EXHIBIT 4
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Merger Agreement
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EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 18, 2006
BY AND AMONG
SIZELER PROPERTY INVESTORS, INC.,
REVENUE PROPERTIES COMPANY LIMITED,
AND
REVENUE PROPERTIES (SIZELER) INC.
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER........................................................2
SECTION 1.1 The Merger...................................................2
SECTION 1.2 Closing; Effective Time......................................2
SECTION 1.3 Effects of the Merger........................................2
SECTION 1.4 Charter; Bylaws..............................................2
SECTION 1.5 Directors and Officers.......................................3
SECTION 1.6 No Dissenters' Rights........................................3
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY AND THE
MERGER SUB................................................................3
SECTION 2.1 Conversion of Securities.....................................3
SECTION 2.2 Exchange of Certificates.....................................5
SECTION 2.3 Treatment of Company Options.................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................8
SECTION 3.1 Organization and Qualification; Subsidiaries.................8
SECTION 3.2 Charter and Bylaws...........................................9
SECTION 3.3 Capitalization...............................................9
SECTION 3.4 Authority Relative to This Agreement........................10
SECTION 3.5 No Conflict; Required Filings and Consents..................11
SECTION 3.6 Compliance..................................................11
SECTION 3.7 SEC Filings; Financial Statements...........................12
SECTION 3.8 Absence of Litigation.......................................13
SECTION 3.9 Employee Benefit Plans; Labor...............................13
SECTION 3.10 Tax Matters................................................14
SECTION 3.11 Proxy Statement............................................16
SECTION 3.12 Fairness Opinion...........................................16
SECTION 3.13 Brokers....................................................16
SECTION 3.14 Takeover Statutes..........................................16
SECTION 3.15 Company Rights Agreement...................................17
SECTION 3.16 Intellectual Property......................................17
SECTION 3.17 Environmental Matters......................................17
SECTION 3.18 Investment Company Act of 1940.............................19
SECTION 3.19 Affiliate Transactions.....................................19
SECTION 3.20 Contracts..................................................19
SECTION 3.21 Properties.................................................19
SECTION 3.22 Insurance..................................................21
SECTION 3.23 Books and Records of the Company...........................21
SECTION 3.24 Absence of Certain Changes.................................22
SECTION 3.25 Absence of Undisclosed Liabilities.........................22
SECTION 3.26 Disclosure.................................................22
SECTION 3.27 No Other Representations or Warranties.....................22
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB.......22
SECTION 4.1 Organization and Qualification..............................23
SECTION 4.2 Authority Relative to This Agreement........................23
SECTION 4.3 No Conflict; Required Filings and Consents..................23
SECTION 4.4 Financial Statements........................................24
SECTION 4.5 Absence of Litigation.......................................25
SECTION 4.6 Brokers.....................................................25
SECTION 4.7 Operations of Merger Sub....................................25
SECTION 4.8 Ownership of Shares of Sizeler Common Stock.................25
SECTION 4.9 Financing...................................................25
SECTION 4.10 No Other Representations or Warranties.....................26
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER...........................26
SECTION 5.1 Conduct of Business of the Company Pending the Merger.......26
SECTION 5.2 Conduct of Business of the Acquiror Pending the Merger......28
SECTION 5.3 Assistance..................................................29
SECTION 5.4 No Control of Other Party's Business........................29
ARTICLE VI ADDITIONAL AGREEMENTS...........................................29
SECTION 6.1 Stockholders Meetings; Company Recommendation...............29
SECTION 6.2 Proxy Statement.............................................30
SECTION 6.3 Access to Information; Confidentiality......................30
SECTION 6.4 Company Acquisition Proposals...............................31
SECTION 6.5 Employment and Employee Benefits Matters....................33
SECTION 6.6 Directors' and Officers' Indemnification and Insurance......34
SECTION 6.7 Tax Matters.................................................35
SECTION 6.8 Further Action and Efforts..................................36
SECTION 6.9 Public Announcements........................................37
SECTION 6.10 Dividends..................................................38
ARTICLE VII CONDITIONS OF MERGER...........................................38
SECTION 7.1 Conditions to Obligation of Each Party to Effect the Merger.38
SECTION 7.2 Conditions to Obligations of the Acquiror and Merger Sub....39
SECTION 7.3 Conditions to Obligations of the Company....................39
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER.............................40
SECTION 8.1 Termination.................................................40
SECTION 8.2 Effect of Termination.......................................41
SECTION 8.3 Expenses....................................................42
SECTION 8.4 Amendment...................................................43
SECTION 8.5 Waiver......................................................43
ARTICLE IX GENERAL PROVISIONS..............................................43
SECTION 9.1 Non-Survival of Representations, Warranties and Agreements..43
SECTION 9.2 Notices.....................................................43
SECTION 9.3 Certain Definitions.........................................45
SECTION 9.4 Severability................................................47
SECTION 9.5 Entire Agreement; Assignment................................47
SECTION 9.6 Parties in Interest.........................................47
SECTION 9.7 Governing Law...............................................47
SECTION 9.8 Waiver of Jury Trial........................................48
SECTION 9.9 Headings....................................................49
SECTION 9.10 Counterparts...............................................49
SECTION 9.11 Acquiror Guarantee.........................................49
SECTION 9.12 Interpretation.............................................49
SECTION 9.13 Obligations of Acquiror and Company.......................50
SECTION 9.14 Survival; No Amendment.....................................50
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 18, 2006 (this
"Agreement"), is made and entered into by and among Sizeler Property Investors,
Inc., a Maryland corporation (the "Company"), Revenue Properties Company
Limited, a corporation formed under the federal laws of Canada (the "Acquiror"),
and Revenue Properties (Sizeler) Inc., a Maryland corporation and an indirect
wholly owned subsidiary of the Acquiror (the "Merger Sub").
RECITALS
WHEREAS, the board of directors of the Company (the "Company Board")
has approved this Agreement and declared advisable the merger of the Company
with and into Merger Sub (the "Merger") in accordance with the Maryland General
Corporation Law (the "MGCL"), pursuant to which (i) each of the issued and
outstanding shares of the Company's common stock, par value $0.0001 per share
(the "Sizeler Common Stock"), shall be converted into the right to receive the
Merger Consideration (as defined herein) upon the terms and subject to the
conditions herein; and (ii) each of the issued and outstanding shares of Sizeler
Series B Preferred Stock (as defined herein) shall be converted into the right
to receive the Series B Cash Consideration (as defined herein) upon the terms
and subject to the conditions herein;
WHEREAS, the Acquiror has approved this Agreement and desires to
provide herein for the Merger, upon the terms and subject to the conditions set
forth herein;
WHEREAS, Revenue Properties (U.S.), Inc., a Delaware corporation and
sole stockholder of the Merger Sub (the "Parent"), has approved this Agreement
and declared advisable the Merger in accordance with the MGCL; and
WHEREAS, the Company Board has (a) determined that this Agreement, the
Merger, and the other transactions contemplated hereby, and thereby, taken
together, are fair to, advisable and in the best interests of the Company and
the Company's stockholders, (b) voted to (i) approve this Agreement and the
transactions contemplated hereby, including the Merger and (ii) recommend
acceptance and approval by the Company's stockholders of this Agreement, the
Merger and the other transactions contemplated hereby, and (c) taken all actions
necessary to render inapplicable to each of the transactions contemplated by
this Agreement and the Merger, or exempt such transactions from, the provisions
of any "fair price", "moratorium", "control share," "business combination" or
other takeover defense or similar statute or regulation that would otherwise
govern such transactions and the parties hereto, including Subtitles 6 and 7 of
Title 3 of the MGCL.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Acquiror, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions of
this Agreement and in accordance with the MGCL, at the Effective Time (as
defined herein), the Company shall be merged with and into Merger Sub. As a
result of the Merger, the separate legal existence of the Company shall cease
and Merger Sub shall continue as the surviving corporation of the Merger (the
"Surviving Corporation").
SECTION 1.2 Closing; Effective Time. Subject to the provisions of
Article VII, the closing of the Merger (the "Closing") shall take place at the
offices of DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP, 0000 Xxxxx Xxxxxx, Xxxxxxxxx
Xxxxxxxx 00000, as soon as practicable, but in no event later than the fifth
business day after the satisfaction or waiver of the conditions set forth in
Article VII (other than those conditions that can only be fulfilled at the
Effective Time, but subject to the fulfillment or waiver of those conditions),
or at such other place or at such other date as the Acquiror and the Company may
mutually agree. The date on which the Closing actually occurs is hereinafter
referred to as the "Closing Date". At the Closing, the parties hereto shall
execute and cause the articles of merger ("Articles of Merger") to be filed
with, delivered in the manner required by the MGCL to and accepted for record by
the State Department of Assessments and Taxation of Maryland (the "Department")
(the date and time of the acceptance for record of the Articles of Merger with
the Department, or such later time as is specified in the Articles of Merger and
as is agreed to by the parties hereto, being the "Effective Time") and shall
make all other filings or recordings required under the MGCL in connection with
the Merger.
SECTION 1.3 Effects of the Merger. From and after the Effective Time,
the Merger shall have the effects set forth in the applicable provisions of the
MGCL. Without limiting the generality of the foregoing and subject thereto, at
the Effective Time, all the property, rights, privileges, powers and franchises
of the Company and Merger Sub shall vest in the Surviving Corporation and all
debts, liabilities, duties and obligations of the Company and Merger Sub shall
become the debts, liabilities, duties and obligations of the Surviving
Corporation.
SECTION 1.4 Charter; Bylaws. From and after the Effective Time, the
charter of the Merger Sub shall be the charter of the Surviving Corporation
until thereafter amended in accordance with its terms and applicable law. From
and after the Effective Time, the Bylaws of the Merger Sub shall be the bylaws
of the Surviving Corporation until thereafter amended in accordance with their
terms, the charter of the Surviving Corporation and applicable law.
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SECTION 1.5 Directors and Officers. From and after the Effective Time,
the directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation, each to hold office in accordance with
the charter and bylaws of the Surviving Corporation and until their respective
successors are duly elected and qualify, and the officers of the Merger Sub
immediately prior to the Effective Time, shall be the officers of the Surviving
Corporation, in each case until the earlier of their resignation or removal or
the date their respective successors are duly elected or appointed (as the case
may be) and qualify.
SECTION 1.6 No Dissenters' Rights. No dissenters' or appraisal rights
shall be available with respect to the Merger or the other transactions
contemplated hereby, so long as the provisions of Section 3-202(c)(1)(ii) of the
MGCL are applicable to the Merger.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE COMPANY AND THE MERGER SUB
SECTION 2.1 Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of the Acquiror, Merger Sub,
the Company or the holders of any of the stock of the Company:
(a) Merger Consideration.
(i) Each issued and outstanding share of Sizeler Common Stock,
outstanding immediately prior to the Effective Time shall be converted
into the right to receive from Acquiror $15.10 in cash (payable in U.S.
dollars), without interest (such sum, the "Merger Consideration").
(ii) As of the Effective Time, all shares of Sizeler Common Stock,
including the Restricted Shares (as defined herein), outstanding
immediately prior to the Effective Time 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 of
Sizeler Common Stock (each, a "Common Certificate") shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration upon surrender of such certificate in accordance with
Section 2.2.
(iii) Each issued and outstanding share of Sizeler Series B
Preferred Stock (as defined herein) outstanding immediately prior to
the Effective Time shall be converted into the right to receive from
Acquiror the Series B Cash Consideration (as defined herein) (payable
in U.S. dollars); provided, however that if the Series B Preferred
Merger Approval
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(as defined herein) is not obtained prior to the Effective Time, then
each issued and outstanding share of Sizeler Series B Preferred Stock
shall not be converted into the right to receive the Series B Cash
Consideration and instead shall be converted into one validly issued,
fully paid and nonassessable share of Series B Preferred Stock of the
Surviving Corporation, which shall have terms consistent with the
Sizeler Series B Preferred Stock until thereafter redeemed or
cancelled, whether upon liquidation of the Surviving Corporation or
otherwise, in accordance with the Surviving Corporation's Articles of
Incorporation, as amended and supplemented. The term "Series B Cash
Consideration" means the sum of (x) $25.00 plus (y) any accrued and
unpaid dividends on a share of Series B Preferred Stock to the
Effective Time plus (z) an amount equal to the aggregate amount of
dividends that would have accrued on each such share of Series B
Preferred Stock between the Effective Time and May 10, 2007 had such
share remained outstanding through May 10, 2007. The term "Series B
Merger Approval" means approval of the Merger by the holders of at
least two-thirds of the outstanding shares of Sizeler Series B
Preferred Stock, given in person or by proxy and in writing or at a
meeting.
(iv) If the Series B Preferred Merger Approval is obtained then as
of the Effective Time all shares of Sizeler Series B Preferred Stock
outstanding immediately prior to the Effective Time 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 of Sizeler Series B Preferred Stock (each, a "Preferred
Certificate") shall cease to have any rights with respect thereto,
except the right to receive Series B Cash Consideration upon surrender
of such certificate. Each Common Certificate and Preferred Certificate
is sometimes referred to in this Agreement as a "Certificate."
(v) Notwithstanding anything in this Agreement to the contrary,
if, between the date of this Agreement and the Effective Time, the
outstanding shares of Sizeler Common Stock or Sizeler Series B
Preferred Stock shall have been changed into a different number of
shares or a different class by reason of any reclassification,
recapitalization, split, combination, exchange of shares, readjustment
or other similar transaction, or a stock dividend thereon shall be
declared with a record date within said period, the Merger
Consideration and Series B Cash Consideration, as applicable, and any
other relevant provisions of this Agreement shall be equitably
adjusted.
(b) Stock of Merger Sub. All issued and outstanding shares of common
stock, par value $0.0001 per share, of the Merger Sub immediately prior to the
Effective Time shall be converted into one validly issued, fully paid and
nonassessable share of Common Stock, of the Surviving Corporation.
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SECTION 2.2 Exchange of Certificates.
