environmental Law or with respect to any
treatment, storage, recycling, transportation, disposal, Release or
threatened Release by Urban or any Urban Subsidiary, or on any property
owned, operated or leased by Urban or any Urban Subsidiary, of any
Hazardous Material.
(ii) Neither Urban nor any Urban Subsidiary nor, to
the Knowledge of Urban, any owner or lessee of any property owned,
operated or leased by Urban or any Urban Subsidiary, has used,
generated, stored, treated or handled any Hazardous Material on such
property, except in compliance with Environmental Laws. To the
Knowledge of Urban, (A) there are no asbestos-containing materials
present on, in or under any property owned, leased or operated by Urban
or any Urban Subsidiary, (B) there are no PCBs present on, in or under
any property owned, leased or operated by Urban or any Urban
Subsidiary, and (C) there are no underground storage tanks, active or
abandoned, used for the storage of Hazardous Materials currently
present on, in or under any property owned, leased or operated by Urban
or any Urban Subsidiary, except in each case where in compliance with
Environmental Laws.
(iii) Urban and the Urban Subsidiaries have not
received notice of a claim, investigation, litigation, proceeding,
notice of violation, complaint, or request for information that has not
been resolved, to the effect that it is liable to a third party,
including a Governmental Entity, as a result of a Release or threatened
Release of a Hazardous Material into the environment at any property
currently or formerly owned, leased or operated by Urban or an Urban
Subsidiary, and to the Knowledge of Urban, there is no reasonable basis
for such claim, investigation, litigation, proceeding, notice of
violation, complaint, or request for information.
(iv) Neither Urban nor any Urban Subsidiary has
transported or arranged for the transportation of any Hazardous
Material to any location which is the subject of any action, suit or
proceeding that could be reasonably expected to result in claims
against Urban or any Urban Subsidiary related to such Hazardous
Material for clean-up costs, remedial work, damages to natural
resources or personal injury claims, including, but not limited to,
claims under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and the rules and regulations
promulgated thereunder ("CERCLA") and, to the Knowledge of Urban, there
is no
-32-
reasonable basis for such claim. All Hazardous Material which has
been removed from any property owned, leased, or operated by Urban or
any Urban Subsidiary has been handled, transported and disposed of in
compliance with Environmental Laws and by handlers, transporters and to
facilities maintaining all required permits and licenses.
(v) Urban has made notification of Releases and
threatened Releases of a Hazardous Material where required by
applicable Environmental Law, and no property now or, to the Knowledge
of Urban, previously owned, leased or operated by Urban or any Urban
Subsidiary is listed or, to the Knowledge of Urban, proposed for
listing on the National Priorities List promulgated pursuant to CERCLA
or on any similar state list of sites where such listing requires
investigation or clean-up.
(vi) There are no Liens threatened or attached to any
Urban Property (as defined in Section 4.1(p)(i)(A)) arising under or
pursuant to any applicable Environmental Law, and no action of any
Governmental Entity has been taken or, to the Knowledge of Urban, is in
process which could subject any of such properties to such Liens. To
the Knowledge of Urban, neither Urban nor any Urban Subsidiary
currently has a duty under any applicable Environmental Law to place
any restriction relating to the presence of Hazardous Material at any
such Urban Property.
(vii) Neither Urban nor any Urban Subsidiary has
entered into any agreement to provide indemnification to any third
party purchaser pursuant to Environmental Laws in relation to any
property or facility previously owned, leased or operated by Urban or
an Urban Subsidiary.
(viii) To the Knowledge of Urban, neither Urban nor
any Urban Subsidiary has in its possession or control or knows of the
existence of any environmental assessment or investigation reports
prepared within the last four years that have not been provided to
Hexalon prior to the execution of this Agreement.
(ix) To the Knowledge of Urban, Urban and all Urban
Subsidiaries are in compliance with all Environmental Laws at, in, on
or under any of their owned or leased properties.
(x) To the Knowledge of Urban, there has been no
Release or threatened Release of Hazardous Material in violation of any
Environmental Law on any property owned, leased or operated by Urban or
any Urban Subsidiary or on adjacent parcels of real estate.
(p) PROPERTIES.
(i) (A) Except as listed in Section 4.1(p)(i)(A) of
the Urban Disclosure Letter, Urban or an Urban 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 Urban and/or
the Urban LP included in the Urban SEC Documents and as identified in
Section 4.1(p)(i)(A) of the Urban Disclosure Letter (each, a "URBAN
PROPERTY" and collectively, the "URBAN PROPERTIES"), which are all of
the real estate properties owned by them, free and clear of Liens
except for (1) debt and other matters identified in Section
-33-
4.1(p)(i)(A)(1) of the Urban Disclosure Letter, (2) inchoate Liens
imposed for construction work in progress 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,
reciprocal easement agreements 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(p)(i)(A)(1) of the Urban Disclosure Letter) and (5) real estate
Taxes and special assessments; (B) except as listed in Section
4.1(p)(i)(B) of the Urban Disclosure Letter or as would not reasonably
be expected to have an Urban Material Adverse Effect, the Urban
Properties are not 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, "URBAN PROPERTY
RESTRICTIONS"), except for (1) Urban Property Restrictions imposed or
promulgated by Law with respect to real property, including zoning
regulations, (2) other Urban Property Restrictions, if any, (3) leases
on the Rent Roll, reciprocal easement agreements 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(p)(i)(A)(1) of the Urban Disclosure Letter) and
(4) real estate Taxes and special assessments; (C) except as listed in
Section 4.1(p)(i)(C) of the Urban Disclosure Letter or as would not
reasonably be expected to have an Urban Material Adverse Effect, valid
policies of title insurance have been issued insuring Urban's or an
Urban Subsidiary's or a predecessor in interest's fee simple title or
leasehold estate to the Urban Properties except as noted therein, and,
to the Knowledge of Urban, such policies are, at the date of this
Agreement, in full force and effect and no claim has been made against
any such policy; (D) except as listed in Section 4.1(p)(i)(D) of the
Urban Disclosure Letter or as would not reasonably be expected to have
an Urban Material Adverse Effect, to the Knowledge of Urban, there is
no certificate, permit or license from any Governmental Entity having
jurisdiction over any of the Urban 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 Urban
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 Urban Properties (collectively, the "PROPERTY
AGREEMENTS") that has not been obtained and is not in full force and
effect, or of any pending threat of modification or cancellation of any
of same; (E) except as listed in Section 4.1(p)(i)(E) of the Urban
Disclosure Letter or as would not reasonably be expected to have an
Urban Material Adverse Effect, neither Urban nor an Urban Subsidiary
has received written notice of any violation of any federal, state or
municipal Law, ordinance, order, regulation or requirement affecting
any portion of any of the Urban Properties issued by any Governmental
Entity that has not otherwise been resolved; (F) except as listed in
Section 4.1(p)(i)(F) of the Urban Disclosure Letter or as would not
reasonably be expected to have an Urban Material Adverse Effect,
neither Urban nor an Urban Subsidiary has received written notice to
the effect that there are any and there are no (1) condemnation or
rezoning or proceedings that are pending or, to the Knowledge of Urban,
threatened with respect to any material portion of any of the Urban
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 Urban Properties or by the continued
-34-
maintenance, operation or use of the parking areas; (G) except as
listed in Section 4.1(p)(i)(G) of the Urban Disclosure Letter or as
would not reasonably be expected to have an Urban Material Adverse
Effect, neither Urban nor any Urban Subsidiary has received written
notice that it is currently in default or violation of any Urban
Property Restrictions; and (H) except as listed in Section
4.1(p)(i)(H) of the Urban Disclosure Letter or as would not
reasonably be expected to have an Urban Material Adverse Effect,
neither Urban nor any Urban Subsidiary has received written notice
that it is currently in default of any material Property Agreements.
(ii) Except as listed in Section 4.1(p)(ii) of the
Urban Disclosure Letter or, individually or in the aggregate, as would
not reasonably be expected to have an Urban Material Adverse Effect,
each Urban Property complies with the Urban Property Restrictions.
(iii) Except as listed in Section 4.1(p)(iii) of the
Urban Disclosure Letter or, individually or in the aggregate, as would
not reasonably be expected to have an Urban Material Adverse Effect,
all properties currently under development or construction by Urban or
the Urban Subsidiaries and all properties currently proposed for
acquisition, development or commencement of construction prior to the
Effective Time by Urban and the Urban Subsidiaries are listed as such
in Section 4.1(p)(iii) of the Urban Disclosure Letter. Except as,
individually or in the aggregate, would not reasonably be expected to
have an Urban Material Adverse Effect, all executory agreements entered
into by Urban or any of the Urban Subsidiaries which would require
payments by Urban or any Urban Subsidiary in excess of $1,000,000
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(w)(i) of the Urban Disclosure Letter.
(iv) The rent roll for each of the Urban Properties
(the "RENT ROLL") as of a recent date has been provided or made
available to Hexalon. Except as disclosed in Section 4.1(p)(iv) of the
Urban Disclosure Letter and for discrepancies that, either individually
or in the aggregate, would not reasonably be expected to have an Urban
Material Adverse Effect, the information set forth in the Rent Roll is
true, correct and complete as of the date thereof. Except as disclosed
in Section 4.1(p)(iv) of the Urban Disclosure Letter or as set forth in
a delinquency report made available to Hexalon, neither Urban nor an
Urban Subsidiary, on the one hand, nor, to the Knowledge of Urban, any
other party, on the other hand, is in material monetary default under
any lease which, individually or in the aggregate, would reasonably be
expected to result in an Urban Material Adverse Effect.
(v) Section 4.1(p)(v) of the Urban Disclosure Letter
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.
(vi) Except as would not, individually or in the
aggregate, be reasonably expected to have an Urban Material Adverse
Effect, no tenants have been
-35-
granted options to purchase or rights of first refusal under their
applicable leases which would require consent or be triggered by the
Merger.
(vii) Section 4.1(p)(vii) of the Urban Disclosure
Letter contains a list of any unfunded tenant improvements due from
Urban or any Urban Subsidiary in excess of $250,000 in any one
instance.
(viii) Except as set forth in Section 4.1(p)(viii) of
the Urban Disclosure Letter, there are no written agreements which
restrict Urban or any Urban Subsidiary, including the OP, from
transferring any of the Urban Properties.
(ix) Except as set forth on Section 4.1(p)(i)(A)(1)
of the Urban Disclosure Letter, Urban and each of the Urban
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 Urban as of December 31, 1999, 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 Urban as of December 31, 1999, 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 Urban and the
Urban Subsidiaries and are not, in the aggregate, material in relation
to the assets of Urban 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 reasonably be expected to cause an Urban Material Adverse
Effect.
(q) INSURANCE. Section 4.1(q) of the Urban Disclosure Letter
sets forth an insurance schedule of Urban. Urban and each of the Urban
Subsidiaries maintains insurance with financially responsible insurers in such
amounts and covering such risks as are in accordance with normal industry
practice for companies engaged in businesses similar to those of Urban and each
of the Urban Subsidiaries (taking into account the cost and availability of such
insurance). Except as set forth in this SECTION 4.1(q), neither Urban nor any of
the Urban Subsidiaries has received any written notice of cancellation or
termination with respect to any existing material insurance policy of Urban or
any of the Urban Subsidiaries.
(r) OPINION OF FINANCIAL ADVISOR. The Urban Special Committee
has received the written opinion of the Urban Financial Advisor to the effect
that, based on, and subject to the various assumptions and qualifications set
forth in such opinion, as of the date of such opinion, the consideration to be
received by holders of shares of Public Common Stock and Urban Preferred Stock,
in the aggregate, pursuant to this Agreement is fair from a financial point of
view to such holders (other than Hexalon and its affiliates). A copy of the
written opinion of the Urban Financial Advisor has been delivered to Hexalon.
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(s) VOTE REQUIRED.
