VOTING AGREEMENT
This VOTING AGREEMENT ("Agreement") is entered into as of December
16, 1996 by and among Camden Property Trust, a Texas real estate investment
trust ("CAMDEN"), Paragon Group, Inc., a Maryland corporation (the "COMPANY"),
and each of the undersigned stockholders of the Company and/or limited partners
in Paragon Group L.P. (the "OPERATING PARTNERSHIP") (such stockholders and/or
limited partners each individually referred to herein as a "MAJOR
SECURITYHOLDER" and collectively as the "MAJOR SECURITYHOLDERS");
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of
December 16, 1996 (the "MERGER AGREEMENT") among Camden, Camden Subsidiary,
Inc., a Delaware corporation and a wholly-owned subsidiary of Camden ("CAMDEN
SUB"), and the Company, pursuant to which the Company will be merged with and
into Camden Sub (the "MERGER") and Camden Sub shall be the survivor of the
Merger (all capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement);
WHEREAS, pursuant to Recital (e) of the Merger Agreement, in order
to induce Camden to enter into the Merger Agreement, the Company has agreed to
use its best efforts to cause the persons who are identified on Annex A to the
Merger Agreement to execute and deliver to Camden a Voting Agreement;
WHEREAS, approximately 8.2 percent of the beneficial and record
ownership of the issued and outstanding shares of common stock, $.01 par value
per share, of the Company (the "COMPANY SHARES") and approximately 19.4 percent
of the beneficial and record ownership of the outstanding units of partnership
interest in the Company's Operating Partnership ("UNITS") are held, in the
aggregate, by the Major Securityholders in the manner set forth on Schedule 3(c)
hereto;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DISPOSITION OF COMPANY SHARES AND UNITS
Each Major Securityholder agrees, for the period from the date
hereof through the date on which the Merger is consummated or the Merger
Agreement terminates, whichever is earlier (such period hereinafter referred to
as the "TERM"), that such Major Securityholder, except as contemplated hereby,
(a) will not directly or indirectly sell, transfer, pledge, encumber, assign or
otherwise dispose of , or enter into any contract, option or other agreement or
understanding with respect to the sale, transfer, pledge, encumbrance,
assignment or other disposition of, any Company Shares or Units now owned or
hereafter acquired by such Major
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Securityholder, except for transfers to independent charitable foundations or
institutions and except for transfers approved in writing by Camden, (b) grant
any proxies, deposit any Company Shares or Units into a voting trust or enter
into a voting agreement with respect to any Company Shares or Units or (c) take
any action which would have the effect of preventing or disabling the Major
Securityholder from performing its obligations under this Agreement.
SECTION 2. VOTING
Each Major Securityholder agrees during the Term, to cast all votes
attributable to Company Shares now and hereafter beneficially owned by such
Major Securityholder at any annual or special meeting of stockholders of the
Company, including any adjournments or postponements thereof (a "Meeting"), (a)
in favor of adoption of the Merger Agreement and the transactions contemplated
thereby (including any amendments or modifications of the terms of the Merger
Agreement approved by the board of directors of the Company), and (b) against
approval or adoption of any action or agreement (other than the Merger Agreement
or the transactions contemplated thereby) that would impede, interfere with,
delay, postpone or attempt to discourage the Merger and the Transactions. Each
Major Securityholder also agrees during the Term to exercise all voting, consent
and approval rights attributable to Units now and hereafter beneficially owned
by such Major Securityholder (a) approve and consent to the amendment and
restatement of the Operating Partnership Agreement as provided in Section 1.4 of
the Merger Agreement, (b) if the Required Partnership Vote is not received with
respect to (a), to approve and consent to any Operating Partnership Transaction
elected by the Company pursuant to Section 1.4 of the Merger Agreement, and (c)
vote against approval or adoption of any action or agreement (other than the
Merger Agreement or the transactions contemplated thereby) that would impede,
interfere with, delay, postpone or attempt to discourage the Merger and the
Transactions.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE MAJOR STOCKHOLDERS
Each of the Major Securityholders represents and warrants to Camden
as follows:
(a) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
violate any law, regulation, court order, judgment or decree applicable to such
Major Securityholder, or conflict with or result in any breach of or constitute
a default (or an event which with notice or lapse of time or both would become a
default) under any contract or agreement to which such Major Securityholder is a
party or by which such Major Securityholder is bound or affected, which
conflict, violation, breach or default would materially and adversely affect
such Major Securityholder's ability to perform this Agreement.
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(b) Such Major Securityholder is not required to give any notice or
make any report or other filing with any governmental authority in connection
with the execution or delivery of this Agreement or the performance of such
Major Securityholder's obligations hereunder and no waiver, consent, approval or
authorization of any governmental or regulatory authority or any other person or
entity is required to be obtained by such Major Securityholder for the
performance of such Major Securityholder's obligations hereunder, other than
where the failure to make such filings, give such notices or obtain such
waivers, consents, approvals or authorizations would not materially and
adversely affect such Major Securityholder's ability to perform this Agreement.