(a) Paying Agent. Prior to the Closing, Acquiror and the Company shall
select a bank or trust company to act as paying agent (the "Paying Agent") for
payment of the Merger Consideration and the Series B Cash Consideration (if the
Series B Merger Approval is obtained prior to the Effective Time) upon surrender
of Certificates. On or before the Effective Time, Acquiror shall deposit by wire
transfer of cash immediately available funds, with the Paying Agent, for the
benefit of the holders of shares of Sizeler Common Stock and Sizeler Series B
Preferred Stock, for exchange in accordance with this Article II, the amount of
cash consideration payable pursuant to Section 2.1(a) in exchange for
outstanding shares of Sizeler Common Stock and for outstanding shares of Sizeler
Series B Preferred Stock (if any). If the Series B Merger Approval is not
obtained prior to the Effective time, then Acquiror shall not deposit the Series
B Cash Consideration. The cash delivered pursuant to this Section 2.2(a) is
hereinafter referred to as the "Exchange Fund"). The Exchange Fund may not be
used for any purpose that is not provided for herein.
(b) Payment Procedures. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
Certificate or Certificates whose shares were converted into the right to
receive the Merger Consideration or the Series B Cash Consideration as
applicable pursuant to Section 2.1(a) a letter of transmittal in a form prepared
prior to the Effective Time and reasonably acceptable to the Company (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 instructions for use in effecting the surrender of the Certificates
in exchange for the Merger Consideration or the Series B Cash Consideration as
applicable. Upon surrender of a Certificate for cancellation to the Paying
Agent, together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefore (i) in the case
of a Common Certificate, a cash payment representing the Merger Consideration
for each share of Sizeler Common Stock represented thereby, which such holder
has the right to receive pursuant to this Article II and (ii) in the case of a
Preferred Certificate, a cash payment representing the Series B Cash
Consideration for each share of Sizeler Series B Preferred Stock represented
thereby (if the Series B Merger Approval has been obtained prior to the
Effective Time), which such holder has the right to receive pursuant to this
Article II, and, in each case the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Sizeler Common Stock or
Sizeler Series B Preferred Stock that is not registered in the transfer records
of the Company prior to the Effective Time, payment may be made to a person
other than the person in whose name the Certificate so surrendered is
registered, if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of such Certificate or establish to the satisfaction of
the Paying Agent that such tax has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.2, each Common Certificate and (if
the Series B Merger Approval has been obtained prior
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to the Effective Time) each Preferred Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive, upon surrender
of such Certificate, the consideration into which the shares theretofore
represented by such Certificate shall have been converted pursuant to Section
2.1(a) together with the dividends, if any, which may have been declared by the
Company on the Sizeler Common Stock or the Sizeler Series B Preferred Stock, as
applicable, in accordance with the terms of this Agreement and which remain
unpaid at the Effective Time. The Acquiror and the Surviving Corporation shall
pay all fees and expenses of the Paying Agent in connection with the Exchange
Fund and the distributions therefrom.
(c) 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 Paying Agent, the posting by such person of a bond in
such reasonable amount as Paying Agent may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Paying Agent
shall pay in exchange for such lost, stolen or destroyed Certificate the
appropriate amount of the consideration into which the shares theretofore
represented by such Certificate shall have been converted pursuant to Section
2.1(a).
(d) Withholding of Tax. Acquiror, the Surviving Corporation or the
Paying Agent shall be entitled to deduct and withhold from the amounts otherwise
payable pursuant to this Agreement to any holder of Sizeler Common Stock and
Sizeler Series B Preferred Stock such amount as Acquiror, the Surviving
Corporation 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 law related to Taxes. To the extent that amounts are so withheld by the
Acquiror, the Surviving Corporation or the Paying Agent, such withheld amounts
shall be paid over to the applicable Governmental Entity in accordance with
applicable law.
(e) No Further Ownership Rights in Sizeler Common Stock or Sizeler
Series B Preferred Stock. The Merger Consideration and Series B Cash
Consideration paid (if the Series B Merger Approval has been obtained prior to
the Effective Time) in accordance with the terms of this Article II upon
conversion of any shares of Sizeler Common Stock and Sizeler Series B Preferred
Stock shall be deemed to have been paid (or delivered) in full satisfaction of
all rights pertaining to such shares of Sizeler Common Stock and Sizeler Series
B Preferred Stock, subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distributions with a record date prior to
the Effective Time that may have been declared or made by the Company on such
shares of Sizeler Common Stock or Sizeler Series B Preferred Stock prior to the
Effective Time and which remain unpaid at the Effective Time, and after the
Effective Time there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of shares of Sizeler Common Stock or
Sizeler Series B Preferred Stock that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, any Certificates formerly
representing shares of Sizeler Common Stock or Sizeler Series B Preferred Stock
are presented to the Surviving
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Corporation or the Paying Agent for any reason, they shall be canceled as
provided in this Article II.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the former stockholders of the Company one year
after the Effective Time shall be delivered to the Acquiror and any holder of
Sizeler Common Stock and Sizeler Series B Preferred Stock who has not
theretofore complied with this Article II shall thereafter look only to Acquiror
and the Surviving Corporation (subject to abandoned property, escheat and other
similar laws) for payment of its claim for consideration specified in this
Agreement.
(g) No Liability. None of the Acquiror, Merger Sub, the Company or the
Paying Agent shall be liable to any person in respect of any cash delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
SECTION 2.3 Treatment of Company Options.
(a) Subject to paragraph (c) below, immediately prior to the Effective
Time, each outstanding right to acquire Sizeler Common Stock ("Company Options")
granted pursuant to the Company's 1996 Stock Option and Incentive Plan (the
"Company Option Plan") whether or not then exercisable, shall fully vest,
contingent on the Closing. The Company shall take all actions necessary to
effect such vesting. At the Effective Time, each of the Company Options shall be
cancelled by the Company, and in consideration of such cancellation, the holder
thereof shall be entitled to receive, as soon as practicable thereafter, an
amount of cash from the Surviving Corporation equal to the product of (A) the
excess, if any, of the Merger Consideration over the per share exercise price
thereof and (B) the total number of shares of Sizeler Common Stock subject to
the Company Options to the extent such Company Options shall not theretofore
have been exercised (the "Option Amount") (such payment to be net of applicable
withholding taxes). Immediately after the Effective Time, the Surviving
Corporation shall deposit in a bank account an amount of cash equal to the
Option Amount for each Company Option then outstanding (subject to any
applicable withholding tax), together with instructions that such cash be
promptly distributed following the Effective Time to the holders of such Company
Options in accordance with this Section 2.3(a). At the Effective Time, each
Company Option with an exercise price equal to or greater than the Merger
Consideration shall terminate, in accordance with its terms, without payment of
any consideration.
(b) Immediately prior to the Effective Time, each share of Sizeler
Common Stock subject to a right of reacquisition by the Company granted under
the Company Option Plan or the Company's 1994 Directors' Stock Ownership Plan,
as amended through January 15, 2002 (the "Restricted Shares"), shall fully vest,
contingent on the Closing. The Company shall take all actions necessary to
effect such vesting and issuance.
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(c) The Company's Board, or, if appropriate, any committee
administering the Company Option Plan, shall adopt such resolutions or take such
actions as are necessary to carry out the terms of this Section 2.3.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Acquiror and Merger Sub
as of the date of this Agreement (except in the case of any representation or
warranty that by its express terms is made as of another specified date) that,
except as set forth on the corresponding section of the disclosure schedule
delivered by the Company to Acquiror and Merger Sub prior to the execution of
this Agreement (the "Company Disclosure Schedule"):
SECTION 3.1 Organization and Qualification; Subsidiaries. Each of the
Company and its Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation and has the
requisite power and authority to own, lease and operate its properties and
assets and to carry on its business as it is now being conducted, except where
any such failure to be so organized, existing or in good standing or to have
such power or authority would not, individually or in the aggregate, have a
Company Material Adverse Effect. Each of the Company and its Subsidiaries is
duly qualified, licensed or admitted to do business and is in good standing in
each jurisdiction in which the ownership, use or leasing of its assets and
properties, or the conduct or nature of its business, makes such qualification,
licensing or admission necessary, except for such failures to be so qualified,
licensed or admitted and in good standing which, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
The term "Subsidiary" means any corporation or other organization,
whether incorporated or unincorporated, (i) of which the Company or any other
Subsidiary of the Company is a general partner (excluding partnerships, the
general partnership interests of which held by the Company or any Subsidiary of
the Company do not have a majority of the voting interests in such partnership)
or (ii) at least a majority of the securities or other interests of which having
by their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by the Company or by any one or more of its Subsidiaries, or by the Company and
one or more of its Subsidiaries.
The term "Company Material Adverse Effect" with respect to the Company
and its Subsidiaries means any state of facts, change, development, event,
effect or set of circumstances that is or is reasonably likely to be materially
adverse to the business, operations, properties, financial condition, or assets
of the Company and its Subsidiaries taken as a whole; provided, however, that
none of the following shall be deemed in and of themselves, either alone or in
combination, to constitute, and none of
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the following shall be taken into account in determining whether there has been
a Company Material Adverse Effect: (i) general economic or other changes or
developments in or affecting the industries or markets in which the Company and
its Subsidiaries operate (excluding for the avoidance of doubt, changes or
developments caused by Acts of God) to the extent that such changes or
developments do not have a disproportionate impact on the Company and its
Subsidiaries, or (ii) changes in any laws or regulations or accounting
regulations or principles applicable to the Company and its Subsidiaries. An
"Act of God" shall mean any storm, flood, freeze, hurricane, earthquake, fire or
explosion that causes property damage or destruction to the Company and or its
Subsidiaries in an amount equal to or greater than $7,500,000.
SECTION 3.2 Charter and Bylaws. The Company has previously delivered or
made available to the Acquiror complete and correct copies of the Company's
charter (the "Charter") and bylaws (the "Bylaws"), and the charter and bylaws
(or other comparable documents) of each of its Subsidiaries, as currently in
effect.
SECTION 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of (i)
51,484,000 shares of Sizeler Common Stock and (ii) 2,516,000 shares of preferred
stock, par value $0.0001 per share (the "Sizeler Preferred Stock"), of which
40,000 shares are designated as Series A Preferred Stock (the "Sizeler Series A
Preferred Stock") and 2,476,000 shares are designated as Series B 9.75%
Cumulative Redeemable Preferred Stock (the "Sizeler Series B Preferred Stock").
As of the date of this Agreement, there are 21,469,074 shares of Sizeler Common
Stock issued and outstanding (including 26,000 Restricted Shares), no shares of
Sizeler Series A Preferred Stock issued and outstanding and 246,540 shares of
Sizeler Series B Preferred Stock issued and outstanding. In addition, as of the
date of this Agreement, the Company had authorized or reserved 329,001 shares of
Sizeler Common Stock for issuance pursuant to the Company Option Plan. As of the
date of this Agreement 40,000 shares of Sizeler Series A Preferred Stock have
been reserved for issuance upon exercise of the rights (the "Company Rights")
distributed to the holders of Sizeler Common Stock pursuant to the Rights
Agreement between the Company and The Bank of New York dated as of August 6,
1998 (as amended from time to time) (the "Rights Agreement").
(b) Section 3.3(b) of the Company Disclosure Schedule sets forth an
accurate and complete list of each of the Company's Subsidiaries, and the
Company's ownership interests therein. All such shares and equity interests are
owned by the Company or another subsidiary of the Company free and clear of all
security interests, liens, claims, pledges, limitations in voting rights,
charges or other encumbrances of any nature whatsoever ("Liens"), except where
any such failure to own any such shares or equity interests free and clear would
not, individually or in the aggregate, have a Company Material Adverse Effect.
(c) Except as set forth in Section 3.3(c) of the Company Disclosure
Schedule, the Company does not of record or beneficially own (within the
9
meaning of Rule 13d-3 of the Exchange Act), directly or indirectly, any equity,
investment or similar interest in, or any interest convertible into or
exchangeable or exercisable for, any equity or similar interest in any
corporation or organization (other than Subsidiaries). With respect to such
interests, except as set forth in Section 3.3(c) of the Company Disclosure
Schedule, the Company and each Company Subsidiary is a partner, member or
stockholder in good standing, and owns such interests free and clear of all
Liens.
SECTION 3.4 Authority Relative to This Agreement. (a) The Company has
the requisite corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and, subject to obtaining the
Company Requisite Vote, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company, the performance by the
Company of its obligations hereunder, and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary pursuant to the Charter or the MGCL to authorize this
Agreement or to consummate the transactions so contemplated (other than (i) the
approval of the Merger by the affirmative vote of the holders of at least a
majority of the outstanding shares of Sizeler Common Stock entitled to vote
thereon (the "Company Requisite Vote") and (ii) with respect only to conversion
of Series B Preferred Stock into the right to receive the Series B Cash
Consideration, the Series B Merger Approval). This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery hereof by Acquiror and Merger Sub,
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law).
(b) The Company Board has (i) approved this Agreement and declared the
Merger advisable and fair to, and in the best interests of, the Company and the
stockholders of the Company (including the holders of the Sizeler Series B
Preferred Stock), (ii) resolved to recommend the approval of the Merger to the
stockholders of the Company (including the holders of the Sizeler Series B
Preferred Stock), and (iii) directed that the Merger be submitted to the
stockholders of the Company for their approval (including the holders of the
Sizeler Series B Preferred Stock).
10
SECTION 3.5 No Conflict; Required Filings and Consents.
(a) Except as set forth on Section 3.5 of the Company Disclosure
Schedule, the execution and delivery of, and the performance by the Company of
its obligations under, this Agreement, do not and will not (i) conflict with or
violate the Charter or Bylaws, (ii) result in the creation of any Lien on any of
the material properties or assets of the Company or any of its Subsidiaries or
(iii) result in (A) any breach or violation of or constitute a default (or an
event which with notice or lapse of time or both would become a default) or
result in the loss of a benefit under, or give rise to any right of termination,
cancellation, amendment or acceleration of, any Contract to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or its or any of their respective properties or assets are bound or
(B) any change of any rights or obligations of any party to a Contract to which
the Company or any of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries or its or any of their respective properties or assets are
bound, except, in the case of clauses (ii) and (iii), for any such conflict,
violation, Lien, breach, default, loss, right, change or other occurrence which
would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(b) The execution and delivery of this Agreement by the Company, the
performance by the Company of its obligations hereunder, and the consummation of
the Merger and the other transactions contemplated hereby, do not and will not
require any consent, approval, authorization or permit of, action by, filing
with or notification to, any governmental or regulatory authority, except for
(i) applicable requirements of the Securities Exchange Act of 1934, as amended
(together with the rules and regulations promulgated hereunder, the "Exchange
Act"), and state securities, takeover and "blue sky" laws, (ii) any approvals
and authorization required pursuant to Sections 6.8(b) and (c) hereof, and (iii)
the filing with and acceptance for record by the Department of the Articles of
Merger as required by the MGCL and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business.
