Exhibit 99.(D)(3)
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
Dated as of October 28, 2001
by and among
CALWEST INDUSTRIAL PROPERTIES, LLC,
ROOSTER ACQUISITION CORP.,
CABOT INDUSTRIAL TRUST
and
CABOT INDUSTRIAL PROPERTIES, L.P.
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TABLE OF CONTENTS
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ARTICLE I THE TENDER OFFER .................................................2
Section 1.1 The Offer ..................................................2
Section 1.2 Company Action .............................................5
ARTICLE II THE MERGER .......................................................7
Section 2.1 The Merger .................................................7
Section 2.2 Closing ....................................................8
Section 2.3 Effective Times ............................................8
Section 2.4 Merger Consideration .......................................8
Section 2.5 Organizational Documents ...................................9
Section 2.6 Officers of the Surviving Entity ...........................9
Section 2.7 Cabot Common Share Options .................................9
ARTICLE III EFFECTS OF THE MERGER; EXCHANGE OF CERTIFICATES .................10
Section 3.1 [Intentionally Omitted] ...................................10
Section 3.2 Payment for Securities/Exchange of Certificates ...........10
ARTICLE IV REPRESENTATIONS AND WARRANTIES ..................................14
Section 4.1 Representations and Warranties of Cabot ...................14
Section 4.2 Representations and Warranties of CalWest and
Rooster Acquisition Corp. .................................38
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER ....41
Section 5.1 Conduct of Business by Cabot and Cabot LP .................41
ARTICLE VI ADDITIONAL COVENANTS ............................................45
Section 6.1 Access to Information; Confidentiality ....................45
Section 6.2 Reasonable Efforts; Notification ..........................45
Section 6.3 Tax Treatment .............................................46
Section 6.4 No Solicitation of Transaction. ...........................46
Section 6.5 Public Announcements ......................................48
Section 6.6 Employee Arrangements .....................................48
Section 6.7 Indemnification; Directors'/Trustees' and Officers'
Insurance .................................................49
Section 6.8 Assistance; Cabot LP Merger ...............................51
Section 6.9 Tax Returns ...............................................52
ARTICLE VII CONDITIONS PRECEDENT ............................................52
Section 7.1 Conditions to Each Party's Obligation to Effect
the Merger ................................................52
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TABLE OF CONTENTS
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(continued)
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER .............................54
Section 8.1 Termination ...............................................54
Section 8.2 Expenses ..................................................56
Section 8.3 Effect of Termination .....................................58
Section 8.4 Amendment .................................................58
Section 8.5 Extension; Waiver .........................................58
ARTICLE IX GENERAL PROVISIONS ............................................58
Section 9.1 Nonsurvival of Representations and Warranties .............59
Section 9.2 Notices ...................................................59
Section 9.3 Interpretation ............................................60
Section 9.4 Counterparts ..............................................60
Section 9.5 Entire Agreement; No Third-Party Beneficiaries ............60
Section 9.6 Governing Law .............................................60
Section 9.7 Assignment ................................................60
Section 9.8 Enforcement ...............................................60
Section 9.9 Annex I; Exhibits; Disclosure Letter ......................61
Section 9.10 Limitation of Liability of Shareholders, Trustees
and Officers of Cabot .....................................61
Section 9.11 Jurisdiction; Venue .......................................61
Section 9.12 Waiver of Trial by Jury ...................................61
ARTICLE X CERTAIN DEFINITIONS ...........................................61
Section 10.1 Certain Definitions .......................................61
ANNEXES, EXHIBITS AND SCHEDULES
Annex I - Conditions to the Offer
Exhibit A - Opinion of Xxxxx, Xxxxx & Xxxxx
Exhibit B - Parties to Shareholder Agreements
Exhibit C - Contingent WARN Notice
Schedule 10.1(a) - Cabot Knowledge Persons
Schedule 10.1(b) - CalWest Knowledge Persons
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
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October 28, 2001, by and among CALWEST INDUSTRIAL PROPERTIES, LLC, a California
limited liability company ("CalWest"), ROOSTER ACQUISITION CORP., a Maryland
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corporation, ("Rooster Acquisition Corp.", and together with CalWest and any
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other Subsidiary of CalWest, the "CalWest Parties"), CABOT INDUSTRIAL TRUST, a
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Maryland real estate investment trust ("Cabot"), and CABOT INDUSTRIAL
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PROPERTIES, L.P., a Delaware limited partnership ("Cabot LP").
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RECITALS
A. It is proposed that CalWest, through Rooster Acquisition Corp., will
acquire all of the issued and outstanding common shares of beneficial interest,
par value $.01 per share, of Cabot (the "Cabot Common Shares"), including the
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associated Preferred Share Purchase Rights (the "Rights") issued pursuant to the
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Amended and Restated Rights Agreement, dated as of September 10, 1998, between
Cabot and EquiServe Limited Partnership (as successor to BankBoston, N.A.), as
Rights Agent, as amended by the Amendment to Rights Agreement (the "Cabot Rights
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Agreement"), which are not beneficially owned by the CalWest Parties.
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B. It is proposed that CalWest will cause Rooster Acquisition Corp. to
make a cash tender offer (as such may be amended from time to time as permitted
by this Agreement, the "Offer") in compliance with Section 14(d)(1) of the
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Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
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and regulations promulgated thereunder to acquire each issued and outstanding
Cabot Common Share for $24.00 per share (such amount, or any greater amount per
share paid pursuant to the Offer, being hereinafter referred to as the "Per
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Share Amount"), net to the seller in cash, subject to reduction only for any
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federal backup withholding or share transfer taxes payable by such seller, upon
the terms and subject to the conditions of this Agreement, including Annex I
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hereto.
C. If Rooster Acquisition Corp. acquires the Cabot Common Shares
tendered pursuant to the Offer, it is proposed that Rooster Acquisition Corp.
shall merge (the "Merger") with and into Cabot with Cabot surviving in
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accordance with the Maryland General Corporation Law ("MGCL") and Title 8 of the
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Corporations and Associations Article of the Annotated Code of Maryland ("Title
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8"), pursuant to which each outstanding Cabot Common Share shall be converted
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into the right to receive the Per Share Amount upon the terms and subject to the
conditions provided herein.
D. The Board of Trustees of Cabot (the "Cabot Board of Trustees") has
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received the written opinion (the "Fairness Opinion") of X.X. Xxxxxx Securities
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Inc. (the "Cabot Financial Advisor") that, based on, and subject to the various
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assumptions and qualifications set forth in such opinion, as of the date of such
opinion, the consideration to be received by holders of Cabot Common Shares
pursuant to this Agreement is fair from a financial point of view to such
holders (other than CalWest and its affiliates).
E. The Cabot Board of Trustees has unanimously (i) determined that the
Transaction Documents, the Offer, the Merger and the other transactions
contemplated thereby, taken
together, are fair to, advisable and in the best interests of Cabot and its
shareholders, (ii) voted to (A) approve this Agreement and the transactions
contemplated hereby, including the Merger and (B) recommend acceptance and
approval by the holders of Cabot Common Shares of this Agreement, the Offer, the
Merger and the other transactions contemplated thereby and by the Transaction
Documents (as hereinafter defined) and that such holders tender their Cabot
Common Shares in the Offer, (iii) taken all action necessary to render the Cabot
Rights Agreement inapplicable to the Offer and the Merger, without any payment
to the holders of the Rights, (iv) taken all action necessary to waive the
application of the Ownership Limit (as hereinafter defined) to the purchase or
ownership of any Cabot Common Shares acquired pursuant to the Offer, the Merger
or otherwise pursuant to the Transaction Documents, and (v) taken all actions
necessary to render inapplicable to each of the transactions contemplated by the
Transaction Documents or exempt such transactions from the provisions of any
"fair price", "moratorium", "control share" or other takeover defense or similar
statute or regulation that would otherwise govern such transactions and the
parties hereto, including the provisions of MGCL Title 3, Subtitles 6, 7 and
Title 8.
F. CalWest and the Board of Directors of Rooster Acquisition Corp. have
each approved this Agreement, the Offer, the Merger and the other transactions
contemplated hereby.
G. Simultaneously with, and as a condition to, the execution and
delivery of this Agreement, CalWest and Rooster Acquisition Corp. have received
the opinion of Xxxxx, Xxxxx & Xxxxx, dated the date hereof, in the form attached
hereto as Exhibit A (the "REIT Opinion").
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H. Simultaneously with the execution and delivery of this Agreement,
(i) the trustees and executive officers of Cabot and their respective
Affiliates, as identified on Exhibit B hereto, have entered into Shareholder
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Agreements (collectively, the "Shareholder Agreements") each dated as of the
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date hereof, with CalWest, Rooster Acquisition Corp., Cabot and Cabot LP,
pursuant to which, among other things, such holders have agreed to tender their
shares into the Offer and vote their shares in favor of the Merger, this
Agreement and the other transactions contemplated hereby and thereby and, in
some instances, sell their common units of limited partnership interest in Cabot
LP ("LP Units") to CalWest; and (ii) certain holders of LP Units who are not
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trustees or executive officers of Cabot have entered into LP Unitholder
Agreements (collectively, the "Unitholder Agreements") each dated as of the date
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hereof, with CalWest, Rooster Acquisition Corp., Cabot and Cabot LP, pursuant to
which, among other things, such holders have agreed to convert their LP Units
into Cabot Common Shares and tender such Common Shares into the Offer.
I. Simultaneously with the execution and delivery of this Agreement,
Cabot has entered into a Share Option Agreement (the "Option Agreement"), dated
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as of the date hereof, with CalWest and Rooster Acquisition Corp.
J. CalWest and Cabot intend that, for federal income tax purposes, the
Offer and Merger shall be treated as a taxable purchase of Cabot Common Shares
directly by CalWest and the existence of Rooster Acquisition Corp. shall be
disregarded.
K. Certain capitalized terms used in this Agreement are defined in
Article X.
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AGREEMENT
In consideration of the representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
THE TENDER OFFER
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Section 1.1 The Offer.
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(a) Provided that this Agreement shall not have been terminated in
accordance with Article VIII and subject to the conditions set forth in Annex I
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(including that none of the events or conditions set forth therein shall have
occurred and be existing) (the "Tender Offer Conditions"), Rooster Acquisition
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Corp. shall, and CalWest shall cause Rooster Acquisition Corp. to, commence
(within the meaning of Rule 14d-2 under the Exchange Act) the Offer to purchase
at the Per Share Amount all of the issued and outstanding Cabot Common Shares
(including any and all Rights) as promptly as reasonably practicable, but in no
event later than five (5) Business Days following the first public announcement
by Rooster Acquisition Corp. and Cabot of the execution of this Agreement, and
shall take the actions specified in Section 1.1(c). The obligation of Rooster
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Acquisition Corp. to accept for payment and pay for any Cabot Common Shares
tendered pursuant to the Offer shall be subject only to the satisfaction of the
Tender Offer Conditions. Cabot agrees that no Cabot Common Shares held by Cabot
or any Cabot Subsidiary will be tendered pursuant to the Offer.
(b) CalWest and Rooster Acquisition Corp. expressly reserve the right
from time to time, without the consent of Cabot, to waive any Tender Offer
Condition, irrevocably increase the Per Share Amount or make any other changes
to the terms and conditions of the Offer; provided, however, that without the
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prior written consent of Cabot, Rooster Acquisition Corp. shall not, and CalWest
shall cause Rooster Acquisition Corp. not to, (i) except as set forth in Section
1.1(e), decrease the Per Share Amount or change the form of consideration
payable in the Offer, (ii) decrease the number of Cabot Common Shares sought in
the Offer, (iii) modify or amend the Tender Offer Conditions or impose
conditions to the Offer in addition to the Tender Offer Conditions, (iv) waive
the Minimum Condition or (v) except as provided in Section 1.1(d), extend the
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Offer if all of the Tender Offer Conditions are satisfied. Upon the terms and
subject to the satisfaction or waiver of the conditions of the Offer and this
Agreement (including the Tender Offer Conditions), Rooster Acquisition Corp.
shall, and CalWest shall cause Rooster Acquisition Corp. to, accept for payment
and pay for all Cabot Common Shares validly tendered and not withdrawn prior to
the expiration of the Offer as promptly as possible after expiration of the
Offer, unless terminated in accordance with its terms. CalWest shall provide or
cause to be provided to Rooster Acquisition Corp. on a timely basis funds
sufficient to accept for payment and pay for any and all Cabot Common Shares
that Rooster Acquisition Corp. becomes obligated to accept for payment and pay
for pursuant to the Offer. Unless required by Law (as evidenced by the legal
opinion of a nationally recognized U.S. law firm reasonably acceptable to
CalWest and Cabot), commencing with the consummation of the Offer until the
Merger Effective Time,
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Cabot, CalWest and Rooster Acquisition Corp. shall each use their respective
commercially reasonable efforts to not take any action which is reasonably
likely to cause Cabot to fail to qualify as a REIT for purposes of the Code.
(c) The Offer shall be made by means of an offer to purchase (the
"Offer to Purchase") subject only to the Tender Offer Conditions. As soon as
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reasonably practicable on the date the Offer is commenced, Rooster Acquisition
Corp. shall file with the Securities and Exchange Commission (the "SEC") a
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Tender Offer Statement on Schedule TO (together with all amendments and
supplements thereto, the "Schedule TO") with respect to the Offer that will
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comply in all material respects with the provisions of all applicable federal
securities laws as to form, and will contain (including as exhibits) or
incorporate by reference the Offer to Purchase, forms of the related letter of
transmittal and summary advertisement and any other documents required to be
filed in connection with the Offer (which documents, together with any
supplements or amendments thereto, are referred to collectively herein as the
"Offer Documents"), which shall be mailed to the holders of Cabot Common Shares
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and to holders of LP Units ("LP Unitholders"). Rooster Acquisition Corp. agrees
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to correct promptly the Schedule TO and the Offer Documents if and to the extent
that they shall have become false or misleading in any material respect (and
Cabot and Cabot LP, with respect to information supplied by them specifically
for use in the Schedule TO or the Offer Documents, shall promptly notify Rooster
Acquisition Corp. and its counsel of any required corrections of such
information and shall reasonably cooperate with Rooster Acquisition Corp. with
respect to correcting such information) and to supplement the Schedule TO or the
Offer Documents to include any information that shall become necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading (and Cabot and Cabot LP shall supplement the
information provided by them specifically for use in the Schedule TO or the
Offer Documents to include any information that shall become necessary in order
to make the statements therein that are based on such provided information, in
light of the circumstances under which they were made, not misleading), and to
take all steps necessary to cause the Schedule TO, as so corrected or
supplemented, to be filed with the SEC and the Offer Documents, as so corrected
or supplemented, to be disseminated to holders of Cabot Common Shares and LP
Unitholders, in each case to the extent required by applicable federal
securities laws. Cabot and its counsel shall be given a reasonable opportunity
to review and comment on the Schedule TO and the Offer Documents before they are
filed with the SEC and before they are distributed to holders of Cabot Common
Shares and LP Unitholders. Rooster Acquisition Corp. shall provide Cabot and its
counsel copies of any written comments and telephone notification of any oral
comments that Rooster Acquisition Corp. or its counsel receive from the SEC or
its staff with respect to the Schedule TO or the Offer Documents promptly after
receipt of such comments. Rooster Acquisition Corp. shall use its commercially
reasonable efforts to respond to such comments promptly, shall provide Cabot and
its counsel with a reasonable opportunity to participate in all communications
with the SEC and its staff, including meetings and telephone conferences,
relating to the Schedule TO and the Offer Documents, and shall provide Cabot and
its counsel copies of any written responses and telephonic notification of any
verbal responses by Rooster Acquisition Corp. or its counsel.
(d) So long as this Agreement has not been terminated in accordance
with the terms hereof, and subject to the terms and conditions hereof (including
the Tender Offer Conditions), the Offer shall expire at midnight, Eastern
Standard Time, on the date that is twenty
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(20) Business Days after the date on which the Offer is commenced; provided,
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that without the consent of Cabot, Rooster Acquisition Corp. may (i) from time
to time, extend the Offer, if at the scheduled expiration date of the Offer any
of the Tender Offer Conditions shall not have been satisfied or waived, until
such time as such Tender Offer Conditions are satisfied or waived, (ii) from
time to time, extend the Offer for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Offer or (iii) extend the Offer for a total of not more than five (5) Business
Days beyond the initial expiration date or the latest expiration date that would
otherwise be permitted under clauses (i) or (ii) of this sentence if, on such
expiration date, the Cabot Common Shares validly tendered pursuant to the Offer
and not withdrawn are sufficient to satisfy the Minimum Condition (as defined in
Annex I) but, together with all other Cabot Common Shares owned by Rooster
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Acquisition Corp., are entitled to cast less than 90.0% of the votes entitled to
be cast on the Merger. So long as this Agreement is in effect, the Offer has
been commenced and the Tender Offer Conditions have not been satisfied or
waived, Rooster Acquisition Corp. shall cause the Offer not to expire subject,
however, to CalWest's right of termination under this Agreement; provided,
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however, that Rooster Acquisition Corp. shall not be required to extend the
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Offer any time beyond (i) December 28, 2001, if the Minimum Condition is not
satisfied on December 28, 2001, or any date thereafter, at CalWest's option, if
the Minimum Condition continues to be unsatisfied on such date, or (ii) the date
that is 120 days from the date of this Agreement. Notwithstanding the foregoing,
in the event that the Tender Offer Conditions have not been satisfied as the
result of the occurrence an event specified in clause (k) of Annex I, Rooster
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Acquisition Corp. shall be required to extend the Offer until such time (but in
no event longer than thirty (30) Business Days after the date on which Rooster
Acquisition Corp. first invokes such Tender Offer Condition as a reason for not
consummating the Offer) as CalWest's bridge loan lender funds the Bridge Loan
Commitment (as defined in Annex I); provided, further, that during such thirty
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(30) Business Day period, Rooster Acquisition Corp. shall use its commercially
reasonable efforts, subject to any contractual restrictions binding upon CalWest
or Rooster Acquisition Corp. pursuant to the Commitment Letter (as defined in
Annex I), to obtain financing for the Offer and the Merger on terms
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substantially similar and at least as favorable as the terms of the Commitment
Letter. Rooster Acquisition Corp. may, in addition, provide a "subsequent offer
period" (as contemplated by Rule 14d-11 under the Exchange Act) of not less than
three (3) Business Days following its acceptance for payment of Cabot Common
Shares in the Offer.
(e) The parties understand and agree that the Per Share Amount has been
calculated based upon, among other things, the accuracy of the representation
and warranty set forth in Section 4.1(c) and that, in the event the number of
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outstanding Cabot Common Shares, other outstanding shares of beneficial interest
of Cabot, or share equivalents of Cabot issuable upon the exercise of, or
subject to, options or other agreements exceeds the amounts specifically set
forth in Section 4.1(c) (including as a result of any stock split, reverse stock
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split, stock dividend, including any dividend or distribution of securities
convertible into beneficial shares or share equivalents of Cabot,
recapitalization, or other like change occurring after the date of this
Agreement, but excluding any Cabot Common Shares or units of Cabot LP issued
pursuant to the Cabot Option Plans, in accordance with, and subject to, Section
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2.7), the Per Share Amount shall be appropriately adjusted. The provisions of
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this Section 1.1(e) shall not, however, affect the representation and warranty
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set forth in Section 4.1(c).
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Section 1.2 Company Action.
(a) Cabot hereby approves of and consents to the Offer and
represents and warrants that the Cabot Board of Trustees at a meeting duly
called and held on October 28, 2001, unanimously (A) determined that this
Agreement, the Offer, the Merger and the other transactions contemplated hereby,
taken together, are fair to, advisable and in the best interests of Cabot and
its shareholders; (B) voted to (1) approve the Transaction Documents and the
transactions contemplated thereby, including the Merger and (2) recommend
acceptance and approval by the holders of Cabot Common Shares of this Agreement,
the Offer, the Merger, the Transaction Documents and the other transactions
contemplated hereby or thereby and that such holders tender their Cabot Common
Shares in the Offer; (C) took all other action necessary to render the Cabot
Rights Agreement inapplicable to the Offer and the Merger, without any payment
to the holders of the Rights; (D) took all action necessary to waive the
application of the ownership limit (the "Ownership Limit") set forth in the
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Cabot Charter (as hereinafter defined) to the purchase or ownership of any Cabot
Common Shares acquired pursuant to the Offer, the Merger, or otherwise pursuant
to the Transaction Documents; and (E) took all actions necessary to render
inapplicable to each of the transactions contemplated by the Transaction
Documents or exempt such transactions from the provisions of any "fair price",
"moratorium", "control share acquisition" or other takeover defense or similar
statute or regulation that would otherwise govern such transactions and the
parties hereto, including the provisions of the Takeover Statutes (as
hereinafter defined). Subject to the terms of this Agreement, Cabot consents to
the inclusion of such recommendations and approvals in the Offer Documents.
Cabot hereby represents and warrants that the Cabot Financial Advisor has
delivered to the Cabot Board of Trustees its written Fairness Opinion that,
subject to the various assumptions and qualifications set forth therein, as of
the date of such opinion, the consideration to be received by holders of Cabot
Common Shares pursuant to this Agreement, the Offer and the Merger is fair from
a financial point of view to such holders (other than CalWest and its
affiliates). Cabot has been authorized by the Cabot Financial Advisor to permit,
subject to the prior review and consent of the Cabot Financial Advisor and its
counsel (such consent not to be unreasonably withheld) (i) the inclusion of the
Fairness Opinion in the Schedule 14D-9 (as hereinafter defined) and the Proxy
Statement (as hereinafter defined) and (ii) references to the identity of the
Cabot Financial Advisor and to the Fairness Opinion's substance and conclusions
in the Offer Documents. Cabot represents and warrants that it has been advised
by each of its Trustees and executive officers that they intend to tender all
Cabot Common Shares beneficially owned by them to Rooster Acquisition Corp.
pursuant to the Offer.
(b) Cabot hereby agrees to file with the SEC, on the day of
the filing by CalWest and Rooster Acquisition Corp. of the Schedule TO with
respect to the Offer, a Tender Offer Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any and all amendments, supplements and exhibits
thereto, the "Schedule 14D-9") that will (i) comply in all material respects as
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to form with the provisions of all applicable federal securities laws, (ii)
reflect the recommendations and actions of the Cabot Board of Trustees referred
to in Section 1.2(a) and (iii) include the Fairness Opinion, in each case
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subject to the terms of this Agreement. Cabot agrees to include such Schedule
14D-9 in the mailing of the Offer Documents by Rooster Acquisition Corp. to the
holders of Cabot Common Shares promptly after the commencement of the Offer.
Cabot agrees promptly to correct the Schedule 14D-9 if and to the extent that it
shall become false or misleading in any material respect (and CalWest and
Rooster Acquisition Corp.,
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with respect to information supplied by them specifically for use in the
Schedule 14D-9, shall promptly notify Cabot and its counsel of any required
corrections of such information and shall reasonably cooperate with Cabot with
respect to correcting such information) and to supplement the information
contained in the Schedule 14D-9 to include any information that shall become
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading (and CalWest and Rooster Acquisition
Corp. shall supplement the information provided by them specifically for use in
the Schedule 14D-9 to include any information that shall become necessary in
order to make the statements therein that are based on such provided
information, in light of the circumstances under which they were made, not
misleading), and Cabot shall take all steps necessary to cause the Schedule
14D-9, as so corrected or supplemented, to be filed with the SEC and
disseminated to the holders of Cabot Common Shares, to the extent required by
applicable federal securities laws. CalWest and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 before it is
filed with the SEC or disseminated to the holders of Cabot Common Shares. Cabot
shall provide CalWest and its counsel copies of any written comments and
telephone notification of any oral comments that Cabot or its counsel receive
from the SEC or its staff with respect to the Schedule 14D-9 promptly after
receipt of such comments. Cabot shall use its commercially reasonable efforts to
respond to such comments promptly, shall provide CalWest and its counsel with a
reasonable opportunity to participate in all communications with the SEC and its
staff, including meetings and telephone conferences, relating to the Schedule
14D-9, and shall provide CalWest and its counsel copies of any written responses
and telephonic notification of any verbal responses by Cabot or its counsel.
(c) In connection with the Offer, Cabot shall promptly, or
cause its transfer agent to promptly, following execution of this Agreement
furnish Rooster Acquisition Corp. with mailing labels containing the names and
addressees of all record holders of Cabot Common Shares, a non-objecting
beneficial owners list and security position listings of Cabot Common Shares
held in stock depositories, each as of a recent date, and shall promptly furnish
Rooster Acquisition Corp. with such additional information, including updated
lists of shareholders and LP Unitholders, mailing labels and security position
listings for the holders of Cabot Common Shares and LP Unitholders, and such
other information and assistance as Rooster Acquisition Corp. or its agents may
reasonably request for the purpose of communicating the Offer to the record and
beneficial holders of Cabot Common Shares and LP Units. Subject to the
requirements of applicable Law, and except for such steps as are appropriate to
disseminate the Offer Documents and any other documents necessary to consummate
the Merger, CalWest and Rooster Acquisition Corp. and their Affiliates,
associates, agents and advisors shall hold in confidence and use only in
connection with the Offer, and the Merger the information contained in any such
labels, listings and files, and, if this Agreement shall be terminated, will
promptly deliver to Cabot all copies of such information then in their
possession.
(d) Promptly upon the acceptance for payment and payment for
Cabot Common Shares by Rooster Acquisition Corp. pursuant to the Offer
(including upon acceptance for payment and payment for Cabot Common Shares
pursuant to the Offer during the subsequent offering period, if any), Rooster
Acquisition Corp. shall be entitled to designate up to such number of trustees,
rounded up to the nearest whole number, on the Cabot Board of Trustees as will
give Rooster Acquisition Corp., subject to compliance with Section 14(f) of the
Exchange Act, representation on the Cabot Board of Trustees equal to the product
of the number of trustees
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on the Cabot Board of Trustees (giving effect to any increase in the number of
trustees pursuant to this Section 1.2(d)) multiplied by a fraction the numerator
of which shall be the number of Cabot Common Shares beneficially owned by
CalWest, Rooster Acquisition Corp. and their Affiliates and the denominator of
which shall be the total number of Cabot Common Shares outstanding at such time.
At such time, Cabot shall also cause, if requested by Rooster Acquisition Corp.,
(i) each committee of the Cabot Board of Trustees, (ii) the board of directors
of each of Cabot's Subsidiaries and (iii) each committee of each such Subsidiary
board to include individuals designated by Rooster Acquisition Corp.
constituting up to the same percentage of each such committee or board as
Rooster Acquisition Corp. designees constitute on the Cabot Board of Trustees.