(i) The affirmative vote of the holders of shares of
Urban Common Stock casting at least two-thirds of the votes entitled to
be cast (the "URBAN STOCKHOLDER APPROVAL") is the only vote of the
holders of any class or series of the Urban Stock required to approve
this Agreement, the Merger, the Amendment and the other transactions
contemplated by the Transaction Documents and is only necessary in the
event that the shares of Urban Common Stock purchased pursuant to the
Offer represent less than 90.0% of the votes entitled to be cast on the
Merger.
(ii) The affirmative vote of the holders of a
majority of the LP Units are the only votes of any unitholders of the
Urban LP (including, without limitation, any holders of the Urban
Preferred Units) required to approve this Agreement, the Merger, the
Amendment and the other transactions contemplated by this Agreement and
the Amendment.
(t) BENEFICIAL OWNERSHIP OF URBAN COMMON STOCK. Neither Urban
nor the Urban Subsidiaries "beneficially own" (as defined in Rule 13d-3
promulgated under the Exchange Act) any of the outstanding Urban Stock.
(u) BROKERS. Except for the fees and expenses payable to the
Urban Financial Advisor (which fees and the engagement letter with respect to
which Person have been disclosed to Hexalon), 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 the Transaction
Documents based upon arrangements made by or on behalf of Urban.
(v) INVESTMENT COMPANY ACT OF 1940. Neither Urban nor any of
the Urban Subsidiaries is, or at the Effective Time will be, required to be
registered as an investment company under the Investment Company Act of 1940, as
amended.
(w) CONTRACTS.
(i) Section 4.1(w)(i) of the Urban Disclosure Letter
lists all Material Contracts of Urban. Except as set forth in Section
4.1(w)(i) of the Urban Disclosure Letter or in the Urban SEC Documents,
each Material Contract is valid, binding and enforceable and in full
force and effect, except where such failure to be so valid, binding and
enforceable and in full force and effect would not, individually or in
the aggregate, reasonably be expected to have an Urban Material Adverse
Effect, and there are no defaults or violations thereunder, 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,
individually or in the aggregate, reasonably be expected to have an
Urban Material Adverse Effect. For purposes of this Agreement,
"MATERIAL CONTRACTS" shall mean (i) any loan agreement, indenture,
note, bond, debenture, mortgage 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 $1,000,000, (ii) each material commitment, contractual
obligation, capital expenditure or transaction entered into by
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Urban or any Urban Subsidiary which may result in total payments by
or liability of Urban or any Urban Subsidiary in excess of
$1,000,000, other than leases reflected on Section 4.1(p)(vii) of
the Urban Disclosure Letter and (iii) any other agreements filed or
required to be filed as exhibits to the Urban SEC Documents pursuant
to Item 601(b)(10) of Regulation S-K of Title 17, Part 229 of the
Code of Federal Regulations; PROVIDED, HOWEVER, any contract,
agreement or other arrangement under clause (ii) or (iii) above
that, by its terms, is terminable within 30 days (without penalty)
of the date of this Agreement shall not be deemed to be a Material
Contract.
(ii) All mortgages on any of the assets of Urban or
the Urban LP are listed in Section 4.1(w)(ii) of the Urban Disclosure
Letter. The Offer, the Merger, the Amendment and the other transactions
contemplated by the Transaction Documents will not trigger any
due-on-sale provision on any of such mortgages, except as set forth in
Section 4.1(w)(ii) of the Urban Disclosure Letter and will not require
the consent of any mortgage lender, except as set forth in Section
4.1(w)(ii) of the Urban Disclosure Letter.
(iii) Except as set forth in Section 4.1(w)(iii) of
the Urban Disclosure Letter, there is no confidentiality agreement,
non-competition agreement or other contract or agreement that contains
covenants that restrict Urban's ability to conduct its business in any
location.
(iv) Except as set forth in Section 4.1(w)(iv) of the
Urban Disclosure Letter, there are no indemnification agreements
entered into by and between Urban and any director or officer of Urban
or any of the Urban Subsidiaries.
(x) RULE 16B-3. Urban has taken all necessary action,
including, without limitation, causing the Urban Board of Directors to adopt
resolutions authorizing and approving the Merger, the Amendment, this Agreement
and the other transactions contemplated by the Transaction Documents to exempt
such transactions under Rule 16b-3 of the Exchange Act from the provisions of
Section 16(b) of the Exchange Act.
(y) INAPPLICABILITY OF TAKEOVER STATUTES, URBAN RIGHTS
AGREEMENT AND CERTAIN CHARTER AND BYLAW PROVISIONS. (i) Urban has taken all
appropriate and necessary actions to exempt the Offer, the Merger, the
Amendment, this Agreement and the other transactions contemplated hereby from
the restrictions of Subtitles 6 and 7 of Title 3 of the MGCL (the "TAKEOVER
STATUTE"). Urban and the Urban Board of Directors have taken all appropriate and
necessary actions to (A) amend the Urban Rights Agreement to (1) exempt Rodamco,
Hexalon, Head Acquisition LP and Head Acquisition Corp from the definition of an
Acquiring Person (as defined in the Urban Rights Agreement) thereunder due
solely to this Agreement and the transactions contemplated hereby (including the
Merger and the Offer) and (2) provide that no Distribution Date (as defined in
the Urban Rights Agreement) shall be deemed to have occurred as a result of this
Agreement or the transactions contemplated hereby (including the Merger and the
Offer), (B) render any anti-takeover or other provision contained in the Urban
Charter or Urban By-laws inapplicable in the Offer, the Merger, the Amendment,
this Agreement and the other transactions contemplated hereby and (C) render any
and all limitations on ownership of (1) Urban Stock as set forth in the Urban
Charter and (2) the limited partner interests in the Urban LP as set forth in
the Urban LP Agreement, including, without limitation, the Ownership
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Limit inapplicable to the Offer, the Merger, the Amendment and the other
transactions contemplated by this Agreement.
(z) RELATED PARTY TRANSACTIONS. Except as disclosed in the
Urban SEC Documents or as set forth in Section 4.1(z) of the Urban Disclosure
Letter, there are no material arrangements, agreements or contracts entered into
by Urban or any of the Urban Subsidiaries, on the one hand, and any Person who
is an officer, director or affiliate of Urban or any Urban Subsidiary, any
relative of the foregoing or an entity of which any of the foregoing is an
affiliate, on the other hand. Copies of all such documents have been made
available to Hexalon.
(aa) DISCLOSURE DOCUMENTS.
(i) Each document required to be filed by Urban with
the SEC in connection with the Offer, the Merger, the Amendment and the
other transactions contemplated by this Agreement (the "URBAN
DISCLOSURE DOCUMENTS"), including, without limitation, the Schedule
14D-9, the Proxy Statement, if any, to be filed with the SEC in
connection with the Merger and any amendments or supplements thereto,
will comply in all material respects with the provisions of applicable
federal securities laws.
(ii) At the time the Schedule 14D-9 and the Proxy
Statement, if any, including any amendment or supplement thereto filed
with the SEC, is first mailed, published or given to the Urban
stockholders and at the time of the Urban Stockholder Meeting, each of
the Schedule 14D-9 and the Proxy Statement as supplemented or amended,
if applicable, will not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which
they were made, not misleading. At the time of the filing of any Urban
Disclosure Document (other than the Proxy Statement) filed after the
date of this Agreement, such Urban Disclosure Document will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
The representations and warranties contained in SECTION 4.1(aa)(i) and
this SECTION 4.1(aa)(ii) will not apply to information furnished in
writing to Urban by Hexalon specifically for inclusion in an Urban
Disclosure Document.
(iii) Neither the information supplied or to be
supplied in writing by or on behalf of Urban or any Urban Subsidiary
for inclusion in, nor the information incorporated by reference from
documents filed by Urban or any Urban Subsidiary with the SEC into, the
Schedule TO and the Offer Documents will, on the date the Schedule TO
and the Offer Documents are filed with the SEC or on the date they are
first published, sent or given to Urban stockholders, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading.
(iv) Urban shall promptly correct the Schedule 14D-9
if and to the extent that it shall have become false or misleading in
any material respect and Urban shall take all steps necessary to cause
such document as so corrected to be filed with the
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SEC and disseminated to Urban's stockholders to the extent required
by applicable federal securities laws.
Section 4.2. REPRESENTATIONS AND WARRANTIES OF RODAMCO, HEXALON,
HEAD ACQUISITION LP AND HEAD ACQUISITION CORP. Rodamco, Hexalon,
Head Acquisition LP and Head Acquisition Corp represent and warrant
to Urban and the Urban LP as follows:
(a) ORGANIZATION, STANDING AND POWER OF RODAMCO, HEXALON, HEAD
ACQUISITION LP AND HEAD ACQUISITION CORP. Rodamco is a company duly formed and
validly existing under the Law of the Netherlands and is in good standing in
such jurisdiction. Hexalon is a corporation duly formed and validly existing
under the Delaware Law and is in good standing with the Delaware Office. Head
Acquisition LP is a limited partnership duly formed and validly existing under
Delaware Law and is in good standing with the Delaware Office. Head Acquisition
Corp is a corporation duly formed and validly existing under the Delaware Law
and is in good standing with the Delaware Office. Rodamco and Hexalon have made
available to Urban complete and correct copies of its charter and by-laws and
complete and correct copies of Head Acquisition LP's Limited Partnership
Agreement and Head Acquisition Corp's charter and by-laws, each of which is in
full force and effect as of the date hereof.
(b) AUTHORITY; NO VIOLATIONS; CONSENTS AND APPROVALS.
(i) Rodamco, Hexalon, Head Acquisition LP and Head
Acquisition Corp have all requisite power and authority to enter into
the Transaction Documents to which they are parties and to consummate
the transactions contemplated hereby or thereby. The execution and
delivery of the Transaction Documents and the consummation of the
transactions contemplated hereby or thereby have been duly authorized
by all necessary action on the part of Rodamco, Hexalon, Head
Acquisition LP and Head Acquisition Corp.
(ii) The Transaction Documents to which Rodamco,
Hexalon, Head Acquisition LP and Head Acquisition Corp are parties have
been duly executed and delivered by each of Rodamco, Hexalon, Head
Acquisition LP and Head Acquisition Corp, as the case may be, and,
constitute valid and binding obligations of each of Rodamco, Hexalon,
Head Acquisition LP and Head Acquisition Corp, as the case may be,
enforceable in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other Laws of general applicability
relating to or affecting creditors' rights and by 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 the Transaction
Documents by Rodamco, Hexalon, Head Acquisition LP or Head Acquisition
Corp 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
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any Lien upon any of the properties or assets of such parties under,
require the consent or approval of any third party or otherwise
result in a material detriment to such parties under, require the
consent or approval of any third party or otherwise result in a
material detriment to such parties under, any provision of (A) the
charter or by-laws of Rodamco or Hexalon, the partnership agreement
of Head Acquisition LP or the charter or by-laws of Head Acquisition
Corp, (B) any Material Contract applicable to Rodamco, Hexalon, Head
Acquisition LP or Head Acquisition Corp, their respective properties
or assets or any guarantee by Rodamco, Hexalon, Head Acquisition LP
or Head Acquisition Corp, (C) any joint venture or other ownership
arrangement 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 judgment,
order, decree, statute, Law, ordinance, rule or regulation
applicable to Rodamco, Hexalon, Head Acquisition LP or Head
Acquisition Corp or any of their respective properties or assets,
other than, in the case of clauses (B), (C) and (D), any such
conflicts, violations, defaults, rights, Liens or detriments that,
individually or in the aggregate, would not reasonably be expected
to materially impair or delay the ability of Rodamco, Hexalon, Head
Acquisition LP or Head Acquisition Corp to perform its obligations
hereunder or under any of the other Transaction Documents or prevent
the consummation of any of the transactions contemplated hereby or
thereby.
