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Exhibit 99.2
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STOCK PURCHASE AGREEMENT
BETWEEN
EQUITABLE REALTY PORTFOLIO MANAGEMENT, INC.,
AS SELLING SHAREHOLDER
AND
AMERICAN REALTY TRUST, INC.,
AS PURCHASER
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DATED AS OF DECEMBER 23, 1997
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into this
23rd day of December, 1997, between Equitable Realty Portfolio Management, Inc.
(the "Selling Shareholder") and American Realty Trust, Inc. (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Selling Shareholder owns 1,685,556 outstanding shares of
beneficial interest of EQK Realty Investors I, par value $0.01 per share (the
"Common Stock");
WHEREAS, the Selling Shareholder desires to sell to the Purchaser all
of the shares of Common Stock owned by such Selling Shareholder for the
consideration set forth herein; and
WHEREAS, the Purchaser desires to purchase from the Selling
Shareholder such shares of Common Stock on the terms and subject to the
conditions set forth herein; and
WHEREAS, immediately after the execution of this Agreement, the
Purchaser will file a Registration Statement on Form S-3 (the "Registration
Statement") for registration of 623,628 shares of its Preferred Stock (as
defined in Section 1.2) under the Securities Act of 1933, as amended (the
"Securities Act").
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and subject to and on the terms and conditions herein set forth, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE SHARES
Section 1.1. PURCHASE AND SALE OF SHARES. On the Closing Date
(as defined in Section 1.3), pursuant to the terms and conditions of this
Agreement, the Selling Shareholder shall sell and transfer to the Purchaser,
and the Purchaser shall purchase and accept from the Selling Shareholder,
1,685,556 shares of Common Stock (collectively, the "Shares") for the Purchase
Price (as defined in Section 1.2).
Section 1.2. PURCHASE PRICE. The aggregate purchase price payable
by the Purchaser to the Seller for the Shares shall be $3,118,280.00 payable
exclusively as 311,828 shares of Series F Cumulative Convertible Preferred
Stock, par value $2.00 per share, with a stated liquidation value of $10.00 per
share, of the Purchaser (such shares, the "Preferred Stock", and the aggregate
liquidation value of the Preferred Stock so delivered to the Selling
Shareholder, the "Purchase Price").
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Section 1.3. CLOSING. The closing of the purchase and sale of the
Shares contemplated hereby (the "Closing") will take place at the offices of
Xxxxxxx & Xxxxx L.L.P., in Dallas, Texas, at a mutually agreeable time,
following the satisfaction of each of the conditions described in Sections 4.1
and 4.2 hereof, or on such other day as may be mutually agreed upon in writing
by the Purchaser and the Seller (the "Closing Date"). Prior to the Closing
Date, (i) the Selling Shareholder shall have delivered or caused to be
delivered to The Depository Trust Company ("DTC") or a participant thereof (a
"Participant") the certificate or certificates representing the Shares, along
with a duly executed stock power attached thereto and such other assignments or
instruments of conveyance and transfer, in form and substance reasonably
satisfactory to the Purchaser and its counsel, as shall be effective to vest in
the Purchaser all of the Selling Shareholder's right, title and interest in and
to the Shares, and (ii) the Purchaser shall have delivered or caused to be
delivered to DTC or a Participant the certificate or certificates representing
the Preferred Stock, registered in the name of "CEDE & CO.", as DTC's nominee,
along with an irrevocable instruction letter to DTC instructing DTC to release
the Preferred Stock to the Selling Shareholder upon delivery and release by the
Selling Shareholders of the Shares to Purchaser. Notwithstanding the
foregoing, the procedures for delivery of the Shares and the Preferred Stock
set forth above may be varied, if necessary, in order to comply with the
standard practices and procedures of DTC.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. REPRESENTATIONS AND WARRANTIES BY THE SELLING
SHAREHOLDER. The Selling Shareholder hereby covenants with, represents and
warrants to the Purchaser as follows:
(A) Shares. The Shares are now, and on the
Closing Date will be, owned of record and beneficially by the Selling
Shareholder free and clear of any security interest, pledge, option,
lien, claim, commitment, proxy, equity, right, restriction on transfer
or encumbrance of any nature whatsoever (collectively,
"Encumbrances"). The Shares constitute all of the Common Stock owned
by the Selling Shareholder. There are no Encumbrances whatsoever,
fixed or contingent, that directly or indirectly, (i) provide for the
sale, pledge or other transfer or disposition of any of the Shares
held by the Selling Shareholder, any interest therein or any rights
with respect thereto, or relate to the voting, disposition, exercise,
conversion or control of the Shares or (ii) obligate the Selling
Shareholder to grant, offer or enter into any of the foregoing.