Cabot shall, upon request by Rooster Acquisition Corp., promptly take all
actions necessary to cause the Rooster Acquisition Corp.'s designees to be
elected to the Cabot Board of Trustees in accordance with the terms of this
Section 1.2(d), including by increasing the size of the Cabot Board of Trustees
and/or, at Cabot's election, securing the resignations of such number of
trustees as is necessary to enable the designees of Rooster Acquisition Corp. to
be elected to the Cabot Board of Trustees in accordance with the terms of this
Section 1.2(d). In the event that designees of Rooster Acquisition Corp. are
elected to the Cabot Board of Trustees, until the Merger Effective Time, those
continuing members of the Cabot Board of Trustees who are not designees,
Affiliates or associates (within the meaning of the federal securities laws) of
Rooster Acquisition Corp. shall be deemed the "Independent Trustees" for
purposes of the provisions of this Agreement. Subject to applicable law, Cabot
shall promptly take all action necessary pursuant to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its
obligations under this Section 1.2(d) and shall include in the Schedule 14D-9
mailed to holders of Cabot Common Shares promptly after the commencement of the
Offer (or an amendment thereto or an information statement pursuant to Rule
14f-1 if Rooster Acquisition Corp. has not theretofore designated trustees or
timely provided the requisite information) such information with respect to
Cabot and its officers and trustees as is required under Section 14(f) and Rule
14f-1 in order to fulfill its obligations under this Section 1.2(d). Rooster
Acquisition Corp. will promptly supply Cabot and be solely responsible for any
information with respect to itself and its nominees, officers, trustees and
Affiliates required by Section 14(f) and Rule 14f-1. Notwithstanding anything in
this Agreement to the contrary, following the time trustees designated by
Rooster Acquisition Corp. are elected to the Cabot Board of Trustees and prior
to the Merger Effective Time, the affirmative vote of a majority of the
Independent Trustees shall be required to (i) amend or terminate this Agreement
on behalf of Cabot, (ii) exercise or waive any of Cabot's rights or remedies
hereunder, (iii) extend the time for performance of obligations of Rooster
Acquisition Corp. hereunder, (iv) take any other action by Cabot in connection
with this Agreement required to be taken by the Cabot Board of Trustees, or (v)
take any action taken by Cabot in connection with the transactions contemplated
by this Agreement, and such affirmative majority vote shall be sufficient to
take any such action.
- 8 -
ARTICLE II
THE MERGER
----------
Section 2.1 The Merger.
----------
(a) Upon the terms and subject to the conditions set forth in
this Agreement, at the Merger Effective Time (as defined in Section 2.3),
-----------
Rooster Acquisition Corp. shall be merged with and into Cabot in accordance with
the MGCL and Title 8 and the Articles of Merger and the separate corporate
existence of Rooster Acquisition Corp. shall cease and Cabot shall continue as
the Surviving Entity (in such capacity, the "Surviving Entity"). Notwithstanding
------------------
any other provision of this Agreement, neither CalWest nor Rooster Acquisition
Corp. shall be obligated to effectuate the Merger unless the Offer shall have
been consummated and in accordance therewith Rooster Acquisition Corp. shall
have acquired that number of Cabot Common Shares at least equal to the Minimum
Condition.
(b) The Merger shall have the effects set forth in the MGCL
and Title 8. Accordingly, from and after the Merger Effective Time, the
Surviving Entity shall have all the properties, rights, privileges, purposes and
powers and debts, duties and Liabilities of Cabot.
Section 2.2 Closing. The closing of the Merger (the "Closing") will
------- ---------
take place at 10:00 a.m. Eastern Standard Time as promptly as practicable but in
no event later than the third (3rd) Business Day after the satisfaction or
waiver of the conditions (other than those conditions that by their nature are
to be satisfied at Closing, but subject to the fulfillment or waiver of those
conditions) set forth in Article VII (the "Closing Date"), at the offices of
----------- --------------
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, unless
another date or place is agreed to in writing by the parties.
Section 2.3 Effective Time. On the Closing Date, Cabot and Rooster
--------------
Acquisition Corp. shall execute and file the Articles of Merger in accordance
with, and shall make all other filings or recordings and take all such other
action required with respect to the Merger under, the MGCL and Title 8. Unless
Cabot and CalWest agree otherwise, the Merger shall become effective when the
Articles of Merger have been accepted for record by the Maryland Department or
at such other time specified in the Articles of Merger (the "Merger Effective
-----------------
Time"), it being understood that the parties shall cause the Merger Effective
-----
Time to occur as soon as practicable after the Closing.
Section 2.4 Merger Consideration.
--------------------
(a) At the Merger Effective Time, by virtue of the Merger and
without any further action on the part of Rooster Acquisition Corp., Cabot or
the Cabot Common Shareholders, each Cabot Common Share issued and outstanding
immediately prior to the Merger Effective Time (other than any Cabot Common
Shares that are owned by the CalWest Parties, which Cabot Common Shares shall be
cancelled as provided below) shall be converted into the right to receive the
greater of the Per Share Amount, or any higher price paid per Cabot Common Share
in the Offer, in cash, without interest thereon (the "Merger Consideration"),
----------------------
upon surrender of the Certificate (as defined in Section 3.2(b)) formerly
--------------
evidencing such share.
- 9 -
All such Cabot Common Shares, when so converted, shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
each holder of a Certificate representing any such shares shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration to be paid in consideration therefor upon the surrender of such
Certificates in accordance with Section 3.2, without interest.
-----------
(b) At the Merger Effective Time, by virtue of the Merger and
without any further action on the part of Rooster Acquisition Corp., Cabot or
the Cabot Common Shareholders:
(i) Each Cabot Common Share issued and outstanding
immediately prior to the Merger Effective Time that is
owned by the CalWest Parties shall automatically be
canceled and retired and shall cease to exist, each
holder of a Certificate evidencing any such shares shall
cease to have any rights with respect thereto, and no
payment, distribution or other consideration shall be
made with respect thereto; and
(ii) Each share of common stock, par value $1.00 per share, of
Rooster Acquisition Corp. issued and outstanding
immediately prior to the Merger Effective Time shall be
converted into and become one validly issued, fully paid
and nonassessable common share of beneficial interest,
par value $.01 per share, of the Surviving Entity and
shall constitute the only outstanding common shares of
beneficial interest of the Surviving Entity.
Section 2.5 Organizational Documents. The Amended and Restated
------------------------
Declaration of Trust of Cabot shall continue to be the Declaration of Trust of
the Surviving Entity following the Merger Effective Time until further amended
in accordance with Title 8, and the Bylaws of Cabot shall continue to be the
Bylaws of the Surviving Entity following the Merger until further amended in
accordance with Title 8.
Section 2.6 Officers of the Surviving Entity. From and after the Merger
--------------------------------
Effective Time, the officers of Rooster Acquisition Corp. shall be the officers
of the Surviving Entity, and such officers shall serve until their successors
have been duly elected or appointed (in the case of officers) and qualified, or
until their death, resignation or removal from office in accordance with the
Surviving Entity's organizational documents.
Section 2.7 Cabot Common Share Options.
--------------------------
(a) At the Merger Effective Time, each outstanding option
(including dividend equivalent units ("DEUs")) (collectively, the "Cabot
------ ------
Options") to purchase Cabot Common Shares or LP Units granted under the Cabot
--------
Long Term Incentive Plan (the "LTIP") and the Cabot 1999 Long Term Incentive
Plan (the "1999 LTIP"; together with the LTIP, the "Cabot Option Plans"),
----------- --------------------
whether or not then vested or exercisable, shall be cancelled and of no further
force and effect and the holder of any such option shall be entitled to receive,
from and after the Merger Effective Time, an amount in cash equal to the product
of (i) the number of Cabot Common Shares or LP Units provided for in such Cabot
Option and (ii) the excess, if any, of the Merger Consideration over the
exercise price per share or unit provided for in such Cabot Option, which cash
payment shall be treated as compensation and shall be net of any applicable
- 10 -
Tax. Notwithstanding the foregoing, if the exercise price per share provided for
in any Cabot Option exceeds the Merger Consideration, no cash shall be paid with
regard to such Cabot Option to the holder of such Cabot Option. Prior to the
Merger Effective Time, CalWest and Cabot shall establish a procedure to effect
the surrender of Cabot Options contemplated by this Section 2.7(a).
--------------
(b) Each of Cabot and Cabot LP covenants that the Cabot Option
Plans shall terminate as of the Merger Effective Time and all awards issued
under such Cabot Option Plans shall be terminated and the provisions in any
other plan, program, arrangement or agreement providing for the issuance or
grant of any other interest in respect of the equity interests of Cabot or any
of the Cabot Subsidiaries (including, without limitation, Cabot LP) shall be of
no further force or effect and shall be deemed to be terminated as of the Merger
Effective Time and no holder of a Cabot Option or any participant in any Cabot
Option Plan shall have any right thereunder to (i) acquire any securities of
Cabot, Cabot LP, the Surviving Entity or any Subsidiary thereof, or (ii) receive
any additional payment or benefit with respect to any award previously granted
under the Cabot Option Plans.
Section 2.8 Termination of DRIP. Cabot shall terminate Cabot's 1999
-------------------
Dividend Reinvestment and Share Purchase Plan (the "DRIP"), effective prior to
------
the Merger Effective Time, and ensure that no purchase or other rights under the
DRIP enable the purchaser or holder of such rights to acquire any interest in
the Surviving Entity, CalWest or any CalWest Subsidiary, including Rooster
Acquisition Corp., as a result of such purchase or the exercise of such rights
at or after the Merger Effective Time.
ARTICLE III
EFFECTS OF THE MERGER; EXCHANGE OF CERTIFICATES
-----------------------------------------------
Section 3.1 [Intentionally omitted.]
Section 3.2 Payment for Securities/Exchange of Certificates.
-----------------------------------------------
(a) Paying Agent. At the Merger Effective Time, CalWest shall
------------
deposit or cause to be deposited with a bank or trust company designated by
CalWest and reasonably acceptable to Cabot (the "Paying Agent"), for the benefit
--------------
of the holders of Cabot Common Shares and for payment in accordance with this
Article III, through the Paying Agent, cash in an amount sufficient to pay the
-----------
aggregate amount of the Merger Consideration (such cash being hereinafter
referred to as the "Payment Fund"), payable pursuant to Section 2.3 in exchange
-------------- -----------
for outstanding Cabot Common Shares. Any income from investment of such Payment
Fund will be payable solely to CalWest.
(b) Exchange Procedures.
-------------------
(i) Within five (5) Business Days after the Merger
Effective Time, the Paying Agent shall mail to each holder of
record of a certificate or certificates which, immediately
prior to the Merger Effective Time, evidenced outstanding
- 11 -
Cabot Common Shares (each, a "Certificate"), which holder's
-------------
Cabot Common Shares were converted into the right to receive
the Merger Consideration as set forth in Section 2.4: (A) a
-----------
letter of transmittal (a "Letter of Transmittal") which shall
-----------------------
specify that delivery shall be effected and risk of loss and
title to the Certificates shall pass only upon delivery of the
Certificates to the Paying Agent and shall be in such form and
have such other provisions as the Surviving Entity may
reasonably specify; and (B) instructions for use in effecting
the surrender of the Certificates in exchange for the
applicable Merger Consideration.
(ii) Upon surrender of a Certificate for cancellation
to the Paying Agent, together with a Letter of Transmittal,
duly executed, and any other documents reasonably required by
the Paying Agent or the Surviving Entity, (A) the holder of
such Certificate shall be entitled to receive in exchange
therefor the applicable amount of the Merger Consideration,
payable by check, which such holder has the right to receive
pursuant to the provisions of Section 2.4; and (B) the
-----------
Certificate so surrendered shall forthwith be canceled. Until
so surrendered, each such Certificate shall represent the
right to receive the aggregate Merger Consideration relating
thereto.
(iii) In the event of a transfer of ownership of
Cabot Common Shares which is not registered in the transfer
records of Cabot, the appropriate amount of the Merger
Consideration may be paid to a transferee if the Certificate
representing such Cabot Common Shares is presented to the
Paying Agent properly endorsed or accompanied by appropriate
stock powers and otherwise in proper form for transfer and
accompanied by all documents reasonably required by the Paying
Agent to evidence and effect such transfer and to evidence
that any applicable Taxes have been paid. Until surrendered as
contemplated by this Section 3.2, each such Certificate shall
-----------
be deemed at any time after the Merger Effective Time to
represent only the right to receive upon such surrender the
appropriate amount of the applicable Merger Consideration.
(c) Tax Characterization. CalWest and Cabot intend that, for
--------------------
federal income tax purposes, the portions of the transactions contemplated
hereby constituting the Offer and Merger shall be treated as a taxable purchase
of Cabot's Common Shares directly by CalWest and that the existence of Rooster
Acquisition Corp. shall be disregarded.
(d) No Further Ownership Rights. All Merger Consideration paid
---------------------------
upon the surrender for exchange of the Certificates representing Cabot Common
Shares in accordance with the terms hereof shall be deemed to have been paid in
full satisfaction of all rights pertaining to such Cabot Common Shares and,
after the Merger Effective Time, there shall be no further registration of
transfers on the transfer books of the Surviving Entity, of the Cabot Common
Shares that were outstanding immediately prior to the Merger Effective Time. If,
after the Merger Effective Time, Certificates are presented to the Surviving
Entity, for any reason, they shall be canceled and exchanged as provided in this
Article III.
-----------
(e) Termination of Payment Fund. Any portion of the Payment
---------------------------
Fund (including any interest and other income received with respect thereto)
that remains undistributed
- 12 -
to the former Cabot Common Shareholders on the date 180 days after the Merger
Effective Time shall be delivered to the Surviving Entity upon demand, and any
former Cabot Common Shareholders who have not theretofore received any
applicable Merger Consideration to which they are entitled under this Article
-------
III, shall thereafter look only to the Surviving Entity for payment of their
---
claims with respect thereto and only as general creditors thereof.
(f) No Liability. None of CalWest, the Surviving Entity or
------------
Rooster Acquisition Corp. shall be liable to any holder of Cabot Common Shares
for any part of the Merger Consideration delivered to a public official pursuant
to any applicable abandoned property, escheat or similar Law. Any amounts
remaining unclaimed by holders of any such shares immediately prior to the time
at which such amounts would otherwise escheat to, or become property of, any
federal, state or local government or any court, regulatory or administrative
agency or commission, governmental arbitrator or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity"), shall, to the
---------------------
extent permitted by applicable Law, become the property of the Surviving Entity
free and clear of any claims or interest of any such holders or their
successors, assigns or personal representatives previously entitled thereto.
(g) Lost, Stolen or Destroyed Certificates. If any Certificate
--------------------------------------
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen or
destroyed and, if required by CalWest or the Surviving Entity, the posting by
such Person of a bond in such reasonable amount as CalWest or the Surviving
Entity may direct as indemnity against any claim that may be made against it
with respect to such Certificate, the Paying Agent shall issue in exchange for
such lost, stolen or destroyed Certificate the appropriate amount of the Merger
Consideration.
(h) Withholding of Tax. CalWest, the Surviving Entity or the
------------------
Paying Agent shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable pursuant to this Agreement to any holder of
Cabot Common Shares or any LP Unitholder such amount as CalWest, the Surviving
Entity, any Affiliate of the Surviving Entity or the Paying Agent is required to
deduct and withhold with respect to the making of such payment under the Code or
any provision of state, local or foreign Tax Law. To the extent that amounts are
so withheld by the Surviving Entity or the Paying Agent, such withheld amounts
shall be (i) paid over to the applicable Governmental Entity in accordance with
applicable Law and (ii) treated for all purposes of this Agreement as having
been paid to the former holder of a Certificate in respect of which such
deduction and withholding was made by the Surviving Entity or the Paying Agent.
(i) No Dissenters' Rights. No dissenters' or appraisal rights
---------------------
shall be available with respect to the Merger or the other transactions
contemplated hereby; provided, that the requirements of Section 3-202(c) of the
MGCL have been complied with.
(j) Shareholders' Meeting.
---------------------
(i) If required by applicable law to consummate the
Merger, Cabot, acting through the Cabot Board of Trustees, shall, in accordance
with the Cabot Charter, Cabot By-Laws and applicable Law and provided that this
Agreement shall not have been terminated:
- 13 -
(A) duly call, give notice of, convene and hold a
special meeting of the holders of Cabot Common Shares (the
"Cabot Common Shareholder Meeting") as promptly as practicable
----------------------------------
following the acceptance for payment and payment for Cabot
Common Shares by Rooster Acquisition Corp. pursuant to the
Offer for the purpose of considering and taking action upon
the approval of the Merger and the adoption of this Agreement;
(B) as promptly as practicable, prepare and file with
the SEC a preliminary proxy statement or information statement
relating to the Merger and this Agreement and use its
commercially reasonable efforts, subject to the terms of this
Agreement, (1) to obtain and furnish the information required
to be included by the SEC in the proxy statement or
information statement and, after consultation with CalWest, to
respond promptly to any comments made by the SEC with respect
to the preliminary proxy statement or information statement
and cause a definitive proxy statement (the "Proxy Statement")
-----------------
or information statement, including any amendment or
supplement thereto, to be mailed to its shareholders;
provided, that no amendment or supplement to the Proxy
--------
Statement or information statement will be made by Cabot
without consultation with CalWest and its counsel and (2) to
obtain the necessary approvals of the Merger and this
Agreement by its shareholders; and
(C) subject to the terms of this Agreement, include
in the Proxy Statement or information statement (i) the
recommendation of the Cabot Board of Trustees that
shareholders of Cabot vote in favor of the approval of the
Merger and this Agreement and (ii) the Fairness Opinion.
(ii) The CalWest Parties shall vote, or cause to be
voted, as the case may be, all of the Cabot Common Shares purchased in the Offer
or otherwise acquired or owned by such parties in favor of the approval of the
Merger and this Agreement.
(k) Merger Without Meeting of Shareholders. Notwithstanding
--------------------------------------
Section 3.2(j), if the CalWest Parties shall own, in the aggregate, Cabot Common
--------------
Shares entitled to cast at least 90.0% of all the votes entitled to be cast on
the Merger, pursuant to the Offer or otherwise (including pursuant to the Option
Agreement), the parties hereto shall take all necessary and appropriate action
to cause the Merger to become effective as soon as practicable after acceptance
for payment of and payment for the Cabot Common Shares by Rooster Acquisition
Corp. pursuant to the Offer without a meeting of shareholders of Cabot, in
accordance with Section 3-106 of the MGCL, including providing notice, as
promptly as practicable, of the Merger to each shareholder of record of Cabot in
accordance with Section 3-106(d) of the MGCL.
(l) Additional Actions. If, at any time after the Merger
------------------
Effective Time, CalWest shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other documents, actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in
Rooster Acquisition Corp. its right, title or interest in, to or under any of
the rights, properties or assets of CalWest and Rooster Acquisition Corp., Cabot
or Cabot LP, or otherwise to carry out this Agreement, the officers of Rooster
Acquisition Corp. shall be
- 14 -
authorized to execute and deliver, in the name and on behalf of CalWest, Rooster
Acquisition Corp., Cabot or Cabot LP, all such deeds, bills of sale,
assignments, assurances and other documents and to take and do, in the name and
on behalf of CalWest, Rooster Acquisition Corp., Cabot or Cabot LP, all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under such rights,
properties or assets in Rooster Acquisition Corp. or otherwise to carry out this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 4.1 Representations and Warranties of Cabot. Cabot and Cabot LP
---------------------------------------
represent and warrant to CalWest and Rooster Acquisition Corp. as follows:
(a) Organization, Standing and Trust Power of Cabot. Cabot is
-----------------------------------------------
a real estate investment trust duly organized, validly existing and in
good standing under the Laws of the State of Maryland and has all of
the requisite trust power, authority and all necessary government
approvals or licenses to own, lease, operate its properties, and to
carry on its business as now being conducted. Cabot is duly qualified
or licensed to do business and is in good standing in each jurisdiction
in which the nature of the business it is conducting, or the ownership,
operation or leasing of its properties or the management of properties
for others makes such qualification or licensing necessary, other than
in such jurisdictions where the failure to be so qualified or licensed,
individually or in the aggregate, will not constitute a Cabot Material
Adverse Effect. Cabot has heretofore made available to CalWest complete
and correct copies of Cabot's declaration of trust, as amended through
the date hereof (the "Cabot Charter"), and by-laws, as amended through
---------------
the date hereof (the "Cabot By-laws"). The Cabot Charter and the Cabot
---------------
By-laws are each in full force and effect. Each jurisdiction in which
Cabot is qualified or licensed to do business and each assumed name
under which it conducts business in any jurisdiction are identified in
Section 4.1(a) of the disclosure letter, dated the date hereof and
delivered to CalWest in connection with the execution and delivery of
this Agreement (the "Cabot Disclosure Letter").
-------------------------
(b) Cabot Subsidiaries; Interests in Other Persons. (i) Each
----------------------------------------------
Cabot Subsidiary that is a corporation is duly organized, validly
existing and in good standing under the Laws of its jurisdiction of
incorporation and has all of the requisite corporate power and
authority and all necessary government approvals and licenses to own,
lease, operate its properties, and to carry on its business as now
being conducted, except where the failure to have such approvals or
licenses would not, individually or in the aggregate, constitute a
Cabot Material Adverse Effect. Each Cabot Subsidiary, including Cabot
LP, that is a partnership, limited liability company or trust is duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of organization and has the requisite power and authority
and all necessary government approvals and licenses to own, lease,
operate its properties, and to carry on its business as now being
conducted, except where the failure to have such approvals or licenses
would not, individually or in the aggregate,
- 15 -
constitute a Cabot Material Adverse Effect. Each Cabot Subsidiary,
including Cabot LP, is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the nature of its
business or the ownership, operation or leasing of its properties or
the management of properties for others makes such qualification or
licensing necessary, other than in such jurisdictions where the failure
to be so qualified or licensed would not, individually or in the
aggregate, constitute a Cabot Material Adverse Effect. All outstanding
shares of stock of each Cabot Subsidiary that is a corporation have
been duly authorized, are validly issued, fully paid and nonassessable,
and are not subject to any preemptive rights and are owned by Cabot
and/or another Cabot Subsidiary, except as disclosed in Section
4.1(b)(i) of the Cabot Disclosure Letter, and are so owned free and
clear of all pledges, claims, liens, charges, encumbrances and security
interests of any kind or nature whatsoever (collectively, "Liens"). All
-----
equity interests in each Cabot Subsidiary, including Cabot LP, that
is a partnership, limited liability company, trust or other
entity have been duly authorized and are validly issued and are owned
by Cabot and/or another Cabot Subsidiary, except as disclosed in
Section 4.1(b)(i) of the Cabot Disclosure Letter, and are so owned free
and clear of all Liens. Except as set forth in Section 4.1(b)(i) or
Section 4.1(c)(i)(D) of the Cabot Disclosure Letter, there are no
outstanding options, warrants or other rights to acquire ownership
interests from any Cabot Subsidiary. Cabot has heretofore made
available to CalWest complete and correct copies of the charter,
by-laws or other organizational documents of each of the Cabot
Subsidiaries, each as amended to the date hereof and each as in full
force and effect. Section 4.1(b)(i) of the Cabot Disclosure Letter sets
forth (A) all Cabot Subsidiaries and their respective jurisdictions of
incorporation or organization, (B) each owner and the respective amount
of such owner's equity interest in each Cabot Subsidiary and (C) a list
of each jurisdiction in which each Cabot Subsidiary is qualified or
licensed to do business and each assumed name under which each such
Cabot Subsidiary conducts business in any jurisdiction.
(ii) Except for the stock of, or other equity
interests in, the Cabot Subsidiaries, and the other interests
disclosed in Section 4.1(b)(ii) of the Cabot Disclosure Letter
(the "Cabot Other Interests"), neither Cabot nor any of the
-----------------------
Cabot Subsidiaries owns any stock or other ownership or equity
interest in any Person. Neither Cabot nor any Cabot Subsidiary
has violated any provision of any organizational documents
governing or otherwise relating to its rights in any Cabot
Other Interest that constitutes a Cabot Material Adverse
Effect.
(c) Capital Structure.
-----------------
(i) Shares
------
(A) The authorized shares of beneficial
interest of Cabot consist of (1) 140,900,000 Common
Shares, (2) 1,000,000 Series A Junior Participating
Preferred Shares of Beneficial Interest, par value
$0.01 per share (the "Junior Participating Preferred
-------------------------------
Shares"), (3) 1,300,000 8.625% Series B Cumulative
-------
Redeemable Preferred Shares of Beneficial Interest,
par value $0.01 per share (the "Series B Preferred
-------------------
Shares"), (4) 2,600,000 8.625% Series C Cumulative
-------
Redeemable Preferred Shares of Beneficial
- 16 -
Interest, par value $0.01 per share (the "Series C
---------
Preferred Shares"), (5) 200,000 8.375% Series D
-----------------
Cumulative Redeemable Preferred Shares of Beneficial
Interest, par value $0.01 per share (the "Series D
---------
Preferred Shares"), (6) 200,000 8.375% Series E
-----------------
Cumulative Redeemable Preferred Shares of Beneficial
Interest, par value $0.01 per share (the "Series E
---------
Preferred Shares"), (7) 1,800,000 8.5% Series F
-----------------
Cumulative Redeemable Preferred Shares of Beneficial
Interest, par value $0.01 per share (the "Series F
---------
Preferred Shares"), (8) 600,000 8.875% Series G
-----------------
Cumulative Redeemable Preferred Shares of Beneficial
Interest, par value $0.01 per share (the "Series G
---------
Preferred Shares"), and (9) 1,400,000 8.95% Series H
-----------------
Cumulative Redeemable Preferred Shares of Beneficial
Interest, par value $0.01 per share (the "Series H
---------
Preferred Shares"; together with the Series B
-----------------
Preferred Shares, Series C Preferred Shares, Series D
Preferred Shares, Series E Preferred Shares, Series F
Preferred Shares and Series G Preferred Shares, the
"Preferred Shares").
------------------
(B) As of the date of this Agreement, (1)
41,246,584 Common Shares are issued and outstanding
and (2) no Junior Participating Preferred Shares,
Series B Preferred Shares, Series C Preferred Shares,
Series D Preferred Shares, Series E Preferred Shares,
Series F Preferred Shares, Series G Preferred Shares
or Series H Preferred Shares are issued and
outstanding.