SECTION 3.6 Compliance. Neither the Company nor any of its Subsidiaries
are in violation of any law, rule, regulation, order, judgment or decree
applicable to the Company or to any of its Subsidiaries or by which its or any
of their respective properties or assets are bound, except for any such
violation which would not, individually or in the aggregate, have a Company
Material Adverse Effect. The Company and its Subsidiaries have all permits,
licenses, authorizations, exemptions, orders, consents, approvals and franchises
from governmental and regulatory agencies required to conduct their respective
businesses as now being conducted, except for any such permit, license,
authorization, exemption, order, consent, approval or franchise the absence of
which would not, individually or in the aggregate, have a Company Material
Adverse Effect.
11
SECTION 3.7 SEC Filings; Financial Statements.
(a) The Company has filed or otherwise transmitted all forms, reports,
statements, certifications and other documents required to be filed with the
Securities and Exchange Commission (the "SEC") (collectively with the forms,
reports, statements, certifications and other documents required to be filed
with the SEC subsequent to the date of this Agreement, the "Company SEC
Reports"), each of which, as finally amended, has complied as to form in all
material respects with the applicable requirements of the Securities Act of
1933, as amended (together with the rules and regulations promulgated hereunder,
the "Securities Act"), or the Exchange Act, each as in effect on the date so
filed.
(b) As of its filing date, each Company SEC Report filed pursuant to
the Exchange Act did 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.
(c) The audited consolidated financial statements of the Company
(including any related notes thereto) for the fiscal years ended December 31,
2005 and December 31, 2004 included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2005 filed with the SEC have been
prepared and, any audited consolidated financial statements of the Company
(including any related notes thereto) filed after the date of this Agreement,
will be prepared, in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto) and fairly present, and, if filed
after the date of this Agreement, will fairly present, in all material respects
the consolidated financial position of the Company and its Subsidiaries at the
respective dates thereof and the consolidated statements of operations, cash
flows and changes in stockholders' equity for the periods indicated. The
unaudited consolidated financial statements of the Company (including any
related notes thereto) included in or incorporated by reference into the Company
SEC Reports filed with the SEC have been prepared, and, if filed after the date
of this Agreement, will be prepared, in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto) and fairly present, and, if filed after the date of this
Agreement, will fairly present, in all material respects the consolidated
financial position of the Company and its Subsidiaries as of the date thereof
and the consolidated statements of operations and cash flows for the periods
indicated (subject to normal period-end adjustments that will not be material in
amount or effect).
(d) The management of the Company has (i) implemented disclosure
controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to
ensure that material information relating to the Company, including its
consolidated Subsidiaries, is made known to the management of the Company by
others within those entities, and (ii) has disclosed, based on its most recent
evaluation, to the Company's outside auditors and the audit committee of the
Company Board (A) all significant deficiencies and material weaknesses in the
design or operation of internal control over
12
financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are
reasonably likely to adversely affect the Company's ability to record, process,
summarize and report financial data and (B) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company's internal control over financial reporting.
SECTION 3.8 Absence of Litigation. Except as disclosed in Section 3.8
of the Company Disclosure Schedule, there are no suits, claims, actions,
proceedings or investigations pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries (including, without
limitation, any suits, claims, actions, proceedings or investigations that in
any manner challenge or seek to prevent, enjoin, alter or materially delay the
Merger or any of the other transactions contemplated herein), other than any
such suit, claim, action, proceeding or investigation that would not,
individually or in the aggregate, have a Company Material Adverse Effect.
Neither the Company nor any of its Subsidiaries nor any of their respective
properties or assets is or are subject to any order, writ, judgment, injunction,
decree or award which has or would have a Company Material Adverse Effect. As of
the date of this Agreement, to the knowledge of the Company, no investigation or
review, including with respect to any accounting or disclosure practices of the
Company or any of its Subsidiaries or any malfeasance by any executive officer
or director of the Company, by any governmental authority, including the SEC, is
pending or has been threatened against the Company or any of its Subsidiaries.
SECTION 3.9 Employee Benefit Plans; Labor.
(a) Section 3.9(a) of the Company Disclosure Schedule contains a true
and complete list of each "employee benefit plan" (within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and each other director and employee plan, program, agreement or
arrangement, vacation or sick pay policy, material fringe benefit plan, and
compensation, severance, change of control, consulting or employment agreement
contributed to, sponsored or maintained by the Company or any of its
Subsidiaries as of the date of this Agreement for the benefit of any employees
(and former employees) and directors (and former directors) of the Company and
its Subsidiaries (such plans, programs, agreements and arrangements,
collectively, "Company Plans"). Neither the Company nor any of its affiliates or
predecessors has contributed to any defined benefit, multiple, multi-employer or
post-retirement welfare benefit plans.
(b) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, to the Company's knowledge, each Company Plan
has been established and administered in accordance with its terms and in
compliance with the applicable provisions of ERISA, the Internal Revenue Code of
1986, as amended (the "Code"), and other applicable laws, rules and regulations.
(c) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, with respect to each Company Plan, to the
13
knowledge of the Company, no actions, suits or claims (other than routine claims
for benefits in the ordinary course) are pending or threatened.
(d) Except as disclosed in Section 3.9(d) of the Company Disclosure
Schedule, none of the execution and delivery of, the stockholder approval of,
the performance by the Company of its obligations under, or the consummation of
the transactions contemplated by, this Agreement, will (either alone or upon
occurrence of any additional or subsequent events) (i) constitute an event under
any Company Plan or any trust or loan related to any of those plans or
agreements that will or may result in any material payment, acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee of the Company or any
of its Subsidiaries, or (ii) result in the triggering or imposition of (A) any
material restrictions or limitations on the right of the Company or any of its
Subsidiaries to amend or terminate any Company Plan, or (B) result in any
material "excess parachute payments" within the meaning of Section 280G(b)(1) of
the Code.
(e) Neither the Company nor any of its Subsidiaries is (or has been) a
party to any collective bargaining agreements or similar labor agreements
relating to any employees or former employees of the Company or any of its
Subsidiaries and there have been no actions to represent any employees of the
Company or any of its Subsidiaries and, to the knowledge of the Company, no such
actions are pending or threatened.
SECTION 3.10 Tax Matters.
(a) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, the Company and each of its Subsidiaries have
(i) timely filed (taking into account any extension of time within which to
file) all Tax Returns required to be filed by any of them in the manner provided
by law and all such filed Tax Returns were complete and accurate in all material
respects and (ii) paid all Taxes shown on such Tax Returns to be due and
payable. Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, (A) since December 31, 2005, neither the Company nor
any of its Subsidiaries has incurred any material liability for Taxes other than
in the ordinary course of business and (B) no audits have begun or been
threatened in writing and no deficiencies for material Taxes have been asserted
or assessed or threatened in writing by a governmental authority against the
Company or any of its Subsidiaries. Except as would not, individually or in the
aggregate, have a Company Material Adverse Effect, the Company has established
in its books and records reserves or accrued liabilities or expenses that are
adequate for payment of all Taxes for which the Company or any of the
Subsidiaries is liable but are not yet due and payable. No event has occurred,
and condition or circumstance exists, which presents a material risk that any
material Tax described in the preceding sentence will be imposed on the Company.
(b) Except as set forth on Section 3.10(b) of the Company Disclosure
Schedule or as would not, individually or in the aggregate, have a Company
14
Material Adverse Effect, (i) neither the Company nor any of its Subsidiaries has
any liability for the Taxes of any person other than the Company or its
Subsidiaries either (A) under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign law) or (B) as a transferee or
successor, and (ii) neither the Company nor any of its Subsidiaries is a party
to, is bound by, or has any obligation under, any Tax sharing, allocation,
indemnity or similar agreement or arrangement (whether or not in writing) that
obligates it to make any payment computed by reference to the Taxes, taxable
income or taxable losses of another person.
(c) During the five year period ending on the date hereof, neither the
Company nor any of its Subsidiaries was a distributing corporation or a
controlled corporation in a transaction intended to be governed by Section 355
of the Code.
(d) The Company, (i) for each taxable year beginning with its taxable
year ended on December 31, 2005, has been subject to taxation as a real estate
investment trust within the meaning of the Code ("REIT") and has satisfied the
requirements to qualify as a REIT for such years, (ii) has operated since
December 31, 2005, and intends to continue to operate, consistent with the
requirements for qualification and taxation as a REIT, and (iii) 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 the
Company's status as a REIT, and no such challenge is pending, or to the
knowledge of the Company, threatened. Each Subsidiary which is a partnership,
joint venture, limited liability company or other entity other than a
corporation (i) has been since its formation and continues to be treated for
federal income tax purposes as a partnership or as an entity that is disregarded
for federal income tax purposes and not as a corporation or an association
taxable as a corporation and (ii) has not since the later of its formation or
the acquisition by the Company of a direct or indirect interest therein, owned
any assets (including, without limitation, securities) that would cause the
Company to violate Section 856(c)(4) of the Code. Each Subsidiary which is a
corporation or treated as an association taxable as a corporation and any person
in which the Company owns 10% or more, by vote or by value, of such person's
securities, is and has been since its formation or acquisition by the Company a
qualified REIT subsidiary under Section 856(i) of the Code, or is and has been a
"taxable REIT subsidiary" under Section 856(l) of the Code.
(e) The Company is a "domestically-controlled REIT" within the meaning
of Section 897(h) of the Code.
(f) As a result of the consummation of the Merger, (i) the Merger Sub
shall have an aggregate adjusted basis in the Company's assets for U.S. federal
income tax purposes immediately after the Effective Time equal to the sum of (A)
the aggregate amount of the Merger Consideration, (B) the aggregate amount of
the Series B Cash Consideration, and (C) the aggregate amount of the Company's
liabilities at the Effective Time and (ii) the amount of gain recognized by the
Company for federal income tax purposes upon the transfer of its assets pursuant
to the Merger will not exceed
15
the dividends paid deduction of the Company under Part IV of Subchapter G of
Chapter 1 of Subtitle A of the Code for the taxable year which includes the
Closing Date and therefore, the Company will not be subject to any
corporate-level income tax in connection with any such recognized gain.
As used in this Agreement, the term (i) "Taxes" shall mean all federal,
state, local and foreign income, profits, franchise, license, transfer,
recording, gross receipts, environmental, customs duty, capital stock,
severances, stamp, payroll, sales, employment, unemployment, disability, use,
property, withholding, excise, production, value added, occupancy and other
taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties and additions imposed with respect to such amounts and any
interest in respect of such penalties and additions, and (ii) "Tax Return" shall
mean all returns and reports (including elections, declarations, disclosures,
attachments, schedules, work papers, estimates and information returns) required
to be supplied to a Tax authority relating to Taxes.
SECTION 3.11 Proxy Statement. The Proxy Statement shall not at the time
the Proxy Statement is filed, or at any time it is supplemented or amended, or
at the time it is cleared by the SEC or sent to the stockholders of the Company,
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 were made, not
misleading. The Proxy Statement to be sent to the stockholders of the Company in
connection with the Company Stockholders Meeting will, at the time of the
Company Stockholders Meeting, comply as to form in all material respects with
the requirements of the Exchange Act. Notwithstanding the foregoing, the Company
makes no representations or warranties with respect to information that has been
or will be supplied by the Acquiror or Merger Sub, or any of their respective
representatives, specifically for use in the Proxy Statement.
SECTION 3.12 Fairness Opinion. Wachovia Securities and Xxxxx & Steers
have each delivered to the Company Board their opinions dated as of the date of
this Agreement, to the effect that, as of such date, the Merger Consideration is
fair, from a financial point of view, to the holders of the Sizeler Common Stock
at the time of the execution of this Agreement.
SECTION 3.13 Brokers. No broker, finder or investment banker (other
than Wachovia Securities and Xxxxx & Steers) is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by and on behalf of
the Company or any of its Subsidiaries.
SECTION 3.14 Takeover Statutes. The Company has taken all necessary
corporate action so that no "fair price," "moratorium," "control share
acquisition," "business combination" or other similar anti-takeover statute or
regulation enacted under the MGCL or the federal laws in the United States
applicable to the Company is applicable to the Merger and the other transactions
contemplated hereby,
16
including any takeover or ownership restriction provision in the Company's
organizational documents.
SECTION 3.15 Company Rights Agreement. The Company has taken all
necessary actions so that the Company Rights Agreement will not be applicable to
this Agreement, the Merger and the other transactions contemplated hereby, and
this Agreement, the Merger and the other transactions contemplated hereby will
not result in the ability of any Person to exercise any Company Rights under the
Company Rights Agreement or enable or require the Company Rights to separate
from the shares of Sizeler Common Stock to which they are attached or to become
distributable, unredeemable or exercisable.
SECTION 3.16 Intellectual Property. Except as would not, individually
or in the aggregate, have a Company Material Adverse Effect: (a) the Company and
its Subsidiaries own or have the rights to use all patents, inventions,
copyrights, software, trademarks, service marks, domain names, trade dress,
trade secrets and all other intellectual property rights of any kind or nature
("Intellectual Property") used in their business as currently conducted, all of
which shall survive the execution of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby; and (b)(i) to the
knowledge of the Company, nothing used in the Company's business as currently
conducted infringes the Intellectual Property of any third party and no
Intellectual Property of the Company is being infringed by any third party; and
(ii) there is no action pending and no claim has been asserted or threatened
alleging the same.
SECTION 3.17 Environmental Matters.
