Exhibit 10.8
FORM OF OPTION STANDSTILL AGREEMENT
OPTION STANDSTILL AGREEMENT (this "Agreement"), dated as of June __,
1999, between [Director] (the "Original Optionholder") and Starwood Financial
Trust, a Maryland real estate investment trust (the "Rightholder").
RECITALS
A. Pursuant to the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of June ___, 1999, by and among the Rightholder, ST Merger
Sub, Inc., a Maryland corporation ("Starwood Sub"), and TriNet Corporate Realty
Trust, Inc., a Maryland corporation ("TriNet"), the Rightholder, Starwood Sub
and TriNet have agreed, among other things, to enter into a transaction (the
"Merger") in which, subject to the terms and conditions of the Merger Agreement,
Starwood Sub will merge with and into TriNet, with TriNet being the surviving
corporation.
B. Pursuant to an Agreement and Plan of Merger (the "Incorporation
Merger Agreement"), dated as of June___, 1999, by and between the Rightholder
and Starwood Financial, Inc., a newly-formed Maryland corporation ("New
Starwood"), the Rightholder intends to merge with and into New Starwood (the
"Incorporation Merger"), with New Starwood being the surviving corporation.
C. The Original Optionholder, holds options to acquire common stock,
par value $0.01 per share, of TriNet, which options, pursuant to the Merger
Agreement, will be converted into options to purchase Common Stock (as
hereinafter defined), and the parties hereto wish to restrict the exercise of
such options to purchase Common Stock.
In consideration of the foregoing and of the mutual covenants
contained herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Certain Definitions. The following terms shall have the
following meanings for purposes of this Agreement:
"Affiliate" means, with respect to a Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the power to direct or cause the direction of the
management or policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
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"Board of Directors" means, with respect to a Person, the board of
directors, board of trustees, board of managers or similar body of such Person.
attorneys representing such parties and agreed-upon by such parties.
"Change of Control" means that the common shareholders of the
Company immediately prior to the consummation of a merger, consolidation,
acquisition of assets or securities or a disposition of assets or securities
(other than a public offering of common stock), own less than 50% of the equity
of the surviving or successor entity resulting from such transaction.
"Common Stock" means, (i) prior to the consummation of the
Incorporation Merger, Starwood Common Stock and (ii) subsequent to the
consummation of the Incorporation Merger, New Starwood Common Stock.
"Company" means, prior to the consummation of the Incorporation
Merger, the Rightholder and, subsequent to the consummation of the Incorporation
Merger, New Starwood.
"Deed of Adherence" means a Deed of Adherence to this Agreement
substantially in the form of Exhibit 1 hereto.
"Director" means, (i) prior to the consummation of the Incorporation
Merger, a member of the Board of Trustees of the Rightholder and (ii) subsequent
to the consummation of the Incorporation Merger, a member of the Board of
Directors of New Starwood.
"Enforcement Action" shall have the meaning ascribed to it in
Section 4.2 hereof.
"New Starwood Common Stock" means the common stock, par value $0.001
per share, of New Starwood.
"Optionholder" means each of the Original Optionholder and any other
Persons who hold Restricted Options and execute a Deed of Adherence in
accordance with Section 2.2 hereof.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Pro Rata Share" means, with respect to a Person, the fraction, the
numerator of which is the number of shares of Common Stock then owned as of
record by such Person and the denominator of which is the total number of shares
of Common Stock then outstanding.
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"Restricted Options" means all options to purchase Common Stock
issued to the Original Optionholder pursuant the Merger but only for so long as
such options are subject to the transfer restrictions of Sections 2.1 and 2.2
hereof.
"Starwood Common Stock" means the Class A shares of beneficial
interest, par value $1.00 per share, and the Class B shares of beneficial
interest, par value $0.01 per share, of the Rightholder.
"Warranted" means, with respect to an Enforcement Action, that such
Enforcement Action was based on the best knowledge, information and belief,
formed after an inquiry reasonable under the circumstances, of the parties
bringing such Enforcement Action that this Agreement has been breached and that
such Enforcement Action was not presented for any improper purpose, such as to
harass or to cause unnecessary delay or needless increase in litigation costs.
References in this Agreement to a "party" or "parties" are references to a party
or parties (respectively) to this Agreement unless the context requires
otherwise. Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings ascribed to them by the Merger Agreement.
Section 2. Restrictions on Options. Except as provided in Section 3
hereof:
2.1 During the period from the Closing Date until the date
this Agreement terminates in accordance with Section 5 hereof, no Optionholder
shall exercise any Restricted Options.
2.2 No Optionholder shall directly or indirectly sell, pledge,
encumber, transfer, enter into any voting or similar agreement with respect to
or otherwise dispose of (collectively, "Transfer") or enter into any agreement
or series of agreements to Transfer, Restricted Options unless (i) such Transfer
is in accordance with the provisions of the Rightholder's 1996 Long-Term
Incentive Plan; and (ii) all Persons that will receive Restricted Options have
executed a Deed of Adherence prior to such Transfer.