(C) As of the date of this Agreement, (1)
5,738,454 Common Shares are reserved for issuance
upon exercise of outstanding Cabot Options (including
DEUs) and 623,335 Common Shares are reserved for
issuance under the Cabot Option Plans, (2) 2,426,255
Common Shares are reserved for issuance upon exchange
of LP Units (as defined below) for Cabot Common
Shares pursuant to the Second Amended and Restated
Agreement of Limited Partnership of Cabot LP (the
"Cabot LP Agreement"), (3) 1,500,000 Common Shares
--------------------
are reserved for issuance pursuant to the 1999
Dividend Reinvestment and Share Purchase Plan and (4)
750,000 Common Shares are reserved for issuance upon
the exercise of a Common Share Purchase Warrant dated
September 5, 2000, (5) 1,300,000 Series B Preferred
Shares are reserved for issuance upon conversion of
the Series B Preferred Units (defined below), (6)
2,600,000 Series C Preferred Shares are reserved for
issuance upon conversion of the Series C Preferred
Units (defined below), (7) 200,000 Series D Preferred
Shares are reserved for issuance upon conversion of
the Series D Preferred Units (defined below), (8)
200,000 Series E Preferred Shares are reserved for
issuance upon conversion of the Series E Preferred
Units (defined below), (9) 1,800,000 Series F
Preferred Shares are reserved for issuance upon
conversion of the Series F Preferred Units (defined
below), (10) 600,000 Series G Preferred Shares are
reserved for issuance upon conversion of the Series G
Preferred Units (defined below), and (11) 1,400,000
Series H Preferred Shares are reserved for issuance
upon conversion of the Series H Preferred Units
(defined below).
- 17 -
(D) Except as set forth in this Section
-------
4.1(c) or in Section 4.1(c)(i)(D) of the Cabot
------
Disclosure Letter, there are issued and outstanding
or reserved for issuance: (1) no shares, Voting Debt
or other equity securities of Cabot; (2) no
restricted Cabot Common Shares, performance share
awards or DEUs relating to the equity interests of
Cabot or Cabot LP, (3) no securities of Cabot or any
Cabot Subsidiary or securities or assets of any other
entity convertible into or exchangeable for shares,
Voting Debt or other equity securities of Cabot or
any Cabot Subsidiary; and (4) no subscriptions,
options, warrants, conversion rights, stock
appreciation rights, calls, claims, rights of first
refusal, rights (including preemptive rights),
commitments, arrangements or agreements to which
Cabot or any Cabot Subsidiary is a party or by which
it is bound in any case obligating Cabot or any Cabot
Subsidiary to issue, deliver, sell, purchase, redeem
or acquire, or cause to be issued, delivered, sold,
purchased, redeemed or acquired, additional shares,
Voting Debt or other equity securities of Cabot or of
any Cabot Subsidiary, or obligating Cabot or any
Cabot Subsidiary to grant, extend or enter into any
such subscription, option, warrant, conversion right,
share appreciation right, call, right, commitment,
arrangement or agreement. All outstanding shares of
Cabot are, and all shares reserved for issuance will
be, upon issuance in accordance with the terms
specified in the instruments or agreements pursuant
to which they are issuable, duly authorized, validly
issued, fully paid and nonassessable and not subject
to or issued in violation of, any preemptive right,
purchase option, call option, right of first refusal,
subscription or any other similar right.
(E) Except as set forth in Section
4.1(c)(i)(E) of the Cabot Disclosure Letter, all
dividends or distributions on securities of Cabot or
any Cabot Subsidiary that have been declared or
authorized prior to the date of this Agreement have
been paid in full.
(ii) Partnership Units
-----------------
(A) As of the date of this Agreement, (1)
41,246,584 units of general partner interest in Cabot
LP (the "GP Units"), (2) 2,426,255 LP Units, (3)
----------
1,300,000 8.625% Series B Cumulative Redeemable
Preferred Units (the "Series B Preferred Units"), (4)
--------------------------
2,600,000 8.625% Series C Cumulative Redeemable
Preferred Units (the "Series C Preferred Units"), (5)
--------------------------
200,000 8.375% Series D Cumulative Redeemable
Preferred Units (the "Series D Preferred Units"), (6)
--------------------------
200,000 8.375% Series E Cumulative Redeemable
Preferred Units (the "Series E Preferred Units"), (7)
--------------------------
1,800,000 8.5% Series F Cumulative Redeemable
Preferred Units (the "Series F Preferred Units"), (8)
--------------------------
600,000 8.875% Series G Cumulative Redeemable
Preferred Units (the "Series G Preferred Units"), and
--------------------------
(9) 1,400,000 8.95% Series H Cumulative Redeemable
Preferred Units (the "Series H Preferred Units";
--------------------------
together with the Series B Preferred Units, Series C
Preferred Units, Series D Preferred Units, Series E
Preferred
- 18 -
Units, Series F Preferred Units and Series G
Preferred Units, the "Preferred Units") are validly
---------------
issued and outstanding, are not subject to preemptive
rights and any capital contributions required to be
made by the holders thereof have been made.
(B) Cabot is the sole general partner of
Cabot LP and as of the date of this Agreement holds
41,246,584 GP Units, representing 100% of the
outstanding GP Units in Cabot LP. Section
4.1(c)(ii)(B) of the Cabot Disclosure Letter sets
forth the name, number and class of GP Units, LP
Units and Preferred Units held by each partner in
Cabot LP. Except as disclosed in Section
4.1(c)(ii)(B) of the Cabot Disclosure Letter, all
holders of LP Unitholders have executed and delivered
to CalWest and Rooster Acquisition Corp. Shareholder
Agreements.
(C) Each LP Unit may, under certain
circumstances and subject to certain conditions set
forth in the Cabot LP Agreement, be converted to
Cabot Common Shares on a one-for-one basis. The
holders of Series B Preferred Units have the right,
under certain circumstances, to exchange such units
for Series B Preferred Shares on a one-for-one basis
pursuant to the terms of the Series B Preferred
Units. The holders of Series C Preferred Units have
the right, under certain circumstances, to exchange
such units for Series C Preferred Shares on a
one-for-one basis pursuant to the terms of the Series
C Preferred Units. The holders of the Series D
Preferred Units have the right, under certain
circumstances, to exchange such units for Series D
Preferred Shares on a one-for-one basis pursuant to
the terms of the Series D Preferred Units. The
holders of Series E Preferred Units have the right,
under certain circumstances, to exchange such units
for Series E Preferred Shares on a one-for-one basis
pursuant to the terms of the Series E Preferred
Units. The holders of Series F Preferred Units have
the right, under certain circumstances, to exchange
such units for Series F Preferred Shares on a
one-for-one basis pursuant to the terms of the Series
F Preferred Units. The holders of Series G Preferred
Units have the right, under certain circumstances, to
exchange such units for Series G Preferred Shares on
a one-for-one basis pursuant to the terms of the
Series G Preferred Units. The holders of Series H
Preferred Units have the right, under certain
circumstances, to exchange such units for Series H
Preferred Shares on a one-for-one basis pursuant to
the terms of the Series H Preferred Units. As of the
date of this Agreement, no notice has been received
by Cabot or Cabot LP of the exercise of any of the
rights set forth in this paragraph (C), which are not
reflected in this Section 4.1(c).
--------------
(iii) Miscellaneous
-------------
(A) Except for the Transaction Documents and
except as set forth in Section 4.1(c)(iii)(A) or
Section 4.1(c)(iii)(B) of the Cabot Disclosure
Letter, there are not any (i) shareholder agreements,
voting
- 19 -
trusts, proxies or other agreements or understandings
relating to the voting of any shares of Cabot or
partnership interests in Cabot LP or any ownership
interests in any Cabot Subsidiary or (ii) agreements
or understandings relating to the sale or transfer
(including agreements imposing transfer restrictions)
of any shares of Cabot or any ownership interests in
any Cabot Subsidiary, to which Cabot or any Cabot
Subsidiary is a party or by which it is bound. Except
as set forth in Section 4.1(c)(iii)(A) of the Cabot
Disclosure Letter, there are no restrictions on
Cabot's ability to vote the equity interests of any
of the Cabot Subsidiaries.
(B) Except as set forth in Section
4.1(c)(iii)(B) of the Cabot Disclosure Letter, no
holder of securities in Cabot or any Cabot Subsidiary
has any right to have such securities registered by
Cabot or any Cabot Subsidiary, as the case may be.
(C) Except as set forth in Section 4.1(b)(i)
or Section 4.1(c)(iii)(C) of the Cabot Disclosure
Letter and except for LP Units, there are not any
Cabot Subsidiaries in which any officer or director
of Cabot or any Cabot Subsidiary owns any stock or
other securities. There are no agreements or
understandings between Cabot or any Cabot Subsidiary
and any Person that could cause such Person to be
treated as holding any share, stock or security in
Cabot or any Cabot Subsidiary as an agent for, or
nominee of, Cabot or any Cabot Subsidiary.
(D) All prior issuances of securities were
in all material respects made in compliance with and
not in violation of all applicable federal and state
securities laws.
(d) Authority; No Violations; Consents and Approval; LP Units.
---------------------------------------------------------
(i) Cabot has all requisite power and authority to
enter into the Transaction Documents and to consummate the
transactions contemplated thereby, subject, solely with
respect to the consummation of the Merger, to receipt of the
Cabot Common Shareholder Approval and the acceptance for
record of the Articles of Merger by the Maryland Department.
Each Cabot Subsidiary that is a party to any Transaction
Document has all requisite power and authority to enter into
such Transaction Document and to consummate the transactions
contemplated thereby. The execution and delivery of the
Transaction Documents and the consummation of the transactions
contemplated hereby or thereby have been duly authorized by
all necessary action on the part of Cabot and each applicable
Cabot Subsidiary, subject, solely with respect to the
consummation of the Merger, to receipt of the Cabot Common
Shareholder Approval. Such Transaction Documents have been
duly executed and delivered by Cabot and each applicable Cabot
Subsidiary and subject, solely with respect to the
consummation of the Merger, to receipt of the Cabot Common
Shareholder Approval, constitute legal, valid and binding
obligations of Cabot and each applicable Cabot
- 20 -
Subsidiary, enforceable against Cabot and each Cabot
Subsidiary in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other Laws of general
applicability relating to or affecting creditors' rights and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
Law).
(ii) Except as set forth in Section 4.1(d)(ii) of the
Cabot Disclosure Letter and except for the Cabot Common
Shareholder Approval, the execution and delivery of the
Transaction Documents by Cabot or each applicable Cabot
Subsidiary do not, and the consummation of the transactions
contemplated thereby, and compliance with the provisions
thereof, will not conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation, or the loss of
a benefit under, or give rise to a right of purchase under,
result in the creation of any Lien upon any of the properties
or assets of Cabot or any of the Cabot Subsidiaries under,
require the consent or approval of any third party or
otherwise result in a detriment or default to Cabot or any of
the Cabot Subsidiaries under, any provision of (A) the Cabot
Charter or the Cabot By-laws or any provision of the
comparable charter or organizational documents of any of the
Cabot Subsidiaries, (B) any loan or credit agreement or note,
except for the Triggered Loans (as defined below) or any bond,
mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise or license applicable to Cabot
or any of the Cabot Subsidiaries, or to which their respective
properties or assets are bound or any guarantee by Cabot or
any of the Cabot Subsidiaries of any of the foregoing, (C) any
joint venture or other ownership arrangement or any Material
Contract (as defined in Section 4.1(u)(i)) except for the
Triggered Loans (as defined below) or (D) assuming the
consents, approvals, authorizations or permits and filings or
notifications referred to in Section 4.1(d)(iii) are duly and
-------------------
timely obtained or made and the Cabot Common Shareholder
Approval has been obtained, any Law or Order applicable to or
binding upon Cabot or any of the Cabot Subsidiaries, or any of
their respective properties or assets, other than, in the case
of clauses (B) (except with respect to the Triggered Loans),
(C) and (D), any such conflicts, violations, defaults, rights,
Liens or detriments that, individually or in the aggregate,
would not constitute a Cabot Material Adverse Effect. For the
purposes of this Agreement, the term "Triggered Loans" means
-----------------
the loans identified as "Triggered Loans" in Section
4.1(d)(ii) of the Cabot Disclosure Letter.
(iii) Except as set forth in Section 4.1(d)(iii) of
the Cabot Disclosure Letter, no consent, approval, order or
authorization of, or registration, declaration or filing with,
notice to or permit from, any Governmental Entity, is required
by or on behalf of Cabot or any of the Cabot Subsidiaries in
connection with the execution and delivery of the Transaction
Documents by Cabot and each of the applicable Cabot
Subsidiaries or the consummation by Cabot or the applicable
Cabot Subsidiaries of the transactions contemplated hereby or
thereby, except for: (A) the filing with the SEC of (1) (a) if
required by the rules and regulations of
- 21 -
the SEC, a proxy or information statement in preliminary and
definitive form relating to the Cabot Common Shareholder
Meeting held in connection with the Merger, if any, or (b)
other documents otherwise required in connection with the
transactions contemplated hereby and (2) such reports under
Section 13(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and such other compliance with
--------------
the Exchange Act and the rules and regulations thereunder, as
may be required in connection with the Transaction Documents
and the transactions contemplated thereby; (B) the filing of
the Articles of Merger, and the acceptance for record of the
Articles of Merger by, the Maryland Department; (C) such
filings and approvals as may be required by any applicable
state securities or "blue sky" Laws; (D) such filings as may
be required in connection with state or local transfer taxes;
and, (E) except with respect to the Merger, any such consent,
approval, order, authorization, registration, declaration,
filing or permit that the failure to obtain or make,
individually or in the aggregate, would not constitute a Cabot
Material Adverse Effect.
(iv) The holders of Preferred Units do not and will
not have any right to (A) cause the redemption of such
Preferred Units, (B) exchange such Preferred Units for any
other securities, or (C) convert, redeem or receive a
distribution with respect to such Preferred Units, in each
case solely as a result of the Offer, the Merger, or the other
transactions contemplated by the Transaction Documents.
(e) SEC Documents.
-------------
(i) Each of Cabot and Cabot LP has made available to
CalWest a true and complete copy of each report, schedule,
registration statement, other statement (including proxy
statements) and information filed by Cabot and Cabot LP with
the SEC since its inception and prior to or on the Closing
Date (the "Cabot SEC Documents"), which are all the documents
---------------------
(other than preliminary material) that each of Cabot and Cabot
LP was required to file with the SEC between its inception and
the Closing Date pursuant to the federal securities laws and
the SEC rules and regulations thereunder. Section 4.1(e)(i) of
the Cabot Disclosure Letter accurately lists each Cabot SEC
Document filed prior to the date of this Agreement. As of
their respective dates, the Cabot SEC Documents complied in
all material respects with the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), or the
----------------
Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Cabot SEC
Documents and none of the Cabot SEC Documents contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading, except to the
extent such statements have been modified or superseded by
later Cabot SEC Documents filed and publicly available prior
to the date of this Agreement. Neither Cabot nor Cabot LP has
any outstanding and unresolved comments from the SEC with
respect to any of the Cabot SEC Documents. None of the Cabot
SEC Documents is the subject of any confidential treatment
request by Cabot or Cabot LP. The consolidated financial
statements of Cabot and Cabot LP (including the notes
- 22 -
thereto) included in the Cabot SEC Documents complied as to
form in all material respects with the applicable accounting
requirements and the published rules and regulations of the
SEC with respect thereto, were prepared in accordance with
generally accepted accounting principles ("GAAP") applied on a
----
consistent basis during the periods involved (except as may be
indicated in the notes thereto, or, in the case of the
unaudited statements, as permitted by Rule 10-01 of Regulation
S-X of the SEC) and fairly presented, in accordance with
applicable requirements of GAAP and the applicable rules and
regulations of the SEC (subject, in the case of the unaudited
statements, to normal, recurring adjustments, none of which
are material), the assets, liabilities and the consolidated
financial position of Cabot and the Cabot Subsidiaries, taken
as a whole, and Cabot LP as of their respective dates and the
consolidated statements of income and the consolidated cash
flows of Cabot and the Cabot Subsidiaries taken as a whole,
and Cabot LP for the periods presented therein. The books of
account and other financial records of Cabot and the Cabot
Subsidiaries are accurately reflected in all material respects
in the financial statements included in the Cabot SEC
Documents. Other than Cabot and Cabot LP, no Cabot Subsidiary
is required to make any filing with the SEC.
(ii) The GP Units, LP Units and the Preferred Units
are not registered under Section 12 of the Exchange Act.
(iii) Section 4.1(e)(iii) of the Cabot Disclosure
Letter sets forth a true and complete copy of the unaudited
consolidated balance sheet of Cabot as at September 30, 2001
(the "Balance Sheet") and the unaudited consolidated
---------------
statements of income for the nine months ended September 30,
2001 and September 30, 2000 (together with the Balance Sheet,
the "Interim Financial Information"). The Interim Financial
-------------------------------
Information was prepared in accordance with GAAP (except for
the absence of footnotes) applied on a basis consistent with
the consolidated financial statements included in the Cabot
SEC Documents and fairly presents (subject to normal recurring
adjustments, none of which are material), the assets,
liabilities, consolidated financial position and consolidated
statements of income of Cabot and the Cabot Subsidiaries taken
as a whole as at and for the periods indicated. The books of
account and other financial records of Cabot and the Cabot
Subsidiaries are accurately reflected in all material respects
in the Interim Financial Information. A true, complete and
correct copy of the Interim Financial Information is included
in Cabot's press release issued to the media and public
October 24, 2001. The Interim Financial Information has been
reviewed by Cabot's independent public accountants in
accordance with the American Institute of Certified Public
Accountants' Statement on Auditing Standards No. 71.
(iv) The Quarterly Report on Form 10-Q for the
quarter ended September 30, 2001 will include without change
the Interim Financial Information; provided that the financial
--------
statements included in such Form 10-Q may include line items
that have been combined in the Interim Financial Information.
- 23 -
(f) Absence of Certain Changes or Events. Except as disclosed
------------------------------------
in Section 4.1(f) of the Cabot Disclosure Letter, since the Balance
Sheet date, Cabot and the Cabot Subsidiaries have conducted their
business only in the ordinary course consistent with past practice and
there has not been: (1) (A) a Cabot Material Adverse Effect; (B) any
declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any
of Cabot's Common Shares or any ownership interest in Cabot LP; (C) any
amendment of any term of any outstanding security of Cabot or any Cabot
Subsidiary; (D) any repurchase, redemption or other acquisition by
Cabot or any Cabot Subsidiary of any outstanding shares of stock or
other securities of, or other ownership interests in, Cabot or any
Cabot Subsidiary; (E) any change in any method of accounting or
accounting practice or any material change in any tax method or
election by Cabot or any Cabot Subsidiary; (F) any (i) amendment of any
employment, consulting, severance, retention or any other agreement
between Cabot and any officer or trustee of Cabot; (ii) grant of any
severance or termination pay to any trustee, director or officer of
Cabot or any Cabot Subsidiary; (iii) entering into of any employment
agreement with any trustee, director or officer of Cabot or any Cabot
Subsidiary; (iv) material increase in any benefits payable under any
existing severance or termination pay policies or employment
agreements; or (v) increase in compensation, bonus or other benefits
payable to trustees, directors or officers of Cabot or a Cabot
Subsidiary; (G) any change, event, effect, damage, destruction, loss
relating to the business or operations of Cabot that has constituted,
or would constitute, a Cabot Material Adverse Effect; (H) any
incurrence, assumption or guarantee by Cabot or any Cabot Subsidiary of
any indebtedness for borrowed money other than in the ordinary course
of business consistent with past practices; (I) any creation or
assumption by Cabot or any Cabot Subsidiary of any Lien in an amount,
individually or in the aggregate, in excess of $1,000,000 on any asset
other than in the ordinary course of business consistent with past
practices; or (J) any making of any loan, advance or capital
contribution to or investment in any Person; or (2) any split,
combination or reclassification of any of Cabot's stock or any issuance
or the authorization of any issuance of any other securities in respect
of, in lieu of or in substitution for, or giving the right to acquire
by exchange or exercise, shares of its stock or any issuance of an
ownership interest in, any Cabot Subsidiary.
(g) No Undisclosed Material Liabilities. Except as set forth
-----------------------------------
in Section 4.1(g)(i) of the Cabot Disclosure Letter or as otherwise
would not constitute a Cabot Material Adverse Effect, there are no
Liabilities of Cabot or any of the Cabot Subsidiaries, whether accrued,
contingent, absolute or determined, and, except with respect to the
environmental matters which are the subject of the representations and
warranties in Section 4.1(o), there is no existing condition, situation
or set of circumstances that could reasonably be expected to result in
such a Liability, other than: (i) Liabilities adequately provided for
on the Balance Sheet or (ii) Liabilities incurred in the ordinary
course of business consistent with past practice subsequent to the
Balance Sheet date. Section 4.1(g)(ii) of the Cabot Disclosure Letter
sets forth a complete list of all loan or credit agreements, notes,
bonds, mortgages, indentures and other agreements and instruments
pursuant to which any indebtedness of Cabot or any Cabot Subsidiary, is
outstanding or may be incurred and the respective principal amounts
outstanding thereunder as of the date of this Agreement. For purposes
of this Section 4.1(g), "indebtedness" means, with respect to any
Person, without duplication (i) all obligations
- 24 -
of such Person for borrowed money, or with respect to deposits or
advances of any kind to such person, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments,
(iii) all obligations of such Person upon which interest charges are
customarily paid, (iv) all obligations of such Person under conditional
sale or other title retention agreements relating to property purchased
by such Person, (v) all obligations of such Person issued or assumed as
the deferred purchase price of property or services (excluding
obligations of such person or creditors for raw materials, inventory,
services and supplies incurred in the ordinary course of such Person's
business, consistent with past practice), (vi) all capitalized lease
obligations of such Person, (vii) all obligations of such Person under
interest rate or currency hedging transactions (valued at the
termination value thereof), (viii) all letters of credit issued for the
account of such Person, and (ix) all guarantees and arrangements having
the economic effect of a guarantee of such Person of any indebtedness
of any other Person.
(h) No Default. Neither Cabot nor any of the Cabot
----------
Subsidiaries is in default or violation (and no event has occurred
which, with notice or the lapse of time or both, would constitute a
default or violation) of any term, condition or provision of (A) the
Cabot Charter or the Cabot By-laws or the comparable charter or
organizational documents of any of the Cabot Subsidiaries, (B) any loan
or credit agreement or note, including any Triggered Loan or any bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license to which Cabot or any of the Cabot
Subsidiaries is now a party or by which Cabot or any of the Cabot
Subsidiaries or any of their respective properties or assets is bound,
or (C) any Law or Order applicable to or binding upon Cabot or any of
the Cabot Subsidiaries or any of their respective properties or assets,
except, in the case of clauses (B) and (C), for defaults or violations
which, individually or in the aggregate, have not constituted and would
not constitute a Cabot Material Adverse Effect.
(i) Compliance with Applicable Laws. Cabot and the Cabot
-------------------------------
Subsidiaries hold all permits, licenses, certificates, registrations,
variances, exemptions, orders, franchises and approvals of all
Governmental Entities necessary or required by any applicable Law or
Order for the lawful conduct of their respective businesses (together
with the Cabot Environmental Permits (as hereinafter defined), the
"Cabot Permits"), except where the failure so to hold, individually or
---------------
in the aggregate, does not and would not constitute a Cabot Material
Adverse Effect. Cabot and the Cabot Subsidiaries are in compliance with
the terms of the Cabot Permits, except where the failure to so comply,
individually or in the aggregate, does not and would not constitute a
Cabot Material Adverse Effect. Except as would not constitute a Cabot
Material Adverse Effect, the businesses of Cabot and the Cabot
Subsidiaries are not being conducted in violation of any Law or Order.
No investigation or review by any Governmental Entity with respect to
Cabot or any of the Cabot Subsidiaries is pending or, to the Knowledge
of Cabot, is threatened, other than those the outcome of which,
individually or in the aggregate, would not constitute a Cabot Material
Adverse Effect.
(j) Litigation. Except as set forth in Section 4.1(j) of the
----------
Cabot Disclosure Letter, there is no litigation, arbitration, claim,
investigation, suit, action or proceeding pending or, to the Knowledge
of Cabot, threatened against or affecting Cabot or any
- 25 -
Cabot Subsidiary or any of their respective property or assets that,
individually or in the aggregate, constitutes or would constitute a
Cabot Material Adverse Effect, nor is there any such litigation,
arbitration, claim, investigation, suit, action or proceeding or any
Order outstanding against Cabot or any Cabot Subsidiary or any of their
respective properties or assets which in any manner challenges or seeks
to prevent or enjoin, alter or materially delay the Merger, the Offer
or the transactions contemplated by the Transaction Documents or could
reasonably be expected to, individually or in the aggregate, (A)
constitute a Cabot Material Adverse Effect, (B) cause any of the
transactions contemplated by the Transaction Documents to be rescinded
following their consummation, including the Offer or the Merger, or (C)
materially adversely affect the rights of CalWest and Rooster
Acquisition Corp. to own their respective or Cabot's or any Cabot
Subsidiary's assets and to operate their respective or Cabot's or any
Cabot Subsidiary's business.
(k) Taxes.
-----
(i) Each of Cabot and the Cabot Subsidiaries has
timely filed all Tax Returns required to be filed by it (after
giving effect to any filing extension properly granted by a
Governmental Entity having authority to do so or otherwise
permitted by Law). Each such Tax Return was, at the time
filed, true, correct and complete in all material respects.
Cabot and each Cabot Subsidiary has paid (or Cabot has paid on
behalf of such Cabot Subsidiary), within the time and in the
manner prescribed by Law, all material Taxes that are due and
payable. The most recent financial statements contained in the
Cabot SEC Documents filed with the SEC prior to the date of
this Agreement reflect an adequate reserve or accrued
liabilities or expenses for all material Taxes due and payable
by Cabot and the Cabot Subsidiaries as a group for all taxable
periods and portions thereof through the date of such
financial statements. Cabot and the Cabot Subsidiaries (as a
group) have established on their books and records (which may,
but are not required to, be reflected only on the books and
records of Cabot or Cabot LP) reserves or accrued liabilities
or expenses that are adequate for the payment of all Taxes for
which Cabot or any Cabot Subsidiary is liable but are not yet
due and payable. Since the date of the most recent audited
financial statements included in the Cabot SEC Documents, (A)
Cabot has incurred no liability for any material Taxes under
Sections 857(b), 860(c) or 4981 of the Code or IRS Notice
88-19 or Treasury Regulation Section 1.337(d)-5T, including,
without limitation, any material Tax arising from a prohibited
transaction described in Section 857(b)(6) of the Code, and
(B) neither Cabot nor any of the Cabot Subsidiaries has
incurred any material liability for Taxes other than in the
ordinary course of business. No deficiencies for material
Taxes have been asserted or assessed in writing by a
Governmental Entity against Cabot or any of the Cabot
Subsidiaries, and no requests for waivers of the time to
assess any such material Taxes have been granted and remain in
effect or are pending. No claim is pending or proposed by any
Governmental Entity in any jurisdiction where Cabot or any
Cabot Subsidiary does not file Tax Returns that Cabot or any
Cabot Subsidiary is or may be subject to taxation by such
jurisdiction, nor to the Knowledge of Cabot are there any
facts that could reasonably be expected to give rise to such a
claim.
