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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ERP OPERATING LIMITED PARTNERSHIP
GLOBE HOLDING CO., INC.
AND
GLOBE BUSINESS RESOURCES, INC.
DATED AS OF JANUARY 13, 2000
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TABLE OF CONTENTS
ARTICLE 1 THE MERGER...........................................................................................2
SECTION 1.1 The Merger......................................................................................2
SECTION 1.2 Effective Time..................................................................................2
SECTION 1.3 Effect of the Merger............................................................................2
SECTION 1.4 Articles of Incorporation, Code of Regulations..................................................3
SECTION 1.5 Directors and Officers..........................................................................3
SECTION 1.6 Effect on Capital Stock.........................................................................3
SECTION 1.7 Exchange of Certificates........................................................................5
SECTION 1.8 Stock Transfer Books............................................................................6
SECTION 1.9 No Further Ownership Rights in Common Stock.....................................................6
SECTION 1.10 Lost, Stolen or Destroyed Certificates..........................................................7
SECTION 1.11 Taking of Necessary Action; Further Action......................................................7
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................7
SECTION 2.1 Organization, Standing And Power of Company.....................................................7
SECTION 2.2 Company Subsidiaries............................................................................8
SECTION 2.3 Capital Structure...............................................................................9
SECTION 2.4 Other Interests................................................................................10
SECTION 2.5 Authority; Noncontravention; Consents..........................................................10
SECTION 2.6 SEC Documents; Financial Statements; Undisclosed Liabilities...................................12
SECTION 2.7 Absence of Certain Changes or Events...........................................................12
SECTION 2.8 Litigation.....................................................................................13
SECTION 2.9 Properties.....................................................................................14
SECTION 2.10 Environmental Matters..........................................................................16
SECTION 2.11 Related Party Transactions.....................................................................18
SECTION 2.12 Employee Benefits..............................................................................18
SECTION 2.13 Employee Matters...............................................................................21
SECTION 2.14 Taxes..........................................................................................21
SECTION 2.15 No Payments to Employees, Officers, Trustees or Directors......................................25
SECTION 2.16 Brokers; Schedule of Fees And Expenses.........................................................25
SECTION 2.17 Compliance With Laws...........................................................................25
SECTION 2.18 Contracts; Debt Instruments....................................................................25
SECTION 2.19 Opinion of Financial Advisor...................................................................27
SECTION 2.20 Investment Company Act of 1940.................................................................28
SECTION 2.21 Trademarks, Patents And Copyrights.............................................................28
SECTION 2.22 Insurance......................................................................................28
SECTION 2.23 Definition of Knowledge of Company.............................................................29
SECTION 2.24 Vote Required..................................................................................29
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SECTION 2.25 Year 2000......................................................................................29
SECTION 2.26 Chapter 1704 of the Ohio Law Not Applicable....................................................29
SECTION 2.27 Stock Issued in Connection with Acquisitions...................................................29
SECTION 2.28 Contingent Earn-Outs...........................................................................29
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF ERP...............................................................30
SECTION 3.1 Organization, Good Standing and Power of ERP...................................................30
SECTION 3.2 Authority; Noncontravention; Consents Relating to ERP..........................................30
SECTION 3.3 Brokers; Schedule of Fees And Expenses.........................................................31
SECTION 3.4 State Takeover Statutes........................................................................31
SECTION 3.5 Definition of Knowledge of ERP. ..............................................................31
SECTION 3.6 Proxy Statement................................................................................31
SECTION 3.7 Financing......................................................................................32
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF NEWCO.............................................................32
SECTION 4.1 Organization, Good Standing and Power of Newco.................................................32
SECTION 4.2 Authority; Noncontravention; Consents Relating to Newco........................................32
SECTION 4.3 Organization, Good Standing and Power of Acquisition...........................................33
SECTION 4.4 Authority; Noncontravention; Consents Relating to Acquisition..................................33
SECTION 4.5 Brokers; Schedule of Fees And Expenses.........................................................34
SECTION 4.6 State Takeover Statutes........................................................................34
SECTION 4.7 Definition of Knowledge of Newco. ............................................................34
SECTION 4.8 Proxy Statement................................................................................35
ARTICLE 5 COVENANTS...........................................................................................35
SECTION 5.1 Acquisition Proposals..........................................................................35
SECTION 5.2 Conduct of the Company's Business Pending Merger...............................................36
SECTION 5.3 Other Actions..................................................................................40
ARTICLE 6 ADDITIONAL AGREEMENTS...............................................................................40
SECTION 6.1 Preparation of Proxy Statement; Stockholder Meeting; Comfort Letters...........................40
SECTION 6.2 HSR Act........................................................................................41
SECTION 6.3 Access to Information; Confidentiality.........................................................41
SECTION 6.4 Best Efforts; Notification.....................................................................42
SECTION 6.5 Costs of Transaction...........................................................................42
SECTION 6.6 Public Announcements...........................................................................42
SECTION 6.7 Taxes..........................................................................................43
SECTION 6.8 Optionees......................................................................................43
SECTION 6.9 Declaration of Dividends and Distributions.....................................................43
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SECTION 6.10 Resignations...................................................................................43
SECTION 6.11 Indemnification................................................................................44
SECTION 6.12 Certain Debt of the Company....................................................................45
SECTION 6.13 Fees and Expenses..............................................................................45
SECTION 6.14 Employee Benefits..............................................................................45
ARTICLE 7 CLOSING CONDITIONS..................................................................................45
SECTION 7.1 Conditions to Each Party's Obligation to Effect the Merger.....................................45
SECTION 7.2 Conditions to Obligations of ERP...............................................................45
SECTION 7.3 Conditions to Obligations of the Company.......................................................47
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER...................................................................48
SECTION 8.1 Termination....................................................................................48
SECTION 8.2 Certain Fees and Expenses......................................................................49
SECTION 8.3 Effect of Termination..........................................................................51
SECTION 8.4 Amendment......................................................................................51
SECTION 8.5 Extension; Waiver..............................................................................51
ARTICLE 9 GENERAL PROVISIONS..................................................................................51
SECTION 9.1 Nonsurvival of Representations and Warranties..................................................51
SECTION 9.2 Notices. ......................................................................................53
SECTION 9.3 Interpretation. ...............................................................................54
SECTION 9.4 Counterparts. .................................................................................54
SECTION 9.5 Entire Agreement; No Third-Party Beneficiaries. ...............................................54
SECTION 9.6 Governing Law. ...............................................................................54
SECTION 9.7 Assignment. ...................................................................................54
SECTION 9.8 Enforcement. .................................................................................55
SECTION 9.9 Severability. ................................................................................55
SECTION 9.10 Non-Recourse to Trustees and Officers. ........................................................55
EXHIBIT INDEX
Exhibit A - Form of Agreement and Plan of Merger
Exhibit B - Form of Company Counsel Opinion
Exhibit C - Form of ERP's Counsel Opinion
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of January
13, 2000, is by and among GLOBE BUSINESS RESOURCES, INC., an Ohio corporation
(the "Company"), GLOBE HOLDING CO., INC., a Delaware corporation ("Newco") and
ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited partnership ("ERP").
R E C I T A L S:
WHEREAS, the General Partner of ERP, the Board of Directors of Newco
and the Board of Directors of the Company (the "Company Board"), including the
Special Committee of the Company Board established to consider the transaction
(the "Special Committee"), have each approved the acquisition of the Company by
an indirect partially-owned subsidiary of ERP upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, ERP, Xxxxx X. Xxxxxx, Xxxxx X. Xxxxxx and others have entered
into that certain Formation and Investment Agreement dated as of even date
herewith (the "Formation Agreement") pursuant to which the parties have formed
Newco which will, in turn, form a wholly-owned Ohio corporation ("Acquisition");
WHEREAS, the General Partner of ERP and the Board of Directors of Newco
have approved and the Board of Directors and sole shareholder of Acquisition
will approve the merger (the "Merger") of Acquisition with and into the Company
in accordance with the Ohio General Corporation Law (the "Ohio Law") upon the
terms and subject to the conditions set forth herein;
WHEREAS, the Company has received a fairness opinion relating to the
Merger, as more fully described herein;
WHEREAS, the Company Board, including the Special Committee, has: (i)
determined that the consideration to be paid for each issued and outstanding
share of common stock, no par value per share ("Common Stock") of the Company
(each a "Share") in the Merger (as defined below) is fair to and in the best
interests of the shareholders of the Company; and (ii) approved this Agreement
and the transactions contemplated hereby and declared their advisability and
resolved to recommend approval and adoption of this Agreement by the
shareholders of the Company; and
WHEREAS, ERP, Newco and the Company desire to make certain
representations, warranties and agreements in connection with the Merger.
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NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company, Newco and ERP hereby agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1 THE MERGER.
(a) AGREEMENT OF MERGER. Prior to the Effective Time (as defined
below), and subject to and upon the terms and conditions of this Agreement, the
Agreement of Merger substantially in the form attached as Exhibit A hereto (the
"Agreement of Merger") shall be executed and delivered by the Company and
Acquisition, as soon as practicable after the date hereof, but in no event later
than the date of the meeting of the shareholders of the Company called to adopt
the Agreement of Merger, in accordance with Ohio Law. Pursuant to the terms of
the Agreement of Merger, Acquisition shall be merged with and into the Company,
the separate corporate existence of Acquisition shall cease and the Company
shall continue as the surviving corporation. The Company as the surviving
corporation after the Merger is hereinafter sometimes referred to as the
"Surviving Corporation."
(b) CLOSING. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
8.1 and subject to the satisfaction or waiver of the conditions set forth in
Article 7, the consummation of the Merger will take place on the eleventh day
following the meeting of the Company's shareholders held to vote on the approval
of the Merger; provided, however, in the event that ERP waives the condition set
forth in Section 7.2(j) then the Merger shall take place as soon as practicable
after the meeting of the Company's shareholders, but in no event later than 3
business days after satisfaction or waiver of the conditions set forth in
Article 7 (the "Closing Date"), at the offices of Xxxxx Xxxxxxx Xxxxxxx & Xxxxx,
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, unless another
date, time or place is agreed to in writing by the parties hereto.
SECTION 1.2 EFFECTIVE TIME. On the Closing Date, Newco, Acquisition and
the Company shall cause the Merger to be consummated by filing a certificate of
merger as contemplated by the Ohio Law (the "Certificate of Merger"), together
with any required related documents, with the Secretary of State of the State of
Ohio, in such form as required by, and executed in accordance with the relevant
provisions of, the Ohio Law (the time of such filing being the "Effective
Time").
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SECTION 1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of
the Merger shall be as provided in the Agreement of Merger and the Certificate
of Merger and the applicable provisions of the Ohio Law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time all the
property rights, privileges, powers and franchises of the Company and
Acquisition shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Acquisition shall become the debts, liabilities
and duties of the Surviving Corporation.
SECTION 1.4 ARTICLES OF INCORPORATION, CODE OF REGULATIONS.
(a) ARTICLES OF INCORPORATION. At the Effective Time the Articles of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Articles of Incorporation of the Surviving Corporation until
thereafter amended as provided by Ohio Law and such Articles of Incorporation.
(b) CODE OF REGULATIONS. The Code of Regulations of the Company, as in
effect immediately prior to the Effective Time, shall be the Code of Regulations
of the Surviving Corporation until thereafter amended as provided by the Ohio
Law, the Articles of Incorporation of the Surviving Corporation and such Code of
Regulations.
SECTION 1.5 DIRECTORS AND OFFICERS. The directors of Acquisition
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and Code of Regulations of the Surviving Corporation, and the
officers of the Company immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified.
SECTION 1.6 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of ERP, Acquisition, Newco, the
Company or the holders of any of the following securities:
(a) CONVERSION OF SECURITIES. Each Share issued and outstanding
immediately prior to the Effective Time (excluding any Shares to be canceled
pursuant to Section 1.6(b)) shall be cancelled and converted into the right to
receive, subject to the terms and conditions of this Agreement, up to $13.50 per
Share (the "Merger Consideration") payable to the holder thereof, without
interest thereon, upon the surrender of the certificate formerly representing
such Share, less any required withholding of taxes. Of the Merger Consideration,
$13.00 per Share (the "Base Amount") shall be payable in cash without interest
thereon in accordance with Section 1.7 as soon as practicable after the Deposit
Date, as defined herein, and an amount equal to $.50 per Share less the
Indemnification Amount, as defined herein (the "Reserved Amount"), shall be
payable in cash
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without interest thereon in accordance with Section 1.7 as soon as practicable
after the Reserved Amount Deposit Date.
(b) CANCELLATION. Each Share held in the treasury of the Company and
each Share owned by ERP, Newco, Acquisition or any direct or indirect
wholly-owned subsidiary of the Company or ERP immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of the
holder thereof, cease to be outstanding, be canceled and retired without payment
of any consideration therefor and cease to exist.
(c) STOCK OPTIONS. At the Effective Time, each outstanding option (a
"Stock Option") to purchase Common Stock granted under or pursuant to any
employee stock option plan or agreement entered into by the Company with any
employee of the Company or any subsidiary thereof or any other person listed on
Schedule 2.3 of the Company Disclosure Letter or otherwise existing (the
"Company Stock Option Plans"), shall be cancelled and the holder thereof shall
be entitled to receive in cash (the "Total Option Amount") (less applicable
withholding taxes) equal to the product of: (i) the number of shares of Common
Stock previously subject to such Stock Option, whether vested or unvested,
multiplied by; (ii) the excess, if any, of the Base Amount plus the Reserved
Amount over the exercise price per share of Common Stock previously subject to
such Stock Option, payable, (x) as soon as practicable after the Effective Time,
in an amount equal to the number of shares of Common Stock previously subject to
such Stock Option whether vested or unvested multiplied by the excess, if any,
of the Base Amount over the exercise price and (y) as soon as practicable after
the Determination Date, in an amount equal to the number of shares of Common
Stock previously subject to such Stock Option, whether vested or unvested
multiplied by the excess, if any, of the Base Amount plus the Reserve Amount
over the exercise price per share of the Common Stock previously subject to such
Stock Option minus any amount paid to the holder of such Stock Option at the
Effective Time.
(d) CAPITAL STOCK OF ACQUISITION. Each share of common stock, no par
value, of Acquisition issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of common stock, no par value, of the Surviving
Corporation.
(e) DISSENTING SHARES. Notwithstanding anything in this Agreement to
the contrary, Shares outstanding immediately prior to the Effective Time and
held by a holder who has not voted in favor of the Merger or consented thereto
in writing and who has demanded appraisal for such Shares in accordance with
Section 1701.85 of the Ohio Law ("Dissenting Shares") shall not be converted
into a right to receive the Merger Consideration, unless such holder fails to
perfect or withdraws or loses his right to appraisal, in which case such Shares
shall be treated as if they had been converted as of the Effective Time into a
right to receive the Merger Consideration, without interest thereon. The Company
shall give ERP prompt notice of any demands received by the
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Company for appraisal of Shares and, prior to the Effective Time, ERP shall have
the right to direct all negotiations and proceedings with respect to such
demands. Prior to the Effective Time, the Company shall not, except with the
prior written consent of ERP, make any payment with respect to, or settle or
offer to settle, any such demands. From and after the Effective Time, the
Surviving Corporation shall give ERP prompt notice of any demands received by
the Surviving Corporation for appraisal of Shares and, after the Effective Time,
ERP shall have the right to direct all negotiations and proceedings with respect
to such demands. After the Effective Time, the Surviving Corporation shall not,
except with the prior written consent of ERP, make any payment with respect to,
or settle or offer to settle, any such demands.
SECTION 1.7 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT AND PROCEDURES. Prior to the Effective Time, a bank
or trust company reasonably acceptable to the Company shall be designated by ERP
(the "Paying Agent") to act as agent in connection with the Merger to receive
the funds to which holders of shares shall become entitled pursuant to Section
1.6(a). Promptly after the Effective Time but in no event more than three (3)
business days after the Effective Time, the Surviving Corporation shall cause to
be mailed to each record holder, as of the Effective Time, of a certificate or
certificates (the "Certificates") that, prior to the Effective Time, represented
Shares, a form of letter of transmittal and instructions for use in effecting
the surrender of the Certificates for payment of the Merger Consideration
therefor. Upon the surrender of each such Certificate formerly representing
Shares, together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, the Paying Agent shall pay
the holder of such Certificate the Merger Consideration multiplied by the number
of Shares formerly represented by such Certificate, in exchange therefor, and
such Certificate shall forthwith be canceled. Until so surrendered and
exchanged, each such Certificate (other than Shares held by ERP, Newco,
Acquisition or the Company, or any direct or indirect subsidiary thereof) shall
represent solely the right to receive the Merger Consideration. No interest
shall be paid or accrue on the Merger Consideration. If the Merger Consideration
(or any portion thereof) is to be delivered to any person other than the person
in whose name the Certificate formerly representing the Shares surrendered in
exchange therefor is registered, it shall be a condition to such exchange that
the Certificate so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the person requesting such exchange shall pay
to the Paying Agent any transfer or other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of the Certificate surrendered, or shall establish to the satisfaction of the
Paying Agent that such tax has been paid or is not applicable.
(b) CONSIDERATION. (i) Within three (3) business days after the
Effective Time (the "Deposit Date"), ERP or the Surviving Corporation shall
deposit, or cause to be deposited, in trust with the Paying Agent the Base
Amount to which holders of Shares shall be entitled at the Effective
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Time pursuant to Section 1.6(a) hereof, and (ii) within 3 business days after
the occurrence of the Determination Date, as defined herein (the "Reserved
Amount Deposit Date"), ERP or the Surviving Corporation shall deposit, or cause
to be deposited, in trust with the Paying Agent the Reserved Amount, if any to
which holders of Shares shall be entitled at the Determination Date pursuant to
Section 1.6(a) hereof.
(c) INVESTMENT OF MERGER CONSIDERATION. The Merger Consideration shall
be invested by the Paying Agent, as directed by ERP, provided such investments
shall be limited to direct obligations of the United States of America,
obligations for which the full faith and credit of the United States of America
is pledged to provide for the payment of principal and interest, commercial
paper rated of the highest quality by Xxxxx'x Investors Service, Inc. and
Standard & Poor's Corporation, or certificates of deposit issued by a commercial
bank having at least $10,000,000,000 in assets.
(d) TERMINATION OF DUTIES. Promptly following the date which is six (6)
months after the Effective Time, ERP will cause the Paying Agent to deliver to
the Surviving Corporation all cash and documents in its possession relating to
the funds to be deposited on the Deposit Date described in this Agreement, and
the Paying Agent's duties relating thereto shall terminate. Promptly following
the date which is six (6) months after the Reserved Amount Deposit Date, ERP
will cause the Paying Agent to deliver to the Surviving Corporation all cash and
documents in its possession relating to the funds to be deposited in the
Reserved Amount Deposit Date described in this Agreement, and the Paying Agent's
duties relating thereto shall terminate. Thereafter, each holder of a
Certificate formerly representing a Share may surrender such Certificate to the
Surviving Corporation and (subject to applicable abandoned property, escheat and
similar laws) receive in exchange therefor the Merger Consideration, without any
interest thereon.
(e) NO LIABILITY. None of ERP, Acquisition, Newco and the Company shall
be liable to any holder of Common Stock for any Merger Consideration delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
(f) WITHHOLDING RIGHTS. ERP 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 Common Stock such amounts as ERP or the Paying
Agent is required to deduct and withhold with respect to the making of such
payment under the Internal Revenue Code of 1986, as amended (the "Code"), or any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by ERP or the Paying Agent, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the Shares
in respect of which such deduction and withholding was made by ERP or the Paying
Agent.
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SECTION 1.8 STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
registration of transfers of the Common Stock thereafter on the records of the
Company.
SECTION 1.9 NO FURTHER OWNERSHIP RIGHTS IN COMMON STOCK. The Merger
Consideration delivered upon the surrender for exchange of Shares in accordance
with the terms hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to such Shares, and there shall be no further
registration of transfers on the records of the Surviving Corporation of Shares
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article 1.
SECTION 1.10 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Paying Agent shall
deliver in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the Merger
Consideration as may be required pursuant to Section 1.6; provided, however,
that ERP may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed Certificates to
deliver a bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against ERP, the Surviving Corporation or the Paying
Agent with respect to the Certificates alleged to have been lost, stolen or
destroyed.
