Exhibit 10.1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
DATED AS OF October 23, 2005
BY AND AMONG
PRIME PROPERTY FUND, LLC,
ATOM ACQUISITION LLC,
ATOM ACQUISITION PARTNERS, L.P.,
AMLI RESIDENTIAL PROPERTIES TRUST
AND
AMLI RESIDENTIAL PROPERTIES, L.P.
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Table of Contents
Page
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ARTICLE I. THE MERGER.................................................... 3
Section 1.1 The Mergers............................................ 3
Section 1.2 Closing................................................ 3
Section 1.3 Effective Times........................................ 3
Section 1.4 Merger Consideration................................... 4
Section 1.5 Partnership Merger Consideration....................... 5
Section 1.6 Organizational Documents............................... 6
Section 1.7 Directors and Officers of the Surviving Entity......... 6
Section 1.8 AMLI Common Share Options.............................. 6
Section 1.9 Termination of ESPP and Restricted Share Plan.......... 7
Section 1.10 Termination of DRIP.................................... 7
ARTICLE II. EFFECTS OF THE MERGER; EXCHANGE OF CERTIFICATES.............. 8
Section 2.1 Payment for Securities................................. 8
ARTICLE III. REPRESENTATIONS AND WARRANTIES.............................. 13
Section 3.1 Representations and Warranties of AMLI................. 13
Section 3.2 Representations and Warranties of Purchaser,
Purchaser Acquisition Entity and Purchaser
Acquisition LP......................................... 37
ARTICLE IV. COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE
MERGERS................................................... 39
Section 4.1 Conduct of Business by AMLI............................ 39
ARTICLE V. ADDITIONAL COVENANTS.......................................... 45
Section 5.1 Preparation of Proxy Statement; Shareholders'
Meeting................................................ 45
Section 5.2 Access to Information; Confidentiality................. 46
Section 5.3 Reasonable Efforts; Notification....................... 47
Section 5.4 Tax Matters............................................ 48
Section 5.5 No Solicitation of Transactions........................ 49
Section 5.6 Board Actions.......................................... 50
Section 5.7 Public Announcements................................... 51
Section 5.8 Employee Arrangements.................................. 52
Section 5.9 Indemnification; Trustees' and Officers' Insurance..... 52
Section 5.10 Tax Returns............................................ 54
ARTICLE VI. CONDITIONS PRECEDENT......................................... 55
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Table of Contents
(continued)
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Section 6.1 Conditions to Each Party's Obligation to Effect the
Mergers................................................ 55
Section 6.2 Conditions to Obligations of Purchaser Parties......... 55
Section 6.3 Conditions to Obligations of AMLI...................... 56
ARTICLE VII. TERMINATION, AMENDMENT AND WAIVER........................... 57
Section 7.1 Termination............................................ 57
Section 7.2 Expenses............................................... 58
Section 7.3 Effect of Termination.................................. 59
Section 7.4 Amendment.............................................. 59
Section 7.5 Extension; Waiver...................................... 59
Section 7.6 Payment of Amount or Expense........................... 59
ARTICLE VIII. GENERAL PROVISIONS......................................... 61
Section 8.1 Nonsurvival of Representations and Warranties.......... 61
Section 8.2 Notices................................................ 61
Section 8.3 Interpretation......................................... 62
Section 8.4 Performance Guaranty................................... 62
Section 8.5 Specific Performance................................... 62
Section 8.6 Counterparts........................................... 62
Section 8.7 Entire Agreement; No Third-Party Beneficiaries......... 62
Section 8.8 Governing Law.......................................... 62
Section 8.9 Assignment............................................. 62
Section 8.10 Severability........................................... 63
Section 8.11 Exhibits; Disclosure Letter............................ 63
Section 8.12 Jurisdiction; Venue.................................... 63
Section 8.13 Waiver of Trial by Jury................................ 63
ARTICLE IX. CERTAIN DEFINITIONS.......................................... 64
Section 9.1 Certain Definitions.................................... 64
Exhibit A - Tax Opinion
Exhibit B - AMLI Knowledge Persons
Exhibit C - Purchaser Knowledge Persons
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of October
23, 2005, by and among PRIME PROPERTY FUND, LLC, a Delaware limited liability
company ("Purchaser"), ATOM ACQUISITION LLC, a Delaware limited liability
company ("Purchaser Acquisition Entity"), ATOM ACQUISITION PARTNERS, L.P., a
Delaware limited partnership ("Purchaser Acquisition LP", and together with
Purchaser and Purchaser Acquisition Entity, the "Purchaser Parties"), AMLI
RESIDENTIAL PROPERTIES TRUST, a Maryland real estate investment trust ("AMLI"),
and AMLI RESIDENTIAL PROPERTIES, L.P., a Delaware limited partnership ("AMLI
LP").
RECITALS
A. It is proposed that AMLI shall merge (the "Merger") with and into
Purchaser Acquisition Entity with Purchaser Acquisition Entity surviving in
accordance with Title 8 of the Corporations and Associations Article of the
Annotated Code of Maryland ("Title 8") and the Limited Liability Company Act of
the State of Delaware (the "LLC Act"), pursuant to which each of the issued and
outstanding common shares of beneficial interest, par value $0.01 per share, of
AMLI, together with the associated preferred share purchase rights granted
pursuant to the Rights Agreement, dated as of November 2, 1998 (as amended, the
"AMLI Rights Agreement") between AMLI and Xxxxxx Trust and Savings Bank as
Rights Agent (together, the "AMLI Common Shares") shall be converted into the
right to receive the Merger Consideration (as defined herein) upon the terms and
subject to the conditions provided herein.
B. It is proposed that Purchaser Acquisition LP shall merge with and into
AMLI LP (the "Partnership Merger" and, together with the Merger, the "Mergers"),
with AMLI LP surviving on the terms and subject to the conditions set forth in
this Agreement and in accordance with the Delaware Revised Uniform Limited
Partnership Act, as amended ("DRULPA"), pursuant to which each common unit of
limited partnership interest in AMLI LP ("LP Units") shall be converted into the
right to receive the Partnership Merger Consideration (as defined herein) upon
the terms and subject to the conditions provided herein;
C. The Board of Trustees of AMLI (the "AMLI Board of Trustees") has
received the written opinion (the "Fairness Opinion") of X.X. Xxxxxx Securities
Inc. (the "AMLI Financial Advisor") that, based on, and subject to the various
assumptions and qualifications set forth in such opinion, as of the date of such
opinion, (i) the consideration to be received by holders of AMLI Common Shares
(the "AMLI Common Shareholders") pursuant to this Agreement is fair from a
financial point of view to such holders and (ii) the consideration to be
received by holders of LP Units (the "AMLI LP Unitholders") is fair from a
financial point of view to such holders considered as if such LP Units had been
converted into or redeemed for AMLI Common Shares in accordance with the
existing terms of LP Units.
D. The AMLI Board of Trustees has (i) determined that the Transaction
Documents (as hereinafter defined), the Merger, and the other transactions
contemplated hereby and thereby, taken together, are fair to, advisable and in
the best interests of AMLI and the AMLI Common Shareholders, (ii) voted to (A)
approve this Agreement and the transactions contemplated hereby, including the
Merger and (B) recommend acceptance and approval by the AMLI Common
Shareholders of this Agreement, the Merger and the other transactions
contemplated hereby and by the Transaction Documents, (iii) taken all action
necessary to waive the application of the Ownership Limit (as hereinafter
defined) to the purchase or ownership of any AMLI Common Shares acquired
pursuant to the Merger, and (iv) taken all actions necessary to render
inapplicable to each of the transactions contemplated by the Transaction
Documents or exempt such transactions from the provisions of any "fair price",
"moratorium", "control share" or other takeover defense or similar statute or
regulation that would otherwise govern such transactions and the parties hereto,
including Subtitles 6 and 7 of Title 3 of the Maryland General Corporation Law
("MGCL") and Title 8.
E. The AMLI Board of Trustees on behalf of AMLI as the general partner of
AMLI LP has (i) determined that the Transaction Documents (as hereinafter
defined), the Partnership Merger, and the other transactions contemplated hereby
and thereby, taken together, are fair to, advisable and in the best interests of
AMLI LP and the AMLI Unitholders and (ii) voted to approve this Agreement and
the transactions contemplated hereby, including the Partnership Merger.
F. The manager of Purchaser, the sole member of Purchaser Acquisition
Entity and Purchaser Acquisition Entity in its capacity as general partner of
Purchaser Acquisition LP, have each approved this Agreement, the Merger or the
Partnership Merger, as applicable, and the other transactions contemplated
hereby.
G. Purchaser, AMLI and AMLI LP intend that, for U.S. federal income tax
purposes, the Merger will be treated as a taxable purchase of all of the assets
of AMLI directly by Purchaser and the existence of Purchaser Acquisition Entity
shall be disregarded.
H. Purchaser, AMLI and AMLI LP intend that, for U.S. federal income tax
purposes, the Partnership Merger will be treated as a taxable sale of interests
in AMLI LP.
I. As an inducement to the Purchaser Parties entering into this agreement
and incurring the obligations set forth herein, concurrently with the execution
and delivery of this Agreement, certain officers of AMLI are each entering into
a Voting Agreement (a "Voting Agreement") relating to the AMLI Common Shares
owned by such officers.
J. Certain capitalized terms used in this Agreement are defined in Article
IX.
AGREEMENT
In consideration of the representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
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ARTICLE I.
THE MERGER
Section 1.1 The Mergers.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, at the Merger Effective Time, AMLI shall be merged with and into
Purchaser Acquisition Entity in accordance with Title 8 and the Articles of
Merger and the LLC Act and the LLC Certificate of Merger, and the separate
existence of AMLI shall cease and Purchaser Acquisition Entity shall continue as
the surviving entity (in such capacity, the "Surviving Entity"). The Merger
shall have the effects set forth in Title 8 and the LLC Act. Accordingly, from
and after the Merger Effective Time, the Surviving Entity shall have all the
properties, rights, privileges, purposes and powers and debts, duties and
Liabilities of AMLI.
(b) Upon the terms and subject to the conditions set forth in this
Agreement, at the Partnership Merger Effective Time, Purchaser Acquisition LP
shall be merged with and into AMLI LP in accordance with the DRULPA and the LP
Certificate of Merger, and the separate existence of Purchaser Acquisition LP
shall cease and AMLI LP shall continue as the surviving partnership (the
"Surviving Partnership"). The Partnership Merger shall have the effects set
forth in the DRULPA. Accordingly, from and after the Partnership Merger
Effective Time, the Surviving Partnership shall have all the properties, rights,
privileges, purposes and powers and debts, duties and Liabilities of AMLI LP.
Section 1.2 Closing. The closing of the Mergers (the "Closing") will take
place at 10:00 a.m., local time, as promptly as practicable but in no event
later than the third (3rd) Business Day after the satisfaction or waiver of the
conditions (other than those conditions that by their nature are to be satisfied
at Closing, but subject to the fulfillment or waiver of those conditions) set
forth in Article VI (the "Closing Date"), at the offices of Mayer, Brown, Xxxx &
Maw LLP, 00 Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, 00000, unless another date or
place is agreed to in writing by the parties; provided, that the Closing Date
shall not occur prior to February 1, 2006.
Section 1.3 Effective Times.
(a) On the Closing Date, AMLI and Purchaser Acquisition Entity shall
execute and file the Articles of Merger in accordance with, and shall make all
other filings or recordings and take all such other action required with respect
to the Merger under Title 8 and the LLC Act. Unless AMLI, AMLI LP and Purchaser
agree otherwise, the Merger shall become effective when both the Articles of
Merger have been accepted for record by the Maryland Department and the LLC
Certificate of Merger has been accepted for record by the Delaware Secretary of
State or at such other time specified in the Articles of Merger and the LLC
Certificate of Merger (the "Merger Effective Time"), it being understood that
the parties shall cause the Merger Effective Time to occur as soon as
practicable after the Closing.
(b) On the Closing Date, immediately after the Merger Effective Time,
AMLI LP and Purchaser Acquisition LP shall execute and file the LP Certificate
of Merger in
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accordance with, and shall make all other filings or recordings and take all
such other action required with respect to the Partnership Merger under the
DRULPA. Unless AMLI, AMLI LP and Purchaser agree otherwise, the Partnership
Merger shall become effective when the LP Certificate of Merger has been
accepted for record with the Delaware Secretary of State or at such other time
specified in the LP Certificate of Merger (the "Partnership Merger Effective
Time"), it being understood that the parties shall cause the Partnership Merger
Effective Time to occur as soon as practicable after the Merger Effective Time.
Section 1.4 Merger Consideration.
(a) At the Merger Effective Time, by virtue of the Merger and without
any further action on the part of Purchaser Acquisition Entity, AMLI or the AMLI
Common Shareholders, each AMLI Common Share and each Preferred Share issued and
outstanding immediately prior to the Merger Effective Time that is owned by AMLI
or by any wholly owned Subsidiary of AMLI (other than, in each case, shares in
trust accounts, managed accounts, custodial accounts and the like that are
beneficially owned by third parties) shall automatically be cancelled and
retired and shall cease to exist, and no payment shall be made with respect
thereto.
(b) At the Merger Effective Time, by virtue of the Merger and without
any further action on the part of Purchaser Acquisition Entity, AMLI or the AMLI
Common Shareholders, each AMLI Common Share issued and outstanding immediately
prior to the Merger Effective Time, other than AMLI Common Shares cancelled
pursuant to Section 1.4(a), shall automatically be converted into the right to
receive an amount in cash equal to the sum of $37.75 per share plus an amount in
cash equal to $0.48 multiplied by the quotient obtained by dividing (A) the
number of days between the last day of the last quarter for which full quarterly
dividends on the AMLI Common Shares have been declared and paid and the Closing
Date (including the Closing Date) by (B) the total number of days in the quarter
in which the Closing Date occurs without interest (such sum, the "Merger
Consideration"), upon surrender of the Common Share Certificate formerly
evidencing such share. All such AMLI Common Shares, when so converted, shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a Common Share Certificate representing any
such shares shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration to be paid in consideration therefor
upon the surrender of such Common Share Certificates in accordance with Section
2.1, without interest.
(c) At the Merger Effective Time, by virtue of the Merger and without
any further action on the part of Purchaser Acquisition Entity, AMLI or the
holders of Preferred Shares,
(i) each Series B cumulative redeemable convertible preferred
share of beneficial interest, par value $0.01 per share (the "Series B
Preferred Shares"), of AMLI issued and outstanding immediately prior
to the Merger Effective Time, other than Series B Preferred Shares
cancelled pursuant to Section 1.4(a), shall automatically be converted
into the right to receive an amount in cash equal to the sum of $37.75
per share, plus a per share amount in cash equal to $0.48 multiplied
by the quotient obtained by dividing (x) the number of days between
the last day
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of the last quarter for which full quarterly dividends on the AMLI
Common Shares have been declared and paid and the Closing Date
(including the Closing Date) by (y) the total number of days in the
quarter in which the Closing Date occurs without interest (such sum,
the "Series B Merger Consideration") and
(ii) each Series D cumulative convertible redeemable preferred
share of beneficial interest, par value $0.01 per share (the "Series D
Preferred Shares", and collectively with the Series B Preferred
Shares, the "Preferred Shares"), of AMLI issued and outstanding
immediately prior to the Merger Effective Time, other than Series D
Preferred Shares cancelled pursuant to Section 1.4(a), shall
automatically be converted into the right to receive an amount in cash
equal to the sum of $34.008975 per share, plus a per share amount in
cash equal to $0.540625 multiplied by the quotient obtained by
dividing (x) the number of days between the last day of the last
quarter for which full quarterly dividends on the AMLI Common Shares
have been declared and paid and the Closing Date (including the
Closing Date) by (y) the total number of days in the quarter in which
the Closing Date occurs without interest (such sum, the "Series D
Merger Consideration").
All such Preferred Shares, when so converted, shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist, and each
holder of a Preferred Share Certificate representing any such Preferred Shares
shall cease to have any rights with respect thereto, except the right to receive
the Series B Merger Consideration or Series D Merger Consideration, as
applicable, to be paid in consideration therefor upon the surrender of such
Preferred Share Certificates in accordance with Section 2.1, without interest.
(d) At the Merger Effective Time, by virtue of the Merger and without
any further action on the part of Purchaser Acquisition Entity, AMLI or the AMLI
Common Shareholders, the limited liability company interest in Purchaser
Acquisition Entity outstanding immediately prior to the Merger Effective Time
shall remain outstanding as a limited liability company interest in the
Surviving Entity and shall constitute the only outstanding limited liability
company interest in the Surviving Entity.
Section 1.5 Partnership Merger Consideration.
(a) At the Partnership Merger Effective Time, by virtue of the
Partnership Merger and without any further action on the part of Purchaser
Acquisition LP, AMLI LP or the AMLI LP Unitholders, each LP Unit issued and
outstanding immediately prior to the Partnership Merger Effective Time that is
owned by AMLI LP or by any wholly owned Subsidiary of AMLI LP (other than, in
each case, LP Units in trust accounts, managed accounts, custodial accounts and
the like that are beneficially owned by third parties) shall automatically be
canceled and retired and shall cease to exist, and no payment shall be made with
respect thereto.
(b) At the Partnership Merger Effective Time, by virtue of the
Partnership Merger and without any further action on the part of Purchaser
Acquisition LP, AMLI LP or the AMLI LP Unitholders, each LP Unit issued and
outstanding immediately prior to the Partnership Merger Effective Time, other
than LP Units cancelled pursuant to Section 1.5(a), shall automatically be
converted into the right to receive cash, without interest thereon (the
"Partnership Merger Consideration"), in an amount equal to the product of (A)
the Merger
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Consideration multiplied by (B) the number of AMLI Common Shares issuable upon
exchange of each such LP Unit in accordance with the Amended and Restated
Agreement of Limited Partnership of AMLI LP (the "AMLI LP Agreement").
(c) At the Partnership Merger Effective Time, by virtue of the
Partnership Merger and without any further action on the part of Purchaser
Acquisition LP, AMLI LP or the AMLI LP Unitholders, the Series B units of
limited partnership interests of AMLI LP and the Series D units of limited
partnership interest of AMLI LP issued and outstanding immediately prior to the
Partnership Merger Effective Time shall automatically be canceled and retired
and shall cease to exist, and no payment shall be made with respect thereto.
(d) At the Partnership Merger Effective Time, by virtue of the
Partnership Merger and without any further action on the part of Purchaser
Acquisition LP, AMLI LP or the AMLI LP Unitholders, the general partner
interests of AMLI LP shall automatically be canceled and retired and shall cease
to exist, and no payment shall be made with respect thereto.
(e) At the Partnership Merger Effective Time, by virtue of the
Partnership Merger and without any further action on the part of Purchaser
Acquisition LP, AMLI LP or the AMLI LP Unitholders, (i) the general partnership
interest in Purchaser Acquisition LP shall be automatically converted into the
general partnership interest in the Surviving Partnership and shall constitute
the only outstanding general partnership interest in the Surviving Partnership
and (ii) the limited partnership interest in Purchaser Acquisition LP shall
automatically be converted into the limited partnership interest in the
Surviving Partnership and shall constitute the only outstanding limited
partnership interest in the Surviving Partnership.
Section 1.6 Organizational Documents.
(a) The limited liability company agreement and certificate of
formation of Purchaser Acquisition Entity shall continue to be the limited
liability company agreement and certificate of formation of the Surviving Entity
following the Merger Effective Time until amended in accordance with its terms
and the LLC Act. The Surviving Entity shall have no bylaws immediately following
the Merger Effective Time.
(b) The agreement of limited partnership of Purchaser Acquisition LP
shall continue to be the agreement of limited partnership of the Surviving
Partnership following the Partnership Merger Effective Time until further
amended in accordance with the DRULPA. The certificate of limited partnership of
AMLI LP shall continue to be the certificate of limited partnership of the
Surviving Partnership following the Partnership Merger Effective Time until
further amended in accordance with the DRULPA.
Section 1.7 Directors and Officers of the Surviving Entity. From and after
the Merger Effective Time, the officers of Purchaser Acquisition Entity shall be
the officers of the Surviving Entity, and such officers shall serve until their
successors have been duly elected or appointed, or until their death,
resignation or removal from office in accordance with the Surviving Entity's
limited liability company agreement. The Surviving Entity shall have no board of
directors or similar body immediately following the Merger Effective Time.
Section 1.8 AMLI Common Share Options.
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(a) At the Merger Effective Time, each outstanding option
(collectively, the "AMLI Options") to purchase AMLI Common Shares granted under
the AMLI Option Plan, as amended (the "AMLI Option Plan"), whether or not then
vested or exercisable, shall be cancelled and of no further force and effect and
the holder of any such option shall be entitled to receive, from and after the
Merger Effective Time, an amount in cash equal to the product of (i) the number
of AMLI Common Shares such holder could have purchased under the AMLI Option
(assuming full vesting) had such holder exercised such AMLI Option in full
immediately prior to the Merger Effective Time and (ii) the excess, if any, of
$37.75 over the exercise price per share or unit of such AMLI Option, which cash
payment shall be treated as compensation and shall be net of any applicable
withholding Tax. Notwithstanding the foregoing, if the exercise price per share
provided for in any AMLI Option exceeds $37.75, no cash shall be paid with
regard to such AMLI Option to the holder of such AMLI Option. Prior to the
Merger Effective Time, Purchaser and AMLI shall establish a procedure to effect
the surrender of AMLI Options contemplated by this Section 1.8(a). In connection
with the Merger, as of the Merger Effective Time, any restrictions with respect
to outstanding restricted shares awarded under the AMLI Executive Share Purchase
Plan, as amended and restated (the "ESPP"), and the AMLI Senior Officer Share
Acquisition Plan (the "Restricted Share Plan") shall terminate or lapse. After
such restrictions terminate or lapse, the shares relating thereto shall be
automatically converted into the right to receive the Merger Consideration on
the terms and conditions set forth in the applicable sections of this Article I.
(b) AMLI covenants that the AMLI Option Plan shall terminate as of the
Merger Effective Time and all awards issued under such AMLI Option Plan shall be
terminated and the provisions in any other plan, program, arrangement or
agreement providing for the issuance or grant of any other interest in respect
of the equity interests of AMLI or any of the AMLI Subsidiaries shall be of no
further force or effect and shall be deemed to be terminated as of the Merger
Effective Time and no holder of an AMLI Option or any participant in any AMLI
Option Plan shall have any right thereunder to (i) acquire any securities of
AMLI, the Surviving Entity or any Subsidiary thereof or (ii) receive any payment
or benefit with respect to any award previously granted under the AMLI Option
Plan except as provided in Section 1.8(a).
Section 1.9 Termination of ESPP and Restricted Share Plan. AMLI shall (i)
concurrently with the execution of this Agreement, suspend the ESPP and (ii)
effective as of the Merger Effective Time, terminate each of the ESPP and the
Restricted Share Plan and ensure that no employee of AMLI or any AMLI Subsidiary
has rights to acquire any interest in the Surviving Entity, Purchaser or any
Purchaser Subsidiary, including Purchaser Acquisition Entity at or after the
Merger Effective Time.