- 26 -
(ii) Cabot (A) for each taxable year of Cabot's
existence (other than its first taxable year ended December
31, 1997) through its taxable year ended December 31, 2000,
has been subject to taxation as a real estate investment trust
(a "REIT") within the meaning of the Code and has satisfied
------
the requirements to qualify as a REIT for such years, (B) has
operated consistent with the requirements for qualification
and taxation as a REIT for the period from December 31, 2000
through the date hereof, (C) has not taken any action or
omitted to take any action which would reasonably be expected
to result in a successful challenge by the Internal Revenue
Service to its status as a REIT, and no such challenge is
pending, or to Cabot's Knowledge, threatened. Each Cabot
Subsidiary which files Tax Returns as a partnership for
federal income tax purposes has since its acquisition by Cabot
been classified for federal income tax purposes as a
partnership and not as an association taxable as a
corporation, or a "publicly traded partnership" within the
meaning of Section 7704(b) of the Code that is treated as a
corporation for federal income tax purposes under Section
7704(a) of the Code. Except in the case of Cabot Advisors,
Inc. or any subsidiary thereof, each Cabot Subsidiary which is
a corporation has been since its formation classified as a
qualified REIT subsidiary under Section 856(i) of the Code.
Neither Cabot nor any Cabot Subsidiary holds any asset (x) the
disposition of which would be subject to rules similar to
Section 1374 of the Code as announced in IRS Notice 88-19 or
Treasury Regulation Section 1.337(d)-5T or (y) that is subject
to a consent filed pursuant to Section 341(f) of the Code.
Except as set forth in Section 4.1(k)(ii) of the Cabot
Disclosure Letter, none of the property owned by Cabot or any
Cabot Subsidiary is property described in Section 1221(a)(1)
of the Code.
(iii) As of the date of this Agreement, Cabot does
not have any earnings and profits attributable to Cabot or any
other corporation in any non-REIT year within the meaning of
Section 857 of the Code. Cabot is not subject to any
adjustment under Section 481 of the Code.
(iv) All material Taxes which Cabot or the Cabot
Subsidiaries are required by Law to withhold or collect,
including material Taxes required to have been withheld in
connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other third
party and sales, gross receipts and use taxes, have been duly
withheld or collected and, to the extent required, have been
paid over to the proper Governmental Entities or are held in
separate bank accounts for such purpose. There are no Liens
for material Taxes upon the assets of Cabot or the Cabot
Subsidiaries except for statutory Liens for Taxes not yet due.
(v) Except as set forth in Section 4.1(k)(v) of the
Cabot Disclosure Letter, (a) the Tax Returns of Cabot or any
Cabot Subsidiary have not been audited by any taxing
authority, (b) there are no audits by and contests with any
taxing authority currently being conducted with regard to
material Taxes or Tax Returns of Cabot or any Cabot Subsidiary
and, to the Knowledge of Cabot, there are no audits pending
with or proposed by any taxing authority with respect to any
- 27 -
material Taxes or Tax Returns, and (c) there are not any
unresolved questions or claims concerning any liability for
Taxes of Cabot or any Cabot Subsidiary that were raised by any
Governmental Entity in a written communication to Cabot or any
Cabot Subsidiary.
(vi) Except as set forth in Section 4.1(k)(vi) of the
Cabot Disclosure Letter, neither Cabot nor the Cabot
Subsidiaries are a party to any Tax allocation or sharing
agreement.
(vii) Cabot does not have any material liability for
the Taxes of any Person other than Cabot and the Cabot
Subsidiaries and the Cabot Subsidiaries do not have any
material liability for the Taxes of any Person other than
Cabot and the Cabot Subsidiaries (A) under Treasury Regulation
Section 1.1502-6 (or any similar provision of state, local or
foreign Law), (B) to the Knowledge of Cabot as a transferee or
successor or (C) by contract.
(viii) Except as set forth in Section 4.1(k)(viii) of
the Cabot Disclosure Letter, neither Cabot nor the Cabot
Subsidiaries have made any payments, are obligated to make any
payments, or are parties to an agreement that could obligate
them to make any payments that will not be deductible under
Section 280G of the Code. Cabot and the Cabot Subsidiaries
have disclosed to the Internal Revenue Service all positions
taken on their federal income tax returns which could give
rise to a substantial understatement of Tax under Section 6662
of the Code.
(ix) All material elections with respect to Taxes
affecting Cabot or any Cabot Subsidiary as of the date hereof
that are not reflected in Tax Returns are set forth in Section
4.1(k)(ix) of the Cabot Disclosure Letter.
(l) Pension and Benefit Plans; ERISA. (i) Except as set forth
--------------------------------
in Section 4.1(l)(i) of the Cabot Disclosure Letter, all "employee
pension benefit plans," as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
maintained or contributed to by Cabot or any trade or business (whether
or not incorporated) which is under common control, or which is treated
as a single employer, with Cabot under Section 414(b), (c), (m) or (o)
of the Code (a "Cabot ERISA Affiliate") or to which Cabot or any of the
-----------------------
Cabot Subsidiaries or any Cabot ERISA Affiliate contributed or is
obligated to contribute thereunder within six years prior to the Merger
Effective Time intended to qualify under Section 401 of the Code (the
"Cabot Pension Plans") have received a favorable determination letter
---------------------
from the IRS and, to the Knowledge of Cabot, such determination has not
been modified, revoked or limited, and, to the Knowledge of Cabot as of
the Closing Date, nothing has occurred with respect to the operation of
the Cabot Pension Plans that could reasonably be expected to cause the
loss of such qualification or the imposition of any material Liability,
penalty or Tax under ERISA or the Code.
(ii) Except as set forth in Section 4.1(l)(ii) of the
Cabot Disclosure Letter, neither Cabot nor any Cabot ERISA
Affiliate currently sponsors, contributes to, maintains or has
liability (whether contingent or otherwise) under
- 28 -
(i) a "multiemployer plan" (as defined in Section 4001(a)(3)
of ERISA) or (ii) an employee benefit plan that was subject to
Part 3 of Subtitle B of Title I of ERISA, or Section 412 of
the Code, or Title IV of ERISA.
(iii) There is no violation of ERISA or the Code that
would result in any material liability, penalty or Tax under
ERISA or the Code with respect to (A) the filing of applicable
reports, documents, and notices with the Secretary of Labor
and the Secretary of the Treasury regarding all "employee
benefit plans," as defined in Section 3(3) of ERISA, and all
other employee compensation and benefit arrangements or
payroll practices, including, without limitation, severance
pay, sick leave, vacation pay, salary continuation for
disability, consulting or other compensation agreements,
retirement, deferred compensation, bonus (including, without
limitation, any retention bonus plan), long-term incentive,
stock option, stock purchase, hospitalization, medical
insurance, life insurance and scholarship programs maintained
by Cabot or any of the Cabot Subsidiaries or with respect to
which Cabot or any of the Cabot Subsidiaries has any liability
or the Cabot Pension Plans (all such plans, including Cabot
Pension Plans, being hereinafter referred to as the "Cabot
------
Employee Benefit Plans") or (B) the furnishing of such
-----------------------
documents to the participants or beneficiaries of Cabot
Employee Benefit Plans.
(iv) Each Cabot Employee Benefit Plan, related trust
(or other funding or financing arrangement) and all amendments
thereto are listed in Section 4.1(l)(iv) of the Cabot
Disclosure Letter, true and complete copies of which have been
made available to CalWest, as have the most recent summary
plan descriptions, administrative service agreements, the
three (3) most recent Form 5500s and, with respect to any
Cabot Employee Benefit Plan intended to be qualified pursuant
to Section 401(a) of the Code, a current IRS determination
letter.
(v) Each of the Cabot Employee Benefit Plans is, and
its administration is and has been, in material compliance
with, and none of Cabot nor any of the Cabot Subsidiaries has
received any claim, notice or information that any such Cabot
Employee Benefit Plan is not in compliance with, its terms
(except for those terms which are inconsistent with changes
required by statutes, regulations and rulings for which
changes are not yet required to be made, in which case such
plans have been administered in accordance with the provisions
of those statutes, regulations and rulings) and all applicable
Laws, regulations, rulings and all other applicable
governmental Laws, regulations and orders, and prohibited
transaction exemptions, including, without limitation, the
requirements of ERISA, bonding requirements and the furnishing
of documents to the participants and beneficiaries (and other
individuals entitled to such documents) of each such plan.
Except as described in Section 4.1(l)(v) of the Cabot
Disclosure Letter, to the Knowledge of Cabot, there is no
material liability for breaches of fiduciary duty in
connection with Cabot Employee Benefit Plans, and neither
Cabot nor any of the Cabot Subsidiaries or any "party in
interest" or "disqualified person" with respect to the Cabot
Employee Benefit Plans has
- 29 -
engaged in a non-exempt "prohibited transaction" within the
meaning of Section 4975 of the Code or Section 406 of ERISA.
(vi) There are no actions, disputes, suits, claims,
arbitration or legal, administrative or other proceeding or
governmental investigation pending (other than routine claims
for benefits) or, to the Knowledge of Cabot, threatened,
alleging any breach of the terms of any Cabot Employee Benefit
Plan or of any fiduciary duties thereunder or violation of any
applicable Law with respect to any such Cabot Employee Benefit
Plan.
(vii) Except for the payments contemplated by Section
-------
2.7 and except as described in Section 4.1(l)(vii), Section
---
4.1(k)(viii) or Section 4.1(l)(xv) of the Cabot Disclosure
Letter, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby
will (A) result in any payment (including, but not limited to,
any retention bonuses, parachute payments or noncompetition
payments) becoming due to any employee or former employee or
group of employees or former employees of Cabot or any of the
Cabot Subsidiaries; (B) increase any benefits otherwise
payable under any Cabot Employee Benefit Plan; (C) result in
the acceleration of the time of payment or vesting of any such
rights or benefits; or (D) otherwise result in the payment of
any "excess parachute payment" within the meaning of Section
280G of the Code with respect to a current or former employee
of Cabot or any of the Cabot Subsidiaries. Except as described
in Section 4.1(l)(vii) of the Cabot Disclosure Letter, there
are no severance agreements, noncompetition agreements or
employment agreements between Cabot or any of the Cabot
Subsidiaries and any employee of Cabot or such Cabot
Subsidiary. True and complete copies of all severance
agreements and employment agreements described in Section
4.1(l)(vii) of the Cabot Disclosure Letter have been provided
to CalWest.
(viii) Except as set forth in Section 4.1(l)(viii) of
the Cabot Disclosure Letter, neither Cabot nor any of the
Cabot Subsidiaries has any consulting agreement or
arrangement, whether oral or written, with any Person
involving annual compensation in excess of $50,000.
(ix) All contributions, premiums and other payments
required by Law or any Cabot Employee Benefit Plan or
applicable collective bargaining agreement have been made
under any such plan to any fund, trust or account established
thereunder or in connection therewith by the due date thereof,
and no amounts are or will be due to the Pension Benefit
Guaranty Corporation as of the Closing Date (except for
premiums in the ordinary course of business); and any and all
contributions, premiums and other payments with respect to
compensation or service before and through the Closing Date,
or otherwise with respect to periods before and through the
Closing Date, due from any of Cabot or its ERISA Affiliates
to, under or on account of each Cabot Employee Benefit Plan
shall have been paid prior to the Closing Date or shall have
been fully reserved and provided for or accrued on the Cabot
financial statements.
- 30 -
(x) Except as set forth in Section 4.1(l)(x) of the
Cabot Disclosure Letter, no stock or other security issued by
Cabot or any of the Cabot Subsidiaries forms or has formed a
part of the assets of any Cabot Employee Benefit Plan.
(xi) Except as set forth in Section 4.1(l)(xi) of the
Cabot Disclosure Letter, no Cabot Employee Benefit Plan that
is a "welfare benefit plan" as defined in Section 3(1) of
ERISA provides for continuing benefits or coverage for any
participant or beneficiary or covered dependent of a
participant after such participant's termination of
employment, except to the extent required under Section 4980B
of the Code and Parts 6 and 7 of Subtitle B of Title I of
ERISA, or any similar state law. Except as set forth in
Section 4.1(l)(xi) of the Cabot Disclosure Letter, all Cabot
Employee Benefit Plans that provide medical, dental health or
long-term disability benefits are fully insured and claims
with respect to any participant or covered dependent under
such Cabot Employee Benefit Plan could not reasonably result
in any uninsured liability to Cabot, any Cabot Subsidiary or
CalWest or Rooster Acquisition Corp. Cabot and the Cabot ERISA
Affiliates have complied in all material respects with the
requirements of Section 4980B of the Code and Parts 6 and 7 of
Subtitle B of Title I of ERISA regarding health care coverage
under Cabot Employee Benefit Plans.
(xii) Except as set forth in Section 4.1(l)(xii) of
the Cabot Disclosure Letter, no amount has been paid by Cabot
or any of the Cabot ERISA Affiliates, and no amount is
expected to be paid by Cabot or any of the Cabot ERISA
Affiliates, which would be subject to the provisions of
Section 162(m) of the Code such that all or a part of such
payments would not be deductible by the payor.
(xiii) Except as set forth in Section 4.1(l)(xiii) of
the Cabot Disclosure Letter, without limiting any other
provision of this Section 4.1(l), no event has occurred and,
to the Knowledge of Cabot, no condition exists, with respect
to any Cabot Employee Benefit Plan, that has subjected or
could subject Cabot or any Cabot ERISA Affiliate, or any Cabot
Employee Benefit Plan or any successor thereto, to any Tax,
fine, penalty or other liability (other than, in the case of
Cabot, a Cabot ERISA Affiliate and the Cabot Employee Benefit
Plans, a liability arising in the normal course to make
contributions or payments, as applicable, when ordinarily due
under a Cabot Employee Benefit Plan with respect to employees
of Cabot and the Cabot Subsidiaries). No event has occurred
and, to the Knowledge of Cabot, no condition exists, with
respect to any Cabot Employee Benefit Plan that could subject
CalWest and Rooster Acquisition Corp. or any of its
Affiliates, or any plan maintained by CalWest and Rooster
Acquisition Corp. or any Affiliate (other than an Affiliate
which becomes such pursuant to the transactions contemplated
by this Agreement) thereof, to any material Tax, fine, penalty
or other liability, that would not have been incurred by
CalWest and Rooster Acquisition Corp. or any of its
Affiliates, or any such plan, but for the transactions
contemplated hereby. No plan other than a Cabot Employee
Benefit Plan is or will be directly or indirectly binding on
CalWest and Rooster Acquisition Corp. by virtue of the
transactions contemplated hereby. CalWest,
- 31 -
Rooster Acquisition Corp. and their Affiliates, including on
and after the Closing Date, Cabot and any Cabot ERISA
Affiliate, to the Knowledge of Cabot, shall have no liability
for, under, with respect to or otherwise in connection with
any plan, which liability arises under ERISA or the Code, by
virtue of Cabot or any Cabot Subsidiary being aggregated in a
controlled group or affiliated service group with any Cabot
ERISA Affiliate for purposes of ERISA or the Code at any
relevant time prior to the Closing Date (other than a
liability from providing benefits arising in the ordinary
course of business).
(xiv) Each Cabot Employee Benefit Plan may be
unilaterally amended or terminated in its entirety by Cabot or
the Surviving Entity without liability except as to benefits
accrued thereunder prior to amendment or termination.
(xv) All individual employment, termination,
severance, change in control, retention bonus, post-employment
and other compensation agreements, arrangements and plans
existing prior to the execution of this Agreement or which
will exist prior to the Closing, which are between Cabot or a
Cabot Subsidiary and any current or former director, officer
or employee thereof, including the name and title of such
current or former director, officer or employee, the type of
agreement and the amount of any estimated severance payment
(including estimated gross up) owed thereunder due solely to
the transactions contemplated by this Agreement, are listed in
Section 4.1(1)(vii) or Section 4.1(l)(xv) of the Cabot
Disclosure Letter (collectively, the "Cabot Severance
Agreements").
(xvi) Cabot has not granted any options intended to
be "incentive stock options" pursuant to the Code.
(m) Labor and Employment Matters.
----------------------------
(i) Except as set forth in Section 4.1(m)(i) of the
Cabot Disclosure Letter, neither Cabot nor any of the Cabot
Subsidiaries is a party to any collective bargaining agreement
or other current labor agreement with any labor union or
organization, and there is no question involving current union
representation of employees of Cabot or any of the Cabot
Subsidiaries, nor does Cabot or any of the Cabot Subsidiaries
know of any activity or proceeding of any labor organization
(or representative thereof) or employee group (or
representative thereof) to organize any such employees.
(ii) There is no unfair labor practice charge,
decision, side letter, letter agreements, letters of
understanding or settlement agreements or grievance arising
out of a collective bargaining agreement or other grievance
procedure pending, or, to the Knowledge of Cabot, threatened
against Cabot or any of the Cabot Subsidiaries.
(iii) Except as set forth in Section 4.1(j) of the
Cabot Disclosure Letter, there is no complaint, lawsuit or
proceeding in any forum by or on behalf of any present or
former employee, any applicant for employment or any classes
of the
- 32 -
foregoing, alleging breach of any express or implied contract
of employment, any Law or regulation governing employment or
the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment
relationship pending, or, to the Knowledge of Cabot,
threatened against Cabot or any of the Cabot Subsidiaries.
(iv) There is no strike, slowdown, representation or
certification campaign or work stoppage or lockout with
respect to the employees of Cabot or the Cabot Subsidiaries
pending, or, to the Knowledge of Cabot, threatened, against or
involving Cabot or any of the Cabot Subsidiaries.
(v) To the Knowledge of Cabot, the employees of Cabot
and the Cabot Subsidiaries are lawfully authorized to work in
the United States according to federal immigration Laws.
(vi) There is no proceeding, claim, suit, action or
governmental investigation pending or, to the Knowledge of
Cabot, threatened, with respect to which any current or former
director, officer, employee or agent of Cabot or any of the
Cabot Subsidiaries is claiming indemnification from Cabot or
any of the Cabot Subsidiaries.
(vii) Except as set forth in Section 4.1(m)(vii) of
the Cabot Disclosure Letter and except for such matters as
would not, individually or in the aggregate, constitute a
Cabot Material Adverse Effect, there are no pending
administrative matters with any federal, provincial, state or
local agencies regarding (i) violations or alleged violations
of any federal, provincial, state or local wage and hour law
or any federal, provincial, state or local law with respect to
discrimination on the basis of race, color, creed, national
origin, religion or any other basis under such federal,
provincial, state or local law, (ii) any claimed violation of
Title VII of the 1964 Civil Rights Acts, as amended, (iii) any
allegation or claim arising out of Executive Order 11246 or
any other applicable order relating to governmental
contractors or state contractors, or (iv) any violation or
alleged violation of the Age Discrimination and Employment
Act, as amended, or any other federal, provincial, state or
local statute or ordinance, or any other applicable laws with
respect to wages, hours, employment practices and terms and
conditions of employment.
(n) Intangible Property. Cabot and the Cabot Subsidiaries own,
-------------------
possess or have adequate rights to use all trademarks, trade names,
patents, service marks, brand marks, brand names, computer programs,
databases, industrial designs and copyrights (including any
registrations or applications for registration of any of the foregoing)
currently used in the operation of the businesses of each of Cabot and
the Cabot Subsidiaries (collectively, the "Cabot Intangible Property"),
---------------------------
except where the failure to possess or have adequate rights to use such
property, individually or in the aggregate, would not constitute a
Cabot Material Adverse Effect. All of the Cabot Intangible Property is
owned or licensed by Cabot or the Cabot Subsidiaries free and clear of
any and all Liens, except as would not, individually or in the
aggregate, constitute a Cabot
- 33 -
Material Adverse Effect, and neither Cabot nor any such Cabot
Subsidiary has forfeited or otherwise relinquished any Cabot Intangible
Property. Except as set forth in Section 4.1(n) of the Cabot Disclosure
Letter, to the Knowledge of Cabot, the use of Cabot Intangible Property
by Cabot or the Cabot Subsidiaries does not in any material respect
conflict with, infringe upon, violate or interfere with or constitute
an appropriation of any right, title, interest or goodwill, including
any intellectual property right, trademark, trade name, patent, service
xxxx, brand xxxx, brand name, software license, invention, computer
program, database, industrial design, copyright or any pending
application therefor, of any other Person. Except as set forth in
Section 4.1(n) of the Cabot Disclosure Letter, there have been no
claims made against Cabot or any Cabot Subsidiary, and neither Cabot
nor any of the Cabot Subsidiaries has received any notice of any claim
that any of the Cabot Intangible Property is invalid or conflicts with
the asserted rights of any other Person or has not been used or
enforced or has failed to have been used or enforced in a manner that
would result in the abandonment, cancellation or unenforceability of
any of the Cabot Intangible Property, except as would not, individually
or in the aggregate, constitute a Cabot Material Adverse Effect.
(o) Environmental Matters. Except as described in Section
---------------------
4.1(o) of the Cabot Disclosure Letter:
(i) neither Cabot, Cabot LP nor any of Cabot
Subsidiaries is in violation of any applicable Law or Order
relating to pollution or protection of human health and
safety, the environment (including indoor or ambient air,
surface water, groundwater, land surface or subsurface),
natural resources or wildlife, including laws and regulations
relating to the release or threatened release of any chemical,
compound, pollutant, contaminant, waste, toxic substance,
product, solid gas, liquid, or material which is hazardous or
toxic, including asbestos or any substance containing
asbestos, polychlorinated biphenyls and petroleum or petroleum
products (including crude oil and any fraction thereof)
(collectively, "Hazardous Materials") or to the manufacture,
---------------------
management, possession, presence, generation, processing,
distribution, use, treatment, storage, disposal,
transportation, abatement, removal, remediation or handling
of, or exposure to, Hazardous Materials (collectively,
"Environmental Laws"), except for any violation which does not
--------------------
constitute a Cabot Material Adverse Effect;
(ii) Cabot, Cabot LP and the Cabot Subsidiaries have
all material permits, authorizations and approvals required
under any applicable Environmental Laws ("Environmental
--------------
Permits");
--------
(iii) neither Cabot, the Cabot LP, nor the Cabot
Subsidiaries have received any notice of, and there are no
pending or, to the Knowledge of Cabot, threatened
administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings
relating to Hazardous Materials or any Environmental Law
against or affecting Cabot, Cabot LP or any of the Cabot
Subsidiaries or any of the Cabot Properties (as hereinafter
defined);
- 34 -
(iv) neither Cabot, the Cabot LP, nor the Cabot
Subsidiaries have received any notice of, and Cabot does not
have any Knowledge of, any occurrence, condition or
circumstance that would reasonably be expected to give rise to
a claim or liability under or pursuant to any Environmental
Law;
(v) to the Knowledge of Cabot, there is not any
restriction on the ownership, occupancy, use or
transferability of any of the Cabot Properties in connection
with any Environmental Law or release, threatened release or
disposal or any Hazardous Material;
(vi) Cabot, Cabot LP and the Cabot Subsidiaries have
not used, and have not permitted the use of, any Cabot
Property (as defined in Section 4.1(p)) for activities or
operations that involve the handling, use, processing,
manufacturing, generating, producing, storing, refining,
recycling, transporting, spilling, pumping, pouring, emitting,
emptying, discharging, injecting, burying, leaching, dumping,
disposing of or releasing into the environment or otherwise
dealing with any Hazardous Material, except for Hazardous
Materials utilized in the ordinary course of maintaining such
real properties or utilized in the ordinary course of business
of the tenant of such Cabot Properties, provided such use
would not, in the ordinary course of business, reasonably be
expected to give rise to Liability under any Environmental
Laws;
(vii) to the Knowledge of Cabot, there is not any
seepage, leaking, escaping, leaching, discharging, injection,
release, emission, spill, pumping, pouring, emptying, dumping
or other release or threatened release of Hazardous Materials
into the environment at or from any Cabot Properties,
including any land or water on, at, under or adjacent to any
such Cabot Properties, or on, at, under or from land or water
from which Hazardous Materials might seep, flow or drain into
such land or water;
(viii) no Cabot Property is included or, to the
Knowledge of Cabot, proposed for inclusion on the National
Priorities List issued by the United States Environmental
Protection Agency ("EPA") pursuant to applicable Environmental
Laws, or on the Comprehensive Environmental Response,
Compensation and Liability Information System list, and no
such real property has been identified by the EPA as a
potential CERCLA site or to the Knowledge of Cabot included,
or proposed for inclusion, on any analogous list or inventory
issued pursuant to any other Environmental Law or issued by
any other Governmental Entity having or claiming jurisdiction
under Environmental Laws or with respect to such real
property; and
(ix) Cabot and the Cabot LP do not have any Knowledge
of any occurrence, condition or circumstance (including,
without limitation, any investigation, remediation, claim or
notice) involving or relating to the actual or suspected
presence of any mold, fungi, or other
microbial/microbiological contaminants, or any other indoor
air contaminants, at any Cabot Property.
- 35 -
(p) Properties. (i) Except as listed in Section 4.1(p)(i) of
----------
the Cabot Disclosure Letter, Cabot or a Cabot Subsidiary owns fee
simple title to or has a valid leasehold interest in each of the real
properties identified in Section 4.1(p)(i) of the Cabot Disclosure
Letter (each, a "Cabot Property" and collectively, the "Cabot
---------------- ------
Properties"), which are all of the real estate properties owned by
-----------
them, in each case (except as provided below) free and clear of liens,
mortgages or deeds of trust, claims against title, charges which are
liens, security interests or other encumbrances on title
("Encumbrances"). Section 4.1(p)(i) of the Cabot Disclosure Letter
further identifies which of the Cabot Properties are owned in fee
simple by Cabot or a Cabot Subsidiary and which of the Cabot Properties
are subject to a ground lease. Except as set forth in Section 4.1(p)(i)
of the Cabot Disclosure Letter, no other Person has any ownership
interest in any of the Cabot Properties and any such ownership interest
so scheduled does not materially interfere with the present use of any
of the Cabot Properties subject thereto or affected thereby. Except as
set forth in Section 4.1(p)(i) of the Cabot Disclosure Letter, none of
the Cabot Properties is subject to any restriction on the sale or other
disposition thereof or on the financing or release of financing
thereon. The Cabot Properties are not subject to any rights of way,
agreements, or Laws affecting building use or occupancy, or
reservations of an interest in title (collectively, "Property
---------
Restrictions") or Encumbrances, except for (collectively, the
-------------
"Permitted Title Exceptions") (A) Encumbrances and Property
----------------------------
Restrictions set forth in Section 4.1(p)(i) of the Cabot Disclosure
Letter, (B) Property Restrictions imposed or promulgated by Law or any
Governmental Entity or included in any Cabot space lease with respect
to real property, including zoning regulations, provided that they do
not materially adversely affect the currently intended use of any Cabot
Property, (C) Encumbrances and Property Restrictions disclosed on
existing title policies or existing surveys (in either case copies of
which title policies or surveys have been delivered or made available
to CalWest), and (D) mechanics', carriers', workmen's, repairmen's and
materialmen's liens and other Liens, Property Restrictions and other
limitations of any kind, if any, which individually and in the
aggregate will be paid in full in the ordinary course of business.