SECTION 1.11 TAKING OF NECESSARY ACTION; FURTHER ACTION. Each of ERP,
Acquisition, Newco and the Company will take all such reasonable and lawful
action as may be necessary or appropriate in order to effectuate the Merger in
accordance with this Agreement as promptly as possible. If, at any time after
the Effective Time, any such further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of the Company and Acquisition, the officers and directors
of the Company and Acquisition immediately prior to the Effective Time are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary action.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to ERP and Newco that,
except as set forth in the written letter of even date herewith signed by the
Chairman of the Board or the President of the Company, in his capacity as such,
and delivered on or prior to the date hereof by the Company to ERP (the "Company
Disclosure Letter"):
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SECTION 2.1 ORGANIZATION, STANDING AND POWER OF COMPANY. The Company is
a corporation duly organized and validly existing under the laws of Ohio and has
the requisite corporate power and authority to carry on its business as now
being conducted. The Company is duly qualified or licensed to do business as a
corporation and is in good standing (or the local law equivalent) in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed,
individually or in the aggregate, would not have a material adverse effect on
the business, properties, assets, financial condition or results of operations
of the Company and the Company Subsidiaries (as defined below) taken as a whole
(a "Company Material Adverse Effect"). Schedule 2.1 of the Company Disclosure
Letter sets forth each jurisdiction in which the Company is qualified or
licensed to do business, as well as all assumed names under which the Company
conducts business in such jurisdictions. The Company has previously delivered to
ERP complete and correct copies of its Articles of Incorporation and Code of
Regulations, in each case, as amended or supplemented to the date of this
Agreement.
SECTION 2.2 COMPANY SUBSIDIARIES. Except as otherwise provided in the
Company Disclosure Letter:
(a) Schedule 2.2 of the Company Disclosure Letter sets forth:
(i) each subsidiary of the Company (each a "Company
Subsidiary");
(ii) the legal form of each Company Subsidiary,
including the state or country of formation;
(iii) the identity and ownership interest of each
owner of such Company Subsidiary, including but not limited to
the amount of securities of such Company Subsidiary owned by
such owner;
(iv) each jurisdiction in which each Company
Subsidiary is qualified or licensed to do business; and
(v) each assumed name under which each Company
Subsidiary conducts business in any jurisdiction.
As used in this Agreement, "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 a majority of any of the capital stock or other
equity interests of such corporation, partnership, limited liability company,
joint venture or other legal entity. As used herein, "Person" or "person" means
an individual, corporation,
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partnership, limited liability company, joint venture, association, trust,
unincorporated organization or any other legal entity.
(b) All the outstanding shares of capital stock of each Company
Subsidiary that is a corporation have been validly issued and are (A) fully paid
and nonassessable, (B) owned by the Company or by another Company Subsidiary,
and (C) owned free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens") other than restrictions on transfer imposed by federal
or state securities laws or regulations, and all equity interests in each
Company Subsidiary that is a partnership, joint venture, limited liability
company or trust which are owned by the Company, by another Company Subsidiary
or by the Company and another Company Subsidiary are owned free and clear of all
Liens other than restrictions on transfer imposed by federal or state securities
laws and regulations and by the operating agreement of any such Company
Subsidiary that is a limited liability company. Each Company Subsidiary that is
a corporation is duly incorporated and validly existing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to carry on its business as now being conducted, and each Company
Subsidiary that is a partnership, limited liability company or trust is duly
organized and validly existing under the laws of its jurisdiction of
organization and has the requisite power and authority to carry on its business
as now being conducted. Each Company Subsidiary is duly qualified or licensed to
do business and, with respect to each Company Subsidiary that is a corporation,
is in good standing (or the local law equivalent) in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed, individually or in the
aggregate, would not have a Company Material Adverse Effect. True and correct
copies of the Articles of Incorporation, Codes of Regulations, Bylaws,
partnership agreements, joint venture and operating agreements or similar
organizational documents of each Company Subsidiary, as amended to the date of
this Agreement, have been previously delivered to ERP.
SECTION 2.3 CAPITAL STRUCTURE.
(a) As of the date hereof, the authorized shares of capital stock of
the Company consist of (i) 15,000,000 shares of Common Stock (which includes all
restricted stock) of which 4,803,198 are issued and outstanding and (ii) 100,000
shares of preferred stock, none of which are issued and outstanding. As of the
date hereof, 677,638 shares of Common Stock were reserved for issuance but not
issued under the Company Stock Option Plans. On the date hereof, except as set
forth in this Section 2.3 or Schedule 2.3 of the Company Disclosure Letter, no
Common Stock or other voting securities of the Company were issued, reserved for
issuance or outstanding.
(b) Set forth in Schedule 2.3 of the Company Disclosure Letter is a
true and complete list as of the date hereof of each outstanding incentive or
nonqualified stock option outstanding
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under the Company Stock Option Plans and a total thereof, all agreements to
issue shares of Restricted Stock and the amount and terms of all outstanding
shares of restricted stock issued by the Company.
(c) All outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and nonassessable and not subject to, and were not issued in
violation of, any preemptive rights. There are no bonds, debentures, notes or
other indebtedness of the Company, or assets of any other entities exchangeable
into Common Stock having the right to vote on any matters on which shareholders
of the Company may vote.
(d) Except as set forth in this Section 2.3 or in Schedule 2.3 of the
Company Disclosure Letter, as of the date of this Agreement there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company or any
Company Subsidiary is a party or by which such entity is bound, obligating the
Company or any Company Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock, voting securities
or other ownership interests of the Company or any Company Subsidiary or
obligating the Company or any Company Subsidiary to issue, grant, extend or
enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking.
(e) Except as set forth in Schedule 2.3 of the Company Disclosure
Letter, all dividends or distributions on Common Stock which have been
authorized or declared prior to the date of this Agreement have been paid in
full.
SECTION 2.4 OTHER INTERESTS. Except as set forth in Schedule 2.2 or 2.4
of the Company Disclosure Letter, neither the Company nor any Company Subsidiary
owns directly or indirectly any interest or investment (whether equity or debt)
in any corporation, partnership, limited liability company, joint venture,
business trust or entity (other than investments in short-term investment
securities). With respect to such interests, the Company and each such Company
Subsidiary owns such interests free and clear of all Liens, pledges, security
interests, claims, options or other encumbrances. With respect to such
interests, neither the Company nor any of the Company Subsidiaries is in breach
in any material respect of any provision of any agreement, document or contract
governing its rights in or to the interests owned or held by it, all of which
agreements, documents and contracts are (a) set forth on the Company Disclosure
Letter, (b) unmodified except as described therein and (c) in full force and
effect. To the Knowledge of Company (as defined in Section 2.23), the other
parties to such agreements, documents or contracts are not in any material
breach of any of their respective obligations under such agreements, documents
or contracts.
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SECTION 2.5 AUTHORITY; NONCONTRAVENTION; CONSENTS.
(a) The Company has the requisite power and authority to enter into
this Agreement and, subject to the affirmative vote of holders of at least a
majority of the outstanding Common Stock entitled to vote thereon to approve the
Merger (the "Company Shareholder Approval"), to consummate the transactions
contemplated by this Agreement to which the Company is a party. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated by this Agreement have been duly
authorized by all necessary action on the part of the Company or any Company
Subsidiary, including the Special Committee of the Company's Board, subject to
the Company Shareholder Approval. This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to applicable bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights and general principles of equity.
(b) Except as set forth in Schedule 2.5 of the Company Disclosure
Letter, the execution and delivery of this Agreement by the Company do not, and
the consummation of the transactions contemplated by this Agreement by the
Company and compliance by the Company with the provisions of this Agreement 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 to loss of a material
benefit under, or result in the creation of any Lien upon any of the properties
or assets of the Company or any Company Subsidiary under, (i) the Articles of
Incorporation or Code of Regulations, in each case as amended or supplemented to
the date of this Agreement, of the Company or the comparable charter or
organizational documents or partnership or similar agreement (as the case may
be) of any Company Subsidiary, in each case as amended or supplemented to the
date of this Agreement, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, reciprocal easement agreement, lease or other agreement, instrument,
permit, concession, franchise or license to which the Company or any Company
Subsidiary is a party or their respective properties or assets are bound or
(iii) subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation (collectively, "Laws") applicable to the Company or any Company
Subsidiary, or their respective properties or assets, other than, in the case of
clause (ii) or (iii), any such conflicts, violations, defaults, rights, loss or
Liens that individually or in the aggregate would not (x) have a Company
Material Adverse Effect or (y) prevent the consummation of the transactions
contemplated by this Agreement. Except as set forth on Schedule 2.5 of the
Company Disclosure Letter, no consent, approval, order or authorization of, or
registration, declaration or filing with, any federal, state or local government
or any court, administrative or regulatory agency or commission or other
governmental authority or agency, domestic or foreign (a "Governmental Entity"),
is required by or with respect to the Company or any Company Subsidiary in
connection with the execution and delivery of this Agreement by the Company or
the consummation by the Company of the transactions contemplated by this
Agreement, except for (i) the filing with the SEC of (x) materials relating to
the transactions contemplated by this Agreement
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including, but not limited to the Proxy Statement and (y) such reports under
Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") as may be required in connection with this Agreement and the transactions
contemplated by this Agreement, (ii) the acceptance for record of the
Certificate of Merger by the Ohio Secretary of State and post-closing filings of
the said Certificate of Merger or other documents with the secretaries of state
of other jurisdictions in which the Company is qualified to do business as a
foreign corporation, (iii) the pre-merger notification of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended ("HSR Act"); and (iv) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings (A) as are set forth in Schedule 2.5 of the Company Disclosure Letter or
(B) which, if not obtained or made, would not prevent or delay in any material
respect the consummation of any of the transactions contemplated by this
Agreement or otherwise prevent the Company or any Company Subsidiary from
performing its obligations under this Agreement in any material respect or have,
individually or in the aggregate, a Company Material Adverse Effect.
SECTION 2.6 SEC DOCUMENTS; FINANCIAL STATEMENTS; UNDISCLOSED
LIABILITIES. The Company has filed all required reports, schedules, forms,
statements and other documents with the SEC since February 7, 1996 through the
date hereof (the "Company SEC Documents"). Schedule 2.6 of the Company
Disclosure Letter contains a complete list (without exhibits) of all Company SEC
Documents filed by Company with the SEC since February 7, 1996 and on or prior
to the date of this Agreement. All of the Company SEC Documents (other than
preliminary material), as of their respective filing dates, or as of the date of
the last amendment thereof (if amended after filing), complied in all material
respects with all applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the Exchange Act and, in each case, the
rules and regulations promulgated thereunder applicable to such Company SEC
Documents. None of the Company SEC Documents at the time of filing contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except to the extent such statements have been modified or
superseded by later Company SEC Documents filed on a non-confidential basis
prior to the date of this Agreement. The consolidated financial statements of
the Company included in the Company SEC Documents complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles ("GAAP") (except, in
the case of unaudited statements, as permitted by the applicable rules and
regulations of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated therein or in the notes thereto) and fairly
presented, in accordance with the applicable requirements of GAAP and the
applicable rules and regulations of the SEC in all material respects, the
consolidated financial position of the Company and the consolidated Company
Subsidiaries, taken as a whole, as of the dates thereof and the consolidated
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments, any other
adjustments described
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therein and the fact that certain information and notes have been condensed or
omitted in accordance with the Exchange Act). Schedule 2.6 of the Company
Disclosure Letter sets forth all Company Subsidiaries which are not consolidated
for accounting purposes as of the date hereof. Except for liabilities and
obligations set forth in the Company SEC Documents or in Schedule 2.6 of the
Company Disclosure Letter, neither the Company nor any of the Company
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by GAAP to be set forth on a
consolidated balance sheet of the Company or in the notes thereto and which,
individually or in the aggregate, would have a Company Material Adverse Effect,
after taking into account any assets acquired or services provided in connection
with the incurrence of such liabilities or obligations.
SECTION 2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Company SEC Documents or Schedule 2.7 of the Company Disclosure Letter,
since the date of the most recent audited financial statements included in the
Company SEC Documents (the "Company Financial Statement Date") the Company and
the Company Subsidiaries have conducted their business only in the ordinary
course (taking into account prior practices, including the acquisition of
properties and issuance of securities) and there has not been (a) any material
adverse change in the business, financial condition or results of operations of
the Company and the Company Subsidiaries taken as a whole (a "Company Material
Adverse Change"), nor has there been any occurrence or circumstance that with
the passage of time would reasonably be expected to result in a Company Material
Adverse Change, (b) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to any
Common Stock, (c) any split, combination or reclassification of any Common 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 beneficial interest or any issuance of an
ownership interest in, any Company Subsidiary except as contemplated by this
Agreement, (d) any damage, destruction or loss, whether or not covered by
insurance, that has or would have caused or created a Company Material Adverse
Effect, (e) any change made prior to the date of this Agreement in accounting
methods, principles or practices by the Company or any Company Subsidiary
materially affecting its assets, liabilities or business, except insofar as may
have been disclosed in Company SEC Documents or required by a change in GAAP, or
(f) any amendment of any employment, consulting, severance, retention or any
other agreement between the Company and any officer or director of the Company.
SECTION 2.8 LITIGATION. Except as disclosed in the Company SEC
Documents, Schedule 2.8 or Schedule 2.9 of the Company Disclosure Letter, and
other than personal injury and other routine tort litigation arising from the
ordinary course of operations of the Company and the Company Subsidiaries (a)
which are covered by adequate insurance or (b) for which all material costs and
liabilities arising therefrom are reimbursable pursuant to common area
maintenance or similar agreements, there is no suit, action or proceeding
pending or, to the Knowledge of the
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Company, threatened against or affecting the Company or any Company Subsidiary
that, individually or in the aggregate, could reasonably be expected to (i) have
a Company Material Adverse Effect or (ii) prevent the consummation of any of the
transactions contemplated by this Agreement, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator outstanding
against the Company or any Company Subsidiary having, or which could reasonably
be expected to have, any such effect. Notwithstanding the foregoing, (y)
Schedule 2.8 of the Company Disclosure Letter sets forth each and every
uninsured claim that the Company has Knowledge of involving a potential dollar
cost to the Company in excess of $50,000 and each and every equal employment
opportunity claim, claim relating to sexual harassment and/or discrimination and
claim threatened as of the date hereof, in each case with a brief summary of
such claim or threatened claim and (z) no claim is pending or has been made
since February 7, 1996 under any directors' or officers' liability insurance
policy maintained at any time by the Company or any of the Company Subsidiaries.
SECTION 2.9 PROPERTIES.
(a) Schedule 2.9 of the Company Disclosure Letter identifies all real
property owned by the Company and the Company Subsidiaries (the "Company
Properties"). Except as provided in Schedule 2.9 of the Company Disclosure
Letter, the Company and the Company Subsidiaries set forth on Schedule 2.2 of
the Company Disclosure Letter owns fee simple title to their respective Company
Properties. Except as set forth on Schedule 2.9, all such properties are owned
in each case free and clear of liens, mortgages or deeds of trust, claims
against title, charges which are liens, security interests or other encumbrances
on title securing monetary obligations ("Encumbrances"). Except as set forth in
Schedule 2.2, Schedule 2.9 or Schedule 2.18 of the Company Disclosure Letter, no
other Person has any ownership interest in any of the Company Properties, and
any such ownership interest so scheduled does not materially detract from the
value of, or materially interfere with the present use of, any of the Company
Properties subject thereto or affected thereby. The Company Properties owned by
the Company are not subject to any rights of way, written agreements, laws,
ordinances and regulations affecting building use or occupancy, or reservations
of an interest in title (collectively, "Property Restrictions") or other
Encumbrances, except for (i) Encumbrances and Property Restrictions set forth in
the Company Disclosure Letter, (ii) Property Restrictions imposed or promulgated
by law or any governmental body or authority with respect to real property,
including zoning regulations, provided they do not materially adversely affect
the current use of any Company Property, (iii) Encumbrances and Property
Restrictions of record, which Encumbrances and Property Restrictions, in any
event, do not materially detract from the value of, or materially interfere with
the present use of, any of the Company Properties subject thereto or affected
thereby, (iv) real estate taxes and assessments which constitute a lien but are
not yet due and payable and (v) mechanics', carriers', workmen's, repairmen's
liens, other Encumbrances and Property Restrictions, if any, which, individually
or in the aggregate, do not materially detract from the value of or materially
interfere with the present use of any of the Company Properties subject
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thereto or affected thereby, and do not otherwise materially impair business
operations conducted by the Company and the Company Subsidiaries.
(b) Schedule 2.9 of the Company Disclosure Letter also identifies all
real property leased by the Company and the Company Subsidiaries and used as
showrooms, warehouses or office space (the "Company Leased Properties"). Except
as set forth in Schedule 2.9, all such properties are leased pursuant to leases
that are in full force and effect on the date of this Agreement, with the
Company and the Company Subsidiaries not being in default under such leases and
with the lessors thereof, to the Knowledge of the Company, also not being in
default thereunder. The Company Leased Properties are not, to the Knowledge of
the Company, subject to any Property Restrictions or other Encumbrances, except
for (i) Encumbrances and Property Restrictions set forth in the Company
Disclosure Letter, (ii) Property Restrictions imposed or promulgated by law or
any governmental body or authority with respect to real property, including
zoning regulations, provided they do not materially adversely affect the current
use of any Company Leased Property, (iii) Encumbrances and Property Restrictions
of record, which Encumbrances and Property Restrictions, in any event, do not
materially detract from the value of, or materially interfere with the present
use of, any of the Company Leased Properties subject thereto or affected
thereby, (iv) real estate taxes and assessments which constitute a lien but are
not yet due and payable and (v) mechanics', carriers', workmen's, repairmen's
liens, other Encumbrances and Property Restrictions, if any, which, individually
or in the aggregate, do not materially detract from the value of or materially
interfere with the present use of any of the Company Leased Properties subject
thereto or affected thereby, and do not otherwise materially impair business
operations conducted by the Company Subsidiaries.
(c) Except as provided in Schedule 2.9 of the Company Disclosure
Letter, the Company has no Knowledge (i) that, any certificate, permit or
license from any governmental authority having jurisdiction over any of the
Company Properties owned by the Company or any agreement, easement or other
right which is necessary to permit the lawful use and operation of the buildings
and improvements on any of the Company Properties owned by the Company or which
is necessary to permit the lawful use and operation of all driveways, roads and
other means of egress and ingress to and from any of the Company Properties
owned by the Company has not been obtained and is not in full force and effect,
or of any pending threat of modification or cancellation of any of same; (ii) of
any written notice of any violation of any federal, state or municipal law,
ordinance, order, regulation or requirement materially and adversely affecting
any of the Company Properties owned by the Company issued by any governmental
authority; (iii) of any material structural defects relating to any Company
Property owned by the Company which costs more than $50,000 to repair; (iv) of
any Company Property owned by the Company whose building systems are not in
working order in any material respect and costs more than $50,000 to repair; (v)
of any physical damage to any Company Property owned by the Company in excess of
$50,000 for which there is no insurance in effect covering the cost of the
restoration; (vi) of any current renovation or uninsured restoration
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underway to any Company Property owned by the Company the cost of which exceeds
$50,000; or (vii) of items referred to in Section 2.9(c)(iii)-2.9(c)(iv) which
aggregate for the Company and the Company Subsidiaries more than $250,000.
(d) Except as set forth in Schedule 2.9 of the Company Disclosure
Letter, neither the Company nor any of the Company Subsidiaries has received any
written notice to the effect that (i) any condemnation or rezoning proceedings
are pending or threatened with respect to any of the Company Properties or (ii)
any zoning, building or similar law, code, ordinance, order or regulation is or
will be violated in any material respect for any property by the continued
maintenance, operation or use of any buildings or other improvements on any of
the Company Properties or by the continued maintenance, operation or use of the
parking areas.
(e) Schedule 2.9 of the Company Disclosure Letter contains a printout
which is accurate in all material respects as of January 11, 2000 of all
apartment units leased or otherwise occupied by the Company, and the Company
Subsidiaries and used in the Company's corporate housing business activities
(the "Corporate Housing Units"), which computer printout is true and correct in
all material respects as of January 11, 2000. Except as set forth on Schedule
2.9, all such Corporate Housing Units are leased pursuant to leases that are in
full force and effect as of January 11, 2000, with the Company and the Company
Subsidiaries not being in default under any material number of such leases,
taking the Corporate Housing Units as a whole (except insofar as such leases may
have been acquired by the Company and the Company Subsidiaries without
compliance with consent to assignment provisions included in the leases), and
with the lessors thereof, to the Knowledge of the Company, also not being in
default under any material number of such leases, taking the Corporate Housing
Units as a whole.