Section 1.10 Termination of DRIP. AMLI shall terminate AMLI's Dividend
Reinvestment Plan (the "DRIP"), effective prior to the Merger Effective Time,
and ensure that no purchase or other rights under the DRIP enable the holder of
such rights to acquire any interest in the Surviving Entity, Purchaser or any
Purchaser Subsidiary, including Purchaser Acquisition Entity, as a result of
such purchase or the exercise of such rights at or after the Merger Effective
Time.
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ARTICLE II.
EFFECTS OF THE MERGER; EXCHANGE OF CERTIFICATES
Section 2.1 Payment for Securities.
(a) Exchange Agent. At or before the Merger Effective Time, Purchaser
shall appoint a bank or trust company reasonably satisfactory to AMLI to act as
Exchange Agent (the "Exchange Agent") for the payment in accordance with this
Article II of the Merger Consideration, the Series B Merger Consideration, the
Series D Merger Consideration and the Partnership Merger Consideration
(collectively, such cash being referred to as the "Exchange Fund"). On or before
the Effective Time, the Purchaser shall deposit the Exchange Fund with the
Exchange Agent for the benefit of the holders of AMLI Common Shares, Series B
Preferred Shares, Series D Preferred Shares and LP Units. The Exchange Agent
shall make payments of the Merger Consideration, the Series B Merger
Consideration, the Series D Merger Consideration and the Partnership Merger
Consideration out of the Exchange Fund in accordance with this Agreement, the
Articles of Merger, the LLC Certificate of Merger and the LP Certificate of
Merger. The Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures.
(i) As promptly as practicable following the Merger Effective
Time (but in no event later than five (5) Business Days), the
Purchaser shall cause the Exchange Agent to mail to (A) each holder of
record of a certificate or certificates (each, a "Common Share
Certificate") that immediately prior to the Merger Effective Time
represented outstanding AMLI Common Shares whose shares were converted
into the right to receive the Merger Consideration pursuant to Section
1.4(b) and (B) each holder of record of a certificate or certificates
(each, a "Preferred Share Certificate") that immediately prior to the
Merger Effective Time represented outstanding Series B Preferred
Shares or Series D Preferred Shares whose preferred shares were
converted into the right to receive the Series B Merger Consideration
or the Series D Merger Consideration, as applicable, pursuant to
Section 1.4(c): (x) a letter of transmittal (a "Letter of
Transmittal") which shall specify that delivery shall be effected and
risk of loss and title to the Common Share Certificates or Preferred
Share Certificate, as the case may be, shall pass only upon delivery
of the Common Share Certificates or Preferred Share Certificates, as
applicable, to the Exchange Agent and shall be in such form and have
such other provisions as the Surviving Entity may reasonably specify;
and (y) instructions for use in effecting the surrender of the Common
Share Certificates in exchange for the Merger Consideration or the
Preferred Share Certificates in exchange for the Series B Merger
Consideration or the Series D Merger Consideration, as applicable.
(ii) Upon surrender of a Common Share Certificate for
cancellation to the Exchange Agent, together with a Letter of
Transmittal, duly executed, and any other documents reasonably
required by the Exchange Agent or the Surviving Entity, (A) the holder
of such Common Share Certificate shall be entitled to
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receive in exchange therefor a check in the amount equal to the per
share cash amount of the Merger Consideration, which such holder has
the right to receive pursuant to the provisions of Section 1.4(b); and
(B) the Common Share Certificate so surrendered shall forthwith be
canceled. Until surrendered as contemplated by this Section 2.1, each
such Common Share Certificate shall be deemed at any time after the
Merger Effective Time to represent only the right to receive upon such
surrender the Merger Consideration.
(iii) In the event of a transfer of ownership of AMLI Common
Shares which is not registered in the transfer records of AMLI, the
Merger Consideration shall be paid to a transferee if (A) the Common
Share Certificate representing such AMLI Common Shares is presented to
the Exchange Agent properly endorsed or accompanied by appropriate
stock powers and otherwise in proper form for transfer and accompanied
by all documents reasonably required by the Exchange Agent to evidence
and effect such transfer and (B) such transferee shall pay any
transfer or other taxes required by reason of the payment to a person
other than the registered holder of the Common Share Certificate or
establish to the satisfaction of the Exchange Agent and the Surviving
Entity that such tax has been paid or is not applicable.
(iv) Upon surrender of a Preferred Share Certificate for
cancellation to the Exchange Agent, together with a Letter of
Transmittal, duly executed, and any other documents reasonably
required by the Exchange Agent or the Surviving Entity, (A) the holder
of such Preferred Share Certificate shall be entitled to receive in
exchange therefore a check in the amount equal to the per share cash
amount of the Series B Merger Consideration or the Series D Merger
Consideration which such holder has the right to receive pursuant to
the provisions of Section 1.4(c); and (B) the Preferred Share
Certificate so surrendered shall forthwith be canceled. Until
surrendered as contemplated by this Section 2.1, each such Preferred
Share Certificate shall be deemed at any time after the Merger
Effective Time to represent only the right to receive upon such
surrender the Series B Merger Consideration or Series D Merger
Consideration, as applicable.
(v) In the event of a transfer of ownership of Preferred Shares
which is not registered in the transfer records of AMLI, the Series B
Merger Consideration or the Series D Merger Consideration, as
applicable, shall be paid to a transferee if (A) the Preferred Share
Certificate representing such Preferred Shares is presented to the
Exchange Agent properly endorsed or accompanied by appropriate share
powers and otherwise in proper form for transfer and accompanied by
all documents reasonably required by the Exchange Agent to evidence
and effect such transfer and (B) such transferee shall pay any
transfer or other taxes required by reason of the payment to a person
other than the registered holder of the Preferred Share Certificate or
establish to the satisfaction of the Exchange Agent and the Surviving
Entity that such tax has been paid or is not applicable.
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(c) Payment with respect to LP Units.
(i) As promptly as practicable after the Partnership Merger
Effective Time (but in no event later than five (5) Business Days),
the Purchaser shall cause the Exchange Agent to mail to each holder of
LP Units registered on the transfer books of AMLI LP immediately prior
to the Partnership Merger Effective Time (x) a letter of transmittal
(a "Unitholder Letter of Transmittal") which shall certify to the
Purchaser and to the Exchange Agent the number of LP Units held by
such holder and shall be in such form and have such other provisions
as the Surviving Entity may reasonably specify; and (y) instructions
for use in effecting the delivery of the Unitholder Letter of
Transmittal in order to receive the Partnership Merger Consideration.
(ii) Upon delivery of a Unitholder Letter of Transmittal, duly
executed, and any other documents reasonably required by the Exchange
Agent or the Surviving Entity, the holder of the LP Units identified
in such Unitholder Letter of Transmittal shall be entitled to a check
in the amount equal to the per unit cash amount of the Partnership
Merger Consideration, which such holder has the right to receive
pursuant to the provisions of Section 1.5.
(iii) In the event of a transfer of ownership of LP Units which
is not registered in the transfer records of AMLI LP, the Partnership
Merger Consideration shall be paid to a transferee if (A) such
transferee delivers a Unitholder Letter of Transmittal in accordance
with Section 2.1(c)(i) and (B) such transferee shall pay any transfer
or other taxes required by reason of the payment to a person other
than the registered holder of the LP Unit or establish to the
satisfaction of the Exchange Agent and the Surviving Partnership that
such tax has been paid or is not applicable.
(d) Tax Characterizations. Purchaser and AMLI intend that, for U.S.
federal and state income tax purposes, the Merger shall be treated as a taxable
sale by AMLI of all of AMLI's assets to Purchase Acquisition Entity in exchange
for the Merger Consideration, the Series B Merger Consideration and the Series D
Merger Consideration and the assumption of AMLI's liabilities, followed by a
liquidating distribution of such Merger Consideration, Series B Merger
Consideration and Series D Merger Consideration to the holders of AMLI Common
Shares, Series B Preferred Shares and Series D Preferred Shares, as applicable,
pursuant to Section 331 and Section 562 of the Code. This Agreement shall
constitute a "plan of liquidation" of AMLI for U.S. federal income tax purposes.
Purchaser and AMLI LP intend that, for U.S. federal and state income tax
purposes, the Partnership Merger shall be treated as a taxable purchase of LP
Units directly by Purchaser Acquisition Entity and that the separate existence
of Purchaser Acquisition LP shall be disregarded.
(e) No Further Ownership Rights.
(i) The Merger Consideration paid upon the surrender for exchange
of the Common Share Certificates representing AMLI Common Shares in
accordance with the terms hereof shall be deemed to have been paid in
full
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satisfaction of all rights pertaining to such AMLI Common Shares and,
after the Merger Effective Time, there shall be no further
registration of transfers on the transfer books of the Surviving
Entity of the AMLI Common Shares. If, after the Merger Effective Time,
Common Share Certificates are presented to the Surviving Entity, for
any reason, they shall be canceled and exchanged as provided in this
Article II.
(ii) The Series B Merger Consideration and Series D Merger
Consideration paid upon the surrender for exchange of the Preferred
Share Certificates representing Preferred Shares in accordance with
the terms hereof shall be deemed to have been paid in full
satisfaction of all rights pertaining to such Preferred Shares and,
after the Merger Effective Time, there shall be no further
registration of transfers on the transfer books of the Surviving
Entity of the Preferred Shares. If, after the Merger Effective Time,
Preferred Share Certificates are presented to the Surviving Entity,
for any reason, they shall be canceled and exchanged as provided in
this Article II.
(iii) The Partnership Merger Consideration paid with respect to
the LP Units in accordance with the terms hereof shall be deemed to
have been paid in full satisfaction of all rights pertaining to such
LP Units and, after the Partnership Merger Effective Time, there shall
be no further registration of transfers on the transfer books of the
Surviving Partnership, of the LP Units.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
(including any interest and other income received with respect thereto) that
remains undistributed to the former holders of AMLI Common Shares, Preferred
Shares or LP Units on the first anniversary of the Merger Effective Time shall
be delivered to the Purchaser, as applicable, upon demand, and any former
holders of AMLI Common Shares, Preferred Shares or LP Units who have not
theretofore received any applicable Merger Consideration, Series B Merger
Consideration, Series D Merger Consideration or Partnership Merger
Consideration, as applicable, to which they are entitled under this Article II,
shall thereafter look only to the Surviving Entity or the Surviving Partnership,
as applicable, for payment of their claims with respect thereto.
(g) No Liability. None of Purchaser, Purchaser Acquisition Entity,
Purchaser Acquisition LP, the Surviving Entity or the Surviving Partnership
shall be liable to any holder of AMLI Common Shares, Preferred Shares or LP
Units for any part of the Merger Consideration, Series B Merger Consideration,
Series D Merger Consideration or Partnership Merger Consideration, as
applicable, delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Law. Any amounts remaining unclaimed by holders of
any such shares immediately prior to the time at which such amounts would
otherwise escheat to, or become property of, any federal, state or local
government or any court, regulatory or administrative agency or commission,
governmental arbitrator or other governmental authority or instrumentality,
domestic or foreign (a "Governmental Entity"), shall, to the extent permitted by
applicable Law, become the property of the Surviving Entity or the Surviving
Partnership, as a applicable, free and clear of any claims or interest of any
such holders or their successors, assigns or personal representatives previously
entitled thereto.
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(h) Lost, Stolen or Destroyed Certificates. If any Common Share
Certificate or Preferred Share Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Common Share Certificate or Preferred Share Certificate to be lost, stolen
or destroyed and, if required by Purchaser or the Surviving Entity, the posting
by such Person of a bond in such reasonable amount as Purchaser or the Surviving
Entity may direct as indemnity against any claim that may be made against it
with respect to such Common Share Certificate or Preferred Share Certificate,
the Exchange Agent shall pay in exchange for such lost, stolen or destroyed
Common Share Certificate the appropriate amount of the Merger Consideration or
shall pay in exchange for such lost, stolen or destroyed Preferred Share
Certificate the appropriate amount of the Series B Merger Consideration or
Series D Merger Consideration, as applicable.
(i) Withholding of Tax. Purchaser, the Surviving Entity, the Surviving
Partnership or the Exchange Agent shall be entitled to deduct and withhold from
the Merger Consideration, the Series B Merger Consideration, the Series D Merger
Consideration or the Partnership Merger Consideration otherwise payable pursuant
to this Agreement to any holder of AMLI Common Shares, Preferred Shares or LP
Units such amount as Purchaser, the Surviving Entity, the Surviving Partnership,
any Affiliate of the Surviving Entity or the Surviving Partnership or the
Exchange Agent is required to deduct and withhold with respect to the making of
such payment under the Code or any provision of state, local or foreign Law
related to Taxes. To the extent that amounts are so withheld by the Surviving
Entity, the Surviving Partnership or the Exchange Agent, such withheld amounts
shall be (i) paid over to the applicable Governmental Entity in accordance with
applicable Law and (ii) treated for all purposes of this Agreement as having
been paid to the former holder of AMLI Common Shares, Preferred Shares or LP
Units in respect of which such deduction and withholding was made by the
Surviving Partnership or the Exchange Agent.
(j) No Dissenters' Rights. No dissenters' or appraisal rights shall be
available with respect to the Merger, the Partnership Merger or the other
transactions contemplated hereby; provided, that the provisions of Section
3-202(c)(1)(ii) of the MGCL are applicable to the transaction.
(k) Additional Actions. If, at any time after the Merger Effective
Time, Purchaser shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other documents, actions or things are necessary
or desirable to vest, perfect or confirm of record or otherwise in the Surviving
Entity or the Surviving Partnership its right, title or interest in, to or under
any of the rights, properties or assets of Purchaser, Purchaser Acquisition
Entity, Purchaser Acquisition LP, AMLI or AMLI LP, or otherwise to carry out
this Agreement, the officers of the Surviving Entity and the Surviving
Partnership shall be authorized to execute and deliver, in the name and on
behalf of Purchaser, Purchaser Acquisition Entity, Purchaser Acquisition LP,
AMLI or AMLI LP, all such deeds, bills of sale, assignments, assurances and
other documents and to take and do, in the name and on behalf of Purchaser,
Purchaser Acquisition Entity, Purchaser Acquisition LP, AMLI or AMLI LP, all
such other actions and things as may be necessary or desirable to vest, perfect
or confirm any and all right, title and interest in, to and under such rights,
properties or assets in the Surviving Entity or the Surviving Partnership or
otherwise to carry out this Agreement.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of AMLI. AMLI and AMLI LP
represent and warrant to Purchaser, Purchaser Acquisition Entity and Purchaser
Acquisition LP as follows:
(a) Organization, Standing and Trust Power of AMLI. AMLI is a real
estate investment trust duly formed, validly existing and in good standing under
the Laws of the State of Maryland and has all of the requisite power, authority
and all necessary government approvals or licenses to own, lease, operate its
properties, and to carry on its business as now being conducted. AMLI is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of the business it is conducting, or the
ownership, operation or leasing of its properties or the management of
properties for others makes such qualification or licensing necessary, other
than in such jurisdictions where the failure to be so qualified or licensed or
in good standing would not, individually or in the aggregate, constitute an AMLI
Material Adverse Effect. AMLI has heretofore made available to Purchaser
complete and correct copies of AMLI's Amended and Restated Declaration of Trust,
as amended and supplemented through the date hereof (the "AMLI Charter"), and
Amended and Restated Bylaws, as amended through the date hereof (the "AMLI
Bylaws"). The AMLI Charter and the AMLI Bylaws are each in full force and
effect. Each jurisdiction in which AMLI is qualified or licensed to do business
and each assumed name under which it conducts business in any jurisdiction are
identified in Section 3.1(a) of the disclosure letter, dated the date hereof and
delivered to Purchaser in connection with the execution and delivery of this
Agreement (the "AMLI Disclosure Letter").
(b) AMLI Subsidiaries; Interests in Other Persons.
(i) Each AMLI Subsidiary is duly organized, validly existing and
in good standing under the Laws of its jurisdiction of formation and
has all of the requisite corporate, partnership, limited liability
company or other organizational power and authority and all necessary
government approvals and licenses to own, lease and operate its
properties and to carry on its business as now being conducted, except
where the failure to have such approvals or licenses would not,
individually or in the aggregate, constitute an AMLI Material Adverse
Effect. Each AMLI Subsidiary is duly qualified or licensed to do
business and is in good standing in each jurisdiction in which the
nature of its business or the ownership, operation or leasing of its
properties or the management of properties for others makes such
qualification or licensing necessary, other than in such jurisdictions
where the failure to be so qualified or licensed or in good standing
would not, individually or in the aggregate, constitute an AMLI
Material Adverse Effect. Section 3.1(b)(i) of the AMLI Disclosure
Letter sets forth (A) all AMLI Subsidiaries and their respective
jurisdictions of formation, (B) each owner and the respective amount
of such owner's equity interest in each AMLI Subsidiary and (C) a list
of each jurisdiction in which each AMLI Subsidiary is qualified or
licensed to do business and each assumed name under which each such
AMLI Subsidiary conducts business in any jurisdiction. All outstanding
equity interests
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in each AMLI Subsidiary have been duly authorized and are validly
issued, fully paid and (except for general partnership interests)
non-assessable, and are not subject to any preemptive rights and are
owned by AMLI, except as disclosed in Section 3.1(b)(i) of the AMLI
Disclosure Letter, and are so owned free and clear of all pledges,
claims, liens, charges, encumbrances and security interests of any
kind or nature whatsoever (collectively, "Liens"). Except as set forth
in Section 3.1(b)(i) or Section 3.1(c)(i)(D) of the AMLI Disclosure
Letter, there are no outstanding options, warrants or other rights to
acquire ownership interests from any AMLI Subsidiary. AMLI has
heretofore made available to Purchaser complete and correct copies of
the charter, bylaws or other organizational documents of each of the
AMLI Subsidiaries, each as amended to the date hereof and each as in
full force and effect.
(ii) Except for the stock of, or other equity interests in, the
AMLI Subsidiaries disclosed in Section 3.1(b)(i) of the AMLI
Disclosure Letter, and the other interests disclosed in Section
3.1(b)(ii) of the AMLI Disclosure Letter (the "AMLI Other Interests"),
neither AMLI nor any of the AMLI Subsidiaries owns any stock or other
ownership or equity interest in any Person. Neither AMLI nor any AMLI
Subsidiary has violated any provision of any organizational documents
governing or otherwise relating to its rights in any AMLI Other
Interest that would, individually or in the aggregate, constitute an
AMLI Material Adverse Effect.
(c) Capital Structure.
(i) Shares
(A) The authorized shares of beneficial interest of AMLI
consist of an aggregate of 150,000,000 shares, par value, $0.01
per share, which consist of (1) 144,225,000 AMLI Common Shares,
(2) 300,000 Series A cumulative convertible preferred shares of
beneficial interest, par value $0.01 per share (the "Series A
Preferred Shares"), (3) 3,125,000 Series B Preferred Shares, (4)
150,000 Series C junior participating preferred shares of
beneficial interest, par value $0.01 per share (the "Series C
Preferred Shares"), (5) 1,000,000 Series D Preferred Shares and
(6) 1,200,000 shares of beneficial interest without designation.
(B) As of the date of this Agreement, (1) 25,473,005 AMLI
Common Shares are issued and outstanding, (2) no Series A
Preferred Shares are issued and outstanding (3) 3,125,000 Series
B Preferred Shares are issued and outstanding, (4) no Series C
Preferred Shares are issued and outstanding and (5) 800,000
Series D Preferred Shares are issued and outstanding.
(C) As of the date of this Agreement, there are outstanding
(1) AMLI Options to purchase an aggregate of 1,509,852 AMLI
Common Shares and (2) an aggregate of 213,109 restricted AMLI
Common Shares
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granted under the AMLI Restricted Share Plan. As of the date of
this Agreement, there are 3,125,000 AMLI Common Shares reserved
for issuance upon the conversion of Series B Preferred Shares and
720,721 AMLI Common Shares reserved for issuance upon the
conversion of Series D Preferred Shares.
(D) Except as set forth in this Section 3.1(c) or in Section
3.1(c)(i)(D) of the AMLI Disclosure Letter, there are issued and
outstanding or reserved for issuance: (1) no shares or other
equity securities of AMLI; (2) no restricted AMLI Common Shares
or performance stock awards relating to the equity interests of
AMLI, (3) no securities of AMLI or any AMLI Subsidiary or
securities or assets of any other entity convertible into or
exchangeable for stock or other equity securities of AMLI or any
AMLI Subsidiary; and (4) no subscriptions, options, warrants,
conversion rights, stock appreciation rights, "phantom" stock,
stock units, calls, claims, rights of first refusal, rights
(including preemptive rights), commitments, arrangements or
agreements to which AMLI or any AMLI Subsidiary is a party or by
which it is bound in any case obligating AMLI or any AMLI
Subsidiary to issue, deliver, sell, purchase, redeem or acquire,
or cause to be issued, delivered, sold, purchased, redeemed or
acquired, stock or other equity securities of AMLI or of any AMLI
Subsidiary, or obligating AMLI or any AMLI Subsidiary to grant,
extend or enter into any such subscription, option, warrant,
conversion right, stock appreciation right, call, right,
commitment, arrangement or agreement. All outstanding shares of
AMLI are, and all shares reserved for issuance will be, upon
issuance in accordance with the terms specified in the
instruments or agreements pursuant to which they are issuable,
duly authorized, validly issued, fully paid and nonassessable and
not subject to or issued in violation of, any preemptive right,
purchase option, call option, right of first refusal,
subscription or any other similar right.
(E) Except as set forth in Section 3.1(c)(i)(E) of the AMLI
Disclosure Letter, all dividends or distributions on securities
of AMLI or any AMLI Subsidiary that have been declared or
authorized prior to the date of this Agreement have been paid in
full.
(ii) Partnership Units
(A) As of the date of this Agreement, (1) 25,686,114 units
of general partner interest in AMLI LP (the "GP Units"), (2)
1,633,415 LP Units, (3) 3,125,000 Series B units of limited
partnership interests and (4) 800,000 Series D units of limited
partnership interest are validly issued and outstanding. All such
partnership interests are duly authorized, validly issued and are
not subject to preemptive rights and any capital contributions
required to be made by the holders thereof have been made.
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All of the Series B units of limited partnership interests and
all of the Series D units of limited partnership interests are
directly held by AMLI.
(B) AMLI is the sole general partner of AMLI LP and as of
the date of this Agreement directly holds 25,686,114 GP Units,
representing 100% of the outstanding GP Units in AMLI LP. Section
3.1(c)(ii)(B) of the AMLI Disclosure Letter sets forth the name
of, and the number and class of GP Units, LP Units and Preferred
Units held by, each partner in AMLI LP.
(C) Each LP Unit held by a limited partner of AMLI LP may,
under the circumstances and subject to the conditions set forth
in the AMLI LP Agreement, be converted to AMLI Common Shares on a
one-for-one basis. As of the date of this Agreement, no notice
has been received by AMLI or AMLI LP of the exercise of any of
the rights set forth in this paragraph (C), which remain
outstanding on the date hereof.