(a) The Company has delivered or made available to Acquiror true and
complete copies of the most recent Environmental Documents in the possession or
control of the Company or any Subsidiary with respect to the subject matter
contained therein listed on Section 3.17(a) of the Company Disclosure Schedule
(the "Company Environmental Reports"). To the Company's knowledge, the Company
Environmental Reports constitute all material Environmental Documents
(including, without limitation, all most recent versions of environmental
investigations and testing or analysis made by or on behalf of the Company or
any of its Subsidiaries) with respect to the Company and its Subsidiaries, their
past and present operations, and the Company Properties in the possession or
control of the Company or any Subsidiary. Except as would not, individually or
in the aggregate, have a Company Material Adverse Effect: (i) no Materials of
Environmental Concern (as defined below) have been used, stored, manufactured,
treated or processed on or about any Company Property by the Company, any
Subsidiary or, to the knowledge of the Company, any other person except in
compliance with Environmental Laws (as defined below) and in the ordinary course
of business; (ii) the Company and each of its Subsidiaries have complied in all
material ways with applicable Environmental Laws), and possess and comply with
all material applicable Environmental Permits (as defined below) required under
such laws to operate as it presently operates and the Company Properties and the
business conducted thereon
17
are not in violation of Environmental Laws by the Company, any Subsidiary or, to
the knowledge of the Company, any other person; (iii) there have been no
releases of Materials of Environmental Concern at any property owned or operated
by the Company or any of its Subsidiaries or, to the knowledge of the Company,
by any other party, under circumstances that would reasonably be expected to
result in liability of the Company or any of its Subsidiaries under any
applicable Environmental Law; (iv) neither the Company nor any of its
Subsidiaries has received any written notification alleging any violation of any
Environmental Law or that it is liable for, or requesting information pursuant
to Section 104(e) of the Comprehensive Environmental Response, Compensation and
Liability Act or similar state statute concerning, any release or threatened
release of Materials of Environmental Concern at any location, except, with
respect to any such notification or request for information concerning any such
release or threatened release, to the extent such matter has been resolved with
the appropriate foreign, federal, state or local regulatory authority or
otherwise; and (v) neither the Company nor any of its Subsidiaries is subject to
any order, decree or injunction issued by any governmental authority or any
indemnity or other agreement with any third party relating to liability under
any Environmental Law or otherwise relating to any Materials of Environmental
Concern.
(b) Notwithstanding any other representations and warranties in this
Agreement, the representations and warranties in this Section 3.17 are the only
representations and warranties in this Agreement with respect to Environmental
Laws or Materials of Environmental Concern.
(c) For purposes of this Agreement, the following terms shall have the
meanings assigned below:
"Environmental Documents" shall mean all demands, claims, notices of
violation, reports, site assessments or orders relating to environmental matters
or pursuant to an Environmental Law other than any such demands, claims, notices
of violation, reports, site assessments or orders that are not material to the
Company and its Subsidiaries.
"Environmental Laws" shall mean all foreign, federal, state, or local
statutes, regulations, ordinances, codes, or decrees protecting the environment
and health and safety, including the quality of the ambient air, soil, surface
water or groundwater, in effect as of the date of this Agreement.
"Environmental Permits" shall mean all permits, licenses,
registrations, and other authorizations required under applicable Environmental
Laws.
"Materials of Environmental Concern" shall mean any "hazardous",
"acutely hazardous", or "toxic" substance, pollutant, contaminant or waste as
defined and regulated under Environmental Laws, including the Comprehensive
Environmental Response, Compensation and Liability Act and the Resource
Conservation and Recovery Act.
18
SECTION 3.18 Investment Company Act of 1940. Neither the Company nor
any of its Subsidiaries is required to be registered as an investment company
under the Investment Company Act of 1940, as amended.
SECTION 3.19 Affiliate Transactions. Except as disclosed in Section
3.19 of the Company Disclosure Schedule, there are no transactions, agreements,
arrangements or understandings between the Company or its Subsidiaries, on the
one hand, and the Company's affiliates (other than Subsidiaries of the Company)
or other persons, on the other hand, that would be required to be disclosed
under Item 404 of Regulation S-K.
SECTION 3.20 Contracts.
(a) Except for any default that would not, individually or in the
aggregate, have a Company Material Adverse Effect, (i) neither the Company nor
any of its Subsidiaries is in default under any material Contract to which the
Company or any of its Subsidiaries is a party or by which it or any of the
Company Properties or Leased Properties or assets is bound nor, to the knowledge
of the Company, is any other party thereto in default hereunder, and (ii) no
event has occurred that with the lapse of time or the giving of notice or both
would constitute a default hereunder by the Company or any of its Subsidiaries,
or to the knowledge of the Company, any other party. No party to any such
material Contract, has given notice to the Company or any of its Subsidiaries
of, or made a claim against the Company or any of its Subsidiaries with respect
to, any breach or default hereunder, in any such case, where such breach or
default would, individually or in the aggregate, have a Company Material Adverse
Effect. "Contract" means any note, bond, indenture, mortgage, deed of trust,
lease, sublease, reciprocal easement, commitment, guarantee, subordination,
nondisturbance and attornment agreement, license, contract, agreement or other
instrument of any kind.
(b) Section 3.20(b) of the Company Disclosure Schedule contains a true
and complete list of material Contracts providing for total payments by the
Company or any of its Subsidiaries in excess of $250,000, between the Company or
any of its Subsidiaries, on the one hand, and the persons listed therein, on the
other hand, pursuant to which the Company or any of its Subsidiaries, on the one
hand, and such persons, on the other hand, have any continuing obligations,
excluding leases executed by the Company or its Subsidiaries in their respective
ordinary course of business.
SECTION 3.21 Properties.
(a) Section 3.21(a) of the Company Disclosure Schedule contains a list
of the properties the Company or its Subsidiaries own ("Owned Properties") and a
list of the properties the Company or its Subsidiaries leases (as lessee)
("Leased Properties," and collectively with the Owned Properties, the "Company
Properties"). Except as set forth in Section 3.21(a) of the Company Disclosure
Schedule, the Company and its Subsidiaries own good, marketable and insurable
fee or leasehold interests in each of the Company Properties, and the same are
owned (or
19
leased) free and clear of Encumbrances except for (a) liens, mortgages or deeds
of trust, claims against title, options, rights of first offer or refusal,
charges which are liens, security interests or other encumbrances (collectively,
"Encumbrances") on title as set forth in Section 3.21(a) of the Company
Disclosure Schedule, (b) inchoate Encumbrances imposed for construction work in
progress, including mechanics' liens, workers' or repairmen's liens, or
otherwise incurred in the ordinary course of business which (i) are not yet due
and payable, (ii) are duly budgeted to be paid and (iii) do not materially
detract from value of or do not adversely affect in any material respect the
value, use or operation of the applicable Company Property, (c) property
restrictions imposed or promulgated by legal requirements that do not adversely
affect in any material respect the value, use or operation of the applicable
Company Property, including zoning regulations, which, to the knowledge of the
Company are not violated by the current use of the Company Properties, (d)
matters disclosed on the current title reports or surveys (in either case copies
of which title reports and surveys have been delivered to or made available to
Acquiror) that do not adversely affect in any material respect the value, use or
operation of the applicable Company Property, (e) real estate Taxes and special
assessments not yet due and payable (except as are being contested in good faith
by appropriate proceedings or for which reserves in accordance with generally
accepted accounting practices have been set forth on the books of the relevant
Company Property Owner), (f) ground leases, space leases or other occupancy
agreements affecting a Company Property set forth in Section 3.21(a) of the
Company Disclosure Schedule (which Schedule includes a true and correct rent
roll for all space leases and residential leases) and (g) other Encumbrances set
forth on the Company Disclosure Schedule. Except as would not have a Company
Material Adverse Effect, valid policies of title insurance have been issued
insuring the Company interest in each of the Company Properties, and no material
claim has been made against any such policies.
(b) Except as set forth on Section 3.21(b) of the Company Disclosure
Schedule, neither the Company nor any Subsidiary has received any written notice
nor has knowledge to the effect that (i) any condemnation or rezoning
proceedings are pending or threatened with respect to any of the Company
Properties or (ii) any zoning, building or similar legal requirement is or will
be violated in any material respect for any property by the continued
maintenance, operation or use of any buildings or other improvements on any of
the Company Properties or by the continued maintenance, operation or use of the
parking areas.
(c) With regard to any Leased Property where the Company or any
Subsidiary holds a leasehold estate or is the lessor under any ground lease (a
"Ground Lease"), the Company has made available to Acquiror true, complete and
correct copies of all Ground Leases, including all amendments, modifications,
supplements, renewals, extensions and guaranties related thereto. Each Ground
Lease is a valid and subsisting lease and none of the Company or any Subsidiary,
on the one hand, nor, to the knowledge of the Company or any Subsidiary, none of
the other parties under the Ground Lease, on the other hand, is in default under
any terms thereunder, except for such defaults that, individually in or in the
aggregate, would not have a Company Material Adverse Effect.
20
(d) With regard to any Company Property where the Company or any
Subsidiary is a party to a reciprocal easement agreement, operating agreement or
similar agreement imposing obligations on, and granting rights to, a Company
Property and an adjacent property owned by a third party (any such agreement, a
"REA"), the Company has made available to Acquiror true, complete and correct
copies of all REAs, including all amendments, modifications, supplements,
renewals, extensions and guaranties related thereto. Each REA is a valid
agreement and neither the Company nor any Subsidiary, on the one hand, nor, to
the knowledge of the Company or any Subsidiary, none of the other parties to an
REA, on the other hand, is in default under any terms thereunder, except for
such defaults that, individually in or in the aggregate, would not have a
Company Material Adverse Effect.
(e) There are no Tax abatements or exemptions specifically affecting
the Company Properties, and neither the Company nor any Subsidiary has received
any written notice of (and the Company and the Subsidiaries do not have any
knowledge of) any proposed increase in the assessed valuation of any of the
Company Properties or of any proposed public improvement assessments.
(f) Except as set forth on Section 3.21(f) of the Company Disclosure
Schedule, each of the Company Properties is managed by the Company or a
wholly-owned Subsidiary of the Company.
SECTION 3.22 Insurance. Section 3.22 of the Company Disclosure Schedule
contains a list of all material insurance policies which are owned by the
Company and its Subsidiaries and which name the Company or a Subsidiary as an
insured, including without limitation, those which pertain to the assets,
directors, officers, employees or operations of the Company or its Subsidiaries.
There is no material claim by the Company or any Subsidiary pending under any
such policies which has been denied by the insurer or being disputed by the
insurers (excluding customary discussions regarding the actual dollar amount of
loss with respect to particular claims). Neither the Company nor any of its
Subsidiaries has received any notice of cancellation or termination with respect
to any insurance policy of the Company or any of its Subsidiaries.
SECTION 3.23 Books and Records of the Company. The books of account,
minute books, stock record books, and other records of the Company, all of which
have been made available to Acquiror, are materially complete and correct,
accurately reflect in reasonable detail the transactions to which the Company or
any Subsidiary is a party or by which its properties are bound in accordance
with generally accepted accounting principles consistently applied and have been
maintained in accordance with sound business practices and the requirements of
Section 13(b)(2) of the Exchange Act, including the maintenance of an adequate
system of internal controls. The minute books of the Company contain materially
accurate and complete records of all meetings held of, and actions taken by, the
Company shareholders, the Board, and committees of the Board of the Company, and
no meeting of any such shareholders, Board, or committee has been held for which
minutes have not been prepared and are not
21
contained in such minute books. At the Closing, all of those books and records
will be delivered to Acquiror.
SECTION 3.24 Absence of Certain Changes. Except as provided in Section
3.24 of the Company Disclosure Schedule or disclosed in the Company SEC Reports,
since June 30, 2006 (i) the Company and its Subsidiaries have conducted their
respective businesses only in the ordinary course consistent with past practice;
and (ii) there has not been any action taken by the Company or any Subsidiary
during the period from June 30, 2006 through the date of this Agreement that, if
taken during the period from the date of this Agreement through the Effective
Time would constitute a breach of Section 5.1. Since June 30, 2006, there have
not been any changes, circumstances or events which, in the aggregate, have had,
or would reasonably be expected to have, a Company Material Adverse Effect.
SECTION 3.25 Absence of Undisclosed Liabilities. The Company and its
Subsidiaries do not have any liabilities or obligations, known or unknown,
contingent or otherwise, except (a) liabilities and obligations in the
respective amounts reflected on or reserved against in, or disclosed in the
footnotes to, the Company's audited consolidated balance sheets as of December
31, 2005 or June 30, 2006 included in the Company SEC Reports, and (b)
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since that date which individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Affect.
SECTION 3.26 Disclosure. Neither this Agreement including any of its
Schedules nor any certificate or other document furnished by the Company to the
Acquiror or Merger Sub pursuant hereto, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained herein and therein not misleading. To the knowledge of the Company,
there is no fact which has resulted in a Company Material Adverse Effect, or in
the future would, individually or in the aggregate, reasonably be expected to
result in a Company Material Adverse Effect.
SECTION 3.27 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, each of the
Acquiror and Merger Sub acknowledges that neither the Company nor any other
person on behalf of the Company makes any other express or implied
representation or warranty with respect to the Company or with respect to any
other information provided to the Acquiror or Merger Sub.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
ACQUIROR AND MERGER SUB
Acquiror and Merger Sub hereby, jointly and severally, represent and
warrant to the Company as of the date of this Agreement (except in the case of
any
22
representation or warranty that by its express terms is made as of another
specified date) that, except as set forth on the corresponding section of the
disclosure schedule delivered by the Acquiror and Merger Sub to the Company
prior to the execution of this Agreement (the "Acquiror Disclosure Schedule"):
SECTION 4.1 Organization and Qualification. Each of the Acquiror and
Merger Sub, is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization and has the requisite power and
authority to own, operate or lease its properties and assets and to carry on its
business as it is now being or will be conducted, except where the failure to be
so organized, existing or in good standing or to have such power or authority
would not, individually or in the aggregate, prevent or materially delay or
impair the ability of the Acquiror or Merger Sub to consummate the transactions
contemplated hereby (an "Acquiror Material Adverse Effect"). The Acquiror and
each of its Subsidiaries is duly qualified or licensed to do business, and is in
good standing in each jurisdiction where the character of its properties owned,
leased or operated by it or the management of properties for others or the
conduct of its business makes such qualification or licensing necessary, except
for any such failure to be so qualified or licensed or in good standing which
would not, individually or in the aggregate, have an Acquiror Material Adverse
Effect. The Parent beneficially owns all of the outstanding stock of Merger Sub
free and clear of all Liens.