Except as provided for herein and except for any restrictions on
transfer under applicable state and federal securities laws, upon the
Closing, the Purchaser will acquire valid and indefeasible title to
the Shares free and clear of any Encumbrance.
(B) Non-Contravention. The execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby by the Selling Shareholder will not
result in a violation or breach of or constitute a default under any
term or provision of articles of incorporation or bylaws of the
Selling Shareholder.
(C) No Conflicts. The execution and delivery of
this Agreement by the Selling Shareholder, and the consummation of the
transactions contemplated hereby, will not
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conflict with or violate any agreement, law, rule, regulation,
ordinance, order, writ, injunction, judgment or decree applicable to
or binding on the Selling Shareholder.
(D) Organization, Qualification and Authority of
the Selling Shareholder. The Selling Shareholder is duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its incorporation. The Selling Shareholder has
all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby and
otherwise perform its obligations hereunder. This Agreement has been
duly authorized, executed and delivered by the Selling Shareholder and
constitutes a legal, valid and binding agreement of the Selling
Shareholder, enforceable against the Selling Shareholder in accordance
with its terms, subject to bankruptcy, court or regulatory agency
order and the exercise of such equitable remedies as may be applicable
or available to the Selling Shareholder.
(E) No Consents or Approvals. The Selling
Shareholder is not required to submit any notice, report or other
filing with any governmental or regulatory authority or
instrumentality, and no waiver, consent, approval or authorization of
any governmental or regulatory authority or any other person is
required to be obtained or made by the Selling Shareholder, in
connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby.
(F) No Commission. The Selling Shareholder has
not employed any broker, agent, finder or advisor in connection with
any transaction contemplated by this Agreement. The Selling
Shareholder hereby indemnifies the Purchaser against any liability for
a broker's commission or agent or finder's fee of any description
incurred by the Selling Shareholder with respect to any transaction
contemplated by this Agreement.
(G) Litigation. As of the date hereof, no
action, suit, proceeding or governmental investigation is pending or,
to the knowledge of the Selling Shareholder, threatened that seeks to
delay or prevent the consummation of the transactions contemplated by
this Agreement.
(H) Disclosure. No representation or warranty by
the Selling Shareholder in this Agreement nor any certificate,
schedule, statement, document or instrument furnished or to be
furnished to the Purchaser pursuant hereto, or in connection with the
execution or performance of this Agreement, contains or will contain
any untrue statement of a material fact or, subject to any applicable
qualifications contained in such certificate, schedule, statement,
document or instrument, omits or will omit to state a material fact
necessary in order to make any statement herein or therein not
misleading, in light of the circumstances under which they were made.
(I) Solvency. The Selling Shareholder is not now
insolvent, nor will it be rendered insolvent by the consummation of
the transactions contemplated by this Agreement. As used in this
Section 2.1(I), "insolvent" means, for the Selling Shareholder, that
the sum of the present fair saleable value of its assets does not
and/or will not exceed its debts and other probable liabilities, and
the term "debts" includes any legal liability, whether matured
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or unmatured, liquidated or unliquidated, absolute, fixed or
contingent, disputed or secured or unsecured.
Section 2.2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser represents and warrants to, and agrees with, the Selling Shareholder
as follows:
(A) Organization and Authority of the Purchaser.
The Purchaser has been duly incorporated, is validly existing and is
in good standing under the laws of the State of Georgia, has all
requisite corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby and otherwise
carry out its obligations hereunder. This Agreement has been duly
authorized, executed and delivered by the Purchaser and constitutes a
legal, valid and binding agreement of the Purchaser, enforceable
against the Purchaser in accordance with its terms, subject to
bankruptcy, court or regulatory agency order and the exercise of such
equitable remedies as may be applicable or available to the Purchaser.