(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 Rodamco, Hexalon,
Head Acquisition LP or Head Acquisition Corp in connection with the
execution and delivery by Rodamco, Hexalon, Head Acquisition LP or Head
Acquisition Corp of the Transaction Documents to which Rodamco,
Hexalon, Head Acquisition LP or Head Acquisition Corp is a party or the
consummation by Rodamco, Hexalon, Head Acquisition LP or Head
Acquisition Corp of the transactions contemplated hereby or thereby,
except for: (A) the filing with the SEC of such reports under Section
13(a) of the Exchange Act and such other compliance with the Securities
Act and the Exchange Act and the rules and regulations thereunder as
may be required in connection with this Agreement and the transactions
contemplated hereby; (B) the filing of the Articles of Merger and the
Certificate of Merger with, and acceptance for recording of the
Articles of Merger and the Certificate of Merger by, the Maryland
Department and the Delaware Office; (C) such filings and approvals as
may be required by any applicable state securities or "blue sky" Laws,
Takeover Statute or Environmental Laws; (D) filings under the HSR Act,
if applicable; and (E) any such consent, approval, order,
authorization, registration, declaration, filing or permit that the
failure to obtain or make would not reasonably be expected to
materially impair or delay the ability of Rodamco, Hexalon, Head
Acquisition LP or Head Acquisition Corp to perform its obligations
hereunder or under any of the other Transaction Documents or prevent
the consummation of any of the transactions contemplated hereby or
thereby.
(c) FINANCING COMMITMENT LETTER. Head Acquisition LP has
provided to Urban a copy of the financing commitment letter, attached as EXHIBIT
F, including any exhibits, schedules or amendments thereto (the "FINANCING
LETTER"). The Financing Letter is effective and has not been withdrawn or
modified and all commitment fees have been paid thereunder. To the Knowledge of
Rodamco and Hexalon, the conditions set forth in the Financing Letter will be
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able to be satisfied prior to the Effective Time. Head Acquisition LP or Head
Acquisition Corp will have available, and Rodamco and Hexalon will cause Head
Acquisition LP or Head Acquisition Corp to have available, at the time of
acceptance for payment and payment for the Urban Stock pursuant to the Offer all
funds necessary to pay for all shares of Urban Stock that Head Acquisition LP or
Head Acquisition Corp becomes obligated to accept for payment and pay for
pursuant to the Offer and to consummate the Offer, the Merger, the Amendment and
the other transactions contemplated by the Transaction Documents.
(d) DOCUMENTS RELATING TO OFFER. The Schedule TO, the Offer
and the Offer Documents shall comply in all material respects with the
applicable requirements of the federal securities laws, except that no
representation is made by Rodamco, Hexalon, Head Acquisition LP or Head
Acquisition Corp with respect to information supplied in writing by Urban or the
Urban LP specifically for use in the Offer Documents. At the time of the filing
of any Urban Disclosure Document, none of the information that may be supplied
in writing by Rodamco, Hexalon, Head Acquisition LP or Head Acquisition Corp or
any of their Affiliates specifically for use in such document will contain any
untrue statement of a 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. At the time the Schedule TO is first
mailed, published or given to the Urban stockholders, it will not contain any
untrue statement of a 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.
(e) NO OTHER BUSINESS. Head Acquisition LP and Head
Acquisition Corp were formed solely for the purpose of engaging in the
transactions contemplated hereby, have engaged in no other business activities
and have conducted their operations only as contemplated thereby.
(f) BROKERS. 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 the Transaction Documents based
upon arrangements made by or on behalf of Rodamco, Hexalon, Head Acquisition LP
or Head Acquisition Corp, for which fee or commission Urban or any Urban
Subsidiary may be liable.
(g) LITIGATION. There is no litigation, arbitration, claim,
investigation, suit, action or proceeding pending or, to the Knowledge of
Rodamco or Hexalon, threatened against or affecting Rodamco, Hexalon, Head
Acquisition LP or Head Acquisition Corp, nor is there any judgment, award,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against Rodamco, Hexalon, Head Acquisition LP or Head Acquisition
Corp which would reasonably be expected to, individually or in the aggregate,
(A) cause any of the transactions contemplated by the Transaction Documents to
be rescinded following their consummation, including, without limitation, the
Offer, the Merger or the Amendment or (B) materially impair or delay the ability
of Rodamco, Hexalon, Head Acquisition LP or Head Acquisition Corp to perform its
obligations hereunder or under any of the other Transaction Documents or prevent
the consummation of any of the transactions contemplated hereby or thereby.
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(h) REIT STATUS. The ownership of any one or more shares of
stock, options or warrants of Urban, or units or other equity interests, options
or warrants of Urban LP, by Rodamco, Hexalon, Head Acquisition LP or Head
Acquisition Corp will not at any time adversely affect Urban's status as a REIT
under the Code or cause Urban to be treated as a "pension held REIT" under
Section 856(h) of the Code.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1. CONDUCT OF BUSINESS BY URBAN AND THE URBAN LP.
(a) During the period from the date of this Agreement to the
earlier of the termination of this Agreement or the Effective Time, Urban shall,
and shall cause each of the Urban Subsidiaries (including the Urban LP) to,
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, use its commercially reasonable efforts to preserve intact
its current business organization, goodwill, ongoing businesses and Urban's
status as a REIT within the meaning of the Code. Urban shall confer on a regular
and frequent basis with Hexalon, report on operational matters and promptly
advise Hexalon orally and in writing of any Urban Material Adverse Effect or any
matter which could reasonably be expected to have an Urban Material Adverse
Effect (including, without limitation, any litigation having potential liability
to Urban or any of the Urban Subsidiaries in excess of $250,000 or any
complaint, investigation or hearing by a Governmental Entity involving Urban or
any of the Urban Subsidiaries). Urban shall promptly provide to Hexalon (and its
counsel) copies of all filings made by Urban with any Governmental Entity in
connection with this Agreement and the transactions contemplated hereby.
(b) Without limiting the generality of the foregoing, during
the period from the date of this Agreement to the earlier of the termination of
this Agreement or the Effective Time, except as set forth in SECTION 6.3(c), as
otherwise contemplated by this Agreement or the Stock Purchase Agreement or to
the extent consented to by Hexalon, Urban shall not and shall not authorize or
commit or agree to, and shall cause the Urban Subsidiaries (including the Urban
LP) not to (and not to authorize or commit or agree to):
(i) (A) declare, set aside or pay any dividends on,
or make any other distributions in respect of, any of Urban's stock or
the partnership interests, stock or other equity interests in any Urban
Subsidiary that is not directly or indirectly wholly-owned by Urban,
except for dividends or distributions on the Urban Preferred Stock and
Urban Preferred Units, the record date and payment date for which for
the quarter ended September 30, 2000 shall in no event be earlier than
December 27, 2000, and PROVIDED, that Urban may make dividend payments
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, the
record date for which will be no earlier than December 29, 2000 and the
payment date for which shall be no earlier than January 26, 2001, (B)
split, combine or reclassify any stock, partnership interests or other
equity interests or issue or authorize the issuance of
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any other securities in respect of, in lieu of or in substitution
for shares of such stock, partnership interests or other equity
interests or (C) purchase, redeem (except for the redemption of LP
Units for shares of Public Common Stock in accordance with their
terms) or otherwise acquire any shares of Urban's stock or the
partnership interests, stock or other equity interests in any Urban
Subsidiary or any options, warrants or rights to acquire, or
security convertible into, shares of Urban's stock or the
partnership interests, stock or other equity interests in any Urban
Subsidiary, except with respect to any of the foregoing (1) in
connection with the use of Urban Common Stock or LP Units to pay the
exercise price or Tax withholding obligation upon the exercise of an
Urban Option as presently permitted under any Urban Option Plan; or
(2) in connection with the conversion, redemption or exchange of
Convertible Preferred Units, Series A Preferred Stock or Series B
Preferred Stock;
(ii) issue, deliver, sell or grant any option or
other right in respect of any shares of stock, any other voting or
redeemable securities (including LP Units or other partnership
interests) of Urban or any Urban 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) to Urban or an Urban Subsidiary, (B) as permitted or
required under the Urban LP Agreement as presently in effect, and (C)
in connection with the exercise of outstanding Urban Options under the
Urban Option Plan or the exchange of units of the Urban LP for shares
of Urban Stock or other units of partnership interest of the Urban LP,
pursuant to the terms of such units;
(iii) amend the Urban Charter or the Urban By-laws,
the Urban LP Agreement or any other comparable charter or
organizational documents of any Urban Subsidiary, except as otherwise
contemplated by this Agreement;
(iv) merge, consolidate or enter into any other
business combination transaction with any Person, except as provided in
SECTION 6.4;
(v) (A) enter into any new commitments obligating
Urban or any Urban Subsidiary to make capital expenditures in excess of
$1,000,000 in the aggregate for each successive period of 45 days
following the date hereof, not including tenant allowances under
existing leases and the commitments set forth in Section 5.1(b)(v) of
the Urban Disclosure Letter, (B) acquire, enter into any option to
acquire, or exercise an option or other right or election or enter into
any other commitment or contractual obligation (each, a "COMMITMENT")
for the acquisition of any real property or other transaction (other
than any Commitment referred to in Section 5.1(b)(v) of the Urban
Disclosure Letter) involving nonrefundable deposits in excess of
$250,000 and, in any event, not in excess of $2,000,000 in the
aggregate; PROVIDED, FURTHER, that on a weekly basis, Urban shall
provide Hexalon with notice of any new Commitments entered into
irrespective of the amount of any such deposit, (C) commence
construction of, or enter into any Commitment to develop or construct,
other real estate projects involving in excess of $250,000 (other than
any Commitment referred to in Section 5.1(b)(v) of the Urban Disclosure
Letter), (D) incur additional indebtedness (secured or unsecured)
except under its revolving line(s) of credit and Commitments for
indebtedness described
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in Section 5.1(b)(v) of the Urban Disclosure Letter; or (E) enter
into any lease in excess of 10,000 square feet and incur any
expenditures related thereto.
(vi) sell, mortgage, subject to Lien or otherwise
dispose of any of the Urban Properties, except those that are disclosed
in Section 5.1(b)(vi) of the Urban Disclosure Letter;
(vii) sell, lease, mortgage, subject to Lien or
otherwise dispose of any of its personal or intangible property, except
in transactions made in the ordinary course of business and which are
not material, individually or in the aggregate;
(viii) except as set forth in Section 5.1(b)(viii) of
the Urban Disclosure Letter, 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
prepay, refinance or amend any existing indebtedness or make any
investments in any other Person in excess of $100,000;
(ix) make or rescind any material election relating
to Taxes (unless Urban reasonably determines, after prior consultation
with Hexalon, that such action is (a) required by Law; (b) necessary or
appropriate to preserve Urban's status as a REIT or the partnership
status of the Urban LP or any other Urban Subsidiary which files Tax
Returns as a partnership for federal tax purposes; or (c) commercially
reasonable in the context of Urban's business and relates to a change
in Law in 1999 or thereafter); PROVIDED, that, subject to SECTION
5.1(b)(x), nothing in this Agreement shall preclude Urban from
designating dividends paid by it as "capital gain dividends" within the
meaning of Section 857 of the Code (with the prior written consent of
Hexalon, which will not be unreasonably withheld) or electing to treat
any entity as a "taxable REIT subsidiary" (within the meaning of
Section 856(i) of the Code);
(x) elect to treat any portion of the liquidating
distribution made in connection with the portions of the transactions
contemplated hereby constituting the Partnership Merger or the
Alternative Partnership Merger, as the case may be, as a dividend
received by the distributee or elect to pay Tax on any capital gain
realized after January 1, 2000;
(xi) (A) change any of its methods, principles or
practices of accounting in effect other than as required by GAAP,
PROVIDED, that with the consent of Hexalon, which shall not be
unreasonably withheld, Urban may implement a change in method of
accounting for federal income tax purposes with respect to classifying
certain property as personal property rather than real property, or (B)
settle or compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to Taxes,
except in the case of settlements or compromises relating to Taxes on
real property or sales Taxes in an amount not to exceed, individually
or in the aggregate, $250,000, or change any of its methods of
reporting income or deductions for federal income tax purposes from
those employed in the preparation of its federal income Tax
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Return for the taxable year ended December 31, 1999, except as may
be required by the SEC, applicable Law or GAAP;
(xii) except as set forth in Section 5.1(b)(xii) of
the Urban Disclosure Letter, adopt any new employee benefit plan,
incentive plan, severance plan, bonus plan, stock option or similar
plan, grant new stock appreciation rights or amend any existing plan or
rights, or enter into or amend any employment agreement or similar
agreement or arrangement or, except in the ordinary course consistent
with past practice, 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;
(xiii) settle or compromise any material litigation,
including, without limitation, any material stockholder 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;
(xiv) except as set forth in Section 5.1(b)(xiv) of
the Urban Disclosure Letter, enter into or amend or otherwise modify
any agreement or arrangement with persons that are Affiliates of Urban
(other than agreements with Urban Subsidiaries) or, as of the date of
this Agreement, are employees, officers or directors of Urban or any
Urban Subsidiary without the prior written consent of Hexalon and the
approval of a majority of the "independent" members of the Urban Board
of Directors;
(xv) except as otherwise permitted or contemplated by
this Agreement, authorize, recommend, propose or announce an intention
to adopt a plan of complete or partial liquidation or dissolution of
Urban or any of the Urban Subsidiaries;
(xvi) 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;
(xvii) materially amend or terminate, or waive
compliance with the terms of or breaches under, any Material Contract
or enter into a new contract, agreement or arrangement that, if entered
into prior to the date of this Agreement, would have been required to
be listed in Section 4.1(w)(i) of the Urban Disclosure Letter;
(xviii) 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
Urban or any Urban Subsidiary;
(xix) take any action that would, or that would
reasonably be expected to, result in (A) any of the representations and
warranties of Urban set forth in this Agreement becoming untrue or (B)
any of the Tender Offer Conditions or SECTION 7.2 not being satisfied;
and
(c) agree in writing or otherwise to take any action
inconsistent with any of the foregoing.