Section 3. Exceptions to Option Restrictions. The restrictions set
forth in Section 2 shall not apply to (i) a Transfer or exercise of Restricted
Options that is made by the Optionholder in response to a "tender offer" with
respect to which the completion of such tender offer is conditioned upon such
completion resulting in a Change of Control; (ii) a Transfer of Restricted
Options (or an exercise of Restricted Options and a Transfer of the Common Stock
issued in respect thereof) that is made to the Person (or any Affiliate of such
Person) receiving control of the Company as a result of a Change of Control;
(iii) a pledge of Restricted Options that is made in order
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to establish a margin account at a reputable brokerage firm; (iv) a pledge of
Restricted Options to a lender in order to effect a bona-fide loan or financing
transaction with such lender which transaction is not intended to circumvent the
transfer restrictions of Section 2 hereof; (v) a Transfer of Restricted Options
to the lender or brokerage firm that is the pledgee with respect to a pledge
described in clause (iii) or (iv) above, or to an Affiliate of such lender or
such brokerage firm or to a purchaser in a foreclosure sale; (vi) a Transfer of
Restricted Options that occurs because of entry by the Shareholders into a
voting agreement, proxy or other arrangement deemed reasonably necessary by the
Board of Directors of the Company to effectuate a merger, consolidation,
amalgamation or other business combination that has been approved by the Board
of Directors of the Company. For the avoidance of doubt, all Restricted Options
Transferred pursuant to exceptions (i), (ii) or (v) listed in this Section 3
shall no longer be deemed to be Restricted Options subsequent to such Transfer.
Section 4. Remedies.
4.1 The parties declare and agree that it is impossible to
measure in money the damages that would be suffered by a party by reason of the
failure by any other party to perform any of its obligations under this
Agreement. Therefore, if any party institutes any action or proceeding to
enforce the provisions of this Agreement, any party against whom such action or
proceeding is brought hereby waives any claim or defense therein that the other
party has an adequate remedy at law and, consequently, the parties hereby agree
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.
4.2 If the Rightholder institutes any action or proceeding (an
"Enforcement Action") to enforce the provisions of this Agreement against an
Optionholder:
4.2.1 If such Enforcement Action results in a court of
competent jurisdiction entering a final judgment in favor of such Optionholder,
the Rightholder shall pay such Optionholder an amount equal to the reasonable
costs and expenses (including the fees and disbursements of attorneys other than
Agreed Counsel) of such Optionholder incurred in connection with the resolution
of such Enforcement Action.
4.2.2 If such Enforcement Action results in a court of
competent jurisdiction entering a final judgment against such Optionholder, the
Optionholder shall pay the Rightholder an amount equal to the product of (x) the
Optionholder's Pro Rata Share times (y) the reasonable costs and expenses
(including the fees and disbursements of attorneys) of such Rightholder incurred
in connection with the resolution of such Enforcement Action.
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4.2.3 Otherwise, each party shall bear its own expenses
incurred in connection with the resolution of Enforcement Actions.
4.3 If any amount payable under Section 4.2.2 hereof is not
paid in full by an Optionholder liable for such amount within 30 calendar days
after written notice requesting such payment is provided to the Optionholder by
the Rightholder, the Company shall not make any distributions (whether cash or
otherwise) to such Optionholder in respect of its equity interests in the
Company until the amount of such distributions withheld equals the amount owed
by such Optionholder.
Section 5. Term and Termination. Unless earlier terminated by a
writing executed by all parties, this Agreement shall terminate on the earlier
of (i) the date falling 12 months and one day after the Closing Date and (ii)
earliest date after the Closing Date on which the Original Optionholder no
longer is a Director.
Section 6. Representations and Warranties. The Original Optionholder
represents and warrants that:
6.1 As of the date hereof, this Agreement has been duly
executed and delivered by the Original Optionholder and constitutes the valid
and binding agreement of the Original Optionholder and is enforceable against
the Original Optionholder in accordance with its terms; and
6.2 As of the date hereof and as of the Closing Date, the
execution, delivery and performance of this Agreement by the Original
Optionholder does not and will not violate or conflict with any Law, contract,
instrument or arrangement to which the Original Optionholder is a party or by
which the Original Optionholder is bound.
Section 7. Miscellaneous.