(B) Litigation. As of the date hereof, no
action, suit, proceeding or governmental investigation is pending or,
to the knowledge of the Purchaser, threatened that seeks to delay or
prevent the consummation of the transactions contemplated by this
Agreement.
(C) Non-Contravention. The execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby by the Purchaser will not result in a
violation or breach of or constitute a default under any term or
provision of the articles of incorporation or bylaws of the Purchaser.
(D) No Conflicts. The execution and delivery of
this Agreement by the Purchaser, and the consummation of the
transactions contemplated hereby and thereby, will not conflict with
or violate any agreement, law, rule, regulation, ordinance, order,
writ, injunction, judgment or decree applicable to or binding on the
Purchaser.
(E) No Consents or Approvals. The Purchaser is
not required to submit any notice, report or other filing with any
governmental or regulatory authority or instrumentality, and no
waiver, consent, approval or authorization of any governmental or
regulatory authority or any other person is required to be obtained or
made by the Purchaser, in connection with the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby, other than (i) the filing of the Registration
Statement with the Securities and Exchange Commission (the "SEC"),
(ii) the filing of a certificate of merger for EQK Realty Investors I
("EQK") and ART Newco, L.L.C. with the Secretary of State of the
Commonwealth of Massachusetts, (iii) the filing of a Schedule 13D with
the SEC, and (iv) any such other filings, consents or approvals that
may be necessary or required solely by reason of EQK's (as opposed to
any other third party's) participation in the transactions
contemplated hereby.
(F) Purchase Price. The Purchaser has authorized
the issuance of the number of shares of Preferred Stock necessary to
consummate the transactions contemplated by this Agreement. The
Preferred Stock will, upon consummation of the transactions
contemplated
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by this Agreement, be owned of record and beneficially by the Selling
Shareholder free and clear of any Encumbrances. There are no
Encumbrances whatsoever, fixed or contingent, that directly or
indirectly, (i) provide for the sale, pledge or other transfer or
disposition of any of the Preferred Stock, any interest therein or any
rights with respect thereto, or relate to the voting, disposition,
exercise, conversion or control of the Preferred Stock or (ii)
obligate the Purchaser to grant, offer or enter into any of the
foregoing. Except as provided for herein and except for any
restrictions on transfer under applicable state and federal securities
laws, upon the Closing, the Selling Shareholder will acquire valid and
indefeasible title to the Preferred Stock free and clear of any
Encumbrance.
(G) Commission. Purchaser hereby indemnifies the
Selling Shareholder against any liability for a broker's commission,
finder's fee or other fee of any description incurred by the Purchaser
with respect to any transaction contemplated by this Agreement.
(H) Disclosure. No representation or warranty by
the Purchaser in this Agreement nor any certificate, schedule,
statement, document or instrument furnished or to be furnished to the
Selling Shareholder pursuant hereto, or in connection with the
negotiation, execution or performance of this Agreement, contains or
will contain any untrue statement of a material fact or, subject to
any applicable qualifications contained in such certificate, schedule,
statement, document or instrument, omits or will omit to state a
material fact necessary in order to make any statement herein or
therein not misleading in light of the circumstances under which they
were made.
(I) Registration and Listing of the Preferred
Stock. Following the execution of this Agreement by the Selling
Shareholder, Purchaser will promptly take such actions as are
necessary and within its control to cause the Preferred Stock to
become (i) registered under the Securities Act pursuant to the
Registration Statement, and (ii) listed, and thereafter to continue to
be listed, for trading on the New York Stock Exchange or another
national securities exchange, including, without limitation, the
Nasdaq Stock Market (such securities exchange, the "Securities
Exchange").
ARTICLE III
ADDITIONAL AGREEMENTS OF THE PARTIES
Section 3.1. TRANSFER TAXES. The Purchaser will pay all transfer,
federal, state or local taxes, if any, payable in connection with the transfer
of the Shares pursuant to this Agreement, and the Selling Shareholder will pay
all transfer, federal, state or local taxes, if any, payable in connection with
the transfer or issuance of the Preferred Stock pursuant to this Agreement.
