Exhibit 10.1
OPTION AGREEMENT (this "Agreement"), dated as of
October 28, 2001, between CABOT INDUSTRIAL TRUST, a Maryland business trust
("Cabot"), and CALWEST INDUSTRIAL PROPERTIES, LLC, a California limited
liability company ("CalWest").
WHEREAS, Cabot, Cabot Industrial Properties, L.P., a
Delaware limited partnership, CalWest and Rooster Acquisition Corporation,
a Maryland corporation and a newly formed wholly owned direct subsidiary of
CalWest ("Rooster Acquisition Corp."), have contemporaneously with the
execution of this Agreement entered into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"), which provides, among
other things, that upon the terms and subject to the conditions thereof,
Rooster Acquisition Corp. will commence a tender offer (the "Offer") for
all of the issued and outstanding common shares of beneficial interest of
Cabot (the "Cabot Common Shares") and, after accepting for payment and
paying for the Cabot Common Shares validly tendered and not withdrawn
pursuant to the Offer (the "Tendered Shares"), Rooster Acquisition Corp.
shall merge with and into Cabot with Cabot continuing as the surviving
entity as a wholly owned subsidiary of CalWest; and
WHEREAS, as an essential condition and inducement to
CalWest's entering into the Merger Agreement and in consideration therefor,
Cabot has agreed to grant CalWest the Option (as hereinafter defined); and
WHEREAS, capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed thereto in the Merger
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein and in the Merger
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally
bound hereby, the parties hereby agree as follows:
1. Grant of Option.
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Cabot hereby grants to CalWest an irrevocable option (the
"Option") to purchase for a price per share equal to the Per Share Amount,
as the same may be adjusted pursuant to Section 1.1(e) of the Merger
Agreement (the "Option Price"), subject to the terms hereof, a number of
fully paid an nonassessable Cabot Common Shares (such shares being referred
to herein as the "Option Shares") equal to the Applicable Cabot Common
Share Amount (as hereafter defined). The "Applicable Cabot Common Share
Amount" shall be the number of Cabot Common Shares which, when added to the
number of Cabot Common Shares owned by the CalWest Parties immediately
prior to the exercise of the Option, would result in the CalWest Parties
owning, in the aggregate, immediately after exercise of the Option no more
than 90.0% of the then outstanding Cabot Common Shares; provided, however,
that in no event shall the Applicable Cabot Common Share Amount exceed
19.8% of the Cabot Common Shares then issued and outstanding (without
giving effect to any Cabot Common Shares issued pursuant to the Option).
2. Exercise of Option.
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(a) Exercise of Option. CalWest may exercise the Option if, but
only if (a) Rooster Acquisition Corp. shall have accepted for payment and
paid for all Cabot Common Shares validly tendered and not withdrawn
pursuant to the Offer and (b) after giving effect to such exercise, the
CalWest Parties would own 90.0% of the then outstanding Cabot Common
Shares.
(b) Expiration of the Option. The Option shall expire on the date
thirty (30) Business Days after the expiration of the Offer, if not
exercised on or prior thereto. Notwithstanding the expiration of the
Option, and provided that the conditions set forth in Section 2(a) hereof
have been satisfied, CalWest shall be entitled to purchase those Option
Shares with respect to which it may have exercised the Option in accordance
with the terms hereof prior to the expiration of the Option, and the
expiration of the Option will not affect any rights hereunder which by
their terms do not terminate or expire prior to or at such expiration.
(c) Notice of Exercise; Closing. In the event that CalWest is
entitled to and desires to exercise the Option, it shall send to Cabot a
written notice (such notice being herein referred to as an "Exercise
Notice" and the date of issuance of an Exercise Notice being herein
referred to as the "Notice Date") indicating that CalWest is exercising the
Option and specifying (i) the total number of Option Shares that it will
purchase pursuant to such exercise and (ii) a place and date not earlier
than one (1) Business Day and not later than five (5) Business Days from
the Notice Date for the closing of such purchase (the "Option Closing
Date").
(d) Purchase Price. At the Option Closing CalWest shall pay the
full purchase price for the Option Shares being purchased under the Option
in immediately available funds by wire transfer to a bank account
designated by Cabot; provided that the failure by CalWest to effect such a
wire transfer because of a failure or refusal of Cabot to designate such a
bank account shall not relieve Cabot of its obligations under Section 2(e)
at the Option Closing.
(e) Issuance of Option Shares. At the Option Closing, simultaneously
with the payment of the purchase price therefor as provided in Section
2(d), Cabot shall deliver to CalWest a certificate or certificates
representing the number of Option Shares purchased by CalWest. If at the
time of issuance of the Option Shares Cabot shall have issued any rights or
other securities which are attached to or otherwise associated with the
Cabot Common Shares, then each Option Share issued pursuant to such
exercise shall also represent such rights or other securities with terms
substantially the same as and at least as favorable to CalWest as are
provided under any shareholder rights agreement or similar agreement of
Cabot then in effect.