(ii) Except as provided in Section 4.1(p)(ii) of the
Cabot Disclosure Letter, valid policies of title insurance or
updates or endorsements have been issued, insuring Cabot's or
the applicable Cabot Subsidiaries' fee simple title or
leasehold estate to each of the Cabot Properties in amounts at
least equal to the purchase price paid for such Cabot
Properties at the time of the issuance of each such policy,
subject only to the Permitted Title Exceptions and the matters
disclosed in Section 4.1(p)(ii) of the Cabot Disclosure
Letter, and such policies are, at the date hereof and will be
as of the consummation of the Offer, in full force and effect
and no material claim has been made against any such policy.
(iii) Section 4.1(p)(iii) of the Cabot Disclosure
Letter lists (i) each of the Cabot Properties which are under
development as of the date of this Agreement and describes the
status of such development as of the date hereof, and (ii) all
properties currently proposed for acquisition, development or
commencement of construction prior to the Merger Effective
Time by Cabot and the Cabot Subsidiaries.
- 36 -
(iv) Except as provided in Section 4.1(p)(iv) of the
Cabot Disclosure Letter, (i) all requisite certificates,
permits and licenses from each Governmental Entity having
jurisdiction over each of the Cabot Properties and all
agreements, easements or other rights which are necessary to
permit the lawful use and operation of the buildings and
improvements on any of the Cabot Properties or which are
necessary to permit the lawful use and operation of all
driveways, roads and other means of egress and ingress to and
from any of the Cabot Properties have been obtained and are in
full force and effect, and there are no pending threats of
modification or cancellation of any of the same, the absence
of which would reasonably be expected to have a material
adverse effect on such Cabot Property, (ii) Cabot and the
Cabot Subsidiaries have not been notified in writing of any
violation of any Law or Order issued by any Governmental
Entity which would reasonably be expected to have a material
adverse effect on such Cabot Property, (iii) Cabot and the
Cabot Subsidiaries have not been notified in writing of any
structural defects relating to any Cabot Property which would
reasonably be expected to have a material adverse effect on
such Cabot Property, (iv) Cabot and the Cabot Subsidiaries
have not been notified in writing of any Cabot Property whose
building systems are not in working order so as to have a
material adverse effect on such Cabot Property, or (v) Cabot
and the Cabot Subsidiaries have not been notified in writing
of any physical damage to any Cabot Property which would
reasonably be expected to have a material adverse effect on
such Cabot Property for which there is not insurance in effect
covering the cost of the restoration and the loss of revenue
(subject to a reasonable deduction or retention limit).
(v) Except as set forth in Section 4.1(p)(v) of the
Cabot Disclosure Letter, none of Cabot or any Cabot Subsidiary
has received any written or published notice to the effect
that (i) any condemnation or involuntary rezoning proceedings
are pending or threatened with respect to any of the Cabot
Properties or (ii) any zoning, building or similar law, code,
ordinance, order or regulation is or will be violated by the
continued maintenance, operation or use of any buildings or
other improvements on any of the Cabot Properties or by the
continued maintenance, operation or use of the parking areas
which would reasonably be expected to have a material adverse
effect on such Cabot Property. Except as set forth in Section
4.1(p)(v) of the Cabot Disclosure Letter, (i) all work
required to be performed, payments required to be made and
actions required to be taken prior to the date hereof pursuant
to any agreement entered into with a Governmental Entity in
connection with a site approval, zoning reclassification or
other similar action relating to any Cabot Properties (e.g.,
Local Improvement District, Road Improvement District,
Environmental Mitigation (as defined herein)) have been
performed, paid or taken, as the case may be, and (ii) there
are no planned, and there has been no proposal by or to Cabot
or any Cabot Subsidiary regarding, payments or actions that
may be required after the date hereof pursuant to such
agreements. As used in this Agreement, "Environmental
Mitigation" means investigation, clean-up, removal action,
remedial action, restoration, repair, response action,
corrective action, monitoring, sampling and
- 37 -
analysis, installation, reclamation, closure or post-closure
in response to any actual or suspected environmental condition
or Hazardous Materials.
(vi) The rent rolls previously provided by Cabot to
CalWest (the "Cabot Rent Roll") list each Cabot Space Lease
-----------------
(as defined herein) in effect as of the dates set forth
therein, and, except for immaterial omissions or
discrepancies, all information set forth in the Cabot Rent
Roll is true, correct and complete as of the date thereof.
"Cabot Space Lease" means each lease or other right of
-------------------
occupancy affecting or relating to a property in which Cabot
LP (or an entity in which it directly or indirectly has an
interest) is the landlord, either pursuant to the terms of the
lease agreement or as successor to any prior landlord, but
excluding any ground lease. Cabot has made available to
CalWest true, correct and complete copies of all Cabot Space
Leases, including all amendments, modifications, supplements,
renewals, extensions and guarantees related thereto, as of the
date hereof. Except as set forth in Section 4.1(p)(vi) of the
Cabot Disclosure Letter, none of Cabot or any Cabot
Subsidiary, on the one hand, nor, to the Knowledge of Cabot,
any other party, on the other hand, is in default under any
Cabot Space Lease, except for such defaults that, individually
or in the aggregate, do not and would not constitute a Cabot
Material Adverse Effect.
(vii) As of the date of this Agreement, Section
4.1(p)(vii) of the Cabot Disclosure Letter sets forth a
complete and correct list, of all material leases which have
been executed, but are either not yet included on the Rent
Roll or relate to property not yet open for business.
(viii) Except as set forth on Section 4.1(p)(viii) of
the Cabot Disclosure Letter and except as would not,
individually or in the aggregate, constitute a Cabot Material
Adverse Effect, no tenants have been granted options to
purchase or rights of first refusal under their applicable
leases which would require consent or be triggered by the
Merger.
(ix) Section 4.1(p)(ix) of the Cabot Disclosure
Letter contains a list, as of the date hereof, of (A) all
unfunded tenant improvements due from Cabot or any Cabot
Subsidiary in excess of $50,000 in any instance, (B) all
outstanding leasing commissions in excess of $10,000 in any
instance and (C) all committed capital expenditures in excess
of $50,000 in any instance, excluding capital expenditures
related to Cabot's development projects.
(x) Except as set forth in Section 4.1(p)(x) of the
Cabot Disclosure Letter, there are no written agreements which
restrict Cabot or any Cabot Subsidiary, including Cabot LP,
from transferring any of the Cabot Properties.
(xi) Except as set forth on Section 4.1(p)(xi) of the
Cabot Disclosure Letter, Cabot and each of the Cabot
Subsidiaries have good and sufficient title to, or are
permitted to use under valid and existing leases, all their
personal and nonreal properties and assets reflected in their
books and records as being owned by them (including those
reflected in the consolidated balance sheet of Cabot as
- 38 -
of December 31, 2000, except as since sold or otherwise
disposed of in the ordinary course of business) or used by
them in the ordinary course of business, free and clear of all
Liens and Encumbrances, except such as are reflected on the
consolidated balance sheet of Cabot as of December 31, 2000,
and the notes thereto, and except for (A) immaterial Liens for
current taxes not yet due and payable, and liens or
encumbrances which are normal to the business of Cabot and the
Cabot Subsidiaries and (B) imperfections of title or leasehold
interest, easements or encumbrances, if any, as do not
materially interfere with the present use of the properties or
assets subject thereto or affected thereby.
(q) Insurance. Section 4.1(q) of the Cabot Disclosure Letter
---------
contains a true and complete list, type of insurance, carrier,
coverages (including limits) and term, of all policies of casualty,
Liability and other types of insurance (except title insurance) carried
by Cabot or any Cabot Subsidiary. All such policies are in full force
and effect and neither Cabot nor any Cabot Subsidiary has received from
any insurance company notice of any material defects or deficiencies
affecting the insurability of Cabot or any Cabot Subsidiary or any of
their respective assets thereunder. Cabot and each of the Cabot
Subsidiaries maintains insurance with financially responsible insurers
in such amounts and covering such risks as are in accordance with
normal industry practice for companies engaged in businesses similar to
those of Cabot and each of the Cabot Subsidiaries (taking into account
the cost and availability of such insurance). Except as set forth in
this Section 4.1(q), neither Cabot nor any of the Cabot Subsidiaries
has received any written notice of cancellation or termination with
respect to any existing insurance policy of Cabot or any of the Cabot
Subsidiaries.
(r) Opinion of Financial Advisor. The Cabot Board of Trustees
----------------------------
has received the written opinion of the Cabot Financial Advisor to the
effect that, based on, and subject to the various assumptions and
qualifications set forth in such opinion, as of the date of such
opinion, the consideration to be received by holders of Common Shares
(other than CalWest and its Affiliates) pursuant to this Agreement is
fair from a financial point of view to such holders (other than CalWest
and its Affiliates). A copy of the written opinion of the Cabot
Financial Advisor has been delivered to CalWest.
(s) Vote Required. The affirmative vote of the holders of
-------------
Cabot Common Shares casting at least two-thirds of the votes entitled
to be cast (the "Cabot Common Shareholder Approval") is the only vote
-----------------------------------
of the holders of any class or series of the Cabot Common Shares or
other securities required to approve this Agreement, the Merger and the
other transactions contemplated by the Transaction Documents and is
only necessary in the event that the Cabot Common Shares purchased
pursuant to the Offer or otherwise owned by Rooster Acquisition Corp.
represent less than 90.0% of all the votes entitled to be cast on the
Merger.
(t) Brokers. Except for the fees and expenses payable to the
-------
Cabot Financial Advisor pursuant to the engagement letter set forth in
Section 4.1(t) of the Cabot Disclosure Letter, no broker, investment
banker or other Person is entitled to any broker's, finder's or other
similar fee or commission in connection with the transactions
- 39 -
contemplated by the Transaction Documents based upon arrangements made
by or on behalf of Cabot, and any Cabot Subsidiary or any Affiliate
thereof.
(u) Contracts.
---------
(i) Section 4.1(u)(i) of the Cabot Disclosure Letter
lists all Material Contracts of Cabot. Except as set forth in
Section 4.1(u)(i) of the Cabot Disclosure Letter, all Material
Contracts are valid, binding and enforceable and in full force
and effect, except where such failure to be so valid, binding
and enforceable and in full force and effect do not and would
not, individually or in the aggregate, constitute a Cabot
Material Adverse Effect, and there are no defaults or
violations thereunder, nor does there exist any condition
which upon the passage of time or the giving of notice or both
would cause such a violation of or a default thereunder,
except those defaults or violations that do not and would not,
individually or in the aggregate, constitute a Cabot Material
Adverse Effect. For purposes of this Agreement, "Material
---------
Contracts" shall mean (i) any loan agreement, indenture, note,
----------
bond, debenture, mortgage or any other document, agreement or
instrument evidencing a capitalized lease obligation or other
indebtedness to any Person, (ii) each commitment, contractual
obligation, capital expenditure or transaction entered into by
Cabot or any Cabot Subsidiary which may result in total
payments by or liability of Cabot or any Cabot Subsidiary in
excess of $250,000 individually or $1,000,000 in the
aggregate, other than leases listed on Section 4.1(p)(vii) of
the Cabot Disclosure Letter, (iii) any other agreements filed
or required to be filed as exhibits to the Cabot SEC Documents
pursuant to Item 601(b)(10) of Regulation S-K of Title 17,
Part 229 of the Code of Federal Regulations, (iv) any interest
rate cap, interest rate collar, interest rate swap, currency
hedging transaction and any other agreement relating to a
similar transaction to which Cabot or any Cabot Subsidiary is
a party or an obligor with respect thereto and (v) any
agreement, commitment, instrument or obligation of a type
described in Sections 4.1(u)(ii) through 4.1(u)(x).
(ii) All mortgages on any of the assets of Cabot or
Cabot LP are listed in Section 4.1(u)(ii) of the Cabot
Disclosure Letter. The Offer, the Merger and the other
transactions contemplated by the Transaction Documents will
not trigger any due-on-sale provision on any of such
mortgages, except as set forth in Section 4.1(d)(ii) of the
Cabot Disclosure Letter, and will not require the consent of
any mortgage lender, except as set forth in Sections
4.1(d)(ii) of the Cabot Disclosure Letter.
(iii) Except as set forth in Section 4.1(u)(iii) of
the Cabot Disclosure Letter, there is no confidentiality
agreement, non-competition agreement or other contract or
agreement that contains covenants that restrict Cabot's
ability to conduct its business in any location.
(iv) Except as set forth in Section 4.1(u)(iv) of the
Cabot Disclosure Letter, there are no indemnification
agreements entered into by and between Cabot and any director
or officer of Cabot or any of the Cabot Subsidiaries.
- 40 -
(v) Except as set forth in Section 4.1(u)(v) of the
Cabot Disclosure Letter, none of Cabot or any Cabot Subsidiary
is a party to any agreement which would restrict any of them
from prepaying any of their indebtedness without penalty or
premium at any time or which requires any of them to maintain
any amount of indebtedness with respect to any of the Cabot
Properties.
(vi) Except as set forth in Section 4.1(u)(vi) of the
Cabot Disclosure Letter, none of Cabot or any Cabot Subsidiary
is a party to any agreement relating to the management of any
Cabot Property by any Person other than Cabot or a Cabot
Subsidiary.
(vii) None of Cabot or any Cabot Subsidiary is a
party to any agreement pursuant to which Cabot or any Cabot
Subsidiary manages or provides services with respect to any
real properties other than Cabot Properties, except for the
agreements listed in Section 4.1(u)(vii) of the Cabot
Disclosure Letter.
(viii) Section 4.1(u)(viii) of the Cabot Disclosure
Letter lists all agreements entered into by Cabot or any Cabot
Subsidiary providing for the sale of, or option to sell, any
Cabot Properties or the purchase of, or option to purchase, by
Cabot or any Cabot Subsidiary, on the one hand, or the other
party thereto, on the other hand, any real estate not yet
consummated as of the date hereof.
(ix) Except as set forth in Section 4.1(u)(ix) of the
Cabot Disclosure Letter, none of Cabot or any Cabot Subsidiary
has any material continuing contractual liability (A) for
indemnification or otherwise under any agreement relating to
the sale of real estate previously owned, whether directly or
indirectly, by Cabot or any Cabot Subsidiary or (B) to pay any
additional purchase price for any of the Cabot Properties.
(x) Except as set forth in Section 4.1(u)(x) of the
Cabot Disclosure Letter, neither Cabot nor any Cabot
Subsidiary has entered into or is subject, directly or
indirectly, to any Tax Protection Agreements. As used herein,
a "Tax Protection Agreement" is an agreement, oral or written,
(A) that has as one of its purposes to permit a Person to take
the position that such Person could defer federal taxable
income that otherwise might have been recognized upon a
transfer of property to Cabot LP or any other Cabot Subsidiary
that is treated as a partnership for federal income tax
purposes, and that (i) prohibits or restricts in any manner
the disposition of any assets of Cabot or any Cabot
Subsidiary, (ii) requires that Cabot or any Cabot Subsidiary
maintain, put in place, or replace indebtedness, whether or
not secured by one or more of the Cabot Properties, or (iii)
requires that Cabot or any Cabot Subsidiary offer to any
Person at any time the opportunity to guarantee or otherwise
assume, directly or indirectly (including, without limitation,
through a "deficit restoration obligation", guarantee
(including, without limitation, a "bottom" guarantee),
indemnification agreement or other similar arrangement), the
risk of loss for federal income tax purposes for indebtedness
or other liabilities of Cabot or any Cabot Subsidiary,
- 41 -
(B) that specifies or relates to a method of taking into
account book-tax disparities under Section 704(c) of the Code
with respect to one or more assets of Cabot or a Cabot
Subsidiary, or (C) that requires a particular method for
allocating one or more liabilities of Cabot or any Cabot
Subsidiary under Section 752 of the Code. Neither Cabot nor
any Cabot Subsidiary is in violation of or in default under
any Tax Protection Agreement.
(v) Rule 16b-3. Cabot and Cabot LP have taken all necessary
----------
action, including causing the Cabot Board of Trustees to adopt
resolutions authorizing and approving the Merger, this Agreement and
the other transactions contemplated by the Transaction Documents, to
exempt such transactions under Rule 16b-3 of the Exchange Act from the
provisions of Section 16(b) of the Exchange Act.
(w) Inapplicability of Takeover Statutes, Cabot Rights
--------------------------------------------------
Agreement and Certain Charter and Bylaw Provisions. (i) Cabot has taken
--------------------------------------------------
all appropriate and necessary actions to exempt the Offer, the Merger,
the Transaction Documents and the other transactions contemplated
thereby from the restrictions of Subtitles 6 and 7 of Title 3 of the
MGCL and Title 8 (collectively, the "Takeover Statute"). Cabot and the
------------------
Cabot Board of Trustees have taken all appropriate and necessary
actions to (A) amend the Cabot Rights Agreement to (1) exempt CalWest
and Rooster Acquisition Corp. from the definition of an Acquiring
Person (as defined in the Cabot Rights Agreement) thereunder due solely
to the Transaction Documents and the transactions contemplated thereby
(including the Merger and the Offer) and (2) provide that no
Distribution Date (as defined in the Cabot Rights Agreement) shall be
deemed to have occurred as a result of the Transaction Documents or the
transactions contemplated thereby (including the Merger and the Offer),
(B) render any takeover defense or other provision contained in the
Cabot Charter or Cabot By-laws inapplicable in the Offer, the Merger,
the Transaction Documents and the other transactions contemplated
thereby and (C) render any and all limitations on ownership of (1)
Cabot Common Shares as set forth in the Cabot Charter and (2) the
limited partner interests in Cabot LP as set forth in the Cabot LP
Agreement, including the Ownership Limit inapplicable to the Offer, the
Merger, the Transaction Documents and the other transactions
contemplated thereby.
(x) Related Party Transactions. Except as expressly described
--------------------------
in the Cabot SEC Documents or as set forth in Section 4.1(x) of the
Cabot Disclosure Letter, there are no material arrangements, agreements
or contracts entered into by Cabot or any of the Cabot Subsidiaries, on
the one hand, and any Person who is an officer, director or affiliate
of Cabot or any Cabot Subsidiary, any relative of the foregoing or an
entity of which any of the foregoing is an Affiliate or an Associate,
on the other hand. Copies of all such documents have been made
available to CalWest.
(y) Disclosure Documents.
--------------------
(i) Each document required to be filed by Cabot with
the SEC in connection with the Offer, the Merger, the
Transaction Documents and the other transactions contemplated
thereby (the "Cabot Disclosure Documents"), including the
----------------------------
Schedule 14D-9 (including information required by 14f-1 under
the Exchange
- 42 -
Act), the Proxy Statement or information statement containing
the information required by Regulation 14A, if any, to be
filed by Cabot with the SEC in connection with the Merger and
any amendments or supplements thereto, will, when filed,
comply in all material respects with the provisions of
applicable federal securities laws.
(ii) At the time the Schedule 14D-9 and the Proxy
Statement or information statement containing the information
required by Regulation 14A, if any, including any amendment or
supplement thereto filed with the SEC, is first mailed,
published or given to the Cabot Common Shareholders and at the
time of the Cabot Common Shareholder Meeting, each of the
Schedule 14D-9 and the Proxy Statement or information
statement containing the information required by Regulation
14A as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements made therein, in the light of the circumstances
under which they were made, not misleading. At the time of the
filing of any Cabot Disclosure Document (other than the Proxy
Statement) filed after the date of this Agreement, such Cabot
Disclosure Document will not contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties contained in Section 4.1(y)(i)
-----------------
and this Section 4.1(y)(ii) will not apply to information
------------------
furnished in writing to Cabot by CalWest specifically for
inclusion in a Cabot Disclosure Document.
(iii) Neither the information supplied or to be
supplied in writing by or on behalf of Cabot or any Cabot
Subsidiary for inclusion in, nor the information incorporated
by reference from documents filed by Cabot or any Cabot
Subsidiary with the SEC into, the Schedule TO and the Offer
Documents will, on the date the Schedule TO and the Offer
Documents are filed with the SEC or on the date they are first
published, sent or given to Cabot Common Shareholders, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(iv) Cabot shall promptly correct the Schedule 14D-9
if and to the extent that it shall have become false or
misleading in any material respect and Cabot shall take all
steps necessary to cause such document as so corrected to be
filed with the SEC and disseminated to Cabot's shareholders to
the extent required by applicable federal securities laws.
(z) Beneficial Ownership of Cabot Common Shares. Neither Cabot
-------------------------------------------
nor the Cabot Subsidiaries "beneficially own" (as defined in Rule 13d-3
promulgated under the Exchange Act) any of the outstanding Cabot Common
Shares or Preferred Shares.
- 43 -
(aa) Investment Company Act of 1940. Neither Cabot nor any of
------------------------------
the Cabot Subsidiaries is, or at the Merger Effective Time will be,
required to be registered as an investment company under the Investment
Company Act of 1940, as amended.
Section 4.2 Representations and Warranties of CalWest and Rooster
-----------------------------------------------------
Acquisition Corp. CalWest and Rooster Acquisition Corp. represent and warrant to
----------------
Cabot and Cabot LP as follows:
(a) Organization, Standing and Power of CalWest and Rooster
-------------------------------------------------------
Acquisition Corp. CalWest is a limited liability company duly formed
----------------
and validly existing under the laws of the State of California and is
in good standing with the Secretary of State of California. Rooster
Acquisition Corp. is a corporation duly formed and validly existing
under MGCL, is in good standing with the Maryland Department and is a
wholly owned subsidiary of CalWest. CalWest has made available to Cabot
complete and correct copies of the organizational documents of Rooster
Acquisition Corp., which are in full force and effect as of the date
hereof.
(b) Authority; No Violations; Consents and Approvals.
------------------------------------------------
(i) CalWest and Rooster Acquisition Corp. have all
requisite power and authority to enter into the Transaction
Documents to which they are parties and to consummate the
transactions contemplated thereby. The execution and delivery
of the Transaction Documents and the consummation of the
transactions contemplated hereby or thereby have been duly
authorized by all necessary action on the part of CalWest and
Rooster Acquisition Corp.
(ii) The Transaction Documents to which CalWest and
Rooster Acquisition Corp. are parties have been duly executed
and delivered by each of CalWest and Rooster Acquisition
Corp., as the case may be, and, constitute valid and binding
obligations of each of CalWest and Rooster Acquisition Corp.,
as the case may be, enforceable against them in accordance
with their terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and
other Laws of general applicability relating to or affecting
creditors' rights and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iii) The execution and delivery of the Transaction
Documents by CalWest and Rooster Acquisition Corp. do not, and
the consummation of the transactions contemplated thereby, and
compliance by CalWest and Rooster Acquisition Corp. with the
provisions thereof, will not conflict with, or result in any
violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any material obligation or the
loss of a material benefit under, or give rise to a right of
purchase under or result in the creation of any Lien upon any
of the properties or assets of such parties under, require the
consent or approval of any third party or otherwise result in
a material detriment to such parties under, any provision of
(A) the limited liability company agreement of CalWest or the
charter or by-laws of Rooster Acquisition Corp., (B) any
material contract, agreement or commitment
- 44 -
of CalWest and Rooster Acquisition Corp., or any guarantee by
CalWest and Rooster Acquisition Corp., (C) any joint venture
or other ownership arrangement or (D) assuming the consents,
approvals, authorizations or permits and filings or
notifications referred to in Section 4.2(B)(iv) are duly and
------------------
timely obtained or made, any Law or Order applicable to or
binding on CalWest and Rooster Acquisition Corp. or any of
their respective properties or assets, other than, in the case
of clauses (B), (C) and (D), any such conflicts, violations,
defaults, rights, Liens or detriments that, individually or in
the aggregate, would not reasonably be expected to materially
impair or delay the ability of CalWest and Rooster Acquisition
Corp. to perform its obligations under any of the Transaction
Documents or prevent the consummation by CalWest and Rooster
Acquisition Corp. of any of the transactions contemplated
thereby.
(iv) No consent, approval, order or authorization of,
or registration, declaration or filing with, or permit from,
any Governmental Entity is required by or on behalf of CalWest
and Rooster Acquisition Corp. in connection with the execution
and delivery by CalWest and Rooster Acquisition Corp. of the
Transaction Documents to which CalWest and Rooster Acquisition
Corp. is a party or the consummation by CalWest and Rooster
Acquisition Corp. of the transactions contemplated thereby,
except for: (A) compliance with the Securities Act and the
Exchange Act and the rules and regulations thereunder as may
be required in connection with the Transaction Documents and
the transactions contemplated thereby; (B) with respect to the
Merger, the filing of the Articles of Merger with, and
acceptance for recording of the Articles of Merger by, the
Maryland Department; (C) such filings and approvals as may be
required by any applicable state securities or "blue sky"
Laws, Takeover Statute or Environmental Laws; and (D) any such
consent, approval, order, authorization, registration,
declaration, filing or permit that the failure to obtain or
make would not reasonably be expected to materially impair or
delay the ability of CalWest and Rooster Acquisition Corp. to
perform its obligations hereunder or under any of the other
Transaction Documents or prevent the consummation by them of
any of the transactions contemplated thereby.
(c) Funding. CalWest has afforded Cabot and its advisors an
-------
opportunity to review in full the Commitment Letter (as defined in
Annex I) and the loan agreement to be entered into between CalWest and
its lender upon the consummation of the Offer, and, as of the date
hereof, no amendments or modifications have been made thereto or
authorized by CalWest or Rooster Acquisition Corp. CalWest and Rooster
Acquisition Corp. hereby covenant and agree that, without the prior
written consent of Cabot, neither CalWest nor Rooster Acquisition Corp.
shall amend or alter, or consent to any amendment or alteration of, the
Commitment Letter or the associated loan agreement or loan documents in
any respect relating to the obligations of CalWest's bridge lender to
fund the Bridge Loan Commitment. As of the date hereof, the Commitment
Letter is effective and has not been withdrawn or modified by the
bridge lender. Subject to the failure of any conditions contained in
the Commitment Letter, Rooster Acquisition Corp. will have available,
and CalWest will cause Rooster Acquisition Corp. to have available, at
the time of acceptance for payment and payment for all Cabot Common
Shares that
- 45 -
Rooster Acquisition Corp. becomes obligated to accept for payment and
pay for pursuant to the Offer and to consummate the Offer, the Merger
and the other transactions contemplated by the Transaction Documents,
in each case, in accordance with the terms of this Agreement (including
the Tender Offer Conditions).
(d) Documents Relating to Offer. The Schedule TO, the Offer
---------------------------
and the Offer Documents shall comply in all material respects with the
applicable requirements of the federal securities laws as to form,
except that no representation or warranty is made by CalWest and
Rooster Acquisition Corp. with respect to information provided by Cabot
or Cabot LP specifically for use in the Offer Documents. At the time of
the filing of any Cabot Disclosure Document, none of the information
that may be supplied in writing by CalWest and Rooster Acquisition
Corp. or any of their Affiliates specifically for use in such document
will contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
At the time the Schedule TO is first mailed, published or given to the
Cabot Common Shareholders, it will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation or
warranty is made by CalWest or Rooster Acquisition Corp. with respect
to information provided by Cabot or Cabot LP specifically for use in
the Offer Documents.