(f) The Company and each of the Company Subsidiaries have good and
sufficient title to all their personal and non-real properties and assets
reflected in their books and records as being owned by them (including those
reflected in the consolidated balance sheet of the Company as of August 31,
1999, except as since sold or otherwise disposed of in the ordinary course of
business), free and clear of all liens and encumbrances, except such
Encumbrances reflected on Schedule 2.9 or Schedule 2.18 of the Company
Disclosure Letter or on the consolidated balance sheet of Company as of August
31, 1999, and the notes thereto, and except for liens for current taxes not yet
due and payable, and Liens or Encumbrances which are normal to the business of
the Company and the Company Subsidiaries and are not, in the aggregate, material
in relation to the assets of Company on a consolidated basis and except also for
such imperfections of title, easement and encumbrances, if any, as do not
materially interfere with the present use of the properties subject thereto or
affected thereby, or otherwise materially impair the consolidated business
operations of the Company.
(g) Except as set forth in Schedule 2.9 of the Company Disclosure
Letter, no Company Property owned by the Company is currently under development
or subject to any agreement with
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respect to development, and neither the Company nor any Company Subsidiary shall
enter into any such agreements between the date hereof and the Effective Time
without the prior written approval of ERP.
SECTION 2.10 ENVIRONMENTAL MATTERS. The Company has delivered to ERP a
true and complete copy of the environmental reports by third-party consulting
firms listed on Schedule 2.10 of the Company Disclosure Letter (the "Company
Environmental Reports"). To the Company's Knowledge, the Company Environmental
Reports constitute all final environmental reports (including, without
limitation, all final versions of environmental investigations and testing or
laboratory analysis made by or on behalf of the Company or any of the Company
Subsidiaries) with respect to the Company Properties owned by the Company in the
possession of the Company or any Company Subsidiary. With respect to each
Company Property owned by the Company, except for any condition that
individually or in the aggregate would not be reasonably likely to have a
Company Material Adverse Effect, (a) no Hazardous Substances (as defined below)
have been used, stored, manufactured, treated, processed or transported to or
from any such Company Property owned by the Company except as necessary to the
conduct of business and in compliance with Environmental Laws (as defined
below); (b) no unlawful spills, releases, discharges or disposals of Hazardous
Substances have occurred or are presently occurring on or from such Company
Property owned by the Company; (c) such Company Property owned by the Company
and the business conducted thereon are not in violation of Environmental Laws;
and (d) the Company and the Company Subsidiaries have not received and do not
reasonably expect to receive any notice of potential responsibility, letter of
inquiry or notice of alleged liability under any Environmental Law from any
Person regarding such Company Property or the business conducted thereon,
provided, however, that with respect to any Company Property covered by an
Environmental Report, the representation contained in this Section 2.10 covers
only that period following the date of such Environmental Report. For the
purposes of this Section 2.10 only, "Company Properties" shall be deemed to
include all property formerly owned by the Company or the Company Subsidiaries;
solely, however, as to the period of time when such property was so owned by the
Company or the Company Subsidiaries.
"Environmental Laws" shall mean any applicable statute, code,
enactment, ordinance, rule, regulation, permit, consent, approval,
authorization, judgment, order, common law rule (including without limitation
the common law respecting nuisance and tortious liability), decree, injunction,
or other requirement having the force and effect of law, whether local, county,
state, territorial or national, at the date of this Agreement or at any prior
time in force or effect relating to:
(a) emissions, discharges, spills, releases or threatened
releases of Hazardous Substances into ambient air, surface water,
groundwater, watercourses, publicly or privately owned treatment works,
drains, sewer systems, wetlands, septic systems or onto land;
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(b) the use, treatment, storage, disposal, handling,
manufacturing, transportation or shipment of Hazardous Substances;
(c) the regulation of storage tanks; or
(d) otherwise relating to pollution or the protection the
environment.
"Hazardous Substances" shall mean all substances, wastes, pollutants,
contaminants and materials regulated or defined or designated as hazardous,
extremely or imminently hazardous, dangerous, or toxic pursuant to any law, by
any local, county, state, territorial or federal governmental authority, or with
respect to which such a governmental authority otherwise requires environmental
investigation, monitoring, reporting, or remediation; including, but not limited
to,
(a) all substances, wastes, pollutants, contaminants and
materials regulated, or defined or designated as hazardous, extremely
or imminently hazardous, dangerous or toxic, under the following
federal statutes and their state counterparts, as well as their
statutes' implementing regulations: the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. section 9601 et.
seq., the Resource Conservation and Recovery Act, 42 U.S.C. section
6901 et. seq., the Toxic Substances Control Act, 15 U.S.C. section 2601
et. seq., the Clean Water Act, 33 U.S.C. section 1251 et. seq., the
Clean Air Act, 42 U.S.C. section 7401 et. seq., the Emergency Planning
and Community Right to Know Act, 42 U.S.C. section 11011 et. seq., the
Safe Drinking Water Act, 33 U.S.C. section 300f et. seq., the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. section 136 et.
seq., and the Hazardous Materials Transportation Act, 49 U.S.C. section
1501 et. seq.;
(b) petroleum and petroleum products including crude oil and
any fractions thereof;
(c) natural gas, synthetic gas, and any mixtures thereof; and
(d) radon, radioactive substances, asbestos, urea
formaldehyde, polychlorinated biphenyls and electromagnetic field
radiation.
SECTION 2.11 RELATED PARTY TRANSACTIONS. Set forth in Schedule 2.11 of
the Company Disclosure Letter is a list of all arrangements, agreements and
contracts entered into by the Company or any of the Company Subsidiaries under
which continuing obligations exist with (a) any consultant (other than a
consultant entitled to receive less than $10,000 annually from the Company or
any Company Subsidiary, provided, however, that if the total amount owed to
consultants by the Company and the Company Subsidiaries exceeds $100,000
annually, all such agreements shall be set forth in Schedule 2.11), (b) any
person who is an officer, director or Affiliate
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(as defined below) of the Company or any of the Company Subsidiaries, any member
of the "immediate family" (as such term is defined in Item 404 of Regulation S-K
promulgated under the Securities Act) of any of the foregoing or any entity of
which any of the foregoing is an Affiliate or (c) any person who acquired Common
Stock in a private placement within three years preceding the date hereof,
except those of a type available to the Company employees generally. To the
extent in writing, such documents, copies of all of which have previously been
delivered or made available to ERP, are listed in Schedule 2.11 of the Company
Disclosure Letter. As used in this Agreement, the term "Affiliate" shall have
the same meaning as such term is defined in Rule 405 promulgated under the
Securities Act.
SECTION 2.12 EMPLOYEE BENEFITS. As used herein, the term "Company
Employee Plan" includes any pension, retirement, savings, disability, medical,
dental, health, life, death benefit, group insurance, profit sharing, deferred
compensation, stock option, stock loan, bonus, incentive, vacation pay, tuition
reimbursement, severance pay, or other employee benefit plan, trust, agreement,
contract, arrangement, policy or commitment (including, without limitation, any
pension plan, as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended and the rules and regulations promulgated
thereunder ("ERISA") ("Pension Plan"), and any welfare plan as defined in
Section 3(1) of ERISA ("Welfare Plan")), whether any of the foregoing is funded,
insured or self-funded, written or oral, (i) sponsored or maintained by the
Company or Company Subsidiaries (each a "Controlled Group Member") and covering
any Controlled Group Member's active or former employees (or their
beneficiaries), (ii) to which any Controlled Group Member is a party or by which
any Controlled Group Member (or any of the rights, properties or assets thereof)
is bound or (iii) with respect to which any current Controlled Group Member may
otherwise have any material liability (whether or not such Controlled Group
Member still maintains such Company Employee Plan). Each Company Employee Plan
is listed on Schedule 2.12. With respect to the Company Employee Plans:
(a) Except as disclosed in the Company SEC Documents or in Schedule
2.12 of the Company Disclosure Letter, no Controlled Group Member has any
continuing liability under any Welfare Plan which provides for continuing
benefits or coverage for any participant or any beneficiary of a participant
after such participant's termination of employment, except as may be required by
section 4980B of the Code or Section 601 (et seq.) of ERISA, or under any
applicable state law, and at the expense of the participant or the beneficiary
of the participant.
(b) Each Company Employee Plan complies in all material respects with
the applicable requirements of ERISA and any other applicable law governing such
Company Employee Plan, and each Company Employee Plan has at all times been
properly administered in all material respects in accordance with all such
requirements of law, and in accordance with its terms and the terms of any
applicable collective bargaining agreement to the extent consistent with all
such requirements of law. Each Pension Plan which is intended to be qualified is
qualified under Section 401(a) of the
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Code, has received a favorable determination letter from the Internal Revenue
Service (the "IRS") stating that such Plan meets the requirements of Section
401(a) of the Code and that the trust associated with such Plan is tax exempt
under Section 501(a) of the Code and no event has occurred which would be likely
to jeopardize the qualified status of any such plan or the tax exempt status of
any such trust under Sections 401(a) and Section 501(a) of the Code,
respectively. No lawsuits, claims (other than routine claims for benefits) or
complaints to, or by, any person or governmental entity have been filed or are
pending, the Company has received no notice of such a lawsuit, claim or
complaint and, to the Knowledge of the Company, there is no fact or contemplated
event which would be expected to give rise to any such lawsuit, claim (other
than routine claims for benefits) or complaint with respect to any Company
Employee Plan. Without limiting the foregoing, except as disclosed on Schedule
2.12 of the Company Disclosure Letter, the following are true with respect to
each Company Employee Plan:
(i) except for those not yet required to be filed or
distributed, all Controlled Group Members have filed or caused to be
filed every material return, report, statement, notice, declaration and
other document required by any law or governmental agency, federal,
state and local (including, without limitation, the IRS and the United
States Department of Labor) with respect to each such Company Employee
Plan, each of such filings has been complete and accurate in all
material respects and no Controlled Group Member has incurred any
material liability in connection with such filings;
(ii) except for those not yet required to be filed or
distributed, all Controlled Group Members have delivered or caused to
be delivered to every participant, beneficiary and other party entitled
to such material, all material plan descriptions, returns, reports,
schedules, notices, statements and similar materials, including,
without limitation, summary plan descriptions and summary annual
reports, as are required under Title I of ERISA, the Code, or both, and
no Controlled Group Member has incurred any material liability in
connection with such deliveries;
(iii) all contributions and payments with respect to the
Company Employee Plans that are required to be made by a Controlled
Group Member with respect to periods ending on or before the Closing
Date (including periods from the first day of the current plan or
policy year to the Closing Date) have been, or will be, made or accrued
before the Closing Date in accordance with the appropriate plan
document, actuarial report, collective bargaining agreements or
insurance contracts or arrangements or as otherwise required by ERISA
or the Code;
(iv) with respect to each such Company Employee Plan, to the
extent applicable, the Company has delivered to ERP true and complete
copies of (A) current plan documents, or any and all other documents
that establish the existence of the current plan, trust,
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arrangement, contract, policy or commitment and all amendments thereto,
(B) the most recent determination letter, if any, received from the
IRS, (C) the three most recent Form 5500 Annual Report (and all
schedules and reports relating thereto) and actuarial reports and (D)
all related trust agreements, insurance contract or other funding
agreements that implement each such Company Employee Plan.
(c) With respect to each Company Employee Plan, there has not occurred,
and no person or entity is contractually bound to enter into, any "prohibited
transaction" within the meaning of Section 4975(c) of the Code or Section 406 of
ERISA, which transaction is not exempt under Section 4975(d) of the Code or
Section 408 of ERISA.
(d) Except as disclosed in Schedule 2.12, no Controlled Group Member
has maintained or been obligated to contribute to any Company Employee Plan
subject to Code Section 412 or Title IV of ERISA. With respect to each Company
Employee Plan set forth on Schedule 2.12A, the Company represents that each such
Company Employee Plan has been completely terminated in accordance with all Code
and ERISA requirements for a "standard termination" (as defined in 4041(b) of
ERISA), as applicable on the termination date.
(e) Except as set forth in Schedule 2.12 of the Company Disclosure
Letter, with respect to each pension plan maintained by any Controlled Group
Member, such Plans provide the Plan Sponsor the authority to amend or terminate
the plan at any time, subject to applicable requirements of ERISA and the Code.
SECTION 2.13 EMPLOYEE MATTERS. Schedule 2.13 of the Company Disclosure
Letter lists the employee handbooks of the Company and each of the Company
Subsidiaries currently in effect. A copy of each such employee handbook has
previously been made available to ERP. Except as set forth in Schedule 2.13 of
the Company Disclosure Letter, such handbooks fairly and accurately summarize
all material employee policies, vacation policies and payroll practices of the
Company and the Company Subsidiaries. Neither the Company nor any of the Company
Subsidiaries is a party to, or bound by, any collective bargaining agreement,
contract or other agreement or understanding with a labor union or other labor
organization, nor has the Company or any of the Company Subsidiaries agreed that
any unit of their employees is appropriate for collective bargaining. No union
or other labor organization has been certified as bargaining representative for
any of the Company's employees. To the Knowledge of the Company there are no
organizational efforts with respect to the formation of a collective bargaining
unit presently being made or threatened involving employees of the Company or
any of the Company Subsidiaries.
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SECTION 2.14 TAXES.
(a) TAX RETURNS. For all tax years ending on or after February
28, 1995, the Company and each of the Company Subsidiaries has been or
will be included in the Affiliated Group (as defined below) and, to the
extent eligible to do so, has been or will be included in the
consolidated federal income tax returns (and any analogous combined,
consolidated or unitary group defined and required under state, local,
or foreign income Tax law) of the Company (the "Consolidated Group").
The Company and each of the Company Subsidiaries has filed separate,
consolidated or combined tax returns, as appropriate, under state,
local, or foreign income tax law as required. Except as set forth on
Schedule 2.14(a), all Tax Returns for tax years ending on or after
February 28, 1995, required to have been filed on or prior to the date
hereof or the Closing Date by the Consolidated Group, the Company or
any Company Subsidiary have been filed on or prior to the due date for
such Tax Return and such Tax Returns are true and correct in all
material respects. In particular, the foregoing Tax Returns are not
subject to penalties under Section 6662 of the Code, relating to
accuracy-related penalties (or any corresponding provision of the
state, local or foreign Tax law) or any predecessor provision of law.
Except as set forth on Schedule 2.14(a), an extension of time within
which to file any Tax Return that has not been filed has not been
requested or granted. As used in this Agreement, the term "Affiliated
Group" shall mean an affiliated group as defined in Section 1504 of the
Code (or any analogous combined, consolidated or unitary group defined
under state, local or foreign income Tax law) of which the Company is
or has been a member.
(b) PAYMENT OF TAXES. With respect to all amounts of Taxes
imposed on the Consolidated Group, the Company, any Company Subsidiary
or for which the Consolidated Group, the Company or any Company
Subsidiary is or could be liable, whether to taxing authorities or to
other persons or entities (as, for example, under Tax allocation
agreements), with respect to all taxable periods or portions of periods
ending on or before the Closing Date, all applicable Tax laws and
agreements have been fully complied with except where the failure to
comply would not have a Material Adverse Effect on the Company and all
such amounts required to be paid by the Consolidated Group, the Company
or any Company Subsidiary to taxing authorities or others on or before
the Closing Date have been paid, or have been accrued for or fully
reserved against on the Financial Statements.
(c) AUDIT HISTORY. Except as set forth on Schedule 2.14(c),
all federal income tax returns of the Consolidated Group for taxable
years ended prior to the date hereof, that have been examined by the
Internal Revenue Service and any deficiencies or assessments, including
interest and penalties thereon, claimed or made as a result of those
examinations have been paid or are fully reserved against on the
Financial Statements. Except as set forth on Schedule 2.14(c), no
issues have been raised or, to the Knowledge of the Company or any
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of the Company Subsidiaries, are currently pending by any taxing
authority in connection with any of the Tax Returns of the Consolidated
Group or the Company or any of the Company Subsidiaries. Except as set
forth on Schedule 2.14(c), to the Knowledge of the Company, no issue
has been raised by any taxing authority in any audit of the Company or
any member of the Consolidated Group that, if raised with respect to
any other period not so audited, could be expected to result in a
proposed deficiency for any period so audited. Except as set forth on
Schedule 2.14(c), no waivers of statutes of limitation with respect to
the Tax Returns have been given by or requested from the Consolidated
Group, any members of the Consolidated Group, the Company or any
Affiliates of such parties. Schedule 2.14(c) sets forth, with respect
to the taxable years of the Consolidated Group, any members of the
Consolidated Group, the Company and any of the Company Subsidiaries,
those years for which examinations have not been initiated, and those
years for which required Tax Returns have not yet been filed. Except to
the extent shown on Schedule 2.14(c), all deficiencies asserted or
assessments made as a result of any examinations have been fully paid.
(d) LIENS. There are no liens for Taxes (other than for
current Taxes not yet due and payable) on any of the assets of the
Company or any of the Company Subsidiaries.
(e) TAX-SHARING OR ALLOCATION AGREEMENTS. Any Tax-indemnity,
Tax-sharing, Tax allocation or similar agreements of the Company or any
of the Company Subsidiaries and any liability or obligation of the
Company or any of the Company Subsidiaries under such agreements will
terminate as of the Closing Date and be of no further force or effect.
All such agreements to which the Company or any of the Company
Subsidiaries is a party and are now in effect are listed on Schedule
2.14(e). Any payments pursuant to such agreements that were not
reflected in the Financial Statements, are disclosed on Schedule
2.14(e).
(f) PRIOR AFFILIATED GROUPS. Except as set forth on Schedule
2.14(f), and except for the Consolidated Group, neither the Company nor
any of the Company Subsidiaries has ever been a member of an Affiliated
Group of corporations.
(g) TAX ELECTIONS AND METHODS OF ACCOUNTING. Except as set
forth on Schedule 2.14(c), after the date hereof, no election with
respect to Taxes of the Company will be made without the written
consent of ERP which consent will not be unreasonably withheld and,
except as required by law, no method of accounting of the Company will
be changed without the written consent of ERP, which consent will not
be unreasonably withheld.
(h) CERTAIN CONSENTS AND ELECTIONS. (i) Neither the Company
nor any Affiliated Group in which the Company is or was a member has
filed a consent pursuant to the collapsible corporation provisions of
Section 341(f) of the Code (or any corresponding
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provision of state, local, or foreign income Tax law) or agreed to have
Section 341(f)(2) of the Code (or any corresponding provision of state,
local, or foreign income Tax law) apply to any disposition of any asset
owned by the Company or any of the Company Subsidiaries; (ii) none of
the assets of the Company or any of the Company Subsidiaries is
property that is required to be treated as being owned by any other
person pursuant to the "safe harbor lease" provisions of former Section
168(f)(8) of the Code; (iii) to the Knowledge of the Company, none of
the assets of the Company or any of the Company Subsidiaries is
"tax-exempt use property" within the meaning of Section 168(h) of the
Code; (iv) the Company or any of the Company Subsidiaries has not made
a deemed dividend election under Regulations Section 1.1502-32(f)(2)
and has not made and will not make a consent dividend election under
Section 565 of the Code; (v) the Company or any of the Company
Subsidiaries has not agreed to make nor is it required to make any
adjustment under Section 481(a) of the Code by reason of a change in
accounting method or otherwise; and (vi) the Company or any of the
Company Subsidiaries has not been a member of an Affiliated Group that
has filed an election to discontinue filing consolidated returns
pursuant to Revenue Procedure 91-11.
(i) PARACHUTE PAYMENT. Neither the Company nor any Company
Subsidiary is a party to any agreement, contract, arrangement, or plan
that has resulted or would result, separately or in the aggregate, in
the payment of any "excess parachute payments" within the meaning of
Section 280G or 4999 of the Code and the consummation of the
transactions contemplated by this Agreement will not result in any
excise tax withholding.
(j) NO WITHHOLDING. The transaction contemplated herein is not
subject to the tax withholding provisions of Section 3406 of the Code,
or of Subchapter A of Chapter 3 of the Code, or of any other tax
withholding provision of U.S. federal, state, local or foreign law.
(k) EXISTING PARTNERSHIPS. Except as set forth on Schedule
2.14(k), neither the Company nor any Company Subsidiary is a party to
any joint venture, partnership, or other arrangement or contract that
could be treated as a partnership for federal income tax purposes.
(l) COPIES OF TAX RETURNS. The Company has true, correct and
complete copies of all income Tax Returns filed by the Company and each
of the Company Subsidiaries including copies of any Tax Returns filed
by the Consolidated Group as listed on Schedule 2.14(l).
(m) DEFERRED INCOME. As a result of the transactions
contemplated under this Agreement, the Company will not recognize any
deferred income under federal consolidated
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return regulations (or similar provisions, if any, of state, local or
foreign Tax laws), including, but not limited to, the deferred
intercompany transaction provisions of such federal consolidated return
regulations (or similar provisions, if any, of state, local or foreign
tax laws).