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ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1. ACCESS TO INFORMATION; CONFIDENTIALITY. Urban shall, and
shall cause each of the Urban Subsidiaries to, afford to Hexalon and the Hexalon
Subsidiaries and their officers, employees, accountants, counsel, financial
advisors and other representatives, reasonable access during normal business
hours and upon reasonable advance notice during the period prior to the
Effective Time to all its properties (but not for the purpose of any physical
testing), books, contracts, commitments, personnel and records and, during such
period, Urban shall, and shall cause each of the Urban Subsidiaries to, furnish
reasonably promptly to Hexalon (a) a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities Laws and (b) all other information
concerning its business, properties and personnel as Hexalon and the Hexalon
Subsidiaries may reasonably request. Each of Hexalon and the Hexalon
Subsidiaries will hold, and will cause its respective officers, employees,
accountants, counsel, financial advisors and other representatives and
Affiliates to hold, any nonpublic information in confidence to the extent
required by, and in accordance with, and will comply with the provisions of the
letter agreement between Urban and Rodamco dated as of July 6, 2000, as amended
to date (as so amended, the "CONFIDENTIALITY AGREEMENT").
Section 6.2. REASONABLE EFFORTS; NOTIFICATION.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of Rodamco, Hexalon, Head Acquisition LP, Head Acquisition
Corp, Urban and the Urban LP 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 applicable to such party pursuant
to this Agreement and to consummate and make effective, in the most expeditious
manner practicable, the Offer, the Merger, the Amendment and the other
transactions contemplated by the Transaction Documents, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings and the taking of all reasonable steps as may be
necessary to obtain an approval, waiver or exemption from any Governmental
Entity; (ii) the obtaining of all necessary consents, approvals, waivers or
exemptions from non-governmental third parties; 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. In addition, each of Rodamco, Hexalon, Head Acquisition LP, Head
Acquisition Corp, Urban and the Urban LP agrees to use its commercially
reasonable efforts to defend any lawsuits or other legal proceedings, whether
judicial or administrative, challenging the Merger, this Agreement or the
transactions contemplated by the Transaction Documents, including seeking to
have any stay, temporary restraining order, injunction, or restraining order or
other order adversely affecting the ability of the parties to consummate the
transactions contemplated by the Transaction Documents entered by any court or
other Governmental Entity vacated or reversed. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purpose of this Agreement, the proper officers, directors or partners, of
Rodamco, Hexalon, Head Acquisition LP, Head Acquisition Corp, Urban and the
Urban LP shall take all such necessary action. From
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the date of this Agreement through the Effective Time, Urban shall timely
file, or cause to be filed, with the SEC all Urban SEC Documents required to
be so filed.
(b) Urban shall give prompt notice to Hexalon and Rodamco,
Hexalon, Head Acquisition LP and Head Acquisition Corp shall give prompt notice
to Urban, if (i) any representation or warranty made by it contained in this
Agreement that is qualified as to materiality becomes untrue or inaccurate in
any respect or any such representation or warranty that is not so qualified
becomes untrue or inaccurate in any material respect or (ii) it fails to comply
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement; PROVIDED, HOWEVER,
that (A) such notification shall only be required to the extent that the matter
in question would prevent satisfaction of a condition specified in ANNEX I and
(B) no such notification shall affect the representations, warranties, covenants
or agreements of the parties or the conditions to the obligations of the parties
under this Agreement; provided further, however, that such notification required
pursuant to clause (i) above shall be required only as soon as practicable after
Urban becomes aware of such untruth or inaccuracy.
Section 6.3. TAX TREATMENT.
(a) Rodamco, Hexalon, Head Acquisition LP, Head Acquisition
Corp and Urban shall cause the portions of the transactions contemplated hereby
consisting of the Partnership Merger or the Alternative Partnership Merger, as
the case may be, to be treated, for federal income tax purposes, in accordance
with the treatment contemplated by SECTION 3.2(c) including, without limitation,
filing the final Tax Returns of Urban and the Tax Returns of each Urban
Subsidiary (which such Tax Returns shall be filed, or caused to be filed, by
Head Acquisition LP) for the period ending on the Effective Time in accordance
with such treatment and filing an IRS Form 966 for Urban in accordance with
Treasury Regulation Section 1.6043-1.
(b) Unless required by Law (as evidenced by the legal opinion
of a nationally recognized U.S. law firm reasonably acceptable to Hexalon and
Urban), neither Rodamco, Hexalon, Head Acquisition LP and Head Acquisition Corp,
on the one hand, nor Urban, on the other hand, will 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, Urban's status as a REIT under
the Code or the status of Urban LP or any Urban Subsidiary Partnership (as
defined in Annex I) as a partnership for purposes of Taxes for any period.
(c) Up to the Effective Time, Urban, each Urban Subsidiary and
any Affiliate of any of them, shall be permitted to take or omit to take any
action, or permit any status to exist, in order to maintain Urban's status as a
REIT under the Code or the status of Urban LP or any Urban Subsidiary as a
partnership for purposes of Taxes for any period.
(d) Hexalon shall prepare and file, on a timely basis (or
cause to be prepared and filed on a timely basis), all Federal and state income
Tax Returns and shall use its commercially reasonable efforts to so prepare and
file (or cause to be prepared and filed) all other Tax returns and reports
required to be filed from and after the consummation of the Offer (whether such
return or report related to a time period prior to, at or after the consummation
of
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the Offer) for Urban and the Urban Subsidiaries (i) in good faith and (ii)
with respect to any Federal income Tax Return of Urban for the time period
ending contemporaneously with the Effective Time, on a basis and in a manner
that preserves the qualification of Urban as a REIT within the meaning of
Section 856 of the Code.
Section 6.4. NO SOLICITATION OF TRANSACTIONS.
(a) Urban shall not, nor shall it permit any Urban Subsidiary
to, nor shall it authorize or permit any officer, director or employee of, or
any investment banker, attorney or other advisor or representative of, Urban or
any Urban Subsidiary to (i) solicit or initiate, encourage, or facilitate,
directly or indirectly, any inquiries relating to, or the submission of, any
proposal or offer, whether in writing or otherwise, from any person other than
Rodamco, Hexalon, Head Acquisition LP, Head Acquisition Corp or any affiliates
thereof (a "THIRD PARTY") to acquire beneficial ownership (as defined under Rule
13(d) of the Exchange Act) of all or more than 15% of the assets of Urban and
the Urban Subsidiaries, taken as a whole, or 15% or more of any class of equity
securities of Urban or the Urban LP pursuant to a merger, consolidation or other
business combination, sale of shares of stock, sale of assets, tender offer,
exchange offer or similar transaction or series of related transactions, which
is structured to permit such Third Party to acquire beneficial ownership of more
than 15% of the assets of Urban and the Urban Subsidiaries, taken as a whole, or
15% or more of any class of equity securities of Urban or the Urban LP (a
"COMPETING TRANSACTION"); (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information or data with respect to or
access to the properties of, or take any other action to knowingly facilitate
the making of any proposal that constitutes, or may reasonably be expected to
lead to, any Competing Transaction; or (iii) enter into any agreement (written
or oral) with respect to any Competing Transaction, approve or recommend or
resolve to approve or recommend any Competing Transaction or enter into any
agreement (written or oral) requiring it to abandon, terminate or fail to
consummate the Offer, the Merger, the Amendment and the other transactions
contemplated by this Agreement. Notwithstanding the foregoing sentence, prior to
the expiration of the Offer, if Urban receives a bona fide, written proposal or
offer for a Competing Transaction by a Third Party, which the Urban Special
Committee determines in good faith (after consulting the Urban Special
Committee's independent financial advisor and independent legal counsel) (A) is
on terms which are more favorable from a financial point of view to the holders
of shares of Urban Stock than the Offer, the Merger, and the other transactions
contemplated by this Agreement, (B) is not subject to any material contingency,
including any contingency relating to financing, to which neither the Urban
Special Committee determines may likely be overcome or addressed nor the other
party thereto has reasonably demonstrated in its written offer its ability to
overcome or address, including the receipt of government consents or approvals
(including any such approval required under the HSR Act), and (C) is reasonably
capable of being consummated (PROVIDED, that Urban, including the Urban Special
Committee, and any of its advisors shall be permitted to contact such Third
Party and its advisors solely for the purpose of clarifying the proposal and any
material contingencies and the capability of consummation) (a "SUPERIOR
COMPETING TRANSACTION"), then Urban may, in response to an unsolicited request
therefor and subject to compliance with SECTION 6.4(b), furnish information with
respect to Urban and the Urban Subsidiaries to, and participate in discussions
and negotiations directly or through its representatives with, such Third Party,
subject to a confidentiality agreement not materially less favorable to Urban
than the Confidentiality Agreement. Nothing contained in this Agreement
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shall prevent the Urban Board of Directors or the Urban Special Committee
from complying with Rule 14d-9 and Rule 14e-2 promulgated under the Exchange
Act.
(b) Urban shall advise Hexalon orally and in writing of (i)
any Competing Transaction or any inquiry with respect to or which could
reasonably be expected to lead to any Competing Transaction received by any
officer or director of Urban or, to the Knowledge of Urban, any financial
advisor, attorney or other advisor or representative of Urban, (ii) the material
terms of such Competing Transaction (including a copy of any written proposal)
and (iii) the identity of the person making the proposal or offer for any such
Competing Transaction or inquiry immediately following receipt by Urban or any
officer or director of Urban or, to the Knowledge of Urban, any financial
advisor, attorney or other advisor or representative of Urban of such Competing
Transaction proposal or inquiry. Urban will keep Hexalon, Head Acquisition LP
and Head Acquisition Corp fully informed of the status and details of any such
Competing Transaction proposal or inquiry in a timely manner.
Section 6.5. PUBLIC ANNOUNCEMENTS. Urban and Rodamco shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or any of the transactions
contemplated by the Transaction Documents and shall not issue any such press
release or make any such public statement without the prior consent of the other
party, which consent shall not be unreasonably withheld or delayed; PROVIDED,
HOWEVER, that a party may, without the prior consent of the other party, issue
such press release or make such public statement as may be required by Law or
the applicable rules of any stock exchange if it has used its commercially
reasonable efforts to consult with the other party and to obtain such party's
consent but has been unable to do so in a timely manner. In this regard, the
parties shall make a joint public announcement of the transactions contemplated
by the Transaction Documents no later than (i) the close of trading on the New
York Stock Exchange on the day this Agreement is signed, if such signing occurs
during regular business hours on a Business Day or (ii) the opening of trading
on the New York Stock Exchange on the Business Day following the date on which
this Agreement is signed, if such signing does not occur during a Business Day.