(iii) Miscellaneous
(A) Except for the Transaction Documents and except as set
forth in Section 3.1(c)(iii)(A) or Section 3.1(c)(iii)(B) of the
AMLI Disclosure Letter, there are not any (i) shareholder
agreements, voting trusts, proxies or other agreements or
understandings relating to the voting of any shares of AMLI or
partnership interests in AMLI LP or any ownership interests in
any other AMLI Subsidiary or (ii) agreements or understandings
relating to the sale or transfer (including agreements imposing
transfer restrictions) of any shares of AMLI or any AMLI
Subsidiary, to which AMLI or any AMLI Subsidiary is a party or by
which it is bound. Except as set forth in Section 3.1(c)(iii)(A)
of the AMLI Disclosure Letter, there are no restrictions on
AMLI's ability to vote the equity interests of any of the AMLI
Subsidiaries.
(B) Except as set forth in Section 3.1(c)(iii)(B) of the
AMLI Disclosure Letter, no holder of securities in AMLI or any
AMLI Subsidiary has any right to have the offering or sale of
such securities registered by AMLI or any AMLI Subsidiary, as the
case may be.
(C) Except as set forth in Section 3.1(b)(i) or Section
3.1(c)(iii)(C) of the AMLI Disclosure Letter and except for LP
Units, there are not any AMLI Subsidiaries in which any officer,
trustee or director of AMLI or any AMLI Subsidiary owns any
share, stock or other securities. There are no agreements or
understandings between AMLI or any AMLI Subsidiary and any Person
that could cause such Person to be treated as holding any stock
or security in AMLI or any AMLI Subsidiary as an agent for, or
nominee of, AMLI or any AMLI Subsidiary.
-16-
(D) All prior issuances of securities were in all material
respects made in compliance with all, and not in violation of
any, applicable federal and state securities Laws.
(d) Authority; No Violations; Consents and Approval; LP Units.
(i) The AMLI Board of Trustees has approved and declared
advisable the Merger, the Partnership Merger and the other
transactions contemplated by the Transaction Documents and has
directed that the Merger be submitted for consideration at a special
meeting of the holders of AMLI Common Shares (the "AMLI Shareholder
Meeting"). AMLI has all requisite trust power and authority to enter
into this Agreement and its other Transaction Documents and to
consummate the transactions contemplated hereby and thereby, subject,
solely with respect to the consummation of the Merger, to receipt of
the AMLI Shareholder Approval and the acceptance for record of the
Articles of Merger by the Maryland Department and the LLC Certificate
of Merger by the Delaware Secretary of State. AMLI LP has all
requisite partnership power and authority to enter into this Agreement
and its other Transaction Documents and to consummate the transactions
contemplated hereby and thereby, subject, solely with respect to the
consummation of the Partnership Merger, the acceptance for record of
the LP Certificate of Merger by the Delaware Secretary of State. Each
other AMLI Subsidiary that is a party to any Transaction Document has
all requisite power and authority to enter into such Transaction
Document and to consummate the transactions contemplated thereby. The
execution and delivery of this Agreement and each other applicable
Transaction Document and the consummation of the transactions
contemplated hereby or thereby have been duly authorized by all
necessary corporate, trust or other organizational action on the part
of AMLI and each applicable AMLI Subsidiary, subject, solely with
respect to the consummation of the Merger, to receipt of the AMLI
Shareholder Approval. This Agreement and such other Transaction
Documents have been duly executed and delivered by AMLI and each
applicable AMLI Subsidiary and subject, solely with respect to the
consummation of the Merger, to receipt of the AMLI Shareholder
Approval, constitute legal, valid and binding obligations of AMLI and
each applicable AMLI Subsidiary, enforceable against AMLI and each
AMLI Subsidiary in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other Laws of general applicability
relating to or affecting creditors' rights and by general principles
of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at Law).
(ii) Except as set forth in Section 3.1(d)(ii) of the AMLI
Disclosure Letter and subject to receipt of the AMLI Shareholder
Approval, the execution and delivery of this Agreement by AMLI and
AMLI LP and the execution and delivery of the Transaction Documents by
AMLI and each applicable AMLI Subsidiary do not, and the consummation
of the transactions contemplated hereby and thereby, and compliance
with the provisions hereof and thereof, will not, conflict with, or
result in any violation of, or default (with or without notice or
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lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation, or the loss of a
benefit under, or give rise to a right of purchase under, result in
the creation of any Lien upon any of the properties or assets of AMLI
or any of the AMLI Subsidiaries under, require the consent or approval
of any third party or otherwise result in a detriment or default to
AMLI or any of the AMLI Subsidiaries under, any provision of (A) the
AMLI Charter or the AMLI Bylaws or any provision of the comparable
charter or organizational documents of any of the AMLI Subsidiaries,
(B) any loan or credit agreement or note (except for the Triggered
Loans (as defined herein)), or any bond, mortgage, indenture, lease,
contract or other agreement, instrument, permit, concession, franchise
or license applicable to AMLI or any of the AMLI Subsidiaries, or to
which their respective properties or assets are bound or any guarantee
by AMLI or any of the AMLI Subsidiaries of any of the foregoing, (C)
any joint venture or other ownership arrangement, or (D) assuming the
consents, approvals, authorizations or permits and filings or
notifications referred to in Section 3.1(d)(iii) are duly and timely
obtained or made and the AMLI Shareholder Approval has been obtained,
any Law or Order applicable to or binding upon AMLI or any of the AMLI
Subsidiaries, or any of their respective properties or assets, other
than, in the case of clauses (B) (except with respect to the Triggered
Loans), (C) and (D), any such conflicts, violations, defaults, rights,
Liens or detriments that, individually or in the aggregate, would not
constitute an AMLI Material Adverse Effect. For the purposes of this
Agreement, the term "Triggered Loans" means the loans identified as
"Triggered Loans" in Section 3.1(d)(ii) of the AMLI Disclosure Letter.
(iii) Except as set forth in Section 3.1(d)(iii) of the AMLI
Disclosure Letter, no consent, approval, order or authorization of, or
registration, declaration or filing with, notice to or permit from,
any Governmental Entity, is required by or on behalf of AMLI or any of
the AMLI Subsidiaries in connection with the execution and delivery of
this Agreement or any other Transaction Documents by AMLI and each of
the applicable AMLI Subsidiaries or the consummation by AMLI or the
applicable AMLI Subsidiaries of the transactions contemplated hereby
or thereby, except for: (A) the filing with the SEC of (1) (a) a proxy
or information statement in preliminary and definitive form (the
"Proxy Statement") relating to the AMLI Shareholder Meeting held in
connection with the Merger, or (b) other documents otherwise required
in connection with the transactions contemplated hereby and (2) such
reports under Section 13(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and such other compliance with the
Exchange Act and the rules and regulations thereunder, as may be
required in connection with the Transaction Documents and the
transactions contemplated hereby and thereby; (B) the filing of the
Articles of Merger, and the acceptance for record of the Articles of
Merger by, the Maryland Department; (C) the filing of the LLC
Certificate of Merger, and the acceptance for record of the LLC
Certificate of Merger by, the Delaware Secretary of State; (D) the
filing of the LP Certificate of Merger and the acceptance for record
of the LP Certificate of Merger; (E) such filings and approvals as may
be required by any applicable state securities or "blue sky" Laws; (F)
such filings as may be
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required in connection with state or local transfer taxes; (G)
compliance with the rules and regulations of the New York Stock
Exchange; and (H) any such other consent, approval, order,
authorization, registration, declaration, filing or permit that the
failure to obtain or make, individually or in the aggregate, would not
constitute an AMLI Material Adverse Effect.
(e) SEC Documents.
(i) AMLI has made available to Purchaser (by public filing with
the SEC or otherwise) a true and complete copy of each report,
schedule, registration statement, other statement (including proxy
statements) and information filed by AMLI with the SEC since January
1, 2002 and prior to or on the Closing Date (the "AMLI SEC
Documents"), which are all the documents (other than preliminary
material) that AMLI was required to file with the SEC since January 1,
2002 through the date hereof pursuant to the federal securities laws
and the SEC rules and regulations thereunder. As of their respective
dates, the AMLI SEC Documents complied in all material respects with
the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC thereunder applicable to such AMLI
SEC Documents, in each case as in effect at such time, and none of the
AMLI SEC Documents contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except to
the extent such statements have been modified or superseded by later
AMLI SEC Documents filed and publicly available prior to the date of
this Agreement. AMLI does not have any outstanding and unresolved
comments from the SEC with respect to any of the AMLI SEC Documents.
The consolidated financial statements of AMLI (including the notes
thereto) included in the AMLI SEC Documents complied as to form in all
material respects with the applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were
prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto, or, in the case of
the unaudited statements, as permitted by Rule 10-01 of Regulation S-X
of the SEC) and fairly present, in accordance with applicable
requirements of GAAP and the applicable rules and regulations of the
SEC (subject, in the case of the unaudited statements, to normal,
recurring adjustments, none of which are material), in each case as in
effect at such time, the assets, liabilities and the consolidated
financial position of AMLI and the AMLI Subsidiaries, taken as a
whole, as of their respective dates and the consolidated results of
operations and cash flows of AMLI and the AMLI Subsidiaries taken as a
whole, for the periods presented therein. The books of account and
other financial records of AMLI and the AMLI Subsidiaries are
accurately reflected in all material respects in the financial
statements included in the AMLI SEC Documents. No AMLI Subsidiary is
required to make any filing with the SEC.
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(ii) Section 3.1(e)(ii) of the AMLI Disclosure Letter sets forth
a true and complete copy of the unaudited consolidated balance sheet
of AMLI as at June 30, 2005 (the "Balance Sheet") and the unaudited
consolidated statements of income for the six months ended June 30,
2005 and June 30, 2004 (together with the Balance Sheet, the "Interim
Financial Information"). The Interim Financial Information was
prepared in accordance with GAAP (except for the absence of footnotes)
applied on a basis consistent with the consolidated financial
statements included in the AMLI SEC Documents and fairly presents in
all material respects (subject to normal recurring adjustments, none
of which are material), the assets, liabilities, consolidated
financial position and consolidated results of operations and cash
flows of AMLI and the AMLI Subsidiaries taken as a whole as at and for
the periods indicated. The books of account and other financial
records of AMLI and the AMLI Subsidiaries are accurately reflected in
all material respects in the Interim Financial Information.
(iii) Each AMLI SEC Document filed since July 31, 2002, was
accompanied by the certifications required to be filed or submitted by
Parent's chief executive officer and chief financial officer pursuant
to the Xxxxxxxx-Xxxxx Act of 2002 (the "Xxxxxxxx-Xxxxx Act") and, at
the time of filing or submission of each such certification, such
certification was true and accurate and complied with the
Xxxxxxxx-Xxxxx Act.
(f) Absence of Certain Changes or Events. Except as disclosed in
Section 3.1(f) of the AMLI Disclosure Letter, since the Balance Sheet date, AMLI
and the AMLI Subsidiaries have conducted their business only in the ordinary
course consistent with past practice and there has not been: (1) (A) an AMLI
Material Adverse Effect; (B) any declaration, setting aside for payment or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to any of the AMLI Common Shares, the Preferred Shares or
any LP Units; (C) any amendment of any term of any outstanding security of AMLI
or any AMLI Subsidiary; (D) any repurchase, redemption or other acquisition by
AMLI or any AMLI Subsidiary of any outstanding shares, stock or other securities
of, or other ownership interests in, AMLI or any AMLI Subsidiary; (E) any change
in any method of accounting or accounting practice or any material change in any
tax method or election by AMLI or any AMLI Subsidiary; (F) any increase in the
amount of compensation, bonus or other benefits payable to any current or former
director, trustee, officer or (other than in the ordinary course of business
consistent with past practices) other employee, of AMLI or the AMLI
Subsidiaries, any grant of severance or termination pay or benefits (or any
increase in the amount of such pay or benefits) to any current or former
director, trustee, officer or other employee, of AMLI or the AMLI Subsidiaries
that would be payable after the Merger Effective Time, or the entering into, or
amendment of, any employment, severance, change in control, tax gross-up,
deferred compensation, retention, special or stay bonus or any other similar
agreements or arrangements; (G) any change, event, effect, damage, destruction,
loss relating to the business or operations of AMLI that, individually or in the
aggregate, has constituted, or would constitute, an AMLI Material Adverse
Effect; (H) any incurrence, assumption or guarantee by AMLI or any AMLI
Subsidiary of any indebtedness for borrowed money other than in the ordinary
course of business consistent with past practice; (I) any creation or assumption
by AMLI or any AMLI Subsidiary of any Lien in an amount, individually or in the
aggregate, in excess of $2,000,000 on any asset other than in the ordinary
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course of business consistent with past practices; (J) any material commitment,
contractual obligation (including, without limitation, any management or
franchise agreement, any lease (capital or otherwise) or any letter of intent),
borrowing, guaranty, capital expenditure or transaction entered into by AMLI or
by any AMLI Subsidiary other than in the ordinary course of business consistent
with past practice; or (K) any making of any loan, advance or capital
contribution to or investment in any Person; or (2) any split, combination or
reclassification of any of AMLI's stock or any issuance or the authorization of
any issuance of any other securities in respect of, in lieu of or in
substitution for, or giving the right to acquire by exchange or exercise, shares
of its stock or any issuance of an ownership interest in, any AMLI Subsidiary.
(g) No Undisclosed Material Liabilities. Except as disclosed in the
AMLI SEC Documents filed prior to the date hereof, as set forth in Section
3.1(g)(i) of the AMLI Disclosure Letter, there are no Liabilities of AMLI or any
of the AMLI Subsidiaries, whether accrued, contingent, absolute or determined,
and, except with respect to the environmental matters which are the subject of
the representations and warranties in Section 3.1(o), there is no existing
condition, situation or set of circumstances that could reasonably be expected
to result in such a Liability, other than: (i) Liabilities adequately provided
for on the Balance Sheet, (ii) Liabilities incurred in the ordinary course of
business consistent with past practice subsequent to the Balance Sheet date and
(iii) such other Liabilities as would not, individually or in the aggregate,
constitute an AMLI Material Adverse Effect. Section 3.1(g)(ii) of the AMLI
Disclosure Letter sets forth a complete list of all loan or credit agreements,
notes, bonds, mortgages, indentures and other agreements and instruments
pursuant to which any indebtedness of AMLI or any AMLI Subsidiary, is
outstanding or may be incurred and the respective principal amounts outstanding
thereunder as of September 30, 2005. For purposes of this Agreement,
"indebtedness" means, with respect to any Person, without duplication (i) all
obligations of such Person for borrowed money, or with respect to deposits or
advances of any kind to such person, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (iii) all
obligations of such Person upon which interest charges are paid by such Person,
(iv) all obligations of such Person issued or assumed as the deferred purchase
price of property or services (excluding obligations of such person to trade
creditors for raw materials, inventory, services and supplies incurred in the
ordinary course of such Person's business, consistent with past practice), (v)
all capitalized lease obligations of such Person, (vi) all obligations of such
Person under interest rate or currency hedging transactions (valued at the
termination value thereof), (vii) all letters of credit issued for the account
of such Person, and (viii) all guarantees or keepwell agreements in respect of
any indebtedness of any other Person.
(h) No Default. Neither AMLI nor any of the AMLI Subsidiaries is or
has been in default or violation (and no event has occurred which, with notice
or the lapse of time or both, would constitute a default or violation) of any
term, condition or provision of (A) the AMLI Charter or the AMLI Bylaws or the
comparable charter or organizational documents of any of the AMLI Subsidiaries,
(B) any loan or credit agreement or any note, bond, mortgage, indenture, lease
or other agreement, instrument, permit, concession, franchise or license to
which AMLI or any of the AMLI Subsidiaries is now a party or by which AMLI or
any of the AMLI Subsidiaries or any of their respective properties or assets is
bound, or (C) any Law or Order applicable to or binding upon AMLI or any of the
AMLI Subsidiaries or any of their respective properties or assets, except, in
the case of clauses (B) and (C), for defaults or violations which,
-21-
individually or in the aggregate, have not constituted, and would not
constitute, an AMLI Material Adverse Effect.
(i) Compliance with Applicable Laws. AMLI and the AMLI Subsidiaries
hold all permits, licenses, certificates, registrations, variances, exemptions,
orders, franchises and approvals of all Governmental Entities necessary or
required by any applicable Law or Order for the lawful conduct of their
respective businesses (together with the AMLI Environmental Permits (as
hereinafter defined), the "AMLI Permits"), except where the failure so to hold,
individually or in the aggregate, does not and would not constitute an AMLI
Material Adverse Effect. AMLI and the AMLI Subsidiaries are in compliance with
the terms of the AMLI Permits, except where the failure to so comply,
individually or in the aggregate, does not and would not constitute an AMLI
Material Adverse Effect. Except as would not, individually or in the aggregate,
constitute an AMLI Material Adverse Effect, the businesses of AMLI and the AMLI
Subsidiaries are not being and have not been conducted in violation of any Law
or Order. No investigation or review by any Governmental Entity with respect to
AMLI or any of the AMLI Subsidiaries is pending or, to the Knowledge of AMLI, is
threatened, other than those the outcome of which, individually or in the
aggregate, would not constitute an AMLI Material Adverse Effect.
(j) Litigation. Except as set forth in Section 3.1(j) of the AMLI
Disclosure Letter, there is no litigation, arbitration, claim, investigation,
suit, action or proceeding pending or, to the Knowledge of AMLI, threatened
against or affecting AMLI or any AMLI Subsidiary or any of their respective
property or assets that, individually or in the aggregate, constitutes or would
constitute an AMLI Material Adverse Effect, nor is there any such litigation,
arbitration, claim, investigation, suit, action or proceeding or any Order
outstanding against AMLI or any AMLI Subsidiary or any of their respective
properties or assets which in any manner challenges or seeks to prevent or
enjoin, alter or materially delay the Merger or the Partnership Merger or the
other transactions contemplated by the Transaction Documents.
(k) Taxes.
(i) Each of AMLI and each AMLI Subsidiary has timely filed or has
had timely filed on its behalf all Tax Returns required to be filed by
it or on its behalf (after giving effect to any filing extension
properly granted by a Governmental Entity having authority to do so or
otherwise permitted by Law). Each such Tax Return was, at the time
filed, true, correct and complete in all material respects. Each of
AMLI and the AMLI Subsidiaries has paid (or AMLI has paid on behalf of
such AMLI Subsidiary), within the time and in the manner prescribed by
Law, all material Taxes that are due and payable. The most recent
financial statements contained in the AMLI SEC Documents filed with
the SEC prior to the date of this Agreement reflect an adequate
reserve or accrued liabilities or expenses for all material Taxes due
and payable by AMLI and the AMLI Subsidiaries as a group for all
taxable periods and portions thereof through the date of such
financial statements. AMLI and the AMLI Subsidiaries (as a group) have
established on their books and records (which may, but are not
required to, be reflected only on the books and records of AMLI or
AMLI LP) reserves or accrued liabilities or expenses that are adequate
for the payment of all
-22-
Taxes for which AMLI or any AMLI Subsidiary is liable but are not yet
due and payable. AMLI has incurred no liability for any Taxes under
Sections 857(b), 860(c) or 4981 of the Code or Treasury Regulation
Sections 1.337(d)-5, 1.337(d)-6 or 1.337(d)-7, including, without
limitation, any Tax arising from a prohibited transaction described in
Section 857(b)(6) of the Code and the excise tax on redetermined
rents, redetermined deductions, and excess interest under Section
857(b)(7) of the Code; and neither AMLI nor any of the AMLI
Subsidiaries has incurred any material liability for Taxes other than
in the ordinary course of business and other than transfer or similar
Taxes arising in connection with the sale of property. No deficiencies
for material Taxes have been asserted or assessed in writing by a
Governmental Entity against AMLI or any of the AMLI Subsidiaries, and
no requests for waivers of the time to assess any such material Taxes
have been granted and remain in effect or are pending. No claim is
pending or proposed by any Governmental Entity in any jurisdiction
where AMLI or any AMLI Subsidiary does not file Tax Returns that AMLI
or any AMLI Subsidiary is or may be subject to taxation by such
jurisdiction, nor to the Knowledge of AMLI are there any facts that
could reasonably be expected to give rise to such a claim. Copies of
all material Tax Returns with respect to taxable years commencing on
or after the taxable year ending December 31, 1999 have been delivered
to or made available to representatives of Purchaser.
(ii) Each of AMLI and the AMLI Subsidiaries that file Tax Returns
as a REIT (as defined herein) (A) for each taxable period beginning
with its date of formation through its most recent taxable year ended
on or before the date hereof, has been subject to taxation as a real
estate investment trust (a "REIT") within the meaning of the Code and
has satisfied the requirements to qualify as a REIT for such years,
(B) has operated consistent with the requirements for qualification
and taxation as a REIT for the period from the end of its most recent
taxable year ended before the date hereof through the date hereof, (C)
has not taken any action or omitted to take any action which would
reasonably be expected to result in a successful challenge by the
Internal Revenue Service to its status as a REIT, and no such
challenge is pending, or to AMLI's Knowledge, threatened and (D)
intends to continue to operate in such a manner as to permit it to
continue to qualify as a REIT for the taxable year or portion thereof
that will end with the Merger. Each AMLI Subsidiary which files Tax
Returns as a partnership or is a disregarded entity for U.S. federal
income tax purposes has since its acquisition by AMLI been classified
for U.S. federal income tax purposes as a partnership or disregarded
entity, as the case may be, and not as an association taxable as a
corporation, or a "publicly traded partnership" within the meaning of
Section 7704(b) of the Code that is treated as a corporation for U.S.
federal income tax purposes under Section 7704(a) of the Code. Each
AMLI Subsidiary which is a corporation has been since its formation
classified as a qualified REIT subsidiary under Section 856(i) of the
Code, a taxable REIT subsidiary under Section 856(l) of the Code or as
a REIT under Sections 856 through 860 of the Code.
-23-
(iii) As of the date of this Agreement, AMLI does not have any
earnings and profits attributable to AMLI or any other corporation in
any non-REIT year within the meaning of Section 857 of the Code.
(iv) All material Taxes which AMLI or the AMLI Subsidiaries are
required by Law to withhold or collect, including material Taxes
required to have been withheld in connection with amounts paid or
owing to any employee, independent contractor, creditor, shareholder
or other third party and sales, gross receipts and use taxes, have
been duly withheld or collected and, to the extent required, have been
paid over to the proper Governmental Entities or, if not yet due, are
held in separate bank accounts for such purpose. There are no Liens
for material Taxes upon the assets of AMLI or the AMLI Subsidiaries
except for statutory Liens for Taxes not yet due.
(v) Except as set forth in Section 3.1(k)(v) of the AMLI
Disclosure Letter: (A) there are no audits by or contests with any
taxing authority currently being conducted with regard to material
Taxes or Tax Returns of AMLI or any AMLI Subsidiary; (B) there are no
audits pending with or proposed in writing by any taxing authority
with respect to any material Taxes or Tax Returns; (C) neither AMLI
nor any AMLI Subsidiary is a party to any litigation or administrative
proceeding relating to any material Taxes; and (D) neither AMLI nor
any AMLI Subsidiary has requested, received or is subject to any
written ruling of a taxing authority or has entered into any written
agreement with a taxing authority with respect to any material Taxes.