7.1 Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally or sent by
registered mail or overnight delivery service, in either case postage prepaid,
or delivered by telecopy, facsimile or similar telecommunications equipment. Any
such notice shall be deemed given when so delivered personally or, if sent by
registered mail, five days after the date of deposit in the mails or, if sent by
overnight delivery service, on the business day following deposit with such
delivery service or, if delivered by telecopy, facsimile or similar
telecommunications equipment, at the time of receipt thereof, as follows:
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If to the Original Shareholder, to:
c/o REIT Consulting Services
000 Xxxxx Xxxxx Xxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
If to the Rightholder, to:
Starwood Financial Trust
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxx, General Counsel
with a copy to:
Katten, Muchin & Zavis
000 X. Xxxxxx Xx. #0000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Any party may, by notice to the other parties, designate another address or
person for receipt of notices hereunder. Any additional parties agreeing to be
bound by the terms of this Agreement who execute a Deed of Adherence shall
receive notices hereunder at the location specified in such Deed of Adherence.
7.2 In the event any provision hereof is held void or
unenforceable by any court, such provision shall be severable and shall not
affect the remaining provisions hereof.
7.3 This Agreement reflects the entire agreement among the
parties and supersedes all prior agreements and communications, either oral or
in writing, among the parties with respect to the subject matter hereof.
7.4 This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by an written
instrument signed by all of the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part
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of any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege. The rights
and remedies herein provided are cumulative and are not exclusive of any rights
or remedies that any party may otherwise have at law or in equity.
7.5 This Agreement may not be assigned by any party without
the prior written consent of the other parties except in connection with a
transfer of Restricted Options in accordance with this Agreement. The provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted transferees from and after the
date hereof.
7.6 Each of the parties shall execute such documents and other
papers and take such further actions as may be reasonably required or desirable
to carry out the provisions hereof and the transactions contemplated hereby.
7.7 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE (WITHOUT REGARD TO THE CONFLICTS
OF LAWS, PRINCIPLES OF SUCH STATE).
7.8 Each party to this Agreement agrees that all disputes
between them arising out of or relating to the relationship established between
them in connection with this Agreement, whether arising in contract, tort,
equity, or otherwise, shall be resolved only by federal courts located in New
York, New York, to the extent such courts have jurisdiction. Each of the parties
waives any objection that each may have (including, without limitation, any
objection to the laying of venue or based on forum non conveniens) to the
location of the court in which any proceeding is commenced in accordance with
this paragraph. Each party waives personal service of any process upon him or it
and irrevocably consents to service of process of any of the aforementioned
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage pre-paid, to such persons address
specified in this Agreement or such other address designated by such person in
accordance with the terms of this Agreement.
7.9 This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Option
Standstill Agreement as of the date first above written.
[Original Optionholder]
_______________________
STARWOOD FINANCIAL TRUST
By: ___________________________
Name:
Title:
Exhibit 1
DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made the __________ day of _________
AMONG:
(#) [The Persons then party to the Agreement]; and
(#) [Name of New Optionholder] (the "New Optionholder").
WHEREAS:
(A) On the ___ day of June 1999, the Original Optionholder and the Rightholder
entered into a Option Standstill Agreement (the "Agreement") to which a
form of this Deed is attached as Exhibit 1.
(B) The New Optionholder wishes to [have transferred to him/her/it] options to
purchase [______] Class A Shares, from [name of Old Optionholder] (the
"Old Optionholder") and in accordance with Section 2.2 of the Agreement
has agreed to enter into this Deed.
NOW THIS DEED WITNESSES as follows:
1. Interpretation.
In this Deed, except as the context may otherwise require, all capitalized
terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Agreement.
2. Covenant.
The New Optionholder hereby covenants with and to the Rightholder and the
other Optionholders, to adhere to and be bound by all the duties, burdens
and obligations of an Optionholder under the Agreement and all documents
expressed in writing to be supplemental or ancillary thereto as if the New
Optionholder had been an Optionholder under the Agreement since the date
thereof.
3. Enforceability.
Each other Optionholder and the Rightholder shall be entitled to enforce
the Agreement against the New Optionholder, and the New Optionholder shall
be entitled to all rights and benefits of the Old Optionholder (other than
those that are non-assignable) under the Agreement in each case as if the
New Optionholder had been an Optionholder under the Agreement since the
date thereof.
4. Representations and Warranties.
The New Optionholder represents and warrants as of the date hereof that:
(i) the New Optionholder has all requisite power and authority to enter
into this Deed and the Agreement, and the consummation of all transactions
contemplated by this Deed and the Agreement have been duly authorized by
all necessary action on its part; (ii) this Deed has been duly executed
and delivered by the New Optionholder, and this Deed and the Agreement
constitute the valid and binding agreements of it and are enforceable
against it in accordance with their terms; and (iii) the execution,
delivery of this Deed and performance of this Deed and the Agreement by
the New Optionholder does not and will not violate or conflict with any
organizational document, Law, contract, instrument or arrangement to which
it is a party or by which it is bound.
5. Notices.
All notices to the New Optionholder under Section 7.1 of the Agreement
shall be delivered to:
[Contact Information]
6. Governing Law.
THIS DEED OF ADHERENCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
IN WITNESS WHEREOF, this Deed of Adherence has been executed as a
deed on the date first above written.
[Appropriate Signature Block]