Section 6.6. TRANSFER AND GAINS TAXES; STOCKHOLDER DEMAND LETTERS.
Rodamco, Hexalon, Head Acquisition LP or Head Acquisition Corp shall, with
Urban's good faith, cooperation and assistance, prepare, execute and file, or
cause to be prepared, executed and filed, all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added stock transfer and stamp Taxes, any transfer,
recording, registration and other fees and any similar Taxes which become
payable in connection with the transactions contemplated by this Agreement
(together, with any related interests, penalties or additions to Tax, "TRANSFER
AND GAINS TAXES"). From and after the Effective Time, Rodamco, Hexalon, Head
Acquisition LP and Head Acquisition Corp shall cause the Urban LP to pay or
cause to be paid all Transfer and Gains Taxes. Within 30 days after the
Effective Time, Head Acquisition LP shall cause Urban to send the stockholder
demand letters required by Treasury Regulation Section 1.857-8 to the
appropriate Urban stockholders for Urban's taxable year ended on the Effective
Time. Head Acquisition LP shall, with the good faith cooperation and assistance
of Urban and the Urban Subsidiaries, make, or cause to be made, an election
under Section 754 of the Code for each Urban Subsidiary that is treated as a
partnership for federal tax purposes.
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Section 6.7. EMPLOYEE ARRANGEMENTS.
(a) URBAN SEVERANCE AGREEMENTS. On the Closing Date, Hexalon
shall pay or cause to be paid the amounts due to Urban's senior executive
officers under such senior executive officers' Urban Severance Agreements, which
amounts due are set forth in Section 4.1(1)(xv) of the Urban Disclosure Letter.
(b) BENEFIT PLANS. Upon and after the Effective Time, Head
Acquisition LP (or its successors or assigns) shall become an adopting employer
of the Urban Employee Benefit Plans under which Urban is now an adopting
employer and shall otherwise continue in effect the Urban Employee Benefit Plans
and provide benefits to the employees of Urban that are substantially similar in
all material respects, on a plan-by-plan basis, to the Urban Employee Benefit
Plans in which such employees participated prior to the Closing Date for a
period of not less than one year. With respect to any such plan which is an
"employee benefit plan" as defined in Section 3(3) of ERISA and any other
service based benefits (including vacations) in which the employees of Urban may
participate, solely for purposes of determining eligibility to participate,
vesting and entitlement to benefits but not for purposes of accrual of benefits
(except in the case of accrued vacation, sick or personal time), service with
Urban or any Urban Subsidiary shall be treated as service with Head Acquisition
LP; PROVIDED, HOWEVER, that such service shall not be recognized to the extent
that such recognition would result in a duplication of benefits under both an
Urban Employee Benefit Plan and a benefit plan of Head Acquisition LP (or is not
otherwise recognized for such purposes under the benefit plans of Head
Acquisition LP). Without limiting the foregoing, Head Acquisition LP shall not
treat any Urban employee as a "new" employee for purposes of any pre-existing
condition exclusions, waiting periods, evidence of insurability requirements or
similar provision under any health or other welfare plan, and will make
appropriate arrangements with its insurance carrier(s), to the extent
applicable, to ensure such result. After the Effective Time, Head Acquisition LP
shall in good faith work to develop equity-based incentives and benefit programs
for executive officers that are consistent with industry standards for
similarly-sized companies.
(c) EMPLOYEE LOANS. Except as set forth in Section 6.7(c) of
the Urban Disclosure Letter, prior to the Effective Time, Urban shall use its
commercially reasonable efforts to cause each officer, director or other
employee who has any outstanding loan from, or other debt obligations to, Urban
or any Urban Subsidiary, for any purpose, to repay such loan in accordance with
the terms thereof.
(d) URBAN OPTIONS AND INCENTIVE SECURITIES. Urban and each
Urban Subsidiary, including the Urban LP, shall take all actions as may be
necessary under the Urban Option Plan and the Urban Incentive Programs to effect
the cancellations described in SECTION 2.7 and shall comply with all
requirements regarding tax withholding in connection therewith. In addition to
the foregoing and subject to the terms of the Urban Option Plan and Urban
Incentive Programs and applicable Law, Urban and the Urban LP shall take all
actions necessary to cause the Urban Option Plan and the Urban Incentive
Programs to be terminated at or prior to the Effective Time, and to satisfy
Hexalon that no holder of Urban Options or Incentive Securities or other awards
under such plans or programs or participant in the Urban Option Plan or Urban
Incentive Programs, will have any right to acquire any interest in Hexalon or
any Hexalon Subsidiary, including Head Acquisition LP and Head Acquisition Corp,
as a result of the
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exercise of Urban Options, Incentive Securities or other awards or rights
pursuant to such Urban Option Plan or Urban Incentive Programs at or after
the Effective Time.
(e) URBAN DEFERRAL PLANS. Hexalon and Urban shall take all
actions as may be necessary to provide that distributions under the Urban
Incentive Programs, the Urban Shopping Centers Compensation Deferral Plan and
the Urban Shopping Centers Deferred Cash Compensation Plan will be made in
accordance with the terms of such plans and the elections of the participants
under such plans, and shall cause the Surviving Entity to maintain a deferred
compensation plan that permits the deferral of such distributions, if so elected
by a participant and permitted by applicable tax rules regulations, and also
permits additional compensation deferral elections to be made, in accordance
with applicable tax rules and regulations, during a period of at least two years
following the Closing Date. For the avoidance of doubt, notwithstanding that
deferral elections may be limited after such two-year period, the date on which
such deferred amounts are to be paid shall not be required to occur within such
two year period.
Section 6.8. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) In the event of any threatened or actual claim, action,
suit, demand, proceeding or investigation, whether civil, criminal or
administrative, including, without limitation, any such claim, action, suit,
demand, proceeding or investigation in which any person who is now, or has been
at any time prior to the date hereof, or who becomes prior to the Effective
Time, a director, officer, employee, fiduciary or agent of Urban or any Urban
Subsidiary (the "INDEMNIFIED PARTIES") is, or is threatened to be, made a party
based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he is or was a director, officer, employee,
fiduciary or agent of Urban or any Urban Subsidiary, or is or was serving at the
request of Urban or any Urban Subsidiary as a director, officer, employee,
fiduciary or agent of another corporation, partnership, joint venture, trust or
other enterprise or (ii) the negotiation, execution or performance of this
Agreement or any of the transactions contemplated hereby, whether in any case
asserted or arising before or after the Effective Time, the parties hereto agree
to cooperate and use their commercially reasonable efforts to defend against and
respond thereto. It is understood and agreed that Urban shall indemnify and hold
harmless, and after the Effective Time, Rodamco and Hexalon shall cause the
Surviving Entity to, and the Surviving Entity shall, indemnify and hold
harmless, as and to the full extent permitted by applicable Law, each
Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorneys' fees and expenses), judgments, fines
and amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, demand, proceeding or investigation, and in the event of
any such threatened or actual claim, action, suit, demand, proceeding or
investigation (whether asserted or arising before or after the Effective Time),
(A) Urban, and after the Effective Time, Rodamco and Hexalon shall cause the
Surviving Entity to, and the Surviving Entity shall, promptly pay expenses in
advance of the final disposition of any claim, suit, proceeding or investigation
to each Indemnified Party to the full extent permitted by law, subject to the
provision by such Indemnified Party of an undertaking to reimburse the amounts
so advanced in the event of a final non-appealable determination by a court of
competent jurisdiction that such Indemnified Party is not entitled to such
amounts, (B) the Indemnified Parties may retain one counsel satisfactory to them
(except in case of a conflict of interest among two or more Indemnified Parties,
in which case more than
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one counsel may be retained), and Urban, and after the Effective Time,
Rodamco and Hexalon shall cause the Surviving Entity to, and the Surviving
Entity shall, pay all reasonable fees and expenses of such counsel for the
Indemnified Parties within 30 days after statements therefor are received and
(C) Urban and the Surviving Entity will, and Rodamco and Hexalon will cause
the Surviving Entity to, use their commercially reasonable efforts to assist
in the defense of any such matter; PROVIDED, that neither Urban nor the
Surviving Entity shall be liable for any settlement effected without its
prior written consent (which consent shall not be unreasonably withheld); and
PROVIDED FURTHER, that the Surviving Entity shall have no obligation
hereunder to any Indemnified Party when and if, but only to the extent that,
a court of competent jurisdiction shall ultimately determine, and such
determination shall have become final and non-appealable, that
indemnification of such Indemnified Party in the manner contemplated hereby
is prohibited by applicable law. Any Indemnified Party wishing to claim
indemnification under this SECTION 6.8, upon learning of any such claim,
action, suit, demand, proceeding or investigation, shall notify Urban and,
after the Effective Time, the Surviving Entity, thereof; PROVIDED, that the
failure to so notify shall not affect the obligations of Urban and the
Surviving Entity except to the extent such failure to notify materially
prejudices such party.
(b) Rodamco, Hexalon, Head Acquisition LP and Head Acquisition
Corp agree that all rights to indemnification existing in favor of, and all
exculpations and limitations of the personal liability of, the directors,
officers, employees and agents of Urban and the Urban Subsidiaries provided for
in the Urban Charter or the Urban By-laws as in effect as of the date hereof
with respect to matters occurring at or prior to the Effective Time, including
the Merger, shall continue in full force and effect for a period of not less
than six years from the Effective Time; PROVIDED, HOWEVER, that all rights to
indemnification in respect of any claims (each, a "CLAIM") asserted or made
within such period shall continue until the disposition of such Claim. For a
period of six years after the Effective Time, the Surviving Entity shall, and
Rodamco and Hexalon will cause the Surviving Entity to, cause to be maintained
in effect the existing directors' and officers' liability insurance and
fiduciary insurance policies with an amount of coverage not less than 100% of
the amount of existing coverage, or policies that are no less favorable to the
Indemnified Parties, and with an amount of coverage not less than 100% of the
amount of existing coverage, than the policies which are currently maintained by
Urban, with respect to claims arising from facts or events which occurred at or
before the Effective Time, so long as such policies are available for an annual
premium which is no more than 200% of the current annual premium for the
existing policies; PROVIDED, that if such policies are not available for an
annual premium of no more than 200% of the current annual premium, then policies
in an amount and scope as great as can be obtained for an annual premium of 200%
of the current annual premium shall be obtained.
(c) This SECTION 6.8 is intended for the irrevocable benefit
of, and to grant third party rights to, the Indemnified Parties and shall be
binding on all successors and assigns of Rodamco, Hexalon, Urban and the
Surviving Entity. Each of the Indemnified Parties shall be entitled to enforce
the covenants contained in this SECTION 6.8.
(d) In the event that the Surviving Entity or any of its
successors or assigns (i) consolidates with or merges into any other person or
entity and shall not be the continuing or surviving entity of such consolidation
or merger or (ii) transfers or conveys a majority of its properties and assets
to any person or entity, then, and in each such case, proper provision shall
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be made so that the successors, assigns and transferees of the Surviving
Entity, as the case may be, assume the obligations set forth in this SECTION
6.8.
(e) To the extent permitted by law, all rights of
indemnification for the benefit of any Indemnified Party shall be mandatory
rather than permissive.
Section 6.9. INTERIM TRANSACTIONS COMMITTEE. Urban and Head Acquisition
LP shall establish an interim transactions committee (the "INTERIM TRANSACTIONS
COMMITTEE") consisting of three individuals nominated by each. The Interim
Transactions Committee shall review and jointly evaluate (but will not have the
power to approve or disapprove) acquisition, budget and capital improvement
activities of Urban and the Urban Subsidiaries between the date of this
Agreement and the Effective Time.