(vi) Except as set forth in Section 3.1(k)(vi) of the AMLI
Disclosure Letter, neither AMLI nor the AMLI Subsidiaries are a party
to any Tax allocation or sharing agreement.
(vii) AMLI and the AMLI Subsidiaries do not have any material
liability for the Taxes of any Person other than AMLI and the AMLI
Subsidiaries (A) under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign Law) or (B) as a
transferee or successor.
(viii) Except as set forth in Section 3.1(k)(viii) or Section
3.1(l)(iii)(F) of the AMLI Disclosure Letter, neither AMLI nor the
AMLI Subsidiaries have made any payments, are obligated to make any
payments, or are parties to an agreement that could obligate them to
make any payments that will not be deductible under Section 280G of
the Code.
(ix) Neither AMLI nor any AMLI Subsidiary holds any asset the
disposition of which would be subject to rules similar to Section 1374
of the Code.
(x) There are no Tax Protection Agreements except as disclosed in
Section 3.1(k)(x) of the AMLI Disclosure Letter.
(l) Pension and Benefit Plans; ERISA.
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(i) Except as set forth in Section 3.1(l)(i) of the AMLI
Disclosure Letter, neither AMLI, any AMLI Subsidiary nor any of their
respective ERISA Affiliates is a party to, sponsors, participates in,
contributes to or has any liability or contingent liability with
respect to:
(A) any "employee welfare plan" or "employee pension benefit
plan" (as those terms are respectively defined in Sections 3(1)
and 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), other than a "multiemployer plan" (as
defined in Section 3(37) of ERISA);
(B) any retirement or deferred compensation plan, incentive
compensation plan, stock plan, profit-sharing, unemployment
compensation plan, vacation pay, severance pay, post-employment,
supplemental employment or unemployment benefit plan or
arrangement, bonus or benefit arrangement, insurance (including
any self-insurance) or hospitalization program or any other
fringe or other benefit or compensation plans, programs or
arrangements for any current or former employee, trustee,
director, consultant or agent, whether pursuant to contract,
arrangement, custom or informal understanding, or any other
"employee benefit plan" (as defined in Section 3(3) of ERISA); or
(C) any employment, severance, termination, consultancy or
other similar agreement.
(ii) A true and correct copy of each of the plans, programs,
arrangements, and agreements listed in Section 3.1(l)(i) of the AMLI
Disclosure Letter (referred to hereinafter as "AMLI Employee Benefit
Plans") has been supplied to the Purchaser. In the case of any AMLI
Employee Benefit Plan which is not in written form, the Purchaser has
been supplied with an accurate description of such AMLI Employee
Benefit Plan as in effect on the date hereof. A true and correct copy
of the most recent annual report, actuarial report, accountant's
opinion of the plan's financial statements, summary plan description
and Internal Revenue Service determination letter with respect to each
AMLI Employee Benefit Plan, to the extent applicable, has been
supplied to the Purchaser, and there have been no material changes in
the financial condition in the respective plans from that stated in
the annual reports and actuarial reports supplied. Section 3.1(l)(i)
of the AMLI Disclosure Letter contains a true and complete list of
each loan or extension of credit between AMLI or any AMLI Subsidiary,
on the one hand, and any of their respective trustees, directors,
officers or employees, on the other, and the outstanding balances
under each such loan or extension of credit as of the date hereof.
(iii) As to all AMLI Employee Benefit Plans:
(A) All AMLI Employee Benefit Plans comply and have been
administered in form and in operation in all material respects
with all
-25-
applicable requirements of law, and no event has occurred which
will or could cause any such AMLI Employee Benefit Plan to fail
to comply with such requirements and no notice has been issued by
any governmental authority questioning or challenging such
compliance.
(B) (w) All AMLI Employee Benefit Plans which are employee
pension benefit plans comply in form and in operation in all
material respects with all applicable requirements of Sections
401(a) and 501(a) of the Code; (x) each AMLI Employee Benefit
Plan which is intended to be qualified under Section 401(a) of
the Code has received a favorable determination letter, or has
pending an application for such determination from the Internal
Revenue Service with respect to those provisions for which the
remedial amendment period under Section 401(b) of the Code has
not expired, and AMLI is not aware of any reason why any such
determination letter should be revoked or not be reissued; (y)
there have been no amendments to such plans which are not the
subject of a favorable determination letter issued with respect
thereto by the Internal Revenue Service (other than an amendment
for which the remedial amendment period under Section 401(b) of
the Code has not expired); and (z) no event has occurred which
could reasonably be expected to give rise to disqualification of
any such plan under such sections or to a tax under Section 511
of the Code.
(C) Except as set forth in Section 3.1(l)(iii)(C) of the
AMLI Disclosure Letter, none of the assets of any AMLI Employee
Benefit Plan is invested in employer securities or employer real
property.
(D) There have been no "prohibited transactions" (as
described in Section 406 of ERISA or Section 4975 of the Code)
with respect to any AMLI Employee Benefit Plan.
(E) There have been no acts or omissions by which have given
rise to or which could reasonably be expected to give rise to
fines, penalties, taxes or related charges under Section 502 of
ERISA or Chapters 43, 47, 68 or 100 of the Code for which AMLI or
any AMLI Subsidiary may be liable.
(F) Except as set forth in Section 3.1(l)(iii)(F) of the
AMLI Disclosure Letter, none of the payments contemplated by the
AMLI Employee Benefit Plans would, in the aggregate, constitute
excess parachute payments (as defined in Section 280G of the Code
(without regard to subsection (b)(4) thereof)).
(G) There are no actions, suits or claims (other than
routine claims for benefits) pending or threatened involving any
AMLI Employee Benefit Plan or the assets thereof and no facts
exist which could give rise to any such actions, suits or claims
(other than routine claims for benefits).
-26-
(H) Neither AMLI, any AMLI Subsidiary nor any of their
respective ERISA Affiliates sponsors, maintains or contributes
to, or has in the past six years sponsored, maintained or
contributed to, any employee benefit plan subject to Title IV of
ERISA.
(I) Each AMLI Employee Benefit Plan which constitutes a
"group health plan" (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code), including any plans of current
and former affiliates which must be taken into account under
Sections 4980B and 414(t) of the Code or Section 601 of ERISA,
has been operated in compliance in all material respects with
applicable law, including coverage requirements of Sections 4980B
of the Code, Chapter 100 of the Code and Section 601 of ERISA to
the extent such requirements are applicable.
(J) Neither AMLI nor any AMLI Subsidiary has any liability
or contingent liability for providing, under any AMLI Employee
Benefit Plan or otherwise, any post-retirement medical or life
insurance benefits, other than statutory liability for providing
group health plan continuation coverage under Part 6 of Title I
of ERISA and Section 4980B of the Code.
(K) There has been no act or omission that would impair the
ability of AMLI and AMLI Subsidiaries (or any successor thereto)
to unilaterally amend or terminate any AMLI Employee Benefit
Plan.
(L) Except as set forth in Section 3.1(l)(iii)(L)(I) of the
AMLI Disclosure Letter, the consummation of the transactions
contemplated by this Agreement will not (either alone or together
with any other event) entitle any current or former employee,
director, trustee or independent contractor of AMLI or the AMLI
Subsidiaries to any payment, bonus, retirement, severance, job
security or similar benefit or enhance any such benefit, or
accelerate the time of payment, vesting or exercisability or
trigger any payment of funding (through a grantor trust or
otherwise) of compensation or benefits under, increase the amount
payable or trigger any other obligation pursuant to, any AMLI
Employee Benefit Plan. There is no contract, plan or arrangement
(written or otherwise) covering any employee or former employee
of AMLI or any AMLI Subsidiary that, individually or
collectively, could give rise to the payment of any amount that
would not be deductible pursuant to Section 162(m) of the Code.
Section 3.1(l)(i)(iii)(L)(II) of the AMLI Disclosure Letter lists
all the agreements, arrangements and other instruments which give
rise to an obligation to make or set aside amounts payable to or
on behalf of the officers or key employees of the AMLI or the
AMLI Subsidiaries as a result of the transactions contemplated by
this Agreement and/or any subsequent employment termination
(whether by AMLI or the employee), true and complete copies of
which have been made available to Purchaser prior to the date
hereof.
-27-
(M) There has been no amendment to, written interpretation
or announcement (whether or not written) by AMLI or the AMLI
Subsidiaries relating to, or change in employee participation or
coverage under, any AMLI Employee Benefit Plan which would
increase materially the expense of maintaining such employee plan
above the level of the expense incurred in respect thereof as of
the Balance Sheet Date.
(iv) Neither AMLI, any AMLI Subsidiary nor any of their
respective ERISA Affiliates, contributes to, has contributed to, or
has any liability or contingent liability with respect to a
"multiemployer plan" (as defined in Section 3(37) of ERISA).
(m) Labor and Employment Matters.
(i) Except as set forth in Section 3.1(m)(i) of the AMLI
Disclosure Letter, neither AMLI nor any of the AMLI Subsidiaries is a
party to any collective bargaining agreement or other labor agreement
with any labor union or organization. Except as set forth in Section
3.1(m)(i) of the AMLI Disclosure Letter, to the Knowledge of AMLI,
there is no question involving current union representation of
employees of AMLI or any of the AMLI Subsidiaries, nor is there any
activity by any labor organization (or representative thereof) or
employee group (or representative thereof) to organize any such
employees.
(ii) Except as set forth in Section 3.1(m)(ii) of the AMLI
Disclosure Letter, there is no complaint, lawsuit or proceeding in any
forum by or on behalf of any present or former employee, any applicant
for employment or any classes of the foregoing, alleging breach of any
express or implied contract of employment, any Law or regulation
governing employment or the termination thereof, or other
discriminatory, wrongful or tortious conduct in connection with the
employment relationship pending, or, to the Knowledge of AMLI,
threatened against AMLI or any of the AMLI Subsidiaries. AMLI and the
AMLI Subsidiaries are in compliance in all material respects with all
applicable Laws relating to the employment of their employees,
including those relating to wages, hours, collective bargaining,
unemployment compensation, worker's compensation, equal employment
opportunity, age and disability discrimination, immigration control,
employee classification and the payment and withholding of Taxes.
(iii) There is no strike, slowdown, representation or
certification campaign or work stoppage or lockout with respect to the
employees of AMLI or the AMLI Subsidiaries pending, or, to the
Knowledge of AMLI, threatened, against AMLI or any of the AMLI
Subsidiaries.
(iv) There is no proceeding, claim, suit, action or governmental
investigation pending or, to the Knowledge of AMLI, threatened, with
respect to which any current or former trustee, director, officer,
employee or agent of AMLI
-28-
or any of the AMLI Subsidiaries is claiming indemnification from AMLI
or any of the AMLI Subsidiaries.
(n) Intangible Property.
(i) Except as, individually or in the aggregate, has not had and
would not reasonably be expected to have an AMLI Material Adverse
Effect, there are no valid grounds for any bona fide claims: (i) to
the effect that the manufacture, sale, licensing or use of any product
as now used, sold or licensed or proposed for use, sale or license by
AMLI or any AMLI Subsidiary, infringes on any copyright, patent,
trademark, trade name, service xxxx or trade secret of any third
party; (ii) against the use by AMLI or any AMLI Subsidiary of any
copyrights, patents, trademarks, trade names, service marks, trade
secrets, technology, know-how or computer software programs and
applications used in the business of AMLI or any AMLI Subsidiary as
currently conducted or as proposed to be conducted, (iii) challenging
the ownership, validity or effectiveness of any of the AMLI
Intellectual Property Rights material to AMLI and the AMLI
Subsidiaries, taken as a whole, or (iv) challenging the license or
legally enforceable right to use of the Third-Party Intellectual
Property Rights by AMLI or any AMLI Subsidiary. Except as,
individually or in the aggregate, has not had and would not reasonably
be likely to have an AMLI Material Adverse Effect, AMLI and each AMLI
Subsidiary owns, or is licensed to use (in each case free and clear of
any Encumbrances), all Intellectual Property currently used in its
business as presently conducted.
(ii) As used in this Agreement, the term (i) "Intellectual
Property" means all patents, trademarks, trade names, service marks,
copyrights and any applications therefor, technology, know-how,
computer software programs or applications, and other proprietary
information or materials, trademarks, trade names, service marks and
copyrights, (ii) "Third-Party Intellectual Property Rights" means any
rights to Intellectual Property owned by any third party, and (iii)
"AMLI Intellectual Property Rights" means the Intellectual Property
owned or used by AMLI or any AMLI Subsidiary.
(o) Environmental Matters. Except as described in Section 3.1(o) of
the AMLI Disclosure Letter:
(i) neither AMLI nor any AMLI Subsidiary is in violation of any
applicable Law or Order relating to pollution or protection of public
health and safety, the environment (including indoor or ambient air,
surface water, groundwater, land surface or subsurface) or natural
resources, including laws and regulations relating to the release or
threatened release of any pollutant, contaminant, waste or toxic
substance, including asbestos or any substance containing asbestos,
polychlorinated biphenyls and petroleum or petroleum products
(including crude oil and any fraction thereof) (collectively,
"Hazardous Materials") or to the manufacture, management, possession,
presence, generation, processing, distribution, use, treatment,
storage, disposal, transportation,
-29-
abatement, removal, remediation or handling of, or exposure to,
Hazardous Materials (collectively, "Environmental Laws"), except for
any violation which, individually or in the aggregate, would not
constitute an AMLI Material Adverse Effect;
(ii) in the last three (3) years, neither AMLI nor the AMLI
Subsidiaries have received any notice of, and there are no pending or,
to the Knowledge of AMLI, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigation or proceedings
relating to Hazardous Materials or any Environmental Law against or
affecting AMLI or any of the AMLI Subsidiaries or any of the AMLI
Properties (as hereinafter defined);
(iii) AMLI and the AMLI Subsidiaries have not used, and have not
permitted the use of, any AMLI Property for activities or operations
that involve the handling, use, processing, manufacturing, generating,
producing, storing, refining, recycling, transporting, spilling,
pumping, pouring, emitting, emptying, discharging, injecting, burying,
leaching, dumping, disposing of or releasing into the environment or
otherwise dealing with any Hazardous Material, except for Hazardous
Materials utilized in the ordinary course of maintaining such real
properties or utilized in the ordinary course of business of a tenant
of such AMLI Properties, provided, that such use would not, in the
ordinary course of business, reasonably be expected to violate
applicable Environmental Laws; and
(iv) there is not any seepage, leaking, escaping, leaching,
discharging, injection, release, emission, spill, pumping, pouring,
emptying, dumping or other release or threatened release of Hazardous
Materials into the environment at or from any AMLI Properties,
including any land or water on, at, under or adjacent to any such AMLI
Properties, except in accordance with applicable Environmental Laws
and as would not, individually or in the aggregate, reasonably be
expected to result in an AMLI Material Adverse Effect.
(p) Properties.
(i) Except as listed in Section 3.1(p)(i) of the AMLI Disclosure
Letter, AMLI LP or an AMLI Subsidiary owns fee simple title to each of
the real properties identified in Section 3.1(p)(i) of the AMLI
Disclosure Letter (each property so owned, an "AMLI Property" and
collectively, the "AMLI Properties"), which are all of the real estate
properties owned by them, in each case (except as provided below) free
and clear of liens, mortgages or deeds of trust, claims against title,
charges which are liens, security interests or other encumbrances on
title ("Encumbrances"). Except as set forth in Section 3.1(p)(i) of
the AMLI Disclosure Letter, no other Person has any ownership interest
in any of the AMLI Properties.
(ii) The AMLI Properties are not subject to any rights of way,
restrictive covenants (including deed restrictions or limitations
issued pursuant to
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any Environmental Law), declarations, agreements, or Laws affecting
building use or occupancy, or reservations of an interest in title
(collectively, "Property Restrictions") or Encumbrances, except for
(collectively, the "Permitted Title Exceptions") (A) Encumbrances and
Property Restrictions set forth in Section 3.1(p)(ii) of the AMLI
Disclosure Letter, (B) Property Restrictions imposed or promulgated by
Law or any Governmental Entity or included in any AMLI space lease
with respect to real property, including zoning regulations, provided
that they do not materially adversely affect the currently intended
use of any AMLI Property, (C) Encumbrances and Property Restrictions
disclosed on existing title policies or existing surveys (in either
case copies of which title policies or surveys have been delivered or
made available to Purchaser), and (D) mechanics', carriers',
workmen's, repairmen's and materialmen's liens and other Liens,
Property Restrictions and other limitations of any kind, if any,
which, individually or in the aggregate, are not material in amount,
do not materially detract from the value of or materially interfere
with the present use of any of the AMLI Properties subject thereto or
affected thereby, and which, individually or in the aggregate, would
not be reasonably likely to have an AMLI Material Adverse Effect.
(iii) Except as provided in Section 3.1(p)(ii) of the AMLI
Disclosure Letter, (A) AMLI and AMLI LP have made available to
Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition LP
all valid policies of title insurance insuring AMLI LP's or the
applicable AMLI Subsidiary's fee simple title to the AMLI Properties
and such policies are, at the date hereof, in full force and effect
and no material claim has been made against any such policy; and (B)
AMLI and AMLI LP have previously provided or made available to
Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition LP
all existing surveys of the AMLI Properties in its possession.
(iv) Except as set forth in Section 3.1(p)(iv) to the AMLI
Disclosure Letter, (A) no certificate, permit or license from any
Governmental Entity having jurisdiction over any of the AMLI
Properties or any agreement, easement or other right that is necessary
to permit the lawful use and operation of the buildings and
improvements on any of the AMLI Properties or that is necessary to
permit the lawful use and operation of all driveways, roads and other
means of egress and ingress to and from any of the AMLI Properties has
not been obtained and is not in full force and effect, except for such
failures to obtain and to have in full force and effect, which would
not, individually or in the aggregate, reasonably be likely to have an
AMLI Material Adverse Effect and (B) neither AMLI nor any AMLI
Subsidiary has received written notice of any violation of any
federal, state or municipal law, ordinance, order, regulation or
requirement affecting any of the AMLI Properties issued by any
Governmental Authority which have not been cured, contested in good
faith or which violations would not, individually or in the aggregate,
reasonably be likely to have an AMLI Material Adverse Effect.
(v) Except as set forth in Section 3.1(p)(v) to the AMLI
Disclosure Letter, to AMLI's and AMLI LP's Knowledge, neither AMLI nor
any AMLI Subsidiary has received any written notice to the effect that
(A) any condemnation
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or rezoning proceedings are pending or threatened with respect to any
of the AMLI Properties, or (B) any Laws including, without limitation,
any zoning regulation or ordinance (including with respect to
parking), board of fire underwriters rules, building, fire, health or
similar law, code, ordinance, order or regulation has been violated
for any AMLI Property, which in the case of clauses (A) and (B) above,
would reasonably be likely to have, individually or in the aggregate,
an AMLI Material Adverse Effect.
(vi) Except as set forth in Section 3.1(p)(vi) of the AMLI
Disclosure Letter, all work required to be performed, payments
required to be made and actions required to be taken prior to the date
hereof pursuant to any agreement entered into with a Governmental
Entity in connection with a site approval, zoning reclassification or
other similar action relating to any AMLI Properties (e.g., local
improvement district, road improvement district, environmental
mitigation) have been performed, paid or taken, as the case may be,
other than those actions, individually or in the aggregate, the
failure of which would not reasonably be likely to have an AMLI
Material Adverse Effect.
(vii) Section 3.1(p)(vii) of the AMLI Disclosure Letter lists
each ground lease to which AMLI or any AMLI Subsidiary is party, as
lessee, and each master lease to which AMLI or any AMLI Subsidiary is
a lessor. Each such ground lease or master lease is in full force and
effect and is valid, binding and enforceable, to the Knowledge of
AMLI, in accordance with its terms against the lessor or lessee
thereunder, as applicable, except as would not have, or would not
reasonably be likely to have, individually or in the aggregate, a
material adverse effect on AMLI's interest in the applicable AMLI
Property. Except as listed in Section 3.1(p)(vii) of the AMLI
Disclosure Letter or which would not have, or would not reasonably be
likely to have, individually or in the aggregate, an AMLI Material
Adverse Effect, neither AMLI nor any AMLI Subsidiary, on the one hand,
nor, to the Knowledge of AMLI, any other party, on the other hand, is
in monetary default under any such ground lease or master lease. No
option has been exercised under any of such ground leases or master
leases, except options whose exercise has been evidenced by a written
document as described in Section 3.1(p)(vii) of the AMLI Disclosure
Letter. AMLI and AMLI LP have made available to Purchaser, Purchaser
Acquisition Entity and Purchaser Acquisition LP a correct and complete
copy of each such ground lease and master lease and all material
amendments thereto.
(viii) Except as set forth in Section 3.1(p)(viii) of the AMLI
Disclosure Letter, neither AMLI nor any AMLI Subsidiary has granted
any unexpired option agreements, rights of first offer, rights of
first negotiation or rights of first refusal with respect to the
purchase of an AMLI Property or any portion thereof or any other
unexpired rights in favor of third Persons to purchase or otherwise
acquire an AMLI Property or any portion thereof or entered into any
contract for sale, ground lease or letter of intent to sell or ground
lease any AMLI Property or any portion thereof.
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(ix) Except as set forth in Section 3.1(p)(ix) of the AMLI
Disclosure Letter, neither AMLI nor any AMLI Subsidiary is a party to
any agreement relating to the management of any of the AMLI Properties
by a party other than AMLI or any wholly owned AMLI Subsidiaries.
(x) Except as set forth in Section 3.1(p)(x) of the AMLI
Disclosure Letter, there is no material renovation or construction
project with aggregate projected costs in excess of $5,000,000
currently being performed at any of the AMLI Properties, except for
the projects set forth in Section 3.1(p)(x) of the AMLI Disclosure
Letter (the "Construction Projects"). Section 3.1(p)(x) of the AMLI
Disclosure Letter sets forth the budgeted cost, the cost to complete
and each Material Contract for each Construction Project. Neither AMLI
nor any AMLI Subsidiary is in material default of any material
obligation with respect to the Construction Projects and, to the
Knowledge of AMLI, the contractors obligated to complete any of the
Construction Projects are not in material default with respect to such
obligations as of the date of this Agreement.
(xi) Except as set forth in Section 3.1(p)(xi) of the AMLI
Disclosure Letter, none of the material personal property necessary
for the use, operation, repair or maintenance of any AMLI Property as
currently used, operated, maintained and repaired is leased from or
otherwise owned by third parties, except (A) for equipment owned or
leased by third party vendors providing maintenance or repair services
to an AMLI Property or (B) for leases, the expense for which is
included in AMLI's financial statements.
(xii) There (i) are no material structural defects relating to
any of the AMLI Properties, (ii) is no AMLI Property whose building
systems are not in working order in any material respect, and (iii) is
no physical material damage to any AMLI Property for which there is no
insurance in effect, which, in the case of any of (i), (ii) or (iii),
would, individually or in the aggregate, have an AMLI Material Adverse
Effect.