Section 3.2. CONFIDENTIALITY. The Purchaser and the Selling
Shareholder, and each of their respective officers, directors, representatives
and agents ("Representatives"), if any, agree to treat all information
exchanged by the parties hereto and their Representatives in connection with
the transactions contemplated herein, as confidential, including all notes,
analyses, compilations, studies or other documents, whether prepared by any
party hereto or others, which contain or otherwise reflect such information
(collectively, the "Confidential Information"). Except as required by law,
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the Purchaser and the Selling Shareholder agree that they shall not disclose
any Confidential Information to third parties without the express written
consent of each other party hereto. The obligations of the Purchaser and the
Selling Shareholder hereunder will continue in full force and effect until
Closing, and, if this Agreement is terminated, will remain in full force and
effect. The Purchaser and the Selling Shareholder further agree that they (and
their Representatives) will not use any of the Confidential Information for any
reason or purpose other than to evaluate the transactions contemplated by this
Agreement.
The term "Confidential Information" does not include information which
(i) is or becomes generally available to the public other than as a result of
disclosure in breach of this Section 3.2 by any party hereto or any
Representative, (ii) was available to any party hereto on a non-confidential
basis prior to its disclosure to such party by any other party hereto or their
respective Representatives, or (iii) was or is disclosed to any party hereto on
a non-confidential basis from a source other than any other party hereto or
their respective Representatives, provided that such source was or is, to the
best of such party's knowledge, at the time of such disclosure, not prohibited
from transmitting the information to such party or such party's Representatives
by a contractual, legal or fiduciary obligation.
Section 3.3. REGULATORY AND OTHER AUTHORIZATIONS. Each of the
parties hereto will use its commercially reasonable efforts to obtain the
authorizations, consents, orders and approvals of governmental authorities that
may be or become necessary for the performance of his, her or its obligations
pursuant to this Agreement and the consummation of the transactions
contemplated hereby and will cooperate fully with each other in promptly
seeking to obtain such authorizations, consents, orders and approvals as may be
necessary for the performance of their respective obligations pursuant to this
Agreement. The parties hereto will not take any action that will have the
effect of delaying, impairing or impeding the receipt of any required approvals
and will use reasonable efforts to secure such approvals as promptly as
possible.
Section 3.4. SATISFACTION OF CONDITIONS. Each of the parties hereto
will use his, her or its reasonable efforts to satisfy at or prior to the
Closing Date each of the conditions to the other party's obligations set forth
in Article IV hereof.
Section 3.5. FURTHER ASSURANCES. At any time and from time to time
after the Closing, the parties agree to cooperate with each other, to execute
and deliver such other documents, instruments of transfer or assignment, files,
books and records and do all such further acts and things as may be reasonably
required to carry out the transactions contemplated by this Agreement.
Section 3.6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and covenants made pursuant to or in connection
with this Agreement shall survive (A) the execution and delivery of this
Agreement, (B) any investigation at any time made by or on behalf of the
parties hereto and (C) for a period of one year thereafter, the Closing. If
the Closing does not take place, each representation, warranty and covenant
shall terminate upon the termination of this Agreement pursuant to Section 5.1.
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Section 3.7. COVENANT NOT TO PURCHASE ADDITIONAL COMMON STOCK. In
consideration for Purchaser's purchase of Shares from Seller, Seller hereby
covenants that it will not purchase or otherwise acquire any additional shares
of Common Stock for a period of 42 months after the Closing Date.
Section 3.8. RESTRICTIONS ON TRANSFER OF PREFERRED STOCK. Selling
Shareholder understands that it may be deemed to be an "affiliate" of EQK
within the meaning of Rule 145 ("Rule 145") promulgated under the Securities
Act and the applicable regulations promulgated by the Securities and Exchange
Commission (the "SEC"), although nothing contained herein should be construed
as an admission of such fact. Selling Shareholder further understands that, if
it were in fact an affiliate under the Securities Act, its ability to sell,
assign or transfer the Preferred Stock may be restricted unless such
transaction is made in conformity with the provisions of Rule 145. Selling
Shareholder understands that the Preferred Stock may only be sold (i) pursuant
to the Registration Statement or another registration statement with respect to
the Preferred Stock which has been declared effective by the SEC, (ii) in
transactions which comply with the provisions of Rule 145, or (iii) in a
transaction that is exempt from registration under the Securities Act.