(c) The Company Shares set forth opposite the name of such Major
Securityholder on Schedule 3(c) hereto are the only Company Shares owned
beneficially or of record by such Major Securityholder or over which such person
exercises voting control. The Company Units set forth opposite the name of such
Major Securityholder on Schedule 3(c) hereto are the only Company Units owned
beneficially or of record by such Major Securityholder.
SECTION 4. ACKNOWLEDGMENT OF FIDUCIARY DUTY
Camden acknowledges that recommendation for approval by the
Company's Board of Directors of the Merger is subject to the fiduciary duties
and obligations of the Board of Directors to the Company's stockholders, which
may require the Board to withdraw such recommendation following acceptance of a
proposal with respect to a "SUPERIOR COMPETING TRANSACTION" (as defined in the
Merger Agreement) in accordance with Section 7.1 of the Merger Agreement.
Nothing in this Agreement is intended to restrict or limit the Major
Securityholder's rights or obligations solely in his capacity as a director
and/or executive officer of the Company with respect to withdrawal of such
recommendation in such circumstances.
SECTION 5. UNDERSTANDING OF THIS AGREEMENT
Each Major Securityholder has carefully read this Agreement and has
discussed its requirements, to the extent such Major Securityholder believes
necessary, with its counsel (which may be counsel to the Company). The
undersigned further understands that the parties to the Merger Agreement will be
proceeding in reliance upon this Agreement.
SECTION 6. DESCRIPTIVE HEADINGS
The descriptive headings herein are inserted for convenience only
and are not intended to be part of or to affect the meaning or interpretation of
this Agreement.
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SECTION 7. COUNTERPARTS
This Agreement may be executed in counterparts, each of which when
so executed and delivered shall be an original, but all of such counterparts
shall together constitute one and the same instrument.
SECTION 8. ENTIRE AGREEMENT; ASSIGNMENT
This Agreement (i) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties hereto with respect to the subject matter hereof and (ii) shall not be
assigned by operation of law or otherwise.
SECTION 9. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF.
SECTION 10. SPECIFIC PERFORMANCE
The parties hereto agree that if any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached, irreparable damage would occur, no adequate remedy at law
would exist and damages would be difficult to determine, and that the parties
shall be entitled to specific performance of the terms hereof, in addition to
any other remedy at law or equity.
SECTION 11. PARTIES IN INTEREST
This Agreement shall be binding upon and inure solely to the benefit
of each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person or persons any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
SECTION 12. AMENDMENT; WAIVERS
This Agreement shall not be amended, altered or modified except by
an instrument in writing duly executed by each of the parties hereto. No delay
or failure on the part of any party hereto in exercising any right, power or
privilege under this Agreement shall impair any such right, power or privilege
or be construed as a waiver of any default or any acquiescence thereto. No
single or partial exercise of any such right, power or privilege shall preclude
the further exercise of such right, power or privilege, or the exercise of any
other right, power or
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privilege. No waiver shall be valid against any party
hereto, unless made in writing and signed by the party against whom enforcement
of such waiver is sought, and then only to the extent expressly specified
therein.
SECTION 13. CONFLICT OF TERMS
In the event any provision of this Agreement is directly in conflict
with, or inconsistent with, any provision of the Merger Agreement, the provision
of the Merger Agreement shall control.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Voting Agreement, or have caused this Voting Agreement to be duly
executed and delivered in their names and on their behalf as of the date first
written above.
CAMDEN:
CAMDEN PROPERTY TRUST
By /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chairman of the Board
THE COMPANY:
PARAGON GROUP, INC.
By /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title:
MAJOR SECURITYHOLDERS:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
PGI ASSOCIATES, L.P.
By: Texas PGI, Inc., a Texas corporation
General Partner
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title:
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/s/ Xxxxxx X. Xxxxxxxx, Xx.
Xxxxxx X. Xxxxxxxx, Xx.
FWP, L.P.
By: FW Genpar Inc.
By /s/ Xxxxxx X. Xxxxxxxx, Xx.
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title:
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
/s/ Xxx X. Xxxxx
Xxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
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SCHEDULE 3(C)
MAJOR SECURITYHOLDER SHARES % SHARES UNITS % UNITS
-------------------- ------ -------- ----- -------
Xxxxxxx X. Xxxxxx ............. 448,555 3.03% 2,654,544* 14.37%
PGI Associates, L.P. .......... 0 0 2,207,838 11.96%
Xxxxxx X. Xxxxxxxx, Xx ........ 597,000** 4.04% 892,622*** 4.83%
FWP, L.P. ..................... 595,000 4.02% 892,622 4.83%
Xxxxx X. Xxxxx ................ 96,658 0.65% 389,177**** 2.11%
Xxx X. Xxxxx .................. 40,847 0.28% 35,894 .19%
Xxxxx X. Xxxxx ................ 20,080 0.14% 0 0%
Xxxxxx X. Xxxxx ............... 5,000 0.03% 0 0%
* Includes the 2,207,838 Units owned by PGI Associates L.P. and 376,471
Units owned by Gateway Mall Associates I, L.P.
** Includes the 595,000 shares owned by FWP, L.P.
*** Includes the 892,622 Units owned by FWP, L.P.
**** Includes 376,471 Units owned by Gateway Mall Associates I, L.P.