(e) No Other Business. Rooster Acquisition Corp. was formed
-----------------
solely for the purpose of engaging in the transactions contemplated
hereby, has engaged in no other business activities and has conducted
its operations only as contemplated thereby.
(f) Brokers. No broker, investment banker or other person is
-------
entitled to any broker's, finder's or other similar fee or commission
in connection with the transactions contemplated by the Transaction
Documents based upon arrangements made by or on behalf of CalWest and
Rooster Acquisition Corp., for which fee or commission Cabot or any
Cabot Subsidiary may be liable.
(g) Litigation. There is no litigation, arbitration, claim,
----------
investigation, suit, action or proceeding pending or, to the Knowledge
of CalWest, threatened against or affecting CalWest and Rooster
Acquisition Corp., nor is there any Order outstanding against CalWest
or Rooster Acquisition Corp. which would reasonably be expected to,
individually or in the aggregate, (A) cause any of the transactions
contemplated by the Transaction Documents to be rescinded following
their consummation, including the Offer or the Merger, or (B)
materially impair or delay the ability of CalWest or Rooster
Acquisition Corp. to perform its obligations hereunder or under any of
the other Transaction Documents or prevent the consummation by them of
any of the transactions contemplated thereby.
- 46 -
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGER
------------------------------------------------------------
Section 5.1 Conduct of Business by Cabot and Cabot LP.
-----------------------------------------
(a) During the period from the date of this Agreement to the
earlier of the termination of this Agreement or the Merger Effective Time, Cabot
shall, and shall cause each of the Cabot Subsidiaries (including Cabot LP) to
(i) carry on its businesses in the usual, regular and ordinary course consistent
with past practice and in compliance in all material respects with applicable
Law, in each case, with no less diligence and effort than would be applied in
the absence of this Agreement and (ii) to the extent consistent with the
foregoing clause (i), use its commercially reasonable efforts to preserve intact
its current business organization, goodwill, ongoing businesses, Cabot's status
as a REIT within the meaning of the Code and its relationships with customers,
suppliers, distributors, lessors, creditors, employees, contractors and others
having business dealings with it with the intention that its goodwill and
ongoing businesses shall be unimpaired at the Merger Effective Time. On a
regular and frequent basis, and from time to time promptly upon CalWest's
reasonable request, Cabot shall confer with CalWest and report on operational
matters. Cabot shall promptly (but in any event within two (2) Business Days)
advise CalWest orally and in writing of any Cabot Material Adverse Effect or any
matter which would constitute a Cabot Material Adverse Effect (including any
litigation having potential Liability to Cabot or any Cabot Subsidiary (other
than litigation arising out of or relating to personal injury claims that are
covered by applicable insurance) in excess of $250,000 or any complaint,
investigation or hearing by any Governmental Entity involving Cabot or any Cabot
Subsidiary). Cabot shall promptly provide to CalWest (and its counsel) copies of
all filings made by Cabot with any Governmental Entity in connection with this
Agreement and the transactions contemplated hereby, including any Cabot SEC
Document filed after the date of this Agreement.
(b) Without limiting the generality of the foregoing, during
the period from the date of this Agreement to the earlier of the termination of
this Agreement or the Merger Effective Time, except as otherwise expressly
provided by this Agreement or the Transaction Documents or to the extent
consented to by CalWest in advance and in writing, Cabot shall not and shall not
authorize or commit or agree to, and shall cause the Cabot Subsidiaries
(including Cabot LP) not to (and not to authorize or commit or agree to):
(i) (A) declare, set aside or pay any dividends on,
or make any other actual, constructive or deemed distributions
(whether in cash, shares, property or otherwise) in respect
of, any of Cabot's shares, stock or the partnership interests,
shares, stock or other equity interests in any Cabot
Subsidiary that is not directly or indirectly wholly-owned by
Cabot, except for distributions (i) on the Cabot Common Shares
declared with respect to the quarter ended September 30, 2001
and (ii) on the Preferred Units as required by their terms,
and provided, that Cabot may make dividend payments it is
--------
required to make by the Code in order to maintain REIT status
and those that are sufficient to eliminate any federal tax
liability, (B) split, combine or reclassify any shares, stock,
partnership interests or other equity interests or issue or
authorize the issuance of any securities in respect
- 47 -
of, in lieu of or in substitution for shares of such shares,
stock, partnership interests or other equity interests or (C)
purchase, redeem (except for the redemption of LP Units for
shares of Public Common Shares in accordance with their terms)
or otherwise acquire any Cabot Common Shares, stock, other
equity interests or securities of Cabot or the partnership
interests, stock, other equity interests or securities of any
Cabot Subsidiary or any options, warrants or rights to
acquire, or security convertible into, Cabot Common Shares,
stock, other equity interest or securities of Cabot or the
partnership interests, stock or other equity interests in any
Cabot Subsidiary, except in connection with the use of Cabot
Common Shares or LP Units to pay the exercise price or Tax
withholding obligation upon the exercise of a Cabot Option as
presently permitted under any Cabot Option Plan;
(ii) (A) classify or re-classify any unissued Cabot
Common Shares, shares of stock, units, interests, any other
voting or redeemable securities (including LP Units or other
partnership interests) or stock based performance units of
Cabot or any Cabot Subsidiary; (B) change the number of issued
and outstanding Cabot Common Shares, shares of stock, units,
interests, any other voting or redeemable securities
(including LP Units or other partnership interests) or stock
based performance units of Cabot or Cabot Subsidiaries, (C)
authorize for issuance, issue, deliver, sell, or grant any
option or other right in respect of, any Cabot Common Shares,
shares of stock, units, interests, any other voting or
redeemable securities (including LP Units or other partnership
interests), or stock based performance units of Cabot or any
Cabot Subsidiary or any securities convertible into, or any
rights, warrants or options to acquire, any such shares,
units, interests, voting securities or convertible or
redeemable securities (except, with respect to the foregoing
clause (A), (B) and (C), (1) as required under the Cabot LP
Agreement as presently in effect, (2) in connection with the
exercise of outstanding Cabot Options under the Cabot Option
Plan or the exchange of units of Cabot LP for Cabot Common
Shares or other units of partnership interest of Cabot LP,
pursuant to the terms of such units, (3) the issuance of DEUs
for the fiscal year ending on the earlier of (a) December 31,
2001 and (b) the Merger Effective Time as required by existing
Cabot Options (including DEUs) and (4) as required under the
Option Agreement) or (D) amend or waive any option to acquire
Cabot Common Shares;
(iii) amend the Cabot Charter or the Cabot By-laws,
the Cabot LP Agreement or any other comparable charter or
organizational documents of any Cabot Subsidiary (including
any joint venture agreement to which Cabot or any Cabot
Subsidiary is a party), except as otherwise contemplated by
this Agreement;
(iv) (A) merge, consolidate or enter into any other
business combination transaction with any Person, except as
provided in Section 6.4, (B) acquire (by merger, consolidation
-----------
or acquisition) any corporation, partnership or other entity
or (C) purchase any equity interest in or all or substantially
all of the assets of, any Person or any division or business
thereof;
- 48 -
(v) (A) enter into any new commitments obligating
Cabot or any Cabot Subsidiary to make capital expenditures in
excess of $1,500,000 in the aggregate for each successive
period of forty-five (45) days following the date hereof, not
including tenant allowances under existing leases and the
commitments set forth in Section 5.1(b)(v) of the Cabot
Disclosure Letter, provided Cabot shall be permitted to enter
into a commitment to make repairs and/or prevent damage to any
Cabot Properties as is necessary in the event of an emergency
situation as long as Cabot provides CalWest with a copy of
such commitment within two (2) Business Days after such
commitment is entered into, (B) acquire, enter into any option
to acquire, or exercise an option or other right or election
or enter into any other commitment or contractual obligation
(each, a "Commitment") for the acquisition of any real
property or other transaction (other than (i) any Commitment
referred to in Section 5.1(b)(v) of the Cabot Disclosure
Letter, (ii) any exchange of real property pursuant to Section
1031 of the Code referred to in Section 5.1(b)(v) of the Cabot
Disclosure Letter or (iii) entering into leases for property
of less than 100,000 square feet and incurring any reasonable
and customary expenditures related thereto), (C) commence
construction of, or enter into any Commitment to develop or
construct, other real estate projects involving in excess of
$250,000 (other than any Commitment referred to in Section
5.1(b)(v) of the Cabot Disclosure Letter), (D) incur
additional indebtedness (secured or unsecured) except for
working capital under its revolving line(s) of credit and
Commitments for indebtedness described in Section 5.1(b)(v) of
the Cabot Disclosure Letter or (E) modify, amend, terminate or
enter into any commitment to modify, amend or terminate any
indebtedness in existence as of the date hereof;
(vi) sell, mortgage, subject to Lien (or, in the case
of an involuntary Lien, failed to take action within thirty
(30) days of the creation thereof to have such Lien removed)
or otherwise dispose of any of the Cabot Properties, except
those that are (A) permitted by Section 5.1(b)(v), or (B) made
in the ordinary course of business and subject of a binding
contract in existence on the date of this Agreement;
(vii) sell, lease, mortgage, subject to Lien or
otherwise dispose of any of its personal or intangible
property, except in transactions made in the ordinary course
of business and which are not material, individually or in the
aggregate;
(viii) except as set forth in Section 5.1(b)(viii) of
the Cabot Disclosure Letter, (A) assume or guarantee the
indebtedness of another Person, enter into any "keep well" or
other agreement to maintain any financial statement condition
of another Person or enter into any arrangement having the
economic effect of any of the foregoing, (B) prepay, refinance
or amend any existing indebtedness, (C) make any loans,
advances, capital contributions or investments in any other
Person or (D) pledge or otherwise encumber shares of capital
stock or securities in Cabot or any Cabot Subsidiary;
- 49 -
(ix) (A) make or rescind any express or deemed
material election relating to Taxes (unless Cabot reasonably
determines, after prior consultation with CalWest, that such
action is (i) required by Law; or (ii) necessary or
appropriate to preserve Cabot's status as a REIT or the
partnership status of Cabot LP or any other Cabot Subsidiary
which files Tax Returns as a partnership for federal tax
purposes (in which case, Cabot or Cabot LP, as the case may
be, shall make such election in a timely manner); provided,
--------
that nothing in this Agreement shall preclude Cabot from
designating dividends paid by it as "capital gain dividends"
within the meaning of Section 857 of the Code (with the prior
written consent of CalWest, which will not be unreasonably
withheld), or (B) elect to pay tax on any capital gain
realized after January 1, 2001;
(x) (A) fail to maintain its books and records in all
material respects in accordance with GAAP consistently
applied, (B) change any of its methods, principles or
practices of accounting in effect other than as required by
GAAP; provided, that with the consent of CalWest, which shall
--------
not be unreasonably withheld, Cabot may implement a change in
method of accounting for federal income tax purposes with
respect to classifying certain property as personal property
rather than real property, (C) settle or compromise any claim,
action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes, except
in the case of settlements or compromises relating to Taxes on
real property or sales Taxes in an amount not to exceed,
individually or in the aggregate, $250,000, or change any of
its methods of reporting income or deductions for federal
income tax purposes from those employed in the preparation of
its federal income Tax Return for the taxable year ended
December 31, 2000, or (D) revalue in any material respect any
of its assets, including writing-off accounts receivable,
except, in each of the foregoing cases, as may be required by
the SEC, applicable Law or GAAP (in which case, Cabot shall
promptly inform CalWest of such changes);
(xi) other than as set forth in Section 6.6(d) and
--------------
except as set forth in Section 5.1(b)(xi) of the Cabot
Disclosure Letter, (A) adopt any new employee benefit plan,
incentive plan, severance plan, bonus plan, compensation,
special remuneration, retirement, health, life, disability,
stock option or similar plan, grant new stock appreciation
rights or amend any existing plan or rights, (B) enter into or
amend any employment agreement or similar agreement or
arrangement or, except in the ordinary course consistent with
past practice, grant or become obligated to grant any increase
in the compensation or benefits of officers or employees, (C)
grant any severance or termination pay, or any increase
thereof, to any trustee, officer or employee, except payments
made pursuant to written agreements or plans outstanding on
the date hereof, the material terms of which are disclosed in
Section 5.1(b)(xi) of the Cabot Disclosure Letter and copies
of which have been provided to CalWest, (D) increase the
number of its full-time permanent employees by an amount
inconsistent with past practice or (E) change any actuarial or
other assumption used to calculate funding obligations with
respect to any Cabot Pension Plan, or change the manner in
which contributions to any Cabot Pension Plan are made or the
basis on which such contributions are
- 50 -
determined, except, in each of the foregoing cases, as may be
required by Law (in which case, Cabot shall promptly inform
CalWest of such action);
(xii) settle or compromise any material litigation,
including any shareholder derivative or class action claims
(without regard to materiality), arising out of or in
connection with any of the transactions contemplated by this
Agreement, or waive, release or assign any material rights or
claims;
(xiii) enter into or amend or otherwise modify any
agreement or arrangement with Persons that are Affiliates or
Associates of Cabot or any Cabot Subsidiary or, as of the date
of this Agreement, are employees, officers or trustees or
directors of Cabot or any Cabot Subsidiary without the prior
written consent of CalWest and the approval of a majority of
the "independent" members of the Cabot Board of Trustees;
(xiv) authorize, recommend, propose or announce an
intention to adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of Cabot or any of
the Cabot Subsidiaries;
(xv) fail to use its commercially reasonable efforts
to maintain with financially responsible insurance companies
insurance, insurance coverage substantially similar to
insurance coverage maintained by Cabot and the Cabot
Subsidiaries on the date hereof;
(xvi) (A) amend or terminate, or waive compliance
with the terms of or breaches under, any material term of any
Material Contract or enter into a new contract, agreement or
arrangement that, if entered into prior to the date of this
Agreement, would have been required to be listed in Section
4.1(u)(i) of the Cabot Disclosure Letter or (B) other than in
the ordinary course of business consistent with past practice,
waive, release, grant or transfer any rights of material
value;
(xvii) enter into any Tax Protection Agreement;
(xviii) fail to use its commercially reasonable
efforts to comply or remain in compliance with all material
terms and provisions of any agreement relating to any
outstanding indebtedness (as defined in Section 4.1(g)) of
Cabot or any Cabot Subsidiary;
(xix) take any action that would, or that would
reasonably be expected to, result in (A) any of the
representations and warranties of Cabot set forth in this
Agreement becoming untrue or incorrect or (B) any of the
Tender Offer Conditions or Section 7.1 not being satisfied;
(xx) fail to (A) duly and timely file all material
reports, Tax Returns and other material documents required to
be filed with all Governmental Entities and other authorities
(including the New York Stock Exchange), subject to
- 51 -
extensions permitted by Law, provided Cabot notifies CalWest
and its counsel that it is availing itself of such extensions
and provided such extensions do not adversely affect Cabot's
status as a qualified REIT under the Code or (B) fail to cause
all such reports and other documents to be complete and
accurate in all material respects when filed;
(xxi) fail to pay any Taxes or other material debts
when due;
(xxii) sell, securitize, factor or otherwise transfer
any accounts receivable;
(xxiii) pay, discharge or satisfy any claims,
Liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their
terms, of Liabilities reflected or reserved against in the
balance sheet of Cabot dated as of June 30, 2001 contained in
the Quarterly Report on Form 10-Q for the quarter ended June
30, 2001 of Cabot;
(xxiv) except as described in Section 5.1(b)(xxiv) of
the Cabot Disclosure Letter, change the ownership of any Cabot
Subsidiary;
(xxv) accept a promissory note in payment of the
exercise price payable under any option to purchase Cabot
Common Shares;
(xxvi) accelerate the collection of receivables or
defer the payment of payables, or modify the payment terms of
any receivables or payables, in each case which, either
individually or in the aggregate, in a manner that would be
material to Cabot; or
(xxvii) agree in writing or otherwise to take any
action inconsistent with any of the foregoing.
ARTICLE VI
ADDITIONAL COVENANTS
--------------------
Section 6.1 Access to Information; Confidentiality. Cabot shall, and
--------------------------------------
shall cause each of the Cabot Subsidiaries to, afford to CalWest and the Rooster
Subsidiaries and their officers, employees, accountants, counsel, financial
advisors and other representatives, reasonable access during normal business
hours and upon reasonable advance notice during the period prior to the Merger
Effective Time to all of its properties (but not for the purpose of any invasive
physical testing), offices, books, contracts, commitments, personnel and records
and, during such period, Cabot shall, and shall cause each of the Cabot
Subsidiaries to, furnish reasonably promptly to CalWest and its counsel (a) a
copy of each report, schedule, registration statement and other document filed
by it during such period pursuant to the requirements of federal or state
securities
- 52 -
Laws and (b) all other information (financial or otherwise) concerning its
business, properties and personnel as CalWest and the CalWest Subsidiaries may
reasonably request. Cabot shall also instruct Cabot's employees, counsel and
financial advisors to cooperate reasonably with CalWest in its investigation of
the business of Cabot and the Cabot Subsidiaries. Each of CalWest and the
CalWest Subsidiaries will hold, and will cause its respective officers,
employees, accountants, counsel, financial advisors and other representatives
and Affiliates to hold, any nonpublic information in confidence to the extent
required by, and in accordance with, and will comply with the provisions of the
letter agreement between Cabot and dated as of May 23, 2001, as amended to date
(as so amended, the "Confidentiality Agreement").
---------------------------
Section 6.2 Reasonable Efforts; Notification.
--------------------------------
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of CalWest, Rooster Acquisition Corp., Cabot and Cabot LP
agrees to use its commercially reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things necessary, proper or advisable to fulfill all
conditions applicable to such party pursuant to this Agreement and to consummate
and make effective, in the most expeditious manner practicable, the Offer, the
Merger and the other transactions contemplated by the Transaction Documents,
including (i) the obtaining of all necessary, proper or advisable actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary, proper or advisable registrations, filings and notices
and the taking of all reasonable steps as may be necessary to obtain an
approval, waiver or exemption from any Governmental Entity; (ii) the obtaining
of all necessary, proper or advisable consents, approvals, waivers or exemptions
from non-governmental third parties; and (iii) the execution and delivery of any
additional documents or instruments necessary, proper or advisable to consummate
the transactions contemplated by, and to fully carry out the purposes of the
Transaction Documents. In addition, each of CalWest, Rooster Acquisition Corp.,
Cabot and Cabot LP agrees to use its commercially reasonable efforts to defend
any lawsuits or other legal proceedings, whether judicial or administrative,
challenging the Merger, this Agreement or the transactions contemplated by the
Transaction Documents, including seeking to have any stay, temporary restraining
order, injunction, or restraining order or other order adversely affecting the
ability of the parties to consummate the transactions contemplated by the
Transaction Documents entered by any court or other Governmental Entity vacated
or reversed. If, at any time after the Merger Effective Time, any further action
is necessary or desirable to carry out the purpose of this Agreement, the proper
officers, directors or partners, of CalWest, Rooster Acquisition Corp., Cabot
and Cabot LP shall take all such necessary action. From the date of this
Agreement through the Merger Effective Time, Cabot shall timely file, or cause
to be filed, with the SEC all Cabot SEC Documents required to be so filed.
(b) Cabot shall give prompt notice to CalWest and CalWest and
Rooster Acquisition Corp. shall give prompt notice to Cabot, if (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becomes untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becomes untrue or
inaccurate in any material respect or (ii) it fails to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement; provided, however, that no such
-------- -------
notification shall affect the representations,
- 53 -
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Agreement.
Section 6.3 Tax Treatment.
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(a) CalWest, Rooster Acquisition Corp. and Cabot shall report
the portions of the transactions contemplated hereby consisting of the Merger in
accordance with the treatment contemplated by Section 3.2(c) and each shall use
--------------
its respective best efforts to cause such portions of such transactions to be so
treated for federal income tax purposes.
(b) Unless required by Law (as evidenced by the legal opinion
of a nationally recognized U.S. law firm reasonably acceptable to CalWest and
Cabot), neither CalWest and Rooster Acquisition Corp., on the one hand, nor
Cabot and Cabot LP, on the other hand, will take or omit to take any action, or
permit any status to exist, prior to the Merger Effective Time, that would or
may jeopardize, or that is inconsistent with, Cabot's status as a REIT under the
Code or the status of Cabot LP or any Cabot Subsidiary organized and existing as
a partnership or limited liability company under the Laws of its jurisdiction of
organization (a "Cabot Subsidiary Partnership") as a partnership for purposes of
------------------------------
Taxes for any period.
(c) Unless prohibited by Law (as evidenced by the legal
opinion of a nationally recognized U.S. law firm reasonably acceptable to
CalWest and Cabot) or this Agreement, up to the Merger Effective Time, Cabot,
each Cabot Subsidiary and any Affiliate of any of them, shall be permitted to
take or omit to take any action in order to maintain Cabot's status as a REIT
under the Code or the status of Cabot LP or any Cabot Subsidiary Partnership as
a partnership for purposes of Taxes for any period.
Section 6.4 No Solicitation of Transactions.
-------------------------------
(a) Cabot shall and shall cause the Cabot Subsidiaries
(including Cabot LP) to, and Cabot and Cabot LP shall take all actions
reasonably necessary to cause their respective Affiliates, officers, directors,
employees, financial advisors (including the Cabot Financial Advisor), counsel
and any other agents to, immediately cease any discussions, negotiations or
communications with any party or parties with respect to any Competing
Transaction (as hereinafter defined). Cabot also agrees to promptly request each
person that has heretofore executed a confidentiality agreement in connection
with its consideration of acquiring (whether by merger, acquisition, stock sale,
asset sale or otherwise) Cabot or any Cabot Subsidiary, if any, to return all
confidential information heretofore furnished to such person by or on behalf of
Cabot or any Cabot Subsidiary.
(b) Cabot shall not, nor shall it permit any Cabot Subsidiary
to, nor shall it authorize or permit any officer, trustee, director or employee
of, or any investment banker, attorney, agent or other advisor or representative
of, Cabot or any Cabot Subsidiary to (i) solicit or initiate, encourage,
participate in, or facilitate, directly or indirectly, any inquiries relating
to, or the submission of, any proposal or offer, whether in writing or
otherwise, from any Person or group (as defined in Section l3(d)(3) of the
Exchange Act) other than CalWest, Rooster Acquisition Corp. or any affiliates
thereof (a "Third Party") to acquire beneficial ownership (as defined under Rule
-------------
13(d) of the Exchange Act) of all or more than 15% of the assets of Cabot
- 54 -
and the Cabot Subsidiaries, taken as a whole, or 15% or more of any class of
equity securities (or voting debt) of Cabot or Cabot LP pursuant to a merger,
consolidation or other business combination, sale of shares of beneficial
interest, sale of assets, tender offer, exchange offer or similar transaction or
series of related transactions, which is structured to permit such Third Party
to acquire beneficial ownership of more than 15% of the assets of Cabot and the
Cabot Subsidiaries, taken as a whole, or 15% or more of any class of equity
securities (or voting debt) in Cabot or Cabot LP (a "Competing Transaction");
-----------------------
(ii) directly or indirectly, solicit, initiate, encourage, facilitate or
participate in any discussions or negotiations regarding, or furnish to any
Person or group (as defined in Section l3(d)(3) of the Exchange Act) any
information or data with respect to or access to the properties, offices, books,
records, officers, directors or employees of, or take any other action to
knowingly, directly or indirectly, facilitate, solicit or encourage the making
of any proposal that constitutes, or may reasonably be expected to lead to, any
Competing Transaction; or (iii) enter into any Acquisition Agreement, approve or
recommend or resolve to approve or recommend any Competing Transaction or enter
into any agreement (written or oral) requiring it to abandon, terminate or fail
to consummate the Offer, the Merger and the other transactions contemplated by
this Agreement. Notwithstanding the foregoing sentence, prior to the expiration
of the Offer, if Cabot receives a bona fide, written proposal or offer for a
Competing Transaction by a Third Party, which the Cabot Board of Trustees
determines in good faith (after consultation with Cabot's independent financial
advisor and outside counsel) (A) is on terms which are more favorable from a
financial point of view to the holders of Cabot Common Shares than the Offer,
the Merger, and the other transactions contemplated by this Agreement, (B) would
result in such Third Party owning, directly or indirectly, all or substantially
all of the Cabot Common Shares then outstanding (or of the surviving entity in a
merger) or all or substantially all of the assets of Cabot and the Cabot
Subsidiaries, (C) is not subject to any material contingency, including any
contingency relating to financing (provided that if such contingency related to
--------
financing is substantially similar in substance, and not less favorable to Cabot
than, the Commitment Letter MAE Section (as defined in Annex I), it shall not be
-------
considered a material contingency), to which neither the Cabot Board of Trustees
determines may likely be overcome or addressed nor the other party thereto has
reasonably demonstrated in its written offer its ability to overcome or address,
including the receipt of government consents or approvals (including any such
approval required under the HSR Act), (D) does not contain a "right of first
offer" or "right of first refusal" with respect to any revised Offer that
CalWest or Rooster Acquisition Corp. may make, (E) is reasonably capable of
being consummated (provided, that the Cabot Board of Trustees and any of its
--------
advisors shall be permitted to contact such Third Party and its advisors solely
for the purpose of clarifying the proposal and any material contingencies and
the capability of consummation) and (F) was not solicited, encouraged or
facilitated by Cabot in breach of this Section 6.4(b) (a "Superior Competing
-------------------
Transaction"), then, prior to acceptance by Rooster Acquisition Corp. for
------------
payment and payment by Rooster Acquisition Corp. for Cabot Common Shares
pursuant to the Offer, Cabot may, in response to an unsolicited request therefor
and subject to a good faith determination by the Cabot Board of Trustees (after
consultation with its outside counsel) that the failure to take such action
likely would be inconsistent with its duties under Maryland law and compliance
by Cabot with Section 6.4(c), furnish information with respect to Cabot and the
--------------
Cabot Subsidiaries to, and participate in discussions and negotiations directly
or through its representatives with, such Third Party, subject to a
confidentiality agreement not materially less favorable to Cabot than the
Confidentiality Agreement and which
- 55 -
contains a one (1) year prohibition against such Third Party soliciting the
employment of any employee of Cabot or any Cabot Subsidiary. In addition, except
concurrently with Cabot's termination of this Agreement in accordance with
Section 8.1(d), neither the Cabot Board of Trustees nor any committee thereof
shall (i) take any action (A) to redeem the Rights, (B) to waive or amend any
provision of the Cabot Rights Agreement or (C) make any determination under, the
Cabot Rights Agreement, in any such case to permit or facilitate the
consummation of a Competing Transaction (provided that notwithstanding the
foregoing, the Cabot Board of Trustees may delay the distribution of the Rights
under the Cabot Rights Agreement so long as no person or group of persons has
become an "acquiring person" for purposes of the Cabot Rights Agreement), (ii)
take any action to waive the Ownership Limit with respect to any Competing
Transaction, (iii) take any action necessary to render the provisions of any
"fair price", "moratorium", "control share acquisition" or other takeover
defense or similar statute or regulation (including the provisions of the
Takeover Statute) inapplicable to any Competing Transaction, or (iv) propose,
agree or resolve to do any of the foregoing. Nothing contained in this Agreement
shall prevent the Cabot Board of Trustees from complying with Rule 14d-9 and
Rule 14e-2 promulgated under the Exchange Act. Cabot agrees to promptly notify
CalWest if the Cabot Board of Trustees determines that a Competing Transaction
is not a Superior Competing Transaction.