(n) DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
(i) The term "Tax" shall mean any federal, state,
local or foreign income, gross receipts, franchise, estimated,
alternative minimum, add-on minimum, sales, use, transfer,
registration, value added, excise, natural resources,
severance, stamp, occupation, premium, surplus lines, windfall
profit, environmental, customs, duties, real property,
personal property, capital stock, social security,
unemployment, disability, payroll, license, employee or other
withholding, or other tax, of any kind whatsoever, including
any interest, penalties or additions to tax or additional
amounts in respect to the foregoing; the foregoing shall
include any transferee or secondary liability for a Tax and
any liability assumed by agreement or arising as a result of
being (or ceasing to be) a member of any Affiliated Group (or
being included or required to be included in any Tax Return
relating thereto);
(ii) The terms "Tax Return(s)" shall means returns,
declarations, reports, claims for refund, information returns
or other documents (including any related or supporting
schedules, statements or information) filed or required to be
filed in connection with the determination, assessment or
collection of any Taxes of the Consolidated Group, any members
of the Consolidated Group, the Company, any Company Subsidiary
or any Affiliates of such parties or the administration of any
laws, regulations or administrative requirements relating to
any Taxes; and
(iii) The term "Code" shall mean the Internal Revenue
Code of 1986, as amended, and all citations to the Code or to
the regulations promulgated thereunder shall include any
amendments or any substitute or successor provisions thereof.
SECTION 2.15 NO PAYMENTS TO EMPLOYEES, OFFICERS, TRUSTEES OR DIRECTORS.
Set forth in Schedule 2.3 and Schedule 2.15 of the Company Disclosure Letter is
a true and complete list of all cash and non-cash payments, rights to property
or other contract rights which may become payable, accelerated or vested to or
in each current or former employee, officer or director of the Company or any
Company Subsidiary as a result of the Merger. Except as described in Schedule
2.3, Schedule 2.7 or Schedule 2.15 of the Company Disclosure Letter, or as
otherwise provided for in this Agreement, there is no employment or severance
contract, or other agreement requiring payments, cancellation of indebtedness or
other obligation to be made on a change of control or
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otherwise as a result of the consummation of any of the transactions
contemplated by this Agreement, with respect to any current or former employee,
officer, trustee or director of the Company or any Company Subsidiary.
SECTION 2.16 BROKERS; SCHEDULE OF FEES AND EXPENSES. Except as
disclosed in Schedule 2.16 of the Company Disclosure Letter, no broker,
investment banker, financial advisor or other person, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Company or any Company Subsidiary.
A true and correct copy of all engagement letters executed by parties
disclosed on Schedule 2.16 of the Company Disclosure Letter have been delivered
to ERP prior to the date of this Agreement.
SECTION 2.17 COMPLIANCE WITH LAWS. Except as disclosed in the Company
SEC Documents or in Schedule 2.6 or Schedule 2.17 of the Company Disclosure
Letter, neither the Company nor any of the Company Subsidiaries has violated or
failed to comply with any statute, law, ordinance, regulation, rule, judgment,
decree or order of any Governmental Entity applicable to its business,
properties, operations or the Merger, except to the extent that such violation
or failure would not have a Company Material Adverse Effect.
SECTION 2.18 CONTRACTS; DEBT INSTRUMENTS.
(a) To the Knowledge of the Company, except as disclosed in the Company
SEC Documents or in Schedule 2.18 of the Company Disclosure Letter, there is no
contract or agreement that purports to limit in any material respect the names
under or the geographic location in which the Company or any Company Subsidiary
may conduct its business.
(b) Neither the Company nor any Company Subsidiary has received a
written notice that the Company or any Company Subsidiary is in violation of or
in default under (nor to the Knowledge of the Company 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 default under) any material loan or credit
agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other material contract, agreement, arrangement or
understanding, to which it is a party or by which it or any of its properties or
assets is bound, except as set forth in Schedule 2.18 of the Company Disclosure
Letter, nor to the Knowledge of the Company does such a violation or default
exist, except as set forth in Schedule 2.18 of the Company Disclosure Letter, or
to the extent that such violation or default, individually or in the aggregate,
would not have a Company Material Adverse Effect.
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(c) (i) Except for any of the following expressly identified in Company
SEC Documents, Schedule 2.18 of the Company Disclosure Letter sets
forth a list of each loan or credit agreement, note, bond, mortgage,
indenture and any other agreement and instrument pursuant to which any
Indebtedness of the Company or any Company Subsidiary is outstanding or
may be incurred (collectively, the "Debt Documents"), as well as, with
respect to the Indebtedness evidenced by each Debt Document as of
December 31, 1999, the outstanding principal balance, the maturity
date, the applicable interest rate (including the method or formula for
calculating any interest that is not a fixed percentage of the
principal balance) and the amount of or the method or formula for
calculating any Equity Participation (as defined herein). For purposes
of this Section 2.18, "Indebtedness" shall mean (1) indebtedness for
borrowed money, whether secured or unsecured, (2) obligations under
conditional sale or other title retention agreements relating to
property purchased by such person, (3) capitalized lease obligations,
(4) obligations under interest rate cap, swap, collar or similar
transaction or currency hedging transactions (valued at the termination
value thereof), (5) obligations to pay any equity kicker or other
participation in the operating cash flow, gross revenue or other income
from the real property or other asset of the Company or any Company
Subsidiary or in the gross, net or excess sale, financing, refinancing
or other capital proceeds from any such property or other asset
(whether or not in connection with any other Indebtedness)(each an
"Equity Participation") and (6) guarantees of any such indebtedness of
any other person.
(ii) The Company hereby represents and warrants that the Merger
will not cause a default or event of default under any item of
Indebtedness, except as set forth in Schedule 2.18 of the Company
Disclosure Letter, and will not require the consent of or requirement
to obtain the approval or confirmation as to any matter from the holder
of any such Indebtedness or any other person. For purposes of this
Section 2.18, "default" and/or "event of default" shall mean that,
immediately or after the giving of notice or the passage of time (or
both), such Indebtedness will not, either automatically or upon the
exercise of any right or option of the holder of such Indebtedness or
any other person, be accelerated or become due and payable in whole or
in part as a result of the consummation of the transactions
contemplated by this Agreement (including, without limitation, the
Merger).
(d) To the extent not set forth in response to the requirements of
Section 2.18(c), Schedule 2.18 of the Company Disclosure Letter sets forth each
interest rate cap, interest rate collar, interest rate swap, currency hedging
transaction, and any other agreement relating to a similar transaction to which
the Company or any Company Subsidiary is a party or an obligor with respect
thereto.
(e) Except as set forth in Schedule 2.18 of the Company Disclosure
Letter, neither the Company nor any of the Company Subsidiaries is party to any
agreement which would restrict any
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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 Company Properties.
(f) Schedule 2.18 of the Company Disclosure Letter lists all agreements
entered into by the Company or any of the Company Subsidiaries providing for the
sale of, or option to sell, any Company Properties owned by the Company or the
purchase of, or option to purchase, any real estate which are currently in
effect.
(g) Except as set forth in Schedule 2.18 of the Company Disclosure
Letter, neither the Company nor any Company Subsidiary has any continuing
contractual liability (i) for indemnification or otherwise under any agreement
relating to the sale of real estate previously owned, whether directly or
indirectly, by the Company or any Company Subsidiary, except for standard
indemnification provisions entered into in the normal course of business, (ii)
to pay any additional purchase price for any of the Company Properties owned by
the Company, or (iii) to make any reprorations or adjustments to prorations that
may previously have been made with respect to any property currently or formerly
owned by the Company.
(h) Except as set forth in Schedule 2.18 of the Company Disclosure
Letter there are no material outstanding contractual obligations of the Company
or any Company Subsidiary to make any investment in the form of a loan, capital
contribution or otherwise in any Company Subsidiary or any other Person. A true
and complete copy of each Note has previously been furnished to ERP.
SECTION 2.19 OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Friedman, Billings, Xxxxxx & Co., Inc. (the "Financial Advisor"),
satisfactory to the Company, and a signed copy of which has been provided to
ERP, to the effect that the consideration to be received by the holders of the
Shares pursuant to the Merger is fair, from a financial point of view, to such
holders.
SECTION 2.20 INVESTMENT COMPANY ACT OF 1940. Neither the Company nor
any of the Company Subsidiaries is, or at the Effective Time will be, required
to be registered under the Investment Company Act of 1940, as amended (the "1940
Act").
SECTION 2.21 TRADEMARKS, PATENTS AND COPYRIGHTS. Except as set forth in
Schedule 2.21 of the Company Disclosure Letter, or to the extent the inaccuracy
of any of the following (or the circumstances giving rise to such inaccuracy)
individually or in the aggregate would not have a Company Material Adverse
Effect, the Company and each Company Subsidiary owns or possesses adequate
licenses or other legal rights to use all patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, copyrights, service marks,
trade secrets, applications for trademarks and for service marks, know-how and
other proprietary rights and
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information used or held for use in connection with the business of the Company
and the Company Subsidiaries as currently conducted and the Company has no
Knowledge of any assertion or claim challenging the validity of any of the
foregoing. Each of the Company's material patents, patent rights, trademarks,
trademark rights, trade names, trade name rights, copyrights, service marks,
trade secrets, applications for trademarks and for service marks, know-how and
other proprietary rights and information used or held for use in connection with
the business of the Company and the Company Subsidiaries as currently conducted
is listed on Schedule 2.21 of the Company Disclosure Letter. The conduct of the
business of the Company and the Company Subsidiaries as currently conducted does
not and will not infringe in any way any patent, patent right, license,
trademark, trademark right, trade name, trade name right, service xxxx, or
copyright of any third party that, individually or in the aggregate, could have
a Company Material Adverse Effect. To the Company's Knowledge, there are no
infringements of any proprietary rights owned by or licensed by or to the
Company or any Company Subsidiary that individually or in the aggregate could
have a Company Material Adverse Effect.
SECTION 2.22 INSURANCE. Except as set forth on Schedule 2.22 of the
Company Disclosure Letter, each of the Company and the Company Subsidiaries are,
and has been continuously since the later of February 7, 1996 or the date upon
which Company acquired ownership of such Company Subsidiary, insured with
insurers in such amounts and against such risks and losses as are customary for
companies conducting the business as conducted by Company and the Company
Subsidiaries during such time period. Except as set forth on Schedule 2.22 of
the Company Disclosure Letter, neither the Company nor any Company Subsidiary
has received any written notice of cancellations or termination with respect to
any material insurance policy of the Company or any Company Subsidiary. The
insurance policies of the Company and each Company Subsidiary are valid and
enforceable policies in all material respects. Each insurance policy of the
Company and the Company Subsidiaries in effect on the date hereof and a summary
of the terms of each such policy is listed on Schedule 2.22.
SECTION 2.23 DEFINITION OF KNOWLEDGE OF COMPANY. As used in this
Agreement, the phrase "to the Knowledge of Company" (or words of similar import)
means the knowledge of those individuals identified in Schedule 2.23 of the
Company Disclosure Letter.
SECTION 2.24 VOTE REQUIRED. Except for the Company Shareholder
Approval, no other vote or consent by the equity holders of Company or any
Company Subsidiary (whether by agreement, under applicable law or otherwise) is
required to approve this Agreement and the transactions contemplated hereby, nor
shall any such equity holders be entitled to dissenters' rights or other rights
of appraisal in connection with the Company Shareholder Approvals or the
consummation of the transactions contemplated by this Agreement, except as
provided under Ohio Law.
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SECTION 2.25 YEAR 2000. Except as set forth in Schedule 2.25 of the
Company's Disclosure Letter, the information set forth under the caption "Year
2000" in Company's quarterly report on Form 10-Q for the quarterly period ended
August 31, 1999 is true and correct as of the date hereof.
SECTION 2.26 CHAPTER 1704 OF THE OHIO LAW NOT APPLICABLE. The Company
Board has taken all actions so that the restrictions contained in Chapter 1704
of the Ohio Law applicable to a "business combination" (as defined in Chapter
1704) will not apply to the execution, delivery or performance of this Agreement
or the consummation of the Merger or the other transactions contemplated by this
Agreement.
SECTION 2.27 STOCK ISSUED IN CONNECTION WITH ACQUISITIONS. Each offer,
sale and issuance of Common Stock by the Company in connection with the
acquisition of or merger with another company was effected through a transaction
which was exempt from the registration requirements of the Securities Act and
any applicable state securities laws, and neither the Company nor any authorized
agent acting on the Company's behalf has taken any action since such offer, sale
and issuance that would cause the loss of such exemption.
SECTION 2.28 CONTINGENT EARN-OUTS. Except as listed in Schedule 2.28 of
the Company Disclosure Letter, the Company is not a party to any agreement,
contract or any other obligation pursuant to which the Company is or may be
required to make payments based upon an "earn-out" or similar provision. The
maximum amount payable by the Company pursuant to any "earn-out" agreements or
similar provision is set forth in Schedule 2.28 of the Company Disclosure
Letter.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ERP
ERP hereby represents and warrants to the Company that, except as set
forth in the letter of even date herewith signed by the President or an
Executive Vice President of ERP and delivered to the Company on or prior to the
date hereof, by ERP (the "ERP Disclosure Letter"):
SECTION 3.1 ORGANIZATION, GOOD STANDING AND POWER OF ERP. ERP is a
limited partnership duly organized and validly existing under the laws of
Illinois and has the requisite limited partnership power and authority to carry
on its business as now being conducted. ERP is duly qualified or licensed to do
business as a foreign limited partnership and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed,
individually or in the aggregate, would not have a material adverse effect on
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the business, properties, assets, financial condition or results of operations
of ERP and the subsidiaries of ERP ("ERP Subsidiaries") taken as a whole ("ERP
Material Adverse Effect").
SECTION 3.2 AUTHORITY; NONCONTRAVENTION; CONSENTS RELATING TO ERP.
(a) ERP has the requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated by this Agreement to
which ERP is a party. The execution and delivery of this Agreement by ERP and
the consummation by ERP of the transactions contemplated by this Agreement to
which ERP is a party have been duly authorized by all necessary action on the
part of ERP. This Agreement has been duly executed and delivered by ERP and
constitutes a valid and binding obligation of ERP, enforceable against ERP in
accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity.
(b) Except as set forth in Schedule 3.2 to the ERP Disclosure Letter,
the execution and delivery of this Agreement by ERP do not, and the consummation
of the transactions contemplated by this Agreement by ERP and compliance by ERP
with the provisions of this Agreement 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 to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of ERP or any ERP
Subsidiary under, (i) ERP's Certificate of Limited Partnership or ERP's Fifth
Amended and Restated Agreement of Limited Partnership, in each case as amended
or supplemented to the date of this Agreement, or the comparable charter or
organizational documents or partnership or similar agreement (as the case may
be) of any other ERP Subsidiary, each as amended or supplemented to the date of
this Agreement, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, reciprocal easement agreement, lease or other agreement, instrument,
permit, concession, franchise or license to which ERP or any ERP Subsidiary is a
party or their respective properties or assets are bound or (iii) subject to the
governmental filings and other matters referred to in the following sentence,
any Laws applicable to ERP or any ERP Subsidiary or their respective properties
or assets, other than, in the case of clause (ii) or (iii), any such conflicts,
violations, defaults, rights, loss or Liens that individually or in the
aggregate would not (x) have a ERP Material Adverse Effect or (y) prevent the
consummation of the transactions contemplated by this Agreement. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to ERP or any ERP
Subsidiary in connection with the execution and delivery of this Agreement or
the consummation by ERP of any of the transactions contemplated by this
Agreement, except for (i) the filing with the SEC of such reports under Section
13(a) of the Exchange Act as may be required in connection with this Agreement
and the transactions contemplated by this Agreement, (ii) the acceptance for
record of the Certificate of Merger by the Ohio Secretary of State, (iii) such
filings as may be required in connection with the payment of any transfer and
gains taxes, (iv) the pre-merger notification of the
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HSR Act; and (v) such other consents, approvals, orders, authorizations,
registrations, declarations and filings (A) as are set forth in Schedule 3.2 to
the ERP Disclosure Letter, (B) as may be required under federal, state or local
environmental laws or (C) which, if not obtained or made, would not prevent or
delay in any material respect the consummation of any of the transactions
contemplated by this Agreement or otherwise prevent ERP from performing its
obligations under this Agreement in any material respect or have, individually
or in the aggregate, a ERP Material Adverse Effect.
SECTION 3.3 BROKERS; SCHEDULE OF FEES AND EXPENSES. No broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of ERP or any ERP Subsidiary.
SECTION 3.4 STATE TAKEOVER STATUTES. ERP has taken all action necessary
to exempt transactions between ERP and the Company and its Affiliates from the
operation of any anti-takeover laws of any applicable jurisdiction designed to
restrict ERP's ability to consummate the transaction contemplated by this
Agreement.
SECTION 3.5 DEFINITION OF KNOWLEDGE OF ERP. As used in this Agreement,
the phrase "to the Knowledge of ERP" or (or words of similar import) means the
knowledge of those individuals identified in Schedule 3.5 to the ERP Disclosure
Letter.
SECTION 3.6 PROXY STATEMENT. None of the information provided by ERP or
Acquisition and/or by their auditors, attorneys, financial advisors or other
consultants or advisors in writing specifically for use in the Proxy Statement
shall, at the time filed with the SEC, at the time mailed to the Company's
shareholders, at the time of the Company Shareholder Meeting or at the Effective
Time, 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.
SECTION 3.7 FINANCING. At the Effective Time, Acquisition will have
readily available all of the funds necessary for the acquisition of all shares
of Company Common Stock pursuant to the Merger, and to perform its obligations
under the Agreement of Merger and this Agreement.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF NEWCO
Newco hereby represents and warrants to the Company that, except as set
forth in the letter of even date herewith signed by the President or an
Executive Vice President of Newco and delivered to the Company on or prior to
the date hereof, by Newco (the "Newco Disclosure Letter"):
SECTION 4.1 ORGANIZATION, GOOD STANDING AND POWER OF NEWCO. Newco is a
corporation duly organized and validly existing under the laws of Delaware and
has the requisite corporate power and authority to carry on its business as now
being conducted. Newco is duly qualified or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed, individually or in the aggregate, would
not have a material adverse effect on the business, properties, assets,
financial condition or results of operations of Newco and the subsidiaries of
Newco ("Newco Subsidiaries") taken as a whole ("Newco Material Adverse Effect").
SECTION 4.2 AUTHORITY; NONCONTRAVENTION; CONSENTS RELATING TO NEWCO.
(a) Newco has the requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated by this Agreement to
which Newco is a party. The execution and delivery of this Agreement by Newco
and the consummation by Newco of the transactions contemplated by this Agreement
to which Newco is a party have been duly authorized by all necessary action on
the part of Newco. This Agreement has been duly executed and delivered by Newco
and constitutes a valid and binding obligation of Newco, enforceable against
Newco in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.
(b) Except as set forth in Schedule 4.2 to the Newco Disclosure Letter,
the execution and delivery of this Agreement by Newco do not, and the
consummation of the transactions contemplated by this Agreement by Newco and
compliance by Newco with the provisions of this Agreement 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 to loss of a material benefit under,
or result in the creation of any Lien upon any of the properties or assets of
Newco or any Newco Subsidiary under, (i) Newco's Certificate of Incorporation or
Newco's By-laws in each case as amended or supplemented to the date of this
Agreement, or the comparable charter or organizational documents or partnership
or similar agreement (as the case may be) of any other Newco Subsidiary, each as
amended or supplemented to the date of this Agreement, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, reciprocal easement agreement, lease
or other agreement, instrument, permit, concession, franchise or license to
which Newco or any Newco Subsidiary is a party or their respective properties or
assets are bound or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any Laws applicable to Newco or any Newco
Subsidiary or their respective properties or
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assets, other than, in the case of clause (ii) or (iii), any such conflicts,
violations, defaults, rights, loss or Liens that individually or in the
aggregate would not (x) have a Newco Material Adverse Effect or (y) prevent the
consummation of the transactions contemplated by this Agreement. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Entity is required by or with respect to Newco or any
Newco Subsidiary in connection with the execution and delivery of this Agreement
or the consummation by Newco of any of the transactions contemplated by this
Agreement, except for (i) the filing with the SEC of such reports under Section
13(a) of the Exchange Act as may be required in connection with this Agreement
and the transactions contemplated by this Agreement, (ii) the acceptance for
record of the Certificate of Merger by the Ohio Secretary of State, (iii) such
filings as may be required in connection with the payment of any transfer and
gains taxes, (iv) the pre-merger notification of the HSR Act; and (v) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings (A) as are set forth in Schedule 4.2 to the Newco Disclosure Letter, (B)
as may be required under federal, state or local environmental laws or (C)
which, if not obtained or made, would not prevent or delay in any material
respect the consummation of any of the transactions contemplated by this
Agreement or otherwise prevent Newco from performing its obligations under this
Agreement in any material respect or have, individually or in the aggregate, a
Newco Material Adverse Effect.