(q) Insurance. AMLI or AMLI LP maintains insurance coverage with
reputable insurers, or maintains self-insurance practices, in such amounts and
covering such risks as are in accordance with normal industry practice for
companies engaged in businesses similar to that of AMLI and AMLI LP. Section
3.1(q) of the AMLI Disclosure Letter sets forth a list that is true and complete
in all material respects of all material insurance policies in force naming
AMLI, any AMLI Subsidiary or any employees thereof as an insured or beneficiary
or as a loss payable payee or for which AMLI or any AMLI Subsidiary has paid or
is obligated to pay all or part of the premiums. There is no claim by AMLI or
any AMLI Subsidiary pending under any such policies which (A) has been denied or
disputed by the insurer and (B) would reasonably be likely to have, individually
or in the aggregate, an AMLI Material Adverse Effect. All such insurance
policies are in full force and effect, all premiums due and payable thereon have
been paid, and no written notice of cancellation or termination has been
received by AMLI or AMLI LP with respect to any such policy which has not been
replaced on substantially similar terms prior to the date of such cancellation.
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(r) Opinion of Financial Advisor. The AMLI Board of Trustees has
received the Fairness Opinion to the effect that, based on, and subject to the
various assumptions and qualifications set forth in the Fairness Opinion, as of
the date of the Fairness Opinion, (i) the consideration to be received by the
AMLI Common Shareholders in the Merger is fair from a financial point of view to
such holders and (ii) the consideration to be received by the AMLI LP
Unitholders is fair from a financial point of view to such holders considered as
if such LP Units had been converted into or redeemed for AMLI Common Shares in
accordance with the existing terms of LP Units.
(s) Vote Required. The affirmative vote of the holders of AMLI Common
Shares casting at least two-thirds of the votes entitled to be cast (the "AMLI
Shareholder Approval") is the only vote of the holders of any class or series of
the AMLI Common Shares or other securities of or equity interests in AMLI or
AMLI LP required to approve this Agreement and to approve and consummate the
Mergers and the other transactions contemplated by the Transaction Documents.
(t) Brokers. Except for the fees and expenses payable to the AMLI
Financial Advisor pursuant to the engagement letter set forth in Section 3.1(t)
of the AMLI Disclosure Letter, no broker, investment banker or other Person is
entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by the Transaction Documents based
upon arrangements made by or on behalf of AMLI, any AMLI Subsidiary or any
Affiliate thereof.
(u) Contracts.
(i) All of the Material Contracts of AMLI are listed on Section
3.1(u)(i) of the AMLI Disclosure Letter or in the exhibit index set
forth in the AMLI annual report of Form 10-K for the year ended
December 31, 2004. AMLI has, prior to the date hereof, made available
to Purchaser (including by filing with the SEC) true and complete
copies of each Material Contract as in effect as of the date hereof.
Except as set forth in Section 3.1(u)(i) of the AMLI Disclosure
Letter, all Material Contracts are valid, binding and enforceable and
in full force and effect with respect to AMLI and the AMLI
Subsidiaries, and to the Knowledge of AMLI, with respect to each other
party to any such Material Contract, except where such failure to be
so valid, binding and enforceable and in full force and effect do not
and would not, individually or in the aggregate, constitute an AMLI
Material Adverse Effect, and except, in each case, to the extent that
enforcement of rights and remedies created by any Material Contracts
are subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar Laws of general application
related to or affecting creditors' rights and to general equity
principles. Except as set forth in Section 3.1(u)(i) of the AMLI
Disclosure Letter, (i) neither AMLI nor any AMLI Subsidiary is in
violation of or in default under (nor does there exist any condition
which upon the passage of time or the giving of notice or both would
cause such a violation of or default under) any Material Contract to
which it is a party or by which it or any of its properties or assets
is bound and, (ii) to the Knowledge of AMLI there are no such
violations or defaults (nor does there exist any condition
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which upon the passage of time or the giving of notice or both would
cause such a violation or default) with respect to any third party to
any Material Contract, except in either the case of clause (i) or (ii)
for those violations or defaults that, individually or in the
aggregate, would not reasonably be likely to have an AMLI Material
Adverse Effect. For purposes of this Agreement, "Material Contracts"
shall mean (i) any loan agreement, letter of credit, indenture, note,
bond, debenture, mortgage or any other document, agreement or
instrument evidencing a capitalized lease obligation or other
indebtedness to any Person, or any guaranty thereof, in excess of
$5,000,000 (excluding letters of credit, performance bonds or
guaranties entered into in the ordinary course of business), (ii) any
contractual obligation (including any brokerage agreement) entered
into by AMLI or any AMLI Subsidiary that, by its terms, is not
terminable within one year (without termination fee or penalty) and
that may result in total payments by or liability of AMLI or any AMLI
Subsidiary in excess of $5,000,000, (iii) any other agreements filed
or required to be filed as exhibits to the AMLI SEC Documents pursuant
to Item 601(b)(10) of Regulation S-K of Title 17, Part 229 of the Code
of Federal Regulations, (iv) any interest rate cap, interest rate
collar, interest rate swap, currency hedging transaction and any other
agreement relating to a similar transaction to which AMLI or any AMLI
Subsidiary is a party or an obligor with respect thereto (v) any
agreement in which the amount involved exceeds $60,000 per annum with
any trustee, director or employee of AMLI or the AMLI Subsidiaries
earning in excess of $75,000 per annum in base compensation and cash
bonus or with any "associate" or any member of the "immediate family"
(as such terms are respectively defined in Rules 12b-2 and 16a-1 of
the 0000 Xxx) of any such trustee, director or employee; (vi) any
partnership or joint venture agreement with any third parties; and
(vii) any agreement, commitment, instrument or obligation of a type
described in Sections 3.1(u)(ii) through 3.1(u)(v).
(ii) Except as set forth in Section 3.1(u)(ii) of the AMLI
Disclosure Letter, there is no confidentiality agreement,
non-competition agreement or other contract or agreement that contains
covenants that restrict AMLI's ability to compete in any line of
business or with any Person in any geographical area.
(iii) Except as set forth in Section 3.1(u)(iii) of the AMLI
Disclosure Letter, there are no indemnification agreements entered
into by and between AMLI and any trustee, director or officer of AMLI
or any of the AMLI Subsidiaries.
(iv) None of AMLI or any AMLI Subsidiary is a party to any
agreement pursuant to which AMLI or any AMLI Subsidiary manages or
provides services with respect to any real properties other than AMLI
Properties, except for the agreements listed in Section 3.1(u)(iv) of
the AMLI Disclosure Letter.
(v) Section 3.1(u)(v) of the AMLI Disclosure Letter lists all
agreements entered into by AMLI or any AMLI Subsidiary providing for
the sale
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of, or option to sell, any AMLI Properties or the purchase of, or
option to purchase, by AMLI or any AMLI Subsidiary, on the one hand,
or the other party thereto, on the other hand, any real estate not yet
consummated as of the date hereof.
(v) Inapplicability of Takeover Statutes, AMLI Rights Agreement and
Certain Charter and Bylaw Provisions. (i) AMLI has taken all appropriate and
necessary actions to exempt the Merger, the Partnership Merger, the Transaction
Documents and the other transactions contemplated thereby from the restrictions
of Subtitles 6 and 7 of Title 3 of the MGCL and Title 8 (collectively, the
"Takeover Statute"). No other "control share acquisition," "fair price,"
"moratorium" or other antitakeover Laws apply to the Merger, the Partnership
Merger, the Transaction Documents or the other transactions contemplated
thereby. AMLI and the AMLI Board of Trustees have taken all appropriate and
necessary actions to (A) render the rights under the AMLI Rights Agreement
inapplicable in the Merger, the Partnership Merger, the Transaction Documents
and the other transactions contemplated thereby, (B) cause the Merger, the
Partnership Merger, the Transaction Documents and the other transactions
contemplated hereby to comply with or be exempted from any provision contained
in the AMLI Charter, AMLI Bylaws or in the comparable organizational document of
any AMLI Subsidiary that would otherwise prohibit, hinder or delay such
transactions and (C) render any and all limitations on ownership of (1) AMLI
Common Shares as set forth in the AMLI Charter and (2) the limited partner
interests in AMLI LP as set forth in the AMLI LP Agreement, including the
ownership limit (the "Ownership Limit") set forth in the AMLI Charter
inapplicable to the Merger, Partnership Merger, the Transaction Documents and
the other transactions contemplated thereby.
(w) Related Party Transactions. Except as described in the AMLI SEC
Documents filed prior to the date hereof or as set forth in Section 3.1(w) of
the AMLI Disclosure Letter, there are no material arrangements, agreements or
contracts which continue in effect as of the date hereof entered into by AMLI or
any of the AMLI Subsidiaries, on the one hand, and any Person who is an officer,
trustee, director or affiliate of AMLI or any AMLI Subsidiary, any relative of
the foregoing or an entity of which any of the foregoing is an Affiliate, on the
other hand. True and complete copies of all such documents have been made
available to Purchaser prior to the date hereof.
(x) Investment Company Act of 1940. Neither AMLI, AMLI LP nor any of
the other AMLI Subsidiaries is, or at the Merger Effective Time or the
Partnership Merger Effective Time will be, required to be registered as an
investment company under the Investment Company Act of 1940, as amended.
(y) Information Supplied. The information supplied by AMLI or any AMLI
Subsidiary for inclusion in the Proxy, or any amendment or supplement thereto,
shall not, on the date the Proxy is first mailed to AMLI Common Shareholders, at
the time of the AMLI Shareholder Approval or at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
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Section 3.2 Representations and Warranties of Purchaser, Purchaser
Acquisition Entity and Purchaser Acquisition LP. Purchaser, Purchaser
Acquisition Entity and Purchaser Acquisition LP represent and warrant to AMLI as
follows:
(a) Organization, Standing and Power of Purchaser, Purchaser
Acquisition Entity and Purchaser Acquisition LP. Purchaser is a limited
liability company duly formed, validly existing and in good standing under the
Laws of the State of Delaware. Purchaser Acquisition Entity is a limited
liability company duly formed, validly existing and in good standing under the
Laws of the State of Delaware and is an indirect wholly owned subsidiary of
Purchaser. Purchaser Acquisition LP is a limited partnership duly formed,
validly existing and in good standing under the Laws of the State of Delaware.
Acquisition Limited Partner is a limited liability company duly formed, validly
existing and in good standing under the Laws of the State of Delaware and is a
wholly owned subsidiary of Purchaser Acquisition Entity. Purchaser Acquisition
Entity is the sole general partner of Purchaser Acquisition LP and Acquisition
Limited Partner is the sole limited partner of Purchaser Acquisition LP.
Purchaser has heretofore made available to AMLI and AMLI LP complete and correct
copies of the charter, bylaws or other organizational documents of each of the
Purchaser Subsidiaries, each as amended to the date hereof and each as in full
force and effect.
(b) Authority; No Violations; Consents and Approvals.
(i) Purchaser, Purchaser Acquisition Entity and Purchaser
Acquisition LP have all requisite power and authority to enter into
this Agreement and its other Transaction Documents and to consummate
the transactions contemplated hereby or thereby. The execution and
delivery of this Agreement and the Transaction Documents and the
consummation of the transactions contemplated hereby or thereby have
been duly authorized by all necessary action on the part of Purchaser,
Purchaser Acquisition Entity and Purchaser Acquisition LP.
(ii) This Agreement and the Transaction Documents to which
Purchaser, Purchaser Acquisition Entity or Purchaser Acquisition LP
are parties have been duly executed and delivered by such Person, and,
constitute valid and binding obligations of such Person, enforceable
against such Person in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other Laws of general applicability
relating to or affecting creditors' rights and by general principles
of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(iii) The execution and delivery by Purchaser, Purchaser
Acquisition Entity and Purchaser Acquisition LP of this Agreement and
their other Transaction Documents do not, and the consummation of the
transactions contemplated hereby and thereby, and compliance by
Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition LP
with the provisions hereof and thereof, will not, conflict with, or
result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any material obligation or the loss of
a
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material benefit under, or give rise to a right of purchase under or
result in the creation of any Lien upon any of the properties or
assets of such parties under, require the consent or approval of any
third party or otherwise result in a material detriment to such
parties under, any provision of (A) the charter, bylaws or comparable
organizational documents of Purchaser, Purchaser Acquisition Entity or
Purchaser Acquisition LP, (B) any material contract, agreement or
commitment of Purchaser, Purchaser Acquisition Entity or Purchaser
Acquisition LP, or any guarantee by Purchaser, Purchaser Acquisition
Entity or Purchaser Acquisition LP, or (C) assuming the consents,
approvals, authorizations or permits and filings or notifications
referred to in Section 3.2(b)(iv) are duly and timely obtained or
made, any Law or Order applicable to or binding on Purchaser,
Purchaser Acquisition Entity or Purchaser Acquisition LP or any of
their respective properties or assets, other than, in the case of
clauses (B), (C) and (D), any such conflicts, violations, defaults,
rights, Liens or detriments that, individually or in the aggregate,
would not reasonably be expected to materially impair or delay the
ability of Purchaser, Purchaser Acquisition Entity or Purchaser
Acquisition LP to perform its obligations under any of the Transaction
Documents or prevent the consummation by Purchaser, Purchaser
Acquisition Entity or Purchaser Acquisition LP of any of the
transactions contemplated hereby or thereby.
(iv) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from, any
Governmental Entity is required by or on behalf of Purchaser,
Purchaser Acquisition Entity or Purchaser Acquisition LP in connection
with the execution and delivery by Purchaser, Purchaser Acquisition
Entity and Purchaser Acquisition LP of this Agreement or the other
Transaction Documents to which Purchaser, Purchaser Acquisition Entity
and Purchaser Acquisition LP is a party or the consummation by
Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition LP
of the transactions contemplated hereby or thereby, except for: (A)
compliance with the Securities Act and the Exchange Act and the rules
and regulations thereunder as may be required in connection with the
Transaction Documents and the transactions contemplated hereby and
thereby; (B) the filing of the Articles of Merger with, and acceptance
for recording of the Articles of Merger by, the Maryland Department;
(C) the filing of the LLC Certificate of Merger with, and acceptance
for recording of the LLC Certificate of Merger by, the Delaware
Secretary of State; (D) the filing of the LP Certificate of Merger and
the acceptance for record of the LP Certificate of Merger; (E) such
filings and approvals as may be required by any applicable state
securities or "blue sky" Laws, Takeover Statute or Environmental Laws;
(F) compliance with the rules and regulations of the New York Stock
Exchange; and (G) any such other consent, approval, order,
authorization, registration, declaration, filing or permit that the
failure to obtain or make would not reasonably be expected to
materially impair or delay the ability of Purchaser, Purchaser
Acquisition Entity or Purchaser Acquisition LP to perform its
obligations hereunder or under any of the other Transaction Documents
or prevent the consummation by them of any of the transactions
contemplated hereby or thereby.
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(c) Information Supplied. The information supplied by the Purchaser or
any Purchaser Subsidiary for inclusion in the Proxy, or any amendment or
supplement thereto, shall not, on the date the Proxy is first mailed to AMLI
Common Shareholders, at the time of the AMLI Shareholder Approval or at the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(d) No Other Business. Purchaser Acquisition Entity was formed solely
for the purpose of engaging in the transactions contemplated hereby, has engaged
in no other business activities and has conducted its operations only as
contemplated thereby.
(e) Brokers. No broker, investment banker or other person is entitled
to any broker's, finder's or other similar fee or commission in connection with
the transactions contemplated by the Transaction Documents based upon
arrangements made by or on behalf of Purchaser, Purchaser Acquisition Entity and
Purchaser Acquisition LP, for which fee or commission AMLI or any AMLI
Subsidiary may be liable.
(f) Litigation. There is no litigation, arbitration, claim,
investigation, suit, action or proceeding pending or, to the Knowledge of
Purchaser, threatened against or affecting Purchaser, Purchaser Acquisition
Entity and Purchaser Acquisition LP, nor is there any Order outstanding against
Purchaser, Purchaser Acquisition Entity or Purchaser Acquisition LP, in each
case which would reasonably be expected to, individually or in the aggregate,
(A) cause any of the transactions contemplated by the Transaction Documents to
be rescinded following their consummation, including the Merger and the
Partnership Merger, or (B) materially impair or delay the ability of Purchaser,
Purchaser Acquisition Entity or Purchaser Acquisition LP to perform its
obligations hereunder or under any of the other Transaction Documents or prevent
the consummation by them of any of the transactions contemplated thereby.
(g) Funding. Purchaser, Purchaser Acquisition Entity and Purchaser
Acquisition LP will have available, at the Merger Effective Time, the Exchange
Fund. Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition LP have
provided to AMLI and AMLI LP a copy of the financing commitment letter dated
October 19, 2005 between Purchaser and Xxxxxx Xxxxxxx Asset Funding Inc.,
entered into in connection with the transactions contemplated hereby, including
any exhibits, schedules and amendments thereto (the "Financing Letter"). The
Financing Letter is effective and has not been withdrawn or modified and all due
and payable commitment fees have been paid thereunder, and the Purchaser,
Purchaser Acquisition Entity and Purchaser Acquisition LP hereby covenant and
agree to pay on a timely basis any other fees that become due and payable
thereunder. To the Knowledge of Purchaser, the conditions set forth in the
Financing Letter will be able to be satisfied prior to the Merger Effective
Time.
ARTICLE IV.
COVENANTS RELATING TO CONDUCT OF BUSINESS PENDING THE MERGERS
Section 4.1 Conduct of Business by AMLI.
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(a) During the period from the date of this Agreement to the earlier
of the termination of this Agreement or the Partnership Merger Effective Time,
AMLI and AMLI LP shall, and shall cause each of the other AMLI Subsidiaries to
(i) carry on its businesses in the usual, regular and ordinary course consistent
with past practice and in compliance in all material respects with applicable
Law and (ii) to the extent consistent with the foregoing clause (i), use its
commercially reasonable efforts to preserve intact in all material respects its
current business organization, goodwill, ongoing businesses and relationships
with third parties, to keep available the services of their present officers and
employees and to maintain the status of AMLI and each applicable AMLI Subsidiary
as a REIT within the meaning of the Code.
(b) Without limiting the generality of the foregoing, during the
period from the date of this Agreement to the earlier of the termination of this
Agreement or the Partnership Merger Effective Time, except as otherwise
expressly provided by this Agreement or the Transaction Documents or to the
extent consented to by Purchaser in advance and in writing, AMLI and AMLI LP
shall not and shall not authorize or commit or agree to, and shall cause the
other AMLI Subsidiaries not to (and not to authorize or commit or agree to):
(i) (A) declare, set aside for payment or pay any dividends on,
or make any other actual, constructive or deemed distributions
(whether in cash, shares, property or otherwise) in respect of, any of
AMLI's shares, stock or the partnership interests, shares, stock or
other equity interests in any AMLI Subsidiary that is not directly or
indirectly wholly owned by AMLI, other than (i) regular, cash
distributions at a rate not in excess of (x) $0.48 per share of AMLI
Common Shares, declared and paid quarterly, (y) $0.48 per Series B
Preferred Share, declared and paid quarterly and (z) $0.540625 per
Series D Preferred Shares, declared and paid quarterly, in each case,
in accordance with past practice, (ii) corresponding distributions
payable to each holders of LP Units, GP Units, and payable with
respect to the Series B units of limited partnership interests of AMLI
LP and the Series D units of limited partnership interest of AMLI LP
and (iii) dividends or distributions, declared, set aside or paid by
any wholly owned AMLI Subsidiary to AMLI or any AMLI Subsidiary that
is, directly or indirectly, wholly owned by AMLI and provided, that
AMLI may, in accordance with Section 5.4(f), make dividend payments it
is required to make by the Code required to maintain REIT status and
those that are sufficient to eliminate any U.S. federal income tax
liability, (B) except as set forth in Section 4.1(b)(i) of the AMLI
Disclosure Letter, split, combine or reclassify any shares, stock,
partnership interests or other equity interests or issue or authorize
the issuance of any securities in respect of, in lieu of or in
substitution for shares of such shares, stock, partnership interests
or other equity interests or (C) purchase, redeem (except for the
redemption of LP Units for shares of AMLI Common Shares in accordance
with the AMLI LP Agreement) or otherwise acquire any AMLI Common
Shares, stock, other equity interests or securities of AMLI or the
partnership interests, stock, other equity interests or securities of
any AMLI Subsidiary or any options, warrants or rights to acquire, or
security convertible into, AMLI Common Shares, stock, other equity
interest or securities of AMLI or the partnership interests, stock or
other equity interests in any AMLI Subsidiary, except in connection
with the use of AMLI Common Shares or LP Units to pay
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the exercise price or Tax withholding obligation upon the exercise of
an AMLI Option as presently permitted under any AMLI Option Plan;
(ii) (A) classify or re-classify any unissued AMLI Common Shares,
shares of stock, units, interests, any other voting or redeemable
securities (including LP Units or other partnership interests) or
stock based performance units of AMLI or any AMLI Subsidiary; (B)
authorize for issuance, issue, deliver, sell, or grant AMLI Common
Shares, shares of stock, units, interests, any other voting or
redeemable securities (including LP Units or other partnership
interests) or stock based performance units of AMLI or AMLI
Subsidiaries, (C) authorize for issuance, issue, deliver, sell, or
grant any option or other right in respect of, any AMLI Common Shares,
shares of stock, units, interests, any other voting or redeemable
securities (including LP Units or other partnership interests), or
stock based performance units of AMLI or any AMLI Subsidiary or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, units, interests, voting securities or
convertible or redeemable securities or (D) amend or waive any option
to acquire AMLI Common Shares (except, with respect to the foregoing
clause (A), (B) and (C), (1) as required under the AMLI LP Agreement
as presently in effect, (2) as required under the terms of the
Preferred Shares as presently in effect and (3) in connection with the
exercise of AMLI Options outstanding as of the date hereof under the
AMLI Option Plan as in effect as of the date hereof or the exchange of
units of AMLI LP for AMLI Common Shares in accordance with the AMLI LP
Agreement);
(iii) amend the AMLI Charter or the AMLI Bylaws, or any other
comparable charter or organizational documents of any AMLI Subsidiary;
(iv) (A) merge, consolidate or enter into any other business
combination transaction with any Person, except as provided in Section
5.5 and 5.6, (B) acquire (by merger, consolidation or acquisition) any
corporation, partnership or other entity or (C) purchase any equity
interest in or all or substantially all of the assets of, any Person
or any division or business thereof;
(v) (A) make, undertake or enter into any new commitments
obligating AMLI or any AMLI Subsidiary to (I) make, capital
expenditures (x) from the date hereof until December 31, 2005, in
excess of 105% of the total amounts set forth in the capital
expenditure budgets that have been previously provided to the
Purchaser Parties by AMLI and (y) for the period beginning on January
1, 2006 and ending on the earlier of the termination of this Agreement
and the Merger Agreement Effective Time, in excess of 105% of the
total amounts set forth in the 2006 Capital Budgets, in each case not
including the Commitments (as defined herein) set forth in Section
4.1(b)(v) of the AMLI Disclosure Letter, provided AMLI shall be
permitted to enter into a commitment to make repairs and/or prevent
damage to any AMLI Properties as is necessary in the event of an
emergency situation as long as AMLI provides Purchaser with a copy of
such commitment within two (2) Business Days after such commitment is
entered into or (II) undertake any substantial renovation or
rehabilitation of any XXXX
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Xxxxxxxx, (X) acquire, enter into any option to acquire, or exercise
an option or other right or election or enter into any other
commitment or contractual obligation (each, a "Commitment") for the
acquisition of any real property, including by the acquisition of
equity securities in an entity that holds any such real property, or
other transaction (other than (i) any Commitment described in Section
4.1(b)(v) of the AMLI Disclosure Letter, (ii) any exchange of real
property pursuant to Section 1031 of the Code described in Section
4.1(b)(v) of the AMLI Disclosure Letter, (iii) entering into leases
(other than ground leases) as landlord in the ordinary course of
business and incurring any reasonable and customary expenditures
related thereto or (iv) incurring or expending up to an aggregate
amount not to exceed $1,500,000 with respect to the pursuit of the
potential acquisition by an AMLI Subsidiary of one or more real
properties), or amend any Commitment in any material respect, (C)
commence construction of, or enter into any Commitment to develop or
construct, other real estate projects involving in excess of $500,000
(other than any Commitment described in Section 4.1(b)(v) of the AMLI
Disclosure Letter), (D) incur indebtedness (secured or unsecured)
except for draws under its revolving line(s) of credit for working
capital purposes and indebtedness (limited to its revolving line(s) of
credit and any indebtedness described in Section 4.1(b)(v) of the AMLI
Disclosure Letter) to fund any of the Commitments described (and
within the limits so described) in Section 4.1(b)(v) of the AMLI
Disclosure Letter or (E) modify, amend, terminate or enter into any
commitment to modify, amend or terminate any indebtedness in existence
as of the date hereof;
(vi) sell, mortgage, subject to Lien (or, in the case of an
involuntary Lien, fail to take action within thirty (30) days of the
creation thereof to have such Lien removed), lease (other than leases
(other than ground leases) as landlord in the ordinary course of
business) or otherwise dispose of any of the AMLI Properties,
including by the disposition or issuance of equity securities in an
entity that owns an AMLI Property, except (A) as described in Section
4.1(b)(vi) of the AMLI Disclosure Letter (and in the amounts so
described), or (B) made in the ordinary course of business consistent
with past practice pursuant to a binding sales contract in existence
on the date of this Agreement and set forth in Section 4.1(b)(vi) of
the AMLI Disclosure Letter;
(vii) sell, lease, mortgage, subject to Lien or otherwise dispose
of any of its personal or intangible property, except in transactions
made in the ordinary course of business consistent with past practice
and which are not material, individually or in the aggregate, or in
connection with sales of any AMLI Properties as permitted under
Section 4.1(b)(vi);
(viii) acquire any personal or intangible property, except in
transactions made in the ordinary course of business consistent with
past practice or in connection with acquisitions permitted under
Section 4.1(b)(v);
(ix) except as set forth in Section 4.1(b)(ix) of the AMLI
Disclosure Letter, (A) assume or guarantee the indebtedness of another
Person, enter into any
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"keep well" or other agreement to maintain any financial statement
condition of another Person or enter into any arrangement having the
economic effect of any of the foregoing, (B) prepay, refinance or
amend any existing indebtedness, (C) make any loans, advances, capital
contributions or investments in any other Person or (D) pledge or
otherwise encumber shares of capital stock or securities in AMLI or
any AMLI Subsidiary;
(x) make or rescind any express or deemed material election
relating to Taxes (unless AMLI reasonably determines, after prior
consultation with Purchaser, that such action is (i) required by Law;
or (ii) necessary or appropriate to preserve AMLI's status as a REIT
or the partnership status of AMLI LP or any other AMLI Subsidiary
which files Tax Returns as a partnership for U.S. federal income tax
purposes (in which case, AMLI or AMLI LP, as the case may be, shall
make such election in a timely manner and shall inform Purchaser of
such election)); provided, that nothing in this Agreement shall
preclude AMLI from designating dividends paid by it as "capital gain
dividends" within the meaning of Section 857 of the Code (with the
prior written consent of Purchaser, which will not be unreasonably
withheld);
(xi) enter into, or amend or modify any Tax Protection Agreement,
or take any action that would, or could reasonably be expected to,
violate any Tax Protection Agreement or otherwise give rise to any
liability with respect thereto;
(xii) amend any Tax Return in any material respect;
(xiii) (A) fail to maintain its books and records in all material
respects in accordance with GAAP consistently applied, (B) change any
of its methods, principles or practices of accounting in effect other
than as required by GAAP, (C) settle or compromise any claim, action,
suit, litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes, except in the case of settlements or
compromises relating to Taxes on real property or sales Taxes in an
amount not to exceed, individually or in the aggregate, $500,000, or
change any of its methods of reporting income or deductions for U.S.