(f) Record Holder; Expenses. Upon the delivery by CalWest to Cabot
of the Exercise Notice and the tender of the applicable Option Price in
immediately available funds, CalWest shall be deemed to be the holder of
record of the Option Shares issuable upon such exercise, notwithstanding
that the stock transfer books of Cabot may then be closed, that
certificates representing such Option Shares may not then have been
actually delivered to CalWest or that Cabot may have failed or refused to
designate the bank account described in Section 2(d). Cabot shall pay all
expenses that may be payable in connection with the preparation, issuance
and delivery of stock certificates and/or substitute option agreement under
this Section 2 in the name of CalWest or its assignee, transferee or
designee and any filing fees and other expenses arising from compliance by
CalWest with any requirements of any Governmental Entity.
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3. Investment Intent.
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CalWest represents and warrants that it is
entering into this Agreement and is acquiring and/or will acquire the
Option Securities (as defined below) for its own account and not with a
view to resale or any public distribution of all or any part of the Option
Securities in violation of applicable Law.
4. Evaluation of Investments.
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CalWest, by reason of its knowledge and experience in
financial and business matters, believes itself capable of evaluating the
merits and risks of an investment in the Option and the securities to be
purchased pursuant to this Agreement (collectively, the "Option
Securities").
5. Reservation of Shares.
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Cabot agrees (i) that it shall at all times maintain, free
from preemptive rights, sufficient authorized but unissued or treasury Cabot
Common Shares (or Other Option Securities (as defined below)) issuable
pursuant to this Agreement so that the Option may be exercised without
additional authorization of Cabot Common Shares (or Other Option
Securities) after giving effect to all other options, warrants, convertible
securities and other rights to purchase Cabot Common Shares (or Other
Option Securities); (ii) that it will not, by charter amendment or through
reorganization, consolidation, merger, dissolution or sale of assets, or by
any other voluntary act, avoid or seek to avoid the observance or
performance of any of the covenants to be observed or performed hereunder
by Cabot; and (iii) promptly to take all action as may from time to time be
required in order to permit CalWest to exercise the Option and Cabot to
duly and effectively issue Cabot Common Shares (or Other Option Securities)
pursuant hereto.
6. Lost Options.
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Upon receipt by Cabot of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Agreement, and
(in the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Agreement, if
mutilated, Cabot will execute and deliver a new agreement of like tenor and
date.
7. Adjustment Upon Changes in Capitalization.
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The number of Option Shares purchasable upon the exercise
of the Option shall be subject to adjustment from time to time as provided in
this Section 7.
(a) Transaction Adjustment. In the event of any change in Cabot
Common Shares by reason of stock dividends, splits, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of
shares or other similar transactions, then the Option Shares purchasable
upon exercise hereof shall be appropriately adjusted so that CalWest shall
receive upon exercise of the Option and payment of the aggregate Option
Price hereunder the number and class of shares or other securities (any
such shares or other securities referred to herein as "Other Option
Securities") or property (including cash) that CalWest would have owned or
been entitled to receive after the happening of any of the events described
above if the Option had been exercised immediately prior to such event, or
the record date therefor, as applicable.
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(b) Option Price Adjustment. Whenever the number of Option Shares
subject to this Option are adjusted pursuant to Section 7(a), the Option
Price shall be appropriately adjusted, if applicable, by multiplying the
Option Price by a fraction, the numerator of which shall be equal to the
aggregate number of Option Shares purchasable under the Option prior to the
adjustment and the denominator of which shall be equal to the aggregate
number of Option Shares purchasable under the Option immediately after the
adjustment.
8. Extension of Time for Regulatory Approvals.
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The periods related to exercise of the Option and the other
rights of CalWest hereunder shall be extended (i) to the extent necessary to
obtain all regulatory approvals for the exercise of such rights, and for
the expiration of all statutory waiting periods and (ii) to the extent
necessary to avoid liability under Section 10(b) of the Exchange Act by
reason of such exercise.
9. Representations and Warranties of Cabot.
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Cabot hereby represents and warrants to CalWest as follows:
(a) Authority, etc.. Cabot has full trust power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Trustees of Cabot and no other trust
proceedings on the part of Cabot are necessary to authorize this Agreement
or to consummate the transactions so contemplated. This Agreement has been
duly and validly executed and delivered by Cabot and constitutes the legal,
valid and binding obligation of Cabot, enforceable against Cabot in
accordance with the terms hereof.