Purchaser hereby covenants to maintain the effectiveness of the Registration
Statement for a period of two years after the Closing Date and to provide the
Selling Shareholder or the Securities Exchange, as applicable, upon the request
of the Selling Shareholder, with a resale prospectus relating to the Preferred
Stock during such two-year period. Purchaser further covenants that, during
such two year period, Purchaser shall use all reasonable efforts to make all
filings of the nature specified in paragraph (c)(1) of Rule 144 of the
Securities Act.
ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1. CONDITIONS TO OBLIGATION OF THE SELLING SHAREHOLDER
TO CLOSE. The obligation of the Selling Shareholder to consummate the Closing
is subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, unless waived in writing by the Selling Shareholder:
(A) Regulatory and Other Authorizations. All
authorizations, consents, approvals and orders of, and notices to,
governmental authorities or instrumentalities necessary for the
performance by the Selling Shareholder of this Agreement and the
consummation by the Selling Shareholder of the sale of the Shares and
the other transactions contemplated by this Agreement shall have been
obtained or made, and there shall be in effect no preliminary or
permanent injunction or other order of a court or governmental or
regulatory agency of competent jurisdiction directing that the
transactions contemplated herein, or any of them, not be consummated
(collectively, an "Order").
(B) Representations and Warranties. The
representations and warranties of the Purchaser contained in this
Agreement shall be true and correct in all material respects at the
date hereof, and at and as of the Closing Date, as if they were made
at and as of the Closing Date, except for any representations and
warranties made or given as of a specific date, which shall be true
and correct in all material respects as of such date; and the
Purchaser
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shall have performed or complied in all material respects with all
obligations, agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.
(C) Certificate. The Purchaser shall have
delivered to the Selling Shareholder a certificate of the Purchaser,
dated the Closing Date, to the effect that the condition specified in
paragraph (B) of this Section 4.1 has been satisfied.
(D) Transfer of Preferred Stock. All legal
instruments and other documents required for the Purchaser to effect
the transfer of the Preferred Stock to the Selling Shareholder free
and clear of all liens and encumbrances shall have been duly executed.
(E) Approval of Merger Agreement. The Board of
Trustees and shareholders of EQK shall have approved the Agreement and
Plan of Merger dated as of December __, 1997 by and among the
Purchaser, ART Newco, L.L.C., Basic Capital Management, Inc., EQK,
Equitable Realty Portfolio Management, Inc. and Compass Retail, Inc.
(the "Merger Agreement") and the transactions contemplated thereby,
including without limitation the amendment and restatement of EQK's
Amended and Restated Declaration of Trust and the execution of the new
advisory agreement, identified in the Merger Agreement, between EQK
and Basic Capital Management, Inc.
(F) Effectiveness of Registration Statements.
The Registration Statement shall have been declared effective by the
SEC and no stop order suspending effectiveness of the Registration
Statement shall have been issued by the SEC on or prior to the Closing
Date. In addition, the Purchaser's registration statement on Form S-4
(the "Form S-4 Registration Statement") with respect to the issuance
of Preferred Shares in connection with the Merger Agreement shall have
been declared effective by the SEC and no stop order suspending the
effectiveness of the Form S-4 Registration Statement shall have been
issued by the SEC on or prior to the Closing Date.
Section 4.2. CONDITIONS TO OBLIGATION OF THE PURCHASER TO CLOSE. The
obligation of the Purchaser to consummate the Closing is subject to the
fulfillment, prior to or at the Closing, of each of the following conditions,
unless waived in writing by the Purchaser:
(A) Regulatory and Other Authorizations. All
authorizations, consents, approvals and orders of, and notices to,
governmental authorities or instrumentalities necessary for the
performance by the Purchaser of this Agreement and the consummation by
the Purchaser of the purchase of the Shares and the other transactions
contemplated hereunder shall have been obtained or made and there
shall be no Order in effect.
(B) Representations and Warranties. The
representations and warranties of the Selling Shareholder contained in
this Agreement shall be true and correct in all material respects at
the date hereof, and at and as of the Closing Date, as if they were
made at and as of the Closing Date, except for any representations and
warranties made or given as of a specified date, which shall be true
and correct in all material respects as of such date.