federal income tax purposes from those employed in the preparation of
its U.S. federal income Tax Return for the taxable year ended December
31, 2004, or (D) revalue in any material respect any of its assets,
including writing-off accounts receivable, except, in each of the
foregoing cases, as may be required by the SEC, applicable Law or GAAP
(in which case, AMLI shall promptly inform Purchaser of such changes);
(xiv) other than as set forth in Section 5.8(c) and except as set
forth in Section 4.1(b)(xiv) of the AMLI Disclosure Letter, (A) adopt,
amend or terminate any AMLI Employee Benefit Plan or adopt any new
employee benefit plan, incentive plan, AMLI Severance Plan, bonus
plan, compensation, special remuneration, retirement, health, life,
disability, stock option or other plan, program, agreement or
arrangement that would be an AMLI Employee Benefit Plan if it had been
in existence on the date hereof, or, grant any new stock
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appreciation rights, AMLI Options, restricted shares or any other
equity-based awards, (B) enter into or amend any employment severance,
change in control, tax gross-up, deferred compensation or other
similar agreement or arrangement or, except with respect to
non-officer employees in the ordinary course of business consistent
with past practice, grant or become obligated to grant any increase in
the compensation or benefits of officers or employees, (C) grant any
severance or termination pay, or any increase thereof, to any trustee,
director, officer or employee, except payments made pursuant to
written agreements or plans outstanding on the date hereof, the
material terms of which are disclosed in Section 4.1(b)(xiv) of the
AMLI Disclosure Letter and copies of which have been provided to
Purchaser, (D) increase the number of its full-time permanent
employees by an amount inconsistent with past practice or (E)
establish, pay, agree to grant or increase any special bonus, stay
bonus, retention bonus or any similar benefit under any plan,
agreement, award or arrangement;
(xv) settle or compromise any material litigation, including any
shareholder derivative or class action claims other than settlements
or compromises for litigation providing solely for the payment of
money damages where the amount paid (after reduction by any insurance
proceeds actually received or appropriate credits are applied from
self-insurance reserves) in settlement or compromise does not exceed
$500,000, which provide for a complete release of AMLI and each
applicable AMLI Subsidiary of all claims and which do not provide for
any admission of liability by AMLI or any AMLI Subsidiary;
(xvi) authorize, recommend, propose or announce an intention to
adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization
of AMLI or any of the AMLI Subsidiaries;
(xvii) fail to use its commercially reasonable efforts to
maintain with financially responsible insurance companies insurance
coverage substantially similar in all material respects to the
insurance coverage maintained by AMLI and the AMLI Subsidiaries on the
date hereof;
(xviii) except as provided in Section 4.1(b)(xviii) of the AMLI
Disclosure Letter, amend or terminate, or waive compliance with the
terms of or breaches under, or assign any material rights or claims
under, any material term of any Material Contract or enter into a new
contract, agreement or arrangement that, if entered into prior to the
date of this Agreement, would have been required to be listed in any
of Sections 3.1(u)(i) through 3.1(u)(iv) of the AMLI Disclosure
Letter;
(xix) fail to use its commercially reasonable efforts to comply
or remain in compliance with all material terms and provisions of any
agreement relating to any outstanding indebtedness of AMLI or any AMLI
Subsidiary;
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(xx) fail to (A) duly and timely file all material reports, Tax
Returns and other material documents required to be filed with all
Governmental Entities and other authorities (including the New York
Stock Exchange), subject to extensions permitted by Law, provided AMLI
notifies Purchaser and its counsel that it is availing itself of such
extensions and provided such extensions do not adversely affect AMLI's
status as a qualified REIT under the Code or (B) cause all such
reports and other documents to be complete and accurate in all
material respects when filed;
(xxi) fail to pay any material Taxes or other material debts when
due;
(xxii) pay, discharge or satisfy any claims, Liabilities or
obligations (absolute, accrued, contingent or otherwise), other than
the payment, discharge or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their
terms, of Liabilities reflected or reserved against in the balance
sheet of AMLI dated as of June 30, 2005 contained in the Quarterly
Report on Form 10-Q for the quarter ended June 30, 2005 of AMLI or
except as described in Section 4.1(b)(xxii) of the AMLI Disclosure
Letter;
(xxiii) except as described in Section 4.1(b)(xxiii) of the AMLI
Disclosure Letter, change the ownership of any AMLI Subsidiary;
(xxiv) amend the terms of any outstanding security of AMLI or of
any AMLI Subsidiary;
(xxv) take any action that, individually or in the aggregate,
would reasonably be expected to cause any of the conditions set forth
in Article VI not to be satisfied; or
(xxvi) agree in writing or otherwise to take any action
inconsistent with any of the foregoing.
ARTICLE V.
ADDITIONAL COVENANTS
Section 5.1 Preparation of Proxy Statement; Shareholders' Meeting.
(a) As soon as practicable following the date of this Agreement, AMLI
shall prepare and file with the SEC a preliminary Proxy Statement for the
purpose of calling the AMLI Shareholder Meeting to obtain the AMLI Shareholder
Approval, provided, that AMLI shall consult with Purchaser and provide Purchaser
a reasonable opportunity to review and comment on such preliminary Proxy
Statement prior to filing. The parties shall reasonably cooperate with each
other in the preparation of the Proxy Statement and to have such document
cleared by the SEC as promptly as practicable after such filing. AMLI will
notify Purchaser promptly following the receipt of any comments from the SEC and
of any request by the SEC for amendments or supplements to the Proxy Statement
or for additional information and will supply Purchaser with copies of all
correspondence with the SEC with respect to the Proxy Statement.
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The Proxy Statement, and any supplement or amendment thereto, shall comply in
all material respects with all applicable requirements of Law. AMLI shall date
the Proxy Statement as of the approximate date of mailing to its shareholders
and shall use its commercially reasonable efforts to cause the Proxy Statement
to be mailed to its shareholders at the earliest practicable date. Whenever any
event occurs which is required to be set forth in an amendment or supplement to
the Proxy Statement, (i) Purchaser or AMLI, as the case may be, shall promptly
inform the other of such occurrences, (ii) AMLI shall prepare and file with the
SEC any such amendment or supplement to the Proxy Statement; provided, however,
that no amendment or supplement to the Proxy Statement will be made without
prior consultation with Purchaser and providing Purchaser a reasonable
opportunity to review and comment on such amendment or supplement, (iii) AMLI
shall use its commercially reasonable efforts to have any such amendment or
supplement cleared for mailing, to the extent necessary, to AMLI shareholders as
promptly as practicable after such filing and (iv) AMLI shall use its
commercially reasonable efforts to have any such amendment or supplement mailed
to its shareholders at the earliest practicable date.
(b) AMLI will, as soon as practicable following the date on which the
Proxy Statement is cleared by the SEC, duly call, give notice of, convene and
hold the AMLI Shareholder Meeting (but in no event shall such meeting be held
sooner than 20 days, or except as provided in Section 5.1(c) later than 60 days,
following the date the Proxy Statement is mailed to its shareholders), for the
purpose of obtaining the AMLI Shareholder Approval. AMLI will, through the AMLI
Board of Trustees, recommend to its shareholders approval of the Merger and the
other transactions contemplated hereby and further covenants that the Proxy
Statement will include such recommendation (the "AMLI Recommendation") except to
the extent that the AMLI Board of Trustees shall have withdrawn such
recommendation in accordance with Section 5.6 hereof.
(c) If on the date of the AMLI Shareholders Meeting or any subsequent
adjournment thereof pursuant to this Section 5.1(c), AMLI has not received
proxies representing a sufficient number of AMLI Common Shares to approve the
Merger, AMLI shall adjourn the AMLI Shareholder Meeting until such date as shall
be mutually agreed upon by AMLI and Purchaser, which date shall not be less than
ten days nor more than 20 days after the date of adjournment, and shall continue
to use its commercially reasonable efforts, together with its proxy solicitor,
to assist in the solicitation of proxies from shareholders relating to the AMLI
Shareholder Approval.
Section 5.2 Access to Information; Confidentiality. AMLI and AMLI LP shall,
and shall cause each of the AMLI Subsidiaries to, afford to Purchaser, Purchaser
Acquisition Entity and Purchaser Acquisition LP and their officers, employees,
accountants, counsel, financial advisors and other representatives and
Affiliates, reasonable access during normal business hours and upon reasonable
advance notice during the period prior to the Partnership Merger Effective Time
to all of its properties, offices, books, contracts, commitments, personnel and
records and, during such period, AMLI and AMLI LP shall, and shall cause each of
the other AMLI Subsidiaries to, furnish reasonably promptly to Purchaser (a) a
copy of each report, schedule, registration statement and other document filed
by it during such period pursuant to the requirements of federal or state
securities Laws and (b) all other information (financial or otherwise)
concerning its business, properties and personnel as Purchaser, Purchaser
Acquisition Entity and Purchaser Acquisition LP may reasonably request. AMLI
shall also instruct AMLI's
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officers, employees, accountants, counsel, financial advisors and other
representatives to cooperate reasonably with Purchaser in its investigation of
the business of AMLI, AMLI LP and the other AMLI Subsidiaries. Notwithstanding
the foregoing, AMLI shall not be required by this Section 5.2 to provide
Purchaser, Purchaser Acquisition Entity, Purchaser Acquisition LP or their
respective representatives with access to the properties of AMLI or any AMLI
Subsidiary for the purpose of invasive physical testing; provided, that, in the
case of AMLI Properties that are wholly-owned by an AMLI Subsidiary, neither
AMLI nor any AMLI Subsidiary shall unreasonably withhold consent for such access
and testing if Purchaser determines in good faith, after the date hereof, that
there is a reasonable likelihood that a significant environmental Liability
exists with respect to such property. Each of Purchaser, Purchaser Acquisition
Entity and Purchaser Acquisition LP will hold, and will cause its respective
officers, employees, accountants, counsel, financial advisors and other
representatives and Affiliates to hold, any nonpublic information in confidence
to the extent required by, and in accordance with, and will comply with the
confidentiality provisions of the letter agreement between AMLI and Purchaser
dated as of September 21, 2005 (as may be amended, the "Confidentiality
Agreement").
Section 5.3 Reasonable Efforts; Notification.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of Purchaser, Purchaser Acquisition Entity, Purchaser
Acquisition LP, AMLI and AMLI LP agrees to use its commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to fulfill all conditions applicable to such
party pursuant to this Agreement and to consummate and make effective, in the
most expeditious manner practicable, the Mergers and the other transactions
contemplated by the Transaction Documents, including (i) the obtaining of all
necessary, proper or advisable actions or nonactions, waivers, consents and
approvals from Governmental Entities and other third parties and the making of
all necessary, proper or advisable registrations, filings and notices and the
taking of all reasonable steps as may be necessary to obtain an approval, waiver
or exemption from any Governmental Entity; (ii) the obtaining of all necessary,
proper or advisable consents, approvals, waivers or exemptions from
non-governmental third parties; and (iii) the execution and delivery of any
additional documents or instruments necessary, proper or advisable to consummate
the transactions contemplated by, and to fully carry out the purposes of the
Transaction Documents. If, at any time after the Merger Effective Time, any
further action is necessary or desirable to carry out the purpose of this
Agreement, the proper officers, directors or partners, of Purchaser, Purchaser
Acquisition Entity, Purchaser Acquisition LP, AMLI and AMLI LP shall take all
such necessary action. From the date of this Agreement through the Merger
Effective Time, AMLI shall timely file, or cause to be filed, with the SEC all
AMLI SEC Documents required to be so filed. AMLI shall consult with Purchaser
and provide Purchaser a reasonable opportunity to review and comment on all
filings made by AMLI with any Governmental Entity in connection with this
Agreement and the transactions contemplated hereby, prior to the making of such
filings.
(b) Notwithstanding anything to the contrary in this Section 5.3, the
Purchaser shall not be required to dispose of or hold separate, or to restrict
its ownership of, any business or assets of AMLI or any AMLI Subsidiary, or of
the Purchaser or any Purchaser Subsidiary, or agree to take any such action, if
any such action or agreement, individually or in the aggregate, would reasonably
be expected to have a material adverse effect on the business, operations,
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properties, condition (financial or otherwise), assets or Liabilities (i) of
AMLI and the AMLI Subsidiaries taken as a whole or (ii) of the Purchaser and the
Purchaser Subsidiaries taken as a whole.
(c) AMLI and AMLI LP shall give prompt notice to Purchaser, and
Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition LP shall give
prompt notice to AMLI and AMLI LP, if (i) any representation or warranty made by
it contained in this Agreement that is qualified as to materiality becomes
untrue or inaccurate in any respect or any such representation or warranty that
is not so qualified becomes untrue or inaccurate in any material respect or (ii)
it fails to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
Section 5.4 Tax Matters.
(a) Purchaser, Purchaser Acquisition Entity, Purchaser Acquisition LP,
AMLI and AMLI LP shall report the portions of the transactions contemplated
hereby consisting of the Merger in accordance with the treatment contemplated by
Section 2.1(d) and each shall use its respective best efforts to cause such
portions of such transactions to be so treated for U.S. federal income tax
purposes.
(b) Unless required by Law (as evidenced by the legal opinion of a
nationally recognized U.S. law firm reasonably acceptable to Purchaser and
AMLI), neither Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition
LP, on the one hand, nor AMLI and AMLI LP, on the other hand, will take or omit
to take any action, or permit any status to exist, prior to the Merger Effective
Time, that would or may jeopardize, or that is inconsistent with, AMLI's (or any
AMLI Subsidiary that files a REIT tax Return) status as a REIT under the Code or
the status of AMLI LP or any AMLI Subsidiary organized and existing as a
partnership or limited liability company under the Laws of its jurisdiction of
organization (a "AMLI Subsidiary Partnership") as a partnership for purposes of
Taxes for any period.
(c) The Merger Consideration (including assumed liabilities) shall be
allocated among AMLI's assets in accordance with Section 1060 of the Code. The
parties shall work in good faith to agree on such allocation prior to the
Closing Date. Following the Merger, the Surviving Entity in connection with its
U.S. federal, state, and local tax returns and other filings (including without
limitation Internal Revenue Service Form 8594), shall not take any position
inconsistent with such allocation. Any adjustment to the purchase price shall be
allocated as provided by Treas. Reg. Section 1.1060-1(c).
(d) Nothing in this Section 5.4 shall be construed to limit the
ability of Purchaser or its Affiliates from causing AMLI to seek a "closing
agreement" within the meaning of Section 7121 of the Code if it is reasonably
determined that AMLI or an AMLI Subsidiary engaged in any action or failed to
take any action that jeopardized the status of AMLI (or of any AMLI Subsidiary
that is a REIT) as a REIT prior to the Merger Effective Time.
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(e) Within 90 days after the Closing, Purchaser Acquisition Corp.
shall deliver to AMLI a schedule allocating the Purchase Price (including
assumed liabilities) among the assets of AMLI in accordance with Section 1060 of
the Code and the regulations thereunder. The parties agree not to take any
position inconsistent with the Allocation Schedule for Tax reporting purposes.
(f) Unless prohibited by Law (as evidenced by the legal opinion of a
nationally recognized U.S. law firm reasonably acceptable to Purchaser and AMLI)
or this Agreement, up to the Merger Effective Time, AMLI, each AMLI Subsidiary
and any Affiliate of any of them, shall be permitted to take or omit to take any
action required to maintain AMLI's status as a REIT under the Code or the status
of AMLI LP or any AMLI Subsidiary Partnership as a partnership for purposes of
Taxes for any period. AMLI shall provide Purchaser with prior written notice of
its intention to take any such action or to omit to take any such action outside
the ordinary course of business, and shall consult with Purchaser in good faith
with respect to such action or omission.
(g) AMLI shall provide to Purchaser copies of Tax Returns that are to
be filed on or prior to the Partnership Merger Effective Time at least five (5)
calendar days prior to the due date of such returns (including applicable
extensions), and AMLI shall consider in good faith any and all reasonable
comments of Purchaser with respect to such Tax Returns.
(h) AMLI shall use its reasonable best efforts to obtain the tax
opinion described in Section 6.2(e) dated as of the Closing Date.
Section 5.5 No Solicitation of Transactions.
(a) Subject to Section 5.6, none of AMLI, AMLI LP or any other AMLI
Subsidiary shall, nor shall it authorize or permit, directly or indirectly, any
officer, trustee, director, employee, agent, investment banker, financial
advisor, attorney, accountant, broker, finder or other agent, representative or
Affiliate of AMLI, AMLI LP or any other AMLI Subsidiary to initiate, solicit,
encourage or facilitate (including by way of furnishing nonpublic information or
assistance) any inquiries or the making of any proposal or other action that
constitutes, or may reasonably be expected to lead to, any Competing Transaction
(as defined herein), enter into discussions or negotiate with any Person in
furtherance of such inquiries or to obtain a Competing Transaction or release
any Person from any standstill agreement or similar obligation to AMLI or any
AMLI Subsidiary other than the automatic termination of standstill obligations
pursuant to the terms of agreements as in effect as of the date hereof, by
virtue of the execution and announcement of this Agreement. AMLI and AMLI LP
shall, and shall cause the other AMLI Subsidiaries, and AMLI, AMLI LP and the
other AMLI Subsidiaries shall, take all actions reasonably necessary to cause
their respective officers, trustees, directors, employees, investment bankers,
financial advisors, attorneys, accountants, brokers, finders and any other
agents, representatives or Affiliates to, immediately cease any discussions,
negotiations or communications with any party or parties with respect to any
Competing Transaction. AMLI, AMLI LP and the AMLI Subsidiaries shall be
responsible for any failure on the part of their respective officers, trustees,
directors, employees, investment bankers, financial advisors, attorneys,
accountants, brokers, finders and any other agents, representatives or
Affiliates to comply with this Section 5.5(a). AMLI and AMLI LP shall promptly
request each person that
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has heretofore executed a confidentiality agreement in connection with its
consideration of acquiring (whether by merger, acquisition, stock sale, asset
sale or otherwise) AMLI, AMLI LP or any other AMLI Subsidiary, or any material
position of their assets, if any, to return all confidential information
heretofore furnished to such person by or on behalf of AMLI, AMLI LP or any
other AMLI Subsidiary.
(b) AMLI and AMLI LP shall notify Purchaser promptly following receipt
of (but in any event within 24 hours after the Chief Executive Officer of AMLI
has received) the relevant details relating to any inquiry or proposal
(including the identity of the parties, price and other terms thereof) which any
of AMLI, AMLI LP or any of the other AMLI Subsidiaries or any such officer,
trustee, director, employee, agent, investment banker, financial advisor,
attorney, accountant, broker, finder or other representative or Affiliate may
receive after the date hereof relating to any of the matters described in
Section 5.5(a) and shall keep Purchaser reasonably informed on a current basis
as to the status of and any material developments regarding any such inquiry or
proposal.