(b) Trust Action. Cabot has taken all necessary action to authorize
and reserve and to permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with its terms will
have reserved for issuance upon the exercise of the Option, that number of
Cabot Common Shares equal to the maximum number of Cabot Common Shares at
any such time and from time to time issuable hereunder, and all such Cabot
Common Shares, upon issuance pursuant hereto, will be duly authorized,
validly issued, fully paid, nonassessable, and will be delivered free and
clear of all Liens created by Cabot and not subject to any preemptive
rights.
(c) No Conflict. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby and
compliance with the terms hereof will not, conflict with, result in any
violation of or default (with or without notice or lapse of time or both)
under, any provision of any trust agreement, loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument,
permit, concession, franchise, license, judgment, order, notice, decree,
statute, law, ordinance, rule or regulation applicable to Cabot or Cabot's
property or assets. No consent, approval, order or authorization of, or
registration, declaration or filing with, any court, administrative agency
or commission or other governmental authority or instrumentality, domestic,
foreign or supranational, is required by or with respect to Cabot in
connection with the execution and delivery of this Agreement or the
consummation by Cabot of the transactions contemplated hereby.
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(d) Anti-takeover Statutes. The provisions of the Takeover Statutes
will not, prior to the termination of this Agreement, apply to this
Agreement or the transactions contemplated hereby and thereby. Cabot has
taken, and will in the future take, all steps necessary to (i) irrevocably
exempt the transactions contemplated by this Agreement from any other
applicable state takeover law and from any applicable declaration of trust
provision containing change of control or anti-takeover provisions and (ii)
waive the Ownership Limit with respect to any Cabot Common Shares or Other
Option Securities acquired by CalWest pursuant to the Option.
10. Assignment.
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Cabot may not assign any of its rights or obligations under
this Agreement to any other Person, without the express written consent of
CalWest. CalWest may not assign any of its rights or obligations under this
Agreement to any other Person, except that CalWest may assign its rights
hereunder to any Affiliate of CalWest, including Rooster Acquisition Corp.
11. Application for Regulatory Approval.
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Each of CalWest and Cabot will use its reasonable efforts
to make all filings with, and to obtain consents of, all third parties and
Governmental Entities necessary to the consummation of the transactions
contemplated by this Agreement; provided that neither Cabot nor CalWest nor
any subsidiary or affiliate thereof will be required to agree to any
divestiture by itself or any of its affiliates of shares of capital stock
or of any business, assets or property, or the imposition of any material
limitation on the ability of any of them to conduct their businesses or to
own or exercise control of such assets, properties and stock.
12. Specific Performance.
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The parties hereto acknowledge that damages would be an
inadequate remedy for a breach of this Agreement by either party hereto and
that the obligations of the parties hereto shall be enforceable by either
party hereto through injunctive or other equitable relief.
13. Severability.
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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. Upon such determination that
any 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 to the fullest extent permitted by applicable law in a mutually
acceptable manner in order that the terms of this Agreement remain as
originally contemplated to the fullest extent possible.
14. Notices.
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All notices, claims, demands and other communications
hereunder shall be deemed to have been duly given or made when delivered in
accordance with Section 9.2 of the Merger Agreement.
15. Governing Law.
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This Agreement shall be governed by and construed in
accordance with the Laws of the State of Maryland, regardless of the laws
that might otherwise govern under applicable principles of conflicts of
laws thereof.
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16. Counterparts.
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This Agreement may be executed in two or more counterparts,
each of which will be deemed to be an original, but all of which shall
constitute one and the same agreement.
17. Expenses.
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Except as otherwise expressly provided herein or in the
Merger Agreement, each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
18. Entire Agreement.
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Except as otherwise expressly provided herein or in the
Merger Agreement, this Agreement contains the entire agreement between
the parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereto,
written or oral. The terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties
hereto, and their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided herein. Any provision of this Agreement may be
waived only in writing at any time by the party that is entitled to the
benefits of such provision.
19. Amendment.
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This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
20. Further Assurances.
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In the event of any exercise of the Option by CalWest, Cabot
and CalWest shall execute and deliver all other documents and instruments and
take all other action that may be reasonably necessary to the fullest
extent permitted by Law in order to consummate the transactions provided
for by such exercise. Nothing contained in this Agreement shall be deemed
to authorize Cabot or CalWest to breach any provision of the Merger
Agreement.
* * * * *
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IN WITNESS WHEREOF, each of the parties hereto has caused
this Option Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
CABOT INDUSTRIAL TRUST
By: /s/ Xxxxxxxxx Xxxxxxxxx-Xxxxxxxx
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Name: Xxxxxxxxx Xxxxxxxxx-Xxxxxxxx
Title: Chairman, Chief Executive Officer
CALWEST INDUSTRIAL PROPERTIES, LLC
By: RREEF America L.L.C., its Manager
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title:
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