SECTION 4.2 Authority Relative to This Agreement. Each of Acquiror and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by each of the Acquiror and Merger Sub, the performance by each of the
Acquiror and Merger Sub of its obligations under this Agreement, and the
consummation by each of the Acquiror and Merger Sub of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action and no other proceedings on the part of the Acquiror, Merger Sub or
Parent are necessary pursuant to their respective organizational documents, the
laws of the jurisdiction in which the Acquiror was formed, and the MGCL to
authorize this Agreement or to consummate the transactions so contemplated. This
Agreement has been duly and validly executed and delivered by the Acquiror and
Merger Sub and, assuming the due authorization, execution and delivery hereof by
the Company, constitutes a legal, valid and binding obligation of each such
entity enforceable against such entity in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, and general equitable principles (whether considered in a proceeding
in equity or at law). The board of directors of Parent and Parent, as the owner
of all outstanding stock of Merger Sub, have approved this Agreement.
SECTION 4.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of, and performance by each of the
Acquiror and Merger Sub of its obligations under, this Agreement do not and will
not
23
(i) conflict with or violate the respective organizational documents of Acquiror
or Merger Sub, (ii) result in any breach or violation of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
or result in the loss of a material benefit under, or give rise to any right of
termination, cancellation, material amendment or material acceleration of, any
Contract to which the Acquiror or Merger Sub is a party or by which the Acquiror
or Merger Sub or any of their respective properties are bound, except, in the
case of clause (ii) of this subsection (a), for any such conflict, violation,
breach, default, loss, right or other occurrence which would not, individually
or in the aggregate, have an Acquiror Material Adverse Effect.
(b) The execution and delivery of this Agreement by each of the
Acquiror and Merger Sub, the performance by each of Acquiror and Merger Sub of
its obligations under this Agreement, and the consummation by Merger Sub of the
Merger and the other transactions contemplated hereby do not and will not
require any consent, approval, authorization or permit of, action by, filing
with or notification to, any governmental or regulatory authority, except for
(i) applicable requirements of the Exchange Act, and state securities, takeover
and "blue sky" laws, (ii) applicable requirements of Canadian provincial
securities laws and the rules of the Toronto Stock Exchange, (iii) any approvals
or authorizations required by Section 6.8(b) or (c), and (iv) the filing with
and the acceptance for record by the Department of the Articles of Merger as
required by the MGCL and appropriate documents with the relevant authorities of
other states in which the Acquiror is qualified to do business.
SECTION 4.4 Financial Statements. The audited consolidated financial
statements of the Acquiror (including any notes related thereto) for the fiscal
years ended December 31, 2005 and December 31, 2004 included in the Acquiror's
Annual Report filed with the Ontario Securities Commission have been prepared,
and, any audited consolidated financial statements of the Acquiror (including
any related notes thereto) filed with the Ontario Securities Commission after
the date of this Agreement, will be prepared, in accordance with Canadian
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto) and fairly present, and, if filed after the date of this Agreement,
will fairly present, in all material respects the consolidated financial
position of the Acquiror and its subsidiaries at the respective dates thereof
and the consolidated statements of operations, cash flows and changes in
stockholders' equity for the periods indicated. The unaudited consolidated
financial statements of the Acquiror (including any related notes thereto) for
the quarter ending June 30, 2006 as filed with the Ontario Securities Commission
have been prepared in accordance with Canadian generally accepted accounting
principles applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto) and fairly present in all material
respects the consolidated financial position of the Acquiror and its
subsidiaries as of the date thereof and the consolidated statements of
operations and cash flows for the periods indicated (subject to normal
period-end adjustments that will not be material in amount or effect).
24
SECTION 4.5 Absence of Litigation. Except as disclosed in Section 4.6
of the Acquiror Disclosure Schedule, there are no suits, claims, actions,
proceedings or investigations pending or, to the knowledge of the Acquiror,
threatened against the Acquiror or any of its Subsidiaries, other than any such
suit, claim, action, proceeding or investigation that would not, individually or
in the aggregate, have an Acquiror Material Adverse Effect. Neither the Acquiror
nor any of its Subsidiaries nor any of their respective properties or assets is
or are subject to any order, writ, judgment, injunction, decree or award which
would, individually or in the aggregate, have an Acquiror Material Adverse
Effect. As of the date of this Agreement, no investigation or review, including
with respect to any accounting or disclosure practices of Acquiror or any of its
Subsidiaries or any malfeasance by any executive officer or director of
Acquiror, by any governmental authority, including the SEC, is pending or, to
the knowledge of Acquiror, has been threatened against the Acquiror or any of
its Subsidiaries.
SECTION 4.6 Brokers. No broker, finder or investment bank is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by and
on behalf of the Acquiror or Merger Sub.
SECTION 4.7 Operations of Merger Sub. Merger Sub has been organized as
a Maryland corporation solely for the purposes of effecting the Merger and the
other transactions contemplated hereby, and prior to the Effective Time Merger
Sub will have engaged in no other business activities and will have no material
assets or liabilities other than as contemplated herein.
SECTION 4.8 Ownership of Shares of Sizeler Common Stock. Except as
disclosed in the Amendment No. 2 to Schedule 13D filed by the Acquiror on August
11, 2006, none of the Acquiror, Merger Sub or their respective affiliates owns
(directly or indirectly, beneficially or of record) any shares of Sizeler Common
Stock or Sizeler Preferred Stock, and none of the Acquiror or Merger Sub or
their respective affiliates holds any rights to acquire any shares of Sizeler
Common Stock or Sizeler Preferred Stock except pursuant to this Agreement. In
addition, except as contemplated by this Agreement, after the date of this
Agreement, neither the Acquiror nor the Merger Sub, nor their executive officers
or directors, nor any stockholder of the Acquiror who may be deemed to be an
"affiliate" (as that term is defined for purposes of Rules 145 and 405
promulgated by the SEC under the 0000 Xxx) of the Acquiror, shall purchase or
sell on the NYSE, or submit a bid to purchase or an offer to sell on the NYSE,
directly or indirectly, any shares of Sizeler Common Stock, Sizeler Preferred
Stock or any options, rights or other securities convertible into shares of
Sizeler Common Stock.
SECTION 4.9 Financing. The Acquiror is concurrently with the entering
into of this Agreement, entering into a commitment letter, dated as of the date
hereof relating to the debt financing necessary for the consummation of the
Merger and the other transactions contemplated by this Agreement, which
commitment letter is in full force and effect, a copy of which has been provided
to the Company (the "Commitment Letter"). The Acquiror represents to the Company
that it will have available to it
25
internal funds and third party financing that, in the aggregate, will be
sufficient to enable Acquiror and Merger Sub to make all necessary payments by
them in connection with the Merger and the other transactions contemplated by
this Agreement, including any amounts necessary to repay or refinance any
outstanding indebtedness of the Company and its Subsidiaries to the extent such
repayment or refinancing is required in connection with the transactions
contemplated by this Agreement.
SECTION 4.10 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, the Company
acknowledges that none of the Acquiror, Merger Sub or any other person on behalf
of the Acquiror or Merger Sub makes any other express or implied representation
or warranty with respect to the Acquiror or Merger Sub or with respect to any
other information provided to the Company.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1 Conduct of Business of the Company Pending the Merger. The
Company covenants and agrees as to itself and to any of its Subsidiaries of
which the Company has, directly or indirectly, the power generally to direct or
control the day-to-day management and policies thereof, whether through
ownership of securities, by contract or otherwise (each, a "Controlled
Subsidiary"), that, during the period from the date of this Agreement until the
Effective Time, except as expressly permitted by this Agreement, as disclosed in
Section 5.1 of the Company Disclosure Schedule, or as required by law, or unless
Acquiror shall otherwise agree in writing, (A) the business of the Company and
its Controlled Subsidiaries shall be conducted in the ordinary course of
business and substantially in the same manner as heretofore conducted, (B) it
shall make distributions at times and in amounts sufficient and take all actions
necessary to continue to qualify as a REIT under the Code, (C) the Company and
its Controlled Subsidiaries shall use reasonable commercial efforts to preserve
their business organization, goodwill and their present relationships with
persons with which the Company or any of its Controlled Subsidiaries has
significant business relations, (D) continue to maintain, in all material
respects, their properties in accordance with present practices in a condition,
taken as a whole, reasonably suitable for their current use, and (E) neither the
Company nor any of its Controlled Subsidiaries shall without the prior written
consent of the Acquiror (which consent shall not be unreasonably withheld or
delayed):
(a) amend or otherwise change in any material respect any of its
organizational documents;
(b) reclassify, combine, split, subdivide, redeem, purchase or
otherwise acquire any stock of the Company;
(c) issue, deliver or sell, or authorize or propose the issuance,
delivery or sale of, any of its equity securities or any securities convertible
into or
26
exercisable for any of its equity securities or any options, warrants, calls or
rights with respect thereto, other than (A) the issuance of Sizeler Common Stock
pursuant to the Company Option Plans in accordance with their present terms, (B)
the issuance by a wholly-owned Subsidiary of its capital shares to its parent
corporation, or (C) the issuance of Company Rights pursuant to the Company
Rights Agreement in accordance with the terms thereof;
(d) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its stock,
except (i) as expressly provided in Section 6.10 and (ii) any dividend or
distribution by a wholly owned Subsidiary of the Company to the Company or
another wholly owned Subsidiary of the Company or by a non-wholly owned
Subsidiary of the Company to the extent required by its organizational
documents;
(e) fail to use commercially reasonable efforts to maintain in full
force and effect insurance coverage substantially similar to insurance coverage
maintained on the date of this Agreement, to the extent available on
commercially reasonable terms;
(f) incur any indebtedness or guarantee such indebtedness of another
person, or issue or sell any debt securities or warrants or other rights to
acquire any debt security of the Company or any of its Subsidiaries, except for
indebtedness incurred (A) in accordance with Section 5.1(f) of the Company
Disclosure Schedule or (B) in the ordinary course of business consistent under
existing lines of credit or (C) from guarantees by the Company of indebtedness
of any of its wholly owned Subsidiaries incurred as permitted by this Section
5.1(f);
(g) except as disclosed in Section 5.1(g) of the Company Disclosure
Schedule, acquire, enter into any option to acquire, or exercise an option or
other right or election or enter into any Contract for the acquisition of any
real property, encumber real property or commence construction of, or enter into
any Contract to develop or construct, new real estate projects;
(h) sell, lease, mortgage, subject to Lien (or, in the case of an
involuntary Lien, fail to use commercially reasonable efforts to have such Lien
removed within 30 days of the Company's receipt of notice thereof) or otherwise
dispose of, any of the Company Properties or Leased Properties, except in
connection with a transaction disclosed in Section 5.1(h) of the Company
Disclosure Schedule;
(i) except as required pursuant to existing written, binding agreements
in effect prior to the date of this Agreement, or as disclosed in Section 5.1(i)
of the Company Disclosure Schedule, or as otherwise required by law, (i) enter
into any commitment to materially increase the benefits payable under any
existing severance or termination benefit policy or employment agreement (other
than in the ordinary course of business for Company Property related employees
as required to be increased pursuant to the existing terms of any such policy or
agreement), (ii) enter into any employment,
27
deferred compensation or other similar agreement (or amend any such existing
agreement) with any director or officer of the Company or any of its
Subsidiaries, (iii) establish, adopt, amend, terminate or make any new awards
under any bonus, profit-sharing, thrift, pension, retirement, deferred
compensation, compensation, stock option, restricted stock or other benefit plan
or arrangement covering any director, officer or employee of the Company or any
of its Subsidiaries, except that the Company or any of its Subsidiaries may
amend any such existing plan or arrangement if the effect of any such amendment
is immaterial in respect of costs or benefits available under such plan or
arrangement, or (iv) increase the compensation, bonus or other benefits payable
to any director, officer, employee, consultant or independent contractor of the
Company or any of its Subsidiaries, except in the ordinary course of business
consistent with past practice;
(j) change the ownership of any of its Subsidiaries or merge or
consolidate the Company or any of its Subsidiaries with any other person other
than transfers from one subsidiary to another subsidiary or from the subsidiary
to the Company;
(k) make any changes with respect to accounting policies or material
procedures, except as required by changes in GAAP or as suggested or approved by
the Company's auditors;
(l) make or rescind any express or deemed material election relative to
Taxes, unless such election or rescission is (i) required by law, (ii) necessary
to preserve the status of the Company as a REIT or of any Subsidiary of the
Company as a partnership for federal income tax purposes, (iii) beneficial to
the Company or its Subsidiaries or (iv) consistent with elections historically
made by the Company;
(m) make any loans, advances or capital contributions to, or
investments in, any other Person, other than in the ordinary course of business
consistent with past practice or between or among the Company and any of its
Subsidiaries; and
(n) pay, discharge or satisfy any material liabilities, other than the
payment, discharge or satisfaction, in the ordinary course of business
consistent with past practice.
SECTION 5.2 Conduct of Business of the Acquiror Pending the Merger. The
Acquiror covenants and agrees that, during the period from the date of this
Agreement until the Effective Time, except as expressly permitted by this
Agreement, as disclosed in Section 5.2 of the Acquiror Disclosure Schedule, or
as required by law, or unless Company shall otherwise agree in writing, neither
the Acquiror nor any of its Subsidiaries (including the Acquiror and Merger Sub)
shall without the prior written consent of Company take any action that would
prevent or materially impede the consummation of the Merger, including the
obtaining of the financing necessary for the consummation of the Merger and the
transactions contemplated by this Agreement.
28
SECTION 5.3 Assistance. From the date of this Agreement until the
earlier of the Effective Date or the date of the termination of this Agreement,
the Company and its Subsidiaries shall cooperate with the Acquiror, at the sole
expense of the Acquiror, in connection with the Acquiror's planning for the
post-Closing integration of the business organizations of the Acquiror and the
Company; provided, however, that neither the Company nor any of its Subsidiaries
shall be required to engage in any transaction prior to the Effective Time. The
Company agrees that it shall consult with the Acquiror in respect of the
maintenance and/or renewal of any of the insurance policies held by the Company
and its Subsidiaries.
SECTION 5.4 No Control of Other Party's Business. Nothing contained in
this Agreement shall give the Acquiror, directly or indirectly, the right to
control or direct the Company's or its Subsidiaries' operations prior to the
Effective Time. Prior to the Effective Time, the Company shall exercise,
consistent with the terms and conditions of this Agreement, complete control and
supervision over its and its Subsidiaries' operations.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Stockholders Meetings; Company Recommendation.