Section 6.10. TRANSACTIONS RELATING TO THE URBAN LP. Subject to (i) the
approval of the Merger, the Amendment and the other transactions contemplated by
the Amendment by the requisite unitholders of the Urban LP and (ii) the rights
and obligations of the parties under the Voting Agreement, concurrently with the
Effective Time, Urban and Head Acquisition LP shall cause the Amendment to be
made, as permitted by Section 14.1 of the Urban LP Agreement.
Section 6.11. ASSISTANCE. From and after the date of this Agreement, if
Hexalon requests, Urban and the Urban Subsidiaries shall cooperate, and shall
use their commercially reasonable efforts to cause Urban's attorneys,
accountants and other representatives to cooperate, in connection with any
financing efforts (including, without limitation, the refinancing or assumption
of existing indebtedness) of Hexalon, Head Acquisition LP or Head Acquisition
Corp or their Affiliates (including providing assistance in the preparation of
one or more offering circulars, private placement memoranda, registration
statements or other offering documents relating to debt and/or equity financing)
and any other filings that may be made by Hexalon, Head Acquisition LP or Head
Acquisition Corp or their Affiliates, including, if applicable, with the SEC,
all at the sole expense of Hexalon, Head Acquisition LP or Head Acquisition Corp
(or their Affiliates). From and after the acceptance for payment and payment for
shares of Urban Stock by Head Acquisition LP or Head Acquisition Corp in the
Offer, if Hexalon requests, Urban shall create new subsidiaries and effect
mergers and/or conversions of or among wholly-owned Urban Subsidiaries at the
direction of Hexalon and, immediately prior to the Effective Time, shall
transfer any assets and/or liabilities to such entities at the direction of
Hexalon, all at the expense of Hexalon; PROVIDED, HOWEVER, that Urban shall not
be required to undertake any action pursuant to this sentence if doing so would
result in Urban being unable to satisfy the conditions to the obligations of
Rodamco, Hexalon, Head Acquisition LP and/or Head Acquisition Corp to close the
Merger set forth in Article VII or if doing so would be inconsistent with the
Amendment or any other existing agreements. Urban shall cooperate with Hexalon
in obtaining surveys, title commitments and/or policies and appraisals with
respect to the Urban Properties (it being understood that such activities shall
be conducted at Hexalon's (or a Hexalon Subsidiary's) expense).
Section 6.12. ENVIRONMENTAL MATTERS. Urban and the Urban Subsidiaries
shall make available to Hexalon, Head Acquisition LP and Head Acquisition Corp
such environmental investigations, studies, tests, reviews, or other written
analysis within the possession or control of Urban or any Urban Subsidiary in
relation to any property or facility now or previously owned,
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leased or operated by Urban or any Urban Subsidiary which have previously not
been provided to Hexalon, Head Acquisition LP or Head Acquisition Corp.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligations of Urban and Head Acquisition LP or Head
Acquisition Corp to effect the Merger on the Closing Date are subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) if required by the MGCL, this Agreement and the Merger
shall have been approved by the Urban stockholders in accordance with the MGCL;
(b) no Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is then in effect (which order or other action the parties hereto shall
use their commercially reasonable efforts to vacate or lift) and which prohibits
or precludes the consummation of the Merger under applicable Law; and
(c) Head Acquisition LP or Head Acquisition Corp shall have
accepted for payment and paid for, pursuant to the terms and conditions of the
Offer, all shares of Urban Stock duly tendered pursuant to the Offer and not
withdrawn; PROVIDED, HOWEVER, that neither Head Acquisition LP nor Head
Acquisition Corp shall be entitled to rely on this condition if either of them
shall have failed to accept for payment and pay for shares of Urban Stock
pursuant to the Offer in breach of their obligations under this Agreement.
ARTICLE VIII
CONTINGENT OPTION OF HEXALON
Section 8.1. GRANT OF COMMON SHARE OPTION. Urban hereby grants to
Hexalon an irrevocable option (the "COMMON SHARE OPTION") to purchase for a
price of $48.00 per share (the "PER COMMON SHARE OPTION PRICE") in cash a number
of shares of Public Common Stock (the "OPTIONED COMMON STOCK") equal to the
Applicable Common Stock Amount. The "APPLICABLE COMMON STOCK AMOUNT" shall be
the number of shares of Public Common Stock which, when added to the number of
shares of Public Common Stock owned by the Head Parties, in the aggregate,
immediately prior to the exercise of the Common Share Option, would result in
the Head Parties, in the aggregate, owning immediately after the exercise of the
Common Share Option no more than 90.0% of the then outstanding Urban Common
Stock; PROVIDED, HOWEVER, that in no event shall the Applicable Common Stock
Amount exceed 3,520,642 shares of Public Common Stock. Hexalon, Head Acquisition
LP or Head Acquisition Corp, as the case may be, may exercise the Common Share
Option only if at the time of exercise, it (a) shall have accepted for payment
and paid for all shares of Urban Common Stock tendered and not withdrawn
pursuant to the Offer, (b) the Minimum Condition shall have been satisfied and
(c) after giving effect to such exercise, the Head Parties would own 90.0% of
the then outstanding Urban
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Common Stock. The "MINIMUM CONDITION" shall have the meaning set forth in
ANNEX I. The Common Share Option shall expire if not exercised prior to the
earlier of the Effective Time and 12:00 midnight, Chicago time, on the date
five (5) Business Days after expiration of the Offer.
Section 8.2. EXERCISE OF OPTION. Provided that the conditions to
exercise the Common Share Option set forth in SECTION 8.1 are satisfied,
Hexalon, Head Acquisition LP or Head Acquisition Corp, as the case may be, may
exercise the Common Share Option only in whole at any time prior to such
expiration of such option. In the event that Hexalon, Head Acquisition LP or
Head Acquisition Corp wishes to exercise the Common Share Option, it shall give
written notice (the date of such notice being herein called the "NOTICE DATE")
to Urban specifying the number of shares of Optioned Common Stock it will
purchase pursuant to such exercise and a place and date (not later than ten
Business Days from the Notice Date) for the closing of such purchase.
Section 8.3. PAYMENT OF PURCHASE PRICE AND DELIVERY OF CERTIFICATES FOR
OPTION SHARES. At any closing of the Common Share Option hereunder, (a) Hexalon,
Head Acquisition LP or Head Acquisition Corp will make payment to Urban of the
full purchase price for the Optioned Common Stock in funds by certified or
official bank check payable to the order of Urban or by wire transfer of
immediately available funds, in an amount equal to the product of the Per Common
Share Option Price multiplied by the number of shares of Optioned Common Stock
being purchased at such closing and (b) Urban will deliver to Hexalon, Head
Acquisition LP or Head Acquisition Corp, as the case may be, a duly executed
certificate or certificates representing the number of shares of Optioned Common
Stock so purchased, registered in the name of Hexalon, Head Acquisition LP or
Head Acquisition Corp or such party's nominee in the denomination designated by
such party in its notice of exercise.
Section 8.4. SECURITIES ACT. Hexalon, Head Acquisition LP and Head
Acquisition Corp represent that any Optioned Common Stock purchased by Hexalon,
Head Acquisition LP or Head Acquisition Corp will be acquired for investment
only and not with a view to any public distribution thereof and Hexalon, Head
Acquisition LP and Head Acquisition Corp will not offer to sell or otherwise
dispose of any shares of Optioned Common Stock so acquired by it in violation of
the registration requirements of the Securities Act.
Section 8.5. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of
any change in the number of outstanding shares of Urban Common Stock by reason
of any stock dividend, stock split, recapitalization, combination, exchange of
shares, merger, consolidation, reorganization or the like or any other change in
the corporate or capital structure of Urban that would have the effect of
diluting the rights of Hexalon, Head Acquisition LP or Head Acquisition Corp
hereunder, the number of shares of Optioned Common Stock and the Per Common
Share Option Price shall be adjusted appropriately; PROVIDED, HOWEVER, that
nothing in this SECTION 8.5 shall be construed as permitting Urban to take any
action or enter into any transaction prohibited by this Agreement.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1. TERMINATION. This Agreement may be terminated and the
Offer, the Merger and the other transactions contemplated by this Agreement
may be abandoned at any time prior to the Effective Time (notwithstanding any
approval of the Merger, the Amendment, this Agreement or any of the other
transactions contemplated by this Agreement by the Urban stockholders):
(a) by mutual written consent of Urban and Hexalon;
(b) by Urban or Hexalon if any Governmental Entity shall have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the acceptance for payment of,
or payment for, shares of Urban Stock pursuant to the Offer and such order,
decree or ruling or other action shall have become final and nonappealable;
PROVIDED, that the party seeking to terminate this Agreement pursuant to this
clause (b) shall have used all commercially reasonable efforts to remove such
order, decree, ruling, judgment or to reverse such action;
(c) by Urban, acting under the direction of the Urban Special
Committee, if (i) Head Acquisition LP and Head Acquisition Corp shall have
failed to commence the Offer within the five Business Day period specified in
SECTION 1.1(a), (ii) Head Acquisition LP or Head Acquisition Corp terminates or
withdraws the Offer without accepting for payment and promptly paying for all
shares of Urban Stock validly tendered for payment and not withdrawn thereunder
or (iii) the Offer shall have expired (or shall have been required to expire
pursuant to the terms of this Agreement) without the acceptance for payment and
prompt payment for all shares of Urban Stock validly tendered for payment and
not withdrawn thereunder;
(d) by Urban, acting under the direction of the Urban Special
Committee (it being understood that acceptance of any Superior Competing
Transaction would be subject to Maryland law requirements as to approval by the
Urban Board of Directors), if it determines to accept a proposal or offer for a
Superior Competing Transaction; PROVIDED, that this Agreement may not be
terminated under this SECTION 9.1(d) unless, not fewer than forty-eight (48)
hours prior to taking such action, Hexalon is notified in writing of the
intention to take such action and such Competing Transaction continues to be a
Superior Competing Transaction in light of any transaction that may be proposed
by Hexalon prior to the expiration of such 48-hour period;
(e) by Hexalon, prior to the acceptance for payment by Head
Acquisition LP or Head Acquisition Corp of shares of Urban Stock pursuant to the
Offer, if (i) the Urban Board of Directors or the Urban Special Committee shall
have withdrawn or adversely modified its recommendations of the Offer, the
Merger or this Agreement (it being understood, however, that for all purposes of
this Agreement, the fact that Urban has supplied any person with information
regarding Urban or has entered into discussions or negotiations with such person
as permitted by this Agreement, or the disclosure of such facts, shall not be
deemed in and of itself a withdrawal or modification of the Urban Board of
Directors' or the Urban Special Committee's recommendation of the Offer, the
Merger or this Agreement so long as such actions are in compliance with SECTION
6.4); or (ii) the Urban Board of Directors or the Urban Special Committee shall
have (A) recommended to the Urban stockholders that they approve a Competing
Transaction rather than the transactions contemplated by this Agreement or (B)
determined to accept a proposal or offer for a Superior Competing Transaction;
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(f) by Hexalon or Urban, (i) if the Offer terminates or
expires on account of the failure of any Tender Offer Condition without Hexalon,
Head Acquisition LP or Head Acquisition Corp having purchased any shares of
Urban Stock thereunder (PROVIDED, that the right to terminate this Agreement
pursuant to this subparagraph (f)(i) shall not be available to any party whose
(or whose Subsidiary's) failure to fulfill any obligation under this Agreement
has been the proximate cause of, or resulted in the failure of any such
condition) or (ii) if, within one hundred and twenty (120) days after the date
hereof, the Offer has not been consummated (PROVIDED, that the right to
terminate this Agreement pursuant to this subparagraph (f)(ii) shall not be
available to any party whose (or whose Subsidiary's) failure to fulfill any
obligation under this Agreement has been the proximate cause of the failure of
the Offer to be consummated on or prior to such date);
(g) by Hexalon, prior to the acceptance for payment by Head
Acquisition LP or Head Acquisition Corp of shares of Urban Stock pursuant to the
Offer, if any of the following events shall occur and be continuing or
conditions exists: (i) any of the representations and warranties of Urban
contained in this Agreement that are qualified as to materiality shall not be
true and correct and any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each case as
of the date of determination (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 not be true and correct as of such
date), except where the failure to be so true and correct would not reasonably
be expected to (A) have an Urban Material Adverse Effect or (B) materially
increase the cost of the Offer to Head Acquisition LP and Head Acquisition Corp;
or (ii) Urban shall have failed to perform in all material respects each of its
agreements contained in this Agreement required to be performed at or prior to
the date of determination (any such event or condition, a "TERMINATING URBAN
BREACH"); PROVIDED, HOWEVER, that if such Terminating Urban Breach is capable of
being cured by Urban within ten (10) days after the occurrence of the
Terminating Urban Breach prior to the Effective Time through the exercise of its
commercially reasonable efforts and is so cured within such period, so long as
Urban continues to exercise such commercially reasonable efforts, Hexalon may
not terminate this Agreement under this SECTION 9.1(g); or
(h) by Urban, if any of the following events shall occur and
be continuing or conditions exists: (i) any of the representations and
warranties of any Head Party contained in this Agreement that are qualified as
to materiality shall not be true and correct and any such representations and
warranties that are not so qualified shall not be true and correct in any
material respect, in each case as of the date of determination (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
not be true and correct as of such date), except where the failure to be so true
and correct would not reasonably be expected to prevent or materially delay the
consummation of the Offer, the Merger or the Amendment or any other transaction
contemplated hereby, not including the effect of general economic changes,
changes in the U.S. financial markets generally, changes that affect REITs
generally and changes that affect the retail industry or retail real estate
properties generally; or (ii) the Head Parties shall have failed to perform in
all material respects each of their agreements contained in this Agreement
required to be performed at or prior to the date of determination (any such
event or condition, a "TERMINATING HEXALON BREACH"); PROVIDED, HOWEVER, that
such Terminating Hexalon Breach must be reasonably likely to materially
adversely affect the consummation of the Offer, the
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Merger or the Amendment and if such Terminating Hexalon Breach is capable of
being cured by Hexalon prior to the Effective Time through the exercise of
its commercially reasonable efforts, so long as Hexalon continues to exercise
such commercially reasonable efforts, Urban may not terminate this Agreement
under this SECTION 9.1(h).