(c) For purposes of this Agreement, a "Competing Transaction" shall
mean any of the following (other than the transactions expressly provided for in
this Agreement): (i) any merger, consolidation, share exchange, business
combination or similar transaction involving AMLI or AMLI LP (or any of the
other AMLI Subsidiaries); (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of 30% or more of the assets (including by means
of an issuance, sale or other disposition of voting securities) of AMLI and the
AMLI Subsidiaries, taken as a whole, or of 30% or more of any class of voting
securities of AMLI, in a single transaction or series of related transactions,
excluding any bona fide financing transactions which do not, individually or in
the aggregate, have as a purpose or effect the sale or transfer of control of
such assets; or (iii) any tender offer or exchange offer for 30% or more of any
class of voting securities of AMLI (or any of the AMLI Subsidiaries).
(d) For purposes of this Agreement, a "Superior Competing Transaction"
means a bona fide, unsolicited, written proposal for a Competing Transaction
made by a third party which the AMLI Board of Trustees determines (after taking
into account any amendments to this Agreement, the other Transaction Documents
or the transactions contemplated hereby or thereby proposed by Purchaser), in
good faith and after consultation with its financial and legal advisors, is on
terms which are more favorable from a financial point of view (including
financing terms, any termination fee or expense reimbursement payable under this
Agreement, any conditions to the consummation thereof and the likelihood of the
Competing Transaction proposal being consummated) to the AMLI Common
Shareholders than the Mergers and the other transactions contemplated by this
Agreement.
Section 5.6 Board Actions.
(a) Notwithstanding Section 5.5 or any other provision of this
Agreement to the contrary, following the receipt by AMLI of a proposal from a
third party for a Competing Transaction (that was not solicited, encouraged or
facilitated in violation of Section 5.5) the Board of Trustees may (I) contact
such Person and its advisors solely for the purpose of clarifying the proposal
and any material contingencies and the capability of consummation, so as to
determine whether the proposal for a Competing Transaction is reasonably likely
to lead to a
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Superior Competing Transaction and (II) if the Board of Trustees determines in
good faith following consultation with its legal and financial advisors that
such proposal for a Competing Transaction is reasonably likely to lead to a
Superior Competing Transaction, the AMLI Board of Trustees may (directly or
through advisors or representatives) (i) furnish non-public information with
respect to AMLI and the AMLI Subsidiaries to the Person who made such proposal
(provided that AMLI (A) has previously or concurrently furnished such
information to Purchaser, (B) shall furnish such information pursuant to a
confidentiality agreement which is at least as favorable to AMLI as the
Confidentiality Agreement and (C) shall notify Purchaser in writing prior to
providing any such information), (ii) disclose to its shareholders any
information required to be disclosed under applicable Law, (iii) participate in
negotiations regarding such proposal and (iv) following receipt of a proposal
for a Competing Transaction that constitutes a Superior Competing Transaction,
but prior to the AMLI Shareholder Approval, (A) withdraw or modify in a manner
adverse to Purchaser, or fail to make, the AMLI Recommendation or recommend that
AMLI Common Shareholders approve such Superior Competing Transaction, (B)
terminate this Agreement pursuant to, and subject to compliance with, Section
7.1(g) or (C) take any action that any court of competent jurisdiction orders
AMLI to take, but in each case referred to in clauses (i) through (iv) only if,
after complying with Section 5.6(b), the AMLI Board of Trustees determines in
good faith, after consultation with its outside legal counsel, that failure to
take such action would be inconsistent with its duties to AMLI or its
shareholders under applicable Law. Nothing in this Section 5.6 shall prevent the
AMLI Board of Trustees from complying with Rule 14e-2(a) promulgated under the
Exchange Act with respect to a Competing Transaction; provided, however, that
neither AMLI nor the AMLI Board of Trustees shall be permitted to recommend
pursuant to such provision a Competing Transaction which is not a Superior
Competing Transaction.
(b) The AMLI Board of Trustees shall not take any of the actions
referred to in clauses (i) through (iv) of Section 5.6(a) unless not fewer than
three Business Days prior to taking any such action, AMLI shall have, during
such three Business Day period, negotiated in good faith with Purchaser
concerning any proposed amendments to this Agreement, the other Transaction
Documents or the transactions contemplated hereby or thereby.
Section 5.7 Public Announcements. AMLI, AMLI LP and Purchaser shall consult
with each other before issuing any press release or otherwise making any public
statements or filings with respect to this Agreement or any other Transaction
Document or any of the transactions contemplated hereby or thereby and shall not
issue any such press release or make any such public statement or filing without
the prior consent of the other party, which consent shall not be unreasonably
withheld or delayed; provided, however, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement or filing as may be required by Law or the applicable rules of any
stock exchange if it has used its commercially reasonable efforts to consult
with the other party and to obtain such party's consent but has been unable to
do so prior to the time such press release or public statement or filing is
required to be released, filed or furnished pursuant to such Law or rules. In
this regard, the parties shall make a joint public announcement of the
transactions contemplated by the Transaction Documents no later than (i) the
close of trading on the New York Stock Exchange on the day this Agreement is
signed, if such signing occurs during regular business hours on a Business Day
or (ii) the opening of trading on the New York Stock Exchange on the next
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Business Day following the date on which this Agreement is signed, if such
signing does not occur during regular business hours on a Business Day.
Section 5.8 Employee Arrangements.
(a) AMLI Severance Plan and AMLI Severance Agreements. On, or as soon
as reasonably practicable after, the Closing Date, Purchaser shall pay or cause
to be paid the amounts due to such of AMLI's senior executive officers under
such senior executive officers' employment agreements, which agreements are set
forth in Section 5.8(a) of the AMLI Disclosure Letter. On and after the Closing
Date, Purchaser shall cause the Surviving Entity to pay the employees of AMLI
and all AMLI Subsidiaries (collectively, the "AMLI Employees") any severance
payments owed to any such AMLI Employees under any AMLI Severance Plan.
(b) AMLI Options. AMLI and each AMLI Subsidiary shall take all actions
as may be necessary under the AMLI Option Plan to effect the cancellations
described in Section 1.8. In addition to the foregoing and subject to the terms
of the AMLI Option Plan and applicable Law, AMLI shall take all actions
necessary to cause the AMLI Option Plan to be terminated at or prior to the
Merger Effective Time, and to satisfy Purchaser that no holder of AMLI Options
or other awards under such plans or programs or participant in the AMLI Option
Plan, will have any right to acquire any interest in the Surviving Entity,
Purchaser or any Purchaser Subsidiary, including Purchaser Acquisition Entity,
as a result of the exercise of AMLI Options or other awards or rights pursuant
to such AMLI Option Plan at or after the Merger Effective Time.
(c) AMLI Bonuses. AMLI shall be permitted to pay the bonuses
identified on Section 4.1(b)(xiv) of the AMLI Disclosure Letter at such time or
times as identified on Section 4.1(b)(xiv) of the AMLI Disclosure Letter.
(d) Continuing Benefits and Compensation. For a period of not less
than one year commencing immediately following the Merger Effective Time,
Purchaser shall, or cause the Surviving Entity to, provide to each AMLI employee
who remains employed by the Purchaser, the Surviving Entity or the Surviving
Partnership after the Merger Effective Time compensation and employee benefits
(other than equity-based compensation) that are substantially comparable in the
aggregate to the compensation and AMLI employee benefits (other than
equity-based compensation, retention, sale, stay, special bonus or other change
in control payments or awards) provided immediately before the Merger Effective
Time.
Section 5.9 Indemnification; Trustees' and Officers' Insurance.
(a) In the event of any threatened or actual claim, action, suit,
demand, proceeding or investigation, whether civil, criminal or administrative,
including, without limitation, any such claim, action, suit, proceeding or
investigation in which any person who is now, or has been at any time prior to
the date hereof, or who becomes prior to the Merger Effective Time, a trustee,
director or officer of AMLI or any of the AMLI Subsidiaries (each, an
"Indemnified Party" and collectively, the "Indemnified Parties") is, or is
threatened to be, made a party based in whole or in part on, or arising in whole
or in part out of, or pertaining to (i) the fact that he or she is or was a
trustee, director, officer, employee, or agent of AMLI or any of the
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AMLI Subsidiaries, or is or was serving at the request of AMLI or any of the
AMLI Subsidiaries as a trustee, director, officer, employee, or agent of another
corporation, partnership, joint venture, trust or other enterprise, in each case
at or prior to the Merger Effective Time or (ii) the negotiation, execution or
performance of this Agreement, any agreement or document contemplated hereby or
delivered in connection herewith, or any of the transactions contemplated hereby
AMLI shall indemnify and hold harmless, and after the Merger Effective Time, the
Surviving Entity (together with AMLI, the "Indemnitors"), shall indemnify and
hold harmless, as and to the fullest extent that a Maryland corporation is
permitted under applicable Law to indemnify its own officers and directors, each
Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorneys' fees and expenses), judgments, fines
and amounts paid in settlement in connection with any such threatened or actual
claim, action, suit, demand, proceeding or investigation (collectively,
"Indemnifiable Amounts"), and in the event of any such threatened or actual
claim, action, suit, proceeding or investigation (whether asserted before or
after the Merger Effective Time), (A) the Indemnitors, shall promptly (but in
any event within 10 calendar days of written request) advance expenses pending
the final disposition of any such threatened or actual claim, action, suit,
demand, proceeding or investigation to each Indemnified Party to the fullest
extent permitted by applicable Law; (B) the Indemnitors shall have the right to
defend each Indemnified Party in any proceeding which may give rise to the
payment of Indemnifiable Amounts hereunder; provided, however, that the
Indemnitors shall notify such Indemnified Party of any such decision to defend
within ten (10) calendar days of receipt of written notice of any such
proceeding, and, provided further, that the Indemnitors shall not, without the
prior written consent of such Indemnified Party, consent to the entry of any
judgment against such Indemnified Party or enter into any settlement or
compromise which (I) includes an admission of fault of such Indemnified Party or
(II) does not include, as an unconditional term thereof, the full release of
such Indemnified Party from all liability in respect of such proceeding, which
release shall be in form and substance reasonably satisfactory to such
Indemnified Party and (C) notwithstanding clause (B) above, if in a proceeding
to which an Indemnified Party is a party by reason of the Indemnified Party's
service as a trustee, director, officer, employee, or agent of AMLI or any of
the AMLI Subsidiaries, (I) such Indemnified Party reasonably concludes that he
or she may have separate defenses or counterclaims to assert with respect to any
issue which may not be consistent with the position of other defendants in such
proceeding, (II) a conflict of interest or potential conflict of interest exists
between such Indemnified Party and the Indemnitors, or (III) if the Indemnitors
fail to assume the defense of such proceeding in a timely manner, such
Indemnified Party shall be entitled to be represented by separate legal counsel
of such Indemnified Party's choice at the expense of the Indemnitors; provided,
however, that none of the Indemnitors shall be liable for any settlement
effected without its prior written consent (which consent shall not be
unreasonably withheld, conditioned or delayed); and provided further that the
Indemnitors shall have no obligation hereunder to any Indemnified Party when and
if a court of competent jurisdiction shall have ultimately determined, and such
determination shall have become final and non-appealable, that indemnification
by such entities of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law. Any Indemnified Party wishing to claim
indemnification under this Section 5.9, upon learning of any such threatened or
actual claim, action, suit, demand, proceeding or investigation, shall promptly
notify AMLI and, after the Merger Effective Time, the Surviving Entity, thereof;
provided that the failure to so notify shall not affect the obligations
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of AMLI and the Surviving Entity except to the extent, if any, such failure to
promptly notify materially and adversely prejudices such party.
(b) Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition
LP agree that all rights to indemnification existing in favor of, and all
exculpations and limitations of the personal liability of, the Indemnified
Parties provided for in the AMLI Charter or the AMLI Bylaws, as well as
indemnification agreements, as in effect as of the date hereof and listed in
Section 5.9 of the AMLI Disclosure Letter with respect to matters occurring at
or prior to the Merger Effective Time, including the Merger, shall continue in
full force and effect in accordance with their terms. For a period of six (6)
years after the Merger Effective Time, the Surviving Entity shall, and Purchaser
will cause the Surviving Entity to, cause to be maintained in effect, with
respect to actions and omissions occurring at or prior to the Merger Effective
Time, trustees', directors' and officers' liability insurance and fiduciary
insurance policies of not less than the existing coverage under, and having
other terms not less favorable to, the insured persons than the trustees',
directors' and officers' liability insurance coverage presently maintained by
AMLI; provided that, in satisfying such obligation, none of the Purchaser or any
Purchaser Subsidiary shall be obligated to pay premiums per annum in excess of
250% of the aggregate amount per annum that AMLI and the AMLI Subsidiaries paid
for such coverage in the last full fiscal year, which amount AMLI has disclosed
to the Purchaser prior to the date hereof.
(c) This Section 5.9 is intended for the irrevocable benefit of, and
to grant third party rights to, the Indemnified Parties and shall be binding on
all successors and assigns of Purchaser, AMLI and the Surviving Entity. Each of
the Indemnified Parties shall be entitled to enforce the covenants contained in
this Section 5.9.
(d) In the event that the Surviving Entity (i) consolidates with or
merges into any other person or entity and shall not be the continuing or
surviving entity of such consolidation or merger or (ii) transfers or conveys
all or substantially all of its properties and assets to any person or entity,
then, and in each such case, proper provision shall be made so that such
continuing or surviving entity or transferee, as the case may be, assumes the
obligations set forth in this Section 5.9.
Section 5.10 Tax Returns. After the Merger Effective Time, Purchaser shall
prepare and file, or cause to be prepared and filed, all Tax Returns required to
be filed by the AMLI Subsidiaries for all periods (except for their taxable
years which terminate as a result of the Merger or Partnership Merger) with the
applicable taxing authority on or before the due date (including extensions, if
any) for filing such Tax Returns.
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ARTICLE VI.
CONDITIONS PRECEDENT
Section 6.1 Conditions to Each Party's Obligation to Effect the Mergers.
The respective obligations of AMLI, AMLI LP, Purchaser Acquisition Entity and
Purchaser Acquisition LP to effect the Mergers and to consummate the other
transactions contemplated by the Transaction Documents on the Closing Date are
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Shareholder Approval. The AMLI Shareholder Approval shall have
been obtained.
(b) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other Order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger, the Partnership Merger or any of the other
transactions or agreements contemplated by the Transaction Documents shall be in
effect.
Section 6.2 Conditions to Obligations of Purchaser Parties. The obligations
of the Purchaser Parties to effect the Merger and to consummate the other
transactions contemplated by the Transaction Documents on the Closing Date are
further subject to the following conditions, any one or more of which may be
waived by any of the Purchaser Parties:
(a) Representations and Warranties. The representations and warranties
of AMLI and AMLI LP contained in this Agreement (i) which are qualified by
materiality or AMLI Material Adverse Effect shall be true and correct (without
giving effect to any such materiality or AMLI Material Adverse Effect
qualifier), except where the failure of any such representation or warranty to
be so true and correct would not, individually or in the aggregate, constitute
an AMLI Material Adverse Effect and (ii) which are not qualified by materiality
or AMLI Material Adverse Effect shall be true and correct in all material
respects, in the case of each of clause (i) and (ii) as of the date hereof and
as of the Closing Date as if made on and as of such date (except to the extent
that any such representation or warranty, by its terms, is expressly limited to
a specific date, in which case, as of such specific date), and Purchaser shall
have received a certificate signed on behalf of AMLI by the Chief Executive
Officer and the Chief Financial Officer of AMLI to such effect.
(b) Performance of Covenants and Obligations of AMLI. AMLI and AMLI LP
shall have performed in all material respects all covenants and obligations
required to be performed by them under this Agreement at or prior to the Merger
Effective Time, and Purchaser shall have received a certificate signed on behalf
of AMLI by the Chief Executive Officer and the Chief Financial Officer of AMLI
to such effect.
(c) Material Adverse Change. Since the date of this Agreement, there
shall have occurred no changes, events or circumstances which would,
individually or in the aggregate, constitute an AMLI Material Adverse Effect,
and Purchaser shall have received a
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certificate signed on behalf of AMLI by the Chief Executive Officer and the
Chief Financial Officer of AMLI to such effect.
(d) Market Conditions. There shall not have occurred (i) any general
suspension of trading in, or limitation on prices for, securities on the New
York Stock Exchange for a period in excess of five hours, (ii) a declaration of
a banking moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory), (iii) a commencement or escalation of
a war, armed hostilities or other international or national calamity resulting
in a major dislocation of financial markets that materially and adversely
affects the ability of financial institutions in the United States to extend
credit or syndicate loans, or (iv) in the case of any of the foregoing existing
as of the date hereof, a material acceleration or worsening thereof; provided,
that upon the expiration of 30 days following the assertion of this condition by
any party, this condition shall be deemed satisfied with respect to the subject
matter of such assertion.
(e) Tax Opinion. Purchaser and Purchaser Acquisition Entity shall have
received a tax opinion of Mayer, Brown, Xxxx & Maw LLP, tax counsel to AMLI (or
other nationally recognized tax counsel to AMLI satisfactory to Purchaser),
substantially in the form attached hereto as Exhibit A and dated as of the
Closing Date, opining that each of AMLI and the AMLI Subsidiaries that file Tax
Returns as a REIT (i) has been organized and has operated in conformity with the
requirements for qualification as a REIT under the Code for all taxable periods
commencing with the date of its formation through its taxable year ending on or
before the Closing Date, and (ii) solely with respect to such AMLI Subsidiaries,
is organized in conformity with the requirements for qualification as a REIT
under the Code, and its current method of operation and ownership will enable it
to meet the requirements for qualification as a REIT for the taxable year ending
on the Closing Date, deeming for this purpose the Closing Date as the end of the
taxable year for such AMLI Subsidiaries. Such opinion shall be based, in part,
on customary assumptions and customary factual representations of AMLI and the
AMLI Subsidiaries.
Section 6.3 Conditions to Obligations of AMLI. The obligations of AMLI and
AMLI LP to effect the Mergers and to consummate the other transactions
contemplated by the Transaction Documents on the Closing Date are further
subject to the following conditions, any one or more of which may be waived by
AMLI and AMLI LP:
(a) Representations and Warranties. The representations and warranties
of Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition LP
contained in this Agreement (i) which are qualified by materiality, shall be
true and correct; and (ii) which are not qualified by materiality shall be true
and correct in all material respects, in each of the foregoing cases, as of the
date hereof and Closing Date as if made on and as of such date (except to the
extent that any such representation or warranty, by its terms, is expressly
limited to a specific date, in which case, as of such specific date), and AMLI
shall have received a certificate signed on behalf of the Purchaser Parties by
the President and the Chief Financial Officer of the Purchaser to such effect.
(b) Performance of Covenants or Obligations of Purchaser Parties.
Purchaser, Purchaser Acquisition Entity and Purchaser Acquisition LP shall have
performed in all material
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respects all covenants and obligations required to be performed by them under
this Agreement at or prior to the Merger Effective Time, and AMLI and AMLI LP
shall have received a certificate signed on behalf of the Purchaser Parties by
the President and the Chief Financial Officer of the Purchaser to such effect.
ARTICLE VII.
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated at any time prior
to the Merger Effective Time whether before or after the AMLI Shareholder
Approval is obtained:
(a) by mutual written consent of AMLI and Purchaser duly authorized by
their board of trustees or board of directors, respectively;
(b) by the Purchaser Parties, upon a breach of any representation,
warranty, covenant or agreement on the part of AMLI set forth in this Agreement,
or if any representation or warranty of AMLI shall have become untrue, in either
case such that the conditions set forth in Section 6.2(a) or (b), as the case
may be, would be incapable of being satisfied by April 30, 2006 (the
"Termination Date"); provided, however, that in the event that the Purchaser has
delayed the Closing pursuant to Section 6.2(d), the "Termination Date" (as
defined herein) shall be extended to, and shall be, a date occurring on the date
that follows April 30, 2006 by an amount of days equal to the number of days of
such delay;
(c) by AMLI and AMLI LP, upon a breach of any representation,
warranty, covenant or agreement on the part of the Purchaser Parties set forth
in this Agreement, or if any representation or warranty of the Purchaser Parties
shall have become untrue, in either case such that the conditions set forth in
Section 6.3(a) or (b), as the case may be, would be incapable of being satisfied
by the Termination Date;
(d) by either AMLI and AMLI LP or Purchaser, if any judgment,
injunction, order, decree or action by any Governmental Entity of competent
authority preventing the consummation of the Merger shall have become final and
nonappealable;
(e) by either AMLI and AMLI LP or Purchaser, if the Merger shall not
have been consummated before the Termination Date; provided, however, that a
party that has materially breached a representation, warranty or covenant of
such party set forth in this Agreement shall not be entitled to exercise its
right to terminate under this Section 7.1(e);
(f) by either AMLI or Purchaser if, upon a vote at the AMLI
Shareholder Meeting, the AMLI Shareholder Approval shall not have been obtained,
as contemplated by Section 5.1;
(g) by AMLI, prior to the AMLI Shareholder Approval, if the AMLI Board
of Trustees authorizes AMLI, subject to complying with the terms of this
Agreement, to enter into a binding written agreement concerning a transaction
that constitutes a Superior Competing Transaction; provided, that for the
termination to be effective AMLI shall have paid the Break-Up Fee in accordance
with this Agreement; or
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(h) by Purchaser if (i) the AMLI Board of Trustees shall have taken
any action described in clause (iv) of Section 5.6(a) or shall have publicly
announced a decision or intention to take any such action or (ii) AMLI shall
have intentionally breached its obligation to call or hold the AMLI Shareholder
Meeting or to cause the Proxy Statement to be mailed to its shareholders in
advance of such AMLI Shareholder Meeting.
A terminating party shall provide written notice of termination to the
other parties specifying with particularity the basis for such termination. If
more than one provision in this Section 7.1 is available to a terminating party
in connection with a termination, a terminating party may rely on any or all
available provisions in this Section 7.1 for any such termination.
Section 7.2 Expenses.
(a) Except as otherwise specified in this Section 7.2 or agreed in
writing by the parties, all out-of-pocket costs and expenses incurred in
connection with this Agreement, the Merger and the other transactions
contemplated hereby shall be paid by the party incurring such cost or expense.