(a) The Company shall, as soon as reasonably practicable following the
date of this Agreement, acting through the Company Board, (i) establish a record
date for, duly call, give notice of, convene and hold a meeting of the holders
of Sizeler Common Stock for the purpose of obtaining the Company Requisite Vote
(the "Company Stockholders Meeting") and (ii) use its commercially reasonable
efforts to cause the Proxy Statement to be mailed to the holders of the Sizeler
Common Stock and to obtain the Company Requisite Vote. In addition, the Company
shall as soon as reasonably practicable following the date of this Agreement,
acting through the Company Board, seek to obtain the approval of the requisite
holders of the Sizeler Series B Preferred Stock to the Merger. The Company Board
shall recommend approval of the Merger by the stockholders of the Company as
provided in Section 3.4 (the "Company Recommendation"), and shall not withdraw,
modify or qualify (or propose to withdraw, modify or qualify) in any manner
adverse to the Acquiror such recommendation or take any action or make any
statement in connection with the Company Stockholders Meeting inconsistent with
such recommendation including approving or recommending or proposing to approve
or recommend a Company Acquisition Proposal or failing to recommend the approval
of this Agreement; provided that the Company Board may withdraw, modify or
change its recommendation with respect to the Merger and/or may fail to use such
efforts only if it shall have first determined in good faith, after consultation
with outside legal counsel to the Company, that its continued recommendation of
the Merger and/or use of such efforts would be inconsistent with the duties of
the directors of the Company under applicable law.
29
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Company shall not be required to hold the Company Stockholders
Meeting if this Agreement is terminated.
(c) At the Company Stockholders Meeting, the Acquiror agrees to vote or
cause to be voted all of the Sizeler Common Stock owned by the Acquiror or any
of its affiliates in favor of this Agreement, the Merger and any of the other
transactions contemplated by this Agreement.
SECTION 6.2 Proxy Statement. As soon as reasonably practicable
following the date of this Agreement, the Company shall prepare and file with
the SEC a proxy statement (the "Proxy Statement") in preliminary form. The
Company shall use all reasonable efforts to resolve as promptly as practicable
any comments of the SEC with respect thereto. The Company shall notify the
Acquiror promptly of the receipt of any comments from the SEC or its staff and
of any request by the SEC or its staff for amendments or supplements to the
Proxy Statement or for additional information and keep the Acquiror apprised of
any new developments with respect to the SEC staff's review of the Proxy
Statement. If, at any time prior to the Effective Time, any information relating
to the Acquiror, Merger Sub or the Company is discovered by the Acquiror or the
Company that should be set forth in an amendment or supplement to the Proxy
Statement so that such document would not include any misstatement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, the party hereto discovering such information shall promptly notify
the other parties and, to the extent required by law, an appropriate amendment
or supplement describing such information shall be promptly filed with the SEC
and, to the extent required by law, disseminated to the stockholders of the
Company.
SECTION 6.3 Access to Information; Confidentiality.
(a) From the date of this Agreement to the Effective Time or the
earlier termination of this Agreement, upon reasonable prior written notice, the
Company shall, and shall use commercially reasonable efforts to cause its
Subsidiaries and their respective officers, directors and employees to, afford
the officers, employees, auditors and other authorized representatives of the
Acquiror reasonable access, consistent with applicable law, upon prior notice
and at reasonable times, to its officers, employees, properties, offices and
other facilities and to all books and records, and shall make reasonable efforts
to furnish to the Acquiror financial, operating and other data and information
as reasonably requested by the Acquiror in writing, through its officers,
employees or authorized representatives, from time to time. It is expressly
understood that the Acquiror and its agents shall conduct themselves in a manner
so as not to interfere with the business or operations of the Company or any of
its Subsidiaries. Neither the Company nor any of its Subsidiaries shall be
required to provide access to or to disclose information where such access or
disclosure would violate the rights of any person with which it has a business
relationship, jeopardize the attorney-client privilege or contravene any law,
rule, regulation, order, judgment, decree or binding agreement
30
entered into prior to the date of this Agreement, in the sole judgment of the
Company's President. The Company will make appropriate substitute disclosure
arrangements under circumstances in which the restrictions of the preceding
sentence apply.
(b) Each of the Acquiror and the Company will hold and treat and will
cause their respective officers, employees, auditors and other authorized
representatives to hold and treat in confidence all documents and information
concerning the other furnished or otherwise made available to such party in
connection with the transactions contemplated by this Agreement in accordance
with the Confidentiality Agreement, dated April 24, 2006, between the Company
and the Acquiror (the "Confidentiality Agreement"), which Confidentiality
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 6.4 Company Acquisition Proposals.
(a) The Company agrees that (i) it and its Subsidiaries and its and
their respective officers, directors and employees shall not and (ii) it shall
use reasonable efforts to ensure that its investment bankers, attorneys,
consultants or other agents or representatives shall not, (A) directly or
indirectly, initiate, solicit or knowingly encourage or facilitate any inquiries
or the making of any proposal or offer with respect to a tender offer or
exchange offer, proposal for a merger, consolidation or other business
combination involving the Company and its Subsidiaries or any proposal or offer
to acquire or dispose of in any manner, an equity interest representing a 10% or
greater economic interest in the Company, or assets, securities or ownership
interests of or in, the Company or any of its Subsidiaries representing 10% or
more of the consolidated assets of the Company and its Subsidiaries, other than
the Merger (any such proposal or offer being hereinafter referred to as a
"Company Acquisition Proposal"); provided, however, that for purposes of
references to a Company Acquisition Proposal in clause (B) of Section 8.2(b)(ii)
and (iii) and the definition of Company Superior Proposal, the percentage 50%
shall be substituted for the percentage 10%, (B) approve, agree to or recommend
any Company Acquisition Proposal or enter into any agreement with respect to a
Company Acquisition Proposal, (C) directly or indirectly, engage in any
negotiations or discussions concerning, or provide access to its properties,
books and records or any confidential information or data to any person relating
to, a Company Acquisition Proposal, or (D) otherwise knowingly encourage or
facilitate any effort or attempt to make or implement a Company Acquisition
Proposal.
Subject to the rights of the Acquiror under Section 8.1(d)(ii), nothing
contained in this Agreement (including the preceding paragraph) shall prevent
the Company or the Company Board from (i) taking and disclosing to its
stockholders a position contemplated by Rule 14d-9 and Rule 14e-2(a) or Item
1012(a) of Regulation M-A promulgated under the Exchange Act (or any similar
communication to stockholders in connection with the making or amendment of a
tender offer or exchange offer) or from making any legally required disclosure
to stockholders with regard to a Company Acquisition Proposal, (ii) prior to the
approval of the Merger by the Company's stockholders in accordance with this
Agreement, providing access to its
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properties, books and records and providing information or data in response to a
request therefor by a person who has made an unsolicited bona fide written
Company Acquisition Proposal if the Company Board receives from the person so
requesting such information an executed confidentiality agreement containing
confidentiality and other restrictions on terms at least as favorable to the
Company as those contained in the Confidentiality Agreement, (iii) prior to the
approval of the Merger by the Company's stockholders in accordance with this
Agreement, engaging in any negotiations or discussions with any person who has
made an unsolicited bona fide written Company Acquisition Proposal, or (iv)
prior to the approval of the Merger by the Company's stockholders in accordance
with this Agreement and following the receipt of a bona fide written Company
Acquisition Proposal that did not result from a breach of this Section 6.4(a),
(A) withdrawing, modifying or changing in any adverse manner the Company
Recommendation or (B) recommending an unsolicited bona fide written Company
Acquisition Proposal; if and only to the extent that in connection with the
foregoing clauses (ii), (iii) and (iv) above, the Company Board shall have
determined in good faith, after consultation with its outside legal counsel and
financial advisors, that, (1) in the case of clause (iv) above only, such
Company Acquisition Proposal, if accepted, is reasonably likely to be
consummated, taking into account all legal, financial, regulatory, timing and
similar aspects of the proposal and the person making the proposal and would, if
consummated, result in a transaction more favorable to the Company's
stockholders from a financial point of view than the Merger (any such more
favorable Company Acquisition Proposal being referred to in this Agreement as a
"Company Superior Proposal") and (2) in the case of clauses (ii) and (iii) above
only, there is a reasonable likelihood that such actions could lead to a Company
Superior Proposal.
The Company agrees that it will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any persons
conducted prior to the date of this Agreement with respect to any Company
Acquisition Proposal (but the foregoing will not prevent further interaction
with any such persons to the extent permitted by the preceding paragraph).
After the date of this Agreement, the Company shall promptly notify the
Acquiror of the receipt of any Acquisition Proposal or any request for
non-public information or inquiry that it reasonably believes will lead to a
Company Acquisition Proposal.
(b) Notwithstanding anything in this Section 6.4 to the contrary, if,
at any time prior to the approval of the Merger by the Company's stockholders in
accordance with this Agreement, the Company Board determines in good faith,
after consultation with its financial advisors and outside legal counsel, in
response to a Company Acquisition Proposal that was unsolicited, that such
proposal is a Company Superior Proposal, the Company or the Company Board may
terminate this Agreement; if (i) the Company Requisite Vote has not yet been
received, and (ii) the Company has first given the Acquiror at least five (5)
business days to respond to such Company Acquisition Proposal after the Company
has notified the Acquiror that, in the absence of any further action by the
Acquiror, the Company would consider such Company
32
Acquisition Proposal to be a Company Superior Proposal and would terminate this
Agreement, and given due consideration to any amendments or modifications to
this Agreement proposed by the Acquiror during such period; provided, however,
that the Company shall not terminate this Agreement pursuant to this sentence,
and any purported termination pursuant to this sentence shall be void and of no
force or effect, unless the Company prior to or concurrently with such
termination pursuant to this Section 6.4(b) pays to the Acquiror the fee payable
pursuant to Section 8.2(b).
SECTION 6.5 Employment and Employee Benefits Matters.
(a) From and after the Effective Time, the Acquiror shall assume and
honor, or shall cause the Surviving Corporation to assume and honor, the
obligations of the Company and its Subsidiaries under all existing Company Plans
and the Acquiror or the Surviving Corporation, as the case may be, shall perform
the obligations of the Company and its Subsidiaries under such Company Plans in
the same manner and to the same extent that the Company and its Subsidiaries
would have been required to perform hereunder; provided, however, that, except
as otherwise explicitly provided herein, nothing herein shall be construed to
prevent, on or following the Effective Time, (i) the termination of employment
of any individual who immediately prior to the Effective Time was an employee of
the Company or any of its Subsidiaries (such employees, the "Company Employees")
or (ii) the amendment or termination of any Company Plan to the extent permitted
by the terms thereof and applicable law.
(b) For a period of one year following the Effective Time, the Acquiror
shall, or shall cause the Surviving Corporation to arrange for each Company
Employee that was participating in any of the Plans of the Company immediately
before the Effective Time to receive employee benefits and compensation which
shall be no less favorable, in the aggregate, to the benefits that were provided
to the Company Employees prior to the Effective Time either by: (i) continuing
the compensation and employee benefit plans provided to the Company Employees by
the Company prior to the Effective Time (the "Existing Plans") or (ii) enrolling
the Company Employee in the Acquiror's compensation and benefit plans as
provided for in this Section 6.5 (the "Counterpart Plans"). Such participants
shall receive full credit for years of service with the Company or any
Subsidiary prior to the Effective Time for all purposes for which such service
was recognized under the Plans. If Company Employees participate in Counterpart
Plans for purposes of satisfying the obligations under this Section 6.5,
Acquiror shall, or shall cause one of its subsidiaries to, waive all
pre-existing conditions (to the extent waived under the applicable employee
welfare benefit plans of the Company) otherwise applicable to employees of the
Company under the Counterpart Plans. Acquiror shall give credit under those of
its Counterpart Plans that are welfare benefit plans for all co-payments,
waiting periods, deductibles and out-of-pocket maximums satisfied by employees
(and their eligible dependents) of the Company and the Subsidiaries, in respect
of the calendar year in which the Effective Time occurs. Notwithstanding the
forgoing, Acquiror may continue one or more of the Plans, in which case Acquiror
shall have satisfied its obligations hereunder with respect to the benefits so
provided if the
33
terms of the Plans which are continued are no less favorable, as a whole, than
the terms of the Counterpart Plans (as applicable).
(c) The Acquiror acknowledges that a "change of control" or a "change
in control," as that term is used in any Company Plan that contains such term,
shall occur at the Effective Time. Without limiting the generality of the
foregoing, Acquiror agrees that, under the agreements with the individuals
listed in Section 6.5(c) of the Company Disclosure Schedule, the Merger will
constitute a "change in control" (as such term is defined under such
agreements).
(d) For the period beginning on the Effective Time and ending on the
Plan Conversion Date (as hereinafter defined), the Acquiror shall cause the
Surviving Corporation to maintain those Company Plans that provide medical,
prescription drug, dental, vision and disability benefits for active Company
Employees. For purposes of this Section 6.6(d), "Plan Conversion Date" shall
mean the first day of the first plan year following the Effective Time of the
health plans for the Acquiror's similarly situated employees.
SECTION 6.6 Directors' and Officers' Indemnification and Insurance.
(a) Without limiting any additional rights that any director, officer
or employee may have under any Employment Agreement, indemnification agreement,
Company Plan or otherwise, from the Effective Time through the sixth anniversary
of the Effective Time, Acquiror shall cause the Surviving Corporation to,
indemnify and hold harmless each individual who was (as of the Effective Time) a
present or former officer or director of the Company and its Subsidiaries (the
"Indemnified Parties"), against all claims, losses, liabilities, damages,
judgments, inquiries, fines and reasonable fees, costs and expenses, including,
without limitation, attorneys' fees and disbursements (collectively, "Costs"),
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to (i) the fact that the Indemnified Party is or was an
officer or director of the Company or any of its Subsidiaries, or (ii) matters
existing or occurring at or prior to the Effective Time (including, without
limitation, arising out of or pertaining to this Agreement and the transactions
and actions contemplated hereby). Each Indemnified Party will be entitled to
advancement of reasonable expenses incurred in the defense of any claim, action,
suit, proceeding or investigation from Acquiror or the Surviving Corporation
within ten business days of receipt by Acquiror from the Indemnified Party of a
request therefor, subject only to the provisions of undertakings required for
such advancement by the MGCL.