SECTION 4.3 ORGANIZATION, GOOD STANDING AND POWER OF ACQUISITION.
Acquisition will on the Effective Date be a corporation duly incorporated and
validly existing under the laws of Ohio and will have the requisite corporate
power and authority to carry out the transactions contemplated by the Agreement
of Merger and hereby.
SECTION 4.4 AUTHORITY; NONCONTRAVENTION; CONSENTS RELATING TO
ACQUISITION.
(a) The consummation by Acquisition of the transactions contemplated by
the Agreement of Merger and hereby to which Acquisition will be a party will, as
of the Effective Time, have been duly authorized by all necessary action on the
part of Acquisition and will constitute a valid and binding obligation of
Acquisition, enforceable against Acquisition in accordance with their terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
relating to creditors' rights and general principles of equity.
(b) Except as set forth in Schedule 4.4 to the Newco Disclosure Letter,
the consummation of the transactions contemplated by the Agreement of Merger and
this Agreement by Acquisition and compliance by Acquisition with the provisions
of the Agreement of Merger and this Agreement 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 to loss of a material benefit under,
or result in the creation of any Lien upon any of the properties or assets of
Acquisition or under, (i) Acquisition's Articles of Incorporation or Code of
Regulations, (ii) any loan or credit agreement, note, bond, mortgage, indenture,
reciprocal easement
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agreement, lease or other agreement, instrument, permit, concession, franchise
or license to which Acquisition is a party or its properties or assets may be
bound or (iii) subject to the governmental filings and other matters referred to
in the following sentence, any Laws applicable to Acquisition or its properties
or assets, other than, in the case of clause (ii) or (iii), any such conflicts,
violations, defaults, rights, loss or Liens that would prevent the consummation
of the transactions contemplated by the Agreement of Merger or this Agreement.
No consent, approval, order or authorization of, or registration, declaration or
filing with, any Governmental Entity is required by or with respect to
Acquisition in connection with the execution and delivery of this Agreement or
the consummation by Acquisition of any of the transactions contemplated by this
Agreement, except for (i) the acceptance for record of the Certificate of Merger
by the Ohio Secretary of State, (ii) the pre-merger notification of the HSR Act;
and (v) such other consents, approvals, orders, authorizations, registrations,
declarations and filings (A) as are set forth in Schedule 4.4 to the Newco
Disclosure Letter, (B) which, if not obtained or made, would not prevent or
delay in any material respect the consummation of any of the transactions
contemplated by the Agreement of Merger or this Agreement or otherwise prevent
Acquisition from performing its obligations under this Agreement in any material
respect.
SECTION 4.5 BROKERS; SCHEDULE OF FEES AND EXPENSES. No broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of Newco or any Newco Subsidiary.
SECTION 4.6 STATE TAKEOVER STATUTES. Newco has taken all action
necessary to exempt transactions between Newco and the Company and its
Affiliates from the operation of any anti-takeover laws of any applicable
jurisdiction designed to restrict Newco's ability to consummate the transaction
contemplated by this Agreement.
SECTION 4.7 DEFINITION OF KNOWLEDGE OF NEWCO. As used in this
Agreement, the phrase "to the Knowledge of Newco" or (or words of similar
import) means the knowledge of those individuals identified in Schedule 4.7 to
the Newco Disclosure Letter.
SECTION 4.8 PROXY STATEMENT. None of the information provided by Newco
or Acquisition and/or by their auditors, attorneys, financial advisors or other
consultants or advisors in writing specifically for use in the Proxy Statement
shall, at the time filed with the SEC, at the time mailed to the Company's
shareholders, at the time of the Company Shareholder Meeting or at the Effective
Time, 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.
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ARTICLE 5
COVENANTS
SECTION 5.1 ACQUISITION PROPOSALS. Prior to the Effective Time, the
Company agrees that:
(a) neither it nor any of the Company Subsidiaries shall initiate,
solicit or encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer (including, without limitation, any
proposal or offer to its shareholders) with respect to a merger, acquisition,
tender offer, exchange offer, consolidation, sale of assets or similar
transaction involving all or any significant portion of the assets or any equity
securities of the Company or any of the Company Subsidiaries, other than the
transactions contemplated by this Agreement (any such proposal or offer being
hereinafter referred to as an "Acquisition Proposal") or engage in any
negotiations concerning or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement an Acquisition
Proposal;
(b) it will use its best efforts not to permit any of its officers,
employees, agents or financial advisors to engage in any of the activities
described in Section 5.1(a);
(c) it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing and will take the necessary steps to inform
the individuals or entities referred to in Section 5.1(b) of the obligations
undertaken in this Section 5.1; and
(d) it will notify ERP immediately if the Company receives any such
inquiries or proposals, or any requests for such information, or if any such
negotiations or discussions are sought to be initiated or continued with it;
provided, however, that nothing contained in this Section 5.1 shall prohibit the
Company Board from (i) furnishing information to or entering into discussions or
negotiations with, any person or entity that makes an unsolicited Acquisition
Proposal, if, and only to the extent that (A) the Company Board determines in
good faith that failure to do so would create a reasonable probability of a
breach of its duties to shareholders imposed by law, (B) prior to furnishing
such information to, or entering into discussions or negotiations with, such
person or entity, the Company provides written notice to ERP to the effect that
it is furnishing information to, or entering into discussions with, such person
or entity, and (C) subject to any confidentiality agreement with such person or
entity (which the Company determined in good faith was required to be executed
in order for the Company Board to comply with its duties to shareholders imposed
by law), the Company keeps ERP informed of the
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status (not the terms) of any such discussions or negotiations; and (ii) to the
extent applicable, complying with Rule 14e-2 or Rule 14d-9 promulgated under the
Exchange Act with regard to an Acquisition Proposal. Nothing in this Section 5.1
shall (x) permit the Company to terminate this Agreement (except as specifically
provided in Article 8 hereof), (y) permit the Company to enter into an agreement
with respect to an Acquisition Proposal during the term of this Agreement (it
being agreed that during the term of this Agreement, the Company shall not enter
into an agreement with any Person that provides for, or in any way facilitates,
an Acquisition Proposal (other than a confidentiality agreement in customary
form executed as provided above)) or (z) affect any other obligation of the
Company under this Agreement; provided, however, that, subject to the provisions
of Section 8.2, the Company Board may approve and recommend a Superior
Acquisition Proposal and, in connection therewith, withdraw or modify its
approval or recommendation of this Agreement and the Merger. As used herein,
"Superior Acquisition Proposal" means a bona fide Acquisition Proposal made by a
third party which a majority of the members of the Company Board determines in
good faith to be more favorable to the Company's shareholders from a financial
point of view than the Merger and which the Company Board determines is
reasonably capable of being consummated.
SECTION 5.2 CONDUCT OF THE COMPANY'S BUSINESS PENDING MERGER. Prior to
the Effective Time, except as (i) contemplated by this Agreement, (ii) set forth
in Schedule 5.2 of the Company Disclosure Letter or (iii) consented to in
writing by ERP, the Company shall, and shall cause each of the Company
Subsidiaries to, conduct its business only in the usual, regular and ordinary
course and in substantially the same manner as heretofore conducted, and,
irrespective of whether or not in the ordinary course of business, the Company
shall, and shall cause each of the Company Subsidiaries to:
(a) use its reasonable efforts to preserve intact its business
organizations and goodwill and keep available the services of its
officers and employees;
(b) confer on a regular basis with one or more representatives
of ERP to report operational matters of materiality and, subject to
Section 5.1, any proposals to engage in material transactions not
otherwise expressly permitted under Section 5.2;
(c) promptly notify ERP of any material emergency or other
material change in the condition (financial or otherwise), business,
properties, assets, liabilities, or the normal course of its businesses
or in the operation of its properties, or of any material governmental
complaints, investigations or hearings (or communications indicating
that the same may be contemplated);
(d) promptly deliver to ERP true and correct copies of any
report, statement or schedule filed with the SEC subsequent to the date
of this Agreement;
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(e) maintain its books and records in accordance with GAAP
consistently applied and not change in any material manner any of its
methods, principles or practices of accounting in effect at the Company
Financial Statement Date, except as may be required by the SEC,
applicable law or GAAP;
(f) duly and timely file all reports, tax returns and other
documents required to be filed with federal, state, local and other
authorities, subject to extensions permitted by law, provided the
Company notifies ERP that it is availing itself of such extensions;
(g) not make or rescind any express or deemed election
relative to Taxes (unless required by law);
(h) not amend its Articles of Incorporation or Code of
Regulations or the articles of incorporation, codes of regulations,
bylaws, partnership agreement, joint venture agreement or comparable
charter or organization document of any Company Subsidiary without
ERP's prior written consent, which shall not be unreasonably withheld
or delayed;
(i) not issue or make any change in the number of, shares of,
capital stock, membership interests or units of limited partnership
interest issued and outstanding or reserved for issuance, other than
pursuant to those items disclosed in Schedule 2.3 of the Company
Disclosure Letter;
(j) not grant any options or other right or commitment
relating to its shares of capital stock, or any security convertible
into its shares of capital stock, or any security the value of which is
measured by shares of capital stock, or any security subordinated to
the claim of its general creditors;
(k) except for dividends and distributions by a Company
Subsidiary to the Company or a wholly-owned Company Subsidiary, not (x)
authorize, declare, set aside or pay any dividend or make any other
distribution or payment with respect to any shares of its capital
stock, or (y) directly or indirectly redeem, purchase or otherwise
acquire any shares of capital stock, membership interests or units of
partnership interest or any option, warrant or right to acquire, or
security convertible into, shares of capital stock, membership
interests, or units of partnership interest;
(l) not sell, lease, mortgage, subject to Lien or otherwise
dispose of any material part of its assets, individually or in the
aggregate, except for sales or leases of furniture and other personal
property in the ordinary course of business consistent with past
practice and for leases of corporate housing units to customers in the
ordinary course of business consistent with past practice;
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(m) not make any loans, advances or capital contributions to,
or investments in, any other Person, other than (i) loans, advances and
capital contributions to wholly-owned Company Subsidiaries in existence
on the date hereof; (ii) any advances to any officer or director of the
Company made pursuant to the terms of a note, provided, however, that
under no circumstances shall the terms of any note be amended to
increase the total aggregate amount of borrowings available thereunder;
and (iii) advances of travel and other business expenses to employees
in the ordinary course of business consistent with past practice;
(n) not pay, discharge or satisfy any material 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, or contemplated by, the most recent
consolidated financial statements (or the notes thereto) furnished to
ERP or incurred in the ordinary course of business consistent with past
practice;
(o) not enter into any commitment, contractual obligation,
capital expenditure or transaction (each, a "Commitment") which may
result in total payments or liability by or to it in excess of $200,000
or aggregate Commitments in excess of $500,000; provided, however, that
notwithstanding the foregoing, the Company may purchase or make
Commitments to purchase up to $2,500,000 in furniture each month;
(p) not 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;
(q) not enter into or amend any Commitment with any officer,
director, consultant or Affiliate of the Company or any of the Company
Subsidiaries other than Commitments with consultants involving payments
of (i) less than $10,000 per consultant and (ii) total aggregate
payments to all consultants of less than $100,000;
(r) not increase any compensation or enter into or amend any
employment agreement or other arrangement with any of its officers,
directors or employees earning more than $50,000 per annum as of the
date hereof, other than waivers by employees of benefits under such
agreements, enter into any employment agreement or arrangement with any
other Person not currently an employee of the Company or a Company
Subsidiary, providing for compensation in excess of $50,000 per annum
or increase any compensation or enter into or amend any employment
agreement or other arrangement with any new or current employee earning
more than $50,000 per annum except in the ordinary course of business
and consistent with past practice in timing and amount or pursuant to
the terms of any such
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agreement or arrangement; provided, however, that the Company may
increase compensation to employees in connection with promotions or
otherwise, by not more than ten percent (10%);
(s) not adopt any new employee benefit plan or amend any
existing plans, options or rights, except for changes which are
required by law;
(t) not settle any shareholder derivative or class action
claims arising out of or in connection with any of the transactions
contemplated by this Agreement without the prior written approval of
ERP, which approval shall not be unreasonably withheld or denied (it
being understood that it is the intent of the parties to avoid, to the
extent practicable, the termination of this Agreement pursuant to
Article 8 hereof);
(u) not reduce its ownership of any of the Company
Subsidiaries except pursuant to a transaction which has the same effect
as a transaction permitted by subsection 5.2(l) hereof;
(v) not accept a promissory note in payment of the exercise
price payable under any option to purchase shares of Common Stock;
(w) not enter into or amend or otherwise modify or waive any
rights under any agreement or arrangement for the persons that are
Affiliates of the Company or any Company Subsidiary or any officer,
director or employee, of the Company or any Company Subsidiary;
(x) except as provided in the Company Disclosure Letter, not
directly or indirectly or through a subsidiary, merge or consolidate
with, acquire all or substantially all of the assets of, or acquire the
beneficial ownership of a majority of the outstanding capital stock or
other equity interest in any person or entity; and
(y) take all action necessary to cause the payment of
compensation customarily made at the end of each quarter to the members
of the Company Board; and
For purposes of this Section 5.2 only, any contract, transaction or other event
for which a specific amount is not set forth above shall be deemed to be
material and to be subject to the terms hereof if it would result or is expected
to result in a net impact on the Company's consolidated income statement in
excess of $200,000, or on the Company's consolidated balance sheet in excess of
$500,000.
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SECTION 5.3 OTHER ACTIONS. Each of the Company on the one hand and ERP
and Newco on the other hand shall not, and shall use its reasonable best efforts
to cause its Subsidiaries not to take, any action that would result in (i) any
of the representations and warranties of such party set forth in this Agreement
that are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect or (iii) except as contemplated by Section 5.1, any of the
conditions to the Merger set forth in Article 7 not being satisfied.
ARTICLE 6
ADDITIONAL AGREEMENTS
SECTION 6.1 PREPARATION OF PROXY STATEMENT; STOCKHOLDER MEETING;
COMFORT LETTERS.
(a) Promptly following the date of this Agreement, the Company shall
prepare the Schedule 13E-3 with respect to the transactions contemplated by this
Agreement and a proxy statement (the "Proxy Statement") required to be
distributed to holders of Common Stock in connection with the Merger and include
therein the recommendation of the Company Board that the stockholders of the
Company vote in favor of the approval and adoption of this Agreement and include
therein the written opinion of the Financial Adviser that the cash consideration
to be received by the stockholders of the Company pursuant to the Merger is
fair, from a financial point of view, to such stockholders; provided, however,
that the Company Board may fail to make or may withdraw or modify such
recommendation, if, in accordance with Section 5.1, the Company Board recommends
a Superior Proposal. The Company shall use its reasonable best efforts to obtain
and furnish the information required to be included by it in the Proxy Statement
and Schedule 13E-3 and, after consultation with ERP, respond promptly to any
comments made by the Securities and Exchange Commission (the "SEC") with respect
to the Proxy Statement and Schedule 13E-3 and any preliminary version thereof,
ERP and Newco will cooperate with the Company in connection with the preparation
of the Proxy Statement and Schedule 13E-3 including, but not limited to,
furnishing to the Company any and all information regarding ERP as may be
required to be disclosed therein. The Company will use reasonable best efforts
to cause the Proxy Statement to be mailed to the Company's stockholders as
promptly as practicable.
(b) All filings with the SEC and all mailings to the Company's
stockholders in connection with the Merger, including the Proxy Statement and
Schedule 13E-3, shall be subject to the prior review, comment and approval of
ERP and Newco (and such approval shall not be unreasonably withheld or delayed).
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(c) The Company shall, as promptly as practicable following the date of
this Agreement and in consultation with ERP and Newco, duly call and give notice
of, and, provided that this Agreement has not been terminated, convene and hold,
the Company Stockholders' Meeting for the purpose of approving this Agreement
and the transactions contemplated by this Agreement to the extent required by
Ohio Law (the "Company Stockholders' Meeting"). The Company will use reasonable
best efforts to hold such meeting as soon as practicable after the date hereof.
(d) Upon the request of ERP, the Company shall use reasonable best
efforts to cause to be delivered to the Company and ERP a letter of
PricewaterhouseCoopers LLP, the Company's independent public accountants, dated
a date within two (2) business days before the date of mailing the Proxy
Statement to the stockholders of the Company and a letter of
PricewaterhouseCoopers LLP dated a date within two (2) business days before the
Company Stockholders' Meeting, addressed to the Company, in each case customary
in scope and substance for letters delivered by independent public accountants
in connection with proxy statements similar to the Proxy Statement; provided,
however, that such letters shall only be delivered to the extent permitted under
accounting principles and pronouncements applicable to the U.S. accounting
profession.
SECTION 6.2 HSR ACT. As promptly as practicable after the date of this
Agreement, the Company, ERP and Newco shall file notifications under the HSR Act
in connection with the Merger and the transactions contemplated hereby and to
respond as promptly as practicable to any inquiries received from the Federal
Trade Commission (the "FTC") and the Antitrust Division of the Department of
Justice (the "Antitrust Division") for additional information or documentation
and to respond as promptly as practicable to all inquiries and requests received
from any State Attorney General or other governmental authority in connection
with antitrust matters.
SECTION 6.3 ACCESS TO INFORMATION; CONFIDENTIALITY. Subject to the
requirements of confidentiality agreements with third parties, each of the
Company, ERP and Newco shall, and shall cause each of the Company Subsidiaries
and ERP Subsidiaries, respectively, to afford to the other party and to the
officers, employees, accountants, counsel, financial advisors and other
representatives of such other party, reasonable access during normal business
hours prior to the Effective Time to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, each of
the Company, ERP and Newco shall, and shall cause each of the Company
Subsidiaries and ERP Subsidiaries, respectively, to furnish promptly to the
other party (a) a copy of each report, schedule, registration statement and
other document filed by it during such period pursuant to the requirements of
federal or state securities laws and (b) all other information concerning its
business, properties and personnel as such other party may reasonably request.
Each of the Company and ERP shall, and shall cause the Company Subsidiaries and
ERP Subsidiaries, respectively, to use commercially reasonable efforts to cause
its 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
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comply with the provisions of the letter agreements dated as of October 11, 1999
between the Company and ERP (the "Confidentiality Agreements").
SECTION 6.4 BEST EFFORTS; NOTIFICATION.
(a) Subject to the terms and conditions herein provided, the Company,
Newco, Acquisition and ERP shall: (i) use all reasonable best efforts to
cooperate with one another in (A) determining which filings are required to be
made prior to the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time, from
governmental or regulatory authorities of the United States, the several states
and foreign jurisdictions and any third parties in connection with the execution
and delivery of this Agreement, and the consummation of the transactions
contemplated by such agreements and (B) timely making all such filings and
timely seeking all such consents, approvals, permits and authorizations; (ii)
use all reasonable best efforts to obtain in writing any consents required from
third parties to effectuate the Merger, such consents to be in form reasonably
satisfactory to the Company and ERP; and (iii) use all reasonable best efforts
to take, or cause to be taken, all other action and do, or cause to be done, all
other things necessary, proper or appropriate to consummate and make effective
the transactions contemplated by this Agreement, including, but not limited to,
furnishing all information required to be included in the Proxy Statement. If,
at any time after the Effective Time, any further action is necessary or
desirable to carry out the purpose of this Agreement, the proper officers and
trustees of the Company, Newco and ERP shall take all such necessary action.
(b) The Company shall give prompt notice to ERP, and ERP shall give
prompt notice to the Company, (i) if 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) of the
failure by it 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, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
SECTION 6.5 COSTS OF TRANSACTION. In the event that the Merger is not
consummated, each of ERP and the Company shall pay their own costs and expenses
relating to the Merger and the other transactions contemplated by this
Agreement. This Section 6.5 shall in no way affect the rights and obligations of
the parties hereto under Article 8 hereof.
SECTION 6.6 PUBLIC ANNOUNCEMENTS. ERP, Acquisition and the Company will
consult with each other before issuing, and provide each other the opportunity
to review and comment upon, any press release or other written public statements
with respect to the transactions contemplated by this Agreement, including
(without limitation) the Merger, and shall not issue any
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such press release or make any such written public statement prior to such
consultation, except as may be required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange. The parties agree that the initial press release to be issued with
respect to the transactions contemplated by this Agreement will be in the form
agreed to by the parties hereto prior to the execution of this Agreement. For
purposes of this Section 6.6, "written public statements" shall include any
written statement transmitted to the New York Stock Exchange Inc. ("NYSE"),
Nasdaq National Market or the shareholders of ERP or the Company.