(c) In addition to the obligations set forth in Sections
6.4(a) and (b), Cabot shall advise CalWest orally and in writing of (i) any
Competing Transaction or any inquiry with respect to or which could reasonably
be expected to lead to any Competing Transaction received by any officer or
trustee of Cabot or, to the Knowledge of Cabot, any financial advisor, attorney
or other advisor or representative of Cabot, (ii) the material terms and
conditions of such Competing Transaction (including a copy of any written
proposal) and (iii) the identity of the person making the proposal or offer for
any such Competing Transaction or inquiry immediately (but in any event within
twenty-four (24) hours) following receipt by Cabot or any officer or trustee of
Cabot or, to the Knowledge of Cabot, any financial advisor, attorney or other
advisor or representative of Cabot of such Competing Transaction proposal or
inquiry. Cabot will promptly inform CalWest and Rooster Acquisition Corp.
(orally and in writing) of the status and details of any such Competing
Transaction proposal or inquiry (including amendments or changes or proposed
amendments or changes thereto), and, in any event shall promptly inform CalWest
and Rooster Acquisition Corp. (orally and in writing) of any material
developments regarding such proposal or inquiry. Cabot agrees to promptly notify
CalWest if the Cabot Board of Trustees determines that a Competing Transaction
is not a Superior Competing Transaction.
(d) Cabot shall not determine to accept a Superior Competing
Transaction unless (i) it has complied in all material respects with this
Section 6.4, (ii) the Cabot Board of Trustees determines in good faith (after
consultation with its outside counsel) that the failure to take such action
likely would be inconsistent with its duties under Maryland law, (iii) not fewer
than forty-eight (48) hours prior to taking such action, CalWest is notified
orally and in writing of such Board's intention to take such action and (iv) the
Cabot Board of Trustees determines in good faith (after consultation with
Cabot's independent financial advisor and outside counsel) that such Competing
Transaction continues to be a Superior Competing Transaction after (A) taking
into account any amendment of the terms of the Offer or Merger by CalWest or
Rooster Acquisition Corp. and/or any proposal by CalWest to amend the terms of
the Transaction
- 56 -
Documents, the Offer or the Merger and (B) negotiating in good faith with
CalWest concerning any such new proposal by CalWest prior to the expiration of
such 48-hour period.
Section 6.5 Public Announcements. Cabot and CalWest shall consult with
--------------------
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or any of the transactions
contemplated by the Transaction Documents and shall not issue any such press
release or make any such public statement without the prior consent of the other
party, which consent shall not be unreasonably withheld or delayed; provided,
--------
however, that a party may, without the prior consent of the other party, issue
-------
such press release or make such public statement as may be required by Law or
the applicable rules of any stock exchange if it has used its commercially
reasonable efforts to consult with the other party and to obtain such party's
consent but has been unable to do so prior to the time such press release or
public statement is required to be filed pursuant to such Law or rules. In this
regard, the parties shall make a joint public announcement of the transactions
contemplated by the Transaction Documents no later than (i) the close of trading
on the New York Stock Exchange on the day this Agreement is signed, if such
signing occurs during regular business hours on a Business Day or (ii) the
opening of trading on the New York Stock Exchange on the Business Day following
the date on which this Agreement is signed, if such signing does not occur
during a Business Day.
Section 6.6 Employee Arrangements.
---------------------
(a) Cabot Severance Agreements. On the Closing Date, CalWest
--------------------------
shall pay or cause to be paid the amounts due to Cabot's senior executive
officers under such senior executive officers' Cabot Severance Agreements, which
amounts due are set forth in Section 4.1(1)(xv) of the Cabot Disclosure Letter.
(b) WARN Act. On October 29, 2001, Cabot will cause to be
--------
mailed or personally delivered to all full-time employees, defined for purposes
of this provision as all employees who have worked for an average of at least 20
hours per week and have been employed by Cabot for at least six of the twelve
months prior to October 29, 2001, at Cabot's operation in Boston, Massachusetts,
notices which would be sufficient to comply with the terms of the Worker
Adjustment and Retraining Notification Act ("Contingent WARN Notice") and any
------------------------
applicable analogous state plant closing statutes (together "Plant Closing
--------------
Acts"). The Contingent WARN Notice shall be in the form attached hereto as
-----
Exhibit C hereto.
---------
(c) Employee Severance. As of the Merger Effective Time, all
------------------
employees of Cabot, Cabot LP and all other Cabot Subsidiaries (collectively, the
"Cabot Employees") shall be terminated. As of the date of this Agreement, the
-----------------
Cabot Severance Plan has been amended to provide (a) that RREEF Management
Company (and its successors and assigns) shall be treated as an "Affiliate,
purchaser or transferee" for purposes of determining whether a Cabot Employee
has received an offer of employment for purposes of the Cabot Severance Plan;
(b) that as a condition to receiving any payment under the Cabot Severance Plan,
the Cabot Employee must execute a general release in favor of Cabot and Cabot LP
(and their successors and affiliates); and (c) any amount payable under the
Cabot Severance Plan shall be offset by any amount the Cabot Employee receives
pursuant to any state or federal plant closing act, excluding amounts received
by a Cabot Employee with respect to any benefits other than salary.
- 57 -
(d) Cabot Options. Cabot and each Cabot Subsidiary, including
-------------
Cabot LP, shall take all actions as may be necessary under the Cabot Option
Plans to effect the cancellations described in Section 2.7 and shall comply with
-----------
all requirements regarding tax withholding in connection therewith. In addition
to the foregoing and subject to the terms of the Cabot Option Plans and
applicable Law, Cabot and Cabot LP shall take all actions necessary to cause the
Cabot Option Plans to be terminated at or prior to the Merger Effective Time,
and to satisfy CalWest that no holder of Cabot Options or other awards under
such plans or programs or participant in the Cabot Option Plans, will have any
right to acquire any interest in the Surviving Entity, CalWest or any CalWest
Subsidiary, including Rooster Acquisition Corp., as a result of the exercise of
Cabot Options or other awards or rights pursuant to such Cabot Option Plans at
or after the Merger Effective Time.
(e) Cabot 2001 Bonus Plan. Pursuant to, and in accordance with
---------------------
the terms of, the Cabot 2001 Bonus Plan, Cabot shall, and shall be permitted to,
pay the bonuses identified on Schedule 5.1(b)(xi) of the Cabot Disclosure Letter
-------------------
upon the earlier to occur of (i) the Merger Effective Time and (ii) February 1,
2002.
(f) 401(k) Plan. Unless otherwise agreed by Cabot, Cabot LP
-----------
and CalWest, immediately prior to the effective time of any transaction (or
series of transactions) in which Cabot and Cabot LP become members of the
CalWest controlled group, within the meaning of Section 414(b), (c), (m) or (o)
of the Code, and if directed to do so by CalWest, Cabot and Cabot LP will take
such action (and cause their subsidiaries to take such action) as is necessary
to terminate its 401(k) Plan (the "Cabot 401(k) Plan") and also will take all
necessary action to ensure that each Cabot Employee is fully vested in his or
her account balance under the Cabot 401(k) Plan.
(g) COBRA Payments. In the event that the employment of any
--------------
employee of Cabot is terminated at or within six (6) months after the Merger
Effective Time and in the event that such employee obtains insurance pursuant to
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), the
-------
Surviving Entity shall pay a portion of the premium owed by such employee under
the COBRA plan equal to the premium paid by Cabot under the Cabot Employee
Benefit Plans in which such employee participated prior to the Closing Date.
Such premiums shall be paid for a period of time equal to the lesser of (x) the
period of months upon which such employee severance payment has been calculated
and (y) 18 months from the date of termination of employment.
Section 6.7 Indemnification; Directors'/Trustees' and Officers'
---------------------------------------------------
Insurance.
(a) CalWest and Rooster Acquisition Corp. agree that all
rights to indemnification existing in favor of, and all exculpations and
limitations of the personal liability of, the trustees and officers of Cabot
(the "Indemnified Parties") provided for in the Cabot Charter or the Cabot
---------------------
By-laws, as well as indemnification agreements, as in effect as of the date
hereof with respect to matters occurring at or prior to the Merger Effective
Time, including the Merger, shall continue in full force and effect in
accordance with their terms; provided, however, that all rights to
-------- -------
indemnification in respect of any claims (each, a "Claim") asserted or made
-------
within such period shall continue until the disposition of such Claim. For a
period of six (6) years after the Merger Effective Time, the Surviving Entity
shall, and CalWest will cause the
- 58 -
Surviving Entity to, cause to be maintained in effect the existing trustees',
directors' and officers' liability insurance and fiduciary insurance policies
with an amount of coverage not less than 100% of the amount of existing
coverage, or policies that are no less favorable to the Indemnified Parties, and
with an amount of coverage not less than 100% of the amount of existing
coverage, than the policies which are currently maintained by Cabot, with
respect to claims arising from facts or events which occurred at or before the
Merger Effective Time, so long as such policies are available for an annual
premium which is no more than 200% of the current annual premium for the
existing policies; provided, that if such policies are not available for an
annual premium of no more than 200% of the current annual premium, then policies
in an amount and scope as great as can be obtained for an annual premium of 200%
of the current annual premium shall be obtained.
(b) This Section 6.7 is intended for the irrevocable benefit
-----------
of, and to grant third party rights to, the Indemnified Parties and shall be
binding on all successors and assigns of CalWest, Cabot and the Surviving
Entity. Each of the Indemnified Parties shall be entitled to enforce the
covenants contained in this Section 6.7.
-----------
(c) In the event that the Surviving Entity or any of its
successors or assigns (i) consolidates with or merges into any other person or
entity and shall not be the continuing or surviving entity of such consolidation
or merger or (ii) transfers or conveys all or substantially all of its
properties and assets to any person or entity, then, and in each such case,
proper provision shall be made so that the successors, assigns and transferees
of the Surviving Entity, as the case may be, assume the obligations set forth in
this Section 6.7.
-----------
Section 6.8 Assistance; Cabot LP Merger.
---------------------------
(a) From and after the date of this Agreement, if CalWest
requests, Cabot and the Cabot Subsidiaries shall cooperate, and shall use their
commercially reasonable efforts to cause Cabot's attorneys, accountants and
other representatives to cooperate, in connection with any financing efforts
(including the refinancing or assumption of existing indebtedness) of CalWest
and Rooster Acquisition Corp. or their Affiliates (including providing
assistance in the preparation of one or more offering circulars, private
placement memoranda, registration statements or other offering documents
relating to debt and/or equity financing) and any other filings that may be made
by CalWest and Rooster Acquisition Corp. or their Affiliates, including, if
applicable, with the SEC, all at the sole expense of CalWest and Rooster
Acquisition Corp. (or their Affiliates). From and after the acceptance for
payment and payment for Cabot Common Shares by Rooster Acquisition Corp. in the
Offer, if CalWest requests, Cabot shall create new subsidiaries and effect
mergers and/or conversions of or among wholly-owned Cabot Subsidiaries at the
direction of CalWest and, immediately prior to the Merger Effective Time, shall
transfer any assets and/or Liabilities to such entities at the direction of
CalWest, all at the expense of CalWest; provided, however, that Cabot shall not
-------- -------
be required to undertake any action pursuant to this sentence if doing so would
result in Cabot being unable to satisfy the conditions to the obligations of
CalWest and Rooster Acquisition Corp. to close the Merger set forth in Article
VII or if doing so would be inconsistent with any other existing agreements.
Cabot shall cooperate with CalWest in obtaining surveys, title commitments
and/or policies and appraisals with respect to the Cabot Properties (it being
understood that such activities shall be conducted at CalWest's (or a CalWest
Subsidiary's) expense).
-59-
- 59 -
(b) Upon the consummation of the Offer, if there remain
outstanding any LP Units (other than those held by any of the CalWest Parties),
then CalWest, Rooster Acquisition Corp., Cabot and Cabot LP shall take all
actions reasonably necessary to effect a merger of a wholly owned subsidiary of
CalWest or Rooster Acquisition Corp. with and into Cabot LP with Cabot LP
surviving such merger (the "LP Merger") and pursuant to which each then
-----------
outstanding LP Unit shall be exchanged and cancelled for the right to receive an
amount equal to the product of (i) the number of Cabot Common Shares for which
such LP Unit may have been converted immediately prior to the Merger Effective
Time, multiplied by (ii) the Per Share Amount, or such greater amount as is
offered to the holders of Cabot Common Shares pursuant to the Offer, including
amending the Second Amended and Restated Agreement of Limited Partnership of
Cabot LP, dated February 4, 1998, as amended, to provide that such merger will
not cause a liquidation, dissolution or winding-up of Cabot LP. Notwithstanding
anything to the contrary contained herein, CalWest, Rooster Acquisition Corp.,
Cabot and Cabot LP hereby agree that the Merger and such LP Merger shall be
consummated concurrently.
Section 6.9 Tax Returns.
-----------
(a) CalWest shall cause there to be an interim closing of the
books under Section 706 of the Code with respect to Cabot LP effective as of the
Merger Effective Time for purposes of dividing and allocating Cabot LP's income
for the taxable year in which the Merger occurs.
(b) After the Merger Effective Time, CalWest shall prepare and
file, or cause to be prepared and filed, all Tax Returns required to be filed by
Cabot and the Cabot Subsidiaries for all periods with the applicable taxing
authority on or before the due date (including extensions, if any) for filing
such Tax Returns.
Section 6.10 Environmental Matters. Cabot and the Cabot Subsidiaries
---------------------
shall make available to CalWest and Rooster Acquisition Corp. such environmental
investigations, studies, tests, reviews, or other written analysis within the
possession or control of Cabot or any Cabot Subsidiary in relation to any
property or facility now or previously owned, leased or operated by Cabot or any
Cabot Subsidiary, which have previously not been provided to CalWest or Rooster
Acquisition Corp.
Section 6.11 Cabot and Cabot LP Joint Ventures. During the period from
---------------------------------
the date hereof until the Merger Effective Time, Cabot and Cabot LP shall use
commercially reasonable efforts and cause their respective Subsidiaries to use
their commercially reasonable efforts to effect such transactions on such terms
as are reasonably requested by CalWest or Rooster Acquisition Corp. regarding
the joint ventures to which Cabot, Cabot LP and their respective Subsidiaries
are a party, including (a) the sale by Cabot Ventures II, LLC's of its interest
in TC Rancho Cucamonga LLC to Teachers REA, LLC; (b) the purchase by Cabot LP of
CCP Industrial Member, LLC's interest in CCP-Cabot Industrial Investors I, LLC;
(c) the purchase by Cabot LP of CCP-Industrial Member, LLC's interest in
CCP-Cabot Industrial Investors II, LLC; and (d) the purchase by Cabot LP of
Xxxxxx & Xxxxxx Industrial Properties, LLC's interest in Xxxxxxx Business
Center, LLC.
- 60 -
ARTICLE VII
CONDITIONS PRECEDENT
--------------------
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger.
----------------------------------------------------------
The respective obligations of Cabot and Rooster Acquisition Corp. to effect the
Merger on the Closing Date are subject to the satisfaction or waiver on or prior
to the Closing Date of the following conditions:
(a) if required by Title 8, this Agreement and the Merger
shall have been approved by the Cabot Common Shareholders in accordance
with Title 8 and any other applicable Laws (including the proper filing
and dissemination of the Proxy Statement or any information statement,
if required);
(b) there shall be no Law or Order (which Order or other
action the parties hereto shall use their commercially reasonable
efforts to vacate or lift) which prohibits, enjoins, restrains or
precludes the consummation of the Merger under applicable Law; and
(c) Rooster Acquisition Corp. shall have accepted for payment
and paid for, pursuant to the terms and conditions of the Offer, all
Cabot Common Shares duly tendered pursuant to the Offer and not
withdrawn.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 8.1 Termination. This Agreement may be terminated and the
-----------
Offer, the Merger and the adoption, execution and delivery of the other
transactions contemplated by the Transaction Documents may be abandoned at any
time prior to the Merger Effective Time (notwithstanding any approval of the
Merger, this Agreement or any of the other transactions contemplated by this
Agreement or any other Transaction Document by the Cabot Common Shareholders):
(a) by the mutual written consent of Cabot and CalWest;
(b) by Cabot or CalWest, if any Governmental Entity shall have
issued an Order permanently enjoining, restraining or otherwise
prohibiting the acceptance for payment of, or payment for, Cabot Common
Shares pursuant to the Offer, or issued a similar Order with respect to
the Merger or any of the material transactions contemplated by the
other Transaction Documents and such Order shall have become final and
nonappealable; provided, that the party seeking to terminate this
Agreement pursuant to this clause (b) shall have used all commercially
reasonable efforts to remove or to reverse such Order;
- 61 -
(c) by Cabot, if (i) Rooster Acquisition Corp. shall have
failed to commence the Offer within the five (5) Business Day period
provided in Section 1.1(a), subject to the terms of Section 1.1(a)
-------------- --------------
(including the Tender Offer Conditions), (ii) if Rooster Acquisition
Corp. terminates or withdraws the Offer without accepting for payment
and promptly paying for all Cabot Common Shares validly tendered for
payment and not withdrawn thereunder in breach of this Agreement, (iii)
the Offer shall have expired (or shall have been required to expire
pursuant to the terms of this Agreement) without the acceptance for
payment and prompt payment for all Cabot Common Shares validly tendered
for payment and not withdrawn thereunder or (iv) if the Offer has not
been consummated on or before the date that is 120 days from the date
of this Agreement; provided, that the right to terminate this Agreement
pursuant to the foregoing clauses (c)(i), (ii), (iii) and (iv) shall
not be available to Cabot if Cabot's (or any Cabot Subsidiary's)
failure to fulfill any obligation under this Agreement has been the
proximate cause of, or resulted in, such event or condition;
(d) by Cabot, prior to the consummation of the Offer, if it
determines to accept a proposal or offer for a Superior Competing
Transaction; provided, however, that this Agreement may not be so
-------- -------
terminated under this Section 8.1(d) unless (i) the Cabot Board of
--------------
Trustees determines in good faith (after consultation with its outside
counsel) that the failure to take such action likely would be
inconsistent with its duties under Maryland law, (ii) not fewer than
forty-eight (48) hours prior to taking such action, CalWest is notified
orally and in writing of such Board's intention to take such action and
(iii) the Cabot Board of Trustees determines in good faith (after
consultation with Cabot's independent financial advisor and outside
counsel) that such Competing Transaction continues to be a Superior
Competing Transaction after (A) taking into account any amendment of
the terms of the Offer or Merger by CalWest or Rooster Acquisition
Corp. and/or any proposal by CalWest to amend the terms of the
Transaction Documents, the Offer or the Merger and (B) negotiating in
good faith with CalWest concerning any such new proposal by CalWest
prior to the expiration of such 48-hour period;
(e) by CalWest, prior to consummation of the Offer, if (i) the
Cabot Board of Trustees shall have withdrawn or adversely modified its
approvals or recommendations of the Offer, the Merger, the Transaction
Documents or the transactions contemplated thereby (it being
understood, however, that for all purposes of this Agreement, the fact
that Cabot has supplied any person with information regarding Cabot or
has entered into discussions or negotiations with such person as
permitted by, or without violating, this Agreement, or the disclosure
of such facts, shall not be deemed in and of itself a withdrawal or
modification of such approvals or recommendations); or (ii) the Cabot
Board of Trustees shall have (A) recommended to the Cabot Common
Shareholders that they approve or accept a Competing Transaction rather
than the transactions contemplated by the Transaction Documents or (B)
determined to accept a proposal or offer for a Superior Competing
Transaction;
(f) by CalWest, (i) if the Offer terminates or expires without
CalWest and Rooster Acquisition Corp. having purchased any Cabot Common
Shares thereunder or (ii) if the Offer has not been consummated on or
before the later of (A) December 28, 2001 if the Minimum Condition is
not satisfied on December 28, 2001, or any date
- 62 -
thereafter, at CalWest's option, if the Minimum Condition continues to
be unsatisfied on such date (in accordance with Section 1.1(d)), or (B)
--------------
the date that is 120 days from the date of this Agreement (provided,
--------
that the right to terminate this Agreement pursuant to the foregoing
clauses (f)(i) and (ii) shall not be available to CalWest if CalWest's
(or any CalWest Subsidiary's) failure to fulfill any obligation under
this Agreement has been the proximate cause of, or resulted in, such
event or condition);
(g) by CalWest, if any of the following events shall occur and
be continuing or conditions exist (any such event or condition, a
"Terminating Cabot Breach"):
--------------------------
(i) prior to the acceptance for payment by Rooster
Acquisition Corp. of Cabot Common Shares pursuant to the
Offer, any of the representations and warranties of Cabot
contained in this Agreement and qualified by the term Cabot
Material Adverse Effect shall not be true and correct as of
the date of determination or the date hereof (except to the
extent that any such representation or warranty, by its terms,
is expressly limited to a specific date, in which case
CalWest's right to terminate pursuant to this clause (i) shall
be triggered only if such representation or warranty shall not
be true and correct as of such date); or
(ii) prior to the acceptance for payment by Rooster
Acquisition Corp. of Cabot Common Shares pursuant to the
Offer, any of the representations and warranties of Cabot
contained in this Agreement and qualified by materiality (not
including those that are qualified by the term Cabot Material
Adverse Effect) shall not be true and correct as of the date
of determination or the date hereof (except to the extent that
any such representation or warranty, by its terms, is
expressly limited to a specific date, in which case CalWest's
right to terminate pursuant to this clause (ii) shall be
triggered only if such representation or warranty shall not be
true and correct as of such date), except where the failure of
any such representation or warranty to be so true and correct,
together with all other representations and warranties
qualified by materiality (not including those that are
qualified by the term Cabot Material Adverse Effect) which are
not true and correct, would not constitute a Cabot Material
Adverse Effect; or
(iii) prior to the acceptance for payment by Rooster
Acquisition Corp. of Cabot Common Shares pursuant to the
Offer, the representations and warranties of Cabot contained
in this Agreement and not qualified by materiality or the term
Cabot Material Adverse Effect shall not be true and correct in
all material respects as of the date of determination, the
date hereof or, with respect to the representations and
warranties expressly limited to a specific date, as of such
specific dates; or
(iv) Cabot shall have failed to perform or comply
with, in all material respects, each of its agreements
contained in this Agreement required to be performed at or
prior to the date of determination;
provided, however, that if such Terminating Cabot Breach is
-------- -------
capable of being cured by Cabot within ten (10) Business Days after the
notification of the occurrence of
- 63 -
the Terminating Cabot Breach and prior to the Merger Effective Time
through the exercise of its commercially reasonable efforts and is so
cured within such period, so long as Cabot continues to exercise such
commercially reasonable efforts, CalWest may not terminate this
Agreement under this Section 8.1(g); or
--------------
(h) by Cabot, if any of the following events shall occur and
be continuing or conditions exist: (i) any of the representations and
warranties of any CalWest Party contained in this Agreement that are
qualified as to materiality shall not be true and correct and any such
representations and warranties that are not so qualified shall not be
true and correct in any material respect, in each case as of the date
of determination (except to the extent that any such representation or
warranty, by its terms, is expressly limited to a specific date, in
which case such representation or warranty shall not be true and
correct as of such date), except where the failure to be so true and
correct would not reasonably be expected to prevent or materially delay
the consummation of the Offer, the Merger or any other transaction
contemplated by the Transaction Documents and except where the failure
of such representation or warranty to be so true and correct was
principally caused by general economic changes, changes in the U.S.
financial markets generally, changes that affect REITs generally or
changes that generally affect real estate properties of the type
generally owned by Cabot; or (ii) the CalWest Parties shall have failed
to perform in all material respects each of their agreements contained
in this Agreement required to be performed at or prior to the date of
determination (any such event or condition, a "Terminating CalWest
--------------------
Breach"); provided, however, that such Terminating CalWest Breach must
------- -------- -------
be reasonably likely to materially adversely affect the consummation of
the Offer or the Merger, if such Terminating CalWest Breach is capable
of being cured by CalWest prior to the Merger Effective Time through
the exercise of its commercially reasonable efforts, so long as CalWest
continues to exercise such commercially reasonable efforts, Cabot may
not terminate this Agreement under this Section 8.1(h).
--------------
The right of any party hereto to terminate this Agreement pursuant to this
Section 8.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling or controlled by any such party or any of their respective officers,
directors or trustees, whether prior to or after the execution of this
Agreement.
Section 8.2 Expenses.
--------
(a) Except as otherwise specified in this Section 8.2 or
-----------
agreed in writing by the parties, all out-of-pocket costs and expenses incurred
in connection with this Agreement, the Offer, the Merger and the other
transactions contemplated hereby shall be paid by the party incurring such cost
or expense (with respect to such party, its "Expenses"); provided, however, that
---------- -------- -------
if the Merger is consummated, all Expenses of Cabot and Cabot LP shall be paid
by the Surviving Entity and its Subsidiaries; provided, further, that any filing
-------- -------
fees under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), shall be split equally between Cabot and CalWest.