(b) The charter and bylaws of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification, advancement of
expenses and exculpation of the Indemnified Parties than are set forth in the
Charter and the Bylaws in effect immediately prior to the execution of this
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period ending on
34
the sixth anniversary of the Effective Time in any manner that would materially
adversely affect the rights hereunder as of the Effective Time of any of the
Indemnified Parties. Prior to the Effective Time, the Company shall have the
option to obtain and fully pay for "tail" insurance policies with a claims
period of up to six years from and after the Effective Time from its current
insurance carriers or one or more insurance carriers with the same or better
credit rating as the Company's current insurance carriers with respect to
directors' and officers' liability insurance and fiduciary liability insurance
with benefits and levels of coverage at least as favorable as the Company's
existing policies with respect to matters existing or occurring at or prior to
the Effective Time (including in connection with this Agreement or the
transactions or actions contemplated hereby); provided, however, that in no
event shall the Company expend for such policies an aggregate amount in excess
of $750,000 (and to the extent the aggregate amount thereof would be in excess
of $750,000, the Company may acquire such amount of insurance as may be obtained
by such maximum amount or may acquire tail insurance corresponding to a lesser
number of years up to such maximum amount). If the Company does not obtain such
"tail" insurance policies as of the Effective Time, then Acquiror shall, or
shall cause the Surviving Corporation to, maintain, at no expense to the
beneficiaries, in effect until the sixth anniversary of the Effective Time the
current policies of the directors' and officers' liability insurance maintained
by the Company with respect to matters existing or occurring at or prior to the
Effective Time (provided, that the Acquiror or the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions which are not materially less advantageous to any beneficiary
thereof); provided, however, that in no event shall Acquiror or the Surviving
Corporation be required to expend for such policies an aggregate amount in
excess of $750,000 (and to the extent the annual premium is in excess thereof,
Acquiror or the Surviving Corporation will acquire such amount of insurance as
may be obtained by such maximum premium amount). The Acquiror agrees to honor
and perform under, and to cause the Surviving Corporation to honor and perform
under, all indemnification agreements with the Indemnified Parties entered into
by the Company or any of its Subsidiaries prior to the date of this Agreement.
(c) Notwithstanding anything herein to the contrary, if any claim,
action, suit, proceeding or investigation (whether arising before, at or after
the Effective Time) is made against or involves any Indemnified Party, on or
prior to the sixth anniversary of the Effective Time, the provisions of this
Section 6.6 shall continue in effect until the final disposition of such claim,
action, suit, proceeding or investigation.
(d) This covenant is intended to be for the benefit of, and shall be
enforceable by, each of the Indemnified Parties and their respective heirs and
legal representatives. The indemnification provided for herein shall not be
deemed exclusive of any other rights to which an Indemnified Party is entitled,
whether pursuant to law, contract or otherwise.
SECTION 6.7 Tax Matters.
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(a) From the date of this Agreement until the Effective Time, each of
the Company and its Subsidiaries will duly and timely file all Tax Returns and
other documents required by it to be filed with federal, state and local Tax
authorities the failure to file of which could have a material negative impact,
financial or otherwise, subject to extensions permitted by law and properly
granted by the appropriate authority, provided that the Company notifies the
Acquiror that it or any of its subsidiaries is availing itself of such
extensions, and provided, further, that such extensions do not adversely affect
the Company's status as a REIT under the Code. Any Tax Return filed pursuant to
this Section 6.7(a) shall be prepared in a manner consistent with past practice.
Neither the Company nor any of its Subsidiaries shall make or change any
material Tax election, change any annual tax accounting period, adopt or change
any method of Tax accounting, file any material amended Tax Returns or claims
for material Tax refunds, enter into any material closing agreement, surrender
any material Tax claim, audit or assessment, surrender any right to claim a
material Tax refund, offset or other reduction in Tax liability surrendered,
consent to any extension or waiver of the limitations period applicable to any
material Tax claim or material assessment of Tax or omit to take any other
action, if any such action or omission would have the effect of materially
increasing the Tax liability or materially reducing any Tax asset of the Company
or any of its Subsidiaries.
(b) Each party shall cooperate in the preparation, execution, and
filing of 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.
SECTION 6.8 Further Action and Efforts.
(a) Subject to the terms and conditions of this Agreement, each party
shall cooperate with the other and use its reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to satisfy the
conditions to Closing set forth herein and to consummate the Merger and the
other transactions contemplated by this Agreement, including the financing for
the Merger. In furtherance and not in limitation of the foregoing, each party
hereto agrees, to the extent necessary, to make an appropriate filing pursuant
to any Antitrust Law (as defined below) with respect to the transactions
contemplated hereby as promptly as practicable after the date of this Agreement
and to supply as promptly as practicable any additional information and
documentary material that may be requested pursuant to any Antitrust Law and to
take all other actions necessary, proper or advisable to cause the expiration or
termination of the applicable waiting periods under any Antitrust Law as soon as
practicable.
(b) Each of Acquiror and Merger Sub on the one hand, and the Company on
the other hand, shall, in connection with the efforts referenced in Section
6.8(a) to obtain any requisite approvals and authorizations for the transactions
contemplated by this Agreement under any Antitrust Law, use its reasonable
efforts to
35
(i) cooperate in all respects with each other in connection with any required
filing or submission and in connection with any investigation or other inquiry,
including any proceeding initiated by a private party; (ii) keep the other party
informed of any communication received by such party from, or given by such
party to, the Federal Trade Commission (the "FTC"), the Antitrust Division of
the Department of Justice (the "DOJ") or any other United States or foreign
governmental authority and of any communication received or given in connection
with any proceeding by a private party, in each case regarding any of the
transactions contemplated hereby; and (iii) permit the other party to review any
communication given by it to, and consult with each other in advance of any
meeting or conference with, the FTC, the DOJ or any such other governmental
authority or, in connection with any proceeding by a private party, with any
other person, and to the extent permitted by the FTC, the DOJ or such other
applicable governmental authority or other person, give the other party the
opportunity to attend and participate in such meetings and conferences. For
purposes of this Agreement, "Antitrust Law" means the Xxxxxxx Act, as amended,
the Xxxxxxx Act, as amended, the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, the Federal Trade Commission Act, as amended, and all other
federal, state and foreign, if any, statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines and other laws that are designed
or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade or lessening of competition
through merger or acquisition.
(c) In furtherance and not in limitation of the covenants of the
parties contained in Sections 6.8(a) and 6.8(b), if any objections are asserted
with respect to the transactions contemplated hereby under any Antitrust Law or
if any suit is instituted (or threatened to be instituted) by the FTC, the DOJ
or any other applicable governmental authority or any private party challenging
any of the transactions contemplated hereby as violative of any Antitrust Law or
which would otherwise prohibit or materially impair or materially delay the
consummation of the transactions contemplated hereby, each of the Acquiror,
Merger Sub and the Company shall use its reasonable efforts to resolve any such
objections or suits so as to permit consummation of the transactions
contemplated by this Agreement.
(d) Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Section 6.8 shall limit a party's right to terminate
this Agreement pursuant to Section 8.1(b) so long as such party has up to then
complied in all material respects with its obligations under this Section 6.8.
SECTION 6.9 Public Announcements. Schedule 6.9 of the Company
Disclosure Schedule sets forth the form of the initial public release concerning
the transactions contemplated hereby which shall be jointly issued by the
parties and thereafter each party shall use its reasonable efforts to allow each
other party reasonable time to comment on press releases or announcements
relating to the transactions contemplated by this Agreement in advance of their
issuance, it being understood that the final form and content of any such
release or announcement shall be at the final discretion of the disclosing
party.
37
SECTION 6.10 Dividends.
(a) From and after the date of this Agreement, the Company shall not
declare or pay any dividend or distribution to its stockholders except for (i)
distributions required by the Code for the Company to maintain its REIT status
or necessary to eliminate any federal Tax liability, (ii) quarterly
distributions at a rate not in excess of $0.10 per share (the "Quarterly Rate")
of Sizeler Common Stock to the holders thereof prior to the Effective Time with
record and payment dates in accordance with past practice and (iii) quarterly
distributions to the holders of the Sizeler Series B Preferred Stock in
accordance with and as required by the terms of such security. In the event that
a distribution with respect to the Sizeler Common Stock permitted by this
Section 6.10 (including pursuant to Section 6.10(b) below) has (1) a record date
prior to the Effective Time and (2) has not been paid as of the Effective Time,
the holders of Sizeler Common Stock shall be entitled to receive such
distribution from the Company at the time such shares are exchanged pursuant to
Article II of this Agreement.
(b) The Company shall declare a dividend (the "Closing Dividend") on
the outstanding Sizeler Common Stock, the record date for which shall be the
close of business on the last business day prior to the Effective Time. The
Closing Dividend shall be an amount equal to the last quarterly dividend
declared by the Company on a share of Sizeler Common Stock, multiplied by a
fraction the numerator of which is the number of days elapsed in the calendar
quarter in which the Effective Time occurs and the denominator of which is the
total number of days in the calendar quarter in which the Effective Time occurs.
ARTICLE VII
CONDITIONS OF MERGER
SECTION 7.1 Conditions to Obligation of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction or waiver at or prior to the Effective Time of each
of the following conditions:
(a) the Company shall have obtained the Company Requisite Vote;
(b) no statute, rule, regulation, executive order, decree, ruling,
injunction or other order (whether temporary, preliminary or permanent) shall
have been enacted, entered, promulgated or enforced by any governmental
authority which prohibits, restrains or enjoins the consummation of the Merger
or makes such consummation illegal; and
(c) all consents, filings, approvals, orders or authorizations from any
governmental authority required to consummate the Merger or any of the
transactions contemplated hereby shall have been obtained or made without the
38
imposition of material conditions, except for any such consents, filings,
approvals, orders, or authorizations, the failure of which to have been obtained
or made prior to the Effective Time would not, individually or in the aggregate,
have a Company Material Adverse Effect or provide a reasonable basis to conclude
that the parties or their respective directors or officers would be subject to
the risk of criminal prosecution.
SECTION 7.2 Conditions to Obligations of the Acquiror and Merger Sub.
The obligations of the Acquiror and Merger Sub to effect the Merger shall be
further subject to the satisfaction or waiver at or prior to the Effective Time
of each of the following conditions:
(a) the representations and warranties of the Company set forth in this
Agreement shall be true and correct in all respects, in each case as of the date
of this Agreement and immediately before the Effective Time as though made
immediately before the Effective Time (except those representations and
warranties that speak of an earlier date, which shall be true and correct as of
such earlier date), interpreted without giving effect to the words "materially"
or "material" or to any qualifications based on such terms or based on the
defined term Company Material Adverse Effect, except where the failure of any
such representations and warranties referred to above to be so true and correct,
in the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect;
(b) the Company shall have performed in all material respects the
obligations, and complied in all material respects with the agreements and
covenants, required to be performed by or complied with by it under this
Agreement at or prior to the Closing Date;
(c) after the date of this Agreement, there shall not have occurred any
Company Material Adverse Effect; and
(d) the Acquiror shall have received a certificate of the principal
executive officer or the principal financial officer of the Company, certifying
that the conditions set forth in Sections 7.2(a), 7.2(b) and 7.2(c) have been
satisfied.
SECTION 7.3 Conditions to Obligations of the Company. The obligation of
the Company to effect the Merger shall be further subject to the satisfaction or
waiver at or prior to the Effective Time of each of the following conditions:
(a) the representations and warranties of the Acquiror and Merger Sub
set forth in this Agreement shall be true and correct in all respects, in each
case as of the date of this Agreement and immediately before the Effective Time
as though made immediately before the Effective Time (except those
representations and warranties that speak of an earlier date, which shall be
true and correct as of such earlier date), interpreted without giving effect to
the words "materially" or "material" or to any qualifications based on such
terms or based on the defined term Acquiror Material Adverse Effect, except
where the failure of any such representations and warranties
39
referred to above to be so true and correct, in the aggregate, would not
reasonably be expected to have an Acquiror Material Adverse Effect;
(b) each of the Acquiror, the Surviving Corporation and Merger Sub
shall have performed in all material respects the obligations, and complied in
all material respects with the agreements and covenants, required to be
performed by or complied with by it under this Agreement at or prior to the
Closing Date; and
(c) the Company shall have received certificates of the principal
executive officer or the principal financial officer of each of the Acquiror and
Merger Sub, certifying that the conditions set forth in Sections 7.3(a) and
7.3(b) have been satisfied.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after the receipt of the Company
Requisite Vote:
(a) by mutual written consent of the Acquiror and the Company;
(b) by written notice of either the Acquiror or the Company if:
(i) any governmental authority shall have issued a final order,
decree or ruling or taken any other final action restraining, enjoining
or otherwise prohibiting the consummation of the Merger and such order,
decree, ruling or other action is or shall have become final and
nonappealable; provided, that the right to terminate this Agreement
pursuant to this clause (i) shall not be available to any party which
has not used its reasonable efforts to cause such order, decree, ruling
or other action to be lifted or otherwise taken action necessary to
comply with Section 6.8;
(ii) the Effective Time shall not have occurred on or before
December 31, 2006 (the "Termination Date"); provided, that the right to
terminate this Agreement pursuant to this clause (ii) shall not be
available to the party seeking to terminate if any action of such party
(or, in the case of the Acquiror, Merger Sub) or the failure of such
party (or, in the case of the Acquiror, Merger Sub) to perform any of
its obligations under this Agreement required to be performed at or
prior to the Effective Time has been the cause of, or resulted in, the
failure of the Effective Time to occur on or before the Termination
Date and such action or failure to perform constitutes a breach of this
Agreement; or
40
(iii) at the Company Stockholders Meeting or any adjournment or
postponement thereof, the Company Requisite Vote is not obtained;
(c) by written notice of the Company:
(i) if there shall have been a material breach of any
representation, warranty, covenant or agreement on the part of the
Acquiror or Merger Sub contained in this Agreement such that the
condition set forth in either Section 7.3(a) or 7.3(b) would not be
satisfied and which shall not have been cured prior to the earlier of
(A) thirty days following notice of such breach and (B) the Termination
Date; provided, that the Company shall not have the right to terminate
this Agreement pursuant to this clause (i) if the Company is then in
material breach of any of its representations, warranties, covenants or
agreements contained in this Agreement; or
(ii) prior to the approval of the Merger by the stockholders of
the Company in accordance with this Agreement, in accordance with, and
subject to the terms and conditions of, Section 6.4(b);
(d) by written notice of the Acquiror:
(i) if there shall have been a material breach of any
representation, warranty, covenant or agreement on the part of the
Company contained in this Agreement such that the condition set forth
in either Section 7.2(a) or 7.2(b) would not be satisfied and which
shall not have been cured prior to the earlier of (A) thirty days
following notice of such breach and (B) the Termination Date; provided,
that the Acquiror shall not have the right to terminate this Agreement
pursuant to this clause (i) if the Acquiror or Merger Sub is then in
material breach of any of its representations, warranties, covenants or
agreements contained in this Agreement; or
(ii) if the Company Board shall have withdrawn, modified or
changed in a manner adverse to the Acquiror its approval or
recommendation of this Agreement or the Merger or shall have
recommended to the stockholders of the Company a Company Acquisition
Proposal other than the Merger, or shall have resolved to effect any of
the foregoing.