The right of any party hereto to terminate this Agreement pursuant to this
SECTION 9.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling or controlled by any such party or any of their respective
officers or directors, whether prior to or after the execution of this
Agreement.
Section 9.2. EXPENSES.
(a) Except as otherwise specified in this SECTION 9.2 or
agreed in writing by the parties, all out-of-pocket costs and expenses incurred
in connection with this Agreement, the Offer, the Merger, the Amendment and the
other transactions contemplated hereby shall be paid by the party incurring such
cost or expense (with respect to such party, its "EXPENSES"); PROVIDED, HOWEVER,
that if the Merger is consummated, all Expenses of Urban and the Urban LP shall
be paid by the Surviving Entity; PROVIDED, FURTHER, that any filing fees under
the HSR Act shall be split equally between Urban and Hexalon.
(b) The Urban LP agrees that if this Agreement shall be
terminated pursuant to SECTION 9.1(g), then the Urban LP will pay to Hexalon, or
to such party or parties as directed by Hexalon, an amount equal to the Break-Up
Expenses (as defined below). Urban also agrees that if this Agreement (i) is
terminated pursuant to SECTION 9.1(g)(ii) as the result of a Terminating Urban
Breach under SECTION 9.1(g)(ii) and within one year of any such termination
Urban or any Urban Subsidiary shall consummate a Competing Transaction or Urban
or any Urban Subsidiary shall enter an agreement or letter of intent (or
resolves or announces an intention to do so) providing for a Competing
Transaction that is ultimately consummated with a Person that had proposed a
Competing Transaction to Urban prior to the circumstances giving rise to the
Terminating Urban Breach under SECTION 9.1(g)(ii) or (ii) is terminated pursuant
to SECTION 9.1(d) or (e), then, the Urban LP shall pay to Hexalon, or as
directed by Hexalon, an amount equal to the Break-Up Fee (as defined below) plus
any Break-Up Expenses. Payment of any of such amounts shall be made, as directed
by Hexalon, by prompt wire transfer of immediately available funds, but in no
event later than five (5) Business Days after the amount is due as provided
herein.
(c) For purposes of this Agreement, the "BREAK-UP FEE" shall
be an amount equal to the lesser of (i) $37,500,000 (the "FEE BASE AMOUNT") or
(ii) if Hexalon continues to elect to qualify as a REIT, the sum of (A) the
maximum amount that can be paid to Hexalon for the taxable year in which this
Agreement is terminated without causing Hexalon to fail to meet the requirements
of Section 856(c)(2) and (3) of the Code determined as if the payment of such
amount did not constitute income described in Section 856(c)(2) and (3) of the
Code ("QUALIFYING INCOME"), as determined by outside counsel or independent
accountants to Hexalon, and (B) in the event Hexalon receives a letter from
outside counsel (the "BREAK-UP TAX OPINION") indicating that Hexalon has
received a ruling from the IRS holding that the receipt by Hexalon of the Fee
Base Amount would either constitute Qualifying Income as to Hexalon with respect
to Hexalon's proportionate share thereof or would be excluded from Hexalon's
gross
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income for purposes of Section 856(c)(2) and (3) of the Code (the "REIT
REQUIREMENTS"), the Fee Base Amount less the amount payable under clause (A)
above. In the event that Hexalon is not able to receive the full Fee Base
Amount, the Urban LP shall place the unpaid amount (i.e., the difference between
the Fee Base Amount and the Break-Up Fee) in escrow and shall not release any
portion thereof to Hexalon unless and until the Urban LP receives notice from
Hexalon to pay the unpaid amount or any fraction thereof, in which event the
Urban LP shall pay to Hexalon the requested amount; PROVIDED, that Hexalon shall
not have the right to request any such unpaid amounts in excess of (X) the
amount set forth in a letter(s) from Hexalon's outside counsel or independent
accountants computing the amount that can be paid at that time to Hexalon
without causing Hexalon to fail to meet the REIT Requirements for any relevant
taxable year or (Y) the unpaid portion of the Fee Base Amount, if Hexalon has
received a Break-Up Tax Opinion indicating that Hexalon's receipt of such unpaid
portion would satisfy, in whole or in part, the REIT Requirements. The Urban
LP's obligation to pay any unpaid portion of the Break-Up Fee (PROVIDED, that
Urban LP has otherwise complied with its obligations under this provision) shall
terminate (and any amount still held in such escrow shall be released to the
Urban LP) on the date that is five years from the date the Break-Up Fee first
becomes due under this Agreement.
(d) For purposes of this Agreement, the "BREAK-UP EXPENSES"
shall be an amount equal to the lesser of (i) the out-of-pocket expenses of
Hexalon or any of its affiliates (including Rodamco) incurred in connection
with the Offer, the Merger, the Amendment, this Agreement and the other
transactions contemplated hereby (including, without limitation, all
attorneys', accountants', investment bankers' and financing sources' fees and
expenses) but in no event in an amount greater than $12,500,000 (such amount
being referred to in this SECTION 9.2(d) as the "EXPENSE BASE AMOUNT") or
(ii) the sum of (A) the maximum amount that an be paid to Hexalon without
causing Hexalon to fail to meet the REIT Requirements determined as if the
payment of such amount did not constitute Qualifying Income, as determined by
outside counsel or independent accountants to Hexalon and (B) in the event
Hexalon receives a Break-Up Tax Opinion indicating that Hexalon has received
a ruling from the IRS holding that Hexalon's receipt of the Expense Base
Amount would either constitute Qualifying Income as to Hexalon with respect
to Hexalon's proportionate share thereof or would be excluded from Hexalon's
gross income for purposes of the REIT Requirements, the Expense Base Amount
less the amount payable under clause (A) above. In the event that Hexalon is
not able to receive the full Expenses Base Amount, the Urban LP shall place
the unpaid amount (i.e., the difference between the Expense Base Amount and
the Break-Up Expenses) in escrow and shall not release any portion thereof to
Hexalon unless and until the Urban LP receives notice from Hexalon to pay the
unpaid amount or any fraction thereof, in which event the Urban LP shall pay
to Hexalon the requested amount; PROVIDED, that Hexalon shall not have the
right to request any such unpaid amounts in excess of (X) the amount set
forth in a letter(s) from Hexalon's outside counsel or independent
accountants computing the amount that can be paid at that time to Hexalon
without causing Hexalon to fail to meet the REIT Requirements for any
relevant taxable year or (Y) the unpaid portion of the Expense Base Amount,
if Hexalon has received a Break-Up Tax Opinion indicating that Hexalon's
receipt of such unpaid portion would satisfy, in whole or in part, the REIT
Requirements. The Urban LP's obligation to pay any unpaid portion of the
Break-Up Expenses (PROVIDED that Urban LP has otherwise complied with its
obligations under this provision) shall terminate (and any amount still held
in such escrow shall be released to the
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Urban LP) on the date that is five years from the date the Break-Up Expenses
first become due under this Agreement.
(e) In the event that either Hexalon or the Urban LP is
required to file suit to seek all or a portion of the amounts payable under this
SECTION 9.2, and such party prevails in such litigation, such party shall be
entitled to all expenses, including attorneys' fees and expenses, which it has
incurred in enforcing its rights under this SECTION 9.2.
(f) Notwithstanding anything to the contrary in this
Agreement, Hexalon expressly acknowledges and agrees that, with respect to any
termination of this Agreement pursuant to SECTION 9.1(d), (e) or (g) in
circumstances where the Break-Up Fee and/or the Break-Up Expenses are payable in
accordance with SECTION 9.2(b), the payment of the Break-Up Fee and/or the
Break-Up Expenses shall constitute liquidated damages with respect to any claim
for damages or any other claim which Hexalon would otherwise be entitled to
assert against Urban, the Urban LP or any Urban Subsidiary or any of their
respective assets, or against any of their respective directors, officers,
employees, partners or stockholders, with respect to this Agreement and the
transactions contemplated by the Transaction Documents and shall constitute the
sole and exclusive remedy available to Hexalon. The parties hereto expressly
acknowledge and agree that, in light of the difficulty of accurately determining
actual damages with respect to the foregoing upon any termination of this
Agreement pursuant to SECTION 9.1(d), (e) or (g) in circumstances where the
Break-Up Fee and/or the Break-Up Expenses are payable in accordance with SECTION
9.2(b), the right to payment under any of such subsections of SECTION 9.1: (i)
constitutes a reasonable estimate of the damages that will be suffered by reason
of any such proposed or actual termination of this Agreement pursuant to said
section, and (ii) shall be in full and complete satisfaction of any and all
damages arising as a result of the foregoing. Except for nonpayment of the
amounts set forth in SECTION 9.2(b), Hexalon hereby agrees that, upon any
termination of this Agreement pursuant to SECTION 9.1(d), (e) or (g) in
circumstances where the Break-Up Fee and/or the Break-Up Expenses are payable in
accordance with SECTION 9.2(b), in no event shall Hexalon (A) seek to obtain any
recovery or judgment against Urban, the Urban LP or any Urban Subsidiary or any
of their respective assets, or against any of their respective directors,
officers, employees, partners or stockholders, or (B) be entitled to seek or
obtain any other damages of any kind, including, without limitation,
consequential, indirect or punitive damages; PROVIDED, that nothing in this
ARTICLE IX shall be deemed to limit any right of Hexalon, Head Acquisition LP or
Head Acquisition Corp against any party to the Voting Agreement for breaches
thereunder.
Section 9.3. EFFECT OF TERMINATION. In the event of termination of this
Agreement by either Urban or Hexalon as provided in SECTION 9.1, this Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of Hexalon, Head Acquisition LP or Head Acquisition Corp,
Urban or the Urban LP, other than the last sentence of SECTION 6.1, SECTION 9.1,
SECTION 9.2, this SECTION 9.3 and ARTICLE X and except to the extent that such
termination results from a willful breach by a party of any of its covenants or
agreements set forth in this Agreement.