---------
- 64 -
(b) Cabot and Cabot LP agree that if this Agreement shall be
terminated pursuant to Section 8.1(g), then Cabot and Cabot LP will pay to
--------------
CalWest, or to such party or parties as directed by CalWest, an amount equal to
(i) in the event of a termination pursuant to Section 8.1(g)(i), Section
----------------- -------
8.1g(ii) or Section 8.1(g)(iii), the Break-Up Expenses (as hereinafter defined)
-------- -------------------
or (ii) in the event of a termination pursuant to Section 8.1(g)(iv),
------------------
$15,000,000. Cabot and Cabot LP also agree that if this Agreement
(i) is terminated pursuant to Section 8.1(c)(iii),
-------------------
Section 8.1(c)(iv) or Section 8.1(f) and (A) following the
------------------ --------------
first public announcement of this Agreement and on or before
the date of any such termination, a plan or proposal with
respect to a Competing Transaction is publicly disclosed or
announced or is otherwise reported in the media, (B)
thereafter, but prior to such termination, Cabot failed to
publicly reaffirm its recommendations and approvals of the
Offer, Merger and other transactions contemplated by the
Transaction Documents in response to any such plan or proposal
or any material modification thereof and (C) within 180 days
of the date of such termination, Cabot shall consummate a
Competing Transaction or enter into an Acquisition Agreement
(or resolves or announces an intention to do so) providing for
a Competing Transaction that is ultimately consummated (in
each case, regardless of whether such Competing Transaction is
the same Competing Transaction which was proposed or announced
as of the date of termination); or
(ii) is terminated pursuant to Section 8.1(g) (other
--------------
than as a result of a breach by Cabot of Section 6.4) and (A)
on or before the date of any such termination, there has been
or there is proposed by a Third Party to Cabot to consummate,
or a Third Party shall have publicly announced, following the
first public announcement of this Agreement, a plan or
proposal with respect to, a Competing Transaction and (B)
within 360 days of the date of such termination, Cabot shall
consummate a Competing Transaction or enter into an
Acquisition Agreement (or resolves or announces an intention
to do so) providing for a Competing Transaction that is
ultimately consummated (in each case, regardless of whether
such Competing Transaction is the same Competing Transaction
which was proposed or announced as of the date of
termination); or
(iii) is terminated pursuant to Section 8.1(g) as a
--------------
result of a breach by Cabot of Section 6.4 and within 360 days
of the date of such termination, Cabot shall consummate a
Competing Transaction or enter into an Acquisition Agreement
(or resolves or announces an intention to do so) providing for
a Competing Transaction that is ultimately consummated; or
(iv) is terminated pursuant to Section 8.1(d) or (e),
-------------- ---
then, Cabot and Cabot LP shall pay to CalWest, or as directed by CalWest, an
amount equal to the Break-Up Fee (as defined below) plus any Break-Up Expenses
(unless such Break-Up Expenses or an amount equal to $15,000,000 was paid
theretofore pursuant to the first sentence of this Section 8.2(b)). Payment of
any of such amounts shall be made, as directed by CalWest,
- 65 -
by prompt wire transfer of immediately available funds, but in no event later
than one (1) Business Day after the amount is due as provided herein.
(c) For purposes of this Agreement, the "Break-Up Fee" shall
--------------
be an amount equal to $35,000,000.
(d) For purposes of this Agreement, the "Break-Up Expenses"
-------------------
shall be an amount equal to the out-of-pocket expenses of CalWest or any of its
affiliates incurred in connection with the Offer, the Merger, this Agreement and
the other transactions contemplated by the Transaction Documents (including all
attorneys', accountants', investment bankers', consultants', appraisers',
insurers' and financing sources' fees and expenses), but in no event in an
amount greater than $17,500,000.
(e) Notwithstanding anything to the contrary in this Agreement
(other than in the case of a willful or intentional breach of this Agreement,
including such a breach of Section 6.4), CalWest expressly acknowledges and
agrees that, with respect to any termination of this Agreement pursuant to
Section 8.1(d), (e) or (g) in circumstances where the Break-Up Fee and/or the
-------------- --- ---
Break-Up Expenses are payable in accordance with Section 8.2(b), the payment of
--------------
the Break-Up Fee and/or the Break-Up Expenses shall constitute liquidated
damages with respect to any claim for damages or any other claim which CalWest
would otherwise be entitled to assert against Cabot, the Cabot LP or any Cabot
Subsidiary or any of their respective assets, or against any of their respective
trustees, directors, officers, employees, partners or shareholders, with respect
to this Agreement and the transactions contemplated by the Transaction Documents
and shall constitute the sole and exclusive remedy available to CalWest. The
parties hereto expressly acknowledge and agree that, in light of the difficulty
of accurately determining actual damages with respect to the foregoing upon any
termination of this Agreement pursuant to Section 8.1(d), (e) or (g) in
-------------- --- ---
circumstances where the Break-Up Fee and/or the Break-Up Expenses are payable in
accordance with Section 8.2(b), the right to payment under any of such
--------------
subsections of Section 8.1: (i) constitutes a reasonable estimate of the damages
-----------
that will be suffered by reason of any such proposed or actual termination of
this Agreement pursuant to said section, and (ii) shall be in full and complete
satisfaction of any and all damages arising as a result of the foregoing. Except
for nonpayment of the amounts set forth in Section 8.2(b), CalWest hereby agrees
--------------
that, upon any termination of this Agreement pursuant to Section 8.1(d), (e) or
-------------- ---
(g) in circumstances where the Break-Up Fee and/or the Break-Up Expenses are
---
payable in accordance with Section 8.2(b), in no event (other than in the case
--------------
of an intentional or willful breach of this Agreement, including such a breach
of Section 6.4) shall CalWest (A) seek to obtain any recovery or judgment
against Cabot, the Cabot LP or any Cabot Subsidiary or any of their respective
assets, or against any of their respective trustees, directors, officers,
employees, partners or shareholders, or (B) be entitled to seek or obtain any
other damages of any kind, including, without limitation, consequential,
indirect or punitive damages.
Section 8.3 Effect of Termination. In the event of termination of this
---------------------
Agreement by either Cabot or CalWest as provided in Section 8.1, this Agreement
-----------
shall forthwith become void and have no effect, without any liability or
obligation on the part of CalWest and Rooster Acquisition Corp., Cabot or Cabot
LP, other than the last sentence of Section 6.1, Section 8.1, Section 8.2, this
----------- ----------- -----------
Section 8.3 and Article IX and except to the extent that such termination
----------- ----------
results from a breach by a party of any of its covenants or agreements set forth
in this Agreement.
- 66 -
Section 8.4 Amendment. This Agreement may be amended by the parties in
---------
writing by action of their Board of Trustees or Boards of Directors, as the case
may be, at any time before or after the Cabot Common Shareholder Approval is
obtained and prior to the filing of the Articles of Merger with the Maryland
Department with respect to the Merger; provided, however, that, after the Cabot
-------- -------
Common Shareholder Approval is obtained, no such amendment, modification or
supplement shall alter the amount or change the form of the Merger Consideration
to be delivered to Cabot's shareholders or alter or change any of the terms or
conditions of this Agreement if such alteration or change would adversely affect
Cabot's shareholders.
Section 8.5 Extension; Waiver. At any time prior to the Merger
-----------------
Effective Time, each of Cabot and CalWest may (a) extend the time for the
performance of any of the obligations or other acts of the other party, (b)
waive any inaccuracies in the representations and warranties of the other party
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the provisions of Section 8.4, waive compliance with
-----------
any of the agreements or conditions of the other party contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
ARTICLE IX
GENERAL PROVISIONS
------------------
Section 9.1 Nonsurvival of Representations and Warranties. None of the
---------------------------------------------
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive (i) in the case of representations and
warranties made by either of Cabot and the Cabot LP, the acceptance for payment
of any Cabot Common Shares pursuant to the Offer or (ii) in the case of
representations and warranties made by any of the CalWest Parties, the Merger
Effective Time. This Section 9.1 shall not limit any covenant or agreement of
-----------
the parties which by its terms contemplates performance after the Merger
Effective Time.
Section 9.2 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing (and also made orally if
so required pursuant to any Section of the Agreement) and shall be deemed given
if delivered personally, sent by overnight courier (providing proof of delivery)
to the parties or sent by telecopy (providing confirmation of transmission) at
the following addresses or telecopy numbers (or at such other address or
telecopy number for a party as shall be specified by like notice):
(a) if to CalWest, to
CalWest Industrial Properties, LLC
c/o RREEF America L.L.C.
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxx
- 67 -
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxxxx & Sutcliffe LLP
Old Federal Bank Building
400 Sansome Street
Attn.: Xxxxxxx Xxxxxx Xxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
if to Cabot, to
Cabot Industrial Trust
Xxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attn.: Xxxxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
Section 9.3 Interpretation. When a reference is made in this Agreement
--------------
to an Article or a Section, such reference shall be to an Article or a Section
of this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The words "hereof",
"herein" and "hereby" refer to this Agreement.
Section 9.4 Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 9.5 Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement, the Confidentiality Agreement, the Shareholder Agreements, the
Unitholder Agreements, the Option Agreement and the Amendment to Rights
Agreement constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter of this Agreement, and there are no other or additional
- 68 -
agreements between CalWest, Rooster Acquisition Corp., or any of their
respective affiliates, on the one hand, and any holders of Cabot Common Shares
or LP Unitholders or their respective affiliates, on the other hand, relating
to, arising from or otherwise entered into in connection with this Agreement and
the transactions contemplated hereby. Except for the provisions of Sections 6.6
and 6.7, this Agreement is not intended to confer upon any Person other than the
parties hereto any rights or remedies.
Section 9.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 9.7 Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations under this Agreement shall be assigned or delegated, in
whole or in part, by operation of Law or otherwise by any of the parties without
the prior written consent of the other parties, except that CalWest and Rooster
Acquisition Corp. may transfer to their Affiliates and financing sources without
the consent of Cabot or Cabot LP; provided, CalWest continues to be liable for
--------
the performance of all of the obligations and payments to be made by the CalWest
Parties and such assignees hereunder if and only to the extent that such
assignees do not timely perform such obligations in all respects. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
Section 9.8 Enforcement. The parties agree that irreparable damage
-----------
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States,
this being in addition to any other remedy to which they are entitled at Law or
in equity.
Section 9.9 Annex I; Exhibits; Disclosure Letter. Annex I, the Exhibits
------------------------------------
referred to herein and the Cabot Disclosure Letter (and all exhibits or
attachments thereto) are intended to be and hereby are specifically made a part
of this Agreement.
Section 9.10 Limitation of Liability of Shareholders, Trustees and
-----------------------------------------------------
Officers of Cabot. No obligation or Liabilities of Cabot which may arise at any
-----------------
time under this Agreement or any obligation or Liability which may be incurred
by it pursuant to any other instrument, transaction or undertaking contemplated
hereby or thereby shall be personally binding upon, nor shall resort for the
enforcement thereof be had to, the property of any of Cabot's shareholders,
trustees, officers, employees or agents solely as a result of their status, and
solely in their capacities as, shareholders, trustees, officers, employees or
agents, as the case may be, regardless of whether such obligation or Liability
is in the nature of contract, tort or otherwise. Nothing contained herein shall
act to limit the Liability of Cabot's trustees, officers, employees or agents to
Cabot or limit the ability of any shareholder of Cabot to bring a derivative
action on behalf of Cabot against its trustees, officers, employees or agents.
- 69 -
Section 9.11 Jurisdiction; Venue. THE PARTIES HEREBY IRREVOCABLY SUBMIT
-------------------
TO THE JURISDICTION OF THE COURTS OF THE STATE OF MARYLAND AND THE FEDERAL
COURTS OF THE UNITED 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 STATE OR 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 9.12 Waiver of Trial by Jury. 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 LITIGATION 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 9.12.
- 70 -
ARTICLE X
CERTAIN DEFINITIONS
-------------------
Section 10.1 Certain Definitions. For purposes of this Agreement:
-------------------
"Acquisition Agreement" means any letter of intent, agreement in
-----------------------
principle, merger agreement, stock purchase agreement, asset purchase agreement,
acquisition agreement, option agreement or similar agreement relating to a
Competing Transaction.
"Affiliate" of any Person has the meaning assigned thereto by Rule
-----------
12b-2 under the Exchange Act.
"Amendment to Rights Agreement" means the Amendment to Rights
-------------------------------
Agreement dated as of October 28, 2001.
"Articles of Merger" means the articles of merger with respect to the
--------------------
Merger, containing the provisions required by, and executed in accordance with,
the MGCL.
"Associate" of any Person has the meaning assigned thereto by Rule
-----------
12b-2 under the Exchange Act.
"Business Day" means any day other than a Saturday, Sunday or a day on
--------------
which banking institutions in New York, New York are authorized or obligated by
law or executive order to be closed.
"Cabot Material Adverse Effect" means, with respect to Cabot, any
-------------------------------
change, event or effect that shall have occurred that, when taken together with
all other adverse changes, events or effects that have occurred, is or is
reasonably likely to (i) be materially adverse to the business, operations,
properties, condition (financial or otherwise), assets or Liabilities of Cabot
and the Cabot Subsidiaries taken as a whole or (ii) prevent or materially delay
the performance by Cabot or Cabot LP of any of its obligations under this
Agreement or the consummation of the Offer, the Merger or the other transactions
contemplated by the Transaction Documents, not including the effect of general
economic changes, changes in the U.S. financial markets generally, changes that
affect REITs generally and changes that generally affect real estate properties
of the type generally owned by Cabot, in each case that are a principal cause of
such change, event or effect.
"Cabot Rights Agreement" shall mean the Amended and Restated Rights
------------------------
Agreement dated September 10, 1998 between Cabot and EquiServe Limited
Partnership (as successor to BankBoston, N.A.), as rights agent, as amended by
the Amendment to Rights Agreement.
"Cabot Subsidiary" means Cabot LP and each other Subsidiary of Cabot.
------------------
"CalWest Subsidiary" means Rooster Acquisition Corp. and each other
--------------------
Subsidiary of CalWest.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
--------
and Liability Act of 1980, as amended from time to time.
- 71 -
"Code" means the Internal Revenue Code of 1986, as amended.
------
"Knowledge", or any similar expression, shall mean (i) with respect to
-----------
Cabot (or any Cabot Subsidiaries), the actual knowledge of the persons set forth
on Schedule 10.1(a) after due inquiry; and (ii) with respect to CalWest (or any
of its Subsidiaries), the actual knowledge of the persons set forth on Schedule
10.1(b) after due inquiry.
"Law" means any Federal, state, local or foreign statute, law,
-----
regulation, permit, license, approval, authorization, rule, ordinance or code of
any Governmental Entity, including any judicial or administrative interpretation
thereof.
"Liabilities" means any and all debts, liabilities and obligations of
-------------
any nature whatsoever, whether accrued or fixed, absolute or contingent,
including those arising under any Law, those arising under any contract,
agreement, commitment, instrument, permit, license, franchise or undertaking and
those arising as a result of any act or omission.
"Maryland Department" means the State Department of Assessments and
---------------------
Taxation of Maryland.
"Order" means any award, judgment, injunction, consent, ruling, decree
-------
or order (whether temporary, preliminary or permanent) issued, adopted, granted,
awarded or entered by any Governmental Entity or private arbitrator.
"Person" means an individual, corporation, partnership, limited
--------
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Securities Act" means the Securities Act of 1933, as amended.
----------------
"Subsidiary" of any Person means any corporation, partnership, limited
------------
liability company, joint venture or other legal entity of which such Person
(either directly or through or together with another Subsidiary of such Person)
owns more than 50% of the voting stock or value of such corporation,
partnership, limited liability company, joint venture or other legal entity.
"Tax" or "Taxes" shall mean any federal, state, local and foreign
----- -------
income, gross receipts, license, withholding, property, recording, stamp, sales,
use, franchise, employment, payroll, excise, environmental and other taxes,
tariffs or governmental charges of any nature whatsoever, together with
penalties, interest or additions thereto.
"Tax Return" shall mean any return, declaration, report, claim for
------------
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Transaction Documents" means this Agreement, the Option Agreement, the
-----------------------
Shareholder Agreements and all other agreements, instruments and documents to be
executed by Cabot and Cabot LP in connection with the transactions contemplated
by such agreements.
- 72 -
"Voting Debt" shall mean bonds, debentures, notes or other indebtedness
-------------
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which holders of equity interests in
Cabot, any Cabot Subsidiary, CalWest and Rooster Acquisition Corp., as
applicable, may vote.
* * * * *
- 73 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
CALWEST INDUSTRIAL PROPERTIES, LLC
By: RREEF America L.L.C., its Manager
By: /s/ XXXXXXX X. XXXXXXX, III
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx, III
Senior Vice President
ROOSTER ACQUISITION CORP.
By: /s/ XXXXXXX X. XXXXXXX, III
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx, III
President
CABOT INDUSTRIAL TRUST
By: /s/ XXXXXXXXX XXXXXXXXX-XXXXXXXX
--------------------------------------
Name: Xxxxxxxxx Xxxxxxxxx-Xxxxxxxx
Title: Chairman & Chief Executive
Officer
CABOT INDUSTRIAL PROPERTIES, L.P.
By: Cabot Industrial Trust, its
Sole General Partner
By: /s/ XXXXXXXXX XXXXXXXXX-XXXXXXXX
--------------------------------------
Name: Xxxxxxxxx Xxxxxxxxx-Xxxxxxxx
Title: Chairman & Chief Executive
Officer
ANNEX I
Tender Offer Conditions. Notwithstanding any other provision of the Offer,
-----------------------
neither CalWest nor Rooster Acquisition Corp. shall be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) promulgated under the Exchange Act (relating to the
obligation of Rooster Acquisition Corp. to pay for or return tendered Cabot
Common Shares after termination or withdrawal of the Offer), pay for, and
(subject to any such rules or regulations) may delay the acceptance for payment
of any tendered Cabot Common Shares and (except as provided in the Merger
Agreement) amend or terminate the Offer as to any tendered Cabot Common Shares
if (i) there shall not have been validly tendered and not withdrawn prior to the
expiration of the Offer Cabot Common Shares representing two-thirds of the
outstanding Cabot Common Shares on a fully diluted basis, after giving effect to
the exercise or conversion of all options, rights, LP Units and other securities
exercisable or convertible into such voting securities (the "Minimum
--------
Condition"), (ii) any consent identified in Section 4.1(d)(iii) of the Cabot
---------- -------------------
Disclosure Letter shall not have been obtained prior to the expiration of the
Offer, (iii) any applicable waiting period (and any extension thereof) under the
HSR Act shall not have expired or been terminated prior to the expiration of the
Offer, or (iv) at any time after the date of the Merger Agreement and prior to
the time of acceptance for payment of any such Cabot Common Shares, any of the
following events shall occur and be continuing or conditions exist:
(a) there shall have been any action taken, or any Law, temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other Governmental Entity or other legal
restraint or prohibition which (i) prohibits, restrains, limits or makes illegal
the acceptance for payment, payment for or purchase of Cabot Common Shares or
the consummation of the Offer, the Merger or the other material transactions
contemplated by the Transaction Documents, (ii) renders Rooster Acquisition
Corp. unable to accept for payment, pay for or purchase some or all of the Cabot
Common Shares tendered and not withdrawn pursuant to the Offer, or (iii) imposes
material limitations on the ability of Rooster Acquisition Corp. to effectively
exercise full rights of ownership of the Cabot Common Shares to be acquired in
the Offer, including the right to vote such Cabot Common Shares, or the assets
or business of Cabot and the Cabot Subsidiaries; or
(b) there shall be officially threatened in writing or pending any
suit, action or proceeding by any Governmental Entity challenging the
acquisition by CalWest or Rooster Acquisition Corp. of any Cabot Common Shares,
seeking to restrain or prohibit consummation of the Offer or the Merger, or
seeking to place limitations on the ownership of Cabot Common Shares or the
assets and business of Cabot or the Cabot Subsidiaries by CalWest or Rooster
Acquisition Corp.; or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) since the date of the Merger Agreement there shall have occurred a
Cabot Material Adverse Effect; or
(e) (i) any of the representations and warranties of Cabot contained in
this Agreement which are qualified by the term Cabot Material Adverse Effect,
shall not be true and correct; (ii) any of the representations and warranties of
Cabot contained in this Agreement which are
qualified by materiality (not including those that are qualified by the term
Cabot Material Adverse Effect), shall not be true and correct, except where the
failure of any such representation or warranty to be so true and correct,
together with all other representations and warranties qualified by materiality
(not including those that are qualified by the term Cabot Material Adverse
Effect) which are not true and correct, would not constitute a Cabot Material
Adverse Effect; and (iii) the representations and warranties of Cabot contained
in this Agreement which are not qualified by materiality or the term Cabot
Material Adverse Effect shall not be true and correct in all material respects,
in each of the foregoing cases, as of the date of determination or the date
hereof (except to the extent that any such representation or warranty, by its
terms, is expressly limited to a specific date, in which case, as of such
specific date); or
(f) Cabot shall have breached or failed to perform or comply with, in
all material respects, each of its covenants and agreements contained in the
Merger Agreement required to be performed at or prior to the date of
determination; or
(g) the Cabot Board of Trustees (i) shall have withdrawn or modified in
a manner adverse to Rooster Acquisition Corp. (including by amendment of the
Schedule 14D-9) any of its approvals or recommendations set forth in Section
1.2(a), including as to the Offer, the Merger or this Agreement, (ii)
recommended or approved any Competing Transaction or Superior Competing
Transaction or (iii) shall have publicly proposed or resolved to do any of the
foregoing; or
(h) the Rights shall have become exercisable; or
(i) Cabot shall have failed to deliver a bring-down letter, dated the
date of the consummation of the Offer, to the REIT Tax Opinion of Xxxxx, Xxxxx &
Xxxxx; or
(j) CalWest shall have failed to receive an officer's certificate
executed by Cabot's Chief Executive Officer and Chief Financial Officer on
behalf of Cabot, dated the date of consummation of the Offer, to the effect that
none of the events or conditions set forth in paragraphs (d), (e), (f), (g) and
(h) have occurred; or
(k) the failure by CalWest's lender(s) to fund the bridge loan
commitment (the "Bridge Loan Commitment") provided by such lenders(s) to finance
------------------------
the purchase by CalWest or Rooster Acquisition Corp. of the Cabot Common Shares
pursuant to the Commitment Letter, dated as of October 28, 2001, with Xxxxxxx
Sachs Mortgage Company (the "Commitment Letter"), dated as of the date hereof,
-------------------
as a result of the occurrence of a Material Adverse Change (as such term is
defined in the section of the Commitment Letter designated "Material Adverse
Change" (the "Commitment Letter MAE Section"); provided that if after compliance
------------------------------- --------
with Section 1.1(d) of the Agreement, CalWest shall have obtained other
financing for the Offer and the Merger on terms substantially similar and at
least as favorable as the terms of the Commitment Letter and such other
financing is available and funded at the time of the consummation of the Offer,
then the event specified in this clause (k) shall be deemed to have been cured;
which, in the reasonable discretion of CalWest, in any such case, and regardless
of the circumstances (including any action or inaction by CalWest) giving rise
to such condition, makes
-2-
it inadvisable to proceed with the Offer or the acceptance for payment of or
payment for the Cabot Common Shares (tendered and not withdrawn pursuant to the
Offer).
The foregoing conditions are for the sole benefit of Rooster
Acquisition Corp. and may (subject to the terms of the Merger Agreement) be
asserted or waived by Rooster Acquisition Corp., in whole or in part, at any
time and from time to time, in the sole discretion of Rooster Acquisition Corp.,
as the case may be. The failure by Rooster Acquisition Corp. at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
The capitalized terms used in this Annex I shall have the meanings set
forth in the Agreement to which it is annexed, except that the term "Merger
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
annexed.
-3-
Content of Omitted Schedules:
-----------------------------
The filing persons agree to furnish supplementally a copy of any omitted
schedule to the Commission upon request.
Section 4.1(a) Jurisdiction and Qualifications
Section 4.1(b)(i) Jurisdiction and Qualifications of Cabot Subsidiaries and
Equity Owners and Equity Interest in Cabot Subsidiaries
Section 4.1(b)(ii) Cabot Other Interests
Section 4.1(c)(i)(D) Options, DEUs and Other Convertible Securities
Section 4.1(c)(i)(E) Declared and Unpaid Distributions and Dividends
Section 4.1(c)(ii)(B) Cabot OP Partners
Section 4.1(c)(iii)(A) Voting Arrangements and Agreements
Section 4.1(c)(iii)(B) Registration Rights Agreements
Section 4.1(c)(iii)(C) Cabot Subsidiary Securities
Section 4.1(d)(ii) Triggered Loans
Section 4.1(d)(iii) Government Permits and Consents
Section 4.1(e)(i) Cabot SEC Documents
Section 4.1(e)(iii) Interim Financial Statements
Section 4.1(f) Operations Since September 30, 2001
Section 4.1(g)(i) Undisclosed Material Liabilities
Section 4.1(g)(ii) Indebtedness
Section 4.1(j) Litigation
Section 4.1(k)(ii) Section 1221(a)(1) Properties
Section 4.1(k)(v) Audits
Section 4.1(k)(vi) Tax Allocation or Sharing Agreements
Section 4.1(k)(viii) Payments not Deductible Under Section 280G of the Code
Section 4.1(k)(ix) Material Tax Elections Not Reflected in Tax Returns
Section 4.1(l)(i) Employee Pension Benefit Plans Without a Favorable Determination Letter
Section 4.1(l)(ii) Cabot Sponsored Multi-Employer Plans
Section 4.1(l)(iv) Cabot Employee Benefit Plans
Section 4.1(l)(v) Cabot Employee Benefit Plan Breaches
Section 4.1(l)(vii) Increased or Accelerated Benefits
Section 4.1(l)(viii) Consulting Arrangements
Section 4.1(l)(x) Cabot or Cabot Subsidiaries Securities Held by Cabot
Employee Benefit Plans
Section 4.1(l)(xi) Continuing Coverage
Section 4.1(l)(xii) Section 162(m) Liabilities
Section 4.1(l)(xiii) Employee Benefit Plan Regulation
Section 4.1(l)(xv) Payments Under Senior Executive Employment Contracts
Section 4.1(m)(i) Collective Bargaining Agreements
Section 4.1(m)(vii) Employment Law Matters
Section 4.1(n) Intangible Property
Section 4.1(o) Environmental
Section 4.1(p)(i) Liens and Encumbrances
Section 4.1(p)(ii) Title Insurance
Section 4.1(p)(iii) Development Properties
Section 4.1(p)(iv) Government Permits/Violations
Section 4.1(p)(v) Condemnation/Zoning
Section 4.1(p)(vi) Material Defaults
Section 4.1(p)(vii) Material Leases not on Rent Roll
Section 4.1(p)(viii) Purchase Options
Section 4.1(p)(ix) Unfunded Tenant Improvements, Leasing Commissions, Capital Expenditures
Section 4.1(p)(x) Agreements Restricting Transfer
Section 4.1(p)(xi) Personal Property
Section 4.1(q) Summary of Insurance Coverages
Section 4.1(t) Broker's Fees
Section 4.1(u)(i) Material Contracts
Section 4.1(u)(ii) Mortgages
Section 4.1(u)(iii) Confidentiality and Non-Competition Agreements
Section 4.1(u)(iv) Indemnification Agreements
Section 4.1(u)(v) Prepayment Penalties/Maintained Indebtedness
Section 4.1(u)(vi) Third-Party Managers
Section 4.1(u)(vii) Management Agreements
Section 4.1(u)(viii) Real Estate Contracts
Section 4.1(u)(ix) Indemnification
Section 4.1(u)(x) Tax Protection Agreements
Section 4.1(x) Related Party Transactions
Section 5.1(b)(v) Continuing Operations (Commitments, 1031 Transactions, Indebtedness)
Section 5.1(b)(viii) Continuing Operations (Debt Guarantees)
Section 5.1(b)(xi) Continuing Operations (Employment Matters)
Section 5.1(b)(xxiv) Continuing Operations (Change in Ownership)