SECTION 6.7 TAXES. At ERP's expense, the Company will and will cause
each Company Subsidiary to consult with and provide ERP the opportunity to
review and comment upon all returns, questionnaires, applications or other
documents to be filed after the date hereof by the Company with respect to Taxes
including, without limitation, the Company's federal, state and local income tax
returns for its taxable year ended February 29, 2000 (collectively, the "Company
Tax Returns"), and shall not file any such returns without the prior review and
comment of ERP and Acquisition, which shall not be unreasonably delayed.
SECTION 6.8 OPTIONEES.
(a) Prior to the Closing, the Company will, through its Board (or any
committee thereof), take all action required for the cancellation as of the
Effective Time of all Stock Options in consideration for cash in an amount set
forth in section 1.6(c).
(b) From and after the date hereof, the Company, through its Board or
otherwise, will not modify any Stock Option Plan or authorize, and the Company
will not grant, any Stock Options.
(c) The Company shall require each employee who exercises a Stock
Option or otherwise receives any payment from the Company as a result of the
transactions contemplated by this Agreement, to pay to the Company in cash an
amount sufficient to satisfy in full the Company's obligation to withhold Taxes
incurred by reason of such exercise, issuance or receipt.
SECTION 6.9 DECLARATION OF DIVIDENDS AND DISTRIBUTIONS. From and after
the date of this Agreement, neither the Company, nor any of the Company
Subsidiaries shall make any dividend or distribution to its shareholders without
the prior written consent of ERP.
SECTION 6.10 RESIGNATIONS. On the Closing Date, if requested by ERP,
the Company shall cause the directors of each of the Company and the Company
Subsidiaries to submit their resignations from such positions, effective as of
the Effective Time.
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SECTION 6.11 INDEMNIFICATION.
(a) From and after the Effective Time, ERP shall provide exculpation
and indemnification for each person who is now or has been at any time prior to
the date hereof or who becomes prior to the Effective Time, an officer, director
of the Company or any Company Subsidiary (the "Indemnified Parties") which is
the same as the exculpation, indemnification and advancement of expenses
provided to the Indemnified Parties by the Company (including advancement of
expenses, if so provided) immediately prior to the Effective Time in its
Articles of Incorporation or Code of Regulations as in effect at the close of
business on the date hereof; provided, that such exculpation and indemnification
covers actions on or prior to the Effective Time, including, without limitation,
all transactions contemplated by this Agreement. The Surviving Corporation shall
use commercially reasonable efforts to obtain and, if obtained, maintain in
effect from the Effective Time and continuing until the sixth anniversary
thereof "run-off" directors and officers liability insurance with a commercially
reasonable coverage amount and other terms and conditions, including exclusions,
as are commercially reasonable and at least as favorable as now provided by the
Company; provided, however, in no event shall the Surviving Corporation be
required to expend in respect of any year's coverage in excess of 300% of the
annual premium currently paid by the Company for such coverage with respect to
their service as such prior to the Effective Time (the "Run-Off Policy"). The
Surviving Corporation shall provide the Company with a true and complete copy of
a binder with respect to the Run-Off Policy at least 10 days prior to the
Effective Time, and shall use its reasonable best efforts to provide to the
Company a true and complete copy of the Run-Off Policy as proposed to be issued
prior to the Effective Time. The premium for such policy shall be paid in full
at the Effective Time.
(b) The provisions of this Section 6.11 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her personal representatives and shall be binding on all
successors and assigns of ERP and the Surviving Corporation. ERP agrees to pay
all costs and expenses (including fees and expenses of counsel) that may be
incurred by any Indemnified Party or his or her heirs or his or her personal
representatives in successfully enforcing the indemnity or other obligations of
ERP or the Surviving Corporation under this Section 6.11. The provisions of this
Section 6.11 shall survive the Merger and are in addition to any other rights to
which an Indemnified Party may be entitled.
(c) In the event that ERP or the Surviving Corporation or any of its
respective successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then, and in each such case the successors
and assigns of such entity shall assume the obligations set forth in this
Section 6.11, which obligations are expressly intended to be for the irrevocable
benefit of, and shall be enforceable by, each director and officer covered
hereby.
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SECTION 6.12 CERTAIN DEBT OF THE COMPANY. The Company shall maintain in
full force and effect that certain loan outstanding as of the date hereof from
those lenders party to that certain Note Purchase Agreement (the "Note Purchase
Agreement") dated as of September 1, 1997 (the "Section 6.12 Debt") and there
shall be no default or event of default or any condition which upon the passage
of time or the giving of notice or both which would cause such an event of
default or a default to exist under the Note Purchase Agreement as of the
Effective Time.
SECTION 6.13 FEES AND EXPENSES. The Company and the Company
Subsidiaries shall not incur (a) fees and expenses and (b) liabilities
(collectively, the "Transaction Expenses") in excess of the amount set forth on
Schedule 7.2(g) of the Company Disclosure Letter.
SECTION 6.14 EMPLOYEE BENEFITS. Neither the Company nor the Surviving
Corporation shall amend, modify or revise any Employee Plan without the prior
written consent of ERP.
ARTICLE 7
CLOSING CONDITIONS
SECTION 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The obligations of each party to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) SHAREHOLDER APPROVAL. The Merger shall have been approved and
adopted by the shareholders of each of the Company and Acquisition.
(b) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger or any of the other transactions contemplated hereby
shall be in effect.
SECTION 7.2 CONDITIONS TO OBLIGATIONS OF ERP. The obligations of ERP to
effect the Merger and to consummate the other transactions contemplated to occur
on the Closing Date are further subject to the following conditions, any one or
more of which may be waived in writing by ERP:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company set forth in this Agreement shall be true and correct as of the
Closing Date, as though made on and as of the Closing Date, except to the extent
the representation or warranty is expressly limited by its terms to another
date, and ERP shall have received a certificate (which certificate may
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be qualified by Knowledge to the same extent as the representations and
warranties of the Company contained herein are so qualified) signed on behalf of
the Company by the chief executive officer or the chief financial officer of the
Company, in such capacity, to such effect. For the purposes of Section 7.2(a),
the representations and warranties of the Company shall be deemed true and
correct unless the breach of such representations and warranties, in the
aggregate, could reasonably be expected to have a Company Material Adverse
Effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time, and ERP shall have
received a certificate signed on behalf of the Company by the chief executive
officer or the chief financial officer of the Company, in such capacity, to such
effect; provided, however, a failure to perform the covenant set forth in
Section 6.12 shall not be a closing condition and provided further that nothing
in this Section 7.2(b) shall prejudice the right of indemnification under
Section 9.1.
(c) MATERIAL ADVERSE CHANGE. Since November 30, 1999, except as
discussed in Schedule 2.7 of the Company Disclosure Letter, there shall have
been no Company Material Adverse Change and ERP shall have received a
certificate of the chief executive officer or chief financial officer of the
Company, in such capacity, certifying to such effect.
(d) COMFORT LETTER. If required by ERP, ERP shall have received the
letter from the accountants for the Company required by Section 6.9 hereof.
(e) OPINION OF COUNSEL. ERP shall have received an opinion of Xxxxxxx,
Xxxxxxxx & Xxxxxxx, P.L.L. or other counsel to the Company reasonably
satisfactory to ERP dated the Closing Date in form and substance reasonably
satisfactory to ERP addressing the matters set forth in Exhibit "B" hereto.
(f) CONSENTS. Except as set forth on Schedule 7.2 to the Company
Disclosure Letter, all consents and waivers (including, without limitation,
waivers of rights of first refusal) from third parties necessary in connection
with the consummation of the transactions contemplated by this Agreement shall
have been obtained, other than such consents and waivers from third parties,
which, if not obtained, would not result, individually or in the aggregate, in
an ERP Material Adverse Effect or a Company Material Adverse Effect.
(g) CERTAIN FEES, EXPENSES AND LIABILITIES. The Transaction Expenses
set forth in Schedule 7.2(g) of the Company Disclosure Letter shall not exceed
the amounts set forth in such Schedule.
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(h) HSR ACT. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated and no
restrictive order or other requirements shall have been placed on ERP or the
Surviving Corporation in connection therewith which would have a material
adverse effect on the expected benefits to ERP of the transactions contemplated
hereby.
(i) FORMATION AGREEMENT. The Closing, as defined in the Formation
Agreement, shall have been consummated.
(j) DISSENTERS' RIGHTS. The record holders of not more than 10% of the
issued and outstanding shares of Common Stock on the Effective Date have
properly served a demand on the Company seeking relief pursuant to the
provisions of Section 1701.85 of the Ohio Law.
SECTION 7.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation of
the Company to effect the Merger and to consummate the other transactions
contemplated to occur on the Closing Date is further subject to the following
conditions, any one or more of which may be waived in writing by the Company:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of ERP set forth in this Agreement shall be true and correct as of the date of
this Agreement and as of the Closing Date, as though made on and as of the
Closing Date, except to the extent the representation or warranty is expressly
limited by its terms to another date, and the Company shall have received a
certificate (which certificate may be qualified by Knowledge to the same extent
as the representations and warranties of ERP contained herein are so qualified)
signed on behalf of ERP and Acquisition by the chief executive officer and the
chief financial officer of such party to such effect. For the purposes of this
Section 7.3(a), the representations and warranties of ERP shall be deemed true
and correct unless the breach of such representations and warranties, in the
aggregate, could reasonably be expected to have an ERP Material Adverse Effect.
(b) PERFORMANCE OF OBLIGATIONS OF ERP AND ACQUISITION. ERP and
Acquisition shall have performed in all material respects all of their
respective obligations required to be performed by them under this Agreement at
or prior to the Effective Time, and the Company shall have received a
certificate of ERP signed on behalf of ERP by the chief executive officer or the
chief financial officer of ERP, in such capacity, to such effect.
(c) OPINION OF COUNSEL. The Company shall have received an opinion from
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx or other counsel to ERP reasonably satisfactory to
the Company dated the Closing Date in form and substance reasonably satisfactory
to the Company addressing the matters set forth in Exhibit "C" hereto dated the
Closing Date.
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(d) CONSENTS. All consents and waivers (including, without limitation,
waivers or rights of first refusal) from third parties necessary in connection
with the consummation of the transactions contemplated hereby shall have been
obtained, other than such consents and waivers from third parties, which, if not
obtained, would not result, individually or in the aggregate, in an ERP Material
Adverse Effect or a the Company Material Adverse Effect.
(e) CERTAIN FEES, EXPENSES AND LIABILITIES. The (x) fees and expenses
and (y) liabilities set forth in Schedule 7.2(g) of the Company Disclosure
Letter shall not exceed the amounts set forth in such Schedule.
(f) HSR ACT. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated and no
restrictive order or other requirements shall have been placed on ERP or the
Surviving Corporation in connection therewith which would have a material
adverse effect on the expected benefits to ERP of the transactions contemplated
hereby.
(g) FORMATION AGREEMENT. The Closing, as defined in the Formation
Agreement, shall have been consummated.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 TERMINATION. This Agreement may be terminated at any time
prior to the acceptance of the Certificate of Merger for record by the Secretary
of State of the State of Ohio, whether before or after the Shareholder Approval
have been obtained:
(a) by mutual written consent duly authorized by both the Company Board
and the General Partner of ERP;
(b) by ERP, upon a breach of any representation, warranty, covenant,
obligation or agreement on the part of the Company set forth in this Agreement,
in either case such that the conditions set forth in Section 7.2(a) or Section
7.2(b), as the case may be, would be incapable of being satisfied by September
30, 2000 (or as otherwise extended);
(c) by the Company, upon a breach of any representation, warranty,
covenant obligation or agreement on the part of ERP set forth in this Agreement,
in either case such that the conditions set forth in Section 7.3(a) or Section
7.3(b), as the case may be, would be incapable of being satisfied by September
30, 2000 (or as otherwise extended);
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(d) by either ERP or the Company, if any judgment, injunction, order,
decree or action by any Governmental Entity of competent authority preventing
the consummation of the Merger shall have become final and nonappealable;
(e) by either ERP or the Company, if the Merger shall not have been
consummated before September 30, 2000; provided, that in the case of termination
pursuant to this Section 8.1(e), the terminating party shall not have breached
in any material respect its obligations under this Agreement in any manner that
shall have proximately contributed to the occurrence of the failure referred to
in this Section;
(f) by either ERP or the Company if, upon a vote at a duly held the
Company Shareholders Meeting or any adjournment thereof, the Company Shareholder
Approval shall not have been obtained as contemplated by Section 6.1;
(g) by the Company, if prior to the conclusion of the tabulation of the
votes with respect to the Merger at the Company Shareholders Meeting, the
Company Board shall have withdrawn or modified its approval or recommendation of
the Merger or this Agreement in connection with, or approved, recommended or
entered into, a Superior Acquisition Proposal; and
(h) by ERP if (i) prior to the Company Shareholders Meeting, the
Company Board shall have withdrawn or modified in any manner adverse to ERP its
approval or recommendation of the Merger or this Agreement in connection with,
or approved, recommended or entered into, any Superior Acquisition Proposal, or
(ii) the Company shall have entered into a definitive agreement with respect to
any Acquisition Proposal.
(i) by ERP if the record holders of not more than 10% of the issued and
outstanding shares of Common Stock on the Effective Date have properly served a
demand on the Company seeking relief pursuant to the provisions of Section
1701.85 of the Ohio Law.
SECTION 8.2 CERTAIN FEES AND EXPENSES. If this Agreement shall be
terminated (i) pursuant to Section 8.1(g) or 8.1(h), then the Company will pay
ERP (provided the Company was not entitled to terminate this Agreement pursuant
to Section 8.1(c) at the time of such termination) a fee equal to the Break-Up
Fee (as defined below), or (ii) pursuant to Section 8.1(b) or 8.1(f), then the
Company will pay ERP (provided the Company was not entitled to terminate this
Agreement pursuant to Section 8.1(c) at the time of such termination) an amount
equal to the ERP Liquidated Damages Amount (as defined below).
If this Agreement shall be terminated pursuant to Section 8.1(c), then
ERP (rather than Newco) will pay the Company (provided ERP was not entitled to
terminate this Agreement pursuant
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to Section 8.1(b) at the time of such termination), an amount equal to the
Company Liquidated Damages Amount (as defined below).
If the Merger is not consummated (other than due to the termination of
this Agreement pursuant to Section 8.1(a) or 8.1(c), or ERP pursuant to 8.1(e)),
and at the time of the termination of this Agreement an Acquisition Proposal has
been received by the Company, and either prior to the termination of this
Agreement or within twelve (12) months thereafter the Company or any the Company
Subsidiary enters into any written Acquisition Proposal which is subsequently
consummated (whether or not such Acquisition Proposal is the same Acquisition
Proposal which had been received at the time of the termination of this
Agreement), then the Company shall pay the Break-Up Fee to ERP.
The Company and ERP agree that actual damages accruing from a
termination of the Agreement pursuant to the subsections of Section 8.1 with
respect to which the provisions of Section 8.2 provide for the payment of
damages are incapable of precise estimation and would be difficult to prove,
that the payment to ERP or the Company, as applicable, of the ERP Liquidated
Damages Amount, the Company Liquidated Damages Amount or the Break-Up Fee shall
constitute liquidated damages, that the rights to the ERP Liquidated Damages
Amount, Company Liquidated Damages Amount or Break-Up Fee, as applicable,
stipulated in this Section 8.2 bear a reasonable relationship to the potential
injury likely to be sustained in the event of such a termination and that such
stipulated rights to liquidated damages are intended by the parties to provide
just compensation in the event of such a termination and are not intended to
compel performance or to constitute a penalty for nonperformance. Payment of the
ERP Liquidated Damages Amount or the Break-Up Fee by the Company shall terminate
all of ERP's rights and remedies at law or in equity against the Company in
respect of a termination of this Agreement pursuant to the subsections of
Section 8.1 with respect to which the provisions of Section 8.2 provide for the
payment of damages. Payment of the Company Liquidated Damages Amount by ERP
shall terminate all of the Company's rights and remedies at law or in equity
against ERP in respect of a termination of this Agreement pursuant to Section
8.1 (c). The ERP Liquidated Damages Amount or the Break-Up Fee shall be paid by
the Company to ERP, or the Company Liquidated Damages Amount, shall be paid by
ERP to the Company, in immediately available funds within fifteen (15) days
after the date of the event giving rise to the obligation to make such payment
occurred.
The " ERP Liquidated Damages Amount" payable to ERP by the Company
shall be $2,500,000.
The "Company Liquidated Damages Amount" payable to the Company by ERP
shall be $2,500,000.
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As used in this Agreement, "Break-Up Fee" shall be an amount equal to
$5,000,000, less the ERP Liquidated Damages Amount, if such ERP Liquidated
Damages Amount has been paid in full by the Company to ERP,
SECTION 8.3 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or ERP 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 ERP or Newco, or the Company, other than the last
sentence of Section 6.3, Section 8.2, this Section 8.3 and Article 9.
SECTION 8.4 AMENDMENT. This Agreement may be amended by the parties in
writing by action of the Board of Trustees of the General Partner of ERP, by the
Company's Board and the Board of Directors of Newco at any time before or after
any Shareholder Approval is obtained and prior to the filing of the Certificate
of Merger with the Secretary of State of the State of Ohio; provided, however,
that, after the Shareholder Approval is obtained, no such amendment,
modification or supplement shall be made which by law requires the further
approval of shareholders without obtaining such further approval.
SECTION 8.5 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties 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
proviso 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 9
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 confirming the representations and warranties in this
Agreement shall survive the Effective Time other than those contained in
Sections 2.1, 2.2, 2.3, 2.4, 2.16 and 2.19 (the "Covered Sections"). Liability
for the representations and warranties under the Covered Sections shall survive
the Effective Time solely for the purpose and only to the extent that Losses (as
defined herein) relating to such representations and warranties are taken into
account in determining the Indemnification Amount (as defined herein) and only
to the extent Losses relating to such representations and warranties exceed in
the aggregate $1,000,000.
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For purposes of this Agreement, the following terms shall have the
following definitions:
(a) The term "Indemnification Amount" shall mean an amount equal to the
Losses (as defined herein), if any, divided by the number of Shares cancelled
and converted in exchange for Merger Consideration pursuant to the terms of
Section 1.6; provided, however, in no event shall the Indemnification Amount
exceed $0.50. If a claim is made by or on behalf of the holders of the Section
6.12 Debt prior to the Determination Date (as herein defined) that defaults or
events of default exist under the Note Purchase Agreement and any such defaults
or events of default existed as of the Effective Time and if, as a result of
such claims, the Section 6.12 Debt is repaid in whole Indemnification Amount
shall mean $0.50. If a claim is made by or on behalf of the holders of the
Section 6.12 Debt prior to the Determination Date (as herein defined) that
defaults or events of default exist under the Note Purchase Agreement and any
such defaults or events of default existed as of the Effective Time and if, as a
result of such claims, the Section 6.12 Debt is repaid in part, then the
Indemnification Amount shall mean the Losses incurred with respect to such
partial payment.
(b) The term "Losses" shall mean all losses, liabilities, damages,
deficiencies, costs or expenses of whatever kind or nature, foreseen or
unforeseen (including, without limitation, reasonable attorneys fees and
expenses) suffered or incurred by the Company and/or Newco and their directors,
officers, employees, affiliates and assigns (each an "Covered Party"), based
upon, arising out of or otherwise in respect of any inaccuracy in or any breach
of any representation or warranty in any Covered Section or breach or violation
of any covenant or agreement of the Company contained in Article 6 of which the
Company, Newco or ERP obtains knowledge on or prior to the Determination Date
(as defined herein). If a claim is made by or on behalf of the holders of the
Section 6.12 Debt prior to the Determination Date (as herein defined) that
defaults or events of default exist under the Note Purchase Agreement, any such
defaults or events of default existed as of the Effective Time and, as a result
of such claims, the Section 6.12 Debt is not repaid in whole or in part, then
"Losses" shall include all fees, costs and expenses paid or incurred by the
Company to induce the holders of the Section 6.12 Debt to waive, or accept a
cure of, or amend the Note Purchase Agreement or the notes issues thereunder to
eliminate, such defaults or events of default, including, without, limitation,
any default interest, late payment charges or, if the holders of the Section
6.12 Debt require an increase in the interest rate under the Section 6.12 Debt,
the amount of such increased interest paid for any prior period of time and the
net present value of such increased interest that becomes payable in the future.
(c) The term "Determination Date" shall mean the later of (i) December
15, 2000 or (ii) the date which is six months following the Effective Time;
provided, however, if any claim or other matter which may result in any Losses
is pending on the Determination Date as so determined, the Determination Date
shall be extended until the date of the final, binding resolution of such Losses
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(including, without limitation, any settlement of such claims or other matters
approved by the Board of Directors of the Company in its sole discretion).