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(C) Certificate. The Selling Shareholder shall
have delivered to the Purchaser a certificate of the Selling
Shareholder, dated the Closing Date, to the effect that the condition
specified in paragraph (B) of this Section 4.2 has been satisfied.
(D) Transfer of Shares. All legal instruments
and other documents required for the Selling Shareholder to effect the
transfer of the Shares owned by the Selling Shareholder to the
Purchaser free and clear of all liens and encumbrances shall have been
duly executed.
(E) Approval of Merger Agreement. The Board of
Trustees and shareholders of EQK shall have approved the Merger
Agreement and the transactions contemplated thereby (collectively, the
"Merger-Related Transactions"), including, without limitation, the
amendment and restatement of EQK's Amended and Restated Declaration of
Trust, the execution of a new advisory agreement between EQK and Basic
Capital Management, Inc., and the election of the new Board of
Trustees. The Selling Shareholder hereby agrees to vote in favor of
the Merger-Related Transactions.
(F) Effectiveness of Registration Statements.
The Registration Statement and the Form S-4 Registration Statement
shall each have been declared effective by the SEC and no stop order
suspending effectiveness of the Registration Statement or the Form S-4
Registration Statement shall have been issued by the SEC on or prior
to the Closing Date.
ARTICLE V
TERMINATION
Section 5.1. TERMINATION. Notwithstanding anything in this Agreement
to the contrary, this Agreement may be terminated only (A) by the mutual
written consent of the Purchaser and the Selling Shareholder, (B) by either the
Purchaser, on the one hand, or the Selling Shareholder, on the other hand, at
any time, in the event of a breach by the other party which breach remains
uncured for ten (10) calendar days after notice in writing of such breach is
delivered to the breaching party, or (C) by either the Purchaser, on the one
hand, or the Selling Shareholder, on the other hand, by written notice to the
other if the Closing has not occurred prior to May 31, 1998, unless the Closing
has not occurred solely by reason of the failure of the party seeking to
terminate this Agreement to perform or observe any of the covenants or
agreements hereof to be performed by such party prior thereto.
Section 5.2. EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to Section 5.1, this Agreement, other than with
respect to the parties' respective indemnification obligations under Sections
2.1(F) and 2.2(G), the parties' obligations under Section 3.2, and the parties'
obligations under Sections 7.1 and 7.2, will thereafter become void and have no
effect, and there will be no liability on the part of any party or its
stockholders or directors or officers in respect thereof, except that nothing
herein will relieve any party from liability for any breach of this Agreement
occurring prior to such termination.
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ARTICLE VI
INDEMNIFICATION
Section 6.1. INDEMNIFICATION BY THE SELLING SHAREHOLDER. Subject to
the terms of this Article VI, the Selling Shareholder shall indemnify and hold
harmless the Purchaser and each of its officers, directors, employees and
controlling persons from any liability, damage, loss, penalty, cost or expense,
including reasonable attorneys' fees and costs of investigating and defending
lawsuits, complaints, actions or other pending or threatened litigation, after
receiving full credit for the amount of any payments actually received as a
result of insurance coverage ("Costs") arising from or attributable to any
breach of or inaccuracy in any representation, warranty, covenant or agreement
made by the Selling Shareholder herein; provided, however, the Purchaser shall
give the Selling Shareholder written notice as soon as practicable after the
discovery thereof of any suspected breach of or inaccuracy in any
representation, warranty, covenant or agreement made by the Selling
Shareholder, and if the Selling Shareholder is able to cure such breach or
inaccuracy within ten days after receipt of such written notice, without any
Costs being incurred by the Purchaser, the indemnification provisions set forth
in this Section 6.1 shall not apply with respect to such breach or inaccuracy.
Section 6.2. THE SELLING SHAREHOLDER'S LIMITATION ON LIABILITY.