(b) AMLI and AMLI LP agree that if this Agreement shall be terminated
pursuant to (A) Section 7.1(b) or 7.1(f), then AMLI and AMLI LP will pay to
Purchaser, or as directed by Purchaser, an amount equal to the Purchaser
Break-Up Expenses (as defined herein) or (B) Section 7.1(g) or 7.1(h), then AMLI
will pay to Purchaser, or as directed by Purchaser, an amount equal to the
Break-Up Fee (as defined herein); provided, that in either case, such amount
shall be paid promptly, but in no event later than five (5) Business Days after
such termination in the case of termination pursuant to Section 7.1(b), 7.1(f)
or 7.1(h) or, in the case of termination pursuant to Section 7.1(g), prior to
such termination. AMLI also agrees that if this Agreement is terminated pursuant
to Section 7.1(b) or 7.1(f) and (A) after the date hereof and prior to such
termination, a Person (or any representative of such Person) has made any
proposal relating to a Competing Transaction and (B) within nine months of any
such termination AMLI shall consummate a Competing Transaction or enter into a
written agreement with respect to a Competing Transaction that is ultimately
consummated, with any Person, then AMLI shall pay to Purchaser, or as directed
by Purchaser, promptly, but in no event later than five (5) Business Days after
consummating such Competing Transaction, an amount equal to the Break-Up Fee
less any Purchaser Break-Up Expenses previously paid. Payment of any of such
amounts shall be made, as directed by Purchaser, by wire transfer of immediately
available funds. For purposes of this Agreement, the "Break-Up Fee" shall be an
amount equal to $40,000,000. For purposes of this Agreement, the "Purchaser
Break-Up Expenses" shall be an amount equal to Purchaser's out of pocket,
third-party expenses incurred from and after September 21, 2005 in connection
with this Agreement and the other transactions contemplated hereby (including,
without limitation, reasonable attorneys', accountants' and investment bankers'
fees and expenses).
(c) Purchaser agrees that if this Agreement shall be terminated
pursuant to Section 7.1(c), then Purchaser will pay to AMLI and AMLI LP, or as
directed by AMLI and AMLI LP, an amount equal to the AMLI Break-Up Expenses (as
defined herein); provided, such amount shall be paid promptly, but in no event
later than five (5) Business Days after such termination. For purposes of this
Agreement, the "AMLI Break-Up Expenses" shall be an
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amount equal to AMLI's and AMLI LP's out of pocket, third-party expenses
incurred from and after September 21, 2005 in connection with this Agreement and
the other transactions contemplated hereby (including, without limitation,
reasonable attorneys', accountants' and investment bankers' fees and expenses).
(d) The foregoing provisions of this Section 7.2 have been agreed to
by each of the parties hereto in order to induce the other parties to enter into
this Agreement and to consummate the Merger and the other transactions
contemplated by this Agreement, it being agreed and acknowledged by each of them
that the execution of this Agreement by them constitutes full and reasonable
consideration for such provisions.
(e) In the event that either of AMLI or AMLI LP, on the one hand, or
Purchaser, on the other hand, is required to file suit to seek all or a portion
of the amounts payable under this Section 7.2, and such party prevails in such
litigation, such party shall be entitled to all expenses, including attorneys'
fees and expenses, which it has incurred in enforcing its rights under this
Section 7.2.
Section 7.3 Effect of Termination. In the event of termination of this
Agreement by either AMLI or Purchaser as provided in Section 7.1, this Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of AMLI and AMLI LP, on the one hand, or Purchaser, on
the other hand, other than as provided in the last sentence of Section 5.2,
Section 7.1, Section 7.2, this Section 7.3 and Article VIII and except to the
extent that such termination results from fraud or a willful breach by a party
of any of its representations, warranties, covenants or agreements set forth in
this Agreement.
Section 7.4 Amendment. This Agreement may be amended by the parties in
writing by action of their respective board of trustees or board of directors,
or other comparable bodies, at any time before or after the AMLI Shareholder
Approval is obtained and prior to the filing of the Articles of Merger with the
Maryland Department with respect to the Merger; provided, however, that, after
the AMLI Shareholder Approval is obtained, no such amendment, modification or
supplement shall be made that would require the approval of the AMLI Common
Shareholders without obtaining such approval.
Section 7.5 Extension; Waiver. At any time prior to the Effective Time,
each of AMLI and AMLI LP, on the one hand, and Purchaser, on the other hand, may
(a) extend the time for the performance of any of the obligations or other acts
of the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the provisions of Section
7.4, waive compliance with any of the agreements or conditions of the other
party contained in this Agreement. Any agreement on the part of a party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
Section 7.6 Payment of Amount or Expense.
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(a) In the event that AMLI (and AMLI LP if applicable) are obligated
to pay to Purchaser the Break-Up Fee or the Purchaser Break-Up Expenses pursuant
to Section 7.2(b) or Purchaser is obligated to pay to AMLI and AMLI LP the AMLI
Break-Up Expenses pursuant to Section 7.2(c) (collectively, the "Break-Up
Amount"), AMLI (and AMLI LP if applicable) or Purchaser, as applicable (the
"Payor"), shall pay to the other party (the "Payee") from the applicable
Break-Up Amount deposited into escrow, if any, in accordance with the next
sentence, an amount equal to the lesser of (i) the Break-Up Amount and (ii) the
sum of (1) the maximum amount that can be paid to the Payee without causing the
Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code
determined as if the payment of such amount did not constitute income described
in Sections 856(c)(2)(H) or 856(c)(3)(I) of the Code ("Qualifying Income"), as
determined by the Payee's independent certified public accountants, plus (2) in
the event the Payee receives either (A) a letter from the Payee's counsel
indicating that the Payee has received a ruling from the IRS described in
Section 7.6(b)(ii) or (B) an opinion from the Payee's outside counsel as
described in Section 7.6(b)(ii), an amount equal to the Break-Up Amount less the
amount payable under clause (1) above. To secure the Payor's obligation to pay
these amounts, the Payor shall deposit into escrow an amount in cash equal to
the Break-Up Amount with an escrow agent selected by the Payor and on such
customary terms (subject to Section 7.6(b)) as shall be reasonably acceptable to
each of AMLI, Purchaser and the escrow agent, provided that in the case where
the Payor is AMLI and the Payee is Purchaser, the payment or deposit into escrow
shall be at Purchaser's option. The payment or deposit into escrow of the
Break-Up Amount pursuant to this Section 7.6(a) shall be made at the time the
Payor is obligated to pay the Payee such amount pursuant to Section 7.2(b) or
Section 7.2(c), as applicable, by wire transfer of immediately available funds.
(b) The escrow agreement shall provide that the Break-Up Amount in
escrow or any portion thereof shall not be released to the Payee unless the
escrow agent receives any one or combination of the following: (i) a letter from
the Payee's independent certified public accountants indicating the maximum
amount that can be paid by the escrow agent to the Payee without causing the
Payee to fail to meet the requirements of Sections 856(c)(2) and (3) of the Code
determined as if the payment of such amount did not constitute Qualifying Income
or a subsequent letter from the Payee's accountants revising that amount, in
which case the escrow agent shall release such amount to the Payee, or (ii) a
letter from the Payee's counsel indicating that the Payee received a ruling from
the IRS holding that the receipt by the Payee of the Break-Up Amount would
either constitute Qualifying Income or would be excluded from gross income
within the meaning of Sections 856(c)(2) and (3) of the Code (or alternatively,
the Payee's outside counsel has rendered a legal opinion to the effect that the
receipt by the Payee of the Break-Up Amount would either constitute Qualifying
Income or would be excluded from gross income within the meaning of Sections
856(c)(2) and (3) of the Code), in which case the escrow agent shall release the
remainder of the Break-Up Amount to the Payee. The Payor agrees to amend this
Section 7.6 at the reasonable request of the Payee in order to (x) maximize the
portion of the Break-Up Amount that may be distributed to the Payee hereunder
without causing the Payee to fail to meet the requirements of Sections 856(c)(2)
and (3) of the Code, (y) improve the Payee's chances of securing a favorable
ruling described in this Section 7.6(b) or (z) assist the Payee in obtaining a
favorable legal opinion from its outside counsel as described in this Section
7.6(b). The escrow agreement shall also provide that any portion of the Break-Up
Amount held in escrow for five years shall be released by the escrow agent to
the Payor. The
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Payor shall not be a party to such escrow agreement and shall not bear any cost
of or have liability resulting from the escrow agreement.
ARTICLE VIII.
GENERAL PROVISIONS
Section 8.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Merger Effective Time. This Section
8.1 shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Merger Effective Time.
Section 8.2 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing (and also made orally if
so required pursuant to any Section of the Agreement) and shall be deemed given
if delivered personally, sent by overnight courier (providing proof of delivery)
to the parties or sent by telecopy (providing confirmation of transmission) at
the following addresses or telecopy numbers (or at such other address or
telecopy number for a party as shall be specified by like notice):
(a) if to Purchaser Parties, to
Prime Property Fund, LLC
c/x Xxxxxx Xxxxxxx Real Estate Advisor, Inc.
0000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: President
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
if to AMLI Parties, to
AMLI Residential Properties Trust
000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
Fax: (000) 000-0000
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with a copy to:
Mayer, Brown, Xxxx & Maw LLP
00 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
Section 8.3 Interpretation. When a reference is made in this Agreement to
an Article or a Section, such reference shall be to an Article or a Section of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The words "hereof",
"herein" and "hereby" refer to this Agreement. Any singular term in this
Agreement shall be deemed to include the plural, and any plural term the
singular.
Section 8.4 Performance Guaranty. Purchaser hereby guarantees the due,
prompt and faithful performance and discharge by, and compliance with, all of
the obligations, covenants, terms, conditions and undertakings of Purchaser
Acquisition Entity under this Agreement in accordance with the terms hereof.
Section 8.5 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties hereto shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
Section 8.6 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 8.7 Entire Agreement; No Third-Party Beneficiaries. This Agreement,
the Transaction Documents executed substantially concurrently herewith and the
Confidentiality Agreement constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter of this Agreement. Except for the provisions
of Section 5.9, this Agreement is not intended to confer upon any Person other
than the parties hereto any rights or remedies.
Section 8.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 8.9 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or delegated, in
whole or in part, by operation of Law or otherwise by any of the parties without
the prior written consent of the other parties, provided that each of Purchaser
Acquisition Entity and Purchaser Acquisition LP shall be
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permitted to transfer or assign to one of its Affiliates the right to enter into
the transactions contemplated by this Agreement, but no such transfer or
assignment shall relieve such Person of its obligations hereunder. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors
and assigns.
Section 8.10 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
Governmental Entity to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
Section 8.11 Exhibits; Disclosure Letter. The Exhibits referred to herein
and the AMLI Disclosure Letter, and all exhibits or attachments thereto, are
intended to be and hereby are specifically made a part of this Agreement.
Section 8.12 Jurisdiction; Venue. THE PARTIES HEREBY IRREVOCABLY SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF MARYLAND AND THE FEDERAL COURTS
OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF MARYLAND SOLELY IN
RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS
AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND IN RESPECT OF
THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT,
AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR
ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR
THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE
IN SAID COURTS OR THAT THE VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS
AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE
PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION OR
PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH A MARYLAND STATE OR FEDERAL
COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER
THE PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE
THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR
PROCEEDING IN THE MANNER PROVIDED IN SECTION 8.2 OR IN SUCH OTHER MANNER AS MAY
BE PERMITTED BY APPLICABLE LAWS, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
Section 8.13 Waiver of Trial by Jury. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES
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ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
IN THIS SECTION 8.13.
ARTICLE IX.
CERTAIN DEFINITIONS
Section 9.1 Certain Definitions. (a) For purposes of this Agreement:
"Acquisition Limited Partner" means Atom Partner LLC, a Delaware limited
liability company.
"Affiliate" of any Person has the meaning assigned thereto by Rule 12b-2
under the Exchange Act.
"AMLI Material Adverse Effect" means, with respect to AMLI, any change,
event, effect, Liability or set of circumstances that, when taken together with
all other adverse changes, events, effects, Liabilities or sets of circumstances
that have occurred, is or is reasonably likely to be materially adverse to the
business, operations, properties, condition (financial or otherwise), assets or
Liabilities of AMLI and the AMLI Subsidiaries taken as a whole, except for any
such change, event or effect, Liability or set of circumstances resulting from
(a) changes in conditions (including changes in Law or GAAP) affecting the
multifamily residential or real estate industries generally, the United States
of America or global economy, (b) except with respect to Section 3.1(d), the
announcement or performance of this Agreement or the transactions contemplated
by the Transaction Documents, (c) the commencement, continuation or escalation
of a war, material armed hostilities or other material international or national
calamity or act of terrorism directly or indirectly involving or affecting the
Unites States of America or (d) earthquakes, hurricanes, other natural disasters
or acts of God, which, in the case of each of clause (a), (c) and (d), do not
affect AMLI or the AMLI Subsidiaries, taken as a whole, in a materially
disproportionate manner relative to other participants in the multifamily
residential industry.
"AMLI Severance Plan" shall mean any and all letters and arrangements
between AMLI and any of its employees relating to the payment of severance
obligations to such employee following AMLI's termination of employment of such
employee, as listed on Section 5.8(a) of the AMLI Disclosure Letter.
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"AMLI Subsidiary" means each Subsidiary of AMLI; provided, however, the
entities disclosed in Section 9.1 of the AMLI Disclosure Letter shall not be
Subsidiaries of AMLI for purposes of this Agreement.
"Articles of Merger" means the articles of merger with respect to the
Merger, containing the provisions required by, and executed in accordance with,
Title 8.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in New York, New York are authorized or obligated by
law or executive order to be closed.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended from time to time.
"Code" means the Internal Revenue Code of 1986, as amended.
"ERISA Affiliate" of any entity means any other entity that, together with
such entity, would be treated as a single employer under Section 414 of the
Code.
"Knowledge", or any similar expression, shall mean (i) with respect to AMLI
(or any AMLI Subsidiaries), the actual knowledge of the persons set forth on
Exhibit B; and (ii) with respect to Purchaser (or any of its Subsidiaries), the
actual knowledge of the persons set forth on Exhibit C.
"LLC Certificate of Merger" mean the certificate of merger with respect to
the Merger, containing the provisions required by, and executed in accordance
with, the LLC Act.
"LP Certificate of Merger" means the certificate of merger with respect to
the Partnership Merger, containing the provisions required by, and executed in
accordance with, the DRULPA.
"Law" means any Federal, state, local or foreign statute, law, regulation,
permit, license, approval, authorization, rule, ordinance or code of any
Governmental Entity, including any judicial or administrative interpretation
thereof.
"Liabilities" means any and all debts, liabilities and obligations of any
nature whatsoever, whether accrued or fixed, absolute or contingent, including
those arising under any Law, those arising under any contract, agreement,
commitment, instrument, permit, license, franchise or undertaking and those
arising as a result of any act or omission.
"Maryland Department" means the State Department of Assessments and
Taxation of Maryland.
"Order" means any award, judgment, injunction, consent, ruling, decree or
order (whether temporary, preliminary or permanent) issued, adopted, granted,
awarded or entered by any Governmental Entity or private arbitrator of competent
jurisdiction.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity.
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"Purchaser Subsidiary" means Purchaser Acquisition Entity, Purchaser
Acquisition LP and each other Subsidiary of Purchaser.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture or other legal entity of which (i) such Person,
or its Subsidiary, is the general partner or manager or (ii) such Person (either
directly or through or together with another Subsidiary of such Person) owns
more than 50% of the voting stock or value of such corporation, partnership,
limited liability company, joint venture or other legal entity.
"Tax" or "Taxes" shall mean any U.S. federal, state, local and foreign
income, gross receipts, license, withholding, property, recording, stamp, sales,
use, franchise, employment, payroll, excise, environmental and other taxes,
tariffs or governmental charges of any nature whatsoever, together with
penalties, interest or additions thereto.
"Tax Protection Agreement" shall mean any agreement, oral or written, to
which AMLI or any AMLI Subsidiary is a party and pursuant to which (A) any
liability to the holders of the LP Units may arise relating to Taxes, whether or
not as a result of the consummation of the transactions contemplated by this
Agreement; (B) in connection with the deferral of income Taxes of a holder of LP
Units, AMLI or any AMLI Subsidiary has agreed to (1) maintain a minimum level of
debt or continue a particular debt or (2) retain or not dispose of assets for a
period of time that has not since expired or (C) limited partners of AMLI LP
have guaranteed or otherwise assumed, directly or indirectly, debt of AMLI LP or
are offered the opportunity to do so.
"Tax Return" shall mean any return, declaration, report, claim for refund,
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Transaction Documents" means this Agreement and the Voting Agreement. The
Transaction Documents to be executed by a specified Person on or after the date
hereof are referred to as "such Person's Transaction Documents," "its
Transaction Documents" or another similar expression.
"2006 Capital Budgets" means the capital expenditure budgets adopted by the
management of AMLI and approved by the Chief Executive Officer of AMLI on or
prior to December 31, 2005, and, as applicable, subsequently approved by the
applicable AMLI co-investment partner (each being identified on Section
3.1(b)(i) of the AMLI Disclosure Letter) with respect to the AMLI Subsidiaries
not directly or indirectly wholly-owned by AMLI LP with such adjustments,
amendments and modifications reasonably requested by such co-investment partner;
provided, that any provision for a capital investment project for a 2006
budgeted amount in excess of $2,000,000 per AMLI Property contained in the 2006
Capital Budgets shall be reasonably acceptable to Purchaser.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
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XXXX XXXXXXX
---------------------------------------- ---------------------
Agreement Preamble
AMLI Preamble
AMLI Board of Trustees Recitals
AMLI Break-Up Expenses Section 7.2(c)
AMLI Bylaws Section 3.1(a)
AMLI Charter Section 3.1(a)
AMLI Common Shareholders Recitals
AMLI Common Shares Recitals
AMLI Disclosure Letter Section 3.1(a)
AMLI Employee Benefit Plans Section 3.1(l)(ii)
AMLI Employees Section 5.8(a)
AMLI Financial Advisor Recitals
AMLI Intellectual Property Rights Section 3.1(n)(i)
AMLI LP Preamble
AMLI LP Agreement Section 1.5(b)
AMLI LP Unitholders Recitals
AMLI Option Plan Section 1.8(a)
AMLI Options Section 3.1(a)
AMLI Other Interests Section 3.1(b)(ii)
AMLI Permits Section 3.1(b)(i)
AMLI Properties Section 3.1(o)(ii)
AMLI Property Section 3.1(o)(iii)
AMLI Recommendation Section 5.1(b)
AMLI Rights Agreement Recitals
AMLI SEC Documents Section 3.1(e)(i)
AMLI Shareholder Approval Section 3.1(d)(i)
AMLI Shareholder Meeting Section 3.1(d)(i)
AMLI Subsidiary Partnership Section 5.4(b)
Balance Sheet Section 3.1(e)(ii)
Break-Up Amount Section 7.6
Break-Up Fee Section 7.1(g)
Closing Section 1.2
Closing Date Section 1.2
Commitment Section 4.1(b)(v)
Common Share Certificate Section 2.1(b)(i)
Competing Transaction Section 5.5(c)
Confidentiality Agreement Section 5.2
Construction Projects Section 3.1(p)(x)
DRIP Section 1.10
DRULPA Recitals
Encumbrances Section 3.1(p)(i)
Environmental Law Section 3.1(o)
ERISA Section 3.1(l)(i)(A)
ESPP Section 1.8(a)
Exchange Act Section 3.1(d)(iii)
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TERM SECTION
---------------------------------------- ---------------------
Exchange Agent Section 2.1(a)
Exchange Fund Section 2.1(a)
Fairness Opinion Recitals
Financing Letter Section 3.2(g)
GAAP Section 3.1(e)(i)
General Partner Recitals
GP Units Section 3.1(c)(ii)(A)
indebtedness Section 3.1(g)
Indemnifiable Amounts Section 5.9(a)
Indemnified Parties Section 5.9(a)
Indemnified Party Section 5.9(a)
Indemnitors Section 5.9(a)
Intellectual Property Section 3.1(n)(ii)
Interim Financial Information Section 3.1(e)(ii)
Letter of Transmittal Section 2.1(b)(i)
Liens Section 3.1(b)(i)
LLC Act Recitals
LP Units Recitals
Material Contracts Section 3.1(u)(i)
Merger Recitals
Merger Consideration Section 1.4(b)
Merger Effective Time Section 1.3(a)
Mergers Recitals
MGCL Recitals
Ownership Limit Section 3.1(v)
Partnership Merger Recitals
Partnership Merger Consideration Section 1.5(b)
Partnership Merger Effective Time Section 1.3(b)
Payee Section 7.6
Payor Section 7.6
Permitted Title Exceptions Section 3.1(p)(ii)
Preferred Share Certificate Section 2.1(b)(i)
Preferred Shares Section 1.4(c)(ii)
Property Restrictions Section 3.1(p)(ii)
Proxy Statement Section 3.1(d)(iii)
Purchaser Preamble
Purchaser Acquisition Entity Preamble
Purchaser Acquisition LP Preamble
Purchaser Break-Up Expenses Section 7.2(b)
Purchaser Parties Preamble
Qualifying Income Section 7.6
REIT Section 3.1(k)(ii)
Restricted Share Plan Section 1.8(a)
Xxxxxxxx-Xxxxx Act Section 3.1(e)(iii)
Securities Act Section 3.1(e)(i)
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XXXX XXXXXXX
---------------------------------------- ---------------------
Series A Preferred Shares Section 3.1(c)(i)(A)
Series B Merger Consideration Section 1.4(c)(i)
Series B Preferred Shares Section 1.4(c)(i)
Series C Preferred Shares Section 3.1(c)(i)(A)
Series D Merger Consideration Section 1.4(c)(ii)
Series D Preferred Shares Section 1.4(c)(ii)
Superior Competing Transaction Section 5.5(d)
Surviving Entity Section 1.1(a)
Surviving Partnership Section 1.1(b)
Takeover Statute Section 3.1(v)
Termination Date Section 7.1(b)
Third Party Intellectual Property Rights Section 3.1(n)(ii)
Title 8 Recitals
Triggered Loans Section 3.1(d)(ii)
Unitholder Letter of Transmittal Section 2.1(c)(i)
Voting Agreement Recitals
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
date first written above.
PRIME PROPERTY FUND, LLC
By: Xxxxxx Xxxxxxx Real Estate Advisor,
Inc., its Manager
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
----------------------------------
Title: Managing Director
---------------------------------
ATOM ACQUISITION LLC
By: PPF Multifamily, LLC, its sole
member
By: PPF OP, LP, its sole member
By: PPF OPGP, LLC, its general partner
By: Prime Property Fund, LLC, its sole
member
By: Xxxxxx Xxxxxxx Real Estate Advisor,
Inc., its Manager
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
----------------------------------
Title: Managing Director
---------------------------------
ATOM ACQUISITION PARTNERS, L.P.
By: Atom Acquisition LLC, its general
partner
By: PPF Multifamily, LLC, its sole
member
By: PPF OP, LP, its sole member
By: PPF OPGP, LLC, its general partner
By: Prime Property Fund, LLC, its sole
member
By: Xxxxxx Xxxxxxx Real Estate Advisor,
Inc., its Manager
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
----------------------------------
Title: Managing Director
---------------------------------
AMLI RESIDENTIAL PROPERTIES TRUST
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
AMLI RESIDENTIAL PROPERTIES, L.P.
By: AMLI Residential Properties Trust,
its general partner
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
Exhibit A
Tax Opinion
Exhibit B
AMLI Knowledge Persons
Xxxxxxx X. Xxxx
Xxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxxxx X. Xxxxxxx
Exhibit C
Purchaser Knowledge Persons
Xxxx Xxxxxxx
Xxxxxxx Xxxx