This Section 9.1 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time.
SECTION 9.2 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be 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 ERP, Acquisition or Newco:
ERP Operating Limited Partnership
Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
With a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
(b) If to the Company:
Globe Business Resources, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
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With a copy to:
Xxxxxxx, Xxxxxxxx & Xxxxxxx, P.L.L.
1400 Provident Tower
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
All notices shall be deemed given only when actually received.
SECTION 9.3 INTERPRETATION. All references made herein to any party
shall include any predecessor to such party. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
SECTION 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 party.
SECTION 9.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement and the Confidentiality Agreements and the other agreements entered
into in connection with the Transactions (a) 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 (b)
except as provided in Section 6.11 ("Third Party Provisions"), are not intended
to confer upon any person other than the parties hereto any rights or remedies.
The Third Party Provisions may be enforced by the beneficiaries thereof or on
behalf of the beneficiaries thereof by the officers and directors of the Company
who had been officers and directors of the Company prior to the Effective Time.
The Company shall not be deemed to have made to ERP or Newco any representation
or warranty including with respect to any projections, estimates or budgets of
future revenues, expenses or expenditures or future results of operations except
other than as expressly set forth in Article 2 of this Agreement.
SECTION 9.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
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DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICT OF LAWS 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. 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 subject to Article 8, the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any court of
the United States located in the State of Illinois or Ohio or in any Illinois or
Ohio State court located in Illinois or Ohio, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself (without making such
submission exclusive) to the personal jurisdiction of any federal court located
in the State of Illinois or Ohio or any Illinois or Ohio State court in the
event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement and (b) agrees that it will not attempt to deny
or defeat such personal jurisdiction by motion or other request for leave from
any such court.
SECTION 9.9 SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
SECTION 9.10 NON-RECOURSE TO TRUSTEES AND OFFICERS. This Agreement and
all documents, certificates, agreements, understandings and arrangements
relating hereto have been entered into or executed on behalf of the General
Partner of ERP by the undersigned in his capacity as a trustee or officer of the
General Partner of ERP, which has been formed as a Maryland real estate
investment trust pursuant to an Amended and Restated Declaration of Trust of ERP
dated as of November 2, 1992, as amended and restated, and not individually, and
neither the trustees, officers nor shareholders of the General Partner of ERP
shall be personally bound or have any personal liability hereunder. The Company
shall look solely to the assets of ERP for satisfaction of any liability of ERP
with respect to this Agreement and any other agreements to which it is a party.
The Company will not seek recourse or commence any action against any of the
shareholders of the General Partner of ERP or any of their personal assets, and
will not commence any action for money judgments against any of the trustees or
officers of the General Partner of ERP or seek recourse
56
61
against any of their personal assets, for the performance or payment of any
obligation of ERP hereunder or thereunder.
(Remainder of page intentionally blank; signature page follows)
57
62
IN WITNESS WHEREOF, ERP, the Company and Newco have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ERP OPERATING LIMITED
PARTNERSHIP
By:
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
GLOBE BUSINESS RESOURCES, INC.
By:
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman
GLOBE HOLDING CO. INC.
By:
----------------------------
Name: Xxxxx X. Xxxxxx
Title: President
By:
----------------------------
Name: Xxxxx X. Xxxxxx
Title: Secretary
58
63
STOCKHOLDER VOTING AGREEMENT
THIS STOCKHOLDER VOTING AGREEMENT (the "Agreement") dated as of January
13, 2000 between ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited
partnership ("ERP"), and the undersigned holder of shares of common stock, no
par value (the "Common Stock"), of GLOBE BUSINESS RESOURCES, INC., an Ohio
corporation (the "Company") for and on behalf of itself and each of its
affiliates which is a holder of Common Stock (the undersigned holder, the
"Stockholder" and, where the content requires, all such holders, the
"Stockholders" or each a "Stockholder").
WHEREAS, ERP, Globe Holding Co., Inc., a Delaware corporation
("Newco"), and the Company propose to enter into an Agreement and Plan of Merger
dated as of the date hereof (as the same may be amended or supplemented, the
"Agreement and Plan of Merger"; capitalized terms used but not defined herein
shall have the meanings set forth in the Agreement and Plan of Merger) providing
for the merger of Acquisition, an Ohio corporation to be formed, with and into
the Company (the "Merger"), upon the terms and subject to the conditions set
forth in the Agreement and Plan of Merger;
WHEREAS, the Stockholder owns the number of shares of Common Stock set
forth below his name on the signature page of this Agreement (such shares of
Common Stock, the "Existing Shares" and, together with any other shares of
capital stock of the Company acquired by such Stockholder after the date hereof
and during the term of this Agreement, being collectively referred to herein as
the "Subject Shares"); and
WHEREAS, as a condition to its willingness to enter into the Agreement
and Plan of Merger, ERP has requested that Stockholder enter into this
Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, the parties agree
as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Stockholder
hereby represents and warrants to ERP as of the date hereof as follows:
(a) Stockholder has all requisite legal capacity, power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Stockholder and constitutes a
valid and binding obligation of the Stockholder enforceable in
accordance with its terms. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby
and compliance with the terms hereof will not, conflict with, or result
in any breach or violation of, or default (with or without notice or
lapse of time or both) under any provision of, any agreement to which
any Stockholder is a party. Except as
64
contemplated by that certain Formation and Investment Agreement dated
as of the date hereof (the "Formation Agreement"), the Existing Shares
are not subject to any lien, pledge or encumbrance of any kind except
for any encumbrances under the terms of the Stockholder's margin
account in which the Existing Shares are held, but with respect to such
margin account, only for the period permitted by, and subject to the
provisions of, the Formation Agreement.
(b) Each Stockholder is the record holder or beneficial owner
of the number of Existing Shares as is set forth on the signature page
hereto. On the date hereof, the Existing Shares set forth on the
signature page hereto constitute all of the outstanding shares of
Common Stock owned of record or beneficially by such Stockholder.
Stockholder does not have record or beneficial ownership of any shares
of Common Stock not set forth on the signature page hereto. Each
Stockholder has sole power of disposition with respect to all of the
Existing Shares set forth on the signature page hereto and sole voting
power with respect to the matters set forth in Section 3 hereof and
sole power to demand dissenter's or appraisal rights, in each case with
respect to all of the Existing Shares set forth on the signature page
hereto, with no restrictions on such rights, subject to the terms of
this Agreement.
(c) Each Stockholder's Existing Shares and the certificates
representing such shares and the Subject Shares and the certificates
representing such shares when acquired are now and at all times during
the term hereof will be held by such Stockholder, or by a nominee or
custodian for the benefit of such Stockholder, free and clear of all
liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising
hereunder or under the terms of the Stockholder's margin account in
which the Existing Shares are held, but with respect to such margin
account, only for the period permitted by, and subject to the
provisions of, the Formation Agreement.
(d) The Stockholder is a bona fide resident of the State set
forth below Stockholder's name on the signature page hereto.
2. REPRESENTATIONS AND WARRANTIES OF ERP. ERP hereby represents and
warrants to the Stockholder that ERP has all requisite limited partnership power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the general
partner of ERP, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary limited partnership action on the
part of ERP. This Agreement has been duly executed and delivered by the general
partner of ERP and constitutes a valid and binding obligation of ERP enforceable
in accordance with its terms.
3. COVENANTS OF STOCKHOLDER. From and after the date hereof and until
the termination of this Agreement in accordance with Section 7, Stockholder
agrees as follows:
2
65
(a) At any meeting of stockholders of the Company called to
vote upon the Merger or the Agreement and Plan of Merger or any
adjournment thereof or in any other circumstances upon which a vote,
consent or other approval with respect to the Merger or the
transactions contemplated by the Agreement and Plan of Merger is
sought, each Stockholder shall vote (or cause to be voted) all of the
Subject Shares in favor of the Merger, the adoption by the Company of
the Agreement and Plan of Merger and the approval of the terms thereof
and the transaction contemplated thereby.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, each
Stockholder shall vote (or cause to be voted) all of the Subject Shares
against (i) any merger agreement or merger (other than the Agreement
and Plan of Merger and the Merger), consolidation, combination, sale of
assets, reorganization, recapitalization, dissolution, liquidation or
winding-up of or by the Company or any other takeover proposal
(collectively, "Takeover Proposal"), (ii) any action or agreement that
would result in a breach of any covenant, representation or warranty or
any other obligation or agreement of the Company under the Agreement
and Plan of Merger or this Agreement or (iii) (x) any material
amendment of the Company's articles of incorporation or code of
regulations, (y) any change in a majority of the persons who constitute
the Board of Directors of the Company or (z) any other proposal or
transaction involving the Company, which is intended by any Stockholder
to, or which ERP notifies any Stockholder that ERP reasonably believes
will, impede, frustrate, prevent, delay or nullify (A) the ability of
the Company to consummate the Merger or (B) any of the transactions
contemplated by this Agreement or the Agreement and Plan of Merger.
(c) Except as contemplated by the Formation Agreement,
Stockholder agrees not to (i) offer to sell, sell, transfer, encumber,
pledge, assign or otherwise dispose of (including by gift)
(collectively, "Transfer"), or enter into any contract, option or other
arrangement with respect to or consent to the Transfer of, the Subject
Shares or any interest therein to any person other than pursuant to the
terms of the Merger, (ii) except as contemplated hereby, grant any
proxies or powers of attorney with respect to the Subject Shares,
deposit any Subject Shares into a voting trust or enter into any voting
arrangement with respect to the Subject Shares, or any interest in the
foregoing, except with ERP, (iii) take any action that would make any
representation or warranty of such Stockholder contained herein untrue
or incorrect to have the effect of preventing or disabling the
Stockholder from performing any of its obligations under this Agreement
or (iv) commit or agree to take any of the foregoing actions.
(d) Stockholder hereby irrevocably waives and agrees not to
exercise any rights of appraisal or rights to dissent from the Merger
that the Stockholder may have.
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66
(e) Stockholder agrees with, and covenants to, ERP that the
Stockholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Subject Shares, unless such transfer is made in
compliance with this Agreement.
(f) Stockholder will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to the sale, voting or
other disposition of the Existing Shares or a business combination
transaction involving the Company. Stockholder shall not directly or
indirectly, through any employee of the Company, representative, agent
or other person, solicit or encourage the initiation or submission of
any direct or indirect inquiries, proposals or offers regarding any
acquisition, merger, takeover bid or sale of all or any of the assets
or any shares of capital stock of the Company, whether or not in
writing and whether or not delivered to the Company or to the
stockholders of the Company generally (including, without limitation,
by way of a tender offer) by any party other than ERP or its affiliates
(any such inquiry, proposal or offer being referred to herein as an
"Acquisition Proposal"); provided, however, that nothing contained in
this Agreement shall prevent any Stockholder from considering or
negotiating, solely in his capacity as a director of the Company, an
unsolicited, bona fide Acquisition Proposal in accordance with Section
5.1 of the Agreement and Plan of Merger. Stockholder will immediately
notify ERP, orally and in writing, of any direct or indirect contact
related in any way to an Acquisition Proposal, including the identity
of the person involved in such contact, or on whose behalf such contact
is made, and the terms and conditions of any Acquisition Proposal made.
(g) THE STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS ERP AND ANY
DESIGNEE OF ERP, AND EACH OF THEM INDIVIDUALLY, STOCKHOLDER'S
IRREVOCABLE (UNTIL THE TERMINATION OF THIS AGREEMENT) PROXY AND
ATTORNEY-IN-FACT WITH FULL POWER OF SUBSTITUTION TO VOTE THE SUBJECT
SHARES OF STOCKHOLDER AS INDICATED IN SECTION 3(A) AND 3(B) ABOVE. THE
STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION
OF THIS AGREEMENT) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION TO REVOKE AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY STOCKHOLDER WITH RESPECT TO SUCH STOCK HOLDER'S SUBJECT
SHARES.
4. FORMATION AGREEMENT. Notwithstanding anything herein to the
contrary, the Stockholder's execution of the Formation Agreement shall not be
deemed to be a violation or breach of this Agreement in any manner.
5. FURTHER ASSURANCES. The Stockholder will, from time to time, execute
and deliver, or cause to be executed and delivered, such additional or further
consents, documents and other
4
67
instruments as ERP may reasonably request for the purpose of effectively
carrying out the transactions contemplated by this Agreement.
6. ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties without the
prior written consent of the other parties. This Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successor and assigns.
7. TERMINATION. This Agreement shall terminate, and no party shall have
any rights or obligations hereunder and this Agreement shall become null and
void and have no further effect upon the Effective Time or sooner termination of
the Agreement and Plan of Merger pursuant to Section 8.1 thereof, and the
payment, if required, by the Company to ERP of the Break-Up Fee or the ERP
Liquidated Damages Amount. Nothing in this Section 7 shall relieve any party of
liability for breach of this Agreement.
8. COSTS AND EXPENSES. All costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such expenses.
9. GENERAL PROVISIONS.
(a) AMENDMENTS. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) NOTICE. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to ERP in
accordance with Section 9.2 of the Agreement and Plan of Merger and to
Stockholder at its address set forth on the signature page of this
Agreement (or at such other address for a party as shall be specified
by like notice).
(c) INTERPRETATION. When a reference is made in this Agreement
to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Wherever the words
"include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
(d) SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to
any party. Upon such determination that any
5
68
term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby may be consummated as originally
contemplated to the fullest extent possible.
(e) 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 of the
counterparts have been signed by each of the parties and delivered to
the one party, it being understood that each party need not sign the
same counterpart.
(f) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement (including the documents and instruments referred to herein)
(i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (ii) is not intended to
confer upon any Person other than the parties hereto any rights or
remedies hereunder.
(g) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law thereof.
10. ENFORCEMENT. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Ohio or in an Ohio state court, this being in addition
to any other remedy to which they are entitled at law or in equity. In addition,
each of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any Federal court located in the State of Ohio or any Ohio state
court in the event any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court; (iii) agrees that such party will not bring any
action relating to this Agreement or the transactions contemplated hereby in any
court other than a Federal court sitting in the State of Ohio or an Ohio state
court and (iv) waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
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69
11. JOINDER. If the Stockholder resides in a community property state,
the Stockholder has delivered to ERP a spousal joinder or consent in the form
heretofore provided by ERP.
(signature page follows)
7
70
IN WITNESS WHEREOF, ERP has caused this Agreement to be signed by its
general partner and Stockholder has signed this Agreement, all as of the date
first written above.
ERP OPERATING LIMITED
PARTNERSHIP
By: Equity Residential Properties Trust, its
general partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
STOCKHOLDER
By:
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Address: 00000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
By:
-----------------------------------------
Name: Xxxxx X. Xxxxxx, as custodian
for Xxxxxxxx X. Xxxxxx
Address: 00000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
By:
-----------------------------------------
Name: Xxxxx X. Xxxxxx, as custodian
for Xxxxx X. Xxxxxx
Address: 00000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxx 00000
Aggregate Number of Existing Shares: 772,630
8
71
JOINDER OF SPOUSE
I, Xxxxxxxxx X. Xxxxxx, spouse of Xxxxx X. Xxxxxx, acknowledge that I
have read the Stockholder Voting Agreement and the Formation and Investment
Agreement, each dated as of January 13, 2000 both of which this Joinder is
attached as an addendum (each an "Agreement," and together the "Agreements") and
that I know the contents thereof. All capitalized terms not defined herein shall
have the meanings set forth in the Agreements.
I am aware that by the provisions of the Stockholder Voting Agreement
(a) my spouse is required to vote his Subject Shares in favor of the Merger, the
adoption by the Company of the Agreement and Plan of Merger and the approval of
the terms thereof and the transactions thereby; (b) certain other restrictions
are imposed upon the sale, transfer or other disposition of the Subject Shares;
(c) my spouse irrevocably waives and agrees not to exercise any rights of
appraisal or rights to dissent from the Merger that my spouse may have; (d) my
spouse must terminate any activities, negotiations or discussions with any
parties heretofore conducted with respect to the sale, voting or other
disposition of the Existing Shares or a business combination transaction
involving the Company; and (e) my spouse granted and appointed ERP and any
designee of ERP, his irrevocable (until termination of the Agreement) proxy and
attorney-in-fact to vote his Subject Shares.
I am aware that by the provisions of the Formation and Investment
Agreement (a) my spouse has agreed, subject to certain conditions, to contribute
certain of his shares of GBR Common Stock to Newco; (b) the shares of Class B
Common Stock that he would receive in exchange therefor will be subject to
certain restrictions on transfer (whether voluntary or involuntary) as set forth
in the Stockholders Agreement; (c) my spouses' shares of Class B Common Stock
are subject to certain buy-back provisions whereby ERP or an affiliate of ERP or
others may buy-back his shares of Class B Common Stock; (d) my spouses' shares
of Class B Common Stock will be subject to certain "drag-along" rights; (e) my
spouse will deposit certain shares of his GBR Common Stock into an escrow
account; and (f) if my spouse is terminated by the Company for any reason
(whether by death, disability, termination or otherwise), ERP may be entitled to
purchase his shares of Class B Common Stock at pre-determined valuation
I hereby agree that my interest, if any, in the Existing Shares subject
to the Stockholder Voting Agreement and the Formation and Investment Agreement
shall be irrevocably bound by the Agreement. I understand that the execution of
this Joinder of Spouse shall not create any right or interest in any of the
shares of stock described herein.
I am aware that the legal and related matters contained in the
Agreements are complex and that I am free to seek independent professional
guidance or counsel with respect to this Joinder. I have either sought such
guidance or counsel or determined after reviewing the Agreements carefully that
I will waive such right.
[signature page follows]
72
Dated as of the 13th day of January, 2000.
By:
-----------------------------
Xxxxxxxxx X. Xxxxxx
73
STOCKHOLDER VOTING AGREEMENT
THIS STOCKHOLDER VOTING AGREEMENT (the "Agreement") dated as of January
13, 2000 between ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited
partnership ("ERP"), and the undersigned holder of shares of common stock, no
par value (the "Common Stock"), of GLOBE BUSINESS RESOURCES, INC., an Ohio
corporation (the "Company") for and on behalf of itself and each of its
affiliates which is a holder of Common Stock (the undersigned holder, the
"Stockholder" and, where the content requires, all such holders, the
"Stockholders" or each a "Stockholder").
WHEREAS, ERP, Globe Holding Co., Inc., a Delaware corporation
("Newco"), and the Company propose to enter into an Agreement and Plan of Merger
dated as of the date hereof (as the same may be amended or supplemented, the
"Agreement and Plan of Merger"; capitalized terms used but not defined herein
shall have the meanings set forth in the Agreement and Plan of Merger) providing
for the merger of Acquisition, an Ohio corporation to be formed, with and into
the Company (the "Merger"), upon the terms and subject to the conditions set
forth in the Agreement and Plan of Merger;
WHEREAS, the Stockholder owns the number of shares of Common Stock set
forth below his name on the signature page of this Agreement (such shares of
Common Stock, the "Existing Shares" and, together with any other shares of
capital stock of the Company acquired by such Stockholder after the date hereof
and during the term of this Agreement, being collectively referred to herein as
the "Subject Shares"); and
WHEREAS, as a condition to its willingness to enter into the Agreement
and Plan of Merger, ERP has requested that Stockholder enter into this
Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, the parties agree
as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Stockholder
hereby represents and warrants to ERP as of the date hereof as follows:
(a) Stockholder has all requisite legal capacity, power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Stockholder and constitutes a
valid and binding obligation of the Stockholder enforceable in
accordance with its terms. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby
and compliance with the terms hereof will not, conflict with, or result
in any breach or violation of, or default (with or without notice or
lapse of time or both) under any provision of, any agreement to which
any Stockholder is a party. Except as
74
contemplated by that certain Formation and Investment Agreement dated
as of the date hereof (the "Formation Agreement"), the Existing Shares
are not subject to any lien, pledge or encumbrance of any kind except
for any encumbrances under the terms of the Stockholder's margin
account in which the Existing Shares are held, but with respect to such
margin account, only for the period permitted by, and subject to the
provisions of, the Formation Agreement.
(b) Each Stockholder is the record holder or beneficial owner
of the number of Existing Shares as is set forth on the signature page
hereto. On the date hereof, the Existing Shares set forth on the
signature page hereto constitute all of the outstanding shares of
Common Stock owned of record or beneficially by such Stockholder.
Stockholder does not have record or beneficial ownership of any shares
of Common Stock not set forth on the signature page hereto. Each
Stockholder has sole power of disposition with respect to all of the
Existing Shares set forth on the signature page hereto and sole voting
power with respect to the matters set forth in Section 3 hereof and
sole power to demand dissenter's or appraisal rights, in each case with
respect to all of the Existing Shares set forth on the signature page
hereto, with no restrictions on such rights, subject to the terms of
this Agreement.