Notwithstanding any other provision in this Agreement, the obligation of the
Selling Shareholder to indemnify the Purchaser and its officers, directors,
employees and controlling persons pursuant to Section 6.1 against any Costs
sustained by reason of any claim made under Section 6.1 shall be limited to
claims as to which the Purchaser has given to the Selling Shareholder written
notice thereof; provided, however, that any delay or failure to notify the
Selling Shareholder of any claim shall not relieve the Selling Shareholder from
any liability except to the extent that the Selling Shareholder demonstrates
that the defense of such action is materially prejudiced by such delay or
failure to notify.
Section 6.3. INDEMNIFICATION BY THE PURCHASER. The Purchaser shall
indemnify and hold harmless the Selling Shareholder and each of its officers,
directors, employees and controlling persons, if any, from any Costs arising
from or attributable to any breach of or inaccuracy in any representation,
warranty, covenant or agreement made by the Purchaser herein; provided,
however, the Selling Shareholder shall give the Purchaser written notice as
soon as practicable after the discovery thereof of any suspected breach of or
inaccuracy in any representation, warranty, covenant or agreement made by the
Purchaser, and if the Purchaser is able to cure such breach or inaccuracy
within ten days after receipt of such written notice, without any Costs being
incurred by the Selling Shareholder, the indemnification provisions set forth
in this Section 6.3 shall not apply with respect to such breach or inaccuracy.
Section 6.4. THE PURCHASER'S LIMITATION ON LIABILITY. Notwithstanding
any other provision in this Agreement, the obligation of the Purchaser to
indemnify the Selling Shareholder pursuant to Section 6.3 against any Costs
sustained by reason of any claim made under Section 6.3 shall be limited to
claims as to which the Selling Shareholder has given to the Purchaser written
notice thereof; provided, however, that any delay or failure to notify the
Purchaser of any claim shall
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not relieve the Purchaser from any liability except to the extent that the
Purchaser demonstrates that the defense of such action is materially prejudiced
by such delay or failure to notify.
Section 6.5. PROCEDURES FOR THIRD PARTY CLAIMS. Within twenty (20)
days after the assertion by any third party of any claim against any indemnitee
that, in the judgment of such indemnitee, may result in the incurrence by such
indemnitee of Costs for which such indemnitee would be entitled to
indemnification pursuant to this Agreement, such indemnitee shall deliver to
the indemnitor a written notice (the "Indemnity Notice") describing in
reasonable detail such claim; provided, however, that any delay or failure to
notify the indemnitor of any claim shall not relieve it from any liability
except to the extent that the indemnitor demonstrates that the defense of such
action is materially prejudiced by such delay or failure to notify. In the
case of third party claims, the indemnitor shall, within ten (10) days of
receipt of notice of such claim, notify the indemnitee of its intention to
assume the defense of such claim. If the indemnitor shall assume the defense
of the claim, the indemnitor shall have the right and obligation (A) to conduct
any proceedings or negotiations in connection therewith and necessary or
appropriate to defend the indemnitee, (B) to take all other required steps or
proceedings to settle or defend any such claims, and (C) to employ counsel to
contest any such claim or liability in the name of the indemnitee or otherwise.
If defendants in any action include the indemnitee and the indemnitor, and the
indemnitee shall have been advised by its counsel in writing that there may be
legal defenses available to the indemnitee which are different from or in
addition to those available to the indemnitor, the indemnitee shall have the
right to employ its own counsel in such action, and, in such event, the fees
and expenses of such counsel shall be borne by the indemnitor. If the
indemnitor shall not assume the defense of any such claim or litigation
resulting therefrom, the indemnitee may defend against any such claim or
litigation in such manner as it may deem appropriate and the indemnitee may
settle such claim or litigation on such terms as it may deem appropriate;
provided, however, that any such settlement shall be subject to the prior
consent of the indemnitor, which consent shall not be unreasonably withheld.
Within ten (10) days after final determination with respect to a third party
claim, the indemnitor shall pay to the indemnitee the Costs incurred by
indemnitee in respect of which indemnity may be sought pursuant to this Section
6.5. In the case of a non-third party claim, payment of damages incurred by
the indemnitee shall be made by the indemnitor within ten (10) days after
receipt of the Indemnity Notice by indemnitor.