Section 9.4. AMENDMENT. This Agreement may be amended by the parties in
writing by action of their respective Boards of Directors (and the Urban Special
Committee in respect of Urban) at any time before or after the Urban Stockholder
Approval is obtained and prior to the
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filing of the Articles of Merger and/or the Certificate of Merger, as the
case may be, with the Maryland Department and/or the Delaware Office, as the
case may be; PROVIDED, HOWEVER, that, after the Urban Stockholder Approval is
obtained, no such amendment, modification or supplement shall alter the
amount or change the form of the Merger Consideration to be delivered to
Urban's stockholders or alter or change any of the terms or conditions of
this Agreement if such alteration or change would adversely affect Urban's
stockholders.
Section 9.5. EXTENSION; WAIVER. At any time prior to the Effective
Time, each of Urban and Hexalon may (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)
subject to the provisions of SECTION 9.4, waive 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 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 X
GENERAL PROVISIONS
Section 10.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive (i) in the case of
representations and warranties made by either of Urban and the Urban LP, the
acceptance for payment of any shares of Urban Stock pursuant to the Offer or
(ii) in the case of representations and warranties made by any of the Head
Parties, the Effective Time. This SECTION 10.1 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
Section 10.2. 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 (providing proof of
delivery) to the parties or sent by telecopy (providing confirmation of
transmission) 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 Hexalon, to
Hexalon Real Estate, Inc.
x/x Xxxxxxx Xxxxx Xxxxxxx
000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
Fax: (000)000-0000
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with a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) if to Urban, to
Urban Shopping Centers, Inc.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxxx
Fax: (000) 000-0000
and with a copy to the Urban Special Committee:
Urban Shopping Centers, Inc. Special Committee
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxx
Fax: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 X. Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Xx.
Fax: (000) 000-0000
Section 10.3. INTERPRETATION. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of
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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. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation."
Section 10.4. 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 10.5. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, the Confidentiality Agreement, the Amendment, the Voting Agreement,
the Stock Purchase Agreement, the Amendment to Rights Agreement, the Tax
Indemnification Agreement and the Insurance Agreement constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter of this
Agreement, and there are no other or additional agreements between Rodamco,
Hexalon, Head Acquisition LP or any of their respective affiliates, on the one
hand, and any holders of Urban Stock or LP Unitholders or their respective
affiliates, on the other hand, relating to, arising from or otherwise entered
into in connection with this Agreement and the transactions contemplated hereby.
Except for the provisions of ARTICLE III and SECTIONS 6.7(a) and (b) and 6.8,
this Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies.
Section 10.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND.
Section 10.7. 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, except that Hexalon, Head
Acquisition LP and Head Acquisition Corp may transfer to their Affiliates and
financing sources without the consent of Urban or the Urban LP. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
Section 10.8. ENFORCEMENT. The parties agree that irreparable damage
would occur 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 any court of the United States
located in the State of Maryland or in any Maryland State court, 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 (i) consents to submit itself (without
making such submission exclusive) to the personal jurisdiction of any federal
court located in the State of Maryland or any Maryland state court in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement and (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court. Each of the parties further agrees that service of any
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process, summons, notice or document by U.S. registered mail to such party's
respective address set forth herein shall be effective service of process for
any action, suit or proceeding in Maryland with respect to any matters to
which it has submitted to jurisdiction as set forth in this section.
Section 10.9. EXHIBITS; DISCLOSURE LETTER. All Exhibits referred to
herein and in the Urban Disclosure Letter are intended to be and hereby are
specifically made a part of this Agreement.
ARTICLE XI
CERTAIN DEFINITIONS
Section 11.1. CERTAIN DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT:
"AFFILIATE" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.
"AMENDMENT TO RIGHTS AGREEMENT" means the Amendment to Rights Agreement
dated as of September 25, 2000.
"ARTICLES OF MERGER" means the articles of merger with respect to the
Merger, containing the provisions required by, and executed in accordance with,
the MGCL.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which banking institutions in Chicago, Illinois or New York, New York are
authorized or obligated by law or executive order to be closed.
"CERTIFICATE OF MERGER" means the certificate of merger with respect to
the Merger, containing the provisions required by, and executed in accordance
with, Delaware Law.
"DELAWARE OFFICE" means the office of the Secretary of State of the
State of Delaware.
"URBAN RIGHTS AGREEMENT" shall mean the Rights Agreement dated May 5,
1999 between Urban and First Chicago Trust Company of New York, as rights agent,
as amended.
"URBAN SUBSIDIARY" means the Urban LP and each other Subsidiary of
Urban.
"HEXALON SUBSIDIARY" means Head Acquisition LP, Head Acquisition Corp
and each other Subsidiary of Hexalon.
"INSURANCE AGREEMENT" means the Insurance Agreement to be entered into
in the form attached to the Voting Agreement as Exhibit B.
"KNOWLEDGE", or any similar expression, shall mean (a) with respect to
Urban (or any of its Subsidiaries), the actual knowledge of the persons set
forth on Schedule 11.1(a) after due
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inquiry and (b) with respect to Rodamco or Hexalon (or any of its
Subsidiaries), the actual knowledge of the persons set forth on Schedule
11.1(b) after due inquiry.
"LAW" means any statute, law, regulation, order, interpretation,
permit, license, approval, authorization, rule or ordinance of any
Governmental Entity applicable to Hexalon or Urban or any of their respective
Subsidiaries.
"MARYLAND DEPARTMENT" means the State Department of Assessments
and Taxation of Maryland.
"MERGER" means either (i) the Partnership Merger or (ii) the
Corporate Merger and the Alternative Partnership Merger, collectively, as the
case may be.
"PERSON" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated as
of September 25, 2000, among Head Management Company Holding, Inc., JMB
Properties Company and Urban Retail Properties Co.
"SUBSIDIARY" of any Person means any corporation, partnership, limited
liability company, joint venture or other legal entity of which such Person
(either directly or through or together with another Subsidiary of such Person)
owns more than 50% of the voting stock or value of such corporation,
partnership, limited liability company, joint venture or other legal entity.
"TAX" or "TAXES" shall mean any federal, state, local and foreign
income, gross receipts, license, withholding, property, recording, stamp, sales,
use, franchise, employment, payroll, excise, environmental and other taxes,
tariffs or governmental charges of any nature whatsoever, together with
penalties, interest or additions thereto.
"TAX INDEMNIFICATION AGREEMENT" means the Indemnification and Tax
Contest Agreement to be entered into in the form attached to the Voting
Agreement as Exhibit C.
"TAX RETURN" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"VOTING DEBT" shall mean bonds, debentures, notes or other
indebtedness having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which holders of equity
interests in Urban, any Urban Subsidiary, Hexalon, Head Acquisition LP or Head
Acquisition Corp, as applicable, may vote.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
RODAMCO NORTH AMERICA N.V.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director and Chief
Financial Officer
HEXALON REAL ESTATE, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
HEAD ACQUISITION, L.P.
By: Hexalon Real Estate, Inc., its
General Partner
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
HEAD ACQUISITION CORP.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
URBAN SHOPPING CENTERS, INC.
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Secretary
URBAN SHOPPING CENTERS, L.P.
By: Urban Shopping Centers, Inc., its
Sole General Partner
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Secretary
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ANNEX I
TENDER OFFER CONDITIONS. Notwithstanding any other provision of the
Offer, neither Head Acquisition LP nor Head Acquisition Corp shall be required
to accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to the
obligation of Head Acquisition LP or Head Acquisition Corp to pay for or return
tendered Urban Stock promptly after termination or withdrawal of the Offer), pay
for, and (subject to any such rules or regulations) may delay the acceptance for
payment of any tendered Urban Stock and (except as provided in the Merger
Agreement) amend or terminate the Offer as to any tendered Urban Stock if (i)
there shall not have been validly tendered and not withdrawn prior to the
expiration of the Offer shares of Urban Common Stock entitled to cast at least
66-2/3% of the votes entitled to be cast on the Merger (the "MINIMUM CONDITION")
or (ii) any applicable waiting period (and any extension thereof) under the HSR
Act shall not have expired or been terminated prior to the expiration of the
Offer or (iii) at any time after the date of the Merger Agreement and prior to
the time of acceptance for payment of any such shares of Urban Stock, any of the
following events shall occur and be continuing or conditions exists:
(a) there shall have been any statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other
Governmental Entity or other legal restraint or prohibition which (i) prohibits,
or makes illegal, the acceptance for payment, payment for or purchase of shares
of Urban Stock or the consummation of the Offer, the Merger, the Amendment or
the other transactions contemplated by the Merger Agreement, (ii) renders Head
Acquisition LP or Head Acquisition Corp unable to accept for payment, pay for or
purchase some or all of the shares of Urban Stock tendered and not withdrawn
pursuant to the Offer or (iii) imposes material limitations on the ability of
Head Acquisition LP or Head Acquisition Corp to effectively exercise full rights
of ownership of the shares of Urban Stock to be acquired in the Offer, including
the right to vote such shares of Urban Stock; or
(b) the Merger Agreement shall have been terminated in accordance with
its terms; or
(c) since the date of the Merger Agreement there shall have occurred
any event, change, effect or development that, individually or in the aggregate
with any other event, change, effect or development since the date of the Merger
Agreement, has had or would reasonably be expected to have an Urban Material
Adverse Effect; or
(d) any of the representations and warranties of Urban contained in the
Merger Agreement that are qualified as to materiality shall not be true and
correct and any such representations and warranties that are not so qualified
shall not be true and correct in any material respect, in each case as of the
date of determination (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 not be true and correct as of such date),
except where the failure to be so true and correct would not reasonably be
expected to (i) have an Urban Material Adverse Effect or (ii) materially
increase the cost of the Offer to Head Acquisition LP and Head Acquisition Corp;
or
(e) Urban shall have failed to perform in all material respects each of
its agreements contained in the Merger Agreement required to be performed at or
prior to the date of determination; or
(f) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange or
in the over-the-counter market in the United States, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation (whether or not mandatory) by any
Governmental Entity on, or other event that materially and adversely affects,
the extension of credit by banks or other lending institutions or (iv) in the
case of any of the foregoing existing at the time of the execution of the Merger
Agreement, a material acceleration or worsening thereof; or
(g) the Urban Board of Directors or the Urban Special Committee (i)
shall have withdrawn or modified in a manner adverse to Head Acquisition LP or
Head Acquisition Corp (including by amendment of the Schedule 14D-9) its
approval or recommendation of the Offer, the Merger or this Agreement or
recommended or approved any Competing Transaction or (ii) shall have resolved to
do any of the foregoing; or
(h) Urban shall have failed to deliver (i) a bring-down letter, dated
the date of the consummation of the Offer, to the REIT Tax Opinion of Xxxxx,
Xxxxx & Xxxxx substantially in form attached hereto as EXHIBIT G-1 and (ii) a
bring-down letter, dated the date of the consummation of the Offer, to the
Maryland Corporate Opinion of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP in
substantially the form attached hereto as EXHIBIT G-2;
which in the reasonable judgment of Head Acquisition LP or Head
Acquisition Corp, in any such case, and regardless of the circumstances giving
rise to such condition, makes it inadvisable to proceed with the Offer or
payment for or the acceptance for payment of the Urban Stock (tendered and not
withdrawn pursuant to the Offer).
The foregoing conditions are for the sole benefit of Head Acquisition
LP and Head Acquisition Corp and may (subject to the terms of the Merger
Agreement) be asserted or waived by Head Acquisition LP or Head Acquisition
Corp, in whole or in part, at any time and from time to time, in the sole
discretion of Head Acquisition LP or Head Acquisition Corp, as the case may be.
The failure by Head Acquisition LP or Head Acquisition Corp at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
The capitalized terms used in this ANNEX I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this ANNEX I is
annexed.
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