(c) Each Stockholder's Existing Shares and the certificates
representing such shares and the Subject Shares and the certificates
representing such shares when acquired are now and at all times during
the term hereof will be held by such Stockholder, or by a nominee or
custodian for the benefit of such Stockholder, free and clear of all
liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising
hereunder or under the terms of the Stockholder's margin account in
which the Existing Shares are held, but with respect to such margin
account, only for the period permitted by, and subject to the
provisions of, the Formation Agreement.
(d) The Stockholder is a bona fide resident of the State set
forth below Stockholder's name on the signature page hereto.
2. REPRESENTATIONS AND WARRANTIES OF ERP. ERP hereby represents and
warrants to the Stockholder that ERP has all requisite limited partnership power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the general
partner of ERP, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary limited partnership action on the
part of ERP. This Agreement has been duly executed and delivered by the general
partner of ERP and constitutes a valid and binding obligation of ERP enforceable
in accordance with its terms.
3. COVENANTS OF STOCKHOLDER. From and after the date hereof and until
the termination of this Agreement in accordance with Section 7, Stockholder
agrees as follows:
2
75
(a) At any meeting of stockholders of the Company called to
vote upon the Merger or the Agreement and Plan of Merger or any
adjournment thereof or in any other circumstances upon which a vote,
consent or other approval with respect to the Merger or the
transactions contemplated by the Agreement and Plan of Merger is
sought, each Stockholder shall vote (or cause to be voted) all of the
Subject Shares in favor of the Merger, the adoption by the Company of
the Agreement and Plan of Merger and the approval of the terms thereof
and the transaction contemplated thereby.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, each
Stockholder shall vote (or cause to be voted) all of the Subject Shares
against (i) any merger agreement or merger (other than the Agreement
and Plan of Merger and the Merger), consolidation, combination, sale of
assets, reorganization, recapitalization, dissolution, liquidation or
winding-up of or by the Company or any other takeover proposal
(collectively, "Takeover Proposal"), (ii) any action or agreement that
would result in a breach of any covenant, representation or warranty or
any other obligation or agreement of the Company under the Agreement
and Plan of Merger or this Agreement or (iii) (x) any material
amendment of the Company's articles of incorporation or code of
regulations, (y) any change in a majority of the persons who constitute
the Board of Directors of the Company or (z) any other proposal or
transaction involving the Company, which is intended by any Stockholder
to, or which ERP notifies any Stockholder that ERP reasonably believes
will, impede, frustrate, prevent, delay or nullify (A) the ability of
the Company to consummate the Merger or (B) any of the transactions
contemplated by this Agreement or the Agreement and Plan of Merger.
(c) Except as contemplated by the Formation Agreement,
Stockholder agrees not to (i) offer to sell, sell, transfer, encumber,
pledge, assign or otherwise dispose of (including by gift)
(collectively, "Transfer"), or enter into any contract, option or other
arrangement with respect to or consent to the Transfer of, the Subject
Shares or any interest therein to any person other than pursuant to the
terms of the Merger, (ii) except as contemplated hereby, grant any
proxies or powers of attorney with respect to the Subject Shares,
deposit any Subject Shares into a voting trust or enter into any voting
arrangement with respect to the Subject Shares, or any interest in the
foregoing, except with ERP, (iii) take any action that would make any
representation or warranty of such Stockholder contained herein untrue
or incorrect to have the effect of preventing or disabling the
Stockholder from performing any of its obligations under this Agreement
or (iv) commit or agree to take any of the foregoing actions.
(d) Stockholder hereby irrevocably waives and agrees not to
exercise any rights of appraisal or rights to dissent from the Merger
that the Stockholder may have.
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76
(e) Stockholder agrees with, and covenants to, ERP that the
Stockholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Subject Shares, unless such transfer is made in
compliance with this Agreement.
(f) Stockholder will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to the sale, voting or
other disposition of the Existing Shares or a business combination
transaction involving the Company. Stockholder shall not directly or
indirectly, through any employee of the Company, representative, agent
or other person, solicit or encourage the initiation or submission of
any direct or indirect inquiries, proposals or offers regarding any
acquisition, merger, takeover bid or sale of all or any of the assets
or any shares of capital stock of the Company, whether or not in
writing and whether or not delivered to the Company or to the
stockholders of the Company generally (including, without limitation,
by way of a tender offer) by any party other than ERP or its affiliates
(any such inquiry, proposal or offer being referred to herein as an
"Acquisition Proposal"); provided, however, that nothing contained in
this Agreement shall prevent any Stockholder from considering or
negotiating, solely in his capacity as a director of the Company, an
unsolicited, bona fide Acquisition Proposal in accordance with Section
5.1 of the Agreement and Plan of Merger. Stockholder will immediately
notify ERP, orally and in writing, of any direct or indirect contact
related in any way to an Acquisition Proposal, including the identity
of the person involved in such contact, or on whose behalf such contact
is made, and the terms and conditions of any Acquisition Proposal made.
(g) THE STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS ERP AND ANY
DESIGNEE OF ERP, AND EACH OF THEM INDIVIDUALLY, STOCKHOLDER'S
IRREVOCABLE (UNTIL THE TERMINATION OF THIS AGREEMENT) PROXY AND
ATTORNEY-IN-FACT WITH FULL POWER OF SUBSTITUTION TO VOTE THE SUBJECT
SHARES OF STOCKHOLDER AS INDICATED IN SECTION 3(A) AND 3(B) ABOVE. THE
STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION
OF THIS AGREEMENT) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION TO REVOKE AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY STOCKHOLDER WITH RESPECT TO SUCH STOCK HOLDER'S SUBJECT
SHARES.
4. FORMATION AGREEMENT. Notwithstanding anything herein to the
contrary, the Stockholder's execution of the Formation Agreement shall not be
deemed to be a violation or breach of this Agreement in any manner.
5. FURTHER ASSURANCES. The Stockholder will, from time to time, execute
and deliver, or cause to be executed and delivered, such additional or further
consents, documents and other
4
77
instruments as ERP may reasonably request for the purpose of effectively
carrying out the transactions contemplated by this Agreement.
6. ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties without the
prior written consent of the other parties. This Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successor and assigns.
7. TERMINATION. This Agreement shall terminate, and no party shall have
any rights or obligations hereunder and this Agreement shall become null and
void and have no further effect upon the Effective Time or sooner termination of
the Agreement and Plan of Merger pursuant to Section 8.1 thereof, and the
payment, if required, by the Company to ERP of the Break-Up Fee or the ERP
Liquidated Damages Amount. Nothing in this Section 7 shall relieve any party of
liability for breach of this Agreement.
8. COSTS AND EXPENSES. All costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such expenses.
9. GENERAL PROVISIONS.
(a) AMENDMENTS. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) NOTICE. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to ERP in
accordance with Section 9.2 of the Agreement and Plan of Merger and to
Stockholder at its address set forth on the signature page of this
Agreement (or at such other address for a party as shall be specified
by like notice).
(c) INTERPRETATION. When a reference is made in this Agreement
to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Wherever the words
"include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
(d) SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to
any party. Upon such determination that any
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78
term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby may be consummated as originally
contemplated to the fullest extent possible.
(e) 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 of the
counterparts have been signed by each of the parties and delivered to
the one party, it being understood that each party need not sign the
same counterpart.
(f) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement (including the documents and instruments referred to herein)
(i) constitutes the entire agree ment and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (ii) is not intended to
confer upon any Person other than the parties hereto any rights or
remedies hereunder.
(g) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law thereof.
10. ENFORCEMENT. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Ohio or in an Ohio state court, this being in addition
to any other remedy to which they are entitled at law or in equity. In addition,
each of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any Federal court located in the State of Ohio or any Ohio state
court in the event any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court; (iii) agrees that such party will not bring any
action relating to this Agreement or the transactions contemplated hereby in any
court other than a Federal court sitting in the State of Ohio or an Ohio state
court and (iv) waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
6
79
11. JOINDER. If the Stockholder resides in a community property state,
the Stockholder has delivered to ERP a spousal joinder or consent in the form
heretofore provided by ERP.
(signature page follows)
7
80
IN WITNESS WHEREOF, ERP has caused this Agreement to be signed by its
general partner and Stockholder has signed this Agreement, all as of the date
first written above.
ERP OPERATING LIMITED
PARTNERSHIP
By: Equity Residential Properties Trust, its
general partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
STOCKHOLDER
By:
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Address: 000 X. Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
By:
-----------------------------------------
Name: Xxxxx X. Xxxxxx, Trustee for the
Xxxxxx Trust
Address: 000 X. Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Number of Existing Shares: 705,709
8
81
STOCKHOLDER VOTING AGREEMENT
THIS STOCKHOLDER VOTING AGREEMENT (the "Agreement") dated as of January
13, 2000 between ERP OPERATING LIMITED PARTNERSHIP, an Illinois limited
partnership ("ERP"), and the undersigned holder of shares of common stock, no
par value (the "Common Stock"), of GLOBE BUSINESS RESOURCES, INC., an Ohio
corporation (the "Company") for and on behalf of itself and each of its
affiliates which is a holder of Common Stock (the undersigned holder, the
"Stockholder" and, where the content requires, all such holders, the
"Stockholders" or each a "Stockholder").
WHEREAS, ERP, Globe Holding Co., Inc., a Delaware corporation
("Newco"), and the Company propose to enter into an Agreement and Plan of Merger
dated as of the date hereof (as the same may be amended or supplemented, the
"Agreement and Plan of Merger"; capitalized terms used but not defined herein
shall have the meanings set forth in the Agreement and Plan of Merger) providing
for the merger of Acquisition, an Ohio corporation to be formed, with and into
the Company (the "Merger"), upon the terms and subject to the conditions set
forth in the Agreement and Plan of Merger;
WHEREAS, the Stockholder owns the number of shares of Common Stock set
forth below his name on the signature page of this Agreement (such shares of
Common Stock, the "Existing Shares" and, together with any other shares of
capital stock of the Company acquired by such Stockholder after the date hereof
and during the term of this Agreement, being collectively referred to herein as
the "Subject Shares"); and
WHEREAS, as a condition to its willingness to enter into the Agreement
and Plan of Merger, ERP has requested that Stockholder enter into this
Agreement;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained herein, the parties agree
as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Stockholder
hereby represents and warrants to ERP as of the date hereof as follows:
(a) Stockholder has all requisite legal capacity, power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Stockholder and constitutes a
valid and binding obligation of the Stockholder enforceable in
accordance with its terms. The execution and delivery of this Agreement
do not, and the consummation of the transactions contemplated hereby
and compliance with the terms hereof will not, conflict with, or result
in any breach or violation of, or default (with or without notice or
lapse of time or both) under any provision of, any agreement to which
any Stockholder is a party. Except as
82
contemplated by that certain Formation and Investment Agreement dated
as of the date hereof (the "Formation Agreement"), the Existing Shares
are not subject to any lien, pledge or encumbrance of any kind except
for any encumbrances under the terms of the Stockholder's margin
account in which the Existing Shares are held, but with respect to such
margin account, only for the period permitted by, and subject to the
provisions of, the Formation Agreement.
(b) Each Stockholder is the record holder or beneficial owner
of the number of Existing Shares as is set forth on the signature page
hereto. On the date hereof, the Existing Shares set forth on the
signature page hereto constitute all of the outstanding shares of
Common Stock owned of record or beneficially by such Stockholder.
Stockholder does not have record or beneficial ownership of any shares
of Common Stock not set forth on the signature page hereto. Each
Stockholder has sole power of disposition with respect to all of the
Existing Shares set forth on the signature page hereto and sole voting
power with respect to the matters set forth in Section 3 hereof and
sole power to demand dissenter's or appraisal rights, in each case with
respect to all of the Existing Shares set forth on the signature page
hereto, with no restrictions on such rights, subject to the terms of
this Agreement.
(c) Each Stockholder's Existing Shares and the certificates
representing such shares and the Subject Shares and the certificates
representing such shares when acquired are now and at all times during
the term hereof will be held by such Stockholder, or by a nominee or
custodian for the benefit of such Stockholder, free and clear of all
liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising
hereunder or under the terms of the Stockholder's margin account in
which the Existing Shares are held, but with respect to such margin
account, only for the period permitted by, and subject to the
provisions of, the Formation Agreement.
(d) The Stockholder is a bona fide resident of the State set
forth below Stockholder's name on the signature page hereto.
2. REPRESENTATIONS AND WARRANTIES OF ERP. ERP hereby represents and
warrants to the Stockholder that ERP has all requisite limited partnership power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the general
partner of ERP, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary limited partnership action on the
part of ERP. This Agreement has been duly executed and delivered by the general
partner of ERP and constitutes a valid and binding obligation of ERP enforceable
in accordance with its terms.
3. COVENANTS OF STOCKHOLDER. From and after the date hereof and until
the termination of this Agreement in accordance with Section 7, Stockholder
agrees as follows:
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83
(a) At any meeting of stockholders of the Company called to
vote upon the Merger or the Agreement and Plan of Merger or any
adjournment thereof or in any other circumstances upon which a vote,
consent or other approval with respect to the Merger or the
transactions contemplated by the Agreement and Plan of Merger is
sought, each Stockholder shall vote (or cause to be voted) all of the
Subject Shares in favor of the Merger, the adoption by the Company of
the Agreement and Plan of Merger and the approval of the terms thereof
and the transaction contemplated thereby.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, each
Stockholder shall vote (or cause to be voted) all of the Subject Shares
against (i) any merger agreement or merger (other than the Agreement
and Plan of Merger and the Merger), consolidation, combination, sale of
assets, reorganization, recapitalization, dissolution, liquidation or
winding-up of or by the Company or any other takeover proposal
(collectively, "Takeover Proposal"), (ii) any action or agreement that
would result in a breach of any covenant, representation or warranty or
any other obligation or agreement of the Company under the Agreement
and Plan of Merger or this Agreement or (iii) (x) any material
amendment of the Company's articles of incorporation or code of
regulations, (y) any change in a majority of the persons who constitute
the Board of Directors of the Company or (z) any other proposal or
transaction involving the Company, which is intended by any Stockholder
to, or which ERP notifies any Stockholder that ERP reasonably believes
will, impede, frustrate, prevent, delay or nullify (A) the ability of
the Company to consummate the Merger or (B) any of the transactions
contemplated by this Agreement or the Agreement and Plan of Merger.
(c) Except as contemplated by the Formation Agreement,
Stockholder agrees not to (i) offer to sell, sell, transfer, encumber,
pledge, assign or otherwise dispose of (including by gift)
(collectively, "Transfer"), or enter into any contract, option or other
arrangement with respect to or consent to the Transfer of, the Subject
Shares or any interest therein to any person other than pursuant to the
terms of the Merger, (ii) except as contemplated hereby, grant any
proxies or powers of attorney with respect to the Subject Shares,
deposit any Subject Shares into a voting trust or enter into any voting
arrangement with respect to the Subject Shares, or any interest in the
foregoing, except with ERP, (iii) take any action that would make any
representation or warranty of such Stockholder contained herein untrue
or incorrect to have the effect of preventing or disabling the
Stockholder from performing any of its obligations under this Agreement
or (iv) commit or agree to take any of the foregoing actions.
(d) Stockholder hereby irrevocably waives and agrees not to
exercise any rights of appraisal or rights to dissent from the Merger
that the Stockholder may have.
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84
(e) Stockholder agrees with, and covenants to, ERP that the
Stockholder shall not request that the Company register the transfer
(book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Subject Shares, unless such transfer is made in
compliance with this Agreement.
(f) Stockholder will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to the sale, voting or
other disposition of the Existing Shares or a business combination
transaction involving the Company. Stockholder shall not directly or
indirectly, through any employee of the Company, representative, agent
or other person, solicit or encourage the initiation or submission of
any direct or indirect inquiries, proposals or offers regarding any
acquisition, merger, takeover bid or sale of all or any of the assets
or any shares of capital stock of the Company, whether or not in
writing and whether or not delivered to the Company or to the
stockholders of the Company generally (including, without limitation,
by way of a tender offer) by any party other than ERP or its affiliates
(any such inquiry, proposal or offer being referred to herein as an
"Acquisition Proposal"); provided, however, that nothing contained in
this Agreement shall prevent any Stockholder from considering or
negotiating, solely in his capacity as a director of the Company, an
unsolicited, bona fide Acquisition Proposal in accordance with Section
5.1 of the Agreement and Plan of Merger. Stockholder will immediately
notify ERP, orally and in writing, of any direct or indirect contact
related in any way to an Acquisition Proposal, including the identity
of the person involved in such contact, or on whose behalf such contact
is made, and the terms and conditions of any Acquisition Proposal made.
(g) THE STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS ERP AND ANY
DESIGNEE OF ERP, AND EACH OF THEM INDIVIDUALLY, STOCKHOLDER'S
IRREVOCABLE (UNTIL THE TERMINATION OF THIS AGREEMENT) PROXY AND
ATTORNEY-IN-FACT WITH FULL POWER OF SUBSTITUTION TO VOTE THE SUBJECT
SHARES OF STOCKHOLDER AS INDICATED IN SECTION 3(A) AND 3(B) ABOVE. THE
STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION
OF THIS AGREEMENT) AND COUPLED WITH AN INTEREST AND WILL TAKE SUCH
FURTHER ACTION TO REVOKE AND HEREBY REVOKES ANY PROXY PREVIOUSLY
GRANTED BY STOCKHOLDER WITH RESPECT TO SUCH STOCK HOLDER'S SUBJECT
SHARES.
4. FORMATION AGREEMENT. Notwithstanding anything herein to the
contrary, the Stockholder's execution of the Formation Agreement shall not be
deemed to be a violation or breach of this Agreement in any manner.
5. FURTHER ASSURANCES. The Stockholder will, from time to time, execute
and deliver, or cause to be executed and delivered, such additional or further
consents, documents and other
4
85
instruments as ERP may reasonably request for the purpose of effectively
carrying out the transactions contemplated by this Agreement.
6. ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties without the
prior written consent of the other parties. This Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successor and assigns.
7. TERMINATION. This Agreement shall terminate, and no party shall have
any rights or obligations hereunder and this Agreement shall become null and
void and have no further effect upon the Effective Time or sooner termination of
the Agreement and Plan of Merger pursuant to Section 8.1 thereof, and the
payment, if required, by the Company to ERP of the Break-Up Fee or the ERP
Liquidated Damages Amount. Nothing in this Section 7 shall relieve any party of
liability for breach of this Agreement.
8. COSTS AND EXPENSES. All costs and expenses incurred in connection
with this Agreement and the consummation of the transactions contemplated hereby
shall be paid by the party incurring such expenses.
9. GENERAL PROVISIONS.
(a) AMENDMENTS. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) NOTICE. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to ERP in
accordance with Section 9.2 of the Agreement and Plan of Merger and to
Stockholder at its address set forth on the signature page of this
Agreement (or at such other address for a party as shall be specified
by like notice).
(c) INTERPRETATION. When a reference is made in this Agreement
to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Wherever the words
"include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
(d) SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to
any party. Upon such determination that any
5
86
term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby may be consummated as originally
contemplated to the fullest extent possible.
(e) 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 of the
counterparts have been signed by each of the parties and delivered to
the one party, it being understood that each party need not sign the
same counterpart.
(f) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement (including the documents and instruments referred to herein)
(i) constitutes the entire agree ment and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (ii) is not intended to
confer upon any Person other than the parties hereto any rights or
remedies hereunder.
(g) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law thereof.
10. ENFORCEMENT. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Ohio or in an Ohio state court, this being in addition
to any other remedy to which they are entitled at law or in equity. In addition,
each of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any Federal court located in the State of Ohio or any Ohio state
court in the event any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court; (iii) agrees that such party will not bring any
action relating to this Agreement or the transactions contemplated hereby in any
court other than a Federal court sitting in the State of Ohio or an Ohio state
court and (iv) waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party.
6
87
11. JOINDER. If the Stockholder resides in a community property state,
the Stockholder has delivered to ERP a spousal joinder or consent in the form
heretofore provided by ERP.
(signature page follows)
7
88
IN WITNESS WHEREOF, ERP has caused this Agreement to be signed by its
general partner and Stockholder has signed this Agreement, all as of the date
first written above.
ERP OPERATING LIMITED
PARTNERSHIP
By: Equity Residential Properties
Trust, its general partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
STOCKHOLDER
By:
-------------------------------------
Name: Xxxxx X. Xxxxxx
Address: 0000 Xxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxx 00000
Number of Existing Shares: 381,428
8