A final determination of a disputed claim as to damages shall be (A) a
judgment of any court determining the validity of a disputed claim, if no
appeal is pending from such judgment or if the time to appeal therefrom has
elapsed, (B) an award of any arbitration determining the validity of such
disputed claim, if there is not pending any motion to set aside such award or
if the time within which to move to set such award aside has elapsed, (C) a
written agreement as to the termination of the dispute with respect to such
claim signed by all of the parties thereto or their attorneys, (D) a written
acknowledgment of the indemnitor that he, she or it no longer disputes the
validity of such claim, or (E) such other evidence of final determination of a
disputed claim as shall be acceptable to the parties.
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ARTICLE VII
MISCELLANEOUS
Section 7.1. EXPENSES. Unless otherwise indicated, the parties will
bear their own respective expenses (including, but not limited to, all
compensation and expenses of counsel, financial advisers, finders, brokers,
consultants, actuaries and independent accountants) incurred in connection with
the negotiation, preparation and execution of this Agreement and consummation
of the transactions contemplated hereby.
Section 7.2. PUBLIC DISCLOSURE. Each of the parties to this
Agreement hereby agrees with each other party that, except as may be required
to comply with the requirements of applicable law, no press release or similar
public announcement or communication will be made or caused to be made
concerning the execution or performance of this Agreement unless specifically
approved in advance by all parties.
Section 7.3. GOVERNING LAW. This Agreement will be deemed to be made
in and in all respects will be interpreted, construed and governed by and in
accordance with the internal, substantive law of the State of Georgia without
reference to principles of conflicts of laws.
Section 7.4. NOTICES. Any notices and other communications required
or permitted under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered to the appropriate party at the following
addresses:
(i) if to the Purchaser:
American Realty Trust, Inc.
c/o Basic Capital Management, Inc.
00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
(ii) if to the Selling Shareholder:
Equitable Realty Portfolio Management, Inc.
0000-X Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: General Counsel
or at such other place or places or to such other persons as shall be
designated in writing by the parties to this Agreement in the manner herein
provided.
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Section 7.5. SECTION HEADINGS. The section headings contained in
this Agreement are for reference purposes only and will not in any way affect
interpretation of this Agreement.
Section 7.6. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original and all of which, when taken together, shall constitute one and
the same agreement. Signatures on this Agreement may be communicated by
facsimile transmission and shall be binding upon the parties transmitting the
same by facsimile transmission. Counterparts with original signatures shall be
provided to the other party within five (5) days of the applicable facsimile
transmission, provided, however, that the failure to provide the original
counterpart shall have no effect on the validity or the binding nature of the
Agreement.
Section 7.7. ASSIGNMENT. Except as provided in the following
sentence, this Agreement may not be assigned, by operation of law or otherwise.
The Purchaser may assign its rights under this Agreement in whole or in part to
a wholly owned subsidiary of the Purchaser that will take title to the Shares
and will assume all obligations of the Purchaser hereunder; provided, however,
in such event, the Purchaser will remain fully liable for the fulfillment of
all such obligations. This Agreement will be binding upon and inure to the
benefit of successors and assigns of the parties hereto.
Section 7.8. MISCELLANEOUS. This Agreement (A) 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 (B) is not intended to confer upon any other persons any rights or remedies
hereunder. If any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired thereby.
Section 7.9. SPECIFIC PERFORMANCE. The parties hereto acknowledge
and agree that the breach of the provisions of this Agreement by the Selling
Shareholder or the Purchaser could not be adequately compensated with monetary
damages, and the parties hereto agree, accordingly, that injunctive relief and
specific performance shall be appropriate remedies to enforce the provisions of
this Agreement and waive any claim or defense that there is an adequate remedy
at law for such breach; provided, however, that nothing herein shall limit the
remedies available and all remedies herein are in addition to any remedies
available at law or otherwise.
Section 7.10. AMENDMENTS AND WAIVERS. No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing and signed
by each party to this Agreement. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
SELLING SHAREHOLDER:
EQUITABLE REALTY PORTFOLIO
MANAGEMENT, INC.
By /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
---------------------------------------
Title: Vice President
--------------------------------------
PURCHASER:
AMERICAN REALTY TRUST, INC.
By /s/ Xxxx X. Xxxxx
-----------------------------------------
Name: Xxxx X. Xxxxx
---------------------------------------
Title: President
--------------------------------------
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