SECTION 8.2 Effect of Termination.
(a) In the event of the termination of this Agreement pursuant to
Section 8.1, this Agreement shall forthwith become void and there shall be no
liability
41
or obligation on the part of any party hereto, except with respect to Sections
6.3(b) and 6.9, this Section 8.2, Section 8.3 and Article IX, which shall
survive such termination; provided, however, that nothing herein shall relieve
any party from liability for any willful and material breach hereof.
(b) (i) In the event that this Agreement is terminated by the Company
pursuant to Section 8.1(c)(ii), then the Company shall pay the Acquiror Expense
Reimbursement at or prior to the time of termination by wire transfer of same
day funds.
(ii) In the event that this Agreement is terminated pursuant to
Section 8.1(b)(iii), and (A) prior to such termination any person or
"group" (within the meaning of Section 13(d)(3) of the Exchange Act)
shall have publicly made a Company Acquisition Proposal, which proposal
is not withdrawn prior to the Company Stockholders Meeting, and (B)
within nine months of the termination of this Agreement pursuant to
Section 8.1(b)(iii), the Company enters into an agreement with respect
to such Company Acquisition Proposal or a transaction pursuant to which
such Company Acquisition Proposal is consummated, then the Company
shall pay the Acquiror Expense Reimbursement by wire transfer of same
day funds on the consummation of such Company Acquisition Proposal.
(iii) In the event that this Agreement is terminated by the
Acquiror pursuant to Section 8.1(d)(ii), and within nine months of the
termination of this Agreement pursuant to Section 8.1(d)(ii) the
Company enters into an agreement with respect to a Company Acquisition
Proposal or a transaction pursuant to which a Company Acquisition
Proposal is consummated, then the Company shall pay the Acquiror
Expense Reimbursement by wire transfer of same day funds, on the date
of the consummation of such Company Acquisition Proposal.
(iv) "Acquiror Expense Reimbursement" means the lesser of (A)
$6,500,000 and (B) all of the costs and expenses incurred by the
Acquiror or its affiliates in connection with this Agreement and the
transactions contemplated by this Agreement, minus any costs and
expenses paid or payable pursuant to Section 8.3(a).
SECTION 8.3 Expenses.
(a) If this Agreement is terminated pursuant to Section 8.1(d)(ii), the
Company shall pay to the Acquiror all of the costs and expenses incurred by the
Acquiror or its affiliates in connection with this Agreement and the
transactions contemplated by this Agreement up to a maximum amount of $250,000
and if this Agreement is terminated pursuant to Section 8.1(b)(iii), the Company
shall pay to the Acquiror all of the costs and expenses incurred by the Acquiror
or its affiliates in
42
connection with this Agreement and the transactions contemplated by this
Agreement up to a maximum amount of $1,000,000, in each case, such payment to be
made not later than five business days after being notified by the Acquiror of
the amount of such costs and expenses (together with a reasonable breakdown and
identification of the components thereof).
(b) Except as provided for in this Section 8.3 and otherwise
specifically provided in this Agreement, each party shall bear its own expenses
in connection with this Agreement, the Merger and the transactions contemplated
hereby.
SECTION 8.4 Amendment. Subject to the provisions of Article 9, this
Agreement may be amended by the parties hereto by action taken by or on behalf
of their respective Boards of Directors at any time prior to the Effective Time,
whether before or after receipt of the Company Requisite Vote; provided,
however, that, after receipt of the Company Requisite Vote, no amendment may be
made which (a) by law requires the further approval of the stockholders of the
Company or (b) reduces the amount or changes the form of Merger Consideration,
in each case, without further approval of the stockholders of the Company. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
SECTION 8.5 Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) subject to the requirements of applicable law and
compliance with the proviso in Section 8.4, waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver shall be
valid if set forth in an instrument in writing signed by the party or parties to
be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, including
any rights arising out of any breach of such representations, warranties,
covenants and agreements, shall survive the Effective Time, except for those
covenants and agreements contained herein that by their terms apply or are to be
performed in whole or in part after the Effective Time, including without
limitation, the applicable provisions of Article II, VI, VIII, and this Article
IX.
SECTION 9.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective
43
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
if to the Acquiror or Merger Sub:
Revenue Properties Company Limited
00 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, XX X0X 0X0
Attention: Xxxxxxxx Xxxxx
Phone Number: (000) 000-0000
Fax Number: (000) 000-0000
with a copy (which shall not constitute notice) to:
Stikeman Elliott LLP
0000 Xxxxxxxx Xxxxx Xxxx
000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxxx X. Xxxxxxxxxxx and Xxxxxxx X. Pogrin
Phone Number: (000) 000-0000
Fax Number: (000) 000-0000
and with a copy (which shall not constitute notice) to:
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: J. Xxxxx Xxxxxx and Xxxxxxxx X.X. Xxxxxx
Phone Number: (000) 000-0000
Fax Number: (000) 000-0000
if to the Company:
Sizeler Property Investors, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
Phone Number: (000) 000-0000
Fax Number: (000) 000-0000
44
with a copy (which shall not constitute notice) to:
DLA Xxxxx Xxxxxxx Xxxx Xxxx US LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx., Esq.
Phone Number: (000) 000-0000
Fax Number: (000) 000-0000
SECTION 9.3 Certain Definitions. The terms used in this Agreement are
defined in the sections referenced below:
Term Cross-reference
---- ---------------
Agreement Introduction
Acquiror Introduction
Acquiror Disclosure Schedule Article IV
Acquiror Expense Reimbursement Section 8.2(b)(iv)
Acquiror Material Adverse Effect Section 4.1
Antitrust Law Section 6.8(b)
Articles of Merger Section 1.2
Bylaws Section 3.2
Certificate Section 2.1(a)(iv)
Charter Section 3.2
Closing Section 1.2
Closing Date Section 1.2
Closing Dividend Section 6.10(b)
Code Section 3.9(b)
Commitment Letter Section 4.9
Common Certificate Section 2.1(a)(ii)
Company Introduction
Company Acquisition Proposal Section 6.4(a)
Company Board Recitals
Company Disclosure Schedule Article III
Company Employees Section 6.5(a)
Company Environmental Reports Section 3.17(a)
Company Material Adverse Effect Section 3.1
Company Option Plan Section 2.3(a)
Company Options Section 2.3(a)
Company Plans Section 3.9(a)
Company Properties Section 3.21(a)
Company Recommendation Section 6.1(a)
Company Requisite Vote Section 3.4(a)
Company Rights Section 3.3(a)
Company SEC Reports Section 3.7(a)
45
Company Stockholders Meeting Section 6.1(a)
Company Superior Proposal Section 6.4(a)
Confidentiality Agreement Section 6.3(b)
Contract Section 3.20(a)
Controlled Subsidiary Section 5.1
Costs Section 6.6(a)
Counterpart Plans Section 6.5(b)
Department Section 1.2
DOJ Section 6.8(b)
Effective Time Section 1.2
Encumbrances Section 3.21(a)
Environmental Documents Section 3.17(c)
Environmental Laws Section 3.17(c)
Environmental Permits Section 3.17(c)
ERISA Section 3.9(a)
Exchange Act Section 3.5(b)
Exchange Fund Section 2.2(a)
Existing Plans Section 6.5(b)
FTC Section 6.8(b)
GAAP Section 3.7(c)
Ground Lease Section 3.21(c)
Indemnified Parties Section 6.6(a)
Intellectual Property Section 3.16
Leased Properties Section 3.21(a)
Liens Section 3.3(b)
Materials of Environmental Concern Section 3.17(c)
Merger Recitals
Merger Consideration Section 2.1(a)(i)
Merger Sub Introduction
MGCL Recitals
Option Amount Section 2.3(a)
Owned Properties Section 3.21(a)
Parent Recitals
Paying Agent Section 2.2(a)
Plan Conversion Date Section 6.5(d)
Preferred Certificate Section 2.1(a)
Proxy Statement Section 6.2
Quarterly Rate Section 6.10(a)
REA Section 3.21(d)
REIT Section 3.10(d)
Restricted Shares Section 2.3(b)
Rights Agreement Section 3.3(a)
SEC Section 3.7(a)
Securities Act Section 3.7(a)
Series B Cash Consideration Section 2.1(a)(iii)
46
Series B Merger Approval Section 2.1(a)(iii)
Sizeler Common Stock Recitals
Sizeler Preferred Stock Section 3.3(a)
Sizeler Series A Preferred Stock Section 3.3(a)
Sizeler Series B Preferred Stock Section 3.3(a)
Subsidiary Section 3.1
Surviving Corporation Section 1.1
Taxes Section 3.10
Tax Return Section 3.10
Termination Date Section 8.1(b)(ii)
SECTION 9.4 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
SECTION 9.5 Entire Agreement; Assignment. This Agreement (including the
Exhibits hereto), the Company Disclosure Schedule and the Acquiror Disclosure
Schedule and the Confidentiality Agreement constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements and undertakings, both written and oral, among the parties, or any of
them, with respect to the subject matter hereof. 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 and any
assignment in violation of this Agreement shall be void.
SECTION 9.6 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement, other than with respect to the provisions of Section
6.5 and 6.6 which shall inure to the benefit of the persons or entities
benefiting therefrom, who are intended to be third-party beneficiaries thereof.
SECTION 9.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT REGARD TO
CONFLICTS OF LAW PROVISIONS THEREOF. THE PARTIES HEREBY IRREVOCABLY SUBMIT TO
THE JURISDICTION OF THE FEDERAL COURTS OF THE UNITED
47
STATES OF AMERICA LOCATED IN THE STATE OF MARYLAND SOLELY IN RESPECT OF THE
INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND OF THE
DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN
ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR
OF ANY SUCH DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT
OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT
THE VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH
DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES HERETO
IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR PROCEEDING
SHALL BE HEARD AND DETERMINED IN SUCH A MARYLAND FEDERAL COURT. THE PARTIES
HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH
PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF
PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE
MANNER PROVIDED IN SECTION 9.2 OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY
APPLICABLE LAWS, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
SECTION 9.8 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY CLAIM, SUIT, LITIGATION, ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A)
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
IN THIS SECTION 9.8.
48
SECTION 9.9 Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.10 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 9.11 Acquiror Guarantee. Acquiror agrees to take all action
necessary to cause Merger Sub or the Surviving Corporation, as applicable, to
perform all of its respective agreements, covenants and obligations under this
Agreement. Acquiror unconditionally guarantees to the Company the full and
complete performance by Merger Sub or the Surviving Corporation, as applicable,
of its respective obligations under this Agreement and shall be liable for any
breach of any covenant or obligation of Merger Sub or the Surviving Corporation,
as applicable, under this Agreement. Merger Sub shall at all times be a direct
or indirect Subsidiary of Acquiror. This is a guarantee of payment and
performance and not collectibility. Acquiror hereby waives diligence,
presentment, demand of performance, filing of any claim, any right to require
any proceeding first against Merger Sub or the Surviving Corporation, as
applicable, protest, notice and all demands whatsoever in connection with the
performance of its obligations set forth in this Section 9.11. Acquiror further
waives, to the fullest extent permitted by law, any defenses or benefits that
may be derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, except to the extent that any such defense is available
to Merger Sub, in connection with such performance.
SECTION 9.12 Interpretation. When 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 contents and headings contained in this
Agreement are for convenience of 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." Whenever the words
"herein," "hereof," "hereto," or "hereunder" are used in this Agreement, they
will be deemed to refer to this Agreement as a whole and not to any specific
Section of this Agreement. Whenever used in this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, any noun or pronoun
shall be deemed to include the plural as well as the singular. The fact that any
item of information is disclosed in the Acquiror Disclosure Schedule or the
Company Disclosure Schedule shall not be construed to mean that such information
is required to be disclosed by this Agreement. Such information shall not be
used as a basis for interpreting the term "Material Adverse Effect" or other
similar terms in this Agreement. The parties to this Agreement have participated
jointly in the negotiating and drafting of this Agreement. In the event that an
ambiguity or a question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provision of this Agreement.
49
SECTION 9.13 Obligations of Acquiror and Company. Whenever this
Agreement requires a subsidiary of Acquiror to take any action, such
requirements shall be deemed to include an undertaking on the part of Acquiror
to cause such subsidiary to take such action. Whenever this Agreement requires a
subsidiary of the Company to take any action, such requirements shall be deemed
to include an undertaking on the part of the Company to cause such subsidiary to
take such action.
SECTION 9.14 Survival; No Amendment. In the event that the Surviving
Corporation or Acquiror or any of their respective successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or a majority of its properties and assets to any
person, then, and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation or the Acquiror, as the case
may be, shall succeed to the obligations of the Surviving Corporation or the
Acquiror, as the case may be, under this Agreement that by their terms apply or
are to be performed in whole or in part after the Effective Time, including
without limitation the applicable provisions of Article II, VI, VIII and IX.
Notwithstanding anything contained herein to the contrary, from and after the
Effective Time, this Agreement shall not be amended, modified or terminated in
any manner that adversely affects the rights of any person (whether or not a
party hereto) other than the Acquiror or the Surviving Corporation contained in
the applicable provisions of Articles II, VI, VIII and IX.
50
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
signed by its officer thereunto duly authorized as of the date first above
written.
SIZELER PROPERTY INVESTORS, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
--------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: President
REVENUE PROPERTIES COMPANY LIMITED
By: /s/ K. (Rai) Sahi
--------------------------------
Name: K. (Rai) Sahi
Title: Chairman & CEO
REVENUE PROPERTIES (SIZELER) INC.
By: /s/ K. (Rai) Sahi
--------------------------------
Name: K. (Rai) Sahi
Title: Chairman & CEO
51
